================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

(Mark One)

   [X]      QUARTERLY REPORT UNDER TO SECTION 13 OR 15(d) OF THE SECURITIES
            EXCHANGE ACT OF 1934

            For the Quarterly Period Ended March 31, 2002


   [ ]      TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
            EXCHANGE ACT OF 1934

            For the Transition Period from __________ to ___________

                           Commission File No. 1-12559

                             CRAGAR INDUSTRIES, INC.
                 (Name of small business issuer in its charter)

             DELAWARE                                   86-0721001
  (State or other jurisdiction              (I.R.S. Employer Identification No.)
of incorporation or organization)


                 4620 EAST ARCADIA LANE, PHOENIX, ARIZONA 85018
              (Address of principal executive offices and zip code)

                                 (480) 596-6483
                           (Issuer's telephone number)

         Securities Registered Under Section 12(b) of the Exchange Act:

                                      None

         Securities Registered Under Section 12(g) of the Exchange Act:

                          COMMON STOCK, $.01 PAR VALUE
                         COMMON STOCK PURCHASE WARRANTS

     Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes [X] No [_]

     Number of shares of common stock, $.01 par value, outstanding as of March
31, 2002: 3,897,611.

     Transitional small business disclosure format.    Yes [_] No [X]
================================================================================
<PAGE>

                             CRAGAR INDUSTIRES, INC.
                            Condensed Balance Sheets
                      March 31, 2002 and December 31, 2001

<TABLE><CAPTION>
                                                                                 March 31,            December 31,
                                                                                    2002                 2001
                                                                                ------------         ------------
                                                                                (unaudited)
<S>                                                                             <C>                  <C>
                                     ASSETS
Current Assets
       Cash and cash equivalents                                                $    110,419         $     33,216
       Non-trade receivables                                                         281,426              132,233
       Investments                                                                    78,489               78,489
       Other current assets                                                          222,945              240,000
                                                                                ------------         ------------
             Total current assets                                                    693,279              483,938

Other Assets                                                                            --                 30,000
                                                                                ------------         ------------

Total Assets                                                                    $    693,279         $    513,938
                                                                                ============         ============

                      LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities
       Accounts payable                                                         $    485,670         $    491,808
       Notes payable - related parties                                             1,305,500            1,305,500
       Accrued interest                                                               10,004                7,999
       Accrued expenses                                                               87,117              192,692
                                                                                ------------         ------------
             Total current liabilities                                             1,888,291            1,997,999
                                                                                ------------         ------------

Total Liabilities                                                                  1,888,291            1,997,999
                                                                                ------------         ------------

Stockholders' Deficit
       Common stock, par value $0.01; 10,000,000 shares authorized,
             3,897,611 and 3,897,611 respectively issued and outstanding              38,976               38,976
       Additional paid-in capital - comon                                         15,679,177           15,679,177
       Accumulated deficit                                                       (16,913,165)         (17,202,214)
                                                                                ------------         ------------
             Total stockholders' deficit                                          (1,195,012)          (1,484,061)
                                                                                ------------         ------------

Total Liabilities and Stockholders' Deficit                                     $    693,279         $    513,938
                                                                                ============         ============
</TABLE>
See accompanying notes to condensed financial statements




                                        2
<PAGE>

                             CRAGAR INDUSTRIES, INC.
                       Condensed Statements of Operations
                   Three Months Ended March 31, 2002 and 2001
                                   (unaudited)

<TABLE><CAPTION>
                                                                            Three Months Ended
                                                                                  March 31,
                                                                       -------------------------------
                                                                           2002                2001
                                                                       -----------         -----------
<S>                                                                    <C>                 <C>
Net sales                                                              $      --           $      --
Royalty revenues                                                           131,586             131,419
                                                                       -----------         -----------

                     Total revenues                                        131,586             131,419

Cost of goods sold                                                            --                  --
                                                                       -----------         -----------

                     Gross profit                                          131,586             131,419

Selling, general and administrative expenses                               154,187              97,549
                                                                       -----------         -----------

                     Income (loss) from operations                         (22,601)             33,870
                                                                       -----------         -----------
Non-operating income (expenses), net
           Interest expense                                                (27,138)            (39,151)
           Gain on sale of investment                                       35,513              13,001
           Litigation settlement                                           300,000                --
           Other                                                             3,275              50,733
                                                                       -----------         -----------
                     Total non-operating income (expenses), net            311,650              24,583
                                                                       -----------         -----------

Net earnings (loss) before income taxes                                    289,049              58,453

Income taxes                                                                  --                  --
                                                                       -----------         -----------

Net earnings                                                           $   289,049         $    58,453
                                                                       ===========         ===========

Basic earnings per common share                                        $      0.07         $      0.02
                                                                       ===========         ===========

Diluted earnings per common share                                      $      0.07         $      0.01
                                                                       ===========         ===========

Basic weighted average shares outstanding                                3,897,611           3,627,014
                                                                       ===========         ===========

Diluted weighted average shares outstanding                              3,901,900           5,375,655
                                                                       ===========         ===========
</TABLE>
See accompanying notes to condensed financial statements



                                        3
<PAGE>

                             CRAGAR INDUSTRIES, INC.
                       Condensed Statements of Cash Flows
                   Three Months Ended March 31, 2002 and 2001
                                   (unaudited)
<TABLE><CAPTION>
                                                                                        Three Months Ended
                                                                                             March 31,
                                                                                    ---------------------------
                                                                                       2002              2001
                                                                                    ---------         ---------
<S>                                                                                 <C>               <C>
Cash Flows from operating activities
      Net earnings                                                                  $ 289,049         $  58,453
      Adjustments to reconcile net earnings to net cash provided
         by (used in) operating activities:
              Increase (decrease) in cash resulting from changes in:
                   Accounts receivable - non trade                                   (149,193)          (21,351)
                   Other current assets                                                17,055           (39,800)
                   Other assets                                                        30,000            21,320
                   Accounts payable and accrued expenses                             (111,713)         (106,046)
                   Accrued interest                                                     2,005             3,325
                                                                                    ---------         ---------
                        Net cash provided by (used in) operating activities            77,203           (84,099)

Cash flows from investing activities
      Disposition of property and equipment                                              --              41,926
                                                                                    ---------         ---------


                        Net increase (decrease) in cash and cash equivalents           77,203           (42,173)

Cash and cash equivalents at beginning of period                                       33,216            68,300
                                                                                    ---------         ---------

Cash and cash equivalents at end of period                                          $ 110,419         $  26,127
                                                                                    =========         =========

Supplemental disclosure of cash flow information:
      Cash paid for interest                                                        $  25,133         $  35,826
                                                                                    =========         =========
</TABLE>

See accompanying notes to condensed financial statements










                                        4
<PAGE>

                             CRAGAR INDUSTRIES, INC.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                        THREE MONTHS ENDED MARCH 31, 2002
                                   (Unaudited)

1.         Summary of Significant Accounting Policies
           Basis of Presentation:

           The interim financial data as of and for the three months ended March
           31, 2002, and 2001 is unaudited; however, in the opinion of the
           Company, the interim data includes all adjustments, consisting only
           of normal recurring adjustments, necessary for a fair presentation of
           the results for the interim periods.

           The year-end balance sheet information was derived from audited
           financial statements. These interim financial statements should be
           read in conjunction with the Company's audited financial statements.

2.         Basic and Diluted Earnings  per Share

           Basic and diluted earnings per share amounts are based on the
           weighted average number of common shares and common stock equivalents
           outstanding as reflected on Exhibit 11 to this Quarterly Report on
           Form 10-QSB.

3.         The accompanying financial statements are prepared using the
           generally accepted accounting principles which contemplates
           continuation of the Company as a going concern. However, the Company
           has negative working capital and negative equity as of the balance
           sheet date.

           The above conditions indicate that the company may be unable to
           continue in existence. The financial statements do not include any
           adjustments relating to the recoverability and classification of
           recorded asset amounts, or the amounts and classification of
           liabilities that might be necessary should the Company be unable to
           continue in existence.


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

FORWARD-LOOKING STATEMENTS

     This report contains forward-looking statements. Additional written or oral
forward-looking statements may be made by the Company from time to time in
filings with the Securities and Exchange Commission or otherwise. Such
forward-looking statements are within the meaning of that term in Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. Such statements may include, but not be
limited to, projections of revenues, income or loss, estimates of capital
expenditures, plans for future operations, products or services, and financing
needs or plans, as well as assumptions relating to the foregoing. The words
"believe," "expect," "anticipate," "estimate," "project," and similar
expressions identify forward-looking statements, which speak only as of the date
the statement was made. Forward-looking statements are inherently subject to
risks and uncertainties, some of which cannot be predicted or quantified. Future
events and actual results could differ materially from those set forth in,
contemplated by, or underlying the forward-looking statements. The following
disclosures, as well as other statements in the Company's report, including
those contained below in this Item 2, "Results of Operations" and "Special
Considerations," describe factors, among others, that could contribute to or

                                       5
<PAGE>

cause such differences. Specifically, management is uncertain whether the
anticipated cash flow from operations will be sufficient to meet the Company's
anticipated operations and working capital needs. Therefore, the Company is
seeking to secure additional working capital through the sale of equity or debt
securities. There can be no assurance that the Company's cash flow will be
sufficient to finance its operations as currently planned or that it will be
able to supplement its cash flow with additional financing. In addition, no
assurance can be given regarding the Company's ability to obtain such financing
on favorable terms, if at all. If the Company is unable to obtain additional
financing, its ability to meet its anticipated operating and working capital
needs will be materially and adversely affected. As a result of the Company's
stockholders' deficit and the uncertainty surrounding the Company's ability to
meet its anticipated operating and working capital needs, the independent
auditors' report on the Company's 2001 financial statements has been qualified
for a going concern.

                                  INTRODUCTION

     From our inception in December 1992 through the first nine months of fiscal
year 1999, we designed, produced, and sold high-quality custom vehicle wheels
and wheel accessories. We sold our wheel products in the automotive aftermarket
through a national distribution network of value-added resellers, including tire
and automotive performance warehouse distributors and retailers and mail order
companies. During the fourth quarter of fiscal year 1999, we began our
transformation into a licensing and trademark company. This process was
concluded during the fiscal year ended December 31, 2000.

     In connection with a reassessment of our business strategy, we considered
combinations and strategic alliances with other companies that could complement
our existing business, including outsourcing our manufacturing and sales
operations. Accordingly, in September 1999, we entered into an Exclusive Field
of Use License Agreement and an Agreement of Purchase and Sale of Assets with
Weld Racing, Inc. Under this agreement, Weld will manufacture, sell, and
distribute our line of wheels with non-cast wrought aluminum alloy outer rims
and related accessories and we will receive a royalty based on sales of the
licensed products. We also sold certain assets to Weld related to our wrought
wheel business. We completed this transaction in October 1999. During the fourth
quarter of fiscal year 2001, we amended our agreement with Weld. Pursuant to the
amendment, we modified the product classes that Weld held rights to.

     In October 1999, we entered into a similar transaction with Carlisle Tire
and Wheel Co., pursuant to which we granted an exclusive worldwide license to
Carlisle. Under this agreement, Carlisle will manufacture, sell, and distribute
our line wheels with steel outer rims and related accessories and we will
receive a royalty based on sales of the licensed products. We also sold certain
assets to Carlisle related to our steel outer rim wheel business. We completed
this transaction with Carlisle in December 1999.

     In September 2000, we entered into and completed a similar transaction with
Performance Wheel Outlet, Inc. Under this agreement, Performance will
manufacture, sell, and distribute our line of one-piece cast aluminum wheels and
we will receive a royalty based on sales of the licensed products. During the
fourth quarter of fiscal year 2001, we amended our agreement with Performance to
offer certain incentives for Performance to expand its product offerings.

     As a consequence of the transactions with Performance, Weld, and Carlisle,
we no longer engage in the manufacture, marketing, sale, or distribution of any
products related to our one-piece wheel business, wrought wheel business, and
steel outer rims wheel business, which together generated practically all of our
revenue in 2001. In general, the outsourcing of the

                                        6
<PAGE>

manufacturing, marketing, sales, and distribution operations with respect to the
licensed products, together with the sale of all the related assets, has
substantially decreased our revenue and related operating and marketing costs.

     We intend to rely on Performance's, Weld's, and Carlisle's greater
financial, operational, and distribution capabilities to increase net sales of
the licensed products and generate a stream of increasing revenue in the form of
quarterly royalty payments. In addition, we are entitled to royalties based on
the net sales of any new products developed by Carlisle related to the steel
outer rims wheel business under the CRAGAR brand name, including products and
related accessories for vehicles other than automobiles, trucks, and vans, such
as all-terrain vehicles and golf carts. We are also entitled to receive
royalties based on net sales of any new products developed by Weld related to
the wrought wheel business under the CRAGAR brand name, including two-piece
aluminum wheels and new types of race wheels. Because our licensing partners'
primary fiduciary obligation is to their stockholders rather than our
stockholders, they may make decisions or take steps that may result in lower
royalty payments or that could adversely affect the CRAGAR brand name. See Item
1, "Business - Special Considerations."

     As part of our new business strategy, we also intend to pursue licensing
opportunities through the utilization of the CRAGAR brand name for other
products, including, but not limited to, aftermarket performance automotive
products. On April 1, 2001, we retained the services of Trademarketing
Resources, Inc., or TRI. TRI will act as our exclusive licensing agent for the
purposes of exercising the merchandising rights in and to the trademarks owned
by us, including CRAGAR, CRAGAR Lite, Keystone Klassic, S/S, Street Pro, Star
Wire, CRAGAR XLS, TRU=CRUISER, and TRU=SPOKE, and implementing, subject to our
approval, a marketing strategy to broaden the use of our intellectual property,
including the CRAGAR brand name. TRI will also oversee and coordinate the
licensing activities of Carlisle, Weld, and Performance. As part of the
agreement with TRI, we issued 58,182 shares of our common stock to certain
individuals who will be providing us services directly under the agreement. They
will receive an additional 58,182 shares of our common stock on April 2, 2002.
There can be no assurance that we will be successful developing or implementing
such a marketing strategy or that we will generate any material sales of
products utilizing our intellectual property. In addition, TRI will act as our
exclusive agent with respect to coordinating advertising and promotion all of
our products, services, and premiums across all media.

     During the fourth quarter of fiscal year 2001, we entered into a licensing
agreement with Racing Champions Ertl, Inc. pursuant to which we granted an
exclusive license in specified geographic territories for the manufacture,
marketing, and sale of 1:18th scale die cast replicas, 1:18th scale die cast
model kits, and 1:25th scale plastic model kits. During the fourth quarter of
fiscal year 2001, we also entered into a licensing agreement with Playing
Mantis, Inc. pursuant to which we granted an exclusive license in specified
geographic territories for the manufacture, marketing and sale of 1:64th scale
die cast replicas and 1:64th scale die cast model kits.

RECENT DEVELOPMENTS

     We are the general partner of Cragar Investment Limited Partnership. As of
December 31, 2001, the partnership had raised $3,020,000, which was used
primarily to acquire the economic rights to 201,333 shares of Wrenchead common
stock owned by our company and pay for the costs of forming and administering
the partnership. During the first quarter of fiscal year 2002, we acquired and
assigned to the partnership 918,750 shares of Wrenchead Series A Senior
Convertible Preferred Stock. To complete this transaction, the Partnership
raised $285,000 from a group of private investors. During the fourth quarter of
fiscal year 2001, we reported a loss on our investment in Wrenchead of
$1,229,029 as a result of the reduction in the estimated market value of
Wrenchead common stock.

                                        7
<PAGE>

RESULTS OF OPERATIONS

     The following table sets forth various items as a percentage of net sales
revenue for the three month periods ended March 31, 2002 and 2001:

                                                  THREE MONTHS ENDED MARCH 31,
                                                      2002            2001
                                                  --------------------------
           Total revenues                            100.0%          100.0%
           Cost of goods sold                         00.0            00.0
                                                  ----------      ----------
           Gross profit                              100.0           100.0
           SG&A                                      117.18           74.2
                                                  ----------      ----------
           Income (loss) from operations             (17.18)          25.8
           Non-operating income (expense), net       236.84           18.7
           Income taxes                                -               -
           Extraordinary gain                          -               -
                                                  ----------      ----------
           Net earnings                              219.67%          44.5%
                                                  ==========      ==========


COMPARISON OF QUARTER ENDED MARCH 31, 2002 AND QUARTER ENDED MARCH 31, 2001

     REVENUE. Total revenues consist of royalties on the sale of licenced
products. Total revenues for the quarter ended March 31, 2002 and 2001, were
$131,586 compared to $131,419, represents a 0.1% increase in total revenue.

     GROSS PROFIT. Gross profit is determined by subtracting cost of goods sold
from total revenue. Historically, cost of goods sold consisted primarily of the
costs of labor, aluminum, steel, raw materials, overhead, and material
processing used in the production of our products, as well as the freight costs
of shipping product to our customers. Currently, we do not realize any cost of
goods sold, since all of our total revenue is derived from royalties. Gross
profit for the fiscal quarter ended March 31, 2002 was $131,586 compared to
$131,419 for the fiscal quarter ended March 31, 2001.

     SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES. Selling, general, and
administrative expenses consist primarily of accounting and legal expenses,
office expenses, salaries and wages, marketing expenses, and general overhead.
These expenses for the fiscal quarter ended March 31, 2002 were $154,187
compared to $97,549 for the quarter ended March 31, 2001, a 61.1% increase. This
increase

                                        8
<PAGE>

was due primarily to increases in professional and consulting fees associated
with our evaluation of potential strategic business alliances and opportunities,
in addition to the potential opportunities to expand the use of the Cragar brand
names. For the quarter ended March 31, 2002 we incurred $12,275 in legal fees
attributable to our lawsuits against Titan International, which as of March 18,
2002 had been settled.

     NON-OPERATING INCOME, NET. Non-operating income, net, for the fiscal
quarter ended March 31, 2002 were $311,650 compared to non-operating income, net
of $24,583 for the same fiscal quarter ended March 31, 2001. This increase of
$287,067, was attributable primarily to the settlement of the Titan
International Lawsuit..

     INCOME TAXES. Because of carry-forward losses from previous years, the
Company had no income tax provision in the first fiscal quarter of 2002 or 2001.

     NET EARNINGS; EARNINGS PER SHARE. Net earnings for the fiscal quarter
ended March 31, 2002 were $289,049 compared to net earnings of $58,453 for the
fiscal quarter ended March 31, 2001. Basic earnings per share for the fiscal
quarter ended March 31, 2002 were $0.07 compared to basic earnings per share of
$0.02 for the fiscal quarter ended March 31, 2001. See Exhibit 11 to this
Quarterly Report on Form 10-QSB.

LIQUIDITY AND CAPITAL RESOURCES

     In April 1998, we secured a credit facility with NationsCredit Commercial
Funding Corporation. The terms of the NCFC credit facility specified a maximum
combined term loan and revolving loan totaling $8.5 million at an interest rate
of 1.25% above the prime rate. The NCFC credit facility was secured by
substantially all of our assets and certain pledged assets from three investors.
During the third quarter of fiscal year 2000, we paid off and terminated the
NCFC credit facility. The proceeds for the pay-off were provided by a loan from
two investors totaling $1,200,000 at an interest rate of 2.25% above the prime
rate. The loan is secured by substantially all of our assets and is due to
expire in August 2002. During the first quarter of fiscal year 2001, we entered
into a similar agreement with another investor for a loan totaling $105,500 at
an interest rate of 2.25% above the prime rate. This loan is secured by
substantially all of our assets and expires in April 2003.

     At March 31, 2002, we had an accumulated deficit of $16,913,165. For the
fiscal quarter ended March 31, 2002, our operating activities provided $77,203
of cash, which was primarily attributable to lower payments on accounts payable
and accrued expenses, including legal costs associated with our various
litigation matters and the settlement of the Titan Lawsuit. During the fiscal
quarter ended March 31, 2002, our investing activities provided/used no cash.

     We do not anticipate any major capital budget expenditures in fiscal year
2002. In addition, we do not believe our operating activities will generate
sufficient cash flow to meet our operating cash flow requirements and other
current obligations. Consequently, it is likely we will be required to raise
additional funds from equity or debt financing or receive an extension on our
loans. However, we cannot provide any assurance that such additional financing
will be available on terms acceptable to us, if at all. See Item 2 - "Business -
Special Considerations."

                                        9
<PAGE>

SEASONALITY

     Historically, we have experienced higher total revenue in the first two
quarters of the year than in the latter half of the year. We believe that this
results from seasonal buying patterns resulting, in part, from an increased
demand for certain automotive parts and accessories and its ultimate customers
having added liquidity from income tax refunds during the first half of the
year. We expect this seasonality to have an effect on the revenue stream derived
from sales of CRAGAR brand products by our license partners.

INFLATION

     Increases in inflation generally result in higher interest rates. Higher
interest rates on our borrowings would decrease our profitability. To date,
general price inflation has not had a significant impact on our operations;
however, increases in metal prices have from time to time, and could in the
future, adversely affect the total revenue derived from the sales of our
licensed products. See "Special Considerations - Dependence on External
Financing" and "History of Previous Losses; Stockholders' Deficit; Going Concern
Opinion."

                             SPECIAL CONSIDERATIONS

     Our future operating results and financial condition are dependent upon,
among other things, our ability to implement our new business strategy. Some,
but not all, potential risks and uncertainties that could affect our
profitability are set forth below.

WE HAVE A HISTORY OF PREVIOUS LOSSES AND A TOTAL STOCKHOLDERS' DEFICIT.

     We were incorporated in December 1992 and have incurred significant losses
in each of our fiscal years since fiscal year ended December 31, 1998. For the
fiscal year ended December 31, 2000, we reported net earnings of $1,075,029 and
for the fiscal year ended December 31, 1999, we reported net earnings of
$54,678. For the fiscal year ended December 31, 2001, we reported a net loss of
$1,357,031. As of December 31, 2001, we had an accumulated deficit of
$17,202,214 and a total stockholders' deficit of $1,484,061. There can be no
assurance that we will be profitable in the future.

THE INDEPENDENT AUDITOR'S REPORT ON OUR COMPANY'S 2001 FINANCIAL STATEMENTS HAS
BEEN QUALIFIED FOR A GOING CONCERN.

     As a result of our total stockholders' deficit and the uncertainty
regarding our ability to meet our anticipated operating and working capital
needs, the independent auditors' report on our company's 2001 financial
statements has been qualified for a going concern.

WE ARE DEPENDENT ON THIRD PARTIES TO GENERATE ROYALTIES.

     As a result of our change in business strategy, our revenue and operating
results will be substantially dependent on the efforts and success of our third
party licensing partners. Because the amount of royalties payable to us are
determined by the net sales of those products by our licensing partners, our
revenue will be subject to the abilities of our licensing partners to generate
substantial net sales and deliver a high-quality product on a timely basis to
our customers. In addition, because the primary fiduciary obligations of our
licensing partners are to their stockholders rather than our stockholders, they
may make decisions or take steps that would result in lower royalty payments
than would otherwise be the case. If any of our licensing partners does not meet
its obligation under its respective licensing agreement, our primary remedy is
to terminate that license agreement, which may be an effective remedy only if we
can identify and secure other capable licensees of the affected products.

                                       10
<PAGE>

WE MAY BE UNABLE TO SUPPORT MANUFACTURING, MARKETING, SALE, AND DISTRIBUTION IF
ANY OF OUR LICENSE AGREEMENT ARE TERMINATED.

     If any of our licensing partners terminates its license agreement or we
terminate the license agreement for any reason, we may be forced to incur the
cost of manufacturing, marketing, selling, and distributing the licensed
products without the financial resources and distribution capabilities of our
licensees. In the alternative, we would be forced to possibly secure another
licensee capable of manufacturing, marketing, selling, and distributing the
licensed products on our behalf and paying any royalties based on the net sales
of those products. There can be no assurance that we would be able to meet these
obligations in the event that one or more of the license agreements is
terminated.

WE ARE DEPENDENT ON EXTERNAL FINANCING.

     During the fiscal quarter ending September 30, 2000, we paid off and
terminated our credit facility with the proceeds from a loan from two investors
totaling $1,200,000 at an interest rate of 2.25% above the prime rate. The loan
is secured by substantially all of our assets and was due to expire in August
2001. However, we extended the term of the loan to August 1, 2002. During the
fiscal quarter ended March 31, 2001, we obtained a loan from an investor
totaling $105,500 at an interest rate of 2.25% above the prime rate. The loan is
secured by substantially all of our assets and expires in April 2002. Upon
expiration of these loans, it is likely we will be required to raise additional
funds through equity or debt financing to repay such loans and to fund working
capital. No assurance can be given, however, that additional financing will be
available on terms acceptable to us, if at all.

OUR INVESTMENT IN WRENCHEAD MAY NOT BE PROFITABLE.

     We have made a substantial investment in Wrenchead, Inc. During the fourth
quarter of fiscal year 2001, we reported a loss of $1,229,029 on our investment
in Wrenchead due to the reduction in estimated market value of Wrenchead common
stock. There can be no assurance that the investment in Wrenchead will turn out
to be profitable.

ROYALTY PAYMENTS WILL DECREASE AS A PERCENTAGE OF SALES AS ROYALTIES INCREASE.

     The royalty structure negotiated by us with two of our current licensing
partners provides for a decrease in the applicable percentage of net sales that
determines royalty payments to us as net sales increase above certain levels.
The consequence of this structure is that our ability to realize the benefits of
a substantial increase in sales with respect to any group of our licensed
products sold by those licensing partners will be limited by the negotiated
royalty fee structure as net sales of the licensed products increase.

OUR CHANGE IN BUSINESS STRATEGY MAY DEPRESS THE VALUE OF OUR COMMON STOCK.

     The completion of the sale and licensing of our one-piece cast aluminum
wheels and related accessories, our wheels with non-cast wrought aluminum alloy
outer rims and related accessories, our line of wheels with steel outer rims and
related accessories, and any other related licensing arrangement we may complete
in the future represents a significant change in our business model. In general,
the outsourcing of the manufacturing, marketing, sales, and distribution
operations with respect to the licensed products, together with the sale of the
related assets, will result in a substantial decrease in our revenue and
operating and marketing costs. We anticipate that the decrease in revenue and
operating and marketing costs will be replaced by a

                                       11
<PAGE>

stream of royalty payments generated by the net sales of the licensed products
by our licensing partners. As a result, we only have one year of history of
financial results upon which stockholders can rely to make a determination that
the new business strategy will be successful. Given the uncertainty of the
consequences of this change in business strategy, as well as the significant
decrease in revenue expected to occur, there can be no assurance that the change
will result in a profitable stream of royalty payments. As a result of this
uncertainty, the price of our common stock may be adversely affected.

THE EXTENSION OF OUR BRAND NAMES TO OTHER PRODUCTS MAY NOT BE SUCCESSFUL.

     Our business strategy contemplates using the services of Trademarketing
Resources, Inc. to extend the CRAGAR brand names to new products developed by
our licensees as well as to non-wheel related products within the automotive
aftermarket industry. We regard this extension of our brand names to new
products as a key element of a strategy that is designed to increase net sales
of CRAGAR brand products to generate increased royalty revenue. There can be no
assurance, however, that TRI, our licensees, or we will be successful in
developing and marketing any new products under the CRAGAR brand names, or if
any new products are developed, that the net sales of these products will have a
positive impact on our financial results.

WE HAVE NO DUTY TO DISTRIBUTE ROYALTY PAYMENTS TO OUR STOCKHOLDERS.

     We anticipate using any royalty payments we receive pursuant to our
licensing agreements to increase our working capital and reduce our debt. We
have never paid any cash dividends on our common stock and do not anticipate
doing so in the foreseeable future. As a result, stockholders should not
anticipate that they will receive any distribution of the royalties generated by
our licensing transactions.

WE ARE DEPENDANT ON KEY CUSTOMERS AND OUR LICENSEES ABILITY TO MARKET AND SELL
TO EXISTING AND NEW CUSTOMERS.

     A limited number of customers have historically accounted for a substantial
portion of our revenue in each fiscal year. These are the same customers doing
business with our licensees. In the past, the financial condition and success of
our customers and our ability to obtain orders from new customers have been
critical to our success and will be critical to the success of our licensing
partners. As a result of our change in business strategy, we believe an
increasing percentage of revenue will be dependent on royalties from sales of
CRAGAR products by our licensing partners. There can be no assurance that any of
the licensees will be successful in their sales and marketing efforts.

OUR INDUSTRY IS HIGHLY COMPETITIVE.

     The market for our products is highly competitive. We historically competed
primarily on the basis of product selection (which includes style and vehicle
fit), timely availability of product for delivery, quality, design innovation,
price, payment terms, and service. We anticipate that our licensing partners
will compete on those same terms. We believe that Weld, Carlisle, and
Performance have sufficient financial, operational, and distribution
capabilities to compete effectively within the custom aftermarket wheel
industry. However, there can be no assurance that our licensing partners will be
successful in marketing custom aftermarket wheels under the CRAGAR brand names.
Increased competition could result in price reductions (which may be in the form
of rebates or allowances), reduced margins, and loss of market share, all of
which could have a material adverse effect on our licensing partners, possibly
resulting in the reduction or elimination of royalty payments due to us.

                                       12
<PAGE>

GENERAL ECONOMIC FACTORS MAY ADVERSELY AFFECT OUR BUSINESS.

     The automotive aftermarket is directly impacted by certain external
factors, such as the general demand for aftermarket automotive parts, prices for
raw materials used in producing our products, fluctuations in discretionary
consumer spending, and general economic conditions, including, but not limited
to, employment levels, business conditions, interest rates, and tax rates. While
we believe that current economic conditions favor stability in the markets in
which our products are sold, various factors, including, but not limited to,
those listed above, could lead to decreased sales and increased operating
expenses. We cannot provide any assurances that various factors will not
adversely affect our licensing partners' businesses in the future, causing a
decrease in royalty payments due us, or prevent us from successfully
implementing our business strategies.

WE CANNOT PROVIDE ANY ASSURANCES OF ADDITIONAL SUCCESSFUL ALLIANCES.

     In furtherance of our change in business strategy and sale of our licensing
rights, we will continue to consider alliances with other companies that could
complement our new business strategy, including other complementary automotive
aftermarket product lines where we can capitalize on the CRAGAR brand name. We
cannot provide any assurances that suitable licensing candidates can be
identified, or that, if identified, adequate and acceptable licensing terms will
be available to us. Furthermore, even if we complete one or more licensing
agreements, there can be no assurance that our licensing partners will be
successful in manufacturing, marketing, selling, and distributing the licensed
products.

     Any additional investment by us in Wrenchead or other companies may result
in a potentially dilutive issuance of equity securities, or the incurrence of
additional debt, which could adversely affect our financial position. Alliances,
whether licensing or direct investments in companies, involve numerous risks,
such as the diversion of the attention of our management from other business
concerns and our entrance into markets in which we have had no or only limited
experience, both of which could have a material adverse effect on our business,
financial condition, and results of operations.

OUR OPERATING RESULTS MAY VARY SUBSTANTIALLY FROM QUARTER TO QUARTER.

     Our results of operations have historically been subject to substantial
variations as a result of a number of factors and we anticipate that these same
factors will continue to impact seasonal variation. In particular, in the past
our operating results varied due to the size and timing of customer orders,
delays in new product enhancements and new product introductions, vendor quality
control and delivery difficulties, market acceptance of new products, product
returns, product rebates and allowances, seasonality in product purchases by
distributors and end users, and pricing trends in the automotive aftermarket
industry in general and in the specific markets in which we participated and
that our custom wheel licensees participate in. Historically, our net sales were
highest in the first and second quarters of each fiscal year. Significant
variation in orders during any period may have an impact on our cash flow or
workflow. We believe that any period-to-period comparisons of our financial
results are not necessarily meaningful and should not be relied upon as an
indication of future performance. We expect that our licensing partners will be
subject to the same variations and industry seasonality as we have experienced
in the past. These variations may cause fluctuations in the sales of CRAGAR
branded products thereby causing fluctuations in the royalties due us.

                                       13
<PAGE>

WE ARE SUBJECT TO CHANGING CUSTOMER TRENDS.

     Our success will depend, in part, on the ability of our licensing partners
to correctly and consistently anticipate, gauge, and respond in a timely manner
to changing consumer preferences. We cannot provide any assurance that our
licensed products will continue to enjoy acceptance among consumers or that any
of the future CRAGAR branded products developed and marketed by our licensing
partners will achieve or maintain market acceptance. Any misjudgment by our
licensing partners of the market for a particular product or product extension,
or their failure to correctly anticipate changing consumer preferences, could
have a material adverse effect on their businesses, financial condition, and
results of operations. Any material adverse effect experienced by our licensing
partners may have an adverse effect on us and our business, financial condition,
and results of operations.

WE ARE SUBJECT TO VARIOUS GOVERNMENTAL REGULATIONS.

     We historically have been subject to various federal and state governmental
regulations related to occupational safety and health, labor, and wage practices
as well as federal, state, and local governmental regulations relating to the
storage, discharge, handling, emission, generation, manufacture, and disposal of
toxic or other hazardous substances used to produce our products. We believe
that we have been and are currently in material compliance with such
regulations. Prior to November 1999, in the ordinary course of our business, we
used metals, oils, and similar materials, which were stored on site. The waste
created by use of these materials was transported off-site on a regular basis by
a state-registered waste hauler. Although we are not aware of any material claim
or investigation with respect to these activities, we cannot provide any
assurance that such a claim may not arise in the future or that the cost of
complying with governmental regulations in the future will not have a material
adverse effect on us.

     We are subject to regulation as a publicly traded company under the
Securities Exchange Act of 1934. In addition, as a consequence of the sale and
licensing of our wrought wheel, steel outer rim wheel and one-piece businesses,
which could be considered a sale of substantially all of our assets, in exchange
for the receipt of a stream of royalty payments, we could face regulatory issues
under the Investment Company Act of 1940 if the royalty payments are considered
investment securities. If we are considered to be an investment company under
the 1940 Act, we would be required to register under that Act as an investment
company. As a registered investment company, we would be subject to further
regulatory oversight of the Division of Investment Management of the SEC, and
our activities would be subject to substantial and costly regulation under the
1940 Act. While we do not believe that our activities will subject us to the
1940 Act and accordingly do not intend to register as an investment company
under the Act, we cannot provide any assurances that such registration would not
be required in the future.

WE RELY ON INTELLECTUAL PROPERTY.

     We own the rights to certain trademarks and patents, rely on trade secrets
and proprietary information, technology, and know-how, and seek to protect this
information through agreements with former employees and vendors. We cannot
provide any assurances that our patents will preclude our competitors from
designing competitive products, that proprietary information or confidentiality
agreements with licensees, former employees, and others will not be breached,
that our patents will not be infringed, that we would have adequate remedies for
any breach or infringement, or that our trade secrets will not otherwise become
known to or independently developed by our competitors.

                                       14
<PAGE>

OUR EXISTING STOCKHOLDERS MAY EFFECTIVELY CONTROL OUR COMPANY.

     Our directors, officers, and principal stockholders beneficially own
approximately 36.5% of our outstanding common stock. As a result, these persons
have a significant influence on our affairs and management, as well as on all
matters requiring stockholder approval, including electing and removing members
of our Board of Directors, causing us to engage in transactions with affiliated
entities, causing or restricting the sale or merger of our company, and changing
our dividend policy. Such concentration of ownership and control could have the
effect of delaying, deferring, or preventing a change in control of our company
even when such a change of control would be in the best interest of our other
stockholders.

THE ISSUANCE OF LARGE AMOUNTS OF PREFERRED STOCK COULD HAVE A MATERIAL ADVERSE
EFFECT ON THE VALUE OF OUR COMMON STOCK.

     Our Amended and Restated Certificate of Incorporation authorizes our Board
of Directors to issue "blank check" preferred stock, the relative rights,
powers, preferences, limitations, and restrictions of which may be fixed or
altered from time to time by our Board of Directors. Accordingly, our Board of
Directors is empowered, without stockholder approval, to issue preferred stock
with dividend, liquidation, conversion, voting, or other rights that could
adversely affect the voting power and other rights of the holders of common
stock. In the first quarter of 1998, for example, we issued 22,500 shares of
Series A Preferred Stock for approximately $2,250,000 in additional capital.
During the quarter ended September 30, 2000, 11,500 shares of Series A Preferred
Stock and the preferred stock dividends issued on that stock were converted into
456,393 shares of our common stock. During the month ended January 30, 2001, an
additional 11,000 shares of Series A Preferred Stock and the preferred stock
dividends issued on that stock were converted into 616,131 shares of common
stock. As of the month ended January 30, 2001 there was no longer any Series A
Preferred Stock outstanding.

     Additional series of preferred stock could be issued, under certain
circumstances, as a method of discouraging, delaying, or preventing a change in
control of our company that stockholders might consider to be in our company's
best interests. There can be no assurance that we will not issue additional
shares of preferred stock in the future.

WE ARE DEPENDENT ON KEY PERSONNEL.

     Our future success depends, in large part, on the efforts of Michael L.
Hartzmark, our Chairman and Chief Executive Officer. The loss of the services of
Dr. Hartzmark could have a material adverse effect on our business. While Dr.
Hartzmark does not have an employment agreement with us, Dr. Hartzmark and his
family beneficially held, as of December 31, 2001, more than 16.7% of our common
stock. The successful implementation of our business strategies will depend, for
the most part, on qualified management and other personnel being hired by our
licensing partners. In addition, the successful implementation of our brand
extension strategy will depend, for the most part, on the qualified management
and other personnel working at Trademarketing Resources, Inc. We have no input
in the hiring decisions being made by our licensing partners. We do not maintain
key man insurance on any of our personnel or consultants.

                                       15
<PAGE>

WE HAVE NEVER PAID CASH DIVIDENDS.

     We have never paid cash dividends or stock dividends on our common stock
and do not anticipate that we will pay cash dividends in the foreseeable future.
It is anticipated that any earnings will be used to finance growth of our
business and to reduce our debt.


                           PART II - OTHER INFORMATION
                           ---------------------------

ITEM 1. LEGAL PROCEEDINGS

     We are an unsecured creditor in the matter of in Re Super Shops, Inc., et
al., Case No. LA 97-46094-ER, a bankruptcy action filed by Super Shops, Inc.,
previously our primary customer. Because we are an unsecured creditor in this
matter, the amount and timing of the recovery, if any, on our account receivable
from Super Shops, Inc. is uncertain. In connection with this proceeding, we
incurred an obligation of $125,000 in fiscal year 1998, for preference payments
as a result of the on-going liquidation of the bankruptcy estate. We paid this
obligation during the third quarter of fiscal year 1999.

     During the 1999 fiscal year, we filed a complaint against Titan Wheel
International, Inc. and Titan International, Inc. in the United States District
Court for the District of Arizona, Case No. CIV99-0649, seeking damages of more
than $5,500,000. The lawsuit alleged, among other things, breach of contract,
breach of warranty, and conversion arising out of a supply contract with Titan's
subsidiary Automotive Wheel, Inc. for the delivery of automotive wheels to our
company. In 2001, we amended the complaint to include the charge of fraud by
Titan. As of March 18, 2002, the parties had settled this lawsuit.

     Automotive Wheels Inc. (a wholly-owned subsidiary of Titan International,
Inc.), filed a lawsuit against us in the United States District Court for the
District of Arizona, Case No. CIV01-2374, seeking a recovery of $430,000. The
lawsuit alleged, among other things, breach of contract and unjust enrichment
arising out of a supply arrangement that was terminated in 1997. The action was
directly related to our action against Titan discussed above. As of March 18,
2002, the parties had settled this lawsuit.

     Sears, Roebuck and Co., filed a lawsuit against us in the Superior Court,
Maricopa County, State of Arizona, Case No. CV2001021979, seeking a recovery of
$29,000. The lawsuit alleged, among other things, breach of contract and
conversion arising out of a supply arrangement that was terminated in 1999. We
plan on vigorously defending this matter.

     There are currently no other material pending proceedings to which we are a
party or to which any of our property is subject, although we are from time to
time involved in routine litigation incidental to the conduct of our business.

     The Company currently maintains discontinued product liability insurance,
with limits of $1.0 million per occurrence and $2.0 million in the aggregate per
annum. However, such coverage is becoming increasingly expensive and difficult
to obtain. There can be no assurance that the Company will be able to maintain
adequate product liability insurance at commercially reasonable rates or that
the Company's insurance will be adequate to cover future product liability
claims. Any losses that the Company may suffer as a result of claims in excess
of the Company's coverage could have a material adverse effect on the Company's
business, financial condition, and results of operations.

                                       16
<PAGE>

ITEM 2.    CHANGES IN SECURITIES AND USE OF PROCEEDS

           None

ITEM 3.    DEFAULTS UPON SENIOR SECURITIES

           None

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

           None

ITEM 5.    OTHER INFORMATION

           None

ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K

           (a) Exhibits


EXHIBIT
NUMBER                              DESCRIPTION
------                              -----------

3.1        Second Amended and Restated Certificate of Incorporation of the
           Registrant filed with State of Delaware on October 1, 1996 (1)
3.2        Amended and Restated Bylaws of the Registrant (1)
3.3        Form of Certificate of Designation (3)
4          Form of Certificate representing Common Stock (1)
4.1        Form of Warrant Agreement (2)
4.3        Form of Warrant Certificate (1)
4.4        Loan and Security Agreement, dated as of April 20, 1998, executed by
           and between Registrant and NationsCredit Commercial Corporation (4)
4.5        Form of Class A Stock Purchase Warrant Certificate (1)
4.7        Form of Class C Stock Purchase Warrant Certificate (1)
4.8        Form of Stock Option / Restricted Stock Grant for grants made
           pursuant to either or both the CRAGAR Industries, Inc.
           1996 Non-Employee Directors' Stock Option Plan and the CRAGAR
           Industries, Inc. 1996 Stock Option and Restricted Stock Plan (1)
4.9        Form of Representative's Warrant Agreement, dated December 18, 1996,
           by and between the Registrant and Dickinson & Co. (2)
10.1       CRAGAR Industries, Inc. 1996 Non-Employee Directors' Stock Option
           Plan (1)
10.1(a)    First Amendment to the CRAGAR Industries, Inc. 1996 Non-Employee
           Directors' Stock Option Plan, dated October 1, 1996 (1)
10.2       CRAGAR Industries, Inc. 1996 Stock Option and Restricted Stock Plan
           (1)
10.2(a)    First Amendment to the CRAGAR Industries, Inc. 1996 Stock Option and
           Restricted Stock Plan, dated October 1, 1996 (1)
10.3       Commercial Lease, dated February 5, 1993, executed by and between
           Registrant and Principal Mutual Life Insurance Company (1)
10.4       Form of Promissory Note of the Registrant, dated March 16, 1999 (5)
10.5       Form of Security Agreement underlying Promissory Note of the
           Registrant, dated March 16, 1999 (5)
10.6       Agreement of Purchase and Sale of Assets between the Registrant and
           Weld Racing, Inc. dated September 30, 1999 (6)

                                       17
<PAGE>

10.7       Exclusive Field of Use License Agreement between the Registrant and
           Weld Racing, Inc. dated September 30, 1999 (6)
10.8       Agreement of Purchase and Sale of Assets between the Registrant and
           Carlisle Tire and Wheel Co. dated October 15, 1999 (6)
10.9       Exclusive Field of Use License Agreement between the Registrant and
           Carlisle Tire and Wheel Co. dated October 15, 1999 (6)
10.10      Form of Promissory Note of the Registrant, dated December 22, 1999
           (7)
10.11      Form of Security Agreement underlying Promissory Note of Registrant,
           dated December 22, 1999 (7)
10.12      Stock Option (8)
10.13      Sales Agreement (8)
10.14      Amendment to Sales Agreement (8)
10.15      Form of Promissory Note of the Registrant, dated August 1, 2000 (9)
10.16      Form of Security Agreement underlying Promissory Note of the
           Registrant, dated August 1, 2000 (9)
10.17      Form of Security Agreement (Pledge) underlying Promissory Note of the
           Registrant, dated August 1, 2000 (9)
10.18      Exclusive Field of Use License Agreement between the Registrant and
           Performance Wheel Outlet, Inc. dated September 1, 2000 (9)
10.19      Form of Promissory Note of the Registrant, dated March 1, 2001 (9)
10.20      Form of Restricted Stock Agreement with Trademarketing Resources,
           Inc. (10)
10.21      Licensing Representation Agreement with Trademarketing Resources,
           Inc. (11)
11         Schedule of Computation of earnings per Share
21         List of Subsidiaries of the Registrant (1)
---------------

(1)        Incorporated by reference to Cragar's Registration on Form SB-2 (No.
           333-13415)
(2)        Incorporated by reference to Cragar's Annual Report on Form 10-K for
           the fiscal year ended December 31, 1996 (No. 1-12559)
(3)        Incorporated by reference to Cragar's Current Report of Form 8-K,
           filed January 23, 1999 (no. 1-12559)
(4)        Incorporated by reference to Cragar's Quarterly Report on Form 10QSB,
           filed on May 15, 1998 (no. 1-12559)
(5)        Incorporated by reference to Cragar's Quarterly Report on Form 10QSB,
           filed on May 12, 1999 (no. 1-12559)
(6)        Incorporated by reference to Cragar's Quarterly Report on Form 10QSB,
           filed on November 15, 1999 (no. 1-12559)
(7)        Incorporated by reference to Cragar's Annual Report on Form 10-K for
           the fiscal year ended December 31, 1999 (No. 1-12559)
(8)        Incorporated by reference to Cragar's Quarterly Report on Form 10QSB,
           filed on August 15, 2000 (no. 1-12559)
(9)        Incorporated by reference to Cragar's Annual Report on Form 10-K for
           the fiscal year ended December 31, 2000 (No. 1-12559)
(10)       Incorporated by reference to Cragar's Registration Statement on Form
           S-8 filed on May 22, 2001 (No. 333-61414)
(11)       Incorporated by reference to Cragar's Quarterly Report on Form 10QSB,
           filed on August 14, 2001 (no. 1-12559)

                                       18
<PAGE>

                                   SIGNATURES
                                   ----------

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                             CRAGAR INDUSTRIES, INC.


Dated:  May 14, 2002             By: /s/ Michael L. Hartzmark
        -------------               ------------------------------
                                    Michael L. Hartzmark
                                    Chairman, CEO and Treasurer

Dated:  May 14, 2002             By: /s/ Richard P. Franke
        -------------               ------------------------------
                                    Richard P. Franke
                                    Chief Financial Officer
                                    (Principal Financial and Accounting Officer)






















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