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                       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, 2003


[_]         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 of        (I.R.S. Employer Identification No.)
      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)

     Number of shares of common stock, $.01 par value, outstanding as of
March 31, 2003: 3,839,429.

     Transitional small business disclosure format. Yes [ ] No [X]

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<PAGE>

                             CRAGAR INDUSTRIES, INC.
                            Condensed Balance Sheets
                      March 31, 2003 and December 31, 2002
<TABLE><CAPTION>
                                                                               March 31,            December 31,
                                                                                 2003                   2002
                                                                             ------------           ------------
                                                                              (unaudited)
<S>                                                                          <C>                    <C>
                                     ASSETS
Current Assets
       Cash and cash equivalents                                             $    100,280           $     18,616
       Trade receivables                                                          121,733                237,902
       Investments                                                                   --                   78,489
       Other current assets                                                        19,147                 40,310
                                                                             ------------           ------------
             Total current assets                                                 241,160                375,317
Investments                                                                        78,489                   --
Other Assets                                                                         --                   17,360
                                                                             ------------           ------------

Total Assets                                                                 $    319,649           $    392,677
                                                                             ============           ============

                     LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
       Accounts payable                                                      $     62,096           $    110,968
       Notes payable - related parties                                          1,265,500              1,265,500
       Accrued interest                                                             9,219                  9,219
       Accrued expenses                                                            11,164                  3,681
                                                                             ------------           ------------
             Total current liabilities                                          1,347,979              1,389,368
                                                                             ------------           ------------

Total Liabilities                                                               1,347,979              1,389,368
                                                                             ------------           ------------

Stockholders' Deficit
       Common stock, par value $0.01; 10,000,000 shares authorized,
             3,839,429 shares issued and outstanding                               38,394                 38,394
       Additional paid-in capital                                              15,705,799             15,705,799
       Accumulated deficit                                                    (16,772,523)           (16,740,884)
                                                                             ------------           ------------
             Total stockholders' deficit                                       (1,028,330)              (996,691)
                                                                             ------------           ------------

Total Liabilities and Stockholders' Deficit                                  $    319,649           $    392,677
                                                                             ============           ============
</TABLE>

See accompanying notes to condensed unaudited financial statements

                                        2
<PAGE>

                                     CRAGAR INDUSTRIES, INC.
                               Condensed Statements of Operations
                           Three Months Ended March 31, 2003 and 2002
                                           (unaudited)

<TABLE><CAPTION>
                                                                                    Three Months Ended
                                                                                          March 31,
                                                                             -----------------------------------
                                                                                 2003                   2002
                                                                             ------------           ------------
<S>                                                                          <C>                    <C>
Royalty revenues                                                             $    159,121           $    131,586

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

                     Gross profit                                                 159,121                131,586

Selling, general and administrative expenses                                      158,521                154,187
                                                                             ------------           ------------

                     Income (loss) from operations                                    600                (22,601)
                                                                             ------------           ------------

Non-operating income (expense)
           Interest expense                                                       (33,601)               (27,138)
           Gain on disposition of assets                                             --                   35,513
           Litigation settlement                                                     --                  300,000
           Other                                                                    1,362                  3,275
                                                                             ------------           ------------
                     Total non-operating income (expense), net                    (32,239)               311,650
                                                                             ------------           ------------

Net earnings (loss) before income taxes                                           (31,639)               289,049

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

Net earnings (loss)                                                          $    (31,639)          $    289,049
                                                                             ============           ============

Basic earnings (loss) per common share                                       $      (0.01)          $       0.07
                                                                             ============           ============

Diluted earnings (loss) per common share                                     $      (0.01)          $       0.07
                                                                             ============           ============

Basic weighted average shares outstanding                                       3,839,429              3,897,611
                                                                             ============           ============

Diluted weighted average shares outstanding                                     3,839,429              3,901,900
                                                                             ============           ============
</TABLE>

See accompanying notes to condensed unaudited financial statements

                                        3
<PAGE>

                             CRAGAR INDUSTRIES, INC.
                       Condensed Statements of Cash Flows
                   Three Months Ended March 31, 2003 and 2002
                                   (unaudited)
<TABLE><CAPTION>
                                                                                     Three Months Ended
                                                                                          March 31,
                                                                             -----------------------------------
                                                                                 2003                   2002
                                                                             ------------           ------------
<S>                                                                          <C>                    <C>
Cash Flows from operating activities
      Net earnings (loss)                                                    $    (31,639)          $    289,049
      Adjustments to reconcile net earnings (loss) to net cash flow
         in operating activities:
              Increase (decrease) in cash resulting from changes in:
                   Non-trade receivables                                          116,169               (149,193)
                   Other current assets                                            21,163                 17,055
                   Other assets                                                    17,360                 30,000
                   Accounts payable and accrued expenses                          (41,389)              (111,713)
                   Accrued interest                                                  --                    2,005
                                                                             ------------           ------------
                        Net cash provided by operating activities                 160,153                 77,203
                                                                             ------------           ------------

                        Net increase in cash and cash equivalents                 160,153                 77,203

Cash and cash equivalents at beginning of period                                   18,616                 33,216
                                                                             ------------           ------------

Cash and cash equivalents at end of period                                   $    178,769           $    110,419
                                                                             ============           ============

Supplemental disclosure of cash flow information:
      Cash paid for interest                                                 $     33,601           $     25,133
                                                                             ============           ============
</TABLE>

See accompanying notes to condensed unaudited financial statements



















                                       4
<PAGE>

                             CRAGAR INDUSTRIES, INC.
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                        THREE MONTHS ENDED MARCH 31, 2003
                                   (Unaudited)

      1.    Summary of Significant Accounting Policies

            Basis of Presentation:
            The interim financial data as of and for the three months ended
            March 31, 2003, and 2002 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 results of
            operations for the three month period ended March 31, 2003 may not
            be indicative of the results for the entire year.

            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 2002 financial statements has been qualified
for a going concern.

                                  INTRODUCTION

            In 2001, 2000, and 1999, we entered into Exclusive Field of Use
License Agreements and amendments to the agreements with Performance Wheel
Outlet, Inc., Weld Racing, Inc., and Carlisle Tire and Wheel Co., who, together,
manufacture, market, sell, or distribute the products related to our one-piece
wheel business, wrought wheel business, and steel outer rim wheel business. We
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 business strategy, we also 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 to 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 to implement, subject to our
approval, a marketing strategy to broaden the use of our intellectual property,
including the CRAGAR brand name. Under the Agreement, TRI acted as our exclusive
agent with respect to coordinating advertising and promotion of all of our
products, services, and premiums across all media. TRI also oversaw and
coordinated 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 directly provide us services directly under the
agreement. On April 2, 2002 they also received an option to purchase an
additional 58,182 shares of our common stock. On April 1, 2003, we terminated
TRI's contract with an addendum that enables TRI to work with us on specified
projects for a period ending December 31, 2003. There can be no assurance that
we will be successful developing or implementing a marketing strategy without
TRI or that we will generate any material sales of products utilizing our
intellectual property.

            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. in which we granted an

                                       6
<PAGE>

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. During the fourth quarter of fiscal year 2002, we entered into a
licensing agreement with Georgia Marketing and Promotion, Inc. in which we
granted a non-exclusive license in specified geographic territories for the
manufacture, marketing, and sale of replacement wheels for die-cast replicas
from 1:10th to 1:43rd scales and 1:24th and 1:43rd scale replicas with CRAGAR
wheels.

RECENT DEVELOPMENTS

            On April 1, 2003, the Licensing Representation Agreement with TRI
was terminated. We have agreed to work together with TRI on specified projects
for a period ending December 31, 2003.

            During the first quarter 2003, Performance was in breach of its
Exclusive Field of Use and Licensing Agreement. The breach related to
Performance's failure to meet or exceed its minimum guaranteed payments for the
fiscal year ended December 31, 2002. We are working with Performance to modify
the Agreement in an attempt to cure the default and reduce the likelihood of
future defaults.

RESULTS OF OPERATIONS (UNAUDITED)

            The following table sets forth various items as a percentage of net
sales revenue for the three month periods ended March 31, 2003 and 2002:

                                                   THREE MONTHS ENDED MARCH 31,
                                                      2003             2002
                                                   ----------       ----------
            Total revenues                            100.0 %          100.0 %
            Cost of goods sold                           00.0             00.0
                                                   ----------       ----------
            Gross profit                                100.0            100.0
            SG&A                                         99.6            117.2
                                                   ----------       ----------
            Income (loss) from operations                  .4            (17.2)
            Non-operating income (expense), net         (20.3)           236.8
            Income taxes                                 --               --
                                                   ----------       ----------
            Net earnings (losses)                       (19.9%)          219.6%
                                                   ==========       ==========

COMPARISON OF QUARTER ENDED MARCH 31, 2003 AND QUARTER ENDED MARCH 31, 2002

            REVENUE. Total revenues consist of royalties on the sale of licenced
products. Total revenues for the quarter ended March 31, 2003 and 2002, were
$159,121 compared to $131,586, which represents a 20.9% increase in total
revenue.

            GROSS PROFIT. Gross profit is determined by subtracting the cost of
goods sold from total revenue. Since our total revenue is derived from
royalties, we did not realize any cost of goods sold. Therefore, Gross Profit
for the fiscal quarter ended March 31, 2003 was $159,121 compared to $131,586
for the fiscal quarter ended March 31, 2002.

                                       7
<PAGE>

            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, 2003 were $158,521
compared to $154,187 for the quarter ended March 31, 2002, a 2.8% increase.

            NON-OPERATING INCOME, NET. Non-operating expenses, net, for the
fiscal quarter ended March 31, 2003 were $32,239 compared to non-operating
income, net of $311,650 for the same fiscal quarter ended March 31, 2002. This
decrease of $343,889, was attributable primarily to the settlement of the Titan
International Lawsuit in March 2002.

            INCOME TAXES.  Due to carry-forward losses from previous years, we
had no income tax provision in the first fiscal quarters of 2003 or 2002.

            NET EARNINGS(LOSSES); EARNINGS (LOSSES) PER SHARE. Net earnings for
the fiscal quarter ended March 31, 2002 were $289,049 compared to net loss of
$31,639 for the fiscal quarter ended March 31, 2003. Basic earnings per share
for the fiscal quarter ended March 31, 2002 were $0.07 compared to basic loss
per share of $0.01 for the fiscal quarter ended March 31, 2003. See Exhibit 11
to this Quarterly Report on Form 10-QSB.

LIQUIDITY AND CAPITAL RESOURCES

            During the third quarter of fiscal year 2000, we paid off and
terminated the $8.5 million credit facility with Nations Credit Commercial
Funding Corporation. Two investors provided payoff proceeds totaling $1,200,000
at an interest rate of prime plus 2.25%. 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 prime plus 2.25%. This loan is secured
by substantially all of our assets and will expire in April 2004. During the
fiscal year ended December 31, 2002 we paid off $40,000 of the loan balance and
reduced the outstanding indebtness associated with the loans to $1,265,500.

            At December 31, 2002, we had an accumulated deficit of $16,740,884.
For the fiscal quarter ended March 31, 2003 our operating activities provided
$81,664 of cash, which was primarily attributable to our receiving the final
installment of the settlement proceeds from Titan International.

            We do not anticipate any major capital budget expenditures in fiscal
year 2003. 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 1 - "Business -
Special Considerations."

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 by 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.

                                       8
<PAGE>

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 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 up through fiscal year ended December 31,
1998. For the fiscal year ended December 31, 2002, we reported net earnings of
$461,330. In addition, for the fiscal years ended December 31, 2000 and December
31, 1999, we reported net earnings of $1,075,029 and $54,678, respectively. For
the fiscal year ended December 31, 2001, we reported a net loss of $1,357,031.
As of December 31, 2002, we had an accumulated deficit of $16,740,884 and a
total stockholders' deficit of $996,691. There can be no assurance that we will
be profitable in the future.

THE INDEPENDENT AUDITOR'S REPORT ON OUR COMPANY'S 2002 FINANCIAL STATEMENTS HAS
BEEN QUALIFIED AS 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 2002 financial
statements has been qualified as a going concern.

WE ARE DEPENDENT ON THIRD PARTIES TO GENERATE ROYALTIES.

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

            During the first quarter 2003, Performance breached its Exclusive
Field of Use and Licensing Agreement. The breach related to Performance's
failure to meet its minimum guaranteed payments for the fiscal year ended
December 31, 2002. We are working with Performance to modify the Agreement to
cure the default and reduce the likelihood of future defaults.

                                       9
<PAGE>

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

            If any of our licensing partners terminate their license agreement
or we terminate their 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
2002. However, we extended the term of the loan to August 1, 2003. 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 will expire in April 2004. 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 own 485,000 shares of Wrenchead, Inc.'s common stock. Of this
amount, we have assigned 208,108 shares to various parties. Most of the shares
are assigned to Limited Partners 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, Inc.'s
common stock owned by our company and to pay for the costs of forming and
administering the partnership. We are the general partner of Cragar Investment
Limited Partnership. During the first quarter of fiscal year 2002, we acquired
and assigned to the Cragar Investment Limited Partnership 918,750 shares of
Wrenchead, Inc. 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, Inc. of $1,229,029 as a result of the reduction in the
estimated market value of Wrenchead, Inc.'s common stock that we have not
assigned. There can be no assurance that the investment in Wrenchead, Inc. will
be profitable in the future.

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

            The royalty structure with two of our licensing partners provides
for a decrease in percentage of net sales that determines our royalty payments
as net sales increase above certain levels. As a consequence, the benefits of a
substantial increase in sales sold by those licensing partners will be limited
by the negotiated royalty fee structure.

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

            Our business strategy will attempt 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

                                       10
<PAGE>

revenue. There can be no assurance, however, that 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 all royalty payments we receive pursuant to our
licensing agreements for working capital and to 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 royalties distribution 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 historically accounted for a
substantial portion of our revenue in each fiscal year. These customers
currently do business with our licensees. We are dependent on royalties from
sales of CRAGAR products by our licensing partners to customers including our
previous customers. 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. Our royalties are
based on our licensing partners ability to compete on product selection (which
includes style and vehicle fit), timely availability of product for delivery,
quality, design innovation, price, payment terms, and service. 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.

GENERAL ECONOMIC FACTORS MAY ADVERSELY AFFECT OUR BUSINESS.

            The automotive aftermarket is directly impacted by several 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 business strategy, we will continue to
consider alliances with other companies that could complement our 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

                                       11
<PAGE>

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, Inc. 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 operating results traditionally have 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.

WE ARE SUBJECT TO CHANGING CUSTOMER TRENDS.

            Our success depends, 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.

            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

                                       12
<PAGE>

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.

OUR EXISTING STOCKHOLDERS MAY EFFECTIVELY CONTROL OUR COMPANY.

            Our directors, officers, and principal stockholders beneficially own
approximately 38.4% 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. As of January 30, 2001, there were no shares of 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, 2002, more than 18.0% of our common
stock. The successful implementation of our business strategies depend, in
significant part, on the hiring of qualified management and other personnel by
our licensing partners.

                                       13
<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.

            There are currently no 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.

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)
4.5         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

                                       14
<PAGE>

            the CRAGAR Industries, Inc. 1996 Non-Employee Directors' Stock
            Option Plan and the CRAGAR Industries, Inc. 1996 Stock Option and
            Restricted Stock Plan (1)
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)
10.4        Form of Promissory Note of the Registrant, dated March 16, 1999 (4)
10.5        Form of Security Agreement underlying Promissory Note of the
            Registrant, dated March 16, 1999 (4)
10.6        Agreement of Purchase and Sale of Assets between the Registrant and
            Weld Racing, Inc. dated September 30, 1999 (5)
10.7        Exclusive Field of Use License Agreement between the Registrant and
            Weld Racing, Inc. dated September 30, 1999 (5)
10.8        Agreement of Purchase and Sale of Assets between the Registrant and
            Carlisle Tire and Wheel Co. dated October 15, 1999 (5)
10.9        Exclusive Field of Use License Agreement between the Registrant and
            Carlisle Tire and Wheel Co. dated October 15, 1999 (5)
10.10       Form of Promissory Note of the Registrant, dated December 22, 1999
            (6)
10.11       Form of Security Agreement underlying Promissory Note of Registrant,
            dated December 22, 1999 (6)
10.12       Stock Option (7)
10.13       Sales Agreement (7)
10.14       Amendment to Sales Agreement (7)
10.15       Form of Promissory Note of the Registrant, dated August 1, 2000 (8)
10.16       Form of Security Agreement underlying Promissory Note of the
            Registrant, dated August 1, 2000 (8)
10.17       Form of Security Agreement (Pledge) underlying Promissory Note of
            the Registrant, dated August 1, 2000 (8)
10.18       Exclusive Field of Use License Agreement between the Registrant and
            Performance Wheel Outlet, Inc. dated September 1, 2000 (8)
10.19       Form of Promissory Note of the Registrant, dated March 1, 2001 (8)
10.20       Form of Restricted Stock Agreement with Trademarketing Resources,
            Inc. (9)
10.21       Licensing Representation Agreement with Trademarketing Resources,
            Inc. (10)
11          Schedule of Computation of Earnings per Share
21          List of Subsidiaries of the Registrant (1)
99.1        Certification Pursuant to 18 U.S.C Section 1350
99.2        Certification Pursuant to 18 U.S.C Section 1350

---------------
     (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
            10-QSB, filed on May 12, 1999 (no. 1-12559)
     (5)    Incorporated by reference to Cragar's Quarterly Report on Form
            10-QSB, filed on November 15, 1999 (no. 1-12559)
     (6)    Incorporated by reference to Cragar's Annual Report on Form 10-K for
            the fiscal

                                       15
<PAGE>

            year ended December 31, 1999 (No. 1-12559)
     (7)    Incorporated by reference to Cragar's Quarterly Report on Form
            10-QSB, filed on August 15, 2000 (no. 1-12559)
     (8)    Incorporated by reference to Cragar's Annual Report on Form 10-K for
            the fiscal year ended December 31, 2000 (No. 1-12559)
     (9)    Incorporated by reference to Cragar's Registration Statement on Form
            S-8 filed on May 22, 2001 (No. 333-61414)
     (10)   Incorporated by reference to Cragar's Quarterly Report on Form
            10-QSB, filed on August 14, 2001 (no. 1-12559)





                                   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 15, 2003                      By: /s/ Michael L. Hartzmark
        ----------------                      ---------------------------
                                              Michael L. Hartzmark
                                              Chairman, CEO and Treasurer

Dated:  May 15, 2003                      By: /s/ Richard P. Franke
        ----------------                      ---------------------------
                                              Richard P. Franke
                                              Chief Financial Officer
                                              (Principal Financial and
                                              Accounting Officer)








                                       16
<PAGE>

                                  CERTIFICATION

            I, Michael L. Hartzmark, certify that:

            1. I have reviewed this quarterly report on Form 10-QSB of Cragar
Industries, Inc.;

            2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
quarterly report;

            3. Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations, and cash flows
of the registrant as of, and for, the periods presented in this quarterly
report;

            4. The registrant's other certifying officers and I are responsible
for establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

                        a) Designed such disclosure controls and procedures to
            ensure that material information relating to the registrant,
            including its consolidated subsidiaries, is made known to us by
            others within those entities, particularly during the period in
            which this quarterly report is being prepared;

                        b) Evaluated the effectiveness of the registrant's
            disclosure controls and procedures as of a date within 90 days prior
            to the filing date of this quarterly report (the "Evaluation Date");
            and

                        c) Presented in this quarterly report our conclusions
            about the effectiveness of the disclosure controls and procedures
            based on our evaluation as of the Evaluation Date;

            5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the audit
committee of the registrant's board of directors (or persons performing the
equivalent functions):

                        a) All significant deficiencies in the design or
            operation of internal controls which could adversely affect the
            registrant's ability to record, process, summarize, and report
            financial data and have identified for the registrant's auditors any
            material weaknesses in internal controls; and

                        b) Any fraud, whether or not material, that involves
            management or other employees who have a significant role in the
            registrant's internal controls; and

            6. The registrant's other certifying officers and I have indicated
in this quarterly report whether there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date:  May 15, 2003                         /s/ Michael L. Hartzmark
                                            -----------------------------------
                                            Michael L. Hartzmark
                                            Chief Executive Officer

                                       17
<PAGE>

                                  CERTIFICATION

            I, Richard P. Franke, certify that:

            1. I have reviewed this quarterly report on Form 10-QSB of Cragar
Industries, Inc.;

            2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
quarterly report;

            3. Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations, and cash flows
of the registrant as of, and for, the periods presented in this quarterly
report;

            4. The registrant's other certifying officers and I are responsible
for establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

                        a) Designed such disclosure controls and procedures to
            ensure that material information relating to the registrant,
            including its consolidated subsidiaries, is made known to us by
            others within those entities, particularly during the period in
            which this quarterly report is being prepared;

                        b) Evaluated the effectiveness of the registrant's
            disclosure controls and procedures as of a date within 90 days prior
            to the filing date of this quarterly report (the "Evaluation Date");
            and

                        c) Presented in this quarterly report our conclusions
            about the effectiveness of the disclosure controls and procedures
            based on our evaluation as of the Evaluation Date;

            5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the audit
committee of the registrant's board of directors (or persons performing the
equivalent functions):

                        a) All significant deficiencies in the design or
            operation of internal controls which could adversely affect the
            registrant's ability to record, process, summarize, and report
            financial data and have identified for the registrant's auditors any
            material weaknesses in internal controls; and

                        b) Any fraud, whether or not material, that involves
            management or other employees who have a significant role in the
            registrant's internal controls; and

            6. The registrant's other certifying officers and I have indicated
in this quarterly report whether there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date:  May 15, 2003                         /s/ Richard P. Franke
                                            -----------------------------------
                                            Richard P. Franke
                                            Chief Financial Officer

                                       18