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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

The Registrant has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934, as amended (“Exchange Act”) during the preceding 12 months and has been subject to such filing requirements for the past 90 days.

The Registrant is not an accelerated filer as defined in Rule 12-b2 of the Exchange Act.

On May 14, 2003 the latest practicable date, there were 2,728,354 shares of Common Stock outstanding.

Exhibit Index—Page 10

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GIANT GROUP, LTD.

INDEX

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GIANT GROUP, LTD.
STATEMENTS OF OPERATIONS
for the three-month periods ended March 31, 2002 and 2003
(Unaudited)
(Dollars in thousands, except per share amounts)

The accompanying Notes are an integral part of these Financial Statements.

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GIANT GROUP, LTD.
BALANCE SHEETS
at December 31, 2002 (Audited) and March 31, 2003 (Unaudited)
(Dollars in thousands, except per share amounts)

The accompanying Notes are an integral part of these Financial Statements.

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GIANT GROUP, LTD.
STATEMENTS OF CASH FLOW
 for the three-month periods ended March 31, 2002 and 2003
 (Unaudited)
 (Dollars  in thousands, except per share amounts)

The accompanying Notes are an integral part of these Financial Statements.

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GIANT GROUP, LTD.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
(Dollars in thousands, except per share amounts)

FORWARD-LOOKING STATEMENTS

          GIANT GROUP, LTD.’s (“Company”) Form 10-Q for the first quarter ended March 31, 2003 contains forward-looking statements concerning a number of risks and uncertainties involving the Company. Forward-looking statements contain strategies, plans or intentions and may be identified by words such as “believes”, “expects”, “predicts” or “could”. Forward-looking statements are also dependent on assumptions and estimates made that may not be correct.

          Many factors outside the control of the Company may cause actual results to differ materially from those discussed in forward-looking statements. These factors include, but are not limited to  (1) availability of adequate working capital, (2) changing market value of the Company’s investments, (3) outcome of litigation, (4) development and implementation of a business plan and (5) changes in federal or state tax laws.

          In addition, many factors involving Checkers Drive-In Restaurants, Inc. (“Checkers”), the Company’s 8.0% equity investment, may cause actual results to differ materially from those discussed in the Company’s forward-looking statements. These factors include, but are not limited to  (1) heavy and sustained discounts, advertising and promotion by numerous, well established competitors who have substantially greater financial resources than Checkers and (2) the need to continue improvement in same store restaurant sales, which is dependent on the success of advertising and promotional efforts and the success of operating and training initiatives, to achieve improved profitability. See Checkers Annual Report on Form 10-K for the fiscal year ended December 30, 2002, as well as other periodic reports filed with the Securities and Exchange Commission (“SEC”). 

          In addition, risks and uncertainties are also described in the Company’s Form 10-K and other periodic reports filed with the SEC.

1.        Basis of Presentation

          The accompanying unaudited financial statements have been prepared in accordance with Form 10-Q instructions and in the opinion of management contain all adjustments necessary to present fairly the financial position as of March 31, 2003 and the results of operations and cash flows for the three-month periods ended March 31, 2002 and 2003. These results have been determined on the basis of generally accepted accounting principles and practices accepted in the United States of America applied consistently with those used in the preparation of the Company’s 2002 Annual Report on Form 10-K (“2002 Annual Report”) and are supported by management’s use of assumptions, judgments and estimates. Certain 2002 amounts have been reclassified to conform to the 2003 presentation. 

          Operating results for the three-month period ended March 31, 2003 are not necessarily indicative of the results that may be expected for the full year.  It is suggested that the accompanying unaudited financial statements be read in conjunction with the Financial Statements and Notes in the 2002 Annual Report.

          For the two weeks prior to December 31, 2002 and the three months ended March 31, 2003, operating expenses are being paid through the margin of marketable securities and from time-to-time, the sale of these securities. At December 31, 2002 and March 31, 2003, the margin availability was $472 and $569 and net borrowings were $12 and $92, respectively. Net borrowings is included in accounts payable on the Balance Sheet.

          Management believes the current dollar amount that can be borrowed would not cover GIANT’s operating expenses for the current year. Management expects that marketable securities will have to be sold to continue to fund operations, unless an additional source of cash flow becomes available to the Company.  Management believes that the proceeds from the sale of the Company’s marketable securities will be sufficient to fund GIANT’s operations for the foreseeable future.

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GIANT GROUP, LTD.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
(Dollars in thousands, except per share amounts)

          Giant meets the technical requirements of an Investment Company under the Investment Company Act of 1940. The Company is not engaged in the business of investing, re-investing or trading of securities. Accordingly, the Company is exploring alternatives so as not to fall under the Investment Company Act of 1940. The Board of Directors continues to seek to maximize shareholder value, which could include a liquidation of the Company, a merger with another company, reorganization or other extraordinary transaction.

          In November 2002, the FASB’s Emerging Issues Task Force (EITF) released Issue No. 02-16, “Accounting by a Reseller for Cash Consideration Received from a Vendor.” The consensus reached on this issue was that cash consideration received from a vendor is presumed to be a reduction of the cost of merchandise and should be recorded as a reduction of cost of goods sold unless the consideration is for either (1) payment for assets or services and therefore revenue, or (2) a reimbursement of costs incurred to advertise the vendor’s products, and therefore, a reduction of advertising expense. Management does not expect the adoption of Issue No. 02-16 to have a material impact on the current period’s financial statements.

          Pro forma Diluted Earnings per Share—If the compensation cost for all options granted to employees and Directors had been determined consistent with SFAS No. 123, as amended by SFAS No. 148, the Company’s net loss and loss per share for the quarter would have been increased to the following pro forma amounts:

          For purposes of the pro forma disclosures assuming the use of the fair value method of accounting, the fair value of each option is estimated on the date of grant using the Black-Scholes option pricing model with an expected dividend yield of zero percent based on the Company’s history of no dividends paid to stockholders with the following weighted-average assumptions:

          This option valuation model requires input of highly subjective assumptions. The Company’s employee and Director stock options have characteristics significantly different from those of traded options and changes in the subjective input assumptions can materially affect the fair value estimate. Therefore, in management’s opinion, this existing model does not necessarily provide a reliable single measure of the fair value of its employee and Director stock options.

2.        Commitments and Contingencies

          The Company is involved in three legal proceedings which have been described in the Company’s 2002 Annual Report on Form 10-K.  Material changes to these legal proceedings during the three-months ended March 31, 2003 are described in the following paragraphs.

          GIANT GROUP, LTD. vs. L.H. Friend, Gregory Presson and Robert Campbell

          The Motion filed by L.H. Friend, Gregory Presson and Robert Campbell ("Defendants") to Transfer Venue was denied by the Los Angeles Superior Court-West District ("Court") on April 22, 2003. Counsel has issued Form and Special interrogatories and requests for production of documents to the Defendants.

          On May 9, 2003, a status conference was held. The Defendants have until May 22, 2003 to file their responsive pleadings to the Company's complaint. GIANT's counsel filed a Motion Pro Hac Vice to allow the Company's New York attorneys to represent GIANT in California. The Court ordered a hearing to take place on June 19, 2003.

          Management is unable to predict the outcome of this legal proceeding.

3.        Comprehensive Income (Loss)

          The changes in components of comprehensive income (loss) for the three months ended March 31, 2002 and 2003 are as follows:

          Management believes no income taxes will be paid on the unrealized gains on marketable securities due to the Company’s Federal and State net operating loss carry forwards. 

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Critical Accounting Policies 

          Management’s discussion and analysis of financial condition and results of operations discusses GIANT’s Financial Statements, which have been prep