----

----

| Delaware                                                       | (a)    | 75-1277589                           |
|----------------------------------------------------------------|--------|--------------------------------------|
| (State or other jurisdiction of incorporation or organization) |   | (I.R.S. Employer Identification No.) |

| Yes  o |   | No x |
|------------------|--------|-----------|

| Yes  o |   | No x |
|------------------|--------|-----------|

| Yes  x |   | No o |
|------------------|--------|-----------|

| Yes  o |   | No o |
|------------------|--------|-----------|

| Large accelerated filer  o                                             | Accelerated filer  o |
|----------------------------------------------------------------------------------|--------------------------------|
| Non-accelerated filer o  (Do not check if a smaller reporting company) | Smaller reporting company x    |

| Yes  o |   | No x |
|------------------|--------|------|

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TABLE OF CONTENTS

|       |     |                                                                                                               | PAGE      |
|------------|----------|--------------------------------------------------------------------------------------------------------------------|-----------|
| PART I     |     |                                                                                                               |   2  |
|       | Item 1.  | BUSINESS                                                                                                           |   2  |
|       | Item 1A. | RISK FACTORS                                                                                                       |   5  |
|       | Item 1B. | UNRESOLVED STAFF COMMENTS                                                                                          |   9  |
|       | Item 2.  | PROPERTIES                                                                                                         |   10 |
|       | Item 3.  | LEGAL PROCEEDINGS                                                                                                  |   10 |
|       | Item 4.  | (REMOVED AND RESERVED)                                                                                             |   10 |
| PART II    |     |                                                                                                               |   11 |
|       | Item 5.  | MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |   11 |
|       | Item 7.  | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS                        |   12 |
|       | Item 8.  | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                                                        |   21 |
|       | Item 9.  | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE                               |   48 |
|       | Item 9A. | CONTROLS AND PROCEDURES                                                                                            |   48 |
|       | Item 9B. | OTHER INFORMATION                                                                                                  |   49 |
| PART III   |     |                                                                                                               |   50 |
|       | Item 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE                                                             |   50 |
|       | Item 11. | EXECUTIVE COMPENSATION                                                                                             |   50 |
|       | Item 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS                     |   50 |
|       | Item 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE                                          |   51 |
|       | Item 14. | PRINCIPAL ACCOUNTING FEES AND SERVICES                                                                             |   51 |
| PART IV    |     |                                                                                                               |   52 |
|       | Item 15. | EXHIBITS, FINANCIAL STATEMENT SCHEDULES                                                                            |   52 |
| SIGNATURES |     |                                                                                                               |   52 |
| EXHIBITS   |     |                                                                                                               |   54 |

----

index

PART I

Item 1.  BUSINESS

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index

----

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Item 1A.  RISK FACTORS

----

index

| ·   | announcements concerning us or our competitors; |
|--------------------|-------------------------------------------------|

| ·   | quarterly variations in operating results; |
|--------------------|--------------------------------------------|

| ·   | introduction or abandonment of new technologies or products; |
|--------------------|--------------------------------------------------------------|

| ·   | divestiture or acquisition of business groups or units; |
|--------------------|---------------------------------------------------------|

| ·   | limited trading in our stock; |
|--------------------|-------------------------------|

| ·   | changes in product pricing policies; |
|--------------------|--------------------------------------|

| ·   | changes in governmental regulations affecting us; and |
|--------------------|-------------------------------------------------------|

| ·   | changes in earnings estimates by analysts or changes in accounting policies. |
|--------------------|------------------------------------------------------------------------------|

----

index

| ·   | make it more difficult for us to satisfy our outstanding debt obligations; |
|--------------------|----------------------------------------------------------------------------|

| ·   | require us to dedicate a substantial portion or even all of our cash flow from operations to payments on our debt, thereby reducing the amount of our cash flow available for working capital, capital expenditures, acquisitions, and other general corporate purposes; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | increase the amount of interest expense that we will have to pay because our borrowings are at variable rates of interest, which, if increased, will result in higher interest payments; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | limit our flexibility in planning for, or reacting to, changes in our business and the industries in which we compete; |
|--------------------|------------------------------------------------------------------------------------------------------------------------|

| ·   | place us at a competitive disadvantage compared to our competitors, some of which have lower debt service obligations and greater financial resources than we do; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | limit our ability to borrow additional funds; and |
|--------------------|---------------------------------------------------|

| ·   | increase our vulnerability to existing and future adverse economic and industry conditions. |
|--------------------|---------------------------------------------------------------------------------------------|

| ·   | incur additional debt; |
|--------------------|------------------------|

| ·   | make certain distributions, investments and other restricted payments; |
|--------------------|------------------------------------------------------------------------|

| ·   | limit the ability of restricted subsidiaries to make payments to us; |
|--------------------|----------------------------------------------------------------------|

| ·   | enter into transactions with affiliates; |
|--------------------|------------------------------------------|

| ·   | create certain liens; |
|--------------------|-----------------------|

| ·   | sell assets and if sold, use the proceeds at management’s discretion; and |
|--------------------|---------------------------------------------------------------------------------|

| ·   | consolidate, merge or sell all or substantially all of our assets. |
|--------------------|--------------------------------------------------------------------|

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Item 1B.  UNRESOLVED STAFF COMMENTS

----

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Item 2.  PROPERTIES

|  Location      |            |  Facility                            |  Business Unit                           |
|---------------------|-----------------|-------------------------------------------|-----------------------------------------------|
|                |            |                                      |                                          |
|  UNITED STATES |            |                                      |
|  California    |            |                                      |                                          |
|                |  Norwalk   |  Office, Manufacturing, Distribution |  Continental, Contico, Container         |
|                |  Chino     |  Distribution                        |  Continental, Glit, Wilen, Disco         |
|                |            |                                      |                                          |
|  Georgia       |            |                                      |                                          |
|                |  McDonough |  Office, Manufacturing, Distribution |  Glit, Wilen, Disco                      |
|                |  Wrens*    |  Office, Manufacturing, Distribution |  Glit                                    |
|                |            |                                      |                                          |
|  Missouri      |            |                                      |                                          |
|                |  Bridgeton |  Office, Manufacturing, Distribution |  Continental, Contico, Wilen, Corporate  |
|                |  Hazelwood |  Manufacturing                       |  Contico                                 |
|                |            |                                      |                                          |
|  CANADA        |            |                                      |
|  Ontario       |            |                                      |                                          |
|                |  Toronto   |  Office, Manufacturing               |  Gemtex                                  |
|                |            |  Distribution                        |  Gemtex, Continental, Glit, Wilen, Disco |

Item 3.  LEGAL PROCEEDINGS

Item 4.  (REMOVED AND RESERVED)

----

index

PART II

Item 5.  MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

| Period         |   | High   |   |   | Low    |   |
|----------------|--------|--------|--------|--------|--------|--------|
|           |   |   |   |   |   |   |
| 2009           |   |   |   |   |   |   |
| First Quarter  |   | $      | 1.25   |   |   | $      | 0.29 |   |
| Second Quarter |   |   | 1.38   |   |   |   | 0.35 |   |
| Third Quarter  |   |   | 1.75   |   |   |   | 0.84 |   |
| Fourth Quarter |   |   | 1.80   |   |   |   | 1.05 |   |
|           |   |   |   |   |   |   |   |   |
| 2010           |   |   |   |   |   |   |   |   |
| First Quarter  |   | $      | 2.00   |   |   | $      | 1.05 |   |
| Second Quarter |   |   | 1.80   |   |   |   | 1.16 |   |
| Third Quarter  |   |   | 1.74   |   |   |   | 0.45 |   |
| Fourth Quarter |   |   | 1.20   |   |   |   | 0.41 |   |
|           |   |   |   |   |   |   |   |   |

----

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Item 7.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

| -   | Increases in the cost of, or in some cases continuation of, the current price levels of thermoplastic resins, paper board packaging, latex binders, cotton and other raw materials. |
|---------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| -   | Our inability to reduce product costs, including manufacturing, sourcing, freight, and other product costs. |
|---------------|-------------------------------------------------------------------------------------------------------------|

| -   | Our inability to protect our intellectual property rights adequately. |
|---------------|-----------------------------------------------------------------------|

| -   | Our inability to expand our customer base and increase corresponding revenues. |
|---------------|--------------------------------------------------------------------------------|

| -   | Our inability to achieve product price increases, especially as they relate to potentially higher raw material costs. |
|---------------|-----------------------------------------------------------------------------------------------------------------------|

| -   | Unfavorable economic or business conditions, as well as our exposure to the credit risks of our customers and distributors, which may reduce our sales or make it difficult to collect accounts receivable. |
|---------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| -   | Competition from foreign and domestic competitors. |
|---------------|----------------------------------------------------|

| -   | The potential impact of rising interest rates on our debt outstanding under the PNC Credit Agreement. |
|---------------|-------------------------------------------------------------------------------------------------------|

| -   | Our inability to meet covenants associated with the PNC Credit Agreement. |
|---------------|---------------------------------------------------------------------------|

| -   | Our inability to access funds under our current loan agreements or refinance our loan agreements given the current instability in the credit markets. |
|---------------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

| -   | Our failure to identify, and promptly and effectively remediate, any material weaknesses or significant deficiencies in our internal control over financial reporting. |
|---------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| -   | The potential impact of rising costs for insurance for properties and various forms of liabilities. |
|---------------|-----------------------------------------------------------------------------------------------------|

| -   | The potential impact of changes in foreign currency exchange rates related to our Canadian operations. |
|---------------|--------------------------------------------------------------------------------------------------------|

| -   | Labor issues, including union activities that require an increase in production costs or lead to a strike, thus impairing production and decreasing sales, and labor relations issues at entities involved in our supply chain, including both suppliers and those involved in transportation and shipping. |
|---------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| -   | Changes in significant laws and government regulations affecting environmental compliance and income taxes. |
|---------------|-------------------------------------------------------------------------------------------------------------|

----

index

|                                                   |   | Years Ended December 31,                                     |   |
|--------------------------------------------------------|--------|--------------------------------------------------------------|--------|
|                                                   |   | 2010                                                         |   |   | 2009 |   |
|                                                   |   | (Amounts in Millions, except per share data and percentages) |   |
|                                                   |   | $                                                            |   |   | % to Sales |   |   | $ |   |   | % to Sales |   |
| Net sales                                              |   | $                                                            | 141.0  |   |   |   | 100.0 |   |   | $ | 141.2 |   |   |   | 100.0 |   |
| Cost of goods sold                                     |   |                                                         | 125.3  |   |   |   | 88.9 |   |   |   | 121.2 |   |   |   | 85.8 |   |
| Gross profit                                           |   |                                                         | 15.7   |   |   |   | 11.1 |   |   |   | 20.0 |   |   |   | 14.2 |   |
| Selling, general and administrative expenses           |   |                                                         | 20.8   |   |   |   | 14.7 |   |   |   | 25.9 |   |   |   | 18.3 |   |
| Impairment of long-lived assets                        |   |                                                         | -      |   |   |   | - |   |   |   | 0.1 |   |   |   | 0.1 |   |
| Severance, restructuring and related charges           |   |                                                         | 1.3    |   |   |   | 0.9 |   |   |   | 0.1 |   |   |   | 0.1 |   |
| (Gain) loss on sale or disposal of assets              |   |                                                         | (0.2   | ) |   |   | (0.2 | ) |   |   | 0.1 |   |   |   | 0.1 |   |
| Operating loss                                         |   |                                                         | (6.2   | ) |   |   | (4.4 | ) |   |   | (6.2 | ) |   |   | (4.4 | ) |
|                                                   |   |                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest expense                                       |   |                                                         | (1.6   | ) |   |   |   |   |   |   | (1.1 | ) |   |   |   |   |
| Other, net                                             |   |                                                         | 2.2    |   |   |   |   |   |   |   | 0.7 |   |   |   |   |   |
|                                                   |   |                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss before income tax benefit                         |   |                                                         | (5.6   | ) |   |   |   |   |   |   | (6.6 | ) |   |   |   |   |
| Income tax benefit                                     |   |                                                         | 0.5    |   |   |   |   |   |   |   | 0.5 |   |   |   |   |   |
|                                                   |   |                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss                                               |   | $                                                            | (5.1   | ) |   |   |   |   |   | $ | (6.1 | ) |   |   |   |   |
|                                                   |   |                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                   |   |                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss per share of common stock - Basic and diluted |   | $                                                            | (0.64  | ) |   |   |   |   |   | $ | (0.77 | ) |   |   |   |   |
|                                                   |   |                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

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Item 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

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|                                                         |   | 2010   |    |   | 2009   |   |
|--------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
| CURRENT ASSETS:                                              |   |   |    |   |   |   |
| Cash                                                         |   | $      | 1,319   |   |   | $      | 747 |   |
| Trade accounts receivable, net of allowances of $98 and $146 |   |   | 13,541  |   |   |   | 12,831 |   |
| Inventories, net                                             |   |   | 16,450  |   |   |   | 16,195 |   |
| Other current assets                                         |   |   | 1,512   |   |   |   | 1,144 |   |
|                                                         |   |   |    |   |   |   |   |   |
| Total current assets                                         |   |   | 32,822  |   |   |   | 30,917 |   |
|                                                         |   |   |    |   |   |   |   |   |
|                                                         |   |   |    |   |   |   |   |   |
| OTHER ASSETS:                                                |   |   |    |   |   |   |   |   |
| Goodwill                                                     |   |   | 665     |   |   |   | 665 |   |
| Intangibles, net                                             |   |   | 3,530   |   |   |   | 4,010 |   |
| Other                                                        |   |   | 3,160   |   |   |   | 2,830 |   |
|                                                         |   |   |    |   |   |   |   |   |
| Total other assets                                           |   |   | 7,355   |   |   |   | 7,505 |   |
|                                                         |   |   |    |   |   |   |   |   |
|                                                         |   |   |    |   |   |   |   |   |
| PROPERTY AND EQUIPMENT                                       |   |   |    |   |   |   |   |   |
| Land and improvements                                        |   |   | 336     |   |   |   | 336 |   |
| Buildings and improvements                                   |   |   | 9,243   |   |   |   | 9,514 |   |
| Machinery and equipment                                      |   |   | 90,945  |   |   |   | 91,585 |   |
|                                                         |   |   |    |   |   |   |   |   |
|                                                         |   |   | 100,524 |   |   |   | 101,435 |   |
| Less - Accumulated depreciation                              |   |   | (77,807 | )      |   |   | (73,417 | ) |
|                                                         |   |   |    |   |   |   |   |   |
| Property and equipment, net                                  |   |   | 22,717  |   |   |   | 28,018 |   |
|                                                         |   |   |    |   |   |   |   |   |
| Total assets                                                 |   | $      | 62,894  |   |   | $      | 66,440 |   |
|                                                         |   |   |    |   |   |   |   |   |
| See Notes to Consolidated Financial Statements.              |   |   |    |   |   |   |   |   |

----

index

|                                                        |   | 2010   |     |   | 2009   |   |
|-------------------------------------------------------------|--------|--------|----------|--------|--------|--------|
| CURRENT LIABILITIES:                                        |   |   |     |   |   |   |
| Accounts payable                                            |   | $      | 12,094   |   |   | $      | 10,476 |   |
| Book overdraft                                              |   |   | 1,257    |   |   |   | 1,285 |   |
| Accrued compensation                                        |   |   | 1,548    |   |   |   | 2,614 |   |
| Accrued expenses                                            |   |   | 10,774   |   |   |   | 14,252 |   |
| Current maturities, long-term debt                          |   |   | 1,275    |   |   |   | 6,899 |   |
| Revolving credit agreement                                  |   |   | 15,432   |   |   |   | 8,856 |   |
|                                                        |   |   |     |   |   |   |   |   |
| Total current liabilities                                   |   |   | 42,380   |   |   |   | 44,382 |   |
|                                                        |   |   |     |   |   |   |   |   |
| LONG-TERM DEBT, less current maturities                     |   |   | 6,169    |   |   |   | - |   |
|                                                        |   |   |     |   |   |   |   |   |
| OTHER LIABILITIES                                           |   |   | 5,306    |   |   |   | 8,739 |   |
|                                                        |   |   |     |   |   |   |   |   |
| Total liabilities                                           |   |   | 53,855   |   |   |   | 53,121 |   |
|                                                        |   |   |     |   |   |   |   |   |
| COMMITMENTS AND CONTINGENCIES (Note 14)                     |   |   |     |   |   |   |   |   |
|                                                        |   |   |     |   |   |   |   |   |
| STOCKHOLDERS’ EQUITY                                  |   |   |     |   |   |   |   |   |
| 15% Convertible preferred stock, $100 par value; authorized |   |   |     |   |   |   |   |   |
| 1,200,000 shares; issued and outstanding 1,131,551          |   |   |     |   |   |   |   |   |
| shares; liquidation value $113,155                          |   |   | 108,256  |   |   |   | 108,256 |   |
| Common stock, $1 par value; authorized 35,000,000 shares;   |   |   |     |   |   |   |   |   |
| issued 9,822,304 shares                                     |   |   | 9,822    |   |   |   | 9,822 |   |
| Additional paid-in capital                                  |   |   | 27,385   |   |   |   | 27,246 |   |
| Accumulated other comprehensive loss                        |   |   | (1,405   | )      |   |   | (2,053 | ) |
| Accumulated deficit                                         |   |   | (113,582 | )      |   |   | (108,515 | ) |
| Treasury stock, at cost, 1,871,128 shares                   |   |   | (21,437  | )      |   |   | (21,437 | ) |
|                                                        |   |   |     |   |   |   |   |   |
| Total stockholders' equity                                  |   |   | 9,039    |   |   |   | 13,319 |   |
|                                                        |   |   |     |   |   |   |   |   |
| Total liabilities and stockholders' equity                  |   | $      | 62,894   |   |   | $      | 66,440 |   |
|                                                        |   |   |     |   |   |   |   |   |
| See Notes to Consolidated Financial Statements.             |   |   |     |   |   |   |   |   |

----

index

|                                                   |   | 2010   |    |   | 2009   |   |
|--------------------------------------------------------|--------|--------|---------|--------|--------|--------|
|                                                   |   |   |    |   |   |   |
| Net sales                                              |   | $      | 141,000 |   |   | $      | 141,196 |   |
| Cost of goods sold                                     |   |   | 125,326 |   |   |   | 121,134 |   |
|    Gross profit                              |   |   | 15,674  |   |   |   | 20,062 |   |
| Selling, general and administrative expenses           |   |   | 20,764  |   |   |   | 25,914 |   |
| Impairment of long-lived assets                        |   |   | -       |   |   |   | 118 |   |
| Severance, restructuring and related charges           |   |   | 1,277   |   |   |   | 92 |   |
| (Gain) loss on sale or disposal of assets              |   |   | (216    | )      |   |   | 91 |   |
|    Operating loss                            |   |   | (6,151  | )      |   |   | (6,153 | ) |
| Interest expense                                       |   |   | (1,639  | )      |   |   | (1,165 | ) |
| Other, net                                             |   |   | 2,232   |   |   |   | 705 |   |
|                                                   |   |   |    |   |   |   |   |   |
| Loss before income tax benefit                         |   |   | (5,558  | )      |   |   | (6,613 | ) |
| Income tax benefit                                     |   |   | 491     |   |   |   | 495 |   |
|                                                   |   |   |    |   |   |   |   |   |
| Net loss                                               |   | $      | (5,067  | )      |   | $      | (6,118 | ) |
|                                                   |   |   |    |   |   |   |   |   |
|                                                   |   |   |    |   |   |   |   |   |
| Net loss per share of common stock - Basic and diluted |   | $      | (0.64   | )      |   | $      | (0.77 | ) |
|                                                   |   |   |    |   |   |   |   |   |
| See Notes to Consolidated Financial Statements.        |   |   |    |   |   |   |   |   |

----

index

|                                            |   |            |      |   |   |   |    |       |   |   |      |   |   |    |   |   | Accumulated |   |   |        |   |   |     |   |   |    |     |   |          |   |
|-------------------------------------------------|--------|-----------------|-----------|--------|--------|--------|---------|------------|--------|--------|-----------|--------|--------|---------|--------|--------|-------------|--------|--------|-------------|--------|--------|----------|--------|--------|---------|----------|--------|---------------|--------|
|                                            |   | Convertible     |      |   | Common |   |    |       |   |   | Other     |   |   |    |   |   |        |   |   |        |   |   |     |   |
|                                            |   | Preferred Stock |      |   | Stock  |   |    | Additional |   |   | Compre-   |   |   |    |   |   |        |   |   | Compre-     |   |   | Total    |   |
|                                            |   | Number of       |      |   | Par    |   |    | Number of  |   |   | Par       |   |   | Paid-in |   |   | hensive     |   |   | Accumulated |   |   | Treasury |   |   | hensive |     |   | Stockholders' |   |
|                                            |   | Shares          |      |   | Value  |   |    | Shares     |   |   | Value     |   |   | Capital |   |   | Loss        |   |   | Deficit     |   |   | Stock    |   |   | Loss    |     |   | Equity        |   |
| Balance, January 1, 2009                        |   |            | 1,131,551 |   |   | $      | 108,256 |       |   |   | 9,822,304 |   |   | $       | 9,822  |   |        | $      | 27,248 |        |   | $      | (1,742   | )      |   | $       | (102,397 | )      |          | $      | (21,894 | ) |   |   |   |   | $ | 19,293 |   |
| Net loss                                        |   |            | -         |   |   |   | -       |       |   |   | -         |   |   |    | -      |   |        |   | -      |        |   |   | -        |   |   |    | (6,118   | )      |          |   | - |   |   | $ | (6,118 | ) |   |   | (6,118 | ) |
| Foreign currency translation adjustment         |   |            | -         |   |   |   | -       |       |   |   | -         |   |   |    | -      |   |        |   | -      |        |   |   | 41       |   |   |    | -        |   |          |   | - |   |   |   | 41 |   |   |   | 41 |   |
| Pension and other postretirement benefits       |   |            | -         |   |   |   | -       |       |   |   | -         |   |   |    | -      |   |        |   | -      |        |   |   | (352     | )      |   |    | -        |   |          |   | - |   |   |   | (352 | ) |   |   | (352 | ) |
| Comprehensive loss                              |   |            |      |   |   |   |    |       |   |   |      |   |   |    |   |   |        |   |   |        |   |   |     |   |   |    |     |   |          |   |   |   |   | $ | (6,429 | ) |   |   |   |   |
| Stock compensation                              |   |            | -         |   |   |   | -       |       |   |   | -         |   |   |    | -      |   |        |   | 455    |        |   |   | -        |   |   |    | -        |   |          |   | - |   |   |   |   |   |   |   | 455 |   |
| Other                                           |   |            | -         |   |   |   | -       |       |   |   | -         |   |   |    | -      |   |        |   | (457   | )           |   |   | -        |   |   |    | -        |   |          |   | 457 |   |   |   |   |   |   |   | - |   |
| Balance, December 31, 2009                      |   |            | 1,131,551 |   |   | $      | 108,256 |       |   |   | 9,822,304 |   |   | $       | 9,822  |   |        | $      | 27,246 |        |   | $      | (2,053   | )      |   | $       | (108,515 | )      |          | $      | (21,437 | ) |   |   |   |   |   | $ | 13,319 |   |
| Net loss                                        |   |            | -         |   |   |   | -       |       |   |   | -         |   |   |    | -      |   |        |   | -      |        |   |   | -        |   |   |    | (5,067   | )      |          |   | - |   |   | $ | (5,067 | ) |   |   | (5,067 | ) |
| Foreign currency translation adjustment         |   |            | -         |   |   |   | -       |       |   |   | -         |   |   |    | -      |   |        |   | -      |        |   |   | 142      |   |   |    | -        |   |          |   | - |   |   |   | 142 |   |   |   | 142 |   |
| Pension and other postretirement benefits       |   |            | -         |   |   |   | -       |       |   |   | -         |   |   |    | -      |   |        |   | -      |        |   |   | 506      |   |   |    | -        |   |          |   | - |   |   |   | 506 |   |   |   | 506 |   |
| Comprehensive loss                              |   |            |      |   |   |   |    |       |   |   |      |   |   |    |   |   |        |   |   |        |   |   |     |   |   |    |     |   |          |   |   |   |   | $ | (4,419 | ) |   |   |   |   |
| Stock compensation                              |   |            | -         |   |   |   | -       |       |   |   | -         |   |   |    | -      |   |        |   | 139    |        |   |   | -        |   |   |    | -        |   |          |   | - |   |   |   |   |   |   |   | 139 |   |
| Balance, December 31, 2010                      |   |            | 1,131,551 |   |   | $      | 108,256 |       |   |   | 9,822,304 |   |   | $       | 9,822  |   |        | $      | 27,385 |        |   | $      | (1,405   | )      |   | $       | (113,582 | )      |          | $      | (21,437 | ) |   |   |   |   |   | $ | 9,039 |   |
|                                            |   |            |      |   |   |   |    |       |   |   |      |   |   |    |   |   |        |   |   |        |   |   |     |   |   |    |     |   |          |   |   |   |   |   |   |   |   |   |   |   |
| See Notes to Consolidated Financial Statements. |   |            |      |   |   |   |    |       |   |   |      |   |   |    |   |   |        |   |   |        |   |   |     |   |   |    |     |   |          |   |   |   |   |

----

index

|                                                                                             |   | 2010   |   |   | 2009   |   |
|--------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Cash flows from operating activities:                                                            |   |   |   |   |   |   |
| Net loss                                                                                         |   | $      | (5,067 | )      |   | $      | (6,118 | ) |
| Depreciation                                                                                     |   |   | 6,100  |   |   |   | 6,305 |   |
| Amortization of intangible assets                                                                |   |   | 545    |   |   |   | 529 |   |
| Write-off and amortization of debt issuance costs                                                |   |   | 470    |   |   |   | 382 |   |
| Impairment of long-lived assets                                                                  |   |   | -      |   |   |   | 118 |   |
| Stock-based compensation                                                                         |   |   | (66    | )      |   |   | 560 |   |
| (Gain) loss on sale or disposal of assets                                                        |   |   | (216   | )      |   |   | 91 |   |
| Gain on settlement of existing obligation                                                        |   |   | (2,100 | )      |   |   | - |   |
|                  |   |   | (334   | )      |   |   | 1,867 |   |
| Changes in operating assets and liabilities:                                                     |   |   |   |   |   |   |   |   |
| Accounts receivable                                                                              |   |   | (673   | )      |   |   | 1,080 |   |
| Inventories                                                                                      |   |   | (166   | )      |   |   | 3,792 |   |
| Other assets                                                                                     |   |   | (428   | )      |   |   | 1,152 |   |
| Accounts payable                                                                                 |   |   | 1,584  |   |   |   | 78 |   |
| Accrued expenses                                                                                 |   |   | (2,067 | )      |   |   | (590 | ) |
| Other                                                                                            |   |   | (3,126 | )      |   |   | (2,284 | ) |
|                                                                                             |   |   | (4,876 | )      |   |   | 3,228 |   |
|                                                                                             |   |   |   |   |   |   |   |   |
| Net cash (used in) provided by operating activities                                              |   |   | (5,210 | )      |   |   | 5,095 |   |
|                                                                                             |   |   |   |   |   |   |   |   |
| Cash flows from investing activities:                                                            |   |   |   |   |   |   |   |   |
| Capital expenditures                                                                             |   |   | (942   | )      |   |   | (1,948 | ) |
| Proceeds from sale of assets, net                                                                |   |   | 351    |   |   |   | 3 |   |
| Net cash used in investing activities                                                            |   |   | (591   | )      |   |   | (1,945 | ) |
|                                                                                             |   |   |   |   |   |   |   |   |
| Cash flows from financing activities:                                                            |   |   |   |   |   |   |   |   |
| Net borrowings (repayments) on revolving loans                                                   |   |   | 6,529  |   |   |   | (365 | ) |
| Decrease in book overdraft                                                                       |   |   | (28    | )      |   |   | (1,004 | ) |
| Proceeds from term loans                                                                         |   |   | 8,182  |   |   |   | - |   |
| Repayments of term loan                                                                          |   |   | (7,637 | )      |   |   | (1,529 | ) |
| Direct costs associated with debt facilities                                                     |   |   | (775   | )      |   |   | - |   |
| Net cash provided by (used in) financing activities                                              |   |   | 6,271  |   |   |   | (2,898 | ) |
|                                                                                             |   |   |   |   |   |   |   |   |
| Effect of exchange rate changes on cash                                                          |   |   | 102    |   |   |   | (188 | ) |
| Net increase in cash                                                                             |   |   | 572    |   |   |   | 64 |   |
| Cash, beginning of period                                                                        |   |   | 747    |   |   |   | 683 |   |
| Cash, end of period                                                                              |   | $      | 1,319  |   |   | $      | 747 |   |
|                                                                                             |   |   |   |   |   |   |   |   |
| See Notes to Consolidated Financial Statements.                                                  |   |   |   |   |   |   |   |   |

----

index

----

index

|               |   | December 31,           |   |
|--------------------|--------|------------------------|--------|
|               |   | 2010                   |   |   | 2009 |   |
|               |   | (Amounts in Thousands) |   |
|               |   |                   |   |   |   |   |
| Raw materials      |   | $                      | 8,366  |   |   | $ | 10,240 |   |
| Finished goods     |   |                   | 13,146 |   |   |   | 10,744 |   |
| Inventory reserves |   |                   | (1,250 | ) |   |   | (1,315 | ) |
| LIFO reserve       |   |                   | (3,812 | ) |   |   | (3,474 | ) |
|               |   | $                      | 16,450 |   |   | $ | 16,195 |   |
|               |   |                   |   |   |   |   |   |   |

----

index

| Asset retirement obligation at January 1, 2009   |   | $      | 827    |   |
|--------------------------------------------------|--------|--------|--------|--------|
|    Accretion expense              |   |   | 29     |   |
| Asset retirement obligation at December 31, 2009 |   |   | 856    |   |
|    Accretion expense              |   |   | 28     |   |
|    Payments                       |   |   | (26    | )      |
| Asset retirement obligation at December 31, 2010 |   | $      | 858    |   |
|                                             |   |   |   |   |

----

index

|                                      |   | 2010   |   |   | 2009   |   |
|-------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                      |   |   |   |   |   |   |
| Stock option expense                      |   | $      | 139    |   |   | $      | 455 |   |
| Stock appreciation right (income) expense |   |   | (205   | )      |   |   | 105 |   |
|                                      |   | $      | (66    | )      |   | $      | 560 |   |
|                                      |   |   |   |   |   |   |   |   |

|                    | December 31,    |
|-------------------------|-----------------|
|                    | 2009            |
|                    |            |
| Expected term (years)   | 5.5 - 6.5       |
| Volatility              | 109.9% - 117.4% |
| Risk-free interest rate | 2.0% - 2.3%     |

----

index

|                    | December 31,    |
|-------------------------|-----------------|
|                    | 2010            |   | 2009 |
|                    |            |   |   |
| Expected term (years)   | 0.4 - 5.7       |   | 1.4 - 6.4 |
| Volatility              | 153.7% - 238.5% |   | 119.5% - 181.1% |
| Risk-free interest rate | 0.2% - 2.3%     |   | 0.8% - 3.2% |

|                 |   | December 31, |   |   | December 31, |   |
|----------------------|--------|--------------|--------|--------|--------------|--------|
|                 |   | 2010         |   |   | 2009         |   |
|                 |   | Gross        |   |   | Accumulated  |   |   | Net Carrying |   |   | Gross |   |   | Accumulated |   |   | Net Carrying |   |
|                 |   | Amount       |   |   | Amortization |   |   | Amount |   |   | Amount |   |   | Amortization |   |   | Amount |   |
|  Patents        |   | $            | 1,267  |   |         | $      | (1,057 | ) |   | $ | 210 |   |   | $ | 1,202 |   |   | $ | (952 | ) |   | $ | 250 |   |
|  Customer lists |   |         | 10,231 |   |         |   | (8,773 | ) |   |   | 1,458 |   |   |   | 10,231 |   |   |   | (8,582 | ) |   |   | 1,649 |   |
|  Tradenames     |   |         | 5,054  |   |         |   | (3,192 | ) |   |   | 1,862 |   |   |   | 5,054 |   |   |   | (2,943 | ) |   |   | 2,111 |   |
|  Total          |   | $            | 16,552 |   |         | $      | (13,022 | ) |   | $ | 3,530 |   |   | $ | 16,487 |   |   | $ | (12,477 | ) |   | $ | 4,010 |   |
|                 |   |         |   |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

index

| 2011       |   | $      | 524    |   |
|------------|--------|--------|--------|--------|
| 2012       |   |   | 499    |   |
| 2013       |   |   | 478    |   |
| 2014       |   |   | 461    |   |
| 2015       |   |   | 446    |   |
| Thereafter |   |   | 1,122  |   |
|       |   | $      | 3,530  |   |
|       |   |   |   |   |

|                                                                                        |   | December 31,           |    |
|---------------------------------------------------------------------------------------------|--------|------------------------|---------|
|                                                                                        |   | 2010                   |    |   | 2009 |   |
|                                                                                        |   | (Amounts in Thousands) |    |
|                                                                                        |   |                   |    |   |   |   |
| Term loan payable under the PNC Credit Agreement and the Bank of America                    |   |                   |    |   |
| Credit Agreement, respectively, interest based on Eurodollar and Base Rates (6.51% - 8.50%) |   | $                      | 7,444   |   |   | $ | 6,899 |   |
| Revolving loans payable under the PNC Credit Agreement and the Bank of America              |   |                   |    |   |   |
| Credit Agreement, respectively, interest based on Eurodollar and Base Rates (3.51% - 5.50%) |   |                   | 15,432  |   |   |   | 8,856 |   |
| Total debt                                                                                  |   |                   | 22,876  |   |   |   | 15,755 |   |
| Less revolving loans, classified as current (see below)                                     |   |                   | (15,432 | ) |   |   | (8,856 | ) |
| Less current maturities                                                                     |   |                   | (1,275  | ) |   |   | (6,899 | ) |
| Long-term debt                                                                              |   | $                      | 6,169   |   |   | $ | - |   |
|                                                                                        |   |                   |    |   |   |   |   |   |

| 2011   |   | $      | 1,275  |   |
|--------|--------|--------|--------|--------|
| 2012   |   |   | 1,425  |   |
| 2013   |   |   | 4,744  |   |
|   |   | $      | 7,444  |   |
|   |   |   |   |   |

----

index

----

index

|                                              |   | For the Years Ended December 31, |   |
|---------------------------------------------------|--------|----------------------------------|--------|
|                                              |   | 2010                             |   |   | 2009 |   |
|                                              |   | (Amounts in Thousands,           |   |
|                                              |   | except per share amounts)        |   |
|                                              |   |                             |   |   |   |   |
| Basic and Diluted EPS:                            |   |                             |   |   |   |   |
| Net loss                                          |   | $                                | (5,067 | ) |   | $ | (6,118 | ) |
|                                              |   |                             |   |   |   |   |   |   |
| Weighted average shares – Basic and Diluted |   |                             | 7,951  |   |   |   | 7,951 |   |
|                                              |   |                             |   |   |   |   |   |   |
| Per share amount:                                 |   |                             |   |   |   |   |   |   |
| Net loss                                          |   | $                                | (0.64  | ) |   | $ | (0.77 | ) |
|                                              |   |                             |   |   |   |   |   |   |

----

index

|                          |   | December 31, |   |
|-------------------------------|--------|--------------|--------|
|                          |   | 2010         |   |   | 2009 |   |
|                          |   | Plan Assets  |   |   | Plan Assets |   |
|  Asset Category          |   | Fair Value   |   |   | Percentage |   |   | Fair Value |   |   | Percentage |   |
|  Equity Securities       |   | $            | 423    |   |   |   | 46 | % |   | $ | 375 |   |   |   | 42 | % |
|  Fixed Income Securities |   |         | 488    |   |   |   | 52 | % |   |   | 492 |   |   |   | 55 | % |
|  Other                   |   |         | 20     |   |   |   | 2 | % |   |   | 23 |   |   |   | 3 | % |
|                          |   | $            | 931    |   |   |   | 100 | % |   | $ | 890 |   |   |   | 100 | % |
|                          |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                                               |   | Pension Benefits       |   |   | Other Benefits |   |
|----------------------------------------------------|--------|------------------------|--------|--------|----------------|--------|
|                                               |   | 2010                   |   |   | 2009           |   |   | 2010 |   |   | 2009 |   |
|                                               |   | (Amounts in Thousands) |   |
| Change in projected benefit obligation:            |   |                   |   |   |           |   |   |   |   |   |   |   |
| Projected benefit obligation at beginning of year  |   | $                      | 1,331  |   |           | $      | 1,147 |   |   | $ | 2,377 |   |   | $ | 2,223 |   |
| Interest cost                                      |   |                   | 73     |   |           |   | 76 |   |   |   | 102 |   |   |   | 139 |   |
| Actuarial loss (gain)                              |   |                   | 24     |   |           |   | 199 |   |   |   | (438 | ) |   |   | 260 |   |
| Benefits paid                                      |   |                   | (76    | )      |           |   | (91 | ) |   |   | (259 | ) |   |   | (245 | ) |
| Projected benefit obligation at end of year        |   | $                      | 1,352  |   |           | $      | 1,331 |   |   | $ | 1,782 |   |   | $ | 2,377 |   |
|                                               |   |                   |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Change in plan assets:                             |   |                   |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Fair value of plan assets at beginning of year     |   | $                      | 890    |   |           | $      | 750 |   |   | $ | - |   |   | $ | - |   |
| Actuarial return on plan assets                    |   |                   | 75     |   |           |   | 114 |   |   |   | - |   |   |   | - |   |
| Employer contributions                             |   |                   | 42     |   |           |   | 117 |   |   |   | 259 |   |   |   | 245 |   |
| Benefits paid                                      |   |                   | (76    | )      |           |   | (91 | ) |   |   | (259 | ) |   |   | (245 | ) |
| Fair value of plan assets at end of year           |   | $                      | 931    |   |           | $      | 890 |   |   | $ | - |   |   | $ | - |   |
|                                               |   |                   |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Funded status at end of year                       |   | $                      | (421   | )      |           | $      | (441 | ) |   | $ | (1,782 | ) |   | $ | (2,377 | ) |
|                                               |   |                   |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Amounts recognized in Consolidated Balance Sheets: |   |                   |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Other non-current assets                           |   | $                      | (41    | )      |           | $      | (37 | ) |   | $ | - |   |   | $ | - |   |
| Accrued expenses                                   |   |                   | -      |   |           |   | - |   |   |   | 183 |   |   |   | 205 |   |
| Other liabilities                                  |   |                   | 462    |   |           |   | 478 |   |   |   | 1,599 |   |   |   | 2,172 |   |
| Total                                              |   | $                      | 421    |   |           | $      | 441 |   |   | $ | 1,782 |   |   | $ | 2,377 |   |
|                                               |   |                   |   |   |           |   |   |   |   |   |   |   |   |   |   |   |

----

index

|                           |   | 2010                                             |   |   | 2009                                               |   |
|--------------------------------|--------|--------------------------------------------------|--------|--------|----------------------------------------------------|--------|
|                           |   | Projected benefit obligation exceeds plan assets |   |   | Accumulated benefit obligation exceeds plan assets |   |   | Projected benefit obligation exceeds plan assets |   |   | Accumulated benefit obligation exceeds plan assets |   |
|                           |   |                                             |   |   |                                               |   |   |   |   |   |   |   |
| Projected benefit obligation   |   | $                                                | 1,175  |   |                                               | $      | 1,175 |   |   | $ | 1,149 |   |   | $ | 1,149 |   |
| Accumulated benefit obligation |   | $                                                | 1,175  |   |                                               | $      | 1,175 |   |   | $ | 1,149 |   |   | $ | 1,149 |   |
| Fair value of plan assets      |   | $                                                | 712    |   |                                               | $      | 712 |   |   | $ | 672 |   |   | $ | 672 |   |

|                                                      |   | Pension Benefits |   |   | Other Benefits |   |
|-----------------------------------------------------------|--------|------------------|--------|--------|----------------|--------|
|                                                      |   | 2010             |   |   | 2009           |   |   | 2010 |   |   | 2009 |   |
| Assumptions as of December 31:                            |   |             |   |   |           |   |   |   |   |   |   |   |
| Discount rates                                            |   |             | 5.75   | %      |           |   | 5.75 | % |   |   | 5.75 | % |   |   | 5.75 | % |
| Expected long-term return rate on assets                  |   |             | 7.00   | %      |           |   | 7.00 | % |   |   | N/A |   |   |   | N/A |   |
| Assumed rates of compensation increases                   |   |             | N/A    |   |           |   | N/A |   |   |   | N/A |   |   |   | N/A |   |
| Medical trend rate pre-65 (initial)                       |   |             | N/A    |   |           |   | N/A |   |   |   | 7.50 | % |   |   | 7.50 | % |
| Medical trend rate post-65 (initial)                      |   |             | N/A    |   |           |   | N/A |   |   |   | 8.50 | % |   |   | 8.50 | % |
| Medical trend rate (ultimate)                             |   |             | N/A    |   |           |   | N/A |   |   |   | 5.00 | % |   |   | 5.00 | % |
| Years to ultimate rate pre-65                             |   |             | N/A    |   |           |   | N/A |   |   |   | 5 |   |   |   | 6 |   |
| Years to ultimate rate post-65                            |   |             | N/A    |   |           |   | N/A |   |   |   | 7 |   |   |   | 8 |   |
|                                                      |   |             |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Impact of one-percent increase in medical trend rate:     |   |             |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Increase in accumulated postretirement benefit obligation |   |             |   |   |           |   | $ | 130 |   |   | $ | 201 |   |
| Increase in service cost and interest cost                |   |             |   |   |           |   |   |   |   | $ | 8 |   |   | $ | 11 |   |
|                                                      |   |             |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Impact of one-percent decrease in medical trend rate:     |   |             |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Decrease in accumulated postretirement benefit obligation |   |             |   |   |           |   | $ | 115 |   |   | $ | 175 |   |
| Decrease in service cost and interest cost                |   |             |   |   |           |   |   |   |   | $ | 7 |   |   | $ | 10 |   |

----

index

|                           |   | Pension Benefits |   |   | Other Benefits |   |
|--------------------------------|--------|------------------|--------|--------|----------------|--------|
|                           |   | 2010             |   |   | 2009           |   |   | 2010 |   |   | 2009 |   |
|                           |   |             |   |   |           |   |   |   |   |   |   |   |
| Interest cost                  |   | $                | 73     |   |           | $      | 76 |   |   | $ | 102 |   |   | $ | 139 |   |
| Expected return on plan assets |   |             | (62    | )      |           |   | (54 | ) |   |   | - |   |   |   | - |   |
| Amortization of net loss       |   |             | 44     |   |           |   | 45 |   |   |   | - |   |   |   | - |   |
| Net periodic benefit cost      |   | $                | 55     |   |           | $      | 67 |   |   | $ | 102 |   |   | $ | 139 |   |
|                           |   |             |   |   |           |   |   |   |   |   |   |   |   |   |   |   |

|       |   | Pension Benefits |   |   | Other Benefits |   |
|------------|--------|------------------|--------|--------|----------------|--------|
|       |   |             |   |   |           |   |
| 2011       |   | $                | 43     |   |           | $      | 186 |   |
| 2012       |   |             | 64     |   |           |   | 183 |   |
| 2013       |   |             | 41     |   |           |   | 179 |   |
| 2014       |   |             | 95     |   |           |   | 174 |   |
| 2015       |   |             | 306    |   |           |   | 168 |   |
| Thereafter |   |             | 506    |   |           |   | 732 |   |
|       |   | $                | 1,055  |   |           | $      | 1,622 |   |
|       |   |             |   |   |           |   |   |   |

----

index

|                                        |   |    |      |   |     |   | Weighted    |   |           |   |
|---------------------------------------------|--------|---------|-----------|--------|----------|--------|-------------|--------|----------------|--------|
|                                        |   |    |      |   | Weighted |   | Average     |   | Aggregate      |   |
|                                        |   |    |      |   | Average  |   | Remaining   |   | Intrinsic      |   |
|                                        |   |    |      |   | Exercise |   | Contractual |   | Value          |   |
|                                        |   | Options |      |   | Price    |   | Life        |   | (in thousands) |   |
|                                        |   |    |      |   |     |   |        |   |           |   |
| Outstanding at January 1, 2010              |   |    | 1,501,000 |   |     | $      | 1.97        |   |           |   |   |   |
|                                        |   |    |      |   |     |   |        |   |           |   |   |   |
| Granted                                     |   |    | -         |   |     |   | -           |   |           |   |   |   |
| Expired                                     |   |    | (14,000   | )      |     |   | 9.93        |   |           |   |   |   |
| Cancelled                                   |   |    | (125,000  | )      |     |   | 1.16        |   |           |   |   |   |
|                                        |   |    |      |   |     |   |        |   |           |   |   |   |
| Outstanding at December 31, 2010            |   |    | 1,362,000 |   |     | $      | 1.96        |   | 5.70 years     |   | $ | 30 |   |
|                                        |   |    |      |   |     |   |        |   |           |   |   |   |   |
| Vested and Exercisable at December 31, 2010 |   |    | 987,001   |   |     | $      | 2.27        |   | 4.98 years     |   | $ | 12 |   |
|                                        |   |    |      |   |     |   |        |   |           |   |   |   |   |

----

index

|                            |   |    |     |   | Weighted   |   |
|---------------------------------|--------|---------|----------|--------|------------|--------|
|                            |   |    |     |   | Average    |   |
|                            |   |    |     |   | Grant Date |   |
|                            |   | Options |     |   | Fair Value |   |
|                            |   |    |     |   |       |   |
| Non-Vested at January 1, 2010   |   |    | 791,666  |   |       | $      | 0.89 |   |
|                            |   |    |     |   |       |   |   |   |
| Vested                          |   |    | (333,334 | )      |       |   | 0.87 |   |
| Cancelled                       |   |    | (83,333  | )      |       |   | 0.97 |   |
|                            |   |    |     |   |       |   |   |   |
| Non-Vested at December 31, 2010 |   |    | 374,999  |   |       | $      | 0.88 |   |
|                            |   |    |     |   |       |   |   |   |

| Non-Vested at January 1, 2010          |   |   | 32,000  |   |
|----------------------------------------|--------|--------|---------|--------|
|                                   |   |   |    |   |
| Granted                                |   |   | 66,000  |   |
| Vested                                 |   |   | (16,668 | )      |
| Cancelled                              |   |   | (15,000 | )      |
|                                   |   |   |    |   |
| Non-Vested at December 31, 2010        |   |   | 66,332  |   |
|                                   |   |   |    |   |
| Total Outstanding at December 31, 2010 |   |   | 536,267 |   |
|                                   |   |   |    |   |

----

index

|     |   | For the Years Ended December 31, |   |
|----------|--------|----------------------------------|--------|
|     |   | 2010                             |   |   | 2009 |   |
|     |   | (Amounts in Thousands)           |   |
|     |   |                             |   |   |   |   |
| Domestic |   | $                                | (4,558 | ) |   | $ | (5,261 | ) |
| Foreign  |   |                             | (1,000 | ) |   |   | (1,352 | ) |
| Total    |   | $                                | (5,558 | ) |   | $ | (6,613 | ) |
|     |   |                             |   |   |   |   |   |   |

|                             |   | For the Years Ended December 31, |   |
|----------------------------------|--------|----------------------------------|--------|
|                             |   | 2010                             |   |   | 2009 |   |
|                             |   | (Amounts in Thousands)           |   |
| Current tax (benefit) provision: |   |                             |   |   |   |   |
| Federal                          |   | $                                | (517   | ) |   | $ | (516 | ) |
| State                            |   |                             | 26     |   |   |   | 21 |   |
| Total benefit                    |   | $                                | (491   | ) |   | $ | (495 | ) |
|                             |   |                             |   |   |   |   |   |   |

|                                                           |   | For the Years Ended December 31, |   |
|----------------------------------------------------------------|--------|----------------------------------|--------|
|                                                           |   | 2010                             |   |   | 2009 |   |
|                                                           |   | (Amounts in Thousands)           |   |
|                                                           |   |                             |   |   |   |   |
| Benefit from income taxes at statutory rate                    |   | $                                | (1,945 | ) |   | $ | (2,315 | ) |
|   State income taxes, net of federal benefit              |   |                             | 17     |   |   |   | 14 |   |
|   Foreign tax credits                                     |   |                             | 433    |   |   |   | 57 |   |
|   Net operating losses adjustments                        |   |                             | 254    |   |   |   | 371 |   |
|   Valuation allowance adjustments                         |   |                             | 2,460  |   |   |   | 1,723 |   |
|   Settlement of existing obligation to Pentland USA, Inc. |   |                             | (1,269 | ) |   |   | - |   |
|   Permanent items                                         |   |                             | 26     |   |   |   | 29 |   |
|   Reduction of tax reserves                               |   |                             | (517   | ) |   |   | (432 | ) |
|   Other, net                                              |   |                             | 50     |   |   |   | 58 |   |
| Net benefit from income taxes                                  |   | $                                | (491   | ) |   | $ | (495 | ) |
|                                                           |   |                             |   |   |   |   |   |   |

----

index

|                                              |   | As of December 31,     |    |
|---------------------------------------------------|--------|------------------------|---------|
|                                              |   | 2010                   |    |   | 2009 |   |
|                                              |   | (Amounts in Thousands) |    |
| Deferred tax liabilities                          |   |                   |    |   |   |   |
|   Inventory costs                       |   | $                      | (122    | ) |   | $ | (852 | ) |
|                                              |   |                   |    |   |   |   |   |   |
| Deferred tax assets                               |   |                   |    |   |   |   |   |   |
| Allowance for doubtful receivables                |   | $                      | 36      |   |   | $ | 58 |   |
| Accrued expenses and other items                  |   |                   | 6,133   |   |   |   | 7,075 |   |
| Difference between book and tax bases of property |   |                   | 3,819   |   |   |   | 6,492 |   |
| Operating loss carry-forwards - domestic          |   |                   | 53,929  |   |   |   | 48,627 |   |
| Operating loss carry-forwards - foreign           |   |                   | 1,110   |   |   |   | 613 |   |
| Tax credit carry-forwards                         |   |                   | 13,299  |   |   |   | 13,731 |   |
|                                              |   |                   | 78,326  |   |   |   | 76,596 |   |
| Less valuation allowance                          |   |                   | (78,204 | ) |   |   | (75,744 | ) |
|                                              |   |                   | 122     |   |   |   | 852 |   |
| Net deferred income tax asset                     |   | $                      | -       |   |   | $ | - |   |
|                                              |   |                   |    |   |   |   |   |   |

| Balances at January 1, 2009                         |   | $      | 1,319  |   |
|-----------------------------------------------------|--------|--------|--------|--------|
| Tax positions related to prior years                |   |   | 140    |   |
| Reductions for tax positions related to prior years |   |   | (159   | )      |
| Lapse of applicable statute of limitations          |   |   | (413   | )      |
| Balances at December 31, 2009                       |   |   | 887    |   |
| Tax positions related to prior years                |   |   | 16     |   |
| Reductions for tax positions related to prior years |   |   | (196   | )      |
| Lapse of applicable statute of limitations          |   |   | (337   | )      |
| Balances at December 31, 2010                       |   | $      | 370    |   |
|                                                |   |   |   |   |

----

index

| 2011       |   | $      | 4,251  |   |
|------------|--------|--------|--------|--------|
| 2012       |   |   | 3,664  |   |
| 2013       |   |   | 3,397  |   |
| 2014       |   |   | 3,256  |   |
| 2015       |   |   | 2,813  |   |
| Thereafter |   |   | 6,794  |   |
|       |   | $      | 24,175 |   |
|       |   |   |   |   |

----

index

|                            |   | United |    |   |   |   |   |   |   |   |   |   |   |         |   |
|---------------------------------|--------|--------|---------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------------|--------|
|                            |   | States |    |   | Canada |   |   | Europe |   |   | Other  |   |   | Consolidated |   |
| 2010:                           |   |   |    |   |   |   |   |   |   |   |   |   |   |         |   |
| Sales to unaffiliated customers |   | $      | 126,122 |   |   | $      | 8,528  |   |   | $      | 2,724  |   |   | $            | 3,626  |   |   | $ | 141,000 |   |
| Long-lived assets               |   | $      | 26,621  |   |   | $      | 291    |   |   | $      | -      |   |   | $            | -      |   |   | $ | 26,912 |   |
| Total assets                    |   | $      | 59,663  |   |   | $      | 3,231  |   |   | $      | -      |   |   | $            | -      |   |   | $ | 62,894 |   |
|                            |   |   |    |   |   |   |   |   |   |   |   |   |   |         |   |   |   |   |   |   |
| 2009:                           |   |   |    |   |   |   |   |   |   |   |   |   |   |         |   |   |   |   |   |   |
| Sales to unaffiliated customers |   | $      | 126,985 |   |   | $      | 7,455  |   |   | $      | 3,570  |   |   | $            | 3,186  |   |   | $ | 141,196 |   |
| Long-lived assets               |   | $      | 32,360  |   |   | $      | 333    |   |   | $      | -      |   |   | $            | -      |   |   | $ | 32,693 |   |
| Total assets                    |   | $      | 63,119  |   |   | $      | 3,321  |   |   | $      | -      |   |   | $            | -      |   |   | $ | 66,440 |   |

----

index

----

index

|                                                             |   | For the Years Ended December 31, |   |
|------------------------------------------------------------------|--------|----------------------------------|--------|
|                                                             |   | 2010                             |   |   | 2009 |   |
|                                                             |   |                             |   |   |   |   |
| Wilen facility relocation                                        |   | $                                | 1,277  |   |   | $ | - |   |
| Consolidation of St. Louis manufacturing/distribution facilities |   |                             | -      |   |   |   | 92 |   |
| Total severance, restructuring and related charges               |   | $                                | 1,277  |   |   | $ | 92 |   |
|                                                             |   |                             |   |   |   |   |   |   |

|                                           |   |   |   |   | One-time    |   |   | Contract    |   |   |   |   |
|------------------------------------------------|--------|--------|--------|--------|-------------|--------|--------|-------------|--------|--------|--------|--------|
|                                           |   |   |   |   | Termination |   |   | Termination |   |   |   |   |
|                                           |   | Total  |   |   | Benefits    |   |   | Costs       |   |   | Other  |   |
| Restructuring liabilities at January 1, 2010   |   | $      | -      |   |        | $      | -      |        |   | $      | -      |   |   | $ | - |   |
| Additions                                      |   |   | 1,277  |   |        |   | 217    |        |   |   | 633    |   |   |   | 427 |   |
| Payments                                       |   |   | (1,152 | )      |        |   | (92    | )           |   |   | (633   | )      |   |   | (427 | ) |
| Restructuring liabilities at December 31, 2010 |   | $      | 125    |   |        | $      | 125    |        |   | $      | -      |   |   | $ | - |   |
|                                           |   |   |   |   |        |   |   |        |   |   |   |   |   |   |   |   |

----

index

|                                           |   | Contract    |   |
|------------------------------------------------|--------|-------------|--------|
|                                           |   | Termination |   |
|                                           |   | Costs       |   |
| Restructuring liabilities at January 1, 2009   |   | $           | 569    |   |
| Additions                                      |   |        | 92     |   |
| Payments                                       |   |        | (246   | ) |
| Restructuring liabilities at December 31, 2009 |   | $           | 415    |   |
| Additions                                      |   |        | -      |   |
| Payments                                       |   |        | (197   | ) |
| Other                                          |   |        | 96     |   |
| Restructuring liabilities at December 31, 2010 |   | $           | 314    |   |
|                                           |   |        |   |   |

|                                           |   |   |   |   | One-time    |   |   | Contract    |   |   |   |   |
|------------------------------------------------|--------|--------|--------|--------|-------------|--------|--------|-------------|--------|--------|--------|--------|
|                                           |   |   |   |   | Termination |   |   | Termination |   |   |   |   |
|                                           |   | Total  |   |   | Benefits    |   |   | Costs       |   |   | Other  |   |
| Restructuring liabilities at January 1, 2009   |   | $      | 569    |   |        | $      | -      |        |   | $      | 569    |   |   | $ | - |   |
| Additions                                      |   |   | 92     |   |        |   | -      |        |   |   | 92     |   |   |   | - |   |
| Payments                                       |   |   | (246   | )      |        |   | -      |        |   |   | (246   | )      |   |   | - |   |
| Restructuring liabilities at December 31, 2009 |   | $      | 415    |   |        | $      | -      |        |   | $      | 415    |   |   | $ | - |   |
| Additions                                      |   |   | 1,277  |   |        |   | 217    |        |   |   | 633    |   |   |   | 427 |   |
| Payments                                       |   |   | (1,349 | )      |        |   | (92    | )           |   |   | (830   | )      |   |   | (427 | ) |
| Other                                          |   |   | 96     |   |        |   | -      |        |   |   | 96     |   |   |   | - |   |
| Restructuring liabilities at December 31, 2010 |   | $      | 439    |   |        | $      | 125    |        |   | $      | 314    |   |   | $ | - |   |
|                                           |   |   |   |   |        |   |   |        |   |   |   |   |   |   |   |   |

|                                |   | December 31, |   |
|-------------------------------------|--------|--------------|--------|
|                                |   | 2010         |   |   | 2009 |   |
| Prepaids                            |   | $            | 712    |   |   | $ | 738 |   |
| Non-trade miscellaneous receivables |   |         | 397    |   |   |   | 385 |   |
| Letters of credit collateral        |   |         | 348    |   |   |   | - |   |
| Other                               |   |         | 55     |   |   |   | 21 |   |
| Total                               |   | $            | 1,512  |   |   | $ | 1,144 |   |
|                                |   |         |   |   |   |   |   |   |

----

index

|                     |   | December 31, |   |
|--------------------------|--------|--------------|--------|
|                     |   | 2010         |   |   | 2009 |   |
| Note receivable          |   | $            | 1,349  |   |   | $ | 1,200 |   |
| Debt issuance costs, net |   |         | 702    |   |   |   | 345 |   |
| Rabbi trust assets       |   |         | 551    |   |   |   | 631 |   |
| Deposits                 |   |         | 218    |   |   |   | 267 |   |
| Trade credits            |   |         | 216    |   |   |   | 229 |   |
| Other                    |   |         | 124    |   |   |   | 158 |   |
| Total                    |   | $            | 3,160  |   |   | $ | 2,830 |   |
|                     |   |         |   |   |   |   |   |   |

|                                             |   | December 31, |   |
|--------------------------------------------------|--------|--------------|--------|
|                                             |   | 2010         |   |   | 2009 |   |
| Contingent liabilities                           |   | $            | 4,603  |   |   | $ | 6,180 |   |
| Advertising and rebates                          |   |         | 3,156  |   |   |   | 2,777 |   |
| Commissions                                      |   |         | 371    |   |   |   | 358 |   |
| Accrued SARs                                     |   |         | 340    |   |   |   | 545 |   |
| Non-cancelable lease liabilities - restructuring |   |         | 314    |   |   |   | 227 |   |
| Medical self insurance                           |   |         | 294    |   |   |   | 310 |   |
| Professional services                            |   |         | 289    |   |   |   | 219 |   |
| Accrued utilities                                |   |         | 197    |   |   |   | 179 |   |
| Pension and postretirement benefits              |   |         | 184    |   |   |   | 209 |   |
| Asset retirement obligations                     |   |         | 141    |   |   |   | 105 |   |
| Sales tax                                        |   |         | 107    |   |   |   | 126 |   |
| Deferred rent expense                            |   |         | 71     |   |   |   | 71 |   |
| Property taxes                                   |   |         | 36     |   |   |   | 126 |   |
| Settlement payment - current                     |   |         | -      |   |   |   | 1,900 |   |
| Accrued relocation expense                       |   |         | -      |   |   |   | 210 |   |
| Other                                            |   |         | 671    |   |   |   | 710 |   |
| Total                                            |   | $            | 10,774 |   |   | $ | 14,252 |   |
|                                             |   |         |   |   |   |   |   |   |

|                                             |   | December 31, |   |
|--------------------------------------------------|--------|--------------|--------|
|                                             |   | 2010         |   |   | 2009 |   |
| Pension and postretirement benefits              |   | $            | 2,059  |   |   | $ | 2,646 |   |
| Deferred compensation                            |   |         | 1,083  |   |   |   | 1,236 |   |
| Asset retirement obligations                     |   |         | 751    |   |   |   | 751 |   |
| Deferred lease                                   |   |         | 543    |   |   |   | 260 |   |
| Deferred rent expense                            |   |         | 500    |   |   |   | 571 |   |
| Accrued income taxes - long-term                 |   |         | 370    |   |   |   | 887 |   |
| Settlement payment - long-term                   |   |         | -      |   |   |   | 2,200 |   |
| Non-cancelable lease liabilities - restructuring |   |         | -      |   |   |   | 188 |   |
| Total                                            |   | $            | 5,306  |   |   | $ | 8,739 |   |
|                                             |   |         |   |   |   |   |   |   |

----

index

|         |   | December 31, |   |
|--------------|--------|--------------|--------|
|         |   | 2010         |   |   | 2009 |   |
| Interest     |   | $            | 1,075  |   |   | $ | 790 |   |
| Income taxes |   | $            | 22     |   |   | $ | (89 | ) |
|         |   |         |   |   |   |   |   |   |

Item 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Item 9A.  CONTROLS AND PROCEDURES

----

index

Item 9B.  OTHER INFORMATION

----

index

PART III

Item 10.  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Item 11.  EXECUTIVE COMPENSATION

Item 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

|                  |   |                     |   |                 |   | Number of Securities          |
|-----------------------|--------|--------------------------|--------|----------------------|--------|-------------------------------|
|                  |   |                     |   |                 |   | Remaining Available for       |
|                  |   | Number of Securities to  |   | Weighted-average     |   | Future Issuances Under Equity |
|                  |   | Be Issued on Exercise of |   | Exercise Price of    |   | Compensation Plans            |
|                  |   | Outstanding Option,      |   | Outstanding Options, |   | (Excluding Securities         |
| Plan Category         |   | Warrants and Rights      |   | Warrants and Rights  |   | Reflected in Column (a))      |
|                  |   |                     |   |                 |   |                          |
|                  |   | (a)                      |   | (b)                  |   | (c)                           |
| Equity Compensation   |   |                     |   |                 |   |                          |
| Plans Approved by     |   |                     |   |                 |   |                          |
| Stockholders          |   | 270,250                  |   | $5.44                |   | 0                             |
|                  |   |                     |   |                 |   |                          |
| Equity Compensation   |   |                     |   |                 |   |                          |
| Plans Not Approved by |   |                     |   |                 |   |                          |
| Stockholders          |   | 1,628,017                |   | $2.26                |   | 587,513                       |
|                  |   |                     |   |                 |   |                          |
| Total                 |   | 1,898,267                |   |                 |   | 587,513                       |
|                  |   |                     |   |                 |   |                          |

----

index

Item 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Item 14.  PRINCIPAL ACCOUNTING FEES AND SERVICES

----

index

PART IV

Item 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES

SIGNATURES

----

index

|  Signature                   |  Title                                                 |
|-----------------------------------|-------------------------------------------------------------|
|                              |                                                        |
|                              |                                                        |
|  /S/ William F. Andrews      |  Chairman of the Board and Director                    |
|  William F. Andrews          |                                                        |
|                              |                                                        |
|                              |                                                        |
|  /S/ David J. Feldman        |  President, Chief Executive Officer and Director       |
|  David J. Feldman            |  (Principal Executive Officer)                         |
|                              |                                                        |
|                              |                                                        |
|  /S/ James W. Shaffer        |  Vice President, Treasurer and Chief Financial Officer |
|  James W. Shaffer            |  (Principal Financial and Accounting Officer)          |
|                              |                                                        |
|                              |                                                        |
|  /S/ Christopher Anderson    |  Director                                              |
|  Christopher Anderson        |                                                        |
|                              |                                                        |
|                              |                                                        |
|  /S/ Daniel B. Carroll       |  Director                                              |
|  Daniel B. Carroll           |                                                        |
|                              |                                                        |
|                              |                                                        |
|  /S/ Wallace E. Carroll, Jr. |  Director                                              |
|  Wallace E. Carroll, Jr.     |                                                        |
|                              |                                                        |
|                              |                                                        |
|  /S/ Samuel P. Frieder       |  Director                                              |
|  Samuel P. Frieder           |                                                        |
|                              |                                                        |
|                              |                                                        |
|  /S/ Christopher Lacovara    |  Director                                              |
|  Christopher Lacovara        |                                                        |
|                              |                                                        |
|                              |                                                        |
|  /S/ Shant Mardirossian      |  Director                                              |
|  Shant Mardirossian          |                                                        |

----

index

KATY INDUSTRIES, INC.

| ExhibitNumber |  Exhibit Title                                                                                                                                                                                                                                                                                              |    |
|---------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------|
|          |                                                                                                                                                                                                                                                                                                             |         |
| 2             | Preferred Stock Purchase and Recapitalization Agreement, dated as of June 2, 2001 (incorporated by reference to Annex B to the Company’s Proxy Statement on Schedule 14A filed June 8, 2001).                                                                                                              | *            |
| 3.1           | The Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K on July 13, 2001).                                                                                                                              | *            |
| 3.2           | The By-laws of the Company, as amended (incorporated by reference to Exhibit 3.1 of the Company’s Quarterly Report on Form 10-Q filed May 15, 2001).                                                                                                                                                       | *            |
| 10.1          | Amended and Restated Katy Industries, Inc. 1997 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.20 of the Company’s Quarterly Report on Form 10-Q filed August 9, 2006).                                                                                                                 | *            |
| 10.2          | Katy Industries, Inc. Non-Employee Director Stock Option Plan (incorporated by reference to Exhibit 4.1 of the Company’s Registration Statement on Form S-8 filed June 21, 1995).                                                                                                                          | *            |
| 10.3          | Katy Industries, Inc. Supplemental Retirement and Deferral Plan effective as of June 1, 1995 (incorporated by reference to Exhibit 10.4 to Company’s Annual Report on Form 10-K filed April 1, 1996).                                                                                                      | *            |
| 10.4          | Katy Industries, Inc. Directors’ Deferred Compensation Plan effective as of June 1, 1995 (incorporated by reference to Exhibit 10.5 to Company’s Annual Report on Form 10-K filed April 1, 1996).                                                                                                    | *            |
| 10.5          | Employment Agreement dated as of April 21, 2008 between David J. Feldman and the Company (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed May 13, 2008).                                                                                                    | *            |
| 10.6          | Katy Industries, Inc. 2008 Chief Executive Officer’s Plan (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed May 13, 2008).                                                                                                                             | *            |
| 10.7          | CFO Employment Offer Letter dated as of October 27, 2008 between James W. Shaffer and the Company (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K filed October 27, 2008).                                                                                          | *            |
| 10.8          | Amendment to CFO Employment Offer Letter dated as of January 18, 2011 between James W. Shaffer and the Company.                                                                                                                                                                                                  | **           |
| 10.9          | Katy Industries, Inc. 2008 Chief Financial Officer’s Plan, (incorporated by reference to Exhibit 10.9 to the Company’s Annual Report on Form 10-K dated March 31, 2009).                                                                                                                             | *            |
| 10.10         | Subordinated Note dated February 14, 2011 between David J. Feldman and the Company.                                                                                                                                                                                                                              | **           |
| 10.11         | Subordinated Note dated February 14, 2011 between Wallace E. Carroll, Jr. and the Company.                                                                                                                                                                                                                       | **           |
| 10.12         | Subordinated Note dated February 14, 2011 between Daniel Carroll and the Company.                                                                                                                                                                                                                                | **           |
| 10.13         | Katy Industries, Inc. 2002 Stock Appreciation Rights Plan, dated November 21, 2002, (incorporated by reference to Exhibit 10.17 to the Company’s Annual Report on Form 10-K dated April 15, 2003).                                                                                                         | *            |
| 10.14         | Katy Industries, Inc. Executive Bonus Plan dated December 2001 (incorporated by reference to Exhibit 10.18 to the Company’s Annual Report on Form 10-K dated April 15, 2005).                                                                                                                              | *            |
| 10.15         | Second Amended and Restated Loan Agreement dated as of November 30, 2007 with Bank of America, (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed December 5, 2007).                                                                                             | *            |
| 10.16         | Revolving Credit, Term Loan and Security Agreement dated May 26, 2010, among Continental Commercial Products, LLC, Glit/Gemtex, Ltd., Katy Industries, Inc. and PNC Bank, National Association (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed June 2, 2010). | *            |

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index

| 10.17 | First Amendment to Revolving Credit, Term Loan and Security Agreement dated January 18, 2011, among Continental Commercial Products, LLC, Glit/Gemtex, Ltd., Katy Industries, Inc. and PNC Bank, National Association.                                                                                                                  | **  |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----|
| 10.18 | Second Amendment to Revolving Credit, Term Loan and Security Agreement dated January 18, 2011, among Continental Commercial Products, LLC, Glit/Gemtex, Ltd., Katy Industries, Inc. and PNC Bank, National Association.                                                                                                                 | **  |
| 10.19 | Third Amendment to Revolving Credit, Term Loan and Security Agreement dated January 18, 2011, among Continental Commercial Products, LLC, Glit/Gemtex, Ltd., Katy Industries, Inc. and PNC Bank, National Association(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed March 4, 2011). | *   |
| 10.20 | Stand-Alone Stock Appreciation Rights Agreement (incorporated by reference to Exhibit 99.1 of the Company’s Current Report on Form 8-K filed September 6, 2006).                                                                                                                                                                  | *   |
| 10.21 | Katy Industries, Inc, 2011 Change in Control Plan effective as of March 28, 2011.                                                                                                                                                                                                                                                       | **  |
| 10.22 | Director Compensation Arrangements                                                                                                                                                                                                                                                                                                      | **  |
| 21    | Subsidiaries of Registrant                                                                                                                                                                                                                                                                                                              | **  |
| 23    | Consent of Independent Registered Public Accounting Firm                                                                                                                                                                                                                                                                                | **  |
| 31.1  | CEO Certification pursuant to Securities Exchange Act Rule 13a-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                | **  |
| 31.2  | CFO Certification pursuant to Securities Exchange Act Rule 13a-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                | **  |
| 32.1  | CEO Certification required by 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                             | **# |
| 32.2  | CFO Certification required by 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                             | **# |

| *   | Indicates incorporated by reference.                                                                                                                                                                                                                                                                                                                                                                                        |
|----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **  | Indicated filed herewith.                                                                                                                                                                                                                                                                                                                                                                                                   |
| #   | These certifications are being furnished solely to accompany this report pursuant to 18 U.S.C. Section 1350, and are not being filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and are not to be incorporated by reference into any filing of Katy Industries, Inc. whether made before or after the date hereof, regardless of any general incorporation language in such filing. |

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