U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 10-K/A
                                (Amendment No. 1)

(Mark One)

|X|      ANNUAL  REPORT  PURSUANT  TO  SECTION  13 OR  15(d)  OF THE  SECURITIES
         EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2008

                                       or

|_|      TRANSITION  REPORT  PURSUANT  TO SECTION 13 OR 15(d) OF THE  SECURITIES
         EXCHANGE ACT OF 1934

         For the transition period from _________ to __________.

                           Commission File No. 1-1031

                               RONSON CORPORATION
             ---------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

                  NEW JERSEY                            22-0743290
            -----------------------     ------------------------------------
            (State of incorporation)    (I.R.S. Employer Identification No.)

            3 RONSON ROAD, P.O. BOX 3000, WOODBRIDGE, N.J.           07095
            ----------------------------------------------        ----------
            (Address of principal executive office)               (Zip Code)

            Registrant's telephone number     (732) 636-2430
                                              --------------

            Securities registered pursuant to Section 12(g) of the Act:

                                                  Name of each exchange
            Title of each class                   on which registered
            -------------------                   -------------------

            Common Stock par value                Over-the-Counter Pink Sheets
            $1.00 per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act.
Yes |_| No |X|

Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act.
Yes |_| No |X|

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.
YES |X| NO |_|

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. |X|

<PAGE>

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer (as defined in Rule 12b-2 of the
Act). Large accelerated filer |_| Accelerated filer |_| Non-accelerated filer
|X|

Indicate by the check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act).      Yes |_| No |X|


<PAGE>

                                EXPLANATORY NOTE

         Ronson Corporation (the "Company") is filing this Amendment No. 1 to
its Annual Report on Form 10-K (this "Form 10-K/A") for the fiscal year ended
December 31, 2008 (the "2008 10-K"), which was originally filed on April 15,
2009, to address comments from the staff (the "Staff") of the Securities and
Exchange Commission in connection with the Staff's regular periodic review of
the Company's filings. As a result of comments received from the Staff, the
Company has reevaluated its classification of debt and has determined that the
Company should restate its consolidated financial statements for the year ended
December 31, 2008 included in our 2008 10-K to reclassify certain Long-Term Debt
as Current Liabilities and to make corresponding revisions to Item 7 -
Management's Discussion and Analysis of Financial Condition and Results of
Operations. The Company's independent accounting firm has also reissued their
"Report of Independent Registered Public Accounting Firm" in connection with the
restatements, which is included with the consolidated financial statements. In
addition, this Form 10-K/A also includes the restatement of selected financial
data included in Item 6, revision of Item 9A - Controls and Procedures and
revision of the Section 302 Certifications included as Exhibit 31; Section 302
Certifications and the Section 906 Certification, included as Exhibit 32, are
currently dated.

         Except as discussed above, the Company has not modified or updated
disclosures presented in the 2008 10-K in this Form 10-K/A, except as required
to reflect the effects of the items discussed above. Accordingly, this Form
10-K/A does not reflect events occurring after the filing of the 2008 10-K or
modify or update those disclosures affected by subsequent events or discoveries
and information contained in the 2008 10-K and not affected by these
restatements and reclassifications are unchanged. Events occurring after the
filing of the 2008 10-K or other disclosures necessary to reflect subsequent
events have been or will be addressed in the Company's reports filed subsequent
to the 2008 10-K.

         This Form 10-K/A should be read in conjunction with the Company's
filings made with the Securities and Exchange Commission subsequent to the
filing of the 2008 10-K, including any amendments to those filings.

                                       2
<PAGE>


Item 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         -----------------------------------------------------------------------
         OF OPERATIONS
         -------------

RESULTS OF OPERATIONS
---------------------

2008 Compared to 2007

            The Company's Net Sales of $24,187,000 in the year 2008 were lower
as compared to $26,246,000 in 2007. The Company had a Loss from Operations of
$(1,427,000) in the year 2008 as compared to Earnings From Operations of $38,000
in the year 2007. The Company's Net Loss was $(1,652,000) in the year 2008 as
compared to $(597,000) in the year 2007.

Ronson Consumer Products
------------------------
 (in thousands)
                                                        Year Ended December 31
                                                            2008        2007
                                                            ----        ----
Net sales                                                 $12,524     $13,883
Earnings (loss) before interest, other items,
   intercompany charges, and taxes                         (1,116)        269
Nonrecurring Loss                                             (93)         --
Loss before intercompany charges
   and taxes                                               (1,655)       (254)

            Net Sales of consumer products at Ronson Consumer Products
Corporation ("RCPC"), Woodbridge, New Jersey, and Ronson Corporation of Canada
Ltd. ("Ronson-Canada"), Mississauga, Ontario, (together "Ronson Consumer
Products") decreased by 10% in 2008 as compared to 2007 primarily due to
decreased sales of the Company's Ronsonol lighter fuel and Multi-Fill butane
fuel. The sales decrease of 10% in 2008 consisted of a sales decrease of about
13% due to lower unit volume of products sold partially offset by an increase of
higher average net selling prices of about 3%. The Net Sales at Ronson Consumer
Products were significantly reduced in the fourth quarter because: 1) reduced
loan availability under the Company's revolving line of credit restricted the
ability of Ronson Consumer Products to acquire the raw materials to produce the
products to meet customer orders, and 2) the decline in the economy reduced
customer purchases.

            Cost of Sales, as a percentage of Net Sales, at Ronson Consumer
Products increased to 71% in 2008 from 62% in 2007. The increase in the Cost of
Sales percentage in 2008 was primarily due to substantially increased material
costs due to the substantially higher prices of oil used in fuels for butane
refills and Ronsonol as well as other purchased components, to write-downs to
lower-of-cost-or-market of certain inventory items, and to the lower net sales
in 2008. The amount of the Cost of Sales at Ronson Consumer Products increased
in 2008 by 3%. The increase in the amount of Cost of Sales was composed of the
following, in percent:

            Decreased unit volume of products sold           (8)%
            Increased unit costs of products sold *           6 %
            Increased manufacturing costs                     2 %
            Inventory write-down                              3 %
                                                             ----
            Total increase in amount of Cost of Sales         3 %
                                                             ====

            * The increase in unit costs of products sold was due primarily to
increases in oil prices.

                                       3
<PAGE>

            Selling, Shipping and Advertising Expenses, as a percentage of Net
Sales, at Ronson Consumer Products increased to 27% in 2008 from 26% in 2007
primarily because reduced selling personnel costs were more than offset by the
decreased Net Sales. General and Administrative Expenses, as a percentage of Net
Sales, was 8% in 2008 and 7% in 2007.

            Interest Expense at Ronson Consumer Products decreased to $389,000
in 2008 from $406,000 in 2007. The Interest Expense at Ronson Consumer Products
in 2008 included increased interest expense of $35,000 due to the default rate
charged by Wells Fargo Bank, National Association ("Wells Fargo").

Ronson Aviation
---------------
 (in thousands)
                                                       Year Ended December 31,
                                                          2008        2007
                                                          ----        ----
Net sales                                               $11,663     $12,363
Earnings before interest, other items,
   intercompany charges, and taxes                        1,326       1,612
Nonrecurring Loss                                           (52)         --
Earnings before intercompany charges
   and taxes                                              1,079       1,539

            Net Sales at Ronson Aviation decreased in 2008 by 6% as compared to
2007 primarily because increased sales of aircraft fuel in 2008 due to higher
oil prices in 2008 were substantially offset by lower sales of aircraft (none
were sold in 2008)and by reduced sales of aircraft maintenance services.

            Ronson Aviation's Cost of Sales, as a percentage of Net Sales,
increased to 79% in 2008 from 77% in 2007. The increase in the Cost of Sales
Percentage in 2008 was primarily due to the increased cost of aircraft fuel sold
caused by higher oil prices. The increase in the dollar amount of cost of sales
of aircraft fuel due to higher oil prices was approximately equal to the amount
of higher sales of aircraft fuel due to price increases.

            Ronson Aviation's Selling, Shipping and Advertising Expenses and
General and Administrative Expenses, as a percentage of Net Sales, decreased to
8% in 2008 as compared with 9% in 2007 primarily due to decreased personnel
costs because of reductions in management incentive compensation to the
Company's officers related to both 2008 and 2007.

            Interest Expense at Ronson Aviation increased to $207,000 in 2008
from $44,000 in 2007. In 2006 and through November 2007, Ronson Aviation
capitalized much of its interest cost as part of the cost of construction of its
new 19,200 sq. ft. hangar. The hangar was placed in service in November 2007
and, accordingly,the interest costs are no longer being capitalized. The
interest expense at Ronson Aviation in 2008 included increased interest expense
of $48,000 due to the default rate charged by Wells Fargo.

Other Items
-----------

            The General and Administrative Expenses of Corporate and Others
decreased to $1,637,000 in 2008 as compared to $1,815,000 in 2007 primarily
because of reduced personnel costs and reduced professional fees in 2008 as
compared to 2007.

            The Nonrecurring Loss on Extinguishment of Debt of $145,000 in 2008
($93,000 at Ronson Consumer Products and $52,000 at Ronson Aviation) was the

                                       4
<PAGE>

result of repayment of Short-term Debt and Long-term Debt with the new Wells
Fargo financing on May 30, 2008. The Nonrecurring Loss on Extinguishment of Debt
was composed of the following:

Unamortized balance of deferred financing costs          $106,000
Early termination fee paid to CIT Group/Commercial
    Services, Inc.                                         31,000
Difference between book value of Long-term Leases with
    Bank of America Leasing and payoff amount               3,000
Legal fees and other                                        5,000
                                                         --------
    Total                                                $145,000
                                                         ========

            Other-Net included pension expenses related to the Company's frozen
defined benefit plans of $273,000, $220,000 and $315,000, in the years ended
December 31, 2008, 2007, and 2006, respectively.


2007 Compared to 2006

            The Company's Net Sales of $26,246,000 in the year 2007 were lower
as compared to $29,244,000 in 2006. The Company's Earnings from Operations were
$38,000 in the year 2007 as compared to $1,093,000 in the year 2006. The
Company's Earnings (Loss) before Income Taxes were a loss of $(834,000) in the
year 2007 as compared to earnings of $289,000 in the year 2006.

            There were two significant events that negatively affected the
Company's Earnings before Income Taxes in 2006 and 2007. Both events are
nonrecurring. These were:

            Event #1 - There was a sizable sale of about $960,000 in 2006 of
Ronson fuels to a distributor in China, intended solely for the China domestic
market. Contrary to our understanding, the distributor shortly thereafter
returned the fuels back into the U.S. domestic market to a third party without
authorization. The unauthorized return of Ronson fuels to a third party and
their sales into the U.S. market by that third party significantly reduced
domestic sales in 2006 and 2007.

            Event #2 - Results in 2006 and 2007 also reflected the effects of
the Company's investment of approximately $3.3 million in a new 19,200 sq. ft.
hangar at Ronson Aviation. The $3.3 million expenditure met the County's
requirement for an additional investment by Ronson Aviation to extend Ronson
Aviation's favorable lease with Mercer County for an additional twenty-five
years. The new hangar, completed near the end of 2007, tied up sizable cash
funds during construction and did not contribute revenue or earnings to the
Company until the very end of 2007.

Ronson Consumer Products
------------------------
 (in thousands)
                                                         Year Ended December 31,
                                                           2007          2006
                                                           ----          ----
Net sales                                                $13,883       $16,870
Earnings before interest, other items,
   intercompany charges, and taxes                           269         1,243
Earnings (loss) before intercompany charges
   and taxes                                                (254)          946

            Net Sales of consumer products at Ronson Consumer Products decreased
by 18% in 2007 as compared to 2006 primarily due to decreased sales of the

                                       5
<PAGE>

Company's Ronsonol lighter fuel and Multi-Fill butane fuel, and to the sale in
April 2006 to a distributor in China discussed above. The sales decrease of 18%
in 2007 consisted of a sales decrease of about 21% due to lower unit volume of
products sold partially offset by an increase of higher average net selling
prices of about 3%. The April 2006 sale to the distributor in China was at
reduced selling prices.

            Cost of Sales, as a percentage of Net Sales, at Ronson Consumer
Products increased to 62% in 2007 from 61% in 2006. The increase in the Cost of
Sales percentage in 2007 was primarily due to increased material costs due to
the effects of large increases in the price of oil. The amount of the Cost of
Sales at Ronson Consumer Products decreased in 2007 by 16%. The decrease in the
amount of Cost of Sales was composed of the following, in percent:

            Decreased unit volume of products sold       (18)%
            Increased unit costs of products sold *        4 %
            Decreased manufacturing costs                 (2)%
                                                         -----
            Total decrease in amount of Cost of Sales    (16)%
                                                         =====

            * The increase in unit costs of products sold was due primarily to
increases in oil prices.

            Selling, Shipping and Advertising Expenses, as a percentage of Net
Sales, at Ronson Consumer Products increased to 26% in 2007 from 22% in 2006
primarily due to decreased Net Sales. General and Administrative Expenses, as a
percentage of Net Sales, were unchanged at 7% in 2007 and 2006.

            Interest Expense at Ronson Consumer Products increased to $406,000
in 2007 from $290,000 in 2006 primarily due to increased average Long-term Debt,
and, to a lesser extent, increased average Short-term Debt.

Ronson Aviation
---------------
 (in thousands)
                                                  Year Ended December 31,
                                                     2007          2006
                                                     ----          ----
Net sales                                          $12,363       $12,374
Earnings before interest, other items,
   intercompany charges, and taxes                   1,612         1,660
Earnings before intercompany charges
   and taxes                                         1,539         1,606

            Net Sales at Ronson Aviation were unchanged in 2007 as compared to
2006 primarily because reduced sales of new aircraft was substantially offset by
higher sales of fuel and other aviation services in 2007 from 2006.

            Ronson Aviation's Cost of Sales, as a percentage of Net Sales, was
unchanged at 77% in 2007 and 2006. Ronson Aviation's Cost of Sales in 2008 will
include the costs related to the new hangar, including depreciation.

            Ronson Aviation's Selling, Shipping and Advertising Expenses and
General and Administrative Expenses, as a percentage of Net Sales, increased to
9% in 2007 as compared with 7% in 2006 primarily due to increased personnel
costs.

            Interest Expense at Ronson Aviation increased to $44,000 in 2007
from $24,000 in 2006. In 2006 and through November 2007, Ronson Aviation

                                       6
<PAGE>

capitalized much of its interest costs as part of the cost of construction of
its new hangar.

Other Items
-----------

            The General and Administrative Expenses of Corporate and Others
increased to $1,815,000 in 2007 as compared to $1,719,000 in 2006 primarily
because the benefits costs in 2006 were reduced by $99,000, the value of the
President's vacation time previously earned, but not used, that he waived in
2006.

            Effective for the year ended December 31, 2007, the Company is
required (as are other public companies of similar size) to comply with the
provisions of Section 404 of the Sarbanes-Oxley Act related to the Company's
internal control over financial reporting. (Refer to Item 9A(T) below.) The
costs in the initial-year of compliance are expected to be significantly higher
than those in future years. In the fourth quarter of 2007, the Company incurred
$72,000 in initial-year compliance costs, which is included in General and
Administrative Expenses in the Consolidated Statements of Operations. In the
segment data presented in Note 11 of the Notes to Consolidated Financial
Statements, $29,000 is included in each of Ronson Consumer Products and Ronson
Aviation and $14,000 is included in Corporate and Others. The Company expects
that the balance of the initial-year SOX 404 compliance costs will be incurred
in the first quarter of 2008 and total about $50,000.

            The net Other Charges of $28,000, $91,000, and $95,000, in 2007,
2006, and 2005, respectively, were the legal fees incurred as a result of the
two lawsuits filed by the same stockholder. The net shareholder litigation
expenses were included in General and Administrative Expenses in the
Consolidated Statements of Operations. These litigation expenses were net of the
associated insurance reimbursements. This litigation was settled in December
2007 and the costs will not continue.

            Other-Net included pension expenses related to the Company's frozen
defined benefit plans of $220,000, $315,000, and $308,000, in the years ended
December 31, 2007, 2006, and 2005, respectively.

            Other-Net included $90,000 in fees charged by Bank of America in the
first half of 2006 (none in 2007) due to terms of a loan amendment dated January
11, 2006 (which extended the loan agreements to January 31, 2007). Under the
terms of the extension, fees were due to Bank of America, beginning on February
28, 2006, at the end of each month in which the Bank of America loans had not
been repaid. The Bank of America loans were repaid on July 31, 2006.

            Other-Net also included the amortization of $149,000 and $40,000 in
2007 and 2006, respectively, in deferred costs incurred to complete the CIT and
Capital One financing. The costs are being amortized over the terms of the
loans.

Income Taxes
------------

            In accordance with Statement of Financial Accounting Standards
("SFAS") #109, "Accounting for Income Taxes", in 2008, 2007, and 2006, the
Company recognized deferred income tax expense (benefits) of $(1,051,000),

                                       7
<PAGE>

$(244,000), and $130,000, respectively, primarily due to the Earnings (Losses)
before Taxes.

            Current income taxes in the years ended December 31, 2008, 2007, and
2006, were presented net of credits of $24,000, $17,000, and $17,000,
respectively, arising from the utilization of available tax losses and loss
carryforwards in accordance with SFAS #109. In 2008, 2007 and 2006, current
income tax expenses (benefits) were as follows (in thousands):

                                           Year Ended December 31,
                                            2008   2007    2006
                                            ----   ----    ----
                Federal                     $ --   $ (1)   $ --
                State                         10     13      20
                Foreign                        9     (5)     72
                                            ----   ----    ----
                          Total             $ 19   $  7    $ 92
                                            ====   ====    ====

            At December 31, 2008, the Company had net operating loss
carryforwards for federal income tax purposes of approximately $7,471,000 and
federal and state alternative minimum tax credit carryforwards of $102,000.
(Refer to Note 2 of the Notes to Consolidated Financial Statements.)

            For purposes of financial reporting, the Company's effective income
tax rates were benefits of 38% in 2008 and 28% in 2007, and expense of 77% in
2006. The changes in the effective tax rate in 2007 and 2006 were primarily due
to increases in the valuation allowance related to deferred tax assets. In 2006
and 2007, the Company reviewed the likelihood that, using a tax planning
strategy, it would be able to utilize net operating loss carryforwards of
Prometcor, Inc. for purposes of State of New Jersey income taxes. The
determination was made that a portion was not likely to be utilized. Therefore,
in 2006 and 2007, the Company increased the valuation reserve related to
deferred income tax assets resulting in increased Income Tax Expenses.

FINANCIAL CONDITION
-------------------

            The Company's Stockholders' Equity decreased to a deficit of $94,000
at December 31, 2008, from equity of $2,987,000 at December 31, 2007. The
decrease in Stockholders' Equity in 2008 was primarily due to the Net Loss of
$1,652,000 in 2008 and to an increase of $1,398,000 in the Net Pension Loss
component of Accumulated Other Comprehensive Loss. The Net Pension Loss
increased primarily due to reductions in 2008 in the values of the assets held
by the Ronson Corporation Retirement Plan.

            The Company had a deficiency in working capital of $8,337,000 at
December 31, 2008, as compared to a deficiency of $2,436,000 at December 31,
2007. The increase of $5,901,000 in the working capital deficiency was primarily
due to the Loss Before Income Taxes in 2008 of $2,684,000 and by the
classification as current of $3,208,000 of the Wells Fargo term loans and the
$2,088,000 of the Capital One mortgage loan (refer to Note 4 of the Notes to
Consolidated Financial Statements).

            The Company's independent registered public accountants report on
the Company's financial statements for the year ended December 31, 2008,
includes a statement that there is substantial doubt about the Company's ability
to continue as a going concern. The Company has incurred losses from operations
and has a Stockholders' Deficiency and a working capital deficiency. (Refer

                                       8
<PAGE>

to Note 1 to Consolidated Financial Statements on Going Concern and Managements'
Response.)

            On May 30, 2008, the Company and RCPC, Ronson Aviation, and
Ronson-Canada (collectively, the "Borrowers") entered into a secured, revolving
credit facility with Wells Fargo. The credit facility consists of (1)a revolving
line of credit of up to $4.0 million, subsequently reduced to $2,000,000, (2)a
Real Estate Term Loan of $2,922,500 and (3)an Equipment Term Loan of $837,500.
Availability under the credit facility is determined based on the value of the
Borrowers' receivables and inventory, and other factors, as set forth in the
credit and security agreement. The Company is a guarantor of the obligations
under the credit facility. Amounts advanced under the credit facility are
secured by substantially all of the assets of the Company and its subsidiaries,
other than (1)the real property owned by RCPC in Woodbridge, New Jersey and (2)
34% of the Company's interest in Ronson-Canada.

            The term of the credit facility is 60 months. The revolving line of
credit had a balance of $1,472,000 at December 31, 2008. Initially, the
revolving line of credit bore interest at 1/2% over the Wells Fargo prime rate,
or, at the Company's option, a portion could bear interest at LIBOR plus 3%.

            The Equipment Term Loan is payable in 60 equal monthly principal
payments of about $14,000 plus interest. The Real Estate Term Loan is payable in
60 equal monthly principal payments of about $16,000 plus interest. The interest
rate for the Equipment Term Loan, originally the prime rate plus .75%, was
increased in the fourth quarter 2008, to the prime rate plus 3.75%, effective
July 1, 2008. Similarly, the interest rate for the Real Estate Term Loan,
originally the prime rate plus 1%, was increased to the prime rate plus 4%,
effective July 1, 2008.

            In November 2008, Wells Fargo advised the Company and its
subsidiaries that Events of Default under the Credit Agreement had occurred.
These events of default included the Company's not meeting financial covenants
and the Company's not meeting all of the requirements of the Post-Closing
Agreement dated May 30, 2008. The revolving credit facility with Wells Fargo
required the Company, for the quarter ended September 30, 2008, to maintain
Tangible Net Worth (Deficit) (as defined in the facility) of not less than
$(1,500,000), to achieve Net Income (Loss) (as defined in the facility) for the
period from January 1, 2008 to such date of not less than $(437,000) and to
achieve Net Cash Flow (as defined in the facility) for the period from January
1, 2008 to such date of $(280,000). The Company's actual performance for the
quarter resulted in:

      o     Tangible Net Worth (Deficit) of $(2,576,000) (consisting of Book Net
            Worth (Deficit) of $2,556,000 minus Intangible Assets of $4,673,000,
            as defined in the facility);

      o     Net Income (Loss) for the nine-month period of $(986,000)
            (consisting of net income from continuing operations, including
            extraordinary losses but excluding extraordinary gains);

      o     Net Cash Flow for the nine-month period of $(680,000) (consisting of
            Net Income, plus depreciation and amortization of $561,000 and
            periodic pension expense of $208,000, plus write off of deferred
            loan costs of $145,000, minus unfinanced capital expenditures of
            $106,000, pension plan payments of $110,000 and current

                                       9
<PAGE>

            maturities  of  long-term  debt  of  $392,000,  as  defined  in  the
            facility).

            Accordingly, the Company was not in compliance with its covenants to
Wells Fargo as of September 30, 2008, regarding Tangible Net Worth, Net Income
and Net Cash Flow. As a result of the events of default, Wells Fargo increased
the interest rate charged on the loans outstanding under the credit agreement by
3%. These increases were assessed retroactively to July 1, 2008.

            The revolving credit facility with Wells Fargo required the Company,
for the quarter ended December 31, 2008, to maintain Tangible Net Worth
(Deficit) (as defined in the facility) of not less than $(1,150,000), to achieve
Net Income (Loss) (as defined in the facility) for the period from January 1,
2008 to such date of not less than $(50,000) and to achieve Net Cash Flow (as
defined in the facility) for the period from January 1, 2008 to such date of
$50,000. The Company's actual performance for the quarter resulted in:

      o     Tangible Net Worth (Deficit) of $(5,583,000) (consisting of Book Net
            Worth (Deficit) of $(94,000) minus Intangible Assets of $5,759,000,
            as defined in the facility);

      o     Net Income (Loss) for the twelve-month period of $(1,652,000)
            (consisting of net income from continuing operations, including
            extraordinary losses but excluding extraordinary gains);

      o     Net Cash Flow for the twelve-month period of $(1,275,000)
            (consisting of Net Income, plus depreciation and amortization of
            $761,000 and periodic pension expense of $277,000, plus write off of
            deferred loan costs of $145,000, minus unfinanced capital
            expenditures of $135,000, pension plan payments of $155,000 and
            current maturities of long-term debt of $516,000, as defined in the
            facility).

            Accordingly, the Company was not in compliance with its covenants to
Wells Fargo as of December 31, 2008, regarding Tangible Net Worth, Net Income
and Net Cash Flow.

            On February 20, 2009, the Company received from Wells Fargo
additional notification of Wells Fargo's reservation of rights and remedies
relating to previously disclosed events of default which would permit Wells
Fargo to accelerate the Company's outstanding indebtedness owed to Wells Fargo.
These events of default extend to maintaining financial covenant compliance
relating to minimum net income, net cash flow and tangible net worth
requirements of the Company's last completed fiscal quarter, failure to obtain
certain waivers and other agreements with third parties required under the
credit facility, and failure to meet certain financial reporting due dates.
Wells Fargo has instituted certain restrictions and reduced loan availability
and has required the Company to engage a consultant to review its operations and
cash requirements, but has not accelerated any payments under the credit
facility and has continued to lend to the Company.

            Under cross-default provisions in the Company's mortgage loan from
Capital One, the events of default under the Wells Fargo facility are an event
of default under the mortgage loan. Capital One has not accelerated any payments
under the mortgage loan. At December 31, 2008, the amounts of

                                       10
<PAGE>

the outstanding  indebtedness to Wells Fargo and Capital One were $5,042,000 and
$2,133,000, respectively.

            As a result of the Events of the Default under the Wells Fargo
agreement discussed above and the likelihood that the Company would not attain
compliance with the Wells Fargo financial covenants within one year, the
long-term portion of the Equipment Term Loan ($578,000) and the long-term
portion of the Real Estate Term Loan ($2,630,000) have been included in the
Current Portion of Long-term Debt. Under cross default provision of the Capital
One mortgage loan agreement, these events of default under the Wells Fargo
agreement could result in an event of default under the Capital One mortgage
agreement. Therefore, the portion of the loan due after December 31, 2008,
$2,088,000, has also been included in the Current Portion of Long-term Debt.

            On March 30, 2009, the Company and RCPC, Ronson Aviation, and
Ronson-Canada entered into a forbearance agreement with Wells Fargo, under which
Wells Fargo has agreed not to assert existing events of default under the
Borrowers' credit facilities with Wells Fargo through April 24, 2009, or such
earlier date determined under the forbearance agreement. The forbearance period
may terminate earlier if, among other events, the Borrowers breach the
forbearance agreement, additional events of default occur under the credit
facilities with Wells Fargo, the Borrowers fail to employ a Chief Restructuring
Officer or the Borrowers fail actively to pursue alternative financing or
divestiture of the Company's aviation division.

            During the forbearance period, Wells Fargo will make available to
the domestic Borrowers an overadvance facility in the amount of up to $500,000
to supplement the Borrowers' credit line, the maximum amount of which will be
adjusted to $2 million. During the forbearance period, the Borrowers will
continue to be obligated for interest at the default rate under the credit and
term loan facilities with Wells Fargo, except for interest on overadvances that
accrue at the bank's prime rate plus 8% per annum, in addition to a forbearance
fee in the amount of $450,000 which will be charged as an advance under the
credit line upon the earlier of the end of the forbearance period or payment of
all amounts owed to Wells Fargo.

            On March 30, 2009, the Company retained Joel Getzler, of Getzler
Henrich & Associates LLC ("Getzler Henrich"), as Chief Restructuring Officer,
with responsibility for operations, finance, accounting and related
administrative issues, subject to the authority and reporting to the Company's
Board of Directors. Getzler Henrich is a corporate turnaround and restructuring
firm which, in addition to its operational restructuring focus, is experienced
in restructuring, lender/credit relationship management and financing. Mr.
Getzler will act as Chief Restructuring Officer for the period during which
Wells Fargo continues to make revolving advances to the Borrowers in an amount
sufficient to fund their cash flow needs. The Company will be obligated for fees
and expenses to Getzler Henrich in connection with services provided by Mr.
Getzler and his associates. Under the engagement letter, the Company will pay to
Getzler Henrich a fee in the amount of $15,000 per week for the services of Mr.
Getzler as Chief Restructuring Officer and hourly fees for Mr. Getzler's
associates, the aggregate amount of which will not exceed $130,000 for the
initial four-week term under the Engagement Agreement. In addition, Getzler
Henrich will be entitled to a signing bonus in the amount of $200,000.

            During the term of the engagement agreement, payments against
accrued amounts, including the signing bonus, will be made to Getzler Henrich in
the

                                       11
<PAGE>

amount of $10,000 each week. All accrued amounts, together with the amount of
$190,000 owed to Getzler Henrich in fees prior to the appointment of Mr.
Getzler, will become due upon specified liquidity events, but no later than
August 31, 2009, or earlier, if the Company is not in compliance under the
engagement agreement. All amounts owed to Getzler Henrich are secured by a
collateral interest in those assets pledged to Wells Fargo, subordinated to the
interest of Wells Fargo. During the term of the engagement agreement, payment of
salaries, fees, perks and expenses to members of the Company's Board of
Directors, including its President and Chief Executive Officer, will be
deferred.

            The Company announced that it has initiated plans to divest Ronson
Aviation. The Company is in the process of procuring purchasers so as to
maximize the value of Ronson Aviation, permit it to satisfy outstanding
indebtedness, including to Wells Fargo, and provide working capital to support
and focus on its consumer products business. The Company's objective is to
consummate a transaction prior to the end of the second quarter, subject to
identifying and reaching agreement with a prospective purchaser, obtaining
shareholder approval and meeting other conditions that may be contained in
definitive documentation once negotiated.

            In 2008 and to date in 2009, the Company has taken steps to reduce
its costs and expenses. Certain salaries to officers were reduced. The Company's
officers accepted reductions in the management incentive compensation totaling
$79,000 related to operating results in 2007 that had been due to be paid in
2008 and $44,000 in management incentive compensation related to operating
results in 2008. In the first quarter of 2009, the Company reduced its workforce
by about 15 persons, or 17% of the Company's staff. The Company reduced certain
of the health benefits provided to its employees, and the Company deferred
payment of the Company's contribution to its defined contribution pension plan.
In addition, certain employees have temporarily assumed payment of costs of
Company vehicles and costs of life and other insurance. All payments to
directors of the Company, including officers who are directors, have been
deferred. The Company continues to review its costs and expenses in order to
implement additional reductions.

            Pending consummation of a transaction, the Company will continue to
effect cost reductions and seek sources of financing, without which the Company
will not be able to fund current operations beyond the forbearance period. The
Company does not have a commitment from Wells Fargo to extend the forbearance
period beyond its current duration. In the event of acceleration of its
indebtedness to Wells Fargo and its outstanding mortgage loans, as a result of
existing defaults, the Company would not have sufficient cash resources to pay
such amounts. There can be no assurance that the Company will be able to obtain
an extension of its arrangements with Wells Fargo, arrange additional financing
or complete its divestiture plans, within its anticipated time frame or on terms
acceptable to it.

            Should the sale of Ronson Aviation be consummated at or near the
values expected by management, the Company will substantially reduce its
outstanding debt and improve working capital. (Refer to Note 16 of the Notes to
Consolidated Financial Statements.) Management believes that the improved
financial condition will allow the Company to support and focus on its consumer
products business. The Company expects that its manufacturing and delivery to
customers will return to prior levels.

            Based on the amount of the loans outstanding and levels of accounts
receivable and inventory at December 31, 2008, the Company's subsidiaries had

                                       12
<PAGE>

unused borrowings available at December 31, 2008, of about $135,000 under the
Wells Fargo line of credit described above, of which approximately $70,000 was
utilized on January 2, 2009 to meet the debt service requirements and fees of
Wells Fargo.

            The Company's results of operations and cash flow in 2009 will be
adversely affected by the lack of working capital. In the first quarter of 2009,
the Company was not consistently able to purchase the materials necessary for
Ronson Consumer Products to meet its customers' orders, and sales have been
adversely affected. The overadvance from Wells Fargo has resulted in
significantly reducing the shortfall in raw materials in the second quarter;
however, sales at Ronson Consumer Products will continue to be adversely
affected in the second quarter. In addition, the Company has incurred
substantial legal and consulting costs related to the Wells Fargo agreement and
the consulting and engagement agreements with Getzler Henrich.

            In the third quarter of 2008, the Company's President and CEO
provided a loan to the Company of $275,000. In the first quarter of 2009, the
Company's President and CEO increased the loan by $25,000 to $300,000.

            The Company's Accounts Receivable were lower at December 31, 2008,
as compared to December 31, 2007, due to the reduced sales in the fourth quarter
2008, described above. The Company's inventory was lower at December 31, 2008,
as compared to December 31, 2007, because of the Company's reduced access to
funds to purchase materials for Ronson Consumer Products.

            Other Current Assets were lower at December 31, 2008, as compared to
December 31, 2007, primarily due to a reduction in prepaid insurance and to
reduced restricted cash balances. The Company's Other Assets increased at
December 31, 2008, as compared to December 31, 2007, primarily due to increased
Deferred Income Tax Assets due to the Loss before Income Taxes in 2008. The
Company's Other Long-term Liabilities increased at December 31, 2008 as compared
to December 31, 2007, due to the net pension loss in 2008 (refer to Note 6 of
Notes to Consolidated Financial Statements).

            The Company's Capital Expenditures were $1,097,000 in 2007 primarily
at Ronson Aviation for the construction of its new 19,200 sq. ft. hangar. Ronson
Aviation expended a total of approximately $3,285,000 on the new hangar. By
mid-November 2007, Ronson Aviation began utilizing the new hangar and receiving
additional revenues and operating earnings from the new hangar's operations.

            In February 2009, the Company received notice from the Nasdaq Stock
Market that trading in the Company's common stock on the Nasdaq Capital Market
would be suspended on February 27, 2009. The Company does not comply with the
minimum stockholders' equity requirement for continued listing. The Company's
common stock is now traded on the Over-the-Counter Pink Sheets.

            The Company's capital commitments including long-term debt and
leases are discussed more fully in Notes 4 and 5 of the Notes to Consolidated
Financial Statements. A summary of the maturities of contractual obligations and
other commitments is as follows (in thousands):

                                       13
<PAGE>

                                           Payments Due by Period
                                           ----------------------
Contractual                           Less than     2-3        4-5       After
Obligations                  Total      1 Year     Years      Years     5 Years
                            --------   --------   --------   --------   --------

Long-term debt              $  5,890   $  5,750   $     83   $     57   $     --
Capital lease obligations         35         17         18         --         --
Operating leases               1,110        436        477        197         --
Other long-term
    obligations (1)            1,266      1,266         --         --         --
Total contractual
    obligations             $  8,301   $  7,469   $    578   $    254   $     --

Pension obligations (2)                $    242   $    927   $    558

      (1)   Other long-term obligations include amounts due under an employment
            agreement, the forbearance fee due to Wells Fargo, and the Chief
            Restructuring Officer fees and signing bonus.

      (2)   The payments of pension obligations assume necessary required
            contributions are made annually and that the plan incurs no
            actuarial or asset gains or losses. No estimate of contributions
            after five years can be made at this time because actuarial gains
            and losses cannot be estimated at this time.

            The Company will continue to incur interest expenses related to its
outstanding short-term and long-term debt. In the years ended December 31, 2008,
2007, and 2006, the Company's interest expenses were $671,000, $533,000 and
$476,000, respectively. Management expects its interest expenses (excluding
interest related to capital lease obligations) in the years ending December 31,
2009, through 2012 to be approximately (in thousands):

               2009                                     $553
               2010-2011 (2 years)                      $565
               2012-2013 (2 years)                      $393
               After 2013                                ---

            The estimated interest payments assume: 1) that the long-term debt
and capitalized lease obligations are repaid according to the maturities with
the mortgage loan amortization adjusted to conform with the revised terms
effective August 12, 2008; 2) the Company's revolving loans will continue
through 2012 at the same terms and at the average balances of 2008; 3) interest
rates remain at the December 31, 2008 levels; and 4) interest expense related to
capitalized lease obligations is excluded because it is included in the table of
Contractual Obligations above. Each of these assumptions is subject to
potentially significant changes based on future conditions and events. The
Company expects that its interest expense will be reduced substantially if and
when the sale of Ronson Aviation is completed.

            The Company has no off-balance sheet financing arrangements other
than the operating leases discussed above, no guarantees of the obligations of
others, and no unconsolidated subsidiaries or special purpose entities.

Item 9A(T) - CONTROLS AND PROCEDURES
             -----------------------

            a) Evaluation of Disclosure Controls and Procedures. The Company's
Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO") have

                                       14
<PAGE>

evaluated the effectiveness of the Company's disclosure controls and procedures
(as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the
period covered by this annual report. Based on such evaluation, such officers
have concluded that, as of the end of the period covered by this annual report,
the Company's disclosure controls and procedures were adequate, are designed to
ensure that material information related to the Company (including its
consolidated subsidiaries) would be made known to the above officers, are
effective and provide reasonable assurance that they will meet their objectives.

            The Company's CEO and CFO reviewed whether the restatement of the
Company's consolidated financial statements for the fiscal year ended December
31, 2008, as described in the Explanatory Note above and Note 17 to the
consolidated financial statements, affected their conclusions that the Company's
disclosure controls and procedures, as of December 31, 2008, were effective in
timely alerting them to material company information required to be included in
our periodic filings with the SEC. In connection with their review, our CEO and
CFO noted that our decision to restate our financial results did not call into
question whether the relevant information was recorded, processed, summarized or
reported within the time periods specified in the SEC's rules and forms. It also
did not involve any issue about whether information required to be disclosed was
accumulated and communicated to our CEO and CFO to allow timely decisions
regarding required disclosure. Rather, the restatements resulted from an
interpretation of the guidance provided in Emerging Issues Task Force Statement
86-30 that resulted in the incorrect classification of certain liabilities as
long-term when they properly should have been classified as current. Therefore,
based on that review, the Company's management, including the CEO and CFO
determined that its prior conclusions, that the Company's disclosure controls
and procedures were effective as of December 31, 2008, had not changed.

            Management's Report on Internal Control over Financial Reporting

            Management is responsible for establishing and maintaining adequate
internal control over financial reporting. A company's internal control over
financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted
accounting principles.

            The Company's management, including the CEO and CFO, does not expect
that our Disclosure Controls will prevent all errors and all fraud. A control
system, no matter how well conceived and operated, can provide only reasonable,
not absolute, assurance that the objectives of the control system are met.
Further, the design of a control system must reflect the fact that there are
resource constraints, and the benefits of controls must be considered relative
to their costs. Because of the inherent limitations in all control systems, no
evaluation of controls can provide absolute assurance that all control issues
and instances of fraud, if any, within the Company have been detected. These
inherent limitations include the realities that judgments in decision-making can
be faulty, and that breakdowns can occur because of simple error or mistake. The
design of any system of controls also is based in part upon certain assumptions
about the likelihood of future events, and there can be no assurance that any
design will succeed in achieving its stated goals under all potential future
conditions.

                                       15
<PAGE>

            Management, including the CEO and CFO, has conducted an evaluation
of the effectiveness of the Company's internal control over financial reporting
as of December 31, 2008, based on the criteria for effective internal control
described in Internal Control - Integrated Framework issued by the Committee of
Sponsoring Organization of the Treadway Commission. Based on its assessment,
management concluded that the Company's internal control over financial
reporting was effective as of December 31, 2008.

            This annual report does not include an attestation report of the
Company's registered public accounting firm regarding internal control over
financial reporting. Management's report was not subject to attestation by the
Company's registered public accounting firm pursuant to temporary rules of the
Securities and Exchange Commission that permit the Company to provide only
management's report in this annual report.

            This report shall not be deemed to be filed for purposes of Section
18 of the Securities Exchange Act of 1934, or otherwise subject the liabilities
of that section, and is not incorporated by reference into any filing of the
Company, whether made before or after the date hereof, regardless of any general
incorporation language in such filing.

            b) Changes in Internal Controls. There were no significant changes
in the Company's internal controls or in other factors that could significantly
affect these controls in the last fiscal quarter or subsequent to the date of
their evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.


                                       16
<PAGE>


                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                               RONSON CORPORATION



                                         RONSON CORPORATION

Dated: November 20, 2009          By:   /s/ Louis V. Aronson II
                                        ------------------------
                                        Louis V. Aronson II, President &
                                        Chief Executive Officer and Director

Dated: November 20, 2009          By:   /s/ Daryl K. Holcomb
                                        --------------------
                                        Daryl K. Holcomb, Vice President,
                                        Chief Financial Officer & Controller

Dated: November 20, 2009          By:   /s/ Erwin M. Ganz
                                        -----------------
                                        Erwin M. Ganz, Treasurer,
                                        Assistant Secretary and Director

Dated: November 20, 2009          By:   /s/ Justin P. Walder
                                        --------------------
                                        Justin P. Walder, Secretary and
                                        Director

Dated: November 20, 2009          By:   /s/ Barbara L. Collins
                                        ----------------------
                                        Barbara L. Collins, Director

Dated: November 20, 2009          By:   /s/ Edward E. David
                                        -------------------
                                        Edward E. David, Director

Dated: November 20, 2009          By:   /s/ John H. Bess
                                        ----------------
                                        John H. Bess, Director

Dated: November 20, 2009          By:   /s/ Gerard J. Quinnan
                                        ---------------------
                                        Gerard J. Quinnan, Director

                                       17
<PAGE>


RONSON CORPORATION FIVE-YEAR SELECTED FINANCIAL DATA
----------------------------------------------------

Dollars in thousands (except per share data)

<TABLE>
<CAPTION>
                                        2008       2007         2006       2005        2004
                                        ----       ----         ----       ----        ----
<S>                                  <C>         <C>         <C>        <C>         <C>
Net sales                            $ 24,187    $ 26,246    $ 29,244   $ 26,563    $ 28,483

Earnings (loss) from continuing
   operations                        $ (1,652)   $   (597)   $     67   $   (333)   $    193

Total assets                         $ 14,837    $ 15,401    $ 14,720   $ 12,654    $ 13,942

Long-term obligations                $  2,486    $  3,790    $  4,020   $  2,717    $  2,898

Per common share (1,2):
   Earnings (loss) from continuing
      operations:
      Basic                          $  (0.32)   $  (0.12)   $   0.01   $  (0.07)   $   0.04
      Diluted                        $  (0.32)   $  (0.12)   $   0.01   $  (0.07)   $   0.04

   Cash dividends declared (3)       $     --    $     --    $     --   $   0.02    $   0.03
</TABLE>


(1) Basic Net Earnings (Loss) per Common Share provides for quarterly cumulative
preferred dividends with no conversion of preferred shares to common shares.
Diluted Earnings (Loss) per Common Share assumes no provision for the quarterly
cumulative preferred dividends with full conversion of all preferred shares to
common shares in 2004 and includes the dilutive effect of outstanding stock
options. The stock options were anti-dilutive for the years ended December 31,
2008, 2007 and 2005, and therefore, were excluded from the computation of
Diluted Net Earnings (Loss) per Common Share for those years.

(2) A 5% stock dividend on the Company's outstanding common stock was declared
on February 1, 2008, and issued on April 15, 2008. Previously, 5% stock
dividends on the Company's outstanding common stock were issued on April 16,
2007, and on April 15, 2006, 2005, and 2004.

(3) Cash dividends of $0.01 per share were paid on March 15, 2005, and on June
17, 2005. Cash dividends of $0.01 per share were paid on June 18, September 18,
and December 17, 2004.

                                       18
<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
             -------------------------------------------------------

To the Board of Directors and
Stockholders of Ronson Corporation

We have audited the accompanying consolidated balance sheets of Ronson
Corporation and subsidiaries as of December 31, 2008 and 2007, and the related
consolidated statements of operations, changes in stockholders' equity and cash
flows for each of the years in the three-year period ended December 31, 2008.
These financial statements are the responsibility of the company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Ronson Corporation
and subsidiaries as of December 31, 2008 and 2007, and the results of their
operations and their cash flows for each of the years in the three-year period
ended December 31, 2008 in conformity with accounting principles generally
accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
consolidated financial statements, the company has suffered recurring losses
from operations and has a net capital deficiency that raise substantial doubt
about its ability to continue as a going concern. Management's plans in regard
to these matters are also described in Note 1. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.

As discussed in Note 17 to the consolidated financial statements, these
statements have been restated.


DEMETRIUS & COMPANY, L.L.C.

Wayne, New Jersey
April 15, 2009
Except as to the restatement discussed in Note 17 of the consolidated financial
statements, which is as of November 18, 2009

                                       19
<PAGE>

RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES

     CONSOLIDATED BALANCE SHEETS
     ---------------------------
     Dollars in thousands


                                     ASSETS
                                     ------
                                                               December 31,
                                                             -----------------
                                                              2008      2007
                                                              ----      ----

CURRENT ASSETS:
Cash and cash equivalents ................................   $    84   $    78
Accounts receivable, less allowances for doubtful accounts
   of: 2008, $56 and 2007, $67 ...........................     1,288     1,743
Inventories:
   Finished goods ........................................     1,382     2,106
   Work in process .......................................        22        45
   Raw materials .........................................       435       925
                                                             -------   -------
                                                               1,839     3,076

Other current assets .....................................       897     1,291
                                                             -------   -------
                  TOTAL CURRENT ASSETS ...................     4,108     6,188


PROPERTY, PLANT AND EQUIPMENT:
Land .....................................................         6         6
Buildings and improvements ...............................     8,802     8,812
Machinery and equipment ..................................     6,947     6,875
Construction in progress .................................       126       125
                                                             -------   -------
                                                              15,881    15,818

Less accumulated depreciation and amortization ...........    10,038     9,500
                                                             -------   -------
                                                               5,843     6,318



OTHER ASSETS .............................................     4,886     2,895
                                                             -------   -------
                                                             $14,837   $15,401
                                                             =======   =======

         See notes to consolidated financial statements.

                                       20
<PAGE>

RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES

     CONSOLIDATED BALANCE SHEETS
     ---------------------------
     Dollars in thousands (except share data)


                      LIABILITIES AND STOCKHOLDERS' EQUITY
                      ------------------------------------
<TABLE>
<CAPTION>
                                                                          December 31,
                                                                 ----------------------------
                                                                      2008            2007
                                                                      ----            ----
<S>                                                              <C>            <C>
   CURRENT LIABILITIES:
   Short-term debt ..........................................    $     1,747    $      3,126
   Current portion of long-term debt ........................          5,750             423
   Current portion of lease obligations .....................             13             242
   Accounts payable .........................................          2,902           3,086
   Accrued expenses .........................................          2,033           1,747
                                                                 -----------    ------------
                     TOTAL CURRENT LIABILITIES ..............         12,445           8,624

   LONG-TERM DEBT ...........................................            140           3,097
   LONG-TERM LEASE OBLIGATIONS ..............................             19             457
   OTHER LONG-TERM LIABILITIES ..............................          2,327             236

   COMMITMENTS AND CONTINGENCIES ............................             --              --

   STOCKHOLDERS' EQUITY:
   Preferred stock, no par value, authorized 5,000,000 shares

   Common stock, par value $1
                                       2008            2007
                                      -----            -----
      Authorized shares ..........   11,848,106      11,848,106
      Reserved shares ............       25,513          11,026
      Issued (including treasury).    5,172,577       5,172,577        5,173           5,173
   Additional paid-in capital ...............................         29,998          29,997
   Accumulated deficit ......................................        (30,893)        (29,241)
   Accumulated other comprehensive loss .....................         (2,775)         (1,345)
                                                                 ------------   ------------
                                                                       1,503          4,584
   Less cost of treasury shares:
       2008 and 2007, 89,038 ................................          1,597           1,597
                                                                 ------------   ------------
                     TOTAL STOCKHOLDERS' EQUITY .............            (94)          2,987
                                                                 ------------   ------------
                                                                 $    14,837    $     15,401
                                                                 ============   ============
</TABLE>

         See notes to consolidated financial statements.

                                       21
<PAGE>

RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES

      CONSOLIDATED STATEMENTS OF OPERATIONS
      -------------------------------------
      Dollars in thousands (except per share data)

<TABLE>
<CAPTION>
                                                                       Year Ended December 31,
                                                        --------------------------------------------------
                                                              2008              2007             2006
                                                              ----              ----             ----
<S>                                                     <C>                <C>                <C>
   NET SALES .....................................      $     24,187       $     26,246       $     29,244
                                                        ------------       ------------       ------------

   Cost and expenses:
       Cost of sales .............................            18,053             18,075             19,807
       Selling, shipping and advertising .........             3,373              3,642              3,714
       General and administrative ................             3,566              3,900              4,014
       Depreciation and amortization .............               622                591                616
                                                        ------------       ------------       ------------
                                                              25,614             26,208             28,151
                                                        ------------       ------------       ------------
   EARNINGS (LOSS) BEFORE INTEREST AND
       OTHER ITEMS ...............................            (1,427)                38              1,093
                                                        ------------       ------------       ------------

   Other expense:
       Interest expense ..........................               671                533                476
       Nonrecurring loss on extinguishment of debt               145                 --                 --
       Other-net .................................               441                339                328
                                                        ------------       ------------       ------------
                                                               1,257                872                804
                                                        ------------       ------------       ------------

   EARNINGS (LOSS) BEFORE INCOME TAXES ...........            (2,684)              (834)               289

   Income tax provision (benefits) ...............            (1,032)              (237)               222
                                                        ------------       ------------       ------------

   NET EARNINGS (LOSS) ...........................      $     (1,652)      $       (597)      $         67
                                                        ============       ============       ============

   NET EARNINGS (LOSS) PER COMMON SHARE:


   Basic .........................................      $      (0.32)      $      (0.12)      $       0.01
                                                        ============       ============       ============

   Diluted .......................................      $      (0.32)      $      (0.12)      $       0.01
                                                        ============       ============       ============
</TABLE>

                 See notes to consolidated financial statements.

                                       22
<PAGE>

 RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES

      CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
       For the Years Ended December 31, 2008, 2007 and 2006
       Dollars in thousands

<TABLE>
<CAPTION>
                                                                                 Accumulated                               Compre-
                                                          Additional                 Other      Treasury                   hensive
                                                Common     Paid-in   Accumulated Comprehensive   Stock                     Income
                                                Stock      Capital     Deficit       Loss      (at cost)     Total         (Loss)
                                              --------    --------   ---------    --------     ---------  ----------      ----------
      Balance at December 31, 2005            $ 5,088     $ 30,069   $ (28,711)   $ (1,545)    $ (1,597)  $    3,304
                                              --------    --------   ---------    --------     ---------  ----------

<S>                                           <C>         <C>        <C>          <C>          <C>        <C>             <C>
      Net  earnings - 2006                                                  67                                   67       $      67
                                                                                                                          ----------
      Translation adjustment, net of tax                                                                                        (48)
      Other comprehensive loss on swap                                                                                          (13)
      Pensions, net of tax                                                                                                      356
                                                                                                                          ----------
      Other comprehensive  income                                                      295                      295             295
                                                                                                                          ----------
      Comprehensive income                                                                                                $     362
                                                                                                                          =========
      Adjustment to initially apply FASB
           Statement No. 158, net of tax                                               (39)                     (39)
      Shares issued for:
           Stock options exercised                 56           (9)                                              47
      Stock option purchased                                   (48)                                             (48)
                                              --------    --------   ---------    --------     ---------  ----------
      Balance at December 31, 2006              5,144       30,012     (28,644)     (1,289)      (1,597)      3,626
                                              --------    --------   ---------    --------     ---------  ----------

      Net  loss - 2007                                                    (597)                                (597)      $    (597)
                                                                                                                          ----------
      Translation adjustment, net of tax                                                                                         28
      Pensions, net of tax                                                                                                      (91)
      Pensions, PSC, net of tax                                                                                                   7
                                                                                                                          ----------
      Other comprehensive  loss                                                        (56)                     (56)            (56)
                                                                                                                          ----------
      Comprehensive loss                                                                                                  $    (653)
                                                                                                                          ==========
      Shares issued for:
           Stock options exercised                 29           (3)                                              26
      Stock option purchased                                   (24)                                             (24)
      Stock option expense                                      12                                               12
                                              --------    --------   ----------   ---------    ---------  ----------
      Balance at December 31, 2007              5,173       29,997     (29,241)     (1,345)      (1,597)      2,987
                                              --------    --------   ----------   ---------    ---------  ----------

      Net  loss - 2008                                                  (1,652)                              (1,652)      $  (1,652)
                                                                                                                          ----------
      Translation adjustment, net of tax                                                                                        (37)
      Pensions, net of tax                                                                                                   (1,398)
      Pensions, PSC, net of tax                                                                                                   5
                                                                                                                          ----------
      Other comprehensive  loss                                                     (1,430)                  (1,430)         (1,430)
                                                                                                                          ----------
      Comprehensive loss                                                                                                  $  (3,082)
                                                                                                                          ==========
      Stock option expense                                       1                                                1
                                              --------    --------   ---------    ---------    ---------  ----------
      Balance at December 31, 2008            $ 5,173     $ 29,998   $ (30,893)   $ (2,775)    $ (1,597)  $     (94)
                                              =======     ========   =========    ========     ========   ==========
</TABLE>


                                        SHARE ACTIVITY
                                    ----------------------

                                      Common      Treasury
                                      Stock        Stock
                                    ----------   ---------
     Balance at December 31, 2005   5,088,216      89,038
     Shares issued for:
          Stock options exercised      55,883
                                    ---------   ---------
     Balance at December 31, 2006   5,144,099      89,038
     Shares issued for:
          Stock options exercised      28,478
                                    ---------   ---------
     Balance at December 31, 2007   5,172,577      89,038
     Shares issued for:
          Stock options exercised
                                    ---------   ---------
     Balance at December 31, 2008   5,172,577      89,038
                                    =========   =========

                 See notes to consolidated financial statements.

                                       23
<PAGE>

RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES


  CONSOLIDATED STATEMENTS OF CASH FLOWS
  -------------------------------------
  Dollars in thousands

<TABLE>
<CAPTION>
                                                                           Year Ended December 31,
                                                                     ----------------------------------
                                                                      2008         2007           2006
                                                                      ----         ----           ----
<S>                                                                 <C>           <C>           <C>
   Cash Flows from Operating Activities:
   Net earnings (loss) .......................................      $(1,652)      $  (597)      $    67
   Adjustments to reconcile net earnings (loss)
       to net cash provided by (used in) operating activities:
       Depreciation and amortization .........................          761           740           656
       Stock option expense ..................................            1            12            --
       Deferred income tax provision (benefits) ..............       (1,051)         (244)          130
       Write-off previously deferred loan costs ..............          106            --            --
       Net changes in assets and liabilities:
          Accounts receivable ................................          418           144           (49)
          Inventories ........................................        1,237          (281)         (240)
          Other current assets ...............................          318          (105)         (185)
          Accounts payable ...................................         (147)          715           231
          Accrued expenses ...................................           81          (263)          129
          Other non-current assets and other long-term
            liabilities ......................................         (314)         (136)         (221)
       Net change in pension-related accounts ................          119           (11)         (398)
       Exchange (gain) loss ..................................           --            --           (78)
                                                                    -------       -------       -------
          Net Cash Provided by (Used in) Operating Activities          (123)          (26)           42
                                                                    -------       -------       -------

   Cash Flows from Investing Activities:
   Capital expenditures ......................................         (117)       (1,097)       (2,185)
   Proceeds from sale of property, plant & equipment .........           --            --            12
                                                                    -------       -------       -------
          Net Cash Used in Investing Activities ..............         (117)       (1,097)       (2,173)
                                                                    -------       -------       -------

   Cash Flows from Financing Activities:
   Proceeds from short-term debt .............................        1,747           985         2,526
   Proceeds from long-term debt ..............................        3,761           499         3,145
   Proceeds from issuance of common stock ....................           --            26            47
   Payments of long-term debt ................................       (1,409)         (347)       (1,518)
   Payments of long-term lease obligations ...................         (667)         (277)         (255)
   Payments of short-term debt ...............................       (3,126)           (2)       (1,883)
   Cost of stock option agreement ............................           --           (24)          (48)
                                                                    -------       -------       -------
          Net Cash Provided by Financing Activities ..........          306           860         2,014
                                                                    -------       -------       -------
   Effect of Exchange Rate Changes on Cash and
    Cash Equivalents .........................................          (60)           47            (3)
                                                                    -------       -------       -------
   Net (Increase) Decrease in Cash and Cash Equivalents .. ...            6          (216)         (120)

   Cash and Cash Equivalents at Beginning of Year ............           78           294           414
                                                                    -------       -------       -------
   Cash and Cash Equivalents at End of Year ..................      $    84       $    78       $   294
                                                                    =======       =======       =======
</TABLE>

                 See notes to consolidated financial statements.

                                       24
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

            Principles of Consolidation - The consolidated financial statements
include the accounts of Ronson Corporation (the "Company") and its subsidiaries,
all of which are wholly owned. Its principal subsidiaries are Ronson Consumer
Products Corporation ("RCPC"), Woodbridge, New Jersey; Ronson Corporation of
Canada Ltd. ("Ronson-Canada"), Mississauga, Ontario, Canada (these together are
"Ronson Consumer Products"); and Ronson Aviation, Inc. ("Ronson Aviation"),
Trenton, New Jersey. All significant intercompany accounts and transactions have
been eliminated in consolidation.

            Estimates - The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the period. Actual results could differ from those
estimates.

            Going Concern and Management's Response - The accompanying financial
statements have been prepared assuming that the Company will continue as a going
concern. The Company had a Loss from Operations of $1,427,000 and a Net Loss of
$1,652,000 for the year ended December 31, 2008. At December 31, 2008, the
Company had both a deficiency in working capital and a Stockholders' Deficit. In
addition, the Company was in violation of certain provisions of certain
short-term and long-term debt covenants at December 31, 2008 (refer to Note 3).
As a result of the violations of certain debts covenant, the long term portion,
$5,246,000, of three loans was classified as Current Portion of Long-Term Debt
(refer to Note 17 below).

       The Company's losses and difficulty in generating sufficient cash flow to
meet its obligations and sustain its operations, as well as existing events of
default under its credit facilities and mortgage loans, raise substantial doubt
about its ability to continue as a going concern. The consolidated financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.

            On March 30, 2009, the Company and its wholly-owned subsidiaries
entered into a forbearance agreement with their principal lender, Wells Fargo
Bank, National Association ("Wells Fargo"), under which Wells Fargo has agreed
not to assert existing events of default under the borrowers' credit facilities
with Wells Fargo through April 24, 2009, or such earlier date determined under
the forbearance agreement. The forbearance period may terminate earlier if,
among other events, the borrowers breach the forbearance agreement, additional
events of default occur under the credit facilities with Wells Fargo, the
borrowers fail to employ a Chief Restructuring Officer or the borrowers fail
actively to pursue alternative financing or divestiture of the Company's
aviation division.

            During the forbearance period, Wells Fargo will make available to
the domestic borrowers an overadvance facility in the amount of up to $500,000
to supplement the Borrowers' credit line, the maximum amount of which will be
adjusted to $2 million. During the forbearance period, the borrowers will
continue to be obligated for interest at the default rate under the credit and
term loan facilities with Wells Fargo, except for interest on overadvances that
accrue at the bank's prime rate plus 8% per annum, in addition to a forbearance
fee in the amount of $450,000 which will be charged as an advance under the
credit line upon

                                       25
<PAGE>

the earlier of the end of the  forbearance  period or  repayment  of all amounts
owed to Wells Fargo.

            On March 30, 2009, the Company also announced that it has initiated
plans to divest Ronson Aviation, its wholly-owned subsidiary engaged as a
fixed-base operator at Trenton-Mercer Airport. Ronson Aviation provides aircraft
fueling and servicing, avionics sales, aircraft repairs and maintenance, hangar
and office leasing and related services. The Company is in the process of
procuring purchasers so as to maximize the value of Ronson Aviation, permit it
to satisfy outstanding indebtedness, including to Wells Fargo, and provide
working capital to support and focus on its consumer products business. The
Company's objective is to consummate a transaction prior to the end of the
second quarter of 2009, subject to identifying and reaching agreement with a
prospective purchaser, obtaining shareholder approval and meeting other
conditions that may be contained in definitive documentation once negotiated.

            In 2008 and to date in 2009, the Company has taken steps to reduce
its costs and expenses. Certain salaries to officers were reduced. The Company's
officers accepted reductions in the management incentive compensation totaling
$79,000 related to operating results in 2007 that had been due to be paid in
2008 and $44,000 in management incentive compensation related to operating
results in 2008. In the first quarter of 2009, the Company reduced its workforce
by about 15 persons, or 17% of the Company's staff. The Company reduced the
health benefits provided to its employees, and deferred payment of the Company's
contribution to its defined contribution pension plan. In addition, certain
employees have temporarily assumed payment of costs of Company vehicles and
costs of life and other insurance. All payments to directors of the Company,
including officers who are directors, have been deferred. The Company continues
to review its costs for additional reductions.

            Pending consummation of a transaction, the Company will continue to
effect cost reductions and seek sources of financing, without which the Company
will not be able to fund current operations beyond the forbearance period. The
Company does not have a commitment from Wells Fargo to extend the forbearance
period beyond its current duration. In the event of acceleration of its
indebtedness to Wells Fargo and its outstanding mortgage loans as a result of
existing defaults, the Company would not have sufficient cash resources to pay
such amounts. There can be no assurance that the Company will be able to obtain
an extension of its arrangements with Wells Fargo, arrange additional financing
or complete its divestiture plans, within its anticipated time frame or on terms
acceptable to it.

            Allowances for Doubtful Accounts and Sales Incentives - Management
must make estimates of the uncollectibility of accounts receivable. Management
specifically analyzes accounts receivable, historical bad debts, customer
concentrations, customer credit-worthiness, current economic trends and changes
in customer payment terms when evaluating the adequacy of the allowance for
doubtful accounts.

            Estimated sales incentives are calculated and recorded at the time
related sales are made and are based primarily on historical rates and in
consideration of recent promotional activities. In the Company's financial
statements, the allowance for sales incentives is classified as reductions of
accounts receivable and net sales.

            Self-insurance - The Company does not self-insure any significant
insurable risks. The Company accounts for potential losses due to the deductible
on its product liability insurance coverage for consumer products claims with an
accrual of potential losses based on open claims and prior years' loss
experience.

                                       26
<PAGE>

            Inventories - Inventories are valued at the lower of average cost or
market.

            Property and Depreciation - Property, plant and equipment are
carried at cost and are depreciated over their estimated useful lives using the
straight-line method. Capitalized leases are amortized over their useful lives
using the straight-line method. Leasehold improvements are amortized over their
estimated useful lives or the remaining lease terms, whichever is shorter.
Buildings and improvements include: buildings and improvements with useful lives
of 5-50 years, land improvements with useful lives of 5-20 years, and leasehold
improvements with useful lives of 3-20 years. Machinery and equipment includes
production equipment with useful lives of 5-20 years, office furniture and
equipment with useful lives of 2-15 years, autos and trucks with useful lives of
3-5 years, and tools, dies and molds with useful lives of 3-5 years.

            Foreign Currency Translation - All balance sheet accounts of the
Company's foreign subsidiary, Ronson-Canada, are translated at the current
exchange rate as of the end of the year. All income statement accounts are
translated at average currency exchange rates. Stockholders' Equity accounts are
translated at historical exchange rates. The resulting translation adjustment is
recorded as part of Accumulated Other Comprehensive Loss in Stockholders'
Equity. Transaction gains and losses are not significant in the periods
presented.

            Fair Value of Financial Instruments - The Company's financial
instruments include cash, cash equivalents, accounts receivable, accounts
payable, accrued expenses, other current liabilities and short-term and
long-term debt. The book values of cash, cash equivalents, accounts receivable,
accounts payable, accrued expenses, other current liabilities, and short-term
debt are representative of their fair values due to the short-term maturity of
these instruments. The Company's term loans with Wells Fargo are at variable
interest rates and, therefore, their book values are considered representative
of their fair values.

            The Company's mortgage loan with Capital One, N.A. ("Capital One")
has an approximate fair market value of $2,237,000 at December 31, 2008 as
compared to its book value of $2,133,000. The book value of the Company's other
long-term debt is considered to approximate its fair value based on current
market rates and conditions (refer to Note 4).

            Derivative Financial Instruments - Prior to July 31, 2006, the
Company utilized a derivative instrument, an interest rate swap, to modify the
Company's exposure to interest rate risk. The Company accounted for this
derivative instrument under the Statement of Financial Accounting Standards No.
133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS
133"). SFAS 133 required that all derivative instruments be recognized in the
financial statements and measured at fair value regardless of the purpose or
intent for holding them. For derivatives that are designated as a hedge and used
to hedge an existing asset or liability, both the derivative and hedged item are
recognized at fair value with any changes recognized immediately in the
Consolidated Statements of Operations. By policy, the Company has not
historically entered into derivative financial instruments for trading purposes
or for speculation.

            Impairment of Long-Lived Assets - The Company periodically evaluates
whether events or circumstances have occurred that indicate long-lived assets
may not be recoverable or that the remaining useful life may warrant revision.
When such events or circumstances are present, the Company assesses the
recoverability of long-lived assets by determining whether the carrying value
will be recovered through the estimated undiscounted future cash flows resulting
from the use of the

                                       27
<PAGE>

asset. In the event the sum of the estimated  undiscounted  future cash flows is
less than the  carrying  value of the  asset,  an  impairment  loss equal to the
excess of the asset's carrying value over its fair value is recorded.

            Declaration of 5% Common Stock Dividend - The Company's Board of
Directors, on February 1, 2008, declared a 5% stock dividend on the Company's
outstanding common stock. The 5% stock dividend was payable on April 15, 2008,
to stockholders of record March 28, 2008. The 5% stock dividend increased the
outstanding common shares of the Company by about 241,000 to about 5,084,000
shares.

            Revenue Recognition - Net Sales are recognized by Ronson Consumer
Products on the date of shipment of the product to domestic customers and on the
date title for the goods has been transferred on shipments to foreign customers,
prior to which an arrangement exists, the price is fixed, and it has been
determined that collectibility is reasonably assured.

            Net Sales at Ronson Aviation are recognized on the date of delivery
of the product or service to customers. For aircraft, this occurs at the time
the title for the aircraft has been transferred and the sales proceeds received.
For aircraft fueling, repairs and other aircraft services, delivery occurs only
after an arrangement exists, the price is fixed, and collectibility is
reasonably assured.

            Research and Development Costs - Costs of research and new product
development are charged to operations as incurred and amounted to approximately
$299,000, $371,000, and $376,000, for the years ended December 31, 2008, 2007
and 2006, respectively.

            Shipping and Handling Costs - The Company records shipping and
handling costs within Selling, Shipping, and Advertising Expenses. Such costs
amounted to about $1,507,000, $1,538,000, and $1,660,000, for the years ended
December 31, 2008, 2007, and 2006, respectively.

            Advertising Expenses - Costs of advertising are expensed as incurred
and amounted to approximately $143,000, $175,000, and $202,000, for the years
ended December 31, 2008, 2007 and 2006, respectively.

            Accrued Expenses - On December 31, 2008 and 2007, Accrued Expenses
included accrued vacation pay and other compensation of $655,000 and $691,000,
respectively. No other item amounted to greater than 5% of total current
liabilities. At December 31, 2008 and 2007, Accrued Expenses included accrued
expenses of discontinued operations of $320,000 and $318,000, respectively.

            Other Current Assets - On December 31, 2008 and 2007, Other Current
Assets included deferred income tax assets of $547,000 and $623,000,
respectively. No other item amounted to greater than 5% of total current assets.

            Stock Options - The Company accounts for stock-based compensation
under the provisions of SFAS No. 123 (Revised 2004) "Share-Based Payment" ("SFAS
123R"). SFAS 123R requires the recognition of the fair value of stock-based
compensation in net income. The fair value of the Company's stock option awards
are estimated using a Black-Scholes option valuation model. The fair value of
stock-based awards is amortized over the vesting period of the award.

            Per Common Share Data - The calculation and reconciliation of Basic
and Diluted Earnings (Loss) per Common Share were as follows (in thousands
except per share data):

                                       28
<PAGE>

                                              Year Ended December 31, 2008
                                                                      Per Share
                                             Loss         Shares       Amount
                                           -------        ------      --------

   BASIC ............................      $(1,652)        5,084      $(0.32)
       Effect of dilutive securities,
          stock options (1) .........           --            --
                                           -------         -----
   DILUTED ..........................      $(1,652)        5,084      $(0.32)
                                           =======       =======      ======


                                              Year Ended December 31, 2007
                                                                      Per Share
                                             Loss         Shares       Amount
                                           -------        ------      --------
                                                            (2)          (2)

   BASIC ...........................       $(597)         5,067       $(0.12)
      Effect of dilutive securities,
          stock options(1) .........          --            --
                                           -----          -----
   DILUTED .........................       $(597)         5,067       $(0.12)
                                           =====          =====       ======


                                              Year Ended December 31, 2006
                                                                      Per Share
                                           Earnings       Shares       Amount
                                           --------       ------      --------
                                                           (2)          (2)

   BASIC ..........................        $  67          5,026       $ 0.01
     Effect of dilutive securities,
       stock options ..............           --             40
                                           -----          -----
   DILUTED ........................        $  67          5,066       $ 0.01
                                           =====          =====       ======


            (1) The stock options were anti-dilutive for the years ended
December 31, 2008 and 2007 and, therefore, were excluded from the calculation
and reconciliation of Diluted Loss per Common Share for those years. The numbers
of potentially anti-dilutive securities were 1,000 and 11,000 in the years ended
December 31, 2008 and 2007, respectively.

            (2) Information as to the number of shares and per share amounts has
been retroactively adjusted to reflect the 5% stock dividend on common stock
declared February 1, 2008.

            At December 31, 2008, the Company had outstanding approximately
5,084,000 shares of common stock.


Recent Accounting Pronouncements

         In September 2006, the Financial Accounting Standards Board (FASB)
issued SFAS No. 157, Fair Value Measurements,("SFAS No. 157") which defines fair
value, establishes a framework for measuring fair value in generally accepted
accounting principles and expands disclosures about fair value measurements. The
provisions of SFAS No. 157 related to financial assets and financial liabilities
were effective during 2008. With respect to certain nonfinancial assets and
nonfinancial liabilities, SFAS No. 157 is effective for fiscal years beginning
after November 15, 2008, and interim periods within those fiscal years. The
Company does not expect that the adoption of SFAS No. 157 with respect to

                                       29
<PAGE>

nonfinancial assets and nonfinancial liabilities will have a material impact on
its consolidated financial statements.

         In December 2007, the FASB issued SFAS No. 141(R), Business
Combinations, and SFAS No. 160, Noncontrolling Interests in Consolidated
Financial Statements. SFAS No. 141(R) requires an acquirer to measure the
identifiable assets acquired, the liabilities assumed and any non-controlling
interest in the acquiree at their fair values on the acquisition date, with
goodwill being the excess value over the net identifiable assets acquired. SFAS
No. 160 clarifies that a non-controlling interest in a subsidiary should be
reported as equity in the consolidated financial statements, consolidated net
income should be adjusted to include the net income attributed to the
non-controlling interest and consolidated comprehensive income shall be adjusted
to include the comprehensive income attributed to the non-controlling interest.
The calculation of earnings per share will continue to be based on income
amounts attributable to the parent. SFAS No. 141(R) and SFAS No. 160 are
effective for financial statements issued for fiscal years beginning after
December 15, 2008. Early adoption of SFAS No. 141(R) or SFAS No. 160 is
prohibited. The Company does not expect that the adoption of SFAS No. 141(R) or
SFAS No. 160 with respect to nonfinancial assets and nonfinancial liabilities
will have a material impact on its consolidated financial statements.

         In March 2008, the FASB issued SFAS No. 161, Disclosures about
Derivative Instruments and Hedging Activities. SFAS No. 161 is intended to
improve financial reporting about derivative instruments and hedging activities
by requiring enhanced disclosures to enable investors to better understand their
effects on an entity's financial position, financial performance, and cash
flows. SFAS No. 161 is effective for financial statements issued for fiscal
years and interim periods beginning after November 15, 2008, with early
application encouraged. The Company does not expect that the adoption of SFAS
No. 161 will have a material impact on its consolidated financial statements.

         In April 2008, the FASB issued FSP FAS 142-3, Determination of the
Useful Life of Intangible Assets ("FSP FAS 142-3"). FSP FAS 142-3 amends the
factors that should be considered in developing renewal or extension assumptions
used to determine the useful life of a recognized intangible asset under SFAS
No. 142, Goodwill and Other Intangible Assets. The intent of this FSP is to
improve the consistency between the useful life of a recognized intangible asset
under FSP FAS 142 and the period of expected cash flows used to measure the fair
value of the asset under SFAS No. 141(R) and other generally accepted accounting
principles. FSP FAS 142-3 is effective for fiscal years, and interim periods
within those fiscal years, beginning after December 15, 2008. The Company has
not yet determined the effect on its consolidated financial statements, if any,
that will occur upon adoption of FSP FAS 142-3.

         In May 2008, the FASB issued SFAS 162, The Hierarchy of Generally
Accepted Accounting Principles. SFAS No. 162 identifies the sources of
accounting principles and provides entities with a framework for selecting the
principles used in preparation of financial statements that are presented in
conformity with GAAP. The current GAAP hierarchy has been criticized because it
is directed to the auditor rather than the entity, it is complex, and it ranks
FASB Statements of Financial Accounting Concepts, which are subject to the same
level of due process as FASB Statements of Financial Accounting Standards, below
industry practices that are widely recognized as generally accepted but that are
not subject to due process. The Board believes the GAAP hierarchy should be
directed to entities because it is the entity (not its auditors) that is
responsible for selecting accounting principles for financial statements that
are presented in conformity

                                       30
<PAGE>

with GAAP. The adoption of FASB 162 is not expected to have a material impact on
the Company's financial statements.

         In October 2008, the FASB issued Emerging Issues Task Force ("EITF")
08-6 Equity Method Investment Accounting Considerations, which addresses how the
initial carrying value of an equity method investment should be determined, how
an impairment assessment of an underlying indefinite-lived intangible asset of
an equity method investment should be performed, and the proper accounting of an
equity method investee's issuance of shares. The Company's management believes
that this will not have a material impact on the Company's consolidated
financial statements.

         Other accounting standards that have been issued or proposed by the
FASB or other standards-setting bodies that do not require adoption until a
future date are not expected to have a material impact on the financial
statements upon adoption.


Note 2. INCOME TAXES:

            At December 31, 2008, the Company had, for federal income tax
purposes, net operating loss carryforwards of approximately $7,471,000, expiring
as follows: $1,478,000 in 2010 to 2012; $1,379,000 in 2018 to 2020; and
$4,614,000 in 2021 to 2028. The Company also had available federal and state
alternative minimum tax credit carryforwards of approximately $102,000.

            The income tax expenses (benefits) consisted of the following (in
thousands):

                                                  Year Ended December 31,
                                              2008          2007         2006
                                              ----          ----         ----
Current:
      Federal ........................      $    --       $    (1)     $     --
      State ..........................           10            13            20
      Foreign ........................            9            (5)           72
                                            -------       -------       -------
                                                 19             7            92
                                            -------       -------       -------
   Deferred:
      Federal ........................         (957)         (206)           76
      State ..........................          (95)          (36)           60
      Foreign ........................            1            (2)           (6)
                                            -------       -------       -------
                                             (1,051)         (244)          130
                                            -------       -------       -------
   Income tax expenses (benefits), net      $(1,032)      $  (237)      $   222
                                            =======       =======       =======


            Current income taxes in the years ended December 31, 2008, 2007, and
2006, were presented net of credits of $24,000, $17,000, and $17,000,
respectively, arising from the utilization of available tax losses and loss
carryforwards in accordance with SFAS #109.

            The reconciliation of estimated income taxes attributed to
continuing operations at the United States statutory tax rate to reported income
tax expense (benefits) was as follows (in thousands):

                                       31
<PAGE>
<TABLE>
<CAPTION>
                                                            Year Ended December 31,
                                                        2008           2007         2006
                                                        ----           ----         ----
<S>                                                   <C>           <C>           <C>
Tax expense amount computed using statutory rate      $  (913)      $  (284)      $    99
State taxes, net of federal benefit ............         (103)          (23)            4
Operations outside the US ......................           21            (7)           11
Discontinued operations and other ..............          (37)           77           108
                                                      -------       -------       -------
  Income tax expense (benefits), net ...........      $(1,032)      $  (237)      $   222
                                                      =======       =======       =======
</TABLE>

            The tax effects of temporary differences that give rise to
significant portions of the deferred income tax assets and deferred income tax
liabilities are presented below (in thousands):

<TABLE>
<CAPTION>
                                                                                        December 31,
                                                                                     2008         2007
                                                                                     ----         ----
<S>                                                                                 <C>         <C>
Deferred income tax assets:
 Inventories, principally due to additional costs inventoried for tax purposes
   pursuant to the Tax Reform Act of 1986 and valuation reserves for
   financial reporting purposes ..............................................      $  118      $  140
 Compensation and compensated absences, principally
   due to the accrual for financial reporting purposes .. ....................         231         246
 Accrual of projected environmental costs, principally
  related to Prometcor's compliance with NJDEP requirements ..................         199         199
 Net operating loss carryforwards ............................................       3,107       2,086
 Alternative minimum tax credit carryforwards ................................         102         113
 Unrecognized net loss on pension plan .......................................       1,830         901
 Other .......................................................................         367         351
                                                                                    ------      ------
   Total gross deferred income tax assets ....................................       5,954       4,036
   Less valuation allowance ..................................................          91         163
                                                                                    ------      ------
   Net deferred income tax assets ............................................       5,863       3,873
                                                                                    ------      ------
Deferred income tax liabilities:
 Pension expense, due to contributions in excess of
   net accruals ..............................................................         996       1,044
 Other .......................................................................         169         131
                                                                                    ------      ------
   Total gross deferred income tax liabilities ...............................       1,165       1,175
                                                                                    ------      ------
    Net deferred income taxes ................................................      $4,698      $2,698
                                                                                    ======      ======
</TABLE>

            A valuation allowance has been established based on the likelihood
that a portion of the deferred income tax assets will not be realized.
Realization is dependent on generating sufficient taxable income prior to
expiration of the loss carryforwards. The ultimate realization of the deferred
income tax assets will require aggregate taxable income of approximately
$7,150,000 in the years prior to the expiration of the net operating loss
carryforwards in 2028. The amount of the deferred income tax assets considered
realizable, however, could be reduced in the near term if estimates of future
taxable income during the carryforward periods are reduced.

                                       32
<PAGE>

            The net deferred income tax assets were classified in the
Consolidated Balance Sheets as follows (in thousands):

                                                      December 31,
                                                   2008        2007
                                                   ----        ----
Current:
   Other current assets ....................      $  348      $  424
   Current assets of discontinued operations         199         199
                                                  ------      ------
   Total current ...........................         547         623
                                                  ------      ------
Long-Term:
   Other assets ............................       3,429       1,332
   Other assets of discontinued operations .         722         743
                                                  ------      ------
   Total long-term .........................       4,151       2,075
                                                  ------      ------
Total net deferred income tax assets .......      $4,698      $2,698
                                                  ======      ======

         On January 1, 2007, the Company adopted the provisions of FIN 48,
"Accounting for Uncertainty in Income Taxes - An Interpretation of FASB
Statement No. 109". Implementation of FIN 48 did not result in a cumulative
effect adjustment to retained earnings.

         The Company's policy is to report interest and penalties, if any,
related to income taxes in Interest Expense and General and Administrative
Expenses, respectively.


Note 3.  SHORT-TERM DEBT:

            Composition (in thousands):

                                        December 31,
                                      2008        2007
                                      ----        ----
Revolving loans, Wells Fargo(a)      $1,472      $   --
Revolving loans, CIT ..........          --       2,596
Note Payable, Bank of the West           --         500
Other (b) .....................         275          30
                                     ------      ------
                                     $1,747      $3,126
                                     ======      ======

            (a) On May 30, 2008, the Company and RCPC, Ronson Aviation and
Ronson-Canada (collectively, the "Borrowers") entered into a secured revolving
credit facility with Wells Fargo. The credit facility consisted of (1) a
revolving line of credit of up to $4.0 million, (2) a Real Estate Term Loan of
$2,922,500 and (3) an Equipment Term Loan of $837,500. Availability under the
credit facility is determined based on the value of the Borrowers' receivables
and inventory, and other factors, as set forth in the credit and security
agreement. The Company is a guarantor of the obligations under the credit
facility. Amounts advanced under the credit facility are secured by
substantially all of the assets of the Company and its subsidiaries, other than
(1) the real property owned by RCPC in Woodbridge, New Jersey and (2) 34% of the
Company's interest in Ronson-Canada.

            The term of the credit facility is 60 months. The revolving line of
credit had a balance of $1,472,000 at December 31, 2008. The revolving line of
credit bore interest at 1/2% over the Wells Fargo prime rate (3.25% at December
31, 2008), or, at the Company's option, a portion may bear interest at LIBOR
plus 3%.

            The Company paid fees to Wells Fargo that are customary for
facilities of this type. The credit facility contains minimum tangible net
worth, minimum net income, minimum net cash flow and other financing covenants,
certain restrictions

                                       33
<PAGE>

on capital expenditures, as well as affirmative and negative covenants and
events of default customary for facilities of this type.

            The Company applied $2,940,000 of the proceeds of the credit
facility to pay off its prior credit facility with CIT Group/Commercial
Services, Inc; $399,000 to EPIC Aviation, LLC; $502,000 to Bank of the West; and
$577,000 to Banc of America Leasing.

            As a result of the repayment of the Short-term Debt and Long-term
Debt with the new Wells Fargo financing on May 30, 2008, the Company recorded a
Nonrecurring Loss on Extinguishment of Debt of $145,000 in 2008. The
Nonrecurring Loss on Extinguishment of Debt was composed of the following:

Unamortized balance of deferred financing costs             $106,000
Early termination fee paid to CIT Group/Commercial
          Services, Inc.                                      31,000
Difference between book value of Long-term Leases with
    Bank of America Leasing and payoff amount                  3,000
Legal fees and other                                           5,000
                                                            --------
          Total                                             $145,000
                                                            ========

       On November 21, 2008, Wells Fargo advised the Company and its
subsidiaries that Events of Default under the credit agreement dated May 30,
2008, had occurred. These events of default included the Company's not meeting
financial covenants as follows: 1) the minimum Tangible Net Worth as of
September 30, 2008, 2) the minimum Net Income for the nine months ended
September 30, 2008, and 3) the minimum Net Cash Flow for the nine months ended
September 30, 2008, and the Company's not meeting all of the requirements of the
Post-Closing Agreement dated May 30, 2008.

            As a result of the events of default, Wells Fargo increased the
interest rate charged on the loans outstanding under the credit agreement by 3%.
These increases were assessed retroactively to July 1, 2008. In addition, in
November and December, Wells Fargo reduced the amounts available to be borrowed
under the revolving line of credit. In December 2008, Wells Fargo required that
the Company engage a consultant to review and monitor the Company's operation
and Wells Fargo increased its monitoring of the line of credit.

            Based on the amount of the loans outstanding and the levels of
accounts receivable and inventory at December 31, 2008, the Company's
subsidiaries had unused borrowings available at December 31, 2008 of about
$135,000 under the Wells Fargo line of credit described above, of which
approximately $70,000 was utilized on January 2, 2009 to meet the debt service
requirements and fees of Wells Fargo. (Refer to Note 4 below for information
regarding the book value of assets pledged as collateral for the debt above.)

            On March 30, 2009, the Company, its subsidiaries and Wells Fargo
entered into a forbearance agreement. (Refer to Note 16. Subsequent Events
below.)

(b) Refer to Note 14. Related Party Transactions below.

                       At December 31, 2008, the weighted average interest rate
for the total short-term debt was 6.12%.

                                       34
<PAGE>

Note 4. LONG-TERM DEBT:

            Composition (in thousands):

                                                December 31,

                                             2008         2007
                                             ----       ------
Mortgage loan payable, Capital One (a)      $2,133      $2,160
Note payable, lessor (b) .............         160         189
Term loans payable, Wells Fargo (c) ..       3,570          --
Term notes payable, CIT ..............          --         689
Note payable, supplier ...............          --         440
Term notes payable, other ............          27          42
                                            ------      ------
                                             5,890       3,520
Less portion in current liabilities ..       5,750         423
                                            ------      ------
Balance of long-term debt ............      $  140      $3,097
                                            ======      ======

      (a) In September 2006, RCPC entered into a mortgage loan agreement with
Capital One for $2,200,000. The mortgage loan had a balance of $2,133,000 at
December 31, 2008 and is secured by a first mortgage on the property of RCPC at
3 and 6 Ronson Road, Woodbridge, NJ and the guarantees of the Company and Ronson
Aviation. In connection with a waiver of a covenant violation at December 31,
2007 provided to the Company by Capital One, effective April 1, 2008, the
interest rate on the mortgage loan was increased to 8.00%, monthly installments
were increased to $17,081, the final installment on November 1, 2016 was
increased to $1,746,000, and the debt service coverage ratio was modified.

              On August 12, 2008, Capital One provided the Company with a
modification of the mortgage loan because the Company did not meet a minimum
Earnings before Income Taxes covenant for the six months ended June 30, 2008. In
connection with the modification, the interest rate on the mortgage loan was
increased to 9.00% effective 9/1/08, 9.50% effective 1/1/09, 10.00% effective
4/1/09, 10.50% effective 7/1/09, and 11.00% effective 10/1/09. The final due
date of the mortgage was changed to January 1, 2010, from the prior due date of
November 1, 2016. The mortgage modification also eliminated the prepayment
penalty on the agreement until April 1, 2009, when it is partially reinstated.
Based on current interest rates, under the terms of the original mortgage loan
prior to the modification, the prepayment penalty would have been as much as
$700,000.

            As stated in Note 3 above, the Company was notified in November 2008
that events of Default under the Wells Fargo credit agreement had occurred.
Under cross default provisions of the Capital One mortgage loan agreement, these
Events of Default under the Wells Fargo agreement could result in an event of
default under the Capital One mortgage loan agreement. Therefore, the portion of
the loan due after December 31, 2008, $2,088,000 has been included in the
Current Portion of Long-Term Debt.

            (b) As part of the lease agreement for its warehouse, effective
March 1, 2004, RCPC entered into a term note payable to the lessor in the
original amount of $440,000. The note bears interest at the rate of 8.25% and is
payable in monthly installments of $3,787 including interest through February
2013. The note is secured by the leasehold improvements in the warehouse.

            (c) On May 30, 2008, the Company obtained two term loans from Wells
Fargo as part of the new credit facility (refer to Note 3 above), an Equipment
Term Loan in the original amount of $837,500 with a balance of $745,000 as of
December 31, 2008, and a Real Estate Term Loan in the original amount of
$2,922,500 with a balance of $2,825,000 as of December 31, 2008. The Equipment
Term Loan is payable

                                       35
<PAGE>

in 60 equal monthly principal payments of about $14,000 plus interest. The Real
Estate Term Loan is payable in 60 equal monthly principal payments of about
$16,000 plus interest. The interest rate for the Equipment Term Loan, originally
the prime rate plus .75%, was increased in the fourth quarter 2008, to the prime
rate plus 3.75%, effective July 1, 2008. Similarly, the interest rate for the
Real Estate Term Loan, originally the prime rate plus 1%, was increased to the
prime rate plus 4%, effective July 1, 2008.

            As a result of the Events of Default discussed in Note 3 above and
the likelihood that the Company would not attain compliance with the financial
covenants within one year, the long-term portion of the Equipment Term Loan
($578,000) and the long-term portion of the Real Estate Term Loan ($2,630,000)
have been included in the Current Portion of Long-Term Debt.

            At December 31, 2008, fixed assets with a net book value of
$4,825,000, accounts receivable and inventories of $3,151,000, and other
noncurrent assets with a net book value of $337,000 were pledged as collateral
for the debt detailed in Notes 3 and 4 above.

            Net assets of consolidated subsidiaries, excluding intercompany
accounts, amounted to approximately $1,500,000 at December 31, 2008,
substantially all of which were restricted as to transfer to the Company and its
subsidiaries due to various covenants of their debt agreements at December 31,
2008.

            Long-term debt matures as follows: 2009, $454,000; 2010, $2,490,000;
2011, $406,000; 2012, $413,000; and 2013, $2,127,000.

Note 5. LEASE OBLIGATIONS:

            Lease expenses consisting principally of office and warehouse
rentals, totaled $579,000, $604,000, and $573,000 for the years ended December
31, 2008, 2007 and 2006, respectively.

            At December 31, 2008, the Company's future minimum lease payments
under operating and capitalized leases with initial or remaining noncancellable
lease terms in excess of one year are presented in the table below (in
thousands):

<TABLE>
<CAPTION>
                                                               Operating  Capitalized
                                                     Total      Leases      Leases
                                                    ------      ------      -------
<C>                                                 <C>         <C>         <C>
Year Ending December 31:
2009 .........................................      $  453      $  436      $   17
2010 .........................................         326         312          14
2011 .........................................         169         165           4
2012 .........................................         140         140          --
2013 .........................................          57          57          --
                                                    ------      ------      ------
Total obligations ............................      $1,145      $1,110          35
                                                    ======      ======

      Less: Amount representing interest .....                                   3
                                                                            ------
Present value of capitalized lease obligations                              $   32
                                                                            ======
</TABLE>

                                       36
<PAGE>

Capitalized lease property included in the Consolidated Balance Sheets is
presented below (in thousands):

                                      December 31,
                                    2008        2007
                                   ------      ------
Machinery and equipment .........  $   62      $1,499
Less accumulated amortization ...      25         335
                                   ------      ------
                                   $   37      $1,164
                                   ======      ======

            The Company has accounted for step rent provisions so that rent
abatements are amortized over the life of the lease on a straight-line basis.
The amounts due under escalation charges (which are all related to operating
expenses, real estate taxes and utilities) are expensed as incurred and included
in minimum lease payments. The capital improvements funding provided to the
Company by the lessor for the Company's South Brunswick, New Jersey warehouse,
was capitalized in leasehold improvements and the debt included in long-term
debt as reported in Note 4 above.

Note 6. RETIREMENT PLANS:

            The Company and its subsidiaries have trusteed retirement plans
covering substantially all employees. The Company's funding policy is to make
minimum annual contributions as required by applicable regulations. The Plan
covering union members generally provides benefits of stated amounts for each
year of service. The Company's salaried pension plan provides benefits using a
formula which is based upon employee compensation. On June 30, 1985, the Company
amended its salaried pension plan so that benefits for future service would no
longer accrue. A defined contribution plan was established on July 1, 1985, in
conjunction with the amendments to the salaried pension plan.

            Plan assets primarily included common stocks (65%), fixed income
securities (12%), cash and money market accounts (12%), a guaranteed annuity
contract (7%), and 241,033 shares of common stock of the Company (4%). The stock
of the Company held by the Plan was valued at $106,000 and $371,000 at December
31, 2008 and 2007, respectively.

            The benefit obligations below are equal to the accumulated benefit
obligations. The following table sets forth the Plan's aggregate funded status
and amounts recognized in the Company's Consolidated Balance Sheets (in
thousands):

<TABLE>
<CAPTION>
                                                                      Year Ended December 31,
                                                                         2008          2007
                                                                       -------       -------
<S>                                                                    <C>           <C>
Change in Benefit Obligation:
   Benefit obligation at beginning of year ......................      $ 4,527       $ 4,678
   Service cost .................................................           20            24
   Interest cost ................................................          268           257
   Actuarial loss ...............................................          858            19
   Benefits paid ................................................         (513)         (451)
                                                                       -------       -------
   Benefit obligation at end of year ............................        5,160         4,527
                                                                       -------       -------

Change in Plan Assets:
   Fair value of plan assets at beginning of year................        4,674         4,961
   Actual return on plan assets .................................       (1,448)          (74)
   Employer contributions .......................................          155           238
   Benefits paid ................................................         (513)         (451)
                                                                       -------       -------
   Fair value of plan assets at end of year .....................        2,868         4,674
                                                                       -------       -------
   Funded status at end of year .................................      $(2,292)      $   147
                                                                       =======       =======

Amounts recognized in the Consolidated Balance Sheets consist of:
   Non-current Assets ...........................................      $    --       $   147
   Current Liabilities ..........................................          205            --
   Long-term Liabilities ........................................        2,087            --
                                                                       -------       -------
   Net amount recognized ........................................      $ 2,292       $   147
                                                                       =======       =======
</TABLE>

                                       37
<PAGE>

            The weighted-average assumptions used in the benefit obligations
were as follows:
                                                         Year Ended December 31,
                                                          2008            2007
                                                          ----            ----
Discount rate ..........................................  6.30%          5.92%

            The Company's Consolidated Statements of Operations included pension
expense consisting of the following components (in thousands):

                                                Year Ended December 31,
                                              2008         2007       2006
                                              ----         ----       ----
Components of net periodic benefit cost:
   Service cost ........................      $  20       $  24       $  26
   Interest cost .......................        268         257         262
   Expected return on plan assets ......       (257)       (273)       (202)
   Amortization of prior service cost ..          5           5           5
   Recognized net actuarial loss .......        239         213         255
                                              -----       -----       -----
   Net pension expense .................      $ 275       $ 226       $ 346
                                              =====       =====       =====

            The detail of amounts included in Accumulated Other Comprehensive
Loss is included in Note 12, Accumulated Other Comprehensive Loss.

            The weighted-average assumptions used in computing the net periodic
benefit cost were as follows:
                                                        Year Ended December 31,
                                                     2008       2007       2006
                                                     ----       ----       ----
Discount rate ..................................     5.92%      5.50%      5.50%
Expected long-term rate of return on plan assets     5.50%      5.50%      5.00%

            The estimated net actuarial loss and prior service cost for the
defined benefit pension plans that will be amortized from accumulated other
comprehensive loss into net periodic benefit cost in 2009 are $418,000 and
$5,000, respectively. The estimated prior service cost for the other defined
benefit postretirement plan that will be amortized from accumulated other
comprehensive loss into net periodic benefit cost in 2009 is $1,000.

            Contributions to the pension plan during 2009 are expected to be
approximately $242,000.

            Investment objectives for the Company's U.S. plan assets are to:

            (1) optimize the long-term return on plan assets at an acceptable
                level of risk;
            (2) maintain diversification across asset classes;
            (3) maintain control of the risk level within each asset class; and
            (4) focus on a long-term return objective.

                                       38
<PAGE>

            The Plan engages investment managers to manage the Plan's
investments in equities, other than in the Company's stock and fixed income
securities. Investment guidelines are established with each investment manager.
Unless exceptions have been approved, investment managers are prohibited from
buying or selling commodities, futures, or option contracts, as well as from
short selling of securities. The Company does not expect to make further
investments in the guaranteed annuity contract or in the stock of the Company.
To determine the expected long-term rate of return assumption on plan assets,
the Company uses a conservative estimate of future returns.


            The benefit payments expected to be paid in the next ten years, in
thousands, are as follows:

            2009                  $ 434
            2010                    445
            2011                    442
            2012                    458
            2013                    456
            2014-2018             2,335

            The Company contributes to its defined contribution plan at the rate
of 1% of each covered employee's compensation. The Company also contributes an
additional amount equal to 50% of a covered employee's contribution to a maximum
of 1% of compensation. Expenses of about $62,000, $64,000, and $62,000 for this
plan were recorded in 2008, 2007, and 2006, respectively. These Company
contributions in 2009 are being deferred.


Note 7. COMMITMENTS AND CONTINGENCIES:

            In December 1989 the Company adopted a plan to discontinue the
operations of its wholly owned subsidiary, Ronson Metals Corporation,
subsequently renamed Prometcor, Inc. ("Prometcor"). Upon the cessation of
operations, Prometcor began its compliance with the environmental requirements
of all applicable laws with the objective of selling the property previously
used in the discontinued operations. The full extent of the costs and time
required for completion is not determinable until the remediation, if any is
required, and confirmatory testing related to the remaining groundwater matter
have been completed and accepted by the New Jersey Department of Environmental
Protection ("NJDEP").

            The liability for these estimated costs and expenses as recorded in
the financial statements at December 31, 2008, was approximately $500,000 based
on the lower limit of the range of costs as projected by the Company and its
consultants. The estimated upper limit of the range of costs was discounted at
approximately $600,000 above the lower limit.

            The long-term portion of the environmental liability related to
Prometcor was discounted at the rate of 6% per annum. The aggregate undiscounted
amount was approximately $273,000 as compared to the discounted amount of
$181,000. The current portion, which would be expended in the year a plan is
approved by the NJDEP, is $317,000. The undiscounted amount of the long-term
portion is expected to be expended at the rate of about $24,000 in the first
year following the approval by the NJDEP of a plan; about $11,000/year for an
additional eighteen years; and about $10,000/year for an additional ten years.

                                       39
<PAGE>

            In 1999 Ronson Aviation completed the installation of a new fueling
facility and ceased use of most of its former underground storage tanks. The
primary underground fuel storage tanks formerly used by Ronson Aviation were
removed in 1999 as required by the NJDEP. Related contaminated soil was removed
and remediated. In 2000 initial groundwater tests were completed. Ronson
Aviation's environmental consultants have advised the Company that preliminary
results of that testing indicate that no further actions should be required. The
extent of groundwater contamination cannot be determined until final testing has
been completed and accepted by the NJDEP. The Company intends to vigorously
pursue its rights under the leasehold and under the statutory and regulatory
requirements. Since the amount of additional costs, if any, and their ultimate
allocation cannot be fully determined at this time, an estimate of additional
loss, or range of loss, if any, that is reasonably possible, cannot be made.
Thus, the effect on the Company's financial position or results of future
operations cannot yet be determined, but management believes that the effect
will not be material.

            The Company is involved in various lawsuits and claims. While the
amounts claimed may be substantial, the ultimate liability cannot now be
determined because of the considerable uncertainties that exist. Therefore, it
is possible that results of operations or liquidity in a particular period could
be materially affected by certain contingencies. However, based on facts
currently available including the insurance coverage that the Company has in
place, management believes that the outcome of these lawsuits and claims will
not have a material adverse effect on the Company's financial position.

            The Company has an employment contract with an officer of the
Company which expires on December 31, 2009. Base salary in the year 2009 under
the contract is $544,341, with future increases subject to the Company reporting
operating earnings in the year prior to each increase; however, in the first
quarter of 2009 Mr. Louis V. Aronson accepted reductions totaling 12%. The base
salary in 2007 reflected a 5% reduction offered and accepted by Mr. Louis V.
Aronson effective November 16, 2007; a 7% reduction offered and accepted by Mr.
Louis V. Aronson effective October 1,2005; and the increases due to Mr. Aronson
under the terms of the contract on January 1, 2008, January 1, 2007, and January
1, 2006, were waived by him. The contract also provides for additional
compensation and benefits, including a death benefit equal to two years' salary.
The Company has purchased term life insurance for which the Company is the sole
beneficiary to provide coverage for a substantial portion of the potential death
benefit.

Note 8. PREFERRED STOCK:

            In 1998 the Company declared a dividend of one Preferred Stock
Purchase Right ("Right") for each outstanding share of the Company's common
stock. The Rights are not presently exercisable. Each Right entitles the holder,
upon the occurrence of certain specified events, to purchase from the Company
one one-thousandth of a share of Series A Preferred Stock at a purchase price of
$20 per share. The Rights further provide that each Right will entitle the
holder, upon the occurrence of certain other specified events, to purchase from
the Company, common stock having a value of twice the exercise price of the
Right and, upon the occurrence of certain other specified events, to purchase
from another person into which the Company was merged or which acquired 50% or
more of the Company's assets or earnings power, common stock of such other
person having a value of twice the exercise price of the Right. The Rights may
be generally redeemed by the Company at a price of $0.01 per Right. The Rights
had been due to expire on October 22, 2008. On October 10, 2008, the expiration
date of the Rights was extended to September 1, 2011.

                                       40
<PAGE>

Note 9. STOCK OPTIONS:

            The Company has an incentive stock option plan which provides for
the grant of options to purchase shares of the Company's common stock. The
options may be granted to officers, directors and other key employees of the
Company and its subsidiaries at not less than 100% of the fair market value on
the date on which options are granted. On November 27, 2001, the stockholders
approved the adoption of the Company's 2001 Incentive Stock Option Plan which
provides for the grant of options for up to 175,888 shares of common stock.
Options granted under the plan are exercisable after six months from the date of
the grant and within five years of the grant date, at which time such options
expire. All options are vested on the date of the grant.

            The fair value of each option grant is estimated on the date of
grant using the Black-Scholes option-pricing model average assumptions:

<TABLE>
<CAPTION>
                                                                   Year Ended December 31,
                                                              2008         2007            2006
                                                              ----         ----            ----
<S>                                                          <C>          <C>             <C>
Risk-free interest rate                                      3.25%        3.44%           4.69%
Dividend yield                                                  0%           0%              0%
Volatility factor - expected market price of
  Company's common stock                                      0.81         0.67            0.63
Weighted average expected life of options                  5 years      5 years         5 years
</TABLE>

            A summary of the Company's stock option activity and related
information for the three years ended December 31, 2008, were as follows:

<TABLE>
<CAPTION>
                                                                         Weighted Average
                                                  Number of Options      Exercise Price
                                                  ------------------     ---------------
<S>                                                    <C>                <C>
Outstanding at 12/31/05 ..................             97,750             $    0.851
  Exercised ..............................            (55,882)            $    0.852
  Expired ................................             (7,739)            $    0.856
                                                       ------

Outstanding at 12/31/06 ..................             34,129             $    0.849
  Granted ................................             11,026             $    1.846
  Exercised ..............................            (28,478)            $    0.849
  Expired ................................             (5,651)            $    0.849
                                                       ------

Outstanding at 12/31/07 ..................             11,026             $    1.846
  Granted ................................             20,000             $    0.453
  Expired ................................             (5,513)            $    1.846
                                                       ------

Outstanding at 12/31/08 ..................             25,513             $    0.754
                                                      =======             ==========

Exercisable at 12/31/08 ..................              5,513             $    1.846
                                                      =======             ==========
</TABLE>

            Weighted average fair value of options granted during the year for
options on which the exercise price:

            Equals the market price on the grant date          $0.273
            Exceeds the market price on the grant date            N/A

            The weighted average exercise price for options outstanding as of
December 31, 2008, was $0.754 per share. The weighted average contractual life
of those options was 4.5 years.

                                       41
<PAGE>

Note 10. STATEMENTS OF CASH FLOWS:

            Certificates of deposit that have a maturity of less than 90 days
are considered cash equivalents for purposes of the accompanying Consolidated
Statements of Cash Flows.

            Supplemental disclosures of cash flow information are as follows (in
thousands):
                                                         Year Ended December 31,
                                                        2008      2007      2006
                                                        ----      ----      ----
Cash Payments for:
   Interest                                             $598      $629      $502
   Income taxes                                            2        87       152

Financing & Investing Activities Not Affecting Cash:
   Capital lease obligations incurred                     --        14        49
   Equipment financed by seller                           18        --        55


Note 11. INDUSTRY SEGMENTS INFORMATION:

            The Company has two reportable segments: consumer products and
aviation services. The Company's reportable segments are strategic business
units that offer different products and services.

            The consumer products segment produces packaged fuels, flints,
refillable lighters and multi-purpose lighters, torches, a candle, a penetrant
spray lubricant, and a spot remover, which are distributed through distributors,
food brokers, mass merchandisers, drug chains, convenience stores, and
automotive and hardware representatives. Ronson Consumer Products is a principal
supplier of packaged flints and lighter fuels in the United States and Canada.

            The aviation services segment represents the fueling and servicing
of fixed wing aircraft and helicopters, and rental of hangar and office space.
The aircraft products and services are sold through Company sales personnel.
Ronson Aviation provides a wide range of general aviation services to the
general public and to government agencies located in the vicinity of its
facilities in Trenton, New Jersey.

            The accounting policies of the segments are the same as those
described in the summary of significant accounting policies. The Company
evaluates performance based on profit or loss before intercompany charges and
income taxes.

                                       42
<PAGE>

Financial information by industry segment is summarized below (in thousands):

<TABLE>
<CAPTION>
                                                                               2008           2007           2006
                                                                               ----           ----           ----
<S>                                                                          <C>            <C>            <C>
Net sales:
  Consumer  Products ..................................................      $ 12,524       $ 13,883       $ 16,870
  Aviation Services ...................................................        11,663         12,363         12,374
                                                                             --------       --------       --------
Consolidated ..........................................................      $ 24,187       $ 26,246       $ 29,244
                                                                             ========       ========       ========

Earnings (loss) before interest, other items, and intercompany charges:
  Consumer Products ...................................................      $ (1,116)      $    269       $  1,243
  Aviation Services ...................................................         1,326          1,612          1,660
                                                                             --------       --------       --------
  Total Reportable Segments ...........................................           210          1,881          2,903
  Corporate and others ................................................        (1,637)        (1,815)        (1,719)
  Other charges .......................................................            --            (28)           (91)
                                                                             --------       --------       --------
Consolidated ..........................................................      $ (1,427)      $     38       $  1,093
                                                                             ========       ========       ========

Interest expense:
  Consumer Products ...................................................      $    389       $    406       $    290
  Aviation Services ...................................................           207             44             24
                                                                             --------       --------       --------
  Total Reportable Segments ...........................................           596            450            314
  Corporate and others ................................................            75             83            162
                                                                             --------       --------       --------
Consolidated ..........................................................      $    671       $    533       $    476
                                                                             ========       ========       ========

Depreciation and amortization:
  Consumer Products ...................................................      $    415       $    498       $    412
  Aviation Services ...................................................           256            193            199
                                                                             --------       --------       --------
  Total Reportable Segments ...........................................           671            691            611
  Corporate and others ................................................            57             49             45
                                                                             --------       --------       --------
Consolidated ..........................................................      $    728       $    740       $    656
                                                                             ========       ========       ========

Earnings (loss) before intercompany charges and taxes:
  Consumer Products ...................................................      $ (1,655)      $   (254)      $    946
  Aviation Services ...................................................         1,079          1,539          1,606
                                                                             --------       --------       --------
  Total Reportable Segments ...........................................          (576)         1,285          2,552
  Corporate and others ................................................        (1,963)        (2,091)        (2,172)
  Other charges .......................................................            --            (28)           (91)
  Nonrecurring loss ...................................................          (145)            --             --
                                                                             --------       --------       --------
Consolidated ..........................................................      $ (2,684)      $   (834)      $    289
                                                                             ========       ========       ========

Segment assets:
  Consumer Products ...................................................      $  6,600       $  7,829       $  7,640
  Aviation Services ...................................................         5,201          5,302          4,506
                                                                             --------       --------       --------
  Total Reportable Segments ...........................................        11,801         13,131         12,146
  Corporate and others ................................................         2,115          1,329          1,550
  Discontinued operations .............................................           921            941          1,024
                                                                             --------       --------       --------
Consolidated ..........................................................      $ 14,837       $ 15,401       $ 14,720
                                                                             ========       ========       ========

Segment expenditures for long-lived assets:
  Consumer Products ...................................................      $     87       $    118       $    155
  Aviation Services ...................................................            22            990          2,032
                                                                             --------       --------       --------
  Total Reportable Segments ...........................................           109          1,108          2,187
  Corporate and others ................................................            26              3            102
                                                                             --------       --------       --------
Consolidated ..........................................................      $    135       $  1,111       $  2,289
                                                                             ========       ========       ========
</TABLE>

                                       43
<PAGE>

Geographic information regarding the Company's net sales and long-lived assets
was as follows (in thousands):

                                     Year Ended December 31,
                                2008         2007         2006
                                ----         ----         ----
Net sales (1):
  United States .............  $21,722      $23,892      $25,831
  Canada ....................    2,400        2,047        1,949
  Other foreign countries ...       65          307        1,464
                               -------      -------      -------
                               $24,187      $26,246      $29,244
                               =======      =======      =======


                           December 31,
                         2008        2007
                         ----        ----
Long-lived assets:
United States .......   $5,799      $6,267
Canada ..............       44          51
                        ------      ------
                        $5,843      $6,318
                        ======      ======

(1) Net sales are attributed to countries based on location of customer.

            Information regarding the Company's net sales by product category
was as follows (in thousands):

<TABLE>
<CAPTION>
                                                          Year Ended December 31,
                                                     2008          2007         2006
                                                     ----          ----         ----
<S>                                                 <C>          <C>          <C>
Packaged fuels, flints, lighters and torches .      $12,441      $13,831      $16,803
Other consumer products ......................           83           52           67
Aircraft .....................................           --        1,269        1,796
Aviation fuels and other aviation products and
services .....................................       11,663       11,094       10,578
                                                    -------      -------      -------
                                                    $24,187      $26,246      $29,244
                                                    =======      =======      =======
</TABLE>

            In the financial information by industry segment above, Corporate
and Others is primarily composed of general and administrative expenses of the
parent company. Expense categories included salaries and benefits costs;
professional fees; the pension expense of the former defined benefit plans
(included only in Earnings (Loss) before Intercompany Charges and Taxes) and
shareholder relations expenses, among others.

            The Company performs ongoing credit evaluations of its customers'
financial condition and generally requires no collateral from its customers.

            For the year ended December 31, 2006, Net Sales which amounted to
approximately $3,809,000, of Consolidated Net Sales were made by Ronson Consumer
Products to one customer. As of December 31, 2008 and 2007, accounts receivable
from that customer amounted to approximately 12% and 13%, respectively, of
Consolidated Accounts Receivable. No customer accounted for more than 10% of Net
Sales for the years ended December 31, 2008 and 2007, and no other customer
accounted for more than 10% of Consolidated Accounts Receivable at December 31,
2008 and 2007.

                                       44
<PAGE>

Note 12. ACCUMULATED OTHER COMPREHENSIVE LOSS:

            Comprehensive loss (income) is included in the Statements of
Consolidated Stockholders' Equity. The components of Accumulated Other
Comprehensive Loss as shown on the Consolidated Balance Sheets were as follows
(in thousands):

<TABLE>
<CAPTION>
                                          Foreign                                               Accumulated
                                          Currency       Net                        Cash          Other
                                        Translation    Pension    Prior Service  Flow Hedging  Comprehensive
                                        Adjustments     Loss         Cost        Adjustment        Loss
                                        -----------   -------     -------------  ----------     -------------
<S>                                     <C>           <C>           <C>           <C>           <C>
Balance at December 31, 2005 .....      $   (61)      $ 1,619       $    --       $   (13)      $ 1,545
Adjustment to initially apply FASB
  Statement No. 158 ..............           --            --            65            --            65
Current period loss (gain) .......           81          (335)           --            21          (233)
Recognized as components of net
  periodic benefit cost ..........           --          (257)           --            --          (257)
Income tax expense (benefit) .....          (33)          236           (26)           (8)          169
                                        -------       -------       -------       -------       -------
Balance at December 31, 2006 .....          (13)        1,263            39            --         1,289
Current period loss (gain) .......          (46)          365            (8)           --           311
Recognized as components of net
  periodic benefit cost ..........           --          (213)           (6)           --          (219)
Income tax expense (benefit) .....           18           (61)            7            --           (36)
                                        -------       -------       -------       -------       -------
Balance at December 31, 2007 .....          (41)        1,354            32            --         1,345
Current period loss (gain) .......           60         2,563            --            --         2,623
Recognized as components of net
  periodic benefit cost ..........           --          (239)           (6)           --          (245)
Income tax expense (benefit) .....          (23)         (926)            1            --          (948)
                                        -------       -------       -------       -------       -------
Balance at December 31, 2008 .....      $    (4)      $ 2,752       $    27       $    --       $ 2,775
                                        =======       =======       =======       =======       =======
</TABLE>

Note 13. CONCENTRATIONS:

            Due to an increase in FDIC insured limits, at December 31, 2008, the
Company did not have cash deposits in banks in excess of those insured limits.
The Company periodically reviews the financial condition of the bank to minimize
its exposure.

            Ronson Consumer Products currently purchases lighter products and
torches from manufacturers in Peoples Republic of China and Taiwan. Since there
are a number of sources of similar lighter products, management believes that
other suppliers could provide lighters on comparable terms. A change of
suppliers, however, might cause a delay in delivery of the Company's lighter
products and torches and, possibly, a short-term loss in sales which could have
a short-term adverse effect on operating results.

Note 14. RELATED PARTY TRANSACTIONS:

            Prior to 2005, Mr. Carl W. Dinger III, a minority shareholder,
entered into a consulting agreement and an option agreement with the Company
whereby Mr. Dinger would provide certain consulting services. The option and
consulting agreements expired July 7, 2007 and were not renewed.
Notwithstanding, Mr. Dinger received compensation for these services in the
amounts of $39,060 and $78,120, during the years ended December 31, 2007 and
2006, respectively.

                                       45
<PAGE>

            In addition, Mr. Dinger had granted the Company an option to acquire
his shares in the Company. For the years 2007 and 2006, the option cost was
$4,000 a month. Effective January 1, 2005, Mr. Dinger owned 590,082 shares of
the Company, for which Mr. Dinger would receive $5.35 per share as the exercise
price. Mr. Dinger had also granted the Company's Board of Directors an
irrevocable proxy to vote these shares during the term of the option. The
Company's cost for the option agreement was $24,000 and $48,000 during each of
the years ended December 31, 2007 and 2006, respectively.

            The Company incurred costs for consulting services under an
agreement with a director of the Company (two in 2006) of $21,000, $24,000, and
$31,000, in the years ended December 31, 2008, 2007 and 2006, respectively. The
Company incurred costs for printing services from Michael Graphics, Inc., of
$50,000, $62,000, and $67,000 in the years ended December 31, 2008, 2007, and
2006, respectively. A greater than 10% shareholder of Michael Graphics, Inc., is
the son-in-law of the Company's president.

            In the third quarter of 2008, the Company's President and CEO
provided loans to the Company totaling $275,000, due on demand with interest at
the prime rate minus one-half percent (2.75% at December 31, 2008).


Note 15.  QUARTERLY FINANCIAL DATA:

            Presented below is a schedule of selected quarterly consolidated
financial information for each of the two years in the period ending December
31, 2008.

<TABLE>
<CAPTION>
(Dollars in thousands, except per share amounts)

                                                  First         Second          Third          Fourth         Total
                                                  Quarter       Quarter        Quarter         Quarter         Year
                                                 ---------      --------       --------       --------       --------
<S>                                              <C>            <C>            <C>            <C>            <C>
Year ended December 31, 2008
Net sales                                        $  6,596       $  6,715       $  5,455       $  5,421       $ 24,187
Gross profit(a)                                  $  1,799       $  1,816       $  1,115       $    929       $  5,659
Net Loss                                         $   (261)      $   (238)      $   (487)      $   (666)      $ (1,652)

Loss per share
 Basic                                           $  (0.05)      $  (0.05)      $  (0.10)      $  (0.13)      $  (0.32)
 Diluted                                         $  (0.05)      $  (0.05)      $  (0.10)      $  (0.13)      $  (0.32)
Other income (expense) included in net
loss(b),(c)                                      $     --       $    (87)      $     --       $     --       $    (87)


Year ended December 31, 2007
Net sales                                        $  6,097       $  6,543       $  6,606       $  7,000       $ 26,246
Gross profit(a)                                  $  1,939       $  1,850       $  1,806       $  2,130       $  7,725
Net Loss                                         $    (92)      $   (245)      $   (198)      $    (62)      $   (597)
Loss per share
 Basic                                           $  (0.02)      $  (0.05)      $  (0.04)      $  (0.01)      $  (0.12)
 Diluted                                         $  (0.02)      $  (0.05)      $  (0.04)      $  (0.01)      $  (0.12)
Other income (expense) included in net loss
(b),(d)                                          $     21       $      5       $    (37)      $     (6)      $    (17)
</TABLE>

                                       46
<PAGE>

(a)  Net Sales, less Cost of Sales, less a portion of Depreciation and
     Amortization
(b)  Items are presented net of income tax effect
(c)  The cost included in second quarter of 2008 was the charge recognized due
     to the Company's refinancing of former loans
(d)  The costs included in the 2007 quarters were the legal fees incurred as a
     result of the derivative action and a second lawsuit filed by the same
     shareholder, net of related insurance reimbursements


Note 16.  SUBSEQUENT EVENTS:

            On March 30, 2009, the Company and its wholly-owned subsidiaries
entered into a forbearance agreement with their principal lender, Wells Fargo,
under which Wells Fargo has agreed not to assert existing events of default
under the Borrowers' credit facilities with Wells Fargo through April 24, 2009,
or such earlier date determined under the Forbearance Agreement. The forbearance
period may terminate earlier if, among other events, the Borrowers breach the
forbearance agreement, additional events of default occur under the credit
facilities with Wells Fargo, the Borrowers fail to employ a Chief Restructuring
Officer or the Borrowers fail actively to pursue alternative financing or
divestiture of the Company's aviation division. During the forbearance period,
Wells Fargo will make available to the domestic Borrowers an overadvance
facility in the amount of up to $500,000 to supplement the Borrowers' credit
line, the maximum amount of which will be adjusted to $2 million. During the
forbearance period, the Borrowers will continue to be obligated for interest at
the default rate under the credit and term loan facilities with Wells Fargo,
except for interest on overadvances that accrue at the bank's prime rate plus 8%
per annum, in addition to a forbearance fee in the amount of $450,000 which will
be charged as an advance under the credit line upon the earlier of the end of
the Forbearance Period or repayment of all amounts owed to Wells Fargo. (Refer
to Notes 3 and 4 above.)

            On March 30, 2009, the Company also announced that it has initiated
plans to divest Ronson Aviation, its wholly-owned subsidiary engaged as a
fixed-base operator at Trenton-Mercer Airport. Ronson Aviation provides aircraft
fueling and servicing, avionics sales, aircraft repairs and maintenance, hangar
and office leasing and related services.

            The Company is in the process of procuring purchasers so as to
maximize the value of Ronson Aviation, permit it to satisfy outstanding
indebtedness, including to Wells Fargo, and provide working capital to support
and focus on its consumer products business. The Company's objective is to
consummate a transaction prior to the end of the second quarter of 2009, subject
to identifying and reaching agreement with a prospective purchaser, obtaining
shareholder approval and meeting other conditions that may be contained in
definitive documentation once negotiated.

            The unaudited proforma information is presented for informational
purposes only and is not intended to be indicative of either future results of
our operations or results that might have been achieved had the sale actually
occurred in the reported period.

            The proforma adjustments include the sale of the net assets of
Ronson Aviation and the repayment of the credit facility with Wells Fargo.

                                       47
<PAGE>

            The unaudited proforma consolidated balance sheet as of December 31,
2008 gives effect to the sale of the net assets of Ronson Aviation as if the
transaction occurred on December 31, 2008, the last day of the Company's fiscal
year.

<TABLE>
<CAPTION>
                                                                                       PROFORMA
                                                                       HISTORICAL     ADJUSTMENTS    PROFORMA
                                                                       ----------     -----------    ---------
            ASSETS
<S>                                                                    <C>            <C>            <C>
Current Assets
Cash and cash equivalents                                              $     84       $  3,656       $  3,740
Accounts receivable, net                                                  1,288                         1,288
Inventories                                                               1,839           (272)         1,567
Other current assets                                                        897           (194)           703
                                                                       --------       --------       --------
   Total Current Assets                                                   4,108          3,190          7,298
                                                                       --------       --------       --------

Property, plant and equipment, at cost                                   15,881         (7,639)         8,242
Less accumulated depreciation and amortization                           10,038         (4,077)         5,961
                                                                       --------       --------       --------
                                                                          5,843         (3,562)         2,281

Other assets                                                              4,886         (1,333)         3,553
                                                                       --------       --------       --------

                                                                       $ 14,837       $ (1,705)      $ 13,132
                                                                       ========       ========       ========

                LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)

Current Liabilities
Short-term debt                                                        $  1,747       $ (1,472)      $    275
Current portion of long-term debt and leases                              5,763         (3,575)           188
Accounts payable                                                          2,902            (25)         2,877
Accrued expenses                                                          2,033            439          2,472
                                                                       --------       --------       --------
   Total Current Liabilities                                             12,445         (4,633)         7,812
                                                                       --------       --------       --------

Long-term debt and leases                                                   159             (7)           152
Other long-term liabilities                                               2,327                         2,327

Stockholders' Equity (Deficiency)
Common stock                                                              5,173                         5,173
Additional paid-in capital                                               29,998                        29,998
Accumulated deficit                                                     (30,893)         2,935        (27,958)
Accumulated other comprehensive loss                                     (2,775)                       (2,775)
                                                                       --------       --------       --------
                                                                          1,503          2,935          4,438
Less cost of treasury shares                                              1,597                         1,597
                                                                       --------       --------       --------
   Total Stockholders' Equity (Deficiency)                                  (94)         2,935          2,841
                                                                       --------       --------       --------
                                                                       $ 14,837       $ (1,705)      $ 13,132
                                                                       ========       ========       ========
</TABLE>


         The unaudited proforma consolidated statement of operations for the
year ended December 31, 2008 gives effect to the sale of the net assets of
Ronson Aviation as if the transaction occurred on January 1, 2008, the first day
of the Company's fiscal year.

                                       48
<PAGE>
<TABLE>
<CAPTION>
                                                        PROFORMA
                                         HISTORICAL   ADJUSTMENTS      PROFORMA
                                         ----------   -----------      ---------
<S>                                      <C>            <C>            <C>
Net Sales                                $ 24,187       $(11,663)      $ 12,524
                                         --------       --------       --------

Cost and expenses:
  Cost of sales                            18,053         (9,172)         8,881
  Selling, shipping and advertising         3,373            (26)         3,347
  General and administrative                3,566           (923)         2,643
  Depreciation and amortization               622           (216)           406
                                         --------       --------       --------
                                           25,614        (10,337)        15,277
                                         --------       --------       --------

Loss from Operations                       (1,427)        (1,326)        (2,753)
                                         --------       --------       --------

Other (income) expense:
  Interest expense                            671           (183)           488
  Gain on sale of assets                                  (4,604)        (4,604)
  Other-net                                   586            (92)           494
                                         --------       --------       --------
                                            1,257         (4,879)        (3,622)
                                         --------       --------       --------

Earnings (Loss) Before Income Taxes        (2,684)         3,553            869

Income tax expense (benefit)               (1,032)         2,062          1,030
                                         --------       --------       --------

Net Earnings (Loss)                      $ (1,652)      $  1,491       $   (161)
                                         ========       ========       ========
</TABLE>


         Assets and liabilities expected to be included in the sale comprise the
following at December 31, 2008:

Inventory                                       $   272
Other current assets                                 47
Property and equipment, net                       3,562
Other assets                                          2
                                                -------

                                                  3,883

Accounts payable and accrued expenses                64
Lease obligations                                    12
                                                -------
                                                     76
                                                -------
                                                $ 3,807
                                                =======

Note 17. RESTATEMENT:

      The Company has reviewed and revised its classification as Long-Term Debt
of the portion of the loans from Wells Fargo and Capital One that would have
been due, according to the terms of the agreements, after December 31, 2009.
Because of the Company's failure to meet some of its financial covenants under
the Wells Fargo credit agreement resulting in events of default under the
agreement and the cross-default provisions of the Capital One mortgage loan
agreement and the likelihood that the Company would not attain compliance with
the applicable financial covenants within one year, the Company adjusted the
Current Portion of Long-Term Debt and Long-Term Debt in the Consolidated Balance
Sheet at December 31, 2008, by classifying as current the amount previously
classified as long-term as follows (in thousands):

                                       49
<PAGE>

                                    As Previously
                                      Reported     Adjustment     Restated
                                      --------     ----------     --------
Current Portion of Long-Term Debt      $   454      $ 5,296       $ 5,750
Total Current Liabilities                7,149        5,296        12,445
Long-Term Debt                           5,436       (5,296)          140

The adjustment is composed of the previously reported long-term portion of the
Long-Term Debt, as follows (in thousands):

Wells Fargo
     Equipment                                                      $  578
     Real Estate                                                     2,630
                                                                    ------
     Subtotal                                                        3,208
                                                                    ------
Capital One                                                          2,088
                                                                    ------
                                                                    $5,296
                                                                    ======

            The following Notes to the Consolidated Financial Statements have
been restated to reflect the above adjustments.

Note 1:  Basis of Presentation and Summary of Significant Accounting
         Policies
Note 4:  Long-Term Debt
Note 16: Subsequent Events


                                       50