UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549


FORM
10-K





(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, 2009


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





RCLC,
Inc.


(Exact
name of registrant as specified in its charter)





New Jersey
            22-0743290(State
      or other jurisdiction of incorporation)
            (I.R.S.
      Employer Identification No.)3 Ronson Rd, PO Box 3000 Woodbridge,
      N.J.
            08875(Address
      of principal executive office)
            (Zip
      Code)





Registrant's telephone number including
area code: (732)
636-2430





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





Name
      of each exchangeTitle of each class
            on which registeredCommon
      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 whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). Yes |_|  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|





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 |_|   Smaller
reporting company |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|





The
aggregate market value of common equity held by non-affiliates of the registrant
was approximately $286,755 as of June 30, 2009; the last business day of the
registrant's most recently completed second fiscal quarter, computed by
reference to the average bid and asked price of such common equity.





As of March 31, 2010, there were
5,083,539 shares of the registrant's common stock outstanding.





DOCUMENTS
INCORPORATED BY REFERENCE





None.





FORWARD-LOOKING
STATEMENTS





This
Annual Report on Form 10-K, including “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” in Item 7, contains
forward-looking statements that involve risks and uncertainties, as well as
assumptions that, if they never materialize or prove incorrect, could cause the
results of RCLC, Inc. and its consolidated subsidiaries (the “Company”) to
differ materially from those expressed or implied by such forward-looking
statements.  All statements other than statements of historical fact
are statements that could be deemed forward-looking statements, including any
projections of earnings, revenue, margins, costs or other financial items; any
statements of the plans, strategies and objectives of management for future
operations; any statement concerning new products, services or developments; any
statements regarding future economic conditions or performance; any statements
of belief; and any statements of assumptions underlying any of the
foregoing.  The risks, uncertainties and assumptions referred to above
include the success of new products; competition; prices of key materials, such
as petroleum products; the challenge of managing asset levels, including
inventory; the difficulty of aligning expense levels with revenue changes;
assumptions relating to pension costs; and other risks that are described herein
and that are otherwise described from time to time in the Company's Securities
and Exchange Commission reports.  The Company assumes no obligation
and does not intend to update these forward-looking statements.








FORM
10-K


RCLC,
INC.





For
the Fiscal Year Ended December 31, 2009





TABLE OF
CONTENTS








Part I
            
            
            PageItem  1.
            
            Business.
            1Item
      1A.
            
            Risk
      Factors.
            3Item
      1B.
            
            Unresolved
      Staff Comments
            7Item
      2.
            
            Properties.
            7Item
      3.
            
            Legal
      Proceedings.
            8Item
      4.
            
            Submission
      of Matters to a Vote of Security Holders.
            8Part IIItem
      5.
            
            Market
      for the Company’s Common Stock, Related Stockholder Matters and Issuer
      Purchases of Equity Securities.
            10Item
      6.
            
            Selected
      Financial DataItem
      7.
            
            Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations.
            11Item
      7A
            
            Quantitative
      and Qualitative Disclosure About Market Risk
            20Item
      8.
            
            Financial
      Statements and Supplementary Data.
            20Item
      9.
            
            Changes
      in and Disagreements with Accountants on Accounting and Financial
      Disclosure.
            21Item
      9A.(T)
            
            Controls
      and Procedures.
            21Item
      9B.
            
            Other
      Information.
            21Part IIIItem
      10.
            
            Directors,
      Executive Officers and Corporate Governance.
            22Item
      11.
            
            Executive
      Compensation.
            25Item
      12.
            
            Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters.
            29Item
      13.
            
            Certain
      Relationships and Related Transactions, and Director
      Independence.
            31Item
      14.
            
            Principal
      Accountant Fees and Services.
            31











Part IVItem
      15.
            
            Exhibits
      and Financial Statement Schedules.
            32Signatures.
            
            
            35Financial
      Statements.
            36











PART
I





Item
1 - DESCRIPTION OF
BUSINESS





(a)               General
Development of Business.





The Registrant, RCLC, Inc., formerly
known as Ronson Corporation (“RCLC” and collectively with its subsidiaries, the
“Company”), is a New Jersey corporation incorporated in 1928.





Historically, the Company has been
engaged principally in the following businesses:





1.        Consumer
Products; and





2.        Aviation-Fixed
Wing and Helicopter Services.





Prior to March 2, 2009, the Company’s
shares of common stock were listed on the Nasdaq Capital Market and quoted under
the symbol RONC.  Effective March 2, 2009, the Company’s shares of
common stock are traded on the Over-the-Counter Pink Sheets and quoted under the
symbol RONC.PK.





On February 2, 2010, subsequent to
receipt of shareholder approval of the transaction at a Special Meeting of
Shareholders held on February 1, 2010 (the “Special Meeting of Shareholders”),
the Company completed the sale of its consumer products business to Zippo
Manufacturing Company (“Zippo”) for an adjusted purchase price of approximately
$10.48 million in cash pursuant to an asset purchase agreement, dated October 8,
2009 (the “Consumer Products Sale Agreement”), among Zippo, RCLC and RCLC’s
wholly-owned subsidiaries, Ronson Consumer Products Corporation, now known as
RCPC Liquidation Corp (“RCPC”), and Ronson Corporation of Canada Ltd., now known
as RCC, Inc. (“RCC”).  The Consumer Products Sale Agreement provided
for a purchase price of $11.1 million in cash less certain credits to which
Zippo would be entitled at closing and subject to certain post-closing
adjustments as described in the Consumer Products Sale Agreement.  The
sale included the Ronson trade marks, trade name and other intellectual property
and, as such, as part of the sale, the Company agreed to change its name and the
names of its subsidiaries.





Also at the Special Meeting of
Shareholders, the Company received shareholder approval to sell its aviation
business to Hawthorne TTN Holdings, LLC (“Hawthorne”) for a purchase price of
approximately $9.5, million in cash subject to certain adjustments, pursuant to
an asset purchase agreement, dated May 15, 2009 (the “Aviation Sale Agreement”
together with the Consumer Products Sale Agreement, the “Sale Agreements”),
among Hawthorne, RCLC and Ronson Aviation, Inc. (“Ronson
Aviation”).  While the transaction was expected to close promptly
following the satisfaction or waiver of all conditions precedent described in
the Aviation Purchase Agreement, certain issues relating to Hawthorne’s
financing have delayed closing.





(b)               Financial
Information about Segments.





Please
refer to Note 11 of the Notes to Consolidated Financial Statements presented
elsewhere in this Annual Report on Form 10-K.





(c)               
Narrative Description of Business.





(1) Consumer
Products





The Company’s consumer packaged
products, which had been manufactured in Woodbridge, New Jersey and distributed
in the United States by the Company’s consumer products business, included
Ronsonol lighter fluid, Multi-Fill butane fuel injectors, flints, wicks for
lighters, and a multi-use penetrant spray lubricant product under the tradename
“Multi-Lube.”  In addition, the Company’s consumer packaged products
were marketed in Canada through RCC.  The Company’s consumer products
business also marketed a number of lighters and torches in the United States and
Canada.  In 2009, the consumer products segment had two greater than
10% customers, a distributor, supplying products to numerous retailers, and a
major retailer.  Sales to this distributor in 2009 and 2008 accounted
for 12% and 13%, respectively, of Consolidated Net Sales of the
Company


1


(less
than 10% in 2007).  Sales to this distributor in 2009, 2008, and 2007
accounted for 23%, 22% and 18%, respectively, of Net Sales of the consumer
products segment.  Sales to this major retailer in each of the years
2009, 2008, and 2007 accounted for 13% of Net Sales of the consumer products
segment.  In addition, the retailer was a significant customer of the
above distributor for the Company’s consumer products.





(2)        Aviation - Fixed Wing and
Helicopter Services





Ronson Aviation operated at the
Trenton-Mercer Airport, Trenton, New Jersey, provides a wide range of general
aviation services to the general public and to government
agencies.  Services include aircraft fueling, cargo handling,
avionics, new and used aircraft sales, aircraft repairs, aircraft storage and
office rental.  The facilities include a 52,000 square foot
hangar/office complex, a new 19,200 sq. ft. storage hangar, two aircraft storage
units (“T” hangars) and a 58,500 gallon fuel storage complex.  The new
aircraft hangar was completed and approved for occupancy in November
2007.





Ronson Aviation is an FAA approved
repair station for major and minor airframe and engine service and an avionics
repair station for service and installations.  Ronson Aviation is an
authorized Hawker Beechcraft Aircraft and Parts Service Center and a Cessna
Aircraft service station.  Ronson Aviation became a Cirrus Aircraft
service station in 2006.





Environmental
Matters





In the conduct of certain of its
manufacturing operations, the Company is required to comply with various
environmental statutes and regulations concerning the generation, storage and
disposal of hazardous materials.  Additionally, under New Jersey's
“ISRA” law, operators of particular facilities classified as industrial
establishments are required to ensure that their facility complies with
environmental laws, including implementation of remedial action, if necessary,
before selling or closing a facility.





In December 1989, the Company adopted a
plan to discontinue the operations in 1990 of one of its facilities, Prometcor,
Inc. (“Prometcor”) located in Newark, New Jersey, and to comply with all
applicable laws.  In October 1994, Prometcor entered into a Memorandum
of Agreement with the New Jersey Department of Environmental Protection
(“NJDEP”) as to its environmental compliance activities at its Newark
facility.  As the result of sampling and the evaluation of the results
by the Company's environmental consultants and the NJDEP in 1996 and 1997, areas
of contamination in the groundwater below a section of the property were
identified.  The sampling and delineation were undertaken and may
resume in the future in this area of the property.  No plan related to
the groundwater issue has yet been approved by the NJDEP.  Long-term
monitoring of groundwater may be required.  The extent of the
remaining costs associated with groundwater is not determinable until testing
and remediation have been completed and accepted by the NJDEP.





In October 2000, Ronson Aviation
completed installation and initial testing of monitoring wells in the area where
Ronson Aviation had removed and abandoned in place its former fuel
tanks.  Ronson Aviation’s environmental advisors believe that the
preliminary results of the testing indicate that no further testing should be
required.  The final extent of costs cannot be determined until the
results of testing have been completed and accepted by the
NJDEP.  Therefore, the amount of additional costs, if any, cannot be
fully determined at this time, but management believes that the effect will not
be material.





In connection with the sale of the
consumer products business, the Company was required to comply with the
requirements of ISRA.  The Company has established an escrow account
in the amount of $100,000 as its Remediation Trust Fund to provide the funds
necessary to complete compliance with ISRA.  In addition, the Company
has agreed to indemnify Zippo for potential environmental costs related to the
properties it acquired from the Company in connection with the consumer products
business.





On December 22, 2009, the Company
received a General Notice Letter (“Notice Letter”) from the United States
Environmental Protection Agency (“USEPA”) notifying the Company, together with
___ other companies, that it has been identified as a Potentially Responsible
Party (“PRP”) in the Lower Passaic River Study Area (“LPRSA”), which is part of
the Diamond Alkali Superfund Site (“Site”) in Newark, N.J.  The
Company is not able to estimate at this time the potential costs which it could
be required to incur associated with this Site or the investigation relating
thereto.


2





The Company believes that compliance
with environmental laws and regulations will not have a material adverse effect
upon the Company’s future capital expenditures or competitive
position.





Patents
and Trademarks





The Company’s numerous patents and
trademarks in the United States, Canada, Mexico and a limited number of other
countries were sold to Zippo as part of the consumer products sale discussed
above, except for the Ronson Aviation name which is to be sold to Hawthorne in
connection with the contemplated sale of the aviation business.





Seasonality
and Methods of Competition





No material portion of the Company’s
business is seasonal.  As the Company has sold its consumer products
business and expects to close on the sale of its aviation business soon, it does
not expect competition to be a factor in the future.





Research
Activities





The Company’s consumer products segment
expensed approximately $267,000, $299,000, and $371,000, during the fiscal years
ended December 31, 2009, 2008 and 2007, respectively, on research activities
relating to the development of new products and the improvement of existing
products, all of which were Company sponsored.





Employees





As of December 31, 2009, the
Company employed a total of 91 full-time employees.





Customer
Dependence





Please
see the disclosure above under “Consumer Products.”





Sales and
Revenues





The
following table sets forth the percentage of total sales contributed by each of
the Company’s classes of similar products which contributed to total sales
during the last three fiscal years.





Consumer
              Products
            Aviation
      Operations
              and Services2009
            59%
            49%2008
            52%
            48%2007
            53%
            47%





(d)
Financial Information About Geographic Areas.





Please
refer to Note 11 of the Notes to Consolidated Financial Statements presented
elsewhere in this Annual Report on Form 10-K.





Item
1A - RISK
FACTORS





General
Risk Considerations Associated with the Company





Liabilities
Exceed the Value of the Assets





Following the completion of the sale of the Company’s consumer products business
and anticipated sale of its aviation business, the Company’s primary assets will
be cash and cash equivalents of approximately $4.3 million, funds held in escrow
of about $1.9 million, and remaining accounts receivable of about $.2 million
(please


3


refer to
Note 17 of Notes to Consolidated Financial Statements presented elsewhere in
this Annual Report on Form 10-K).  The Company’s liabilities were
recorded at about $7 million, not including any additional obligations due to
contingent liabilities (refer to Note 8 of Notes to Consolidated Financial
Statements).  The Company intents to negotiate settlements with its
creditors but there can be no assurance that the Company will be able to reach
satisfactory settlements with its creditors and the Company may file a
proceeding under the bankruptcy laws, including one under Chapter 7 of Title 11
of the United States Code.





Lack
of Financing





On March 30, 2009, Wells Fargo
entered into a forbearance agreement with the Company under which Wells Fargo
agreed not to assert existing events of default under the Credit Agreement
through April 24, 2009 unless earlier terminated if the Company, among other
things, were to breach the forbearance agreement.  Wells Fargo also
agreed to an overadvance facility in the amount of $500,000 to supplement the
Company’s credit line.  The forbearance agreement was subsequently
amended on each of April 24, April 29, May 4, May 27, July 2, July 16, July 31,
November 5 and December 28, 2009, and on February 5, February 19, March 5 and
Aril 1, 2010, to provide, in each case, extensions of the forbearance period
and, in some cases, for additional credit availability (the original agreement
together with all amendments, collectively, the “Forbearance
Agreement”).  Following the sale of the consumer products business
whereupon Wells Fargo was repaid a portion of its loan balances, interest and
fees in the amount of approximately $3.138 million,, the maximum amount of the
overadvance facility was changed to $1,500,000.  Under the Forbearance
Agreement as most recently amended, the overadvance limit was reduced to $0
commencing April 9, 2010, subject to an automatic increase to $1,385,059.30 upon
receipt by Wells Fargo of notice of the consummation of the sale of the aviation
business to Hawthorne.  Ronson Aviation will continue to be permitted
to request advances under the Wells Fargo credit facility until April 16, 2010;
provided, however, that Wells Fargo will have no obligation to make advances if
Wells Fargo, in its reasonable discretion, believes that a New Jersey Economic
Development Authority-approved bond issuance to finance Hawthorne’s acquisition
of the assets of Ronson Aviation is not expected to occur by April 16,
2010.  While the Company believes that the Wells Fargo will extend its
forbearance beyond April 16, 2010, the Company does not have a commitment from
Wells Fargo to extend the forbearance period beyond this date.  In the
event of acceleration of its indebtedness to Wells Fargo 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.





Funds
Held in Escrow





Following the consummation of both sale
transactions, the funds being held in escrow will total approximately
$1,891,000.  These escrow funds are held primarily to secure the
Company’s indemnification obligations to the purchasers under the Consumer
Products Sale Agreement and the Aviation Sale Agreement.  The Company
does not believe that a material portion of the funds held in escrow will be
required under these indemnifications and that the material portion of the funds
will ultimately be released to the Company, but there can be no assurance that
indemnification claims will not be made and deplete the amounts held in
escrow.





Political
and Economic Risks





Until completion of the sale of the
aviation business, the Company’s operations will continue to be exposed to the
risk of political and economic uncertainties.  Changes in political
and economic conditions may affect product cost, availability, distribution,
pricing, purchasing, and consumption patterns.  While the Company
seeks to manage its business in consideration of these risks, there can be no
assurance that the Company will be successful in doing so.





Operating
Results and Net Earnings May Not Meet Expectations





The Company cannot be sure that its
operating results and net earnings will meet its expectations.  If the
Company’s assumptions and estimates are incorrect or do not come to fruition, or
if the Company does not achieve all of its key goals, then the Company’s actual
performance could vary materially from its expectations.  The
Company’s operating results and net earnings may be influenced by a number of
factors, including the following:





4





* the
Company’s ability to control its internal costs, including professional fees,
while negotiating settlements with its creditors;





* the
ability to successfully manage regulatory, tax and legal matters, including
resolution of pending matters within current estimates;





* the
ability of the Company to attract and retain qualified personnel.





Regulatory
Risks





The Company is subject to numerous
environmental laws and regulations that impose various environmental controls on
its business operations, including among other things, the discharge of
pollutants into the air and water, the handling, use, treatment, storage and
clean-up of solid and hazardous wastes, and the investigation and remediation of
soil and groundwater affected by hazardous substances.  Such laws and
regulations may otherwise relate to various health and safety matters that
impose burdens upon the Company's operations.  These laws and
regulations govern actions that may have adverse environmental effects and also
require compliance with certain practices when handling and disposing of
hazardous wastes.  These laws and regulations also impose strict and
joint and several liability for the costs of, and damages resulting from,
cleaning up current sites, past spills, disposal and other releases of hazardous
substances.  The Company believes that its expenditures related to
environmental matters are not currently expected to have a material adverse
effect on its financial condition, results of operations and cash
flows.  However, the environmental laws under which the Company
operates are complicated and often increasingly more stringent, and may be
applied retroactively.  Accordingly, there can be no assurance that
the Company will not be required to make additional expenditures to remain in or
to achieve compliance with environmental laws in the future or that any such
additional expenditures will not have a material adverse effect on the Company's
financial condition, results of operations and cash flows.  Please see
“Environmental Matters” above.





Interest
Rates





The Company is exposed to changes in
prevailing market interest rates affecting its interest costs and the return on
its investments.  All of the Company’s Short-term Debt carries a
variable rate of interest.





Special
Risk Considerations Regarding Our Sale Transactions





Upon
the consummation of the sale of our consumer products business, we made
substantial payments to our creditors and expect to make additional payments to
our creditors when our aviation business is sold as well and we do not
anticipate any distribution to shareholders.





The
Company utilized the proceeds from the sale of the consumer products business to
repay the mortgage loan from Capital One in full and a portion of the secured
debt to Wells Fargo and costs related to the sale.  The proceeds of
the sale of the aviation business will be utilized to pay the remaining amounts
due to Wells Fargo and to Getzler Henrich and to pay for professional fees
incurred previously related to the two asset sales.  The remaining
proceeds will not be sufficient to satisfy the obligations to the remaining
creditors,   The Company intends to negotiate settlements with
its creditors but there can be no assurance that the Company will be able to
reach satisfactory settlements with its creditors and the Company may file a
proceeding under the bankruptcy laws, including one under Chapter 7 of Title 11
of the United States Code.




If
the sale of the aviation business to Hawthorne is not consummated, we may seek
other purchasers for that business.





Although
prior to execution of the Aviation Sale Agreement, we had discussions with
various parties concerning the proposed sale transactions, none of these parties
may now have an interest in these businesses or be willing to offer a reasonable
purchase price.  Furthermore, the Company may not be in a position to
fund operations until other purchasers are identified.





Each
of the Sale Agreements will expose us to contingent liabilities.





Pursuant
to each of the Sale Agreements, we undertook to indemnify, respectively, the
Aviation Buyer and the Consumer Products Buyer for any losses from breaches of
our representations or warranties or covenants that


5


occur
within specified periods after the closing dates of its Sale Transaction. Our
potential indemnification obligations are secured up to $500,000 in the case of
the Aviation Division Sale, which amount is to be withheld from the
consideration paid to us at closing and retained in escrow for a period of 15
months, and up to $1.35 million in the case of the Consumer Products Division
Sale, which amount is to be withheld from the consideration paid to us at
closing and retained in escrow for a period of 12 months (or longer if necessary
to secure the Company’s environmental obligations), but our exposure is not
limited to these amounts.  An indemnification claim might result, for
example, if we are inaccurate in any of our representations about the assets
being sold.  Although we know of no breaches of our representations or
warranties, and we do not anticipate breaching any of our covenants, the payment
of any indemnification obligations would adversely impact our cash resources
following the consummation of either of the Sale Transactions.





The
Sale of our Aviation Business subjects us to potential termination payments and
expenses.





Under the
Aviation Sale Agreement, we are obligated to pay to Hawthorne $400,000 if we
terminate the Aviation Sale Agreement in order to accept a third party proposal
that we deem to be a superior offer.





Since
only the sale of our consumer products business has closed to date, we are now
left with a significantly less diversified business and potentially no
financing.





Since the
sale of the consumer products business has closed, we are left with a
significantly less diversified business in having only the aviation
business.  Moreover, we have unsatisfied indebtedness and no recourse
to working capital to sustain our business.  The Company does not have
a commitment from its principal lender, Wells Fargo, to extend the forbearance
period beyond its current duration expiring on April 16, 2010.  In the
event of acceleration of its indebtedness to Wells Fargo 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.





If
we do not complete the sale of our aviation business but, nevertheless, are able
to overcome interim liquidity issues and continue to operate while we procure
alternative purchasers, we will continue to face the risks and uncertainties
attendant to the aviation business and could be adversely affected by, for
example, increases in fuel prices.





Ronson
Aviation’s business could be significantly affected by the availability and
price of jet fuel.  A significant increase in jet fuel prices would
most likely have a material impact on our profitability unless we are able to
pass on such costs to our customers.  Due to the competitive nature of
the industry, our ability to pass on increased fuel prices by increasing rates
is uncertain.  Similarly, any potential benefit of lower fuel prices
could be offset by increased competition and lower revenues in
general.  While we do not currently anticipate a significant reduction
in fuel availability, dependency on foreign imports of crude oil and the
possibility of changes in government policy on jet fuel production,
transportation and marketing make it impossible to predict the future
availability of jet fuel.





If
we do not complete the sale of our aviation business but, nevertheless, are able
to overcome interim liquidity issues and  continue to operate while we
procure alternative purchasers, we will continue to face concerns regarding
decreased demand for private aviation.





Uncertainties
arising from the political climate involving public and private aircraft,
including potential terrorist actions,  may have a significant impact
on Ronson Aviation.  Additionally, recent economic conditions may
cause companies to reduce the use of corporate jets due to cost or government
oversight of some companies’ perquisites.  The result of these actions
could be that individuals and corporate or other entities curtail or stop using
private aircraft.  In this event, our revenues would be adversely
affected.





If
we do not complete the sale of our aviation business but, nevertheless, are able
to overcome interim liquidity issues and continue to operate while we procure
alternative purchasers, we would continue to be subject to the extensive
governmental regulation of the aviation industry.


6


The
aviation industry is subject to extensive regulatory requirements that could
result in significant costs.  For example, the Federal Aviation
Administration  from time to time issues directives and promulgates
regulations relating to maintenance and operation of facilities and our
compliance with such requirements may cause us to incur significant
expenditures.  Additionally, other laws and regulations are proposed
from time to time that may increase the cost of our operations and reduce
overall revenues.  We cannot provide assurances that laws or
regulations enacted in the future will not adversely affect our revenues and
future profitability.





Item
1B - UNRESOLVED STAFF
COMMENTS





None.





Item
2 - DESCRIPTION OF
PROPERTIES





The following list sets forth the
location and certain other information concerning the Company’s manufacturing
and office facilities.  The Company’s facilities are in relatively
modern buildings which were designed for their present purpose.  The
Company believes its manufacturing and other facilities to be suitable for the
operations conducted.  In the list below, “medium” facilities are
those which have between 19,000 and 100,000 square feet; and “small” facilities
are those which have less than 19,000 square feet.





The facilities in Woodbridge and South
Brunswick, New Jersey, and Canada comprised the consumer products
segment.  The Trenton, New Jersey, facilities were used by the
aviation services segment.





(1) Woodbridge, New Jersey





Facilities included in (a) and (b)
below were owned subject to a mortgage in favor of Capital One, N.A. (“Capital
One”).  These facilities were sold in the sale to Zippo and the
mortgage loan was repaid.





(a) One medium facility for
manufacturing consumer products.  This facility is owned and is
constructed of brick, steel and cinder block.





(b) One small facility for
storage.  This facility is owned and is constructed of metal, cinder
block and cement.





(2) South Brunswick, New
Jersey





One small facility for shipping and
storage of finished goods which is subject to a lease expiring in March 2013,
with two additional three-year options.  The Company vacated the
facility in March 2010.





(3) Trenton, New Jersey





The facilities and leasehold in Trenton
are to be sold to Hawthorne in April 2010.





(a) Two medium facilities for fixed
wing and helicopter services, sales and office space leased to
others.  These buildings are owned and constructed of steel and
concrete.  The land on which these buildings are located is leased
under a leasehold with five five-year terms automatically renewed, with the last
five-year term expiring in November 2032.  The lease was extended in
2007 by Ronson Aviation for five additional five-year terms through November
2032, because Ronson Aviation invested more than $1,500,000 in capital
improvements.





(b) One medium facility - “T”
hangars.  These structures are owned and are constructed of aluminum
and concrete.  The land upon which these structures are located is
leased under a leasehold on the same terms as in 4 (a) above.





(5) Mississauga, Ontario,
Canada





One small facility for sales and
marketing, distribution center and storage.  This facility is subject
to a lease which expires in March 2011.  This facility is constructed
of brick and cinder block.  The Company vacated the facility in March
2010.


7





Item
3 - LEGAL
PROCEEDINGS





PENSION BENEFIT GUARANTY
CORPORATION v. RONSON CORPORATION.  On December 30, 2009, the
Pension Benefit Guaranty Corporation (“PBGC”) filed a complaint in the United
States District Court for the District of New Jersey alleging that the Ronson
Corporation Retirement Plan (“Retirement Plan”) will be unable to pay benefits
when due.  On December 29, 2009, the PBGC sent a notice to the
Company, which is the plan administrator of the Retirement Plan, requesting the
Company to terminate the Retirement Plan on December 30, 2009, and to have the
PBGC appointed as the Retirement Plan’s Trustee.  The PBGC notice
sought a response from the Company within 15 days.  The complaint,
filed on December 30, 2009, seeks to have the Retirement Plan terminated
effective December 30, 2009, and to have the PBGC appointed trustee of the
Retirement Plan.  The PBGC has advised the Company that the PBGC has
determined that the PBGC will have a claim against the Company totaling about
$4,565,000, consisting of an unfunded benefit liability and required
contributions of about $2,836,000 and a pension liability insurance termination
premium of $1,729,000.   The Company expects that the Retirement
will be terminated and the PBGC named trustee. Discussions between the Company
and the PBGC are ongoing regarding the amount of the claim and the date of
termination.





The
Company is involved in various product liability claims.  The
claimants have claimed unspecified damages.  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 these
matters.  However, based on facts currently available, management
believes that damages awarded, if any, would be well within existing insurance
coverage.





Item
4 - SUBMISSION OF
MATTERS TO A VOTE OF SECURITY HOLDERS





(a)  At the Company’s Special
Meeting of Shareholders held on February 1, 2010, the matters set forth in the
Company’s Notice of Special Meeting and Proxy Statement, which is incorporated
herein by reference, were submitted to the Company’s shareholders.





(b)  The number of
affirmative votes, negative votes and abstentions on each matter is set forth
below:





1.
            APPROVAL
      OF THE AVIATION DIVISION SALE. A proposal to approve the sale of
      substantially all of the assets of the Company’s Aviation Division
      pursuant to an asset purchase agreement dated May 15, 2009, among the
      Company, Ronson Aviation and Hawthorne as subsequently
      amended.





FOR
              
              2,405,459
            %
              
              74.3
            AGAINST
              
              824,646
            %
              
              25.5
            ABSTAIN
              
              9,158
            %
              
              .3





2.  APPROVAL
OF THE CONSUMER PRODUCTS DIVISION SALE.  A proposal to approve the
sale of substantially all of the assets of the Company’s Consumer Products
Division including the name “Ronson,” pursuant to an asset purchase agreement
dated as of October 5, 2009, among the Company, RCPC, RCC, and Zippo and its
wholly-owned subsidiary, Nosnor, Inc..





FOR
            %
            AGAINST
            %
            ABSTAIN
            %2,408,005
            74.3
            821,905
            25.4
            9,353
            .3





8





3.
AMENDMENT OF CERTIFICATE OF INCORPORATION.  A proposal to approve the
amendment (the “Charter Amendment”) of our Restated Certificate of
Incorporation, as previously amended, to change the name of the Company from
Ronson Corporation to “RCLC, Inc.” in the event the Consumer Products Division
Sale is consummated.





FOR
            %
            AGAINST
            %
            ABSTAIN
            %2,411,753
            74.5
            817,688
            25.2
            9,822
            .3





4.
ADJOURNMENTS OR POSTPONEMENTS.  A proposal to approve an adjournment
or postponement of the Special Meeting to such time and place as designated by
the presiding officer of the Special Meeting, if necessary or appropriate, in
order to solicit additional proxies to vote in favor of the Aviation Division
Sale, The Consumer Products Division Sale and/or the Charter Amendment (the
“Adjournment Proposal”).





FOR
            %
            AGAINST
            %
            ABSTAIN
            %2,402,797
            74.2
            827,257
            25.5
            9,209
            .3





9





PART
II





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





(a) The
principal market for trading in Ronson common stock was the Nasdaq Capital
Market in 2008. Effective March 2, 2009, the Company’s common stock is traded in
the Over-the-Counter Pink Sheets. Market data for the last two fiscal years are
listed below for information and analysis.  The data presented reflect
inter-dealer prices, without retail markup, markdown or commission and may not
necessarily represent actual transactions.





2009Quarter
              
              1st
              
              
              2nd
              
              
              3rd
              
              
              4thHigh
      Bid
              
              $
              0.98
              
              
              $
              0.40
              
              
              $
              0.33
              
              
              $
              0.30Low
      Bid
              
              
              0.04
              
              
              
              0.09
              
              
              
              0.05
              
              
              
              0.01
 2008Quarter
              
              1st
              
              
              2nd
              
              
              3rd
              
              
              4thHigh
      Bid
              
              $
              1.80
              
              
              $
              1.76
              
              
              $
              1.25
              
              
              $
              1.15Low
      Bid
              
              
              0.95
              
              
              
              0.95
              
              
              
              0.99
              
              
              
              0.11





(b) At
March 31, 2010, there were 1,864 stockholders of record of the Company’s common
stock.





(c) Dividends -





1.      There
were no cash dividends declared or paid by the Company in the years ended
December 31, 2009, 2008 and 2007.





2.      Stock
dividends - The Company’s Board of Directors declared a 5% stock dividend on the
Company’s outstanding common stock on February 1, 2008, February 1, 2007,
February 23, 2006, February 15, 2005, February 12, 2004, March 18, 2003, and
March 12, 2002, respectively.  Information regarding the number of
shares and per share amounts was retroactively adjusted for the stock dividends
declared on the Company's common stock.





(d) See Item 11 below for information
as to securities authorized for issuance under equity compensation
plans.





(e) The
following table contains information about purchases of equity securities by the
Company and affiliated persons during the fourth quarter of 2009:





Issuer
Purchases of Equity Securities




Period
            
            Total
      Number of
              Shares
      Purchased
            
            
            Average
              Price
              Paid
      per
              Share
            
            
            Total
              Number
      of
              Shares
              Purchased
              as
      Part of
              Publicly
              Announced
              Plans
      or
              Programs
            
            
            Maximum
              Number
      (or
              Approximate
      Dollar
              Value)
      of Shares that
              May
      Yet Be
              Purchased
      Under the
              Plans
      or ProgramsOctober
      1 - October 31, 2009
            
            
            --
            
            
            $
            --
            
            
            
            --
            
            
            
            --November
      1 - November 30, 2009
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --December
      1 - December 31, 2009
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --Total
            
            
            --
            
            
            $
            --
            
            
            
            --
            
            
            
            --





10


Item
6 - SELECTED FINANCIAL
DATA





The information required by this item
is provided in response to Item 15.





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





RESULTS OF
OPERATIONS





2009
Compared to 2008





In March 2009, the Company announced
its plan to divest its aviation business.  On May 18, 2009, the
Company announced that it had entered into an agreement to sell substantially
all of the assets of the wholly-owned subsidiary, Ronson Aviation.  On
October 8, 2009, the Company entered into an agreement to sell substantially all
of the assets of its consumer products business.  On February 2, 2010,
the Company completed the sale of the consumer products
business.  Therefore, the operations of the Company’s consumer
products business and its aviation business have been classified as discontinued
in the Consolidated Statements of Operations below.  The results of
continuing operations include only the Company.





The Company’s Loss from Continuing
Operations was $(1,411,000) in 2009 as compared to $(1,209,000) in
2008.  The Company had a Loss from Discontinued Operations in 2009 of
$(3,302,000) as compared to $(443,000) in 2008.  The Company’s Net
Loss was $(4,713,000) in the year 2009 as compared to $(1,652,000) in the year
2008.





The Loss from Discontinued Operations
in 2009 included expenses for increased professional fees of $2,380,000 (before
income taxes) consisting of legal fees, fees related to the engagement of
Getzler Henrich & Associates LLC (“Getzler Henrich”) and Mr. Joel Getzler,
as Chief Restructuring Officer, a forbearance fee to Wells Fargo of $500,000,
other increased fees charged by Wells Fargo, and investment banking
expenses.





Continuing
Operations





Because the operations of Ronson
Consumer Products and Ronson Aviation are classified as discontinued, the
Company’s continuing operations are the Company’s corporate costs and
expenses.





The Company’s General and
Administrative Expenses were reduced in 2009 to $1,323,000 from $1,580,000 in
2008 primarily due to reductions in personnel costs resulting from staff
reductions and salary reductions in the first quarter of 2009.





The Other-net included increased
pension expenses related to the Company’s frozen pension plan of $571,000 in
2009 as compared to $273,000 in 2008.





Discontinued
Operations





As discussed above, the Company’s
discontinued operations include the operations of the Company’s consumer
products business and aviation business in all periods presented.





The Company had a Loss from
Discontinued Operations in 2009 of $(3,302,000), including an income tax
provision of $22,000, as compared to a loss of $(443,000), net of income tax
benefits of $279,000, in 2008.  The Loss from Discontinued Operations
in 2009 included increased costs of about $301,000 in professional fees related
to the Wells Fargo forbearance agreement, a forbearance fee to Wells Fargo of
$500,000, fees and expenses of  $1,946,000 to Getzler Henrich related
to the Company’s retention of Mr. Joel Getzler of Getzler Henrich as the
Company’s CRO, and investment banking expenses of $133,000 related to the
Company’s divestiture of Ronson Consumer Products.





The Losses from Discontinued Operations
in the years ended December 31, 2009 and 2008 were composed of the following (in
thousands):


11





Year
      EndedDecember
      31,2009
            
            
            2008Consumer
      ProductsNet
      sales
            
            $
            10,969
            
            
            $
            12,524Gross
      profit
            
            
            3,281
            
            
            
            3,378Loss
      from operations
            
            
            (1,654
            )
            
            
            (1,116
            )Interest
      expense
            
            
            448
            
            
            
            389Other
      – net
            
            
            451
            
            
            
            243Loss
      before intercompany charges and income taxes
            
            
            (2,553
            )
            
            
            (1,748
            )Income
      tax benefits (expenses)
            
            
            42
            
            
            
            716Loss
      from discontinued operations of Consumer Products
            
            
            (2,511
            )
            
            
            (1,032
            )AviationNet
      sales
            
            $
            7,769
            
            
            $
            11,663Gross
      profit
            
            
            1,890
            
            
            
            2.281Earnings
      (loss) from operations
            
            
            (193
            )
            
            
            1,326Interest
      expense
            
            
            223
            
            
            
            207Other
      – net
            
            
            312
            
            
            
            92Earnings
      (loss) before intercompany charges and income taxes
            
            
            (728
            )
            
            
            1,027Income
      tax benefits (expenses)
            
            
            (63
            )
            
            
            (412
            )Earnings
      (loss) from discontinued operations of Aviation
            
            
            (791
            )
            
            
            615Other
            
            
            -
            
            
            
            (26
            )Loss
      from discontinued operations
            
            $
            (3,302
            )
            
            $
            (443
            )





Increased
      professional fees related to financing included in earnings (loss) from
      operations aboveConsumer
      Products
            
            $
            1,144
            
            
            $
            -Aviation
            
            
            1,236
            
            
            
            -Total
            
            $
            2,380
            
            
            $
            -Forbearance
      fee to Wells Fargo included in other-net aboveConsumer
      Products
            
            $
            225
            
            
            $
            -Aviation
            
            
            275
            
            
            
            -Total
            
            $
            500
            
            
            $
            -





In the
consumer products business, the lower net sales and gross profit in of 2009 as
compared to 2008 were primarily due to the Company’s reduced lending
availability in the first quarter of 2009. An improvement in the results from
operations in 2009 due to lower oil prices in 2009 was offset by the increased
professional fees discussed above.





In the aviation business, the net sales
were lower in 2009 as compared to 2008 primarily due to the lower prices for
aviation fuel and lower volume of fuel sold. The Earnings (Loss) from Operations
were lower in 2009 from 2008 primarily due to the increased professional fees
discussed above and the lower volume of aviation fuel sold.





12








Income
Taxes





In accordance with Accounting Standards
Code (“ASC”) 740 (“ASC 740”) formerly Statement of Financial Accounting
Standards No. 109, “Income Taxes,” in 2009 and  2008, the Company
recognized deferred income tax expense (benefits) as follows:





Year
      Ended December 31,2009
            
            
            2008Continuing
      Operations
            
            $
            (239
            )
            
            $
            (15
            )Discontinued
      Operations
            
            
            (299
            )
            
            
            (1,036
            )Total
            
            $
            (538
            )
            
            $
            (1,051
            )





Current income taxes in the years ended
December 31, 2009 and 2008 were presented net of credits of $24,000, and
$17,000, respectively, (none in 2009) arising from the utilization of available
tax losses and loss carryforwards in accordance with ASC 740.  In 2009
and 2008, current income tax expenses (benefits) were as follows (in
thousands):





Year
      Ended December 31,2009
            
            
            2008Federal
            
            $
            -
            
            
            $
            -State
            
            
            8
            
            
            
            10Foreign
            
            
            1
            
            
            
            9Total
            
            $
            9
            
            
            $
            19





At December 31, 2009, the Company had
net operating loss carryforwards for federal income tax purposes of
approximately $11,715,000 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 10%, and 38% in 2009
and 2008, respectively.  The lower effective tax benefit rate in
2009  was primarily due to increases in the valuation allowance
related to deferred tax assets.  In 2009, the Company reviewed the
likelihood that it would be able to utilize the available net operating loss
carryforwards since the Company had determined to sell its two operating
segments.  The expected gains on the two sales were compared to the
available tax carryforwards and determined that the expected gains would not be
sufficient to utilize the entire tax benefits available. Therefore, in 2009, the
Company increased the valuation reserve related to deferred income tax assets
which resulted in reduced Income Tax Benefits.











FINANCIAL CONDITION AND
LIQUIDITY AND CAPITAL RESOURCES





The Company’ Stockholders’ Deficit
increased to $4,789,000 at December 31, 2009, from $94,000 at December 31,
2008.  The increase in the Stockholders' Deficit in 2009 was primarily
due to the Net Loss of $4,713,000 in 2009.





The Company had a deficiency in working
capital of $12,649,000 at December 31, 2009, as compared to a deficiency of
$8,337,000 at December 31, 2008.  The increase in the working capital
deficiency was primarily due to the Loss before Income Taxes in 2009 of
$5,243,000.





The Company’s independent registered
public accountants report on the Company’s financial statements for the year
ended December 31, 2009, 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’


13


Deficiency
and working capital deficiency.  (Refer to Note 1 to Consolidated
Financial Statements on Going Concern and Managements’ Response.)





On May 15, 2009, the Company entered
into an asset sale agreement with Hawthorne TTN Holding, LLC (“Hawthorne”) for
the sale of substantially all of the assets of the Company’s aviation business
(other than specified assets including cash and cash equivalents and accounts
receivable).  The agreement provides for a purchase price of $9.5
million in cash, $0.5 million of which would be held in escrow for a period of
15 months after closing to secure indemnification claims against the
Company.  The Company has been advised by Hawthorne that it expects to
complete the purchase shortly but issues with Hawthorne’s financing have delayed
closing..





On February 2, 2010, the Company
completed the sale of substantially all of the assets of its consumer products
business to Zippo Manufacturing Company (“Zippo”) pursuant to an asset sale
agreement, dated October 8, 2009, entered into with Zippo.  Zippo paid
the Company $11.1 million in cash, less certain credits, for the assets of
consumer products business, a minimum of $1.1 million and a maximum of $1.35
million of which will be held in escrow to secure potential indemnification
claims against the Company for a period of 12 months (or longer to secure the
Company’s environmental compliance obligations). At the closing, Zippo delivered
$9.75 million, as adjusted, to RCPC and the remaining $1.1 million and an
additional $250,000 were delivered, in part, to First National Bank of
Pennsylvania, as escrow agent, pursuant to an escrow agreement entered into
between the parties at the closing and, in part, to the trustee under an
environmental remediation agreement with the NJDEP. (Refer to Note 17 to
Consolidated Financial Statements).





The proceeds from the sale of the
consumer products business were utilized as follows, in thousands:





Repayment
      of mortgage loan with Capital One, including interest and
    fees
            
            $
            2,275Repayment
      of a portion of the loans from Wells Fargo, including interest and
      fees
            
            
            3,138Held
      in escrow by Wells Fargo pending completion of the sale of the aviation
      business
            
            
            2,752Amounts
      held in escrow in accordance with the Asset Sale Agreement
            
            
            1,364Professional
      fees associated with the transaction
            
            
            746Payment
      of amounts due to Getzler Henrich and for employees’ accrued compensation
      (none to executive officers)
            
            
            203Total
            
            $
            10,478





The proceeds from the sale of the
aviation business are expected to be utilized as follows, in
thousands:





Purchase
      price
            
            $
            9,500Receipt
      of funds held in escrow by Wells Fargo above
            
            
            2,752Total
            
            $
            12,252Repay
      the balance of the loans from Wells Fargo, including interest and fees
      (which include Wells Fargo’s legal fees of $106)
            
            
            4,172Payment
      of the forbearance fee to Wells Fargo
            
            
            500Payment
      of amounts due to Getzler Henrich
            
            
            1,690Amounts
      to be held in escrow in accordance with the Asset Sale
      Agreement
            
            
            527Professional
      fees associated with the transaction, and other professional fees
      outstanding
            
            
            826Payment
      of state income taxes
            
            
            219Total
      proceeds utilized
            
            $
            7,934Cash
      provided to the Company
            
            $
            4,318





The Company currently intends to retain
the remaining net cash proceeds and use them to repay outstanding indebtedness,
including pension plan liabilities, accounts payable and accrued expenses
(including amounts owed to officers and directors and their affiliates) subject
to applicable law.  Based on the Company’s outstanding obligations and
estimated obligations through closing, the utilization of the proceeds described
above


14


results
in satisfaction of the Company’s indebtedness secured by the assets sold, but
the remaining cash proceeds will not satisfy all of the Company’s other
obligations and, as a consequence, the Company may file a proceeding under the
bankruptcy laws, including one under Chapter 7 of Title 11 of the United States
Code, to effectuate a distribution of any net cash proceeds of the Sale
Transactions in accordance with the priority scheme set forth under such
laws.  The Company does not anticipate distribution to the
shareholders of the proceeds of the sale transactions.





As a result of events of default under
its Credit Agreement with its primary lender, Wells Fargo, commencing in
November 2008, Wells Fargo advised the Company of an increase in the interest
rate on the amounts outstanding under the Credit Agreement by 3%, retroactive to
July 1, 2008 as allowed under the terms of the Credit
Agreement.  Under cross-default provisions in the Company’s mortgage
loan documentation with Capital One, the events of default under the Credit
Agreement with Wells Fargo were events of default under the mortgage
loan.





In December 2008, in response to
suggestions from Wells Fargo, the Board began interviewing financial consultants
for the Company to assist in managing its operations and cash requirements and
on January 6, 2009, the Company engaged Getzler Henrich as its financial
consultant.





On February 20, 2009, the Company
received from Wells Fargo an additional notification of Wells Fargo’s
reservation of rights and remedies relating to the previously identified events
of default.  The notification further indicated that Wells Fargo was
instituting certain restrictions and reducing loan availability.





On March 30, 2009, Wells Fargo
entered into a forbearance agreement with the Company under which Wells Fargo
agreed not to assert existing events of default under the Credit Agreement
through April 24, 2009 unless earlier terminated if the Company, among other
things, were to breach the forbearance agreement.  Wells Fargo also
agreed to an overadvance facility in the amount of $500,000 to supplement the
Company’s credit line.  The forbearance agreement was subsequently
amended on each of April 24, April 29, May 4, May 27, July 2, July 16, July 31,
November 5 and December 28, 2009, and on February 5, February 19, March 5 and
Aril 1, 2010, to provide, in each case, extensions of the forbearance period
and, in some cases, for additional credit availability (the original agreement
together with all amendments, collectively, the “Forbearance
Agreement”).  Following the sale of the consumer products business
whereupon Wells Fargo was repaid a portion of its loan balances, interest and
fees in the amount of approximately $3.138 million,, the maximum amount of the
overadvance facility was changed to $1,500,000.  Under the Forbearance
Agreement as most recently amended, the overadvance limit was reduced to $0
commencing April 9, 2010, subject to an automatic increase to $1,385,059.30 upon
receipt by Wells Fargo of notice of the consummation of the sale of the aviation
business to Hawthorne.  Ronson Aviation will continue to be permitted
to request advances under the Wells Fargo credit facility until April 16, 2010;
provided, however, that Wells Fargo will have no obligation to make advances if
Wells Fargo, in its reasonable discretion, believes that a New Jersey Economic
Development Authority-approved bond issuance to finance Hawthorne’s acquisition
of the assets of Ronson Aviation is not expected to occur by April 16,
2010.  While the Company believes that the Wells Fargo will extend its
forbearance beyond April 16, 2010, there can be no assurance that it will do
so.




As previously reported, as a result of
the consummation of the sale of the Company’s consumer products business to
Zippo Manufacturing Company on February 2, 2010, RCPC and Ronson Canada are no
longer permitted to request advances under the credit facility with Wells Fargo
and any remaining assets of RCPC and Ronson Canada are no longer considered in
borrowing base calculations.




Also, on March 30, 2009, the Company
expanded the scope of the engagement of Getzler Henrich and, in accordance with
its obligations under the Forbearance Agreement, retained Joel Getzler of
Getzler Henrich as the Company’s CRO responsible for operations, finance,
accounting and related administrative issues, subject to the authority of and
reporting to the Board of Directors.  Pursuant to the engagement, Mr.
Getzler has agreed to act as CRO during the period that Wells Fargo continues to
make revolving advances to the Company in an amount sufficient to fund the
Company’s cash flow needs.




Under cross-default provisions in the
Company’s mortgage loan from Capital One, the events of default under the Wells
Fargo facility were also an event of default under the mortgage
loan.  Capital One did not accelerate any payments under the mortgage
loan.  At December 31, 2009, the amounts of the
outstanding


15


indebtedness
to Wells Fargo and Capital One were $5,973,000 and $2,131,000,
respectively.  The mortgage loan with Capital One was repaid from the
proceeds of the sale of the consumer products business and the Company also
repaid Wells Fargo a portion of its outstanding indebtedness, interest and fees
in the amount of approximately $3.138 million.





In 2008 and in 2009, the Company took
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 the aviation
sale 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.  As noted above, the Company
does not have a commitment from Wells Fargo to extend the forbearance period
beyond its current duration expiring on April 16, 2010.  In the event
of acceleration of its indebtedness to Wells Fargo 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.





Based on the amount of the loans
outstanding and levels of accounts receivable and inventory at December 31,
2009, the Company’s subsidiaries had unused borrowings available at December 31,
2009, of about $610,000 under the Wells Fargo line of credit and overadvance
described above.





The Company’s Other Current Assets
increased in 2009 due to increased deferred income tax assets because of the
compensation deferred in 2009.  The Other Current Assets of
Discontinued Operations were higher at December 31, 2009 as compared to December
31, 2008, primarily due to costs deferred related to the sales of the two
operating segments.  About $671,000 in professional fees and related
costs had been incurred and included in Other Current Assets of Discontinued
Operations at December 31, 2009.  As a part of the sale of the
consumer products business, RCPC entered into an inventory agreement with
Zippo.  Under that agreement, RCPC produced finished goods and sold
them to Zippo.  Because provisions in the inventory agreement provided
that Zippo was authorized to return those goods to RCPC if the sale of the
consumer products business were not consummated, the revenues and costs of those
sales were deferred until the sale was completed on February 2,
2010.  At December 31, 2009, the deferred costs included in Other
Current Assets of Discontinued Operations and the deferred sales revenues
included in Current Liabilities of Discontinued Operations each totaled about
$1,800,000.  The revenues and costs will be recognized in the first
quarter of 2010.





The Company’s Accounts Payable
increased in 2009 due to the deferral of payments to Getzler Henrich in the
amount of $1,135,000 and to deferral of payments for professional fees until
completion of the sales of the two business segments.  The Company’s
Accrued Expenses increased in 2009 due to the accrual of the forbearance fee to
Wells Fargo of $500,000, the signing bonus for Getzler Henrich of $200,000, and
for the accrual of deferred compensation due to the Company’s
officers.





The Current Liabilities of Discontinued
Operations increased in 2009 due primarily to the deferred revenue under the
agreement with Zippo discussed above and the delayed payments to
suppliers.





The Company’s capital commitments
including long-term debt and leases are discussed more fully in Notes 5 and 6 of
the Notes to Consolidated Financial Statements.  A summary of the
maturities of contractual obligations and other commitments is as follows (in
thousands):


16








Payment Due by PeriodContractualObligations
            
            Total
            
            
            Less than 1 Year
            
            
            2-3 years
            
            
            4-5 Years
            
            
            After 5 YearsLong-term
      debt
            
            $
            5,495
            
            
            $
            5,405
            
            
            $
            87
            
            
            $
            3
            
            
            $
            --Capital
      lease obligations
            
            $
            20
            
            
            $
            16
            
            
            $
            4
            
            
            $
            --
            
            
            $
            --Operating
      leases
            
            $
            663
            
            
            $
            240
            
            
            $
            309
            
            
            $
            114
            
            
            $
            --Other
      long-term obligations (1)
            
            $
            2,286
            
            
            $
            2,286
            
            
            $
            --
            
            
            $
            --
            
            
            $
            --Total
      contractual obligations
            
            $
            8,464
            
            
            $
            7,947
            
            
            $
            400
            
            
            $
            117
            
            
            $
            --Pension
      obligations (2)
            
            $
            6,185
            
            
            $
            516
            
            
            $
            1,590
            
            
            $
            1,179
            
            
            $
            2,900




(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 possible termination of the Retirement Plan as requested by
the PBGC has not been incorporated into these payments.





The Company will continue to incur
interest expenses related to its outstanding short-term and long-term
debt.  In the years ended December 31, 2009 and 2008, the Company’s
interest expenses were $728,000 and $671,000,
respectively.  Management expects its interest expenses (excluding
interest related to capital lease obligations) in the years ending December 31,
2010, through 2012 to be approximately (in thousands):





2010
            
            $
            882011-2012
      (2 years)
            
            $
            --2013-2014
      (2 years)
            
            $
            --After
      2014
            
            $
            --





The estimated interest payments assume:
(1) that the long-term debt are repaid from the proceeds of the sales of the
consumer products business, February 2, 2010, and aviation business, assumed to
be completed in April 2010 ; 2) the Company’s revolving loans will continue
through the dates of the sales; 3) interest rates remain at the December 31,
2009 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 due to
the sales of the consumer products business and the aviation
business.





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.





CRITICAL
ACCOUNTING POLICIES





The Company’s consolidated financial
statements have been prepared in conformity with accounting principles generally
accepted in the United States of America which require that certain estimates
and assumptions be made that affect the amounts and disclosures reported in
those financial statements and the related accompanying notes.  Actual
results could differ from these estimates and assumptions.  Management
uses its best judgment in valuing these estimates and may, as warranted, solicit
external professional advice.  Estimates are


17


based on
current facts and circumstances, prior experience and other assumptions believed
to be reasonable.  The following critical accounting policies, some of
which are impacted significantly by judgments, assumptions and estimates, affect
the Company’s consolidated financial statements.





Allowance
for Doubtful Accounts





The preparation of financial statements
requires management to make estimates and assumptions relating to the
collectability of accounts receivable.  Management specifically
analyzes historical bad debts, customer credit worthiness, current economic
trends and changes in customer payment terms when evaluating the adequacy of the
allowance for doubtful accounts.





Accounting
for Sales Incentives





The Company records sales incentives as
a reduction of sales in the statements of operations.  Sales
incentives include rebates, consideration and allowances given to retailers for
space in their stores (slotting fees), consideration and allowances given to
obtain favorable display positions in the retailer's stores and other
promotional activity.  The Company records these promotional
incentives in the period during which the related product is shipped to the
customer, or when the expense is incurred.





Estimated sales incentives are
calculated and recorded at the time related sales are made and are based
primarily on historical rates and consideration of recent promotional
activities.  The Company reviews the assumptions and adjusts the
allowances quarterly.  The financial statements could be materially
impacted if the actual promotion costs fluctuate from the standard
rate.  The allowances are classified as a reduction of accounts
receivable.





Revenue
Recognition





Net Sales are recognized by the
consumer products business 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 collectability is reasonably
assured.





Net Sales at the aviation business 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 collectability is
reasonably assured.





Inventory
Valuations





Inventories are valued at lower of cost
or market determined by the average cost method.  Management regularly
reviews inventory for salability and establishes obsolescence reserves to absorb
estimated lower market values.  On an annual basis, the Company takes
a physical inventory verifying the units on hand and comparing its perpetual
records to physical counts.





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 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.





Other
Loss Accruals





The Company has a number of other
potential loss exposures incurred in the ordinary course of business such as
environmental claims, product liability claims, and litigation
costs.  Establishing accruals for these matters


18


required
management's estimate and judgment with regard to maximum risk exposure and
ultimate liability or realization.  As a result, these estimates are
often developed with the Company’s counsel, or other appropriate advisors, and
are based on management’s current understanding of the underlying facts and
circumstances.  Certain loss exposures, such as the Company’s
potential liability for environmental costs at the former property of Prometcor
(now discontinued), can only be estimated as a range of potential
costs.  Because of uncertainties related to the ultimate outcome of
these issues or the possibility of changes in the underlying facts and
circumstances, additional charges related to these issues could be required in
the future.





Pension
Plans





The valuation of our pension plans
requires the use of assumptions and estimates that are used to develop actuarial
valuation of expenses, assets and liabilities.  These assumptions
include discount rates, investment returns, and mortality rates.  The
actuarial assumptions used in the Company’s pension reporting are reviewed
annually by management and the Company's independent actuary and compared with
external benchmarks to ensure that they accurately account for the Company’s
future pension obligations.  Changes in assumptions and future
investment returns could potentially have a material impact on pension expenses
and related funding requirements.





Accounting
for Income Taxes





The Company assesses the need for a
valuation allowance against deferred tax assets by considering future taxable
income and ongoing prudent and feasible tax planning
strategies.  Should management determine that the Company would not be
able to realize all or part of its deferred tax assets in the future, an
adjustment to the valuation allowance against the deferred tax assets would be
charged to income in the period such determination was made.





Recent
Accounting Pronouncements





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.





Item
7A - QUALITATIVE AND
QUANTITATIVE DISCLOSURES ABOUT MARKET RISK





Not applicable to smaller reporting
companies.





Item
8 - FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA





Financial statements required by this
item are included in Item 15.





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





There were no disagreements with
accountants in the years ended December 31, 2009 and 2008.





Item
9A(T) - CONTROLS AND
PROCEDURES





a) Evaluation of Disclosure Controls
and Procedures.  The Company’s CRO and Chief Financial Officer (“CFO”)
have 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
are effective for ensuring that information required to be disclosed by us in
the reports that we file or submit under the Securities Exchange Act of 1934, as
amended, is recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commission’s rules and
forms.





Management’s Report on Internal Control
over Financial Reporting


19





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
CRO 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.





Management, including the CRO and CFO,
has conducted an evaluation of the effectiveness of the Company’s internal
control over financial reporting as of December 31, 2009, 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, 2009.





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.





Item
9B - OTHER
INFORMATION





None.





PART
III





Item
10 – DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE


(a)               Identification
of directors.





The following table indicates certain
information about the Company’s seven (7) directors:





Name of Director
            Age
            Period
              Served
      as
              Director
            Term
      as
              Director
              Expires
            Positions
      and Offices with Company Presently
              Held
      (other than that of Director); Business
              Experience
      During Past Five Years (with
              Company
      unlessotherwise
      noted)Louis
      V. Aronson II
            87
            1952-Present
            2011
            President
      & Chief Executive Officer; Chairman of Executive
      Committee.





20





John
      H. Bess
            58
            2008-Present
            2011
            Member
      of Audit Committee; CEO of John Bess, LLC, the principal business of which
      is investing in or advising small and emerging companies, 2008 to present;
      Group President, Northlich, Inc., the principal business of which is
      advertising/public relations and brand strategy/innovation consulting,
      2005 to 2007; IBM Business Consulting Services/PricewaterhouseCoopers LLP,
      assisting clients in corporate and transformational strategy, 1999 to
      2005; President & Chief Operating Officer, International Home Foods,
      Inc., the principal business of which was food manufacturing and
      marketing, 1997 to 1998; Procter and Gamble Company, 1975 to 1996 – Vice
      President & Managing Director, Worldwide Strategic Planning – Hair
      Care Products, 1995 to 1996; Vice President and General Manager, U.S. Oral
      Products, 1993 to 1995; Vice President & General Manager, U.S. Dish
      Care Products, 1989 to 1993; Advertising Manager, U.S. Disposable Diapers,
      1987 to 1989; Associate Advertising Manager, U.S. Beauty Care Division,
      1983 to 1987; Assistant Brand Manager/Brand Manager, 1975 to
      1983.  Member of Dean’s Executive Advisory Board, New York
      University’s Stern School of Business, 2007 to Present.Barbara
      L. Collins
            56
            2004-Present
            2010
      (1)
            Member
      of Compensation Committee, Nominating Committee  and Audit
      Committee; President and CEO of The Whistling Elk, Chester, NJ, the
      principal business of which is home furnishing and interior decorating,
      1990 to present; Vice President of Human Resources of Van Heusen Retail
      Division of Phillips-Van Heusen Corporation, the principal business of
      which is retail apparel, 1986 to
1990.





21





Edward
      E. David, Jr
            85
            2005-Present
            2010
      (1)
            Chairman
      of Audit Committee, Member of Compensation Committee and Nominating
      Committee; Principal and Vice President, Treasurer, The Washington
      Advisory Group, 1997 to 2004; President, Exxon Research and Engineering,
      the principal business of which is research, development, engineering and
      technical service for Exxon Corporation, 1977 to 1985; Executive Vice
      President R&D and Planning, Gould, Inc. 1973 to 1977; Science Advisor
      to the President of the United States, 1970-1973; Executive Director,
      Research, Bell Telephone Laboratories, 1950-1970; Life Member MIT
      Corporation, Member of Executive Committee, 1974 to
    present.Erwin
      M. Ganz
            80
            1976-Present
            2010
            Treasurer
      & Assistant Secretary, 2006 to present; Member of Executive Committee;
      Consultant for the Company, 1994 to 2005; Executive Vice
      President-Industrial Operations, 1975 to 1993; Chief Financial Officer,
      1987 to 1993.Gerard
      J. Quinnan
            81
            1996-Present
            2010
      (1)
            Member
      of Compensation Committee, Executive Committee and
      Nominating  Committee; Consultant for the Company, 1990 to
      present, Vice President-General Manager of Ronson Consumer Products
      Corporation, 1981 to 1990.Justin
      P. Walder
            74
            1972-Present
            2010
            Secretary;
      Assistant Corporation Counsel; Member of Executive Committee; Principal in
      Walder, Hayden & Brogan, P.A., Attorneys at Law, Roseland,
      NJ.








(1)
            These
      directors’ terms were to have expired at the 2009 annual stockholders’
      meeting.  Because the Company did not hold an annual meeting in
      2009, the terms of these directors continue until the next annual meeting
      of shareholders is held.





No director also serves as a director
of another company registered under the Securities Exchange Act of 1934, except
for Dr. David who serves as a director of Medjet, Inc.





(b)    
           Identification
of executive officers.





The following table sets forth certain
information concerning the executive officers of the Company, each of whom is
serving a one-year term of office, except Mr. Louis V. Aronson II, who is a
party to an employment contract with the Company which expires on December 31,
2010 and  Mr. Getzler who is serving as CRO under an agreement with
Getzler Henrich which expires April 30, 2010:


22





Name
            Age
            Period
      Served
              as
      Officer
            Positions
      and Offices with Company;
              Family RelationshipsLouis
      V. Aronson II
            87
            1953
      - Present
            President
      & Chief Executive Officer; Chairman of the Executive Committee;
      Director.Erwin
      M. Ganz
            80
            2006
      - Present
            Treasurer
      & Assistant Secretary; Director.Joel
      Getzler
            48
            April
      2009 – April 2010
            Chief
      Restructuring Officer.Daryl
      K. Holcomb
            59
            2006
      - Present
            Vice
      President, Chief Financial Officer and Controller.1996
      - 2005
            Vice
      President, Chief Financial Officer, Controller and Treasurer.1993
      - 1996
            Chief
      Financial Officer, Controller and Treasurer.1988
      - 1993
            Controller
      & Treasurer.Justin
      P. Walder
            74
            1989
      - Present
            Secretary;1972
      - Present
            Assistant
      Corporation Counsel;
              Director.





Messrs. L.V. Aronson and Holcomb have
been employed by the Company in an executive capacity for at least the five-year
period immediately preceding the date hereof.  Mr. Walder has been
Secretary, Assistant Corporation Counsel and Director of the Company and a
principal in Walder, Hayden & Brogan, P.A., Attorneys at Law, for at least
the five-year period preceding the date hereof.  Mr. Ganz has been a
consultant to the Company and others from 1994 to 2005.  Mr. Ganz was
Executive Vice President - Industrial Operations for the Company from 1975 to
1993.  Mr. Getzler is Vice Chairman of Getzler Henrich &
Associates LLC (“Getzler Henrich”) and has been with that firm since
1990.  Getzler Henrich is a corporate turnaround and restructuring
firm.





(c)          
     Section 16(a) Beneficial Ownership Reporting
Compliance.





Under the rules of the Securities and
Exchange Commission (the “SEC”) rules, the Company is required to review copies
of beneficial ownership reports filed with the Company which are required under
Section 16(a) of the Exchange Act by officers, directors and greater than 10%
beneficial owners.  Based solely on the Company's review of forms
filed with the Company, the Company believes no information is required to be
reported under this item.





(d)             
  Code of ethics.





The Company has adopted a code of
ethics entitled, Standards of Integrity, applicable to it and all its
subsidiaries.  The Standards of Integrity are an integral part of the
Company’s business conduct compliance program and embody the commitment of the
Company and its subsidiaries to conduct operations in accordance with the
highest legal and ethical standards.  A copy of the Standards of
Integrity may be obtained without charge upon written request to: Investor
Relations, RCLC, Inc., P.O. Box 3000, Woodbridge, NJ 07095.





(e)          
     Material changes in procedures by which security
holders may recommend nominees to the Company’s Board of Directors:





None.





(f)           
     Audit Committee.





The Audit Committee of the Board of
Directors reports to the Board regarding the appointment of the Company's
independent public accountants, the scope and results of its annual audits,
compliance with accounting


23


and
financial policies and management's procedures and policies relative to the
adequacy of internal accounting controls.





The Company’s Board of Directors has
adopted a written charter for the Audit Committee which can be found on the
investor relations page of the Company's website
www.ronsoncorp.com.





The Audit Committee consists of three
independent directors: Messrs. David (Chairman), and Bess, and Ms.
Collins.  Each member of the Audit Committee is an independent
director, as independence is defined in the listing standards of the Nasdaq
relating to audit committee members.  Each member of the Audit
Committee is "financially literate" as required by Nasdaq rules.  The
Board of Directors has determined that Dr. David, the Audit Committee Chairman,
is an "audit committee financial expert" as defined by regulations adopted by
the Securities and Exchange Commission and meets the qualifications of
"financial sophistication" in accordance with Nasdaq
rules.  Stockholders should understand that these designations related
to our Audit Committee members' experience and understanding with respect to
certain accounting and auditing matters do not impose upon any of them any
duties, obligations or liabilities that are greater than those generally imposed
on a member of the Audit Committee or of the Board.





Item
11 – EXECUTIVE
COMPENSATION





SUMMARY
COMPENSATION TABLE





The Summary Compensation Table presents
compensation information for the years ended December 31, 2009 and 2008, for the
Chief Executive Officer, Chief Financial Officer, and the other executive
officers of the Company whose total compensation exceeded $100,000.





Name and Principal Position
            
            Year
            
            Salary
              ($)
            
            
            Incentive
              Non-Equity
              Compensation
              Plan
              ($)(1)
            
            
            All
      Other
              Compensation
              ($) (2)
            
            
            Total (6)Louis
      V. Aronson II
            
            2009
            
            $
            427,248
            
            
            $
            --
            
            
            $
            68,833
            
            
            $
            496,081President
      and Chief
            
            2008
            
            
            544,341
            
            
            
            --
            (4)
            
            
            72,637
            
            
            
            616,978Executive
      OfficerJoel
      Getzler, of Getzler Henrich
            
            2009
            
            
            --
            
            
            $
            --
            
            
            $
            1,884,180
            (3)
            
            $
            1,884,180Chief
      Restructuring
            
            2008
            
            
            --
            
            
            
            --
            
            
            
            
            
            
            
            --OfficerDaryl
      K. Holcomb
            
            2009
            
            $
            159,569
            
            
            $
            --
            
            
            $
            7,455
            
            
            $
            167,024Vice
      President,Chief
      Financial
            
            2008
            
            
            161,320
            
            
            
            3,940
            (4,5)
            
            
            12,406
            
            
            
            177,715Officer
      and ControllerErwin
      M. Ganz
            
            2009
            
            $
            47,917
            
            
            $
            --
            
            
            $
            7,176
            
            
            $
            55,093Treasurer andAssistant
      Secretary
            
            2008
            
            
            69,867
            
            
            
            5,253
            (4,5)
            
            
            20,810
            
            
            
            95,930





______________


(1)
            The
      non-equity incentive compensation – Management Incentive Plan
      (“MIP”)  results from the attainment by the Company’s operating
      subsidiaries of certain levels of net sales and profits before taxes (no
      MIP participation was approved for the year
  2009).





(2)
            In
      2009, All Other Compensation included perquisites and other personal
      benefits (Mr. Aronson, $25,176, Mr. Holcomb, $6,235, and Mr. Ganz,
      $2,974), matching credits by the Company under
  its


24


Employees’
Savings Plan (Mr. Aronson, $835, Mr. Holcomb, $258, and Mr. Ganz, $83), and life
insurance premiums (Mr. Aronson, $42,823, Mr. Holcomb, $962, and Mr. Ganz,
$4,119).  The types of perquisites and other personal benefits
provided to the named executive officers include personal use of Company-owned
autos, long-term care insurance for Mr. Aronson and Mr. Holcomb.





(3)
            Mr.
      Getzler, a principal of Getzler Henrich, was appointed CRO as of April 1,
      2009.  The Company compensated Getzler Henrich for the services
      of Mr. Getzler at the rate of $15,000 per week since April 1,
      2009.  All Other Compensation reflects fees  charged
      by Getzler Henrich prior to the engagement agreement ($326,380), fees
      under the engagement agreement for Mr. Getzler’s services as CRO
      ($594,000), fees under the engagement agreement for the services of other
      employees of Getzler Henrich ($763,800), and the signing bonus ($200,000)
      payable under the engagement
agreement.





(4)
            The
      named executive officers waived portions of their incentive compensation
      earned in 2008 and 2007, as
follows:





%
            
            
            Amount WaivedWaived
            
            
            2008
            
            
            2007
            
            
            TotalMr.
      Aronson
            
            
            100
            %
            
            $
            19,698
            
            
            $
            34,384
            
            
            $
            54,082Mr.
      Holcomb
            
            
            50
            %
            
            $
            3,940
            
            
            $
            6,877
            
            
            $
            10,817Mr.
      Ganz
            
            
            50
            %
            
            $
            5,253
            
            
            $
            9,169
            
            
            $
            14,422








(5)
            In
      order to conserve its cash resources in 2009 and 2008 and in accordance
      with the terms of the engagement agreement with Getzler Henrich, the
      Company has not yet paid the incentive compensation earned in 2007 and
      2008 and due in 2008 and 2009,
respectively.





(6)
            Under
      the terms of the agreement with Getzler Henrich for the engagement of Joel
      Getzler as Chief Restructuring Officer beginning April 1, 2009, and prior
      to that date, in order to conserve cash, the following amounts were not
      paid in 2009 and have been
deferred:








Name
            
            Salary
              ($)
            
            
            All
      Other
              Compensation ($)
            
            
            TotalLouis
      V. Aronson II
            
            $
            364,744
            
            
            $
            60,289
            
            
            $
            425,033Joel
      Getzler
            
            $
            --
            
            
            $
            1,357,800
            
            
            $
            1,357,800Daryl
      K. Holcomb
            
            $
            12,078
            
            
            $
            6,235
            
            
            $
            18,313Erwin
      M. Ganz
            
            $
            41,667
            
            
            $
            2,974
            
            
            $
            44,641





7)
            No
      salaried employees of the Company accrue any benefits under the Company’s
      defined benefit pension plan, and therefore, the Change in Pension Value
      column of the table is not
applicable.





2009 GRANTS OF PLAN BASED
AWARDS





No stock options were granted under the
Company’s stock option plans to named executive officers.





OUTSTANDING EQUITY AWARDS AT
DECEMBER 31, 2009





None


25


2009 OPTION
EXERCISES





None





2009 PENSION
BENEFITS





Name
      (1)
            
            Plan
      Name
            
            Number
      of
              Years
      Credited
              Service
      (#)
            
            Present
              Value
      of
              Accumulated
              Benefit
      ($)
            
            Payments
      During 2009 ($)Erwin
      M. Ganz
            
            Ronson
      Corporation Retirement Plan
            
            24
      (2)
            
            $416,715
            
            $48,605





________________





(1)
            No
      other named executive officer is a participant in the Company’s defined
      benefit pension plan.





(2)
            The
      credited service for Mr. Ganz is the period from the inception of the
      retirement plan to June 30, 1985, the date the benefit accruals were
      frozen.





2009 NON-QUALIFIED DEFERRED
COMPENSATION





Name
            
            Executive
              Contributions
              in
      2009
              ($)
            
            Registrant
              Contributions
              in
      2009
              ($)
            
            Aggregate
              Earnings
      in
              2009
              ($)
            
            Aggregate
              Withdrawals/
              Distributions
              ($)
            
            Aggregate
      Balance at
              December
      31, 2009
              ($)Louis
      V. Aronson II
            --
            
            --
            
            --
            
            --
      (2)
            
            $26,447
      (1)





_________________


(1)
            The
      deferred compensation for Mr. Aronson represents earned, but not taken,
      vacation time which was earned in years prior to
  1990.








COMPENSATION
OF DIRECTORS





Directors who are not officers of the
Company receive an annual fee of $10,000 and, in addition, are compensated at
the rate of $750 for each regular meeting and $450 for each telephonic meeting
of the Company's Board of Directors actually attended and $450 for each meeting
of a Committee of the Company's Board of Directors actually
attended.  Independent directors, as defined under Nasdaq Listing
Requirements, receive an additional annual fee of $1,000 as compensation for
separate meetings of the independent directors.  Officers receive no
compensation for their services on the Board or on any
Committee.  Effective March 1, 2009, the fees earned by Directors have
been reduced to the following:





Annual
      Directors’ fees
            
            $
            5,000Board
      of Directors meeting attended
            
            $
            500Telephonic
      Board of Directors meeting attended
            
            $
            350Committee
      meeting attended
            
            $
            350Telephonic
      Committee meeting attended
            
            $
            200Independent
      Director meetings
            
            $
            --





26





2009 DIRECTOR
COMPENSATION





Name
            
            Fees
      Earned or Paid
              in
      Cash
              ($)
            
            
            All
      Other Compensation
              ($)
            
            
            Total
      ($)
            
            
            Amounts
              Unpaid
      at
              12/31/09 (1)
              ($)Barbara
      L. Collins
            
            
            13,120
            
            
            
            --
            
            
            
            13,120
            
            
            
            24,470Edward
      E. David, Jr.
            
            
            12,620
            
            
            
            --
            
            
            
            12,620
            
            
            
            23,970Gerard
      J. Quinnan
            
            
            13,820
            
            
            
            15,600
            (2)
            
            
            29,420
            
            
            
            40,770John
      H. Bess
            
            
            11,970
            
            
            
            --
            
            
            
            11,970
            
            
            
            14,214Justin
      P. Walder
            
            
            --
            
            
            
            42,165
            (3)
            
            
            42,165
            
            
            
            37,016


___________________





(1)           In
accordance with the engagement agreement with Getzler Henrich discussed in Item
7 above, all payments to Directors have been deferred.  The amount
unpaid also includes amounts unpaid from 2008.





(2)           Mr.
Quinnan earned fees for consulting services at a specified daily
rate.





(3)           Mr.
Walder earned compensation in 2009 as the Company’s Secretary and


Assistant
Corporation Counsel as follows:  salary $38,333, matching credits
by


the
Company under its Employee’s Savings Plan, $67, and life insurance


premiums,
$3,765.





EMPLOYMENT
CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS





On November 24, 2003, the Company and
Mr. Aronson entered into a new employment agreement which became effective upon
the December 31, 2004 expiration of the existing agreement.  This
agreement, as amended on May 17, 2007, provides for a term originally expiring
on December 31, 2009, and automatic one-year renewals.  The cont
provides for the payment of a base salary which is to be increased 3.5% as of
January 1 of each year beginning in 2005, subject to the Company reporting
operating earnings in the year prior to each increase.  Mr. Aronson
waived the 3.5% increases due on January 1, 2005, on January 1, 2006, on January
1, 2007, and on January 1, 2008.  Effective October 1, 2005, Mr.
Aronson offered and accepted a 7% reduction in his base salary provided for by
the terms of his employment contract.  Also, on November 16, 2007, Mr.
Aronson offered and accepted a 5% reduction in his base salary.  Both
the existing and new contracts also provide that the Company shall reimburse Mr.
Aronson for reported expenses incurred on behalf of the Company, provide him
with an automobile, and pay a death benefit equal to two years'
salary.  The Company has purchased term insurance, for which the
Company is the sole beneficiary, to provide coverage for a substantial portion
of the potential death benefit.  Under the employment contract, Mr.
Aronson’s full compensation will continue in the event of Mr. Aronson's
disability for the duration of the agreement or one full year, whichever is
later.  The employment contracts also provide that if, following a
Change-in-Control (as defined in the employment contract), Mr. Aronson's
employment with the Company terminated under prescribed circumstances as set
forth in the employment contract, the Company will pay Mr. Aronson a lump sum
equal to the base salary (including the required increases in base salary) for
the remaining term of the employment contract.





On March 30, 2009, the Company retained
Joel Getzler, of 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, age 48, has been with Getzler Henrich since
1990, and acts as Vice Chairman of that firm.  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 may terminate Mr. Getzler’s appointment
upon two business days’ notice, and Getzler Henrich may terminate the
appointment in the event the Company breaches its agreement with Getzler Henrich
entered into on March 30, 2009, which supplements the Company’s earlier
consulting agreement with that firm (collectively, the “Engagement Agreement”),
or upon such earlier date allowed under the Engagement Agreement.




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 Agreement, as
amended, the Company will pay to Getzler Henrich a fee in the amount of $15,000
per week for the services of Mr. Getzler as CRO and fees of $25,000 per week for
Mr. Getzler’s associates included under the Engagement Agreement.  In
addition, Getzler Henrich will be entitled to a signing bonus in the amount of
$200,000.




27


During the term of the Engagement
Agreement, payments against accrued amounts, including the signing bonus, will
be made to Getzler Henrich in the 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, or earlier if the Company is not in compliance under the
Engagement Agreement.  A payment of approximately $100,000 was made to
Getzler Henrich from the proceeds of the sale of the consumer products business
on February 2, 2010. 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.







COMPENSATION
COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION





None.





SECURITIES
AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS





Equity
Compensation Plan Information





Plan
      Category
            Number
      of Securities to
              be
      Issued upon Exercise
              of
      Outstanding Options,
              Warrants
      and Rights
            Weighted-Average
              Exercise
      Price of
              Outstanding
      Options,
              Warrants
      and Rights
            Number
      of Securities
              Remaining
      Available for
              Future
      Issuance Under
              Equity
      Compensation
              Plans
      (Excluding
              Securities
      Reflected in
              Column
      (a) )(a)
            (b)
            (c)Equity
      compensation plans approved by security holders
            25,513
            $0.754
            49,184Equity
      compensation plans not approved by security holders
            None
            N/A
            NoneTotal
            25,513
            $0.754
            49,184





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





(a)           Security
ownership of certain beneficial owners.





Set forth below are the persons who, to
the best of management’s knowledge, own beneficially more than five percent of
any class of the Company’ voting securities, together with the number of shares
so owned and the percentage which such number constitutes of the total number of
shares of such class presently outstanding:








Name
      and Address
              of
      Beneficial
              Owner
            
            Title
      of
              Class
            
            Beneficially
              Owned
            
            Percent
      of
              ClassLouis
      V. Aronson II
            
            Common
            
            1,428,353
      (1)
            
            28.07%
      (1)Campus
      Drive, P.O. Box 6707Somerset,
      New Jersey  08875Carl
      W. Dinger III
            
            Common
            
            590,082
      (2)
            
            11.61%
      (2)P.O.
      Box 150Green
      Village, New Jersey  07935





28





(1)
            The
      Ronson Corporation Retirement Plan (“Retirement Plan”) is the beneficial
      owner of 241,033 common shares.  The shares held by the
      Retirement Plan are voted by the Retirement Plan's trustees, Messrs.
      Aronson and Ganz.  If the shares held by the Retirement Plan
      were included in Mr. Aronson's beneficial ownership, Mr. Aronson’s
      beneficial ownership would be increased to 1,669,386 shares, or 32.84% of
      the class.  The Retirement Plan’s holdings were reported in 1988
      on a Statement on  Schedule 13G, as amended September 22, 1997,
      adjusted for the 5% common stock dividends declared through February 1,
      2008.





(2)
            590,082
      shares of common stock owned directly, adjusted for the 5% common stock
      dividends declared through February 1, 2008.  This information
      was from a Form 4 filed by Mr. Dinger on July 9,
  2007.





(b)           Security
ownership of management.





The following table shows the number of
shares of common stock beneficially owned by each director, each named executive
officer, and by all directors and officers as a group as of March 31, 2009, and
the percentage of the total shares of common stock outstanding on March 31,
2009, owned by each individual and by the group shown in the table, adjusted for
the 5% stock dividends declared through February 1, 2008.  Individuals
have sole voting and investment power over the stock shown unless otherwise
indicated in the footnotes:





Name
      of Individual or Identity of Group
            
            Amount
      and Nature of
              Beneficial
      Ownership
            
            Percent
      of ClassLouis
      V. Aronson II
            
            1,428,353
            (1)
            28.07%Barbara
      L. Collins
            
            1,215
            
            *Edward
      E. David, Jr.
            
            2,579
            
            *Erwin
      M. Ganz
            
            54,324
            (1)
            1.07%John
      H. Bess
            
            3,000
            
            *Gerard
      J. Quinnan
            
            14,054
            
            *Justin
      P. Walder
            
            84,056
            
            1.65%Daryl
      K. Holcomb
            
            68,757
            
            1.35%All
      directors and officers as a group (eight(8) individuals including those
      named above)
            1,656,338
            
            32.58%


*Shares
owned beneficially are less than 1% of total shares outstanding.


_______________________


(1)
            Does
      not include 241,033 shares of issued common stock owned by the Retirement
      Plan.  The shares held by the Retirement Plan are voted by the
      Retirement Plan's trustees, Messrs. Aronson and Ganz.  If the
      shares held by the Retirement Plan were included in Mr. Aronson's
      beneficial ownership, Mr. Aronson's beneficial ownership would be
      1,669,386 shares, or 32.84% of the class; however, if the shares held by
      the Retirement Plan were not included in Mr. Aronson’s beneficial
      ownership, but instead were included in Mr. Ganz’s beneficial ownership,
      Mr. Ganz’s beneficial ownership would be 295,357 shares, or 5.81% of the
      class.





(c)           Changes
in control.





The
Company knows of no contractual arrangements which may operate at a subsequent
date to result in a change in control of the Company.





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





(a)           Transactions
with management and others.


29


Please refer to Item 11 above for
information regarding the Engagement Agreement of Getzler Henrich and the
services of  Joel Getzler as the Company’s CRO.








(b)           Certain
business relationships.





None.





(c)           Indebtedness
of management.





None.





(d)           Transactions
with promoters.





Not applicable.





(e)           Director
independence.





The
      Company’s Board of Directors has determined, after considering all the
      relevant factors, that Ms. Collins, Messrs. David, Bess, and Quinnan are
      each independent directors, as “independence” is defined in the Nasdaq
      Marketplace Rules.  Further, the Board has determined that each
      of the directors who serve on the Audit, Compensation, and Nominating
      Committees of the Board meets the definition of independence applicable to
      each committee as defined in the Nasdaq Marketplace
  Rules.





Item
14 - PRINCIPAL
ACCOUNTANT FEES AND SERVICES





The fees billed and accrued for
services provided to the Company by Demetrius & Company, L.L.C., for the
years ended December 31, 2009 and 2008, were as follows:





2009
            
            
            2008Audit
      fees
            
            $
            99,000
            
            
            $
            108,000Audit-related
      fees
            
            
            9,000
            
            
            
            -Tax
      fees, principally related to tax return
              preparation
            
            
            16,000
            
            
            
            16,000All
      other fees
            
            
            -
            
            
            
            -





The Audit Committee of the Board of
Directors pre-approves substantially all of the services of the Company’s
auditing firm.  These pre-approved services are approved by the Audit
Committee based upon “not to exceed” proposals in advance of the Company’s
Annual Meeting of Shareholders.








30


PART
IV





Item
15 - EXHIBITS AND
FINANCIAL STATEMENT SCHEDULES





PART
IV


(a)(1)  Financial
Statements





The
following consolidated financial statements of RCLC, Inc. and subsidiaries are
included in Item 8:


Report
      of Independent Registered Public Accounting Firm
            F-1Balance
      sheets as of December 31, 2009 and 2008
            F-2Statements
      of income for the years ended December 31, 2009 and 2008
            F-3Statements
      of changes in stockholders’ equity for the years ended December 31, 2009
      and 2008
            F-4Statements
      of cash flows for the years ended December 31, 2009 and
    2008
            F-6Notes
      to financial statements
            F-7


(2)  Financial
Statement Schedules


None.





(3) Exhibits.







3.1
            Restated
      Certificate of Incorporation of the Company (incorporated by
      reference to the Company’s Registration Statement on Form S-2 filed on
      September 18, 1987 and the Company’s Registration Statement on Form S-2
      filed with the SEC on April 8, 1988)3.2
            Certificate
      of Amendment to Restated Certificate of Incorporation of the Company
      (incorporated by reference to Annex E to the Company’s Proxy Statement on
      Schedule 14A filed with the SEC on January 4, 2010)3.3
            Bylaws
      of the Company (incorporated by reference to Exhibit 3 to the Company’s
      Annual Report on Form 10-K for the fiscal year ended December 31, 2006,
      filed with the SEC on March 31, 2007)3.4
            Amendment
      to Article VI of Bylaws of the Company (incorporated by reference to
      Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC
      on December 12, 2007)3.5
            Amendment
      to Article IV of Bylaws of the Company (incorporated by reference to
      Exhibit 3(ii) to the Company’s Current Report on Form 8-K filed with the
      SEC on April 3, 2009)





31





4.1
            Preferred
      Shares Rights Agreement dated as of December 8, 1998 between the Company
      and Registrar and Transfer Co. (incorporated by reference to Exhibit 1 to
      the Company’s Registration Statement on Form 8-A filed with the SEC on
      December 16, 1998)4.2
            Amendment
      Number 1 to Preferred Shares Rights Agreement between the Company and
      Registrar and Transfer Co. (incorporated by reference to Exhibit 2 to the
      Company’s Amendment No. 1 on Form 8-A/A to Registration Statement on Form
      8-A filed with the SEC on October 10, 2008)4.3
            Amendment
      Number 2 to Preferred Shares Rights Agreement between the Company and
      Registrar and Transfer Co. (incorporated by reference to Exhibit 99.a to
      the Company’s Current Report on Form 8-K filed with the SEC on October 8,
      2003)4.4
            Amendment
      Number 3 to Preferred Shares Rights Agreement between the Company and
      Registrar and Transfer Co. (incorporated by reference to Exhibit 4 to the
      Company’s Amendment No. 1 on Form 8-A/A to Registration Statement on Form
      8-A filed with the SEC on October 10, 2008)4.5
            Certificate
      of Adjusted Exercise Price of the Company (incorporated by reference to
      Exhibit 5 to the Company’s Amendment No. 1 on Form 8-A/A to Registration
      Statement on Form 8-A filed with the SEC on October 10, 2008)10.1
            Subordinated
      Demand Promissory Note dated June 30, 2008 by the Company to Louis V.
      Aronson II (incorporated by reference to Exhibit 10.1 to the Company’s
      Current Report on Form 8-K filed with the SEC on July 7,
2008)10.2
            Subordination
      Agreement dated June 30, 2008 by Louis V. Aronson II for the benefit of
      Wells Fargo Bank, N.A. (incorporated by reference to Exhibit 10.2 to the
      Company’s Current Report on Form 8-K filed with the SEC on July 7,
      2008)10.3
            Mortgage
      dated September 26, 2006 from Ronson Consumer Products Corporation to
      North Fork Bank (incorporated by reference to Exhibit 10.1 to the
      Company’s Current Report on Form 8-K filed with the SEC on October 2,
      2006)10.4
            Mortgage
      Promissory Note dated September 27, 2006 by Ronson Consumer Products
      Corporation in favor of North Fork Bank in the amount of $2,200,000
      (incorporated by reference to Exhibit 10.2 to the Company’s Current Report
      on Form 8-K filed with the SEC on October 2, 2006)10.5
            Note
      and Mortgage Modification Agreement dated March 2008 Modifying Note and
      Mortgage dated September 27, 2006 between Ronson Consumer Products
      Corporation and Capital One, N.A. (formerly North Fork Bank) (incorporated
      by reference to Exhibit 10.1 to the Company’s Annual Report on Form 10-K
      for its fiscal year ended December 31, 2007, filed with the SEC on March
      31, 2008)





32





10.6
            Second
      Note and Mortgage Modification Agreement dated August 13, 2008 Modifying
      Note and Mortgage dated September 27, 2006 between Ronson Consumer
      Products Corporation and Capital One, N.A. (formerly North Fork Bank)
      (incorporated by reference to Exhibit 10.1 to the Company’s Current Report
      on Form 8-K filed with the SEC on August 18, 2008)10.7
            Credit
      and Security Agreement dated as of May 30, 2008 among the Company, Ronson
      Consumer Products Corporation, Ronson Aviation, Inc., Ronson Corporation
      of Canada Ltd., and Wells Fargo Bank, National Association, acting through
      its Wells Fargo Business Credit operating
      division  (incorporated by reference to Exhibit 10.1 to the
      Company’s Current Report on Form 8-K filed with the SEC on June 5,
      2008)10.8
            Forbearance
      Agreement dated as of March 30, 2009 among the Company, Ronson Consumer
      Products Corporation, Ronson Aviation, Inc., Ronson Corporation of Canada
      Ltd., and Wells Fargo Bank, National Association, acting through its Wells
      Fargo Business Credit operating division (incorporated by reference to
      Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the
      SEC on April 3, 2009)10.9
            Amendment
      to Forbearance Agreement dated April 24, 2009, Second Amendment to
      Forbearance Agreement dated April 29, 2009 and Third Amendment to
      Forbearance Agreement dated as of May 4, 2009 among the Company, Ronson
      Consumer Products Corporation, Ronson Aviation, Inc., Ronson Corporation
      of Canada Ltd., and Wells Fargo Bank, National Association, acting through
      its Wells Fargo Business Credit operating division (incorporated by
      reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K
      filed with the SEC on May 12, 2009)10.10
            Fourth
      Amendment to Forbearance Agreement dated as of May 27, 2009 among the
      Company, Ronson Consumer Products Corporation, Ronson Aviation, Inc.,
      Ronson Corporation of Canada Ltd., and Wells Fargo Bank, National
      Association, acting through its Wells Fargo Business Credit operating
      division (incorporated by reference to Exhibit 10.1 to the Company’s
      Current Report on Form 8-K filed with the SEC on June 3,
2009)10.11
            Fifth
      Amendment to Forbearance Agreement dated as of July 2, 2009 among the
      Company, Ronson Consumer Products Corporation, Ronson Aviation, Inc.,
      Ronson Corporation of Canada Ltd., and Wells Fargo Bank, National
      Association, acting through its Wells Fargo Business Credit operating
      division (incorporated by reference to Exhibit 10.1 to the Company’s
      Current Report on Form 8-K filed with the SEC on July 9,
2009)10.12
            Sixth
      Amendment to Forbearance Agreement dated as of July 16, 2009 among the
      Company, Ronson Consumer Products Corporation, Ronson Aviation, Inc.,
      Ronson Corporation of Canada Ltd., and Wells Fargo Bank, National
      Association, acting through its Wells Fargo Business Credit operating
      division (incorporated by reference to Exhibit 10.1 to the Company’s
      Current Report on Form 8-K filed with the SEC on July 23,
      2009)





33





10.13
            Seventh
      Amendment to Forbearance Agreement dated as of July 31, 2009 among the
      Company, Ronson Consumer Products Corporation, Ronson Aviation, Inc.,
      Ronson Corporation of Canada Ltd., and Wells Fargo Bank, National
      Association, acting through its Wells Fargo Business Credit operating
      division (incorporated by reference to Exhibit 10.1 to the Company’s
      Current Report on Form 8-K filed with the SEC on August 6,
      2009)10.14
            Eighth
      Amendment to Forbearance Agreement dated as of November 5, 2009 among the
      Company, Ronson Consumer Products Corporation, Ronson Aviation, Inc.,
      Ronson Corporation of Canada Ltd., and Wells Fargo Bank, National
      Association, acting through its Wells Fargo Business Credit operating
      division (incorporated by reference to Exhibit 10.1 to the Company’s
      Current Report on Form 8-K filed with the SEC on November 10,
      2009)10.15
            Ninth
      Amendment to Forbearance Agreement dated as of December 28, 2009 among the
      Company, Ronson Consumer Products Corporation, Ronson Aviation, Inc.,
      Ronson Corporation of Canada Ltd., and Wells Fargo Bank, National
      Association, acting through its Wells Fargo Business Credit operating
      division (incorporated by reference to Exhibit 10.1 to the Company’s
      Current Report on Form 8-K filed with the SEC on December 31,
      2009)10.16
            Tenth
      Amendment to Forbearance Agreement dated as of February 5, 2010 among the
      Company, Ronson Consumer Products Corporation, Ronson Aviation, Inc.,
      Ronson Corporation of Canada Ltd., and Wells Fargo Bank, National
      Association, acting through its Wells Fargo Business Credit operating
      division (incorporated by reference to Exhibit 10.2 to the Company’s
      Current Report on Form 8-K filed with the SEC on February 8,
      2010)10.17
            Eleventh
      Amendment to Forbearance Agreement dated as of February 19, 2010 among the
      Company, RCPC Liquidating Corp. (formerly Ronson Consumer Products
      Corporation), Ronson Aviation, Inc., RCC Inc. (formerly Ronson Corporation
      of Canada Ltd.), and Wells Fargo Bank, National Association, acting
      through its Wells Fargo Business Credit operating division (incorporated
      by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K
      filed with the SEC on February 24, 2010)10.18
            Twelfth
      Amendment to Forbearance Agreement dated as of March 5, 2010 among the
      Company, RCPC Liquidating Corp. (formerly Ronson Consumer Products
      Corporation), Ronson Aviation, Inc., RCC Inc. (formerly Ronson Corporation
      of Canada Ltd.), and Wells Fargo Bank, National Association, acting
      through its Wells Fargo Business Credit operating division (incorporated
      by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K
      filed with the SEC on March 11, 2010)





34





10.19
            Thirteenth
      Amendment to Forbearance Agreement dated as of April 1, 2010 among the
      Company, RCPC Liquidating Corp. (formerly Ronson Consumer Products
      Corporation), Ronson Aviation, Inc., RCC Inc. (formerly Ronson Corporation
      of Canada Ltd.), and Wells Fargo Bank, National Association, acting
      through its Wells Fargo Business Credit operating division†10.20
            Engagement
      Agreement dated May 30, 2009 among the Company, Ronson Consumer Products
      Corporation, Ronson Aviation, Inc. and Getzler Henrich & Associates,
      LLC, together with Consulting Agreement dated January 6, 2009 between the
      Company and Getzler Henrich & Associates, LLC (incorporated by
      reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K
      filed with the SEC on April 3, 2009)10.21
            Asset
      Purchase Agreement dated May 15, 2009 among the Company, Ronson Aviation,
      Inc. and Hawthorne TTN Holdings, LLC (incorporated by reference to Exhibit
      10.1 to the Company’s Current Report on Form 8-K filed with the SEC on May
      21, 2009)10.22
            First
      Amendment and Second Amendment to Asset Purchase Agreement dated May 15,
      2009 among the Company, Ronson Aviation, Inc. and Hawthorne TTN Holdings,
      LLC (incorporated by reference to Annex A to the Company’s Proxy Statement
      on Schedule 14A filed with the SEC on January 4, 2010)10.23
            Fifth
      Amendment to Asset Purchase Agreement dated May 15, 2009 among the
      Company, Ronson Aviation, Inc. and Hawthorne TTN Holdings,
      LLC†10.24
            Asset
      Purchase Agreement dated October 15, 2009 among Ronson Corporation, Ronson
      Consumer Products Corporation, Ronson Corporation of Canada Ltd., Zippo
      Manufacturing Company and Nosnor, Inc. (incorporated by reference to
      Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the
      SEC on October 15, 2009)10.25
            Amendment
      to Asset Purchase Agreement dated as of February 2, 2010 among the
      Company, Ronson Consumer Products Corporation, Ronson Corporation of
      Canada Ltd., Zippo Manufacturing Company and Nosnor, Inc. (incorporated by
      reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K
      filed with the SEC on February 8, 2010)10.26
            Employment
      Agreement dated May 17, 2007 between the Company and Louis V. Aronson II
      (incorporated by reference to Exhibit 10-a to the Company’s Current Report
      on Form 8-K filed with the SEC on May 22, 2007)#14.1
            Code
      of Ethics for  the Company’s Senior Financial Officers entitled
      “Standards of Integrity” (incorporated by reference to Exhibit 99.d to the
      Company’s Current Report on Form 8-K filed with the SEC on May 17,
      2004)





35





21.1
            Subsidiaries
      of the Company†23.1
            Consent
      of Demetrius & Company, L.L.C.†24.1
            Power
      of Attorney (included on signature page hereto)31.1
            Certification
      of Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the
      Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002†31.2
            Certification
      of Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the
      Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002†32.1
            Certification
      Pursuant to 18 U.S.C. Section 1350 Adopted Pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002†







†
            Filed
      herewith.





#
            Indicates
      management contract or compensatory plan or arrangement required to be
      identified pursuant to Item 15(b) of this Annual Report on Form
      10-K.










36


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.





RCLC,
      INC.Dated:  April
      15, 2010
            By: /s/ Louis V. Aronson
  IILouis
      V. Aronson II, President andChief
      Executive Officer and Director


POWER
OF ATTORNEY




We, the undersigned, hereby constitute
Louis V. Aronson II and Daryl K. Holcomb, or either of them, our true and lawful
attorneys-in-fact with full power to sign for us in our name and in the capacity
indicated below any and all amendments and supplements to this report, and to
file the same, with exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that said attorneys-in-fact or their substitutes, each acting
alone, may lawfully do or cause to be done by virtue hereof.




Pursuant to the requirements of the
Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.







Name
            
            Title
            
            Date/s/ Louis V. Aronson II
            
            President
      and Chief Executive Officer
            
            April
      15, 2010Louis
      V. Aronson II
            
            and
      Director/s/ Daryl K. Holcomb
            
            Vice
      President, Chief Financial
            
            April
      15, 2010Daryl
      K. Holcomb
            
            Officer
      and Controller/s/ Joel Getzler
            
            Chief
      Restructuring Officer
            
            April
      15, 2010Joel
      Getzler/s/ Erwin M. Ganz
            
            Treasurer,
      Assistant Secretary
            
            April
      15, 2010Erwin
      M. Ganz
            
            and
      Director/s/ Justin P. Walder
            
            Secretary
      and Director
            
            April
      15, 2010Justin
      P. Walder r/s/ Barbara L. Collins
            
            Director
            
            April
      15, 2010Barbara
      L. Collins/s/ Edward E. David
            
            Director
            
            April
      15, 2010Edward
      E. David/s/ Gerard J. Quinnan
            
            Director
            
            April
      15, 2010Gerard
      J. Quinnan/s/ John Bess
            
            Director
            
            April
      15, 2010John
      Bess





37





REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
  To the
Board of Directors and
 Stockholders
of RCLC, Inc.
 
 We have
audited the accompanying consolidated balance sheets of RCLC, Inc., formerly
Ronson Corporation, and subsidiaries as of December 31, 2009 and 2008, and
the related consolidated statements of operations, changes in stockholders’
equity and cash flows for each of the years in the two-year period ended
December 31, 2009.  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 RCLC, Inc., formerly Ronson
Corporation, and subsidiaries as of December 31, 2009 and 2008, and the
results of their operations and their cash flows for each of the years in the
two-year period ended December 31, 2009 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.
 
 
 
 Demetrius
& Company, L.L.C.
 
 Wayne,
New Jersey
 April 15,
2010





F-1


RCLC,
      INC. AND ITS WHOLLY OWNED SUBSIDIARIESCONSOLIDATED BALANCE SHEETSDollars
      in thousandsASSETSDecember
      31,2009
                
                
                2008CURRENT
      ASSETS:Other
      current assets
                
                $
                329
                
                
                $
                191Other
      current assets of discontinued operations
                
                
                6,419
                
                
                
                3,917TOTAL
      CURRENT ASSETS
                
                
                6,748
                
                
                
                4,108PROPERTY,
      PLANT AND EQUIPMENT:Buildings
      and improvements
                
                
                -
                
                
                
                93Machinery
      and equipment
                
                
                121
                
                
                
                200121
                
                
                
                293Less
      accumulated depreciation and amortization
                
                
                111
                
                
                
                23310
                
                
                
                60OTHER
      ASSETS
                
                
                1,626
                
                
                
                1,636OTHER
      ASSETS OF DISCONTINUED OPERATIONS
                
                
                8,836
                
                
                
                9,033$
                17,220
                
                
                $
                14,837
  See
      notes to consolidated financial statements.





F-2


RCLC,
      INC. AND ITS WHOLLY OWNED SUBSIDIARIESCONSOLIDATED BALANCE
      SHEETSDollars
      in thousands (except share data)LIABILITIES AND STOCKHOLDERS'
      DEFICIENCYDecember
      31,2009
                
                
                2008CURRENT
      LIABILITIES:Short-term
      debt
                
                $
                300
                
                
                $
                275Current
      portion of long-term debt
                
                
                -
                
                
                
                11Accounts
      payable
                
                
                2,394
                
                
                
                580Accrued
      expenses
                
                
                2,010
                
                
                
                439Current
      liabilities of discontinued operations
                
                
                14,693
                
                
                
                11,140TOTAL
      CURRENT LIABILITIES
                
                
                19,397
                
                
                
                12,445LONG-TERM
      DEBT
                
                
                -
                
                
                
                14OTHER
      LONG-TERM LIABILITIES
                
                
                2,136
                
                
                
                1,970OTHER
      LONG-TERM LIABILITIES OF DISCONTINUEDOPERATIONS
                
                
                476
                
                
                
                502COMMITMENTS
      AND CONTINGENCIES
                
                
                -
                
                
                
                -
 STOCKHOLDERS'
      DEFICIENCY:Preferred
      stock, no par value, authorized 5,000,000 sharesCommon
      stock, par value $12009
                2008Authorized
      shares
                11,848,106
                11,848,106Reserved
      shares
                25,513
                25,513Issued
      (including treasury)
                5,172,577
                5,172,577
                
                
                5,173
                
                5,173
 Additional
      paid-in capital
                
                
                30,007
                
                
                
                29,998Accumulated
      deficit
                
                
                (35,606
                )
                
                
                (30,893
                )Accumulated
      other comprehensive loss
                
                
                (2,766
                )
                
                
                (2,775
                )(3,192
                )
                
                
                1,503Less
      cost of treasury shares:2009
      and 2008, 89,038
                
                
                1,597
                
                
                
                1,597TOTAL
      STOCKHOLDERS' DEFICIENCY
                
                
                (4,789
                )
                
                
                (94
                )$
                17,220
                
                
                $
                14,837See
      notes to consolidated financial statements.
 
 F-3


RCLC,
      INC.  AND ITS WHOLLY OWNED SUBSIDIARIESCONSOLIDATED STATEMENTS OF
      OPERATIONSDollars
      in thousands (except per share data)Year
      Ended December 31,2009
              
              
              2008NET
      SALES
              
              $
              -
              
              
              $
              -Cost
      and expenses:General
      and administrative
              
              
              1,323
              
              
              
              1,580Depreciation
      and amortization
              
              
              47
              
              
              
              571,370
              
              
              
              1,637LOSS
      BEFORE INTEREST ANDOTHER
      ITEMS
              
              
              (1,370
              )
              
              
              (1,637
              )Other
      expense:Interest
      expense
              
              
              57
              
              
              
              75Other-net
              
              
              536
              
              
              
              250593
              
              
              
              325LOSS
      BEFORE INCOME TAXES
              
              
              (1,963
              )
              
              
              (1,962
              )Income
      tax benefits
              
              
              (552
              )
              
              
              (753
              )LOSS
      FROM CONTINUING OPERATIONS
              
              
              (1,411
              )
              
              
              (1,209
              )Loss
      from discontinued operations (net of taxprovision
      (benefit) of $22 and $(279))
              
              
              (3,302
              )
              
              
              (443
              )NET
      LOSS
              
              $
              (4,713
              )
              
              $
              (1,652
              )LOSS
      PER COMMON SHARE:Basic:Loss
      from continuing operations
              
              $
              (0.28
              )
              
              $
              (0.23
              )Loss
      from discontinued operations
              
              
              (0.65
              )
              
              
              (0.09
              )Net
      loss
              
              $
              (0.93
              )
              
              $
              (0.32
              )Diluted:Loss
      from continuing operations
              
              $
              (0.28
              )
              
              $
              (0.23
              )Loss
      from discontinued operations
              
              
              (0.65
              )
              
              
              (0.09
              )Net
      loss
              
              $
              (0.93
              )
              
              $
              (0.32
              )See
      notes to consolidated financial statements.


F-4


RCLC,
      INC. AND ITS WHOLLY OWNED SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN
      STOCKHOLDERS' EQUITY (DEFICIENCY)For
      the Years Ended December 31, 2009 and 2008Dollars
      in thousandsAccumulated
              
              
              
              
              
              
              
              
              Compre-Additional
              
              
              
              
              
              Other
              
              
              Treasury
              
              
              
              
              
              hensiveCommon
              
              
              Paid-in
              
              
              Accumulated
              
              
              Comprehensive
              
              
              Stock
              
              
              
              
              
              IncomeStock
              
              
              Capital
              
              
              Deficit
              
              
              Loss
              
              
              (at
      cost)
              
              
              Total
              
              
              (Loss)Balance
      at December 31, 2007
              
              
              5,173
              
              
              
              29,997
              
              
              
              (29,241
              )
              
              
              (1,345
              )
              
              
              (1,597
              )
              
              
              2,987Net  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
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              5Other
      comprehensive  loss
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (1,430
              )
              
              
              
              
              
              
              (1,430
              )
              
              
              (1,430
              )Comprehensive
      loss
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              $
              (3,082
              )Stock
      option expense
              
              
              
              
              
              
              1
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              1Balance
      at December 31, 2008
              
              
              5,173
              
              
              
              29,998
              
              
              
              (30,893
              )
              
              
              (2,775
              )
              
              
              (1,597
              )
              
              
              (94
              )Net  loss
      - 2009
              
              
              
              
              
              
              
              
              
              
              (4,713
              )
              
              
              
              
              
              
              
              
              
              
              (4,713
              )
              
              $
              (4,713
              )Translation
      adjustment, net of tax
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              12Pensions,
      net of tax
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (6
              )Pensions,
      PSC, net of tax
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              3Other
      comprehensive  income
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              9
              
              
              
              
              
              
              
              9
              
              
              
              9Comprehensive
      loss
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              $
              (4,704
              )Stock
      option expense
              
              
              
              
              
              
              9
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              9Balance
      at December 31, 2009
              
              $
              5,173
              
              
              $
              30,007
              
              
              $
              (35,606
              )
              
              $
              (2,766
              )
              
              $
              (1,597
              )
              
              $
              (4,789
              )
 SHARE
      ACTIVITYCommon
                
                
                TreasuryStock
                
                
                StockBalance
      at December 31, 2007
                
                
                5,172,577
                
                
                
                89,038Balance
      at December 31, 2008
                
                
                5,172,577
                
                
                
                89,038Balance
      at December 31, 2009
                
                
                5,172,577
                
                
                
                89,038See
      notes to consolidated financial statements.





F-5


RCLC,
      INC.  AND ITS WHOLLY OWNED SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH
      FLOWSDollars
      in thousandsYear
      Ended December 31,2009
              
              
              2008Cash
      Flows from Operating Activities:Net
      loss
              
              $
              (4,713
              )
              
              $
              (1,652
              )Adjustments
      to reconcile net lossto
      net cash used in operating activities:Loss
      from discontinued operations
              
              
              3,302
              
              
              
              443Depreciation
      and amortization
              
              
              47
              
              
              
              90Stock
      option expense
              
              
              9
              
              
              
              1Deferred
      income tax benefits
              
              
              (239
              )
              
              
              (15
              )Net
      changes in assets and liabilities:Other
      current assets
              
              
              (595
              )
              
              
              9Accounts
      payable
              
              
              1,814
              
              
              
              102Accrued
      expenses
              
              
              1,368
              
              
              
              -Other
      non-current assets and other long-termliabilities
              
              
              2
              
              
              
              (40
              )Net
      change in pension-related accounts
              
              
              357
              
              
              
              117Net
      cash provided by (used in) operating activitiesof
      continuing operations
              
              
              1,352
              
              
              
              (945
              )Net
      cash provided by (used in) operating activitiesof
      discontinued operations
              
              
              (2,267
              )
              
              
              762Net
      Cash Used in Operating Activities
              
              
              (915
              )
              
              
              (183
              )Cash
      Flows from Investing Activities:Capital
      expenditures
              
              
              (4
              )
              
              
              (8
              )Proceeds
      from sale of property, plant & equipment
              
              
              10
              
              
              
              -Net
      cash provided by (used in) investingactivities
              
              
              6
              
              
              
              (8
              )Net
      cash used in investing activities ofdiscontinued
      operations
              
              
              (37
              )
              
              
              (109
              )Net
      Cash Used in Investing Activities
              
              
              (31
              )
              
              
              (117
              )Cash
      Flows from Financing Activities:Proceeds
      from short-term debt
              
              
              25
              
              
              
              275Payments
      of long-term debt
              
              
              (3
              )
              
              
              (21
              )Payments
      of short-term debt
              
              
              -
              
              
              
              (30
              )Net
      cash provided by financing activities
              
              
              22
              
              
              
              224Net
      cash provided by financing activities ofdiscontinued
      operations
              
              
              880
              
              
              
              82Net
      Cash Provided by Financing Activities
              
              
              902
              
              
              
              306Net
      Increase (Decrease) in Cash and Cash Equivalentsfor
      Continuing Operations
              
              
              1,380
              
              
              
              (729
              )Net
      Increase (Decrease) in Cash and Cash Equivalentsfor
      Discontinued Operations
              
              
              (1,424
              )
              
              
              735Net
      Increase (Decrease) in Cash and Cash Equivalents
              
              
              (44
              )
              
              
              6Cash
      and Cash Equivalents at Beginning of Year
              
              
              84
              
              
              
              78Cash
      and Cash Equivalents at End of Year
              
              $
              40
              
              
              $
              84See
      notes to consolidated financial statements.
 F-6


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
RCLC, Inc., formerly known as Ronson Corporation (the "Company") and its
subsidiaries, all of which are wholly owned.  Its principal
subsidiaries are RCPC Liquidating Corp., formerly known as Ronson Consumer
Products Corporation ("RCPC"), RCC, Inc., formerly known as Ronson Corporation
of Canada Ltd. ("RCC"), (these together are "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 Continuing Operations of
$1,411,000 and a Net Loss of $4,713,000 for the year ended December 31,
2009.  At December 31, 2009, 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, 2009 (Refer to Note 4 and 5).





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
November 21, 2008, as a result of events of default under the Credit Agreement,
extending to the failure of the Company to meet its minimum tangible net worth
requirement as of September 30, 2008 and its minimum net income and minimum net
cash flow requirements for the nine months ended September 30, 2008, Wells
Fargo, National Association (“Wells Fargo”)advised the Company of an increase in
the interest rate on the amounts outstanding under its Credit Agreement by 3%,
retroactive to July 1, 2008, as allowed under the terms of the Credit
Agreement.  Under cross-default provisions in the Company’s mortgage
loan documentation with Capital One, N.A. (“Capital One”), the events of default
under the Credit Agreement with Wells Fargo were events of default under the
mortgage loan.





In
December 2008, in response to the request from Wells Fargo, the Company’s Board
of Directors (the “Board”) began interviewing financial consultants for the
Company to assist in managing its operations and cash requirements and on
January 6, 2009, the Company engaged Getzler Henrich as its financial
consultant.


F-7


On
February 20, 2009, the Company received from Wells Fargo an additional
notification of Wells Fargo’s reservation of rights and remedies relating to the
previously identified events of default.  The notification further
indicated that Wells Fargo was instituting certain restrictions and reducing
loan availability.





On March 30, 2009, the Company and its
wholly-owned subsidiaries entered into a forbearance agreement with Wells Fargo,
under which Wells Fargo 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. Wells Fargo also
agreed to an overadvance facility in the amount of $500,000 to supplement the
Company’s credit line.  The forbearance agreement was subsequently
amended in 2009 on each of April 24, April 29, May 4, May 27, July 2, July 16,
July 31, November 5, December 28, and in 2010 February 5, February 19 and March
5 and April 1, to provide, in each case, extensions of the forbearance period
and, in some cases, for additional credit availability (the original agreement
together with all amendments, collectively, the “Forbearance
Agreement”).  Under the amendment dated March 5, 2010, Wells Fargo
increased the maximum amount of the Company’s overadvance facility to $1.5
million and, in the April 1, 2010 amendment also agreed to extend the
forbearance period to April 16, 2010.





Also, on
March 30, 2009, the Company expanded the scope of the engagement of Getzler
Henrich and, in accordance with its obligations under the Forbearance Agreement,
retained Joel Getzler of Getzler Henrich as the Company’s Chief Restructuring
Officer (“CRO”) responsible for operations, finance, accounting and related
administrative issues, subject to the authority of and reporting to the
Board.  Pursuant to the engagement, Mr. Getzler has agreed to act as
CRO during the period that Wells Fargo continues to make revolving advances to
the Company in an amount sufficient to fund the Company’s cash flow
needs.





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 $500,000 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.





On
February 2, 2010, subsequent to the receipt of shareholder approval of the
purchase agreement dated October 5, 2009 to sell substantially all of the assets
of Consumer Products to Zippo, Manufacturing Company (“Zippo”), from the
Company’s shareholders, the Company completed the sale of the Company’s consumer
products business to Zippo for an adjusted purchase price of $10,478,000 in
cash.  The assets sold included rights to the “Ronson” name and mark
and, as such, in connection with the transaction, the Company changed its name
from Ronson Corporation to RCLC, Inc.  The sale price for these assets
was $11.1 million, payable in cash at closing subject to various adjustments,
$1.350 million of which is to be held in escrow to secure the Company’s
indemnification obligations for a period of twelve months and longer in
specified events.





On May
15, 2009, the Company entered into an asset sale agreement with Hawthorne TTN
Holdings, LLC. (“Hawthorne”), for the sale of substantially all of the assets of
the Company’s aviation business (other than specified assets including cash and
cash equivalents and accounts


F-8


receivable).
The agreement provides for a purchase price of $9.5 million, $0.5 million of
which will be held in escrow for a period of 15 months after closing to secure
indemnification claims against the Company.  The Company has been
advised by Hawthorne that it expects to complete the purchase shortly but issues
with Hawthorne’s financing have delayed closing.





Upon the
completion of the sales of the consumer products business to Zippo and the
aviation business to Hawthorne, the Company will have paid all amounts due to
its secured creditors.  The Company will have remaining liabilities to
other creditors in excess of its assets.





In 2008
and 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.





Allowances
for Doubtful Accounts and Sales Incentives - Management must make estimates of
the uncollectability 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.





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


F-9


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 fair market value of the
Company’s mortgage loan with Capital One, N.A. (“Capital One”) approximated its
book value at December 31, 2009 because the due date of the loan is January 1,
2010.  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 5).





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
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.  The Company has also reviewed the carrying value of its
long-lived assets taking into account the sales values of the assets, as part of
the sales to Zippo and Hawthorne.





Revenue Recognition - Net Sales are
recognized by 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 collectability 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,


F-10


delivery
occurs only after an arrangement exists, the price is fixed, and collectability
is reasonably assured.





Research and Development Costs -
Costs of research and new product development are charged to operations as
incurred and amounted to approximately $267,000 and $299,000 for the years ended
December 31, 2009 and 2008, respectively.





Shipping and Handling Costs - The
Company records shipping and handling costs within Selling, Shipping, and
Advertising Expenses.  Such costs amounted to about $1,387,000 and
$1,507,000 for the years ended December 31, 2009 and 2008,
respectively.





Advertising Expenses - Costs of
advertising are expensed as incurred and amounted to approximately $104,000 and
$143,000 for the years ended December 31, 2009 and 2008,
respectively.





Accrued Expenses - On December 31,
2009 Accrued Expenses of discontinued operations included deferred income of
$1,839,000, consisting of sales to Zippo.  On December 31, 2008
Accrued Expenses included accrued vacation pay and other compensation of
$655,000 of which $552,000 belongs to discontinued operations.  No
other item amounted to greater than 5% of total current
liabilities.





Other Current Assets - On December
31, 2009 and 2008, Other Current Assets included deferred income tax assets of
$677,000 and $547,000, respectively.  Deferred cost of goods sold of
$1,801,000 related to Zippo sales and deferred expenses of $671,000 incurred
related to the sales of Consumer Products and Ronson Aviation to Zippo and
Hawthorne, respectively, are also included in Other Current Assets of
Discontinued Operations. No other item amounted to greater than 5% of total
current assets.





Stock Options - The Company accounts
for stock-based compensation in accordance with current accounting guidance,
which 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):





Year
      Ended December 31, 2009Loss
            
            
            Shares
            
            
            Per
      ShareContinuing
      Operations:Basic
            
            $
            (1,411
            )
            
            
            5,084
            
            
            $
            (0.28
            )Effect
      of dilutive securities, stock options (1)
            
            
            --
            
            
            
            --Diluted
            
            $
            (1,411
            )
            
            
            5,084
            
            
            $
            (0.28
            )Discontinued
      Operations:Basic
            
            $
            (3,302
            )
            
            
            5,084
            
            
            $
            (0.65
            )Effect
      of dilutive securities, stock options (1)
            
            
            --
            
            
            
            --Diluted
            
            $
            (3,302
            )
            
            
            5,084
            
            
            $
            (0.65
            )NetBasic
            
            $
            (4,713
            )
            
            
            5,084
            
            
            $
            (0.93
            )Effect
      of dilutive securities, stock options (1)
            
            
            --
            
            
            
            --Diluted
            
            $
            (4,713
            )
            
            
            5,084
            
            
            $
            (0.93
            )





F-11











Year
      Ended December 31, 2008Loss
            
            
            Shares
            
            
            Per
      ShareContinuing
      Operations:Basic
            
            $
            (1,209
            )
            
            
            5,084
            
            
            $
            (0.24
            )Effect
      of dilutive securities, stock options (1)
            
            
            --
            
            
            
            --Diluted
            
            $
            (1,209
            )
            
            
            5,084
            
            
            $
            (0.24
            )Discontinued
      Operations:Basic
            
            $
            (443
            )
            
            
            5,084
            
            
            $
            (0.09
            )Effect
      of dilutive securities, stock options (1)
            
            
            --
            
            
            
            --Diluted
            
            $
            (443
            )
            
            
            5,084
            
            
            $
            (0.09
            )NetBasic
            
            $
            (1,652
            )
            
            
            5,084
            
            
            $
            (0.33
            )Effect
      of dilutive securities, stock options (1)
            
            
            --
            
            
            
            --Diluted
            
            $
            (1,652
            )
            
            
            5,084
            
            
            $
            (0.33
            )





(1)            The
stock options were anti-dilutive for the years ended December 31, 2009 and 2008
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 1,000 in the years ended December 31,
2009 and 2008, respectively.





At December 31, 2009, the Company had
outstanding approximately 5,084,000 shares of common stock.











Recent
Accounting Pronouncements





In June 2009, the FASB adopted a
codification of accounting standards and the hierarchy of GAAP. The codification
became effective for financial statements issued for interim or annual periods
ending after September 15, 2009 and is the source of authoritative GAAP
recognized by the FASB to be applied by nongovernmental entities. All
nongrandfathered non-SEC accounting literature not included in the codification
is superseded and deemed non-authoritative. Adoption of the codification did not
have a financial effect on the Corporation’s consolidated financial
statements.





In June 2009, the Corporation adopted
new FASB requirements to evaluate events or transactions that occur after the
balance sheet date but before financial statements are issued. Subsequent events
that provide additional evidence about conditions that existed at the balance
sheet date, including estimates inherent in the process of preparing financial
statements, must be recognized in the financial statements. Subsequent events
that provide evidence about conditions that did not exist at the balance sheet
date but arose after the balance sheet date but before financial statements are
issued are not permitted to be recognized, but may require
disclosure.





The Company has evaluated events
occurring subsequent to December 31, 2009 through April 15, 2010, the date
of filing the 2009 Annual Report on Form 10-K with the SEC, to determine if any
such events should either be


F-12


recognized
or disclosed in the Consolidated Financial Statements. See Note 17 for
additional disclosure.











Note
2:  DISCONTINUED
OPERATIONS





On February 2, 2010, the Company
consummated the sale to Zippo of substantially all of the assets of its Consumer
Products business for the purchase price of about $10.5 million in cash, $1.1
million of which will be held in escrow for a period of 12 months after closing
to secure indemnification claims against the Company and an additional $250,000
of which will be held in escrow to secure the Company’s environmental compliance
obligations.





On May 15, 2009, the Company
entered into an asset sale agreement with Hawthorne for the sale of
substantially all of the assets of the Company’s aviation business (other than
specified assets including cash and cash equivalents and accounts receivable).
The agreement provides for a purchase price of $9.5 million, $0.5 million of
which will be held in escrow for a period of 15 months after closing to secure
indemnification claims against the Company.  The Company has been
advised by Hawthorne that it expects to complete the purchase shortly but issues
with Hawthorne’s financing have delayed closing


The carrying amount of the assets and
liabilities of discontinued operations at December 31, 2009 and December 31,
2008, were as follows (in thousands):




December
      31,2009
            
            
            2008Current
      assets of discontinued operations:Cash
            
            $
            40
            
            
            $
            84Accounts
      receivable, net
            
            
            1,102
            
            
            
            1,288Inventories
            
            
            1,843
            
            
            
            1,839Other
      current assets
            
            
            3,434
            
            
            
            706Total
            
            $
            6,419
            
            
            $
            3,917Other
      assets of discontinued operations:Property,
      plant and equipment, net
            
            $
            5,325
            
            
            $
            5,783Other
      assets
            
            
            3,511
            
            
            
            3,250Total
            
            $
            8,836
            
            
            $
            9,033Current
      liabilities of discontinued operations:Short-term
      debt
            
            $
            2,736
            
            
            $
            1,472Current
      portion of long-term debt & leases
            
            
            5,418
            
            
            
            5,752Accounts
      payable
            
            
            3,081
            
            
            
            2,322Accrued
      expenses
            
            
            3,458
            
            
            
            1,594Total
            
            $
            14,693
            
            
            $
            11,140Other
      long-term liabilities of discontinued operations:Long-term
      debt and leases
            
            $
            95
            
            
            $
            145Other
      long-term liabilities
            
            
            381
            
            
            
            357Total
            
            $
            476
            
            
            $
            502





Net Sales
of Discontinued Operations were as follows (in thousands):


December
      31,2009
            
            
            2008Net
      Sales from Discontinued Operations
            
            $
            18,738
            
            
            $
            24,187





F-13








Note 3.
INCOME TAXES:





At December 31, 2009, the Company
had, for federal income tax purposes, net operating loss carryforwards of
approximately $11,715,000, expiring as follows: $1,478,000 in 2010 to 2012;
$1,379,000 in 2018 to 2020; and $8,858,000 in 2021 to 2029.  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,Current:
            
            2009
            
            
            2008Federal
            
            $
            --
            
            
            $
            --State
            
            
            7
            
            
            
            10Foreign
            
            
            1
            
            
            
            98
            
            
            
            19Deferred:Federal
            
            
            (957
            )
            
            
            (957
            )State
            
            
            (95
            )
            
            
            (95
            )Foreign
            
            
            (7
            )
            
            
            1538
            )
            
            
            (1,051
            )Income
      tax expenses (benefits), net
            
            $
            (530
            )
            
            $
            (1,032
            )





Current income taxes in the year
ended December 31, 2008 were presented net of credits of $24,000, (none in 2009)
arising from the utilization of available tax losses and loss carryforwards in
accordance with current accounting guidance.





The reconciliation of estimated
income taxes attributed to continuing operations at the United States statutory
tax rate to reported income tax


benefits
was as follows (in thousands):


Year Ended December 31,2009
            
            
            2008Tax
      expense amount computed using statutory rate
            
            $
            (667
            )
            
            $
            (667
            )State
      taxes, net of federal benefit
            
            
            (40
            )
            
            
            --Increase
      in valuation allowance
            
            
            143
            
            
            
            --Other
            
            
            12
            
            
            
            (86
            )Income
      tax benefits, net
            
            $
            (552
            )
            
            $
            (753
            )





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 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):


F-14





December 31,2009
            
            
            2008Deferred
      income tax assets:Inventories,
      principally due to additional costsinventoried
      for tax purposes pursuant to the TaxReform
      Act of 1986 and valuation reserves forfinancial
      reporting purposes
            
            $
            108
            
            
            $
            118Compensation
      and compensated absences, principallydue
      to the accrual for financial reporting purposes
            
            
            385
            
            
            
            231Accrual
      of projected environmental costs, principally
              related
      to Prometcor’s compliance with NJDEP requirements
            
            
            199
            
            
            
            199Net
      operating loss carryforwards
            
            
            4,903
            
            
            
            3,107Alternative
      minimum tax credit carryforwards
            
            
            102
            
            
            
            102Unrecognized
      net loss on pension plan
            
            
            1,834
            
            
            
            1,830Other
            
            
            275
            
            
            
            367Total
      gross deferred income tax assets
            
            
            7,806
            
            
            
            5,954Less
      valuation allowance
            
            
            1,562
            
            
            
            91Net
      deferred income tax assets
            
            
            6,244
            
            
            
            5,863Deferred
      income tax liabilities:Pension
      expense, due to contributions in excess ofnet
      accruals
            
            
            774
            
            
            
            996Other
            
            
            237
            
            
            
            169Total
      gross deferred income tax liabilities
            
            
            1,011
            
            
            
            1,165Net
      deferred income taxes
            
            $
            5,233
            
            
            $
            4,698





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 $8,500,000 in the
years prior to the expiration of the net operating loss carryforwards in
2029.  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.





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





December
      31,2009
            
            
            2008(1)Current:Other
      current assets
            
            $
            251
            
            
            $
            37Current
      assets of discontinued operations
            
            
            426
            
            
            
            510Total
      current
            
            
            677
            
            
            
            547Long-Term:Other
      assets
            
            
            1,542
            
            
            
            1,505Other
      assets of discontinued operations
            
            
            3,014
            
            
            
            2,646Total
      long-term
            
            
            4,556
            
            
            
            4,151Total
      net deferred income tax assets
            
            $
            5,233
            
            
            $
            4,698





(1)Reclassified
for comparability.





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.








F-15





Note
4.  SHORT-TERM DEBT:





Composition
(in thousands):


December
      31,2009
            
            
            2008Revolving
      loans, Wells Fargo (a)
            
            $
            2,736
            
            
            $
            1,472Other
      (b)
            
            
            300
            
            
            
            275$
            3,036
            
            
            $
            1,747





(a) On May 30, 2008, the Company and
RCPC, Ronson Aviation and RCC (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
RCC.





The term of the credit facility is 60
months.  The revolving line of credit had a balance of $2,736,000 at
December 31, 2009.  The revolving line of credit bore interest at 1⁄2%
over the Wells Fargo prime rate (3.25% at December 31, 2009 plus a default rate
of 3%), or, at the Company’s option, a portion may bear interest at LIBOR plus
3%.  The term for the overadvance facility was the prime rate plus 8%
per annum.





The Company paid fees to Wells Fargo
that is 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 on capital expenditures, as
well as affirmative and negative covenants and events of default customary for
facilities of this type.





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.





On March
30, 2009, the Company, its subsidiaries and Wells Fargo entered into a
forbearance agreement, subsequently amended, in 2009 on each of April 24, April
29, May 4, May 27, July 2, July 16, July 31, November 5, December 28, and in
2010 on February 5, February 19, March 5 and April 1,under which Wells Fargo has
agreed not to assert existing events of default under the Company’s credit
facilities with Wells Fargo through March 31, 2010, or such earlier date
determined under the forbearance agreement.  The forbearance period
may terminate earlier if, among other events, the


F-16


Company
breaches the forbearance agreement, additional events of default occur under the
credit facilities with Well Fargo, the Company fails to employ a Chief
Restructuring Officer or the Company fails actively to pursue alternative
financing or divestiture of the Company’s aviation division.





On March
30, 2009, the Company announced that, as required under the forbearance
agreement, it had retained Joel Getzler, of Getzler Henrich & Associates
LLC, as Chief Restructuring Officer, as well as, that it had initiated plans to
divest Ronson Aviation, Inc.





On
February 2, 2010, the Company, RCPC and RCC consummated the sale to
Zippo.  Of the proceeds, $1.1 million is being held in escrow for a
period of 12 month after closing to secure potential indemnification claims
against the Company and an additional $250,000 of which will be held
in escrow to secure the Company’s environmental compliance obligations. The sale
of Ronson Aviation to Hawthorne is expected to
be completed.  Of the proceeds, $500,000 is being held in escrow
for indemnification claims.  The proceeds from both sales will
repay the loans to Wells Fargo.  (Refer to Note 17. Subsequent
Events below.)





On May
18, 2009, the Company announced that it had entered into an agreement to sell
substantially all the assets of Ronson Aviation to Hawthorne.  On
October 15, 2009 the Company announced that it had entered into a definitive
agreement with Zippo to sell to substantially all of the assets of its Consumer
Products companies, Ronson Consumer Products Corporation and Ronson Corporation
of Canada, Ltd.





During
the forbearance period, Wells Fargo will make available to the Company an
overadvance facility in the amount of up to $2,000,000 to supplement the
Company’s credit line, the maximum amount of which has been adjusted to
$3,500,000.  During the forbearance period, the Company 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 $500,000 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. On March 5, 2010, as a result of the consummation
of the sale to Zippo, RCPC and RCC are no longer permitted to request advances
under the credit facility with Wells Fargo or consider its remaining assets in
borrowing base calculations.  Ronson Aviation will continue to be
permitted to request advances under the credit facility. The amendment to the
Forbearance Agreement reduces the overadvance facility and the maximum revolving
credit line to $1,500,000 and $1,900,000, respectively.





Based on the amount of the loans
outstanding and the levels of accounts receivable and inventory at December 31,
2009, the Company’s subsidiaries had unused borrowings available at December 31,
2009 of about $610,000 under the Wells Fargo line of credit described above, of
which approximately $81,000 was utilized on January 1, 2010 to meet the debt
service requirements and fees of Wells Fargo. (Refer to Note 5 below for
information regarding the book value of assets pledged as collateral for the
debt above.)





(b)         Refer
to Note 15. Related Party Transactions below.


At
December 31, 2009, the weighted average interest rate for the total short-term
debt was 8.30%.


F-17











Note 5.
LONG-TERM DEBT:





Composition (in
thousands):




December
      31,2009
            
            
            2008Mortgage
      loan payable, Capital One (a)
            
            $
            2,131
            
            
            $
            2,133Note
      payable, lessor (b)
            
            
            127
            
            
            
            160Term
      loans payable, Wells Fargo (c)
            
            
            6,576
            
            
            
            3,570Term
      notes payable, other
            
            
            --
            
            
            
            275,495
            
            
            
            5,890Less
      portion in current liabilities
            
            
            5,405
            
            
            
            454Balance
      of long-term debt
            
            $
            90
            
            
            $
            5,436





(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 $2,131,000 at December
31, 2009 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 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.





On February 2, 2010, the sale of
Consumer Products to Zippo was consummated.  The proceeds from this
sale repaid the mortgage loan to Capital One. (Refer to Note 17. Subsequent
Events below.)





(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 $591,000 as of December 31, 2009, and a Real
Estate Term Loan in the original amount of $2,922,500 with a balance of
$2,646,000 as of December 31, 2009.  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.


F-18





In November 2008, the Company was
notified 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.  As a result of the Events of Default and the likelihood
that the Company wound not attain compliance with the financial covenants within
one year, the long-term portion of the Equipment Term Loan and the long-term
portion of the Real Estate Term Loan have been included in the Current Portion
of Long Term Debt.  Subsequently, on February 2, 2010, the equipment
term loan was repaid with the proceeds from the sale of Consumer Products.
(Refer to Note 17. Subsequent Events below.)





The Wells Fargo and Capital One
long-term debt referred to above, have been classified as Current Liabilities of
Discontinued Operations on the Company’s balance sheets at December 31,
2009.





At December 31, 2009, fixed assets with
a net book value of $5,335,000, accounts receivable and inventories of
$3,009,000, and other noncurrent assets with a net book value of $314,000 were
pledged as collateral for the debt detailed in Notes 4 and 5 above.





Net assets of consolidated
subsidiaries, excluding intercompany accounts, amounted to approximately
$1,600,000 at December 31, 2009, 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, 2009.





Long-term debt matures as follows:
2010, $5,405,000; 2011, $40,000; 2012, $47,000; and 2013, $3,000.











Note 6.
LEASE OBLIGATIONS:





Lease expenses consisting principally
of office and warehouse rentals, totaled $478,000 and $579,000 for the years
ended December 31, 2009 and 2008, respectively.





At December 31, 2009, 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):





Total
            
            
            Operating
              Leases
            
            
            Capitalized
              LeasesYear
      Ending December 31:2010
            
            $
            256
            
            
            $
            240
            
            
            $
            162011
            
            
            173
            
            
            
            169
            
            
            
            42012
            
            
            140
            
            
            
            140
            
            
            
            --2013
            
            
            57
            
            
            
            57
            
            
            
            --2014
            
            
            57
            
            
            
            57
            
            
            
            --Total
      obligations
            
            $
            683
            
            
            $
            663
            
            
            
            20Less:
      Amount representing interest
            
            
            
            
            
            
            
            
            
            
            1Present
      value of capitalized lease obligations
            
            
            
            
            
            
            
            
            
            $
            19





F-19





Capitalized
      lease property included in the Consolidated Balance Sheets is presented
      below (in thousands):December
      31,2009
            
            
            2008Machinery
      and equipment
            
            $
            64
            
            
            $
            62Less
      accumulated amortization
            
            
            37
            
            
            
            25$
            27
            
            
            $
            37





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 5
above.











Note 7.
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 (75%), fixed income securities (10%), cash and money market accounts
(8%), a guaranteed annuity contract (7%), and 241,033 shares of common stock of
the Company (0%). The stock of the Company held by the Plan was valued at $7,000
and $106,000 at December 31, 2009 and 2008, 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):


Year
      Ended December 31,2009
            
            
            2008Change
      in Benefit Obligation:Benefit
      obligation at beginning of year
            
            $
            5,160
            
            
            $
            4,527Service
      cost
            
            
            24
            
            
            
            20Interest
      cost
            
            
            325
            
            
            
            268Actuarial
      loss
            
            
            402
            
            
            
            858Benefits
      paid
            
            
            (507
            )
            
            
            (513
            )Benefit
      obligation at end of year
            
            
            5,404
            
            
            
            5,160Change
      in Plan Assets:Fair
      value of plan assets at beginning of year
            
            
            2,868
            
            
            
            4,674Actual
      return on plan assets
            
            
            131
            
            
            
            (1,448
            )Employer
      contributions
            
            
            215
            
            
            
            155Benefits
      paid
            
            
            (507
            )
            
            
            (513
            )Fair
      value of plan assets at end of year
            
            
            2,707
            
            
            
            2,868Funded
      status at end of year
            
            $
            (2,697
            )
            
            $
            (2,292
            )Amounts
      recognized in the Consolidated Balance Sheetsconsist
      of:Non-current
      Assets
            
            $
            --
            
            
            $
            --Current
      Liabilities
            
            
            408
            
            
            
            205Long-term
      Liabilities
            
            
            2,289
            
            
            
            2,087Net
      amount recognized
            
            $
            2,697
            
            
            $
            2,292





F-20





The weighted-average assumptions used
in the benefit obligations were as follows:




Year
      Ended December 31,2009
            
            
            2008Discount
      rate
            
            
            5.35
            %
            
            
            6.30
            %








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





Year
      Ended
              December
      31,2009
            
            
            2008Components
      of net periodic benefit cost:Service
      cost
            
            
            23
            
            
            $
            20Interest
      cost
            
            
            325
            
            
            
            268Expected
      return on plan assets
            
            
            (158
            )
            
            
            (257
            )Amortization
      of prior service cost
            
            
            5
            
            
            
            5Recognized
      net actuarial loss
            
            
            418
            
            
            
            239Net
      pension expense
            
            $
            613
            
            
            $
            275





The
detail of amounts included in Accumulated Other Comprehensive Loss is included
in Note 13, Accumulated Other Comprehensive Loss.





The
weighted average assumptions used in computing the net period benefit cost were
as follows:





Year
      Ended December
              31,2009
            
            
            2008Discount
      rate
            
            
            6.30
            %
            
            
            5.92
            %Expected
      long-term rate of return on plan assets
            
            
            5.50
            %
            
            
            5.50
            %





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 2010 are $435,000 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 2010 is
$1,000.





Contributions
to the pension plan during 2010 are expected to be approximately


$516,000





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;


F-21





(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.





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:





2010
            $   
      5162011
            9902012
            6002013
            5932014
            5862015-2019
            2,900





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 $63,000, $62,000, for this
plan were recorded in 2009 and 2008, respectively.  These Company
contributions in 2009 were deferred.











Note 8.
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, 2009,
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


F-22


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.





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.





On December 22, 2009, the Company
received a General Notice Letter (“Notice Letter”) from the United States
Environmental Protection Agency (“USEPA”) notifying the Company that it has been
identified as a Potentially Responsible Party (“PRP”) in the Lower Passaic River
Study Area (“LPRSA”), which is part of the Diamond Alkali Superfund Site
(“Site”) in Newark, NJ.  The Company is not able to estimate any
potential cost that it could be required to incur associated with this
Site.





On
December 30, 2009, the Pension Benefit Guaranty Corporation (“PBGC”) filed a
complaint in the United States District Court for the District of New Jersey
alleging that the Ronson Corporation Retirement Plan (“Retirement Plan”) will be
unable to pay benefits when due.  On December 29, 2009, the PBGC sent
a notice to the Company, which is the plan administrator of the Retirement Plan,
requesting the Company terminate the Retirement Plan on December 30, 2009, and
to have the PBGC appointed as the Retirement Plan’s Trustee.  The PBGC
notice sought a response from the Company within 15 days.  The
complaint, filed on December 30, 2009, seeks to have the Retirement Plan
terminated effective December 30, 2009, and to have the PBGC appointed trustee
of the Retirement Plan.  The PBGC has advised the Company that the
PBGC has determined that the PBGC will have a claim against the Company totaling
about $4,565,000, consisting of an unfunded benefit liability and required
contributions of about $2,836,000 and a pension liability insurance termination
premium of $1,729,000.   The Company expects that the Retirement
will be terminated and the PBGC named trustee. Discussions between the Company
and the PBGC are ongoing regarding the amount of the claim and the date of
termination.





In June
2009, the Company vacated its leased office space in Somerset NJ; in March 2010,
RCPC vacated its leased warehouse space in Dayton, NJ; and in March 2010, RCC
vacated its leased office and warehouse space in Mississauga, ON.  If
the Company were to be obligated for the rent over the remaining lease terms,
the additional liability would be about $672,000.


F-23





The Company is involved in various
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 now expires on December 31,
2010.  Base salary in the year 2010 under the contract is $414,657,
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 9.
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.








Note 10.
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,


F-24


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:


Year Ended December 31,2009
            
            
            2008Risk-free
      interest rate
            
            
            1.49
            %
            
            
            3.25
            %Dividend
      yield
            
            
            0
            %
            
            
            0
            %Volatility
      factor – expected market price of
              Company’s
      common stock
            
            
            1.59
            
            
            
            0.81Weighted
      average expected life of options
            
            5
      years
            
            
            5
      years








A summary of the Company's stock
option activity and related information for the two years ended December 31,
2009, were as follows:




Number
      of
              Options
            
            
            Weighted
      Average
              Exercise
      PriceOutstanding
      at 12/31/07
            
            
            11,026
            
            
            $
            1.846Granted
            
            
            20,000
            
            
            $
            0.453Expired
            
            
            (5,513
            )
            
            $
            1.846Outstanding
      at 12/31/08
            
            
            25,513
            
            
            $
            0.754Granted
            
            
            10,000
            
            
            $
            0.500Expired
            
            
            (10,000
            )
            
            $
            0.500Outstanding
      at 12/31/09
            
            
            25,513
            
            
            $
            0.754





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
            
            $
            0.297Exceeds
      the market price on the grant date
            
            
            N/A





The weighted average exercise price
for options outstanding as of December 31, 2009, was $0.754 per
share.  The weighted average contractual life of those options was 3.5
years.








Note 11.
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 31,2009
            
            
            2008Cash
      Payments for:Interest
            
            $
            642
            
            
            $
            598Income
      taxes
            
            
            7
            
            
            
            2Financing
      & Investing Activities Not Affecting Cash:Capital
      lease obligations incurred
            
            
            --
            
            
            
            --Equipment
      financed by seller
            
            
            --
            
            
            
            18





F-25





Note 12.
INDUSTRY SEGMENTS INFORMATION:





The Company has had two reportable
segments both of which are now reported as discontinued operations: 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 product 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.





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





2009
            
            
            2008Net
      sales:Consumer
      Products
            
            $
            10,969
            
            
            $
            12,524Aviation
      Services
            
            
            7,769
            
            
            
            11,663Consolidated
            
            $
            18,738
            
            
            $
            24,187Earnings
      (loss) before interest, other items,
              and
      intercompany charges:Consumer
      Products
            
            $
            (1,794
            )
            
            $
            (1,116
            )Aviation
      Services
            
            
            (272
            )
            
            
            1,326Total
      Reportable Segments
            
            
            (2,066
            )
            
            
            210Corporate
      and others
            
            
            (1,230
            )
            
            
            (1,637
            )Other
      charges
            
            
            --
            
            
            
            --Consolidated
            
            $
            (3,296
            )
            
            $
            (1,427
            )Interest
      expense:Consumer
      Products
            
            $
            448
            
            
            $
            389Aviation
      Services
            
            
            223
            
            
            
            207Total
      Reportable Segments
            
            
            671
            
            
            
            596Corporate
      and others
            
            
            57
            
            
            
            75Consolidated
            
            $
            728
            
            
            $
            671Depreciation
      and amortization:Consumer
      Products
            
            $
            382
            
            
            $
            415





F-26





Aviation
      Services
            
            
            230
            
            
            
            256Total
      Reportable Segments
            
            
            612
            
            
            
            671Corporate
      and others.
            
            
            47
            
            
            
            57Consolidated
            
            $
            659
            
            
            $
            728Earnings
      (loss) before intercompany charges
              and
      taxes:Consumer
      Products
            
            $
            (2,693
            )
            
            $
            (1,655
            )Aviation
      Services
            
            
            (807
            )
            
            
            1,079Total
      Reportable Segments
            
            
            (3,500
            )
            
            
            (576
            )Corporate
      and others
            
            
            (1,822
            )
            
            
            (1,963
            )Other
      charges
            
            
            --
            
            
            
            --Nonrecurring
      loss
            
            
            --
            
            
            
            (145
            )Consolidated
            
            $
            (5,322
            )
            
            $
            (2,684
            )Segment
      assets:Consumer
      Products
            
            $
            8,095
            
            
            $
            6,600Aviation
      Services
            
            
            5,334
            
            
            
            5,201Total
      Reportable Segments
            
            
            13,429
            
            
            
            11,801Corporate
      and others
            
            
            2,870
            
            
            
            2,115Other
      Discontinued operations
            
            
            921
            
            
            
            921Consolidated
            
            $
            17,220
            
            
            $
            14,837Segment
      expenditures for long-lived assets:Consumer
      Products
            
            $
            33
            
            
            $
            87Aviation
      Services
            
            
            4
            
            
            
            22Total
      Reportable Segments
            
            
            37
            
            
            
            109Corporate
      and others
            
            
            4
            
            
            
            26Consolidated
            
            $
            41
            
            
            $
            135





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





Year
      Ended
                December
      31,2009
              
              
              2008Net
      sales (1):United
      States
              
              $
              17,254
              
              
              $
              21,722Canada
              
              
              1,486
              
              
              
              2,400Other
      foreign countries
              
              
              (2
              )
              
              
              65$
              18,738
              
              
              $
              24,187
  December
      31,2009
              
              
              2008Long-lived
      assets:United
      States
              
              $
              5,300
              
              
              $
              5,799Canada
              
              
              35
              
              
              
              44$
              5,335
              
              
              $
              5,843





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








F-27


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





Year
      Ended
              December
      31,2009
            
            
            2008Packaged
      fuels, flints, lighters and torches
            
            $
            10,909
            
            
            $
            12,441Other
      consumer products
            
            
            60
            
            
            
            83Aircraft
            
            
            --
            
            
            
            --Aviation
      fuels and other aviation products and services
            
            
            7,769
            
            
            
            11,663$
            18,738
            
            
            $
            24,187





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, 2009,
Net Sales which amounted to approximately $2,220,000, of Consolidated Net Sales
were made by Consumer Products to one customer.  As of December 31,
2009, accounts receivable from that customer amounted to approximately 17% of
Consolidated Accounts Receivable.  The above sales for Consumer
Products, amounted to more than 10% of Net Sales and Accounts Receivable in
2009.  No customer accounted for more than 10% of Net Sales for the
years ended December 31, 2008 and no customer accounted for more than 10% of
Consolidated Accounts Receivable at December 31, 2008.








Note 13.
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):





Foreign
              Currency
              Translation
              Adjustments
            
            
            Net
              Pension
              Loss
            
            
            Prior
              Service
              Cost
            
            
            Accumulated
              Other
              Comprehensive
              LossBalance
      at December 31,2007
            
            $
            (41
            )
            
            $
            1,354
            
            
            $
            32
            
            
            $
            1,345Current
      period loss (gain)
            
            
            60
            
            
            
            2,563
            
            
            
            --
            
            
            
            2,623Recognized
      as components ofnet
      periodic benefit cost
            
            
            --
            
            
            
            (239
            )
            
            
            (6
            )
            
            
            (245
            )Income
      tax expense (benefit)
            
            
            (23
            )
            
            
            (926
            )
            
            
            1
            
            
            
            (948
            )Balance
      at December 31,2008
            
            
            (4
            )
            
            
            2,752
            
            
            
            27
            
            
            
            2,775Current
      period loss (gain)
            
            
            (19
            )
            
            
            429
            
            
            
            --
            
            
            
            410Recognized
      as components ofnet
      periodic benefit cost
            
            
            7
            
            
            
            (418
            )
            
            
            (5
            )
            
            
            (416
            )Income
      tax expense (benefit)
            
            
            --
            
            
            
            (5
            )
            
            
            2
            
            
            
            (3
            )Balance
      at December 31,2009
            
            $
            (16
            )
            
            $
            2,758
            
            
            $
            24
            
            
            $
            2,766





F-28














Note 14.
CONCENTRATIONS:





Due to an increase in FDIC insured
limits, at December 31, 2009, 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.





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 15.
RELATED PARTY TRANSACTIONS:


The Company incurred costs for
consulting services under an agreement with a director of the Company (of
$16,000 and $21,000, in the years ended December 31, 2009 and 2008,
respectively.  The Company incurred costs for printing services from
Michael Graphics, Inc., of $50,000 in December 31, 2008.  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. In
the first quarter of 2009, the President provided additional loans of $25,000.
The total loans of about $300,000 are due on demand with interest at the prime
rate minus one-half percent (3.25% at December 31, 2009). Also in 2009, the
President advanced a legal retainer for the Company of $25,000.





On March 30, 2009, the Company retained
Joel Getzler of 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.  Mr. Getzler acts as Chief Restructuring Officer for the
period during which Wells Fargo continues to make revolving advances to the
Company in an amount sufficient to fund the Company’s cash flow
needs.  The Company is 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 included 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 ($40,000 per week), are being made
to Getzler Henrich in the amount of $10,000 each week.  All accrued
amounts, which includes the signing bonus, 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.  All amounts owed to
Getzler Henrich are secured by a collateral interest in those assets pledged to
Wells Fargo, subordinated to


F-29


the
interest of Wells Fargo.  For the year ended December 31, 2009, the
Getzler Henrich fees and expenses totaled $1,946,000 including the signing
bonus.  As of December 31, 2009, the fees due to Getzler Henrich
totaled $1,159,000 and the signing bonus of $200,000.








Note
16.  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, 2009.





(Dollars
in thousands, except per share amounts)





Year Ended December 31,
2009
            
            First
              Quarter
            
            
            Second
              Quarter
            
            
            Third
              Quarter
            
            
            Fourth
              Quarter
            
            
            Total
              YearNet
      sales
            
            $
            --
            
            
            $
            --
            
            
            $
            --
            
            
            $
            --
            
            
            $
            --Gross
      Profit
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --Loss
      from continuing operations
            
            
            (292
            )
            
            
            (266
            )
            
            
            (383
            )
            
            
            (470
            )
            
            
            (1,411
            )Loss
      from discontinued operations
            
            
            (1,119
            )
            
            
            (215
            )
            
            
            (1,258
            )
            
            
            (710
            )
            
            
            (3,302
            )Net
      loss
            
            
            (1,411
            )
            
            
            (481
            )
            
            
            (1,651
            )
            
            
            (1,180
            )
            
            
            (4,713
            )Loss
      per share from continuing operationsBasic
            
            $
            (0.06
            )
            
            $
            (0.05
            )
            
            $
            (0.07
            )
            
            $
            (0.09
            )
            
            $
            (0.28
            )Diluted
            
            $
            (0.06
            )
            
            $
            (0.05
            )
            
            $
            (0.07
            )
            
            $
            (0.09
            )
            
            $
            (0.28
            )Loss
      per share from discontinued operationsBasic
            
            $
            (0.22
            )
            
            $
            (0.04
            )
            
            $
            (0.25
            )
            
            $
            (0.14
            )
            
            $
            (0.65
            )Diluted
            
            $
            (0.22
            )
            
            $
            (0.04
            )
            
            $
            (0.25
            )
            
            $
            (0.14
            )
            
            $
            (0.65
            )Net
      lossBasic
            
            $
            (0.28
            )
            
            $
            (0.09
            )
            
            $
            (0.32
            )
            
            
            (0.23
            )
            
            
            (0.93
            )Diluted
            
            $
            (0.28
            )
            
            $
            (0.09
            )
            
            $
            (0.32
            )
            
            
            (0.23
            )
            
            
            (0.93
            )Other
      income(expense)included in net loss
            
            $
            --
            
            
            $
            --
            
            
            $
            --
            
            
            $
            --
            
            
            $
            --





Year Ended December 31,
2008
            
            First
              Quarter
            
            
            Second
              Quarter
            
            
            Third
              Quarter
            
            
            Fourth
              Quarter
            
            
            Total
              YearNet
      sales
            
            $
            --
            
            
            $
            --
            
            
            $
            --
            
            
            $
            --
            
            
            $
            --Gross
      Profit
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --
            
            
            
            --Loss
      from continuing operations
            
            
            (305
            )
            
            
            (268
            )
            
            
            (249
            )
            
            
            (387
            )
            
            
            (1,209
            )Earnings
      (loss) from discontinued operations
            
            
            44
            
            
            
            30
            
            
            
            (238
            )
            
            
            (279
            )
            
            
            (443
            )Net
      loss
            
            
            (261
            )
            
            
            (238
            )
            
            
            (487
            )
            
            
            (666
            )
            
            
            (1,652
            )Loss
      per share from continuing operationsBasic
            
            $
            (0.06
            )
            
            $
            (0.05
            )
            
            
            (0.05
            )
            
            
            (0.08
            )
            
            
            (0.24
            )Diluted
            
            $
            (0.06
            )
            
            $
            (0.05
            )
            
            
            (0.05
            )
            
            
            (0.08
            )
            
            
            (0.24
            )Earnings(loss)
      per share from discontinued operationsBasic
            
            $
            0.01
            
            
            $
            --
            
            
            
            (0.05
            )
            
            
            (0.05
            )
            
            
            (0.09
            )Diluted
            
            $
            0.01
            
            
            $
            --
            
            
            
            (0.05
            )
            
            
            (0.05
            )
            
            
            (0.09
            )Net
      lossBasic
            
            $
            (0.05
            )
            
            $
            (0.05
            )
            
            $
            (0.10
            )
            
            $
            (0.13
            )
            
            $
            (0.33
            )Diluted
            
            $
            (0.05
            )
            
            $
            (0.05
            )
            
            $
            (0.10
            )
            
            $
            (0.13
            )
            
            $
            (0.33
            )Other
      income(expense)included in net loss (a)
            
            $
            --
            
            
            $
            (87
            )
            
            $
            --
            
            
            $
            --
            
            
            $
            (87
            )





F-30





(a) The
cost included in second quarter of 2008 was the charge recognized due to the
Company’s refinancing of former loans








Note
17.  SUBSEQUENT EVENTS





On February 2, 2010, the Company
completed the sale of its consumer products business to Zippo for an adjusted
purchase price of about $10.48 million in cash.  On October 8, 2009,
the Company, RCPC and RCC had entered into an Asset Purchase Agreement with
Zippo for the sale to Zippo of substantially all of the assets of the Company’s
consumer products business for a purchase price of $11.1 million in cash less
certain credits to which Zippo would be entitled at closing and subject to
certain post-closing adjustments as described in the Asset Purchase
Agreement.  The proceeds from the sale were utilized as follows, in
thousands:





Repay
      mortgage loan with Capital One, including interest and
fees
            
            $
            2,275Repay
      a portion of the loans from Wells Fargo, including interest and
      fees
            
            
            3,138Held
      in escrow by Wells Fargo pending completion of the sale of
    RAI
            
            
            2,752Amounts
      to be held in escrow in accordance with the Asset Purchase
      Agreement
            
            
            1,364Professional
      fees associated with the transaction
            
            
            746Payment
      of amounts due to Getzler Henrich and for accrued
    compensation
            
            
            203Total
            
            $
            10,478





The sale of the consumer products
business resulted in a gain, prior to income taxes, in the first quarter of 2010
of approximately $5,150,000.





The Company expects soon to complete
the sale of substantially all of the assets of its aviation business for a
purchase price of about $9.5 million in cash.  On March 30, 2009, the
Company had announced that it had initiated plans to divest Ronson Aviation, and
on May 15, 2009, the Company had entered into an Asset Purchase Agreement with
Hawthorne for the sale of substantially all of the assets of its aviation
business. The proceeds from the sale were utilized as follows, in
thousands:





Purchase
      price
            
            $
            9,500Return
      of funds held in escrow by Wells Fargo above
            
            
            2,752Total
            
            $
            12,252Repay
      the balance of the loans from Wells Fargo, including interest and fees
      (which include legal fees of $106)
            
            
            4,172Payment
      of the forbearance fee to Wells Fargo
            
            
            500Payment
      of amounts due to Getzler Henrich
            
            
            1,690Amounts
      to be held in escrow in accordance with the Asset Purchase
      Agreement
            
            
            527Professional
      fees associated with the transaction, and other professional fees
      outstanding
            
            
            826Payment
      of state income taxes
            
            
            219Total
      proceeds utilized
            
            $
            7,934Cash
      provided to the Company, after the completion of both
sales
            
            $
            4,318











F-31