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, 1998

                                       OR

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

                 For the transition period from _____ to _____ .

                           Commission File No. 1-1031

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

               NEW JERSEY                         22-0743290
       --------------------------        --------------------------------
       (State of incorporation)          (IRS Employer Identification No.)

       CAMPUS DRIVE, P.O. BOX 6707, SOMERSET, N.J.             08875
       -------------------------------------------         --------------
         (Address of principal executive office)             (Zip Code)

       Registrant's telephone number, including area code: (732) 469-8300
                                                           --------------

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

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

        Common Stock par value                   Nasdaq SmallCap Market
            $1.00 per share


        12% Cumulative Convertible        Over-the-Counter Bulletin Board
            Preferred Stock
            No par value

       Indicate by check mark whether the  registrant  (1) has filed all reports
       required  to be filed by Section 13 or 15(d) of the  Securities  Exchange
       Act of 1934 during the  preceding 12 months (or for such  shorter  period
       that the registrant was required to file such reports),  and (2) has been
       subject to such filing requirements for the past 90 days.

                                    YES  X      NO 
                                        ----       ----
        
       Indicate by check mark if  disclosure of  delinquent  filers  pursuant to
       Item 405 of  Regulation  S-K (229.505 of this  chapter) 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. [ ]
<PAGE>
       The aggregate market value of voting stock held by  non-affiliates of the
       registrant was $5,771,670 as of March 10, 1999.

       As of March 10, 1999,  there were  3,197,142  shares of the  registrant's
       common stock outstanding.




<PAGE>
                                TABLE OF CONTENTS


         Part I                                                     

         Item 1.     Business. 

              2.     Properties.

              3.     Legal Proceedings.

              4.     Submission of Matters to a Vote of Security Holders.


        Part II

        Item  5.     Market for the Company's Common Stock
                       and Related Stockholder Matters.

              6.     Selected Financial Data.

              7.     Management's Discussion and Analysis of Financial 
                       Condition and Results of Operations.

              8.     Financial Statements and Supplementary Data.

              9.     Changes in and Disagreements with Accountants on 
                       Accounting and Financial Disclosure.


        Part III

        Item  10.    Directors and Executive Officers of the Company.

              11.    Executive Compensation.

              12.    Security   Ownership  of  Certain   Beneficial 
                       Owners and Management.

              13.    Certain Relationships and Related Transactions.


        Part IV

        Item  14.    Exhibits,  Financial  Statement  Schedules and 
                       Reports on Form 8-K.

<PAGE>
                                     PART I

       Item 1 - BUSINESS

       (a) General development of business.

                The Registrant, Ronson Corporation (the "Company"), is a company
        incorporated in 1928 engaged principally in the following businesses:

                1.  Consumer Products; and

                2.  Aviation-Fixed  Wing  Operations and Services and Helicopter
                    Services.

                On October 2, 1995,  the Company's  common shares were listed on
        the Nasdaq  SmallCap  Market,  and on  December 1, 1995,  the  Company's
        preferred  shares  were  listed  on  the  Nasdaq  SmallCap  Market.  The
        Company's  common  shares  are  quoted  under  the  symbol  RONC and its
        preferred shares are quoted under the symbol RONCP.

                On November 15, 1996, the Company issued an offer to exchange up
        to 1,423,912 aggregate shares of its common stock for all of the 837,595
        issued  and  outstanding  shares  of  its  12%  Cumulative   Convertible
        Preferred  Stock.  For each  share of  preferred  stock  exchanged,  the
        Company  offered  to issue 1.7  shares of  common  stock.  The terms and
        conditions  of the  offer  were more  fully  described  in the  Offering
        Circular and the accompanying  Letter of Transmittal  dated November 15,
        1996,  (together the "Exchange Offer") which are incorporated  herein by
        reference.  The Company's  Exchange Offer expired on September 30, 1997.
        After the  expiration  of the Offer,  the Company had  accepted  800,844
        shares of preferred stock in exchange and had issued 1,361,435 shares of
        common stock under the Company's Exchange Offer.

                At  the  time  of  the  termination  of the  Exchange  Offer  on
        September 30, 1997,  there were about 37,000  shares of preferred  stock
        remaining  outstanding.  Because  the  number of  remaining  outstanding
        preferred shares no longer met the NASDAQ minimum requirement of 100,000
        outstanding  shares in order to be listed on the Nasdaq SmallCap Market,
        the  Company's  preferred  stock was delisted  from the Nasdaq  SmallCap
        Market.  Immediately upon the delisting of the preferred shares from the
        Nasdaq  SmallCap  Market,  the preferred  shares were listed on the NASD
        Over-the-Counter ("OTC") Bulletin Board.

                In December 1989 the Company  adopted a plan to discontinue  the
        operations of Ronson Metals Corporation,  Newark, New Jersey, one of the
        Company's wholly owned  subsidiaries.  On January 8, 1997, Ronson Metals
        Corporation  amended  its  Certificate  of  Incorporation  to change its
        corporation name to Prometcor, Inc. ("Prometcor"). Prometcor had sizable
        losses in several years prior to 1987 with reduced losses  continuing in
        1987 through 1989. In 1990 operations  ceased at Prometcor and Prometcor
        began  complying  with  the New  Jersey  Industrial  Site  Recovery  Act
        ("ISRA"),  formerly ECRA, and all other  applicable laws. As part of the
        plan to sell the  properties of the Prometcor  discontinued  operations,
        Prometcor  has also been  involved in  termination  of its United States
        Nuclear Regulatory Commission ("NRC") license.  Compliance with ISRA and
        NRC  requirements  has  continued  through  1998  and  into  1999.  (See
        Environmental  Matters below and Item 7 -  Management's  Discussion  and
        Analysis of Financial Condition and Results of Operations.)

       (b) Financial information about industry segments.
<PAGE>
                     In lieu of the  revenue  and  profit  information  required
        pursuant to Item 101(b) of Regulation  S-K as to the Company's  lines of
        business,  the  revenue and profit  data with  respect to the  Company's
        reportable  industry  segments  is  included  in Note 13 of the Notes to
        Consolidated  Financial  Statements  furnished pursuant to Item 8 below,
        which are incorporated herein by reference.

       (c) Narrative description of business.

                (1) Consumer Products

                    The  Company's   consumer  packaged   products,   which  are
        manufactured  in Woodbridge,  New Jersey,  and distributed in the United
        States  by  the  Company's  wholly  owned  subsidiary,  Ronson  Consumer
        Products   Corporation   ("RCPC"),   include   Ronsonol  lighter  fluid,
        Multi-Fill  butane  fuel  injectors,   flints,  wicks  for  lighters,  a
        multi-use   penetrant  spray  lubricant   product  under  the  tradename
        "Multi-Lube",  a spot remover under the product tradename "Kleenol", and
        a surface protectant under the tradename  "GlossTek".  In addition,  the
        Company's  consumer  packaged  products are  marketed in Canada  through
        Ronson  Corporation of Canada,  Ltd.  ("Ronson-Canada"),  a wholly owned
        subsidiary  of the Company.  RCPC and  Ronson-Canada  together  comprise
        Ronson  Consumer  Products.  The Company also  distributes  its consumer
        products in Mexico. A subsidiary of WalMart Stores, Inc.  ("WalMart") is
        a  significant  distributor  for the consumer  products  segment and, as
        such, supplies Ronson's products to numerous retailers.  Management does
        not believe that this segment is  substantially  dependent on WalMart or
        its  distributor  subsidiary  because  of the  presence  of  many  other
        distributors  which provide retailers with Ronson's  consumer  products.
        Sales to various units of WalMart in 1998 and 1997 accounted for 12% and
        10%, respectively,  of Consolidated Net Sales of the Company and 18% and
        15% of Net Sales of the segment in 1998 and 1997, respectively,  most of
        which were to its distributor subsidiary.

                    The consumer products are distributed through  distributors,
        food  brokers,   automotive  and  hardware   representatives   and  mass
        merchandisers,  drug chains and convenience  stores in the United States
        and Canada. Ronson Consumer Products is a principal supplier of packaged
        flints  and  lighter  fuels  in the  United  States  and  Canada.  These
        subsidiaries' consumer products face substantial  competition from other
        nationally  distributed  products  and from  numerous  local and private
        label  packaged  products.   Since  Ronson  Consumer  Products  produces
        packaged  products in  accordance  with its sales  forecasts,  which are
        frequently reviewed and revised,  inventory  accumulation has not been a
        significant  factor,  and this segment does not have a significant order
        backlog.  The  sources  and  availability  of  raw  materials  for  this
        segment's packaged products are not significant factors.

                    Ronson  Consumer  Products  also  distributes  three lighter
        products - the "RONII"  refillable  butane lighter,  the Ronson "WINDII"
        liquid fuel windproof lighter, and the Ronson "Varaflame Ignitor",  used
        for lighting  fireplaces,  barbecues,  camping  stoves and candles.  The
        lighter products are marketed in the United States, Canada and Mexico.
<PAGE>
                    In 1995 Ronson  Consumer  Products  introduced a new lighter
        product,  the RONII refillable butane lighter, in both the United States
        and  Canada.  The  RONII is a pocket  lighter  that  meets the new child
        resistant requirements issued by the Consumer Product Safety Commission.
        The RONII is  manufactured  for the Company in Spain and is sold through
        the Company's  distribution  channels. The RONII is priced competitively
        but has strong  competition  from  several  other  brands of  disposable
        lighters  and  unbranded  imports  from  China  and  other  Far  Eastern
        countries.

                    In January 1997 Ronson  Consumer  Products  introduced a new
        lighter product,  the WINDII windproof lighter, in the United States and
        Canada. The WINDII uses Ronson flints,  Ronsonol lighter fuel and Ronson
        wicks.  The  WINDII  faces  strong  competition  from  other  nationally
        distributed brands and from unbranded imports.

                    The WINDII lighter and Varaflame Ignitor are manufactured in
        China, both in accordance with the design specifications of the Company.
        The  Company has the  exclusive  right to market  these  products in the
        United States,  Canada and Mexico,  and does so through its distribution
        channels. The Varaflame Ignitor is refillable with Ronson butane refills
        and is less expensive than most other refillable ignitors. The Varaflame
        Ignitor encounters strong competition from imported disposable ignitors.

                (2) Aviation - Fixed Wing Operations and Services and Helicopter
                    Services

                    Ronson Aviation,  Inc. ("Ronson  Aviation"),  a wholly owned
        subsidiary  of the Company,  headquartered  at  Trenton-Mercer  Airport,
        Trenton, New Jersey,  provides a wide range of general aviation services
        to the general public and to government  agencies.  Services include air
        charter,  air  cargo,  cargo  handling,  avionics,  management  aviation
        services,  new and  used  aircraft  sales,  aircraft  repairs,  aircraft
        fueling,  storage  and office  rental.  This  subsidiary's  facility  is
        located on 18 acres,  exclusive of four acres on which  Ronson  Aviation
        has a first  right  of  refusal,  and  includes  a  52,000  square  foot
        hangar/office  complex,  two aircraft  storage units ("T" hangars) and a
        58,500  gallon fuel storage  complex  (refer to Item  2-Properties,  (4)
        Trenton,  New  Jersey).  In its  passenger  and cargo  services,  Ronson
        Aviation  operates a total of three  aircraft,  including a Citation Jet
        and two twin-engine  turbo-prop airplanes in charter operations.  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  Raytheon  Aircraft and
        Parts Sales and Service Center and a customer  service facility for Bell
        Helicopter Textron.

                    At December 31, 1998,  Ronson  Aviation had one new aircraft
        in sales  inventory  and  orders to  purchase  three new  aircraft  from
        Raytheon Aircraft  Corporation,  all of which are for resale.  The total
        sales value of these aircraft is  approximately  $1,835,000.  The orders
        are subject to cancellation by Ronson Aviation.

                    Ronson  Aviation is subject to extensive  competition in its
        air charter  activities,  but Ronson  Aviation  is the only  provider of
        aviation services to the private, corporate and commercial flying public
        at Trenton-Mercer Airport in Trenton, New Jersey.


<PAGE>
        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 ISRA,  operators of particular
        facilities  classified  as  industrial  establishments  are  required to
        ensure that their property complies with environmental  laws,  including
        implementation  of remedial  action,  if  necessary,  before  selling or
        closing a facility. The Company's New Jersey facilities would be subject
        to ISRA should a facility be closed or sold.

                    In December 1989 the Company  adopted a plan to  discontinue
        the operations in 1990 of one of its facilities,  Prometcor,  located in
        Newark,  New  Jersey,  and to comply with ISRA  (formerly  ECRA) and all
        other  applicable  laws.  In  October  1994  Prometcor  entered  into  a
        Memorandum of Agreement with the New Jersey  Department of Environmental
        Protection  ("NJDEP") as to its NJDEP related  environmental  compliance
        activities  respecting its Newark  facility.  In November 1994 Prometcor
        submitted a  Preliminary  Assessment,  Site  Investigation  and Remedial
        Investigation  Report  ("PA/SI/RIR")  to the NJDEP  following  extensive
        testing. The NJDEP approved  Prometcor's  PA/SI/RIR in the first quarter
        of 1995.  Prometcor  completed the actions  required  under the approved
        PA/SI/RIR   and,   in  June  1995,   submitted   its   Remedial   Action
        WorkPlan/Remedial  Action Report ("RAW/RAR") to the NJDEP. As the result
        of the  continuation  of sampling and  evaluation  of the results by the
        Company's  environmental  consultants  and the  NJDEP in 1996 and in the
        first quarter of 1997, areas of contamination in the groundwater below a
        section of the property were  identified.  Sampling and delineation have
        been and are continuing in this area of the property.

                    Prometcor has also  proceeded  with  reporting to the NRC in
        order to terminate  the NRC license held by  Prometcor.  In 1996 through
        1998 Prometcor's  radiological consultants performed additional sampling
        and  submitted  additional  reports to the  Company and to the NRC. As a
        result  of the  evaluation  of the  sampling  results  by the  Company's
        radiological  consultant and in  consideration of comments from the NRC,
        low-level   contamination  was  identified  and  delineated  in  certain
        sections of the Prometcor property.

                    In the second  quarter of 1998,  the  Company's  consultants
        completed  additional testing.  Based on the results of certain of these
        tests and on discussions with parties interested in the properties,  the
        Company  determined,  in the third  quarter  of 1998,  to  demolish  the
        buildings.  The  preparation  for  the  demolition  required  additional
        testing for final  clearance to verify and to supplement  the results of
        previous   consultants.    This   further   testing   and   significant,
        unanticipated  cleanup were required and completed in January 1999.  The
        NRC and NJDEP  accepted  the  results of the  testing for one of the two
        buildings in February 1999 and  acceptance of the results of the testing
        for the other is expected in the next 30 days,  approving the demolition
        of the  buildings.  The  demolition is in progress and is expected to be
        completed in April 1999.

<PAGE>
                    The Company's plan for final  radiological  remediation  and
        clearance of the soils was  approved by the NRC in November  1998 and by
        the NJDEP in February 1999. The  implementation of this plan will follow
        the completion of the  demolition of the  buildings.  The Company's plan
        regarding  resolving  the  non-radiological  issues in the soil has been
        approved by the NJDEP and will be  implemented  after the demolition has
        been completed.  The Company's plan to resolve the groundwater issue has
        not yet been approved by the NJDEP.

                    A portion of the Newark  property has already been  released
        by the NRC and the NJDEP.  In  November  1997  Prometcor  completed  the
        necessary  radiological  cleanup activities for one of the three parcels
        of property and amended the Prometcor  license to release this property.
        Also, in January 1998, the NJDEP  provided a "No Further  Action" letter
        for this portion of the property. It is now available to be sold without
        any further environmental clearance needed.

                    The  additional  sampling and  remediation  required  during
        demolition and for soil  contamination  for the two remaining parcels of
        the Newark property are continuing.  The full extent of the costs is not
        determinable  until all testing and remediation  have been completed and
        accepted by the NJDEP and NRC.

                    Two of the  Company's  subsidiaries  are  subject to the New
        Jersey Underground Storage Tank Law, N.J.S.A.  58:10A-21 et seq. and the
        regulations   promulgated  thereunder,   N.J.A.C.   7:14B-1.1  et  seq.,
        requiring  upgrades to certain types of underground  storage tanks.  The
        Company  previously  replaced its underground  storage tanks at RCPC. In
        February 1999 Ronson Aviation completed the installation of a new 58,500
        gallon fueling facility at a total cost of approximately  $430,000,  and
        ceased use of most of its former underground storage tanks.

                    The  underground  storage  tanks  formerly  used  by  Ronson
        Aviation  will be closed in place or removed in 1999.  The extent of any
        soil and groundwater  contamination  cannot be determined  until testing
        has been undertaken.  Ronson Aviation is currently in negotiations  with
        the lessor,  the County of Mercer  ("Mercer"),  as to the  allocation of
        responsibility  between  Ronson  Aviation  and  Mercer  for the costs of
        meeting regulatory requirements as to the former tank system and for the
        installation  of the new storage  tanks,  because  the former  tanks are
        owned by  Mercer.  In  addition,  most of the tanks  pre-date  the lease
        between Mercer and Ronson  Aviation.  The  negotiations  with Mercer may
        result  in:  1)  Mercer  assuming  responsibility  for the  new  fueling
        facility,  closure  and  removal of the former  tanks,  and all soil and
        groundwater  remediation,  if  any,  found  to be  required;  2)  Ronson
        Aviation  being  responsible  for the  construction  of the new  fueling
        facility,  Mercer assuming responsibility for the closure and removal of
        the  former  tanks,  and  all  or  some  of  the  soil  and  groundwater
        remediation,  with the cost incurred by Ronson  Aviation to be deemed to
        meet the  requirements  in the  lease  for  three  five-year  extensions
        through November 2022; or 3) some other allocation of responsibility for
        the costs. The Company intends to vigorously pursue its rights under the
        leasehold and under the statutory and regulatory requirements. Since the
        ultimate  allocation  of costs  cannot be  estimated  at this time,  the
        effect  on  the  Company's  financial  position  or  results  of  future
        operations  cannot be estimated at this time,  but  management  does not
        believe that the effect will be material.
<PAGE>
                    In  the  third  quarter,  a  mechanical  failure  at  Ronson
        Aviation  resulted  in an overfill of a fuel tank and a release of about
        700 gallons of jet fuel.  The Company  has taken  appropriate  action to
        address  the  release and to meet NJDEP  requirements.  Ronson  Aviation
        expended  approximately  $57,000 in 1998 and  accrued  about  $78,000 in
        future costs related to the release.  The Company's  insurance  carriers
        have been  notified  of the  claim,  and  management  believes  that the
        Company will receive a reimbursement  for the cost from  insurance,  but
        the Company has not  recorded a  receivable  for that  reimbursement  at
        December 31, 1998.

                    In  September  1998  the  Company  received  a "de  minimis"
        settlement   offer   ("Settlement   Offer")   from  the  United   States
        Environmental  Protection  Agency ("USEPA") related to waste disposed of
        prior to 1980 at a landfill  in  Monterey  Park,  California,  which the
        USEPA had designated as a Superfund Site ("Site").  The USEPA identified
        manifests  dated from 1974 through 1979 which  allegedly  indicate  that
        waste  originating  at the  location  of the  Company's  former  Duarte,
        California, hydraulic subsidiary was delivered to the Site. As a result,
        in August 1995 the  Company  received a General  Notice  Letter from the
        USEPA notifying the Company that the USEPA considered the Company one of
        about four thousand Potentially  Responsible Parties ("PRP's") for waste
        disposed of prior to 1980 at a landfill at the Site. In 1981 the Company
        sold the Duarte,  California,  hydraulic  subsidiary,  Ronson  Hydraulic
        Units Corporation  ("RHUCOR-CA"),  to the Boeing Corporation.  The USEPA
        has notified a subsequent owner of the facility that the USEPA considers
        that entity to also be liable for the costs the USEPA  determines  to be
        due as a result of  RHUCOR-CA's  waste having been sent to the Site. The
        USEPA may also  consider  financial  factors  in  determining  the final
        amount due. The USEPA Settlement Offer includes various options at costs
        ranging from $307,000 to $376,000.  In the fourth  quarter of 1998,  the
        Company  offered to settle all  liabilities  in the matter for  payments
        totalling $90,000 to be paid semiannually over three years.  Because the
        USEPA has determined  that the volume of waste generated by the facility
        and sent to the  Site is "de  minimis",  because  the  USEPA  has sent a
        General  Notice Letter to another PRP for the same waste and because the
        Company  has  offered  to settle the  matter  under the above  mentioned
        terms,  the  Company  believes  that the cost,  if any,  will not have a
        material  effect on the  Company's  financial  position  or  results  of
        operations.

                    Other than the  expenditures  related to the replacement and
        closure of  underground  storage tanks at Ronson  Aviation,  the Company
        believes that compliance with  environmental  laws and regulations  will
        not  have  a  material   effect  upon  the  Company's   future   capital
        expenditures. Other than the cash requirements related to completing the
        Prometcor  environmental  clearance and the fact that the full extent of
        the Prometcor costs is not yet  determinable,  the Company believes that
        compliance  with  environmental  laws  and  regulations  will not have a
        material effect upon the Company's earnings or competitive position.


        PATENTS AND TRADEMARKS

                 The  Company  maintains  numerous  patents and  trademarks  for
        varying  periods  in the  United  States,  Canada,  Mexico and a limited
        number of other countries. While both industry segments may benefit from
        the Company's name as a registered trademark, the patents and trademarks
        which are held principally  benefit the consumer products segment of the
        Company's business.
<PAGE>
        SEASONALITY AND METHODS OF COMPETITION

                 No material portion of the Company's business is seasonal.  The
        Company uses various  methods of  competition  as appropriate in both of
        its industry segments, such as price, service and product performance.


        RESEARCH ACTIVITIES

                 The Company's consumer products segment expensed  approximately
        $164,000,  $141,000 and $134,000  during the fiscal years ended December
        31, 1998, 1997 and 1996,  respectively,  on research activities relating
        to the  development  of new  products  and the  improvement  of existing
        products, all of which were Company sponsored.


        NUMBER OF EMPLOYEES

                 As of December  31,  1998,  the  Company  and its  subsidiaries
        employed a total of 131 persons.

        CUSTOMER DEPENDENCE

                 See 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.
<TABLE>
<CAPTION>
                              Consumer        Aviation Operations
                              Products            and Services
                              --------            ------------

          <S>                   <C>                   <C>
          1998                  68%                   32%

          1997                  66%                   34%

          1996                  65%                   35%
</TABLE>
 
       (d)    Financial  information  about foreign and domestic  operations and
              export sales.

                 Since 1981,  the Company  has not been  engaged in  significant
        operations in foreign  countries,  although  after December 31, 1982, it
        recommenced  sales of certain consumer  products in Canada. In June 1985
        Ronson-Canada  was  incorporated.   This  subsidiary  is  the  principal
        distributor of the Company's  consumer  products in Canada.  The Company
        has sold many of its trademarks outside of the USA, Canada and Mexico.
<PAGE>
        Item 2 - PROPERTIES

                 The  following  list sets forth the location and certain  other
        information concerning the Company's principal  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.  (See  paragraphs  (a) and (b)  below.)  In the  list  below,
        "medium"  facilities  are those  which have  between  20,000 and 100,000
        square  feet;  and  "small"  facilities  are those  which have less than
        20,000 square feet.

                 (a) The  facilities  in  Woodbridge,  New  Jersey,  and  Canada
        comprise  the  consumer  products  segment.  The  Trenton,  New  Jersey,
        facilities are used by the aviation services segment.

                 (b) All facilities  are fully  utilized by the Company,  except
        for the  facility  of  Prometcor,  Newark,  New  Jersey  (see Item 1 (a)
        above).

            (1)  Woodbridge, New Jersey

                 Facilities  included in (a) and (b) below are owned  subject to
        first and second mortgages in favor of Summit Bank.

                 (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)  Newark, New Jersey

                 One small  facility and two parcels of vacant land.  Operations
        of these facilities have terminated.

            (3)  Somerset, New Jersey

                 One small facility for executive and consumer products offices.
        This  facility is leased under a lease which  expires in June 2001.  The
        facility is constructed of metal, cinder block and cement.

            (4)  Trenton, New Jersey

                 (a) One medium  facility for fixed wing operations and services
        and helicopter  services,  sales and office space leased to others. This
        building is owned and is constructed of steel and concrete.  The land on
        which this  building  is located is leased  under a  leasehold  with six
        five-year  terms  automatically  renewed,  with the last  five-year term
        expiring in November 2007. The lease may be extended for five additional
        five-year  terms  through  November  2032,   provided  that  during  the
        five-year term ending November 2007, Ronson Aviation invests  $1,500,000
        in capital  improvements.  The Company has  proposed to the lessor,  the
        County  of  Mercer,  that  the  1998  and  1999  investment  in  fueling
        facilities  by Ronson  Aviation  be deemed to meet the  requirements  to
        extend the lease term through November 2022.
<PAGE>
                 (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
        2001. This facility is constructed of brick and cinder block.

        Item 3 - LEGAL PROCEEDINGS

                 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.

                 See  Item 1.  "Business  -  Environmental  Matters"  above  for
        discussion of a pending  environmental matter involving a Superfund Site
        in California.

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

                 Not Applicable.

        PART II

        Item 5 - MARKET FOR THE  COMPANY'S  COMMON STOCK AND RELATED  
                 STOCKHOLDER MATTERS

                 a) The  principal  market for trading in Ronson common stock is
        the Nasdaq  SmallCap  Market.  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.
<TABLE>
<CAPTION>
        1998
        ----------------------------------------------------

        Quarter            1st      2nd      3rd      4th
        ----------------------------------------------------
        <S>               <C> <C>  <C> <C>  <C>  <C> <C>  <C>
        High Bid          3 3/4    3 7/8    3 15/16  3  1/2
        Low Bid           2 9/16   3 5/16   3 3/8    2 11/16

        1997
        ----------------------------------------------------

        Quarter            1st      2nd      3rd      4th
        ----------------------------------------------------
        High Bid          2 5/8    2 1/2    3 1/4    4 1/8
        Low Bid           2 1/4    1 13/16    2      2 1/4
</TABLE>
<PAGE>

                 At March 10, 1999,  there were 2,772  stockholders of record of
        the  Company's  common stock.  Information  required by this Item on the
        frequency  and  amount  of  dividends  is  contained  in  Item  6 and is
        incorporated herein by reference.

                 b) On  November  15,  1996,  the  Company  issued  an  offer to
        exchange up to 1,423,912 aggregate shares of its common stock for all of
        the  837,595  issued  and  outstanding  shares  of  its  12%  Cumulative
        Convertible   Preferred   Stock.  For  each  share  of  preferred  stock
        exchanged,  the Company offered to issue 1.7 shares of common stock. The
        terms and  conditions  of the offer  were more  fully  described  in the
        Schedule 13E-4,  the Offering  Circular and the  accompanying  Letter of
        Transmittal  dated  November 15, 1996  (together the "Exchange  Offer").
        These  items were  previously  filed  with the SEC and are  incorporated
        herein by reference.  The Company's  Exchange Offer expired on September
        30, 1997.  During the year ended  December 31, 1997,  the Company issued
        1,361,435 shares of common stock under the Exchange Offer.

                 The  Company  received a total of 800,844  shares of  preferred
        stock tendered in exchange for the common shares.  The preferred  shares
        received were retired and cancelled.

                 The  issuance  by the  Company  of shares  of  common  stock in
        exchange  for shares of  preferred  stock in the  Exchange  Offer was in
        reliance on the  exemption  from the  registration  requirements  of the
        Securities Act of 1933, as amended,  provided by Section  3(a)(9) of the
        1933 Act. That section provides an exemption from  registration "for any
        security  exchanged  by  the  issuer  with  its  existing   shareholders
        exclusively  where no commission or other  remuneration is paid or given
        directly or indirectly for  soliciting  such  exchange".  Since both the
        preferred  stock and the common stock involved in the Exchange Offer are
        securities  of  the  Company,  and  the  Company  exchanged  one  of its
        securities for another of its securities  exclusively  with its existing
        security holders without paying any commission or other remuneration for
        soliciting the exchange, the Exchange Offer met all the requirements for
        exemption as provided by Section 3(a)(9).


        Item 6 - SELECTED FINANCIAL DATA

                 The information required by this Item is filed with this report
        on page 31 and is incorporated herein by reference.

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

        RESULTS OF OPERATIONS

        1998 Compared to 1997

                    Ronson   Corporation's   (the  "Company's")   Earnings  from
        Continuing  Operations  were  $660,000  in 1998  compared to $783,000 in
        1997. After the Loss from  Discontinued  Operations in 1998 of $949,000,
        the Company's Net Loss in 1998 was $289,000, compared to Net Earnings in
        1997 of $783,000. The $949,000 Loss from Discontinued Operations in 1998
        of  Prometcor,  Inc.  ("Prometcor"),  Newark,  New  Jersey,  related  to
        additional  costs and  expenses  projected to complete  compliance  with
        environmental   requirements   and  the  eventual  sale  of  Prometcor's
        properties.

                    Consolidated  Net Sales were $23,173,000 in 1998 compared to
        $23,170,000 in 1997. Net Sales of consumer products  increased at Ronson
        Consumer Products Corporation ("RCPC"),  Woodbridge,  New Jersey, and at
        Ronson Corporation of Canada, Ltd. ("Ronson-Canada"),  (together "Ronson
        Consumer  Products"),  by 3% in 1998 compared to 1997,  primarily as the
        result of increased  shipments of the Company's flame  accessories.  Net
        Sales at Ronson Aviation, Inc. ("Ronson Aviation"), Trenton, New Jersey,
        decreased by 5% in 1998 compared to 1997,  primarily  because  increased
        sales of general aviation  services were more than offset by lower sales
        of  aircraft  in  1998;  however,   Ronson  Aviation's  Earnings  before
        Interest,  Other Items and Intercompany Charges increased by 80%, before
        non-recurring costs, in 1998 from 1997.

                    Consolidated  Cost of Sales, as a percentage of Consolidated
        Net  Sales,  was  reduced  to 60% in 1998 from 63% in 1997.  The Cost of
        Sales percentage at Ronson Consumer  Products was reduced to 51% in 1998
        from 52% in 1997,  primarily due to reductions in material costs related
        to certain  products.  The Cost of Sales  percentage at Ronson  Aviation
        decreased  to 78% in 1998 from 83% in 1997,  primarily  due to increased
        sales of  general  aviation  services,  particularly  increased  charter
        services. The Cost of Sales at Ronson Aviation in 1998 included one-time
        costs  of about  $135,000  related  to a  release,  due to a  mechanical
        failure,  of  several  hundred  gallons  of jet fuel.  The  Company  has
        notified  its  insurance  carriers  and expects a  reimbursement  of the
        costs,  but  none of that  potential  insurance  reimbursement  has been
        recorded as of December 31, 1998.

                    Consolidated  General  and  Administrative  Expenses,  as  a
        percentage of Consolidated Net Sales,  increased to 17% in 1998 from 15%
        in 1997,  primarily due to increased personnel costs, to legal and other
        professional  fees  related  to  stockholder  matters,  and to  costs of
        development of new international  markets associated with a new brand of
        products.

                    Interest expense increased to $645,000 in 1998 from $523,000
        in 1997,  primarily due to increased  long-term debt financing of Ronson
        Aviation's fourth quarter 1997 purchase of the Citation II jet.

                    Other-Net  increased  to $185,000  in 1998 from  $107,000 in
        1997,  primarily due to costs accrued in the amount of $110,000  related
        to the Company's  offer to settle the  California  Superfund Site matter
        discussed more fully below.
<PAGE>
                    The Company's  Earnings from  Continuing  Operations  before
        Income  Taxes were  $520,000 in 1998  compared to $549,000 in 1997.  The
        1998 Earnings from Continuing Operations before Income Taxes of $520,000
        were net of  non-recurring  costs of  $245,000,  consisting  of $135,000
        related to the jet fuel release and $110,000  related to the  California
        Superfund  Site  matter.  Improved  operating  earnings in 1998 of 9% at
        Ronson  Consumer  Products and of 104%, before  non-recurring  costs, at
        Ronson  Aviation  were  offset by the  increased  corporate  General and
        Administrative Expenses and the non-recurring costs.

                    The Loss from  Discontinued  Operations  included  the costs
        recorded by the Company related to the  discontinuance of Prometcor,  as
        follows (in thousands):

<TABLE>
<CAPTION>
                                               Year Ended December 31,
                                             1998        1997      1996
                                            -------    -------    -------

        <S>                                 <C>        <C>        <C>    
        Discontinuance costs accrued        $ 1,506    $    --    $ 1,370
        Deferred income tax benefit            (557)        --       (180)
                                            -------    -------    -------
        Loss from Discontinued Operations   $   949    $    --    $ 1,190
                                            =======    =======    =======
</TABLE>
                                                       
                    In December 1989 the Company  adopted a plan to  discontinue
        the   operations   of  its  wholly  owned   subsidiary,   Ronson  Metals
        Corporation,  subsequently  renamed  Prometcor.  Upon the  cessation  of
        operations,  Prometcor  began  its  compliance  with  the  environmental
        requirements of the New Jersey Environmental Cleanup  Responsibility Act
        ("ECRA"),  now  known as the  Industrial  Site  Recovery  Act  ("ISRA"),
        administered by the New Jersey  Department of  Environmental  Protection
        ("NJDEP") and other  applicable State laws with the objective of selling
        the land and  existing  buildings  previously  used in the  discontinued
        operations.   The   discontinuance   of  operations  also  required  the
        termination of a United States  Nuclear  Regulatory  Commission  ("NRC")
        license  obtained  in  1984  for  the  storage  and  use  on  site  of a
        radioactive element to be used in a new product, the sales of which were
        minimal.

                    To comply with the New Jersey state  environmental laws, the
        Company  has  utilized  the   services  of   independent   environmental
        consultants  to  undertake  studies  and  extensive  field  tests and to
        develop  appropriate cleanup plans. The plans as originally adopted have
        since been  amended on many  occasions  to  address  various  substances
        uncovered by additional  tests  required from time to time by NJDEP.  In
        addition,  radiological  consultants  have been engaged to conduct tests
        and  sampling  to  develop  and  implement  a  Decommissioning  Plan  to
        terminate the NRC license held by Prometcor.
<PAGE>
                    In  assessing  the  results of recent  additional  tests for
        radiological and  non-radiological  materials  required by the NJDEP and
        NRC in the second half of 1998, the Company has concluded that the final
        release of the Prometcor properties for eventual sale by the Company can
        be  most  economically  obtained  by the  demolition  of  the  Prometcor
        buildings and the removal from the site of the resulting debris, in lieu
        of the  alternative of a prolonged  period of continuing  costly testing
        and more  extensive  cleanup  of every part of the  affected  buildings.
        Accordingly,  further  testing and cleanup were undertaken and completed
        in January 1999 to support the Company's request to the NRC for approval
        of the proposed demolition. In February 1999 the NRC amended Prometcor's
        license to permit the  demolition of the major building on the property,
        and the Company  expects the NRC  amendment  for the  demolition  of the
        remaining building to be received in the next 30 days. All buildings are
        expected to be demolished by April 30, 1999.

                    Separately,  Prometcor's plan for final radiological cleanup
        of the soils was  approved by the NRC in November  1998 and the NJDEP in
        February  1999.  In  addition,  the plan  relating  to  non-radiological
        cleanup  and  clearance  of the soil has been  approved by the NJDEP and
        will be  implemented  following  the  demolition of the  buildings.  The
        Company's plan to resolve  groundwater  issues has not yet been approved
        by the NJDEP.  Completion  of the  actions to be taken under the cleanup
        plans,  including  the  removal  of  affected  debris and soil as may be
        required, is expected to be completed later this year. At that time, the
        properties will be available for sale.

                    The total costs and expenses  related to the  termination of
        Prometcor's business operations in 1990, less the expected gain from the
        eventual sale of Prometcor's assets,  have been estimated,  based on the
        latest available  information,  to be about $5,770,000.  These estimated
        costs and expenses consist of:  Prometcor's  expenses for the completion
        of  compliance  with the NJDEP and NRC  environmental  regulations;  the
        termination of Prometcor's business operations; environmental consulting
        costs,  legal and other professional fees; and costs for the maintenance
        of the Prometcor  property,  including  insurance and taxes. These costs
        and expenses,  net of deferred  income tax  benefits,  have been charged
        against the Company's Loss from Discontinued Operations and Net Earnings
        (Loss)  between the  beginning of 1990 and year end 1998.  The liability
        for these  estimated  costs and  expenses as  recorded in the  financial
        statements at December 31, 1998,  was based,  in accordance  with normal
        accounting  practices,  on the  lower  limit  of the  range  of costs as
        projected  by the  Company.  The  estimated  upper limit of the range of
        costs is approximately $1,000,000 above the lower limit.
<PAGE>

                    The additional  costs accrued in December 1998, as discussed
        above, were primarily due to (in thousands):

<TABLE>
<S>                                                           <C>   

                NRC and NJDEP environmental clearance of
                   the buildings for demolition and
                   their demolition                           $  857
                Additional time required to obtain final
                   clearance from the NRC and NJDEP              287
                Long-term groundwater monitoring (present
                   value)                                        172
                Estimated NRC and NJDEP charges, the
                   majority of which were received by the
                   Company in January 1999                       138
                Other                                             52
                                                              ------
                                                              $1,506
                                                              ======
</TABLE>
      
                    The  full  extent  of  the  costs  and  time   required  for
        completion is not  determinable  until the remediation and  confirmation
        testing of the properties  have been completed and accepted by the NJDEP
        and NRC.

        1997 Compared to 1996

                    The Company's Earnings from Continuing  Operations increased
        to $783,000 in 1997 from $335,000 in 1996,  an increase of $448,000,  or
        134%. After the Loss from Discontinued Operations in 1996 of $1,190,000,
        the Company's Net Loss in 1996 was $855,000, compared to Net Earnings in
        1997 of $783,000. The 1996 $1,190,000 Loss from Discontinued  Operations
        of  Prometcor  related to  additional  costs and  expenses  projected to
        complete  compliance with  environmental  requirements  and the eventual
        sale of Prometcor's properties.

                    Consolidated  Net Sales were $23,170,000 in 1997 compared to
        $25,454,000 in 1996. Net Sales of consumer products  decreased at Ronson
        Consumer  Products  by 7% in 1997  compared  to 1996,  primarily  as the
        result of  reduced  shipments  of the  Varaflame  Ignitor.  Net Sales at
        Ronson  Aviation  decreased by 12% in 1997  compared to 1996,  primarily
        because  increased  sales of general  aviation  services  were more than
        offset by lower sales of aircraft in 1997.

                    Consolidated  Cost of Sales, as a percentage of Consolidated
        Net Sales, was lower at 63% in 1997 compared to 65% in 1996. The Cost of
        Sales  percentage  at Ronson  Consumer  Products was unchanged at 52% in
        1997 and  1996.  The Cost of Sales  percentage  at Ronson  Aviation  was
        reduced  to 83% in 1997 from 88% in 1996.  The Cost of Sales  percentage
        decrease at Ronson  Aviation in 1997 was due to cost  reductions  and to
        increased sales of general aviation services.

                    Consolidated Selling,  Shipping and Advertising Expenses, as
        a percentage of  Consolidated  Net Sales,  increased to 16% in 1997 from
        14% in 1996.  The increase was due  primarily to the lower  Consolidated
        Net Sales in 1997 as compared to 1996.
<PAGE>
                    Consolidated  General  and  Administrative  Expenses,  as  a
        percentage of Consolidated Net Sales,  increased to 15% in 1997 from 13%
        in 1996, primarily due to the decrease in Consolidated Net Sales in 1997
        and to increased personnel-related costs and professional fee expenses.

                    Interest Expense decreased to $523,000 in 1997 from $762,000
        in 1996.  This decrease was primarily due to reduced  short-term debt at
        Ronson Aviation utilized to finance lower aircraft inventory.

                    Other-Net  in  1996  included  a  non-recurring   charge  of
        $434,000 at Ronson  Aviation in the third quarter of 1996 which resulted
        from  a  revaluation  of  certain   aircraft   inventory  and  costs  of
        restructuring Ronson Aviation's operations.

                    The Loss  from  Discontinued  Operations  in the year  ended
        December 31, 1996, included the costs recorded by the Company related to
        the discontinuance of Prometcor, as follows (in thousands):
<TABLE>

          <S>                                              <C>    
          Discontinuance costs accrued                     $ 1,370

          Deferred income tax benefit                         (180)

                                                           -------
          Loss from Discontinued Operations                $ 1,190
                                                           =======
</TABLE>

                    In December 1989 the Company  adopted a plan to  discontinue
        the operations in 1990 of one of its New Jersey  facilities,  Prometcor,
        and to comply with ISRA and all other  applicable  laws.  As part of the
        plan to sell the  properties  of  Prometcor's  discontinued  operations,
        Prometcor has also been involved in the termination of its United States
        NRC license.  The total costs and expenses  related to  terminating  the
        Prometcor operations,  less the expected gain from the eventual sales of
        Prometcor's assets, have been projected to be approximately  $4,260,000.
        These  costs and  expenses  consisted  of:  termination  of  Prometcor's
        operations;  maintenance  of the Prometcor  property;  and completion of
        compliance by Prometcor with  environmental  regulations.  In the fourth
        quarter of 1996,  the  amount of  $1,370,000  was  charged  against  the
        Company's Loss from  Discontinued  Operations,  prior to deferred income
        tax  benefits.  The charges  between the  beginning of 1990 and year end
        1996 were due primarily to: costs incurred;  previously  projected costs
        related  to  compliance  with  the  NJDEP   requirements;   NRC  related
        activities;  and the extended  period of time  previously  projected for
        NJDEP and NRC  clearance.  The  liability  for these costs and  expenses
        recorded  in  the  financial   statements  at  December  31,  1997,  was
        considered  adequate by the Company,  based upon: the results of testing
        completed;  NJDEP  and  NRC  comments;  reports  to the  Company  by its
        environmental counsel and environmental consultants.
<PAGE>
        INCOME TAXES

                    In  accordance   with  Statement  of  Financial   Accounting
        Standards  ("SFAS") #109,  "Accounting for Income Taxes",  in 1998, 1997
        and 1996,  the  Company  recognized  deferred  income  tax  benefits  of
        $727,000,  $225,000  and  $390,000,   respectively,  as  the  result  of
        reductions in the valuation  allowance related to the Company's deferred
        income tax  assets  and to  accruals  of costs  related to  discontinued
        operations  in 1998 and 1996.  Current  income  taxes in the year  ended
        December 31, 1998,  of $108,000 were  presented  net of credits  arising
        from the utilization of available tax losses and loss  carryforwards  in
        accordance  with SFAS #109. In 1998,  1997 and 1996,  current income tax
        benefits   (expenses)   were  composed  of  state  income  tax  benefits
        (expenses) of  $(30,000),  $141,000,  and  $(81,000),  respectively.  At
        December 31, 1998, the Company had net operating loss  carryforwards for
        federal income tax purposes of approximately $7,293,000,  investment tax
        credit  carryforwards  of $43,000  and  alternative  minimum  tax credit
        carryforwards of $60,000.  (Refer to Note 3 of the Notes to Consolidated
        Financial Statements.)

        IMPACT OF INFLATION

                    The Company  recognizes that inflation can adversely  affect
        the  operating  performance  of a  company.  Therefore,  in  formulating
        operating and pricing policy,  the Company carefully  considers changing
        price levels.  The Company  believes that it has been able to pass along
        cost increases as they relate to the production of goods and services.

        FINANCIAL CONDITION

                    The Company's  Stockholders'  Equity increased to $2,145,000
        at December 31, 1998, from $1,864,000 at December 31, 1997. The increase
        of  $281,000  in  1998 in the  Company's  Stockholders'  Equity  was due
        primarily to a net gain on pension plans of $393,000 and amortization of
        the Unrecognized Net Loss on Pension Plans of $162,000, partially offset
        by the Net Loss of  $289,000.  The Company had a  deficiency  in working
        capital at December 31, 1998, of $2,208,000 as compared to $1,605,000 at
        December 31, 1997.  The 1998 decline in working  capital of $603,000 was
        primarily  due  to  the  accrual  of  $1,506,000  in  costs  related  to
        discontinued  operations  in 1998,  partially  offset by  Earnings  from
        Continuing Operations of $660,000.

                    Cash increased in 1998 from changes in inventories primarily
        due to reduced  inventories at Ronson Consumer Products.  Cash increased
        in 1997 from  changes in  inventories  primarily  due to sales by Ronson
        Aviation of aircraft transferred from fixed assets into inventories. The
        Company's  inventories  were  reduced  by  $1,412,000  in the year ended
        December 31, 1996, primarily due to a reduction in aircraft inventory at
        Ronson  Aviation.  Short-term  debt was  reduced by  $1,112,000  in 1996
        primarily as the result of repayment of aircraft-related  loans upon the
        sales of the aircraft.

                    Cash  increased  from  changes in  accounts  payable in 1998
        primarily due to differences in timing of purchases in 1998 from 1997.
<PAGE>
                    The Company's current liabilities of discontinued operations
        increased by  approximately  $727,000 in 1998 primarily as the result of
        the  1998  accrual  of  additional  costs  and  expenses  of  $1,506,000
        projected  to  complete   compliance  by  Prometcor  with  environmental
        requirements.   The  Company's   current   liabilities  of  discontinued
        operations   declined  by  $647,000  in  1997,   primarily  due  to  the
        expenditures  incurred in the year related to Prometcor's  environmental
        compliance.

                    Capital  expenditures  decreased  to  $845,000  in 1998 from
        $2,138,000  in 1997  primarily  due to the fourth  quarter  1997  Ronson
        Aviation  purchase  of  a  Citation  II  jet  for  use  in  its  charter
        operations.  The  acquisition  of the aircraft was financed by long-term
        debt  from  Summit  Bank  ("Summit").  (Refer  to Note 5 of the Notes to
        Consolidated Financial Statements.)

                    Based on the amount of the loans  outstanding and the levels
        of accounts  receivable  and  inventory  at December  31,  1998,  Ronson
        Consumer Products had unused borrowings  available at December 31, 1998,
        of about  $225,000  under  the  Summit  and  Canadian  Imperial  Bank of
        Commerce lines of credit. Ronson Aviation had no outstanding loans under
        the Summit  Revolving Loan.  Based on the level of accounts  receivable,
        Ronson Aviation had unused borrowings of about $294,000 under the Summit
        line of credit at December 31, 1998.

                    In September 1998 Ronson  Aviation  entered into a long-term
        loan  agreement  with its  primary  fuel  supplier.  The loan  agreement
        provided  $250,000 to Ronson  Aviation to be used to  construct  the new
        fueling facility.  The loan is due in 120 monthly installments of $2,775
        including  interest  at the rate of 6% per annum.  The total cost of the
        new fueling  facility is  expected to be about  $430,000,  approximately
        $115,000 of which was yet to be incurred at December 31, 1998.

                    In October 1998 Ronson  Aviation and Summit,  the  Company's
        principal  lender,  agreed to extend Ronson Aviation's Term Loan to June
        30, 2000. All other terms of the agreement were substantially unchanged.

                    In  September  1998  the  Company  received  a "de  minimis"
        settlement   offer   ("Settlement   Offer")   from  the  United   States
        Environmental  Protection  Agency ("USEPA") related to waste disposed of
        prior to 1980 at a landfill  in  Monterey  Park,  California,  which the
        USEPA had designated as a Superfund Site ("Site").  The USEPA identified
        manifests  dated from 1974 through 1979 which  allegedly  indicate  that
        waste  originating  at the  location  of the  Company's  former  Duarte,
        California, hydraulic subsidiary was delivered to the Site. As a result,
        in August 1995 the  Company  received a General  Notice  Letter from the
        USEPA notifying the Company that the USEPA considered the Company one of
        about four thousand Potentially  Responsible Parties ("PRP's") for waste
        disposed of prior to 1980 at a landfill at the Site. In 1981 the Company
        sold the Duarte,  California,  hydraulic  subsidiary,  Ronson  Hydraulic
        Units Corporation  ("RHUCOR-CA"),  to the Boeing Corporation.  The USEPA
        has notified a subsequent owner of the facility that the USEPA considers
        that entity to also be liable for the costs the USEPA  determines  to be
        due as a result of  RHUCOR-CA's  waste having been sent to the Site. The
        USEPA may also  consider  financial  factors  in  determining  the final
        amount due. In the fourth quarter of 1998, the Company offered to settle
        the  matter  for  six  equal  payments  totalling  $90,000,  to be  paid
        semiannually  over three years.  Although the Settlement  Offer includes
        various  options at costs of from  $307,000 to $376,000  and the Company
        has  offered  to settle  the matter for  $90,000,  the  Company's  final
        contribution,  if any, is not yet determinable. As of December 31, 1998,
        the Company has accrued the amount of its offer and related expenses.
<PAGE>
                    In February 1999 Ronson Aviation  completed the installation
        of a new 58,500 gallon fueling facility at a total cost of approximately
        $430,000 and ceased use of most of its former underground storage tanks.
        The  underground  storage tanks formerly used by Ronson Aviation will be
        closed  in  place or  removed  in 1999 as  required  by the  NJDEP.  The
        presence or extent of any soil and groundwater  contamination  cannot be
        determined  until  testing  has  been  undertaken.  Ronson  Aviation  is
        currently  in  negotiations  with  the  lessor,  the  County  of  Mercer
        ("Mercer"),  as to  the  allocation  of  responsibility  between  Ronson
        Aviation and Mercer for the costs of meeting regulatory  requirements as
        to the former  tank system and for the  installation  of the new storage
        tanks,  because the former tanks are owned by Mercer. In addition,  most
        of the tanks pre-date the lease between Ronson Aviation and Mercer.  The
        negotiations   with   Mercer   may   result   in:  1)  Mercer   assuming
        responsibility for the new fueling facility,  closure and removal of the
        former tanks, and all soil and groundwater remediation, if any, found to
        be required;  2) Ronson Aviation being  responsible for the construction
        of the new fueling  facility,  Mercer  assuming  responsibility  for the
        closure and removal of the former tanks, and all or some of the soil and
        groundwater remediation, with the cost incurred by Ronson Aviation to be
        deemed  to meet  the  requirements  in the  lease  for  three  five-year
        extensions  through  November  2022;  or 3)  some  other  allocation  of
        responsibility  for the costs. The Company intends to vigorously  pursue
        its rights under the leasehold  and under the  statutory and  regulatory
        requirements. Since the ultimate allocation of costs cannot be estimated
        at this time, the effect on the Company's  financial position or results
        of future  operations  cannot be estimated at this time,  but management
        does not believe that the effect will be material.

                    At December 31, 1998,  the Company did not have  significant
        other capital  commitments.  The Company has operating leases,  the most
        significant  of which  relates to office  space used by the  Company and
        RCPC. The Company's total commitments under capital and operating leases
        are  presented  in  Note  6  of  the  Notes  to  Consolidated  Financial
        Statements.

                    At   December   31,   1998,   net  assets  of   consolidated
        subsidiaries, excluding intercompany accounts, amounted to approximately
        $2,520,000,  substantially  all of which is restricted by loan covenants
        as to  transfer  to  the  parent.  (Refer  to  Note 5 of  the  Notes  to
        Consolidated Financial Statements.)

                    The Company has  continued to meet its  obligations  as they
        have matured and  management  believes that the Company will continue to
        meet its obligations through internally  generated funds from future net
        earnings and depreciation,  established external financing arrangements,
        potential additional sources of financing and existing cash balances.

        YEAR 2000 ISSUES

                    The  Company's  information  technology  systems  have  been
        reviewed for Year 2000 ("Y2K") readiness, and actions have been taken to
        update all material systems. The information  technology systems used at
        Ronson  Aviation  were  recently  acquired and have been  certified  Y2K
        compliant.  The necessary upgrades to the information technology systems
        utilized by the Company and Ronson Consumer Products have been acquired.
        The  implementation  of these upgraded systems has begun and is expected
        to be completed and tested in the second quarter of 1999.
<PAGE>
                    The Company has also reviewed its non-information technology
        systems.  The  Company  believes  there are no material  concerns.  This
        assessment includes Ronson Aviation's aircraft and related equipment.

                    The Company has  assessed its  material  relationships  with
        third parties.  Based on information  received from the Company's  third
        parties,  the Company  believes  that those third parties with which the
        Company has a material  relationship  will not be  disrupted  by any Y2K
        issues.

                    The  majority  of the costs to  address  the  Company's  Y2K
        issues  have  been  incurred  and  have  not been  material.  Any  costs
        remaining are not expected to be material.

                    Because of the current status of the Company's  preparations
        related to the Y2K  issues,  the  Company  does not  believe  there is a
        material risk of losses related to the Y2K issues.

                    For  those  systems  for which  compliance  has not yet been
        demonstrated,  the Company is developing  contingency  plans even though
        none of those systems are material to the Company's operations.

FORWARD-LOOKING STATEMENTS

                    This  Management's  Discussion  and  Analysis  of Results of
        Operations  and Financial  Condition  and other  sections of this report
        contain  forward-looking  statements  that  anticipate  results based on
        management's plans that are subject to uncertainty. The use of the words
        "expects", "plans", "anticipates" and other similar words in conjunction
        with   discussions  of  future   operations  or  financial   performance
        identifies these statements.

                    Forward-looking statements are based on current expectations
        of future  events.  The Company  cannot ensure that any  forward-looking
        statement  will be accurate,  although the Company  believes that it has
        been reasonable in its expectations  and  assumptions.  Investors should
        realize that if underlying  assumptions prove inaccurate or that unknown
        risks or uncertainties materialize, actual results could vary materially
        from our  projections.  The Company  assumes no obligation to update any
        forward-looking statements as a result of future events or developments.

                    Investors are cautioned not to place undue  reliance on such
        statements  that speak only as of the date made.  Investors  also should
        understand  that it is not  possible  to  predict or  identify  all such
        factors and should not consider  this to be a complete  statement of all
        potential risks and uncertainties.

        Item 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
                 Financial statements required by this item are included in
        Item 14.

        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, 1998, 1997 and 1996.

                                    PART III

        Item 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY

        (a) Identification of directors.
<PAGE>
                          The  following  table  indicates  certain  information
        about the Company's seven (7) directors:

<TABLE>
<CAPTION>
                                                          Positions and Offices
                                                               with Company
                                                          Presently Held (other
                                                          than that of Director);
                               Period                       Business Experience
                               Served   Term as           During Past Five Years
                                 as     Director           (with Company unless
 Name of Director     Age     Director  Expires              otherwise noted)
 ----------------     ---     --------  -------           ----------------------

<S>                    <C>    <C>        <C>              <C>                      
 Louis V. Aronson II   76     1952-      1999             President & Chief     
                              Present                     Executive Officer;    
                                                          Chairman of Executive 
                                                          Committee; Member of  
                                                          Nominating Committee. 
                                                          
 Robert A. Aronson     49     1993-      2001             Member of Audit       
                              Present                     Committee; Managing   
                                                          Member of Independence
                                                          Leather, L.L.C.,      
                                                          Mountainside, NJ, the 
                                                          principal business of 
                                                          which is the import of
                                                          leather products, May 
                                                          1996 to present;      
                                                          Senior Vice           
                                                          President/Chief       
                                                          Financial Officer of  
                                                          Dreher, Inc., Newark, 
                                                          NJ, the principal     
                                                          business of which was 
                                                          the manufacture and   
                                                          import of leather     
                                                          products, October 1987
                                                          to May 1996; son of   
                                                          the President & Chief 
                                                          Executive Officer of  
                                                          the Company. 
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                                          Positions and Offices
                                                               with Company
                                                          Presently Held (other
                                                          than that of Director);
                               Period                       Business Experience
                               Served   Term as           During Past Five Years
                                 as     Director           (with Company unless
 Name of Director     Age     Director  Expires              otherwise noted)
 ----------------     ---     --------  -------           ----------------------
<S>                    <C>    <C>        <C>              <C>                      
 Albert G. Besser (1)  74     Sept.      1999             Founder, former       
                              1998-                       Director and of       
                              Present                     counsel for Hannoch   
                                                          Weisman, Attorneys at 
                                                          Law, Roseland, NJ,    
                                                          1957 to present;      
                                                          Editor, New Jersey Law
                                                          Journal, 1970 to      
                                                          present; Arbitrator   
                                                          for NASD, 1993 to     
                                                          present.              
                                                          
 Erwin M. Ganz         69     1976-      2001             Chairman of Audit     
                              Present                     Committee; Member of  
                                                          Executive Committee   
                                                          and Nominating        
                                                          Committee; Consultant 
                                                          for the Company, 1994 
                                                          to present; Executive 
                                                          Vice President-        
                                                          Industrial Operations,
                                                          1975 to 1993; Chief   
                                                          Financial Officer,    
                                                          1987 to 1993.         
                                                          
Gerard J. Quinnan      70     1996-       2000            Consultant for the     
                              Present                     Company, 1990 to       
                                                          present; Vice          
                                                          President-General      
                                                          Manager of Ronson      
                                                          Consumer Products      
                                                          Corporation, 1981 to   
                                                          1990.                  
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                                          Positions and Offices
                                                               with Company
                                                          Presently Held (other
                                                          than that of Director);
                               Period                       Business Experience
                               Served   Term as           During Past Five Years
                                 as     Director           (with Company unless
 Name of Director     Age     Director  Expires              otherwise noted)
 ----------------     ---     --------  -------           ----------------------
<S>                    <C>    <C>        <C>              <C>                      
Justin P. Walder       63     1972-      2001             Secretary; Assistant   
                              Present                     Corporation Counsel; 
                                                          Member of Executive    
                                                          Committee and          
                                                          Nominating Committee;  
                                                          Principal in Walder,   
                                                          Sondak & Brogan, P.A., 
                                                          Attorneys at Law,      
                                                          Roseland, NJ.          
                                                                                 
Saul H. Weisman        73     1978-      2000             Member of Executive   
                              Present                     Committee and Audit   
                                                          Committee; Retired    
                                                          President, Jarett     
                                                          Industries, Inc.,     
                                                          Cedar Knolls, NJ, the 
                                                          principal business of 
                                                          which is the sale of  
                                                          hydraulic and         
                                                          pneumatic equipment to
                                                          industry, 1955 to     
                                                          1997.                 
</TABLE>
<PAGE>
(1) Mr.  Besser was  appointed on September  15, 1998,  to the Class II director
    position vacated due to the August 1998 resignation of Mr. Barton P. Ferris,
    Jr.

                    No director  also  serves as a director  of another  company
registered under the Securities Exchange Act of 1934.

(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, 2002:
<TABLE>
<CAPTION>
                                                     Positions and Offices
                              Period Served              with Company;
       Name          Age       as Officer            Family Relationships
-------------------  ---       ----------          ------------------------

<S>                  <C>         <C>             <C>                           
Louis V. Aronson II  76          1953-           President & Chief Executive
                                 Present         Officer; Chairman of
                                                 Executive Committee; Director.

Daryl K. Holcomb     48          1996-           Vice President;
                                 Present

                                 1993-           Chief Financial Officer;
                                 Present

                                 1988-           Controller and Treasurer; None.
                                 Present

Justin P. Walder     63          1989-           Secretary;
                                 Present

                                 1972-           Assistant Corporation Counsel;
                                 Present         Director; None.
</TABLE>

                    Messrs. L.V. Aronson and Holcomb have been employed by
        the Company in executive and/or professional capacities for at least
        the five-year period immediately preceding the date hereof.
        Mr. Walder has been Assistant Corporation Counsel and a director of
        the Company and a principal in Walder, Sondak & Brogan, P.A.,
        Attorneys at Law, for at least the five-year period immediately
        preceding the date hereof.

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

                    Under Securities and Exchange  Commission ("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.
<PAGE>

        Item 11 - EXECUTIVE COMPENSATION

        SUMMARY COMPENSATION TABLE

                    The  Summary   Compensation   Table  presents   compensation
        information  for the years ended  December 31, 1998,  1997 and 1996, for
        the Chief  Executive  Officer  and the other  executive  officer  of the
        Company whose combined base salary and bonus exceeded $100,000.

                           SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>        
                                                            Long-Term
                                                            Compensa-   All
                                      Annual Compensation      tion    Other
        Name and                      -------------------   ---------  Compen-
        Principal                     Salary        Bonus    Options/  sation
        Position              Year     ($)         ($)(1)    SARS (#)  ($)(2)
        --------              ----    -------------------   ---------  ------
<S>                           <C>    <C>          <C>       <C>       <C>    
    Louis V. Aronson II       1998   $494,773     $51,535       --    $11,204
        President & Chief     1997    462,405      39,597       --     10,446
        Executive Officer     1996    432,154      53,229   22,500     10,024

    Daryl K. Holcomb          1998    127,500      17,929       --      2,805
        Vice President &      1997    119,062      12,724       --      2,701
        Chief Financial       1996    111,687      15,969   10,000      2,500
        Officer, Controller
        & Treasurer
</TABLE>

        Footnotes

        (1) The  compensation  included  in the  bonus  column  is an  incentive
            payment  resulting  from the  attainment by the Company's  operating
            subsidiaries  of  certain  levels of net sales  and  profits  before
            taxes.

        (2) In 1998 All Other  Compensation  included  matching  credits  by the
            Company under its Employees' Savings Plan (Mr. L.V. Aronson,  $3,200
            and Mr.  Holcomb,  $2,805);  and the  cost  of term  life  insurance
            included in split-dollar life insurance  policies (Mr. L.V. Aronson,
            $8,004).


        OPTION GRANTS IN LAST FISCAL YEAR

                    None.


        AGGREGATED OPTION EXERCISES AND YEAR END OPTION VALUES

                    The  following  table  summarizes,  for  each  of the  named
        executive officers,  options exercised during the year and the number of
        stock options  unexercised at December 31, 1998. All options held by the
        named executives were  exercisable at December 31, 1998.  "In-the-money"
        options  are  those  where  the  fair  market  value  of the  underlying
        securities exceeds the exercise price of the options.
<PAGE>
        AGGREGATED  OPTION  EXERCISES  IN LAST  FISCAL  YEAR AND FISCAL YEAR END
        OPTION VALUES
<TABLE>
<CAPTION>
                                                                     Value of
                         Shares                   Number of        In-the-Money
                        Acquired              Unexercised Options    Options at
                           on      Value (1)     at FY-End (2)       FY-End (3)
         Name           Exercise   Realized       Exercisable       Exercisable            
         ----           --------   --------       -----------       -----------            

   <S>                   <C>       <C>             <C>               <C>   
   Louis V. Aronson II      --     $    --         22,500            $    --
   Daryl K. Holcomb      7,000      14,350         15,500             10,750
</TABLE>

        Footnotes

        (1) The value  realized  equals  the market  value of the  common  stock
            acquired on the date of exercise minus the exercise price.

        (2) The options  held by the named  executive  officers at December  31,
            1998,  are  exercisable  at any time and expire on May 22, 2000, and
            June 26, 2001.

        (3) The value of the unexercised options was determined by comparing the
            average of the bid and ask prices of the  Company's  common stock at
            December 31, 1998, to the option prices.  Options to purchase 15,500
            shares held by Mr. Holcomb were in-the-money at December 31, 1998.

                    LONG-TERM INCENTIVE PLANS

                    None.


                    PENSION PLAN

                    No named executive is a participant in a defined benefit
        pension plan of the Company.


                    COMPENSATION OF DIRECTORS

                    Directors  who are not  officers of the  Company  receive an
        annual fee of $8,500 and, in addition,  are  compensated  at the rate of
        $650 for each  meeting  of the  Company's  Board of  Directors  actually
        attended and $400 for each meeting of a Committee of the Company's Board
        of Directors  actually  attended.  Officers  receive no compensation for
        their services on the Board or on any Committee.

<PAGE>
                    EMPLOYMENT  CONTRACTS  AND  TERMINATION  OF  EMPLOYMENT  AND
        CHANGE-IN-CONTROL ARRANGEMENTS

                    Mr.  L.V.  Aronson II is a party to an  employment  contract
        with the Company dated September 21, 1978, which, as amended on July 24,
        1980, July 1, 1982, October 11, 1985, July 7, 1988, May 10, 1989, August
        22, 1991, May 22, 1995,  June 11, 1997, and December 17, 1998,  provides
        for a term expiring December 31, 2002. The employment  contract provides
        for the  payment  of a base  salary  which is to be  increased  7% as of
        January  1 of each  year.  It  also  provides  that  the  Company  shall
        reimburse Mr. L.V. Aronson for expenses, provide him with an automobile,
        and pay a death benefit equal to two years' salary. During 1990 Mr. L.V.
        Aronson  offered and accepted a 5% reduction in his base salary provided
        for by the terms of his  employment  contract,  and, in  addition,  a 7%
        salary increase due January 1, 1991, under the terms of the contract was
        waived.  During 1992 also,  Mr. L.V.  Aronson  offered and accepted a 7%
        reduction in his base  salary.  Effective  September  1, 1993,  Mr. L.V.
        Aronson  offered and accepted a further 5% reduction in his base salary.
        Under the employment contract, Mr. L.V. Aronson's full compensation will
        continue in the event of Mr. L.V. Aronson's  disability for the duration
        of the agreement or one full year,  whichever is later.  The  employment
        contract  also  provides  that if,  following  a Change in  Control  (as
        defined in the employment contract),  Mr. L.V. Aronson's employment with
        the Company  terminated under  prescribed  circumstances as set forth in
        the employment  contract,  the Company will pay Mr. L.V.  Aronson a lump
        sum equal to the base salary  (including the required  increases in base
        salary) for the remaining term of the employment contract.


                    COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

                    The  Board  of the  Company,  as a whole,  provides  overall
        guidance of the Company's executive compensation program. All members of
        the  Board  participate  in the  review  and  approval  of  each  of the
        components of the Company's  executive  compensation  program  described
        below,   except  that  no  director  who  is  also  a  Company  employee
        participates in the review and approval of his  compensation.  Directors
        of the Company who are also current employees of the Company are Messrs.
        L.V.  Aronson and Walder.  Directors  of the Company who are also former
        employees of the Company are Messrs. R.A. Aronson, whose employment with
        the Company ceased in 1987,  Ganz, who retired from the Company in 1993,
        and Quinnan, who retired from Ronson Consumer Products in 1990. Mr. Ganz
        has a  consulting  agreement  with the  Company  for the  period  ending
        December 31, 2000, which is cancellable at any time by either party with
        180 days notice and, effective January 1, 1999, provides compensation at
        the annual rate of $83,000 for the years  ending  December  31, 1999 and
        2000,  plus  participation  in the Company's  health and life  insurance
        plans and the use of an automobile.  Mr. Ganz's  compensation  under the
        agreement was $77,500 for the year ended  December 31, 1998. Mr. Quinnan
        has a  consulting  agreement  with the  Company  for the  period  ending
        December 31, 1999, which is cancellable at any time by either party with
        60  days  notice.  The  agreement  provides  that  Mr.  Quinnan  perform
        consulting  services  for the Company,  Ronson  Consumer  Products,  and
        Prometcor at a specified daily rate. In 1998 Mr. Quinnan was compensated
        $22,024 for his services and was provided the use of an automobile.
<PAGE>
        (a) Transactions with management and others.

                    During the year ended  December  31,  1998,  the Company and
        Ronson  Consumer  Products  were provided  printing  services by Michael
        Graphics,  Inc.,  a New Jersey  corporation,  amounting  to  $80,781.  A
        greater than 10%  shareholder  of Michael  Graphics is the son-in-law of
        the Company's President.

                    In  October  1998  the  Company  entered  into a  consulting
        agreement  with Mr. Carl W. Dinger III, a 5% shareholder of the Company.
        The agreement  provides that Mr. Dinger will perform certain  consulting
        services  for the  Company  for a period of 18 months at a fee of $4,500
        per month.  During the year ended  December  31,  1998,  Mr.  Dinger was
        compensated $13,500 under the agreement.

                    In October 1998 Mr. Dinger  granted an option to the Company
        to purchase the 186,666 shares of the Company's common stock held by Mr.
        Dinger.  The option is for a period of 18 months, and the exercise price
        of the option is $5.25 per  share.  The cost of the option is $5,500 per
        month for the  period  of the  option or until  exercised.  The  Company
        incurred a cost of $16,500  during the year ended  December 31, 1998. As
        part of the  option  agreement,  Mr.  Dinger  has  granted  the Board of
        Directors  of the  Company  an  irrevocable  proxy to vote the  optioned
        shares during the term of the option.

        (b) Certain business relationships.

                    During the year ended December 31, 1998, the Company,  RCPC,
        Ronson  Aviation and  Prometcor  retained  the firm of Walder,  Sondak &
        Brogan,  P.A.,  Attorneys at Law, to perform legal  services.  Justin P.
        Walder,  a  principal  in that firm,  is a director  and  officer of the
        Company.

<PAGE>
        Item 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

        (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's  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:
<TABLE>
<CAPTION>
        Name and Address                                                                 
         of Beneficial                    Title of        Beneficially        Percent of
            Owner                          Class             Owned              Class
        ----------------                  --------        ------------        ----------   
        <S>                               <C>            <C>      <C>        <C>   <C>   
        Louis V. Aronson II               Common         786,849 (1)(2)      24.4% (1)(2)
           Campus Drive                                                     
           P.O. Box 6707                                                    
           Somerset, New Jersey 08875                                       
                                                                            
        Ronson Corporation Retirement                                       
        Plan                              Common         171,300 (2)          5.4% (2)
           Campus Drive                                                     
           P.O. Box 6707                                                    
           Somerset, New Jersey 08875                                       
                                                                            
        Patrick Kintz                     Common         232,200 (3)          7.3% (3)
           8323 Misty Vale                                                  
           Houston, Texas 77075                                             
                                                                            
        Carl W. Dinger III                Common         184,666 (4)          5.8% (4)
           7 Lake Trail West                                                
           Morristown, New Jersey 07960                                     
                                                                            
        Steel Partners II, L.P.           Common         316,199 (5)          9.9% (5)
           750 Lexington Avenue                                             
           27th Floor                                                       
           New York, New York 10022
</TABLE>
                                                                            
        (1) Includes 22,500 shares of unissued common stock issuable to Mr. L.V.
            Aronson  upon  exercise of stock  options  held by Mr. L.V.  Aronson
            under the Ronson Corporation 1996 Incentive Stock Option Plan.

        (2) The Ronson  Corporation  Retirement Plan ("Retirement  Plan") is the
            beneficial  owner of 171,300 common  shares.  The shares held by the
            Retirement Plan are voted by the Retirement Plan's trustees, Messrs.
            L.V.  Aronson,  Ganz  and  Gedinsky.  If  the  shares  held  by  the
            Retirement  Plan were  included  in Mr.  L.V.  Aronson's  beneficial
            ownership,  Mr. L.V. Aronson's beneficial ownership would be 958,149
            shares,  or 29.8% of the class. If the shares held by the Retirement
            Plan were included in Mr. Ganz's  beneficial  ownership,  Mr. Ganz's
            beneficial  ownership would be 200,442 shares, or 6.3% of the class.
            If the  shares  held by the  Retirement  Plan were  included  in Mr.
            Gedinsky's beneficial ownership, Mr. Gedinsky's beneficial ownership
            would be 171,300 shares or 5.4% of the class. The Retirement  Plan's
            holdings were reported in 1988 on Schedule 13G, as amended September
            22, 1997.


<PAGE>
        (3) 232,200 common shares owned directly. This information was provided
             to the Company by Mr. Kintz.

        (4) 184,666 common shares owned directly.  This information was provided
            to the Company by Mr. Dinger.  Mr. Dinger has provided the Company's
            Board of Directors  with an  irrevocable  proxy to vote these shares
            (refer to  "Transactions  with  Management  and  Others"  in Item 11
            above).

        (5) 316,199  common  shares  owned  by Steel  Partners  II,  L.P., Steel
            Partners,  L.L.C.,  the general  partner of Steel Partners II, L.P.,
            and Mr.  Warren G.  Lichtenstein,  the sole  executive  officer  and
            managing  member  of Steel  Partners,  L.L.C.,  are also  beneficial
            owners of the shares.  This information was obtained from a Schedule
            13D  filed  with  the  SEC by  Steel  Partners  II,  L.P.,  and  Mr.
            Lichtenstein.

        (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 and the  percentage of the
        total shares of common stock outstanding owned by each individual and by
        the  group  shown  in  the  table.  Individuals  have  sole  voting  and
        investment power over the stock shown unless otherwise  indicated in the
        footnotes:

<TABLE>
<CAPTION>
        Name of Individual or    Amount and Nature of       Percent of
          Identity of Group     Beneficial Ownership(2)       Class
        ---------------------   ----------------------      ----------
        <S>                           <C>     <C>              <C>  
        Louis V. Aronson II           786,849 (3)              24.4%

        Robert A. Aronson               6,995                   (1)

        Albert G. Besser                  700                   (1)

        Erwin M. Ganz                  29,142 (3)               (1)

        Gerard J. Quinnan               3,500                   (1)

        Justin P. Walder               47,503                   1.5%

        Saul H. Weisman                15,343                   (1)

        Daryl K. Holcomb               33,270                   1.0%

        All Directors and
        Officers as a group
        (nine (9) individuals
        including those named above)  927,502                  28.6%
</TABLE>

<PAGE>
        (1) Shares  owned   beneficially  are  less  than  1%  of  total  shares
            outstanding.

        (2) Shares listed as owned beneficially include 46,500 shares subject to
            option under the Ronson  Corporation  1987 and 1996 Incentive  Stock
            Option Plans as follows:
<TABLE>
<CAPTION>
                                             Common Shares
                                              Under Option
                                             -------------

            <S>                                 <C>   
            Louis V. Aronson II                 22,500

            Justin P. Walder                     5,000

            Daryl K. Holcomb                    15,500

            All Directors and Officers
            as a group (nine (9)
            individuals including
            those named above)                  46,500
</TABLE>
            
        (3) Does not include  171,300 shares of issued common stock owned by the
            Retirement Plan. The shares held by the Retirement Plan are voted by
            the Plan's trustees, Messrs. L.V. Aronson, Ganz and Gedinsky. If the
            shares  held  by the  Retirement  Plan  were  included  in Mr.  L.V.
            Aronson's  beneficial  ownership,   Mr.  L.V.  Aronson's  beneficial
            ownership  would be 958,149  shares,  or 29.8% of the class.  If the
            shares  held by the  Retirement  Plan were  included  in Mr.  Ganz's
            beneficial  ownership,  Mr.  Ganz's  beneficial  ownership  would be
            200,442 shares, or 6.3% 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

                    Refer  to  Compensation  Committee  Interlocks  and  Insider
        Participation in Item 11 - Executive  Compensation above for information
        in response to (a) and (b) of this Item.

        (c) Indebtedness of management.

                    None.

        (d) Transactions with promoters.

                    Not applicable.


<PAGE>
                                     PART IV

        Item 14 - EXHIBITS,  FINANCIAL  STATEMENT  SCHEDULES  AND REPORTS ON 
                  FORM 8-K

        (a) (1) and (2) - The  response to this  portion of Item 14 is submitted
        as a separate  section of this  report.  

            (3)  Listing of exhibits, as applicable.

                   (3) Articles  of  incorporation  are  incorporated  herein by
        reference.  The By-Laws of the Company were amended on March 5, 1997, to
        include a new Section 9 of Article I, Nomination for Board of Directors.
        The amended  By-Laws were filed as Exhibit 3 with the 1996 Form 10-K and
        are incorporated herein by reference.

                        Reference  is  made  to  Company's  Form  S-2  filed  on
        September 18, 1987, and incorporated herein by reference.

                        Reference is made to  Company's  Form S-2 filed on April
        8, 1988, and incorporated herein by reference.

                   (10) Material contracts.

                        On January 6, 1995,  RCPC entered into an agreement with
        Summit  for a  Revolving  Loan and a Term Loan.  On March 6,  1997,  the
        Revolving  Loan was amended and  extended to June 30,  2000.  On July 8,
        1997,  the  Revolving  Loan was further  amended to provide  $400,000 in
        additional loan  availability.  The 1995 agreements were attached to the
        Company's  1994  Form  10-K as  Exhibits  10(a)-10(f).  The  March  1997
        amendments  to the Revolving  Loan were  attached to the Company's  1996
        Form 10-K as Exhibits 10(a)-10(c).  The July 1997 amendment was attached
        to the Company's September 30, 1997, Form 10-Q as Exhibit 10(g).

                        On December 1, 1995, the Company and RCPC entered into a
        mortgage loan agreement with Summit. The agreements were attached to the
        Company's 1995 Form 10-K as Exhibits 10(a) and 10(b).

                        On August 28,  1997,  Ronson  Aviation  entered  into an
        agreement  with  Summit  for a  Revolving  Loan  and a  Term  Loan.  The
        Revolving Loan and Term Loan  agreements  were attached to the Company's
        September 30, 1997, Form 10-Q as Exhibits 10(a)-10(f).

                        For further  information on Company's  loan  agreements,
        reference  is  made  to  Notes  4 and 5 of  the  Notes  to  Consolidated
        Financial Statements contained in the Company's financial statements for
        the year ended  December  31, 1998,  filed with this report  pursuant to
        Item 8, which is incorporated herein by reference.

                        The Company is a party to an  employment  contract  with
        Mr.  Louis V. Aronson II dated  December  21, 1978,  as amended July 24,
        1980, July 1, 1982, October 11, 1985, July 7, 1988, May 10, 1989, August
        22, 1991,  May 22,  1995,  June 11,  1997,  and December 17, 1998.  This
        contract is  incorporated  herein by reference as filed as Exhibit 10.16
        to  Registration  Statement No. 33-13696 on Form S-2 dated September 18,
        1987.  The  amendment  dated  December 17, 1998,  is attached  hereto as
        Exhibit 10(a).
<PAGE>
                 (a) The Summary of the Management Incentive Plan of the Company
        and its subsidiaries is attached as Exhibit 10(b).

                   (20) Other documents or statements to security holders.

                        The Ronson Corporation Notice of Meeting of Stockholders
        held on October 27, 1998, and Proxy Statement was filed on September 29,
        1998, and is incorporated herein by reference.

                        On November  15,  1996,  the Company  issued an offer to
        exchange up to 1,423,912 aggregate shares of its common stock for all of
        the  837,595  issued  and  outstanding  shares  of  its  12%  Cumulative
        Convertible   Preferred   Stock.  For  each  share  of  preferred  stock
        exchanged,  the Company offered to issue 1.7 shares of common stock. The
        terms  and  conditions  of the  offer are more  fully  described  in the
        Offering  Circular and the accompanying  Letter of Transmittal  filed on
        November 15,  1996,  which are  incorporated  herein by  reference.  The
        Exchange Offer terminated September 30, 1997.

                   (21) Subsidiaries of the Company.

                        The Company is the owner of 100% of the voting  power of
        the   following   subsidiaries,   each  of  which  is  included  in  the
        consolidated financial statements of the Company:

<TABLE>
<CAPTION>
   Wholly Owned Subsidiary              State or Other Jurisdiction
   and Business Name                    of Incorporation or Organization
   -----------------------              --------------------------------

   Domestic

   <S>                                              <C>
   Ronson Consumer Products Corporation             New Jersey
   Ronson Aviation, Inc.                            New Jersey
   Prometcor, Inc. (formerly known as               New Jersey
        Ronson Metals Corporation)

   Foreign

   Ronson Corporation of Canada, Ltd.               Canada
</TABLE>

<PAGE>
                        The Company also holds 100% of the voting power of three
        additional subsidiaries which are included in its consolidated financial
        statements  and  which,  if  considered  in the  aggregate  as a  single
        subsidiary, would not constitute a significant subsidiary.

                        (23) Consent of experts and counsel  attached  hereto as
        Exhibit 23(a).

                        (99) Additional exhibits.

                       None.

        (b) Reports on Form 8-K filed in the fourth quarter of 1998.

                        On October 30,  1998,  and on  November  13,  1998,  the
        Company  filed  reports  on Form 8-K with the  Securities  and  Exchange
        Commission providing  information in response to Item 5 of such reports.
        No financial statements or pro forma financial  information was included
        in these reports.

        (c) Exhibits - The response to this portion of Item 14 is submitted as a
        separate section of this report. (See Item (a) (3).)

        (d) Financial Statement Schedules - The response to this portion of Item
        14 is submitted as a separate section of this report.




<PAGE>
                                   SIGNATURES

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

   Dated:  March 29, 1999       By:     /s/Louis V. Aronson II
                                        ------------------------------------
                                        Louis V. Aronson II, President and
                                        Chief Executive Officer and Director
                                    
                                    
                   
   Dated:  March 29, 1999       By:     /s/Daryl K. Holcomb
                                        ------------------------------------
                                        Daryl K. Holcomb, Vice President &
                                        Chief Financial Officer, Controller
                                        and Treasurer
                                      
                     

   Dated:  March 29, 1999       By:     /s/Justin P. Walder
                                        ------------------------------------
                                        Justin P. Walder, Secretary and
                                        Director
                                  
                                  
                                        
   Dated:  March 29, 1999       By:     /s/Robert A. Aronson
                                        ------------------------------------
                                        Robert A. Aronson, Director



   Dated:  March 29, 1999       By:     /s/Albert G. Besser
                                        ------------------------------------
                                        Albert G. Besser, Director



   Dated:  March 29, 1999       By:     /s/Erwin M. Ganz
                                        ------------------------------------
                                        Erwin M. Ganz, Director



   Dated:  March 29, 1999       By:     /s/Gerard J. Quinnan
                                        ------------------------------------
                                       Gerard J. Quinnan, Director



   Dated:  March 29, 1999       By:     /s/Saul H. Weisman
                                        ------------------------------------
                                        Saul H. Weisman, Director
<PAGE>

                           ANNUAL REPORT ON FORM 10-K

                    ITEM 8, ITEM 14 (a) (1) and (2), and (d)

                   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES


                          YEAR ENDED DECEMBER 31, 1998




                               RONSON CORPORATION

                              SOMERSET, NEW JERSEY


<PAGE>
              RONSON CORPORATION FIVE-YEAR SELECTED FINANCIAL DATA
              ----------------------------------------------------
                  Dollars in thousands (except per share data)

<TABLE>
<CAPTION>                                                         
                                     1998        1997       1996       1995        1994
                                     ----        ----       ----       ----        ----     

<S>                                <C>         <C>        <C>         <C>        <C>    
        Net sales                  $23,173     $23,170    $25,454     $26,953    $25,583
        Earnings from continuing
          operations                   660         783        335       1,500      1,074
        Total assets                14,602      13,519     12,104      13,403     11,887
        Long-term obligations        4,195       4,222      2,963       3,312      2,389
        Per common share (1,2):
          Earnings from continuing
            operations:
               Basic                  0.20        0.26       0.09        0.77       0.52
               Diluted                0.20        0.25       0.09        0.57       0.42
</TABLE>

        (1)    Basic  Earnings per Common Share assumes no conversion of
               preferred shares to common shares and Diluted Earnings per Common
               Share assumes full  conversion of all preferred  shares to common
               and includes the dilutive  effect of  outstanding  stock options.
               The  assumed  conversion  of  preferred  shares to common and the
               exercise of stock options were  anti-dilutive for the years ended
               December 31, 1998 and 1996,  and,  therefore,  they were excluded
               from the  computation  of Diluted  Earnings  per Common Share for
               those years.

        (2)    No  dividends  on common  stock were  declared or paid during the
               five years ended December 31, 1998.


<PAGE>








   FORM 10-K -- ITEM 14 (a) (1) and (2)

   RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES

   LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES


   The following consolidated financial statements of Ronson Corporation and its
   wholly owned subsidiaries are included in Item 8:


        Consolidated Balance Sheets - December 31, 1998 and 1997

        Consolidated Statements of Operations - Years Ended
                December 31, 1998, 1997 and 1996

        Consolidated Statements of Changes in Stockholders' Equity - Years Ended
                December 31, 1998, 1997 and 1996

        Consolidated  Statements of Cash Flows - Years Ended  
                December 31, 1998, 1997 and 1996

        Notes to Consolidated Financial Statements

   The  following   consolidated   financial   statement   schedules  of  Ronson
   Corporation  and its wholly owned  subsidiaries  to be included in Item 14(d)
   will be filed by the Company by amendment before April 30, 1999:


        Schedule I              Condensed Financial Information
                                        of Company

        Schedule II             Valuation and Qualifying Accounts

<PAGE>
                          INDEPENDENT AUDITORS' REPORT


   The Board of Directors and Stockholders
   Ronson Corporation

   We have  audited  the  accompanying  consolidated  balance  sheets  of Ronson
   Corporation  and  subsidiaries  as of  December  31,  1998 and 1997,  and the
   related consolidated statements of operations, changes in stockholders'equity
   and cash flows for each of the years in the three-year  period ended December
   31, 1998. 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  generally  accepted  auditing
   standards.  Those  standards  require  that we plan and perform the audits 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 financial statements referred to above present fairly, in
   all  material  respects,   the  consolidated  financial  position  of  Ronson
   Corporation  and  subsidiaries  as of  December  31,  1998 and 1997,  and the
   consolidated  results  of  their  operations  for  each of the  years  in the
   three-year  period  ended  December  31, 1998 in  conformity  with  generally
   accepted accounting principles.


/s/DEMETRIUS & COMPANY, L.L.C.
------------------------------
   DEMETRIUS & COMPANY, L.L.C.

   Wayne, New Jersey
   March 12, 1999
<PAGE>
<TABLE>
<CAPTION>
RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES                        

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


                      ASSETS 
                      ------                                        December 31,                      
                                                                 ---------------- 
                                                                 1998        1997  
                                                                 ----        ----  
<S>                                                            <C>         <C>    
CURRENT ASSETS:
Cash and cash equivalents ................................     $   146     $    32
Accounts receivable, less allowances for doubtful accounts
  of: 1998, $90; 1997, $76 ...............................       1,777       1,865

Inventories:
  Finished goods .........................................       2,189       2,260
  Work in process ........................................          66          62
  Raw materials ..........................................         429         695
                                                               -------     -------
                                                                 2,684       3,017
Other current assets .....................................         765         527

Current assets of discontinued operations ................         682         387
                                                               -------     -------
      TOTAL CURRENT ASSETS ...............................       6,054       5,828

PROPERTY, PLANT AND EQUIPMENT:
Land .....................................................          19          19
Buildings and improvements ...............................       3,740       3,742
Machinery and equipment ..................................       7,456       7,071
Construction in progress .................................         471          61
                                                               -------     -------
                                                                11,686      10,893

Less accumulated depreciation and amortization ...........       5,879       5,424
                                                               -------     -------
                                                                 5,807       5,469

INTANGIBLE PENSION ASSETS ................................         256         320

OTHER ASSETS .............................................       1,202         843

OTHER ASSETS OF DISCONTINUED OPERATIONS ..................       1,283       1,059
                                                               -------     -------
                                                               $14,602     $13,519
                                                               =======     =======
</TABLE>
See notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES
                                                                                                    
CONSOLIDATED BALANCE SHEETS
---------------------------
Dollars in thousands (except share data)
                                                                                                    
   LIABILITIES AND STOCKHOLDERS' EQUITY                                          
   ------------------------------------                                        December 31,           
                                                                            -----------------   
                                                                              1998      1997   
                                                                              ----      ----   
 <S>                                                                        <C>       <C>         
  CURRENT LIABILITIES:                                              
  Short-term debt .............................................             $ 2,209   $ 2,713
  Current portion of long-term debt ...........................                 392       368
  Current portion of lease obligations ........................                  97        91
  Accounts payable ............................................               1,941     1,431
  Accrued expenses ............................................               1,790     1,724
  Current liabilities of discontinued operations ..............               1,833     1,106
                                                                            -------   -------
       TOTAL CURRENT LIABILITIES ..............................               8,262     7,433
                                                                    
  LONG-TERM DEBT ..............................................               3,649     3,561
                                                                    
  LONG-TERM LEASE OBLIGATIONS .................................                 112       183
                                                                    
  PENSION OBLIGATIONS .........................................                 239       394
                                                                    
  OTHER LONG-TERM LIABILITIES .................................                  34        36
                                                                    
  LONG-TERM LIABILITIES OF DISCONTINUED OPERATIONS ............                 161        48
                                                                    
  COMMITMENTS AND CONTINGENCIES                                    

  STOCKHOLDERS' EQUITY:
  Preferred stock, no par value, authorized 5,000,000 shares:
    12% cumulative convertible, $0.01 stated value; outstanding 
    1998 and 1997, 36,518 .....................................                  --        --   

  Common stock par value $1                          

<CAPTION>
                                              1998              1997           
                                              ----              ----           
<S>                                        <C>               <C>            <C>       <C>   
  Authorized shares ...................... 11,848,106        11,848,106
  Reserved shares ........................    125,218           139,618
  Issued (including treasury) ............  3,259,507         3,225,607       3,260     3,226

Additional paid-in capital ...............                                   29,007    28,991 
Accumulated deficit ......................                                  (27,442)  (27,153)
Accumulated other comprehensive deficit ..                                   (1,086)   (1,606)
                                                                            -------   -------
                                                                              3,739     3,458
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES
                                                                                                    
CONSOLIDATED BALANCE SHEETS
---------------------------
Dollars in thousands (except share data)
                                                                                                    
   LIABILITIES AND STOCKHOLDERS' EQUITY                                          
   ------------------------------------                                        December 31,           
                                                                            ------------------   
                                                                             1998        1997   
                                                                             ----        ----   
 <S>                                                                        <C>        <C>         
Less cost of treasury shares:
  1998, 62,365 and 1997, 62,332 common shares .                               1,594      1,594
                                                                            -------    -------
  TOTAL STOCKHOLDERS' EQUITY ..................                               2,145      1,864
                                                                            -------    -------
                                                                            $14,602    $13,519
                                                                            =======    =======
</TABLE>

See notes to consolidated financial statements. 
<PAGE>
<TABLE>
<CAPTION>
RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------
Dollars in thousands (except per share data)
                                                              Year Ended December 31,
                                                         --------------------------------
                                                         1998          1997          1996
                                                         ----          ----          ----
<S>                                                    <C>           <C>           <C>     
NET SALES ........................................     $ 23,173      $ 23,170      $ 25,454
                                                       --------      --------      --------
Cost and expenses:
  Cost of sales ..................................       13,865        14,504        16,522
  Selling, shipping and advertising ..............        3,586         3,613         3,650
  General and administrative .....................        3,840         3,384         3,196
  Depreciation and amortization ..................          532           490           551
                                                       --------      --------      -------- 
                                                         21,823        21,991        23,919
                                                       --------      --------      -------- 
EARNINGS FROM CONTINUING OPERATIONS BEFORE
  INTEREST AND OTHER ITEMS .......................        1,350         1,179         1,535
                                                       --------      --------      -------- 
Other expense:
  Interest expense ...............................          645           523           762
  Other-net ......................................          185           107           567
                                                       --------      --------      --------
                                                            830           630         1,329
                                                       --------      --------      --------      
EARNINGS FROM CONTINUING OPERATIONS
  BEFORE INCOME TAXES ............................          520           549           206

Income tax benefits-net ..........................          140           234           129
                                                       --------      --------      -------- 
EARNINGS FROM CONTINUING OPERATIONS ..............          660           783           335

Loss from discontinued operations (net of tax
  benefits of: 1998, $557; 1997, $132; 1996, $180)         (949)           --        (1,190)
                                                       --------      --------      --------

NET EARNINGS (LOSS) ..............................     $   (289)     $    783      $   (855)
                                                       ========      ========      ========
EARNINGS (LOSS) PER COMMON SHARE:

Basic:
  Earnings from continuing operations ............     $   0.20      $   0.26      $   0.09
  Loss from discontinued operations ..............        (0.30)           --         (0.66)
                                                       --------      --------      -------- 
  Net earnings (loss) ............................     $  (0.10)     $   0.26      $  (0.57)
                                                       ========      ========      ======== 
Diluted:
  Earnings from continuing operations ............     $   0.20      $   0.25      $   0.09
  Loss from discontinued operations ..............        (0.30)           --         (0.66)
                                                       --------      --------      -------- 
  Net earnings (loss) ............................     $  (0.10)     $   0.25      $  (0.57)
                                                       ========      ========      ======== 
</TABLE>
See notes to consolidated financial statements.  
<PAGE>
<TABLE>
<CAPTION>
RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
----------------------------------------------------------
For the Years Ended December 31, 1998, 1997 and 1996 
Dollars in thousands
                                      
                                                                                                
                                                                                               Accumu 
                              12% Cumulative                                                   lated        
                                Convertible                                            Compre   Other         Treasury Stock
                              Preferred Stock   Common Stock    Additional             hensive Compre            (at cost)
                              --------------- ----------------   Paid-in   Accumulated Income  hensive    --------------------------
                               Shares Amount  Shares    Amount   Capital     Deficit   (Loss)  Deficit   Shares  Amount      Total
                              ------------------------------------------------------------------------------------------------------
<S>                            <C>      <C>  <C>        <C>      <C>       <C>         <C>     <C>       <C>    <C>         <C>    
Balance at December 31, 1995   847,308  $ 8  1,820,893  $ 1,821  $ 30,308  $ (27,081)          $ (1,429) 62,087 $ (1,593)   $ 2,034
                               -------  ---  ---------  -------  --------  ---------           --------  ------ --------    -------
Net loss - 1996                                                                 (855)  $ (855)                                 (855)
                                                                                       ------                               
Translation adjustment                                                                    (10)                              
Pensions                                                                                  (38)                              
                                                                                       ------                               
Other comprehensive loss                                                                  (48)      (48)                        (48)
                                                                                       ------                               
Comprehensive loss                                                                     $ (903)                              
                                                                                       ======                               
Stock options exercised                         33,333       33        47                                                        80
Conversion                      (9,713)  --      9,713       10       (10)                                                       --
Treasury shares                                                                                              18       (1)        (1)
                               -------  ---  ---------  -------  --------  ---------           --------  ------ --------    -------
Balance at December 31, 1996   837,595    8  1,863,939    1,864    30,345    (27,936)            (1,477) 62,105   (1,594)     1,210
                               -------  ---  ---------  -------  --------  ---------           --------  ------ --------    -------
Net earnings - 1997                                                              783   $  783                                   783
                                                                                       ------                               
Translation adjustment                                                                    (25)                              
Pensions                                                                                 (104)                              
                                                                                       ------                               
Other comprehensive loss                                                                 (129)     (129)                       (129)
                                                                                       ------                               
Comprehensive income                                                                   $  654                               
                                                                                       ======                               
Exchange offer                (800,844)  (8) 1,361,435    1,362    (1,354)                                                       --
Conversion                        (233)  --        233       --                                                                  --
Treasury shares                                                                                             227       --         --
                               -------  ---  ---------  -------  --------  ---------           --------  ------ --------    -------
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
----------------------------------------------------------
For the Years Ended December 31, 1998, 1997 and 1996
Dollars in thousands
                                                                                                
                                                                                               Accumu 
                              12% Cumulative                                                   lated        
                                Convertible                                            Compre  Other            Treasury Stock
                              Preferred Stock   Common Stock    Additional             hensive Compre             (at cost)
                              --------------- ----------------   Paid-in   Accumulated Income  hensive   ---------------------------
                               Shares Amount  Shares    Amount   Capital     Deficit   (Loss)  Deficit   Shares  Amount      Total
                             ------------------------------------------------------------------------------------------------------
<S>                             <C>      <C>  <C>        <C>      <C>       <C>         <C>     <C>       <C>    <C>         <C>    
Balance at December 31, 1997    36,518   --  3,225,607    3,226    28,991    (27,153)            (1,606) 62,332   (1,594)     1,864
                               -------  ---  ---------  -------  --------  ---------           --------  ------ --------    -------
Net loss - 1998                                                                 (289)  $ (289)                                 (289)
                                                                                         ----                               
Translation adjustment                                                                    (35)                              
Pensions                                                                                  555                               
                                                                                         ----                               
Other comprehensive income                                                                520       520                         520
                                                                                         ----                               
Comprehensive income                                                                   $  231                               
                                                                                         ====                               
Shares issued for:                                                                                                          
  Stock options exercised                       13,900       14         3                                                        17
  Other                                         20,000       20        30                                                        50
Stock option purchased                                                (17)                                                      (17)
Treasury shares                                                                                              33         --       --
                               -------  ---  ---------  -------  --------  ---------           --------  ------   --------  -------
Balance at December 31, 1998    36,518  $--  3,259,507  $ 3,260  $ 29,007  $ (27,442)          $ (1,086) 62,365   $ (1,594)   2,145
                               =======  ===  =========  =======  ========  =========           ========  ======   ========  =======
</TABLE>
See notes to consolidated financial statements.           
<PAGE>
<TABLE>
<CAPTION>
RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES
                                                                          
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
Dollars in thousands
                                                                   Year Ended December 31,
                                                               ------------------------------
                                                               1998         1997         1996
                                                               ----         ----         ----
<S>                                                         <C>          <C>          <C>     
Cash Flows from Operating Activities:
Net earnings (loss) ....................................    $  (289)     $   783      $  (855)
Adjustments to reconcile net earnings (loss) to net
   cash provided by operating activities:
   Depreciation and amortization .......................        532          490          551
   Deferred income tax benefits ........................       (727)        (225)        (390)
   Increase (decrease) in cash from changes in:
      Accounts receivable ..............................         88         (248)         323
      Inventories ......................................        426          737        1,412
      Other current assets .............................        (93)         (73)         133
      Accounts payable .................................        417          (46)          49
      Accrued expenses .................................         21          (72)         (84)
   Net change in pension-related accounts ..............        209          (56)         (30)
   Other ...............................................        (54)          57          137
   Discontinued operations .............................        864         (791)         685
                                                            -------      -------      -------

      Net cash provided by operating activities ........      1,394          556        1,931
                                                            -------      -------      -------
Cash Flows from Investing Activities:
      Net cash used in investing activities,
       capital expenditures ............................       (845)      (2,138)        (504)
                                                            -------      -------      -------
Cash Flows from Financing Activities:
Proceeds from long-term debt ...........................        489        2,085          400
Proceeds from short-term debt ..........................      1,085        1,431        1,847
Proceeds from exercise of stock options ................         17           --           80
Proceeds from issuance of common stock .................         50           --           --
Payments of long-term debt .............................       (377)        (970)        (665)
Payments of long-term lease obligations ................        (93)        (110)         (78)
Payments of short-term debt ............................     (1,589)        (938)      (2,959)
Other ..................................................        (17)          --           --
                                                            -------      -------      -------
      Net cash provided by (used in)
         financing activities ..........................       (435)       1,498       (1,375)
                                                            -------      -------      -------
Net increase (decrease) in cash ........................        114          (84)          52

Cash at beginning of year ..............................         32          116           64
                                                            -------      -------      -------

Cash at end of year ....................................    $   146      $    32      $   116
                                                            =======      =======      =======
</TABLE>
See notes to consolidated financial statements.
<PAGE>
   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

   Note 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

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

        Estimates - The  preparation of financial  statements in conformity with
   generally  accepted   accounting   principles  requires  management  to  make
   estimates  and  assumptions  that affect the  reported  amounts of assets and
   liabilities  and  disclosure  of  contingent  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.

        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 estimated
   useful  lives using the  straight-line  method.  Leasehold  improvements  are
   amortized  over their  estimated  useful lives or the remaining  lease terms,
   whichever  is shorter.  At December  31,  1998 and 1997,  aircraft  and other
   related costs utilized by Ronson Aviation in its charter  operations and held
   for more than one year were classified as property,  plant and equipment. The
   term  notes  payable  secured  by  the  above-mentioned  aircraft  were  also
   classified as long-term debt.

        Inventories - Inventories,  other than aircraft, are valued at the lower
   of average  cost or  market.  Aircraft  inventory  is carried at the lower of
   cost, specific identification, or market.

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

        Fair Value of Financial  Instruments - The Company has adopted Statement
   of Financial Accounting Standards ("SFAS") #107 "Disclosures about Fair Value
   of Financial  Instruments"  which  requires all entities to disclose the fair
   value of financial  instruments  for which it is practicable to estimate fair
   value.
<PAGE>
        The Company's financial  instruments include cash, accounts  receivable,
   accounts  payable,   accrued  expenses  and  other  current  liabilities  and
   long-term  debt.  The book  values  of cash,  accounts  receivable,  accounts
   payable and accrued expenses and other current liabilities are representative
   of their fair values due to the short-term maturity of these instruments. The
   book value of the Company's  long-term debt is considered to approximate  its
   fair value, based on current market rates and conditions.

        Research  and  Development  Costs - Costs of  research  and new  product
   development   are  charged  to   operations   as  incurred  and  amounted  to
   approximately  $164,000,  $141,000 and $134,000 for the years ended  December
   31, 1998, 1997 and 1996, respectively.

        Advertising  Costs - Costs of  advertising  are expensed as incurred and
   amounted to approximately $295,000, $446,000 and $561,000 for the years ended
   December 31, 1998, 1997 and 1996, respectively.

        Income  Taxes - In  accordance  with SFAS #109,  "Accounting  for Income
   Taxes",  in 1998, 1997 and 1996, the Company recorded net deferred income tax
   assets of $727,000, $225,000 and $390,000, respectively.

        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):
<TABLE>
<CAPTION>


                                              Year Ended December 31, 1998
                                              ----------------------------
                                              Earnings           Per Share
                                               (Loss)    Shares    Amount
                                              --------   ------  ---------
<S>                                           <C>         <C>    <C>      
   Earnings from continuing
     operations.........................      $    660
   Less accrued dividends on
     preferred stock....................            (8)
                                              --------          
   Continuing operations................           652    3,183  $   0.20
   Loss from discontinued operations....          (949)   3,183     (0.30)
                                              --------           --------
     BASIC                                    $   (297)   3,183  $  (0.10)
                                              ========    =====  ========

   Effect of dilutive securities (1):
     Stock options......................                     --
     Cumulative convertible
      preferred stock...................            --       --
                                              --------    -----
   Continuing operations................           652    3,183  $   0.20
   Loss from discontinued operations....          (949)   3,183     (0.30)
                                              --------           --------
     DILUTED                                  $   (297)   3,183  $  (0.10)
                                              ========    =====  ========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                              Year Ended December 31, 1997
                                              ----------------------------
                                                                 Per Share
                                              Earnings   Shares    Amount
                                              --------   ------  ---------
<S>                                           <C>         <C>      <C>      
   Earnings from continuing
     operations.........................      $    783                      
   Less accrued dividends on                                                
     preferred stock....................            (8)                     
                                              --------                      
   Continuing operations................           775    2,958    $  0.26  
   Loss from discontinued operations....            --    2,958         --  
                                              --------             -------  
                                                                            
     BASIC                                         775    2,958    $  0.26  
                                              ========    =====    =======  
                                                                            
   Effect of dilutive securities:                                           
     Stock options......................                     11             
     Cumulative convertible                                                 
      preferred stock...................             8      161             
                                              --------    -----             
   Continuing operations................           783    3,130    $   0.25 
   Loss from discontinued operations....            --    3,130          -- 
                                              --------             -------- 
     DILUTED                                  $    783    3,130    $   0.25 
                                              ========    =====    ======== 
</TABLE>                                                           
<PAGE>
<TABLE>
<CAPTION>
                                              Year Ended December 31, 1996
                                              ----------------------------
                                               Earnings         Per Share
                                               (Loss)    Shares   Amount
                                              --------  -------  --------
  <S>                                         <C>         <C>      <C>    
  Earnings from continuing
     operations.........................      $    335
   Less accrued dividends on
     preferred stock....................          (176)
                                              --------
   Continuing Operations................           159    1,792    $ 0.09
   Loss from discontinued operations....        (1,190)   1,792     (0.66)
                                              --------              ----- 

     BASIC                                    $ (1,031)   1,792    $(0.57)
                                              ========    =====    ====== 

   Effect of dilutive securities (1):
     Stock options......................                     --
     Cumulative convertible
      preferred stock...................            --       --
                                              --------    -----            
   Continuing Operations................           159    1,792    $ 0.09
   Loss from discontinued operations....        (1,190)   1,792     (0.66)
                                              --------              ----- 

     DILUTED                                  $ (1,031)   1,792    $(0.57)
                                              ========    =====    ====== 
</TABLE>
<PAGE>

    (1) The assumed  conversion  of  preferred  shares to common  shares and the
        stock options were  anti-dilutive  for the years ended December 31, 1998
        and  1996,  and,  therefore,  were  excluded  from the  calculation  and
        reconciliation  of Diluted  Earnings  (Loss) per Common  Share for those
        periods.

        Stock Options - The Company has elected to follow Accounting  Principles
   Board Opinion #25, "Accounting  for Stock Issued to Employees" (APB #25), and
   related Interpretations in accounting for its employee stock options because,
   as discussed below, the alternative fair value accounting  provided for under
   SFAS #123, "Accounting for Stock-Based Compensation",  requires use of option
   valuation  models that were not developed for use in valuing  employee  stock
   options.  Under APB #25, because the exercise price of the Company's employee
   stock options equals or exceeds the market price of the  underlying  stock on
   the date of grant, no compensation expense is recognized.

        On November 15, 1996, the Company issued an offer to exchange 1.7 shares
   of its common stock for each share of preferred stock outstanding.  After the
   expiration  of the offer on September  30,  1997,  the Company had accepted a
   total  of  800,844  shares  of  preferred  stock  and had  issued  a total of
   1,361,435  shares of common stock in exchange  under the  Company's  Exchange
   Offer.  At December 31, 1998,  the Company had  outstanding  36,518 shares of
   preferred stock and 3,197,142 shares of common stock.


   Note 2.  DISCONTINUED OPERATIONS:

                The  Loss  from  Discontinued   Operations  included  the  costs
   recorded by the Company related to the discontinuance of Prometcor as follows
   (in thousands):
<TABLE>
<CAPTION>
                                                   Year Ended December 31,    
                                                 1998        1997      1996
                                                 ----        ----      ----
                                             
        <S>                                     <C>         <C>       <C>   
        Discontinuance costs accrued .......    $1,506      $   --    $1,370

         Deferred income tax benefit ........      (557)         --      (180)
                                                ------      ------    ------
                                             
        Loss from Discontinued Operations ..    $  949      $   --    $1,190
                                                ======      ======    ======
</TABLE>                                 

                In December 1989 the Company  adopted a plan to discontinue  the
   operations  of  its  wholly  owned  subsidiary,  Ronson  Metals  Corporation,
   subsequently renamed Prometcor.  Upon the cessation of operations,  Prometcor
   began its compliance  with the  environmental  requirements of the New Jersey
   Industrial  Site  Recovery  Act  ("ISRA")  administered  by  the  New  Jersey
   Department of Environmental  Protection  ("NJDEP") and other applicable State
   laws with the objective of selling the land and existing buildings previously
   used in the discontinued  operations.  The  discontinuance of operations also
   required the  termination  of a United States Nuclear  Regulatory  Commission
   ("NRC")  license  obtained  in  1984  for  the  storage  and use on site of a
   radioactive  element  to be used in a new  product,  the sales of which  were
   minimal.
<PAGE>
                The total  costs and  expenses  related  to the  termination  of
   Prometcor's  business  operations  in 1990,  less the expected  gain from the
   eventual sale of Prometcor's assets, have been estimated, based on the latest
   available  information,  to be about  $5,770,000.  These  estimated costs and
   expenses  consist of:  Prometcor's  expenses for the completion of compliance
   with  the  NJDEP  and  NRC  environmental  regulations;  the  termination  of
   Prometcor's  business operations;  environmental  consulting costs, legal and
   other  professional  fees;  and costs for the  maintenance  of the  Prometcor
   property,  including  insurance and taxes.  These costs and expenses,  net of
   deferred  income tax benefits,  have been charged  against the Company's Loss
   from Discontinued Operations and Net Earnings (Loss) between the beginning of
   1990 and year end 1998. The liability for these  estimated costs and expenses
   as recorded in the financial  statements  at December 31, 1998,  was based on
   the  lower  limit of the  range of costs as  projected  by the  Company.  The
   estimated upper limit of the range of costs is approximately $1,000,000 above
   the lower limit.

                The full extent of the costs and time required for completion is
   not  determinable  until the  remediation  and  confirmation  testing  of the
   properties have been completed and accepted by the NJDEP and NRC.

                Prometcor is being  accounted for as a  discontinued  operation,
   and,  accordingly,  its operating  results are reported in this manner in all
   years presented in the accompanying Consolidated Statements of Operations and
   other related operating statement data.

                The assets and  liabilities  of Prometcor  are  reflected in the
   Consolidated  Balance  Sheets under assets and  liabilities  of  discontinued
   operations.  At December 31, 1998,  Other Assets of  Discontinued  Operations
   consisted  primarily of land and buildings and net deferred income tax assets
   of Prometcor.  The Current Liabilities of Discontinued Operations at December
   31, 1998, consisted principally of $1,665,000 of accrued costs related to the
   environmental   compliance   of  Prometcor   and  accrued  costs  related  to
   discontinuance of Prometcor.

<PAGE>

   Note 3.  INCOME TAXES:

        At December 31, 1998,  the Company had, for federal income tax purposes,
   net operating loss  carryforwards  of approximately  $7,300,000,  expiring as
   follows:  $2,750,000 in 1999; $800,000 in 2000 to 2001; $1,750,000 in 2005 to
   2007;  and  $2,000,000  in 2010 to  2012.  The  Company  also  had  available
   alternative minimum tax credit carryforwards of approximately $60,000.

        The  income tax  benefits  (expenses)  consisted  of the  following  (in
   thousands):
<TABLE>
<CAPTION>
                                                   Year Ended December 31,
                                                    1998     1997    1996
                                                    ----     ----    ----
   Current:
<S>                                                <C>      <C>     <C>   
     State. . . . . . . . . . . . . . . . . . . .  $ (30)   $ 141   $ (81)
                                                   -----    -----   -----

   Deferred:
     Federal. . . . . . . . . . . . . . . . . . .    498      170     342
     State. . . . . . . . . . . . . . . . . . . .    229       55      48
                                                   -----    -----   -----
                                                     727      225     390
                                                   -----    -----   -----
                                                     697      366     309
   Allocated to discontinued operations . . . . .    557      132     180
                                                   -----    -----   -----
     Income tax benefits-net. . . . . . . . . . .  $ 140    $ 234   $ 129
                                                   =====    =====   ===== 
</TABLE>

        The  reconciliation  of estimated  income taxes attributed to continuing
   operations  at the United States  statutory  tax rate to reported  income tax
   benefits (expenses) is as follows (in thousands):
<TABLE>
<CAPTION>
                                                   Year Ended December 31,
                                                    1998     1997    1996
                                                    ----     ----    ----
<S>                                                <C>      <C>     <C>   
   Tax expense amount computed using
     statutory rate. . . . . . . . . . . . . . . . $(177)   $(187)  $ (70)
   State taxes, net of federal benefit . . . . . .   (20)     (93)    (53)
   Operations outside the US . . . . . . . . . . .    27        2       4
   Recognition of deferred income tax assets:
     Federal . . . . . . . . . . . . . . . . . . .   498      170     162
     State . . . . . . . . . . . . . . . . . . . .   229       55      48
   Discontinued operations and other . . . . . . .  (417)     287      38
                                                   -----    -----   -----
     Income tax benefits-net . . . . . . . . . . . $ 140    $ 234   $ 129
                                                   =====    =====   =====
</TABLE>
<PAGE>
        The tax effects of temporary  differences  that give rise to significant
   portions  of  the  deferred   income  tax  assets  and  deferred  income  tax
   liabilities are presented below (in thousands):
<TABLE>
<CAPTION>
                                                              December 31,
                                                              1998    1997
                                                              ----    ----
<S>                                                           <C>     <C>   
   Deferred income tax assets:
      Inventories, principally due to additional costs  
        inventoried for tax purposes pursuant to the Tax
        Reform Act of 1986 and valuation reserves
        for financial reporting purposes. . . . . . . . . . . $  108  $  167
      Compensated absences, principally due to accrual for
        financial reporting purposes. . . . . . . . . . . . .    131     115
      Compensation, principally due to accrual
        for financial reporting purposes. . . . . . . . . . .    118      93
      Accrual of projected environmental costs, principally
        related to Prometcor's compliance with NJDEP and NRC
        requirements. . . . . . . . . . . . . . . . . . . . .    878     360
      Net operating loss carryforwards. . . . . . . . . . . .  3,067   4,452
      Alternative minimum tax and
        investment tax credit carryforwards . . . . . . . . .    104     124
      Other . . . . . . . . . . . . . . . . . . . . . . . . .    132     126
                                                              ------  ------
        Total gross deferred income tax assets. . . . . . . .  4,538   5,437
        Less valuation allowance. . . . . . . . . . . . . . .  1,400   3,059
                                                              ------  ------
        Net deferred income tax assets. . . . . . . . . . . .  3,138   2,378
                                                              ------  ------
    Deferred income tax liabilities:
      Pension expense, due to contributions in excess of
        net accruals. . . . . . . . . . . . . . . . . . . . .    502     570
      Other . . . . . . . . . . . . . . . . . . . . . . . . .    254     153
                                                              ------  ------
        Total gross deferred income tax liabilities . . . . .    756     723
                                                              ------  ------
        Net deferred income taxes . . . . . . . . . . . . . . $2,382  $1,655
                                                              ======  ======
</TABLE>
<PAGE>
        A valuation  allowance is provided  when it is more likely than not that
   some portion or all of the deferred income tax assets will not be realized. 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.   Management  has  assessed  the  Company's  recent
   operating earnings history and expected future earnings.  Based on these past
   and future  earnings,  on the expected  completion of compliance by Prometcor
   with  environmental  regulations  and on tax  planning  strategies,  although
   realization  is not assured,  management  believes it is more likely than not
   that  $3,138,000  of the  deferred  income tax assets will be  realized.  The
   ultimate realization of the deferred income tax assets will require aggregate
   taxable  income  of  approximately  $5,100,000  in  the  years  prior  to the
   expiration of the net operating loss carryforwards in 2012. 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. A portion of the deferred income tax asset
   is the result of a tax  planning  strategy  for state  income tax purposes of
   merging certain of the Company's subsidiaries resulting in realization of net
   operating  loss  carryforwards.  The  valuation  allowance  was reduced  from
   $3,059,000 at December 31, 1997, to $1,400,000 at December 31, 1998, and from
   $4,035,000 at December 31, 1996, to $3,059,000 at December 31, 1997.

        The net deferred  income tax assets are  classified in the  Consolidated
   Balance Sheets as follows (in thousands):
<TABLE>
<CAPTION>
                                                                 December 31,
                                                                 1998    1997
                                                                 ----    ----
<S>                                                            <C>     <C>   
      Current:
        Other current assets ..........................        $  332  $  182
        Current assets of discontinued operations .....           405      87
                                                               ------  ------
          Total current ...............................           737     269
                                                               ------  ------
      Long-term:
        Other assets ..................................           675     641
        Other assets of discontinued operations .......           970     745
                                                               ------  ------
          Total long-term .............................         1,645   1,386
                                                               ------  ------
      Total net deferred income tax assets ............        $2,382  $1,655
                                                               ======  ======
</TABLE>

<PAGE>

   Note 4.  SHORT-TERM DEBT:
<TABLE>
<CAPTION>
          Composition (in thousands):  
          
                                                            December 31,
                                                           1998      1997
                                                           ----      ----

<S>                                                      <C>       <C>    
        Revolving loans (a). . . . . . . . . . . . . . . $ 1,420   $ 2,170
        Notes payable, commercial finance companies (b).     789       543
                                                         -------   -------
        Total short-term debt. . . . . . . . . . . . . . $ 2,209   $ 2,713
                                                         =======   =======
</TABLE>

        (a) In 1995 RCPC entered into an agreement  with Summit Bank  ("Summit")
   for a Revolving Loan and a Term Loan. In March 1997 RCPC and Summit  extended
   RCPC's  Revolving Loan to June 30, 2000. The extended  agreement also amended
   certain other terms of the Revolving  Loan  agreement.  The Revolving Loan of
   $1,315,000  at December 31, 1998,  provides a line of credit up to $2,500,000
   to RCPC based on accounts  receivable  and inventory.  The balance  available
   under  the  Revolving  Loan is  determined  by the level of  receivables  and
   inventory.  The Term Loan was paid in full in April 1998.  The Revolving Loan
   currently bears interest at the rate of 1.5% above Summit's prime rate (7.75%
   at December  31,  1998).  The  Revolving  Loan is payable on demand  under an
   agreement  which expires June 30, 2000.  The Revolving Loan is secured by the
   accounts receivable,  inventory and machinery and equipment of RCPC; a second
   mortgage on the land,  buildings and  improvements of RCPC; and the guarantee
   of the Company.  At December 31, 1998, RCPC also had  outstanding  Letters of
   Credit of approximately  $110,000.  The Summit agreement also has restrictive
   covenants which, among other things, limit the transfer of assets between the
   Company and its subsidiaries.

        In July 1997 RCPC and Summit  amended the  Revolving  Loan  agreement to
   provide  $400,000 in additional loan  availability.  The $400,000  additional
   loan availability was reduced in monthly amounts of $14,583 from October 1997
   to March 1998, and is currently  being reduced in monthly  amounts of $20,833
   from April 1998 to June 1999. The outstanding  amount under the agreement for
   the  additional  available  loan of  $125,000  as of December  31,  1998,  is
   included in the balance of the Revolving Loan in the paragraph above.

        In 1995  Ronson-Canada  entered into an agreement with Canadian Imperial
   Bank  of  Commerce  ("CIBC")  for a line  of  credit  of  C$250,000.  In 1998
   Ronson-Canada and CIBC extended  Ronson-Canada's  Revolving Loan to 1999. The
   extended  agreement  also amended  certain other terms of the Revolving  Loan
   agreement. The Revolving Loan balance of $105,000 (C$160,000) at December 31,
   1998,  under the line of credit is secured  by the  accounts  receivable  and
   inventory  of  Ronson-Canada,  and the amounts  available  under the line are
   based on the level of  accounts  receivable  and  inventory.  The loan  bears
   interest  at the rate of 1.25% (down from the prior 1.5%) over the CIBC prime
   rate (6.75% at December 31, 1998). The line of credit,  payable on demand, is
   guaranteed  by the Company.  The CIBC  agreement  has  restrictive  covenants
   which, among other things, limit the transfer of assets from Ronson-Canada to
   RCPC and the Company.
<PAGE>
        Based on the amount of the loans  outstanding and the levels of accounts
   receivable and inventory at December 31, 1998,  Ronson Consumer  Products had
   unused borrowings available at December 31, 1998, of about $225,000 under the
   Summit and CIBC lines of credit described  above.  (Refer to Note 5 below for
   information  regarding the book value of assets pledged as collateral for the
   debt in (a) above.)

        (b)  At  December  31,  1998,  the  notes  payable,  commercial  finance
   companies,  consisted  of notes  payable by Ronson  Aviation as  follows:  1)
   $707,000 due to Raytheon Aircraft Credit Corp.  ("Raytheon");  and 2) $82,000
   due to Green Tree  Financial  Servicing  Corporation  ("Green  Tree").  Notes
   payable to these  commercial  finance  companies by Ronson  Aviation are each
   collateralized  by  specific  aircraft,  and the  notes are  repaid  from the
   proceeds from the sale of the aircraft. The Raytheon note bears interest at a
   rate of 1.5% over the prime rate (7.75% at December  31,  1998) and the Green
   Tree  note  bears  interest  at the rate of 11%.  The notes  are  secured  by
   aircraft  inventory  of Ronson  Aviation  with a book  value of  $850,000  at
   December 31, 1998.

        In August 1997 Ronson Aviation entered into an agreement with Summit for
   a Revolving Loan and a Term Loan (refer to Note 5(b) below regarding the Term
   Loan).  The Revolving  Loan,  which had not yet been utilized at December 31,
   1998,  provides a line of credit up to $400,000 to Ronson  Aviation  based on
   the level of its accounts  receivable.  The Revolving  Loan  currently  bears
   interest at the rate of 1.5% above Summit's prime rate (7.75% at December 31,
   1998) and is payable on demand  under an  agreement  which  expires  June 30,
   2000.  The  Revolving  Loan  and  Term  Loan  are  secured  by  the  accounts
   receivable, inventory and machinery and equipment of Ronson Aviation, and the
   guarantees  of the  Company  and RCPC.  The Summit  agreement  also  contains
   restrictive covenants.

        Ronson Aviation had no outstanding loans under the Summit Revolving Loan
   at  December  31,  1998.  Based on the level of accounts  receivable,  Ronson
   Aviation had unused  borrowings  of about  $294,000  under the Summit line of
   credit at December 31, 1998.

        At December 31, 1998, the weighted  average  interest rate for the total
   short-term debt was 9.1%.


   Note 5.  LONG-TERM DEBT:
<TABLE>
<CAPTION>
            Composition (in thousands):
                                                               December 31,
                                                             1998       1997
                                                             ----       ----
          <S>                                             <C>        <C>    
          Mortgage loan payable, Summit (a) . . . . . . . $ 1,219    $ 1,248
          Term note payable, Summit (b) . . . . . . . . .     214        296
          Notes payable, bank (c) . . . . . . . . . . . .   2,350      2,385
          Promissory term note payable (d). . . . . . . .     245         --
          Other . . . . . . . . . . . . . . . . . . . . .      13         --
                                                          -------    -------
                                                            4,041      3,929
          Less portion in current liabilities . . . . . .     392        368
                                                          -------    -------
          Balance of long-term debt . . . . . . . . . . . $ 3,649    $ 3,561
                                                          =======    =======
</TABLE>
<PAGE>



        (a) On December 1, 1995,  the Company and RCPC  entered  into a Mortgage
   Loan  agreement with Summit in the original  amount of  $1,300,000.  The loan
   with a balance of  $1,219,000  at December  31,  1998,  is secured by a first
   mortgage on the land,  buildings and  improvements  of RCPC and is payable in
   sixty  monthly  installments  of  $11,589,  including  interest,  and a final
   installment on December 1, 2000, of $1,155,000.  The loan bears interest at a
   fixed rate of 8.75%.

        (b) In August 1997 Ronson  Aviation  entered into a Term Loan  agreement
   with Summit in the original amount of $285,000. On October 26, 1998, the Term
   Loan was amended, extending its maturity to June 30, 2000. The Term Loan with
   a balance of  $214,000  at  December  31,  1998,  is payable in  thirty-three
   monthly  installments  of $4,750 plus  interest  from October 1, 1997,  and a
   final installment on June 30, 2000, of $128,000. The Term Loan bears interest
   at the rate of 1.5% above Summit's prime rate. (Refer to Note 4(b) above.)

        (c) The notes  payable,  bank,  consisted  of six term loans  payable by
   Ronson  Aviation to Summit.  The notes bear interest at the rate of 1.5% over
   the prime rate, are collateralized by specific aircraft with a net book value
   of $3,221,000 at December 31, 1998, and are guaranteed by the Company. Two of
   the notes, in the amount of approximately  $523,000 at December 31, 1998, are
   payable  in monthly  installments  totalling  $6,375  plus  interest  through
   October 2000 with a final payment of about  $383,000 on October 5, 2000.  The
   other four notes in the amount of  approximately  $1,827,000  at December 31,
   1998,  are payable in monthly  installments  totalling  $16,883 plus interest
   through  November 2002 with a final  payment of about  $1,034,000 on December
   20, 2002.

        (d) On September  15, 1998,  Ronson  Aviation  entered into a Promissory
   Term Note agreement with Texaco Refining and Marketing,  Inc. in the original
   amount of $250,000.  The  Promissory  Term Note with a balance of $245,000 at
   December 31, 1998, is payable in 120 monthly installments of $2,775 including
   interest,  through  September  14,  2008.  The  Promissory  Term Note,  bears
   interest at the rate of 6% per annum.  The  proceeds of the  Promissory  Term
   Note are being used to finance  the  construction  of Ronson  Aviation's  new
   aircraft  fueling  facilities.  The  Promissory  Term Note is  secured by the
   leased premises of the fueling facilities complex and all related equipment.

        At December 31, 1998,  fixed assets with a net book value of  $4,683,000
   and  accounts  receivable  and  inventories  of  $4,479,000  are  pledged  as
   collateral for the debt detailed in Notes 4 and 5 above.

        Net  assets  of  consolidated   subsidiaries,   excluding   intercompany
   accounts,   amounted  to  approximately  $2,520,000  at  December  31,  1998,
   substantially  all of which was  restricted as to transfer to the Company and
   its other  subsidiaries due to various  covenants of their debt agreements at
   December 31, 1998.

        Long-term debt matures as follows:  1999,  $392,000;  2000,  $2,017,000;
   2001,  $228,000;  2002,  $1,242,000;  2003,  $25,000;  and 2004 through 2008,
   $137,000.

<PAGE>
   Note 6.  LEASE OBLIGATIONS:

        Lease expenses  consisting  principally of office and warehouse rentals,
   totalled  $476,000,  $476,000 and  $539,000 for the years ended  December 31,
   1998,  1997 and 1996,  respectively.  Sublease income amounted to $27,000 and
   $168,000 for the years ended December 31, 1997 and 1996,  respectively  (none
   in 1998).

        At December 31, 1998, the Company's  future minimum lease payments under
   operating  and  capitalized  leases with initial or remaining  noncancellable
   lease  terms in  excess  of one year are  presented  in the  table  below (in
   thousands):
<TABLE>
<CAPTION>
                                                  Operating     Capitalized
                                       Total        Leases         Leases
                                       -----        ------         ------
      Year Ending December 31:
       <S>                             <C>          <C>            <C>  
       1999 . . . . . . . . . . .      $ 402        $ 276          $ 126
       2000 . . . . . . . . . . .        337          245             92
       2001 . . . . . . . . . . .        100           92              8
       2002 . . . . . . . . . . .          6            1              5
       2003 . . . . . . . . . . .          4           --              4
                                       -----        -----          -----
       Total obligations. . . . .      $ 849        $ 614            235
                                       =====        =====                
 
       Less:  Amount representing
              interest. . . . . .                                     26
                                                                   -----
       Present value of capitalized
          lease obligations . . .                                  $ 209
                                                                   =====
</TABLE>
        Capitalized lease property  included in the Consolidated  Balance Sheets
   is presented below (in thousands):
<TABLE>
<CAPTION>
                                                 December 31,
                                                 1998    1997
                                                 ----    ----

<S>                                             <C>     <C>  
       Machinery and equipment . . . . . . . .  $ 642   $ 613
       Less accumulated amortization . . . . .    204     141
                                                -----   -----
                                                $ 438   $ 472
                                                =====   =====
</TABLE>

<PAGE>
   Note 7.  RETIREMENT PLANS:

        The Company and its subsidiaries have several trusteed  retirement plans
   covering substantially all employees. The Company's funding policy is to make
   minimum annual  contributions  as required by applicable  regulations.  Plans
   covering union members  generally provide 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 include  widely-held common stocks,  U.S. Treasury
   Securities,  171,300 shares of common stock of the Company,  and money market
   funds.

        The following  tables set forth the plans'  aggregate  funded status and
   amounts  recognized  in  the  Company's   Consolidated   Balance  Sheets  (in
   thousands):

<PAGE>
<TABLE>
<CAPTION>
                                                       December 31,
                                                    1998          1997
                                                    ----          ----

<S>                                              <C>           <C>    
   Change in Benefit Obligation:
     Benefit obligation at beginning of year.... $ 4,709       $ 4,599
     Service cost...............................      15            17
     Interest cost..............................     330           333
     Benefit increase...........................      --            25
     Actuarial loss.............................     171            63
     Increase in benefit obligation due to
       decreased discount rate..................     175            85
     Benefits paid..............................    (484)         (413)
                                                 -------       -------
     Benefit obligation at end of year..........   4,916         4,709
                                                 -------       -------

   Change in Plan Assets:
     Fair value of plan assets at beginning
       of year..................................   4,185         4,085
     Actual return on plan assets...............     997           177
     Employer contributions.....................     104           336
     Benefits paid..............................    (484)         (413)
                                                 -------       -------
     Fair value of plan assets at end of year...   4,802         4,185
                                                 -------       -------

     Funded status..............................    (114)         (524)
     Unrecognized actuarial loss................     990         1,545
     Unrecognized prior service cost and
       transition obligation....................     256           320
                                                 -------       -------
   Net amount recognized........................ $ 1,132       $ 1,341
                                                 =======       =======

   Amounts Recognized in the Statement of 
     Financial Position Consist of:
       Prepaid benefit cost..................... $   300       $    --
       Accrued benefit liability................    (414)         (524)
       Intangible asset.........................     256           320
       Accumulated other comprehensive income...     990         1,545
                                                 -------       -------
   Net amount recognized........................ $ 1,132       $ 1,341
                                                 =======       =======
</TABLE>
<PAGE>

<TABLE>
<CAPTION>

                                                    1998            1997
                                                    ----            ----
   Weighted-average assumptions as of December 31:
     <S>                                           <C>              <C>  
     Discount rate..............................   6.50%            7.00%
     Expected return on plan assets.............   6.08%            6.86%
</TABLE>



<PAGE>
        If the additional minimum liability recorded exceeds  unrecognized prior
   service  cost  and  the  unrecognized  net  obligation  at  transition,  that
   difference,  an  unrecognized  net  loss,  is to be  reported  as a  separate
   component  of  Stockholders'  Equity.  This  unrecognized  net  loss is being
   amortized over future periods as a component of pension expense.

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

<TABLE>
<CAPTION>
                                                Year Ended December 31,
                                             1998        1997        1996
                                             ----        ----        ----
   Components of net periodic benefit cost:
     <S>                                   <C>         <C>         <C>   
     Service cost. . . . . . . . . . .     $   15      $   17      $   18
     Interest cost . . . . . . . . . .        330         333         339
     Expected return on plan assets. .       (257)       (275)       (279)
     Amortization of prior service
       cost and transition obligation.         63          62          62
     Recognized actuarial loss . . . .        163         141         125
                                           ------      ------      ------
     Net pension expense . . . . . . .     $  314      $  278      $  265
                                           ======      ======      ======
</TABLE>

        The accumulated benefit obligation and fair value of plan assets for the
   pension plan with an accumulated  benefit obligation in excess of plan assets
   were  $513,000  and  $99,000,  respectively,  as of December  31,  1998,  and
   $519,000 and $142,000, respectively, as of December 31, 1997.

        The Company contributes to its defined contribution plans 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 $71,000, $70,000 and $66,000
   for this plan were recorded in 1998, 1997 and 1996, respectively.

<PAGE>
   Note 8.  COMMITMENTS AND CONTINGENCIES:

                In September 1998 the Company received a "de minimis" settlement
   offer ("Settlement  Offer") from the United States  Environmental  Protection
   Agency ("USEPA")  related to waste disposed of prior to 1980 at a landfill in
   Monterey Park, California, which the USEPA had designated as a Superfund Site
   ("Site").  The USEPA identified  manifests dated from 1974 through 1979 which
   allegedly  indicate that waste  originating  at the location of the Company's
   former Duarte, California, hydraulic subsidiary was delivered to the Site. As
   a result,  in August 1995 the Company  received a General  Notice Letter from
   the USEPA notifying the Company that the USEPA  considered the Company one of
   about four  thousand  Potentially  Responsible  Parties  ("PRP's")  for waste
   disposed of prior to 1980 at a landfill at the Site. In 1981 the Company sold
   the  Duarte,  California,   hydraulic  subsidiary,   Ronson  Hydraulic  Units
   Corporation ("RHUCOR-CA"),  to the Boeing Corporation. The USEPA has notified
   a subsequent  owner of the facility that the USEPA  considers  that entity to
   also be liable  for the costs the USEPA  determines  to be due as a result of
   RHUCOR-CA's  waste having been sent to the Site.  The USEPA may also consider
   financial  factors in determining the final amount due. In the fourth quarter
   of 1998,  the  Company  offered to settle  the matter for six equal  payments
   totalling  $90,000,  to be paid semiannually  over three years.  Although the
   Settlement  Offer  includes  various  options  at costs of from  $307,000  to
   $376,000  and the Company has offered to settle the matter for  $90,000,  the
   Company's final contribution, if any, is not yet determinable. As of December
   31,  1998,  the  Company  has  accrued  the  amount of its offer and  related
   expenses.

                In February 1999 Ronson Aviation completed the installation of a
   new 58,500 gallon fueling facility at a total cost of approximately $430,000,
   and  ceased  use of  most  of  its  former  underground  storage  tanks.  The
   underground  storage tanks formerly used by Ronson Aviation will be closed in
   place or removed in 1999 as required by the NJDEP. The extent of any soil and
   groundwater  contamination  cannot  be  determined  until  testing  has  been
   undertaken. Ronson Aviation is currently in negotiations with the lessor, the
   County of Mercer  ("Mercer"),  as to the allocation of responsibility for the
   costs of meeting regulatory requirements as to the former tank system and for
   the installation of the new storage tanks, because the former tanks are owned
   by Mercer. In addition,  most of the tanks pre-date the leases between Ronson
   Aviation and Mercer.  The  negotiations  with Mercer may result in: 1) Mercer
   assuming responsibility for the new fueling facility,  closure and removal of
   the former tanks, and all soil and groundwater remediation,  if any, found to
   be required; 2) Ronson Aviation being responsible for the construction of the
   new fueling  facilities,  Mercer assuming  responsibility for the closure and
   removal  of the  former  tanks,  and all or some of the soil and  groundwater
   remediation,  with the cost incurred by Ronson  Aviation to be deemed to meet
   the requirements on the lease for three five-year extensions through November
   2022;  or 3) some other  allocation  of  responsibility  for the  costs.  The
   Company intends to vigorously pursue its rights under the leasehold and under
   the statutory and regulatory  requirements.  Since the ultimate allocation of
   costs cannot be estimated at this time, the effect on the Company's financial
   position or results of future  operations  cannot be  estimated at this time,
   but management does not believe that the effect will be material.
<PAGE>
                In the third  quarter of 1998,  a  mechanical  failure at Ronson
   Aviation  resulted  in an  overfill of a fuel tank and a release of about 700
   gallons of jet fuel. The Company has taken appropriate  action to address the
   release   and  to  meet  NJDEP   requirements.   Ronson   Aviation   expended
   approximately  $57,000 in 1998 and accrued about $78,000 in projected  future
   costs related to the release.  Until all required remediation and sampling is
   completed, the total cost of the release cannot be determined.  The Company's
   insurance  carriers have been notified of the claim, and management  believes
   that the Company will receive a  reimbursement  for the cost from  insurance,
   but the Company  has not  recorded a  receivable  for that  reimbursement  at
   December 31, 1998.

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

                The  Company  has  employment  contracts  with an officer of the
   Company and an officer of a subsidiary.  The contracts expire on December 31,
   2002 and 2000, respectively.  Base salaries in the years 1999, 2000, 2001 and
   2002 are  $671,408,  $716,466,  $606,119,  and  $648,547,  respectively.  The
   contract  with the  officer  of the  Company  also  provides  for  additional
   compensation  and  benefits,  including a death  benefit  equal to two years'
   salary.


<PAGE>
   Note 9.  PREFERRED STOCK:

        Each share of 12% Cumulative  Convertible  Preferred  Stock has a stated
   value of $0.01  per  share and a  liquidation  preference  of $1.75 per share
   ($64,000 at December 31, 1998, in the aggregate) plus accrued dividends.  The
   shares are non-voting and have a right to cumulative  dividends at the annual
   rate of $0.21 per share.  The  holders of the  preferred  shares  may, at any
   time,  convert each preferred share into one share of common stock unless the
   preferred  shares  were  previously  redeemed.  The Company has the option to
   redeem all or part of the  preferred  stock at $2.25 per share  plus  accrued
   dividends.

        On November 15, 1996,  the Company  issued an Offer to owners of its 12%
   Cumulative  Convertible Preferred Stock to exchange their shares of preferred
   stock for shares of common  stock at the rate of 1.7  shares of common  stock
   for each  share  of  preferred.  The  Company's  Exchange  Offer  expired  on
   September  30,  1997.  After the  expiration  of the Offer,  the  Company had
   accepted  800,844  shares of  preferred  stock for  exchange  and had  issued
   1,361,435 shares of common stock under the Company's Exchange Offer.

        Dividends in arrears at December 31, 1998, totalled $1.3125 per share of
   preferred stock (twenty-five  quarters at $0.0525 per share per quarter),  or
   approximately $48,000 in the aggregate.  


        In October 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 expire on October 27, 2008.

<PAGE>
   Note 10.  STOCK OPTIONS:

        The Company has two  incentive  stock option plans which provide for the
   grant of  options to  purchase  shares of the  Company's  common  stock.  The
   options may be granted to officers and other key employees of the Company and
   its  subsidiaries  (including  directors  if they are also  employees  of the
   Company or one of its  subsidiaries) at not less than 100% of the fair market
   value  on the  date  on  which  options  are  granted.  In  August  1996  the
   stockholders  approved the adoption of the  Company's  1996  Incentive  Stock
   Option Plan which  provides for the grant of options for up to 100,000 shares
   of common stock. In August 1987 the stockholders approved the adoption of the
   Company's 1987 Incentive  Stock Option Plan,  which provides for the grant of
   options for up to 66,666 shares of common  stock.  After January 21, 1997, no
   further  options were  permitted to be granted  under the 1987 plan.  Options
   granted  under the 1987 plan are  exercisable  at any time  within five years
   from the date of grant,  at which time such options  expire.  Options granted
   under the 1996 plan are  exercisable  after six  months  from the date of the
   grant and within  five years of the grant  date,  at which time such  options
   expire. All options are vested on the date of the grant.

        Pro forma  information  regarding  earnings  (loss) per common  share is
   required  by SFAS  #123,  and  has  been  determined  as if the  Company  had
   accounted for its employee  stock options under the fair value method of that
   statement.  No options  were  granted by the  Company in 1998 and 1997,  and,
   therefore, no estimated compensation would be applicable in 1998 and 1997. In
   1996 the fair  value for these  options  was  estimated  at the date of grant
   using a  Black-Scholes  option  pricing  model  with the  following  weighted
   average  assumptions:  risk-free interest rate of 6.5%; dividend yield of 0%;
   volatility  factor of the expected market price of the Company's common stock
   of 0.5; and a weighted average expected life of the option of five years.

        The  Black-Scholes  option  valuation  model  was  developed  for use in
   estimating the fair value of traded options which are fully transferable.  In
   addition,  option  valuation  models  require the input of highly  subjective
   assumptions  including  the  expected  stock  price  volatility.  Because the
   Company's employee stock options have characteristics significantly different
   from those of traded  options,  and because  changes in the subjective  input
   assumptions can materially  affect the fair value  estimate,  in management's
   opinion,  the existing  models do not  necessarily  provide a reliable single
   measure of the fair value of its employee stock options.

        The Company's pro forma results of operations  after  adjustment for the
   estimated compensation expense under SFAS #123 were as follows (in thousands,
   except per share data):
<PAGE>
<TABLE>
<CAPTION>
                                                    Year Ended December 31,
                                                 1998(1)   1997(1)       1996
                                                -------    -------     ------- 
   <S>                                          <C>        <C>         <C>    
   Pro forma Results of Operations:
     Earnings from continuing operations.....   $   660    $   783     $   210
     Loss from discontinued operations.......      (949)        --      (1,190)
                                                -------    -------     ------- 

     Net earnings (loss).....................   $  (289)   $   783     $  (980)
                                                =======    =======     ======= 

   Pro forma Earnings (Loss) per Common Share:
     Basic:
       Earnings from continuing operations...   $  0.20    $  0.26     $  0.02
       Loss from discontinued operations.....     (0.30)        --       (0.66)
                                                -------    -------     ------- 

       Net earnings (loss)...................   $ (0.10)   $  0.26     $ (0.64)
                                                =======    =======     ======= 

     Diluted:
       Earnings from continuing operations...   $  0.20    $  0.25     $  0.02
       Loss from discontinued operations.....     (0.30)        --       (0.66)
                                                -------    -------     ------- 

       Net earnings (loss)...................   $ (0.10)   $  0.25     $ (0.64)
                                                =======    =======     ======= 
</TABLE>

   (1) Since no options were issued in 1998 and 1997,  no pro forma  adjustments
       have been made above.

        A summary of the Company's stock option activity and related information
   for the three years ended December 31, 1998, is as follows:
<TABLE>
<CAPTION>

                                                Number of    Weighted Average
                                                 Options      Exercise Price
                                                 -------      --------------

        <S>                                      <C>             <C>   
        Outstanding at December 31, 1995........  70,066         $ 1.82
          Granted...............................  87,200           2.88
          Exercised............................. (33,333)          2.39
          Expired............................... (20,083)          1.49
                                                  ------               

        Outstanding at December 31, 1996........ 103,850           2.59
          Expired...............................    (750)          2.88
                                                  ------               

        Outstanding at December 31, 1997........ 103,100           2.58
          Exercised............................. (13,900)          1.20
          Expired...............................    (500)          2.88
                                                  ------                
        Outstanding and Exercisable
          at December 31, 1998..................  88,700         $ 2.80
                                                  ======         ======
</TABLE>
<PAGE>
        Exercise prices for options  outstanding as of December 31, 1998, ranged
   as follows:  15,500  options from $1.63 to $2.25 per share and 73,200 options
   from $2.88 to $3.16 per share. The weighted average contractual life of those
   options is 2.5 years.


   Note 11.  STATEMENTS OF CASH FLOWS:

        Certificates  of deposit that have a maturity of 90 days or more are not
   considered  cash  equivalents for purposes of the  accompanying  Consolidated
   Statements of Cash Flows.

        Supplemental  disclosures  of cash flow  information  are as follows (in
   thousands):
<TABLE>
<CAPTION>
                                                 Year Ended December 31,
                                                 1998      1997     1996
                                                 ----      ----     ----

        <S>                                     <C>       <C>      <C>  
        Cash Payments for:
          Interest.  .  .  .  .  .  .  .  .  .  $ 615     $ 508    $ 747
          Income taxes. .  .  .  .  .  .  .  .     26        45       85

        Financing & Investing Activities
          Not Affecting Cash:
          Capital lease obligations incurred .     28        26      361
</TABLE>
   Note 12.  INDUSTRY SEGMENTS INFORMATION:

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

        The  consumer   products  segment  produces   packaged  fuels,   flints,
   refillable  lighters  and  ignitors,  a  penetrant  spray  lubricant,  a spot
   remover,   and  a  surface   protectant,   which  are   distributed   through
   distributors, food brokers, automotive and hardware representatives and chain
   stores.  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 chartering,  servicing and
   sales of fixed wing aircraft and servicing of helicopters.  Aircraft 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  from  continuing  operations  before
   intercompany charges and income taxes.
<PAGE>
    Financial   information  by  industry   segment  is  summarized   below  (in
thousands):
<TABLE>
<CAPTION>
                                                    Year Ended December 31,
                                           1998                1997               1996
                                           ----                ----               ----
<S>                                      <C>                 <C>                <C>    
Net sales:
  Consumer Products.........             $15,717             $15,304            $16,534
  Aviation Services.........               7,456               7,866              8,920
                                         -------             -------            -------
    Consolidated ...........             $23,173             $23,170            $25,454
                                         =======             =======            =======
Earnings (loss) before 
  interest, other items 
  and intercompany charges:
  Consumer Products.........             $ 2,777             $ 2,546            $ 3,023
  Aviation Services.........                 656                 364                 81
                                         -------             -------            -------
  Total Reportable Segments                3,433               2,910              3,104
  Corporate and others......              (1,948)             (1,731)            (1,569)
  Non-recurring charges.....                (135)                 --                 --
                                         -------             -------            -------
    Consolidated ...........             $ 1,350             $ 1,179            $ 1,535
                                         =======             =======            =======
Interest expense:
  Consumer Products.........             $   206             $   214            $   236
  Aviation Services.........                 290                 154                369
                                         -------             -------            -------
  Total Reportable Segments                  496                 368                605
  Corporate and others......                 149                 155                157
                                         -------             -------            -------
    Consolidated ...........             $   645             $   523            $   762
                                         =======             =======            =======
Depreciation and
  amortization:
  Consumer Products.........             $   234             $   240            $   219
  Aviation Services.........                 280                 233                318
                                         -------             -------            -------
  Total Reportable Segments                  514                 473                537
  Corporate and others......                  18                  17                 14
                                         -------             -------            -------
    Consolidated ...........             $   532             $   490            $   551
                                         =======             =======            =======
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                                    Year Ended December 31,
                                           1998                1997               1996
                                           ----                ----               ----
<S>                                      <C>                 <C>                <C>    
Earnings  (loss) from  
  continuing  operations  
  before  intercompany 
  charges and taxes:
  Consumer Products.........             $ 2,559             $ 2,339            $ 2,801
  Aviation Services.........                 395                 217               (277)
                                         -------             -------            -------
  Total Reportable Segments                2,954               2,556              2,524
  Corporate and others......              (2,189)             (2,007)            (1,884)
  Non-recurring charges.....                (245)                 --               (434)
                                         -------             -------            -------
    Consolidated ...........             $   520             $   549            $   206
                                         =======             =======            =======
Segment assets:
  Consumer Products.........             $ 5,254             $ 5,787            $ 5,306
  Aviation Services.........               6,586               5,788              5,007
                                         -------             -------            -------
  Total Reportable Segments               11,840              11,575             10,313
  Corporate and others......                 797                 498                607
  Discontinued operations...               1,965               1,446              1,184
                                         -------             -------            -------
    Consolidated ...........             $14,602             $13,519            $12,104
                                         =======             =======            =======
Segment expenditures for 
  long-lived assets:
  Consumer Products.........             $   134             $   134            $   619
  Aviation Services.........                 727               2,028                204
                                         -------             -------            -------
  Total Reportable Segments                  861               2,162                823
  Corporate and others......                  12                   2                 42
                                         -------             -------            -------
    Consolidated ...........             $   873             $ 2,164            $   865
                                         =======             =======            =======
</TABLE>

   Geographic  Information  regarding  the  Company's  net sales and  long-lived
   assets are as follows (in thousands):
<TABLE>
<CAPTION>
                                                       Year Ended December 31,
                                           1998                1997               1996
                                           ----                ----               ----
   Net Sales (1):

<S>                                      <C>                 <C>                <C>    
   United States.....................   $21,448              $21,398            $23,803
   Canada............................     1,664                1,552              1,559
   Other foreign countries...........        61                  220                 92
                                        -------              -------            -------
                                        $23,173              $23,170            $25,454
                                        =======              =======            =======
</TABLE>                                                                     
<PAGE>                                                                       
<TABLE>                                                                      
<CAPTION>                                                                    
                                                    December 31,             
                                                1998          1997           
                                                ----          ----         
   Long-Lived Assets:
<S>                                           <C>           <C>     
   United States............................  $  6,076      $  5,719
   Canada...................................        44            63
                                              --------      --------
                                              $  6,120      $  5,782
                                              ========      ========
</TABLE>

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

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

        For the years ended  December 31, 1998,  1997 and 1996,  net sales which
   amounted   to   approximately   $2,770,000,    $2,337,000   and   $3,624,000,
   respectively, of Consolidated Net Sales were made by Ronson Consumer Products
   to various units of one customer.  No other customer  accounted for more than
   10% of Consolidated Net Sales for the years ended December 31, 1998, 1997 and
   1996.


   Note 13.  COMPREHENSIVE INCOME:

        Effective  January 1, 1998,  the Company  adopted SFAS #130,  "Reporting
   Comprehensive Income".  Comprehensive Income is the change in equity during a
   period from transactions and other events from nonowner  sources.  Under SFAS
   #130, the Company is required to classify items of other comprehensive income
   in  financial  statements  and to display  the  accumulated  balance of other
   comprehensive  income  (deficit)  separately  in the  equity  section  of the
   Consolidated  Balance  Sheets.  The  adoption of SFAS  #130  does not have an
   effect on the financial position or results of operations of the Company.

<PAGE>
        Changes in the components of Other Comprehensive Income (Loss)
   and in Accumulated Other  Comprehensive  Deficit for 1998, 1997 and 1996 were
   as follows (in thousands):

<TABLE>
<CAPTION>
                       Foreign Currency   Minimum Pension   Accumulated Other
                         Translation         Liability        Comprehensive
                          Adjustment        Adjustment           Deficit
                       ----------------   ---------------   -----------------
     Balance at
     <S>                     <C>              <C>                <C>     
     December 31, 1995....   $  (26)          $(1,403)           $(1,429)
     Change during 1996...      (10)              (38)               (48)
                             ------           -------            ------- 

     Balance at
     December 31, 1996....      (36)           (1,441)            (1,477)
     Change during 1997...      (25)             (104)              (129)
                             ------           -------            ------- 

     Balance at
     December 31, 1997....      (61)           (1,545)            (1,606)
     Change during 1998...      (35)              555                520
                             ------           -------            ------- 

     Balance at
     December 31, 1998....   $  (96)          $  (990)           $(1,086)
                             ======           =======            ======= 
</TABLE>

   Note 14.  CONCENTRATIONS:

        At December 31, 1998, a subsidiary of the Company had cash balances in a
   bank which exceeded the insured limit by approximately $176,000.

        Ronson  Consumer  Products  currently  purchases  lighter  products from
   manufacturers  in Spain and  Peoples  Republic  of China.  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,  possibly,  a  short-term  loss in sales which  could have a  short-term
   adverse effect on operating results.

<PAGE>
   Note 15.  RELATED PARTY TRANSACTIONS:

                In October 1998 the Company entered into a consulting  agreement
   with Mr. Carl W. Dinger III, a 5% shareholder  of the Company.  The agreement
   provides  that Mr.  Dinger will perform  certain  consulting  services to the
   Company  for a period of 18 months at a fee of $4,500 per  month.  During the
   year ended  December 31, 1998, Mr. Dinger was  compensated  $13,500 under the
   agreement.

                In October 1998 Mr.  Dinger  granted an option to the Company to
   purchase the 186,666 shares of the Company's common stock held by Mr. Dinger.
   The option is for a period of 18 months, and the exercise price of the option
   is $5.25 per share. The cost of the option is $5,500 per month for the period
   of the  option or until  exercised.  The  Company  incurred a cost of $16,500
   during the year ended  December  31,  1998,  which was charged to  Additional
   Paid-in Capital. As part of the option agreement,  Mr. Dinger has granted the
   Board of Directors of the Company an  irrevocable  proxy to vote the optioned
   shares during the time of the option.

                The  Company  incurred  costs  for  consulting   services  under
   agreements  with two  directors  of the  Company of  $100,000,  $112,000  and
   $72,000 in the years ended  December 31, 1998,  1997 and 1996,  respectively.
   The  Company  incurred  costs of $47,000,  $51,000 and  $104,000 in the years
   ended  December 31, 1998,  1997 and 1996,  respectively,  for legal fees to a
   firm  having a member who is also a director  and an officer of the  Company,
   with these fees primarily related to the Prometcor environmental matters.