U.S. 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, 2005

                                       or

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

            For the transition period from _________ to __________.

                           Commission File No. 1-1031

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

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

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

      Registrant's telephone number: (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 Capital Market
         $1.00 per share

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

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

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

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

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). YES |_| NO |X|

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

The aggregate market value of common equity held by non-affiliates of the
registrant was approximately $4,196,000 as of June 30, 2005; the last business
day of the registrant's most recently completed second fiscal quarter, computed
by reference to the average bid and asked price of such common equity.

<PAGE>

As of March 23, 2006, there were 4,536,249 shares of the registrant's common
stock outstanding, adjusted to reflect a 5% common stock dividend declared on
February 23, 2006.

                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant's definitive Proxy Statement for the 2005 Annual
Meeting of Shareholders are incorporated by reference into Part I.

FORWARD-LOOKING STATEMENTS

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


                                       2
<PAGE>

                                TABLE OF CONTENTS

Part I                                                                      Page
------                                                                      ----

Item 1. Business.                                                            4

     1A. Risk Factors.                                                       7

     2.  Properties.                                                        11

     3.  Legal Proceedings.                                                 12

     4.  Submission of Matters to a Vote of Security Holders.               13

Part II
-------

Item 5.  Market for the Company's Common Stock and Related
         Stockholder Matters.                                               14

     6.  Selected Financial Data.                                           15

     7.  Management's Discussion and Analysis of
         Financial Condition and Results of Operations.                     16

     7A. Quantitative and Qualitative Disclosures about Market Risk.        24

     8.  Financial Statements and Supplementary Data.                       25

     9.  Changes in and Disagreements with Accountants
         on Accounting and Financial Disclosure.                            25

     9A. Controls and Procedures.                                           25

     9B. Other Information.                                                 26

Part III
--------

Item 10. Directors and Executive Officers of the Registrant,
         Compliance with Section 16(a) of the Exchange Act.                 26

     11. Executive Compensation.                                            31

     12. Security Ownership of Certain Beneficial Owners and
         Management and Related Stockholder Matters.                        35

     13. Certain Relationships and Related Transactions.                    37

     14. Principal Accountant Fees and Services.                            38

Part IV
-------

Item 15. Exhibits and Financial Statement Schedules.                        38

Signatures.                                                                 41

Financial Statements.                                                       42


                                       3
<PAGE>

                                     PART I
                                     ------

Item 1 - DESCRIPTION OF BUSINESS
         -----------------------

(a) General Development of Business.

      The Registrant, Ronson Corporation (the "Company"), is a company
incorporated in 1928.

      The Company is engaged principally in the following businesses:

      1.    Consumer Products; and

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

      The Company's common shares are listed on the Nasdaq Capital Market. The
Company's common shares are quoted under the symbol RONC.

(b)   Financial Information about Segments.

      Refer to Note 11 of the Notes to Consolidated Financial Statements below.

(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", and a spot remover under the product tradename "Kleenol". 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.
The consumer products segment has a greater than 10% customer, which is a
distributor, supplying Ronson's products to numerous retailers. Management does
not believe that this segment is substantially dependent on this distributor
because of the presence of many other distributors which provide retailers with
Ronson's consumer products. Sales to this distributor in 2005 and 2004 accounted
for 14% and 13%, respectively, of Consolidated Net Sales of the Company and 24%
and 22%, respectively, of Net Sales of the consumer products segment.

      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,
Canada and Mexico. 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; however increased costs associated with the rising prices
of oil used in certain Ronson consumer products are a factor.

      Ronson Consumer Products also distributes seven lighter and torch products
- the "COMET" refillable butane lighter; the Ronson "WINDII" liquid fuel
windproof lighter; the Ronson "AmeroFlame Ignitor", used for lighting
fireplaces, barbecues, camping stoves and candles; the "AMERO LITE" blue point
flame butane lighter, the "JetLite", a blue flame torch lighter, excellent in
the wind as when sailing or


                                       4
<PAGE>

golfing; the "Tech Torch", used for craft and hobby work, cooking specialties,
and soldering; and the "AERO TORCH", geared for soldering, plumbing and outdoor
use and bigger projects requiring a larger flame. The lighter products are
marketed in the United States and Canada.

      The lighter and torch products distributed by Ronson Consumer Products
were each developed by the Company's research and development department. The
products were sourced in Peoples Republic of China and Taiwan and are
manufactured to the Company's engineering and quality specifications, with
quality control inspection both at the manufacturer and at the Company's
facilities in Woodbridge, NJ. Each of the Company's lighter and torch products
is refillable using the Company's Ronsonol lighter fluid or Multi-Fill butane
fuel injectors. The Company believes that several of the products are unique
products in the marketplace. The Company's lighter and torch products however,
face strong competition from several nationally distributed brands and unbranded
imports.

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

      (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 aircraft fueling, cargo handling,
avionics, new and used aircraft sales, aircraft repairs, aircraft 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-Description
of Properties, (4) Trenton, New Jersey). 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 Cessna Aircraft
service station. Ronson Aviation expects to become a Cirrus Aircraft service
station in the second quarter of 2006.

      At December 31, 2005, Ronson Aviation had orders to purchase two new
aircraft from Raytheon Aircraft Corporation, both of which are for resale. The
total sales value of these aircraft is approximately $1,658,000. The orders are
subject to cancellation by Ronson Aviation. Ronson Aviation has received an
order to sell one of the aircraft in the first quarter of 2006.

      Ronson Aviation is subject to extensive competition in its 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.

ENVIRONMENTAL MATTERS
---------------------

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


                                       5
<PAGE>

      In December 1989 the Company adopted a plan to discontinue the operations
in 1990 of one of its facilities, Prometcor, Inc. ("Prometcor") located in
Newark, New Jersey, and to comply with all applicable laws. In October 1994
Prometcor entered into a Memorandum of Agreement with the New Jersey Department
of Environmental Protection ("NJDEP") as to its environmental compliance
activities at its Newark facility. As the result of sampling and the evaluation
of the results by the Company's environmental consultants and the NJDEP in 1996
and 1997, areas of contamination in the groundwater below a section of the
property were identified. The sampling and delineation were undertaken and may
resume in the future in this area of the property. The Company's plan related to
the groundwater issue has not yet been approved by the NJDEP. Long-term
monitoring of groundwater may be required. The extent of the remaining costs
associated with groundwater is not determinable until testing and remediation
have been completed and accepted by the NJDEP.

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

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

PATENTS AND TRADEMARKS
----------------------

      The Company 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. The "Ronson" brand is of
considerable value to the Company; however, its book value, as reported in the
Company's Consolidated Balance Sheets, is nominal.

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 $348,000,
$313,000 and $339,000, during the fiscal years ended December 31, 2005, 2004
and 2003, 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, 2005, the Company and its subsidiaries employed a total
of 90 persons.

CUSTOMER DEPENDENCE
-------------------

      See above under "Consumer Products".


                                       6
<PAGE>

SALES AND REVENUES
------------------

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

                               Consumer           Aviation Operations
                               Products              and Services
                               --------           -------------------

      2005                        59%                      41%

      2004                        59%                      41%

      2003                        63%                      37%

(d) Financial Information About Geographic Areas.

      Refer to Note 11 of the Notes to Consolidated Financial Statements.

Item 1A - RISK FACTORS
          ------------

      Political and Economic Risks

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

      Operating Results and Net Earnings May Not Meet Expectations

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

      *     the introduction of new products and line extensions by the Company
            or its competitors;

      *     the Company's ability to control its internal costs and the cost of
            raw materials;

      *     the effectiveness of the Company's advertising, marketing and
            promotional programs;

      *     the changes in product pricing policies by the Company or its
            competitors;

      *     the ability of the Company to achieve business plans, including
            volume and pricing plans, as a result of high levels of competitive
            activity;

      *     the ability to maintain key customer relationships;

      *     the ability of major customers and other creditors to meet their
            obligations as they come due;

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


                                       7
<PAGE>

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

      *     the costs, distraction of management, and disruption that may be
            incurred due to the actions of a dissident shareholder / hedge fund.

      Regulatory Risks

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

            Certain of the Company's products have chemical compositions that
are controlled by various state, federal and international laws and regulations.
The Company complies with these laws and regulations and seeks to anticipate
developments that could impact the Company's products. These laws and
regulations could have a material adverse effect on the Company's financial
condition, results of operations and cash flows.

      Interest Rates

            The Company is exposed to changes in prevailing market interest
rates affecting its interest costs and the return on its investments. All of the
Company's Short-term Debt carries a variable rate of interest. The Company's
outstanding Long-term Debt as of December 31, 2005, consisted of indebtedness
with a fixed rate of interest which is not subject to change based upon changes
in prevailing market interest rates.

      Foreign Currency Exchange Rates

            The Company is also exposed to changes in foreign currency exchange
rates due to its investment in its Canadian subsidiary, Ronson-Canada and
because approximately 6% of its Consolidated Net Sales were in Canada.

      Prices of Fuels

            The Company, due to the nature of its operations, is also exposed to
changes in the prices of fuels, because of the fuels included in its consumer
products and because of its aircraft fuel sales. The price of the fuels
fluctuates more or less in conjunction with oil prices. Cost of fuels also
impacts the cost of various other components used in the Company's products.
Increases in the price of fuels, to the extent the Company is not able to
increase the prices of its products to its customers, could have an adverse
impact on the Company's results of operations.


                                       8
<PAGE>

      Volatility in the Insurance Market

            The Company evaluates its insurance coverage annually. Trends in the
insurance industry suggest that such coverage may be much more expensive, less
protective or even unavailable which could have a material adverse effect on the
Company's financial condition, results of operations and cash flows. In such a
case, the Company may decide to self-insure more, thereby undertaking additional
risks.

Ronson Consumer Products:

      Component Supply Risk

            Ronson Consumer Products depends upon its vendors for the supply of
the primary components for its flame accessory and chemical products. Certain of
these components are subject to significant price volatility beyond the control
or influence of the Company. Petroleum products have had significant price
volatility in the past and may in the future. Rising oil prices can also impact
the Company's cost of transporting its products. The Company has historically
been successful in managing its component costs and product pricing to maintain
historical gross margins. Additionally, the Company has generally found
alternative sources of constituent chemicals for its products readily available.
As component and raw material costs are the main contribution to cost of goods
sold for all of the Company's products, any significant fluctuation in the costs
of components could also have a material impact on the gross margins realized on
the Company's products. Increases in the prices for the components could have a
material adverse effect on the Company's business, operating results, financial
position and cash flows.

      Reliance on Supply Chain

            Each of Ronson Consumer Products' lighter and torch products is
manufactured by a single vendor. Since there are a number of sources of similar
lighter products, the Company believes that other suppliers could provide
lighters and torches on comparable terms. The loss of any of these suppliers or
manufacturers could, however, temporarily disrupt or interrupt the production of
the Company's products.

      Competition

            The market for the Company's products is highly competitive and is
expected to continue to be competitive in the future. The Company's products
compete both within their own product classes as well as within product
distribution channels, competing with many other products for store placement
and shelf space. The Company is aware of many competing products, some of which
sell for lower prices; however, the Company relies on the awareness of its
brands among consumers, the value offered by those brands as perceived by
consumers, and competitive pricing as its primary competitive strategies.

            These considerations as well as increased competition generally
could result in price reductions, reduced gross margins, and a loss of market
share, any of which could have a material adverse effect on the Company's
business, operating results, financial position and cash flows. In addition,
many of the Company's competitors have significantly greater financial,
technical, product development, marketing and other resources. There can be no
assurance that the Company will be able to compete successfully against current
and future competitors. Competitive pressures faced by the Company could have a
material adverse effect on its business, operating results, financial position
and cash flows.

      Business Risks

            With the trend toward consolidation in the retail marketplace, the
Company's customer base is shifting toward fewer, but larger, customers who
purchase


                                       9
<PAGE>

in larger volumes. The loss of, or reduction in, orders from any of the
Company's most significant customers could have a material adverse effect on the
Company's business and its financial results.

            Large customers also seek price reductions and promotional
concessions. In this regard, the Company has expanded its customer promotions
and allowances which has negatively impacted, and will likely continue to
impact, the Company's maintenance of existing profit margins.

            In addition, the Company is subject to changes in customer
purchasing patterns. These types of changes may result from changes in the
manner in which customers purchase and manage inventory levels, or display and
promote products within their stores. Other potential factors such as customer
disputes regarding shipments, fees, merchandise condition or related matters may
also impact operating results.

            The manufacture, packaging, storage, distribution and labeling of
the Company's products and the Company's business operations all must comply
with extensive federal and state laws and regulations. It is possible that the
government will increase regulation of the transportation, storage or use of
certain chemicals, to enhance homeland security or protect the environment and
that such regulation could negatively impact raw material supply or costs.

            Some of the Company's consumer products are associated in part with
tobacco. These products are also utilized for other purposes such as replacing
the match. The Company's research and development department is continuing to
develop products utilizing the Company's fuels with products not associated with
tobacco. The potential decline in smoking, however, may have a negative impact
on the Company.

      Protection of Intellectual Property

            The Company relies on trademark, trade secret, patent and copyright
laws to protect its most important asset, the Ronson brand name, and its other
intellectual property. The Company cannot be certain that the intellectual
property rights will be successfully asserted in the future or that they will
not be invalidated or circumvented.

Ronson Aviation:

      Supply Risk

            Ronson Aviation depends upon its vendors for the supply of its
principal products. Aircraft fuels are subject to significant price volatility.
Ronson Aviation has historically been successful in the pricing of its fuel to
maintain its gross margins. Increases in the price of the aircraft fuels could
have an adverse effect on the demand for Ronson Aviation products and aviation
services, and on its operating results, financial position and cash flows.

            Ronson Aviation relies on Raytheon Aircraft Corporation as its sole
supplier of new piston engine(s) aircraft for sale. Loss of availability of such
aircraft and delays in deliveries of aircraft have had from time to time, and
may in the future temporarily have, an adverse effect on Ronson Aviation's Net
Sales.

      Business Risk

            Ronson Aviation depends upon demand for general aviation services,
including corporate air travel. Increased security requirements and concerns may
have an effect, positive or adverse, on Ronson Aviation's future operating
results, financial position and cash flows.


                                       10
<PAGE>

Item 2 - DESCRIPTION OF PROPERTIES
         -------------------------

      The following list sets forth the location and certain other information
concerning the Company's manufacturing and office facilities. The Company's
facilities are in relatively modern buildings which were designed for their
present purpose. The Company believes its manufacturing and other facilities to
be suitable for the operations conducted. In the list below, "medium" facilities
are those which have between 20,000 and 100,000 square feet; and "small"
facilities are those which have less than 20,000 square feet.

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

      (1) Woodbridge, New Jersey

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

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

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

      (2) South Brunswick, New Jersey

      One small facility for shipping and storage of finished goods. In March
2004 RCPC began to occupy this facility which is subject to a lease expiring in
March 2013, with two additional three-year options.

      (3) Somerset, New Jersey

      One small facility for executive and consumer products offices. This
facility is subject to a lease which expires in June 2009. 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. In March 2004 Ronson Aviation announced
plans for the expansion of its facilities, the cost of which is more than
sufficient to extend the lease for five additional five-year terms.

      (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 2006. This
facility is constructed of brick and cinder block.


                                       11
<PAGE>

      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.

Steel Partners II, L.P., et al v. Louis V. Aronson II, Robert A. Aronson,
-------------------------------------------------------------------------
Erwin M. Ganz, I. Leo Motiuk, Gerard J. Quinnan, Justin P. Walder,
------------------------------------------------------------------
Saul H. Weisman, Carl W. Dinger III and Ronson Corporation
----------------------------------------------------------

      On March 25, 2003, a derivative lawsuit was filed against the directors of
Ronson in the Superior Court of New Jersey, Chancery Division, Essex County by
Steel Partners II, L.P. and Warren G. Lichtenstein. The lawsuit alleges, among
other matters, breach of fiduciary duty and an absence of disinterestedness by
the defendants, and use of corporate control to advance their own interests. The
lawsuit seeks monetary damages on behalf of Ronson as well as equitable relief
to invalidate the Company's shareholder rights agreement and certain consulting
agreements, to enjoin performance of agreements with certain directors and to
require the Company's President and C.E.O. to divest those shares acquired, and
not to acquire additional shares while the shareholder rights agreement has been
or remains in place. A special committee of two independent directors was
created by the Board of Directors of the Company to investigate and evaluate the
allegations made in the lawsuit. The committee concluded that none of the
directors breached any fiduciary duty owed to the Company or its shareholders,
that it is not in the best interests of the Company or its shareholders to
continue legal action against the directors on any of the claims asserted in the
derivative complaint and that the Company seek to dismiss the derivative action.
The Company's directors have vigorously denied the claims and moved to have the
complaint dismissed. That motion to dismiss was denied in February 2004.

      The Company's directors will continue to contest and to vigorously defend
against the claims.

      On June 21, 2004, the Superior Court of New Jersey granted the motion of
the Ronson directors, over the objection of Steel Partners II, L.P., to
bifurcate the case. As a result, trial of all claims and defenses in the
derivative suit, other than the defense based upon the report and findings of
the Special Litigation Committee, will be held in abeyance pending trial of the
Special Litigation Committee defense. The trial of the Special Litigation
Committee defense was conducted in March 2005. In April 2005, the parties
submitted post-trial memoranda, and await the Superior Court's determination of
the Special Litigation Committee defense.

      On July 23, 2004, Ronson Corporation and certain of its directors filed a
Counterclaim and Third-Party Complaint against Steel Partners II, L.P., Warren
G. Lichtenstein and certain close associates -- namely, Jack Howard, Howard M.
Lorber and Ronald Hayes. The Counterclaim and Third-Party Complaint is based
upon the New Jersey Shareholders Protection Act, and seeks compensatory and
punitive damages, costs of suit and interest, as well as entry of a judgment
directing the public disclosure of all limited partners of Steel Partners II,
L.P., and persons acting directly or indirectly in concert with them in
connection with the acquisition or attempted acquisition of stock in, or control
of, Ronson Corporation. All discovery and other proceedings in connection with
the Counterclaim and Third-Party Complaint are being held in abeyance pending
the Courts decision on the Special Litigation Committee defense.


                                       12
<PAGE>

Steel Partners II, L.P. v. Louis V. Aronson II, Robert A. Aronson, Barbara L.
-----------------------------------------------------------------------------
Collins, Carl W. Dinger III, Paul H. Einhorn, Erwin M. Ganz, Daryl K. Holcomb,
------------------------------------------------------------------------------
I. Leo Motiuk, Gerard J. Quinnan, Justin P. Walder, and Saul H. Weisman
-----------------------------------------------------------------------

      On or about April 14, 2005, Steel Partners II, L.P. commenced an action,
on its own behalf as a shareholder of the Company, in the United States District
Court for the District of New Jersey, against the current directors (other than
Dr. David) of the Company, as well as Daryl K. Holcomb, the Company's chief
financial officer, and Carl W. Dinger, a shareholder of and consultant to the
Company. The Complaint alleges, among other things, that defendants should be
treated collectively as an "Acquiring Person" under the Company's Shareholder
Rights Agreement, and that their acquisition and ownership of more than 12% of
the outstanding stock of the Company has triggered the provisions of the
Shareholder Rights Agreement with respect to the offering of rights to
shareholders, including Steel Partners II (notwithstanding that in its
derivative action in the Superior Court of New Jersey, Steel Partners has
challenged the legality and enforceability of the Company's Shareholder Rights
Agreement). The Complaint alleges further that the defendants have violated
reporting requirements under Section 13(d) of the Securities Exchange Act and
Rule 13-d promulgated by the Securities Exchange Commission by failing to
disclose an alleged agreement to coordinate their purchases of the Company's
stock for the purposes of placing voting control in the hands of Louis V.
Aronson II and for other undisclosed purposes.

      The Company's directors and its chief financial officer intend to contest
the allegations of this second complaint filed by Steel Partners and vigorously
defend the action. The Company's directors and its chief financial officer filed
a motion to dismiss Steel Partners federal court complaint in July 2005. We
await determination of the motion.

Juraj Kosco and Maria Kosco vs. Ronson Consumer Products Corporation, Ronson
----------------------------------------------------------------------------
Corporation, Industrial Waste Management, Inc., Cuno Incorporated, XYZ
----------------------------------------------------------------------
Corporations #1-10 (fictitious parties), John and/or Jane Does #1-10 (fictitious
--------------------------------------------------------------------------------
individuals)
------------

            The plaintiffs, a former employee and his spouse, claim damages
for burns and other injuries allegedly received in an accident occurring during
the employee's performance of his job. The lawsuit was filed in the Superior
Court of New Jersey, Law Division, Middlesex County, on February 10, 2005, and
damages totaling $10,000,000. The claimant has received, and is receiving,
claims workers' compensation benefits related to the incident. Counsel has
advised that it believes that the claim is barred by the exclusive remedy of the
Workers' Compensation Act. Management believes that damages, if any, awarded in
addition to the statutory workers' compensation benefits, will be well within
the Company's insurance coverage.

David Pelous and Mary Pelous, his wife vs. Behr Process Corporation, et al.
---------------------------------------------------------------------------

            On January 26, 2006, Ronson Corporation of Delaware, a former
subsidiary of the Company, was notified it was named as one of at least
forty-one defendants in the above matter. The plaintiffs claim damages from
illness as a result of exposure to benzene and benzene-containing products. The
Company has not received any information which management believes supports any
claims by the plaintiffs against it. Management believes that damages, if any,
will be well within the Company's insurance coverage.

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

            (a) At the Company's Annual Stockholders' Meeting (the "Meeting") on
October 27, 2005, the matters set forth in the Company's 2005 Notice of Meeting
and Proxy Statement, which is incorporated herein by reference, were submitted
to the Company's stockholders.

            (b) The Election of Directors by 87.9% or more of the votes cast at
the meeting is summarized as follows:


                                       13
<PAGE>

            Dr. Edward E. David was elected as the new Class I director, with a
term expiring at the 2006 Annual Meeting;

            Messrs. Louis V. Aronson II, Paul H. Einhorn, and I. Leo Motiuk were
reelected for three-year terms as Class III directors, expiring at the 2008
Annual Meeting; and

            The terms of office of each of the following directors continued
after the Meeting; Robert A. Aronson, Barbara L. Collins, Erwin M. Ganz, Gerard
J. Quinnan, and Justin P. Walder.

      (c) The appointment of Demetrius & Company, L.L.C., independent auditors,
to audit the consolidated financial statements of the Company for the year 2005
was ratified by 88.4% of the votes cast at the Meeting.

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

1. ELECTION OF DIRECTORS

                                         FOR          %      WITHOLD      %
                                         ---         ---     -------     ---

      Class I (term expires at 2006 Annual Meeting of Stockholders):

            Edward E. David, Jr.      3,599,163      87.9    495,069     12.1

      Class III (term expires at 2008 Annual Meeting of Stockholders):

            Louis V. Aronson II       3,598,105      87.9    496,127     12.1
            Paul H. Einhorn           3,599,077      87.9    495,155     12.1
            I. Leo Motiuk             3,599,777      87.9    494,455     12.1

2. To ratify the appointment of DEMETRIUS & COMPANY, L.L.C., as independent
auditors for the year 2005

    FOR          %         AGAINST        %         ABSTAIN        %
    ---         ---        -------       ---        -------       ---
 3,617,821     88.4        473,280       11.6        3,131        0.0

                                     PART II
                                     -------

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

      (a) The principal market for trading in Ronson common stock is the Nasdaq
Capital 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.

       2005
       ----------------------------------------------------

       Quarter        1st        2nd        3rd        4th
       ----------------------------------------------------
       High Bid      $2.12      $2.25      $1.90      $1.81
       Low Bid       $1.72      $1.53      $1.48      $1.07

       2004
       ----------------------------------------------------

       Quarter        1st        2nd        3rd        4th
       ----------------------------------------------------
       High Bid      $2.88      $2.84      $2.42      $1.96
       Low Bid       $1.81      $1.92      $1.22      $1.43


                                       14
<PAGE>

      (b) At March 23, 2006, there were 2,232 stockholders of record of the
Company's common stock.

      (c) Dividends -

      1.    Cash dividends declared and paid by the Company in the years ended
            December 31, 2005 and 2004 are as follows:

                                      2005             2004
                                      ----             ----
            First Quarter            $ .01             $ .00
            Second Quarter             .01               .01
            Third Quarter              .00               .01
            Fourth Quarter             .00               .01

      2.    Stock dividends - On February 23, 2006, the Company's Board of
            Directors declared a 5% stock dividend on the Company's outstanding
            common stock, in addition to a 5% common stock dividend declared
            during each of the last four fiscal years, on February 15, 2005,
            February 12, 2004, March 18, 2003, and March 12, 2002, respectively.
            Information regarding the number of shares and per share amounts has
            been retroactively adjusted for the stock dividends declared on the
            Company's common stock.

      (d) See Item 12 below for information as to securities authorized for
issuance under equity compensation plans.

      (e) The following table contains information about purchases of equity
securities by the Company and affiliated persons during the fourth quarter of
2005:

                      Issuer Purchases of Equity Securities

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------
                                                                                                       Maximum
                                                                                                     Number (or
                                                                                                     Approximate
                                                                               Total Number         Dollar Value)
                                                                                Of Shares          of Shares that
                                                                               Purchased as          May Yet Be
                                                                             Part of Publicly         Purchased
                                       Total Number       Average Price         Announced             Under the
                                        of Shares           Paid per             Plans or              Plans or
Period                                 Purchased (1)          Share               Programs             Programs
------------------------------------------------------------------------------------------------------------------
<S>                                         <C>              <C>                    <C>                   <C>
October 1 - October 31, 2005                 --              $  --                  --                    --
November 1 - November 30, 2005               --                 --                  --                    --
December 1 - December 31, 2005              778               1.37                  --                    --
                                          -----              -----               -----                 -----
Total                                       778              $1.37                  --                    --
                                          =====              =====               =====                 =====
</TABLE>

      (1)   All transactions for the period were made by Directors of the issuer
            as open market purchases.

Item 6 - SELECTED FINANCIAL DATA
         -----------------------

      The information required by this item is filed with this report on page 43
and is incorporated herein by reference.


                                       15
<PAGE>

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

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

2005 Compared to 2004

      The fourth quarter 2005 was profitable, but not sufficient to offset the
one-time nonrecurring loss of $591,000 on the sale in September 2005 of Ronson
Aviation, Inc.'s ("Ronson Aviation's"), Trenton, N.J., charter business and
Citation II Jet. Also, earnings in the fourth quarter of 2005 included a
nonrecurring loss of $51,000 related to a New Jersey State income tax matter
from prior years. The Company would have had Net Earnings for the year 2005 had
it not incurred the nonrecurring losses in 2005 totaling $642,000, before income
taxes.

      The Company's Net Sales were $26,563,000 in the year 2005 as compared to
$28,483,000 in the year 2004, and were $6,861,000 in the fourth quarter of 2005
as compared to $8,079,000 in the fourth quarter of 2004. Net Sales, excluding
aircraft sales, increased by $352,000 in the fourth quarter of 2005 as compared
to the same period in 2004. No aircraft sales were included in 2005; however, in
the fourth quarter and year 2004, Net Sales included sales of aircraft of
$1,570,000 and $2,098,000, respectively.

Ronson Consumer Products
------------------------
(in thousands)
                                                                 Year Ended
                                                                 December 31,
                                                             2005          2004
                                                             ----          ----

Net sales                                                   $15,664      $16,768
Earnings before interest, other items,
   intercompany charges, and taxes                            1,347        1,807
Earnings before intercompany charges
   and taxes                                                  1,126        1,691

      Net Sales of consumer products at Ronson Consumer Products Corporation
("RCPC"), Woodbridge, New Jersey, and Ronson Corporation of Canada Ltd.
("Ronson-Canada"), Mississauga, Ontario, (together "Ronson Consumer Products")
were lower by 7% in 2005 as compared to 2004 primarily due to reduced sales of
certain flame accessory products, composed of a 5% increase due to increased
average net selling prices offset by a decline of about 12% due to reduced
volume of products sold.

      Cost of Sales, as a percentage of Net Sales, at Ronson Consumer Products
decreased to 58% in 2005 from 59% in 2004. A reduction in the Cost of Sales
percentage in 2005 due to the increase in average net selling prices (discussed
above) was offset by increased material costs because of increases in the price
of oil (used in fuels for butane refills and Ronsonol as well as other
components) and the effect of the lower Net Sales. The amount of the Cost of
Sales at Ronson Consumer Products decreased in 2005 by 7%. The decrease in the
amount of Cost of Sales was composed of the following:

      Reduced volume of products sold                  8%
      Decreased manufacturing costs                    1%
      Increased unit costs of products sold           (2)%
                                                     ---
      Total reduction in amount of Cost of Sales       7%
                                                     ===

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

      Selling, Shipping and Advertising Expenses, as a percentage of Net Sales,
at Ronson Consumer Products increased to 23% in 2005 from 21% in 2004 primarily
due to


                                       16
<PAGE>

lower Net Sales, to increased shipping costs due to higher oil prices, and to
increased costs associated with the Company's new warehouse facility. General
and Administrative Expenses, as a percentage of Net Sales were unchanged at 8%
in 2005 and 2004 primarily because lower personnel costs were offset by the
effect of the decreased Net Sales on the percentage.

      Interest Expense at Ronson Consumer Products increased to $195,000 in 2005
from $112,000 in 2004 primarily due to increased Short-term Debt and Long-term
Capitalized Leases and to increased interest rates on Short-Term Debt.

Ronson Aviation
---------------
(in thousands)
                                                      Year Ended
                                                      December 31,
                                                   2005          2004
                                                   ----          ----

Net sales                                        $10,899       $11,715
Earnings before interest, other items,
    intercompany charges, and taxes                1,435         1,253
Earnings before intercompany charges
    and taxes                                      1,381         1,158
Nonrecurring loss-sale of charter aircraft
    and business                                    (591)           --

      Net Sales at Ronson Aviation decreased by 7% in 2005 from 2004 primarily
because Ronson Aviation had no sales of aircraft in 2005; however, Net Sales in
2004 had included aircraft sales of $2,098,000. The reduction in aircraft sales
was partially offset by increased sales of aircraft maintenance and aviation
services and by increased sales of aircraft fuel due to higher aviation fuel
prices.

      Ronson Aviation's Cost of Sales, as a percentage of Net Sales, decreased
to 76% in 2005 from 77% in 2004 primarily because a decrease due to the change
in the mix of products sold was more than offset by the effect of the increased
cost of aircraft fuel due to higher oil prices.

      Ronson Aviation's Selling, Shipping and Advertising Expenses and General
and Administrative Expenses, as a percentage of Net Sales, were unchanged at 8%
in 2005 and 2004 primarily because an increase due to the decreased sales in
2005 was offset by the effect of reduced personnel costs.

      Interest Expense at Ronson Aviation decreased to $50,000 in 2005 from
$100,000 in 2004 primarily because of higher average Short-Term Debt in 2004
related to aircraft inventory for sale and to reduced average Long-Term Debt in
2005 due to the sale of Ronson Aviation's charter aircraft and related charter
business discussed below.

      The Nonrecurring Loss of $591,000 in 2005 was due to the sale of Ronson
Aviation's charter aircraft, the Citation II, and the related charter business.
In the second quarter of 2005, the Company reached an agreement for the sale of
the charter aircraft and related business for $1.6 million in cash. The closing
on the sale was completed on September 30, 2005. The Nonrecurring Loss consisted
of: 1) $97,000 due to the excess of the book value of the aircraft over the
proceeds; and 2) approximately $494,000 in costs preparing the aircraft for sale
and costs related to the sale. The Company repaid two term loans associated with
the aircraft totaling about $460,000. In the years ended December 31, 2005 and
2004, the Ronson Aviation charter business had revenues of $358,000 and
$768,000, respectively, and operating losses of $100,000 and $61,000,
respectively.


                                       17
<PAGE>

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

      The General and Administrative Expenses of Corporate and Others increased
to $1,799,000 in 2005 as compared to $1,702,000 in 2004 primarily due to
increased professional fees, director's fees, and certain benefits costs in
2005.

      Other-Net included pension expenses related to the Company's frozen
defined benefit plans of $308,000, $375,000, and $423,000 in the years ended
December 31, 2005, 2004 and 2003, respectively. In the years ended December 31,
2004 and 2003, $291,000 and $341,000, respectively, of these pension expenses
were reclassified from General and Administrative Expenses to conform with the
current year's presentation.

      The net Other Charges of $95,000, $145,000, and $460,000 in 2005, 2004 and
2003, respectively, were the legal fees incurred as a result of the derivative
action and a second lawsuit filed by the same stockholder. The net shareholder
litigation expenses were included in General and Administrative Expenses in the
Consolidated Statements of Operations. These litigation expenses were net of the
associated insurance reimbursements.

2004 Compared to 2003

      The Company's Net Sales were $28,483,000 in the year 2004 as compared to
$26,740,000 in the year 2003, an increase of 7%. The Company's Net Earnings in
the year 2004 were $193,000 as compared to $703,000 in the year 2003.

      The Company's Net Earnings from Operations in the year 2004 were $922,000
as compared to $1,461,000 in the year 2003. The Company's Earnings from
Operations were after other charges of $145,000 and $460,000 (before income
taxes) in 2004 and 2003, respectively, due to litigation costs related to a
stockholder derivative action, net of the associated insurance reimbursements.

Ronson Consumer Products
------------------------
(in thousands)
                                                              Year Ended
                                                             December 31,
                                                           2004        2003
                                                           ----        ----

Net sales                                                $16,768     $16,773
Earnings before interest, other items,
    intercompany charges, and taxes                        1,807       2,610
Earnings before intercompany charges
    and taxes                                              1,691       2,521

      Net Sales of consumer products at Ronson Consumer Products was unchanged,
composed of a 4% increase due to increased volume of products sold offset by a
decline of about 4% due to reduced average net selling prices.

      Cost of Sales, as a percentage of Net Sales, at Ronson Consumer Products
increased to 59% in 2004 from 56% in 2003. The increase in the Cost of Sales
percentage in 2004 was primarily due to the increased material costs because of
the increases in the price of oil and to increased personnel costs. The amount
of Cost of Sales increased in 2004 from 2003 by 5%, composed of about 3% due to
increased product unit costs, 4% due to increased volume of products sold, and
3% due to increased manufacturing costs, partially offset by (5)% resulting from
the effect of a change in the mix of products sold.

      Selling, Shipping and Advertising Expenses, as a percentage of Net Sales,
at Ronson Consumer Products increased to 21% in 2004 from 19% in 2003 primarily
due to the increased costs associated with the Company's new warehouse facility
and to increased shipping costs due to higher fuel prices, partially offset by a
reduction in the portion of sales subject to commission.


                                       18
<PAGE>

      Interest Expense at Ronson Consumer Products increased to $112,000 in 2004
from $85,000 in 2003 primarily due to increased Short-term and Long-term Debt.

Ronson Aviation
---------------
(in thousands)
                                                              Year Ended
                                                              December 31,
                                                           2004        2003
                                                           ----        ----

Net sales                                                $11,715      $ 9,967
Earnings before interest, other items,
      intercompany charges, and taxes                      1,253        1,454
Earnings before intercompany charges
      and taxes                                            1,158        1,374

      Net Sales at Ronson Aviation increased by 18% in 2004 from 2003 primarily
because of an increase in aircraft sales of $1,500,000. Increased aircraft fuel
sales, primarily due to oil price increases, were offset by reduced sales of
maintenance services.

      Ronson Aviation's Cost of Sales, as a percentage of Net Sales, increased
to 77% in 2004 from 71% in 2003 primarily due to the change in the mix of
products sold and to the increased cost of aircraft fuel due to higher oil
prices.

      Ronson Aviation's Selling, Shipping and Advertising Expenses and General
and Administrative Expenses, as a percentage of Net Sales, were reduced to 8% in
2004 from 11% in 2003 primarily due to the increased sales in 2004.

      Interest Expense at Ronson Aviation increased to $100,000 in 2004 from
$67,000 in 2003 primarily due to increased average Short-term Debt in 2004
related to aircraft inventory for sale.

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

      The General and Administrative Expenses of Corporate and Others were lower
at $1,702,000 in 2004 as compared to $1,802,000 in 2003 primarily due to reduced
professional fees.

      In 2003 Other-Net included a gain of $63,000 from the sale of vacant land
at Delaware Water Gap, PA.

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

      In accordance with Statement of Financial Accounting Standards ("SFAS")
#109, "Accounting for Income Taxes", in 2005, 2004, and 2003, the Company
recognized deferred income tax expenses (benefits) of ($235,000), $154,000, and
$313,000, respectively, primarily due to the Earnings (Losses) before Taxes.

      Current income taxes in the years ended December 31, 2005, 2004, and 2003,
were presented net of credits of $16,000, $110,000, and $420,000, respectively,
arising from the utilization of available tax losses and loss carryforwards in
accordance with SFAS #109. In 2005, 2004 and 2003, current income tax expenses
(benefits) were as follows (in thousands):

                                                 Year Ended December 31,
                                               2005       2004        2003
                                               ----       ----        ----

              Federal                         $  --      $  (4)      $  20
              State                              38        152         110
              Foreign                            28          9           5
                                              -----      -----       -----
                          Total               $  66      $ 157       $ 135
                                              =====      =====       =====


                                       19
<PAGE>

      At December 31, 2005, the Company had net operating loss carryforwards for
federal income tax purposes of approximately $3,657,000 and federal and state
alternative minimum tax credit carryforwards of $104,000. (Refer to Note 2 of
the Notes to Consolidated Financial Statements.)

      The Company's effective income tax rate was 34% in 2005, 62% in 2004, and
39% in 2003. The increase in the effective tax rate in 2004 was primarily due to
the provision of $122,000 for state income tax related to an assessment by the
State of New Jersey for prior years.

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

      The Company's Stockholders' Equity was $3,304,000 at December 31, 2005,
compared to $3,873,000 at December 31, 2004. The decrease in Stockholders'
Equity in 2005 was primarily due to the Net Loss of $333,000 in 2005, and to a
$137,000 increase, net of related income tax benefits, in the Minimum Pension
Liability Adjustment component of Accumulated Other Comprehensive Loss.

      The Company had a deficiency in working capital of $760,000 at December
31, 2005, as compared to a deficiency of $1,060,000 at December 31, 2004. The
increase in working capital of about $300,000 was primarily due to the proceeds
of $1.6 million from the sale of the Citation II, partially offset by the Net
Loss in 2005.

      The Bank of America lines of credit with RCPC and Ronson Aviation had been
scheduled to expire on December 31, 2005. On January 11, 2006, Bank of America
and the Company extended these lines of credit to January 31, 2007. The
extension included a covenant providing for a minimum consolidated earnings
before interest, taxes, depreciation, and amortization ("EBITDA"), and for fees
payable to the bank monthly beginning February 28, 2006, if the loans remain
outstanding at the end of the month. Bank of America and the Company do not
expect a further extension of the lines of credit. The Company is actively
engaged in discussions with other financial institutions to replace Bank of
America as the Company's primary lender in the next few months. The extension
agreement also provided that the expiration date of the mortgage loan between
Bank of America and RCPC, which had been due to expire on December 1, 2008, was
changed to January 31, 2007 to coincide with the expiration date of the lines of
credit.

      Based on the amount of the loans outstanding and the levels of accounts
receivable and inventory at December 31, 2005, Ronson Consumer Products and
Ronson Aviation had total unused borrowings available at December 31, 2005 of
about $679,000 under the Bank of America and Canadian Imperial Bank of Commerce
lines of credit.

      The Company's Raw Material Inventories increased at December 31, 2005,
from December 31, 2004, primarily due to increased inventories at Ronson
Consumer Products related to new products. The Company's Other Current Assets
were reduced at December 31, 2005 from December 31, 2004 due primarily to lower
prepaid insurance.

      The Company's Accounts Payable increased in 2005 primarily due to the
timing of purchases and payments. The Company's Accrued Expenses decreased in
2005 primarily due to lower accrued compensation and to the large contributions
to the Company's defined benefit pension plan.

      Ronson Aviation's property is subject to a long-term lease with an
existing expiration of November 2007. The lease may be extended by Ronson
Aviation for an additional 25 years with an investment in capital improvements
of $1,500,000. In March 2004 Ronson Aviation announced plans to proceed with an
expansion of its facilities to be completed in the second half of 2006 which
will meet the requirements of the lease extension. At December 31, 2005, Ronson
Aviation had expended approximately $426,000 and had outstanding commitments to
expend approximately $105,000 for architectural and engineering services on the
project.


                                       20
<PAGE>

      On February 23, 2006, the Company's Board of Directors declared a 5% stock
dividend on the Company's common stock. The 5% stock dividend will be issued on
April 15, 2006, to stockholders of record March 31, 2006. Information as to the
number of shares and per share amounts has been retroactively adjusted to
reflect this stock dividend.

      On May 31, 2004, the Company completed the redemption of the remaining
outstanding preferred stock. A total of 20,322 preferred shares were redeemed at
a cost of $46,263, and 14,553 preferred shares were converted into common
shares.

      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 financial arrangements, potential additional sources of
financing and existing cash balances.

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

<TABLE>
<CAPTION>
                                                     Payments Due by Period
                                     ------------------------------------------------------
      Contractual                              Less than      2-3         4-5        After
      Obligations                     Total      1 year      years       years      5 years
                                      -----      ------      -----       -----      -------
<S>                                  <C>         <C>         <C>         <C>         <C>
      Long-term debt                 $1,705      $  155      $1,237      $   73      $  240
      Capital lease obligations       1,387         326         594         414          53
      Operating leases                1,580         333         619         336         292
      Other long-term
        obligations (1)               1,365         709         656          --          --
                                     ------      ------      ------      ------      ------
      Total contractual
        obligations                  $6,037      $1,523      $3,106      $  823      $  585
                                     ======      ======      ======      ======      ======

      Pension obligations (2)                    $  740      $  615      $  611
                                                 ======      ======      ======
</TABLE>

(1)   Other long-term obligations include amounts due under an employment
      agreement, a consulting agreement and a stock option agreement.

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

      The Company will continue to incur interest expenses related to its
outstanding short-term and long-term debt. In the years ended December 31, 2005,
2004, and 2003, the Company's interest expenses were $473,000, $367,000, and
$308,000, respectively. The interest expense in 2005 included about $71,000
related to a prior years' New Jersey State income tax matter. Management expects
its interest expenses (excluding interest related to capital lease obligations)
in the years ending December 31, 2006 through 2010 to be approximately (in
thousands):

                      2006                  $ 231
                      2007-2008               284
                      2009-2010               266
                      After 2010               33

      The estimated interest payments assume: 1) that the long-term debt and
capitalized lease obligations are repaid according to the maturities; 2) the
Company's revolving loans will continue through 2010 at the same terms and at
the average balances of 2005; 3) interest rates remain at the December 31, 2005,
levels;


                                       21
<PAGE>

4) no aircraft inventory loans will be required; and 5) interest expense related
to capitalized lease obligations are included in the table of Contractual
Obligations above.

      Other commercial commitments include outstanding letters of credit of a
$60,000 standby letter of credit related to Ronson Aviation aircraft on order
from Raytheon Aircraft Corporation, and a standby letter of credit of $150,000
related to the RCPC lease of additional warehouse space.

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

CRITICAL ACCOUNTING POLICIES

      The Company's consolidated financial statements have been prepared in
conformity with accounting principles generally accepted in the United States of
America which require that certain estimates and assumptions be made that affect
the amounts and disclosures reported in those financial statements and the
related accompanying notes. Actual results could differ from these estimates and
assumptions. Management uses its best judgment in valuing these estimates and
may, as warranted, solicit external professional advice. Estimates are based on
current facts and circumstances, prior experience and other assumptions believed
to be reasonable. The following critical accounting policies, some of which are
impacted significantly by judgments, assumptions and estimates, affect the
Company's consolidated financial statements.

Allowance For Doubtful Accounts

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

Accounting For Sales Incentives

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

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

Revenue Recognition

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


                                       22
<PAGE>

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

Inventory Valuations

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

Impairment of Long-Lived Assets

      The Company periodically evaluates whether events or circumstances have
occurred that indicate long-lived assets may not be recoverable or that the
remaining useful life may warrant revision. When such events or circumstances
are present, the Company assesses the recoverability of long-lived assets by
determining whether the carrying value will be recovered through the estimated
undiscounted future cash flows resulting from the use of the asset. In the event
the sum of the estimated undiscounted future cash flows is less than the
carrying value of the asset, an impairment loss equal to the excess of the
asset's carrying value over its fair value is recorded.

Other Loss Accruals

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

Pension Plans

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

Accounting for Income Taxes

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


                                       23
<PAGE>

New Accounting Pronouncement

      In November 2004 the FASB issued SFAS No. 151, Inventory Costs, an
amendment of ARB No. 43, Chapter 4, to clarify that abnormal amounts of idle
facility expense, freight, handling costs and wasted material (spoilage) should
be recognized as current period charges, and that fixed production overheads
should be allocated to inventory based on normal capacity of production
facilities. SFAS No. 151 is effective for our fiscal year beginning January 1,
2006, and since the Company already complies with this statement, its adoption
will not have a material impact on our financial position or results of
operations.

Item 7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
          ----------------------------------------------------------

      The Company is exposed to changes in prevailing market interest rates
affecting the return on its investments, but does not consider this interest
rate market risk exposure to be material to its financial condition or results
of operations. The Company invests primarily in highly liquid debt instruments
with strong credit ratings and very short-term (less than 90 days) maturities.
The carrying amount of these investments approximates fair value.

      All of the Company's Short-term Debt ($1,500,000 at December 31, 2005)
carries a variable rate of interest, and, therefore, the carrying value of the
Short-term Debt approximates fair value. The Company's outstanding Long-term
Debt as of December 31, 2005, consisted of indebtedness in the amount of
$1,705,000 with a fixed rate of interest which is not subject to change based
upon changes in prevailing market interest rates. Of the Long-term Debt with
fixed interest rates, the $1,241,000 mortgage loan effectively carries a fixed
rate of 7.45% due to an interest rate swap contract even though the loan has a
variable rate. Because the interest rate swap contract is 100% effective, the
contract will result in no future gains or losses being recognized. Based on the
Company's average borrowings with variable interest rates during 2005 and
assuming a one percentage point change in average interest rates, it is
estimated that the Company's interest expense during 2005 would have increased
or decreased by approximately $19,000.

      The Company is also exposed to changes in foreign currency exchange rates
due to its investment in its Canadian subsidiary, Ronson-Canada and because
approximately 6% of its Consolidated Net Sales were in Canada. As of December
31, 2005, the Company's net investment in Ronson-Canada was approximately
$582,000. Because the Company's foreign currency exchange exposure is limited to
one relatively stable currency and the relatively small size of its net
investment in Ronson-Canada, the Company does not consider this foreign currency
exchange exposure to be material to its financial condition and results of
operations. The cumulative effect of translating balance sheet accounts from the
Canadian dollars into the US dollars at the current exchange rate is included in
Accumulated Other Comprehensive Loss in the Consolidated Balance Sheets.

      The Company, due to the nature of its operations, is also exposed to
changes in the prices of fuels. In the years ended December 31, 2005 and 2004,
the Company's cost of fuels included in its consumer products and its cost of
aircraft fuel totaled approximately $4,956,000 and $4,397,000, respectively, or
approximately 28% and 23% of Cost of Sales in the years ended December 31, 2005
and 2004, respectively. The price of the fuels fluctuates more or less in
conjunction with oil prices. An increase or decrease of 1% in the average cost
of the Company's fuels would have increased or decreased the Company's Cost of
Sales by approximately $50,000 in 2005. Cost of fuels also impacts the cost of
various other components used in the Company's products. Increases in the price
of fuels, to the extent the Company is not able to increase the prices of its
products to its customers, could have an adverse impact on the Company's results
of operations.

      Under its current policies, except for an interest rate swap contract
noted above, the Company does not use derivative financial instruments,
derivative


                                       24
<PAGE>

commodity instruments or other financial instruments to manage its exposure to
changes in interest rates, foreign currency exchange rates, commodity prices or
equity prices.

Item 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
         -------------------------------------------

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

QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

      The following table sets forth certain unaudited quarterly consolidated
financial information for each of the two years in the period ending December
31, 2005:

(Dollars in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                            First         Second          Third        Fourth          Total
                                           Quarter       Quarter         Quarter      Quarter          Year
                                          -------------------------------------------------------------------
<S>                                       <C>            <C>            <C>           <C>            <C>
Year Ended December 31, 2005
----------------------------
Net sales                                 $  6,437       $  6,069       $  7,196      $  6,861       $ 26,563
Gross profit (a)                          $  1,959       $  1,905       $  2,297      $  2,343       $  8,504
Net earnings (loss)                       $    (88)      $   (325)      $     20      $     60       $   (333)
Diluted earnings (loss) per share         $  (0.02)      $  (0.08)      $   0.00      $   0.01       $  (0.07)(e)
Cash dividends paid per common share      $   0.01       $   0.01       $     --      $     --       $   0.02
Other expense included in net
 earnings (loss) (b),(c)                  $     --       $     33       $     24      $     --       $     57
Nonrecurring losses included in
 net earnings (loss) (d)                  $     --       $    253       $    102      $     31       $    386

Year Ended December 31, 2004
----------------------------
Net sales                                 $  7,049       $  6,376       $  6,979      $  8,079       $ 28,483
Gross profit (a)                          $  2,572       $  2,100       $  2,104      $  2,174       $  8,950
Net earnings (loss)                       $    275       $    (74)      $     11      $    (19)      $    193
Diluted earnings (loss) per share         $   0.07       $  (0.02)      $   0.00      $  (0.00)      $   0.04(e)
Cash dividends paid per common share      $     --       $   0.01       $   0.01      $   0.01       $   0.03
Other expense included in net
 earnings (loss) (b),(c)                  $     30       $     30       $      9      $     18       $     87
</TABLE>

(a)   Net Sales, less Cost of Sales, less a portion of Depreciation and
      Amortization.

(b)   Items are presented net of income tax effect.

(c)   The costs included in the 2005 and 2004 quarters were the legal fees
      incurred as a result of the derivative action and a second lawsuit filed
      by the same shareholder.

(d)   The Nonrecurring Losses in the second and third quarters of 2005 were
      attributed to the loss on the sales of the Ronson Aviation charter
      aircraft and business; and the loss in the fourth quarter of 2005 related
      to a prior year's state income tax matter.

(e)   Does not add due to rounding.

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, 2005, 2004 and 2003.

Item 9A - CONTROLS AND PROCEDURES
          -----------------------

      a) Evaluation of Disclosure Controls and Procedures. The Company's Chief
Executive Officer ("CEO") and Chief Financial Officer ("CFO") have evaluated the
effectiveness of the Company's disclosure controls and procedures (as such term
is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of
1934, as amended (the "Exchange Act")) as of the end of the period covered by
this annual report. Based on such evaluation, such officers have concluded that,
as of the end of the period covered by this annual report, the Company's
disclosure controls and procedures were adequate, are designed to ensure that
material information related to


                                       25
<PAGE>

the Company (including its consolidated subsidiaries) would be made known to the
above officers, are effective and provide reasonable assurance that they will
meet their objectives.

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

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

Item 9B - OTHER INFORMATION
          -----------------

      None.

                                    PART III

Item 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY, COMPLIANCE WITH
          ----------------------------------------------------------------
          SECTION 16(a) OF THE EXCHANGE ACT
          ---------------------------------

(a)   Identification of directors.

      The following table indicates certain information about the Company's nine
(9) directors:


                                       26
<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>
Louis V. Aronson II        83       1952-             2008        President & Chief
                                    Present                       Executive Officer;
                                                                  Chairman of Executive
                                                                  Committee.

Robert A. Aronson          56       1993-             2007        Managing Member of
                                    Present                       Independence Leather,
                                                                  L.L.C., Mountainside, NJ,
                                                                  the principal business of
                                                                  which is the import of
                                                                  leather products, 1996
                                                                  to present;  son of
                                                                  the President & Chief
                                                                  Executive Officer of the
                                                                  Company.

Barbara L. Collins         52       2004-              2006       Member of Compensation
                                    Present                       Committee, Nominating
                                                                  Committee  and Audit
                                                                  Committee; President and
                                                                  CEO of The Whistling Elk,
                                                                  Chester, NJ, the principal
                                                                  business of which is home
                                                                  furnishing and interior
                                                                  decorating, 1990 to
                                                                  present; Vice President of
                                                                  Human Resources of Van
                                                                  Heusen Retail Division of
                                                                  Phillips-Van Heusen
                                                                  Corporation, the principal
                                                                  business of which is
                                                                  retail apparel, 1986 to
                                                                  1990.
</TABLE>


                                       27
<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>
Edward E. David, Jr.     80      September       2006             President, EED, Inc. the
                                 2005-Present                     principal business of which
                                                                  is advising industry,
                                                                  government and
                                                                  universities on tech-
                                                                  nology, research and
                                                                  innovation management, 1977
                                                                  to present; Affiliate of
                                                                  The Washington Advisory
                                                                  Group, 2004 to present, the
                                                                  principal business of which
                                                                  is providing strategic
                                                                  counsel and management
                                                                  advice; Principal and Vice
                                                                  President, Treasurer, The
                                                                  Washington Advisory Group,
                                                                  1997 to 2004; President,
                                                                  Exxon Research and
                                                                  Engineering, the principal
                                                                  business of which is
                                                                  research, development,
                                                                  engineering and technical
                                                                  service for Exxon
                                                                  Corporation, 1977 to 1985;
                                                                  Executive Vice President
                                                                  R&D and Planning, Gould,
                                                                  Inc. the principal business
                                                                  of which was organizing and
                                                                  directing U.S. laboratories
                                                                  to support business
                                                                  strategies based on new
                                                                  products and technologies,
                                                                  1973 to 1977; Science
                                                                  Advisor to the President of
                                                                  the United States,
                                                                  1970-1973; Executive
                                                                  Director, Research, Bell
                                                                  Telephone Laboratories,
                                                                  1950-1970; Life Member MIT
                                                                  Corporation, Member of
                                                                  Executive Committee,
                                                                  1974 to Present.

Paul H. Einhorn          90      2004-           2008             Chairman of Audit Committee;
                                 Present                          Member of Compensation
                                                                  Committee and Nominating
                                                                  Committee; Management
                                                                  Consultant - CPA, 1985 to
                                                                  present; Director, Vice
                                                                  Chairman of Board and
                                                                  Member of Executive
                                                                  Committee, Valley National
                                                                  Bank, Passaic, NJ, 1968 to
                                                                  1985; President and CEO,
                                                                  Universal Manufacturing
                                                                  Corporation, the principal
                                                                  business of which was
                                                                  manufacturing of
                                                                  fluorescent lighting
                                                                  components, 1968 to 1990.
</TABLE>


                                       28
<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>
Erwin M. Ganz           76        1976-          2007             Treasurer & Assistant
                                  Present                         Secretary, January 2006 to
                                                                  Present, Member of
                                                                  Executive Committee;
                                                                  Consultant for the Company,
                                                                  1994 to 2005; Executive Vice
                                                                  President-Industrial
                                                                  Operations, 1975 to 1993;
                                                                  Chief Financial
                                                                  Officer, 1987 to 1993.

I. Leo Motiuk           60        1999-          2008             Member of Audit Committee;
                                  Present                         Counsel, Windels Marx Lane &
                                                                  Mittendorf, LLP, Attorneys
                                                                  at Law, New Brunswick, NJ;
                                                                  Attorney, 2004 to present;
                                                                  Former partner in Shanley
                                                                  Fisher, P.C., Attorneys at
                                                                  Law, Morristown, NJ, 1990
                                                                  to 1999.

Gerard J. Quinnan       77        1996-          2006             Member of Compensation
                                  Present                         Committee, Executive
                                                                  Committee and Nominating
                                                                  Committee; Consultant for
                                                                  the Company, 1990 to
                                                                  present, Vice President-
                                                                  General Manager of Ronson
                                                                  Consumer Products
                                                                  Corporation, 1981 to 1990.

Justin P. Walder        70        1972-          2007             Secretary; Assistant
                                  Present                         Corporation Counsel; Member
                                                                  of Executive Committee;
                                                                  Principal in Walder, Hayden
                                                                  & Brogan, P.A., Attorneys
                                                                  at Law, Roseland, NJ.
</TABLE>

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

Audit Committee

      The Audit Committee of the Board of Directors reports to the Board
regarding the appointment of the Company's public accountants, the scope and
results of its annual audits, compliance with accounting and financial policies
and management's procedures and policies relative to the adequacy of internal
accounting controls.


                                       29
<PAGE>

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

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

(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, 2007:

<TABLE>
<CAPTION>
                                                         Positions and Offices
                                  Period Served                with Company;
         Name            Age       as Officer             Family Relationships
---------------------    ---      -------------          ----------------------
<S>                      <C>      <C>                   <C>
Louis V. Aronson II..    83       1953 - Present        President & Chief Executive
                                                        Officer; Chairman of the
                                                        Executive Committee;
                                                        Director.

Erwin M. Ganz .......    76       2006 - Present        Treasurer & Assistant
                                                        Secretary; Director;
                                                        No family relationship

Daryl K. Holcomb.....    55       2006 - Present        Vice President, Chief Financial
                                                        Officer & Controller

                                  1996 - 2005           Vice President, Chief
                                                        Financial Officer,
                                                        Controller & Treasurer;

                                  1993 - 1996           Chief Financial Officer,
                                                        Controller & Treasurer;

                                  1988 - 1993           Controller & Treasurer;
                                                        No family relationship.

Justin P. Walder.....    70       1989 - Present        Secretary;

                                  1972 - Present        Assistant Corporation Counsel;
                                                        Director;
                                                        No family relationship.
</TABLE>

      Messrs. L.V. Aronson and Holcomb have been employed by the Company in an
executive capacity for at least the five-year period immediately preceding the
date hereof. Mr. Walder has been Secretary, Assistant Corporation Counsel and
Director of the Company and a principal in Walder, Hayden & Brogan, P.A.,
Attorneys at Law, for


                                       30
<PAGE>

at least the five-year period preceding the date hereof. Mr. Ganz has been a
consultant to the Company and others from 1994 to 2005. Mr. Ganz was Executive
Vice President - Industrial Operations for the Company 1975 to 1993.

(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.

(d) Code of ethics.

      The Company has adopted a code of ethics entitled, Standards of Integrity,
applicable to it and all its subsidiaries. The Standards of Integrity are an
integral part of the Company's business conduct compliance program and embody
the commitment of the Company and its subsidiaries to conduct operations in
accordance with the highest legal and ethical standards. A copy of the Standards
of Integrity may be obtained without charge upon written request to: Investor
Relations, Ronson Corporation, P.O. Box 6707, Somerset, NJ 08875-6707.

Item 11 - EXECUTIVE COMPENSATION
          ----------------------

SUMMARY COMPENSATION TABLE

      The Summary Compensation Table presents compensation information for the
years ended December 31, 2005, 2004, and 2003, for the Chief Executive Officer
and the other executive officer of the Company whose 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        ($)(1)       ($)(2)        SARS(#)          ($)(3)
          --------                 ----        ------       ------        -------          ------
<S>                                <C>       <C>           <C>              <C>          <C>
      Louis V. Aronson II          2005      $605,337      $ 34,160          --          $ 18,817
          President & Chief        2004       616,120        54,484          --            19,435
          Executive Officer        2003       616,120        70,570          --            19,005

      Daryl K. Holcomb             2005       167,025        12,797          --             3,741
          Vice President,          2004       165,000        20,020          --             3,809
          Chief Financial          2003       157,813        25,454          --             3,575
          Officer & Controller
</TABLE>

Footnotes
---------

(1) Effective October 1, 2005, the base salaries of the named executive
officers, the other officers of the Company and its subsidiaries, and other
employees whose base salaries exceeded $100,000 were reduced by 7%.

(2) 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.

(3) In 2005 All Other Compensation included matching credits by the Company
under its Employees' Savings Plan (Mr. L.V. Aronson, $4,200; Mr. Holcomb,
$3,741) and the cost


                                       31
<PAGE>

of term life insurance included in split-dollar life insurance policies (Mr.
L.V. Aronson, $14,617).

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, 2005. "In-the-money" options are those where the fair market value
of the underlying securities exceeds the exercise price of the options.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION
--------------------------------------------------------------------------
VALUES
------

<TABLE>
<CAPTION>
                                                                                         Value of
                                                             Number of                In-the-Money
                        Number of                      Unexercised Options             Options at
                         Shares                           at FY-End (4)(5)             FY-End (3)
                        Acquired                      -----------------------    ---------------------
                            on         Value (1)      Exercis-     Unexercis-    Exercis-   Unexercis-
      Name              Exercise       Realized       able (2)        able         able        able
      ----              --------       --------       --------     ----------    --------   ----------
<S>                         <C>            <C>         <C>             <C>         <C>          <C>
  D.K. Holcomb              --             --          22,487          --         $8,330        --
</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 exercisable options held by the named executive officer at December 31,
2005 are exercisable at any time and expire on July 6, 2006, and September 12,
2007.

(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, 2005 to
the option prices.

(4) The exercise prices of the options held at December 31, 2005 were as
follows:

                                    Number      Exercise Price
                                    ------      --------------

          D.K. Holcomb              10,332         $0.9433
                                    12,155          0.9355

(5) The number of shares acquired on exercise and of unexercised options held at
December 31, 2005, has been adjusted for the 5% common stock dividend declared
February 23, 2006.

LONG-TERM INCENTIVE PLANS

      None.

PENSION PLANS

      No named executive officer is a participant in the Company's defined
benefit pension plan.

COMPENSATION OF DIRECTORS

      Effective October 21, 2004, directors who are not officers of the Company
receive an annual fee of $10,000 and, in addition, are compensated at the rate
of $750 for each meeting of the Company's Board of Directors actually attended
and $450


                                       32
<PAGE>

for each meeting of a Committee of the Company's Board of Directors actually
attended. Independent directors, as defined under NASDAQ Listing Requirements,
receive an additional annual fee of $1,000 as compensation for separate meetings
of the independent directors. Officers receive no compensation for their
services on the Board or on any Committee.

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

      On November 24, 2003, the Company and Mr. L.V. Aronson entered into a new
employment agreement which became effective upon the December 31, 2004
expiration of the existing agreement. The new three-year agreement provides for
a term expiring on December 31, 2007, and provides for the payment of a base
salary which is to be increased 3.5% as of January 1 of each year beginning in
2005, subject to the Company reporting operating earnings in the year prior to
each increase. Mr. L.V. Aronson waived the 3.5% increases due on January 1, 2005
and on January 1, 2006. Effective October 1, 2005, Mr. Aronson offered and
accepted a 7% reduction in his base salary provided for by the terms of his
employment contract. Both the existing and new contracts also provide 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. The Company has
purchased term insurance, for which the Company is the sole beneficiary, to
provide coverage for a substantial portion of the potential death benefit. Under
both of the employment contracts, 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 contracts also
provide 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
contracts.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

      None.

REPORT ON EXECUTIVE COMPENSATION

      On October 21, 2004, the Board formed a separate Compensation Committee
composed of Ms. Collins and Messrs. Einhorn and Quinnan. The Compensation
Committee is responsible for making recommendations to the Board regarding the
executive compensation program.

      The program covers the named executive officers, all other executive
officers and other key employees. The program has three principal components:
base salary, annual cash incentives under the Company's Management Incentive
Plan ("MIP"), and stock options under the Company's Incentive Stock Option Plans
("ISO Plans"). Mr. L.V. Aronson's base salary is determined by the terms of his
employment contract discussed above, except for the reductions which have been
offered and accepted from time to time by Mr. L.V. Aronson. The amendments, also
detailed above, to Mr. L.V. Aronson's employment contract and the reductions
offered and accepted from time to time by Mr. L.V. Aronson have been reviewed
and approved by the Compensation Committee and the Board. The Compensation
Committee and the Board also reviewed and approved the salaries of all of the
other executive officers. Prior to the beginning of the fiscal year, the
Compensation Committee and the Board reviewed and approved which employees
participate in the Company's MIP and the criteria which will determine the cash
awards under the plan to the participants after the close of the fiscal year.
The Compensation Committee and the Board also reviewed and approved all awards
under the Company's ISO Plans.

      The base salaries are intended to meet the requirements of the employment
contract in effect for Mr. L.V. Aronson and to fairly compensate all the
officers of the Company for the effective exercise of their responsibilities,
their management of


                                       33
<PAGE>

the business functions for which they are responsible, their extended period of
service to the Company and their dedication and diligence in carrying out their
responsibilities for the Company and its subsidiaries. In 2004 and prior years,
increases have been granted to Mr. L.V. Aronson in accordance with terms of the
employment contract, except for the above mentioned salary reductions offered
and accepted from time to time by him. In 2005 and prior years, the Compensation
Committee and the Board, after review, have approved increases to the other
executive officers. Effective October 1, 2005, the compensation of each of the
Company's officers, employees earning greater than $100,000 annually, and
several individuals providing consulting services to the Company was reduced by
7%.

      The Company's MIP is based on the financial performance of the Company's
subsidiaries and is adopted annually, after review, for the ensuing year by the
Board. Each year the Compensation Committee and the Board sets the formula for
determining incentive compensation under the MIP for the Company and each
subsidiary based upon (1) the amount net sales exceed thresholds established by
the Compensation Committee and the Board and (2) pretax profits as a percent of
net sales. The Compensation Committee and the Board determines who of the
Company's and its subsidiaries' key employees are eligible to participate in the
MIP and what each employee's level of participation may be. The thresholds set
by the Compensation Committee and the Board must be met by the end of the fiscal
year in order for each eligible employee to receive an award under the MIP for
that year.

      The stock options granted under the Company's ISO Plans are designed to
create a proprietary interest in the Company among its executive officers and
other key employees and reward these executive officers and other key employees
directly for appreciation in the long-term price of the Company's Common Stock.
The ISO Plans directly link the compensation of executive officers and other key
employees to gains by the stockholders and encourages the executive officers,
directors, and other key employees to adopt a strong stockholder orientation in
their work. In 2005 no options were granted.

      The above report is presented by the Compensation Committee:

                Barbara L. Collins
                Paul H. Einhorn
                Gerard J. Quinnan

PERFORMANCE GRAPH

      The following table compares the yearly percentage change in the
cumulative total stockholder returns on the Company's common stock during the
five fiscal years ended December 31, 2005, with the cumulative total returns of
the NASDAQ Stock Market (U.S. Companies) Index and the Russell 2000 Index.

                COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURNS
                  AMONG THE COMPANY, NASDAQ STOCK MARKET INDEX
                             AND RUSSELL 2000 INDEX

                                 TABLE OF VALUES

<TABLE>
<CAPTION>
                                                       Value as of December 31,
                           2000         2001         2002         2003         2004         2005
                           ----         ----         ----         ----         ----         ----
<S>                      <C>          <C>          <C>          <C>          <C>          <C>
Ronson Corporation       $100.00      $144.00      $ 83.20      $198.66      $176.45      $174.92
NASDAQ Stock Market
 Index                    100.00        79.32        54.84        81.99        89.23        83.73
Russell 2000 Index        100.00       102.49        81.31       120.00       142.00       148.46
</TABLE>

      This comparison assumes that $100 was invested in the Company's common
stock on December 31, 2000, in the NASDAQ Stock Market (U.S. Companies) Index
and in the Russell 2000 Index, and that dividends are reinvested.


                                       34
<PAGE>

      The Company has determined that it is not possible to identify a published
industry or line-of-business index or a peer group of companies since the
Company has two distinct lines of business. The Company has selected the Russell
2000 Index since it is composed of companies with smaller capitalizations.

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>
        Louis V. Aronson II                      Common          1,277,046 (1)          28.15% (1)
           Campus Drive
           P.O. Box 6707
           Somerset, New Jersey 08875

        Carl W. Dinger III                       Common            535,222 (2)          11.80% (2)
           P.O. Box 150
           Green Village, New Jersey 07935

        Steel Partners II, L.P.                  Common            438,128 (3)           9.66% (3)
           590 Madison Avenue
           32nd Floor
           New York, New York 10022
</TABLE>

(1)   The Ronson Corporation Retirement Plan ("Retirement Plan") is the
      beneficial owner of 218,624 common shares. The shares held by the
      Retirement Plan are voted by the Retirement Plan's trustees, Messrs. L.V.
      Aronson and Ganz. 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 increased to 1,495,670 shares, or 32.97% of the class.
      The Retirement Plan's holdings were reported in 1988 on Schedule 13G, as
      amended September 22, 1997, adjusted for the 5% common stock dividend
      declared February 23, 2006.

(2)   535,222 shares of common stock owned directly, adjusted for the 5% common
      stock dividend declared February 23, 2006. This information was from a
      Form 4 filed by Mr. Dinger on March 28, 2005. Mr. Dinger has provided the
      Company's Board of Directors an irrevocable proxy to vote these shares.
      (Refer to "Transactions with Management and Others" in Item 13 below.)

(3)   438,128 shares of common stock 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 on January
      26, 2004, by Steel Partners II, L.P., and Mr. Lichtenstein, adjusted for
      the 5% common stock dividends declared through February 23, 2006.

(b) Security ownership of management.

      The following table shows the number of shares of common stock


                                       35
<PAGE>

beneficially owned by each director, each named executive officer, and by all
directors and officers as a group as of March 23, 2006, and the percentage of
the total shares of common stock outstanding on March 23, 2006, 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:

        Name of Individual or        Amount and Nature of       Percent of
          Identity of Group         Beneficial Ownership(2)        Class
          -----------------         -----------------------      ---------

        Louis V. Aronson II             1,277,046 (3)             28.15%
        Robert A. Aronson                  16,105                   (1)
        Barbara L. Collins                  1,102                   (1)
        Edward E. David                       525                   (1)
        Paul H. Einhorn                    10,332                   (1)
        Erwin M. Ganz                      49,023 (3)              1.08%
        I. Leo Motiuk                      10,370                   (1)
        Gerard J. Quinnan                  12,748                   (1)
        Justin P. Walder                   76,242                  1.68%
        Daryl K. Holcomb                   61,459                  1.35%

        All directors and
        officers as a group
        (ten (10) individuals
        including those named
        above)                          1,514,951                 33.10%

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

      (2)   Shares listed as owned beneficially include 41,287 shares subject to
            option under the Ronson Corporation 1996 and 2001 Incentive Stock
            Option Plans as follows:

                                              Number of Common Shares
                                                    Under Option
                                              -----------------------

                Robert A. Aronson                       2,771
                Erwin M. Ganz                           6,912
                Justin P. Walder                        9,117
                Daryl K. Holcomb                       22,487

                All directors and officers
                as a group (ten (10)
                individuals including
                those named above)                     41,287

      (3)   Does not include 218,624 shares of issued common stock owned by the
            Retirement Plan. The shares held by the Retirement Plan are voted by
            the Retirement Plan's trustees, Messrs. L.V. Aronson and Ganz. 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 1,495,670 shares, or 32.97% of the class;
            however, if the shares held by the Retirement Plan were not included
            in Mr. L.V. Aronson's beneficial ownership, but instead were
            included in Mr. Ganz's beneficial ownership, Mr. Ganz's beneficial
            ownership would be 267,647 shares, or 5.89% 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.


                                       36
<PAGE>

(d) Securities authorized for issuance under equity compensation plans.

                      Equity Compensation Plan Information

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
                                                                              Number of Securities
                                                                               Remaining Available
                                                                               For Future Issuance
                            Number of Securities                                  under Equity
                             to Be Issued upon       Weighted-average          Compensation Plans
                                Exercise of          Exercise Price of        (excluding Securities
                            Outstanding Options,     Outstanding Options,       Reflected in Column
Plan Category               Warrants and Rights      Warrants and Rights                (a))
----------------------------------------------------------------------------------------------------
                                     (a)                    (b)                         (c)
----------------------------------------------------------------------------------------------------
<S>                                <C>                     <C>                         <C>
Equity compensation
 plans approved by
 security holders                  88,662                  $.939                       74,170

Equity compensation
 plans not approved
 by security holders                 None                    N/A                         None

  Total                            88,662                  $.939                       74,170
</TABLE>

Item 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
          ----------------------------------------------

(a) Transactions with management and others.

      In October 1998 the Company entered into a consulting agreement with Mr.
Carl W. Dinger III, a greater than 5% shareholder of the Company. The agreement
provided that Mr. Dinger perform certain consulting services for the Company for
a period ending on April 7, 2000. The Company and Mr. Dinger entered into a
second consulting agreement effective upon the expiration date of the original
agreement. This agreement provided that Mr. Dinger continue to perform
consulting services for the Company through April 7, 2004 at a fee of $7,000 per
month. During 2004 the agreement was extended on a month-to-month basis through
July 7, 2004. A new consulting agreement was effective on July 8, 2004, which
provides that Mr. Dinger continue to perform consulting services at a fee of
$7,000 per month for the Company for a period of thirty-six months through July
7, 2007. On January 1, 2006, Mr. Dinger's consulting fee was reduced by 7% from
$7,000 per month to $6,510.00 per month. Mr. Dinger was compensated $84,000
during each of the years ended December 31, 2005, 2004 and 2003 under the
agreements.

      In October 1998 Mr. Dinger granted an option to the Company to purchase
the 186,166 shares of the Company's common stock then held by Mr. Dinger. The
option was for a period of 18 months expiring on April 7, 2000. In 2000 Mr.
Dinger granted a new option to the Company, to purchase the shares of the
Company's common stock held by Mr. Dinger. The option was for a period of 48
months, expiring April 7, 2004. The cost of the option was $4,000 per month for
the period of the option or until exercised. In March 2000 Mr. Dinger purchased
290,359 shares of newly issued restricted common stock of the Company at a price
of $1.96 per share with a cash payment of $569,000 to the Company. During 2004
the option agreement was extended on a month-to-month basis through July 7,
2004. A new option agreement was effective on July 8, 2004. The new option
granted by Mr. Dinger is for a period of 36 months, expiring on July 7, 2007.
The exercise price of the option is $5.90 per share for the 535,224 shares now
held by Mr. Dinger. The cost of the option is $4,000 per


                                       37
<PAGE>

month for the period of the option or until exercised. As part of each of the
option agreements, 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.
The Company expended $48,000 for the options during each of the years ended
December 31, 2005, 2004 and 2003, which were charged to Additional Paid-in
Capital.

      During the year ended December 31, 2005, the Company and Ronson Consumer
Products were provided printing services by Michael Graphics, Inc., a New Jersey
corporation, amounting to $57,247. A greater than 10% shareholder of Michael
Graphics, Inc. is the son-in-law of the Company's president.

      During the year ended December 31, 2005, the Company was provided
consulting services amounting to $93,337 by Mr. Erwin M. Ganz, a director of the
Company, under a consulting agreement. The agreement provided for compensation
at the annual rate of $95,000 plus participation in the Company's health and
life insurance plans and the use of an automobile. Effective October 1, 2005,
the amount of compensation under the terms of the agreement was reduced by 7%.
During the fourth quarter of 2005, Mr. Ganz agreed to return to the Company as
Treasurer and Assistant Secretary, for which the Company paid an inducement to
Mr. Ganz of $18,000, and at which time the consulting agreement ended.

(b) Certain business relationships.

      None.

(c) Indebtedness of management.

      None.

(d) Transactions with promoters.

      Not applicable.

Item 14 - PRINCIPAL ACCOUNTANT FEES AND SERVICES
          --------------------------------------

      The fees billed for services provided to the Company by Demetrius &
Company, L.L.C., for the years ended December 31, 2005 and 2004, were as
follows:

                                                 2005         2004
                                                 ----         ----

         Audit fees                            $83,150      $80,400
         Audit-related fees                         --           --
         Tax fees, principally related to
          tax return preparation                16,000       14,000
         All other fees                             --           --

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

                                     PART IV
                                     -------

Item 15 - EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
          ------------------------------------------

(a) (1) and (2) - The response to this portion of Item 15 is submitted as a
separate section of this report.

      (3) Listing of exhibits, as applicable:


                                       38
<PAGE>

      (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.

      (4) 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 Bank of America,
N.A. ("Bank of America") for a Revolving Loan and a Term Loan. On March 6, 1997,
the Revolving Loan was amended and extended to June 30, 2000. On May 13, 1999,
the Revolving Loan was further extended to June 30, 2002. On June 30, 2002, the
Revolving Loan was amended and further extended to June 30, 2005. On June 30,
2005, the Revolving loan was amended and further extended to September 30, 2005.
On September 30, 2005, the Revolving Loan was amended and further extended to
December 31, 2005. On January 11, 2006, the Revolving loan was amended and
further extended to January 31, 2007. 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). A July 1997 amendment was attached to the Company's September 30,
1997, Form 10-Q as Exhibit 10(g). The May 1999 amendment was attached to the
Company's June 30, 1999, Form 10-Q as Exhibits 10(a) and 10(f). The June 2002
amendment was attached to the Company's June 30, 2002, Form 10-Q as Exhibits
10(a)-10(d). The June 2005 amendment was attached to the Company's Form 8-K
dated July 21, 2005, as Exhibit 10.a)-10.c). The September 2005 amendment was
attached to the Company's Form 8-K dated October 6, 2005, as Exhibits
10.a)-10.d). The January 11, 2006, amendment was attached to the Company's Form
8-K dated January 11, 2006 as Exhibit 10.a).

      On December 1, 1995, the Company and RCPC entered into a mortgage loan
agreement with Bank of America. The agreement and note were attached to the
Company's 1995 Form 10-K as Exhibits 10(a) and 10(b). On May 13, 1999, the
Company and RCPC refinanced the existing mortgage. The new mortgage loan was
attached to the Company's June 30, 1999, Form 10-Q as Exhibits 10(b)-10(e). On
December 3, 2003, the Company, RCPC and Bank of America extended the mortgage
loan. On January 11, 2006, the mortgage loan agreement was amended so that its
expiration date would coincide with the expiration date of the Revolving loan,
January 31, 2007. The amendments to the mortgage loan were attached to the
Company's Form 8-K filed January 6, 2004, as Exhibits 10(a)-10(d). The January
11, 2006, amendment was attached to the Company's Form 8-K dated January 11,
2006 as Exhibit 10.a).

      On August 28, 1997, Ronson Aviation entered into an agreement with Bank of
America for a Revolving Loan and a Term Loan. On May 13, 1999, Ronson Aviation
and Fleet extended the Revolving Loan and Term Loan to June 30, 2002. On June
30, 2002, the Revolving Loan and Term Loan were further extended to June 30,
2005. On June 30, 2005, the Revolving loan was amended and further extended to
September 30, 2005. On September 30, 2005, the Revolving Loan was amended and
further extended to December 31, 2005. On January 11, 2006, the Revolving loans
was amended and further extended to January 31, 2007. 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). The May 1999 amendment agreements were attached to
the Company's June 30, 1999, Form 10-Q as Exhibits 10(g)-10(k). The June 2002
amendment agreements were attached to the Company's June 30, 2002, Form 10-Q as
Exhibits 10(e)-10(i). The June 2005 amendment was attached to the Company's Form
8-K dated July 21, 2005, as Exhibit 10.d) - 10.f). The September 2005 amendment
was attached to the Company's Form 8-K dated October 6, 2005, as Exhibits
10.e)-10.h). The January 11, 2006, amendment was attached to the Company's Form
8-K dated January 11, 2006 as Exhibit 10.a).


                                       39
<PAGE>

      For further information on the Company's loan agreements, reference is
made to Notes 3 and 4 of the Notes to Consolidated Financial Statements
contained in the Company's financial statements for the year ended December 31,
2005, filed with this report pursuant to Item 8, which is incorporated herein by
reference.

      On November 24, 2003, the Company and Mr. Louis V. Aronson II entered into
a new three-year employment agreement which became effective upon the December
31, 2004 expiration of the prior agreement. The new agreement provides for a
term expiring on December 31, 2007. The new agreement was attached to the
Company's Form 8-K filed January 6, 2004, as Exhibit 10(e).

      (14) The Company's code of ethics entitled, Standards of Integrity, was
attached to the Company's Form 8-K dated April 27, 2004 as Exhibit 99.d).

      (20) Other documents or statements to security holders. The Ronson
Corporation Notice of Meeting of Stockholders held on October 27, 2005, and
Proxy Statement was filed on September 30, 2005, and is incorporated herein by
reference.

      (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:

  Wholly Owned Subsidiary                        State or Other Jurisdiction
  and Business Name                            of Incorporation or Organization
  -----------------                            --------------------------------

  Domestic
  --------

  Ronson Consumer Products Corporation                     New Jersey
  Ronson Aviation, Inc.                                    New Jersey

  Foreign
  -------

  Ronson Corporation of Canada Ltd.                          Canada

      The Company also holds 100% of the voting power of two 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).

      31.1(a) and (b) Rule 13a-14(a)/15d-14(a) Certifications pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.

      32.1 Section 1350 Certification pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 (furnished but not filed for purposes of the
Securities Exchange Act of 1934).

      (99) Additional exhibits.

            (a) None.


                                       40
<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 30, 2006               By:    /s/ Louis V. Aronson II
                                         ---------------------------------------
                                         Louis V. Aronson II, President &
                                         Chief Executive Officer and Director

Dated: March 30, 2006               By:   /s/ Daryl K. Holcomb
                                         ---------------------------------------
                                         Daryl K. Holcomb, Vice President,
                                         Chief Financial Officer & Controller

Dated: March 30, 2006               By:   /s/ Erwin M. Ganz
                                         ---------------------------------------
                                         Erwin M. Ganz, Treasurer,
                                         Assistant Secretary and Director

Dated: March 30, 2006               By:   /s/ Justin P. Walder
                                         ---------------------------------------
                                         Justin P. Walder, Secretary and
                                         Director

Dated: March 30, 2006               By:   /s/ Robert A. Aronson
                                         ---------------------------------------
                                         Robert A. Aronson, Director

Dated: March 30, 2006               By:   /s/ Barbara L. Collins
                                         ---------------------------------------
                                         Barbara L. Collins, Director

Dated: March 30, 2006               By:   /s/ Edward E. David
                                         ---------------------------------------
                                         Edward E. David, Director

Dated: March 30, 2006               By:   /s/ Paul H. Einhorn
                                         ---------------------------------------
                                         Paul H. Einhorn, Director

Dated: March 30, 2006               By:   /s/ I. Leo Motiuk
                                         ---------------------------------------
                                         I. Leo Motiuk, Director

Dated: March 30, 2006               By:   /s/ Gerard J. Quinnan
                                         ---------------------------------------
                                         Gerard J. Quinnan, Director


                                       41
<PAGE>

                           ANNUAL REPORT ON FORM 10-K

                                     ITEM 8

                              FINANCIAL STATEMENTS

                          YEAR ENDED DECEMBER 31, 2005

                               RONSON CORPORATION

                              SOMERSET, NEW JERSEY


                                       42

<PAGE>

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

<TABLE>
<CAPTION>
                                       2005          2004          2003          2002          2001
                                       ----          ----          ----          ----          ----
<S>                                 <C>            <C>           <C>           <C>           <C>
Net sales                           $ 26,563       $ 28,483      $ 26,740      $ 23,601      $ 28,705

Earnings (loss) from continuing
   operations                       $   (333)      $    193      $    703      $     42      $    531

Total assets                        $ 12,654       $ 13,942      $ 12,603      $ 12,888      $ 12,627

Long-term obligations               $  2,717       $  2,898      $  3,317      $  4,321      $  4,460

Per common share (1,2):
   Earnings (loss) from continuing
      operations:
      Basic                         $  (0.07)      $   0.04      $   0.16      $   0.01      $   0.12
      Diluted                       $  (0.07)      $   0.04      $   0.15      $   0.01      $   0.12

   Cash dividends declared          $   0.02       $   0.03      $     --      $     --      $     --
</TABLE>

(1)   Basic Net Earnings (Loss) per Common Share provides for quarterly
      cumulative preferred dividends with no conversion of preferred shares to
      common shares. Diluted Net Earnings (Loss) per Common Share assumes no
      provision for the quarterly cumulative preferred dividends with full
      conversion of all preferred shares to common shares and includes the
      dilutive effect of outstanding stock options. The assumed conversion of
      preferred to common and the stock options were anti-dilutive for the years
      ended December 31, 2005 and 2002, and, therefore, were excluded from the
      computation of Diluted Net Earnings (Loss) Per Common Share for those
      years.

(2)   A 5% stock dividend on the Company's outstanding common stock was declared
      on February 23, 2006, payable on April 15, 2006. Previously, 5% stock
      dividends on the Company's outstanding common stock were issued on April
      15, 2005, 2004, 2003, and 2002.

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


                                       43
<PAGE>

RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES
LIST OF FINANCIAL STATEMENTS

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

Consolidated Balance Sheets - December 31, 2005 and 2004

Consolidated Statements of Earnings - Years Ended
        December 31, 2005, 2004 and 2003

Consolidated Statements of Changes in Stockholders' Equity -
        Years Ended December 31, 2005, 2004 and 2003

Consolidated Statements of Cash Flows - Years Ended
        December 31, 2005, 2004 and 2003

Notes to Consolidated Financial Statements


                                       44
<PAGE>

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

To the Board of Directors and
Stockholders of Ronson Corporation

We have audited the accompanying consolidated balance sheets of Ronson
Corporation and subsidiaries as of December 31, 2005 and 2004, 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, 2005.
These financial statements are the responsibility of the company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Ronson Corporation
and subsidiaries as of December 31, 2005 and 2004, and the results of their
operations and their cash flows for each of the years in the three-year period
ended December 31, 2005 in conformity with accounting principles generally
accepted in the United States of America.


DEMETRIUS & COMPANY, L.L.C.

Wayne, New Jersey
March 10, 2006


                                       45
<PAGE>

RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES

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

<TABLE>
<CAPTION>
                               ASSETS
                               ------
                                                                              December 31,
                                                                     ------------------------------
                                                                         2005              2004
                                                                         ----              ----
<S>                                                                  <C>                <C>
CURRENT ASSETS:
Cash and cash equivalents .....................................      $       414        $       599
Accounts receivable, less allowances for doubtful accounts
   of : 2005, $107 and 2004, $84 ..............................            1,832              1,876
Inventories:
   Finished goods .............................................            1,625              1,625
   Work in process ............................................               22                 88
   Raw materials ..............................................              908                621
                                                                     -----------        -----------
                                                                           2,555              2,334

Other current assets ..........................................            1,072              1,302
                                                                     -----------        -----------
            TOTAL CURRENT ASSETS                                           5,873              6,111

PROPERTY, PLANT AND EQUIPMENT:
Land ..........................................................                6                  6
Buildings and improvements ....................................            5,374              5,333
Machinery and equipment .......................................            6,515              8,707
Construction in progress ......................................              555                261
                                                                     -----------        -----------
                                                                          12,450             14,307

Less accumulated depreciation and amortization ................            8,335              8,791
                                                                     -----------        -----------
                                                                           4,115              5,516

OTHER ASSETS ..................................................            2,666              2,315
                                                                     -----------        -----------
                                                                     $    12,654        $    13,942
                                                                     ===========        ===========
</TABLE>

See notes to consolidated financial statements.


                                       46
<PAGE>

RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES

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

<TABLE>
<CAPTION>
         LIABILITIES AND STOCKHOLDERS' EQUITY
         ------------------------------------
                                                                                         December 31,
                                                                               ------------------------------
                                                                                    2005             2004
                                                                                    ----             ----
<S>                                                                            <C>               <C>
CURRENT LIABILITIES:
Short-term debt ........................................................       $      1,500      $      1,439
Current portion of long-term debt ......................................                155               731
Current portion of lease obligations ...................................                252               195
Accounts payable .......................................................              2,134             1,786
Accrued expenses .......................................................              2,592             3,020
                                                                               ------------      ------------
         TOTAL CURRENT LIABILITIES .....................................              6,633             7,171

LONG-TERM DEBT .........................................................              1,550             1,665
LONG-TERM LEASE OBLIGATIONS ............................................                918               826
PENSION OBLIGATIONS ....................................................                 --               138
OTHER LONG-TERM LIABILITIES ............................................                249               269

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

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

Common stock, par value $1
                                               2005              2004
                                               ----              ----
   Authorized shares ..............        11,848,106         11,848,106
   Reserved shares ................            88,662            101,023
   Issued (including treasury) ....         4,617,010          4,617,010              4,617             4,617
Additional paid-in capital .............................................             29,724            29,772
Accumulated deficit ....................................................            (27,895)          (27,478)
Accumulated other comprehensive loss ...................................             (1,545)           (1,441)
                                                                               ------------      ------------
                                                                                      4,901             5,470
Less cost of treasury shares:
    2005, 80,761 and 2004, 80,754 ......................................              1,597             1,597
                                                                               ------------      ------------
          TOTAL STOCKHOLDERS' EQUITY ...................................              3,304             3,873
                                                                               ------------      ------------
                                                                               $     12,654      $     13,942
                                                                               ============      ============
</TABLE>

See notes to consolidated financial statements.


                                       47
<PAGE>

RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES

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

<TABLE>
<CAPTION>
                                                                                  Year Ended December 31,
                                                                        ----------------------------------------------
                                                                            2005              2004             2003
                                                                            ----              ----             ----
<S>                                                                     <C>               <C>              <C>
NET SALES ........................................................      $    26,563       $    28,483      $    26,740
                                                                        -----------       -----------      -----------

Cost and expenses:
    Cost of sales ................................................           17,455            18,884           16,451
    Selling, shipping and advertising ............................            3,583             3,526            3,164
    General and administrative ...................................            3,899             4,088            4,665
    Depreciation and amortization ................................              738               772              658
                                                                        -----------       -----------      -----------
                                                                             25,675            27,270           24,938
                                                                        -----------       -----------      -----------

EARNINGS BEFORE INTEREST AND OTHER ITEMS .........................              888             1,213            1,802
                                                                        -----------       -----------      -----------

Other expense:
    Interest expense .............................................              473               367              308
    Nonrecurring loss - sale of charter aircraft & business ......              591                --               --
    Other-net ....................................................              326               342              343
                                                                        -----------       -----------      -----------
                                                                              1,390               709              651
                                                                        -----------       -----------      -----------

EARNINGS (LOSS) BEFORE INCOME TAXES ..............................             (502)              504            1,151

Income tax provisions (benefits) .................................             (169)              311              448
                                                                        -----------       -----------      -----------

NET EARNINGS (LOSS) ..............................................      $      (333)      $       193      $       703
                                                                        ===========       ===========      ===========

EARNINGS (LOSS) PER COMMON SHARE:
Basic ............................................................      $     (0.07)      $      0.04      $      0.16
Diluted ..........................................................      $     (0.07)      $      0.04      $      0.15
</TABLE>

See notes to consolidated financial statements.


                                       48
<PAGE>

RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
----------------------------------------------------------
For the Years Ended December 31, 2005, 2004 and 2003
Dollars in thousands

<TABLE>
<CAPTION>
                                          12%
                                     Cumulative                                        Accumulated                          Compre-
                                     Convertible             Additional                   Other      Treasury              hensive
                                      Preferred     Common    Paid-in     Accumulated  omprehensive    Stock                Income
                                        Stock       Stock     Capital       Deficit       Loss       (at cost)    Total      (Loss)
                                     -----------  ---------  ----------   -----------  ------------  ---------   -------   ---------
<S>                                   <C>         <C>         <C>          <C>          <C>          <C>         <C>        <C>
Balance at December 31, 2002          $      --   $   4,525   $  29,894     $(28,223)    $ (2,141)    $(1,597)   $2,458
                                      ---------   ---------   ---------     ---------    ---------    --------   -------

Net earnings - 2003                                                              703                                 703    $   703
                                                                                                                            -------

Dividends                                                                         (7)                                 (7)
Translation adjustment, net of tax                                                                                               58
Pensions, net of tax                                                                                                            287
                                                                                                                            -------
Other comprehensive income                                                                    345                    345        345
                                                                                                                            -------
Comprehensive income                                                                                                        $ 1,048
                                                                                                                            =======
Shares issued for:
      Stock options exercised                            24                                                           24
Stock option purchased                                              (48)                                             (48)
                                      ---------   ---------   ---------     ---------    ---------    --------   -------
Balance at December 31, 2003                 --       4,549      29,846      (27,527)      (1,796)      (1,597)    3,475
                                      ---------   ---------   ---------     ---------    ---------    --------   -------

Net earnings - 2004                                                              193                                 193    $   193
                                                                                                                            -------

Dividends                                                                       (125)                               (125)
Translation adjustment, net of tax                                                                                               63
Other comprehensive loss on swap                                                                                                (10)
Pensions, net of tax                                                                                                            302
                                                                                                                            -------
Other comprehensive income                                                                    355                    355        355
                                                                                                                            -------
Comprehensive income                                                                                                        $   548
                                                                                                                            =======
Fair value of stock options granted,
     net of tax                                                       3                                                3
Shares issued for:
     Stock options exercised                             50          16                                               66
     Preferred shares converted                          18         (18)                                              --
Preferred shares redeemed                                           (27)         (19)                                (46)
Stock option purchased                                              (48)                                             (48)
                                      ---------   ---------   ---------     ---------    ---------    --------   -------
Balance at December 31, 2004                 --       4,617      29,772       (27,478)      (1,441)     (1,597)    3,873
                                      ---------   ---------   ---------     ---------    ---------    --------   -------

Net  loss - 2005                                                                (333)                               (333)   $  (333)
                                                                                                                            -------

Dividends                                                                        (84)                                (84)
Translation adjustment, net of tax                                                                                               10
Other comprehensive gain on swap                                                                                                 23
Pensions, net of tax                                                                                                           (137)
                                                                                                                            -------
Other comprehensive  loss                                                                    (104)                  (104)      (104)
                                                                                                                            -------
Comprehensive loss                                                                                                          $  (437)
                                                                                                                            =======
Stock option purchased                                              (48)                                             (48)
                                      ---------   ---------   ---------     ---------    ---------    --------   -------
Balance at December 31, 2005          $      --   $   4,617   $  29,724    $ (27,895)   $  (1,545)   $  (1,597)  $ 3,304
                                      =========   =========   =========    =========    =========    =========   =======
</TABLE>
<TABLE>
<CAPTION>
                                                           SHARE ACTIVITY
                                             -----------------------------------------
                                                  12%
                                              Cumulative
                                             Convertible
                                              Preferred        Common        Treasury
                                                 Stock          Stock          Stock
                                              ---------       ---------      ---------
<S>                                              <C>          <C>               <C>
Balance at December 31, 2002                     34,875       4,524,012         80,737
Shares issued for:
     Stock options exercised                                     24,311
                                              ---------       ---------      ---------
Balance at December 31, 2003                     34,875       4,548,323         80,737
Shares issued for:
     Stock options exercised                                     50,131
     Preferred shares converted                 (14,553)         18,556             17
Preferred shares redeemed                       (20,322)
                                              ---------       ---------      ---------
Balance at December 31, 2004                         --       4,617,010         80,754
Treasury shares                                                                      7
                                              ---------       ---------      ---------
Balance at December 31, 2005                         --       4,617,010         80,761
                                              =========       =========      =========
</TABLE>

See notes to consolidated financial statements.


                                       49
<PAGE>

RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES

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

<TABLE>
<CAPTION>
                                                                                       Year Ended December 31,
                                                                           ----------------------------------------------
                                                                               2005              2004              2003
                                                                               ----              ----              ----
<S>                                                                        <C>               <C>               <C>
Cash Flows from Operating Activities:
Net earnings (loss) .................................................      $      (333)      $       193       $       703
Adjustments to reconcile net earnings (loss) to
    net cash provided by (used in) operating activities:
    Depreciation and amortization ...................................              738               772               658
    Deferred income tax provisions (benefit) ........................             (235)              154               313
    Loss (gain) on disposal of assets ...............................               97                --               (63)
    Increase (decrease) in cash from changes in:
       Accounts receivable ..........................................               49               293              (404)
       Inventories ..................................................             (221)             (431)              434
       Other current assets .........................................              291              (148)               36
       Accounts payable .............................................              343               183               (37)
       Accrued expenses .............................................             (279)             (193)              331
       Other non-current assets and other long-term
         liabilities ................................................             (108)              (23)             (105)
    Net change in pension-related accounts ..........................             (507)             (264)              (24)
    Effect of exchange rate changes .................................               10                63                54
    Discontinued operations .........................................               --                (5)              (42)
                                                                           -----------       -----------       -----------
       Net cash provided by  (used in) operating activities .........             (155)              594             1,854
                                                                           -----------       -----------       -----------

Cash Flows from Investing Activities:
Capital expenditures ................................................             (597)             (687)             (422)
Proceeds from sale of property, plant & equipment ...................            1,600                --                76
                                                                           -----------       -----------       -----------
       Net cash provided ( used in) investing activities ............            1,003              (687)             (346)
                                                                           -----------       -----------       -----------

Cash Flows from Financing Activities:
Proceeds from short-term debt .......................................              750             3,219               495
Proceeds from issuance of common stock ..............................               --                65                24
Payments of long-term debt ..........................................             (738)             (324)             (282)
Payments of long-term lease obligations .............................             (224)              (86)              (37)
Payments of short-term debt .........................................             (689)           (2,627)           (1,302)
Payments of dividends ...............................................              (84)             (125)               (7)
Redemption of preferred stock .......................................               --               (46)               --
Cost of stock option agreement ......................................              (48)              (48)              (48)
                                                                           -----------       -----------       -----------
       Net cash provided by (used in) financing activities ..........           (1,033)               28            (1,157)
                                                                           -----------       -----------       -----------
Net increase (decrease) in cash and cash equivalents ................             (185)              (65)              351

Cash and cash equivalents at beginning of year ......................              599               664               313
                                                                           -----------       -----------       -----------
Cash and cash equivalents at end of year ............................      $       414       $       599       $       664
                                                                           ===========       ===========       ===========
</TABLE>

See notes to consolidated financial statements.


                                       50
<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 (these together are
"Ronson Consumer Products"); and Ronson Aviation, Inc. ("Ronson Aviation"),
Trenton, New Jersey. All significant intercompany accounts and transactions have
been eliminated in consolidation.

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

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

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

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

      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.

      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.

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

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


                                       51
<PAGE>

mortgage loan and term loans with Bank of America, N.A. ("Bank of America") are
at variable interest rates and, therefore, their book values are considered
representative of their fair values. The book value of the Company's other
long-term debt is considered to approximate its fair value based on current
market rates and conditions (refer to Note 4).

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

      The Company has entered into an interest rate swap agreement (see Note 4).
The interest rate swap agreement effectively modifies the Company's exposure to
interest risk by converting a portion of the Company's floating-rate long-term
debt to a fixed rate. Based on criteria defined in SFAS 133, the interest rate
swap is considered a cash flow hedge and is 100% effective. The interest rate
swap is marked to market in the balance sheet. The mark-to-market value of the
cash flow hedge is recorded in Other Non-current Assets or Other Long-term
Liabilities and the offsetting gains or losses in Accumulated Other
Comprehensive Loss. If the contract is terminated prior to maturity, the amount
paid or received in settlement is established by agreement at the time of
termination, and usually represents the net present value, at current rates of
interest, of the remaining obligations to exchange payments under the terms of
the contract. Any gains or losses upon the early termination of the interest
rate swap contracts would be deferred and recognized over the remaining life of
the contract.

      Impairment Of Long-Lived Assets - The Company periodically evaluates
whether events or circumstances have occurred that indicate long-lived assets
may not be recoverable or that the remaining useful life may warrant revision.
When such events or circumstances are present, the Company assesses the
recoverability of long-lived assets by determining whether the carrying value
will be recovered through the estimated undiscounted future cash flows resulting
from the use of the asset. In the event the sum of the estimated undiscounted
future cash flows is less than the carrying value of the asset, an impairment
loss equal to the excess of the asset's carrying value over its fair value is
recorded.

      Declaration of 5% Common Stock Dividend - The Company's Board of Directors
on February 23, 2006, declared a 5% stock dividend on the Company's outstanding
common stock. The 5% stock dividend is payable on April 15, 2006, to
stockholders of record March 31, 2006. The 5% stock dividend will increase the
outstanding common shares of the Company by about 215,000 to about 4,536,000
shares.

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

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


                                       52
<PAGE>

      Research and Development Costs - Costs of research and new product
development are charged to operations as incurred and amounted to approximately
$348,000, $313,000, and $339,000, for the years ended December 31, 2005, 2004
and 2003, respectively.

      Shipping and Handling Costs - The Company records shipping and handling
costs within Selling, Shipping, and Advertising Expenses. Such costs amounted to
about $1,659,000, $1,595,000, and $1,176,000 for the years ended December 31,
2005, 2004, and 2003, respectively.

      Advertising Expenses - Costs of advertising are expensed as incurred and
amounted to approximately $159,000, $164,000, and $131,000 for the years ended
December 31, 2005, 2004 and 2003, respectively.

      Accrued Expenses - On December 31, 2005, Accrued Expenses included:
accrued vacation pay and other compensation of $573,000, and accrued pension
costs of $711,000. No other item amounted to greater than 5% of total current
liabilities. At December 31, 2005 and 2004, Accrued Expenses included accrued
expenses of discontinued operations of $318,000.

      Other Current Assets - On December 31, 2005, Other Current Assets included
deferred income tax assets of $694,000. No other item amounted to greater than
5% of total current assets.

      Stock Options - In 2003 the Company adopted SFAS No. 148, "Accounting for
Stock-Based Compensation - Transition and Disclosure, an amendment of FASB
Statement No. 123". SFAS No. 148 amended SFAS No. 123 to provide alternative
methods of transition for a voluntary change to the fair value based method of
accounting for employee stock-based compensation. The Company has elected to
apply the prospective method as permitted by SFAS No. 148. Accordingly all
options granted on and after January 1, 2003 are charged against income at their
fair value. Those issued prior to adoption are accounted for on the intrinsic
method in accordance with Accounting Principles Board Opinion (APB) No. 25. See
Note 9 to the Consolidated Financial Statements.

      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, 2005
                                                                                            Per Share
                                                            Loss             Shares           Amount
                                                         ---------         ---------        ---------
                                                                               (2)              (2)
<S>                                                      <C>                   <C>          <C>
      BASIC ........................................     $    (333)            4,537        $   (0.07)
         Effect of dilutive
           securities, stock options (1)                        --                --
                                                         ---------         ---------
      DILUTED ......................................     $    (333)            4,537        $   (0.07)
                                                         =========         =========        =========
</TABLE>


                                       53
<PAGE>

<TABLE>
<CAPTION>
                                                                                            Year Ended December 31, 2004
                                                                                                                     Per Share
                                                                                   Earnings           Shares           Amount
                                                                                  ---------         ---------        ---------
                                                                                                        (2)             (2)
<S>                                                                               <C>                   <C>          <C>
      Net earnings .......................................................        $     193
      Less accrued dividends on
         preferred stock .................................................               (2)
                                                                                  ---------
         BASIC ...........................................................        $     191             4,498        $    0.04
                                                                                  =========         =========        =========

      Effect of dilutive securities (1):
        Stock options ....................................................                                 71
        Cumulative convertible
          preferred stock ................................................        $       2                18
                                                                                  ---------         ---------

        DILUTED ..........................................................        $     193             4,587        $    0.04
                                                                                  =========         =========        =========
</TABLE>
<TABLE>
<CAPTION>
                                                                                           Year Ended December 31, 2003
                                                                                                                     Per Share
                                                                                   Earnings           Shares           Amount
                                                                                  ---------         ---------        ---------
                                                                                                        (2)             (2)
<S>                                                                               <C>                   <C>          <C>
      Net earnings .......................................................        $     703
      Less accrued dividends on
        preferred stock ..................................................               (7)
                                                                                  ---------

        BASIC ............................................................        $     696             4,453        $    0.16
                                                                                  =========         =========        =========

      Effect of dilutive securities (1):
        Stock options ....................................................                                 41
        Cumulative convertible
          preferred stock ................................................        $       7                44
                                                                                  ---------         ---------

        DILUTED ..........................................................        $     703             4,538        $    0.15
                                                                                  =========         =========        =========
</TABLE>

      (1)   The stock options were anti-dilutive for the year ended
            December 31, 2005 and, therefore, were excluded from the calculation
            and reconciliation of Diluted Earnings (Loss) per Common Share for
            that year.

      (2)   Information as to the number of shares and per share amounts has
            been retroactively adjusted to reflect the 5% stock dividend on
            common stock declared February 23, 2006.

      At December 31, 2005, the Company had outstanding approximately 4,536,000
shares of common stock, after the 5% stock dividend declared on February 23,
2006.

      Reclassification - Certain reclassifications of prior years' amounts have
been made to conform with the current year's presentation.

Note 2. INCOME TAXES:

      At December 31, 2005, the Company had, for federal income tax purposes,
net operating loss carryforwards of approximately $3,657,000, expiring as
follows: $1,478,000 in 2010 to 2012; $1,379,000 in 2018 to 2020; and $800,000 in
2021 to 2025. The Company also had available federal and state alternative
minimum tax credit carryforwards of approximately $104,000.

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


                                       54
<PAGE>

<TABLE>
<CAPTION>
                                                                        Year Ended December 31,
                                                                     2005        2004        2003
                                                                     ----        ----        ----
<S>                                                                  <C>        <C>         <C>
      Current:
          Federal ..........................................         $   --     $   (4)     $   20
          State ............................................             38        152         110
          Foreign ..........................................             28          9           5
                                                                     ------     ------      ------
                                                                         66        157         135
                                                                     ------     ------      ------
      Deferred:
          Federal ..........................................           (212)       144         343
          State ............................................            (23)        10         (30)
                                                                     ------     ------      ------
                                                                       (235)       154         313
                                                                     ------     ------      ------
             Income tax expenses (benefits) net ............         $ (169)    $  311      $  448
                                                                     ======     ======      ======
</TABLE>

      Current income taxes in the years ended December 31, 2005, 2004, and 2003,
were presented net of credits of $16,000, $110,000, and $420,000, respectively,
arising from the utilization of available tax losses and loss carryforwards in
accordance with SFAS #109.

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

<TABLE>
<CAPTION>
                                                                        Year Ended December 31,
                                                                     2005        2004        2003
                                                                     ----        ----        ----
<S>                                                                  <C>        <C>          <C>
      Tax expense amount computed using
        statutory rate .....................................         $ (170)    $  171       $  392
      State taxes, net of federal benefit ..................             10        110           53
      Operations outside the US ............................             (3)       (10)         (28)
      Discontinued operations and other ....................             (6)        40           31
                                                                     ------     ------       ------
        Income tax expenses (benefit) net ..................         $ (169)    $  311       $  448
                                                                     ======     ======       ======
</TABLE>

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

<TABLE>
<CAPTION>
                                                                                      December 31,
                                                                                    2005       2004
                                                                                    ----       ----
<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 ......................................   $  122      $   97
         Compensation and compensated absences, principally
          due to accrual for financial reporting purposes .....................      199         265
         Accrual of projected environmental costs, principally
          related to Prometcor's compliance with NJDEP
          requirements ........................................................      201         201
         Net operating loss carryforwards .....................................    1,704       1,392
         Alternative minimum tax credit carryforwards .........................      104          96
         Unrecognized net loss on pension plan ................................    1,077         986
         Other ................................................................      382         256
                                                                                  ------      ------
          Total gross deferred income tax assets ..............................    3,789       3,293
          Less valuation allowance ............................................      119         126
                                                                                  ------      ------
          Net deferred income tax assets ......................................    3,670       3,167
                                                                                  ------      ------
      Deferred income tax liabilities:
         Pension expense, due to contributions in excess of
            net accruals ......................................................      865         650
         Other ................................................................       85          32
                                                                                  ------      ------
            Total gross deferred income tax liabilities .......................      950         682
                                                                                  ------      ------
            Net deferred income taxes .........................................   $2,720      $2,485
                                                                                  ======      ======
</TABLE>

      A valuation allowance has been established based on the likelihood that a


                                       55
<PAGE>

portion of the deferred income tax assets will not be realized. Realization is
dependent on generating sufficient taxable income prior to expiration of the
loss carryforwards. The ultimate realization of the deferred income tax assets
will require aggregate taxable income of approximately $3,800,000 in the years
prior to the expiration of the net operating loss carryforwards in 2025. 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 net deferred income tax assets were classified in the Consolidated
Balance Sheets as follows (in thousands):

                                                                December 31,
                                                             2005        2004
                                                             ----        ----
      Current:
        Other current assets ........................       $  495      $  435
        Current assets of discontinued operations ...          199         199
                                                            ------      ------
           Total current ............................          694         634
                                                            ------      ------
      Long Term:
        Other assets ................................        1,127         895
        Other assets of discontinued operations .....          899         956
                                                            ------      ------
           Total long term ..........................        2,026       1,851
                                                            ------      ------

        Total net deferred income tax assets ........       $2,720      $2,485
                                                            ======      ======

Note 3.  SHORT-TERM DEBT:

            Composition (in thousands):

                                                            December 31,
                                                          2005        2004
                                                          ----        ----

      Revolving loans .............................      $1,500      $1,429
      Other .......................................          --          10
                                                         ------      ------
                                                         $1,500      $1,439
                                                         ======      ======

      In 1995 RCPC entered into an agreement with Bank of America for a
Revolving Loan. In 1997 Ronson Aviation entered into an agreement with Bank of
America for a Revolving Loan. On January 11, 2006, RCPC, Ronson Aviation and
Bank of America extended the Revolving Loans to January 31, 2007. The terms of
the agreement provide for a covenant requiring minimum earnings before interest,
taxes, depreciation and amortization (EBITDA), and for fees payable to the bank
monthly beginning on February 28, 2006, if the loans remain outstanding at the
end of each month. The extension agreement also amended certain other terms of
the Revolving Loan agreements.

      The RCPC Revolving Loan of $1,500,000 at December 31, 2005, 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 Revolving Loan bears interest at the
rate of 0.5% above Bank of America's prime rate (7.25% at December 31, 2005).
The Revolving Loan is payable on demand and 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.
The Bank of America agreement also has restrictive covenants which, among other
things, limit the transfer of assets between the Company and its subsidiaries.

      In 1995 Ronson-Canada entered into an agreement with Canadian Imperial
Bank of Commerce ("CIBC") for a line of credit of C$250,000. The Revolving Loan
is secured by the accounts receivable and inventory of Ronson-Canada, and the
amounts available


                                       56
<PAGE>

under the line are based on the level of accounts receivable. The loan bears
interest at the rate of 1.25% over the CIBC prime rate (5.0% at December 31,
2005). 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. At December 31,
2005, Ronson-Canada utilized no borrowings under the Revolving Loan.

      Based on the amount of the loans outstanding and the levels of accounts
receivable and inventory at December 31, 2005, Ronson Consumer Products had
unused borrowings available at December 31, 2005, of about $385,000 under the
Bank of America and CIBC lines of credit described above. (Refer to Note 4 below
for information regarding the book value of assets pledged as collateral for the
debt above.)

      Ronson Aviation's Revolving Loan is under a line of credit up to $500,000
to Ronson Aviation based on the level of its accounts receivable. The Revolving
Loan bears interest at the rate of 1.0% above Bank of America's prime rate
(7.25% at December 31, 2005). The Revolving Loan is payable on demand and is
secured by the accounts receivable, inventory and machinery and equipment
(excluding aircraft) of Ronson Aviation; and the guarantees of the Company and
RCPC. The Bank of America agreement also contains restrictive covenants. At
December 31, 2005, Ronson Aviation utilized no borrowings under the Revolving
Loan.

      Based on no loan outstanding and the level of accounts receivable at
December 31, 2005, Ronson Aviation had unused borrowings available at December
31, 2005, of about $294,000 under the Bank of America line of credit described
above.

      At December 31, 2005, the weighted average interest rate for the total
short-term debt was 7.75%.

      The Company had outstanding letters of credit totaling $210,000 which were
issued by Bank of America as follows: a $60,000 standby letter of credit for
Ronson Aviation under its line of credit related to aircraft on order from
Raytheon, and a standby letter of credit of $150,000 related to the RCPC lease
of additional warehouse space, secured by a certificate of deposit in the amount
of $153,000.

Note 4. LONG-TERM DEBT:

           Composition (in thousands):

<TABLE>
<CAPTION>
                                                                                    December 31,
                                                                                 2005           2004
                                                                                 ----           ----
<S>                                                                             <C>           <C>
         Mortgage loan payable, Bank of America (a) ..........................  $ 1,241       $ 1,336
         Notes payable, Bank of America (b) ..................................       --           590
         Note payable, lessor (c) ............................................      396           421
         Term notes payable ..................................................       68            49
                                                                                -------       -------
                                                                                  1,705         2,396
         Less portion in current liabilities .................................      155           731
                                                                                -------       -------
         Balance of long-term debt ...........................................  $ 1,550       $ 1,665
                                                                                =======       =======
</TABLE>

      (a) In May 1999 the Company, RCPC and Bank of America entered into an
agreement, in the original amount of $1,760,000, which refinanced an existing
Mortgage Loan agreement on the RCPC property in Woodbridge, New Jersey. On
January 11, 2006, the Company, RCPC and Bank of America amended the Mortgage
Loan, changing the expiration to January 31, 2007 from its previously scheduled
expiration date of December 1, 2008. The Mortgage Loan balance was $1,241,000 at
December 31, 2005. The Mortgage Loan agreement is secured by a first mortgage on
the land, buildings and improvements of RCPC, and is payable in monthly
installments of $7,951, plus interest, with a final installment on January 31,
2007, of approximately $1,137,000. The loan bears interest at the rate of 0.5%
above Bank of America's prime rate.

      (b) The Notes Payable, Bank of America, consisted of two term loans
payable by


                                       57
<PAGE>

Ronson Aviation to Bank of America, collateralized by a specific aircraft and
guaranteed by the Company. The notes were repaid from the proceeds of the sale
in September 2005 of Ronson Aviation's charter aircraft and business.

      (c) As part of the lease agreement for its new warehouse, effective March
1, 2004, RCPC entered into a term note payable to the lessor in the original
amount of $440,000. The note, with a balance of $396,000 on December 31, 2005,
bears interest at the rate of 8.25% and is payable in monthly installments of
$3,787 including interest through February 2013, with a final payment of
$150,000 on March 1, 2013. The note is secured by the leasehold improvements at
the warehouse and a letter of credit in the amount of $150,000.

      At December 31, 2005, fixed assets with a net book value of $1,794,000,
accounts receivable and inventories of $4,417,000, and a certificate of deposit
of $153,000 are pledged as collateral for the debt detailed in Notes 4 and 5.

      Net assets of consolidated subsidiaries, excluding intercompany accounts,
amounted to approximately $2,450,000 at December 31, 2005, substantially all of
which was restricted as to transfer to the Company and its subsidiaries due to
various covenants of their debt agreements at December 31, 2005.

      Long-term debt matures as follows: 2006, $155,000; 2007, $1,194,000; 2008,
$43,000; 2009, $36,000; 2010, $37,000, and 2011-2013, $240,000.

      In December 2003 the Company entered into an interest rate swap agreement
in order to manage interest rate exposure. Effectively, the Company converted
its Mortgage Loan payable of variable-rate debt to fixed-rate debt with an
effective interest rate of 7.45%. The interest rate swap is considered a cash
flow hedge and is 100% effective. As a result, the mark-to-market value of both
the fair value hedging instrument and the underlying debt obligation are
recorded as equal, and offsetting gains or losses in other expense. At December
31, 2005, the interest rate swap had a fair value of $21,000 recorded in other
non-current assets with the corresponding adjustment to Accumulated Other
Comprehensive Loss. The fair value of the interest rate swap agreement, obtained
from the financial institution, is based on current rates of interest and is
computed as the net present value of the remaining exchange obligations under
the terms of the contract.

Note 5. LEASE OBLIGATIONS:

      Lease expenses consisting principally of office and warehouse rentals,
totaled $601,000, $602,000, and $514,000 for the years ended December 31, 2005,
2004 and 2003, respectively.

      At December 31, 2005, 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):


                                       58
<PAGE>

                                                       Operating    Capitalized
                                            Total        Leases        Leases
                                            -----      ---------    ------------
      Year Ending December 31:
      2006 ..............................   $  659       $  333       $  326
      2007 ..............................      640          318          322
      2008 ..............................      573          301          272
      2009 ..............................      426          206          220
      2010 ..............................      324          130          194
      2011-2012  ........................      345          292           53
                                            ------       ------       ------
      Total obligations .................   $2,967       $1,580        1,387
                                            ======       ======
      Less: Amount representing
            interest ....................                                217
                                                                      ------
      Present value of capitalized
        lease obligations ...............                             $1,170
                                                                      ======

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

                                                           December 31,
                                                         2005        2004
                                                         ----        ----

      Machinery and equipment ....................      $1,513      $1,232
      Less accumulated amortization ..............         185         168
                                                        ------      ------
                                                        $1,328      $1,064
                                                        ======      ======

      Ronson Aviation leases land under a leasehold consisting of six five-year
terms automatically renewed, with the last five-year term expiring in November
2007. The lease may be extended for up to five additional five-year terms
through November 2032, provided that during the five-year term ending November
2007, Ronson Aviation invests from $600,000 to over $1,500,000 in capital
improvements.

Note 6. RETIREMENT PLANS:

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

      Plan assets primarily included common stocks (71%), cash and money market
accounts (18%), a guaranteed annuity contract (4%), and 218,624 shares of
common stock of the Company (7%). The stock of the Company held by the Plan was
valued at $286,000 and $384,000 at December 31, 2005 and 2004, respectively.

      The Company uses a measurement date of December 31 for its pension plans.
The benefit obligations below are equal to the accumulated benefit obligations.
The following table sets forth the plan's aggregate funded status and amounts
recognized in the Company's Consolidated Balance Sheets (in thousands):


                                       59
<PAGE>

                                                         Year Ended December 31,
                                                            2005         2004
                                                            ----         ----
      Change in Benefit Obligation:
         Benefit obligation at beginning of year ...      $ 4,824      $ 4,980
         Service cost ..............................           31           26
         Interest cost .............................          266          274
         Actuarial loss ............................          242           69
         Benefits paid .............................         (599)        (525)
                                                          -------      -------
         Benefit obligation at end of year .........        4,764        4,824
                                                          -------      -------
      Change in Plan Assets:
         Fair value of plan assets at beginning
           of year .................................        3,826        3,200
         Actual return on plan assets ..............          (21)         469
         Employer contributions ....................          847          682
         Benefits paid .............................         (599)        (525)
                                                          -------      -------
         Fair value of plan assets at end of year ..        4,053        3,826
                                                          -------      -------

         Funded status .............................         (711)        (998)
         Unrecognized actuarial loss ...............        2,695        2,467
         Unrecognized prior service cost ...........           62           69
                                                          -------      -------
      Net amount recognized ........................      $ 2,046      $ 1,538
                                                          =======      =======

      Amounts Recognized in the Consolidated
         Balance Sheets Consist of:
           Accrued benefit liability ...............      $  (711)     $  (998)
           Intangible asset ........................           62           69
           Accumulated other comprehensive loss,
             excluding the income tax effect .......        2,695        2,467
                                                          -------      -------
         Net amount recognized .....................      $ 2,046      $ 1,538
                                                          =======      =======

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

                                                         Year Ended December 31,
                                                                2005      2004
                                                                ----      ----

      Discount rate.................................            5.5%      5.5%

      If the additional minimum liability recorded exceeds the 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):

                                                      Year Ended December 31,
                                                     2005      2004        2003
                                                     ----      ----        ----
Components of net periodic benefit cost:
   Service cost ...............................     $  31      $  26      $  22
   Interest cost ..............................       266        274        269
   Expected return on plan assets .............      (191)      (160)      (132)
   Amortization of prior service cost .........         6         14         20
   Recognized actuarial loss ..................       226        264        291
                                                    -----      -----      -----
   Net pension expense ........................     $ 338      $ 418      $ 470
                                                    =====      =====      =====


                                       60
<PAGE>

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

                                                     Year Ended December 31,
                                                      2005    2004    2003
                                                      ----    ----    ----
      Discount rate ..............................    5.5%    5.5%    5.5%
      Expected long-term rate of return
        on plan assets ...........................    5.0%    5.0%    5.0%

      Contributions to the pension plan during 2006 are expected to be
approximately $740,000.

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

      (1)   optimize the long-term return on plan assets at an acceptable level
            of risk;

      (2)   maintain diversification across asset classes;

      (3)   maintain control of the risk level within each asset class; and

      (4)   focus on a long-term return objective.

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

      The Company contributes to its defined contribution plan at the rate of 1%
of each covered employee's compensation. The Company also contributes an
additional amount equal to 50% of a covered employee's contribution to a maximum
of 1% of compensation. Expenses of about $62,000, $71,000 and $59,000 for this
plan were recorded in 2005, 2004 and 2003, respectively.

Note 7. COMMITMENTS AND CONTINGENCIES:

      In December 1989 the Company adopted a plan to discontinue the operations
of its wholly owned subsidiary, Ronson Metals Corporation, subsequently renamed
Prometcor, Inc. ("Prometcor"). Upon the cessation of operations, Prometcor began
its compliance with the environmental requirements of all applicable laws with
the objective of selling the property previously used in the discontinued
operations. The full extent of the costs and time required for completion is not
determinable until the remediation, if any is required, and confirmatory testing
related to the remaining groundwater matter have been completed and accepted by
the New Jersey Department of Environmental Protection ("NJDEP"). The liability
for these estimated costs and expenses as recorded in the financial statements
at December 31, 2005, was approximately $500,000 based on the lower limit of the
range of costs as projected by the Company and its consultants. The estimated
upper limit of the range of costs is discounted at approximately $600,000 above
the lower limit.

      In 1999 Ronson Aviation completed the installation of a new fueling
facility and ceased use of most of its former underground storage tanks. The
primary underground fuel storage tanks formerly used by Ronson Aviation were
removed in 1999 as required by the NJDEP. Related contaminated soil was removed
and remediated. In 2000 initial groundwater tests were completed. Ronson
Aviation's environmental consultants have advised the Company that preliminary
results of that testing indicate that no further actions should be required. The
extent of groundwater contamination cannot be determined until final testing has
been completed and accepted by the NJDEP. The Company intends to vigorously
pursue its rights under the leasehold and under the statutory and regulatory
requirements. Since the amount of additional costs, if any, and their ultimate
allocation cannot be fully determined at


                                       61
<PAGE>

this time, an estimate of additional loss, or range of loss, if any, that is
reasonably possible, cannot be made. Thus, the effect on the Company's financial
position or results of future operations cannot yet be determined, but
management believes that the effect will not be material.

      The Company is involved in a shareholder's derivative action and a second
lawsuit filed by the same shareholder. The Company incurred approximately
$95,000, $145,000, and $460,000 in net legal costs related to the matters in
2005, 2004, and 2003, respectively. These costs were net of the associated
insurance reimbursements. The Company believes that its directors' and officers'
liability insurance coverage is adequate to meet the future direct costs of the
litigation; however, the Company is not able to estimate at this time the extent
to which it will incur additional legal or other expenses, which may be
substantial, in connection with these proceedings.

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

      The Company has an employment contract with an officer of the Company
which expires on December 31, 2007. Base salaries in the years 2006 and 2007
are $572,991 and $593,045, respectively, with the increases subject to the
Company reporting operating earnings in the year prior to each increase. The
base salary in 2006 reflects a 7% reduction offered and accepted by Mr. Louis V.
Aronson effective October 1, 2005, and the increase due to Mr. Louis V. Aronson
under the terms of the contract on January 1, 2006 was waived by him. The
contract also provides for additional compensation and benefits, including a
death benefit equal to two years' salary. The Company has purchased term
insurance for which the Company is the sole beneficiary to provide coverage for
a substantial portion of the potential death benefit.

Note 8. PREFERRED STOCK:

      In 1998 the Company declared a dividend of one Preferred Stock Purchase
Right ("Right") for each outstanding share of the Company's common stock. The
Rights are not presently exercisable. Each Right entitles the holder, upon the
occurrence of certain specified events, to purchase from the Company one
one-thousandth of a share of Series A Preferred Stock at a purchase price of $20
per share. The Rights further provide that each Right will entitle the holder,
upon the occurrence of certain other specified events, to purchase from the
Company, common stock having a value of twice the exercise price of the Right
and, upon the occurrence of certain other specified events, to purchase from
another person into which the Company was merged or which acquired 50% or more
of the Company's assets or earnings power, common stock of such other person
having a value of twice the exercise price of the Right. The Rights may be
generally redeemed by the Company at a price of $0.01 per Right. The Rights
expire on October 27, 2008.

Note 9. 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, directors and other key employees of the Company and
its subsidiaries at not less than 100% of the fair market value on the date on
which options are granted. On November 27, 2001, the stockholders approved the
adoption of the Company's 2001 Incentive Stock Option Plan which provides for
the grant of options for up to 159,535


                                       62
<PAGE>

shares of common stock. 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 127,628 shares of common stock. Options granted under the
plans are exercisable after six months from the date of the grant and within
five years of the grant date, at which time such options expire. All options are
vested on the date of the grant.

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

                                                    Year Ended December 31,
                                                   2005       2004       2003
                                                   ----       ----       ----

      Risk-free interest rate                      4.31%      3.15%      3.25%
      Dividend yield                                  0%         0%         0%
      Volatility factor -
        expected market price of Company's
        common stock                               0.46       0.47        0.8
      Weighted average expected life
        of options                                5 years    5 years    5 years

      A summary of the Company's stock option activity and related information
for the three years ended December 31, 2005, were as follows:

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

Outstanding at 12/31/02                       176,388             $  1.125
   Granted                                         --
   Exercised                                  (24,311)            $  1.025
   Expired                                     (1,530)            $  0.944
                                              -------

Outstanding at 12/31/03                       150,547             $  1.138
   Granted                                     12,155             $  0.844
   Exercised                                  (50,131)            $  1.293
   Expired                                    (11,548)            $  1.901
                                              -------

Outstanding at 12/31/04                       101,023             $  0.938
   Granted                                         --
   Exercised                                       --
   Expired                                    (12,361)            $  0.938
                                              -------

Outstanding at 12/31/05                        88,662             $  0.939
                                              =======             ========

Exercisable at 12/31/05                        88,662             $  0.939
                                              =======             ========

        Weighted average fair value of options
          granted during the year for options
          on which the exercise price:
        Equals the market price on the grant date                    N/A

        Exceeds the market price on the grant date                   N/A

      Exercise prices for options outstanding as of December 31, 2005, ranged
from $.93 to $.94 per share. The weighted average contractual life of those
options was 1.79 years.


                                       63
<PAGE>

Note 10. STATEMENTS OF CASH FLOWS:

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

      Supplemental disclosures of cash flow information are as follows (in
thousands):


                                                     Year Ended December 31,
                                                    2005      2004      2003
                                                    ----      ----      ----
      Cash Payments for:
         Interest ............................     $  397    $  324    $  283
         Income taxes ........................         30       225        54

      Financing & Investing Activities
         Not Affecting Cash:
         Capital lease obligations incurred           373     1,055        --
         Leasehold improvements financed by
           lessor                                      --       440        --
         Equipment financed by seller                  47        62        --

Note 11. INDUSTRY SEGMENTS INFORMATION:

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

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

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

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


                                       64
<PAGE>

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

<TABLE>
<CAPTION>
                                                           2005                 2004                 2003
                                                           ----                 ----                 ----
<S>                                                    <C>                  <C>                  <C>
Net sales:
  Consumer Products ...........................        $    15,664          $    16,768          $    16,773
  Aviation Services ...........................             10,899               11,715                9,967
                                                       -----------          -----------          -----------
     Consolidated .............................        $    26,563          $    28,483          $    26,740
                                                       ===========          ===========          ===========

Earnings (loss) before interest, other
 items, and intercompany charges:
  Consumer Products ...........................        $     1,347          $     1,807          $     2,610
  Aviation Services ...........................              1,435                1,253                1,454
                                                       -----------          -----------          -----------
  Total Reportable Segments ...................              2,782                3,060                4,064
  Corporate and others ........................             (1,799)              (1,702)              (1,802)
  Other charges ...............................                (95)                (145)                (460)
                                                       -----------          -----------          -----------
     Consolidated .............................        $       888          $     1,213          $     1,802
                                                       ===========          ===========          ===========

Interest expense:
  Consumer Products ...........................        $       195          $       112          $        85
  Aviation Services ...........................                 50                  100                   67
                                                       -----------          -----------          -----------
  Total Reportable Segments ...................                245                  212                  152
  Corporate and others ........................                228                  155                  156
                                                       -----------          -----------          -----------
     Consolidated .............................        $       473          $       367          $       308
                                                       ===========          ===========          ===========

Depreciation and amortization:
  Consumer Products ...........................        $       379          $       289          $       252
  Aviation Services ...........................                324                  449                  398
                                                       -----------          -----------          -----------
  Total Reportable Segments ...................                703                  738                  650
  Corporate and others ........................                 35                   34                    8
                                                       -----------          -----------          -----------
     Consolidated .............................        $       738          $       772          $       658
                                                       ===========          ===========          ===========

Earnings (loss) before intercompany
 charges and taxes:
  Consumer Products ...........................        $     1,126          $     1,691          $     2,521
  Aviation Services ...........................              1,381                1,158                1,374
                                                       -----------          -----------          -----------
  Total Reportable Segments ...................              2,507                2,849                3,895
  Corporate and others ........................             (2,272)              (2,200)              (2,284)
  Other charges ...............................                (95)                (145)                (460)
  Nonrecurring losses .........................               (642)                  --                   --
                                                       -----------          -----------          -----------
     Consolidated .............................        $      (502)         $       504          $     1,151
                                                       ===========          ===========          ===========

Segment assets:
  Consumer Products ...........................        $     7,224          $     6,586          $     4,569
  Aviation Services ...........................              2,745                4,689                5,281
                                                       -----------          -----------          -----------
  Total Reportable Segments ...................              9,969               11,275                9,850
  Corporate and others ........................              1,594                1,511                1,551
  Discontinued operations .....................              1,092                1,156                1,202
                                                       -----------          -----------          -----------
     Consolidated .............................        $    12,655          $    13,942          $    12,603
                                                       ===========          ===========          ===========

Segment expenditures for
 long-lived assets:
  Consumer Products ...........................        $       625          $     1,883          $       152
  Aviation Services ...........................                379                  298                  267
                                                       -----------          -----------          -----------
  Total Reportable Segments ...................              1,004                2,181                  419
  Corporate and others ........................                 13                   62                    3
                                                       -----------          -----------          -----------
     Consolidated .............................        $     1,017          $     2,243          $       422
                                                       ===========          ===========          ===========
</TABLE>


                                       65
<PAGE>

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

                                                Year Ended December 31,
                                              2005        2004        2003
                                              ----        ----        ----
      Net Sales (1):
      United States ..................    $ 24,580    $ 26,752    $ 24,826
      Canada .........................       1,635       1,488       1,534
      Other foreign countries ........         348         243         380
                                          --------    --------    --------
                                          $ 26,563    $ 28,483    $ 26,740
                                          ========    ========    ========

                                                            December 31,
                                                         2005         2004
                                                         ----         ----

      Long-Lived Assets:
      United States ............................     $  4,093     $  5,505
      Canada ...................................           22           11
                                                     --------     --------
                                                     $  4,115     $  5,516
                                                     ========     ========

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

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

                                                      Year Ended December 31,
                                                    2005        2004        2003
                                                    ----        ----        ----
Packaged fuels, flints, lighters and
  torches                                       $ 15,574    $ 16,685    $ 16,691
Other consumer products                               90          83          82
Aircraft                                              --       2,098         598
Charter services (2)                                 358         768         447
Aviation fuels and other aviation
  products and services                           10,541       8,849       8,922
                                                --------    --------    --------
                                                $ 26,563    $ 28,483    $ 26,740
                                                ========    ========    ========

      (2) The charter business of Ronson Aviation was sold in September 2005.

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

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

      For the years ended December 31, 2005, 2004 and 2003, Net Sales which
amounted to approximately $3,697,000, $3,665,000, and $4,276,000, respectively,
of Consolidated Net Sales were made by Ronson Consumer Products to one customer.
As of December 31, 2005 and 2004, accounts receivable from that customer
amounted to approximately 15% and 13%, respectively, of Consolidated Accounts
Receivable. No other customer accounted for more than 10% of Consolidated Net
Sales, for the years ended December 31, 2005, 2004 and 2003, or more than 10% of
Consolidated Accounts Receivable at December 31, 2005 and 2004.

Note 12. ACCUMULATED OTHER COMPREHENSIVE LOSS:

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


                                       66
<PAGE>

<TABLE>
<CAPTION>
                                    Foreign                         Cash          Accumulated
                                   Currency         Minimum          Flow            Other
                                 Translation        Pension        Hedging       Comprehensive
                                  Adjustments      Liability      Adjustment         Loss
                                 -----------       ---------      ---------      -------------
<S>                                 <C>             <C>             <C>             <C>
Balance at December 31, 2002        $    70         $ 2,071         $    --         $ 2,141
Current period change                   (96)           (477)             --            (573)
Income tax expense                       38             190              --             228
                                    -------         -------         -------         -------
Balance at December 31, 2003             12           1,784              --           1,796
Current period change                  (105)           (504)             16            (593)
Income tax expense (benefit)             42             202              (6)            238
                                    -------         -------         -------         -------
Balance at December 31, 2004            (51)          1,482              10           1,441
Current period change                   (17)            228             (37)            174
Income tax expense (benefit)              7             (91)             14             (70)
                                    -------         -------         -------         -------

Balance at December 31, 2005        $   (61)        $ 1,619         $   (13)        $ 1,545
                                    =======         =======         =======         =======
</TABLE>

Note 13. CONCENTRATIONS:

      During 2005 and at December 31, 2005, the Company and two of its
subsidiaries had cash deposits in a bank in excess of FDIC insured limits. The
Company periodically reviews the financial condition of the bank to minimize its
exposure.

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

Note 14. RELATED PARTY TRANSACTIONS:

      In October 1998 the Company entered into a consulting agreement with Mr.
Carl W. Dinger III, a greater than 5% shareholder of the Company. The agreement
provided that Mr. Dinger perform certain consulting services for the Company for
a period ending on April 7, 2000. The Company and Mr. Dinger entered into a
second consulting agreement effective upon the expiration date of the original
agreement. This agreement provided that Mr. Dinger continue to perform
consulting services for the Company through April 7, 2004 at a fee of $7,000 per
month. During 2004 the agreement was extended on a month-to-month basis through
July 7, 2004. A new consulting agreement was effective on July 8, 2004, which
provides that Mr. Dinger continue to perform consulting services at a fee of
$7,000 per month for the Company for a period of thirty-six months through July
7, 2007. On January 1, 2006, Mr. Dinger's consulting fee was reduced by 7% from
$7,000 per month to $6,510 per month. Mr. Dinger was compensated $84,000 during
each of the years ended December 31, 2005, 2004 and 2003, under the agreements.

      In October 1998 Mr. Dinger granted an option to the Company to purchase
the 186,166 shares of the Company's common stock then held by Mr. Dinger. The
option was for a period of 18 months expiring on April 7, 2000. In 2000 Mr.
Dinger granted a new option to the Company, to purchase the shares of the
Company's common stock held by Mr. Dinger. The option was for a period of 48
months, expiring April 7, 2004. The cost of the option was $4,000 per month for
the period of the option or until exercised. In March 2000 Mr. Dinger purchased
290,359 shares of newly issued restricted common stock of the Company at a price
of $1.96 per share. During 2004 the option agreement was extended on a
month-to-month basis through July 7, 2004. A new option agreement was effective
on July 8, 2004. The new option granted by Mr. Dinger is for a period of 36
months, expiring on July


                                       67
<PAGE>

      7, 2007. The exercise price of the option is $5.90 per share for the
535,222 shares now held by Mr. Dinger. The cost of the option is $4,000 per
month for the period of the option or until exercised. As part of each of the
option agreements, 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.
The Company expended $48,000 for the options during each of the years ended
December 31, 2005, 2004 and 2003, which were charged to Additional Paid-in
Capital. At December 31, 2004, the fair value of the option was approximately
$2,000, using the Black-Scholes option pricing model. Key assumptions included:
a risk-free interest rate of 4.35%, a dividend yield of 0%, volatility of 46%,
and the option life of 1.5 years. The fair value of $2,000 compares to $46,000,
the present value of the 18 remaining payments under the contract, discounted at
the Company's incremental borrowing rate of 7.75%.

      The Company incurred costs for consulting services under agreements with
two directors of the Company of $112,000, $128,000, and $128,000, in the years
ended December 31, 2005, 2004 and 2003, respectively. The Company incurred costs
for printing services from Michael Graphics, Inc., of $57,247, $82,488 and
$54,464 in the years ended December 31, 2005, 2004, and 2003. A greater than 10%
shareholder of Michael Graphics, Inc., is the son-in-law of the Company's
president.


                                       68
<PAGE>

FORM 10-K -- ITEM 15 (a) (2) and (d)

RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES

LIST OF FINANCIAL STATEMENT SCHEDULES

                Schedule I              Condensed Financial Information
                                                 of Company

                Schedule II             Valuation and Qualifying Accounts


                                       69
<PAGE>

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

The Board of Directors
  Ronson Corporation:

Under date of March 10, 2006, we reported on the consolidated balance sheets of
Ronson Corporation and subsidiaries as of December 31, 2005 and 2004, 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,
2005 as contained in the annual report on Form 10-K for the year 2005. In
connection with our audits of the aforementioned consolidated financial
statements, we also audited the related financial statement schedules as listed
in the accompanying index. These financial statement schedules are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statement schedules based on our audits.

In our opinion, the related financial statement schedules, when considered in
relation to the basic consolidated financial statements taken as a whole,
present fairly, in all material respects, the information set forth therein.


DEMETRIUS & COMPANY, L.L.C.

Wayne, New Jersey
March 10, 2006


                                       70
<PAGE>

           SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
                               RONSON CORPORATION
--------------------------------------------------------------------------------

                            CONDENSED BALANCE SHEETS
                             (dollars in thousands)

<TABLE>
<CAPTION>
                           ASSETS
                           ------
                                                                                December 31,
                                                                     -------------------------------
                                                                         2005                2004
                                                                         ----                ----
<S>                                                                  <C>                 <C>
CURRENT ASSETS:
Cash ........................................................        $        --         $        35
Other current assets ........................................                304                 360
                                                                     -----------         -----------
         Total Current Assets ...............................                304                 395

Property, plant, and equipment ..............................                227                 216
Less accumulated depreciation and amortization ..............                178                 161
                                                                     -----------         -----------
                                                                              49                  55
Other assets ................................................              5,382               5,343
                                                                     -----------         -----------
TOTAL ASSETS ................................................        $     5,735         $     5,793
                                                                     ===========         ===========

           LIABILITIES AND STOCKHOLDERS' EQUITY
           ------------------------------------

CURRENT LIABILITIES:
Current portion of long-term debt ...........................        $        21         $        21
Accounts payable ............................................                144                 289
Other current liabilities ...................................              1,161               1,388
                                                                     -----------         -----------
         Total Current Liabilities ..........................              1,326               1,698

Long-term debt ..............................................                  7                  28
Other long term liabilities .................................              1,098                  --
Pension obligation ..........................................                 --                 194

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:

Common stock ................................................              4,617               4,617
Additional paid-in capital ..................................             29,724              29,772
Accumulated deficit .........................................            (27,895)            (27,478)
Accumulated other comprehensive loss ........................             (1,545)             (1,441)
                                                                     -----------         -----------
                                                                           4,901               5,470
Less cost of treasury shares:
   2005, 80,761 and 2004, 80,754  common shares .............              1,597               1,597
                                                                     -----------         -----------
                                                                           3,304               3,873
                                                                     -----------         -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ..................        $     5,735         $     5,793
                                                                     ===========         ===========
</TABLE>

The Notes to Consolidated Financial Statements of Ronson Corporation and Its
Wholly Owned Subsidiaries are an integral part of these statements. See
accompanying Notes to Condensed Financial Information of Registrant.


                                       71
<PAGE>

           SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
                               RONSON CORPORATION
--------------------------------------------------------------------------------

                        CONDENSED STATEMENTS OF OPERATIONS
                             (dollars in thousands)

<TABLE>
<CAPTION>
                                                                                 YEAR ENDED DECEMBER 31,
                                                                     ----------------------------------------------
                                                                         2005              2004             2003
                                                                         ----              ----             ----
<S>                                                                  <C>               <C>              <C>
Management administration (from wholly
    owned subsidiaries eliminated
    in consolidation) .........................................      $     1,586       $     2,449      $     2,909
                                                                     -----------       -----------      -----------

Costs and expenses:
    General and administrative expenses .......................            1,893             1,847            2,261
    Interest expense (includes intercompany
       interest expense of  $100
       in 2005, 2004 and 2003,
       eliminated in consolidation) ...........................              228               155              155
    Non-operating expense - net ...............................              296               343              389
                                                                     -----------       -----------      -----------
                                                                           2,417             2,345            2,805
                                                                     -----------       -----------      -----------

EARNINGS (LOSS) BEFORE INCOME TAXES AND
    EQUITY IN NET EARNINGS
    OF SUBSIDIARIES ...........................................             (831)              104              104

Income tax provisions (benefits) ..............................             (367)              144               48

Equity in net earnings of subsidiaries ........................              131               233              647
                                                                     -----------       -----------      -----------
NET EARNINGS (L0SS) ...........................................      $      (333)      $       193      $       703
                                                                     ===========       ===========      ===========
</TABLE>

The Notes to Consolidated Financial Statements of Ronson Corporation and Its
Wholly Owned Subsidiaries are an integral part of these statements. See
accompanying Notes to Condensed Financial Information of Registrant.


                                       72
<PAGE>

           SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
                               RONSON CORPORATION
--------------------------------------------------------------------------------

                       CONDENSED STATEMENTS OF CASH FLOWS
                             (dollars in thousands)

<TABLE>
<CAPTION>
                                                                                     YEAR ENDED DECEMBER 31,
                                                                       -----------------------------------------------
                                                                           2005              2004              2003
                                                                           ----              ----              ----
<S>                                                                    <C>               <C>               <C>
Cash Flows from Operating Activities:
Net earnings (loss) .............................................      $      (333)      $       193       $       703
Adjustments to reconcile net earnings (loss)
    to net cash provided by
    operating activities:
    Equity in net earnings (loss) of subsidiaries ...............             (131)             (233)              (647)
    Depreciation and amortization ...............................               35                34                 8
    Deferred income tax expenses ................................             (214)               102                22
    Increase (decrease) in cash from changes in
       current assets and current liabilities ...................              (77)              (43)              170
    Decrease (increase) in net advances to (from)
       subsidiaries .............................................            1,352               565              (158)
    Net change in pension-related accounts ......................             (538)             (307)              (71)
    Other .......................................................               37              (104)              (17)
                                                                       -----------       -----------       -----------
       Net cash provided by
            operating activities ................................              131               207                10
                                                                       -----------       -----------       -----------

Cash Flows from Investing Activities:
       Net cash used in investing activities,
          capital expenditures ..................................              (13)               --                (3)
                                                                       -----------       -----------       -----------

Cash Flows from Financing Activities:
Proceeds from issuance of common stock ..........................               --                65                24
Payments of long-term lease obligations .........................               --                (5)               (5)
Payments of long-term debt ......................................              (21)              (13)               --
Payments of dividends ...........................................              (84)             (125)               (7)
Redemption of preferred stock ...................................               --               (46)               --
Cost of stock option agreement ..................................              (48)              (48)              (48)
                                                                       -----------       -----------       -----------
       Net cash used in
          financing activities ..................................             (153)             (172)              (36)
                                                                       -----------       -----------       -----------
Net increase (decrease) in cash .................................              (35)               35               (29)

Cash at beginning of year .......................................               35                --                29
                                                                       -----------       -----------       -----------

Cash at end of year .............................................      $        --       $        35       $        --
                                                                       ===========       ===========       ===========
</TABLE>

The Notes to Consolidated Financial Statements of Ronson Corporation and Its
Wholly Owned Subsidiaries are an integral part of these statements. See
accompanying Notes to Condensed Financial Information of Registrant.


                                       73
<PAGE>

SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
                           RONSON CORPORATION
--------------------------------------------------------------------------------

NOTES TO CONDENSED FINANCIAL STATEMENTS

NOTE A: Condensed Financial Statements.

            The accompanying financial statements should be read in conjunction
with the consolidated financial statements of the Registrant, Ronson Corporation
(the "Company") and its subsidiaries included in the Company's Annual Report on
Form 10-K for the year ended December 31, 2005.

            The Company's wholly owned subsidiaries in the condensed financial
statements are accounted for by the equity method of accounting.

            The Company has authorized 5,000,000 shares of preferred stock with
no par value. All of the 34,875 outstanding shares of 12% Cumulative Convertible
Preferred Stock that were outstanding at December 31, 2003 were converted to
common shares or redeemed during 2004.

            The Company has authorized 11,848,106 shares of common stock with a
par value of $1.00, of which 4,536,249 and 4,536,256 were outstanding at
December 31, 2005 and 2004, respectively, adjusted for a 5% stock dividend
declared February 23, 2006.

NOTE B: Other Assets and Other Liabilities.

                                                          December 31,
                                                         (in thousands)
                                                        2005         2004
                                                        ----         ----

         Other Assets
            Investment in subsidiaries               $   4,165    $   3,858
            Deferred income tax assets, net                832          672
            Net advances to subsidiaries                    --          436
            Other                                          385          377
                                                     ---------    ---------
                                                     $   5,382    $   5,343
                                                     =========    =========

         Other Liabilities
            Net advances from subsidiaries           $   1,098    $      --
                                                     =========    =========

            Investment in subsidiaries was eliminated in consolidation. The net
advances to (from) subsidiaries of $(1,098,000) and $436,000 at December 31,
2005 and 2004, respectively, were eliminated in consolidation.

NOTE C: Unrecognized Net Loss on Pension Plans.

            SFAS #87 requires that 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, net of
tax, as a separate component of Stockholders' Equity. This unrecognized net loss
is being amortized over future periods as a component of pension expense.


                                       74
<PAGE>

NOTE D: Income Taxes.

            The Company and its domestic subsidiaries have elected to allocate
consolidated federal income taxes on the separate return method. Under this
method of allocation, income tax expenses (benefits) are allocated to the
Company and each subsidiary based on its taxable income (loss) and net operating
loss carryforwards.

            In accordance with SFAS #109, "Accounting for Income Taxes" the
Company is to record a deferred income tax asset for net operating loss and
credit carryforwards when the ultimate realization is more likely than not. In
2005, 2004 and 2003, the Company and its subsidiaries recorded the expenses
(benefits) of net deferred income tax assets of $(235,000), $154,000, and
$313,000, respectively, of which $(214,000), $102,000 and $22,000, respectively,
were allocated to the Company.

NOTE E: Statements of Cash Flows.

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


                                       75
<PAGE>

                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                  Additions
                                                         -----------------------------
                                      Balance at         Charged to         Charged to                          Balance
                                     beginning of        costs and             other                             at end
             Description                period            expenses           accounts      Deductions (1)      of period
--------------------------------------------------------------------------------------------------------------------------
<S>                                    <C>               <C>               <C>               <C>               <C>
Allowance for doubtful accounts
  Year ended 12/31/05                  $        84       $        48       $        --       $        25       $       107
  Year ended 12/31/04                  $        76       $        54       $        --       $        46       $        84
  Year ended 12/31/03                  $        56       $        75       $        --       $        55       $        76
</TABLE>

(1)  Uncollectible accounts written off, net of recoveries.


                                       76