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 (FEE REQUIRED)

                 For the fiscal year ended December 31, 1996

         OR

        [   ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
               SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

         For the transition period from _______ to ________.

                           Commission File No. 1-1031

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

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

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

       Registrant's telephone number, including area code: (908) 469-8300

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

                                                  Name of each exchange
        Title of each class                       on which registered
        -------------------                       ---------------------
        Common Stock par value                    Nasdaq SmallCap Market
            $1.00 per share


        12% Cumulative Convertible                Nasdaq SmallCap Market
            Preferred Stock
            No par value

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

                                YES  [ X ]   NO  [   ]
<PAGE>
Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K (229.505 of this chapter) is not contained  herein,  and will
not be contained,  to the best of registrant's knowledge, in definitive proxy or
information  statements  incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [ X ]

The  aggregate  market  value of  voting  stock  held by  non-affiliates  of the
registrant was $5,519,000 as of March 10, 1997.

As of March 10, 1997,  there were 2,860,961  shares of the  registrant's  common
stock outstanding.
<PAGE>
                                TABLE OF CONTENTS


        Part I

        Item  1.  Business.

              2.  Properties.

              3.  Legal Proceedings.

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


        Part II

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

              6.  Selected Financial Data.

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

              8.  Financial Statements and Supplementary Data.

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


        Part III

        Item 10.  Directors and Executive Officers of the
                        Company.

             11.  Executive Compensation.

             12.  Security Ownership of Certain Beneficial
                     Owners and Management.

             13.  Certain Relationships and Related Transactions.


        Part IV

        Item 14.  Exhibits, Financial Statement Schedules and
                        Reports on Form 8-K.
<PAGE>
        PART I

        Item 1 - BUSINESS

        (a) General development of business.

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

                    1.  Consumer Products; and

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

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

                    On  November  15,  1996,  the  Company  issued  an  offer to
        exchange up to 1,423,912 aggregate shares of its common stock for all of
        the  837,595  issued  and  outstanding  shares  of  its  12%  Cumulative
        Convertible   Preferred   Stock.  For  each  share  of  preferred  stock
        exchanged,  the Company has offered to issue 1.7 shares of common stock.
        The terms and  conditions  of the offer are more fully  described in the
        Offering  Circular  and the  accompanying  Letter of  Transmittal  dated
        November 15, 1996 (together the "Exchange Offer") which are incorporated
        herein by reference.  No shares were accepted in 1996, but through March
        10,  1997,  623,016  shares of  preferred  stock had been  tendered  and
        accepted  for  exchange  and  1,059,127  shares of common stock had been
        issued in accordance with the Exchange Offer.

                    In December 1989, the Company  adopted a plan to discontinue
        the operations of Ronson Metals Corporation,  Newark, New Jersey, one of
        the  Company's  wholly owned  subsidiaries.  On January 8, 1997,  Ronson
        Metals  Corporation  amended its Certificate of  Incorporation to change
        its corporation  name to Prometcor,  Inc.  ("Prometcor").  Prometcor had
        sizable  losses  in  several  years  prior to 1987 with  reduced  losses
        continuing in 1987 through 1989. In 1990, operations ceased at Prometcor
        and  Prometcor  began  complying  with the New  Jersey  Industrial  Site
        Recovery Act ("ISRA"),  formerly ECRA, and all other applicable laws. As
        part of the plan to sell the  properties of the  Prometcor  discontinued
        operations,  Prometcor  has also been  involved  in  termination  of its
        United States Nuclear Regulatory Commission ("NRC") license.  Compliance
        with ISRA and NRC requirements has continued through 1996 and into 1997.
        (See  Environmental  Matters below and Item 7 - Management's  Discussion
        and Analysis of Financial Condition and Results of Operations.)
<PAGE>

        (b)  Financial information about industry segments.

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

        (c)  Narrative description of business.

                    (1) Consumer Products

                        The  Company's  consumer  packaged  products,  which are
        manufactured  in Woodbridge,  New Jersey,  and distributed in the United
        States  by  the  Company's  wholly  owned  subsidiary,  Ronson  Consumer
        Products   Corporation   ("RCPC"),   include   Ronsonol  lighter  fluid,
        Multi-Fill  butane  fuel  injectors,   flints,  wicks  for  lighters,  a
        multi-use   penetrant  spray  lubricant   product  under  the  tradename
        "Multi-Lube",  a spot remover under the product tradename "Kleenol", and
        a surface protectant under the tradename  "GlossTek".  In addition,  the
        Company's  consumer  packaged  products are  marketed in Canada  through
        Ronson  Corporation of Canada,  Ltd.  ("Ronson-Canada"),  a wholly owned
        subsidiary  of the Company.  RCPC and  Ronson-Canada  together  comprise
        Ronson  Consumer  Products.  The Company also  distributes  its consumer
        products in Mexico.  While the Company does not believe that the Company
        or this segment is substantially  dependent upon any single customer, in
        1996, sales to various units of WalMart Stores,  Inc.  accounted for 14%
        of  Consolidated  Net Sales of the  Company  and 22% of Net Sales of the
        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.

                        Ronson Consumer  Products also distributes three lighter
        products - the "RONII"  refillable  butane lighter,  the Ronson "WINDII"
        liquid fuel windproof lighter, and the Ronson "Varaflame Ignitor",  used
        for lighting  fireplaces,  barbecues,  camping  stoves and candles.  The
        lighter products are marketed in the United States, Canada and Mexico.
<PAGE>

                        On January 1, 1995, Ronson Consumer Products  introduced
        a new lighter product,  the RONII refillable butane lighter, in both the
        United States and Canada.  The RONII is a pocket  lighter that meets the
        new child resistant  requirements  issued by the Consumer Product Safety
        Commission.  The RONII is  manufactured  for the Company in Spain and is
        sold through the Company's  distribution  channels.  The RONII is priced
        competitively  but has strong  competition  from several other brands of
        disposable  lighters  and  unbranded  imports  from  China and other Far
        Eastern  countries.   On  January  1,  1997,  Ronson  Consumer  Products
        introduced a new lighter product,  the WINDII windproof lighter,  in the
        United  States and Canada.  The WINDII uses Ronson  flints and  Ronsonol
        lighter fuel and Ronson wicks. The WINDII faces strong  competition from
        other nationally distributed brands and from unbranded imports.

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

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

                        Ronson  Aviation,  Inc.  ("Ronson  Aviation"),  a wholly
        owned  subsidiary  of  the  Company,   headquartered  at  Trenton-Mercer
        Airport,  Trenton, New Jersey, provides a wide range of general aviation
        services  to the general  public and to  government  agencies.  Services
        include air charter,  air cargo,  cargo handling,  avionics,  management
        aviation  services,  flight  training,  new  and  used  aircraft  sales,
        aircraft  repairs,  aircraft  fueling,  storage and office rental.  This
        subsidiary's facility is located on 18 acres, exclusive of four acres on
        which  Ronson  Aviation  has a first  right of refusal,  and  includes a
        52,000 square foot  hangar/office  complex,  two aircraft  storage units
        ("T"  hangars) and a 48,500 gallon fuel storage  complex  (refer to Item
        2-Properties,  (4) Trenton,  N.J.). In its passenger and cargo services,
        Ronson  Aviation  operates  a  total  of 10  aircraft,  including  three
        twin-engine  airplanes  in charter  operations  and seven  single-engine
        airplanes in the flight school and rental fleet.  Ronson  Aviation is an
        FAA  approved  repair  station for major and minor  airframe  and engine
        repairs and an avionics  repair  station for repairs and  installations.
        Ronson  Aviation is an  authorized  Beech  Aircraft  and Parts Sales and
        Service  Center;  and a customer  service  facility for Bell  Helicopter
        Textron.

                        At December  31,  1996,  Ronson  Aviation  had orders to
        purchase two new aircraft from Beech Aircraft Corporation, both of which
        are for resale to be  delivered  to Ronson  Aviation in 1997.  The total
        sales value of these orders is  approximately  $1,395,000.  These orders
        are subject to cancellation by Ronson Aviation.

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

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

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

                          Prometcor  has also  proceeded  with  reporting to the
        United  States  Nuclear  Regulatory   Commission  ("NRC")  in  order  to
        terminate the NRC license held by Prometcor. In 1996, and to date in the
        first quarter of 1997,  Prometcor's  radiological  consultant  performed
        additional sampling and has submitted  additional reports to the Company
        and to the NRC. As a result of the evaluation of the sampling results by
        the Company's  radiological  consultant and in consideration of comments
        from the NRC,  low-level  contamination was identified and delineated in
        certain sections of the Prometcor  property.  Although the extent is not
        yet determinable,  additional  sampling and remediation will be required
        in these areas.

                          The additional sampling and remediation  required will
        increase  the time and costs  projected  to receive  clearance  from the
        NJDEP  and the NRC.  As a  result,  the  Company  recorded  a charge  of
        $1,370,000 in the fourth quarter of 1996  ($1,190,000  net of a deferred
        income tax  benefit).  Although the Company  believes it has accrued for
        all  costs  to be  incurred,  the  full  extent  of  the  costs  is  not
        determinable  until all testing and remediation  have been completed and
        accepted by the NJDEP and NRC.

                        Two of the Company's subsidiaries are subject to the New
        Jersey Underground Storage Tank Law, N.J.S.A.  58:10A-21 et seq. and the
        regulations   promulgated  thereunder,   N.J.A.C.   7:14B-1.1  et  seq.,
        requiring  upgrades to existing  underground  storage tanks. The Company
        has  replaced  its  underground  storage  tanks at one of its New Jersey
        facilities.  The  Company  will be  required  to  upgrade  or close  its
        underground  storage  tanks at its other New  Jersey  facility  prior to
        December  31,  1998.  The cost of the  remaining  activities  is not yet
        determinable.
<PAGE>
                        On August  31,  1995,  the  Company  received  a General
        Notice Letter from the United  States  Environmental  Protection  Agency
        ("USEPA"),  notifying the Company that the USEPA  considered the Company
        one of about four thousand Potentially Responsible Parties ("PRP's") for
        waste  disposed  of  prior  to  1980 at a  landfill  in  Monterey  Park,
        California, which the USEPA designated as a Superfund site ("Site"). The
        USEPA identified  manifests dated from 1974 through 1979 which allegedly
        indicate that waste  originating at the location of the Company's former
        Duarte, California,  hydraulic subsidiary was delivered to the Site. The
        Company sold the Duarte, California,  hydraulic subsidiary to the Boeing
        Corporation in 1981. As a result of successfully challenging the USEPA's
        original volumetric allocation, on September 29, 1995, the USEPA reduced
        the volume of waste attributed to the Duarte facility,  Ronson Hydraulic
        Units  Corporation  ("RHUCOR-CA"),  and  determined the volume to be "de
        minimis". In addition,  counsel for this matter has informed the Company
        that factual  arguments  are  available  that could  further  reduce the
        amount  of  waste  attributed  to the  hydraulic  subsidiary,  and  that
        arguments also exist that the subsequent  owners of the facility  should
        be required to pay a significant  portion, or possibly all, of the costs
        the USEPA  determines to be due as a result of RHUCOR-CA's  waste having
        been sent to the Site. Although the Company's final contribution amount,
        if any, is not yet determinable, in the General Notice Letter, the USEPA
        offered to  partially  settle the matter if the Company  paid  $212,000,
        which  would  have been full  settlement  of the Fifth  Partial  Consent
        Decree.  This offer,  however,  was made prior to the USEPA reduction of
        the  volume  of waste  allocated  to  RHUCOR-CA  and  prior to the USEPA
        determination  that  the  waste  volume  is  "de  minimis".  No  further
        communication  was  received  by the  Company  related to this matter in
        1996.  Because  the  USEPA  has  determined  that  the  volume  of waste
        generated  by the  facility  and sent to the Site is "de  minimis",  and
        because  the USEPA has sent a General  Notice  Letter to another PRP for
        the same waste,  the Company  believes  that the cost,  if any, will not
        have a material effect on the Company's financial position.

                    Other  than  the  expenditures  related  to the  upgrade  or
        closure of underground  storage tanks, the Company does not believe that
        compliance with  environmental laws and regulations will have a material
        effect  upon the  Company's  future  capital  expenditures.  The Company
        believes that compliance with  environmental  laws and regulations  will
        not have a material  effect upon the Company's  earnings or  competitive
        position.


        PATENTS AND TRADEMARKS

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


        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.
<PAGE>
        RESEARCH ACTIVITIES

                    The   Company's    consumer    products   segment   expensed
        approximately  $134,000,  $135,000  and $86,000  during the fiscal years
        ended  December  31,  1996,  1995 and 1994,  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, 1996,  the Company and its  subsidiaries
        employed a total of 137 persons.


        CUSTOMER DEPENDENCE

                    See above under "Consumer Products".


        SALES AND REVENUES

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

                              Consumer        Aviation Operations
                              Products            and Services
                              --------        -------------------
          1994                   51%                  49%

          1995                   56%                  44%

          1996                   65%                  35%


        (d) Financial information about foreign and domestic operations and
            export sales.

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


        Item 2 - PROPERTIES

                    The following list sets forth the location and certain other
        information concerning the Company's principal  manufacturing and office
        facilities.  The Company's  manufacturing  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  carried on. (See  paragraphs (a) and (b) below.) In
        the list below,  "medium" facilities are those which have between 20,000
        and 100,000  square feet;  and "small"  facilities  are those which have
        less than 20,000 square feet.
<PAGE>
                    (a) The  facilities in  Woodbridge,  New Jersey,  and Canada
        comprise  the  consumer  products  segment.  The  Trenton,  New  Jersey,
        facilities are used by the aviation services segment.

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

                (1) Woodbridge, New Jersey

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

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

                (2) Newark, New Jersey

                    One  small  and two  medium  facilities  are  owned  and are
        constructed of brick, steel, concrete block and concrete.  Operations of
        these facilities have terminated.

                (3) Somerset, New Jersey

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

                (4) Trenton, New Jersey

                    Facilities  included in (a) and (b) below are owned  subject
        to a  mortgage  in  favor of the Bank of New  York,  National  Community
        Division.

                    (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.

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

                (5) Mississauga, Ontario, Canada

                    One small  facility  for sales and  marketing,  distribution
        center and storage. This facility is subject to a lease which expires in
        March 2001. This facility is constructed of brick and cinder block.
<PAGE>


        Item 3 - LEGAL PROCEEDINGS

                Prinest G. Hammond and Scarlett W. Hammond, as Parents,
        Guardians, and Next Friends of Fabian Gayle Hammond, a Minor, and
        Prinest G. Hammond and Scarlett W. Hammond, Individually, v. Ronson
        Corporation

                The  Company is the  Defendant  in a product  liability  lawsuit
        pending in the Superior  Court of Wilkinson  County,  Georgia,  in which
        Plaintiffs  seek  damages for an  incident  that  allegedly  occurred in
        December  1994,  when a spark  from an  unidentified  cigarette  lighter
        ignited the  clothing of Fabian  Gayle  Hammond  after he had  allegedly
        allowed lighter fluid to leak onto his pants. The case was filed in June
        1996.  The  Plaintiffs  seek  substantial  special  damages and punitive
        damages. Discovery has not been completed, and, therefore, the Company's
        counsel is unable to render an opinion about  whether the  likelihood of
        an  unfavorable  outcome  is either  "probable"  or  "remote".  However,
        counsel for the Company has advised that substantial  defenses exist and
        is vigorously  defending this litigation.  Management  believes that the
        claim is  without  merit and a loss,  if any,  would be well  within the
        limits of insurance coverage.

                The Company is involved in various  other  lawsuits.  Management
        believes  that the  outcome of these  lawsuits  will not have a material
        adverse effect on the Company's financial position.

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


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

                Not Applicable.
<PAGE>


        PART II

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

                    The  principal  market for trading in Ronson common stock is
        the Nasdaq  SmallCap  Market.  Prior to October 2, 1995,  the  principal
        market  for  trading  in Ronson  common  stock  was the NASD  Electronic
        Bulletin  Board.  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.

        1996
        ----

        Quarter            1st      2nd      3rd     4th
        -------            ---      ---      ---     ---
        High Bid          4 1/8    2 7/8    2 7/8   2 1/4
        Low Bid           2 5/8    2 1/4    2 3/8   1 7/8

        1995
        ----

        Quarter            1st      2nd      3rd     4th
        -------            ---      ---      ---     ---
        High Bid          1 5/16   2 3/8    4 3/4   4 7/8
        Low Bid             1       3/4     1 1/4     2

                    At March 10, 1997,  there were 2,553  stockholders of record
        of the Company's common stock.  Information required by this Item on the
        frequency  and  amount  of  dividends  is  contained  in  Item  6 and is
        incorporated herein by reference.


        Item 6 - SELECTED FINANCIAL DATA

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

<PAGE>

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

        RESULTS OF OPERATIONS

        1996 Compared to 1995

                          Ronson  Corporation's (the "Company's")  Earnings from
        Continuing Operations were $335,000 in 1996 as compared to $1,500,000 in
        1995.  After  Losses from  Discontinued  Operations  in 1996 and 1995 of
        $1,190,000  and $860,000,  respectively,  the Company's Net Loss in 1996
        was $855,000,  compared to Net Earnings in 1995 of $640,000.  The Losses
        from Discontinued Operations of Prometcor, Inc. ("Prometcor"),  formerly
        known as Ronson  Metals  Corporation,  Newark,  New  Jersey,  related to
        additional  costs and  expenses  projected to complete  compliance  with
        environmental   requirements   and  the  eventual  sale  of  Prometcor's
        properties.

                          Consolidated   Net  Sales  were  $25,454,000  in  1996
        compared  to  $26,953,000  in  1995.  Net  Sales  of  consumer  products
        increased at Ronson Consumer Products Corporation ("RCPC"),  Woodbridge,
        New Jersey, and at Ronson Corporation of Canada, Ltd. ("Ronson-Canada"),
        (together "Ronson Consumer Products"),  by 10% in 1996 compared to 1995,
        primarily  as the  result of  increased  shipments  of its  lighter  and
        accessory  products.  Net  Sales  at  Ronson  Aviation,   Inc.  ("Ronson
        Aviation"),  Trenton,  New Jersey,  decreased by 25% in 1996 compared to
        1995, primarily due to lower sales of aircraft in 1996.

                          The  Company's   Consolidated  Cost  of  Sales,  as  a
        percentage  of Net Sales,  was lower at 65% in 1996  compared  to 68% in
        1995. The lower Consolidated Cost of Sales percentage was due to the Net
        Sales of Ronson Consumer Products  constituting a greater portion of the
        Consolidated  Net Sales of the Company in 1996 as compared to 1995. This
        reduction was partially  offset by an increased Cost of Sales percentage
        at Ronson  Consumer  Products.  The Cost of Sales  percentage  at Ronson
        Consumer  Products  increased  to 52% in 1996 as compared to 51% in 1995
        primarily due to a change in the mix of products sold. The Cost of Sales
        percentage  at Ronson  Aviation  remained  unchanged  at 89% in 1996 and
        1995.

                          Consolidated   Selling,   Shipping   and   Advertising
        Expenses,  as a percentage  of Net Sales,  increased to 14% in 1996 from
        12% in 1995.  The increase was due  primarily to increased  shipping and
        advertising  expenses  at  Ronson  Consumer  Products.  Since  Net Sales
        increased at Ronson Consumer Products;  however,  the Selling,  Shipping
        and Advertising  percentage at Ronson Consumer Products was unchanged at
        22% in 1996 compared to 1995.

                          General and Administrative  Expenses,  as a percentage
        of  Consolidated  Net Sales,  increased to 13% in 1996 from 12% in 1995,
        primarily due to the decrease in Net Sales in 1996.

                          Interest  Expense  increased  to $762,000 in 1996 from
        $541,000 in 1995.  This  increase was  primarily  due to the  additional
        long-term  debt from the new mortgage  loan between RCPC and Summit Bank
        ("Summit"),  formerly  known as United  Jersey Bank,  dated  December 1,
        1995, and to increased  short-term debt at Ronson  Aviation  utilized to
        finance increased aircraft inventory.
<PAGE>

                          Other-Net in 1996 included a  non-recurring  charge of
        $434,000 at Ronson  Aviation in the third quarter of 1996 which resulted
        from  a  revaluation  of  certain   aircraft   inventory  and  costs  of
        restructuring  Ronson Aviation's  operations.  The Company believes that
        the actions taken in the third quarter 1996 will enable Ronson  Aviation
        to expand its  aircraft  sales and charter  operations  and to return to
        profitable operations in 1997.

                          Other-Net  in 1995  included  a gain of  approximately
        $96,000 from insurance  proceeds.  This was more than offset by expenses
        totalling approximately $197,000 related to settlement of a legal matter
        and to costs related to a Superfund site matter, more fully described in
        the Financial  Condition  section below, in which Ronson Hydraulic Units
        Corporation ("RHUCOR-CA"),  Duarte,  California,  sold by the Company to
        the Boeing  Corporation in 1981,  has been  identified as a "de minimis"
        Potentially Responsible Party ("PRP").

                          Earnings  from  Continuing  Operations  before  Income
        Taxes was $206,000 in 1996 compared to $1,003,000 in 1995.  This decline
        was due primarily to a Loss from Operations at Ronson Aviation of $7,000
        in 1996 compared to Earnings from  Operations in 1995 of $246,000 and to
        the non-recurring charge at Ronson Aviation of $434,000 in 1996.

                          Loss from Discontinued  Operations  included the costs
        recorded by the Company in 1996 and 1995  related to the  discontinuance
        of Prometcor, as follows (in thousands):

                                                 Year Ended December 31,
                                                   1996           1995
                                                   ----           ----

          Discontinuance costs accrued           $ 1,370        $   970
          Deferred income tax benefit             (  180)          (110)
                                                 -------        -------
          Loss from Discontinued Operations      $ 1,190        $   860
                                                 =======        =======
<PAGE>

                          In  December  1989,  the  Company  adopted  a plan  to
        discontinue the operations in 1990 of one of its New Jersey  facilities,
        Ronson Metals Corporation, subsequently renamed Prometcor, and to comply
        with the New Jersey Environmental  Industrial Site Recovery Act ("ISRA")
        (formerly  ECRA) and all other  applicable  laws. As part of the plan to
        sell the properties of Prometcor's  discontinued  operations,  Prometcor
        has also been involved in the  termination  of its United States Nuclear
        Regulatory Commission ("NRC") license. Prior to the fourth quarter 1996,
        the total  costs and  expenses  related  to  terminating  the  Prometcor
        operations,   less  the  expected  gain  from  the  eventual   sales  of
        Prometcor's assets, were projected to be approximately $2,890,000. These
        costs and expenses consisted of: termination of Prometcor's  operations;
        maintenance of the Prometcor  property;  and completion of compliance by
        Prometcor  with  environmental  regulations.  In the fourth  quarters of
        1995,  1993,  1992,  1991 and 1990;  the amounts of $970,000,  $625,000,
        $200,000, $520,000 and $575,000, respectively,  (which total $2,890,000)
        were charged  against the Company's Loss from  Discontinued  Operations,
        prior to  deferred  income  tax  benefits.  These  charges  between  the
        beginning  of 1990  and  year end  1995  were  due  primarily:  to costs
        incurred;  to previously  projected costs related to compliance with the
        New   Jersey   Department   of   Environmental    Protection   ("NJDEP")
        requirements;  to NRC related activities;  and to the extended period of
        time previously projected for NJDEP and NRC clearance. The liability for
        these  costs  and  expenses  recorded  in the  financial  statements  at
        December 31, 1995 was  considered  adequate by the Company,  based upon:
        the  results  of  testing  completed  by year end  1995;  NJDEP  and NRC
        comments  through  1995;  reports to the  Company  by its  environmental
        counsel and environmental  consultants that the environmental compliance
        would be completed in 1996; and that the sale of the Prometcor  property
        would be completed prior to December 31, 1996.

                          As the  result of the  continuation  of  sampling  and
        evaluation  of the  results  by the  Company's  radiological  and  other
        environmental  consultants in the third and fourth  quarters of 1996 and
        to date in the first quarter of 1997, and in  consideration  of comments
        from the  NJDEP and NRC in this same  time  period,  certain  additional
        areas requiring  remedial  action were  identified and  delineated.  The
        testing indicated low-level radiological  contamination in various areas
        of the Prometcor  property and solvent  contamination in the groundwater
        below a section of the property. Additional sampling and remediation are
        required  and will  increase  the costs and time  projected  to  receive
        clearance from the NJDEP and the NRC. As a result of the information and
        regulatory  comments  received in the fourth quarter of 1996 and to date
        in the first quarter of 1997, the Company accrued a charge in the fourth
        quarter of 1996 of $1,370,000 ($1,190,000 net of the deferred income tax
        benefit) due to the potential additional time and costs projected.

                          In the fourth  quarter of 1996,  the  Company  adopted
        Statement of Position 96-1, "Environmental Remediation Liability", ("SOP
        96-1"),  issued by the Accounting  Standards  Executive Committee of the
        American Institute of Certified Public  Accountants.  In accordance with
        the  provisions of SOP 96-1,  the charge in the  fourth  quarter of 1996
        included  approximately  $207,000 of costs of compensation  and benefits
        for  employees  of the  Company  who have and are  expected  to devote a
        significant  amount of time directly to the remediation  effort. Of this
        amount,  $99,000  related to employee  costs was  incurred in 1996,  and
        $108,000 in costs is expected to be incurred in 1997.
<PAGE>

                          Although  the Company  believes it has accrued for all
        future  costs  at  Prometcor,  the full  extent  of the  costs  and time
        required is not determinable until additional  sampling and remediation,
        if any, has been completed and accepted by the NJDEP and by the NRC.

        1995 Compared to 1994

                          The  Company's  Earnings  from  Continuing  Operations
        increased in 1995 to $1,500,000  from $1,074,000 in 1994, an increase of
        $426,000.  The Company's Net Earnings in 1995 were $640,000  compared to
        $1,074,000 in 1994. As discussed  more fully below,  the Net Earnings in
        1995 were net of a Loss from  Discontinued  Operations of Prometcor,  of
        $860,000 related to additional costs and expenses  projected to complete
        compliance with  environmental  requirements and the sale of Prometcor's
        property.

                          Consolidated  Net Sales  increased to  $26,953,000  in
        1995  compared to  $25,583,000  in 1994, an increase of 5%. Net Sales of
        consumer  products  increased at Ronson Consumer Products by 15% in 1995
        compared to 1994  primarily as the result of increased  shipments of its
        products.  Net Sales at Ronson Aviation decreased by 5% in 1995 compared
        to 1994 primarily due to reduced sales of general  aviation  services in
        1995.

                          The  Company's  Cost of Sales,  as a percentage of Net
        Sales,  was unchanged at 68% in 1995 compared to 1994. The Cost of Sales
        percentage at Ronson Consumer Products increased to 51% in 1995 from 49%
        in 1994 primarily as the result of a change in the mix of products sold.
        The Cost of Sales percentage at Ronson Aviation increased to 91% in 1995
        from 88% in 1994  primarily  due to the lower sales of general  aviation
        services.

                          Selling,  Shipping  and  Advertising  Expenses,  as  a
        percentage of Net Sales, were unchanged in 1995 at 12% compared to 1994.
        General  and  Administrative  Expenses,  as a  percentage  of Net Sales,
        decreased to 12% in 1995 from 13% in 1994 primarily due to increased Net
        Sales in 1995.

                          Interest  Expense  increased  to $541,000 in 1995 from
        $322,000 in 1994. The increase in Interest Expense in 1995 was primarily
        due to the additional debt from the new line of credit agreement between
        RCPC and  Summit  in  January  1995  and to  increased  short-term  debt
        financing  related to increased  average inventory of aircraft at Ronson
        Aviation.

                          Other-Net  in 1995  included  a gain of  approximately
        $96,000 from insurance  proceeds.  This was more than offset by expenses
        totalling approximately $197,000 related to settlement of a legal matter
        and to costs related to a Superfund site matter, more fully described in
        the  Financial  Condition  section  below.  Other-Net  in 1994  included
        $212,000 in expenses related to the retirement of certain employees.

                          Loss from Discontinued  Operations  included the costs
        recorded by the Company  related to the  discontinuance  of Prometcor of
        $860,000 net of a deferred income tax benefit of $110,000.
<PAGE>

        INCOME TAXES

                          In 1993,  the Company  adopted  Statement of Financial
        Accounting  Standards  (SFAS) #109,  "Accounting  for Income Taxes".  In
        1996, 1995 and 1994, the Company recognized deferred income tax benefits
        of  $390,000,  $686,000  and  $354,000,  respectively,  as the result of
        reductions in the valuation  allowance related to the Company's deferred
        income tax assets. The 1995 and 1994 current income taxes were presented
        net of credits  arising from the utilization of available tax losses and
        loss  carryforwards  in  accordance  with SFAS  #109.  In 1996 and 1995,
        current  income tax  expenses  were  composed of state  income  taxes of
        $81,000 and $79,000, respectively. At December 31, 1996, the Company had
        net  operating  loss  carryforwards  for federal  income tax purposes of
        approximately  $12,550,000,   investment  tax  credit  carryforwards  of
        $83,000 and  alternative  minimum tax credit  carryforwards  of $60,000.
        (Refer to Note 3 of the Notes to Consolidated Financial Statements.)

        IMPACT OF INFLATION

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

        FINANCIAL CONDITION

                          The Company's  Stockholders'  Equity was $1,210,000 at
        December 31, 1996  compared with  $2,034,000  at December 31, 1995.  The
        Company also had a deficiency in working capital at December 31, 1996 of
        $2,119,000 as compared to $563,000 at December 31, 1995.  The reductions
        in 1996 in the  Company's  Stockholders'  Equity and in working  capital
        were due  primarily  to the 1996 Loss from  Discontinued  Operations  at
        Prometcor of $1,370,000, prior to the deferred income tax benefit.

                          The Company's  inventories  were reduced by $1,412,000
        in the year ended  December  31,  1996,  primarily  due to  reduction in
        aircraft  inventory at Ronson  Aviation.  Short-term debt was reduced by
        $1,112,000   in  1996   primarily   as  the  result  of   repayment   of
        aircraft-related loans upon the sales of the aircraft.

                          The  Company's  current  liabilities  of  discontinued
        operations increased by approximately $760,000 in 1996, primarily as the
        result of the  accrual of  additional  cost and  expenses  projected  to
        complete compliance by Prometcor with environmental requirements.
<PAGE>

                          On March 6,  1997,  RCPC and  Summit  extended  RCPC's
        Revolving  Loan by over three years to June 30, 2000. The Revolving Loan
        was  originally  dated  January 11, 1995 for a period of two years.  The
        extended  agreement  also amended  certain  other terms of the Revolving
        Loan  agreement.  The  Revolving  Loan  provides  a line of credit up to
        $2,500,000  (an increase in 1997 of $500,000 from the prior  $2,000,000)
        to  RCPC  based  on  accounts  receivable  and  inventory.  The  balance
        available  under  the  Revolving  Loan is  determined  by the  level  of
        receivables  and  inventory.  RCPC's  1995 Term Loan with  Summit with a
        balance at  December  31, 1996 of  approximately  $100,000 is payable in
        equal  installments of $6,250,  plus interest.  The loans currently bear
        interest  at the  rate of 1.5%  above  Summit's  prime  rate  (8.25%  at
        December 31, 1996).  Prior to the 1997  amendment,  the interest rate on
        the loans was 2% above  Summit's prime rate. The Revolving Loan and Term
        Loan are secured by the accounts  receivable,  inventory,  machinery and
        equipment  of  RCPC,  a  second  mortgage  on the  land,  buildings  and
        improvements  of RCPC  and the  guarantee  of the  Company.  The  Summit
        agreement  also has  restrictive  covenants  which,  among other things,
        limit the transfer of assets between the Company and its subsidiaries.

                          In  February  1997,  Ronson  Aviation  and Bank of New
        York/National  Community  Division  extended to July 31, 1997 the Ronson
        Aviation mortgage, which had a balance of $348,000 on December 31, 1996.
        The mortgage  balance had been due to be paid on January 31,  1997.  The
        monthly payment on the mortgage is $9,000, plus interest.

                          In  November  1995,   Ronson-Canada  entered  into  an
        agreement with Canadian Imperial Bank of Commerce ("CIBC") for a line of
        credit  of  C$250,000.  The line of credit is  secured  by the  accounts
        receivable and inventory of  Ronson-Canada  and amounts  available under
        the line are based on the level of accounts  receivable.  The loan bears
        interest  at the rate of 2% over the CIBC prime rate  (4.75% at December
        31, 1996). The line of credit is guaranteed by the Company.

                          Based on the amount of the loans  outstanding  and the
        levels of accounts receivable and inventory at December 31, 1996, Ronson
        Consumer Products had unused borrowings  available at December 31, 1996,
        of about  $340,000  under the Summit and CIBC lines of credit  described
        above.

                          Ronson Aviation has  consistently  obtained  financing
        from  Raytheon   Aircraft  Credit  Corp.,   formerly  Beech   Acceptance
        Corporation,   Inc.,  for  financing  specific  aircraft.  Also,  Summit
        provides term financing for several Ronson  Aviation  aircraft,  and the
        Company is in  discussions  with  Summit for  additional  financing  for
        Ronson Aviation.  During the year ended December 31, 1996, various lines
        of credit which had been  available to Ronson  Aviation for the purchase
        of aircraft  inventory were not renewed by the lenders,  Summit,  Cessna
        Finance Corporation, and General Electric Capital Corporation.
<PAGE>

                          During the year ended  December 31, 1995,  the Company
        made large payments to its principal  defined  benefit pension plan, the
        Ronson Corporation  Retirement Plan ("Retirement  Plan"),  substantially
        reducing the Accumulated  Benefit Obligation in Excess of Plan Assets to
        $225,000 at December 31, 1995,  from  $2,154,000 at December 31, 1994, a
        reduction  of  90%.  At  December  31,  1996,  the  Accumulated  Benefit
        Obligation in Excess of Plan Assets was further  reduced to $184,000.  A
        contribution of $850,000 was made in January 1995 to the Retirement Plan
        by the Company from the proceeds of the RCPC line of credit from Summit.
        A  further  contribution  of  approximately  $1,124,000  was made by the
        Company to the  Retirement  Plan on December 1, 1995 out of the proceeds
        of the mortgage loan from Summit.  As a result of these payments and the
        favorable   actuarial  results  of  the  Retirement  Plan's  assets  and
        liabilities,  the required  contribution  to the Retirement Plan for the
        plan year  ended  June 30,  1996 was  approximately  $600,000,  or about
        $320,000 (35%) lower than the  contribution for the prior plan year. The
        final  payment of this required  contribution  in the amount of $135,000
        was paid to the Retirement  Plan in February 1997. This reduction in the
        required   contribution   is  because  asset   appreciation   and  prior
        contributions  have brought the Retirement Plan to  fully-funded  status
        for purposes of the Employees' Retirement Income Security Act ("ERISA").
        Further required  contributions,  if any, to the Retirement Plan will be
        limited to only  those  required  as the result of changes in  actuarial
        assumptions  or of  actuarial  results  less  favorable  than  presently
        assumed.

                          On February 28, 1997,  the  Retirement  Plan completed
        the sale of its Salisbury,  North Carolina,  land for the cash proceeds,
        net of related expenses, of about $800,000. The land had previously been
        valued in the Retirement Plan assets, for financial  reporting purposes,
        at the appraised value of $675,000.  The excess of about $125,000 of the
        net sales proceeds over the prior appraised value has increased the Plan
        Assets at Fair Value at December  31, 1996 (refer to Note 7 of the Notes
        to Consolidated Financial  Statements).  The net proceeds of the sale of
        the property has also  satisfied a  substantial  portion of a settlement
        with the United  States  Department  of Labor  ("DOL") and the  Internal
        Revenue Service ("IRS") as described below.

                          On  December  30,  1994,  the  Company had agreed to a
        settlement  with the DOL and on February 3, 1995, the Company had agreed
        to a settlement with an appellate officer of the IRS, which was accepted
        on behalf of the  Commissioner  of the IRS on March 7, 1995,  related to
        the 1991  contribution by the Company of unencumbered land in Salisbury,
        North  Carolina,  not used in operations,  to the  Retirement  Plan. The
        settlements  with the DOL and IRS settled all matters  arising  from the
        IRS examination of the information  return, Form 5500, of the Retirement
        Plan for the years  ended  June 30,  1991 and June 30,  1992.  Under the
        terms  of the  settlements  with the IRS and  DOL,  the land  previously
        contributed remained in the Retirement Plan. A consent judgment with the
        DOL in the amount of $855,194  was entered  against  the  Company,  with
        simple interest at the rate of 4.72% per year,  compounded annually,  on
        December 30, 1994.  Payment of the  judgment  amount was stayed,  and no
        collection  action  would be taken if the  Company  met  certain  terms.
        Further,  a substantial  amount of the judgment was satisfied by the net
        proceeds of about  $800,000 from the February 28, 1997 sale of the North
        Carolina land by the Retirement Plan.
<PAGE>

                          In  addition,  in  accordance  with  the  terms of the
        settlements, in March 1997, the Company transferred the balance of about
        $52,000 held in an escrow account to the Retirement  Plan,  satisfying a
        further   portion  of  the  settlement   amount.   The  balance  of  the
        settlements,  approximately  $92,000, will be paid by the Company to the
        Retirement Plan in 1997.

                          On November 15, 1996,  the Company  issued an Offer to
        owners of its 12%  Cumulative  Convertible  Preferred  Stock to exchange
        their shares of  preferred  stock for shares of common stock at the rate
        of 1.7 shares of common stock for each share of  preferred.  The Company
        did not accept any of the tendered  preferred  shares for exchange prior
        to December 31, 1996, and, therefore,  the effects of the Exchange Offer
        have not been included in the Company's  Consolidated  Balance Sheets or
        Consolidated  Statements  of  Operations  at December 31, 1996.  Through
        March 10, 1997, the Company has accepted  623,016  preferred  shares for
        exchange,  or about 74% of the preferred shares  outstanding on the date
        of the Exchange Offer.

                          If, on December  31,  1996,  the Company had  accepted
        these 623,016 preferred shares and issued the 1,059,127 common shares in
        exchange,  there would have been 214,579  shares of preferred  stock and
        2,860,961  shares of common stock  outstanding  on that date.  Also, the
        aggregate  dividends  in arrears at  December  31,  1996 would have been
        approximately $192,000, a reduction of $556,000.  (Refer to Notes 10 and
        15 of the Notes to Consolidated Financial Statements.)

                          On August 31,  1995,  the  Company  received a General
        Notice Letter from the United  States  Environmental  Protection  Agency
        ("USEPA"),  notifying the Company that the USEPA  considered the Company
        one of about four thousand  PRP's for waste disposed of prior to 1980 at
        a landfill in Monterey Park, California, which the USEPA designated as a
        Superfund site ("Site").  The USEPA identified manifests dated from 1974
        through 1979 which  allegedly  indicate  that waste  originating  at the
        location  of  the  Company's   former  Duarte,   California,   hydraulic
        subsidiary  was  delivered  to the Site.  The  Company  sold the Duarte,
        California, hydraulic subsidiary to the Boeing Corporation in 1981. As a
        result of  successfully  challenging  the  USEPA's  original  volumetric
        allocation, on September 29, 1995, the USEPA reduced the volume of waste
        attributed to the Duarte facility,  RHUCOR-CA, and determined the volume
        to be "de  minimis".  In addition,  counsel for this matter has informed
        the Company that factual  arguments  are  available  that could  further
        reduce the amount of waste attributed to the hydraulic  subsidiary,  and
        that  arguments  also exist that the  subsequent  owners of the facility
        should be required to pay a significant portion, or possibly all, of the
        costs the USEPA  determines to be due as a result of  RHUCOR-CA'S  waste
        having been sent to the Site.  Although the Company's final contribution
        amount, if any, is not yet  determinable,  in the General Notice Letter,
        the USEPA  offered to  partially  settle the matter if the Company  paid
        $212,000,  which would have been full  settlement  of the Fifth  Partial
        Consent  Decree.  This  offer,  however,  was made  prior  to the  USEPA
        reduction of the volume of waste allocated to RHUCOR-CA and prior to the
        USEPA  determination that the waste volume is "de minimis".  Because the
        USEPA has determined  that the volume of waste generated by the facility
        and sent to the Site is "de  minimis",  and because the USEPA has sent a
        General  Notice  Letter to another PRP for the same  waste,  the Company
        believes that the cost,  if any, will not have a material  effect on the
        Company's financial position.
<PAGE>

                          On  December  31,  1996,  the  Company  did  not  have
        significant capital  commitments.  The Company has operating leases, the
        most  significant  of which  related to office space used by the Company
        and Ronson  Consumer  Products.  The Company's total  commitments  under
        capital and  operating  leases are  presented  in Note 6 of the Notes to
        Consolidated Financial Statements.

                          At  December  31,  1996,  net  assets of  consolidated
        subsidiaries, excluding intercompany accounts, amounted to approximately
        $2,225,000,  of which  approximately  $2,180,000  is  restricted by loan
        covenants as to transfer to the parent. (Refer to Note 5 of the Notes to
        Consolidated Financial Statements.)

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


        Item 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                    Financial  statements  required by this item are included in
        Item 14.


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

                    There were no  disagreements  with  accountants in the years
        ended December 31, 1996, 1995 and 1994.

<PAGE>

        PART III

        Item 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY

        (a) Identification of directors.

                          The  following  table  indicates  certain  information
        about the Company's seven (7) directors.
<TABLE>
<CAPTION>
                                                   Positions and Offices
                                                   with Company
                                                   Presently Held (other
                                                   than that of Director);
                               Period              Business Experience
                               Served   Term as    During Past Five Years
                                 As     Director   (with Company unless
 Name of Director     Age     Director  Expires    otherwise noted)
 ----------------     ---     --------  -------    ----------------
<S>                   <C>    <C>        <C>        <C>
Louis V. Aronson II   74     1952 -     1999       President & Chief
                             Present               Executive Officer; Chairman
                                                   of Executive Committee;
                                                   Member of Nominating
                                                   Committee.

 Robert A. Aronson    47     1993 -     1998       Member of Audit Committee;
                             Present               Managing Member of
                                                   Independence Leather, L.L.C.,
                                                   Mountainside, NJ, the
                                                   principal business of which
                                                   is the import of leather
                                                   products, May 1996 to
                                                   present; Senior Vice
                                                   President/Chief Financial
                                                   Officer of Dreher, Inc.,
                                                   Newark, NJ, the principal
                                                   business of which is the
                                                   manufacture and import of
                                                   leather products, October
                                                   1987 to May 1996; son of the
                                                   President and Chief Executive
                                                   Officer of the Company.


<PAGE>
<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>
 Barton P. Ferris, Jr. 56     1989 -     1999      Managing Director-Corporate
                              Present              Finance, Commonwealth
                                                   Associates, New York, NY, the
                                                   principal business of which
                                                   is investment banking and
                                                   securities brokerage, October
                                                   1995 to present. Managing
                                                   Director-Investment Banking,
                                                   Lepercq, de Neuflize &
                                                   Co.,Incorporated, New York,
                                                   NY, the principal business of
                                                   which is investment banking
                                                   and money management, January
                                                   1990 to October 1995;
                                                   Director of Family Bargain
                                                   Corporation.

 Erwin M. Ganz         67     1976 -     1998      Chairman of Audit
                              Present              Committee; Member of
                                                   Executive Committee and
                                                   Nominating Committee;
                                                   Executive Vice President-
                                                   Industrial Operations, 1975-
                                                   1993; Chief Financial
                                                   Officer, 1987-1993.

Gerard J. Quinnan      67    June 1996 - 1997      Consultant for the Company,
                             Present               1990 - present; Vice
                                                   President-General Manager
                                                   of Ronson Consumer
                                                   Products Corporation,
                                                   1981-1990.



<PAGE>
<CAPTION>
                                                   Positions and Offices
                                                   with Company
                                                   Presently Held (other
                                                   than that of Director);
                               Period              Business Experience
                               Served   Term as    During Past Five Years
                                 As     Director   (with Company unless
 Name of Director     Age     Director  Expires    otherwise noted)
 ----------------     ---     --------  -------    ----------------
<S>                   <C>    <C>        <C>        <C>
Justin P. Walder       61    1972 -      1998      Secretary; Assistant Cor-
                             Present               poration Counsel; Member of
                                                   Executive Committee and
                                                   Nominating Committee;
                                                   Principal in Walder, Sondak
                                                   & Brogan, P.A., Attorneys
                                                   at Law, Roseland, NJ.

 Saul H. Weisman       71    1978 -      1997      Member of Executive
                             Present               Committee and Audit
                                                   Committee; President, Jarett
                                                   Industries, Inc., Cedar
                                                   Knolls, NJ, the principal
                                                   business of which is the sale
                                                   of hydraulic and pneumatic
                                                   equipment to industry.
</TABLE>

                  No  director  also  serves as a director  of  another  company
registered under the Securities Exchange Act of 1934, except for Mr. Ferris, who
serves as a director of Family Bargain Corporation.
<PAGE>

        (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, 1998.
<TABLE>
<CAPTION>
                                                   Positions and Offices
                                Period Served          with Company;
       Name            Age      as Officer         Family Relationships
       ----            ---      ----------         --------------------
<S>                    <C>      <C>          <C>
Louis V. Aronson II     74      1953 -       President & Chief Executive
                                Present      Officer; Chairman of
                                             Executive Committee; Director.

Daryl K. Holcomb        46      June 1996 -  Vice President;
                                Present

                                1993 -       Chief Financial Officer;
                                Present

                                1988 -       Controller and Treasurer; None.
                                Present

Justin P. Walder        61      1989 -       Secretary;
                                Present

                                1972 -       Assistant Corporation Counsel;
                                Present      Director; None.

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

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

                        Under Securities and Exchange  Commission ("SEC") rules,
        the Company is required to review copies of beneficial ownership reports
        filed with the Company  which are required  under  Section  16(a) of the
        Exchange Act by  officers,  directors  and greater  than 10%  beneficial
        owners.  Based  solely on the  Company's  review of forms filed with the
        Company,  the Company believes no information is required to be reported
        under this item.
<PAGE>
        Item 11 - EXECUTIVE COMPENSATION

        SUMMARY COMPENSATION TABLE

                        The Summary  Compensation  Table  presents  compensation
        information for the years ended December 31, 1996, 1995 and 1994 for the
        Chief Executive  Officer and the other executive  officer of the Company
        whose base salary and bonus exceeded $100,000.
<TABLE>
<CAPTION>
                           SUMMARY COMPENSATION TABLE

                                                            Long-Term
                                                            Compensa-    All
                                      Annual Compensation      tion     Other
        Name and                      -------------------   ---------  Compen-
        Principal                                   Bonus    Options/  sation
        Position              Year    Salary         (1)     SARS (#)    (2)
        ---------             ----    ------        -----    --------  --------
<S>                           <C>    <C>          <C>       <C>       <C>
    Louis V. Aronson II       1996   $432,154     $53,229   22,500    $10,024
        President & Chief     1995    403,882      53,031       --      9,264
        Executive Officer     1994    377,460      78,830       --      9,174

    Daryl K. Holcomb          1996    111,687      15,969   10,000      2,500
      Vice President &        1995    100,625      13,322    5,500      2,424
      Chief Financial         1994     95,625      20,583       --      2,040
      Officer, Controller
      & Treasurer
</TABLE>

        Footnotes

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

        (2)  In 1996, All Other  Compensation  included  matching credits by the
             Company under its Employees' Savings Plan (Mr. L.V. Aronson, $3,000
             and Mr.  Holcomb,  $2,500);  and the  cost of term  life  insurance
             included in split-dollar life insurance policies (Mr. L.V. Aronson,
             $7,024).
<PAGE>
<TABLE>
<CAPTION>
        OPTION GRANTS IN LAST FISCAL YEAR

                               Individual Grants            |
                               -----------------            |    Potential
                           Percent                          |    Realizable
               Number of   of Total                         | Value at Assumed
              Securities   Options                          | Annual Rates of
              Underlying  Granted to                        |   Stock Price
               Options    Employees    Exercise             | Appreciation for
               Granted    in Fiscal     Price    Expiration |  Option Term (1)
   Name          (#)        Year       (per sh)     Date    |     5%     10%
   ----       ----------  ----------   --------  ----------    ------   -------
<S>             <C>         <C>       <C>      <C>             <C>     <C>
   Louis V.                                                 |
   Aronson II   22,500      26%       $3.1625  June 26, 2001|  $11,403 $33,024
                                                            |
   Daryl K.                                                 |
   Holcomb      10,000      11%        2.875   June 26, 2001|    7,943  17,552
</TABLE>

        Footnote

        (1)  Amounts for the named  executive  shown in these  columns have been
             derived  by   multiplying   the   exercise   price  by  the  annual
             appreciation  rate shown  (compounded for the term of the options),
             multiplying  the  result by the  number of  shares  covered  by the
             options,  and  subtracting  the  aggregate  exercise  price  of the
             options.  The dollar  amounts set forth under this  heading are the
             result of  calculations at the 5% and 10% rates set by the SEC and,
             therefore,   are  not   intended   to  forecast   possible   future
             appreciation, if any, of the stock price of the Company.


        AGGREGATED OPTION EXERCISES AND YEAR END OPTION VALUES

                        The following  table  summarizes,  for each of the named
        executive officers,  the number of stock options unexercised at December
        31, 1996. All options held by the named  executives were  exercisable at
        December  31,  1996.  "In-the-money"  options  are those  where the fair
        market value of the underlying  securities exceeds the exercise price of
        the options.

<TABLE>
<CAPTION>

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

                                                                     Value of
                         Shares                   Number of        In-the-Money
                        Acquired              Unexercised Options    Options at
                            on      Value (1)     at FY-End (2)       FY-End (3)
         Name           Exercise    Realized      Exercisable       Exercisable
         ----           --------    --------      -----------       -----------
<S>                       <C>       <C>           <C>                <C>
   Louis V. Aronson II    20,000    $   --         22,500            $   --
   Daryl K. Holcomb        7,500     10,219        22,500             12,741
</TABLE>
<PAGE>

        Footnotes

        (1)  The value  realized  equals  the market  value of the common  stock
             acquired  on the date of exercise  minus the  exercise  price.  The
             exercise price of the options exercised by Mr. L.V. Aronson in 1996
             exceeded the market price of the shares, and,  therefore,  no value
             was realized.

        (2)  The options  held by the named  executive  officers at December 31,
             1996 are  exercisable  at any time and expire at various times from
             March 11, 1998 through June 26, 2001.

        (3)  The value of the  unexercised  options was  determined by comparing
             the average of the bid and ask prices of the Company's common stock
             at December 31,  1996,  to the option  prices.  Options to purchase
             12,500 shares held by Mr. Holcomb were in-the-money at December 31,
             1996.


                        LONG-TERM INCENTIVE PLANS

                        None.


                        PENSION PLAN

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


                        COMPENSATION OF DIRECTORS

                        Directors who are not officers of the Company receive an
        annual fee of $7,500 and, in addition,  are  compensated  at the rate of
        $600 for each  meeting  of the  Company's  Board of  Directors  actually
        attended and $350 for each meeting of a Committee of the Company's Board
        of Directors  actually  attended.  Officers  receive no compensation for
        their services on the Board or on any Committee.
<PAGE>


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

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


                        COMPENSATION COMMITTEE INTERLOCKS AND INSIDER
                        PARTICIPATION

                        The Board of the Company,  as a whole,  provides overall
        guidance of the Company's executive compensation program. All members of
        the  Board  participate  in the  review  and  approval  of  each  of the
        components of the Company's  executive  compensation  program  described
        below,   except  that  no  director  who  is  also  a  Company  employee
        participates in the review and approval of his  compensation.  Directors
        of the Company who are also current employees of the Company are Messrs.
        L.V.  Aronson and Walder.  Directors  of the Company who are also former
        employees of the Company are Messrs. R.A. Aronson, whose employment with
        the Company ceased in 1987,  Ganz, who retired from the Company in 1993,
        and Quinnan, who retired from Ronson Consumer Products in 1990. Mr. Ganz
        has a  consulting  agreement  with the  Company  for the  period  ending
        December 31, 1998 which is  cancellable at any time by either party with
        60 days notice and which  compensated  Mr. Ganz for his  services at the
        rate of $57,500 in the year ended  December  31,  1996,  and,  effective
        February 1, 1997,  provides  compensation  at the annual rate of $77,500
        for the years ending December 31, 1997 and 1998, plus  participation  in
        the  Company's  health  and  life  insurance  plans  and  the  use of an
        automobile. Mr. Quinnan performs consulting services for the Company and
        Ronson  Consumer  Products,  and in 1996,  Mr.  Quinnan was  compensated
        $14,000 for his services, of which $8,000 was deferred, and was provided
        the use of an automobile.
<PAGE>

        (a) Transactions with management and others.

                        During the year ended December 31, 1996, the Company and
        Ronson  Consumer  Products  were provided  printing  services by Michael
        Graphics,  Inc.,  a New Jersey  corporation,  amounting  to  $88,190.  A
        greater than 10% shareholder of Michael Graphics, Inc. is the son-in-law
        of the Company's President, who also serves as a director.

                        During the year ended  December 31, 1996,  RCPC,  Ronson
        Aviation and  Prometcor  retained  the firm of Walder,  Sondak & Brogan,
        P.A., Attorneys at Law, to perform legal services amounting to $103,880.
        Justin P. Walder, a principal in that firm, is a director and officer of
        the Company.

        (b) Certain business relationships.

                        None.


        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     646,320 (1)(2)   22.4% (1)(2)
           Campus Drive
           P.O. Box 6707
           Somerset, New Jersey 08875

        Ronson Corporation Retirement
        Plan                            Common     165,260 (2)       5.6% (2)
           Campus Drive
           P.O. Box 6707
           Somerset, New Jersey 08875

        Patrick Kintz                   Common     226,166 (3)       7.9% (3)
           8323 Misty Vale
           Houston, Texas 77075
</TABLE>
<PAGE>

        (1)  Includes  22,500  shares of unissued  common stock  issuable to Mr.
             L.V.  Aronson  upon  exercise  of stock  options  held by Mr.  L.V.
             Aronson under the Ronson  Corporation  1996 Incentive  Stock Option
             Plan.

        (2)  The Ronson Corporation  Retirement Plan ("Retirement  Plan") is the
             beneficial  owner of 165,260  shares which include 91,487 shares of
             unissued   common  stock  issuable  to  the  Retirement  Plan  upon
             conversion of 91,487 shares of 12% Cumulative Convertible Preferred
             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,  Ganz and Gedinsky. If the shares held by the
             Retirement  Plan were  included  in Mr. L.V.  Aronson's  beneficial
             ownership, Mr. L.V. Aronson's beneficial ownership would be 811,580
             shares, or 27.3% of the class. If the shares held by the Retirement
             Plan were included in Mr. Ganz's beneficial  ownership,  Mr. Ganz's
             beneficial ownership would be 188,902 shares, or 6.4% of the class.
             If the shares  held by the  Retirement  Plan were  included  in Mr.
             Gedinsky's   beneficial   ownership,   Mr.  Gedinsky's   beneficial
             ownership  would  be  165,260  shares  or  5.7% of the  class.  The
             Retirement Plan's holdings were reported in 1988 on Schedule 13G.

        (3)  Includes 198,066 common shares owned directly, 25,000 common shares
             owned as tenant in common with his spouse and 3,100  common  shares
             owned by his spouse.  This  information was provided to the Company
             by Mr. Kintz.
<PAGE>

        (b) Security Ownership of Management.

                        The following table shows the number of shares of common
        stock  beneficially  owned by each  director  and by all  directors  and
        officers  as a group and the  percentage  of the total  shares of common
        stock outstanding owned by each individual and by the group shown in the
        table.  Individuals have sole voting and investment power over the stock
        shown unless otherwise indicated in the footnotes:
<TABLE>
<CAPTION>
        Name of Individual or    Amount and Nature of       Percent of
          Identity of Group     Beneficial Ownership(2)       Class
          -----------------     -----------------------       -----
<S>                                   <C>
        Louis V. Aronson II           646,320 (3)              22.4%

        Robert A. Aronson               1,995                   (1)

        Barton P. Ferris, Jr.          54,136                   1.9%

        Erwin M. Ganz                  23,642 (3)               (1)

        Gerard J. Quinnan                 500                   (1)

        Justin P. Walder               39,503                   1.4%

        Saul H. Weisman                10,843                   (1)

        All Directors and
        Officers as a group
        (nine (9) individuals
        including those named above)  811,909                  27.9%
</TABLE>

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

        (2)  Shares listed as owned  beneficially  include 54,500 shares subject
             to  option  under  the  Ronson  Corporation  1983,  1987  and  1996
             Incentive Stock Option Plans as follows:

                                                  Common Shares
                                                  Under Option
                                                  ------------

                Louis V. Aronson II                 22,500

                Justin P. Walder                     5,000

                All Directors and Officers
                as a group (nine (9)
                individuals including
                those named above)                  54,500
<PAGE>

        (3)  Does not include  73,773 shares of issued common stock owned by the
             Retirement Plan and 91,487 shares of unissued common stock issuable
             to the  Retirement  Plan upon  conversion  of 91,487  shares of 12%
             Cumulative  Convertible  Preferred  Stock.  The shares  held by the
             Retirement  Plan are voted by the  Plan's  trustees,  Messrs.  L.V.
             Aronson,  Ganz and Gedinsky.  If the shares held by the  Retirement
             Plan were included in Mr. L.V. Aronson's beneficial ownership,  Mr.
             L.V.  Aronson's  beneficial  ownership would be 811,580 shares,  or
             27.3% of the class.  If the shares held by the Retirement Plan were
             included in Mr. Ganz's beneficial ownership,  Mr. Ganz's beneficial
             ownership would be 188,902 shares, or 6.4% of the class.

        (c) Changes in control.

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


        Item 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

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

        (c) Indebtedness of management.

                        None.

        (d) Transactions with promoters.

                        Not applicable.

<PAGE>

        PART IV

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

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

                (3) Listing of exhibits, as applicable.

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

                           (4) Instruments defining the rights of security
        holders, including indentures.

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

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

                          (10) Material contracts.

                               On  January  6,  1995,   RCPC   entered  into  an
        agreement  with  Summit Bank for a  Revolving  Loan and a Term Loan.  On
        March 6, 1997,  the Revolving  Loan was amended and extended to June 30,
        2000  (refer  to Notes 4 and 5 of the  Notes to  Consolidated  Financial
        Statements).  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 are attached hereto as Exhibits 10(a)-10(c) as follows:

                               (a) Amendment to Loan and Security Agreement
        dated March 6, 1997, between Ronson Consumer Products Corporation and
        Summit Bank.

                               (b) Amended and Restated Master Note dated March
        6, 1997, to Summit Bank by Ronson Consumer Products Corporation.

                               (c) Mortgage Modification Agreement dated March
        6, 1997 between Ronson Consumer Products Corporation and Summit Bank.

                               On December 1, 1995 the Company and RCPC entered
        into a mortgage loan agreement with Summit (refer to Note 5 of the Notes
        to Consolidated Financial  Statements).  The agreements were attached to
        the Company's 1995 Form 10-K as Exhibits 10(a) and 10(b).

                               Ronson Aviation has an outstanding mortgage loan
        agreement with the Bank of New York, National Community Division,  which
        was filed as Exhibits 2 and 3 to the Company's Form 10-Q for the quarter
        ended June 30,  1995.  In March 1997,  the mortgage was extended to July
        31,  1997.  (Refer  to Note 5 of the  Notes  to  Consolidated  Financial
        Statements.)
<PAGE>

                               For further information on Company's loan
        agreements,  reference  is  made  to  Notes  4 and  5 of  the  Notes  to
        Consolidated  Financial  Statements contained in the Company's financial
        statements for the year ended December 31, 1996,  filed with this Report
        pursuant to Item 8, which is incorporated herein by reference.

                               The Company is a party to an employment contract
        with Mr.  Louis V. Aronson II dated  December 21, 1978,  as amended July
        24, 1980,  July 1, 1982,  October 11, 1985,  July 7, 1988, May 10, 1989,
        August 22, 1991 and May 22, 1995. This contract is  incorporated  herein
        by reference as filed as Exhibit  10.16 to  Registration  Statement  No.
        33-13696 on Form S-2 dated September 18, 1987.

                               (c) The Summary of the Management Incentive Plan
        of the Company and its subsidiaries is attached as Exhibit 10(d).

                          (11) Statement re computation of per share earnings
        is attached hereto as Exhibit 11.

                         (20) Other documents or statements to security holders.

                               The  Ronson  Corporation  Notice  of  Meeting  of
        Stockholders  held on August 27, 1996, and Proxy  Statement was filed on
        July 29, 1996, and is incorporated herein by reference.

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

   Prometcor, Inc. (formerly known as               New Jersey
        Ronson Metals Corporation)


   Foreign
   --------
   Ronson Corporation of Canada, Ltd.               Canada


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

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

                          (99) Additional exhibits.

                               None.

        (b) Reports on Form 8-K filed in the fourth quarter of 1996.

                        None.

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

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

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



                                         RONSON CORPORATION


   Dated:  March 28, 1997       By:     /s/Louis V. Aronson II
                                        ----------------------------------------
                                        Louis V. Aronson II, President and
                                        Chief Executive Officer and Director


   Dated:  March 28, 1997       By:     /s/Daryl K. Holcomb
                                        ----------------------------------------
                                        Daryl K. Holcomb, Vice President &
                                        Chief Financial Officer, Controller
                                        and Treasurer


   Dated:  March 28, 1997       By:     /s/Justin P. Walder
                                        ----------------------------------------
                                        Justin P. Walder, Secretary and
                                        Director


   Dated:  March 28, 1997       By:     /s/Robert A. Aronson
                                        ----------------------------------------
                                        Robert A. Aronson, Director


   Dated:  March 28, 1997       By:     /s/Barton P. Ferris, Jr.
                                        ----------------------------------------
                                        Barton P. Ferris, Jr., Director


   Dated:  March 28, 1997       By:     /s/Erwin M. Ganz
                                        ----------------------------------------
                                        Erwin M. Ganz, Director


   Dated:  March 28, 1997       By:     /s/ Gerard J. Quinnan
                                        ----------------------------------------
                                        Gerard J. Quinnan, Director


   Dated:  March 28, 1997       By:     /s/Saul H. Weisman
                                        ----------------------------------------
                                        Saul H. Weisman, Director
<PAGE>
                           ANNUAL REPORT ON FORM 10-K

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

                   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES


                          YEAR ENDED DECEMBER 31, 1996




                               RONSON CORPORATION

                              SOMERSET, NEW JERSEY
<PAGE>
<TABLE>
<CAPTION>
                                  RONSON CORPORATION FIVE-YEAR SELECTED FINANCIAL DATA
                                  ----------------------------------------------------
                                  Dollars (other than per share amounts) in thousands





                                                                1996         1995        1994        1993         1992
                                                                ----         ----        ----        ----         ----

<S>                                                          <C>          <C>         <C>         <C>          <C>
Net sales (1)............................................    $ 25,454     $ 26,953    $ 25,583    $ 19,725     $ 22,727

Earnings (loss) from
  continuing operations (1) .............................         335        1,500       1,074        (821)      (1,073)

Total assets ............................................      12,104       13,403      11,887       9,896       16,874

Long-term obligations (2) ...............................       2,963        3,312       2,389       3,619        6,895

Per common share (4):

  Earnings (loss) from continuing operations (3):
       Assuming no dilution .............................        0.09         0.77        0.52       (0.59)       (0.75)
       Assuming full dilution ...........................        0.09         0.58        0.42       (0.59)       (0.75)
</TABLE>


        (1)    Net sales and loss from  continuing  operations for 1992 has been
               reclassified  to conform with the  presentation of continuing and
               discontinued operations.

        (2)    Certain  amounts  were  reclassified  in 1992  through  1995  for
               comparability with the current presentation.

        (3)    "No dilution" assumes no conversion of preferred shares to common
               and "full  dilution"  assumes full  conversion  of all  preferred
               shares to common.  The assumed  conversion of preferred shares to
               common was  anti-dilutive  for the years ended December 31, 1992,
               1993 and 1996, and therefore,  was excluded from the  computation
               of loss per common share, assuming full dilution, for purposes of
               this presentation.

        (4)    No  dividends  on common  stock were  declared or paid during the
               five years ended December 31, 1996.
<PAGE>
   FORM 10-K -- ITEM 14 (a) (1) and (2)

   RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES

   LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES


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


        Consolidated Balance Sheets - December 31, 1996 and 1995

        Consolidated Statements of Operations - Years Ended
                December 31, 1996, 1995 and 1994

        Consolidated  Statements of Cash Flows - Years Ended
                December 31, 1996, 1995 and 1994

        Notes to Consolidated Financial Statements

   The  following   consolidated   financial   statement   schedules  of  Ronson
   Corporation  and its wholly owned  subsidiaries  to be included in Item 14(d)
   will be filed by the Company by amendment before April 30, 1997.


        Schedule I              Condensed Financial Information
                                        of Company

        Schedule II             Valuation and Qualifying Accounts
<PAGE>
         INDEPENDENT AUDITORS' REPORT


        The Board of Directors and Stockholders
        Ronson Corporation


        We have audited the accompanying  consolidated  balance sheets of Ronson
        Corporation  and  subsidiaries as of December 31, 1996 and 1995, and the
        related consolidated statements of operations and cash flows for each of
        the years in the  three-year  period  ended  December  31,  1996.  These
        financial statements are the responsibility of the Company's management.
        Our   responsibility  is  to  express  an  opinion  on  these  financial
        statements based on our audits.

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

        In our  opinion,  the  financial  statements  referred to above  present
        fairly, in all material respects, the consolidated financial position of
        Ronson  Corporation  and  subsidiaries as of December 31, 1996 and 1995,
        and the  consolidated  results of their operations for each of the years
        in the  three-year  period ended  December 31, 1996 in  conformity  with
        generally accepted accounting principles.



        DEMETRIUS & COMPANY, L.L.C.

        Wayne, New Jersey
        March 15, 1997

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

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


                                     ASSETS
                                     ------
                                                                  December 31,
                                                               -----------------
                                                                 1996     1995 *
                                                               -------   -------
<S>                                                            <C>       <C>
CURRENT ASSETS:
Cash .......................................................   $   116   $    64
Accounts receivable, less allowances for doubtful accounts
  of: 1996, $64; 1995, $86 .................................     1,617     1,940

Inventories:
  Finished goods ...........................................     2,428     3,643
  Work in process ..........................................       160       177
  Raw materials ............................................       520       700
                                                               -------   -------
                                                                 3,108     4,520
Other current assets .......................................       613       783

Current assets of discontinued operations ..................       358       187
                                                               -------   -------
      TOTAL CURRENT ASSETS .................................     5,812     7,494

PROPERTY, PLANT AND EQUIPMENT:
Land .......................................................        19        19
Buildings and improvements .................................     3,638     3,477
Machinery and equipment ....................................     5,678     5,211
Construction in progress ...................................        55        45
                                                               -------   -------
                                                                 9,390     8,752

Less accumulated depreciation and amortization .............     5,056     4,728
                                                               -------   -------
                                                                 4,334     4,024


INTANGIBLE PENSION ASSETS ..................................       357       419

OTHER ASSETS ...............................................       775       764

OTHER ASSETS OF DISCONTINUED OPERATIONS ....................       826       702

                                                               -------   -------
                                                               $12,104   $13,403
                                                               =======   =======
</TABLE>
See notes to consolidated financial statements.

* Reclassified for comparability.
<PAGE>
<TABLE>
<CAPTION>
RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES

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


                            LIABILITIES AND STOCKHOLDERS' EQUITY
                            ------------------------------------
                                                                    December 31,
                                                               --------------------
                                                                 1996       1995 *
                                                               --------    --------
<S>                                                            <C>         <C>
CURRENT LIABILITIES:
Short-term debt ............................................   $  2,084    $  3,196
Current portion of long-term debt ..........................        598         370
Current portion of lease obligations .......................        108          40
Accounts payable ...........................................      1,477       1,428
Accrued expenses ...........................................      1,911       2,030
Current liabilities of discontinued operations .............      1,753         993
                                                               --------    --------
     TOTAL CURRENT LIABILITIES .............................      7,931       8,057

LONG-TERM DEBT .............................................      2,352       2,845

LONG-TERM LEASE OBLIGATIONS ................................        250          37

PENSION OBLIGATIONS ........................................        268         287

OTHER LONG-TERM LIABILITIES ................................         36          78

LONG-TERM LIABILITIES OF DISCONTINUED OPERATIONS ...........         57          65

COMMITMENTS AND CONTINGENCIES
<PAGE>
<CAPTION>
RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES

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


                            LIABILITIES AND STOCKHOLDERS' EQUITY
                            ------------------------------------
                                                                    December 31,
                                                               --------------------
                                                                 1996       1995 *
                                                               --------    --------
<S>                                                            <C>         <C>
STOCKHOLDERS' EQUITY:
Preferred stock, no par value, authorized 5,000,000 shares:
  12% cumulative convertible, $.01 stated value, outstanding
  1996, 837,595 and 1995, 847,308 ..........................          8           8

Common stock par value $1
                                        1996          1995
                                        ----          ----
  Authorized shares...............  11,848,106    11,848,106
  Reserved shares.................     941,445       917,374
  Issued (including treasury).....   1,863,939     1,820,893      1,864       1,821

Additional paid-in capital .................................     30,345      30,308
Accumulated deficit ........................................    (27,936)    (27,081)
Unrecognized net loss on pension plans .....................     (1,441)     (1,403)
Cumulative foreign currency translation adjustment .........        (36)        (26)
                                                               --------    --------
                                                                  2,804       3,627
Less cost of treasury shares:
1996, 62,105 and 1995, 62,087 common shares ................      1,594       1,593
                                                               --------    --------
  TOTAL STOCKHOLDERS' EQUITY ...............................      1,210       2,034
                                                               --------    --------
                                                               $ 12,104    $ 13,403
                                                               ========    ========
</TABLE>
See notes to consolidated financial statements.

* Reclassified for comparability.
<PAGE>
<TABLE>
<CAPTION>
RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES

               CONSOLIDATED STATEMENTS OF OPERATIONS
               -------------------------------------
               Dollars in thousands (except per share data)
                                                                                                   Year Ended December 31,
                                                                                        --------------------------------------------
                                                                                          1996             1995 *            1994 *
                                                                                        --------          --------          --------
<S>                                                                                     <C>               <C>               <C>
NET SALES .....................................................................         $ 25,454          $ 26,953          $ 25,583
                                                                                        --------          --------          --------
Cost and expenses:
  Cost of sales ...............................................................           16,608            18,292            17,223
  Selling, shipping and advertising ...........................................            3,650             3,340             3,166
  General and administrative ..................................................            3,196             3,141             3,272
  Depreciation and amortization ...............................................              465               468               538
                                                                                        --------          --------          --------
                                                                                          23,919            25,241            24,199
                                                                                        --------          --------          --------
EARNINGS FROM CONTINUING OPERATIONS BEFORE
  INTEREST AND OTHER ITEMS ....................................................            1,535             1,712             1,384
                                                                                        --------          --------          --------
Other expense:
  Interest expense ............................................................              762               541               322
  Other-net ...................................................................              567               168               342
                                                                                        --------          --------          --------
                                                                                           1,329               709               664
                                                                                        --------          --------          --------
EARNINGS FROM CONTINUING OPERATIONS
  BEFORE INCOME TAXES .........................................................              206             1,003               720

Income tax benefits-net .......................................................              129               497               354
                                                                                        --------          --------          --------
EARNINGS FROM CONTINUING OPERATIONS ...........................................              335             1,500             1,074
                                                                                        --------          --------          --------
Loss from  discontinued  operations  (net of applicable  deferred
  income tax benefit of:
  1996, $180; 1995, $110) .....................................................           (1,190)             (860)             --
                                                                                        --------          --------          --------

NET EARNINGS (LOSS) ...........................................................         $   (855)         $    640          $  1,074
                                                                                        ========          ========          ========

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

               CONSOLIDATED STATEMENTS OF OPERATIONS
               -------------------------------------
               Dollars in thousands (except per share data)
                                                                                                   Year Ended December 31,
                                                                                        --------------------------------------------
                                                                                          1996             1995 *            1994 *
                                                                                        --------          --------          --------
<S>                                                                                     <C>               <C>               <C>
EARNINGS (LOSS) PER COMMON SHARE:

Assuming no dilution:
  Earnings from continuing operations .........................................         $   0.09          $   0.77          $   0.52
  Loss from discontinued operations ...........................................            (0.66)            (0.50)             --
                                                                                        --------          --------          --------
  Net earnings (loss) .........................................................         $  (0.57)         $   0.27          $   0.52
                                                                                        ========          ========          ========
Assuming full dilution:
  Earnings from continuing operations .........................................         $   0.09          $   0.58          $   0.42
  Loss from discontinued operations ...........................................            (0.66)            (0.33)             --
                                                                                        --------          --------          --------
  Net earnings (loss) .........................................................         $  (0.57)         $   0.25          $   0.42
                                                                                        ========          ========          ========
</TABLE>
See notes to consolidated financial statements

* Reclassified for comparability.

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

CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
Dollars in thousands                                                                                 Year Ended December 31,
                                                                                    -----------------------------------------------
                                                                                      1996               1995 *              1994 *
                                                                                    -------             -------             -------
<S>                                                                                 <C>                 <C>                 <C>
Cash Flows from Operating Activities:
Net earnings (loss) ....................................................            $  (855)            $   640             $ 1,074
Adjustments to reconcile net earnings (loss) to net
   cash provided by (used in) operating activities:
   Depreciation and amortization .......................................                465                 468                 538
   Deferred income tax benefits ........................................               (390)               (686)               (354)
   Increase (decrease) in cash from changes in:
      Accounts receivable ..............................................                323                (243)               (417)
      Inventories ......................................................              1,412              (1,424)             (1,319)
      Other current assets .............................................                121                 (19)               (246)
      Accounts payable .................................................                 58                (287)                252
      Accrued expenses .................................................                667                 141                 181
   Net change in pension-related accounts ..............................                (30)             (1,669)                292
   Other ...............................................................                122                 338                 (65)
                                                                                    -------             -------             -------
      Net cash provided by (used in) operating
         activities ....................................................              1,893              (2,741)                (64)
                                                                                    -------             -------             -------
Cash Flows from Investing Activities:
      Net cash used in investing activities,
         capital expenditures ..........................................               (466)               (343)               (493)
                                                                                    -------             -------             -------

Cash Flows from Financing Activities:
Proceeds from long-term debt ...........................................                400               1,563                 106
Proceeds from short-term debt ..........................................              1,847               8,818               1,422
Proceeds from exercise of stock options ................................                 80                  31                   4
Payments of dividends on preferred stock ...............................               --                  --                   (92)
Payments of long-term debt .............................................               (665)               (545)               (443)
Payments of long-term lease obligations ................................                (78)                (60)                (55)
Payments of short-term debt ............................................             (2,959)             (6,845)               (806)
                                                                                    -------             -------             -------
      Net cash provided by (used in)
         financing activities ..........................................             (1,375)              2,962                 136
                                                                                    -------             -------             -------
Net increase (decrease) in cash ........................................                 52                (122)               (421)

Cash at beginning of year ..............................................                 64                 186                 607
                                                                                    -------             -------             -------

Cash at end of year ....................................................            $   116             $    64             $   186
                                                                                    =======             =======             =======
</TABLE>

See notes to consolidated financial statements.

       * Reclassified for comparability.
<PAGE>
   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

   Note 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

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

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

        Property and Depreciation - Property, plant and equipment are carried at
   cost  and are  depreciated  over  their  estimated  useful  lives  using  the
   straight-line  method.  Capitalized leases are amortized over their estimated
   useful  lives using the  straight-line  method.  Leasehold  improvements  are
   amortized  over their  estimated  useful lives or the remaining  lease terms,
   whichever  is shorter.  At December  31,  1996,  aircraft  utilized by Ronson
   Aviation  in its  charter  operations  and held for more  than one year  were
   reclassified  from  finished  goods   inventories  to  property,   plant  and
   equipment.  The term notes payable secured by the reclassified  aircraft were
   also reclassified from short-term debt to long-term debt. Certain information
   in the prior year's  balance  sheets and  statements of  operations  and cash
   flows have been reclassified for comparability.  The  reclassification had no
   effect on earnings (loss).

        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.  In the third  quarter of 1996,
   certain  aircraft were  revalued to reflect net  realizable  values,  and the
   result was a charge of about $190,000.

        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 a separate  component  of  Stockholders'  Equity.
   Transaction gains and losses are not significant in the periods presented.

        Fair Value of Financial  Instruments - In 1995, the Company adopted SFAS
   #107 "Disclosures  about Fair Value of Financial  Instruments" which requires
   all entities to disclose the fair value of financial instruments for which it
   is practicable to estimate fair value.

        The Company's financial  instruments include cash, accounts  receivable,
   accounts  payable,   accrued  expenses  and  other  current  liabilities  and
   long-term  debt.  The book  values  of cash,  accounts  receivable,  accounts
   payable and accrued expenses and other current liabilities are representative
   of their fair values due to the short-term maturity of these instruments. The
   book value of the Company's  long-term debt is considered to approximate  its
   fair value, based on current market rates and conditions.
<PAGE>

        Research  and  Development  Costs - Costs of  research  and new  product
   development   are  charged  to   operations   as  incurred  and  amounted  to
   approximately $134,000, $135,000 and $86,000 for the years ended December 31,
   1996, 1995 and 1994, respectively.

        Advertising  Costs - Costs of  advertising  are expensed as incurred and
   amounted to approximately $561,000, $258,000 and $331,000 for the years ended
   December 31, 1996, 1995 and 1994, respectively.

        Income Taxes - In 1993, the Company  adopted SFAS #109,  "Accounting for
   Income  Taxes".  In 1996,  1995 and 1994,  the Company  recorded net deferred
   income tax assets of $390,000, $686,000 and $354,000, respectively.

        Per Common Share Data - Earnings  (Loss) per Common  Share,  Assuming No
   Dilution,  was computed by dividing earnings (loss) less cumulative preferred
   dividends by the weighted average number of common shares outstanding.

        Earnings (Loss) per Common Share,  Assuming Full Dilution,  was computed
   by dividing  earnings (loss) by the weighted  average number of common shares
   outstanding  plus the assumed  conversion of the preferred shares into common
   shares.

        The weighted average number of shares used for these computations was as
   follows:
<TABLE>
<CAPTION>
                                                      Year Ended December 31,
                                                1996          1995           1994
                                                ----          ----           ----
<S>                                          <C>            <C>            <C>
        Average number of common shares:
                Assuming no dilution         1,791,535      1,719,867      1,700,075
                Assuming full dilution       2,630,438      2,589,787      2,576,932
</TABLE>

        Stock  options  are not  included in  earnings  (loss) per common  share
   computations since their dilutive effect would not be material.
   (Refer to Note 11.)

        Stock Options - The Company has elected to follow Accounting  Principles
   Board Opinion #25,  "Accounting  for Stock Issued to Employees" (APB #25) and
   related Interpretations in accounting for its employee stock options because,
   as discussed below, the alternative fair value accounting  provided for under
   SFAS #123, "Accounting for Stock-Based Compensation",  requires use of option
   valuation  models that were not developed for use in valuing  employee  stock
   options.  Under APB #25, because the exercise price of the Company's employee
   stock options equals or exceeds the market price of the  underlying  stock on
   the date of grant, no compensation expense is recognized.
<PAGE>
   Note 2.  DISCONTINUED OPERATIONS:

        In  December  1989,  the  Company  adopted  a plan  to  discontinue  the
   operations  in  1990  of one of its  New  Jersey  facilities,  Ronson  Metals
   Corporation,  subsequently  renamed  Prometcor,  and to  comply  with the New
   Jersey  Environmental  Industrial Site Recovery Act ("ISRA")  (formerly ECRA)
   and all other  applicable laws. As part of the plan to sell the properties of
   the Prometcor  discontinued  operations,  Prometcor has also been involved in
   the termination of its United States Nuclear  Regulatory  Commission  ("NRC")
   license.  Prior to the fourth  quarter  1996,  the total  costs and  expenses
   related to terminating the Prometcor  operation,  less the expected gain from
   the eventual sale of Prometcor's  assets,  were projected to be approximately
   $2,890,000. These costs and expenses consisted of: termination of Prometcor's
   operations;   maintenance  of  the  Prometcor  property;  and  completion  of
   compliance  by  Prometcor  with  environmental  regulations.  In  the  fourth
   quarters  of 1995,  1993,  1992,  1991 and 1990;  the  amounts  of  $970,000,
   $625,000,  $200,000,  $520,000  and  $575,000,  respectively,   (which  total
   $2,890,000)  were  charged  against the  Company's  Losses from  Discontinued
   Operations,  prior to deferred income tax benefits. These charges between the
   beginning of 1990 and year end 1995 were due primarily: to costs incurred; to
   previously   projected  costs  related  to  the  New  Jersey   Department  of
   Environmental  Protection  ("NJDEP");  to NRC related activities;  and to the
   extended period of time previously projected for NJDEP and NRC clearance. The
   liability for these costs and expenses  recorded in the financial  statements
   at December 31, 1995, was considered adequate by the Company, based upon: the
   results of testing completed by year end 1995; NJDEP and NRC comments through
   1995;  reports to the Company by its environmental  counsel and environmental
   consultants that the environmental compliance would be completed in 1996; and
   that the sale of the Prometcor  property would be completed prior to December
   31, 1996.

        As the result of further  testing  completed and reported to the Company
   by its  radiological  consultant and other  environmental  consultants in the
   third and fourth  quarters of 1996 and to date in the first  quarter of 1997,
   and to further  comments from the NJDEP and NRC in the fourth quarter of 1996
   and to  date in the  first  quarter  of  1997,  somewhat  expanded  areas  of
   contamination were identified and delineated. The testing indicated low-level
   radiological  contamination  in various areas of the  Prometcor  property and
   solvent  contamination  in the  groundwater  below a section of the property.
   Additional  testing and  remediation are required and will increase the costs
   and time  projected  to receive  clearance  from the NJDEP and the NRC.  As a
   result of the  information  and  regulatory  comments  received in the fourth
   quarter of 1996 and to date in the first quarter of 1997, the Company accrued
   a charge in the fourth quarter of 1996 of $1,370,000  ($1,190,000  net of the
   deferred income tax benefit of $180,000) due to the potential additional time
   and costs projected.

        Although the Company  believes it has accrued for all future costs,  the
   full  extent  of the  costs  and  time  required  is not  determinable  until
   additional  testing and remediation,  if any, has been completed and accepted
   by the NJDEP and by the NRC.

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

        The  assets  and   liabilities   of  Prometcor   are  reflected  in  the
   Consolidated  Balance  Sheets under assets and  liabilities  of  discontinued
   operations.  At December 31, 1996,  Other Assets of  Discontinued  Operations
   consisted  primarily of land and buildings and net deferred income tax assets
   of  Prometcor.   The  Current  Liabilities  of  Discontinued  Operations  and
   Long-Term  Liabilities  of  Discontinued  Operations  at December  31,  1996,
   consisted   principally  of  $1,403,000  of  accrued  costs  related  to  the
   environmental   compliance   of  Prometcor   and  accrued  costs  related  to
   discontinuance of Prometcor.


   Note 3.  INCOME TAXES:

        At December 3l, 1996,  the Company had, for federal income tax purposes,
   net operating loss  carryforwards of approximately  $12,550,000,  expiring as
   follows: $l,500,000 in 1997; $4,000,000 in 1998; $2,800,000 in 1999; $800,000
   in 2000 to 2001; and $3,450,000 in 2005 to 2011.

        In  addition,   the  Company  had  approximately  $83,000  of  available
   investment  tax credit  carryforwards  expiring as follows:  $20,000 in 1997;
   $20,000 in 1998;  $32,000 in 1999 and  $11,000 in 2000.  In  accordance  with
   provisions  enacted in the Tax Reform Act of 1986,  the investment tax credit
   carryforwards  available  for future  periods  have been  reduced by 35%. The
   Company also had available  alternative  minimum tax credit  carryforwards of
   approximately $60,000.

        The  income tax  benefits  (expenses)  consisted  of the  following  (in
   thousands):
                                                   Year Ended December 31,
                                                    1996     1995    1994
                                                    ----     ----    ----

        Current:
          Federal. . . . . . . . . . . . . . . . . $  --    $  --   $  --
          State. . . . . . . . . . . . . . . . . .   (81)     (79)     --
                                                   -----    -----   -----
                                                     (81)     (79)     --
                                                   -----    -----   -----
        Deferred:
          Federal. . . . . . . . . . . . . . . . .   342      557     314
          State. . . . . . . . . . . . . . . . . .    48      129      40
                                                   -----    -----   -----
                                                     390      686     354
                                                   -----    -----   -----
                                                     309      607     354
        Allocated to discontinued operations . . .   180      110      --
                                                   -----    -----   -----
          Income tax benefits-net. . . . . . . . . $ 129    $ 497   $ 354
                                                   =====    =====   =====

        In accordance  with SFAS #109, the provision for federal income taxes in
   1994 of $7,000 was offset by available net operating loss carryforwards.
<PAGE>
        The  reconciliation  of estimated  income taxes attributed to continuing
   operations  at the United States  statutory  tax rate to reported  income tax
   benefits (expenses) is as follows (in thousands):

                                                    Year Ended December 31,
                                                 1996        1995        1994
                                                 ----        ----        ----
   Tax expense  amount computed
     using statutory rate. . . . . . . . . .    $ (70)      $(341)      $(245)
   State taxes, net of federal benefit . . .      (53)        (52)         --
   Operations outside the US . . . . . . . .        4         100          16
   Recognition of deferred income tax assets:
     Federal . . . . . . . . . . . . . . . .      162         447         314
     State . . . . . . . . . . . . . . . . .       48         129          40
   Discontinued operations and other . . . .       38         214         229
                                                -----       -----       -----
   Income tax benefits-net . . . . . . . . .    $ 129       $ 497       $ 354
                                                =====       =====       =====
<PAGE>
        The tax effects of temporary  differences  that give rise to significant
   portions  of  the  deferred   income  tax  assets  and  deferred  income  tax
   liabilities are presented below (in thousands):

                                                               December 31,
                                                               1996    1995
                                                              ------  ------
    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. . . . . . . . . . . $  221  $  183
      Compensated absences, principally due to accrual for
        financial reporting purposes. . . . . . . . . . . . .    108     100
      Compensation, principally due to accrual
        for financial reporting purposes. . . . . . . . . . .    157     200
      Accrual of discontinued operations costs, principally
        related to compliance with NJDEP and NRC
        requirements. . . . . . . . . . . . . . . . . . . . .    562     285
      Net operating loss carryforwards. . . . . . . . . . . .  4,783   4,469
      Investment tax credit carryforwards . . . . . . . . . .     83     104
      Other . . . . . . . . . . . . . . . . . . . . . . . . .    125     135
                                                              ------  ------
        Total gross deferred income tax assets. . . . . . . .  6,039   5,476
        Less valuation allowance. . . . . . . . . . . . . . .  4,035   3,902
                                                              ------  ------
        Net deferred income tax assets. . . . . . . . . . . .  2,004   1,574
                                                              ------  ------
    Deferred income tax liabilities:
      Pension expense, due to contributions in excess of
        net accruals. . . . . . . . . . . . . . . . . . . . .    542     529
      Other . . . . . . . . . . . . . . . . . . . . . . . . .     32       5
                                                              ------  ------
        Total gross deferred income tax liabilities . . . . .    574     534
                                                              ------  ------
        Net deferred income taxes . . . . . . . . . . . . . . $1,430  $1,040
                                                              ======  ======

        A valuation  allowance is provided  when it is more likely than not that
   some portion or all of the deferred income tax assets will not be realized. A
   valuation  allowance  has been  established  based on the  likelihood  that a
   portion of the deferred  income tax assets will not be realized.  Realization
   is dependent on generating  sufficient  taxable income prior to expiration of
   the  loss  carryforwards.   Management  has  assessed  the  Company's  recent
   operating earnings history and expected future earnings.  Based on these past
   and future  earnings,  on the expected  completion of compliance by Prometcor
   with  environmental  regulations  and on tax  planning  strategies,  although
   realization  is not assured,  management  believes it is more likely than not
   that  $2,004,000  of the  deferred  income  tax asset will be  realized.  The
   ultimate  realization of the deferred income tax asset will require aggregate
   taxable  income  of  approximately  $3,000,000  in  the  years  prior  to the
   expiration of the net operating loss carryforwards in 2011. The amount of the
   deferred income tax asset considered realizable, however, could be reduced in
   the near term if estimates of future taxable  income during the  carryforward
   period are reduced.  A portion of the deferred income tax asset is the result
   of a tax planning  strategy for state income tax purposes of merging  certain
   of the Company's  subsidiaries resulting in realization of net operating loss
   carryforwards. The  valuation  allowance  was  increased  from  $3,902,000 at
   December 31, 1995, to  $4,035,000 at December 31, 1996,  but was reduced from
   $4,783,000 at December 31, 1994 to $3,902,000 at December 31, 1995.

        Of the net  deferred  income tax  assets,  approximately  $355,000  were
   classified as current and $1,075,000 were classified as long-term at December
   31, 1996.
<PAGE>
   Note 4.  SHORT-TERM DEBT:

            Composition (in thousands):                      December 31,
                                                           1996     1995 *
                                                           ----     ------

        Revolving loans (a). . . . . . . . . . . . . . . $ 1,086   $ 1,164
        Notes payable, banks (b) . . . . . . . . . . . .      --     1,235
        Notes payable, commercial finance companies (c).     998       679
        Note payable, equipment lessor . . . . . . . . .      --       118
                                                         -------   -------
        Total Short-Term Debt. . . . . . . . . . . . . . $ 2,084   $ 3,196
                                                         =======   =======

        * Reclassified for comparability.

        (a) On January 11, 1995, RCPC entered into an agreement with Summit Bank
   ("Summit"), formerly United Jersey Bank, for a Revolving Loan and a Term Loan
   (refer to Note 5(b) below  regarding the Term Loan).  On March 6, 1997,  RCPC
   and Summit  extended  RCPC's  Revolving  Loan by over three years to June 30,
   2000.  The  extended  agreement  also  amended  certain  other  terms  of the
   Revolving  Loan  agreement.  The Revolving Loan of $1,010,000 at December 31,
   1996  provides  a line of credit up to  $2,500,000  (an  increase  in 1997 of
   $500,000 from the prior $2,000,000) 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 currently  bears
   interest at the rate of 1.5% above Summit's prime rate (8.25% at December 31,
   1996).  Prior to the 1997  amendment,  the  interest  rate on the loan was 2%
   above  Summit's  prime rate. The Revolving Loan is payable on demand under an
   agreement  which expires June 30, 2000.  The Revolving Loan and Term Loan are
   secured by the accounts receivable,  inventory and machinery and equipment of
   RCPC; a second mortgage on the land,  buildings and improvements of RCPC; and
   the guarantee of the Company. At December 31, 1996, RCPC also had outstanding
   Letters of Credit of  approximately  $65,000.  The Summit  agreement also has
   restrictive covenants which, among other things, limit the transfer of assets
   between the Company and its subsidiaries.

        In November 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  balance of $76,000  (C$104,000)  at December  31,  1996,  by
   Ronson-Canada  under the line of credit is secured by the accounts receivable
   and inventory of Ronson-Canada,  and the amounts available under the line are
   based on the level of  accounts  receivable.  The loan bears  interest at the
   rate of 2% over the CIBC prime rate (4.75% at December 31, 1996). 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.

        Based on the amount of the loans  outstanding and the levels of accounts
   receivable and inventory at December 31, 1996,  Ronson Consumer  Products had
   unused borrowings available at December 31, 1996, of about $340,000 under the
   Summit and CIBC lines of credit described  above.  (Refer to Note 5 below for
   information  regarding the book value of assets pledged as collateral for the
   debt in (a) above.)
<PAGE>

        (b) At December  31,  1995,  notes  payable,  banks,  consisted of notes
   payable of $1,235,000 by Ronson  Aviation to Summit under a line of credit in
   the amount of $2,000,000.  In 1996, the notes were either repaid or converted
   to term notes (refer to Note 5(d) below). The line of credit expired in 1996.

        (c)  At  December  31,  1996,  the  notes  payable,  commercial  finance
   companies,  consisted  of notes  payable by Ronson  Aviation as  follows:  1)
   $620,000 due to Raytheon  Aircraft  Credit Corp.,  formerly Beech  Acceptance
   Corporation,  Inc.; 2) $270,000 due to Cessna Finance Corporation ("Cessna");
   and 3) $108,000 due to Green Tree  Financial  Servicing  Corporation  ("Green
   Tree").  Notes  payable  to these  commercial  finance  companies  by  Ronson
   Aviation  are each  collateralized  by specific  aircraft,  and the notes are
   repaid  from the  proceeds  from the sale of the  aircraft.  The  notes  bear
   interest  at rates of 1% to 2% over the prime rate except that the Green Tree
   notes bear  interest  at the rate of 11%.  The notes are  secured by aircraft
   inventory  of Ronson  Aviation  with a book value of $977,000 at December 31,
   1996, and the notes due to Cessna are guaranteed by the Company.

        At December 31, 1996, the weighted  average  interest rate for the total
   short-term debt was 9.90%.


   Note 5.  LONG-TERM DEBT:

            Composition (in thousands):                        December 31,
                                                             1996       1995*
                                                             ----       -----

          Mortgage loan payable, Summit (a) . . . . . . . $ 1,276    $ 1,300
          Term note payable, Summit (b) . . . . . . . . .     100        175
          Mortgage loan payable, BONY/NCD (c) . . . . . .     348        456
          Notes payable, banks (d). . . . . . . . . . . .   1,076        752
          Notes payable, commercial finance companies (e)     146        524
          Other . . . . . . . . . . . . . . . . . . . . .       4          8
                                                          -------    -------
                                                            2,950      3,215
          Less portion in current liabilities . . . . . .     598        370
                                                          -------    -------
          Balance of Long-Term Debt . . . . . . . . . . . $ 2,352    $ 2,845
                                                          =======    =======

        *  Reclassified for comparability.

        (a) On December 1, 1995,  the Company and RCPC  entered  into a Mortgage
   Loan  agreement with Summit in the original  amount of  $1,300,000.  The loan
   with a balance  of  $1,276,000  at  December  31,  1996 is secured by a first
   mortgage on the land,  buildings and  improvements  of RCPC and is payable in
   sixty  monthly  installments  of  $11,689,  including  interest,  and a final
   installment on December 1, 2000 of  $1,152,000.  The loan bears interest at a
   fixed rate of 8.75%.

        (b) In January 1995, RCPC entered into a Term Loan agreement with Summit
   in the original amount of $225,000.  The Term Loan with a balance of $100,000
   at  December  31,  1996,  is payable in monthly  installments  of $6,250 plus
   interest  through April 1998, and the Term Loan bears interest at the rate of
   2% over the prime rate. (Refer to Note 4(a) above.)
<PAGE>

        (c) The  Mortgage  Loan with a balance of $348,000 at December 31, 1996,
   is payable by Ronson Aviation to Bank of New York/National Community Division
   ("BONY/NCD") and is collateralized by leasehold  improvements,  certain fixed
   assets,  inventory,  and accounts and notes receivable of Ronson Aviation. In
   February  1997,  Ronson  Aviation and BONY/NCD  extended to July 31, 1997 the
   Ronson  Aviation  mortgage.  The mortgage  balance had been due to be paid on
   January  31,  1997.  The  monthly  payment on the  mortgage  is $9,000,  plus
   interest.  The Mortgage Loan bears  interest at a variable rate of 2.5% above
   prime. The BONY/NCD  mortgage loan agreement  contains certain  covenants and
   restrictions  on  Ronson  Aviation  only,   including  liquidity  ratios  and
   restrictions on the payment of dividends,  management fees,  certain interest
   and subordinated debt to the Company.

        (d) The notes payable,  banks,  consisted of three term loans payable by
   Ronson  Aviation to Summit.  The notes bear interest at the rate of 1.5% over
   the prime rate, are collateralized by specific aircraft with a net book value
   of $1,586,000 at December 31, 1996 and are guaranteed by the Company.  Two of
   the notes in the amount of  approximately  $676,000 at December 31, 1996, are
   payable  in monthly  installments  totalling  $6,375  plus  interest  through
   September  2000,  with a final payment of about  $383,000 on October 5, 2000.
   The third note in the amount of $400,000 at December 31, 1996,  is payable in
   monthly  installments of $6,436 including  interest through December 31, 2001
   with a final installment of about $155,000 on January 29, 2002.

        (e) At December 31, 1996, notes payable,  commercial  finance companies,
   consisted of notes payable by Ronson  Aviation as follows:  1) $64,000 due to
   Cessna;  and 2) $82,000 due to Green Tree.  The notes  payable to Cessna bear
   interest  at the rate of 1.75% above the prime rate,  are  guaranteed  by the
   Company  and are due in monthly  installments  of $1,574  including  interest
   through  April  2001.  The note  payable to Green Tree bears  interest at the
   fixed rate of 11% and is payable in monthly  installments of $1,702 including
   interest through May 2002. The notes are  collateralized by specific aircraft
   with a net book value of $158,000 at December 31, 1996.

        At December 31, 1996,  fixed assets with a net book value of  $4,187,000
   and  accounts  receivable  and  inventories  of  $3,787,000  are  pledged  as
   collateral for the debt detailed in Notes 4(a) and 5(a) through 5(e) above.

        Net  assets  of  consolidated   subsidiaries,   excluding   intercompany
   accounts, amounted to approximately $2,225,000 at December 31, 1996, of which
   approximately $2,180,000 was restricted as to transfer to the Company and its
   other  subsidiaries  due to various  covenants  of their debt  agreements  at
   December 31, 1996.

        Long-term  debt  matures  during  the next six years as  follows:  1997,
   $598,000; 1998, $203,000;  1999, $188,000;  2000, $1,721,000;  2001, $82,000;
   and 2002, $158,000.
<PAGE>
   Note 6.  LEASE OBLIGATIONS:

        Lease  expenses in  continuing  operations,  consisting  principally  of
   equipment  rentals,  totalled  $539,000,  $468,000 and $508,000 for the years
   ended  December  31,  1996,  1995 and  1994,  respectively.  Sublease  income
   amounted  to  $168,000,   $142,000   and  $240,000  for  the  same   periods,
   respectively.

        At December 31, 1996, 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):
                                                  Operating   Capitalized
                                         Total      Leases       Leases
                                         -----      ------       ------
        Year Ending December 31:
        1997 .  .  .  .  .  .  .  .  . $  464     $  322       $  142
        1998 .  .  .  .  .  .  .  .  .    390        283          107
        1999 .  .  .  .  .  .  .  .  .    356        249          107
        2000 .  .  .  .  .  .  .  .  .    313        235           78
        2001 .  .  .  .  .  .  .  .  .     92         92           --
                                       ------     ------       ------
        Total Obligations.  .  .  .  . $1,615     $1,181          434
                                       ======     ======

        Less:  Amount representing
               interest  .  .  .  .  .                             76
                                                               ------
        Present value of capitalized
           lease obligations.  .  .  .                         $  358
                                                               ======

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

                                                        December 31,
                                                        1996    1995
                                                        ----    ----

        Machinery and equipment .  .  .  .  .  .       $ 574   $ 234
        Less accumulated amortization .  .  .  .          90      89
                                                       -----   -----
                                                       $ 484   $ 145
                                                       =====   =====
<PAGE>
   Note 7.  RETIREMENT PLANS:

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

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

                                                                  December 31,
                                                                 1996     1995
                                                              -------   -------
        Accumulated benefit obligation, including vested
          benefits of: 1996, $4,596; 1995, $4,672.  .  .      $ 4,599   $ 4,679
        Less plan assets at fair value  .  .  .  .  .  .        4,085     4,112
                                                              -------   -------
        Accumulated benefit obligation in excess of
          plan assets  .  . .  .  .  .  .  .  .  .  .  .         (514)     (567)
        Unrecognized net obligation at 1/1/85 being
          recognized over 15 to 18 years.  .  .  .  .  .          193       231
        Unrecognized prior service cost .  .  .  .  .  .          164       188
        Unrecognized net loss from past experience
          different from that assumed and effects of
          changes in assumptions  .  .  .  .  .  .  .  .        1,441     1,403
                                                              -------   -------
        Prepaid pension net recognized in the
          Consolidated Balance Sheets.  .  .  .  .  .  .      $ 1,284   $ 1,255
                                                              =======   =======

        Plan assets primarily  include U.S. Treasury  Securities,  real property
   sold in February 1997 (refer to Note 8 below),  73,773 shares of common stock
   and 91,487 shares of preferred  stock of the Company,  money market funds and
   funds held in insurance company group accounts.

        Accounts corresponding to the additional minimum liability were recorded
   in the Consolidated Balance Sheets as follows (in thousands):

                                                              December 31,
                                                            1996        1995
                                                          -------     -------
        Intangible Pension Assets .  .  .  .  .  .  .     $   357     $   419
        Unrecognized Net Loss on Pension Plans.  .  .       1,441       1,403
                                                          -------     -------
                                                          $ 1,798     $ 1,822
                                                          =======     =======

        If the additional minimum liability recorded exceeds  unrecognized prior
   service  cost  and  the  unrecognized  net  obligation  at  transition,  that
   difference,  an  unrecognized  net  loss,  is to be  reported  as a  separate
   component  of  Stockholders'  Equity.  This  unrecognized  net  loss is being
   amortized over future periods as a component of pension expense.
<PAGE>
        The Company's  Consolidated  Statements of Operations  included  pension
   expense consisting of the following components (in thousands):

                                              Year Ended December 31,
                                         1996          1995         1994
                                       -------       -------      -------
        Service cost.  .  .  .  .  .   $    18       $    17      $    15
        Interest cost  .  .  .  .  .       339           350          357
        Actual return on plan assets      (154)         (467)          53
        Net amortization and deferral       62           467          (72)
                                       -------       -------      -------
        Net pension expense  .  .  .   $   265       $   367      $   353
                                       =======       =======      =======

        The weighted  average  discount rates used in determining  the actuarial
   present value of the accumulated  benefit  obligation  were 7.25%,  7.25% and
   7.75% in 1996, 1995 and 1994, respectively.  The estimated long-term rates of
   return  on  assets  were  6.7%,  7.3%  and  7.5%  in  1996,  1995  and  1994,
   respectively.

        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 $66,000,  $65,000 and $64,000 for
   this plan were recorded in 1996, 1995 and 1994, respectively.


   Note 8.  COMMITMENTS AND CONTINGENCIES:

        On  February  28,  1997,   the  Ronson   Corporation   Retirement   Plan
   ("Retirement Plan") completed the sale of its Salisbury, North Carolina, land
   for cash proceeds,  net of related expenses, of about $800,000.  The land had
   previously been valued in the Retirement Plan assets, for financial reporting
   purposes, at the appraised value of $675,000. The excess of about $125,000 of
   the net proceeds from the sale over the prior  appraised  value has increased
   the Plan Assets at Fair Value at  December  31, 1996 (refer to Note 7 above).
   The net proceeds of the sale of the property has also satisfied a substantial
   portion of a settlement  with the United  States  Department of Labor ("DOL")
   and the Internal Revenue Service ("IRS") as described below.

        On December 30, 1994,  the Company  agreed to a settlement  with the DOL
   and on February 3, 1995, the Company agreed to a settlement with an appellate
   officer of the IRS, which was accepted on behalf of the  Commissioner  of the
   IRS on March 7, 1995,  related  to the 1991  contribution  by the  Company of
   unencumbered land in Salisbury,  North Carolina,  not used in operations,  to
   the Retirement Plan. The settlements with the DOL and IRS settled all matters
   arising from the IRS examination of the information return, Form 5500, of the
   Retirement  Plan for the years ended June 30, 1991 and June 30,  1992.  Under
   the terms of the  settlements  with the IRS and DOL, the North  Carolina land
   previously  contributed  remained in the Retirement  Plan. A consent judgment
   with the DOL in the amount of $855,194 was entered against the Company,  with
   simple  interest  at the rate of 4.72%  per  year,  compounded  annually,  on
   December  30,  1994.  Payment  of the  judgment  amount  was  stayed,  and no
   collection action would be taken if the Company met certain terms. Further, a
   substantial amount of the judgment was satisfied by the net proceeds of about
   $800,000 from the February 28, 1997,  sale of the North  Carolina land by the
   Retirement Plan.
<PAGE>

        In addition,  in accordance with the terms of the settlements,  in March
   1997, the Company  transferred the balance of about $52,000 held in an escrow
   account  to  the  Retirement  Plan,  satisfying  a  further  portion  of  the
   settlement  amount.  The balance of the settlements,  approximately  $92,000,
   will be paid by the Company to the Retirement Plan in 1997.

        On August 31, 1995,  the Company  received a General  Notice Letter from
   the United States  Environmental  Protection Agency ("USEPA"),  notifying the
   Company  that the USEPA  considered  the Company  one of about four  thousand
   Potentially Responsible Parties ("PRP's") for waste disposed of prior to 1980
   at a landfill in Monterey Park,  California,  which the USEPA designated as a
   Superfund  site  ("Site").  The USEPA  identified  manifests  dated from 1974
   through 1979 which allegedly  indicate that waste originating at the location
   of  the  Company's  former  Duarte,  California,   hydraulic  subsidiary  was
   delivered  to the Site.  The Company sold the Duarte,  California,  hydraulic
   subsidiary to the Boeing  Corporation  in 1981.  As a result of  successfully
   challenging  the USEPA's  original  volumetric  allocation,  on September 29,
   1995,  the  USEPA  reduced  the  volume  of waste  attributed  to the  Duarte
   facility,  Ronson Hydraulic Units Corporation  ("RHUCOR-CA"),  and determined
   the volume to be "de  minimis".  In  addition,  counsel  for this  matter has
   informed the Company that factual  arguments are available that could further
   reduce the amount of waste attributed to the hydraulic  subsidiary,  and that
   arguments  also exist that the  subsequent  owners of the facility  should be
   required to pay a  significant  portion,  or  possibly  all, of the costs the
   USEPA determines to be due as a result of RHUCOR-CA's  waste having been sent
   to the Site. Although the Company's final contribution amount, if any, is not
   yet  determinable,  in the  General  Notice  Letter,  the  USEPA  offered  to
   partially  settle the matter if the Company paid  $212,000,  which would have
   been full  settlement  of the  Fifth  Partial  Consent  Decree.  This  offer,
   however,  was made  prior  to the  USEPA  reduction  of the  volume  of waste
   allocated to RHUCOR-CA  and prior to the USEPA  determination  that the waste
   volume is "de minimis".  Because the USEPA has determined  that the volume of
   waste  generated by the facility  and sent to the Site is "de  minimis",  and
   because  the USEPA has sent a General  Notice  Letter to another  PRP for the
   same  waste,  the Company  believes  that the cost,  if any,  will not have a
   material effect on the Company's financial position.

        The Company is the Defendant in a product  liability  lawsuit pending in
   the Superior Court of Wilkinson County, Georgia, entitled, PRINEST G. HAMMOND
   AND SCARLETT W. HAMMOND,  AS PARENTS,  GUARDIANS,  AND NEXT FRIENDS OF FABIAN
   GAYLE  HAMMOND,  A MINOR,  AND PRINEST G.  HAMMOND AND  SCARLETT W.  HAMMOND,
   INDIVIDUALLY,  V. RONSON CORPORATION, in which Plaintiffs seek damages for an
   incident  that  allegedly  occurred  in December  1994,  when a spark from an
   unidentified  cigarette  lighter ignited the clothing of Fabian Gayle Hammond
   after he had allegedly allowed lighter fluid to leak onto his pants. The case
   was filed in June 1996. The Plaintiffs seek  substantial  special damages and
   punitive  damages.  Discovery has not been  completed,  and,  therefore,  the
   Company's counsel is unable to render an opinion about whether the likelihood
   of an unfavorable outcome is either "probable" or "remote".  However, counsel
   for the Company has advised that substantial defenses exist and is vigorously
   defending  this  litigation.  Management  believes  that the claim is without
   merit and a loss,  if any,  would be well  within  the  limits  of  insurance
   coverage.

        The Company is involved in various other lawsuits and claims. Management
   believes  that the  outcome  of these  lawsuits  and  claims  will not have a
   material adverse effect on the Company's financial position.
<PAGE>

        The Company has an  employment  contract  with an officer.  The contract
   expires on December  3l, 1998.  Base  salaries in the years 1997 and 1998 are
   $462,405 and $494,773, respectively, and the contract provides for additional
   compensation  and  benefits,  including a death  benefit  equal to two years'
   salary.

        Largely as the result of increased cost of product liability  insurance,
   the Company has secured  substantially smaller amounts of liability insurance
   than it had purchased  prior to 1987.  While the Company has never settled or
   been liable for claims for amounts in excess of the reduced level of coverage
   now available, the present level of insurance represents a potential exposure
   for the Company.

<PAGE>
    Note 9.  STOCKHOLDERS' EQUITY:

                   A  summary  of  activity  within  Stockholders'  Equity is as
    follows (in thousands):
<TABLE>
<CAPTION>
                                                    Year Ended December 31,
                                                 1996        1995        1994
                                               --------    --------    --------
<S>                                            <C>         <C>         <C>
Preferred stock issued:
    Balance at beginning of year ...........   $      8    $      9    $      9
    Conversion of preferred stock
      to common stock ......................         --          (1)         --
                                               --------    --------    --------
    Balance at end of year .................          8           8           9
                                               --------    --------    --------
Common stock issued:
    Balance at beginning of year ...........      1,821       1,768       1,761
    Exercise of stock options ..............         33          27           3
    Conversion of preferred stock
      to common stock ......................         10          26           4
                                               --------    --------    --------
    Balance at end of year .................      1,864       1,821       1,768
                                               --------    --------    --------
Additional paid-in capital:
    Balance at beginning of year ...........     30,308      30,329      30,332
    Exercise of stock options ..............         47           4           1
    Conversion of preferred stock
      to common stock ......................        (10)        (25)         (4)
                                               --------    --------    --------
    Balance at end of year .................     30,345      30,308      30,329
                                               --------    --------    --------
Accumulated deficit:
    Balance at beginning of year ...........    (27,081)    (27,721)    (28,749)
    Net earnings (loss) ....................       (855)        640       1,074
    Dividends on preferred stock ...........         --          --         (46)
                                               --------    --------    --------
    Balance at end of year .................    (27,936)    (27,081)    (27,721)
                                               --------    --------    --------
Unrecognized net loss on pension plans:
    Balance at beginning of year ...........     (1,403)     (1,595)     (1,525)
    Expensed during the year ...............        125         153         124
    Unrecognized net gain (loss)
      during the year ......................       (163)         39        (194)
                                               --------    --------    --------
    Balance at end of year .................     (1,441)     (1,403)     (1,595)
                                               --------    --------    --------
Cumulative foreign currency
    translation adjustment .................        (36)        (26)        (26)
                                               --------    --------    --------
Treasury stock (at cost) ...................     (1,594)     (1,593)     (1,593)
                                               --------    --------    --------
Total Stockholders' Equity .................   $  1,210    $  2,034    $  1,171
                                               ========    ========    ========
</TABLE>
<PAGE>
   Note 10.  PREFERRED STOCK:

        Each share of 12% Cumulative  Convertible  Preferred  Stock has a stated
   value of $0.01  per  share and a  liquidation  preference  of $1.75 per share
   ($1,466,000 at December 31, 1996, in the aggregate)  plus accrued  dividends.
   The shares are  non-voting  and have a right to  cumulative  dividends at the
   annual rate of $0.21 per share.  The holders of the preferred  shares may, at
   any time,  convert each preferred share into one share of common stock unless
   the preferred  shares were previously  redeemed.  During 1996, 1995 and 1994,
   9,713, 25,959 and 4,145 preferred shares,  respectively,  were converted into
   common  shares.  The  Company  has the  option to  redeem  all or part of the
   preferred stock at $2.25 per share plus accrued dividends.

        On November 15, 1996,  the Company  issued an Offer to owners of its 12%
   Cumulative  Convertible Preferred Stock to exchange their shares of preferred
   stock for shares of common  stock at the rate of 1.7  shares of common  stock
   for each share of  preferred.  The Company did not accept any of the tendered
   preferred shares for exchange prior to December 31, 1996, and, therefore, the
   effects  of the  Exchange  Offer  have not  been  included  in the  Company's
   Consolidated  Balance  Sheets or  Consolidated  Statements  of  Operations at
   December 31, 1996. (Refer to Note 15 below.)

        Dividends in arrears at December 31, 1996 totalled  $0.8925 per share of
   preferred  stock  (seventeen  quarters at $0.0525 per share per quarter),  or
   approximately $748,000 in the aggregate.


   Note 11.  STOCK OPTIONS:

        The Company has three incentive stock option plans which provide for the
   grant of  options to  purchase  shares of the  Company's  common  stock.  The
   options may be granted to officers and other key employees of the Company and
   its  subsidiaries  (including  directors  if they are also  employees  of the
   Company or one of its  subsidiaries) at not less than 100% of the fair market
   value  on the  date on  which  options  are  granted.  In  August  1996,  the
   stockholders  approved the adoption of the  Company's  1996  Incentive  Stock
   Option Plan which  provides for the grant of options for up to 100,000 shares
   of common stock.  In August 1987, the  stockholders  approved the adoption of
   the Company's  1987  Incentive  Stock Option Plan and, in November  1983, the
   stockholders  approved the adoption of the  Company's  1983  Incentive  Stock
   Option Plan, each of which provides for the grant of options for up to 66,666
   shares of common stock.  After  January 21, 1997,  no further  options may be
   granted  under the 1983 and 1987 plans.  Options  granted  under the 1983 and
   1987 plans are  exercisable  at any time  within  five years from the date of
   grant, at which time such options expire. Options granted under the 1996 plan
   are  exercisable  after six months from the date of the grant and within five
   years of the grant date, at which time such options  expire.  All options are
   vested on the date of the grant.

        Pro forma information  regarding net earnings (loss) and earnings (loss)
   per common share is required by SFAS #123, and has been  determined as if the
   Company had  accounted  for its employee  stock  options under the fair value
   method of that  statement.  The fair value for these options was estimated at
   the  date of  grant  using a  Black-Scholes  option  pricing  model  with the
   following  weighted average  assumptions for 1996: risk-free interest rate of
   6.5%; dividend yield of 0%; volatility factor of the expected market price of
   the Company's  common stock of 0.5; and a  weighted average  expected life of
   the option of five years.
<PAGE>

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

        The Company's pro forma results of operations  after  adjustment for the
   estimated  compensation  expense under SFAS #123 for the years ended December
   31, 1996 and 1995 were as follows (in thousands,  except for earnings  (loss)
   per share information):

                                                      Year Ended December 31,
                                                        1996           1995
                                                       -------       -------
        Pro forma Results of Operations:
          Earnings from continuing operations.....     $   210       $ 1,495
          Loss from discontinued operations.......      (1,190)         (860)
                                                       -------       -------
          Net earnings (loss).....................     $  (980)      $   635
                                                       =======       =======

        Pro forma Earnings (Loss) per Common Share:
          Assuming no dilution:
            Earnings from continuing operations...     $  0.02       $  0.77
            Loss from discontinued operations.....       (0.66)        (0.50)
                                                       -------       -------
            Net earnings (loss)...................     $ (0.64)      $  0.27
                                                       =======       =======

          Assuming full dilution:
            Earnings from continuing operations...     $  0.02       $  0.58
            Loss from discontinued operations.....       (0.66)        (0.33)
                                                       -------       -------
            Net earnings (loss)...................     $ (0.64)      $  0.25
                                                       =======       =======
<PAGE>

        A summary of the Company's stock option activity and related information
   for the three years ended December 31, 1996, is as follows:

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

        Outstanding at beginning of year 1994... 132,199         $ 1.65
          Granted...............................  10,000           1.31
          Exercised.............................  (3,000)          1.20
          Expired............................... (32,967)          1.83
                                                 -------

        Outstanding at December 31, 1994........ 106,232           1.58
          Granted...............................   5,500           1.63
          Exercised............................. (27,000)          1.18
          Expired............................... (14,666)          1.20
                                                 -------

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

        Outstanding at December 31, 1996........ 103,850         $ 2.59
                                                 =======         ======

        Exercisable at December 31, 1996........  93,850         $ 2.62
                                                  ======         ======

        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..........................        $ 1.44
                                                        ======
            Exceeds the market price on the
            grant date..........................        $ 1.41
                                                        ======

        Exercise  prices for options  outstanding as of December 31, 1996 ranged
   as follows:  13,900 options at $1.20 per share,  15,500 options from $1.63 to
   $2.25  per share and  74,450  options  from  $2.88 to $3.16  per  share.  The
   weighted average contractual life of those options is 4 years.
<PAGE>
   Note 12.  STATEMENTS OF CASH FLOWS:

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

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

                                                 Year Ended December 31,
                                                 1996      1995     1994
                                                -----     -----    -----
        Cash Payments for:
           Interest  .  .  .  .  .  .  .  .  .  $ 747     $ 478    $ 289
           Income taxes .  .  .  .  .  .  .  .     85         1       94

        Financing & Investing Activities
           Not Affecting Cash:
           Capital lease obligations incurred.    361        --       --
           Note payable as deposit on equipment
             to be leased  .  .  .  .  .  .  .     --       118       --
<PAGE>
   Note 13.  INDUSTRY SEGMENTS INFORMATION:

                Financial  information by industry  segment is summarized  below
   (in thousands):
<TABLE>
<CAPTION>
                                                   Year Ended December 31,
                                             1996          1995 *        1994 *
                                           --------      --------      --------
<S>                                        <C>           <C>           <C>
Net sales:
        Consumer Products ............     $ 16,534      $ 15,065      $ 13,129
        Aviation Services ............        8,920        11,888        12,454
                                           --------      --------      --------
                Consolidated .........     $ 25,454      $ 26,953      $ 25,583
                                           ========      ========      ========

Earnings (loss) before
        general corporate
        expenses and other:
        Consumer Products ............     $  2,837      $  2,807      $  2,219
        Aviation Services ............           (7)          246           523
                                           --------      --------      --------
                Consolidated .........        2,830         3,053         2,742
General corporate
        expenses .....................       (1,295)       (1,341)       (1,358)
Interest expense .....................         (762)         (541)         (322)
Other expense-net ....................         (567)         (168)         (342)
                                           --------      --------      --------
Earnings from continuing
        operations before
        income taxes .................     $    206      $  1,003      $    720
                                           ========      ========      ========

Depreciation and
        amortization expense
        identified to segments:
        Consumer Products ............     $    219      $    201      $    187
        Aviation Services ............          232           255           330
                                           --------      --------      --------
                                                451           456           517
        Corporate ....................           14            12            21
                                           --------      --------      --------
                Consolidated .........     $    465      $    468      $    538
                                           ========      ========      ========

Assets identified
        to segments:
        Consumer Products ............     $  5,306      $  5,681      $  5,070
        Aviation Services ............        5,007         6,331         5,525
                                           --------      --------      --------
                                             10,313        12,012        10,595
        Corporate ....................          607           502           764
        Discontinued Operations ......        1,184           889           528
                                           --------      --------      --------
                Consolidated .........     $ 12,104      $ 13,403      $ 11,887
                                           ========      ========      ========
<PAGE>
<CAPTION>
                                                   Year Ended December 31,
                                             1996          1995 *        1994 *
                                           --------      --------      --------
<S>                                        <C>           <C>           <C>
Capital additions, including
        capitalized leases
        identified to segments:
        Consumer Products ............     $    619      $    229      $    272
        Aviation Services ............          166           111           205
                                           --------      --------      --------
                                                785           340           477
        Corporate ....................           42             3            16
                                           --------      --------      --------
                Consolidated .........     $    827      $    343      $    493
                                           ========      ========      ========
</TABLE>

        * Reclassified for comparability.


                   The above segments are comprised as follows:

                        Consumer Products - consists of packaged fuels,  flints,
        refillable  lighters and ignitors,  a penetrant spray lubricant,  a spot
        remover,  and  a  surface  protectant,  which  are  distributed  through
        distributors,  food brokers, automotive and hardware representatives and
        chain  stores.  Consumer  Products is a  principal  supplier of packaged
        flints and lighter fuels in the United States and Canada.

                        Aviation Services - represents the chartering, servicing
        and sales of fixed wing aircraft and servicing of helicopters.  Aircraft
        are sold through Company sales personnel.  Aviation  Services 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.

                        Discontinued  Operations - represents  the operations of
        the Company's  metals  segment.  The segment is being accounted for as a
        discontinued  operation,  and  accordingly,  its  operating  results are
        reported in this manner in all years presented. (Refer to Note 2 above.)

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

                        For the  year  ended  December  31,  1996,  sales  which
        amounted to  approximately  14% of  Consolidated  Net Sales were made by
        Ronson  Consumer  Products to various  units of one  customer.  No other
        customer  accounted for more than 10% of Consolidated  Net Sales for the
        year ended December 31, 1996. No customer  represented  more than 10% of
        Consolidated Net Sales for the years ended December 31, 1995 and 1994.
<PAGE>
        Note 14.  CONCENTRATIONS:

                     At December 31, 1996, a subsidiary  of the Company had cash
        balances in a bank which  exceeded  the insured  limit by  approximately
        $131,000.

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


        Note 15.  SUBSEQUENT EVENT:

                     In 1997,  through  March 10,  1997,  the  Company  accepted
        623,016  shares of  preferred  stock for  exchange  under the  Company's
        November 15, 1996 Exchange  Offer.  As a result,  on March 10, 1997, the
        Company has outstanding  214,579 shares of preferred stock and 2,860,961
        shares of common stock.

                     If on December  31, 1996,  the Company had  accepted  these
        623,016  preferred  shares  and issued the  1,059,127  common  shares in
        exchange,  the aggregate dividends in arrears at December 31, 1996 would
        have been approximately $192,000, a reduction of $556,000.

                     If the shares had been  exchanged  on January 1, 1996,  the
        Earnings  (Loss) per Common  Share in the year ended  December  31, 1996
        would have been as follows:

             Assuming no dilution:
               Earnings from continuing operations............ $ 0.10
               Loss from discontinued operations..............  (0.42)
                                                               ------
               Net loss....................................... $(0.32)
                                                               ======

             Assuming full dilution:
               Earnings from continuing operations............ $ 0.10
               Loss from discontinued operations..............  (0.42)
                                                               ------
               Net loss....................................... $(0.32)
                                                               ======