U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 10-K

(Mark One)

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

For the fiscal year ended December 31, 2006

                                       or

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

             For the transition period from _________ to __________.

                           Commission File No. 1-1031

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

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

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

      Registrant's telephone number:                    (732) 469-8300
                                                        ---------------

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

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

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

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

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

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

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

Large accelerated filer |_|    Accelerated filer |_|   Non-accelerated filer |X|

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

<PAGE>

The aggregate market value of common equity held by non-affiliates of the
registrant was approximately $5,415,000 as of June 30, 2006; the last business
day of the registrant's most recently completed second fiscal quarter, computed
by reference to the average bid and asked price of such common equity.

As of March 22, 2007, there were 4,815,215 shares of the registrant's common
stock outstanding, adjusted to reflect a 5% common stock dividend declared on
February 1, 2007.

                       DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant's definitive Proxy Statement for the 2006 Annual
Meeting of Shareholders are incorporated by reference into Part I.

FORWARD-LOOKING STATEMENTS

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


                                       2
<PAGE>

                                TABLE OF CONTENTS

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

      Item 1.  Business.                                                     4

          1A.  Risk Factors.                                                 7

           2.  Properties.                                                  11

           3.  Legal Proceedings.                                           12

           4.  Submission of Matters to a Vote of Security Holders.         14

Part II
-------

      Item 5.  Market for the Company's Common Stock and Related
               Stockholder Matters.                                         15

           6.  Selected Financial Data.                                     16

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

           7A. Quantitative and Qualitative Disclosures about Market Risk.  26

           8.  Financial Statements and Supplementary Data.                 27

           9.  Changes in and Disagreements with Accountants on Accounting
               and Financial Disclosure.                                    28

          9A.  Controls and Procedures.                                     28

          9B.  Other Information.                                           29

Part III
--------

      Item 10. Directors, Executive Officers and Corporate Governance.      29

           11. Executive Compensation.                                      33

           12. Security Ownership of Certain Beneficial Owners and
               Management and Related Stockholder Matters.                  38

           13. Certain Relationships and Related Transactions, and
               Director Independence.                                       40

           14. Principal Accountant Fees and Services.                      41

Part IV
-------

      Item 15. Exhibits and Financial Statement Schedules.                  41

   Signatures.                                                              44

   Financial Statements.                                                    45


                                       3
<PAGE>

                                     PART I
                                     ------

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

(a) General Development of Business.

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

      The Company is engaged principally in the following businesses:

      1.    Consumer Products; and

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

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

(b)   Financial Information about Segments.

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

(c)   Narrative Description of Business.

      (1) Consumer Products
          -----------------

      The Company's consumer packaged products, which are manufactured in
Woodbridge, New Jersey, and distributed in the United States by the Company's
wholly owned subsidiary, Ronson Consumer Products Corporation ("RCPC"), include
Ronsonol lighter fluid, Multi-Fill butane fuel injectors, flints, wicks for
lighters, a multi-use penetrant spray lubricant product under the tradename
"Multi-Lube", and a spot remover under the product tradename "Kleenol". In
addition, the Company's consumer packaged products are marketed in Canada
through Ronson Corporation of Canada Ltd. ("Ronson-Canada"), a wholly owned
subsidiary of the Company. RCPC and Ronson-Canada together comprise Ronson
Consumer Products. The Company also distributes its consumer products in Mexico.
The consumer products segment has a greater than 10% customer, a distributor,
supplying Ronson's products to numerous retailers. Management does not believe
that this segment is substantially dependent on this distributor because of the
presence of many other distributors which provide retailers with Ronson's
consumer products. Sales to this distributor in 2006 and 2005 accounted for 13%
and 14%, respectively, of Consolidated Net Sales of the Company and 23% and 24%,
respectively, of Net Sales of the consumer products segment.

      Consumer products are distributed through distributors, food brokers,
automotive and hardware representatives and mass merchandisers, drug chains and
convenience stores in the United States and Canada. Ronson Consumer Products is
a principal supplier of packaged flints and lighter fuels in the United States,
Canada and Mexico. These subsidiaries' consumer products face substantial
competition from other nationally distributed products and from numerous local
and private label packaged products. Since Ronson Consumer Products produces
packaged products in accordance with its sales forecasts, which are frequently
reviewed and revised, inventory accumulation has not been a significant factor,
and this segment does not have a significant order backlog. The sources and
availability of raw materials for this segment's packaged products are not
significant factors; however, increased costs in 2006 and 2005 associated with
the rising prices of oil used in certain Ronson consumer products are a factor.

      Ronson Consumer Products also distributes seven lighter and torch products


                                       4
<PAGE>

- the "COMET" refillable butane lighter; the Ronson "WINDII" liquid fuel
windproof lighter; the Ronson "AmeroFlame Ignitor", used for lighting
fireplaces, barbecues, camping stoves and candles; the "AMERO LITE" blue point
flame butane lighter, the "JetLite", a blue flame torch lighter, excellent in
the wind as when sailing or golfing; the "Tech Torch", used for precision craft
and hobby work, and soldering; and the "AERO TORCH", geared for soldering,
plumbing and outdoor use requiring a larger flame. The lighter products are
marketed in the United States and Canada.

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

      The Company recently introduced two new products, both of which are
refillable using the Company's Multi-Fill butane fuel injectors. The Stardust
butane candle set provides the charm of candlelight with the elegance of fine
table decorations. The new Torchef butane cooking torch is specifically designed
by the Company for cooking specialties in the home or professional kitchens, as
well as other uses around the home. Management believes that the Stardust butane
candle set is a unique product, but it faces substantial competition from wax
candles. The Torchef faces substantial competition from a number of other
kitchen torches, but management believes that it is also unique in the
marketplace due to its design.

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

      (2)   Aviation - Fixed Wing Operations and Fixed Wing
            -----------------------------------------------
            Services as well as Services for Helicopters
            --------------------------------------------

      Ronson Aviation, Inc. ("Ronson Aviation"), a wholly owned subsidiary of
the Company, headquartered at Trenton-Mercer Airport, Trenton, New Jersey,
provides a wide range of general aviation services to the general public and to
government agencies. Services include aircraft fueling, cargo handling,
avionics, new and used aircraft sales, aircraft repairs, aircraft storage and
office rental. This subsidiary's facility is located on 18 acres, exclusive of
four acres on which Ronson Aviation has a first right of refusal. The facilities
include a 52,000 square foot hangar/office complex, two aircraft storage units
("T" hangars) and a 58,500 gallon fuel storage complex (refer to Item
2-Description of Properties, (4) Trenton, New Jersey). Ronson Aviation is also
constructing a new 19,200 square foot storage hanger which is expected to be
ready for occupancy in July 2007.

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

      At December 31, 2006, Ronson Aviation had orders to purchase three new
aircraft from Raytheon Aircraft Corporation, all of which are for resale. The
total sales value of these aircraft is approximately $2,380,000. The orders are
subject to


                                       5
<PAGE>

cancellation by Ronson Aviation. Ronson Aviation has received orders to sell two
of the aircraft in the third quarter of 2007.

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

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

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

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

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

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

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

      The Company maintains numerous patents and trademarks for varying periods
in the United States, Canada, Mexico and a limited number of other countries.
While both industry segments may benefit from the Company's name as a registered
trademark, the patents and trademarks which are held principally benefit the
consumer products segment of the Company's business. The "Ronson" brand is of
considerable value to the Company; however, its book value, as reported in the
Company's Consolidated Balance Sheets, is nominal.

SEASONALITY AND METHODS OF COMPETITION
--------------------------------------

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


                                       6
<PAGE>

RESEARCH ACTIVITIES
-------------------

      The Company's consumer products segment expensed approximately $376,000,
$348,000 and $313,000, during the fiscal years ended December 31, 2006, 2005 and
2004, 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, 2006, the Company and its subsidiaries employed a total
of 95 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
                               --------     ------------
       2006                       58%             42%
       2005                       59%             41%
       2004                       59%             41%

(d) Financial Information About Geographic Areas.

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

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

      Political and Economic Risks

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

      Operating Results and Net Earnings May Not Meet Expectations

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

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

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


                                       7
<PAGE>

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

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

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

      *     the ability to maintain key customer relationships;

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

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

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

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

      Regulatory Risks

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

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

      Interest Rates

      The Company is exposed to changes in prevailing market interest rates
affecting its interest costs and the return on its investments. All of the
Company's Short-term Debt carries a variable rate of interest. The Company's
outstanding Long-term Debt as of December 31, 2006, consisted of indebtedness
with a fixed rate of interest which is not subject to change based upon changes
in prevailing market interest rates and indebtedness with a variable rate of
interest.


                                       8
<PAGE>

      Foreign Currency Exchange Rates

      The Company is also exposed to changes in foreign currency exchange rates
due to its investment in its Canadian subsidiary, Ronson-Canada and because
approximately 7% of its Consolidated Net Sales were in Canada.

      Prices of Fuels

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

      Volatility in the Insurance Market

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

Ronson Consumer Products:

      Component Supply Risk

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

      Reliance on Supply Chain

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

      Competition

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


                                       9
<PAGE>

by those brands as perceived by consumers, and competitive pricing as its
primary competitive strategies.

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

      Business Risks

      With the trend toward consolidation in the retail marketplace, the
Company's customer base is shifting toward fewer, but larger, customers who
purchase in larger volumes. The loss of, or reduction in, orders from any of the
Company's most significant customers could have a material adverse effect on the
Company's business and its financial results.

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

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

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

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

      Protection of Intellectual Property

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

Ronson Aviation:

      Supply Risk

      Ronson Aviation depends upon its vendors for the supply of its principal
products. Aircraft fuels are subject to significant price volatility. Ronson
Aviation has historically been successful in the pricing of its fuel to maintain
its


                                       10
<PAGE>

gross margins. Increases in the price of the aircraft fuels could have an
adverse effect on the demand for Ronson Aviation products and aviation services,
and on its operating results, financial position and cash flows.

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

      Business Risk

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

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

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

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

      (1) Woodbridge, New Jersey

      Facilities included in (a) and (b) below are owned subject to a mortgage
in favor of North Fork Bank ("North Fork").

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

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

      (2) South Brunswick, New Jersey

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

      (3) Somerset, New Jersey

      One small facility for executive and consumer products offices. This
facility is subject to a lease which expires in June 2009. The facility is
constructed of metal, cinder block and cement.

      (4) Trenton, New Jersey

      (a) Two medium facilities for fixed wing operations and services and
helicopter services, sales and office space leased to others. These buildings
are owned and constructed of steel and concrete. The second building is
currently under construction. The land on which these buildings are located is
leased under a leasehold with six five-year terms automatically renewed, with
the last five-year


                                       11
<PAGE>

term previously expiring in November 2007. The lease may now be extended by
Ronson Aviation for five additional five-year terms through November 2032,
because Ronson Aviation has invested more than $1,500,000 in capital
improvements.

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

      (5) Mississauga, Ontario, Canada

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

Item 3 - LEGAL PROCEEDINGS
         -----------------

      The Company is involved in various product liability claims. The claimants
have claimed unspecified damages. The ultimate liability cannot now be
determined because of the considerable uncertainties that exist. Therefore, it
is possible that results of operations or liquidity in a particular period could
be materially affected by these matters. However, based on facts currently
available, management believes that damages awarded, if any, would be well
within existing insurance coverage.

Steel Partners II, L.P., et al v. Louis V. Aronson II, Robert A. Aronson, Erwin
-------------------------------------------------------------------------------
M. Ganz, I. Leo Motiuk, Gerard J. Quinnan, Justin P. Walder, Saul H. Weisman,
-----------------------------------------------------------------------------
Carl W. Dinger III and Ronson Corporation (ESX-C-101-03).
---------------------------------------------------------

      On March 25, 2003, a derivative lawsuit was filed against the directors of
the Company in the Superior Court of New Jersey, Chancery Division, Essex County
by Steel Partners II, L.P. and Warren G. Lichtenstein. The lawsuit alleges,
among other matters, breach of fiduciary duty and an absence of
disinterestedness by the defendants, and use of corporate control to advance
their own interests. The lawsuit seeks monetary damages on behalf of the Company
as well as equitable relief to invalidate the Company's preferred shares rights
agreement and certain consulting agreements, to enjoin performance of agreements
with certain directors and to require the Company's President and Chief
Executive Officer to divest those shares acquired, and not to acquire additional
shares while the preferred shares rights agreement has been or remains in place.

      A special litigation committee of two independent directors was created by
the Board of Directors of the Company to investigate and evaluate the
allegations made in the lawsuit. The committee concluded that none of the
directors breached any fiduciary duty owed to the Company or its shareholders,
that it is not in the best interest of the Company or its shareholders to
continue legal action against the directors on any of the claims asserted in the
derivative complaint and that the Company seek to dismiss the derivative action.
On June 19, 2006, the court granted the motion of the Company's directors,
ruling that the special litigation committee was independent, that by virtue of
the special litigation committee defense all claims to the extent based upon the
preferred shares rights agreement were dismissed, and that the application to
dismiss the remaining claims was denied. On July 21, 2006, the court denied
plaintiffs' motion to file an amended and supplemental complaint.

      On July 23, 2004, Ronson Corporation and certain of its directors filed a
counterclaim and third-party complaint against Steel Partners II, L.P., Warren
G. Lichtenstein and certain close associates, namely, Jack Howard, Howard M.
Lorber and Ronald Hayes. The counterclaim and third-party complaint is based
upon the New Jersey Shareholders Protection Act, the Company's preferred shares
rights plan, tortious interference with prospective business advantage and
negligently caused


                                       12
<PAGE>

economic loss, and seeks compensatory and punitive damages, costs of suit and
interest, as well as entry of a judgment directing the public disclosure of all
limited partners of Steel Partners II, L.P., and persons acting directly or
indirectly in concert with them in connection with the acquisition or attempted
acquisition of stock in, or control of, the Company, and divestiture by
defendants of shares of Common Stock acquired subsequent to the initial filing
on Schedule 13D by Steel Partners II, L.P. A motion to dismiss by Steel
Partners, Warren Lichtenstein and Jack Howard dated November 21, 2006 has been
granted by the court as to the allegations of prima facie tort and denied as to
all other counts, and motions to dismiss by Howard Lorber dated October 6, 2006
and by Ronald Hayes, dated November 8, 2006, respectively, have been granted as
to the allegations of unfair competition and prima facie tort and in all other
respects denied.

      Discovery is now proceeding in this lawsuit, with a trial date for
September 2007. The Company's directors will continue to contest and to
vigorously defend against the claims asserted by plaintiffs.

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

      On or about April 14, 2005, Steel Partners II L.P. commenced an action, on
its own behalf as a shareholder of the Company, in the United States District
Court for the District of New Jersey, against the current directors of the
Company (other than Edward E. David, Jr.), as well as Daryl K. Holcomb, the
Company's chief financial officer, and Carl W. Dinger, a shareholder of and
consultant to the Company. The action alleges, among other things, that
defendants should be treated collectively as an "Acquiring Person" under the
Company's preferred shares rights agreement, and that their acquisition and
ownership of more than 12% of the outstanding stock of the Company has triggered
the provisions of the preferred shares rights agreement with respect to the
offering of rights to shareholders, including plaintiff (notwithstanding that in
its derivative action in the Superior Court of New Jersey, Steel Partners has
challenged the legality and enforceability of the Company's preferred shares
rights agreement). The action alleges further that the defendants as a group
have become an "interested shareholder" under the New Jersey Shareholder
Protection Act, and that the defendants have violated reporting requirements
under Section 13(d) of the Securities Exchange Act of 1934 and Rule 13-d
promulgated by the Securities Exchange Commission by failing to disclose an
alleged agreement to coordinate their purchases of the Company's stock for the
purposes of placing voting control in the hands of Louis V. Aronson II and for
other undisclosed purposes.

      On April 13, 2006, the court denied the motion to dismiss filed by the
Company's directors and its chief financial officer in July 2005. The motion
filed by the Company's directors and chief financial officer seeking
certification of the order by the court, so that a petition seeking permission
to appeal to the U.S. Court of Appeals for the Third Circuit may be filed, was
denied on December 22, 2006.

      The Company's directors and its chief financial officer contest the
allegations of this action filed by plaintiff, and intend to vigorously defend
the action. The court has established a discovery schedule, and the action is
proceeding through pretrial discovery.

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

      The plaintiffs, a former employee and his spouse, claim damages for burns
and other injuries allegedly received in an accident occurring during the
employee's performance of his job. The lawsuit was filed in the Superior Court
of New Jersey, Law Division, Middlesex County, on February 10, 2005, and claims
damages totaling $10,000,000. The claimant has received, and is receiving,
workers' compensation


                                       13
<PAGE>

benefits related to the incident. Counsel has advised that it believes that the
claim is barred by the exclusive remedy of the Workers' Compensation Act.
Management believes that damages, if any, awarded in addition to the statutory
workers' compensation benefits, will be well within the Company's insurance
coverage.

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

      On January 26, 2006, Ronson Corporation of Delaware, a former subsidiary
of the Company, was notified it was named as one of at least forty-one
defendants in the above matter. The plaintiffs claim damages from illness as a
result of exposure to benzene and benzene-containing products. In the second
quarter of 2006, the Company was notified that it is no longer a defendant in
the case.

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

      (a) At the Company's Annual Stockholders' Meeting (the "Meeting") on
November 16, 2006, the matters set forth in the Company's 2006 Notice of Meeting
and Proxy Statement, which is incorporated herein by reference, were submitted
to the Company's stockholders.

      (b) The Election of Directors by 98.0% or more of the votes cast at the
meeting is summarized as follows:

      Ms. Barbara L. Collins, and Messrs. Edward E. David, and Gerard J. Quinnan
were reelected for three-year terms as Class I directors, expiring at the 2009
Annual Meeting; and

      The terms of office of each of the following directors continued after the
Meeting; Louis V. Aronson II, Robert A. Aronson, Paul H. Einhorn, Erwin M. Ganz,
I. Leo Motiuk, and Justin P. Walder.

      (c) The appointment of Demetrius & Company, L.L.C., independent auditors,
to audit the consolidated financial statements of the Company for the year 2006
was ratified by 99.8% of the votes cast at the Meeting.

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

1. ELECTION OF DIRECTORS

      Class I (term expires at 2009 Annual Meeting of Stockholders):

                                      FOR            %         WITHHELD      %
                                      ---            -         --------      -
      Barbara L. Collins              4,258,257      99.1      38,817        0.9
      Edward E. David, Jr.            4,217,009      98.1      88,065        1.9
      Gerard J. Quinnan               4,211,463      98.0      89,611        2.0

2. To ratify the appointment of DEMETRIUS & COMPANY, L.L.C., as independent
auditors for the year 2006

       FOR           %           AGAINST      %         ABSTAIN      %
       ---           -           -------      -         -------      -
       4,286,511     99.8        9,469        0.2       1,094        0.0


                                       14
<PAGE>

                                     PART II
                                     -------

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

      (a) The principal market for trading in Ronson common stock is the Nasdaq
Capital Market. Market data for the last two fiscal years are listed below for
information and analysis. The data presented reflect inter-dealer prices,
without retail markup, markdown or commission and may not necessarily represent
actual transactions.

2006
-------------------------------------------------------------------

Quarter                     1st        2nd        3rd       4th
-------------------------------------------------------------------

High Bid                    $5.86      $4.93      $2.33     $2.02
Low Bid                     $1.19      $1.88      $1.33     $1.52

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

Quarter                     1st        2nd        3rd       4th
-------------------------------------------------------------------

High Bid                    $2.02      $2.14      $1.81     $1.72
Low Bid                     $1.64      $1.41      $1.41     $1.02

      (b) At March 22, 2007, there were 2,175 stockholders of record of the
Company's common stock.

      (c) Dividends -

      1. Cash dividends declared and paid by the Company in the years ended
December 31, 2005 and 2004 are as follows (none in 2006):

                                 2005      2004
                                 ----      ----

            First Quarter        $0.01     $.00
            Second Quarter         .01      .01
            Third Quarter          .00      .01
            Fourth Quarter         .00      .01

      2.    Stock dividends - On February 1, 2007, the Company's Board of
            Directors declared a 5% stock dividend on the Company's outstanding
            common stock, in addition to a 5% common stock dividend declared
            during each of the last five fiscal years, on February 23, 2006,
            February 15, 2005, February 12, 2004, March 18, 2003, and March 12,
            2002, respectively. Information regarding the number of shares and
            per share amounts has been retroactively adjusted for the stock
            dividends declared on the Company's common stock.

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

      (e) The following table contains information about purchases of equity
securities by the Company and affiliated persons during the fourth quarter of
2006:


                                       15
<PAGE>

                      Issuer Purchases of Equity Securities

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                        Maximum
                                                                                      Number (or
                                                                    Total Number      Approximate
                                                                      of Shares      Dollar Value)
                                                                    Purchased as    of Shares that
                                                                       Part of        May Yet Be
                                                       Average        Publicly         Purchased
                                     Total Number       Price         Announced        Under the
                                       of Shares      Paid per        Plans or         Plans or
Period                                 Purchased        Share         Programs         Programs
---------------------------------------------------------------------------------------------------
<S>                                          <C>      <C>                    <C>             <C>
October 1 - October 31, 2006                 --       $     --               --              --
November 1 - November 30, 2006               --             --               --              --
December 1 - December 31, 2006               --             --               --              --
                                       --------       --------        ---------        --------
Total                                        --       $     --               --              --
                                       ========       ========        =========        ========
</TABLE>

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

      The information required by this item is filed with this report in Item 15
and is incorporated herein by reference.

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

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

2006 Compared to 2005

      The Company's Net Sales increased 10% in 2006 to $29,244,000 as compared
to $26,563,000 in 2005.

      The Company's Earnings from Operations improved to $1,093,000 in 2006 from
$888,000 in 2005.

      The Company's Earnings before Income Taxes increased by $791,000 to
$289,000 in 2006 from a Loss before Income Taxes of $502,000 in 2005. The Loss
before Income Taxes in 2005 included a nonrecurring loss related to the
Company's sale of Ronson Aviation's charter aircraft and charter business.

      The Company's Income Tax Expenses in 2006 included a $75,000 cost due to
the adjustment of the valuation allowance for deferred tax assets related to a
tax planning strategy.

Ronson Consumer Products
------------------------
(in thousands)

                                                         Year Ended December 31,
                                                               2006         2005
                                                               ----         ----
Net Sales                                                   $16,870      $15,664
Earnings before interest, other items,
   intercompany charges, and taxes                            1,243        1,347
Earnings before intercompany charges
   and taxes                                                    946        1,126


                                       16
<PAGE>

      Net Sales of consumer products at Ronson Consumer Products Corporation
("RCPC"), Woodbridge, New Jersey, and Ronson Corporation of Canada Ltd.
("Ronson-Canada"), Mississauga, Ontario, (together "Ronson Consumer Products")
increased by 8% in 2006 as compared to 2005 primarily due to increased sales of
the Company's JetLite lighter, and to a sale in April 2006 to a customer in
China. The increase of 8% in 2006 consisted of an increase of about 15% due to
higher volume of products sold partially offset by a reduction of about 7% due
to lower average net selling prices, due primarily to reduced selling prices on
the April 2006 sale to the customer in China.

      Cost of Sales, as a percentage of Net Sales, at Ronson Consumer Products
increased to 61% in 2006 from 58% in 2005. The increase in the Cost of Sales
percentage in 2006 was primarily due to a higher Cost of Sales percentage on the
second quarter 2006 sale to the customer in China, and to increased material
costs due to the large increases in the price of oil. The amount of the Cost of
Sales at Ronson Consumer Products increased in 2006 by 13%. The increase in the
amount of Cost of Sales was composed of the following:

      Increased volume of products sold                11%
      Decreased manufacturing costs                    (1)%
      Increased unit costs of products sold             3%
                                                       --
      Total increase in amount of Cost of Sales        13%
                                                       ==

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

      Selling, Shipping and Advertising Expenses, as a percentage of Net Sales,
at Ronson Consumer Products decreased to 22% in 2006 from 23% in 2005 primarily
due to increased Net Sales.

      Interest Expense at Ronson Consumer Products increased to $290,000 in 2006
from $195,000 in 2005 primarily due to increased Short-term Debt and Long-term
Debt.

Ronson Aviation
---------------
(in thousands)

                                                         Year Ended December 31,
                                                              2006         2005
                                                              ----         ----
Net Sales                                                  $12,374      $10,899
Earnings before interest, other items,
   intercompany charges, and taxes                           1,660        1,435
Earnings before intercompany charges
   and taxes                                                 1,606        1,381
Nonrecurring loss-sale of charter aircraft
   and business                                                 --         (591)

      Net Sales at Ronson Aviation, Inc. ("Ronson Aviation"), Trenton, New
Jersey, increased by 14% in 2006 from 2005 primarily because Ronson Aviation had
sales of new aircraft of $1,796,000 in 2006 and none in 2005.

      Ronson Aviation's Cost of Sales, as a percentage of Net Sales, increased
to 77% in 2006 from 76% in 2005 primarily because of the change in the mix of
products sold due to the aircraft sales in 2006.

      Ronson Aviation's Selling, Shipping and Advertising Expenses and General
and Administrative Expenses, as a percentage of Net Sales, were reduced to 7% in
2006 from 8% in 2005 primarily because a decrease due to the increased sales in
2006 was partially offset by the effect of increased personnel costs.

      Interest Expense at Ronson Aviation decreased to $24,000 in 2006 from
$50,000 in 2005 primarily due to reduced average Long-term Debt in 2006 because
of the 2005


                                       17
<PAGE>

sale of Ronson Aviation's charter aircraft and related charter business
discussed below.

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

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

      The General and Administrative Expenses of Corporate and Others decreased
to $1,719,000 in 2006 as compared to $1,799,000 in 2005 primarily due to
reductions of certain benefits costs in 2006.

      Other-Net included pension expenses related to the Company's frozen
defined benefit plans of $315,000, $308,000, and $375,000, in the years ended
December 31, 2006, 2005 and 2004, respectively.

      Other-Net included $90,000 in fees charged by Bank of America in the first
half of 2006 (none in 2005) due to terms of a loan amendment dated January 11,
2006 (which extended the loan agreements to January 31, 2007). Under the terms
of the extension, fees were due to Bank of America, beginning on February 28,
2006, at the end of each month in which the Bank of America loans had not been
repaid. The Bank of America loans were repaid on July 31, 2006.

      Other-Net also included the amortization of $40,000 in 2006 in deferred
costs incurred to complete the new CIT/Commercial Services, Inc. ("CIT") and
North Fork Bank ("North Fork") financing. The balance of the costs, originally
totaling about $290,000, is being amortized over the terms of the loans.

      The net Other Charges of $91,000, $95,000, and $145,000 in 2006, 2005 and
2004, respectively, were the legal fees incurred as a result of the derivative
action and a second lawsuit filed by the same stockholder. The net shareholder
litigation expenses were included in General and Administrative Expenses in the
Consolidated Statements of Operations. These litigation expenses were net of the
associated insurance reimbursements.

2005 Compared to 2004

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

      The Company's Net Sales were $26,563,000 in the year 2005 as compared to
$28,483,000 in the year 2004. No aircraft sales were included in 2005; however,
in 2004, Net Sales included sales of aircraft of $2,098,000.


                                       18
<PAGE>

Ronson Consumer Products
------------------------
(in thousands)

                                                         Year Ended December 31,
                                                               2005         2004
                                                               ----         ----
Net Sales                                                   $15,664      $16,768
Earnings before interest, other items,
   intercompany charges, and taxes                            1,347        1,807
Earnings before intercompany charges
   and taxes                                                  1,126        1,691

      Net Sales of consumer products at Ronson Consumer Products were lower by
7% in 2005 as compared to 2004 primarily due to reduced sales of certain flame
accessory products, composed of a 5% increase due to increased average net
selling prices offset by a decline of about 12% due to reduced volume of
products sold.

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

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

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

      Selling, Shipping and Advertising Expenses, as a percentage of Net Sales,
at Ronson Consumer Products increased to 23% in 2005 from 21% in 2004 primarily
due to lower Net Sales, to increased shipping costs due to higher oil prices,
and to increased costs associated with the Company's new warehouse facility.
General and Administrative Expenses, as a percentage of Net Sales were unchanged
at 8% in 2005 and 2004 primarily because lower personnel costs were offset by
the effect of the decreased Net Sales on the percentage.

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

Ronson Aviation
---------------
(in thousands)

                                                         Year Ended December 31,
                                                               2005         2004
                                                               ----         ----
Net Sales                                                   $10,899      $11,715
Earnings before interest, other items,
   intercompany charges, and taxes                            1,435        1,253
Earnings before intercompany charges
   and taxes                                                  1,381        1,158
Nonrecurring loss-sale of charter aircraft
   and business                                               (591)           --

      Net Sales at Ronson Aviation decreased by 7% in 2005 from 2004 primarily
because Ronson Aviation had no sales of aircraft in 2005; however, Net Sales in
2004 had included aircraft sales of $2,098,000. The reduction in aircraft sales
was


                                       19
<PAGE>

partially offset by increased sales of aircraft maintenance and aviation
services and by increased sales of aircraft fuel due to higher aviation fuel
prices.

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

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

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

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

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

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

      Other-Net included pension expenses related to the Company's frozen
defined benefit plans of $308,000, $375,000, and $423,000 in the years ended
December 31, 2005, 2004, and 2003, respectively.

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

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

      In accordance with Statement of Financial Accounting Standards ("SFAS")
#109, "Accounting for Income Taxes", in 2006, 2005, and 2004, the Company
recognized deferred income tax expenses (benefits) of $130,000,($235,000), and
$154,000, respectively, primarily due to the Earnings (Losses) before Taxes.

      Current income taxes in the years ended December 31, 2006, 2005, and 2004,
were presented net of credits of $17,000, $16,000, and $110,000, respectively,
arising from the utilization of available tax losses and loss carryforwards in
accordance with SFAS #109. In 2006, 2005 and 2004, current income tax expenses
(benefits) were as follows (in thousands):


                                       20
<PAGE>

                                                        Year Ended December 31,
                                                       2006      2005      2004
                                                       ----      ----      ----

                Federal                                $ --      $ --      $ (4)
                State                                    20        38       152
                Foreign                                  72        28         9
                                                       ----      ----      ----
                           Total                       $ 92      $ 66      $157
                                                       ====      ====      ====

      At December 31, 2006, the Company had net operating loss carryforwards for
federal income tax purposes of approximately $3,816,000 and federal and state
alternative minimum tax credit carryforwards of $113,000. (Refer to Note 2 of
the Notes to Consolidated Financial Statements.)

      For purposes of financial reporting, the Company's effective income tax
rate was 77% in 2006, 34% in 2005, and 62% in 2004. The increase in the
effective tax rate in 2006 was primarily due to an increase of $75,000 in the
valuation allowance related to deferred tax assets. In the fourth quarter of
2006, the Company reviewed the likelihood that, using a tax planning strategy,
it would be able to utilize net operating loss carryforwards of Prometcor, Inc.
for purposes of State of New Jersey income taxes. The determination was made
that a portion was not likely to be utilized. Therefore, in the fourth quarter
of 2006, the Company increased the valuation reserve related to deferred income
tax assets by $75,000, resulting in increased Income Tax Expenses. The increase
in the effective tax rate in 2004 was primarily due to the provision of $122,000
for state income tax related to an assessment by the State of New Jersey for
prior years.

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

      The Company's Stockholders' Equity increased to $3,626,000 at December 31,
2006, from $3,304,000 at December 31, 2005. The increase in Stockholders' Equity
in 2006 was primarily due to the Net Earnings of $67,000 in 2006, and to a
decrease of $356,000, net of related income tax benefits, in the Minimum Pension
Liability Adjustment component of Accumulated Other Comprehensive Loss.

      The Company had a deficiency in working capital of $878,000 at December
31, 2006, as compared to a deficiency of $760,000 at December 31, 2005.

      An improvement in the Company's working capital in the quarter ended
September 30, 2006 was primarily due to the Company's new loan agreements with
CIT and North Fork. The new agreements provided additional working capital of
about $2,920,000 in the third quarter of 2006. The improvement in working
capital due to the new financing was substantially offset by capital
expenditures of $2,185,000 in 2006, primarily at Ronson Aviation for the
construction of a 19,200 sq. ft. hangar.

      On July 31, 2006, the Company, RCPC, Ronson-Canada and Ronson Aviation
entered into a financing agreement with CIT. The new financing totals $3,945,000
and is composed of a revolving line of credit of $3,000,000 and two term loans
in the original amounts of $195,000 and $750,000, respectively, both to be
repaid evenly over five years. The amount available to be borrowed under the
revolving line of credit is determined by reference to a "borrowing base", which
is calculated based on the levels of accounts receivables and inventories of the
Company's subsidiaries. Amounts advanced under the CIT financing agreement are
secured by substantially all of the assets of the Company and its subsidiaries,
other than (1) the real property owned by RCPC in Woodbridge, New Jersey and (2)
34% of the Company's interest in Ronson-Canada. The CIT financing agreement
includes covenants and other terms and provisions typical for agreements of its
kind. The revolving line of credit is for a period of three years. The revolving
loan bears interest at prime plus one half percent and the term loans bear
interest at prime plus three percent.


                                       21
<PAGE>

      At December 31, 2006 CIT provided the Company with a waiver of a covenant
violation due to failure by the Company to meet a fixed charge coverage ratio
for the six months ended December 31, 2006.

      The proceeds from the CIT revolving loan and term loans were utilized to
repay all amounts outstanding to the Bank of America under the Company's prior
revolving loan and mortgage loan agreements. The proceeds from the two term
loans improved working capital by about $750,000. The new CIT financing also
provided additional loan availability to the Company of about $600,000.

      On September 27, 2006, RCPC entered into a mortgage loan agreement with
North Fork for $2,200,000. The mortgage loan is secured by a first mortgage on
the property of RCPC at 3 and 6 Ronson Road, Woodbridge, New Jersey, and the
guarantees of the Company and Ronson Aviation. The loan bears interest at the
fixed rate of 6.81% and is payable in monthly installments of $15,422, with a
final installment of approximately $1,697,000 plus interest, on November 1,
2016.

      Based on the amount of the loans outstanding and the levels of accounts
receivable and inventory at December 31, 2006, the Company's subsidiaries had
unused borrowings available at December 31, 2006 of about $610,000 under the CIT
line of credit described above.

      The Company's Raw Material Inventories increased at December 31, 2006,
from December 31, 2005, primarily due to increased inventories at Ronson
Consumer Products related to new products. The Company's Other Current Assets
increased at December 31, 2006 from December 31, 2005 due primarily to increased
deposits and increased prepaid insurance.

      The Company's Accounts Payable increased in 2006 primarily due to the
timing of purchases and payments. The Company's Accrued Expenses decreased in
2006 primarily because the funded status of the Company's defined benefit
pension plan had been a current liability of $711,000 at December 31, 2005, but
improved to a prepaid pension asset at December 31, 2006, included in Other
Assets. The improvement in the Plan's funded status was due to the large
contributions to the plan by the Company and to the plan's favorable return on
assets in 2006.

      The Company's Capital Expenditures increased to $2,185,000 in 2006,
primarily at Ronson Aviation for the construction of its new 19,200 sq. ft.
hangar. Ronson Aviation's property is subject to a long-term lease previously
scheduled to expire in November 2007. The lease has been extended by Ronson
Aviation (for up to additional 25 years) with its investment in capital
improvements of more than $1,500,000. In March 2004 Ronson Aviation announced
plans to proceed with an expansion of its facilities which would meet the
requirements of the lease extension. At December 31, 2006, Ronson Aviation had
expended approximately $2,330,000 on the improvements. Ronson Aviation expects
that, as of December 31, 2006, the additional cost to complete the hangar,
including $345,000 committed at December 31, 2006, is approximately $560,000.

      The Company's required contributions in 2007 to its deferred benefit
pension plan will be significantly reduced from prior years. The contributions
in 2007 will total about $238,000, as compared to the contributions in 2006 and
2005 of $744,000 and $847,000, respectively. Required contributions in 2008 and
2009 are currently projected to be about $114,000 and $139,000, respectively.
(Future actual earnings results on the plan's assets and actuarial gains and
losses will affect future required contribution amounts). The reductions in the
required contributions in 2007 and future years is due primarily to the large
contributions to the plan in recent years, and to improved earnings on the
plan's assets, both of which have resulted in the plan reaching the full funding
limit in 2006.


                                       22
<PAGE>

      On February 1, 2007, the Company's Board of Directors declared a 5% stock
dividend on the Company's common stock. The 5% stock dividend will be issued on
April 16, 2007, to stockholders of record March 30, 2007. Information as to the
number of shares and per share amounts has been retroactively adjusted to
reflect this stock dividend.

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

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

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

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

Long-term debt                   $3,368     $  285    $  566    $  485    $2,032
Capital lease obligations         1,114        335       518       261        --
Operating leases                  1,691        438       727       368       158
Other long-term
  obligations (1)                 1,039      1,014        25        --        --
                                 ------     ------    ------    ------    ------
Total contractual
   obligations                   $7,212     $2,072    $1,836    $1,114    $2,190
                                 ======     ======    ======    ======    ======

Pension obligations (2)                     $  238    $  253    $  403
                                            ======    ======    ======

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

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

      The Company will continue to incur interest expenses related to its
outstanding short-term and long-term debt. In the years ended December 31, 2006,
2005, and 2004, the Company's interest expenses were $476,000, $473,000, and
$367,000, respectively. The interest expense in 2006 and 2005 included about
$18,000 and $71,000, respectively, related to a prior years' New Jersey State
income tax matter. Management expects its interest expenses (excluding interest
related to capital lease obligations) in the years ending December 31, 2007
through 2011 to be approximately (in thousands):

                  2007                         $443
                  2008-2009 (2 years)           803
                  2010-2011 (2 years)           695
                  After 2011                    621


                                       23
<PAGE>

      The estimated interest payments assume: 1) that the long-term debt and
capitalized lease obligations are repaid according to the maturities; 2) the
Company's revolving loans will continue through 2011 at the same terms and at
the average balances of 2006; 3) interest rates remain at the December 31, 2006,
levels; 4) no aircraft inventory loans will be required; and 5) interest expense
related to capitalized lease obligations is excluded because it is included in
the table of Contractual Obligations above.

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

CRITICAL ACCOUNTING POLICIES

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

Allowance For Doubtful Accounts

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

Accounting For Sales Incentives

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

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

Revenue Recognition

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


                                       24
<PAGE>

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

Inventory Valuations

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

Impairment of Long-Lived Assets

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

Other Loss Accruals

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

Pension Plans

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

Accounting for Income Taxes

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


                                       25
<PAGE>

New Accounting Pronouncements

      In September 2006, the FASB issued SFAS No. 158, "Employers Accounting for
Defined Benefit Pension and Other Postretirement Plans, an amendment of SFAS
Nos. 87, 88, 106, and 132(R)" (SFAS No. 158). This statement, among other
things, requires that the Company recognize the funded status of its defined
benefit pension in the Consolidated Balance Sheet as of December 31, 2006, with
changes in the funded status recognized through other comprehensive income in
the year in which such changes occur. The adoption of SFAS No. 158 had no effect
on the Consolidated Statements of Operations for any period presented. Refer to
Note 6 of the Notes to Consolidated Financial Statements below regarding the
effect of adoption of SFAS No. 158 on the Company's Balance Sheet at December
31, 2006.

      In February 2007, the FASB issued Statement No. 159 ("SFAS 159"), "The
Fair Value Option for Financial Assets and Liabilities Including an Amendment of
FASB Statement No. 115". This standard is effective for periods beginning after
November 15, 2007. Therefore, the Company will adopt the provisions of the
standard on January 1, 2008. SFAS 159 permits the Company to elect to measure
certain of its financial instruments at either historical cost or fair value.
The Company is in the process of determining what method it will choose upon
adoption and, once determined, the impact, if any, adoption will have on the
financial results or position of the Company.

      In July 2006, the FASB issued FASB Interpretation No. 48 (FIN 48),
"Accounting for Uncertainty in Income Taxes" - an interpretation of FASB
Statement No. 109, which clarifies the accounting for uncertainty in tax
positions. FIN 48 requires that the Company recognize the impact of a tax
position in the Company's financial statements if that position is more likely
than not of being sustained on audit, based on the technical merits of the
position. The provisions of FIN 48 are effective as of the beginning of the
Company's 2007 fiscal year, with the cumulative effect of the change in
accounting principle recorded as an adjustment to opening retained earnings. The
Company does not expect that FIN 48 will have a material effect on the Company's
Consolidated Balance Sheets or Statements of Operations.

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

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

      All of the Company's Short-term Debt ($2,143,000 at December 31, 2006)
carries a variable rate of interest, and, therefore, the carrying value of the
Short-term Debt approximates fair value. The Company's outstanding Long-term
Debt as of December 31, 2006, consisted of indebtedness in the amount of
$2,486,000 with a fixed rate of interest which is not subject to change based
upon changes in prevailing market interest rates. Of the Long-term Debt with
fixed interest rates, the $2,195,000 mortgage loan carries a fixed rate of
6.81%. Based on the Company's average borrowings with variable interest rates
during 2006 and assuming a one percentage point change in average interest
rates, it is estimated that the Company's interest expense during 2006 would
have increased or decreased by approximately $19,000.

      The Company is also exposed to changes in foreign currency exchange rates
due to its investment in its Canadian subsidiary, Ronson-Canada and because
approximately 7% of its Consolidated Net Sales were in Canada. As of December
31, 2006, the Company's net investment in Ronson-Canada was approximately
$419,000. Because the


                                       26
<PAGE>

Company's foreign currency exchange exposure is limited to one relatively stable
currency and the relatively small size of its net investment in Ronson-Canada,
the Company does not consider this foreign currency exchange exposure to be
material to its financial condition and results of operations. The cumulative
effect of translating balance sheet accounts from the Canadian dollars into the
US dollars at the current exchange rate is included in Accumulated Other
Comprehensive Loss in the Consolidated Balance Sheets.

      The Company, due to the nature of its operations, is also exposed to
changes in the prices of fuels. In the years ended December 31, 2006 and 2005,
the Company's cost of fuels included in its consumer products and its cost of
aircraft fuel totaled approximately $5,636,000 and $4,956,000, respectively, or
approximately 28% of Cost of Sales in each of the years ended December 31, 2006
and 2005. The prices of the fuels fluctuate more or less in conjunction with oil
prices. An increase or decrease of 1% in the average cost of the Company's fuels
would have increased or decreased the Company's Cost of Sales by approximately
$56,000 in 2006. Cost of fuels also impacts the cost of various other components
used in the Company's products. Increases in the price of fuels, to the extent
the Company is not able to increase the prices of its products to its customers,
could have an adverse impact on the Company's results of operations.

      Under its current policies, the Company does not use derivative financial
instruments, derivative commodity instruments or other financial instruments to
manage its exposure to changes in interest rates, foreign currency exchange
rates, commodity prices or equity prices.

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

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

QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

      The following table sets forth certain unaudited quarterly consolidated
financial information for each of the two years in the period ending December
31, 2006:

(Dollars in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                              First        Second       Third       Fourth       Total
                                                              Quarter      Quarter      Quarter     Quarter      Year
                                                              ---------------------------------------------------------------
Year ended December 31, 2006
----------------------------
<S>                                                           <C>          <C>          <C>         <C>          <C>
Net sales                                                     $ 7,342      $ 7,841      $ 7,488     $ 6,573      $29,244
Gross profit (a)                                              $ 2,237      $ 2,385      $ 2,071     $ 2,277      $ 8,970
Net earnings (loss)                                           $    78      $    25      $    51     $   (87)     $    67
Diluted earnings (loss) per share                             $  0.02      $  0.01      $  0.01     $ (0.02)     $  0.01(e)
Cash dividends paid per common
   share                                                      $    --      $    --      $    --     $    --      $    --
Other expense included in net earnings (loss) (b), (c)        $    18      $    24      $     6     $     7      $    55
</TABLE>


                                       27
<PAGE>

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

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

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

(c)   The costs included in the 2006 and 2005 quarters were the legal fees
      incurred as a result of the derivative action and a second lawsuit filed
      by the same shareholder.

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

(e)   Does not add due to rounding.

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

      There were no disagreements with accountants in the years ended December
31, 2006, 2005 and 2004.

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

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

      The Company's management, including the CEO and CFO, does not expect that
our Disclosure Controls will prevent all errors and all fraud. A control system,
no matter how well conceived and operated, can provide only reasonable, not
absolute, assurance that the objectives of the control system are met. Further,
the design of a control system must reflect the fact that there are resource
constraints, and the benefits of controls must be considered relative to their
costs. Because of the inherent limitations in all control systems, no evaluation
of controls can provide absolute assurance that all control issues and instances
of fraud, if any, within the Company have been detected. These inherent
limitations include the realities that


                                       28
<PAGE>

judgments in decision-making can be faulty, and that breakdowns can occur
because of simple error or mistake. The design of any system of controls also is
based in part upon certain assumptions about the likelihood of future events,
and there can be no assurance that any design will succeed in achieving its
stated goals under all potential future conditions.

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

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

      None.

                                    PART III

Item 10 - DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
          ------------------------------------------------------

(a) Identification of directors.

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

<TABLE>
<CAPTION>
                                                                    Positions and Offices with Company
                                                                    Presently Held (other than that of
                                       Period         Term as       Director); Business Experience During
                                       Served as      Director      Past Five Years (with Company unless
Name of Director              Age      Director       Expires       otherwise noted)
----------------              ---      --------       -------       ---------------------------------------
<S>                           <C>      <C>            <C>           <C>
Louis V. Aronson II .....     84       1952-          2008          President & Chief Executive Officer;
                                       Present                      Chairman of Executive Committee

Robert A. Aronson .......     57       1993-          2007          Managing Member of Independence Leather
                                       Present                      L.L.C., Mountainside, NJ, the principal
                                                                    business of which is the import of leather
                                                                    products, 1996 to present; son of the
                                                                    President & Chief Executive Officer of the
                                                                    Company.
</TABLE>


                                       29
<PAGE>

<TABLE>
<CAPTION>
                                                                    Positions and Offices with Company
                                                                    Presently Held (other than that of
                                       Period         Term as       Director); Business Experience During
                                       Served as      Director      Past Five Years (with Company unless
Name of Director              Age      Director       Expires       otherwise noted)
----------------              ---      --------       -------       ---------------------------------------
<S>                           <C>      <C>            <C>           <C>
Barbara L. Collins ......     53       2004-          2009          Member of Compensation Committee,
                                       Present                      Nominating Committee  and Audit Committee;
                                                                    President and CEO of The Whistling Elk,
                                                                    Chester, NJ, the principal business of
                                                                    which is home furnishing and interior
                                                                    decorating, 1990 to present; Vice President
                                                                    of Human Resources of Van Heusen Retail
                                                                    Division of Phillips-Van Heusen
                                                                    Corporation, the principal business of
                                                                    which is retail apparel, 1986 to 1990.

Edward E. David, Jr. ....     82       2005-          2009          Member of the Audit Committee, Nominating
                                       Present                      Committee, and Compensation Committee;
                                                                    President, EED, Inc. the principal business
                                                                    of which is advising industry, government
                                                                    and universities on technology, research
                                                                    and innovation management, 1977 to present;
                                                                    Affiliate of The Washington Advisory Group,
                                                                    2004 to present, the principal business of
                                                                    which is providing strategic counsel and
                                                                    management advice;
                                                                    Principal and Vice President, Treasurer,
                                                                    The Washington Advisory Group, 1997 to
                                                                    2004; President, Exxon Research and
                                                                    Engineering, the principal business of
                                                                    which is research, development, engineering
                                                                    and technical service for Exxon
                                                                    Corporation, 1977 to 1985; Executive Vice
                                                                    President R&D and Planning, Gould, Inc.
                                                                    1973 to 1977; Science Advisor to the
                                                                    President of the United States, 1970-1973;
                                                                    Executive Director, Research, Bell
                                                                    Telephone Laboratories, 1950-1970; Life
                                                                    Member MIT Corporation, Member of Executive
                                                                    Committee, 1974 to Present.
</TABLE>


                                       30
<PAGE>

<TABLE>
<CAPTION>
                                                                    Positions and Offices with Company
                                                                    Presently Held (other than that of
                                       Period         Term as       Director); Business Experience During
                                       Served as      Director      Past Five Years (with Company unless
Name of Director              Age      Director       Expires       otherwise noted)
----------------              ---      --------       -------       ---------------------------------------
<S>                           <C>      <C>            <C>           <C>
Paul H. Einhorn .........     91       2004-          2008          Chairman of Audit Committee; Management
                                       Present                      Consultant - CPA, 1985 to present;
                                                                    Director, Vice Chairman of Board and Member
                                                                    of Executive Committee, Valley National
                                                                    Bank, Passaic, NJ, 1968 to 1985; President
                                                                    and CEO, Universal Manufacturing
                                                                    Corporation, the principal business of
                                                                    which was manufacturing of fluorescent
                                                                    lighting components, 1968 to 1986.

Erwin M. Ganz ...........     77       1976-          2007          Treasurer & Assistant Secretary, January
                                       Present                      2006 to Present, Member of Executive
                                                                    Committee; Consultant for the Company, 1994
                                                                    to 2005; Executive Vice
                                                                    President-Industrial Operations, 1975 to
                                                                    1993; Chief Financial Officer, 1987 to 1993.

I. Leo Motiuk ...........     61       1999-          2008          Member of Audit Committee; Counsel, Windels
                                       Present                      Marx Lane & Mittendorf, LLP, Attorneys at
                                                                    Law, New Brunswick, NJ; Attorney, 2004 to
                                                                    present; Former partner in Shanley Fisher,
                                                                    P.C., Attorneys at Law, Morristown, NJ,
                                                                    1990 to 1999.

Gerard J. Quinnan .......     78       1996-          2009          Member of Compensation Committee, Executive
                                       Present                      Committee and Nominating  Committee;
                                                                    Consultant for the Company, 1990 to
                                                                    present, Vice President-General Manager of
                                                                    Ronson Consumer Products Corporation, 1981
                                                                    to 1990.

Justin P. Walder ........     71       1972-          2007          Secretary; Assistant Corporation Counsel;
                                       Present                      Member of Executive Committee; Principal in
                                                                    Walder, Hayden & Brogan, P.A., Attorneys at
                                                                    Law, Roseland, NJ.
</TABLE>

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


                                       31
<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, 2007:

<TABLE>
<CAPTION>
                                                         Positions and Offices
                                    Period Served        with Company;
Name                       Age      as Officer           Family Relationships
----                       ---      ----------           --------------------
<S>                        <C>      <C>                  <C>
Louis V. Aronson II ....   84       1953 - Present       President & Chief Executive
                                                         Officer; Chairman of the
                                                         Executive Committee; Director.

Erwin M. Ganz ..........   77       2006- Present        Treasurer & Assistant
                                                         Secretary; Director;
                                                         No family relationship

Daryl K. Holcomb .......   56       2006 - Present       Vice President, Chief
                                                         Financial Officer & Controller
                                    1996 - 2005          Vice President, Chief
                                                         Financial Officer, Controller
                                                         & Treasurer;
                                    1993 - 1996          Chief Financial Officer,
                                                         Controller & Treasurer;
                                    1988 - 1993          Controller & Treasurer;
                                                         No family relationship.

Justin P. Walder .......   71       1989 - Present       Secretary;
                                    1972 - Present       Assistant Corporation Counsel;
                                                         Director;
                                                         No family relationship.
</TABLE>

      Messrs. L.V. Aronson and Holcomb have been employed by the Company in an
executive capacity for at least the five-year period immediately preceding the
date hereof. Mr. Walder has been Secretary, Assistant Corporation Counsel and
Director of the Company and a principal in Walder, Hayden & Brogan, P.A.,
Attorneys at Law, for at least the five-year period preceding the date hereof.
Mr. Ganz has been a consultant to the Company and others from 1994 to 2005. Mr.
Ganz was Executive Vice President - Industrial Operations for the Company from
1975 to 1993.

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

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

(d) Code of ethics.

      The Company has adopted a code of ethics entitled, Standards of Integrity,
applicable to it and all its subsidiaries. The Standards of Integrity are an
integral part of the Company's business conduct compliance program and embody
the commitment of the Company and its subsidiaries to conduct operations in
accordance with the highest legal and ethical standards. A copy of the Standards
of Integrity


                                       32
<PAGE>

may be obtained without charge upon written request to: Investor Relations,
Ronson Corporation, P.O. Box 6707, Somerset, NJ 08875-6707.

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

      None.

(f) Audit Committee

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

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

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

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

COMPENSATION DISCUSSION AND ANALYSIS

      The Compensation Committee is responsible for making recommendations to
the Board regarding the executive compensation program.

      The program covers the named executive officers, all other executive
officers and other key employees. The program has three principal components:
base salary, annual cash incentives under the Company's Management Incentive
Plan ("MIP"), and stock options under the Company's Incentive Stock Option Plans
("ISO Plans"). Mr. L.V. Aronson's base salary is determined by the terms of his
employment contract dated November 24, 2003, which became effective on January
1, 2005, except for the reductions which have been offered and accepted from
time to time by Mr. L.V. Aronson. The employment contract dated November 24,
2003, was preceded by an employment contract dated September 21, 1978, amended
from time to time through September 19, 2001. The expiration date of the prior
contract, as amended, was December 31, 2004. The amendments to Mr. L.V.
Aronson's prior employment contract and the reductions offered by him and
accepted from time to time by the Company have been reviewed and approved by the
Compensation Committee and the Board.

      Mr. L.V. Aronson's employment contract provides for an increase in his
base salary of 3.5% on January 1 of each year of the contract, subject to the
Company reporting operating earnings in the year prior to the increase. Mr. L.V.
Aronson waived the 3.5% increase due under the terms of the employment contract
on each of January 1, 2005, 2006, and 2007. In addition, Mr. Aronson, along with
several other employees and consultants with earnings over $100,000, accepted a
7% reduction in base salary on October 1, 2005.


                                       33
<PAGE>

The Compensation Committee and the Board also reviewed and approved the salaries
of all of the other executive officers. Prior to the beginning of the fiscal
year, the Compensation Committee and the Board reviewed and approved which
employees participate in the Company's MIP and the criteria which will determine
the cash awards under the plan to the participants after the close of the fiscal
year. The Compensation Committee and the Board also reviewed and approved all
earned awards under the Company's ISO Plans.

      The base salaries are intended to meet the requirements of the employment
contract in effect for Mr. L.V. Aronson and to fairly compensate all the
officers of the Company for the effective exercise of their responsibilities,
their management of the business functions for which they are responsible, their
extended period of service to the Company and their dedication and diligence in
carrying out their responsibilities for the Company and its subsidiaries. In
2006 and prior years, the Compensation Committee and the Board, after review,
have approved increases to the other executive officers.

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

      The stock options granted under the Company's ISO Plans are designed to
create a proprietary interest in the Company among its executive officers and
other key employees and reward these executive officers and other key employees
directly for appreciation in the long-term price of the Company's common stock.
The ISO Plans directly link the compensation of executive officers and other key
employees to gains by the stockholders and encourage the executive officers,
directors, and other key employees to adopt a strong stockholder orientation in
their work. In 2006 no options were granted.

COMPENSATION COMMITTEE REPORT

      The Compensation Committee has reviewed and discussed the above
Compensation Discussion and Analysis with management, and, based on the review
and discussions, has recommended to the Board of Directors that the Compensation
Discussion and Analysis be included in the Company's 2006 annual report on Form
10-K.

Compensation Committee:
       Barbara L. Collins
       Edward E. David, Jr.
       Gerard J. Quinnan

2006 SUMMARY COMPENSATION TABLE

      The Summary Compensation Table presents compensation information for the
years ended December 31, 2006, 2005, and 2004, for the Chief Executive Officer,
Chief


                                       34
<PAGE>

Financial Officer, and the other executive officer of the Company whose total
compensation exceeded $100,000.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                       Incentive
                                                       Non-Equity
                                                      Compensation       All Other
    Name and Principal                    Salary          Plan          Compensation
         Position              Year        ($)           ($)(1)          ($) (2)(3)          Total
--------------------------    ------    ----------   --------------    ---------------   -------------
<S>                            <C>       <C>             <C>               <C>            <C>
Louis V. Aronson II            2006      $572,991        $53,040           $82,154        $708,185(4)
  President & Chief            2005       605,337         34,160            85,968         725,465
  Executive Officer            2004       616,120         54,484            84,717         755,321

Daryl K. Holcomb               2006      $158,100        $19,159           $11,698        $188,957
  Vice President,              2005       167,025         12,797            12,015         191,837
  Chief Financial              2004       165,000         20,020            13,079         198,099
  Officer & Controller

Erwin M. Ganz (5)              2006      $ 88,350        $21,400           $20,965        $130,715
  Treasurer and                2005            --             --           151,670 (6)     151,670
  Assistant Secretary          2004            --             --           123,680 (6)     123,680
</TABLE>

Footnotes
---------

      1)    The non-equity incentive compensation plan - management incentive
            plan ("MIP") results from the attainment by the Company's operating
            subsidiaries of certain levels of net sales and profits before
            taxes.

      2)    In 2006, All Other Compensation included perquisites and other
            personal benefits (Mr. L.V. Aronson, $34,176; Mr. Holcomb, $6,506
            and Mr. Ganz, $2,755), matching credits by the Company under its
            Employee's Savings Plan (Mr. L.V. Aronson, $4,400, Mr. Holcomb,
            $3,418, and Mr. Ganz $2,127), and life insurance premiums (Mr. L.V.
            Aronson, $43,579, Mr. Holcomb, $1,774, and Mr. Ganz, $16,083).

      3)    The types of perquisites and other personal benefits provided to the
            named executive officers include personal use of Company-owned
            autos, long-term care insurance for Mr. L.V. Aronson and Mr.
            Holcomb, and an expense allowance for Mr. Aronson (that was
            terminated on September 30, 2006 at Mr. L.V. Aronson's request).

      4)    The total compensation in 2006 for Mr. L.V. Aronson would have been
            reduced to $609,014 on the basis that the total compensation
            reflected the reduction of deferred vacation pay of $99,171, waived
            by Mr. L.V. Aronson in the third quarter of 2006.

      5)    Mr. Ganz was appointed Treasurer and Assistant Secretary on January
            1, 2006.

      6)    The All Other Compensation for Mr. Ganz in 2005 and 2004 included
            consulting fees, director's fees, and, in 2005, an inticement
            payment of $18,000 to rejoin the Company as Treasurer and Assistant
            Secretary

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

2006 GRANTS OF PLAN BASED AWARDS
--------------------------------

      No stock options were granted under the Company's stock option plans.


                                       35
<PAGE>

OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2006
----------------------------------------------

<TABLE>
<CAPTION>
                                Number of Securities           Option            Option
                               Underlying Unexercised         Exercise         Expiration
       Name                    Options (#) Exercisable        Price ($)           Date
------------------------    ----------------------------    -------------    --------------
<S>                                    <C>                      <C>              <C>
Erwin M. Ganz                          7,258                    $.891            9/12/07
</TABLE>

2006 OPTION EXERCISES
---------------------

                                Number of Securities
                                Acquired in Exercise         Value Realized
Name                                  (#) (1)                    (2) ($)
------------------------    ---------------------------    ------------------

Daryl K. Holcomb                      23,612                     $27,883

Footnotes
---------

      (1)   The number of shares acquired on exercise has been adjusted for the
            5% common stock dividend declared February 1, 2007.

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

2006 PENSION BENEFITS
---------------------

<TABLE>
<CAPTION>
                                                           Number of
                                                             Years            Present            Payments
                                                           Credited          Value of             During
                                                            Service         Accumulated            2006
       Name (1)                    Plan Name                  (#)            Benefit ($)            ($)
------------------------    -------------------------    -------------    ----------------    ---------------
<S>                         <C>                              <C>              <C>                 <C>
Erwin M. Ganz               Ronson Corporation               24 (2)           $377,416             $48,605
                            Retirement Plan
</TABLE>

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

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

2006 NON-QUALIFIED DEFERRED COMPENSATION
----------------------------------------

<TABLE>
<CAPTION>
                                Executive          Registrant          Aggregate         Aggregate           Aggregate
                              Contributions       Contributions       Earnings in       Withdrawals/        Balance at
                                 in 2006             in 2006             2006          Distributions      December 31, 2006
      Name                         ($)                 ($)                ($)                ($)                ($)
------------------------    -----------------   -----------------   ---------------   -----------------   ---------------
<S>                                  <C>                 <C>                <C>               <C>            <C>
Louis V. Aronson II                  --                  --                 --                -- (2)         $26,447 (1)
</TABLE>

Footnotes
---------

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

      (2)   In the third quarter of 2006, Mr. L.V. Aronson voluntarily waived
            earned vacation time, amounting to $99,171 that had not been taken
            by Mr. Aronson.


                                       36
<PAGE>

COMPENSATION OF DIRECTORS

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

2006 DIRECTOR COMPENSATION
--------------------------

<TABLE>
<CAPTION>
                              Fees Earned or            All Other
Name                          Paid in Cash ($)       Compensation ($)        Total ($)
-------------------------   --------------------   --------------------   --------------
<S>                               <C>                    <C>                  <C>
Robert A. Aronson                $14,950                $    --              $14,950
Barbara L. Collins                19,100                     --               19,100
Edward E. David, Jr.              16,100                 10,000 (1)           26,100
Paul H. Einhorn                   18,200                     --               18,200
I. Leo Motiuk                     16,850                     --               16,850
Gerard J. Quinnan                 21,800                 21,367 (2)           43,167
Justin P. Walder                      --                 89,243 (3)           89,243
</TABLE>

Footnotes
---------

      (1)   Mr. David received fees for consulting services which ended on
            September 30, 2006.

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

      (3)   Mr. Walder received compensation in 2006 as the Company's Secretary
            and Assistant Corporation Counsel as follows: salary $83,700,
            matching credits by the Company under its Employee's Savings Plan,
            $1,674, and life insurance premiums, $3,869.

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

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

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

      None.


                                       37
<PAGE>

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

Equity Compensation Plan Information

--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                   Number of
                                                                                   Securities
                                                                               Remaining Available
                                     Number of                                 For Future Issuance
                                  Securities to Be                                under Equity
                                    Issued upon         Weighted-average       Compensation Plans
                                    Exercise of         Exercise Price of         (excluding
                                    Outstanding            Outstanding             Securities
                                 Options, Warrants      Options, Warrants      Reflected in Column
       Plan Category                 and Rights            and Rights                 (a) )
----------------------------------------------------------------------------------------------------
                                          (a)                  (b)                    (c)
----------------------------------------------------------------------------------------------------
<S>                                     <C>                  <C>                     <C>
Equity compensation                     32,504               $ .891                  87,714
plans approved by
security holders

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

Total                                   32,504               $ .891                  87,714
</TABLE>

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

(a) Security ownership of certain beneficial owners.

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

<TABLE>
<CAPTION>
           Name and Address
             of Beneficial                   Title of        Beneficially         Percent of
                 Owner                        Class             Owned               Class
---------------------------------------    ------------    -----------------    --------------
<S>                                           <C>            <C>                  <C>
Louis V. Aronson II                           Common         1,340,898 (1)        27.85% (1)
Campus Drive, P.O. Box 6707
Somerset, New Jersey  08875

Carl W. Dinger III                            Common           561,983 (2)        11.67% (2)
P.O. Box 150
Green Village, New Jersey  07935

Steel Partners II, L.P.                       Common           460,035 (3)         9.55% (3)
590 Madison Avenue, 32nd Floor
New York, New York  10022
</TABLE>

(1)   The Ronson Corporation Retirement Plan ("Retirement Plan") is the
      beneficial owner of 229,555 common shares. The shares held by the
      Retirement Plan are voted by the Retirement Plan's trustees, Messrs. L.V.
      Aronson and Ganz. If the shares held by the Retirement Plan were included
      in Mr. L.V. Aronson's beneficial ownership, Mr. L.V. Aronson's beneficial
      ownership would be increased to 1,570,453 shares, or 32.61% of the class.
      The Retirement Plan's holdings


                                       38
<PAGE>

      were reported in 1988 on Schedule 13G, as amended September 22, 1997,
      adjusted for the 5% common stock dividends declared through February 1,
      2007.

(2)   561,983 shares of common stock owned directly, adjusted for the 5% common
      stock dividends declared through February 1, 2007. This information was
      from a Form 4 filed by Mr. Dinger on March 28, 2005. Mr. Dinger has
      provided the Company's Board of Directors an irrevocable proxy to vote
      these shares. (Refer to "Transactions with Management and Others" in Item
      13 below.)

(3)   460,035 shares of common stock owned by Steel Partners II, L.P. Steel
      Partners, L.L.C., the general partner of Steel Partners II, L.P., and Mr.
      Warren G. Lichtenstein, the sole executive officer and managing member of
      Steel Partners, L.L.C., are also beneficial owners of the shares. This
      information was obtained from a Schedule 13D filed with the SEC on January
      26, 2004, by Steel Partners II, L.P., and Mr. Lichtenstein, adjusted for
      the 5% common stock dividends declared through February 1, 2007.

(b) Security ownership of management.

      The following table shows the number of shares of common stock
beneficially owned by each director, each named executive officer, and by all
directors and officers as a group as of March 22, 2007, and the percentage of
the total shares of common stock outstanding on March 22, 2007, 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
          Identity of Group                  Beneficial Ownership (2)           Percent of Class
-------------------------------------     ------------------------------     ----------------------
<S>                                                 <C>                               <C>
Louis V. Aronson II                                 1,340,898 (3)                     27.85%
Robert A. Aronson                                      16,910                            (1)
Barbara L. Collins                                      1,157                            (1)
Edward E. David, Jr.                                      551                            (1)
Paul H. Einhorn                                        10,849                            (1)
Erwin M. Ganz                                          51,475 (3)                      1.07%
I. Leo Motiuk                                          10,888                            (1)
Gerard J. Quinnan                                      13,385                            (1)
Justin P. Walder                                       80,054                          1.66%
Daryl K. Holcomb                                       64,533                          1.34%

All directors and officers as
a group (ten (10) individuals
including those named above)                        1,590,700                         32.90%
</TABLE>

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

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

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

       Robert A. Aronson                                           2,909
       Erwin M. Ganz                                               7,258
       Justin P. Walder                                            9,573

       All directors and officers as a group (ten (10)
       individuals including those named above)                   19,740


                                       39
<PAGE>

(3)   Does not include 229,555 shares of issued common stock owned by the
      Retirement Plan. The shares held by the Retirement Plan are voted by the
      Retirement Plan's trustees, Messrs. L.V. Aronson and Ganz. If the shares
      held by the Retirement Plan were included in Mr. L.V. Aronson's beneficial
      ownership, Mr. L.V. Aronson's beneficial ownership would be 1,570,453
      shares, or 32.61% of the class; however, if the shares held by the
      Retirement Plan were not included in Mr. L.V. Aronson's beneficial
      ownership, but instead were included in Mr. Ganz's beneficial ownership,
      Mr. Ganz's beneficial ownership would be 281,030 shares, or 5.83% of the
      class.

(c) Changes in control.

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

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

(a) Transactions with management and others.

      In October 1998 the Company entered into a consulting agreement with Mr.
Carl W. Dinger III, a greater than 5% shareholder of the Company. The agreement
provided that Mr. Dinger perform certain consulting services for the Company for
a period ending on April 7, 2000. The Company and Mr. Dinger entered into a
second consulting agreement effective upon the expiration date of the original
agreement. This agreement provided that Mr. Dinger continue to perform
consulting services for the Company through April 7, 2004 at a fee of $7,000 per
month. During 2004 the agreement was extended on a month-to-month basis through
July 7, 2004. A new consulting agreement was effective on July 8, 2004, which
provides that Mr. Dinger continue to perform consulting services at a fee of
$7,000 per month for the Company for a period of thirty-six months through July
7, 2007. On January 1, 2006, Mr. Dinger's consulting fee was reduced by 7% from
$7,000 per month to $6,510 per month. Mr. Dinger was compensated $78,120,
$84,000, and $84,000 during each of the years ended December 31, 2006, 2005 and
2004 under the agreements.

      In October 1998 Mr. Dinger granted an option to the Company to purchase
the 186,166 shares of the Company's common stock then held by Mr. Dinger. The
option was for a period of 18 months expiring on April 7, 2000. In 2000 Mr.
Dinger granted a new option to the Company, to purchase the shares of the
Company's common stock held by Mr. Dinger. The option was for a period of 48
months, expiring April 7, 2004. The cost of the option was $4,000 per month for
the period of the option or until exercised. In March 2000 Mr. Dinger purchased
304,877 shares of newly issued restricted common stock of the Company at a price
of $1.87 per share with a cash payment of $569,000 to the Company. During 2004
the option agreement was extended on a month-to-month basis through July 7,
2004. A new option agreement was effective on July 8, 2004. The new option
granted by Mr. Dinger is for a period of 36 months, expiring on July 7, 2007.
The exercise price of the option is $5.62 per share for the 561,983 shares now
held by Mr. Dinger. The cost of the option is $4,000 per month for the period of
the option or until exercised. As part of each of the option agreements, Mr.
Dinger has granted the Board of Directors of the Company an irrevocable proxy to
vote the optioned shares during the term of the option. The Company expended
$48,000 for the options during each of the years ended December 31, 2006, 2005
and 2004, which were charged to Additional Paid-in Capital.

(b) Certain business relationships.

      None.

(c) Indebtedness of management.

      None.


                                       40
<PAGE>

(d) Transactions with promoters.

      Not applicable.

(e) Director independence.

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

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

      The fees billed for services provided to the Company by Demetrius &
Company, L.L.C., for the years ended December 31, 2006 and 2005, were as
follows:

                                                               2006         2005
                                                               ----         ----
Audit fees                                                  $98,325      $83,150
Audit-related fees                                               --           --
Tax fees, principally related to tax return
   preparation                                               15,427       16,000
All other fees                                                   --           --

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

                                     PART IV
                                     -------

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

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

      (3) Listing of exhibits, as applicable:

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

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

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

      (10) Material contracts.

      On July 31, 2006, the Company, RCPC, Ronson-Canada, and Ronson Aviation
entered into a financing agreement (the "Financing Agreement") with CIT. The
financing facility totals $3,945,000 and is composed of a revolving line of
credit of $3,000,000 and two term loans in the amounts of $195,000 and $750,000.


                                       41
<PAGE>

The Financing Agreement and term notes are attached as Exhibits 10.1, 10.2, and
10.3 to a Form 8-K dated July 31, 2006.

      In conjunction with the new CIT term loan in the amount of $750,000, Mr.
L.V. Aronson provided a secured limited personal guarantee of $250,000 to CIT.
Related to Mr. L.V. Aronson's $250,000 personal limited guarantee, the Company
and Mr. Aronson entered into a Contribution Agreement which provides that the
Company is responsible for payments by Mr. Aronson under the guarantee and for
his costs in arranging for the security. The Contribution Agreement is attached
as Exhibit 10.4 to the Form 8-K dated July 31, 2006.

     On September 27, 2006, RCPC entered into a mortgage loan agreement with
North Fork for $2,200,000. The mortgage loan is secured by a first mortgage on
the property of RCPC at 3 and 6 Ronson Road, Woodbridge, NJ, and the guarantees
of the Company and Ronson Aviation. The Mortgage and the Mortgage Promissory
Note were attached as Exhibits 10.1 and 10.2 to a Form 8-K dated September 27,
2006.

     For further information on the Company's loan agreements, reference is made
to Notes 3 and 4 of the Notes to Consolidated Financial Statements contained in
the Company's financial statements for the year ended December 31, 2006, filed
with this report pursuant to Item 8, which is incorporated herein by reference.

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

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

     (20) Other documents or statements to security holders. The Ronson
Corporation Notice of Meeting of Stockholders held on November 16, 2006, and
Proxy Statement were filed on October 18, 2006, and 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:

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

Domestic

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

Foreign

Ronson Corporation of Canada Ltd.             Canada

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

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


                                       42
<PAGE>

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

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

      (99) Additional exhibits.

            (a) None.


                                       43
<PAGE>

                                   SIGNATURES

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

                                     RONSON CORPORATION


Dated:  March 30, 2007         By:   /s/ Louis V. Aronson II
                                    --------------------------------------------
                                     Louis V. Aronson II, President &
                                     Chief Executive Officer and Director


Dated:  March 30, 2007         By:   /s/ Daryl K. Holcomb
                                    --------------------------------------------
                                     Daryl K. Holcomb, Vice President,
                                     Chief Financial Officer & Controller


Dated:  March 30, 2007         By:   /s/ Erwin M. Ganz
                                    --------------------------------------------
                                     Erwin M. Ganz, Treasurer,
                                     Assistant Secretary and Director


Dated:  March 30, 2007         By:   /s/ Justin P. Walder
                                    --------------------------------------------
                                     Justin P. Walder, Secretary and Director


Dated:  March 30, 2007         By:   /s/ Robert A. Aronson
                                    --------------------------------------------
                                     Robert A. Aronson, Director


Dated:  March 30, 2007         By:   /s/ Barbara L. Collins
                                    --------------------------------------------
                                     Barbara L. Collins, Director


Dated:  March 30, 2007         By:   /s/ Edward E. David
                                    --------------------------------------------
                                     Edward E. David, Director


Dated:  March 30, 2007         By:   /s/ Paul H. Einhorn
                                    --------------------------------------------
                                     Paul H. Einhorn, Director


Dated:  March 30, 2007         By:   /s/ I. Leo Motiuk
                                    --------------------------------------------
                                     I. Leo Motiuk, Director


Dated:  March 30, 2007         By:   /s/ Gerard J. Quinnan
                                    --------------------------------------------
                                     Gerard J. Quinnan, Director


                                       44
<PAGE>

                           ANNUAL REPORT ON FORM 10-K

                                     ITEM 8

                              FINANCIAL STATEMENTS

                          YEAR ENDED DECEMBER 31, 2006

                               RONSON CORPORATION

                              SOMERSET, NEW JERSEY


                                       45
<PAGE>

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

Dollars in thousands (except per share data)

<TABLE>
<CAPTION>
                                          2006        2005         2004        2003        2002
                                          ----        ----         ----        ----        ----
<S>                                    <C>         <C>          <C>         <C>         <C>
Net sales                              $29,244     $26,563      $28,483     $26,740     $23,601

Earnings (loss) from continuing
   operations                          $    67     $  (333)     $   193     $   703     $    42

Total assets                           $14,720     $12,654      $13,942     $12,603     $12,888

Long-term obligations                  $ 4,020     $ 2,717      $ 2,898     $ 3,317     $ 4,321

Per common share (1,2):
   Earnings (loss) from continuing
      operations:
      Basic                            $  0.01     $ (0.07)     $  0.04     $  0.16     $  0.01
      Diluted                          $  0.01     $ (0.07)     $  0.04     $  0.15     $  0.01
   Cash dividends declared (3)         $    --     $  0.02      $  0.03     $    --     $    --
</TABLE>

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

(2) A 5% stock dividend on the Company's outstanding common stock was declared
on February 1, 2007, payable on April 16, 2007. Previously, 5% stock dividends
on the Company's outstanding common stock were issued on April 15, 2006, 2005,
2004, 2003, and 2002.

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


                                       46
<PAGE>

RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES
LIST OF FINANCIAL STATEMENTS

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

Consolidated Balance Sheets - December 31, 2006 and 2005

Consolidated Statements of Operations - Years Ended
       December 31, 2006, 2005, and 2004

Consolidated Statements of Changes in Stockholders' Equity - Years Ended
       December 31, 2006, 2005, and 2004

Consolidated Statements of Cash Flows - Years Ended
       December 31, 2006, 2005, and 2004

Notes to Consolidated Financial Statements


                                       47
<PAGE>

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

To the Board of Directors and
Stockholders of Ronson Corporation

We have audited the accompanying consolidated balance sheets of Ronson
Corporation and subsidiaries as of December 31, 2006 and 2005, and the related
consolidated statements of operations, changes in stockholders' equity and cash
flows for each of the years in the three-year period ended December 31, 2006.
These financial statements are the responsibility of the company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Ronson Corporation
and subsidiaries as of December 31, 2006 and 2005, and the results of their
operations and their cash flows for each of the years in the three-year period
ended December 31, 2006 in conformity with accounting principles generally
accepted in the United States of America.

DEMETRIUS & COMPANY, L.L.C.

Wayne, New Jersey
March 30, 2007


                                       48
<PAGE>

RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES

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


                                     ASSETS
                                     ------
                                                                December 31,
                                                             -----------------
                                                               2006      2005
                                                               ----      ----

CURRENT ASSETS:
Cash and cash equivalents ................................   $   294   $   414
Accounts receivable, less allowances for doubtful accounts
   of : 2006, $102 and 2005, $107 ........................     1,876     1,832
Inventories:
   Finished goods ........................................     1,820     1,625
   Work in process .......................................        15        22
   Raw materials .........................................       960       908
                                                             -------   -------
                                                               2,795     2,555


Other current assets .....................................     1,231     1,072
                                                             -------   -------
                  TOTAL CURRENT ASSETS ...................     6,196     5,873


PROPERTY, PLANT AND EQUIPMENT:
Land .....................................................         6         6
Buildings and improvements ...............................     5,479     5,374
Machinery and equipment ..................................     6,718     6,515
Construction in progress .................................     2,454       555
                                                             -------   -------
                                                              14,657    12,450

Less accumulated depreciation and amortization ...........     8,885     8,335
                                                             -------   -------
                                                               5,772     4,115


OTHER ASSETS .............................................     2,752     2,666
                                                             -------   -------
                                                             $14,720   $12,654
                                                             =======   =======

                 See notes to consolidated financial statements.


                                       49
<PAGE>

RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES

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

<table>
<caption>
                           LIABILITIES AND STOCKHOLDERS' EQUITY
                           ------------------------------------

                                                                      December 31,
                                                             ----------------------------
                                                                 2006            2005
                                                                 ----            ----

                                                                 <c>             <c>

CURRENT LIABILITIES:
Short-term debt ..........................................   $      2,143    $      1,500
Current portion of long-term debt ........................            285             155
Current portion of lease obligations .....................            276             252
Accounts payable .........................................          2,360           2,134
Accrued expenses .........................................          2,010           2,592
                                                             ------------    ------------
                  TOTAL CURRENT LIABILITIES ..............          7,074           6,633

LONG-TERM DEBT ...........................................          3,083           1,550
LONG-TERM LEASE OBLIGATIONS ..............................            686             918
OTHER LONG-TERM LIABILITIES ..............................            251             249

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

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

Common stock, par value $1
                                       2006        2005
                                       ----        ----
   Authorized shares ............   11,848,106  11,848,106
   Reserved shares ..............       32,504     93,095
   Issued (including treasury) ..    4,900,014   4,846,792           4,900          4,847
Additional paid-in capital ...............................         29,878          29,932
Accumulated deficit ......................................        (28,266)        (28,333)
Accumulated other comprehensive loss .....................         (1,289)         (1,545)
                                                             ------------    ------------
                                                                    5,223          4,901
Less cost of treasury shares:
    2006 and 2005, 84,799 ................................          1,597           1,597
                                                             ------------    ------------
                  TOTAL STOCKHOLDERS' EQUITY .............          3,626           3,304
                                                             ------------    ------------
                                                             $     14,720   $     12,654
                                                             ============   ============
</table>

                 See notes to consolidated financial statements.

                                       50

<PAGE>

RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES

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

<TABLE>
<CAPTION>
                                                                           Year Ended December 31,
                                                                      ---------------------------------
                                                                        2006        2005         2004
                                                                        ----        ----         ----
<S>                                                                     <C>         <C>          <C>
NET SALES ........................................................    $ 29,244    $ 26,563     $ 28,483
                                                                      --------    --------     --------

Cost and expenses:
    Cost of sales ................................................      19,807      17,455       18,884
    Selling, shipping and advertising ............................       3,714       3,583        3,526
    General and administrative ...................................       4,014       3,899        4,088
    Depreciation and amortization ................................         616         738          772
                                                                      --------    --------     --------
                                                                        28,151      25,675       27,270
                                                                      --------    --------     --------
EARNINGS FROM CONTINUING OPERATIONS
    BEFORE INTEREST AND OTHER ITEMS ..............................       1,093         888        1,213
                                                                      --------    --------     --------

Other expense:
    Interest expense .............................................         476         473          367
    Nonrecurring loss - sale of charter aircraft & business ......          --         591           --
    Other-net ....................................................         328         326          342
                                                                      --------    --------     --------
                                                                           804       1,390          709
                                                                      --------    --------     --------
EARNINGS (LOSS) FROM CONTINUING OPERATIONS
    BEFORE INCOME TAXES ..........................................         289        (502)         504

Income tax provisions (benefit) ..................................         222        (169)         311
                                                                      --------    --------     --------

NET EARNINGS (LOSS) ..............................................    $     67    $   (333)    $    193
                                                                      ========    ========     ========

NET EARNINGS (LOSS) PER COMMON SHARE:

Basic ............................................................    $   0.01    $  (0.07)    $   0.04
                                                                      ========    ========     ========

Diluted ..........................................................    $   0.01    $  (0.07)    $   0.04
                                                                      ========    ========     ========
</TABLE>

See notes to consolidated financial statements.


                                       51
<PAGE>

RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
----------------------------------------------------------
For the Years Ended December 31, 2006, 2005 and 2004
Dollars in thousands

<TABLE>
<CAPTION>
                                         12%
                                      Cumulative                                     Accumulated                            Compre-
                                     Convertible            Additional                  Other      Treasury                 hensive
                                      Preferred    Common    Paid-in   Accumulated  Comprehensive   Stock                   Income
                                        Stock      Stock     Capital     Deficit        Loss       (at cost)     Total      (Loss)
                                      ----------  --------  ---------- -----------  -------------  ---------   --------    --------
<S>                                    <C>        <C>        <C>         <C>          <C>          <C>         <C>         <C>
Balance at December 31, 2003           $     --   $  4,775   $ 30,058    $(27,965)    $ (1,796)    $ (1,597)   $  3,475
                                       --------   --------   --------    --------     --------     --------    --------

Net earnings - 2004                                                           193                                   193    $    193
                                                                                                                           --------
Dividends                                                                    (125)                                 (125)
Translation adjustment, net of tax                                                                                               63
Other comprehensive loss on swap                                                                                                (10)
Pensions, net of tax                                                                                                            302
                                                                                                                           --------
Other comprehensive income                                                                 355                      355         355
                                                                                                                           --------
Comprehensive income                                                                                                       $    548
                                                                                                                           ========
Fair value of stock options granted,
     net of tax                                                     3                                                 3
Shares issued for:
     Stock options exercised                            53         13                                                66
     Preferred shares converted                         19        (19)                                               --
Preferred shares redeemed                                         (27)        (19)                                  (46)
Stock option purchased                                            (48)                                              (48)
                                       --------   --------   --------    --------     --------     --------    --------
Balance at December 31, 2004                 --      4,847     29,980     (27,916)      (1,441)      (1,597)      3,873
                                       --------   --------   --------    --------     --------     --------    --------

Net loss - 2005                                                              (333)                                 (333)   $   (333)
                                                                                                                           --------
Dividends                                                                     (84)                                  (84)
Translation adjustment, net of tax                                                                                               10
Other comprehensive gain on swap                                                                                                 23
Pensions, net of tax                                                                                                           (137)
                                                                                                                           --------
Other comprehensive  loss                                                                 (104)                    (104)       (104)
                                                                                                                           --------
Comprehensive loss                                                                                                         $   (437)
                                                                                                                           ========
Stock option purchased                                            (48)                                              (48)
                                       --------   --------   --------    --------     --------     --------    --------
Balance at December 31, 2005                 --      4,847     29,932     (28,333)      (1,545)      (1,597)      3,304
                                       --------   --------   --------    --------     --------     --------    --------

Net earnings - 2006                                                            67                                    67    $     67
                                                                                                                           --------
Translation adjustment, net of tax                                                                                              (48)
Other comprehensive loss on swap                                                                                                (13)
Pensions, net of tax                                                                                                            356
                                                                                                                           --------
Other comprehensive  income                                                                295                      295         295
                                                                                                                           --------
Comprehensive income                                                                                                       $    362
                                                                                                                           ========
Adjustment to initially apply FASB
 Statement No. 158, net of tax                                                             (39)                     (39)
Shares issued for:
     Stock options exercised                            53         (6)                                               47
Stock option purchased                                            (48)                                              (48)
                                       --------   --------   --------    --------     --------     --------    --------
Balance at December 31, 2006           $     --   $  4,900   $ 29,878    $(28,266)    $ (1,289)    $ (1,597)   $  3,626
                                       ========   ========   ========    ========     ========     ========    ========

<CAPTION>
                                                SHARE ACTIVITY
                                    --------------------------------------
                                        12%
                                    Cumulative
                                    Convertible
                                     Preferred      Common       Treasury
                                       Stock        Stock         Stock
                                    -----------   ----------    ----------
<S>                                     <C>        <C>              <C>
Balance at December 31, 2003            34,875     4,774,670        84,775
Shares issued for:
     Stock options exercised                          52,638
     Preferred shares converted        (14,553)       19,484            17
Preferred shares redeemed              (20,322)
                                    ----------    ----------    ----------
Balance at December 31, 2004                --     4,846,792        84,792
Treasury shares                                                          7
                                    ----------    ----------    ----------
Balance at December 31, 2005                --     4,846,792        84,799
Shares issued for:
     Stock options exercised                          53,222
                                    ----------    ----------    ----------
Balance at December 31, 2006                --     4,900,014        84,799
                                    ==========    ==========    ==========
</TABLE>

See notes to consolidated financial statements.


                                       52
<PAGE>

RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES

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

<TABLE>
<CAPTION>
                                                                             Year Ended December 31,
                                                                       ----------------------------------
                                                                         2006         2005         2004
                                                                         ----         ----         ----
<S>                                                                    <C>          <C>          <C>
Cash Flows from Operating Activities:
Net earnings (loss) ...............................................    $     67     $   (333)    $    193
Adjustments to reconcile net earnings (loss) to
    net cash provided by (used in) operating activities:
    Depreciation and amortization .................................         656          738          772
    Deferred income tax provisions (benefit) ......................         130         (235)         154
    Loss on disposal of assets ....................................          --           97           --
    Increase (decrease) in cash from changes in:
       Accounts receivable ........................................         (49)          49          293
       Inventories ................................................        (240)        (221)        (431)
       Other current assets .......................................        (185)         291         (148)
       Accounts payable ...........................................         231          343          183
       Accrued expenses ...........................................         129         (279)        (193)
       Other non-current assets and other long-term
         liabilities ..............................................        (221)        (108)         (23)
    Net change in pension-related accounts ........................        (398)        (507)        (264)
    Effect of exchange rate changes ...............................         (81)          10           63
    Discontinued operations .......................................          --           --           (5)
                                                                       --------     --------     --------
       Net cash provided by  (used in) operating activities .......          39         (155)         594
                                                                       --------     --------     --------

Cash Flows from Investing Activities:
Capital expenditures ..............................................      (2,185)        (597)        (687)
Proceeds from sale of property, plant & equipment .................          12        1,600           --
                                                                       --------     --------     --------
       Net cash provided by (used in) investing activities ........      (2,173)       1,003         (687)
                                                                       --------     --------     --------

Cash Flows from Financing Activities:
Proceeds from short-term debt .....................................       2,526          750        3,219
Proceeds from long-term debt ......................................       3,145           --           --
Proceeds from issuance of common stock ............................          47           --           65
Payments of long-term debt ........................................      (1,518)        (738)        (324)
Payments of long-term lease obligations ...........................        (255)        (224)         (86)
Payments of short-term debt .......................................      (1,883)        (689)      (2,627)
Payments of dividends .............................................          --          (84)        (125)
Redemption of preferred stock .....................................          --           --          (46)
Cost of stock option agreement ....................................         (48)         (48)         (48)
                                                                       --------     --------     --------
       Net cash provided by (used in) financing activities ........       2,014       (1,033)          28
                                                                       --------     --------     --------
Net decrease in cash and cash equivalents .........................        (120)        (185)         (65)

Cash and cash equivalents at beginning of year ....................         414          599          664
                                                                       --------     --------     --------
Cash and cash equivalents at end of year ..........................    $    294     $    414     $    599
                                                                       ========     ========     ========
</TABLE>

See notes to consolidated financial statements.


                                       53
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

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

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

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

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

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

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

      Property and Depreciation - Property, plant and equipment are carried at
cost and are depreciated over their estimated useful lives using the
straight-line method. Capitalized leases are amortized over their estimated
useful lives using the straight-line method. Leasehold improvements are
amortized over their estimated useful lives or the remaining lease terms,
whichever is shorter.

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

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


                                       54
<PAGE>

fair values due to the short-term maturity of these instruments. The Company's
term loans with CIT Group/Commercial Services, Inc. ("CIT") are at variable
interest rates and, therefore, their book values are considered representative
of their fair values.

      The Company's mortgage loan with North Fork Bank ("North Fork") has an
approximate fair market value of $2,216,000 at December 31, 2006 as compared to
its book value of $2,195,000. The book value of the Company's other long-term
debt is considered to approximate its fair value based on current market rates
and conditions (refer to Note 4).

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

      The Company's prior interest rate swap agreement had effectively modified
the Company's exposure to interest risk by converting a portion of the Company's
floating-rate long-term debt to a fixed rate. Based on criteria defined in SFAS
133, the interest rate swap was considered a cash flow hedge and was 100%
effective. The interest rate swap was marked to market in the balance sheet. The
mark-to-market value of the cash flow hedge was recorded in Other Non-current
Assets or Other Long-term Liabilities and the offsetting gains or losses in
Accumulated Other Comprehensive Loss.

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

      Declaration of 5% Common Stock Dividend - The Company's Board of Directors
on February 1, 2007, declared a 5% stock dividend on the Company's outstanding
common stock. The 5% stock dividend is payable on April 16, 2007, to
stockholders of record March 30, 2007. The 5% stock dividend will increase the
outstanding common shares of the Company by about 228,000 to about 4,815,000
shares.

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

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


                                       55
<PAGE>

      Research and Development Costs - Costs of research and new product
development are charged to operations as incurred and amounted to approximately
$376,000, $348,000, and $313,000, for the years ended December 31, 2006, 2005
and 2004, respectively.

      Shipping and Handling Costs - The Company records shipping and handling
costs within Selling, Shipping, and Advertising Expenses. Such costs amounted to
about $1,660,000, $1,659,000, and $1,595,000, for the years ended December 31,
2006, 2005, and 2004, respectively.

      Advertising Expenses - Costs of advertising are expensed as incurred and
amounted to approximately $202,000, $159,000, and $164,000, for the years ended
December 31, 2006, 2005 and 2004, respectively.

      Accrued Expenses - On December 31, 2006, Accrued Expenses included accrued
vacation pay and other compensation of $684,000. No other item amounted to
greater than 5% of total current liabilities. At December 31, 2006 and 2005,
Accrued Expenses included accrued expenses of discontinued operations of
$319,000 and $318,000, respectively.

      Other Current Assets - On December 31, 2006, Other Current Assets included
deferred income tax assets of $668,000. No other item amounted to greater than
5% of total current assets.

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

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

                                                 Year Ended December 31, 2006
                                                                       Per Share
                                               Earnings     Shares      Amount
                                               --------     ------      ------
                                                              (2)         (2)
BASIC ......................................    $   67       4,788      $ 0.01
   Effect of dilutive securities,
       stock options .......................        --          38
                                                ------      ------
DILUTED ....................................    $   67       4,826      $ 0.01
                                                ======      ======      ======

                                                 Year Ended December 31, 2005
                                                                       Per Share
                                                 Loss       Shares      Amount
                                                ------      ------      ------
                                                              (2)         (2)
BASIC ......................................    $ (333)      4,762      $(0.07)
   Effect of dilutive securities,
       stock options (1) ...................        --          --
                                                ------      ------
DILUTED ....................................    $ (333)      4,762      $(0.07)
                                                ======      ======      ======


                                       56
<PAGE>

                                                 Year Ended December 31, 2004
                                                                       Per Share
                                               Earnings     Shares      Amount
                                               --------     ------      ------
                                                              (2)         (2)
Net earnings ...............................    $  193
Less accrued dividends on
  preferred stock ..........................        (2)
                                                ------
   BASIC ...................................    $  191       4,722      $ 0.04
                                                ======      ======      ======
Effect of dilutive securities (1):
  Stock options ............................    $   --          74
  Cumulative convertible
   preferred stock .........................         2          19
                                                ------      ------
   DILUTED .................................    $  193       4,815      $ 0.04
                                                ======      ======      ======

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

      (2) Information as to the number of shares and per share amounts has been
retroactively adjusted to reflect the 5% stock dividend on common stock declared
February 1, 2007.

      At December 31, 2006, the Company had outstanding approximately 4,815,000
shares of common stock, after the 5% stock dividend declared on February 1,
2007.

Note 2. INCOME TAXES:

      At December 31, 2006, the Company had, for federal income tax purposes,
net operating loss carryforwards of approximately $3,816,000, expiring as
follows: $1,478,000 in 2010 to 2012; $1,379,000 in 2018 to 2020; and $959,000 in
2021 to 2026. The Company also had available federal and state alternative
minimum tax credit carryforwards of approximately $113,000.

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

                                                        Year Ended December 31,
                                                       2006      2005      2004
                                                       ----      ----      ----
Current:
   Federal .......................................    $  --     $  --     $  (4)
   State .........................................       20        38       152
   Foreign .......................................       72        28         9
                                                      -----     -----     -----
                                                         92        66       157
                                                      -----     -----     -----
Deferred:
   Federal .......................................       64      (212)      144
   State .........................................       60       (23)       10
   Foreign .......................................        6        --        --
                                                      -----     -----     -----
                                                        130      (235)      154
                                                      -----     -----     -----
Income tax expenses (benefits) net ...............    $ 222     $(169)    $ 311
                                                      =====     =====     =====

      Current income taxes in the years ended December 31, 2006, 2005, and 2004,
were presented net of credits of $17,000, $16,000, and $110,000, respectively,
arising from the utilization of available tax losses and loss carryforwards in
accordance with SFAS #109.


                                       57
<PAGE>

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

<TABLE>
<CAPTION>
                                                                 Year Ended December 31,
                                                                2006      2005      2004
                                                                ----      ----      ----
<S>                                                            <C>       <C>       <C>
Tax expense amount computed using statutory rate ..........    $  99     $(170)    $ 171
State taxes, net of federal benefit .......................        4        10       110
Operations outside the US .................................       11        (3)      (10)
Discontinued operations and other .........................      108        (6)       40
                                                               -----     -----     -----
  Income tax expenses (benefits) net ......................    $ 222     $(169)    $ 311
                                                               =====     =====     =====
</TABLE>

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

                                                                  December 31,
                                                                 2006      2005
                                                                ------    ------
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 .............................   $  128    $  122
 Compensation and compensated absences, principally
   due to the accrual for financial reporting purposes ......      249       199
 Accrual of projected environmental costs, principally
   related to Prometcor's compliance with NJDEP .............      199       201
 Net operating loss carryforwards ...........................    1,731     1,704
 Alternative minimum tax credit carryforwards ...............      113       104
 Unrecognized net loss on pension plan ......................      841     1,077
 Other ......................................................      400       382
                                                                ------    ------
   Total gross deferred income tax assets ...................    3,661     3,789
   Less valuation allowance .................................      135       119
                                                                ------    ------
   Net deferred income tax assets ...........................    3,526     3,670
                                                                ------    ------

Deferred income tax liabilities:
 Pension expense, due to contributions in excess of
   net accruals .............................................    1,036       865
 Other ......................................................       70        85
                                                                ------    ------
   Total gross deferred income tax liabilities ..............    1,106       950
                                                                ------    ------
   Net deferred income taxes ................................   $2,420    $2,720
                                                                ======    ======

      A valuation allowance has been established based on the likelihood that a
portion of the deferred income tax assets will not be realized. Realization is
dependent on generating sufficient taxable income prior to expiration of the
loss carryforwards. The ultimate realization of the deferred income tax assets
will require aggregate taxable income of approximately $3,650,000 in the years
prior to the expiration of the net operating loss carryforwards in 2026. The
amount of the deferred income tax assets considered realizable, however, could
be reduced in the near term if estimates of future taxable income during the
carryforward periods are reduced. A portion of the deferred income tax asset is
the result of a tax planning strategy for state income tax purposes of merging
certain of the Company's subsidiaries resulting in realization of net operating
loss carryforwards.

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


                                       58
<PAGE>

                                                                   December 31,
                                                                  2006      2005
                                                                  ----      ----
Current:
   Other current assets ....................................    $  469    $  495
   Current assets of discontinued operations ...............       199       199
                                                                ------    ------
   Total current ...........................................       668       694
                                                                ------    ------
Long Term:
   Other assets ............................................       927     1,127
   Other assets of discontinued operations .................       825       899
                                                                ------    ------
   Total long term: ........................................     1,752     2,026
                                                                ------    ------
Total net deferred income tax assets .......................    $2,420    $2,720
                                                                ======    ======

Note 3.  SHORT-TERM DEBT:

            Composition (in thousands):
                                                                   December 31,
                                                                  2006      2005
                                                                  ----      ----
Revolving loans, CIT .................................          $2,143    $   --
Revolving loans, Bank of America .....................              --     1,500
                                                                ------    ------
                                                                $2,143    $1,500
                                                                ======    ======

      On July 31, 2006, the Company, RCPC, Ronson-Canada, and Ronson Aviation
entered into a financing agreement (the "Financing Agreement") for RCPC, Ronson
Aviation and Ronson-Canada. The revolving loan balance with CIT at December 31,
2006, was $2,143,000. The financing facility totals $3,945,000 and is composed
of a revolving line of credit of $3,000,000 and two term loans in the original
amounts of $195,000 and $750,000, respectively, both to be repaid evenly over
five years. The revolving line of credit carries an interest rate of prime plus
one half (8.75% in the U.S. and 6.50% in Canada at December 31, 2006) and the
two term loans carry interest at the rate of prime plus 3% (11.25%) at December
31, 2006. The amount available to be borrowed under the revolving line of credit
is determined by reference to a "borrowing base", which is calculated based on
the levels of accounts receivable and inventories of the Company's subsidiaries.
Amounts advanced under the Financing Agreement are secured by substantially all
of the assets of the Company and its subsidiaries, other than (1) the real
property owned by RCPC in Woodbridge, New Jersey and (2) 34% of the Company's
interest in Ronson-Canada. The Financing Agreement includes covenants and other
terms and provisions typical for agreements of its kind. The revolving line of
credit is for a period of three years. In conjunction with one of the CIT term
loans in the original amount of $750,000, Mr. Louis V. Aronson II, the Company's
President and CEO, provided a secured limited personal guaranty of $250,000 to
CIT.

      The proceeds from the CIT revolving loan and term loans were utilized to
repay all amounts outstanding to the Bank of America under the Company's prior
revolving loan and mortgage loan agreements. The new CIT financing also provided
additional loan availability to the Company of about $600,000.

      Based on the amount of the loans outstanding and the levels of accounts
receivable and inventory at December 31, 2006, the Company's subsidiaries had
unused borrowings available at December 31, 2006 of about $610,000 under the CIT
line of credit described above. (Refer to Note 4 below for information regarding
the book value of assets pledged as collateral for the debt above.)

      At December 31, 2006, CIT provided the Company with a waiver of a covenant
violation due to failure by the Company to meet a fixed charge coverage ratio
for the six months ended December 31, 2006.


                                       59
<PAGE>

      At December 31, 2006, the weighted average interest rate for the total
short-term debt was 8.59%.

Note 4. LONG-TERM DEBT:

      Composition (in thousands):

                                                                   December 31,
                                                                  2006      2005
                                                                  ----      ----
Mortgage loan payable, North Fork (a) ......................    $2,195    $   --
Mortgage loan payable, Bank of America (b) .................        --     1,241
Note payable, lessor (c) ...................................       220       396
Term notes payable, CIT (d) ................................       882        --
Term notes payable, other ..................................        71        68
                                                                ------    ------
                                                                 3,368     1,705
Less portion in current liabilities ........................       285       155
                                                                ------    ------
Balance of long-term debt ..................................    $3,083    $1,550
                                                                ======    ======

      (a) On September 27, 2006, RCPC entered into a mortgage loan agreement
with North Fork for $2,200,000. The mortgage loan is secured by a first mortgage
on the property of RCPC at 3 and 6 Ronson Road, Woodbridge, NJ and the
guarantees of the Company and Ronson Aviation. The loan bears interest at the
rate of 6.81% and is payable in monthly installments of $15,422, including
interest, with a final installment of approximately $1,697,000, plus interest,
on November 1, 2016.

      (b) In May 1999 the Company, RCPC and Bank of America entered into an
agreement, in the original amount of $1,760,000, which refinanced an existing
Mortgage Loan agreement on the RCPC property in Woodbridge, New Jersey. The
mortgage loan was repaid in total from the proceeds of the CIT revolving loans
(refer to Note 3 above).

      (c) The Equipment and Trademark term loan balances with CIT, referred to
in Note 3 above, were $182,000 and $700,000, respectively, at December 31, 2006.

      (d) As part of the lease agreement for its new warehouse, effective March
1, 2004, RCPC entered into a term note payable to the lessor in the original
amount of $440,000. The note, with a balance of $220,000 on December 31, 2006,
bears interest at the rate of 8.25% and is payable in monthly installments of
$3,787 including interest through February 2013. The note is secured by the
leasehold improvements in the warehouse.

      At December 31, 2006, fixed assets with a net book value of $2,651,000,
accounts receivable and inventories of $4,791,000, and intangible assets with a
net book value of $250,000 are pledged as collateral for the debt detailed in
Notes 3 and 4.

      Net assets of consolidated subsidiaries, excluding intercompany accounts,
amounted to approximately $3,100,000 at December 31, 2006, substantially all of
which were restricted as to transfer to the Company and its subsidiaries due to
various covenants of their debt agreements at December 31, 2006.

      Long-term debt matures as follows: 2007, $285,000; 2008, $291,000; 2009,
$275,000; 2010, $271,000; 2011, $214,000; and 2012-2016, $2,032,000.


                                       60
<PAGE>

Note 5. LEASE OBLIGATIONS:

      Lease expenses consisting principally of office and warehouse rentals,
totaled $573,000, $601,000, and $602,000 for the years ended December 31, 2006,
2005 and 2004, respectively.

      At December 31, 2006, the Company's future minimum lease payments under
operating and capitalized leases with initial or remaining noncancellable lease
terms in excess of one year are presented in the table below (in thousands):

<TABLE>
<CAPTION>
                                                                  Operating   Capitalized
                                                      Total       Leases      Leases
                                                      -----       ------      ------
<S>                                                   <C>         <C>         <C>
Year Ending December 31:
2007 .............................................    $  773      $  438      $  335
2008 .............................................       706         421         285
2009 .............................................       539         306         233
2010 .............................................       418         213         205
2011 .............................................       211         155          56
2012 .............................................       158         158          --
                                                      ------      ------      ------
Total obligations ................................    $2,805      $1,691      $1,114
                                                      ======      ======
Less: Amount representing interest ...............                               152
                                                                              ------
Present value of capitalized lease obligations                                $  962
                                                                              ======
</TABLE>

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

                                                                   December 31,
                                                                  2006      2005
                                                                  ----      ----
Machinery and equipment ....................................    $1,483    $1,513
Less accumulated amortization ..............................       220       185
                                                                ------    ------
                                                                $1,263    $1,328
                                                                ======    ======

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

Note 6. RETIREMENT PLANS:

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

      Plan assets primarily included common stocks (69%), fixed income
securities (11%), cash and money market accounts (7%), a guaranteed annuity
contract (4%), and 229,555 shares of common stock of the Company (9%). The stock
of the Company held by the Plan was valued at $445,000 and $286,000 at December
31, 2006 and 2005, respectively.


                                       61
<PAGE>

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

<TABLE>
<CAPTION>
                                                                         Year Ended December 31,
                                                                                2006        2005
                                                                                ----        ----
<S>                                                                           <C>         <C>
Change in Benefit Obligation:
   Benefit obligation at beginning of year ..............................     $4,764      $4,824
   Service cost .........................................................         26          31
   Interest cost ........................................................        262         266
   Actuarial loss .......................................................         60         242
   Benefits paid ........................................................       (434)       (599)
                                                                              ------      ------
   Benefit obligation at end of year ....................................      4,678       4,764
                                                                              ------      ------


Change in Plan Assets:
   Fair value of plan assets at beginning of year .......................      4,053       3,826
   Actual return on plan assets .........................................        598         (21)
   Employer contributions ...............................................        744         847
   Benefits paid ........................................................       (434)       (599)
                                                                              ------      ------
   Fair value of plan assets at end of year .............................      4,961       4,053
                                                                              ------      ------
   Funded status at end of year .........................................     $  283      $ (711)
                                                                              ======      ======

Amounts recognized in the Consolidated Balance Sheets Consist of:
   Current liabilities ..................................................     $   --      $ (711)
   Non Current Assets ...................................................        283          --
                                                                              ------      ------
   Net amount recognized ................................................     $  283      $ (711)
                                                                              ======      ======
</TABLE>

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

<TABLE>
<CAPTION>
                                                                          Year Ended December 31,
                                                                                 2006        2005
                                                                                 ----        ----
<S>                                                                              <C>         <C>
Discount rate ...........................................................        5.5%        5.5%
</TABLE>

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

                                                        Year Ended December 31,
                                                       2006      2005      2004
                                                       ----      ----      ----
Components of net periodic benefit cost:
   Service cost ..................................    $  26     $  31     $  26
   Interest cost .................................      262       266       274
   Expected return on plan assets ................     (202)     (191)     (160)
   Amortization of prior service cost ............        5         6        14
   Recognized actuarial loss .....................      255       226       264
                                                      -----     -----     -----
   Net pension expense ...........................    $ 346     $ 338     $ 418
                                                      =====     =====     =====

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

                                                         Year Ended December 31,
                                                         2006     2005     2004
                                                         ----     ----     ----
Discount rate ........................................   5.5%     5.5%     5.5%
Expected long-term rate of return on plan assets .....   5.0%     5.0%     5.0%

      The estimated net loss and prior service cost for the defined benefit
pension plans that will be amortized from accumulated other comprehensive loss
into net periodic benefit cost over the next fiscal year are $213,000 and
$5,000, respectively. The estimated prior service cost for the other defined
benefit postretirement plans


                                       62
<PAGE>

that will be amortized from accumulated other comprehensive loss into net
periodic benefit cost over the next fiscal year is $2,000.

      Contributions to the pension plan during 2007 are expected to be
approximately $238,000.

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

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

      (2)   maintain diversification across asset classes;

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

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

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

              Incremental Effect of Applying FASB Statement No. 158
           on Individual Line Items in the Consolidated Balance Sheet
                                December 31, 2006
                                 (in thousands)

<TABLE>
<CAPTION>
                                           Before                                   After
                                      Application                             Application
                                 of Statement 158        Adjustments     of Statement 158
                                 ----------------        -----------     ----------------
<S>                                        <C>                <C>                  <C>
Other Assets:
  Intangible pension asset                 $   65             $  (65)              $   --
  Prepaid pension asset                       283                 --                  283
  Deferred income tax assets                1,726                 26                1,752

Accumulated other
  comprehensive loss                       (1,250)               (39)              (1,289)

Total stockholders' equity                  3,665                (39)               3,626
</TABLE>

      The Company contributes to its defined contribution plan at the rate of 1%
of each covered employee's compensation. The Company also contributes an
additional amount equal to 50% of a covered employee's contribution to a maximum
of 1% of compensation. Expenses of about $62,000, $62,000, and $71,000 for this
plan were recorded in 2006, 2005 and 2004, respectively.

Note 7. COMMITMENTS AND CONTINGENCIES:

      In December 1989 the Company adopted a plan to discontinue the operations
of its wholly owned subsidiary, Ronson Metals Corporation, subsequently renamed
Prometcor, Inc. ("Prometcor"). Upon the cessation of operations, Prometcor began
its compliance with the environmental requirements of all applicable laws with
the objective of selling the property previously used in the discontinued
operations. The full extent of the costs and time required for completion is not
determinable until the remediation, if any is required, and confirmatory testing
related to the remaining groundwater matter have been completed and accepted by
the New Jersey Department of Environmental Protection ("NJDEP"). The liability
for these estimated costs and expenses as recorded in the financial statements
at December 31, 2006, was approximately $500,000 based on the lower limit of the
range of costs as projected by


                                       63
<PAGE>

the Company and its consultants. The estimated upper limit of the range of costs
is discounted at approximately $600,000 above the lower limit.

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

      The Company is involved in a shareholder's derivative action and a second
lawsuit filed by the same shareholder. The Company incurred approximately
$91,000, $95,000, and $145,000 in net legal costs related to the matters in
2006, 2005, and 2004, respectively. These costs were net of the associated
insurance reimbursements. The Company believes that its directors' and officers'
liability insurance coverage is adequate to meet the future direct costs of the
litigation; however, the Company is not able to estimate at this time the extent
to which it will incur additional legal or other expenses, which may be
substantial, in connection with these proceedings.

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

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

Note 8. PREFERRED STOCK:

      In 1998 the Company declared a dividend of one Preferred Stock Purchase
Right ("Right") for each outstanding share of the Company's common stock. The
Rights are not presently exercisable. Each Right entitles the holder, upon the
occurrence of certain specified events, to purchase from the Company one
one-thousandth of a share of Series A Preferred Stock at a purchase price of $20
per share. The Rights further provide that each Right will entitle the holder,
upon the occurrence of certain other specified events, to purchase from the
Company, common stock having a value of twice the exercise price of the Right
and, upon the occurrence of certain other specified events, to purchase from
another person into which the Company was merged or which


                                       64
<PAGE>

acquired 50% or more of the Company's assets or earnings power, common stock of
such other person having a value of twice the exercise price of the Right. The
Rights may be generally redeemed by the Company at a price of $0.01 per Right.
The Rights expire on October 27, 2008.

Note 9. STOCK OPTIONS:

      The Company has two incentive stock option plans which provide for the
grant of options to purchase shares of the Company's common stock. The options
may be granted to officers, directors and other key employees of the Company and
its subsidiaries at not less than 100% of the fair market value on the date on
which options are granted. On November 27, 2001, the stockholders approved the
adoption of the Company's 2001 Incentive Stock Option Plan which provides for
the grant of options for up to 167,512 shares of common stock. In August 1996
the stockholders approved the adoption of the Company's 1996 Incentive Stock
Option Plan which provides for the grant of options for up to 134,009 shares of
common stock. Options may no longer be granted under the 1996 Incentive Stock
Option Plan. Options granted under the plans are exercisable after six months
from the date of the grant and within five years of the grant date, at which
time such options expire. All options are vested on the date of the grant.

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

                                                     Year Ended December 31,
                                                     2006       2005        2004
                                                     ----       ----        ----
Risk-free interest rate                             4.69%      4.31%       3.15%
Dividend yield                                         0%         0%          0%
Volatility factor - expected market price of
  Company's common stock                             0.63       0.46        0.47
Weighted average expected life of options         5 years    5 years     5 years

      A summary of the Company's stock option activity and related information
for the three years ended December 31, 2006, were as follows:

                                                                   Weighted
                                                Number of          Average
                                                 options        Exercise Price
                                              -------------   ------------------
Outstanding at 12/31/03 ..................       158,074            $ 1.084
  Granted ................................        12,763            $ 0.804
  Exercised ..............................       (52,638)           $ 1.231
  Expired ................................       (12,125)           $ 1.810
                                                 -------

Outstanding at 12/31/04 ..................       106,074            $ 0.893
  Granted ................................            --                 --
  Exercised ..............................            --                 --
  Expired ................................       (12,979)           $ 0.893
                                                 -------

Outstanding at 12/31/05 ..................        93,095            $ 0.894
  Granted ................................            --                 --
  Exercised ..............................       (53,221)           $ 0.895
  Expired ................................        (7,370)           $ 0.899
                                                 -------

Outstanding at 12/31/06 ..................        32,504            $ 0.891
                                                 =======            =======

Exercisable at 12/31/06 ..................        32,504            $ 0.891
                                                 =======            =======


                                       65
<PAGE>

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

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

      Exercise prices for options outstanding as of December 31, 2006, were
$.891 per share. The weighted average contractual life of those options was .75
years.

Note 10. STATEMENTS OF CASH FLOWS:

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

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

<TABLE>
<CAPTION>
                                                                 Year Ended December 31,
                                                                2006      2005      2004
                                                                ----      ----      ----
<S>                                                           <C>       <C>       <C>
Cash Payments for:
   Interest ...............................................   $  502    $  397    $  324
   Income taxes ...........................................      152        30       225

Financing & Investing Activities Not Affecting Cash:
   Capital lease obligations incurred .....................       49       373     1,055
   Leasehold improvements financed by lessor ..............       --        --       440
   Equipment financed by seller ...........................       55        47        62
</TABLE>

Note 11. INDUSTRY SEGMENTS INFORMATION:

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

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

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

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


                                       66
<PAGE>

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

<TABLE>
<CAPTION>
                                                             2006        2005        2004
                                                             ----        ----        ----
<S>                                                       <C>         <C>         <C>
Net sales:
  Consumer Products ..................................    $16,870     $15,664     $16,768
  Aviation Services ..................................     12,374      10,899      11,715
                                                          -------     -------     -------
    Consolidated .....................................    $29,244     $26,563     $28,483
                                                          =======     =======     =======

Earnings (loss) before interest, other items,
  and intercompany charges:
  Consumer Products ..................................    $ 1,243     $ 1,347     $ 1,807
  Aviation Services ..................................      1,660       1,435       1,253
                                                          -------     -------     -------
  Total Reportable Segments ..........................      2,903       2,782       3,060
  Corporate and others ...............................     (1,719)     (1,799)     (1,702)
  Other charges ......................................        (91)        (95)       (145)
                                                          -------     -------     -------
    Consolidated .....................................    $ 1,093     $   888     $ 1,213
                                                          =======     =======     =======

Interest expense:
  Consumer Products ..................................    $   290     $   195     $   112
  Aviation Services ..................................         24          50         100
                                                          -------     -------     -------
  Total Reportable Segments ..........................        314         245         212
  Corporate and others ...............................        162         228         155
                                                          -------     -------     -------
    Consolidated .....................................    $   476     $   473     $   367
                                                          =======     =======     =======

Depreciation and amortization:
  Consumer Products ..................................    $   412     $   379     $   289
  Aviation Services ..................................        199         324         449
                                                          -------     -------     -------
  Total Reportable Segments ..........................        611         703         738
  Corporate and others ...............................         45          35          34
                                                          -------     -------     -------
    Consolidated .....................................    $   656     $   738     $   772
                                                          =======     =======     =======
Earnings (loss) before intercompany charges and taxes:
  Consumer Products ..................................    $   946     $ 1,126     $ 1,691
  Aviation Services ..................................      1,606       1,381       1,158
                                                          -------     -------     -------
  Total Reportable Segments ..........................      2,552       2,507       2,849
  Corporate and others ...............................     (2,172)     (2,272)     (2,200)
  Other charges ......................................        (91)        (95)       (145)
  Nonrecurring loss ..................................         --        (642)         --
                                                          -------     -------     -------
    Consolidated .....................................    $   289     $  (502)    $   504
                                                          =======     =======     =======

Segment assets:
  Consumer Products ..................................    $ 7,640     $ 7,224     $ 6,586
  Aviation Services ..................................      4,506       2,745       4,689
                                                          -------     -------     -------
  Total Reportable Segments ..........................     12,146       9,969      11,275
  Corporate and others ...............................      1,550       1,594       1,511
  Discontinued operations ............................      1,024       1,092       1,156
                                                          -------     -------     -------
    Consolidated .....................................    $14,720     $12,655     $13,942
                                                          =======     =======     =======

Segment expenditures for long-lived assets:
  Consumer Products ..................................    $   155     $   625     $ 1,883
  Aviation Services ..................................      2,032         379         298
                                                          -------     -------     -------
  Total Reportable Segments ..........................      2,187       1,004       2,181
  Corporate and others ...............................        102          13          62
                                                          -------     -------     -------
    Consolidated .....................................    $ 2,289     $ 1,017     $ 2,243
                                                          =======     =======     =======
</TABLE>


                                       67
<PAGE>

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

                                                        Year Ended December 31,
                                                      2006       2005       2004
                                                      ----       ----       ----
Net sales (1):
  United States ...............................    $25,831    $24,580    $26,752
  Canada ......................................      1,949      1,635      1,488
  Other foreign countries .....................      1,464        348        243
                                                   -------    -------    -------
                                                   $29,244    $26,563    $28,483
                                                   =======    =======    =======

                                                        December 31,
                                                      2006       2005
                                                      ----       ----
Long-lived assets:
  United States ...............................     $5,732     $4,093
  Canada ......................................         40         22
                                                    ------     ------
                                                    $5,772     $4,115
                                                    ======     ======

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

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

                                                        Year Ended December 31,
                                                      2006       2005       2004
                                                      ----       ----       ----
Packaged fuels, flints, lighters
  and torches .................................    $16,803    $15,574    $16,685
Other consumer products .......................         67         90         83
Aircraft ......................................      1,796         --      2,098
Charter services (2) ..........................         --        358        768
Aviation fuels and other aviation
  products and services .......................     10,578     10,541      8,849
                                                   -------    -------    -------
                                                   $29,244    $26,563    $28,483
                                                   =======    =======    =======

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

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

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

      For the years ended December 31, 2006, 2005 and 2004, Net Sales which
amounted to approximately $3,809,000, $3,697,000, and $3,665,000, respectively,
of Consolidated Net Sales were made by Ronson Consumer Products to one customer.
As of December 31, 2006 and 2005, accounts receivable from that customer
amounted to approximately 29% and 15%, respectively, of Consolidated Accounts
Receivable. No other customer accounted for more than 10% of Consolidated Net
Sales, for the years ended December 31, 2006, 2005 and 2004, or more than 10% of
Consolidated Accounts Receivable at December 31, 2006 and 2005.


                                       68
<PAGE>

Note 12. ACCUMULATED OTHER COMPREHENSIVE LOSS:

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

<TABLE>
<CAPTION>
                                              Foreign                                   Cash        Accumulated
                                             Currency       Minimum       Prior         Flow           Other
                                            Translation     Pension      Service       Hedging     Comprehensive
                                            Adjustments    Liability       Cost       Adjustment       Loss
                                            -----------    ---------       ----       ----------       ----
<S>                                           <C>           <C>           <C>           <C>           <C>
Balance at December 31, 2003 ..........       $   12        $1,784        $   --        $   --        $1,796
Current period change .................         (105)         (504)           --            16          (593)
Income tax expense
  (benefit) ...........................           42           202            --            (6)          238
                                              ------        ------        ------        ------        ------
Balance at December 31, 2004 ..........          (51)        1,482            --            10         1,441
Current period change .................          (17)          228            --           (37)          174
Income tax expense
  (benefit) ...........................            7           (91)           --            14           (70)
                                              ------        ------        ------        ------        ------
Balance at December 31, 2005 ..........          (61)        1,619            --           (13)        1,545
Current period change .................           81          (592)           65            21          (425)
Income tax expense
  (benefit) ...........................          (33)          236           (26)           (8)          169
                                              ------        ------        ------        ------        ------
Balance at December 31, 2006 ..........       $  (13)       $1,263        $   39        $   --        $1,289
                                              ======        ======        ======        ======        ======
</TABLE>

Note 13. CONCENTRATIONS:

      During 2006 and at December 31, 2006, the Company and two of its
subsidiaries had cash deposits in banks in excess of FDIC insured limits. The
Company periodically reviews the financial condition of the bank to minimize its
exposure.

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

Note 14. RELATED PARTY TRANSACTIONS:

      In October 1998 the Company entered into a consulting agreement with Mr.
Carl W. Dinger III, a greater than 5% shareholder of the Company. The agreement
provided that Mr. Dinger perform certain consulting services for the Company for
a period ending on April 7, 2000. The Company and Mr. Dinger entered into a
second consulting agreement effective upon the expiration date of the original
agreement. This agreement provided that Mr. Dinger continue to perform
consulting services for the Company through April 7, 2004 at a fee of $7,000 per
month. During 2004 the agreement was extended on a month-to-month basis through
July 7, 2004. A new consulting agreement was effective on July 8, 2004, which
provides that Mr. Dinger continue to perform consulting services at a fee of
$7,000 per month for the Company for a period of thirty-six months through July
7, 2007. On January 1, 2006, Mr. Dinger's consulting fee was reduced by 7% from
$7,000 per month to $6,510 per month. Mr. Dinger was compensated $78,120,
$84,000, and $84,000 during each of the years ended December 31, 2006, 2005 and
2004, respectively, under the agreements.


                                       69
<PAGE>

      In October 1998 Mr. Dinger granted an option to the Company to purchase
the 186,166 shares of the Company's common stock then held by Mr. Dinger. The
option was for a period of 18 months expiring on April 7, 2000. In 2000 Mr.
Dinger granted a new option to the Company, to purchase the shares of the
Company's common stock held by Mr. Dinger. The option was for a period of 48
months, expiring April 7, 2004. The cost of the option was $4,000 per month for
the period of the option or until exercised. In March 2000 Mr. Dinger purchased
304,877 shares of newly issued restricted common stock of the Company at a price
of $1.87 per share. During 2004 the option agreement was extended on a
month-to-month basis through July 7, 2004. A new option agreement was effective
on July 8, 2004. The new option granted by Mr. Dinger is for a period of 36
months, expiring on July 7, 2007. The exercise price of the option is $5.62 per
share for the 561,983 shares now held by Mr. Dinger. The cost of the option is
$4,000 per month for the period of the option or until exercised. As part of
each of the option agreements, Mr. Dinger has granted the Board of Directors of
the Company an irrevocable proxy to vote the optioned shares during the term of
the option. The Company expended $48,000 for the options during each of the
years ended December 31, 2006, 2005 and 2004, which were charged to Additional
Paid-in Capital. At December 31, 2006, the fair value of the option was
approximately $3,000, using the Black-Scholes option pricing model. Key
assumptions included: a risk-free interest rate of 5.01%, a dividend yield of
0%, volatility of 63%, and the option life of .5 years. The fair value of $3,000
compares to $23,000, the present value of the 6 remaining payments under the
contract, discounted at the Company's incremental borrowing rate of 8.75%.

      The Company incurred costs for consulting services under agreements with
two directors of the Company (three in 2005) of $31,000, $112,000, and $128,000,
in the years ended December 31, 2006, 2005 and 2004, respectively. The Company
incurred costs for printing services from Michael Graphics, Inc., of $67,000,
$57,000, and $82,000 in the years ended December 31, 2006, 2005, and 2004,
respectively. A greater than 10% shareholder of Michael Graphics, Inc., is the
son-in-law of the Company's president.


                                       70
<PAGE>

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

RONSON CORPORATION AND ITS WHOLLY OWNED SUBSIDIARIES

LIST OF FINANCIAL STATEMENT SCHEDULES

            Schedule I      Condensed Financial Information of Company

            Schedule II     Valuation and Qualifying Accounts


                                       71
<PAGE>

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

The Board of Directors
Ronson Corporation:

Under date of March 30, 2007, we reported on the consolidated balance sheets of
Ronson Corporation and subsidiaries as of December 31, 2006 and 2005, and the
related consolidated statements of operations, changes in stockholders' equity
and cash flows for each of the years in the three year period ended December 31,
2006 as contained in the annual report on Form 10-K for the year 2006. In
connection with our audits of the aforementioned consolidated financial
statements, we also audited the related financial statement schedules as listed
in the accompanying index. These financial statement schedules are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statement schedules based on our audits.

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

DEMETRIUS & COMPANY, L.L.C.

Wayne, New Jersey
March 30, 2007


                                       72
<PAGE>

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

     CONDENSED BALANCE SHEETS
       (dollars in thousands)


                                    ASSETS
                                    ------
                                                      December 31,
                                                  --------------------
                                                    2006        2005
                                                    ----        ----
CURRENT ASSETS:
Cash ..........................................   $     10    $     --
Other current assets ..........................        288         304
                                                  --------    --------
         Total Current Assets .................        298         304

Property, plant, and equipment ................        266         227
Less accumulated depreciation and amortization         173         178
                                                  --------    --------
                                                        93          49
Other assets ..................................      5,355       5,382
                                                  --------    --------
TOTAL ASSETS ..................................   $  5,746    $  5,735
                                                  ========    ========


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

CURRENT LIABILITIES:
Current portion of long-term debt .............   $     18    $     21
Accounts payable ..............................        257         144
Other current liabilities .....................        217       1,161
                                                  --------    --------
         Total Current Liabilities ............        492       1,326

Long-term debt ................................         27           7
Other long term liabilities ...................      1,601       1,098

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:

Common stock ..................................      4,900       4,847
Additional paid-in capital ....................     29,878      29,932
Accumulated deficit ...........................    (28,266)    (28,333)
Accumulated other comprehensive loss ..........     (1,289)     (1,545)
                                                  --------    --------
                                                     5,223       4,901
Less cost of treasury shares:
   2006 and 2005, 84,799 ......................      1,597       1,597
                                                  --------    --------
                                                     3,626       3,304
                                                  --------    --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ....   $  5,746    $  5,735
                                                  ========    ========

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

                                       73

<PAGE>


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

                       CONDENSED STATEMENTS OF OPERATIONS
                             (dollars in thousands)

                                                    YEAR ENDED DECEMBER 31,
                                                 ----------------------------
                                                   2006      2005       2004
                                                 -------   -------    -------

Management administration (from wholly
    owned subsidiaries eliminated
    in consolidation) ........................   $ 2,380   $ 1,586    $ 2,449
                                                 -------   -------    -------

Costs and expenses:
    General and administrative expenses ......     1,810     1,893      1,847
    Interest expense (includes intercompany
       interest expense of  $75, $100 and $100
       in 2006, 2005 and 2004, respectively,
       eliminated in consolidation) ..........       162       228        155
    Non-operating expense - net ..............       291       296        343
                                                 -------   -------    -------
                                                   2,263     2,417      2,345
                                                 -------   -------    -------

EARNINGS (LOSS) BEFORE INCOME TAXES
    AND EQUITY IN NET EARNINGS
    OF SUBSIDIARIES ..........................       117      (831)       104

Income tax provisions (benefit) ..............        69      (367)       144

Equity in net earnings of subsidiaries .......        19       131        233
                                                 -------   -------    -------
NET EARNINGS (LOSS) ..........................   $    67   $  (333)   $   193
                                                 =======   =======    =======

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

                                       74
<PAGE>

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

                       CONDENSED STATEMENTS OF CASH FLOWS
                             (dollars in thousands)

<table>
<caption>
                                                           YEAR ENDED DECEMBER 31,
                                                        -----------------------------
                                                          2006       2005       2004
                                                        -------    -------    -------

                                                          <c>        <c>        <c>

Cash Flows from Operating Activities:
Net earnings (loss) .................................   $    67    $  (333)   $   193
Adjustments to reconcile net earnings (loss)
    to net cash provided by operating activities:
    Equity in net earnings of subsidiaries ..........       (19)      (131)      (233)
    Depreciation and amortization ...................        45         35         34
    Deferred income tax expenses (benefit) ..........       164       (214)       102
    Decrease in cash from changes in
       current assets and current liabilities .......      (232)       (77)       (43)
    Increase in net advances to (from) subsidiaries .       435      1,352        565
    Net change in pension-related accounts ..........      (429)      (538)      (307)
    Other ...........................................        35         37       (104)
                                                        -------    -------    -------
       Net cash provided by operating activities ....        66        131        207
                                                        -------    -------    -------

Cash Flows from Investing Activities:
Capital expenditures ................................       (48)       (13)        --
Proceeds from disposal of property, plant & equipment        12         --         --
                                                        -------    -------    -------
       Net cash used in investing activities ........       (36)       (13)        --
                                                        -------    -------    -------

Cash Flows from Financing Activities:
Proceeds from issuance of common stock ..............        47         --         65
Payments of long-term lease obligations .............        --         --         (5)
Payments of long-term debt ..........................       (19)       (21)       (13)
Payments of dividends ...............................        --        (84)      (125)
Redemption of preferred stock .......................        --         --        (46)
Cost of stock option agreement ......................       (48)       (48)       (48)
                                                        -------    -------    -------
       Net cash used in financing activities ........       (20)      (153)      (172)
                                                        -------    -------    -------
Net increase (decrease) in cash .....................        10        (35)        35

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

Cash at end of year .................................   $    10    $    --    $    35
                                                        =======    =======    =======
</table>


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


                                       75
<PAGE>

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

NOTES TO CONDENSED FINANCIAL STATEMENTS

NOTE A: Condensed Financial Statements.

      The accompanying financial statements should be read in conjunction with
the consolidated financial statements of the Registrant, Ronson Corporation (the
"Company") and its subsidiaries included in the Company's Annual Report on Form
10-K for the year ended December 31, 2006.

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

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

      The Company has authorized 11,848,106 shares of common stock with a par
value of $1.00, of which 4,900,014 and 4,846,792 were outstanding at December
31, 2006 and 2005, respectively, adjusted for a 5% stock dividend declared
February 1, 2007.

NOTE B: Other Assets and Other Liabilities.

                                                                  December 31,
                                                                 (in thousands)
                                                                2006        2005
                                                                ----        ----

         Other Assets
            Investment in subsidiaries                        $4,196      $4,165
            Deferred income tax assets, net                      663         890
            Other                                                496         327
                                                              ------      ------
                                                              $5,355      $5,382
                                                              ======      ======

         Other Liabilities
            Net advances from subsidiaries                    $1,592      $1,098
            Other                                                  9          --
                                                              ------      ------
                                                              $1,601      $1,098
                                                              ======      ======

            Investment in subsidiaries was eliminated in consolidation. The net
advances from subsidiaries of $1,061,000 and $1,098,000 at December 31, 2006 and
2005, respectively, were eliminated in consolidation.

NOTE C: Unrecognized Net Loss on Pension Plans.

      FAS #87 requires that if the additional minimum liability recorded exceeds
unrecognized prior service cost and the unrecognized net obligation at
transition, that difference, an unrecognized net loss, is to be reported, net of
tax, as a separate component of Stockholders' Equity. This unrecognized net loss
is being amortized over future periods as a component of pension expense.

NOTE D: Income Taxes.

      The Company and its domestic subsidiaries have elected to allocate
consolidated federal income taxes on the separate return method. Under this
method of


                                       76
<PAGE>

allocation, income tax expenses (benefits) are allocated to the Company and each
subsidiary based on its taxable income (loss) and net operating loss
carryforwards.

      In accordance with SFAS #109, "Accounting for Income Taxes" the Company is
to record a deferred income tax asset for net operating loss and credit
carryforwards when the ultimate realization is more likely than not. In 2006,
2005 and 2004, the Company and its subsidiaries recorded the expenses (benefits)
of net deferred income tax assets of $128,000, $(235,000), and $154,000,
respectively, of which $164,000, $(214,000), and $102,000, respectively, were
allocated to the Company.

NOTE E: Statements of Cash Flows.

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


                                       77
<PAGE>
                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                                 (in thousands)

<table>
<caption>

                                                       Additions
                                               ------------------------
                                  Balance at    Charged to  Charged to                     Balance
                                 beginning of   costs and     other                        at end
             Description            period      expenses     accounts    Deductions (1)   of period
------------------------------------------------------------------------------------------------------

                              <c>          <c>          <c>          <c>             <c>
Allowance for doubtful accounts
  Year ended 12/31/06             $      107   $       --   $       --   $        5      $      102
  Year ended 12/31/05             $       84   $       48   $       --   $       25      $      107
  Year ended 12/31/04             $       76   $       54   $       --   $       46      $       84

</table>

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


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