TRANSTECH INDUSTRIES INC - FORM 10-K - EX-13

Attached files

file	filename
10-K - TRANSTECH INDUSTRIES INC	fm10k09.txt
EX-3 - TRANSTECH INDUSTRIES INC	exh3.txt
EX-10 - TRANSTECH INDUSTRIES INC	exh10bl.txt
EX-14 - TRANSTECH INDUSTRIES INC	exh14.txt
EX-21 - TRANSTECH INDUSTRIES INC	exh21.txt
EX-32 - TRANSTECH INDUSTRIES INC	ex32b09.txt
EX-31 - TRANSTECH INDUSTRIES INC	ex31b09.txt
EX-31 - TRANSTECH INDUSTRIES INC	ex31a09.txt
EX-32 - TRANSTECH INDUSTRIES INC	ex32a09.txt

Exhibit 13. Annual Report to Stockholders.

TRANSTECH INDUSTRIES, INC.

ANNUAL REPORT

2009

COMPANY PROFILE

Transtech Industries, Inc.,
through its subsidiaries, provides environmental services and
generates electricity for sale to a local utility. The Company's
headquarters are located in Piscataway, New Jersey.

TABLE OF CONTENTS

Page

Management's Discussion and Analysis of
Financial Condition and Results of Operations 3
Consolidated Balance Sheets 20
Consolidated Statements of Operations 22
Consolidated Statements of Stockholders'
Equity 23
Consolidated Statements of Cash Flows 24
Notes to Consolidated Financial Statements 26
Report of Independent Registered Public
Accounting Firm 62
Market for Registrant's Common Equity,
Related Stockholder Matters and Issuer
Purchase of Equity Securities 63
Securities Authorized for Issuance Under
Equity Compensation Plans 64
Directory 65

Transtech Industries, Inc.
Management's Discussion and Analysis of Financial Condition
and Results of Operations
Selected Financial Data
(In $000's, except per share data)

Years ended December 31, 2009 2008

Net Operating Revenues (a) $ 413 $ 689

Cost of Operations
Direct operating costs (430) (502)
Remediation expense (30) (7)
Selling, general and
administrative expenses (1,693) (1,922)
Accretion expense (305) (336)
Total (2,458) (2,767)

Gain on Sale of Equipment - 3

Operating Loss (2,045) (2,075)

Other Income (Expense)
Investment income 56 80
Investment income on restricted
escrow accounts 562 488
Interest expense (4) (2)
Rental income 15 16
Proceeds from insurance claims 120 95
Miscellaneous income 1 87
Total other income 750 764

Loss Before Income Tax Benefit (1,295) (1,311)

Income Tax Benefit 598 374

Net Loss $ (697) $ (937)

Basic Net Loss Per Common Share $(.23) $(.31)

Weighted Average Common Shares
Outstanding 2,979,190 2,979,190

(a) Net Operating Revenues consist of:
Environmental services $ 658 $ 737
Electricity generation 413 689
Subtotal 1,071 1,426
Less intercompany sales (658) (737)
Net operating revenues $ 413 $ 689

Transtech Industries, Inc.
Management's Discussion and Analysis of Financial Condition
and Results of Operations, cont'd
Selected Financial Data
(In $000's, except per share data)

December 31, 2009 2008

Assets
Current Assets $ 4,132 $ 5,185
Net Property, Plant & Equipment 1,950 1,965
Long-Term Assets 5,133 6,055

Total Assets $11,215 $13,205

Liabilities
Current Liabilities $ 1,625 $ 1,833
Long-Term Liabilities 7,357 7,897

Total Liabilities 8,982 9,730

Stockholders' Equity 2,233 3,475

Total Liabilities & Stockholders' Equity $11,215 $13,205

Working Capital $ 2,507 $ 3,352

Management's Discussion and Analysis of Financial Condition
and Results of Operations, cont'd

Introduction

The following discussion and analysis should be read in conjunction
with the Company's Consolidated Financial Statements and related notes,
which provide additional information concerning the Company's financial
activities and condition.

Certain reclassifications have been made to the 2008 financial
statements in order to conform to the presentation followed in preparing the
2009 financial statements.

Forward-Looking Statements

Certain statements in this report which are not historical facts or
information are forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933, Section 21E of the Securities Exchange Act of
1934, and the Private Securities Litigation Reform Act of 1995. These
statements relate to future events or the Company's future financial
performance. In some cases, forward-looking statements can be identified by
terminology such as may, will, should, expect, plan, anticipate, believe,
estimate, intend, potential or continue, and similar expressions or
variations. These statements are only predictions. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors
which may cause the actual results, levels of activity, performance or
achievement of the Company, or industry results, to be materially different
from any future results, levels of activity, performance or achievement
expressed or implied by such forward-looking statements. Such factors
include, among others, the following: general economic and business
conditions; the ability of the Company to implement its business strategy;
the Company's ability to successfully identify new business opportunities;
changes in the industry; competition; the effect of regulatory and legal
proceedings; and other factors discussed herein. As a result of the
foregoing and other factors, no assurance can be given as to the future
results and achievements of the Company. All forward-looking statements
included in this document are based on information available to the Company
and its employees on the date of filing, and the Company and its employees
assume no obligation to update any such forward-looking statements. In
evaluating these statements, the reader should specifically consider various
factors.

Discussion of Critical Accounting Policies

For a discussion of the Company's critical accounting policies, see
Note 1 to the Company's Consolidated Financial Statements.
Results of Operations

Overview

Transtech Industries, Inc. ("Transtech") was incorporated under the
laws of the State of Delaware in 1965. Transtech is a public holding
company which manages its investments and 18 subsidiaries (Transtech and its
subsidiaries collectively referred to as the "Company"). Two subsidiaries
conduct active operations that have been classified into two segments: the
performance of environmental services and the generation and sale of
electricity utilizing methane gas. The other subsidiaries of the Company
are inactive and hold assets consisting primarily of cash and cash
equivalents, real property, intercompany receivables and contract rights.

The Company and certain subsidiaries previously participated in the
resource recovery and waste management industries. These activities
included the hauling of wastes, and the operation of three landfills and a
solvents recovery facility. The last of these operations ceased in 1987,
but the Company continues to own and/or remediate two of the landfills and
has both incurred and accrued for the substantial costs associated
therewith. As of December 31, 2009 the Company's accrual for post-closure
maintenance costs, net of the restricted escrow account dedicated to the
funding of such post-closure costs, was approximately $1.8 million. The
Company has also been named as a potentially responsible party for the
remediation of sites of former operations. The Company has incurred
significant professional fees and administrative expenses for litigation
related to its past activities in the resource recovery and waste management
industries.

As discussed in detail in this report, the Company has pursued various
alternatives to raise cash to fund its liabilities and expenses. The
Company sold certain operations and certain real property during the 1980s
and 1990s, and during 2006, the Company completed the sale of certain real
property which yielded proceeds of approximately $2.1 million. The Company
also settled its claims against certain excess insurance carriers which
resulted in the Company receiving approximately $18.4 million of aggregate
proceeds during the period of 2002 through 2009.

The Company continues to pursue the sale of certain property. However,
the Company is currently unable to determine whether the timing and the
amount of cash generated from its continuing efforts to sell such assets,
its efforts to otherwise enhance liquidity and the Company's remaining
operations will be sufficient to discharge the Company's liabilities and its
continuing operating liabilities as they come due (see the discussion of
"Liquidity and Capital Resources" below and Notes 2 and 13 to the Company's
Consolidated Financial Statements).

Operating Revenues

Consolidated net operating revenues were $413,000 for the year ended
December 31, 2009, a decrease of $276,000 or 40%, compared to $689,000 for
the year ended December 31, 2008. Consolidated operating revenues by
business segment for each of the four quarters within the years ended
December 31, 2009 and 2008 were as follows (in $000):

- Quarter - Total
2009 1st 2nd 3rd 4th Year

Environmental Svcs. $153 $180 $188 $137 $ 658
Electricity Generation 111 94 108 100 413
Subtotal 264 274 296 237 1,071
Intercompany (153) (180) (188) (137) (658)
Net Operating Revenues $111 $ 94 $108 $100 $ 413

- Quarter - Total
2008 1st 2nd 3rd 4th Year

Environmental Svcs. $219 $218 $186 $114 $ 737
Electricity Generation 159 213 201 116 689
Subtotal 378 431 387 230 1,426
Intercompany (219) (218) (186) (114) (737)
Net Operating Revenues $159 $213 $201 $116 $ 689

The environmental services segment provides construction, remedial and
maintenance services at landfills, commercial and industrial sites, and
manages methane gas recovery operations. The environmental services
segment reported $658,000 of gross operating revenues for 2009(prior to
eliminations) compared to $737,000 for 2008.

Substantially all of the environmental services segment's revenues for
2009 and 2008, were for post-closure maintenance conducted at sites
previously operated by the Company's subsidiaries. Bills for post-closure
maintenance work performed on a landfill owned by the Company's wholly
owned subsidiary, Kinsley's Landfill, Inc. ("Kinsley's"), the Kinsley's
Landfill, located in Deptford, New Jersey, are submitted to the New Jersey
Department of Environmental Protection for reimbursement from a restricted
escrow account established to finance the post-closure activities at the
site (the "Kinsley's Escrow") (see Note 5 to the Company's Consolidated
Financial Statements). Kinsley's billings to the Kinsley's Escrow
approximated $645,000 and $713,000 for services performed during the year
ended December 31, 2009 and 2008, respectively. All reimbursements from
the Kinsley's Escrow must be approved by the New Jersey Department of
Environmental Protection ("NJDEP").

Kinsley's has begun re-grading a section of the Kinsley's Landfill in
accordance with a re-grading plan approved by the NJDEP. The re-grading
plan calls for the use of both recycled and non-recycled materials to fill
and re-contour areas of the landfill containing depressions. Kinsley's
receives a fee to accept certain of the recycled materials. The costs
incurred for re-grading activities shall be paid from such fees, and costs
incurred for re-grading activities in excess of such fees, if any, will be
submitted to NJDEP for reimbursement from the Kinsley's Escrow. Kinsley's
intends to utilize recycled materials to the fullest extent possible in
order to minimize the amount of re-grading costs paid from the Kinsley's
Escrow, if any. Kinsley's competes with certain landfills and development
projects for the revenue producing materials on the basis of the fee
imposed for accepting the materials and transportation cost, and must
obtain NJDEP approval prior to utilizing material from a new source unless
such material has been previously approved for such purposes. The gross
revenue reported for the environmental services segment for 2009 and 2008
does not include any fees from the acceptance of the revenue producing
materials. The decline in the revenue associated with the recycled
material is due primarily to competition for such materials from a nearby
re-development project. The competition from such projects and landfills
may continue to negatively impact the quantity of the fee producing
materials obtained by Kinsley's as well as the associated fee.

Billings to the Kinsley's Escrow and for services provided to members
of the consolidated group are eliminated in the calculation of net
operating revenue. The Company is continuing its efforts to expand the
customer base of the environmental services segment to additional entities
beyond the consolidated group.

Revenues from the segment which generates electricity were
approximately $413,000 and $689,000 for the year ended December 31, 2009
and 2008, respectively, a decrease of $276,000 or 40%. The electricity
generating facility consists of four trailer mounted diesel
engine/electricity generator units ("Gen-set(s)") each capable of
generating approximately 11,000 kilowatt hours ("kWh") per day when
operating at 85% capacity. The Gen-sets are fueled by the methane
component of the landfill gas generated by the Kinsley's Landfill. Three
of the four Gen-sets were available for operations during 2009 and 2008,
subject to routine repairs and maintenance. The fourth Gen-set requires
major repairs which have been deferred. Electricity generated is sold
pursuant to a contract with a local utility which is currently renewed
annually. Revenues are a function of the number of kWh sold, the rate
received per kWh and capacity payments. The Company sold approximately 9.0
and 8.0 million kWh during the year ended December 31, 2009 and 2008,
respectively, however, the average combined rate (per kWh and capacity
payment) received for the year ended December 31, 2009 and 2008 declined to
$.046 from $.086, respectively. Generally speaking, the rate received by
the Company reflects the market demand for electric power and the market
price of fossil fuels. The combined rate received is typically higher in
warmer months. Engineering studies indicate the quantity of gas
generated by the landfill is declining but project sufficient landfill gas
to continue the operation of three of the existing Gen-sets through 2011
and two of the existing Gen-sets for the period of 2012 through 2017.
Elements of the landfill gas are more corrosive to the equipment than
traditional fuels, resulting in more off-line hours dedicated to repair and
maintenance than with equipment utilizing traditional fuels.

Cost of Operations

Consolidated direct operating costs for the year ended December 31,
2009 were $430,000, a decrease of $72,000 or 14% when compared to $502,000
reported for 2008. Approximately $30,000 and $61,000 of the reported
direct operating costs for 2009 and 2008, respectively, are attributable to
unabsorbed overhead costs of the environmental services segment remaining
after the elimination of the intercompany transactions described above.
The operating and repair costs of the electricity generating segment were
$400,000 and $441,000 for the year ended December 31, 2009 and 2008,
respectively, a decrease of $41,000 or 9%. An additional $10,000 and
$41,000 of expenditures on the generators and certain related equipment was
capitalized during the year ended December 31, 2009 and 2008, respectively.

Consolidated remediation expense reported for 2009 and 2008 of $30,000
and $7,000, respectively, were post-closure maintenance costs related to
the Mac Landfill, a landfill previously operated by a subsidiary of the
Company (see Liquidity and Capital Resources; Post-Closure Costs).

Consolidated selling, general and administrative expenses for the year
ended December 31, 2009 were $1,693,000, a decrease of $229,000 or 12% from
$1,922,000 reported for the prior year. Components of selling, general and
administrative expenses by quarter for the year ended December 31, 2009 and
2008 were as follows (table in $000):
- Quarter - Total
2009 1st 2nd 3rd 4th Year

Legal expenses $116 $ 49 $ 63 $ 99 $ 327
Other professional fees 53 31 32 37 153
Non-operating subsidiary
expenses 10 20 10 7 47
All other administrative
expenses 284 273 315 294 1,166
$463 $373 $420 $437 $1,693

- Quarter - Total
2008 1st 2nd 3rd 4th Year

Legal expenses $155 $167 $111 $102 $ 535
Other professional fees 53 26 24 28 131
Non-operating subsidiary
expenses 10 19 12 9 50
All other administrative
expenses 300 298 286 322 1,206
$518 $510 $433 $461 $1,922

Legal expenses reported for 2009 and 2008 include approximately
$94,000 and $164,000, respectively, of fees for matters related to the
Company's landfills or the remediation of sites to which the Company has
been named as a potentially responsible party ("PRP") or alleged to be a
PRP. Such fees in 2009 were primarily attributable to matters related to
the Kin-Buc Landfill, and for both the Kin-Buc Landfill and the Scientific
Chemical Processing Site in 2008 (see the discussion of Contingent
Environmental Liabilities within Liquidity and Capital Resources below).
The legal expenses incurred for other matters were primarily attributable
to the Company's challenge of attempts by two municipalities to encumber
certain real property owned by the Company (see the discussion of
"Liquidity and Capital Resources" below and Note 13 - Legal Proceedings to
the Company's Consolidated Financial Statements). Other professional fees
include fees of accountants, engineers, consultants and a director. The
Company also incurs professional fees and administrative expenses during
the course of evaluating businesses for possible acquisition. The
operating costs incurred by the non-operating subsidiaries, consisting
primarily of insurance premiums, franchise, corporate and real estate
taxes, aggregated approximately $47,000 and $50,000 for the year ended
December 31, 2009 and 2008, respectively. All other administrative
expenses decreased $40,000 or 3% to $1,166,000 for 2009 from $1,206,000 for
2008. The net decrease was attributable to decreases in insurance, lease
and general operating expenses.

Consolidated accretion expense recognized on the Company's asset
retirement obligation for landfill post-closure maintenance costs was
$305,000 and $336,000 for the year ended December 31, 2009 and 2008,
respectively.

Consolidated Gain on the Sale of Equipment

Consolidated gain on the sale of miscellaneous equipment of
approximately $3,000 was reported for the year ended December 31, 2008.

Operating Loss

The Company's consolidated operating loss for the year ended December
31, 2009 decreased to $2,045,000 from a loss of $2,075,000 reported for the
prior year.

Other Income (Expense)

Consolidated investment income decreased to $56,000 for the year ended
December 31, 2009 from $80,000 reported for the prior year. The amount
reported for 2009 includes approximately $51,000 of interest earned on
refunded federal income taxes. The decrease in the balance of investment
income reflects both a decrease in the rate of interest earned on U.S.
Treasury securities, and other investments, and a decrease in the amount of
funds available for investment.

Consolidated investment income earned on the restricted escrow account
dedicated to the funding of the Company's landfill post-closure maintenance
costs was $562,000 and $488,000 for the year ended December 31, 2009 and
2008, respectively. Such amounts included net gains of $306,000 and
$183,000, respectively, from the sale of securities.

Consolidated interest expense for the year ended December 31, 2009 and
2008 was $4,000 and $2,000, respectively.

Consolidated rental income, net of related expenses, was $15,000 and
$16,000 for the year ended December 31, 2009 and 2008, respectively.
Rental income was earned from royalty payments, reported net of commission,
received from the lease of certain of the Company's real property situated
beneath the lessee's landfill. Rental income for both 2009 and 2008 also
includes $7,000 and $6,000, respectively, from the rental of certain of the
Company's property upon which a radio tower is located.

Consolidated proceeds from insurance claims for the year ended
December 31, 2009 and 2008 of $120,000 and $95,000, respectively, includes
$112,000 and $58,000, respectively, received on claims previously filed
against the estates of certain of the Company's insolvent excess insurance
carriers. See "Liquidity and Capital Resources - Insurance Claims for Past
Remediation Costs" for further discussion of this issue. Consolidated
proceeds from insurance claims reported for the year ended December 31,
2008 also includes approximately $37,000 from claims for the reimbursement
of costs incurred to repair a Gen-set.

Consolidated net miscellaneous income for the year ended December 31,
2009 and 2008 was $1,000 and $87,000, respectively. The amount reported
for the period in 2008 includes income of $67,000 related to the Company's
receivable from the escrow containing proceeds from the excess insurance
settlement discussed in Note 13, Legal Proceedings, SCA & SC Holdings, Inc.
The amount reported for 2008 also includes a partial refund, $17,000, of
expenses paid toward the 2004 settlement of litigation regarding the
Chemsol (a/k/a Tang) Superfund Site.

Loss before Income Tax Benefit

The consolidated loss before income tax benefit was $1,295,000 for the
year ended December 31, 2009, compared to a loss of $1,311,000 for the
prior year.

Income Tax Benefit

The provision for federal and state income tax benefit for the year
ended December 31, 2009 and 2008 was $598,000 and $374,000, respectively.
The Company recognized federal income tax benefits due to its ability to
carry-back net operating losses to 2006 and 2005 for credit against federal
income taxes paid with respect to such years. The increase in the
effective tax rate, to 46% from 27% of pre-tax income for the year ended
December 31, 2009 and 2008, respectively, was due to a 2009 change in the
federal tax laws which extended the carry-back period for net operating
losses from two to five years. The amount of tax benefit reported in 2008
was limited by the amount of taxes paid in 2006.

Net Loss

Net loss for the year ended December 31, 2009 was $697,000 or $.23 per
share, compared to a net loss of $937,000 or $.31 per share, for the year
ended December 31, 2008.

Liquidity and Capital Resources

Going Concern Uncertainty

As discussed herein, the Company faces significant short-term and
long-term cash requirements for (i) funding its professional and
administrative costs, (ii) federal income taxes payable, and (iii) funding
post-closure maintenance costs and other expenses associated with sites of
past operations. The Company's past participation in the waste handling,
treatment and disposal industries subjects the Company to additional claims
that may be made against the Company for the remediation of sites in which
the Company is deemed a potentially responsible party. In addition, future
events or changes in environmental laws or regulations that cannot be
predicted at this time could result in material increases in post-closure
costs, and other potential liabilities that may ultimately result in costs
and liabilities in excess of its available financial resources.

The Company continues to pursue the sale of certain assets,
however, no assurance can be given that the timing and amount of the
proceeds from such sales will be sufficient to meet the cash requirements
of the Company as they come due. The Company, therefore, cannot ascertain
whether its remaining operations and its efforts to otherwise enhance
liquidity will be adequate to satisfy its future cash requirements (See
Note 2 to the Company's Consolidated Financial Statements).

In the event of an unfavorable resolution of the Company's litigation
and contingent liabilities, discussed below and in the Notes to the
Company's Consolidated Financial Statements, or should the proceeds of
asset sales be insufficient to meet the Company's future cash requirements,
including its tax liabilities, then, if other alternatives are unavailable
at that time, the Company will be forced to consider a plan of liquidation
of its remaining assets, whether through bankruptcy proceedings or
otherwise.

Statement of Cash Flow

Net cash used in operating activities for the year ended December 31,
2009 was $766,000 versus $960,000 reported for the prior year. The primary
sources of cash for both 2009 and 2008 were cash received from customers,
federal income tax refunds and the reimbursement of expenses from the
restricted escrow account dedicated to fund the post-closure maintenance
costs of the Kinsley's Landfill, referred hereinto as the Kinsley's Escrow,
and discussed in the paragraph which follows. Cash received from customers
for the year ended December 31, 2009 and 2008 was $416,000 and $700,000,
respectively. Federal income tax refunds were generated through the carry-
back of losses to years in which the Company paid federal income taxes.
The $807,000 refund received during 2009 was on account of net losses
incurred during 2008 and 2007. The Company has recorded a federal income
tax receivable of $600,000 as of December 31, 2009. Once this receivable
is collected, all income tax payments available for refunds under current
laws will have been refunded. The other sources of cash from operating
activities for the year ended December 31, 2009 and 2008 included $120,000
and $95,000, respectively, of proceeds from claims filed against the
Company's equipment insurance carrier and estates of insolvent excess
insurance carriers. The primary use of cash for operating activities in
both 2009 and 2008 were payments made to suppliers and employees, and
payments of landfill post-closure maintenance costs which again are
discussed below. Cash paid to suppliers and employees totaled $2,243,000
and $1,977,000 for the year ended December 31, 2009 and 2008, respectively.
A significant use of cash in operating activities for both 2009 and 2008,
was the $161,000 and $195,000, respectively, paid toward federal income
taxes payable pursuant to the Company's Offer in Compromise, as discussed
below.

Certain post-closure maintenance costs of the Kinsley's Landfill are
initially paid by Kinsley's, such as personnel costs and other necessary
materials or services for which credit terms are limited. Kinsley's seeks
reimbursement for such payments from the Kinsley's Escrow. Payments of
landfill post-closure maintenance costs related to the Kinsley's Landfill
totaled $700,000 and $743,000 for the year ended December 31, 2009 and
2008, respectively. The amount of reimbursements received from the
Kinsley's Escrow during 2009 and 2008 totaled $891,000 and $1,021,000,
respectively. NJDEP's review and approval process for these expenses has
taken up to 12 months from the month the expense was incurred. Post-
closure costs of the Mac Landfill are funded from the Company's general
funds, and equaled $30,000 and $24,000 for 2009 and 2008, respectively.
See Note 10 to the Company's Consolidated Financial Statements for further
discussion of the Company's landfill post-closure maintenance cost
obligations.

Net cash provided by investing activities for the year ended December
31, 2009 and 2008 was $1,151,000 and $725,000, respectively. Funds provided
by investing activities were utilized primarily to supplement the cash and
cash equivalents used to fund operating activities. During the year ended
December 31, 2009, $30,000 was spent for the purchase of miscellaneous
equipment, and $69,000 was spent for equipment and improvements in 2008,
including $41,000 on electric generation equipment.

Financing activities used $14,000 and $10,000 of cash for 2009 and
2008, respectively, for payment of vehicle financing.

As a result of these activities, funds held by the Company in the form
of cash and cash equivalents increased $371,000 during the year ended
December 31, 2009 to $1,087,000, versus a decrease of $245,000 reported for
2008. The sum of cash, cash equivalents and marketable securities as of
December 31, 2009 equaled $2,387,000 versus $3,196,000 at the end of the
prior year.

Working capital was $2,507,000 and $3,352,000 for the year ended
December 31, 2009 and 2008, respectively, and the ratio of current assets
to current liabilities was 2.5 to 1 as of December 31, 2009 and 2.8 to 1 as
of December 31, 2008.

Taxes

As of December 31, 2009, the Company owes the United States Internal
Revenue Service (the "Service") $577,000 for income taxes pertaining to
taxable years 1980-88 and certain issues from taxable years 1989-91. This
amount is payable in installments pursuant to the Offer in Compromise (the
"Offer") proposed by the Company and accepted by the Service during July
2004. The Offer committed the Company to pay a total of $2,490,000 in
satisfaction of the assessed federal income taxes and interest of
approximately $4,800,000. A payment of $810,000 was made during October
2004 and the balance due is being paid in monthly installments over nine
years. The total of the payments made from inception through December 31,
2009 equals approximately $1,913,000. Approximately $161,000 is due in each
of the three years subsequent to December 31, 2009, and $94,000 due during
2013. The Service does not impose interest on amounts payable pursuant to
the Offer. The Company is permitted to receive refunds of prior tax
overpayments and from the carry-back of losses. Should the Company default
in any of the terms of the Offer, the Service may initiate suit to impose
one or more remedies available to it, including the reinstatement of the
total amount previously assessed and/or impose interest.

Post-Closure Costs

As of December 31, 2009, Kinsley's has accrued $8.0 million for its
estimated share of post-closure costs related to the Kinsley's Landfill.
Approximately $6.1 million is held in a restricted escrow to provided
funding of the post-closure maintenance costs of the Kinsley's Landfill
(see Notes 5 and 10 to the Company's Consolidated Financial Statements).
All disbursements from such escrow must be approved by the NJDEP. The
timing of such approvals and the release of funds from the restricted
escrow account may take between three to twelve months from the month the
expense was incurred.

The thirty-year post-closure care period for the Mac Landfill was to
expire on June 7, 2008. On June 3, 2008 the NJDEP notified the Company of
its decision to temporarily extend the post-closure care period until such
time the NJDEP performs a re-evaluation and re-assessment of conditions at
the landfill. The NJDEP requested certain environmental data concerning
the landfill for such purpose. The NJDEP intends to then determine what
further actions, if any, will be required of the Company. Because of the
nature, scope and timing of NJDEP's decision and information request, the
Company has requested an adjudicatory hearing to contest certain aspects of
NJDEP's decision including the extension of the post-closure care period.
The Company's accrual established for the estimated post-closure
maintenance cost at this site was fully depleted during 2008. The Company
began to expense ongoing post-closure maintenance costs as incurred at that
time, and will continue to do so until the obligations of the Company with
respect to the site, if any, are determined. Annual post-closure
maintenance costs related to the MAC Landfill approximated $30,000 and
$24,000 for the years ended December 31, 2009 and 2008.

Contingent Environmental Liabilities

During November 2004, the Company along with fourteen other potentially
responsible parties were named as respondents to an Unilateral
Administrative Order issued by the United States Environmental Protection
Agency("EPA")regarding the Scientific Chemical Processing Superfund Site
(the "SCP Site") located in Carlstadt, New Jersey, which has been undergoing
remediation pursuant to Unilateral Administrative Order issued in 1990. The
November 2004 Unilateral Administrative Order seeks contribution toward the
remediation of an area designated Operable Unit 2, estimated to cost $7.5
million, and $2.0 million of past oversight and administrative costs from
the fifteen respondents, and a group of sixty nine other potentially
responsible parties under the Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA"). EPA publications report work on
Operable Unit 2 began in April 2008 and should be completed in 2010, and a
final remedy to address contamination of off-site ground water should be
selected in 2011. The Company ceased operations of a solvents recovery
facility at the site in 1970. The Company, together with the property
owner, have contributed cash and proceeds from insurance settlements toward
the remediation of the SCP Site. Such contributions total $16.4 million
through December 31, 2007, plus interest earned thereon, which the Company
believes should satisfy the share of remediation costs which could be found
attributable to the Company for the SCP Site and any contamination or
danger caused off-site.

The Company was one of 158 recipients of a Notice of Potential
Liability and Request to Perform Remedial Investigation/Feasibility Study
(the "Notice"), issued by the EPA on March 9, 2006, regarding the
contamination of the Berry's Creek Study Area (the "Creek Area") located in
Bergen County, N.J. A tributary adjacent to the SCP Site in Carlstadt,
N.J. flows into Berry's Creek. The Creek Area includes the approximately
seven miles long water body known as Berry's Creek, a canal, all
tributaries to Berry's Creek and related wetlands. Tidal areas of the
river into which Berry's Creek empties are also subject of the Notice.
Each recipient of the Notice is designated as a potentially responsible
party under CERCLA, and may be held liable for the cleanup of the Creek
Area and costs the EPA has incurred with regard to the Creek Area. The
investigation and feasibility study regarding the scope of the remediation
of the Creek Area is being conducted by a group of 100 potentially
responsible parties. EPA publications report field work began in May 2009,
and that it will take approximately five years from commencement of field
work to develop potential cleanup options. Since no discovery has taken
place concerning allegations against the Company, it is not possible to
estimate the Company's ultimate liability, if any, with respect to the Creek
Area.

The Kin-Buc Landfill is located in Edison, New Jersey, and was operated
on property both owned and leased by the Company's subsidiary, Kin-Buc, Inc.
("Kin-Buc"). Operations at the Kin-Buc Landfill ceased in 1977. The
operation and maintenance of remedial measures implemented at the Kin-Buc
Landfill continue pursuant to the provisions of Administrative Orders issued
by the EPA to the Company and other respondents, including SCA Services,
Inc. ("SCA"), an affiliate of Waste Management, Inc. As part of a December
1997 settlement of lawsuits regarding the allocation of costs of remediation
of the Kin-Buc Landfill, SCA agreed to defend and indemnify Transtech, Kin-
Buc and another subsidiary, Filcrest Realty, Inc. ("Filcrest") from claims
by non-settling non-municipal waste and municipal waste potentially
responsible parties in the litigation. SCA also agreed to defend and
indemnify the Company from certain liabilities in connection with the
remediation of the Kin-Buc Landfill, substantially relieving the Company
from certain future obligations with respect to the site. However, the
Company remains a responsible party under the Administrative Orders issued
by the EPA discussed above, and continues to incur administrative and legal
costs for issues and activities related to the site.

See Notes 10 and 13 to the Company's Consolidated Financial Statements
for further discussions regarding the SCP Site, the Creek Area and the Kin-
Buc Landfill.

The impact of future events or changes in environmental laws and
regulations, which cannot be predicted at this time, could result in
material increases in remediation and closure costs related to these sites,
possibly in excess of the Company's available financial resources. A
significant increase in such costs could have a material adverse effect on
the Company's financial position, results of operations and net cash flows.
The costs of litigation associated with a site are expensed as incurred.

Real Property

On December 10, 2007 the Mayor and Town Council of the Township of
Deptford, N.J. (the "Township") approved a resolution designating an area,
which includes approximately 342 acres of the Company's property and 60
acres the Company sold in 2006 pursuant to a contract with BWF Development,
Inc. ("BWF"), as an area in need of redevelopment in accordance with New
Jersey Statute 40A:12A-5. This action follows the Township's Planning
Board's August 8, 2007 approval of the study prepared by the Township's
planner entitled "Five Points Study Area, Preliminary Investigation:
Determination of an Area in Need of Redevelopment". This study concluded
that the subject area should be designated a redevelopment area pursuant to
the New Jersey Local Housing and Redevelopment Law. During September 2007,
two subsidiaries of Transtech commenced litigation in the Superior Court of
New Jersey Law Division, Gloucester County, entitled Kinsley's Landfill,
Inc. and Birchcrest, Inc. v. Planning Board of the Township of Deptford, et
al (Docket No.: L-1536-07), in an attempt to, among other remedies, reverse
and set aside the Township's Planning Board approval of the 2007 study
prepared by the Township's planner. During December 2007, this complaint was
amended to include The Township of Deptford, Benderson Properties, Inc. and
certain of its affiliates as defendants. See Note 13 - Legal Proceedings,
Five Points Redevelopment Zone for a discussion of this matter.

The Company's wholly owned subsidiary, Filcrest Realty, Inc. owns
approximately 53 acres of undeveloped property in Edison Township, N.J.
During 2008, the Township of Edison prevailed in its suit against the
Company to condemn 0.48 acres of Filcrest Realty, Inc. property situated
along the Raritan River and obtain easements to install a shoreline walkway.
See Note 13 - Legal Proceedings, Edison Township Property for a discussion
of this matter.

The Company is pursuing the disposition of its remaining property
through the sale of individual parcels and/or groups of parcels. The
Company is unable to determine when sale(s) of the remaining parcels will
ultimately be consummated and proceeds received given the location of the
properties, access issues and the location of wetlands on certain portions
of the property.

Insurance Claims for Past Remediation Costs

In February 2002, the Company consummated an October 2001 settlement
of litigation it had commenced in 1995 against its excess insurers who
provided coverage during the period of 1965 through 1986 (the "Lloyds
Suit"). Many of the non-settling insurance companies are insolvent,
however the estates of some of these insolvent companies had sufficient
assets to make a partial contribution toward claims filed by the Company.
During the year ended December 31, 2009, the Company received $112,000 of
proceeds related to claims filed against the estates of insolvent insurers.
As of such date, the Company has resolved claims against its excess
insurers representing approximately 98% of the value assigned to the
coverage provided under the policies that were the subject of the Lloyds
Suit. The October 2001 Settlement Agreement released and terminated all
rights, obligations and liabilities of the settling excess insurers and the
Company with respect to the subject insurance policies. The Company had
previously reached settlement of claims made against the majority of its
primary insurers for the period of 1965 through 1986 as well, agreeing to
forego future claims against the policies in conjunction with the
settlements.

Transtech Industries, Inc.
Consolidated Balance Sheets
(In $000's)

December 31, 2009 2008

Assets

Current Assets
Cash and cash equivalents $ 1,087 $ 716
Marketable securities 1,300 2,480
Accounts receivable - trade 31 34
Refundable income taxes 601 808
Prepaid expenses and other 43 103
Restricted escrow account for post-
closure costs 1,070 1,044
Total current assets 4,132 5,185

Property, Plant and Equipment
Land 1,067 1,067
Buildings and improvements 617 613
Machinery and equipment 3,405 3,320
Total gross assets 5,089 5,000
Less accumulated depreciation 3,139 3,035
Net property, plant and equipment 1,950 1,965

Other Assets
Restricted escrow account for post-
closure costs 5,100 6,019
Other 33 36
Total other assets 5,133 6,055

Total Assets $11,215 $13,205

See Accompanying Notes to the Consolidated Financial Statements

Transtech Industries, Inc.
Consolidated Balance Sheets, cont'd
(In $000's, except share data)

December 31, 2009 2008

Liabilities and Stockholders' Equity

Current Liabilities
Current portion of long-term debt $ 16 $ 9
Accounts payable 217 194
Current portion of income taxes payable 161 161
Accrued income taxes 3 3
Accrued professional fees 83 364
Accrued miscellaneous liabilities 75 58
Current portion of accrued post-closure costs 1,070 1,044
Total current liabilities 1,625 1,833

Long-Term Liabilities
Long-term debt 46 8
Income taxes payable 416 577
Accrued post-closure costs 6,895 7,312
Total long term liabilities 7,357 7,897

Total Liabilities 8,982 9,730

Stockholders' Equity
Common stock, $.50 par value,
10,000,000 shares authorized:
4,864,940 shares issued 2,432 2,432
Additional paid-in capital 1,450 1,450
Retained earnings 9,371 10,068
Accumulated other comprehensive income (loss) (6) 539
Sub-Total 13,247 14,489
Treasury stock, at cost - 1,885,750 shares (11,014) (11,014)
Total stockholders' equity 2,233 3,475

Total Liabilities and
Stockholders' Equity $ 11,215 $ 13,205

See Accompanying Notes to the Consolidated Financial Statements

Transtech Industries, Inc.
Consolidated Statements of Operations
(In $000's, except per share data)

Years ended December 31, 2009 2008

Net Operating Revenues $ 413 $ 689

Cost of Operations
Direct operating costs (430) (502)
Remediation expense (30) (7)
Selling, general and
administrative expenses (1,693) (1,922)
Accretion expense (305) (336)
Total (2,458) (2,767)

Gain on sale of equipment - 3

Operating Loss (2,045) (2,075)

Other Income (Expense)
Investment income 56 80
Investment income on landfill
escrow accounts 562 488
Interest expense (4) (2)
Rental income 15 16
Proceeds from insurance claims 120 95
Miscellaneous income 1 87
Total other income (expense), net 750 764

Loss Before Income Tax Benefit (1,295) (1,311)

Income Tax Benefit 598 374

Net Loss $ (697) $ (937)

Basic Net Loss Per Common Share $ (.23) $ (.31)

Weighted Average Common Shares Outstanding 2,979,190 2,979,190

See Accompanying Notes to the Consolidated Financial Statements

Transtech Industries, Inc.
Consolidated Statements of Stockholders' Equity
(In $000's)

Years ended December 31, 2009 2008

Common Stock
Balance at January 1 and December 31 $ 2,432 $ 2,432

Additional Paid-In Capital
Balance at January 1 and December 31 1,450 1,450

Retained Earnings
Balance at January 1 10,068 11,005
Net loss (697) (937)
Balance at December 31 9,371 10,068

Accumulated Other Comprehensive Income (Loss)
Balance at January 1 539 298
Change in unrealized (loss) gain on
available-for-sale securities net of tax:
Unrealized gain (loss) arising during the
period (net of deferred income tax of
$0 and $0, respectively) (545) 241
Balance at December 31 (6) 539

Treasury Stock
Balance at January 1 and December 31 (11,014) (11,014)

Total Stockholders' Equity $ 2,233 $ 3,475

Comprehensive Loss
Net Loss $(1,081) $ (937)
Other comprehensive income (loss), net of tax:
Unrealized gains on available for sale
securities:
Unrealized (loss) gain arising during the
period (net of deferred income tax of
$0 and $0, respectively) (545) 241

Comprehensive Loss $(1,626) $ (696)

See Accompanying Notes to the Consolidated Financial Statements

Transtech Industries, Inc.
Consolidated Statements of Cash Flows
(In $000's)

Years ended December 31, 2009 2008

Increase (Decrease) in Cash
and Cash Equivalents

Cash Flows from Operating Activities:
Cash received from customers $ 416 $ 700
Cash paid to suppliers and employees (2,243) (1,977)
Interest and dividends received 56 80
Proceeds from insurance claims 120 95
Other income received 83 35
Interest paid (4) (2)
Income tax refunds 807 50
Income tax paid (163) (195)
Landfill post-closure costs (729) (767)
Proceeds from the restricted escrow account 891 1,021
Net cash used in operating activities (766) (960)

Cash Flows from Investing Activities:
Proceeds from maturity of marketable
securities 6,079 7,464
Purchase of marketable securities (4,898) (6,678)
Proceeds from sale of equipment - 8
Purchase of plant and equipment (30) (69)
Net cash provided by investing activities 1,151 725

Cash Flows from Financing Activities:
Principal payments on vehicle financing (14) (10)
Net cash used in financing activities (14) (10)

Net change in cash
and cash equivalents 371 (245)
Cash and cash equivalents at
beginning of year 716 961

Cash and cash equivalents at
end of year $ 1,087 $ 716

Noncash financing transactions during the year ended December 31,2009 and
2008 are as follows:

Cost of vehicle $ 60 $ -
Loan on new vehicle (60) -
Cash paid $ - $ -

See Accompanying Notes to the Consolidated Financial Statements

Transtech Industries, Inc.
Consolidated Statements of Cash Flows, cont'd
(In $000's)

Years ended December 31, 2009 2008

Reconciliation of Net Loss to Net Cash
Used in Operating Activities:

Net loss $ (697) $ (937)

Adjustments to Reconcile Net Loss to Net Cash
Used in Operating Activities:
Depreciation 104 98
Gain from sale of equipment - (3)
Accretion expense 305 336
Earnings on restricted escrow account (562) (488)
(Increase) decrease in assets:
Accounts receivable, net 3 10
Refundable income taxes 207 (324)
Prepaid expenses and other 60 134
Long term assets - deposits 3 114
Increase (decrease) in liabilities:
Accounts payable and accrued miscellaneous
liabilities 91 29
Accrued income taxes - (1)
Accrued professional fees (281) 6
Income tax payable (161) (195)
Landfill post-closure maintenance costs (729) (760)
Proceeds from the restricted escrow 891 1,021
Net Cash Used in Operating Activities $ (766) $ (960)

See Accompanying Notes to the Consolidated Financial Statements
Transtech Industries, Inc.
Notes to Consolidated Financial Statements

Note 1 - Summary of Significant Accounting Policies:

Description of Business:

The Company's operations consist of the parent company and 18
subsidiaries, two of which conduct active operations. The operations
of these two subsidiaries have been classified into two segments: the
performance of environmental services and the generation and sale of
electricity utilizing an alternative fuel, methane gas. The other
subsidiaries of the Company hold assets consisting primarily of cash
and cash equivalents, real property and contract rights.

Principles of Consolidation:

The Consolidated Financial Statements include the accounts of the
Company and its subsidiaries. All significant intercompany
transactions and balances have been eliminated.

Reclassification:

Certain reclassifications have been made to the 2008 financial
statements in order to conform to the presentation followed in
preparing the 2009 financial statements. The reclassifications have no
effect on previously reported income.

Use of Estimates:

In preparing financial statements in accordance with accounting
principles generally accepted in the United States of America,
management is required to make estimates and assumptions that affect
the reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the financial
statements, and revenues and expenses during the reporting period.
Actual results could differ from these amounts. Significant items
subject to such estimates and assumptions include the accruals for
post-closure costs, obligations resulting from litigation and deferred
taxes.

Concentration of Credit Risk:

Financial instruments, which potentially subject the Company to
concentrations of credit risk, consist principally of temporary cash
investments and accounts receivable. The Company places its temporary
cash investments with high credit quality financial institutions.
These cash investments may, at times, be in excess of the FDIC
insurance or not covered by the FDIC. Credit limits, ongoing credit
evaluations, and account monitoring procedures are utilized to minimize
the risk of loss with respect to accounts receivable. During the years
ended December 31, 2009 and 2008 one customer of the Company accounted
for 100% of the Company's consolidated net operating revenues and
accounts receivable - trade.

Fair Value of Financial Instruments:

The carrying amount of cash and cash equivalents, accounts
receivable, accounts payable and accrued expenses approximates fair
value because of the short maturity of these items. The carrying
amount of notes payable (including current portion) approximates fair
value since such notes bear interest at current market rates.

The fair value of the income tax payable discussed in Note 8 herein
equals approximately $518,000 and $644,000 as of December 31, 2009 and
2008, respectively, determined by discounting the installments at a
rate of 6% per annum.

Cash and Cash Equivalents:

The Company considers all highly liquid investments purchased with
an original maturity of three months or less and funds deposited in
money market accounts to be cash equivalents. At December 31, 2009 and
2008, cash and cash equivalents includes interest-bearing cash
equivalents of $743,000 and $556,000, respectively.

Investments:

The Company's marketable securities are classified as available-
for-sale and are carried at fair value as determined by quoted market
prices. Unrealized gains and losses are reported in a separate
component of stockholders' equity, net of tax, until realized.
Realized gains or losses from the sale of marketable securities are
based on the specific identification method and are included in other
income. Interest and dividend income is recorded as earned.

Trade Accounts Receivable:

Trade accounts receivable are stated at the amount management
expects to collect from outstanding balances. Management provides for
probable uncollectible amounts through a charge to earnings and a
credit to a valuation allowance based on its assessment of the current
status of individual accounts. Balances that are still outstanding
after management has used reasonable collection efforts are written off
through a charge to the valuation allowance and a credit to trade
accounts receivable. No allowances for doubtful accounts exist as of
December 31, 2009 and 2008.

Valuation of Long-Lived Assets:

The Company periodically analyzes its long-lived assets for
potential impairments, assessing the appropriateness of lives and
recoverability of unamortized balances through measurement of
undiscounted operating cash flows on a basis consistent with accounting
principles generally accepted in the United States of America.

Property, Plant and Equipment:

Property, plant and equipment are stated at cost. Depreciation is
provided on a straight-line basis over estimated useful lives of 3-15
years for machinery and equipment, 25 years for buildings and 10-25
years for improvements.

Restricted Escrow Account for Post-Closure Costs:

The Company's wholly owned subsidiary, Kinsley's Landfill, Inc.
("Kinsley's") provided financial assurance by depositing cash during
the operating life of the Kinsley's Landfill into two escrow accounts
which are legally restricted for purposes of funding the closure and
post-closure activities at the Kinsley Landfill site. One of two
escrow accounts has been depleted. Balances maintained in the
remaining restricted escrow account fluctuate based on the ongoing use
of the funds for qualifying post-closure maintenance activities and
the changes in the fair value of the financial instruments held in the
restricted escrow account. Any funds remaining in the restricted
escrow account at the end of the monitoring period will revert to the
State of New Jersey. At December 31, 2009 and 2008 the accrued post-
closure maintenance liability exceeds the funds available in the
restricted escrow account(s) by $1,795,000 and $1,293,000,
respectively. The funds held in the restricted escrow account at
December 31, 2009 and 2008 were invested primarily in U.S. government
and U.S. government backed debt securities.

Post-Closure Costs:

The Company accounts for its subsidiaries obligations for post-
closure activities of two landfills under Accounting Standards
Codification 410 - "Asset Retirement and Environmental Obligations"
("ASC 410"). ASC 410 applies to all legally enforceable obligations
associated with the retirement of tangible long-lived assets.

Under ASC 410, obligations related to closure and post-closure
activities that occur after the landfill has ceased operations are
recognized on a units-of-consumption basis as airspace is consumed
throughout the entire landfill. Landfill retirement obligations are
to be capitalized as the related liabilities are recognized and then
amortized using the units-of-consumption method over the airspace
consumed within the capping event or the airspace consumed throughout
the entire landfill, depending upon the nature of the obligation.
Since the landfills owned and/or operated by the Company's
subsidiaries are closed and no longer operating, the capitalized
retirement obligations are fully amortized. All obligations were
initially measured at estimated fair value. Fair value was calculated
on a present value basis using a credit-adjusted, risk-free rate.

Under ASC 410, accretion of the asset retirement obligation
liability from its initially determined value is recorded as an
expense using the effective interest method. Changes in the liability
due to the passage of time are recognized as operating items in the
statement of operations and are referred to as accretion expense.
Changes in the liability due to revisions to estimated future cash
flows are recognized by increasing or decreasing the liability, with,
in the case of closed landfills, an offset to the statement of
operations.

See Note 10 for further discussion of the Company's subsidiaries
post-closure maintenance costs and ASC 410.

Environmental Matters:

Accruals for environmental matters are recorded when it is probable
that a liability has been incurred and the amount of the liability can
be reasonably estimated, based on current law and existing
technologies. The accruals are developed based on currently available
information and reflect the participation of other potentially
responsible parties. These accruals are adjusted periodically as
assessment and remediation efforts progress or as additional technical
or legal information becomes available.

Revenue Recognition:

Revenues from the sale of electricity are recognized in the period
earned based on kilowatts delivered and, to a lesser extent, capacity
provided.

Income Taxes:

Deferred tax assets and liabilities are recognized for the future
tax consequences attributable to differences between the carrying
amount of assets and liabilities for financial reporting purposes and
the amount used for income tax purposes as well as for the deferred tax
effects of net operating loss carryforwards and tax credits
carryforwards that are available to offset future income taxes.
Deferred tax assets and liabilities are measured using the enacted tax
laws and rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recoverable or
settled. Valuation allowances are recognized if, based on the weight
of available evidence, it is more likely than not that some portion of
the deferred tax assets will not be realized.

It is the Company's policy to record interest and penalties related
to uncertain income tax positions, if any, as a component of income tax
expense. As of December 31, 2009 and 2008, the Company had no
uncertain tax positions that would require recognition or disclosure in
the financial statements. The Company files U.S. and various state
income tax returns. U.S. returns for the years ended December 31, 2006
to 2009 remain open for audit. Generally, the various state returns
for the years ended December 31, 2005 to 2009 remain open for audit.

Net Income (Loss) per Share:

Basic "Earnings per Share" ("EPS") excludes dilution and is
computed by dividing net loss available to common shareholders by the
weighted average number of common shares outstanding during the period.
Diluted EPS reflects the potential dilution that could occur if
securities or other contracts to issue common stock, such as stock
options, were exercised, converted into common stock or resulted in the
issuance of common stock. Diluted EPS is computed by dividing net loss
by the weighted average number of common shares outstanding for the
period increased by the dilutive effect of common stock-equivalent
shares computed using the treasury stock method. Basic EPS and Diluted
EPS are equal in amount for the years ended December 31, 2009 and 2008
since the Company has no common stock-equivalents outstanding in either
year.

Recent Accounting Pronouncements:

In September 2006, the Financial Accounting Standards Board
issued authoritative guidance associated with fair value measurements.
This guidance defined fair value, established a framework for
measuring fair value, and expanded disclosures about fair value
measurements. In February 2008, the FASB delayed the effective date
of the guidance for all non-financial liabilities, except those that
are measured at fair value on a recurring basis. Accordingly, the
Company adopted this guidance for assets and liabilities recognized at
fair value on a recurring basis effective January 1, 2008 and adopted
the guidance for non-financial assets and liabilities measured on a
non-recurring basis effective January 1, 2009. The application of the
fair value framework did not have a material impact on our
consolidated financial position, results of operations or cash flows.
In May 2009, the FASB established standards related to accounting
for, and disclosure of, events that occur after the balance sheet
date, but before the financial statements are issued or are available
to be issued. The Company has adopted the provisions of this new
authoritative guidance, which became effective for interim and annual
reporting periods ending after June 15, 2009. Subsequent events have
been evaluated through the date and time the financial statements were
issued on March 30, 2010. No material subsequent events have occurred
since December 31, 2009 that required recognition or disclosure in the
current period financial statements.
In June 2009, the FASB issued a new accounting standard which
provides guidance related to the FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting
Principles - a replacement of a previously issued standard. The new
accounting standard stipulates the FASB Accounting Standards
Codification is the source of authoritative U.S. GAAP recognized by
the FASB to be applied by nongovernmental entities. The new accounting
standard is effective for financial statements issued for interim and
annual periods ending after September 15, 2009. The implementation of
this standard did not have a material impact on the Company's
statements of operations or financial position.
Note 2 - Going Concern Uncertainty:

The Company's financial statements have been prepared on a going
concern basis which contemplates the realization of assets and the
settlement of liabilities and commitments in the normal course of
business. The Company has incurred significant operating losses this
year and in each of the prior five years and it is anticipated that
such operating losses will continue as general and administrative
expenses are expected to exceed the Company's available earnings from
its remaining operating businesses in the near-term. The Company has
been aggressively pursuing numerous alternatives to raise funds,
including the disposition of all of its non-operating assets (See Note
7). However, the Company is currently unable to determine whether the
timing and the amount of cash generated from these efforts will be
sufficient to discharge the Company's tax liability, contingent
obligations and its continuing operating liabilities as they come due.
These conditions raise substantiated doubt about the Company's ability
to continue as a going concern. The consolidated financial statements
do not include any adjustments that might result if the Company is
unable to continue as a going concern.

Note 3 - Marketable Securities:

At December 31, 2009, the Company's marketable securities consisted
primarily of U.S. Treasury bills classified as available-for-sale and
are carried at their fair value of $1,300,000 which approximated cost.
At December 31, 2008, the Company's marketable securities again
consisted of U.S. Treasury bills classified as available-for-sale and
carried at their fair value of $2,480,000 which also approximated cost.

During the year ended December 31, 2009 and 2008, proceeds from the
maturity of available-for-sale securities were $6,079,000 and
$7,464,000, respectively. No marketable securities were sold prior to
maturity during 2009 and 2008.

Note 4 - Accounts Receivable:

The Company sells the electricity it generates to a local utility.
Such sales account for 100% of the Company's Net Operating Revenues for
both the years ended December 31, 2009 and 2008, and represented 100%
of the Company's Accounts Receivable - Trade as of December 31, 2009
and December 31, 2008.

Note 5 - Restricted Escrow Accounts For Post-Closure Costs:

As of December 31, 2009 and 2008, the Company's wholly owned
subsidiary Kinsley's held $6,170,000 and $7,063,000, respectively, in
a restricted escrow account which is to be used to fund the post-
closure maintenance costs of Kinsley's Landfill. The escrow account
is legally restricted for purposes of settling closure and post-closure
costs, and was established to provide financial assurance through the
deposit of a portion of the tipping fee charged when the landfill was
operating. All disbursements from the restricted escrow account must
be approved by the NJDEP. The balance of funds, if any, remaining
after the end of the post-closure activities will revert to the State
of New Jersey. The restricted escrow account primarily contains U.S.
Treasury Notes and government backed debt securities. At December 31,
2009 the securities had a fair market value of $6,170,000, with a cost
of $6,176,000, unrealized gains of $87,000 and unrealized losses of
$93,000. At December 31, 2008 the securities had a fair market value
of $7,063,000, with a cost of $6,524,000, unrealized gains of $541,000
and unrealized losses of $2,000. The net unrealized gains and losses
are included in stockholder's equity for the respective periods. The
portion of the restricted escrow funds reported as current equals the
current portion of post-closure costs related to the Kinsley's Landfill
(see Note 10).

At December 31, 2009, the restricted escrow account's investments
in debt securities mature as follows (stated at fair value): $347,000
within one year; $3,490,000 1 to 5 years and $2,333,000 6 to 10 years.

Note 6 - Fair Value:

Effective January 1, 2009, the Company adopted Accounting
Standards Codification 820 - "Fair Value Measurements and Disclosures"
("ASC 820") with respect to non-financial assets and liabilities
measured on a non-recurring basis.

ASC 820 defines fair value, outlines a framework for measuring
fair value, and details the required disclosures about fair value
measurements. Under ASC 820, fair value is defined as the price that
would be received to sell an asset or paid to transfer a liability in
an orderly transaction between market participants at the measurement
date in the principal or most advantageous market. ASC 820 enables the
reader of the financial statements to assess the inputs used to
determine the fair value of an asset or liability by establishing a
hierarchy for ranking the quality and reliability of such inputs.
Level 1 inputs include quoted market prices in an active market for
identical assets or liabilities. Level 2 inputs are market data, other
than Level 1, that are observable either directly or indirectly. Level
2 inputs include quoted market prices for similar assets or
liabilities, quoted market prices in an inactive market, and other
observable information that can be corroborated by market data. Level
3 inputs are unobservable and corroborated by little or no market data.
ASC 820 requires the utilization of the lowest possible level of input
to determine fair value. The adoption of this statement did not have
any material impact on the Company's consolidated results of operations
and financial condition.

The following table provides information on the assets measured at
fair value on a recurring basis (table in $000):

Carrying Amount Fair Value Measurements Using
in Consolidated
Balance Sheet Level 1 Level 2 Level 3

Marketable securities
December 31, 2009 $ 1,300 $ 1,300 - -
December 31, 2008 $ 2,480 $ 2,480 - -
Restricted escrow account
for post-closure costs
December 31, 2009 $ 6,170 $ 6,170 - -
December 31, 2008 $ 7,063 $ 7,063 - -

The restricted escrow account primarily contains U.S. Treasury
Notes and government backed debt securities.

Note 7 - Property, Plant and Equipment:

The Company's property, plant and equipment as of December 31, 2009
and 2008 consisted of the following (table in $000's):

2009 2008

Land $ 1,067 $ 1,067
Buildings and improvements:
Buildings 495 491
Gas Collection System 122 122
Machinery and equipment 3,405 3,320
Total 5,089 5,000

Less: Accumulated depreciation (3,139) (3,035)
$ 1,950 $ 1,965

Depreciation expense charged to operations for the year ended
December 31, 2009 and 2008 was $104,000 and $98,000, respectively.

The Company owns approximately 364 contiguous acres in the
Township of Deptford, N.J. (the "Township"). Approximately 110 of the
364 acres are occupied by the closed Kinsley's Landfill, which is
owned by the Company's wholly owned subsidiary, Kinsley's Landfill,
Inc., ("Kinsley's"). On December 10, 2007 the Township's Mayor and
Town Council approved a resolution designating an area, including
approximately 342 acres of the Company's property, as an area in need
of redevelopment in accordance with New Jersey Statute 40A:12A-5.
This action follows the Township's Planning Board's August 8, 2007
approval of the study prepared by the Township's planner entitled
"Five Points Study Area, Preliminary Investigation: Determination of
an Area in Need of Redevelopment". This Study concluded that the
subject area should be designated a redevelopment area pursuant to the
New Jersey Local Housing and Redevelopment Law. During September
2007, two subsidiaries of Transtech commenced litigation entitled
Kinsley's Landfill, Inc., and Birchcrest, Inc. v. Planning Board of the
Township of Deptford (No. L-001536-07) in the Superior Court of New
Jersey, Law Division, Gloucester County. During December 2007, the
complaint was amended to include the Township of Deptford, Benderson
Properties, Inc. and certain of its affiliates as defendants. The suit
seeks, among other remedies, to reverse and set aside the Township's
Planning Board approval of the 2007 study prepared by the Township's
planner. See Note 13, Legal Proceedings, Five Points Redevelopment
Zone, for a discussion of this matter.

On October 19, 2006 Kinsley's entered into a lease with a group of
five affiliated entities, which purchased property from the Company in
2006, for the portion of Kinsley's property upon which a radio tower is
situated. Rent paid to Kinsley's from the Lessees for tower lease rent
payments and real estate tax reimbursement was approximately $7,000 and
$6,000 for 2009 and 2008, respectively. Kinsley's lease with the
Lessees expires February 2015 and is renewable in five year increments
through February 2030. The estimated minimum lease payments and real
estate tax reimbursements expected for 2010 and 2011 is $6,000 per
year.

The Company is pursuing the disposition of its remaining property
through the sale of individual parcels and/or groups of parcels. The
Company is unable to determine when sale(s) of the remaining parcels
will ultimately be consummated and proceeds received given the ongoing
litigation, discussed above, their location, access issues and the
location of wetlands on certain parcels.

Note 8 - Income Taxes:

The benefit from income taxes for the years ended December 31, 2009
and 2008 is based upon the Company's anticipated annual effective tax
rate and consists of the following (table in $000's):

2009 2008
Currently (payable) refundable:
Federal $ 600 $ 376
State (2) (2)
598 374
Deferred (tax) benefit:
Federal - -
State - -
- -
Total income tax benefit:
Federal 600 376
State (2) (2)
$ 598 $ 374

On November 6, 2009 the Worker, Homeownership, and Business
Assistance Act of 2009 ("WHBAA") was passed into law. This law among
other things allows certain companies to elect to increase the
carryback period for 2009 losses up to a maximum of five years.
Previously, federal tax laws limited the carry-back of losses to two
preceding years. As a result of the WHBAA the Company has recognized
a federal income tax benefit of $600,000 in the accompanying financial
statements for the year ended December 31, 2009. The tax benefit
resulting from the loss reported for the periods in 2009 in excess of
available benefits is fully offset by an increase in the deferred tax
valuation allowance.

Deferred tax expense results from temporary differences as follows
(table in $000's):

2009 2008
Excess of tax over book
(book over tax) depreciation $ (86) $ (26)
Change in Federal valuation
allowance (Net of $0 related
to unrealized appreciation of
available for sale securities) 73 25
Change in state valuation allowance (79) (192)
State net operating loss carryforwards 92 199
Post-Closure costs - (6)
Deferred tax (expense) benefit $ - $ -

Deferred tax assets and liabilities at December 31, 2009 and 2008
were comprised of the following (table in $000's):

2009 2008
Deferred tax assets:
Federal net operating loss
carryforwards $ 128 $ -
State net operating loss
Carryforwards 708 616
Depreciation - 36
Subtotal 836 652
Valuation allowance for deferred
tax assets (770) (652)
Total 66 -
Deferred tax liabilities:
Depreciation (66) -
Net deferred tax asset $ - $ -

The Company has recorded valuation allowances of $770,000 and
$652,000 as of December 31, 2009 and 2008, respectively, to reflect the
estimated amount of deferred tax assets which are not currently
realizable. Recognition of these deferred tax assets is dependent upon
both the sufficiency and timing of future taxable income.

The calculation of the above provision includes available state
net operating loss carry-forwards as permitted. At December 31, 2009
the Company and its subsidiaries had state net operating loss
carryforwards of $7,873,000 which expire at various dates through
December 31, 2016.

The following is a reconciliation between the amount of reported
total income (tax) credit and the amount computed by multiplying the
loss before tax by the applicable statutory U.S. federal income tax
rate (table in $000's):
2009 2008
Tax credit computed by applying U.S.
federal income tax rate to income
before income taxes $ 440 $ 446
Elimination of federal tax on:
Accretion expense (104) (114)
Investment income on landfill
escrow accounts 191 166
Non-taxable interest income - 14
(Increases) reductions in taxes
resulting from valuation allowance:
Federal deferred tax
valuation allowance 73 (133)
State taxes net of federal benefit - (1)
Other permanent items - net - (2)
$ 600 $ 376

Income taxes payable, equal to $577,000 as of December 31, 2009,
represents the amount due the United States Internal Revenue Service
(the "Service") in settlement of litigation concluded during October
2000 regarding the Company's tax liability for taxable years 1980-88
and certain issues from taxable years 1989-91. The Company settled all
of the issues before the U.S. Tax Court (Transtech Industries, Inc. v.
Commissioner of Internal Revenue Docket No. 2588-94) and reached
agreement with the Service as to its tax liability for all taxable
years through 1996. During July 2004, the Service accepted the
Company's Offer in Compromise (the "Offer") which requested a reduction
in the amount payable with respect to such settlements and permission
to pay the reduced obligation in installments. The Offer committed the
Company to pay a total of $2,490,000 in satisfaction of the assessed
federal income taxes and interest of approximately $4,800,000. A
payment of $810,000 was made during October 2004 and the balance due is
being paid in monthly installments over nine years as follows: (a)
$18,230 per month for each of the forty-eight months beginning August
2004, and (b) $13,416 per month for each of the sixty months beginning
August 2008. The total of the installments paid from inception through
December 31, 2009 equals approximately $1,103,000. Approximately
$161,000 is due in each of the three years subsequent to December 31,
2009, and $94,000 due in 2013. The sum of the payments due during the
twelve months subsequent to December 31, 2009 has been classified as a
current liability and the balance of the payments due have been
classified as a long-term liability. The Service does not impose
interest on amounts payable pursuant to the Offer. The Company is
permitted to receive refunds of prior tax overpayments and from the
carryback of losses. Should the Company default in any of the terms of
the Offer, the Service may initiate suit to impose one or more remedies
available to it, including the reinstatement of the total amount
previously assessed and/or impose interest.

Note 9 - Long-term Debt:

Long-term debt consists of the following as of December 31, 2009
and 2008 (table in $000's, except for monthly installment amounts):

December 31, December 31,
2009 2008

Note payable to a finance company,
due in monthly installments of
$459, including interest at 7.99%
per annum, paid in full during
August 2009. $ - $ 3

Note payable to a bank, due in
Monthly installments of $505,
including interest at 7.75% per
annum, to June 2011; secured by
a vehicle carried at a net
book value of $12. 8 14

Non-interest bearing note payable
To a finance company, payable in
60 monthly installments of $1,154,
To June 2014; including interest
imputed at 6% per annum; secured by
a vehicle carried at a net book
value of $52. 54 -

Total long-term debt 62 17
Less: Current portion (16) (9)
Long-term portion $ 46 $ 8

Aggregate maturities of long-term debt for five years subsequent to
December 31, 2009 are as follows: 2010 - $16,000; 2011 - $14,000; 2012
- $12,000; 2013 - $13,000 and 2014 - $7,000.

Note 10 - Post-closure Maintenance Costs and Contingent Environmental
Liabilities:

Post-closure Maintenance Costs

The Company's subsidiary, Kinsley's has future obligations for
post-closure maintenance costs with respect to a landfill it owns and
operated, the Kinsley's Landfill, and a landfill a different
subsidiary, Mac Landfill, Inc. ("Mac") operated on real property
leased from others, the Mac Landfill. Kinsley's Landfill ceased
accepting solid waste at its landfill in Deptford Township, New Jersey
during February 1987 and commenced closure of that facility. Mac Land-
fill is also located in Deptford Township, New Jersey and ceased
operations during 1977.

By regulation, post-closure maintenance costs include estimated
costs to be incurred for providing required post-closure monitoring
and maintenance of the landfill. Post-closure activities occur after
an entire landfill ceases to accept waste and closes. These
activities involve maintenance of final cover, methane gas control,
leachate management and groundwater monitoring, surface water
monitoring and control, and other operational and maintenance
activities that occur after a landfill ceases to accept waste. The
post-closure period generally runs for up to 30 years after final site
closure for municipal solid waste landfills. Obligations associated
with monitoring and controlling methane gas migration and emissions
are set forth in applicable permits and these requirements are based
upon the provisions of the Federal Clean Air Act of 1970, as amended,
and the NJ Air Pollution Control and Solid Waste Management Acts.

Kinsley's and Mac accrued for such post-closure costs in
accordance with Accounting Standards Codification 410, "Asset
Retirement and Environmental Obligations" ("ASC 410"). Pursuant to
ASC 410, a liability for an asset retirement obligation should be
initially measured at fair value. In situations where quoted market
prices are unavailable, the estimate of fair value should be based on
the best available information. Changes in the liability due to the
passage of time are recognized as operating items in the income
statement and are referred to as accretion expense. Changes in the
liability due to revisions to estimated future cash flows are
recognized by increasing or decreasing the liability, with, in the
case of closed landfills, an offset to the statement of operations.

The Company's subsidiaries rely on third parties to provide
certain materials, supplies and professional services for post-closure
activities. Accordingly, the fair market value of these future
obligations is based upon quoted and actual prices paid for similar
work. Employees of Kinsley's perform the majority of the services
required for its post-closure obligations. A profit margin is added
onto the cost of such services to better reflect their fair market
value as required by ASC 410.

The estimates of costs to discharge asset retirement obligations
for the landfills are developed in today's dollars. The estimated
costs are inflated to the expected time of payment and then discounted
back to present value. The estimated costs in current dollars were
inflated to the expected time of payment using an inflation rate of
2.5%, and the inflated costs were discounted to present value using a
credit-adjusted, risk-free discount rate of 4.5%. The credit-
adjusted, risk-free rate were based on the risk-free interest rate on
obligations of similar maturity and adjusted for the risk associated
with investments permitted and typically held in Kinsley's post-
closure escrow account discussed in Note 6. Changes in the credit-
adjusted, risk-free rate do not change recorded liabilities, but
subsequently recognized obligations are measured using the revised
credit-adjusted, risk-free rate.

The following table summarizes the actual activity in the
Company's consolidated asset retirement obligation liabilities for
post-closure costs for the years ended December 31, 2009 and 2008
(table in $000):

Years Ended December 31,
2009 2008

Asset retirement obligation
liability, beginning of year $ 8,356 $ 8,797
Accretion expense 305 336
Obligations settled during
the period (642) (741)
Other adjustments (54) (36)
Asset retirement obligation
liability, end of year 7,965 8,356
Less: Current portion 1,070 1,044
Long-term portion $ 6,895 $ 7,312

The amount reported as current portion represents an
estimate of the cost to be incurred during the subsequent twelve
months. The estimates of post-closure maintenance costs in today's
dollars for each of the next five years are: $1,070,000; $1,049,000;
$1,029,000; $1,010,000 and $990,000, respectively. The post-closure
maintenance costs of the Kinsley's Landfill are funded from a
restricted escrow account (see Note 5).

Kinsley's began re-grading sections of the Kinsley's Landfill in
2006 in accordance with a plan approved by the New Jersey Department
of Environmental Protection ("NJDEP"). The re-grading plan calls for
the use of both recycled and non-recycled materials to fill and re-
contour the areas of the mound containing depressions. Kinsley's
received a fee to accept certain of the fill materials. The costs
incurred for re-grading activities shall be paid from such fees.
However, costs incurred for re-grading activities in excess of such
fees, if any, will be submitted to NJDEP for reimbursement from the
Kinsley's Escrow. The amount reported as Other adjustments in the
above table equals the proceeds generated from the materials received
in the re-grading project at the Kinsley's Landfill, less related re-
grading expenses.

During July, 2007 Kinsley's received notice from the NJDEP that
it had modified its approval of Kinsley's re-grading plan. Kinsley's
filed an adjuratory hearing request to challenge the NJDEP's
modification to the re-grading plan approval and was scheduled to
present its objections at an administrative hearing in June 2008.
During June 2008, the NJDEP approved certain modifications made by
Kinsley's to its re-grading plan intended to expedite NJDEP approval
of materials from new sources and address certain modifications
proposed by NJDEP in July 2007. Having resolved the issues and
received NJDEP approval, Kinsley's withdrew its administrative hearing
request.

The thirty-year post-closure care period for the Mac Landfill was
to expire on June 7, 2008. On June 3, 2008 the NJDEP notified Mac of
its decision to temporarily extend the post-closure care period until
such time the NJDEP performs a re-evaluation and re-assessment of
conditions at the landfill. The NJDEP has requested certain
environmental data concerning the landfill for such purpose. The
NJDEP intends to then determine what further actions, if any, will be
required of Mac. Because of the nature, scope and timing of NJDEP's
decision and information request, Mac has requested an adjudicatory
hearing to contest certain aspects of NJDEP's decision including the
extension of the post-closure care period. As of December 31, 2007,
Mac had $17,000 remaining of the accrual established for the estimated
post-closure maintenance cost at this site. Such accrual was fully
depleted during 2008. Mac will expense ongoing post-closure
maintenance costs as incurred until the obligations of Mac with
respect to the site, if any, are determined. Until such time, Mac is
unable to reasonably estimate the future cost of such obligations.
Annual post-closure maintenance costs related to the Mac Landfill
approximated $30,000 and $24,000 for the years ended December 31, 2009
and 2008. This increase in the post-closure maintenance costs was
primarily due to engineering fees incurred in response to NJDEP
inquiries.

The Company's subsidiaries intend to annually review their
calculations with respect to landfill asset retirement obligations
unless there is a significant change in the facts and circumstances
related to a landfill during the year, in which case the subsidiaries
will review their calculations after the significant change has
occurred.

Contingent Environmental Liabilities

The Company's past participation in the waste handling, treatment
and disposal industries subjects the Company to additional claims that
may be made against the Company for the remediation of sites in which
the Company is deemed a potentially responsible party. The impact of
future events or changes in environmental laws and regulations, which
cannot be predicted at this time, could result in material increases in
remediation and closure costs related to these sites, possibly in
excess of the Company's available financial resources. A significant
increase in such costs could have a material adverse effect on the
Company's financial position, results of operations and net cash flows.
The costs of litigation associated with a site are expensed as
incurred.

SCP Site

Transtech was one of 43 respondents to a September 1990
Administrative Order of EPA concerning the implementation of interim
environmental remediation measures at a site in Carlstadt, New Jersey
owned by Inmar and allegedly operated by Transtech as a solvents
recovery plant for approximately five years ending in 1970. The site
is known as the Scientific Chemical Processing Superfund Site (the "SCP
Site").

In September 1995, Transtech entered into a settlement agreement
to resolve litigation regarding the allocation of remediation costs
among certain respondents and potentially responsible parties.
Notwithstanding the September 1995 settlement, under the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA"), the
Company may have liability in connection with the SCP Site to EPA for
its costs of overseeing the remediation of the site, and to parties who
had not contributed to the remediation at the time the settlement was
approved but who may later choose to do so.

During September 2002, EPA issued a notice of potential liability
and of consent decree violations to potentially responsible parties
regarding the SCP Site. On November 12, 2004, a Unilateral
Administrative Order (the "UAO") was issued by EPA naming fifteen
companies, including the Company, as respondents. The UAO requires
the respondents to "make best efforts to cooperate and coordinate with
Settling Defendants" who are in the process of implementing the
response actions required under the UAO. A group of 69 PRPs (the
"Settling Defendants") have entered into a Consent Decree that
requires the implementation of the same response actions as the UAO.
The response actions include the design and implementation of the
remedy selected for the second operable unit ("OU2") at the SCP Site,
reimburse the United States approximately $2.0 million for certain
past costs allegedly incurred at the SCP Site, and make payment of
certain future response costs that may be incurred in connection with
the implementation of the OU2 remedy. The "best efforts to cooperate
and coordinate with Settling Defendants" includes the requirement to
negotiate with the Settling Defendants as to either the amount of work
required under the UAO the Company will be willing to assume or the
amount of the cash contribution the Company is willing to make toward
the implementation of the UAO. The EPA estimated the present value of
the selected remedy is $7.5 million which includes capital cost of
$4.7 million plus annual O&M costs of $180,000 per annum. The Company
has informed EPA of its intent to comply with the UAO and cooperate
and coordinate with the Settling Defendants' representative. The
Company, together with the property owner, previously contributed cash
and proceeds from insurance settlements toward the remediation of the
SCP Site. Such contributions total $16.4 million, plus interest
earned thereon, which the Company believes should satisfy the share of
remediation costs which could be found attributable to the Company for
the SCP Site and any contamination or damage caused offsite. See Note
13 - Legal Proceedings, the Carlstadt SCP Site for a discussion of
litigation regarding this site.

Berry's Creek Study Area

The Company was one of 158 recipients of a Notice of Potential
Liability and Request to Perform Remedial Investigation/Feasibility
Study (the "Notice"), issued by the EPA on March 9, 2006, regarding
the contamination of the Berry's Creek Study Area (the "Creek Area")
located in Bergen County, N.J. A tributary adjacent to the SCP Site
in Carlstadt, N.J. flows into Berry's Creek. The Creek Area includes
the approximately seven mile long water body known as Berry's Creek, a
canal, all tributaries to Berry's Creek and related wetlands. Tidal
areas of the river into which Berry's Creek empties are also subject
to the Notice. Each recipient of the Notice is designated as a
potentially responsible party under CERCLA, and may be held liable for
the cleanup of the Creek Area and costs the EPA has incurred with
regard to the Creek Area. The investigation and feasibility study
regarding the scope of the contamination of the Creek Area is being
conducted by a group of 100 potentially responsible parties. EPA
publications report field work began in May, 2009, and that it will
take approximately five years from commencement of field work to
develop potential cleanup options. Since no discovery has taken place
concerning allegations against the Company, it is not possible to
estimate the Company's ultimate liability, if any, with respect to the
Creek Area.

Kin-Buc Landfill

The Kin-Buc Landfill was owned and operated, both solely and then
with partners, by Transtech's wholly-owned subsidiary, Kin-Buc, Inc.
("Kin-Buc"), and ceased accepting waste in 1976. The Kin-Buc Landfill
and certain neighboring property, including parcels owned by
Transtech's wholly-owned subsidiary Filcrest Realty, Inc. ("Filcrest")
and other third parties, are undergoing remediation pursuant to
Administrative Orders issued by EPA in September 1990 and November 1992
(the "Orders") to the Company, and other responsible parties, including
Inmar Associates, Inc. ("Inmar"), SCA Services, Inc. ("SCA") and
certain related parties (SCA together with such related parties are
referred herein as the "SCA Parties"). The SCA Parties are affiliates
of Waste Management, Inc. ("WMI"). Inmar is controlled by Marvin H.
Mahan, a former principal shareholder and former officer and director
of the Company, and leased real property upon which the landfill is
situated to the Company.

The construction required by EPA at the Kin-Buc Landfill pursuant
to the Administrative Orders is complete, and the operation and
maintenance of the treatment plant and other remedial measures is being
conducted by an affiliate of WMI. The total cost of the construction,
operation and maintenance of remedial systems for a 30-year period,
plus the cost of past remedial activities, was estimated at the time of
the December 1997 settlement to be in the range of approximately $80
million to $100 million. In conjunction with the remediation, 26 acres
of undeveloped land neighboring the site and owned by Filcrest were
utilized for the construction of the containment system, treatment
plant and related facilities.

As previously disclosed, on December 23, 1997, the Company entered
into four agreements which settled a suit in the United States District
Court for the District of New Jersey entitled Transtech Industries,
Inc. et al. v. A&Z Septic Clean et al. (Civil Action No. 2-90-
2578(HAA)) (the "Kin-Buc Cost Recovery Action") against non-municipal
generators and transporters of hazardous waste disposed of at the Kin-
Buc Landfill for contribution towards the cost of remediating the
Landfill, earlier suits and derivative lawsuits all related to the
allocation of costs of remediation. One of the December 23, 1997
agreements provided SCA's Parties commitment to defend and indemnify
the Company from certain future liability for and in connection with
the remediation of the site (the "1997 Settlement Agreement").

Specifically, pursuant to indemnification provisions of the 1997
Settlement Agreement the SCA Parties are to defend and indemnify the
Company from and against (i) all claims, demands and causes of action
which have been made or brought, or hereafter may be made or brought,
by the EPA or any other federal, state or local governmental or
regulatory agency, against the Company, and (ii) all liability, loss,
cost and expense (including reasonable attorneys' fees) which may be
suffered or incurred by the Company, which, in the case of (i) and
(ii) above, arise from (y) the Orders (except for fines or penalties
levied or imposed against the Company for or on account of any of the
Company' actions or omissions on or before the effective date of the
1997 Agreement), or (z) any other orders or directives, and
environmental or other applicable laws, regulations or ordinances,
which are directed against or relate to the Kin-Buc Landfill or any
portion thereof, operations at the Kin-Buc Landfill, the remediation
of the Kin-Buc Landfill (except for the fines and penalties identified
in (y) above), environmental conditions at the Kin-Buc Landfill or
conditions resulting from releases from the Kin-Buc Landfill. The SCA
Parties are not obligated to reimburse the Company for (i) response
costs paid by the Company, on or before the effective date of the 1997
Agreement, or (ii) attorney's fees, disbursements or other costs and
expenses arising from the Company's prosecution, defense or settlement
of the Kin-Buc Cost Recovery Action or the derivative suits paid or
incurred by the Company, on or before the effective date of the 1997
Agreement.

The SCA Parties shall also defend and indemnify the Company from
and against all claims, demands and causes of action (including toxic
tort and similar claims and causes of action), and all liability,
loss, cost and expense (including reasonable attorneys' fees), which
have been, or hereafter may be made, brought, suffered or incurred by
the Company arising from environmental conditions at, or related to,
the Kin-Buc Landfill or any portion thereof, or the remediation and
maintenance of the Kin-Buc Landfill. Nothing contained herein shall
be deemed to obligate the SCA Parties to reimburse the Company for (i)
response costs paid by the Company on or before the effective date of
the 1997 Agreement, or (ii) attorney's fees, disbursements or other
costs and expenses arising from the Company' prosecution, defense or
settlement of the Kin-Buc Cost Recovery Action or the derivative suits
paid or incurred by the Company on or before the effective date of the
1997 Agreement.

The term Kin-Buc Landfill is defined in the 1997 Settlement
Agreement as the Kin-Buc Landfill together with any real property
located outside the boundaries of the Kin-Buc Landfill into which
hazardous substances or contaminants may have migrated or threatened
to migrate from the Kin-Buc Landfill or to which hazardous substances
or contaminants deposited in the Kin-Buc Landfill finally came to rest
or on which hazardous substances or contaminants were deposited from
the operation of the Kin-Buc Landfill.

The Company remains a responsible party under the aforementioned
Administrative Orders issued by EPA, and continues to incur
administrative and legal costs complying with such Administrative
Orders.

On December 30, 2004, Transtech together with Kin-Buc, and
Filcrest executed consent decrees which resolved the claims brought
against the Company and others during 2002 by EPA, the New Jersey
Department of Environmental Protection and New Jersey Spill
Compensation Fund regarding the Kin-Buc Landfill as set forth in the
consolidated cases of United States of America; New Jersey Department
of Environmental Protection; and Acting Administrator, New Jersey Spill
Compensation Fund v. Chemical Waste Management, Inc.; Earthline
Company; Filcrest Realty, Inc.; Anthony Gaess; Inmar Associates, Inc.;
Kin-Buc, Inc.; SCA Services, Inc.; SCA Services of Passaic, Inc.;
Transtech Industries, Inc.; Waste Management, Inc.; and Wastequid,
Inc., Civil Action No. 02-2077 (the "Lawsuit") before the U.S. District
Court for the District of New Jersey (the "Court"). EPA sought payment
of past response costs of $4.2 million as of July 1999, allegedly
incurred with respect to the Kin-Buc Landfill. In addition, EPA sought
$18.1 million for penalties for delays allegedly experienced in
completing the remediation pursuant to the Orders. Both amounts were
subject to interest. The New Jersey Department of Environmental
Protection and New Jersey Spill Compensation Fund sought reimbursement
of unspecified past costs allegedly incurred with respect to the Kin-
Buc Landfill and for unspecified alleged Natural Resource Damages. The
Court entered the consent decrees on October 18, 2005. The terms of
the 1997 Settlement Agreement arguably did not provide the Company with
complete indemnification against the penalties sought by EPA in this
action.

The 2004 Federal Consent Decree resolved the claims of EPA as
alleged in the Lawsuit. EPA agreed to accept a $2,625,000 cash
payment, plus interest from November 8, 2004, from the WMI Group in
satisfaction of EPA's claims for past response costs against all
defendants, including the Company. EPA agreed to resolve its claim for
penalties in exchange for a cash payment of $100,000, plus interest
from November 8, 2004, of which approximately $35,000 was paid by the
Company, plus additional consideration consisting of (a) the
implementation by the Company of an Open Space Preservation Project
through the granting of the Conservation Easements on the Subject
Property (defined below) to the Clean Land Fund ("CLF"), a third party
non-profit organization, thereby preserving the Subject Property as
open space in perpetuity, and through the execution of the Deeds
thereby transferring title of the Subject Property to CLF, (b) the
commitment by the Company to enter into a contract with CLF whereby CLF
would develop and implement a Wetlands Restoration and Land Management
Project, described below, for parcels of the Subject Property together
with, if possible, certain neighboring properties owned or leased by
third parties all in accordance with the Federal Consent Decree, and
(c) an initial payment of $108,000 to CLF to fund its work related to
(a) and (b) above, of which the Company paid $68,000 in December 2004,
pursuant to the CLF Contract. An additional $15,000 shall be paid to
CLF, $5,000 of which shall be paid by the Company, if certain events
transpire.

The Subject Property consists of one parcel of approximately 25
acres owned by Kin-Buc upon which a portion of the Kin-Buc Landfill is
situated and parcels totaling approximately 74 acres of predominately
wetlands in the vicinity of the Kin-Buc Landfill owned by Filcrest.
The Kin-Buc parcel and certain of the Filcrest parcels were undergoing
remediation pursuant to the Orders and performed by SCA.

The EPA may impose financial penalties on the Company if the
Company or CLF should fail to adhere to the terms and conditions of the
Federal Consent Decree. A $100,000 penalty may be imposed under
certain circumstances if the CLF Contract is abandoned by the Company.
If CLF is unwilling or unable to fulfill the CLF Contract, the Company
must make its best effort to find a suitable replacement and obtain EPA
approval of such replacement. Other violations may each be subject to
a penalty of $500 per day. The Company and CLF may be substantially
relieved from the development and implementation of the Plans if EPA
determines the Plans cannot be completed in accordance with the terms
of the Federal Consent Decree.

The 2004 State Consent Decree addresses the claims of the New
Jersey Department of Environmental Protection and New Jersey Spill
Compensation Fund (the "NJ Agencies"). The NJ Agencies agreed to
resolve their claims against the defendants in exchange for a cash
payment of $110,000 from the WMI Group and the commitment of the WMI
Group to perform wetlands restoration on certain property in the
vicinity of the Kin-Buc Landfill, including certain parcels of the
Subject Property.

The Township of Edison owns the majority of the real property
which adjoins or surrounds the Subject Property deeded to CLF by the
Company in December 2004. CLF has not yet been successful in its
effort to obtain the consent of the Township of Edison to incorporate
portions of its land into the Wetlands Restoration and Land management
Project, and to gain access to the Township's land in order to perform
its obligations pursuant to the CLF contract. As a result, the
implementation of the Plans has been delayed, and certain of the
milestones specified within the Federal Consent Decree have not been
achieved. However, EPA has been kept informed of CLF's efforts and
has participated in certain negotiations between CLF and the Township
of Edison. EPA has indicated that it does not, at this point, intend
to impose the financial penalties discussed above.

Note 11 - Employee Benefit Plans:

Retirement Savings and Profit Sharing Plans

The Company and its subsidiaries have a 401(k) Retirement Savings
and Profit Sharing Plan which covers substantially all full-time
employees. Employees may contribute up to amounts allowable under the
Internal Revenue Code. The Company matches employees' contributions in
amounts or percentages determined by the Company's board of directors.
The Company may also make profit sharing contributions to the plan in
amounts determined annually by the Company. The Company's matching
contribution was 50% of an employee's contribution that is no greater
than 2% of their eligible compensation during 2009 and 2008. The plan
provides that the Company's matching and profit sharing contributions
be made in cash. Contributions to and administrative expenses of the
plan paid by the Company was approximately $9,000 and $8,000 for the
year ended December 31, 2009 and 2008, respectively.

Employee Health Plans

The Company maintains employee benefit programs which provide
health care benefits to substantially all full-time employees, and
eligible dependents. The Company's health care plans utilize a program
provided by a leading health maintenance organization and provide
medical benefits, including hospital, physicians' services and major
medical benefits. The employees contribute to the premium incurred for
enrolled dependents.

Note 12 - Lease Commitments and Rental Income:

During the years ended December 31, 2009 and 2008, the Company
leased office facilities under non-cancelable operating leases in
Piscataway, NJ, which expires in June 2010, and Sarasota, FL, which
expired in January 2009. The Company also leases automobiles under
non-cancelable operating leases which expire during 2009 and 2011.
Rent expense for non-cancelable operating leases was $62,000 and
$91,000 for the year ended December 31, 2009 and 2008, respectively.
The future minimum lease commitments for all non-cancelable operating
leases at December 31, 2009 are as follows: 2010 - $33,000 and 2011 -
$6,000.

The Company rents certain of its real property upon which a radio
tower is situated. The Company reported $7,000 and $6,000 of rental
income earned from such property for the year ended December 31, 2009
and 2008, respectively.

Note 13 - Legal Proceedings:

Five Points Redevelopment Zone

This action follows the Township's Planning Board's August 8,
2007 approval of the study prepared by the Township's planner entitled
"Five Points Study Area, Preliminary Investigation: Determination of
an Area in Need of Redevelopment" (the "Five Points Study"). The Five
Points Study concluded that the subject area (the "Five Points Study
Area") should be designated a redevelopment area pursuant to the New
Jersey Local Housing and Redevelopment Law.

The designation of a redevelopment area under the New Jersey
Local Housing and Redevelopment Law grants a municipality many options
to achieve its objectives regarding the ultimate redevelopment of
property located within the redevelopment area. For example,
municipalities have the authority to designate a third party
(generally a land developer) to develop the redevelopment area in a
manner consistent with the municipalities' redevelopment plan for the
area. In addition, in order to advance the redevelopment project,
municipalities may acquire property in the redevelopment area for
redevelopment through good faith negotiations between the property
owner and the designated redeveloper or through their powers of
eminent domain, compensating the property owner for its fair market
value.

The process to determine the ultimate redevelopment plan for that
redevelopment area may take years to complete, and impact the use or
sale of property located within the redevelopment area during the
process. There is no specific time frame set forth in the Local
Housing and Redevelopment Law for completion of a redevelopment
project. The owner of property included in a redevelopment area may
initiate suit against a municipality to challenge the creation of the
redevelopment area, the designation of a redeveloper, the adoption of
a redevelopment plan and/or the amount of compensation offered for
property.

The Company had notified both the Township's Planning Board and
the Township's Town Council of the Company's objections to certain
errors and mischaracterizations contained within the Five Points
Study, as well as the Planning Board's conclusion to approve the Five
Points Study and recommend that the Township declare the Five Points
Study Area a redevelopment area pursuant to the Local Housing and
Redevelopment Law.

During September 2007, the two subsidiaries of Transtech that
owned the property commenced litigation entitled Kinsley's Landfill,
Inc., and Birchcrest, Inc. v. Planning Board of the Township of
Deptford (No. L-001536-07) in the Superior Court of New Jersey, Law
Division, Gloucester County. During December 2007, the complaint was
amended to include The Township of Deptford, Benderson Properties, Inc.
and certain of its affiliates as defendants. The suit seeks, among
other remedies, to reverse and set aside the Township's Planning Board
approval of the 2007 study prepared by the Township's planner.
Proceedings have been stayed pending the outcome of mediation begun
during March 2009. Settlement discussions are continuing.

Edison Township Property

The Company's wholly owned subsidiary, Filcrest Realty, Inc. owns
approximately 53 acres of undeveloped property in Edison Township, N.J.
Edison Township requested that Filcrest Realty, Inc. grant it an
easement on approximately 0.48 acres of this property to install a
shoreline walkway on certain lots situated along the Raritan River.
This property was included in the area remediated pursuant to
Administrative Orders issued by the EPA in September 1990 and November
1992 (see Note 10 - Post-closure Costs and Contingent Environmental
Liabilities, Contingent Environmental Liabilities). The Company denied
the Township's request believing the structure and location proposed by
the Township will adversely impact the value of that entire tract which
totals approximately 15 acres. The Township's appraiser set the value
of the easement at $15,000 which the Company regards as too low. The
Company has offered to sell the 15 acres to the Township, for a higher
price which the Township declined. During April 2008 the Township of
Edison brought suit against the Company in the Superior Court of New
Jersey entitled Township of Edison v. Filcrest Realty, Inc. (No. MID-L-
02173-08) to commence condemnation proceedings on the 0.48 acres for
which the easement was sought. On June 23, 2008 the Superior Court
ruled in favor of the Township, authorizing it to acquire, by eminent
domain, an easement over the shore-line property. On August 5, 2008,
the Company filed an appeal of the Superior Court's decision with the
Appellate Division entitled Township of Edison v. Filcrest Realty, Inc.
(No, A-005891-07T2). The Company also filed a motion with the Superior
Court to stay further action by the Township pending outcome of the
appeal on August 8, 2008, which was denied by the court during
September 2008. On July 28, 2009 the Appellate Division affirmed the
Superior Court's June 2008 decision.

In March 2009, a panel of Commissioners heard testimony related to
the value of the land affected by the easement, and increased the
valuation to approximately $46,000. On April 20, 2009, the Company
filed an appeal of the Commissioner's valuation with the Superior Court
and requested a jury trial to determine this issue. Proceedings have
been stayed pending the outcome of continuing settlement discussions.

The Carlstadt SCP Site

In 1988, Transtech, Inmar and Marvin H. Mahan were sued in a civil
action in the United States District Court for the District of New
Jersey entitled AT&T Technologies, Inc. et al. v. Transtech Industries,
Inc. et al. v. Allstate Insurance Company et al. (the "AT&T Suit") by a
group of generators of waste alleging, among other things, that the
primary responsibility for the clean-up and remediation of the SCP Site
rests with Transtech, Inmar and Marvin H. Mahan, individually.

In September 1995, the Court approved a settlement of the AT&T Suit
among Transtech, Inmar, Marvin H. Mahan, the SCP Cooperating PRP Group
and other generators and transporters of waste handled at the SCP Site
who had contributed to the costs of the remediation of the site.
Pursuant to such settlement, Transtech, Inmar and Marvin H. Mahan
agreed to (i) pay $4.1 million of proceeds from settlements with
primary insurers of a coverage action brought by the Company and Inmar
against their primary and excess insurers, (ii) pay an additional
$145,000 ($72,500 from Transtech and $72,500 from Inmar and Marvin H.
Mahan), and (iii) assign certain of their SCP Site-related insurance
claims against excess insurers (see "Insurance Claims for Past
Remediation Costs" above) in exchange for a complete release from these
parties of all liability to them arising from or on account of
environmental contamination at the SCP site and the parties'
remediation of the same.

Notwithstanding the September 1995 settlement, the Company may have
liability in connection with the SCP Site to EPA for its costs of
overseeing the remediation of the site, and to parties who had not
contributed to the remediation at the time the settlement was approved
but who may later choose to do so (see Note 10).

On various occasions during the period of 2003 through 2007, the
Company requested a complete and detailed accounting of the actual
total expenditures for the remediation work completed at the SCP Site
from the SCP Cooperating PRP Group. The SCP Cooperating PRP Group
denied the request but alleged that, in the aggregate, $15 million had
been expended in regard to the site. The Company, as stated above,
together with the property owner, Inmar Associates, Inc., had
contributed $145,000 cash and $4.1 million of proceeds from the
settlement with primary insurance carriers in 1995, plus $12.0 million
from the Company's October 2001 settlement with its excess insurance
carriers, plus an additional $250,000 in 2005 from the claims being
pursued against the insolvent excess carriers, to a Qualified
Settlement Fund established to fund costs incurred for the remediation
of the Carlstadt SCP Site which is administered by the SCP Cooperating
PRP Group. Such contributions total $16,450,000, plus interest
earned, which the Company believes should more than satisfy the share
of remediation costs which may be found attributable to the Company
for the SCP Site and any contamination or damage caused offsite.

On October 2, 2007, the Company filed a motion under the previously
reported action in the Superior Court of New Jersey, Middlesex County,
entitled Transtech Industries, Inc. et. al v. Certain Underwriters at
Lloyds et al, (Docket No. MSX-L-10827-95), seeking an Order compelling
the SCP Cooperating PRP Group to account for how and how much it has
spent of the $16,450,000 paid by the Company. The October 2007 motion
was denied by the Superior Court in January 2008. In January 2008 the
Company filed an appeal of the Superior Court's decision with the
Superior Court of New Jersey Appellate Division entitled Transtech
Industries, Inc. v. Certain Underwriters at Lloyds London and SCP
Carlstadt PRP Group,(Docket No.A-002604-07T2). During July 2009, the
Appellate Division affirmed the decision of the Supreme Court. The
Company, on advice from counsel, decided not to challenge the
Appellate Division ruling.

Insurance Claims for Past Remediation Costs

During 1995, Transtech and its wholly-owned subsidiaries Kin-Buc,
Inc. and Filcrest Realty, Inc. commenced suit in the Superior Court of
New Jersey, Middlesex County, entitled Transtech Industries, Inc. et.
al v. Certain Underwriters at Lloyds et al., Docket No. MSX-L-10827-95
to obtain indemnification from its excess insurers who provided
coverage during the period 1965 through 1986 against costs incurred in
connection with the remediation of sites in New Jersey (the "Lloyds
Suit"). The defendant insurers included various Underwriters at
Lloyd's, London and London Market insurance companies, First State
Insurance Company and International Insurance Company collectively
referred to herein as "Defendant Insurers".

In conjunction with the September 1995 settlement of litigation
regarding the allocation of remediation costs associated with the SCP
Site, the Company assigned certain of its claims for remediation costs
incurred at the SCP site to a group of potentially responsible parties
who were leading the remediation efforts at the SCP Site (the "SCP
Cooperating PRP Group").

During February 2002, an October 2001 settlement agreement among
the Company, the SCP Cooperating PRP Group and certain Defendant
Insurers was consummated (the "October 2001 Settlement Agreement").
The Company's share of the October 2001 Settlement Agreement proceeds
paid during February 2002 was approximately $13,013,000 of which
$3,500,000 was placed in escrow pending the outcome of litigation
regarding the arbitration with SCA Services, Inc. discussed below. The
October 2001 Settlement Agreement is intended to be a full and final
settlement that releases and terminates all rights, obligations and
liabilities of participating Defendant Insurers, the Company and the
SCP Cooperating PRP Group with respect to the subject insurance
policies.

Some of the Defendant Insurers are insolvent. The estates of some
of these insolvent insurers had sufficient assets to make a partial
contribution toward claims filed by the Company. Pursuant to their
respective liquidation plans, the estates of insolvent insurers make
payments toward agreed claims based upon the amount of their recovered
assets and expenditures funded from such assets. The estates may
elect, based upon their financial situation, to make additional
distributions toward agreed claims, however there are no assurances
that distributions will be paid. As previously disclosed, during the
year ended December 31, 2005, 2006 and 2007 the Company received
payments totaling $4,514,000, $600,000 and $87,000, respectively, with
respect to settled claims against the estates of insolvent insurers.

During the year ended December 31, 2008 the Company received
supplemental distributions totaling $58,000 from the estates of two
insolvent insurers. During the year ended December 31, 2009 the
Company received supplemental distributions totaling $112,000 from the
estates of five insolvent carriers.

The solvent and insolvent Defendant Insurers from whom the Company
has received payment represent approximately 98% of the value of the
coverage provided under the policies that were the subject of the
Lloyd's Suit, as measured by the liability apportioned to each of the
Defendant Insurers at the time of the October 2001 settlement. There
is no assurance that the Company will receive future payments with
respect to its claims against the Defendant Insurers.

SCA & SC Holdings, Inc.

In conjunction with the 1997 settlement of the litigation related
to the Kin-Buc Landfill discussed in Note 10, the Company agreed to
allow SCA to claim against a portion of the proceeds arising from its
lawsuit against its excess insurance carriers discussed above. The
maximum amount which could be found to be payable to SCA from the
Lloyds Suit settlement proceeds, $3.5 million, was placed directly into
escrow until the amount of such obligation was determined in accordance
with the terms of the 1997 settlement. A calculation of the amount due
pursuant to the 1997 Agreement was presented to SCA during March 2002.
SCA subsequently notified the Company of its objection to values
utilized in that calculation, contending it was owed $3.5 million.
Unable to resolve the disputed issues, during August 2002 the Company
and SCA submitted the dispute regarding the amount due to binding
arbitration for resolution in accordance with the terms of the 1997
Agreement. On February 6, 2004 the arbitrator issued the final of
three conflicting rulings, finding in favor of SCA awarding it $3.5
million.

The Company filed a motion under the Kin-Buc Cost Recovery Action
(the existing case in the United States District Court for the
District of New Jersey) under which claims related to the 1997
Agreement had been addressed during February 2004 to either vacate or
modify the arbitrator's award. The arbitrator's ruling was affirmed
by the District Court on October 28, 2005. In December, 2005 the
Company filed an appeal of the District Court's ruling with the United
States Court of Appeals for the Third Circuit (No. 05-5246). The
Appeals Court rendered its decision on March 24, 2008 affirming the
District Court's decision. The Company then petitioned for a rehearing
of this decision with the Appeals Court on April 9, 2008. On June 24,
2008, the Appeals Court denied the Company's petition. The Company, on
advice from counsel, decided not to challenge the Appeals Court
decision which would have required a hearing before the U.S. Supreme
Court.

Given the $3.5 million, plus accumulated interest, was placed in
escrow and not reflected on the Company's financial statements, the
Court's decision resulted in no impact on the Company's financial
statements. The $3.5 million was released to SCA during 2008. The
interest earned from February 14, 2004 was due to SCA and the remainder
due the Company. The interest, less an amount retained for taxes and
escrow related expenses, was paid during January 2009, at which time
the Company received approximately $67,000.

General

With respect to the ongoing matters described above, the Company
is unable to predict the outcome of these claims or reasonably estimate
a range of possible loss given the current status of the claims.
However, the Company believes it has valid defenses to these matters
and intends to contest the charges vigorously.

In the ordinary course of conducting its business, the Company
becomes involved in certain lawsuits and administrative proceedings
(other than those described herein), some of which may result in fines,
penalties or judgments being assessed against the Company. The
management of the Company is of the opinion that these proceedings, if
determined adversely individually or in the aggregate, are not material
to its business or consolidated financial position.

The uncertainty of the outcome of the aforementioned litigation and
the impact of future events or changes in environmental laws or
regulations, which cannot be predicted at this time, could result in
reduced liquidity, increased remediation and post-closure costs, and
other potential liabilities. A significant increase in such costs
could have a material adverse effect on the Company's financial
position, results of operations and net cash flows. The Company may
ultimately incur costs and liabilities in excess of its available
financial resources.

Note 14 - Segment Information:

The Company's continuing operations are grouped into three segments:
(a) operations which generate electricity from recovered methane gas,
(b) operations which perform maintenance, remediation and related
services on landfill sites, and (c) corporate and other. Corporate and
other includes selling, general and administrative expenses not
specifically allocable to the other segments. Corporate assets are
represented primarily by cash and cash equivalents, marketable
securities and real estate held for investment and sale. Financial
information by segment for the years ended December 31, 2009 and 2008
follows.

(table in $000's) Electricity Environmental Corporate
Generation Services and Other Total

2009
Gross operating revenues $ 413 $ 658 $ - $ 1,071
Eliminations (a) - (658) - (658)
Net operating revenues 413 - - 413
Depreciation expense 54 37 7 98
Income (loss)
from operations(b) (45) (517) (1,483) (2,045)
Capital expenditures 10 10 10 30
Identifiable assets (c) 387 754 9,690 10,831

2008
Gross operating revenues $ 689 $ 737 $ - $ 1,426
Eliminations (a) - (737) - (737)
Net operating revenues 689 - - 689
Depreciation expense 51 40 7 98
Income (loss)
from operations(b) 193 (579) (1,689) (2,075)
Capital expenditures 41 20 8 69
Identifiable assets (c) 434 629 12,075 13,138

(a) Eliminations include intercompany sales, billings to the Kinsley's
Escrow and fees received in conjunction with the Kinsley's Landfill
re-grading project.

(b) Income (loss) from operations of the Environmental Services
segment includes accretion expense of $305,000 and $336,000 for 2009
and 2008, respectively.

(c) The Corporate and Other category includes the value of all of the
Company's real estate holdings and the restricted escrow account
dedicated to post-closure costs.

During the years ended December 31, 2009 and 2008 one customer of
the Company accounted for 100% of the Company's consolidated net
operating revenues.

Note 15 - Related Party Transactions:

The Company has provided Marvin H. Mahan, a former officer and
director, and former principal shareholder of the Company, and the
father of three of the Company's principal shareholders, dental
insurance, and fuel and service for an automobile since his retirement
from the Company. Such expenses totaled approximately $2,000 for each
of the years ended December 31, 2009 and 2008.

In October 1998, the Company, entered into an agreement with Inmar,
Marvin H. Mahan and Tang (collectively, the "Mahan Interests") which
resolved outstanding disputes and assigned to the Company all rights of
the Mahan Interests, and certain other insured entities affiliated with
the Mahan Interests, as insureds and claimants under the excess
insurance policies, including those policies which were the subject of
litigation initiated by the Company (see Note 13 - Legal Proceedings).

As of December 31, 2009 and 2008 the Company's accounts included a
receivable of approximately $16,000 and $19,000, respectively, for un-
reimbursed sundry expenses paid or incurred on behalf of the Company's
President and Chairman of the Board, and his affiliates.

Transtech Industries, Inc.
Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors
Transtech Industries, Inc.

We have audited the accompanying consolidated balance sheets of
Transtech Industries, Inc. and subsidiaries as of December 31, 2009 and
2008, and the related consolidated statements of operations, stockholders'
equity, and cash flows for the years then ended. These consolidated
financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these consolidated 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 consolidated financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Transtech Industries, Inc. and subsidiaries as of December 31, 2009 and 2008
and the consolidated results of their operations and their cash flows for
the years then ended, in conformity with accounting principles generally
accepted in the United States of America.

The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. As discussed in
Notes 2, 10 and 13 to the consolidated financial statements, the Company has
experienced recurring operating losses and has potentially significant
ongoing environmental litigation and remediation obligations. These factors
raise substantial doubt about the Company's ability to continue as a going
concern. Management's plans regarding this uncertainty are discussed in
Note 2 to the financial statements. The consolidated financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.

WithumSmith+Brown, PC

New Brunswick, New Jersey
March 30, 2010

The Company's Common Stock is traded under the symbol TRTI on the OTC
Bulletin Board. The following table sets forth by quarter the high and low
bid price for the Company's common stock during the period January 1, 2008
through December 31, 2009. The high and low bid price information has been
obtained from Prophet.Net.

2009 High Low 2008 High Low
1st quarter $.120 $.090 1st quarter $.250 $.120
2nd quarter .120 .090 2nd quarter .190 .110
3rd quarter .090 .070 3rd quarter .240 .110
4th quarter .070 .030 4th quarter .150 .110

The above quotations represent prices between dealers and do not
include retail markups, markdowns or commissions. They do not represent
actual transactions.

The number of holders of record of the Common Stock of the Company at
December 31, 2009 was 257.

The Company paid no dividends in either stock or cash during 2009 or
2008 and does not presently anticipate paying dividends in the foreseeable
future.

There have been no securities sold by the Company within the past three
years without registering the securities under the Securities Act of 1933,
as amended.

There have been no repurchases made by the Company required to be
disclosed by Item 703 of Regulation S-K.

The following table sets forth as of December 31, 2009 the number of
shares of the Company's common stock, the Company's only class of equity
securities, issuable upon exercise of outstanding options, warrants and
other rights, the weighted average exercise price of such options, warrants
and other rights and the number of shares of common stock available for
future issuance pursuant to all "equity compensation plans" relating to our
common stock. Equity compensation plans include those approved by our
shareholders, as well as those not approved by our shareholders, including
individual compensation arrangements with one or more of our officers or
directors.

Equity Compensation Plan Information

Plan category Number of securities Weighted-average Number of securities
to be issued upon exercise price of remaining available
exercise of outstanding options, for future issuance
outstanding options, warrants and rights under equity
warrants and rights compensation plans

Equity compensation -0- -0- -0-
plans approved by
security holders

Equity compensation
plans not approved by
security holders 0 $0 0

Total 0 $0 0

Transtech Industries, Inc.
Directory

Executive Offices: Directors and Officers: Independent Registered
Public Accounting Firm
200 Centennial Avenue Robert V. Silva
Suite 202 Chairman of the Board, WithumSmith+Brown, PC
Piscataway, NJ 08854 President and Chief One Spring Street
Phone: (732) 564-3122 Executive Officer New Brunswick, NJ 08901
Fax: (732) 981-1856

Andrew J. Mayer, Jr. Transfer Agent:
Internet Address: Vice President-Finance,
Chief Financial Officer Continental Stock
www. and Secretary . Transfer & Trust Co.
Transtechindustries.com 17 Battery Place
New York, NY 10004
212-509-4000

OTC Bulletin Board
Symbol:

TRTI

Form 10-K

The Company will provide without charge to any stockholder a copy of its
most recent Form 10-K filed with the Securities and Exchange Commission
including the financial statements and schedules thereto. Requests by
stockholders for a copy of the Form 10-K must be made in writing to:
Transtech Industries, Inc., 200 Centennial Avenue, Suite 202, Piscataway,
New Jersey, 08854, Attention: Secretary

TRANSTECH INDUSTRIES INC - FORM 10-K - EX-13 - March 31, 2010

Attached files