SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

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

                For the quarterly period ended September 30, 2006
                                       or
          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                           Commission File No. 0-11102

                              OCEAN BIO-CHEM, INC.
             (Exact name of Registrant as specified in its charter)


           Florida                                                59-1564329
(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                               Identification No.)


             4041 SW 47 Avenue, Fort Lauderdale, Florida 33314-4023
                                  954-587-6280
       (Address and telephone number, including area code of Registrant's
                          Principal Executive Offices)

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

                     Common stock, par value $.01 per share

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

                                      None

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

                    Yes [x]                    No [ ]

     Indicate by check mark whether the Registrant is a large accelerated filer,
an accelerated filer (as defined by Rule 12b-2 of the Securities Exchange Act of
1934), or a non-accelerated filer

Large Accelerated Filer [ ]    Accelerated Filer [ ]  Non- Accelerated Filer [x]

     Indicate by check mark whether the  Registrant  (1) Is a Shell  Company (as
Defined In rule 12b-2 of the Exchange Act).

                    Yes [ ]                    No [x ]

     Indicate  the number of shares  outstanding  of each class of the  Issuer's
common stock, as of the latest practicable date:

           $.01 par value common stock, 10,000,000 shares authorized,
           5,978,316 shares issued and outstanding at November 8, 2006

<PAGE>


                      OCEAN BIO-CHEM, INC. AND SUBSIDIARIES

                                      INDEX


   Description                                                           Page
                                                                        -------
Part I - Financial Information:

  Item 1. -  Financial Statements:
      Consolidated balance sheets as of September 30, 2006
        and December 31, 2005                                              3
      Consolidated statements of operations for
        the nine months ended September 30,
        2006 and 2005                                                      4
      Consolidated statements of changes in
        shareholders' equity for the nine months
        ended September 30, 2006 and 2005                                  5

      Consolidated statements of cash flows
        For the nine months ended September 30,
        2006 and 2005                                                      6
       Notes to consolidated financial statements                        7-13

  Item 2. - Management's Discussion and Analysis
      of Financial Condition and Results of Operations                  13-17

  Item 3 - Quantitative and Qualitative Disclosures
      about Market Risk                                                   17

  Item 4 - Controls and Procedures                                      17-18

Part II - Other Information:

  Item 1. -   Legal Proceedings                                           18
  Item 1A.-   Risk Factors                                                18
  Item 2. -   Unregistered Sales of Equity Securities and Use of Proceeds 18
  Item 3. -   Defaults upon Senior Securities                             18
  Item 4. -   Submission of Matters to a Vote of Security Holders         18
  Item 5. -   Other information                                           18
  Item 6. -   Exhibits                                                    18

Signatures                                                                18

Certifications










                                        2

<PAGE>

                         PART I - Financial Information

 Item l.  Financial Statements:

                      OCEAN BIO-CHEM, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>

                                     ASSETS
                                                                    SEPTEMBER 30,           DECEMBER 31,
                                                                       2006                     2005
                                                                    -------------           -----------
                                                                     (UNAUDITED)             (RESTATED)
<S>                                                                  <C>                    <C>
  Current assets:
  Cash                                                               $    91,101            $   204,543
  Trade accounts receivable net of allowance for doubtful
    accounts of approximately  $192,700 and $131,000 at
    September 30, 2006 and December 31, 2005, respectively             5,568,412              2,027,162
  Inventories                                                          5,867,555              6,260,813
  Prepaid expenses and other current assets                              211,372                510,074
                                                                     -----------            -----------
      Total current assets                                            11,738,440              9,002,592
                                                                     -----------            -----------

 Property, plant and equipment, net                                    6,979,734              7,310,640
                                                                     -----------            -----------
 Other assets:
  Trademarks, trade names and patents, net
   of accumulated amortization                                           330,439                330,439
  Due from affiliated companies, net                                         869                 29,022
  Deposits and other assets                                              204,028                230,329
                                                                     -----------            -----------
     Total other assets                                                  535,336                589,790
                                                                     -----------            -----------

      Total assets                                                   $19,253,510            $16,903,022
                                                                     ===========            ===========
                      LIABILITIES AND SHAREHOLDERS' EQUITY
  Current liabilities:
  Accounts payable - trade                                           $   974,332            $ 1,256,640
  Note payable - bank                                                  5,525,000              4,000,000
  Current portion of Long-Term debt                                      585,575                580,852
  Accrued expenses payable                                               491,979                451,977
                                                                     -----------            -----------
       Total Current Liabilities                                       7,576,886              6,289,469
                                                                     -----------            -----------

  Due to affiliated companies, net                                        42,700                    -
                                                                     -----------            -----------

  Long term debt, less current portion                                 5,832,628              5,950,958
                                                                     -----------            -----------

  Shareholders' equity:
  Common stock - $.01 par value, 10,000,000 shares authorized;
     5,978,316  and 5,849,316 shares issued and outstanding at
     September 30, 2006 and December 31, 2005, respectively               59,783                 58,493
  Additional paid-in capital                                           5,870,197              5,397,845
  Foreign currency translation adjustment                            (   164,879)           (   179,653)
  Retained earnings (deficit)                                             44,390            (   605,895)
                                                                     ------------           ------------
                                                                       5,809,491              4,670,790
Less cost of common stock in treasury, 7,519 shares
   at September 30, 2006 and December 31, 2005                       (     8,195)           (     8,195)
                                                                     ------------           ------------
                                                                       5,801,296              4,662,595
                                                                     ------------           ------------

Total liabilities and shareholders' equity                           $19,253,510            $16,903,022
                                                                     ============           ============
</TABLE>



                                        3
<PAGE>


                      OCEAN BIO-CHEM, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                         FOR THE THREE MONTHS            FOR THE NINE MONTHS
                                          ENDED SEPTEMBER 30,            ENDED SEPTEMBER 30,
                                           2006         2005             2006           2005
                                        ----------   ----------      -----------    -----------
<S>                                     <C>          <C>             <C>            <C>
Gross sales                             $8,491,859   $6,574,073      $17,939,676    $15,200,391

Allowances                                 766,770      621,242        1,473,486      1,564,667
                                        ----------   ----------      -----------    -----------
Net sales                                7,725,089    5,952,831       16,466,190   13,635,724


Cost of goods sold                       5,543,693    4,940,843       11,758,247     10,946,024
                                        ----------   ----------      -----------    -----------
Gross profit                             2,181,396    1,011,988        4,707,943      2,689,700
                                        ----------   ----------      -----------    ------------

Costs and expenses:
  Advertising and promotion                428,254      353,620          900,611      1,025,022
  Selling and administrative               889,005      950,143        2,629,776      2,916,683
  Interest expense                         204,772      132,989          539,874        344,462
                                        ----------   ----------      -----------    -----------
    Total cost and expenses              1,522,031    1,436,752        4,070,261      4,286,167
                                        ----------   ----------      -----------    -----------
  Operating income (loss)                  759,365   (  424,764)         637,682    ( 1,596,467)


Other income                                11,316        6,510           12,603         16,270
                                        ----------   ----------      -----------    ------------
Income (Loss) before income taxes          670,681   (  418,254)         650,285    ( 1,580,197)

Income taxes (benefit)                         -            -                -      (   274,500)
                                        ----------   -----------     -----------    ------------
Net Income (loss)                          670,681   (  418,254)         650,285    ( 1,305,697)

Other comprehensive income (loss),
  net of tax:

   Foreign currency translation
     adjustment                              1,042       18,177           14,774         22,298
                                        ----------   -----------     -----------    ------------
Comprehensive income (loss)             $  771,723   ($ 400,077)     $   665,059    ($1,283,399)
                                        ==========   ===========     ===========    ============

Earnings (loss) per common share - basic    $  .11     ($   .07)         $   .11       ($   .23)
                                            ======     =========         =======       =========
Earnings (loss) per common share - diluted  $  .11     ($   .07)         $   .10       ($   .23)
                                            ======     =========         =======       =========
</TABLE>

     The Company has adopted Statement of Financial Accounting Standards No. 130
that requires  items of  comprehensive  income to be stated as part of the basic
financial statements.  The only item of comprehensive income that the Registrant
has is its foreign currency translation adjustment.

                                        4
<PAGE>

                      OCEAN BIO-CHEM, INC. AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                            FOR THE NINE MONTHS ENDED
                           SEPTEMBER 30, 2006 AND 2005
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                   Additional     Foreign       Retained
                               Common stock         paid-in       currency      earnings     Treasury
                             Shares     Amount      capital      adjustment     (deficit)     stock          Total
                           ---------   --------    ----------    ----------     ---------    --------      ----------
<S>                        <C>         <C>         <C>           <C>            <C>          <C>           <C>
January 1, 2006,
   as previously
    reported               5,849,316   $ 58,493    $4,908,615    ($179,653)     ($ 488,563)   ($8,195)      $4,290,697

Compensation cost
   associated with the
   modification of stock
   options, net                                       178,332                   (  117,332)                     61,000

Compensation cost
   associated with
   stock warrants                                     310,898                                                  310,898
                           ---------   --------    ----------    ----------     -----------   --------     -----------
January 1, 2006,
  as restated              5,849,316     58,493     5,397,845    ( 179,653)     (  605,895)   ( 8,195)       4,662,595

Net income                                                                         650,285                     650,285

Debt forgiveness -
   affiliate                                          295,752                                                  295,752

Common stock
  issuance                   129,000      1,290       118,132                                                  119,422

Stock based compensation                               58,468                                                   58,468

Foreign currency
  translation  adjustment                                           14,774                                      14,774
                           ---------   --------    ----------    ----------     -----------  ---------     -----------
September 30,
2006                       5,978,316   $ 59,783    $5,870,197    ($164,879)     $   44,390    ($8,195)      $5,801,296
                           =========   ========    ==========    ==========     ===========  =========     ===========

January 1,
   2005                    5,417,813   $ 54,178    $4,722,746    ($204,864)     $1,324,630   ($8,195)      $ 5,888,495

Net (loss)                                                                      (1,305,697)                ( 1,305,697)

Common stock
   issuances                 431,503      4,315       185,869                                                  190,184

Foreign currency
  translation
  adjustment                                                        22,298                                      22,298
                           ---------   --------    ----------    ----------     ----------   --------      -----------
September 30,
  2005                     5,849,316   $ 58,493    $4,908,615    ($182,566)     $   18,933   ($8,195)      $ 4,795,280
                           =========   ========    ==========    ==========     ==========   ========      ===========
</TABLE>
                                        5
<PAGE>
                      OCEAN BIO-CHEM, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                            FOR THE NINE MONTHS ENDED
                           SEPTEMBER 30, 2006 AND 2005
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                         2006                  2005
                                                                     -----------            -----------
<S>                                                                  <C>                    <C>
Cash flow provided (used) by operating activities:
Net income (loss)                                                    $   650,285            ($1,305,698)

Adjustments to reconcile net income  (loss)
  to net cash provided (used) by operations:
  Depreciation and amortization                                          582,971                555,095
  Stock based compensation expense                                        58,468                    -
  Amortization of imputed interest                                        46,636                    -

  Changes in assets and liabilities:
  (Increase) decrease in accounts receivable                         ( 3,541,251)               413,409
  (Increase) decrease in inventories                                     393,257            ( 1,686,183)
  Decrease (increase) in prepaid expenses and other current assets       298,704            (    29,555)
  Increase (decrease) in accounts payable, accrued
   expenses and other                                                (   216,005)                 2,257
                                                                     ------------           ------------
  Net cash used by operating activities                              ( 1,726,935)           ( 2,050,675)
                                                                     ------------           ------------

Cash flows from financing activities:
  Net increases under line of credit                                   1,525,000              1,275,000
  Reduction in due from affiliates, net                                  323,905                    -
  Increases in due to affiliates, net                                     42,700                225,632
  Additions to long term debt, net                                       250,000                800,000
  Payments on long term debt, net                                    (   410,243)           (   380,133)
  Common stock transactions                                              119,422                190,184
                                                                     ------------           ------------
  Net cash provided by financing activities                            1,850,784              2,110,683
                                                                     ------------           ------------

Cash flow used by investing activities:
  Purchases of property, plant, equipment, net
    of funds held in escrow                                          (   252,065)           (   636,683)
                                                                     ------------           ------------
 Net cash used by investing activities                               (   252,065)           (   636,683)
                                                                     ------------           ------------
Increase (decrease) in cash prior to effect of
   foreign currency translation adjustment                           (   128,216)           (   576,675)

Effect of foreign currency translation adjustment on cash                 14,774                 22,298
                                                                     ------------           ------------
Net (decrease) in cash                                               (   113,442)           (   554,377)

Cash at beginning of period                                              204,543                988,106
                                                                     ------------           ------------
Cash at end of period                                                $    91,101            $   433,729
                                                                     ============           ============
Supplemental Information:

  Cash used for payment of interest during period                    $   539,874            $   344,462
                                                                     ============           ============

  Cash used for payment of income taxes during period                $      -               $   110,734
                                                                     ============           ============
Non-cash investing and financing activities:
  Debt forgiven by affiliated entity                                 $   295,752            $      -
                                                                     ============           ============
</TABLE>

                                        6

<PAGE>

                      OCEAN BIO-CHEM, INC. AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

     1. SUMMARY OF ACCOUNTING POLICIES

     Interim Reporting


     The accompanying  unaudited  consolidated  financial statements include the
accounts of Ocean  Bio-Chem,  Inc. and its  subsidiaries  ("the  Company").  All
significant  inter-company  transactions and balances have been eliminated.  The
unaudited  consolidated  financial  statements  have been prepared in conformity
with Rule 10-01 of Regulation S-X of the Securities and Exchange Commission and,
therefore,  do not include  information  or footnotes  necessary  for a complete
presentation  of financial  position,  results of  operations  and cash flows in
conformity with accounting principles generally accepted in the United States of
America.  However,  all adjustments  (consisting of normal  recurring  accruals)
that, in the opinion of management, are necessary for a fair presentation of the
financial statements, have been included. Operating results for the period ended
September  30, 2006 are not  necessarily  indicative  of the results that may be
expected  for  the  future  fiscal  quarter  in  2006 or the  full  year  ending
December 31,  2006  due to  seasonal  fluctuations  in the  Company's  business,
changes in economic  conditions  and other  factors.  For  further  information,
please  refer  to  the  Consolidated  Financial  Statements  and  Notes  thereto
contained  in the  Company's  Annual  Report on Form  10-KA  for the year  ended
December 31, 2005.

     During  August 2006,  we filed an amendment to our Form 10-K for the period
ended December 31, 2005.  The  substantive  changes  reflected in such amendment
were (1) the recognition of  compensation  cost associated with stock options of
which certain terms were modified and (2) the reclassification  between debt and
Additional   Paid-Capital   of  certain  of  the  proceeds  from  the  Revolving
Subordinated Obligation to our president and CEO, Peter G. Dornau.

     Certain  financial  statement  items for the nine months and quarter  ended
September 30, 2005 have been reclassified to conform to the 2006 presentation.

     Use of estimates

     The  preparation  of financial  statements  in  conformity  with  generally
accepted accounting principles requires management to make estimates that affect
the reported  amount of assets,  liabilities,  revenues and expenses  during the
reporting period. Actual results could differ from those estimates.

Revenue recognition

     Revenue from product sales is  recognized  when  persuasive  evidence of an
arrangement exists,  delivery to customer has occurred, the sales price is fixed
and  determinable,  and  collectibility  of the related  receivable is probable.
Reported  net  sales  are net of  customer  prompt  pay  discounts,  contractual
allowances,  authorized  customer returns,  consumer rebates and other allowable
deductions from our invoices.  Cooperative advertising deductions,  based on our
customers'  promotion of our products is recognized as an  advertising  cost and
charged against operations as an operating expense.

Cost of goods sold/Selling, general and administrative expenses

     Cost of  Goods  Sold  include  all of the  direct  and  indirect  costs  of
manufacturing our products.  Included therein specifically are warehousing costs
of both raw and finished  materials,  in-bound  freight,  out-bound  freight (in
those  instances  that  we  absorb  such  costs),  purchasing,   receiving,  and
inspection  costs.  Other costs of the  distribution  network are  reflected  in
Selling,   General  and  Administrative  expenses.  Also  included  therein  are
managerial and clerical wages and related  expenses,  office and  administrative
occupancy costs, taxes, professional fees, insurance coverages and other related
expenses.

Inventories

     Inventories  are  comprised  of finished  goods and raw  materials  and are
stated at the  lower of cost or  market.  Cost is  determined  by the  first-in,
first-out  method.  The  composition  of  inventories  at September 30, 2006 and
December 31, 2005 were as follows:

                                 2006          2005
                              ----------     ----------
      Raw materials           $3,415,180     $3,235,086
      Finished goods           2,452,375      3,025,727
                              ----------     ----------
                              $5,867,555     $6,260,813
                              ==========     ==========
                                        7


<PAGE>
Stock Based Compensation

     At  September  30,  2006,  The Company had options  outstanding  under four
stock-based  compensation  plans, which are described below. On January 1, 2006,
The Company adopted Statement of Financial Accounting Standards No. 123 (revised
2004),  "Shared Based Payment" ("SFAS No. 123R"), which requires the measurement
and recognition of compensation cost for all share-based  payment awards made to
employees and directors based on estimated fair values. Prior to the adoption of
SFAS No. 123R, The Company accounted for its stock-based  employee  compensation
related to stock options under the intrinsic  value  recognition and measurement
principles of Accounting  Principles Board Opinion No.25,  "Accounting for Stock
Issued to Employees"  ("APB 25") and the  disclosure  alternative  prescribed by
SFAS No. 123, "Accounting for Stock-Based  Compensation," as amended by SFAS No.
148,  "Accounting  for  Stock-Based  Compensation - Transition and  Disclosure."
Accordingly,  The Company presents pro- forma  information for the periods prior
to the adoption of SFAS No 123R and no employee compensation cost was recognized
for the  stock-based  compensation  plans  other than the grant  date  intrinsic
value, if any, for the options granted prior to January 1, 2006.

     The Company has elected to use the modified  prospective  transition method
for  adopting  SFAS No. 123R,  which  requires the  recognition  of  stock-based
compensation  cost on a prospective  basis;  therefore,  prior period  financial
statements have not been restated. Under this method, the provisions of SFAS No.
123R are applied to all awards granted after the adoption date and to awards not
yet vested with unrecognized expense at the adoption date based on the estimated
fair value at grant date as determined under the original provisions of SFAS No.
123. The impact of forfeitures that may occur prior to vesting is also estimated
and considered in the amount  recognized.  In addition,  the  realization of tax
benefits in excess of amounts  recognized for financial  reporting purposes will
be recognized as a financing  activity  rather than an operating  activity as in
the past.  Pursuant to the  requirements  of SFAS No.  123R,  The  Company  will
continue to present the pro-forma  information for periods prior to the adoption
date.

Stock Compensation Plans

     Under various plans, The Company may grant incentive or non-qualified stock
options to employees and directors. The terms of stock options granted under the
plans are determined by the Compensation  Committee of the Board of Directors at
the time of grant,  including the exercise price,  term and any  restrictions on
the  exercisability  of such option.  The exercise price of all options  granted
under the plans equals the market price at the date of grant, except for options
granted to Mr. Dornau,  our President and CEO, which are generally  granted at a
premium of 10% above the market price of the  underlying  common  stock,  and no
option is exercisable after the expiration of five or ten years from the date of
grant,  depending  on the Plan under  which it was  awarded.  The stock  options
outstanding  under our qualified or incentive  plans were generally  granted for
terms of five years and vest on a straight  line  basis  over such  period.  The
stock  options  outstanding  under our 2002 non  qualified  plan were  generally
granted for terms of ten years and vested immediately.  No employee compensation
expense was  recognized  in our  financial  statements  upon either the grant or
exercise of these stock options prior to January 1, 2006.

     As of September 30, 2006, the number of options  outstanding and the number
of shares  available for grant under each Stock Option Plan and non-plan options
is presented below:

    Plan                      Options outstanding    Options available for grant

    1992 Plan                 143,000 shares         None - terminated 2002

    1994 Plan                 159,500 shares         None - terminated 2004

    2002 Qualified Plan       265,000 shares         135,000 shares

    2002 Non-qualified Plan   155,000 shares          45,000 shares

    Non-plan options          231,000 shares          N/A


     Information with respect to our stock option activity is as follows:

                                                      Weighted average
                                        Shares        exercise price

Outstanding at December 31, 2005        964,500           $1.12

Granted                                  40,000           $1.08

Exercised                                   -

Forfeited                                51,000           $1.25
                                        -------           -----
Outstanding at September 30, 2006       953,500           $1.13
                                        =======           =====


                                        8

<PAGE>


     For the nine month period ended September 30, 2006, The Company  recognized
$ 58,468 in  stock-based  compensation  costs,  which is  reflected in operating
expenses.  No tax  benefits  were  attributed  to the  stock-based  compensation
expense because a valuation  allowance was maintained for  substantially all net
deferred  tax assets.  The Company  elected to adopt the  alternative  method of
calculating  the  historical  pool of windfall tax benefits as permitted by FASB
Staff Position (FSP) No. SFAS 123R-c, "Transition Election Related to Accounting
for the Tax Effects of Share-Based  Payment Awards." This is a simplified method
to determine the pool of windfall tax benefits that is used in  determining  the
tax effects of stock  compensation  in the results of  operations  and cash flow
reporting for awards that were  outstanding as of the adoption of SFAS No. 123R.
As of September 30, 2006, The Company had approximately $105,800 of unrecognized
compensation costs related to non-vested stock option awards that is expected to
be recognized over a weighted average period of 2.4 years.

     The following information applies to options outstanding and exercisable as
of September 30, 2006:
<TABLE>
<CAPTION>
                                                   Options outstanding                        Options exercisable

                                                         Weighted        Weighted                           Weighted
                                                         average          average                            average
                                                         remaining       exercise                           exercise
                                          Shares           life           price              Shares           price
                                          -------          ----           ------             -------          ------
<S>                                       <C>              <C>            <C>                <C>              <C>
Non-Plan options                          231,000          2.50           $ .758             231,000          $ .758

1992 Plan                                 143,000           .25            1.009             123,200           1.009

1994 Plan                                 159,500          3.08            1.050              31,900           1.050

2002 Plan - qualified                     125,000          1.08            1.260              81,000           1.260

2002 Plan - qualified                     140,000          2.50            1.520              56,000           1.620

2002 Plan - non-qualified                  35,000          3.08            1.260              35,000           1.260

2002 Plan - non-qualified                  40,000          7.75            1.030              40,000           1.030

2002 Plan - non-qualified                  40,000          8.65            1.460              40,000           1.460

2002 Plan - non-qualified                  40,000          9.55            1.080              40,000           1.050
                                          -------                        -------             -------          ------
                                          953,500                         $1.110             678,100          $1.045
                                          =======                         ======             =======          ======
</TABLE>


     The Company utilizes a Black-Scholes  option-pricing model to determine the
fair value of stock  options on the date of grant.  This model  derives the fair
value of stock options based on certain  assumptions  related to expected  stock
price  volatility,  expected option life,  risk-free  interest rate and dividend
yield. The Company's expected  volatility is based on the historical  volatility
of The Company's stock price over the most recent period  commensurate  with the
expected term of the stock option award.  The estimated  expected option life is
based primarily on historical  employee  exercise patterns and considers whether
and the extent to which the options are  in-the-money.  The  risk-free  interest
rate assumption is based upon the U.S.  Treasury yield curve appropriate for the
term of The  Company's  stock  options  awards and the selected  dividend  yield
assumption  was  determined  in view of The Company's  historical  and estimated
dividend  payout.  The  Company  has no  reason  to  believe  that the  expected
volatility  of its stock  price or its  option  exercise  patterns  will  differ
significantly from historical volatility or option exercises.

     No stock options have been granted during the three months ended  September
30,  2006.  The fair value of each option  grant during the three month and nine
month  periods ended  September 30, 2006 and 2005,  was estimated on the date of
grant using the following weighted-average assumptions:
<TABLE>
<CAPTION>

                                     For the three months ended                For the nine months ended
                                 -------------------------------------    ------------------------------------------------
                              September 30, 2006     September 30,2005    September 30, 2006      September 30, 2005
                             -------------------     -----------------    -------------------     ------------------
<S>                              <C>                       <C>              <C>                     <C>
Expected dividend yield          00.0%                     00.0%            00.0%                   00.0%
Expected price volatility        33.5%                     33.5%            33.5%                   33.5%
Risk-free interest rate           4.5%                      4.0%             4.5%                    4.0%
Expected life of options in
   years                          5-10                      5-10             5-10                    5-10


</TABLE>

                                        9
<PAGE>
     The  following  table  illustrates  the  effect  on net loss and  basic and
diluted loss per share if we had applied the fair value  recognition  provisions
of SFAS No. 123 to options  granted  under our stock  option plans for the three
month and nine month period ended September 30, 2005:

<TABLE>
<CAPTION>

                                                                                   For the three      For the nine
                                                                                    months ended      months ended
                                                                                    September 30,     September 30,
                                                                                         2005             2005
                                                                                   --------------   -------------

<S>                                                                                  <C>             <C>
Net loss, as reported                                                                ($418,254)      ($1,305,697)
Add: Stock-based employee compensation expense included in net loss                       -                 -
Deduct: Total stock-based employee compensation expense determined under fair
   value based method, net of income taxes                                              7,700            21,500
                                                                                     ----------     ------------

Pro forma net loss                                                                   $(425,954)      ($1,327,197)
                                                                                     ==========     =============




Loss per share:
   Basic and diluted  as reported                                                    $  (0.08)      $    (0.23)
   Basic and diluted  pro forma                                                      $  (0.08)      $    (0.23)

</TABLE>

     On March 25, 1999, the Company granted two officers a five-year  option for
115,000 shares each, as adjusted for the Company's stock dividend  distributions
of 2000 and 2002, at an exercise price of $.758 representing the market price at
the time of grant.  Such grants were awarded in  consideration  of a loan to the
Company in the amount of $400,000 from an  affiliated  company in which they are
each 50%  co-shareholders.  During  2004,  the  underlying  loan was modified to
extend the maturity  date and,  accordingly,  the options  were  extended for an
additional  five years  expiring  March 25, 2009.  The intrinsic  value of these
options at the date of term modification  aggregated  $178,332.  Such amount was
not originally  recorded as a charge against  operations in our issued financial
statements  as  contained  in our Form 10-K as of December 31, 2005 and 2004 and
the years then ended. Accordingly,  our Consolidated Statement of Operations was
restated for 2004 to reflect such costs along with the corresponding increase to
Additional  paid-in capital on our  Consolidated  Balance Sheet and Consolidated
Statement of  Shareholders'  Equity.  The amended  filing was made during August
2006.


2.  PROPERTY, PLANT & EQUIPMENT

     The Company's  property,  plant and equipment consisted of the following at
September 30, 2006 and December 31, 2005:

                                        Estimated
                                         Useful
                                      Life- Years       2006           2005
                                      -----------    ----------    ----------
  Land                                      N/A      $  278,325    $  278,325
  Building                                   30       4,390,894     4,390,894
  Manufacturing and warehouse equipment    6-10       4,669,009     4,384,268
  Manufacturing and warehouse equipment   11-20       1,659,870     1,659,870
  Office equipment and furniture            3-5         678,537       652,940
  Construction in process                   N/A         219,966       278,239
  Leasehold improvement                   10-15         145,505       145,505
                                                     ----------    ----------
                                                     12,042,106    11,790,041

   Less accumulated depreciation                      5,062,372     4,479,401
                                                     ----------    ----------
   Total property, plant and equipment, net          $6,979,734    $7,310,640
                                                     ==========    ==========


                                       10
<PAGE>
3.  LONG-TERM DEBT

     Long-term debt at September 30, 2006 consisted of the following:

     The  Company is  obligated  pursuant  to capital  leases  financed  through
Industrial  Development  Bonds.  Such  obligations were incurred during 1997 and
2002 in  connection  with  building and  equipment  expansion  at the  Company's
Alabama manufacturing and distribution facility.  Both bear interest at tax-free
rates that adjust weekly.  At September 30, 2006,  approximately  $1,868,100 and
$2,990.000  were   outstanding   attributable  to  the  1997  and  2002  series,
respectively.  During the nine months ended  September 30, 2006  interest  rates
ranged  between  3.3% and 3.9%.  Principal  and accrued  interest  retiring  the
underlying bonds are payable  quarterly  through March,  2012 and July, 2017 for
the 1997 and 2002 series, respectively.  Repayment of the bonds is guaranteed by
a Letter of Credit issued by the Company's primary commercial bank. Security for
the  Letter of Credit is a  priority  first  mortgage  on our  Alabama,  Kinpak,
facility as well as the manufacturing equipment utilized therein..

     The Company, through its subsidiary, Kinpak Inc., was obligated pursuant to
various capital lease agreements  covering  equipment  utilized in the Company's
Alabama plant. Such obligations, aggregating approximately $ 66,000 at September
30, 2006, have varying  maturities through 2009 and carry interest rates ranging
from 7% to 12%.

     During April 2005 we entered into a financing  obligation with Regions Bank
whereby  they  advanced  us $500,000 to finance  equipment  acquisitions  at our
Kinpak  facility.  Such  obligation is due in monthly  installments of principal
aggregating   approximately  $8,300  plus  interest  at  prevailing  rates  (the
outstanding  balance and interest rate on this  obligation at September 30, 2006
were approximately $358,300 and 7.83% per annum,  respectively) through maturity
on April 15, 2010.

     During the quarter  ended  December 31,  2005,  we finalized a $1.5 million
revolving  credit  facility  with our  President  and CEO,  Peter G. Dornau.  At
September  30, 2006 and  December  31, 2005,  the gross  obligation  aggregating
$1,400,000  and  $1,150,000,  respectively  was  outstanding  pursuant  to  this
obligation  which is due in October 2010 along with accrued interest at the rate
of prime plus 2%. In connection with his offering this financing  arrangement to
the Company, we issued warrants to Mr. Dornau to purchase a maximum of 1 million
shares of our common stock.  Such  warrants are  exercisable  500,000  shares at
$1.13 and 500,000 shares at $.863.  The exercise  prices were  determined by the
closing  bid of our  stock  plus ten (10)  percent  on each  date of  grant.  In
addition, he has the right, at his sole discretion,  to convert such debt into a
maximum  of 1.5  million  shares  of our  common  stock at the rate of $1.00 per
share.  The gross  obligation  was reduced by an allocation of imputed  interest
associated  with the warrants  issued to Mr. Dornau.  The initial amount of such
allocation was $310,898 which will be amortized and charged  against  operations
as additional interest expense over the sixty (60) month term of this financing.
During the nine months ended September 30, 2006,  amortization of  approximately
$46,600 was charged  against  operations.  This obligation is subordinate to all
borrowings from Regions Bank.

     The composition of these obligations at September 30, 2006 and December 31,
2005 were as follows:
<TABLE>
<CAPTION>
                                                           Current Portion          Long Term Portion
                                                       2006          2005          2006           2005
                                                     --------      --------     ----------     ----------
<S>                                                  <C>           <C>          <C>            <C>
         Industrial Development Bonds                $460,000      $460,000     $4,398,108     $4,745,000
         Notes payable                                 99,996        99,996        258,343        331,448
         Capitalized equipment leases                  25,579        20,856         40,439         35,408
         Subordinated note payable-P. Dornau              -             -        1,400,000      1,150,000
                                                     --------      --------     ----------     ----------
                                                      585,575       580,852      6,096,890      6,261,856
         Less imputed interest - Subordinated
           note payable-P. Dornau                         -             -       (  264,262)    (  310,898)
                                                     --------      --------     -----------    -----------
                                                     $585,575      $580,852     $5,832,628     $5,950,958
                                                     ========      ========     ==========     ===========
</TABLE>

                                       11

<PAGE>

     Required principal payment obligations  attributable to the foregoing as of
December 31, 2005 are tabulated below:

    Year ending December 31,
                 2006           $  580,852
                 2007              579,279
                 2008              571,757
                 2009              564,360
                 2010            1,643,352
           Thereafter            2,903,108
                                ----------
        Total                   $6,842,708
                                ==========

4.    RELATED PARTY TRANSACTIONS

     At  September  30,  2006 and  December  31,  2005,  the Company had amounts
receivable  from and  payable to  affiliated  companies,  which are  directly or
beneficially  owned by the Company's  president,  aggregated a net receivable of
approximately $900 and $29,000, respectively.  Such amounts result from sales to
the  affiliates,  allocations  of  expenses  incurred  by  the  Company  on  the
affiliates' behalf and funds advanced to or from the Company.  Ina addition,  at
September  30,  2006,  the  Company  was  indebted  to  such  affiliates  in the
approximate amount of 42,700.

     Sales to our European affiliate aggregated approximately $81,200, $183,200,
$485,2009,  and $724,000  during the three months ended  September  30, 2006 and
2005, and the nine months ended September 30, 2006 and 2005, respectively.

     During March 2006,  our lessor  affiliate  offered to forgive the Company's
indebtedness to such entity in the approximate amount of $295,000.  Accordingly,
during the first quarter of 2006, such amount was credited to Additional paid-in
capital and increased the net amount due from affiliates.

     On May 1, 1998, the Company entered into a ten year lease for approximately
12,700  square  feet of office  and  warehouse  facilities  in Fort  Lauderdale,
Florida  from an entity  owned by certain  officers  of the  Company.  The lease
required a minimum  rental of  $94,800  for the first  year and  provides  for a
maximum  2%  increase  on the  anniversary  of the  lease  throughout  the term.
Additionally,  the  landlord  is entitled  to its  pro-rata  share of all taxes,
assessments,  and any other expenses that arise from ownership.  Rent charged to
operations  aggregated  approximately  $75,300,  $71,800,  $25,100,  and $25,100
during the nine months ended  September 30, 2006 and 2005,  and the three months
ended September 30, 2006 and 2005, respectively.

     The  Company  has entered  into a  corporate  guaranty  of a mortgage  note
obligation of such affiliate. The obligation aggregating  approximately $314,100
and $336,900 at  September  30, 2006 and  December  31,  2005,  respectively  is
primarily secured by the real estate leased to the Company.

     The following is a schedule of minimum future rentals on the non-cancelable
operating leases.

         Year ending                   December 31,
               2006             $  104,507
               2007                106,597
               2008                108,729
               2009                    -
               2010                    -
         Thereafter                    -
                                ----------
             Total              $  319,833
                                ==========




                                       12
<PAGE>
5.    EARNINGS (LOSS) PER SHARE
<TABLE>
<CAPTION>
                                                    Nine months                      Three months
                                                ended September 30,               ended September 30,
                                               2006             2005               2006          2005
                                             ---------       ---------          ---------      ---------
<S>                                          <C>             <C>                <C>            <C>
Weighted-average common
  shares outstanding                         5,935,316       5,651,260          5,978,316      5,651,260

Dilutive effect of stock plans,
  other options & conversion rights            170,898          93,507            391,617         69,818
                                             ---------       ---------          ---------      ---------
Diluted weighted-average shares
  outstanding                                6,106,214       5,744,767          6,369,933      5,721,078
                                             =========       =========          =========      =========
</TABLE>

6.    INCOME TAXES

     As of  September  30, 2006,  our  potential  Deferred Tax Asset  aggregated
approximately $472,000.  Estimated Income Taxes attributable to our earnings for
the nine months ended  September 30, 2006 and deferred  Income Taxes  associated
with the timing differences  between policies  reflected in financial  reporting
and for Income Tax purposes  aggregated  approximately  $221,100  and  $247,800,
respectively.  Accordingly,  the result of the  foregoing  is a net Deferred Tax
Asset of approximately  $3,000. There is no assurance that the Company will ever
avail itself of all or a portion of such  credits.  We  established  a valuation
allowance of 100% against this deferred asset.

7.    SUBSEQUENT EVENT

     On November 10, 2006, our President and CEO, Peter G. Dornau indicated that
he is exercising his right to convert our  indebtedness to him into common stock
pursuant to the terms of our  Revolving  Line of Credit.  Had this decision been
reflected in the accompanying  financial statements as of September 30, 2006 our
total long-term debt would be reduced and shareholders' equity been increased by
approximately  $1,250,000,  respectively.  Net income and related  earnings  per
share  for the nine  months  ended  September  30,  2006  would  not  have  been
materially impacted by this subsequent event.

Forward-looking Statements:

     Certain   statements   contained  herein,   including  without   limitation
expectations   as  to   future   sales   and   operating   results,   constitute
forward-looking statements pursuant to the safe harbor provisions of the Private
Securities  Litigations  Reform Act of 1995.  For this purpose,  any  statements
contained  in this  report that are not  statements  of  historical  fact may be
deemed  forward-looking  statements.  Without  limiting  the  generality  of the
foregoing,  words  such as  "may",  "will",  "expect",  "anticipate",  "intend",
"could" or the negative other variations  thereof or comparable  terminology are
intended to identify forward-looking statements.  These statements involve known
and  unknown  risks,  uncertainties  and other  factors  which may cause  actual
results,  performance or achievements of the Company to be materially  different
from any future  results,  performance or  achievements  expressed or implied by
such forward-looking statements.  Factors which may affect the Company's results
include,  but are not limited to, the highly competitive nature of the Company's
industry;  reliance  on  certain  key  customers;  consumer  demand  for  marine
recreational  vehicle  and  automotive  products;  advertising  and  promotional
efforts,  and other  factors.  The Company will not undertake  and  specifically
declines any obligation to update or correct any  forward-looking  statements to
reflect events or circumstances  after the date of such statements or to reflect
the occurrence of anticipated or unanticipated events.

Item 2.  Management's Discussion and Analysis of
         Financial Conditions and Results of Operations

Overview:

     We are a leading  manufacturer  and  distributor  of chemical  formulations
serving the  appearance  and  functional  categories of the marine,  automotive,
recreational  vehicle and home care  markets.  We were  founded in 1973 and have
conducted  operations  within the  aforementioned  categories since then. During
1984, we changed our corporate name to Ocean Bio-Chem, Inc. (the parent company)
from our former name, Star brite Corporation. Our operations were conducted as a
privately owned company through March, 1981 when we completed our initial public
offering of common stock.

                                       13
<PAGE>

Critical accounting policies and estimates:

     Principles of consolidation - Our consolidated financial statements include
the  accounts  of the parent  company  and its wholly  owned  subsidiaries.  All
significant   inter-company   accounts  and   transactions   are  eliminated  in
consolidation.

     Revenue  recognition  -  Revenue  from  product  sales is  recognized  when
persuasive evidence of an arrangement exists, delivery to customer has occurred,
the sales price is fixed and  determinable,  and  collectibility  of the related
receivable is probable.

     Prepaid  advertising and promotion - In any given year we introduce certain
new  products  to  our  customers.  In  connection  therewith,  we  produce  new
promotional  items to be distributed over a period of time. We follow the policy
of amortizing these costs over a one-year basis.

     Property, plant and equipment - Property, plant and equipment are stated at
cost.  Depreciation  is provided over the estimated  useful lives of the related
assets using the straight-line method.

     Stock  based  compensation  - Prior to  January  1,  2006 we  followed  the
provisions of APB Opinion No. 25,  Accounting for Stock Issued to Employees,  to
record  compensation  costs.  Opinion No. 25 requires that  compensation cost be
based on the  difference,  if any,  between the quoted market price of the stock
and the price the employee must pay to acquire the stock  depending on the terms
of the award.  Effective  January 1, 2006 we adopted the provisions of Statement
of Financial  Accounting  Standards No. 123R to record such compensation  costs.
Prior thereto,  such matters were disclosed on a pro-forma basis in the notes to
our consolidated financial statements.

     Concentration  of credit  risk -  Financial  instruments  that  potentially
subject  the  Company to  concentration  of credit  risk  consist  primarily  of
accounts  receivable.  Over the past three  years,  our five  largest  customers
historically  represented a range of  approximately  45% to 55% of  consolidated
gross revenues and 25% to 77% of consolidated accounts receivable, respectively.
We have experienced a longstanding  relationship with each of these entities and
have always collected open receivable balances in a timely manner.  However, the
loss of any of these customers could have an adverse impact on our operations.

     Fair  value  of  financial  instruments  -  The  carrying  amount  of  cash
approximates  its fair  value.  The fair  value  of  long-term  debt is based on
current rates at which we could borrow funds with similar remaining  maturities,
and the carrying amount approximates fair value.

     Income taxes - We file  consolidated  federal and state income tax returns.
We have  adopted  Statement  of Financial  Accounting  Standards  No. 109 in the
accompanying  consolidated financial statements.  The only temporary differences
included   therein  are   attributable   to  differing   methods  of  reflecting
depreciation for financial statement and income tax purposes.

     Trademarks,  trade  names  and  patents  - The Star  brite  trade  name and
trademark  were  purchased  in 1980 for  $880,000.  The cost of such  intangible
assets was amortized on a straight-line  basis over an estimated  useful life of
40 years  through  December 31, 2001.  Effective  January 1, 2002 and  reporting
periods thereafter and pursuant to Statement of Financial  Accounting  Standards
No. 142, we have determined  that the carrying value of such  intangible  assets
relating  to our Star brite  brand does not  require  further  amortization.  In
addition, we own certain patents that we believe are valuable in limited product
lines, but not material to our success or competitiveness in general.  There are
no capitalized costs attributable to our patents.

     Translation of Canadian currency - The accounts of our Canadian  subsidiary
are translated in accordance  with Statement of Financial  Accounting  Standards
No.  52,  which  requires  that  foreign  currency  assets  and  liabilities  be
translated using the exchange rates in effect at the balance sheet date. Results
of  operations  are  translated  using  the  average  exchange  rate  prevailing
throughout the period.  The effects of unrealized  exchange rate fluctuations on
translating  foreign  currency  assets and  liabilities  into U.S.  dollars  are
accumulated as the  translation  adjustment in  shareholders'  equity.  Realized
gains and losses from  foreign  currency  transactions,  if any, are included in
Comprehensive earnings of the period.

Liquidity and Capital Resources:

     The primary  sources of our liquidity  are our  operations  and  short-term
borrowings from Regions Bank pursuant to a revolving line of credit  aggregating
$6 million.  Such line matures May 31, 2007,  bears interest at the 30 Day LIBOR
plus 275 basis points (approximately 8.08% at September 30, 2006) and is secured
by our trade receivables,  inventory and intangible assets. As of each year-end,
December  31, we are  required  to  maintain a minimum  working  capital of $1.5
million  and meet  certain  other  financial  covenants  during  the term of the
agreement. As of September 30, 2006, we were obligated under this arrangement in
the amount of $5,525,000.
                                       14
<PAGE>
     In connection with the purchase and expansion of the Alabama  facility,  we
closed on Industrial Development Bonds during 1997 aggregating  approximately $5
million.  The proceeds were utilized for both the repayment of certain  advances
used to purchase the Alabama facility and to expand such facility for our future
needs.  During July 2002,  we  completed a second  Industrial  Development  Bond
("IDB")  financing  aggregating  $3.5  million  through the City of  Montgomery,
Alabama.  Such transaction  funded an approximate 70,000 square foot addition to
the  manufacturing  facility as well as the  remaining  machinery  and equipment
additions required therein. This project was completed during 2003.

     In order to market the IBD at  favorable  rates,  we obtained a  substitute
irrevocable  letter of credit for the 1997 issue and a new irrevocable letter of
credit for the 2002 issue. Under such letters of credit agreements,  maturing on
July 31,  2007,  we are  required  to  maintain  a  stipulated  level of working
capital,  a  designated  maximum  debt to tangible  ratio,  and a required  debt
service  coverage ratio.  Such letters of credit are secured by a first priority
mortgage on the underlying Alabama facility and equipment.

     The bonds are marketed  weekly at the prevailing  rates for such tax-exempt
instruments.  During the nine months ended September 30, 2006 such bonds carried
interest  ranging  between 3.3% and 3.9%  annually.  Interest and  principal are
payable  quarterly.  We believe current  operations are sufficient to meet these
obligations.

     On April 12, 2005 we entered into a financing  obligation with Regions Bank
whereby  they  advanced  us $500,000 to finance  equipment  acquisitions  at our
Kinpak  facility.  Such  obligation is due in monthly  installments of principal
aggregating   approximately  $8,300  plus  interest  at  prevailing  rates  (the
outstanding  balance and interest rate on this  obligation at September 30, 2006
were approximately $358,300 and 7.83% per annum, respectively).  The maturity on
this obligation is April 15, 2010.

     During the quarter  ended  December 31,  2005,  we finalized a $1.5 million
revolving  credit  facility  with our  president  and CEO,  Peter G. Dornau.  At
September  30, 2006 and  December  31, 2005,  the gross  obligation  aggregating
$1,400,000  and  $1,150,000,  respectively  was  outstanding  pursuant  to  this
obligation  which is due in October 2010 along with accrued interest at the rate
of prime plus 2%. In connection with his offering this financing  arrangement to
the Company, we issued warrants to Mr. Dornau to purchase a maximum of 1 million
shares of our common stock.  Such  warrants are  exercisable  500,000  shares at
$1.13 and 500,000 shares at $.863.  The exercise  prices were  determined by the
closing  bid of our  stock  plus ten (10)  percent  on each  date of  grant.  In
addition, he has the right, at his sole discretion,  to convert such debt into a
maximum  of 1.5  million  shares  of our  common  stock at the rate of $1.00 per
share.  The gross  obligation  was reduced by an allocation of imputed  interest
associated  with the warrants  issued to Mr. Dornau.  The initial amount of such
allocation was $310,898 which will be amortized and charged  against  operations
as additional interest expense over the sixty (60) month term of this financing.
During the nine months ended September 30, 2006,  amortization of  approximately
$46,600 was charged  against  operations.  This obligation is subordinate to all
borrowings from Regions Bank.

     We are involved in making  sales in the Canadian  market and must deal with
the currency fluctuations of the Canadian currency. We do not engage in currency
hedging and deal with such currency risk as a pricing issue.

     During the past few years, we have  introduced  various new products to our
customers.  At times this has  required us to carry  greater  amounts of overall
inventory and has resulted in lower  inventory  turnover  rates.  The effects of
such  inventory  turnover have not been material to our overall  operations.  We
believe that all required  capital to maintain such increases can continue to be
provided by operations and current financing arrangements.

     Many of the raw  materials  that we use in the  manufacturing  process  are
commodities  that are  subject  to  fluctuating  prices.  We react to  long-term
increases by passing along all or a portion of such increases to our customers.

     As of September 30, 2006 and through the date hereof, we did not and do not
have any material commitments for capital expenditures, nor do we have any other
present  commitment  that is likely to result  in our  liquidity  increasing  or
decreasing in any material way. In addition,  except for our need for additional
capital to finance inventory purchases,  we know of no trend, additional demand,
event or uncertainty that will result in, or that is reasonably likely to result
in, our liquidity increasing or decreasing in any material way.

     As  disclosed in our Form 10-Q for the quarter  ended March 31,  2005,  our
largest customer,  West Marine, publicly announced their adoption of a policy to
reduce  their  overall  inventory  levels.   This  resulted  in  an  approximate
$4,294,000  decrease  in  sales to them for the year  ended  December  31,  2005
compared to 2004.  Our  products  have  historically  sold well at their  retail
stores and they have indicated to us that such was the case during 2005. Current
period  sales to West  Marine  represented  an increase  of  approximately  $2.9
million for the nine months ended September 30, 2006 over the comparable  period
in 2005.

                                       15
<PAGE>
     Corporate  management  has enhanced its analysis,  supervision  and overall
involvement with our manufacturing  facility.  We have identified  several areas
that require  improvement and through  increased  on-site  management  presence,
major  personnel  changes,  adoption of certain  strategic  enhancements  to our
manufacturing  process,  and a renewed  commitment  from our team in  Alabama to
strive for improved efficiency and cost savings, we believe that we will achieve
a material reduction in manufacturing cost thereby improving product margins and
operating results at Kinpak during 2006.

     On March 25,  1999,  the Company  entered into a loan  arrangement  with an
entity owned 50% each by our President and Vice President - Advertising, Messrs.
Peter G. Dornau and Jeffrey J. Tieger, respectively whereby we borrowed $400,000
to be repaid in monthly  installments  of  approximately  $3,400 plus prevailing
interest  at prime plus 1%. On March 9, 2006 we received  notification  from the
shareholders  of said  entity  that they were  forgiving  this  obligation  and,
accordingly, the Company has no further obligation associated with this debt. At
that date the principal balance outstanding amounted to $295,752 and such amount
is reflected on the accompany  consolidated statement of shareholders' equity as
an increase to Additional paid-in capital.

Results of Operations:
For The Three Months Ended September 30, 2006 compared to the Three Months
ended September 30, 2005:

     Net sales increased  approximately  $1,772,000 or 30% for the quarter ended
September  30, 2006  compared to the same  quarter of the  preceding  year.  The
consolidated  net sales  aggregated  approximately  $7,725,000  and  $5,952,800,
respectively.  Management  attributes this increase to both timing and increased
revenues  associated  with our  Anti-freeze  season as well as enhanced sales to
West Marine comparing the current period with the same period in 2005.

     Cost of goods sold  amounted to  approximately  $5,543,700  or 71.8% of net
sales  compared  to  $4,940,800  or 83.0% of net  sales for the  quarters  ended
September 30, 2006 and 2005, respectively. These results were favorably effected
by a sales price increase passed along to substantially all customers  effective
January,  2006,  modifications  initiated  in  certain  manufacturing  processes
however,  unfavorably  impacted as the result of spreading  our fixed element of
manufacturing  overhead  over the reduced  sales levels  experienced  during the
current quarter.

     Selling and administrative expenses decreased approximately $61,100 or 6.4%
when comparing the quarters ended September 30, 2006 and 2005.  Certain expenses
which are components of this grouping  increased and others decreased.  However,
the significant changes were reduced personnel costs, principally at Kinpak, and
lower  professional  fees and other outside services,  including  consulting and
outsourced data processing fees.

     Advertising and promotion increased  approximately $74,600 or approximately
21.1% comparing the three months ended September 30, 2006 and 2005. This was the
result  of  advertising  costs  associated  with our  Starton  product  line and
contractual  co-operative  advertising  programs  related to the increased sales
experienced during the current period.

     Interest expense  increased by approximately  $71,800 comparing the quarter
ended September 30, 2006 to the corresponding  quarter in 2005. This principally
resulted  from  increasing  interest  rates,  the  accrual  of  interest  on the
revolving  line loaned to the Company by our president and CEO, Peter G. Dornau,
and  the  amortization  of  imputed  interest   associated  with  the  foregoing
obligation.

     Our net income  for the  quarter  ended  September  30,  2006  amounted  to
approximately  $670,700 compared to a loss of $418,300 for the comparable period
in 2005. As a result of available Income Tax carryovers,  there was no provision
or benefit for income taxes in the current quarter.

For the Nine Months Ended  September  30, 2006  Compared To The Nine Months
Ended September 30, 2005

     Net sales increased 20.7% to approximately  $16,466,200 for the nine months
ended  September 30, 2006  compared to  approximately  $13,635,700  for the nine
months  ended   September  30,  2005.   Management   attributes   such  increase
significantly to our largest customer resuming their purchasing after apparently
reaching  their  inventory  goals,  new  customer   development,   higher  sales
associated with our Anti-freeze  season,  and sales price increases passed along
to customer to cover increasing costs.

     Cost of goods  sold  decreased  to 71.4 % of net sales for the nine  months
ended  September  30,  2006  compared  to 80.3% of net sales for the nine months
ended  September  30,  2005.  This change  resulted was  attributed  sales price
increases  passed along to our  customers,  certain  initiatives  adopted in our
manufacturing  processes,  and the  result of  spreading  our fixed  element  of
manufacturing  overhead over the higher sales levels  experienced during the six
month period.

     Advertising  and promotion  expenses  decreased  approximately  $124,400 or
12.1% for the 2006 period when compared to comparable  expenses in the same time
period in the previous year.  This resulted  primarily from planned  advertising
programs in media and co-op advertising programs for the current year.
                                       16
<PAGE>
     Selling and administrative  expenses decreased by approximately $286,900 or
9.9% for the nine months ended  September  30, 2006  compared to the nine months
ended  September  30,  2005. . Certain  expenses  which are  components  of this
grouping increased and others decreased.  However,  the significant changes were
reduced personnel costs,  principally at Kinpak, and lower professional fees and
other outside  services,  including  consulting and outsourced  data  processing
fees.

     Interest expense for the 2006 period increased  approximately $195,400 when
compared to the same nine month period of 2005. This  principally  resulted from
increasing  interest rates, the accrual of interest on the revolving line loaned
to the Company by our president and CEO, Peter G. Dornau,  and the  amortization
of imputed interest associated with the foregoing obligation.

     Our net  income  was  approximately  $650,300  for the  nine  months  ended
September 30, 2006 compared to a net loss of  approximately  $1,305,700  for the
nine months  ended  September  30,  2005.  As a result of  available  Income Tax
carryovers,  there was no  provision  or benefit for income taxes in the current
nine month period.

Item 3.     Quantitative and Qualitative Disclosures about Market Risk

     Market  risk  represents  the risk of loss that may  impact  our  financial
position,  results  of  operations  or cash  flows  due to  adverse  changes  in
financial and  commodity,  principally  petroleum  based raw  materials,  market
prices and interest rates. We are exposed to market risk in the areas of changes
in borrowing rates in the United States and changes in foreign currency exchange
rates.  Historically,  and as of September 30, 2006, we have not used derivative
instruments or engaged in hedging activities to minimize market risk.

     Interest rate risk

     As of September 30, 2006, we had floating  interest rates on our industrial
development revenue bonds and our working capital line of credit facility. As of
September 30, 2006 the interest rate on our approximate  $4,858,100  outstanding
balance of  industrial  revenue bonds was  approximately  3.9% per annum and the
interest rate on our line of credit  facility was based on the 30 day LIBOR rate
plus 275 basis points (the  effective  interest  rate at September  30, 2006 was
8.08%). We do not expect any changes in interest rates to have a material impact
on our operations during the year ending December 31, 2006.

    Foreign currency risk

     We sell products in Canada, based on the Canadian dollar.  Thereby, we have
exposure  to changes in  exchange  rates.  Changes in the  Canadian  dollar/U.S.
dollar  exchange  rates may  positively or negatively  affect our gross margins,
operating income and retained earnings. We do not believe that near-term changes
in the exchange  rates,  if any, will result in a material  effect on our future
earnings,  fair values or cash flows, and therefore, we have chosen not to enter
into  foreign  currency  hedging  transactions.  We cannot  assure you that this
approach will be successful, especially in the event of a significant and sudden
change in the value of the Canadian dollar.

    Concentration and credit risk

     We maintain  cash  balances at several  financial  institutions,  which are
insured by the Federal Deposit Insurance  Corporation up to $100,000.  At times,
our cash balances may exceed federally  insured limits.  We have not experienced
any losses in such accounts and we believe the risk related to these deposits is
minimal.

Item 4.  Controls and Procedures

     Evaluation of Disclosure  Controls and  Procedures.  We have carried out an
evaluation  under the  supervision  of  management,  including the President and
Chief  Executive  Officer  ("CEO")  and the Chief  Operating  Officer  and Chief
Financial  Officer ("CFO"),  of the effectiveness of the design and operation of
our disclosure  controls and procedures.  Based on that evaluation,  our CEO and
CFO have concluded  that, as of September 30, 2006, our disclosure  controls and
procedures were effective to ensure that information required to be disclosed by
us in the reports filed or submitted by us under the Securities  Exchange Act of
1934, as amended,  was recorded,  processed,  summarized and reported within the
time  periods  specified  in the rules and  regulations  of the SEC, and include
controls  and  procedures  designed  to ensure that  information  required to be
disclosed by us in such reports was accumulated and  communicated to management,
including the CEO and CFO, as  appropriate to allow timely  decisions  regarding
required disclosures.  During the past quarter,  there have not been any changes
in our internal control over financial reporting that have materially  affected,
or are  reasonably  likely  to  materially  affect  our  internal  control  over
financial reporting.

                                       17
<PAGE>
     Limitations on the Effectiveness of Controls. Our management, including the
CEO and CFO,  does not expect  that our  disclosure  or internal  controls  will
prevent all errors or fraud. A control system,  no matter how well conceived and
operated,  can  provide  only  reasonable,  not  absolute,  assurance  that  the
objectives  of the  control  system  are met.  Further,  the design of a control
system  must  reflect  the fact that  there are  resource  constraints,  and the
benefits of controls must be considered relative to their costs.  Because of the
inherent  limitations in a cost-effective  control system,  misstatements due to
error or fraud may occur and not be detected. Despite these limitations, our CEO
and CFO have  concluded  that our  disclosure  controls and  procedures  (1) are
designed to provide  reasonable  assurance of  achieving  their  objectives  and
(2) do provide reasonable assurance of achieving their objectives.

                           PART II - OTHER INFORMATION

     Item 1. - Legal Proceedings:

     We are not a party to any material litigation presently pending nor, to the
best knowledge of the Company, have any such proceedings been threatened.

     Item 1A. - Risk Factors

     Set forth any material changes from Risk Factors as previously  reported in
the Registrant's Form 10-K in response to Item 1A. in Part 1 of Form 10-K.

     There have been no material changes

     Item 2. - Unregistered Sales of Equity Securities and Use of Proceeds:  Not
applicable

     Item 3. - Defaults Upon Senior Securities: Not applicable

     Item 4 - Submission of Matters to Vote of Security Holders: Not applicable

     Item 5. - Other  Information:  (a) Not  applicable  (b) We have no standing
Nominating  Committee  of the  Board of  Directors.  All  members  of the  Board
participate in the consideration of nominees to the Board.

     Item 6. - Exhibits:

     31.1  Certification  of Chief Executive  Officer pursuant to Section 302 of
Sarbanes-Oxley

     31.2  Certification  of Chief Financial  Officer pursuant to Section 302 of
Sarbanes-Oxley

     32.1  Certification of Chief Executive  Officer and Chief Financial Officer
pursuant to Section 906 of Sarbanes-Oxley

                                   SIGNATURES

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
Registrant has duly caused this report to be signed on behalf by the Undersigned
there unto duly authorized.

OCEAN BIO-CHEM, INC.

Date:   November  10, 2006                   /s/ Peter G. Dornau
                                             Peter G. Dornau
                                             Chairman of the Board of Directors
                                             and Chief Executive Officer


                                             /s/ Edward Anchel
                                             Edward Anchel
                                             Chief Financial Officer
                                       18
<PAGE>

                                                                    Exhibit 31.1
                                  CERTIFICATION


I, Peter G. Dornau certify that:

     1. I have reviewed this Form 10-Q of Ocean Bio-Chem, Inc. as of and for the
period ended September 30, 2006;


     2. Based on my knowledge, this report does not contain any untrue statement
of a  material  fact or omit to  state a  material  fact  necessary  to make the
statements made, in light of the circumstances  under which such statements were
made, not misleading with respect to the period covered by this report;

     3. Based on my knowledge,  the financial  statements,  and other  financial
information included in this report, fairly present in all material respects the
financial  condition,  results of operations and cash flows of the registrant as
of, and for, the periods presented in this report;

     4. The  registrants  other  certifying  officer and I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal  control over financial
reporting  (as defined in Exchange Act Rules  13a-15(f) and  15d-15(f))  for the
registrant and we have:

     a)  designed  such  disclosure  controls  and  procedures,  or caused  such
disclosure  controls and  procedures to be designed  under our  supervision,  to
ensure that  material  information  relating to the  registrant,  including  its
consolidated subsidiaries,  is made known to us by others within those entities,
particularly during the period in which this report is being prepared;

     b) designed such internal control over financial reporting,  or caused such
internal control over financial  reporting to be designed under our supervision,
to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial  statements for external purposes in accordance
with generally accepted accounting principles;

     c) evaluated the effectiveness of the registrant's  disclosure controls and
procedures and presented in this report our conclusions  about the effectiveness
of the disclosure  controls and procedures,  as of the end of the period covered
by this report based on such evaluation; and

     d) disclosed in this report any change in the registrant's internal control
over  financial  reporting  that occurred  during the  registrant's  most recent
fiscal quarter (the registrant's  fourth fiscal quarter in the case of an annual
report) that has  materially  affected,  or is  reasonably  likely to materially
affect, the registrants internal control over financial reporting.

     5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation of internal control over financial reporting,  to the
registrant's auditors and the audit committee of registrant's board of directors
(or persons performing the equivalent function):

     a) All significant  deficiencies  and material  weaknesses in the design or
operation of internal  control over  financial  reporting  which are  reasonably
likely  to  adversely  affect  the  registrant's  ability  to  record,  process,
summarize and report financial information; and

     b) Any fraud,  whether or not material,  that involves  management or other
employees who have a significant role in the registrant's  internal control over
financial reporting.


Dated:    November  10, 2006                 /s/ Peter G. Dornau
                                             Peter G. Dornau
                                             Chairman of the Board and
                                             Chief Executive Officer





<PAGE>

                                                                    Exhibit 31.2
                                  CERTIFICATION

I, Edward Anchel certify that:


     1. I have reviewed this Form 10-Q of Ocean Bio-Chem, Inc. as of and for the
period ended September 30, 2006;


     2. Based on my knowledge, this report does not contain any untrue statement
of a  material  fact or omit to  state a  material  fact  necessary  to make the
statements made, in light of the circumstances  under which such statements were
made, not misleading with respect to the period covered by this report;

     3. Based on my knowledge,  the financial  statements,  and other  financial
information included in this report, fairly present in all material respects the
financial  condition,  results of operations and cash flows of the registrant as
of, and for, the periods presented in this report;

     4. The  registrants  other  certifying  officer and I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal  control over financial
reporting  (as defined in Exchange Act Rules  13a-15(f) and  15d-15(f))  for the
registrant and we have:

     a)  designed  such  disclosure  controls  and  procedures,  or caused  such
disclosure  controls and  procedures to be designed  under our  supervision,  to
ensure that  material  information  relating to the  registrant,  including  its
consolidated subsidiaries,  is made known to us by others within those entities,
particularly during the period in which this report is being prepared;

     b) designed such internal control over financial reporting,  or caused such
internal control over financial  reporting to be designed under our supervision,
to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial  statements for external purposes in accordance
with generally accepted accounting principles;

     c) evaluated the effectiveness of the registrant's  disclosure controls and
procedures and presented in this report our conclusions  about the effectiveness
of the disclosure  controls and procedures,  as of the end of the period covered
by this report based on such evaluation; and

     d) disclosed in this report any change in the registrant's internal control
over  financial  reporting  that occurred  during the  registrant's  most recent
fiscal quarter (the registrant's  fourth fiscal quarter in the case of an annual
report) that has  materially  affected,  or is  reasonably  likely to materially
affect, the registrants internal control over financial reporting.

     5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation of internal control over financial reporting,  to the
registrant's auditors and the audit committee of registrant's board of directors
(or persons performing the equivalent function):

     a) All significant  deficiencies  and material  weaknesses in the design or
operation of internal  control over  financial  reporting  which are  reasonably
likely  to  adversely  affect  the  registrant's  ability  to  record,  process,
summarize and report financial information; and

     b) Any fraud,  whether or not material,  that involves  management or other
employees who have a significant role in the registrant's  internal control over
financial reporting.

Dated:   November 10, 2006                   /s/ Edward Anchel
                                             Edward Anchel
                                             Chief Financial Officer





<PAGE>
                                                                    Exhibit 32.1


                                  CERTIFICATION

     Pursuant  to  18U.S.C.Section  1350,  the  undersigned  officers  of  Ocean
Bio-Chem,  Inc. (the  "Company"),  hereby  certify that the Company's  Quarterly
Report on Form 10-Q for the quarter  ended  September  30,  2006 (the  "Report")
fully complies with the  requirements  of Section 13(a) or 15(d), as applicable,
of the Securities Exchange Act of 1934 and that the information contained in the
Report fairly presents,  in all material respects,  the financial  condition and
results of operation of the Company.

Dated: November 10, 2006


                                             /s/  Peter G. Dornau
                                             Peter G. Dornau
                                             Chairman of the Board of
                                             Directors and Chief
                                             Executive Officer



                                             /s/ Edward Anchel
                                             Edward Anchel
                                             Chief Financial Officer