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 June 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  (1) Is a Shell  Company (As
Defined In rule 12b-2 of the Exchange Act).

                          Yes [ ]              No [x ]

     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  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 August 9, 2006

<PAGE>


                      OCEAN BIO-CHEM, INC. AND SUBSIDIARIES

                                      INDEX


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

  Item 1. -  Financial Statements:

      Consolidated balance sheets as of June 30, 2006
         and December 31, 2005                                 3
      Consolidated statements of operations for
         the three months ended June 30,
         2006 and 2005                                         4
      Consolidated statements of changes in
         shareholders' equity for the three months
         ended June 30, 2006 and 2005                          5
      Consolidated statements of cash flows
         for the three months ended June 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 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 by Security
               Holders                                        18
  Item 5. - Other Matters                                     18
  Item 6. - Exhibits                                          19

Signatures                                                    19

Certifications











                                        2
<PAGE>
                         PART I - Financial Information

 Item l.  Financial Statements:

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

                                     ASSETS
                                                                     JUNE 30,                DECEMBER 31,
                                                                       2006                     2005
                                                                   ------------              -----------
                                                                     (UNAUDITED)
  <S>                                                              <C>                       <C>
  Current assets:
  Cash                                                             $    147,634              $    204,543
  Trade accounts receivable net of allowance for doubtful
    accounts of approximately  $177,600 and $131,000 at
    June 30,2006 and December 31, 2005, respectively                  2,046,073                 2,027,162
  Inventories                                                         7,103,684                 6,260,813
  Prepaid expenses and other current assets                             411,307                   510,074

                                                                   ------------              ------------
      Total current assets                                            9,708,698                 9,002,592
                                                                   ------------              ------------

  Property, plant and equipment, net                                  7,141,944                 7,310,640
                                                                   ------------              ------------
  Other assets:
  Trademarks, trade names and patents, net
   of accumulated amortization                                          330,439                   330,439
  Due from affiliated companies, net                                    244,683                    29,022
  Deposits and other assets                                             216,040                   230,329
                                                                   ------------              ------------
     Total other assets                                                 791,162                   589,790
                                                                   ------------              ------------
      Total assets                                                 $ 17,641,804              $ 16,903,022
                                                                   ============              ============
                      LIABILITIES AND SHAREHOLDERS' EQUITY
  Current liabilities:
  Accounts payable - trade                                         $  1,465,790              $  1,256,640
  Note payable - bank                                                 4,200,000                 4,000,000
  Current portion of long term debt                                     585,937                   580,852
  Accrued expenses payable                                              518,057                   512,977
                                                                   ------------              ------------
      Total Current Liabilities                                       6,769,784                 6,350,469
                                                                   ------------              ------------

  Long term debt, less current portion                                5,838,658                 6,261,856
                                                                   ------------              ------------
  Shareholders' equity:
  Common stock - $.01 par value, 10,000,000 shares authorized;
     5,978,316 and 5,849,316 shares issued and outstanding at
     June 30, 2006 and December 31, 2005, respectively                   59,783                    58,493
  Additional paid-in capital                                          5,834,986                 4,908,615
  Foreign currency translation adjustment                          (    165,921)             (    179,653)
  Retained earnings (deficit)                                      (    687,291)             (    488,563)
                                                                   ------------              ------------
                                                                      5,041,557                 4,298,892
Less cost of common stock in treasury, 7,519 shares
     at June 30, 2006 and December 31, 2005                        (      8,195)             (      8,195)
                                                                   ------------              ------------
                                                                      5,033,362                 4,290,697
                                                                   ------------              ------------

   Total liabilities and shareholders' equity                      $ 17,641,804              $ 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 SIX MONTHS
                                                        ENDED JUNE 30,                      ENDED JUNE 30,
                                                  2006                2005            2006            2005
                                              ----------           ----------      ----------       ---------
<S>                                           <C>                  <C>             <C>             <C>
Gross sales                                   $4,658,995           $5,148.807      $9,447,817      $8,626,318

Allowances                                       327,486              561,692         706,716         943,425
                                              ----------           ----------      ----------      ----------
Net sales                                      4,331,509            4,587,115       8,741,101       7,682,893

Cost of goods sold                             3,154,032            3,264,677       6,214,554       6,005,181
                                              ----------           ----------      ----------      ----------
Gross profit                                   1,177,477            1,322,438       2,526,547       1,677,712
                                              ----------           ----------      ----------      ----------


Costs and expenses:
  Advertising and promotion                      285,437              564,997         472,357         671,403
  Selling and administrative                     912,685              955,570       1,740,771       1,966,540
  Interest expense                               192,591              107,539         335,102         211,471
                                              ----------           ----------      ----------      ----------
    Total cost and expenses                    1,390,713            1,628,106       2,548,230       2,849,414
                                              ----------           ----------      ----------      ----------
Operating income (loss)                       (  213,236)          (  305,668)     (   21,683)     (1,171,702)

Other income                                         -                  8,941           1,287           9,760
                                              ----------           ----------      ----------      ----------

 (Loss) before income taxes                   (  213,236)          (  296,727)     (   20,396)     (1,161,942)


Income taxes (benefit)                               -                 19,500             -        (  274,500)
                                              ----------           ----------      ----------      ----------
Net (loss)                                    (  213,236)          (  316,227)     (   20,397)     (  887,442)


Other comprehensive income (loss), net of tax
   Foreign currency translation adjustment         8,233           (    2,362)         13,732           4,121
                                              ----------           ----------      ----------      ----------
Comprehensive income (loss)                   ($ 205,003)          ($ 318,589)     ($   6,664)     ($ 883,321)
                                              ==========           ==========      ==========      ==========

Loss per common share - basic                 ($     .03)          ($     .06)     ($     -  )      ($    .16)
                                              ==========           ==========      ==========      ==========

Loss per common share  - diluted              ($     .03)          ($     .06)     ($     -  )      ($    .16)
                                              ==========           ==========      ==========      ==========
</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 SIX MONTHS ENDED
                             JUNE 30, 2006 AND 2005
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                                      Foreign     Retained
                                   Common stock       Additional     currency     earnings     Treasury
                               Shares      Amount   paid-in 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                                                178,332                 (  178,332)

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)   (  666,895)    ( 8,195)      4,601,595

Net loss                                                                          (   20,396)                (    20,396)

Debt forgiveness -
   affiliate                                             295,752                                                295,752

Common stock and
  warrant issuances            129,000      1,290        118,132                                                119,422

Stock based compensation                                  23,257                                                 23,257

Foreign currency
  translation  adjustment                                               13,732                                   13,732

June 30,                     ---------    -------     ----------    -----------   -----------    --------    -----------
  2006                       5,978,316    $59,783     $5,834,986    ($ 165,921)   ($ 687,291)    ($8,195)     $5,033,362
                             =========    =======     ==========    ===========   ===========    ========    ===========
January 1,
   2005                      5,417,813    $54,178     $4,722,746    ($ 204,864)   $1,324,630    ($8,195)    $ 5,888,495

Net (loss)                                                                        (  887,442)               (   887,442)

Common stock
   issuance                    272,003      2,720         94,545                                                 97,265

Foreign currency
  translation
  adjustment                                                             4,121                                    4,121

June 30,                     ---------    -------     ----------    -----------   ----------    --------    ------------
  2005                       5,689,816    $56,898     $4,817,291    ($ 200,743)   $  437,188    ($8,195)    $ 5,102,439
                             =========    =======     ==========    ===========   ==========    ========    ============
</TABLE>

                                        5
<PAGE>
                      OCEAN BIO-CHEM, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                            FOR THE SIX MONTHS ENDED
                             JUNE 30, 2006 AND 2005
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                        2006                    2005
                                                                   ------------              ------------
<S>                                                                <C>                       <C>
Cash flow provided (used) by operating activities:

  Net (loss)                                                       ($    20,396)             ($   887,442)

Adjustments to reconcile net (loss)
  to net cash provided (used) by operations:
  Depreciation and amortization                                         388,174                   368,589
  Stock based compensation expense                                       23,257                       -
  Amortization of imputed interest                                       31,090                       -

  Changes in assets and liabilities:
  (Increase) decrease in accounts receivable                       (     18,911)                1,362,465
  (Increase) in inventories                                        (    842,872)             (  1,901,199)
  Decrease (increase) in prepaid expenses and other current assets       98,768              (    222,004)
  Increase (decrease) in accounts payable, accrued
   expenses and other                                                   228,519              (    121,954)
                                                                   ------------              -------------
  Net cash used by operating activities                            (    112,371)             (  1,401,545)
                                                                   ------------              -------------
Cash provided (used) by financing activities:
  Net increase (decrease) under line of credit                          200,000                   400,000
  (Increases) in advances to affiliates, net                       (    215,661)                      -
  Reductions  in advances to affiliates, net                            295,752                   212,259
  Increases in long term borrowings                                     125,000                   500,000
  Payments on long term debt, net                                  (    263,305)             (    232,996)
  Common stock transactions                                             119,422                    97,265
                                                                   ------------              ------------
  Net cash provided by financing activities                             261,208                   976,528
                                                                   ------------              ------------
Cash provided (used) by investing activities:
  Purchase property, plant, equipment, net                         (    219,478)             (    541,294)
                                                                   ------------              ------------
 Net cash provided (used) by investing activities                  (    219,478)             (    541,294)
                                                                   ------------              ------------
Increase (decrease) in cash prior to effect of
   foreign currency translation on cash                            (     70,641)             (    966,311)

 Effect of foreign currency translation on cash                          13,732                     4,121
                                                                   ------------              ------------
Increase (decrease) in cash                                        (     56,909)             (    962,190)
Cash at beginning of period                                             204,543                   988,106
                                                                   ------------              ------------
Cash at end of period                                              $    147,634              $     25,916
                                                                   ============              ============
Supplemental Information:
  Cash used for interest during period                             $    304,012              $    211,473
                                                                   ============              ============
  Cash used for 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
June 30, 2006 are not necessarily indicative of the results that may be expected
for the future fiscal quarters 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-K for the year ended December 31, 2005.

     During August 2006, we will be filing an amendment to our Form 10-K for the
period ended December 31, 2005. We are in the process of finalizing such filing.
The  substantive  changes  to be  reflected  in such  amendment  will be (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.  The  effect  of the
foregoing  on our  consolidated  balance  sheet and  consolidated  statement  of
operations as of December 31, 2005 and for the year then ended is as follows:
<TABLE>
<CAPTION>
<S>                                                   <C>           <C>         <C>
Consolidated Balance Sheet:
                                                        Long-                   Shareholders'
                                                       term debt                   equity
                                                      ----------                -------------
As originally reported                                $ 6,261,856               $  4,290,697

Reclassification of imputed interest associated
  with warrants issued pursuant to Subordinated
  Revolving Note Payable                              (   310,898)                   310,898

Recognition of compensation cost associated
  with stock options granted to Messrs. Dornau
  and Tieger of which certain terms were modified            -                           -
                                                      -----------               ------------
As restated                                           $ 5,950,958               $  4,601,595
                                                      ===========               ============

Consolidated Statement of Operations:

Net loss, as originally reported                                    ($1,813,193)

Recognition of compensation cost associated with
  stock options granted to Messrs. Dornau and Tieger
  which certain terms were modified                                     178,332
                                                                    ------------
Net loss, as restated                                               ($1,991,525)
                                                                    ============
</TABLE>
     Certain financial statement items for the six months and quarter ended June
30, 2005 have been  reclassified to conform to the 2006  presentation.
                                        7
<PAGE>
     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 stated at the lower of
cost or market.  Cost is  determined  by the  first-in,  first-out  method.  The
composition  of  inventories  at June 30,  2006 and  December  31,  2005 were as
follows:

                                                 2006                 2005
                                              ----------           ----------
                  Raw materials               $3,760,633           $3,235,086
                  Finished goods               3,343,051            3,025,727
                                              ----------           ----------
                                              $7,103,684           $6,260,813
                                              ==========           ==========


     Stock Based Compensation

     At  June  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  presented 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

                                        8
<PAGE>
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 g ranted 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 the  financial  statements  upon either the grant or
exercise of these stock options.

     As of June 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:
<TABLE>
<CAPTION>
         <S>                                <C>                        <C>
         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
</TABLE>
     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 June 30, 2006                953,500                 $1.11
                                            =======                 =====

     For the six month  period  ended  June 30,  2006,  The  Company  recognized
$23,257 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 June 30, 2006, The Company had $117,714 of unrecognized compensation costs
related to non-vested stock option awards that is expected to be recognized over
a weighted average period of 2.67 years.

     The following information applies to options outstanding and exercisable as
of June 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       2.75          $ .758      231,000       $  .758
1992 Plan                      143,000        .50           1.009      123,200         1.009
1994 Plan                      159,500       3.33           1.050       31,900         1.050
2002 Plan - qualified          125,000       1.33           1.260       81,000         1.260
2002 Plan - qualified          140,000       2.75           1.520       56,000         1.620
2002 Plan - non-qualified       35,000       3.33           1.260       35,000         1.260
2002 Plan - non-qualified       40,000       8.00           1.030       40,000         1.030
2002 Plan - non-qualified       40,000       8.90           1.460       40,000         1.460
2002 Plan - non-qualified       40,000       9.80           1.080       40,000         1.050
                             ---------                -----------   ----------    ----------
                               953,500                     $1.110      678,100        $1.045
                             =========                ===========   ==========    ==========
</TABLE>
                                        9
<PAGE>

     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.

     For the three month and six month periods ended June 30, 2006 and 2005, the
fair value of each  option  grant was  estimated  on the date of grant using the
following weighted-average assumptions:
<TABLE>
<CAPTION>

                                              For the three months ended           For the six months ended
                                             ----------------------------       ----------------------------
                                           June 30, 2006     June 30, 2005     June 30, 2006     June 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>


     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 six month period ended June 30, 2005:



                                                  For the thre    For the six
                                                  months ended    months ended
                                                     June 30,       June 30,
                                                       2005           2005
                                                    ---------      ---------

Net loss, as reported                               ($316,227)     ($887,442)
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                  9,651         19,302
                                                    ---------      ---------

Pro forma net loss                                  ($325,878)     ($906,744)
                                                    =========      =========



Loss per share:
   Basic and diluted - as reported                   ($0.06)        ($0.16)
   Basic and diluted - pro forma                     ($0.06)        ($0.16)


     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 recorded as a charge against  operations in our originally  issued financial
statements  as  contained  in our Form 10-K as of December 31, 2005 and the year
then ended.  Accordingly,  our  Consolidated  Statement  of  Operations  will be
restated for 2005 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.  It is contemplated that such amended filing
will be made during August 2006.

                                       10


<PAGE>
     2. PROPERTY, PLANT & EQUIPMENT

     The Company's  property,  plant and equipment consisted of the following at
June 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      4,682,551    4,384,268
   Manufacturing and warehouse equipment       11-20      1,659,870    1,659,870
   Office equipment and furniture                3-5        661,591      652,940
   Construction in process                       N/A        190,783      278,239
   Leasehold improvement                       10-15        145,505      145,505
                                                         ----------  -----------
                                                         12,009,519   11,790,041

   Less accumulated depreciation                          4,867,575    4,479,401
                                                         ----------   ----------
   Total property, plant and equipment, net              $7,141,944   $7,310,640
                                                         ==========   ==========

     3. LONG-TERM DEBT

     Long-term debt at June 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 June 30, 2006,  $1,953,100  and  $3,020,000  were
outstanding attributable to the 1997 and 2002 series,  respectively.  During the
six months  ended June 30, 2006  interest  rates  ranged  between 3.3% and 3.7%.
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 the Kinpak facility and manufacturing equipment.

     During 2005 and 2004, 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 $73,000 at June 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 June 30, 2006 were
approximately  $383,300 and 7.6% 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 June
30, 2006 and December 31, 2005, the gross obligation  aggregating $1,275,000 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
six months  ended June 30,  2006,  amortization  of $31,090 was charged  against
operations.  This obligation is subordinate to all borrowings from Regions Bank.

                                       11
<PAGE>

     The composition of these obligations at June 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      $4,513,108      $4,745,000
  Notes payable                                99,996        99,996         283,342         331,448
  Capitalized equipment leases                 25,941        20,856          47,016          35,408
  Subordinated note payable-P. Dornau            -               -        1,275,000       1,150,000
                                             --------      --------      ----------      ----------
                                              585,937       580,852       6,118,466       6,261,856
  Less imputed interest - Subordinated
    note payable-P. Dornau                      -             -          (  279,808)     (  310,898)
                                             --------      --------      ----------      -----------
                                             $585,937      $580,852      $5,838,658      $5,950,958
                                             ========      ========      ==========      ==========
</TABLE>


     Required  principal payment  obligations  attributable to the foregoing 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 June 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,  aggregating on a net basis to a receivable of
approximately  $ 244,683 and $29,022,  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.

     Sales  to such  affiliates  aggregated  approximately  $404,109,  $540,727,
$110,109,  and $147,732  during the six months ended June 30, 2006 and 2005, and
the three months ended June 30, 2006 and 2005, respectively.

     During  March  2006,   an  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  $50,200,  $46,700,  $25,100,  and $25,100
during the six months  ended June 30, 2006 and 2005,  and the three months ended
June 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 $321,800
and $336,900 at June 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>

                                                   Six months                  Three months
                                                 ended June 30,               ended June 30,
                                               2006          2005           2006           2005
                                             ---------     ---------     ---------       ---------
<S>                                          <C>           <C>           <C>             <C>
Weighted-average common
  shares outstanding                         5,913,816     5,578,815     5,978,316       5,689,816

Dilutive effect of stock plans,
  other options & conversion rights            956,710       169,609       523,476          19,417

Diluted weighted-average shares              ---------     ---------     ---------       ---------
  outstanding                                6,870,526     5,748,424     6,501,792       5,709,233
                                             =========     =========     =========       =========
</TABLE>


     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.

     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.

                                       13
<PAGE>

     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  Statement of
Financial  Accounting  Standards  No.  123R to record such  compensation  costs.
However,  the impact of this pronouncement to our first quarter's operations was
deemed to be not material.  Prior  thereto,  such matters were  disclosed 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 pursuant to
Statement of Financial Accounting Standards No. 142, we have determined that the
carrying value of such  intangible  assets relating to its Star brite brand does
not require  further  amortization.  In  addition,  we own two  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 of these two
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 net
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  7.9% at June 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 June 30, 2006, we were obligated under this arrangement in the
amount of $4,200,000.

     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
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  substantially  completed during
2003.

     In order to market the Industrial  Development Bonds 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.

                                       14
<PAGE>

     The bonds are marketed  weekly at the prevailing  rates for such tax-exempt
instruments.  During the six  months  ended  June 30,  2006 such  bonds  carried
interest  ranging  between 3.3% and 3.7%  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 June 30, 2006 were
approximately $408,300 and 7.13% 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 June
30, 2006 and December 31, 2005, the gross obligation  aggregating $1,275,000 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
six months  ended June 30,  2006,  amortization  of $31,090 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 June 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.
Accordingly,  it appears that they are approaching their inventory goals as they
relate to our products and the increase in our consolidated  gross sales for the
six  months  ended June 30,  2006  compared  to 2005's  figures  were  favorably
impacted  by  our  current  period's  sales  to  West  Marine;  an  increase  of
approximately  $1.4  million  for the six months  ended  June 30,  2006 over the
comparable period in 2005.

     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.

                                       15
<PAGE>

     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
$400,000.00 to be repaid in monthly  installments  of $3,356.79 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
additional paid-in capital.

     Results of Operations:

     For The Three Months Ended June 30, 2006 compared to the Three Months ended
June 30, 2005

     Net sales decreased  approximately  $255,600 or 5.6 % for the quarter ended
June  30,  2006  compared  to the  same  quarter  of  the  preceding  year.  The
consolidated  net sales  aggregated  approximately  $4,331,500  and  $4,587,100,
respectively.

     Cost of goods sold  amounted to  approximately  $3,154,000 or 72.8 % of net
sales  compared to $3,264,700 or 71.2 % of net sales for the quarters ended June
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 $42,900 or 4.5%
when comparing the quarters ended June 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 consulting fees, outside services,  other professional fees and outsourced
data processing services.

     Advertising and promotion decreased approximately $279,600 or approximately
49.5 % comparing  the three  months  ended June 30, 2006 and 2005.  This was the
result of contractual co-operative advertising programs related to the decreased
sales experienced  during the current period.  In addition,  we placed decreased
levels of media and print advertising during the current three month period.

     Interest expense  increased by approximately  $85,100 comparing the quarter
ended  June 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 loss for the  quarter  ended June 30,  2006  amounted  to  $213,200
compared to a loss of $305,700 for the comparable  period in 2005.  There was no
provision or benefit for income taxes in the current quarter.

     For the Six Months  Ended June 30, 2006  Compared  To The Six Months  Ended
June 30, 2005

     Net sales  increased 13.8% to  approximately  $8,741,100 for the six months
ended June 30, 2006 compared to approximately $7,682,900for the six months ended
June 30, 2005. Management attributes such increase  significantly to our largest
customer  resuming their purchasing  after  apparently  reaching their inventory
goals pursuant to their publicly announced inventory reduction of 2005.

     Cost of goods sold decreased to 71.1% of net sales for the six months ended
June 30, 2006  compared to 78.2% of net sales for the six months  ended June 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  $197,000 or
29.7% for the 2006 period when compared to comparable  expenses in the same time
period in the previous year. This resulted  primarily from planned  decreases in
media and co-op advertising programs for the current year.

     Selling and administrative  expenses decreased by approximately $225,800 or
11.5 % for the six months  ended June 30, 2006  compared to the six months ended
June 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 consulting fees, outside services, other
professional fees and outsourced data processing services.

                                       16

<PAGE>

     Interest expense for the 2006 period increased  approximately $123,600 when
compared to the same six 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 loss was  approximately  $20,400 for the six months  ended June 30,
2006 compared to a net loss of approximately $1,162,900 for the six months ended
June 30, 2005.

     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 June 30,  2006,  we have  not  used  derivative
instruments or engaged in hedging activities to minimize market risk.

     Interest rate risk

     As of June 30,  2006,  we had  floating  interest  rates on our  industrial
development revenue bonds and our working capital line of credit facility. As of
June 30,  2006  the  interest  rate on our  approximate  $4,973,100  outstanding
balance of  industrial  revenue bonds was  approximately  3.7% 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 June 30, 2006 was 7.9%).
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 June 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.

     Since the  evaluation  date by  management  of our internal  controls  over
financial  reporting,  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:

     During April 2006 we issued  129,000  shares of our common stock  bearing a
restricted  legend to certain officers and other key employees as a component of
their compensation.  At the date of grant the shares had a market value of $1.08
each.

     Item 3. - Defaults Upon Senior Securities: Not applicable

     Item 4 - Submission of Matters to Vote of Security Holders:

     On June 15, 2006, at our annual meeting of  shareholders,  seven directors;
Peter G. Dornau,  Edward Anchel,  Jeffrey J. Tieger, Laz L. Schneider,  James M.
Kolisch, John B. Turner, and Sonia B. Beard were elected,  shareholders ratified
issuances of restricted common stock to certain employees, shareholders ratified
the $1.5 million Subordinated Note financing offered to the Company by Mr. Peter
G. Dornau and certain of his affiliated  entities,  and approved Levi,  Cahlin &
Company,  Certified  Public  Accountants,  as independent  auditors for the year
ending December 31, 2006.

The tabulation of voting for the foregoing was as follows:

                                               For       Against/abstain
     Election of directors                   5,449,474       80,870

     Ratification of issuances
       of restricted common
       stock                                 5,441,645       88,699

     Ratification of Subordinated
              Revolving Line of Credit -
              Peter G. Dornau & affiliates   5,447,811       82,533

     Levi, Cahlin and
           Company, CPA's                    5,467,080       63,264


Item 5. - Other Information: Not applicable


                                       18
<PAGE>

     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: August 14, 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































                                       19
<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 June 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  registrant's  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 registrant's 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: August 14, 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 June 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  registrant's  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 registrant's 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:    August 14, 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 March 31, 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:  August 14, 2006


                                           /s/   Peter G. Dornau
                                           ------------------------------------
                                           Peter G. Dornau
                                           Chairman of the Board of
                                           Directors and ChiefExecutive Officer




                                           /s/ Edward Anchel
                                           ------------------------------------
                                           Edward Anchel
                                           Chief Financial Officer