10k1296.TXT  
                       SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C.  20549


                                  FORM 10K


           /x/ Annual Report Pursuant to Section 13 or 15(d) of the
           SECURITIES EXCHANGE ACT OF 1934 [fee required]

For the Fiscal Year Ended December 31, 1996

Commission File 2-70197

                            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 S. W. 47 Avenue, Fort Lauderdale, Florida             33314
----------------------------------------------------------------------------
(Address of principal executive offices)                   (Zip Code)

Registrant's telephone number, including area code         (954) 587-6280
Securities registered pursuant to Section 12 (g) of the Act

                         Common Stock, Par Value $.01
----------------------------------------------------------------------------
                            (Title of Class)

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

          Yes     X                            No                
             --------                             --------
     Indicate by check mark if disclosure of delinquent filers pursuant to 
Item 405 of Regulation S-K is not contained herein, and will not be contained, 
to the best of Registrant's knowledge, in definitive proxy or information 
statements incorporated by reference in Part III of this Form 10-K or any 
amendment to this Form 10-K.  [   ]

     State the aggregate market value of the voting stock held by 
non-affiliates of the registrant.  The aggregate market value shall be 
computed by reference to the price at which the stock was sold or the average 
bid and asked prices of such stock, as of a specified date within 60 days 
prior to the date of filing.

                      $3,170,710 as of February 1, 1997. 

     Indicate   the  number  of  shares   outstanding  of   registrant's  
common  stock  as  of  February 1, 1997. 

         3,702,078 shares of Common Stock, par value $.01 per share.

                    DOCUMENTS INCORPORATED BY REFERENCE

Proxy Statement to be filed within 120 days of December 31, 1996.
<PAGE>
                                PART 1
                               --------

Item l.  Business
-----------------
General:  The Company was organized on November 13, 1973 under the laws of the 
State of Florida.  The Company is principally engaged in the manufacturing, 
marketing and distribution of a broad line of appearance and maintenance 
products for boats, recreational vehicles and aircraft under the Star brite 
name.     

The Registrant's trade name has been trademarked and the Registrant has had no 
incidents of infringement.  In the event of such infringement, the Registrant 
would defend its trade name vigorously.  The Registrant has two patents which 
it believes are valuable in limited product lines, but not material to its 
success or competitiveness in general.

PRODUCTS OF THE COMPANY

Set forth is a general description of the products the Company markets.

Marine:  The Marine line consists of polishes, cleaners, protectants, waxes of 
various formulations.  The line also includes various vinyl protectants, 
cleaners, teak cleaners, teak oils, bilge cleaners, hull cleaners, silicone 
sealants, polyurethane sealants, polysulfide sealants, gasket materials, 
lubricants and antifouling additives.  

Recreational Vehicle: The Recreational products are made up of cleaners, 
polishes, detergents, fabric cleaners and protectors, silicone sealants, 
waterproofers, gasket materials, degreasers, vinyl cleaners and protectors.

Aircraft:  The Aircraft product line consists primarily of polishes and 
cleaners.

Although the above products are utilized for different types of vehicles and 
boats, they all constitute one industry segment.  

Manufacturing:  The Company manufactures and packages its products as well as 
contracting unrelated companies to package products which are manufactured to 
the Company's specifications, using the Company's formulas for each product.  
All raw materials used in manufacturing are readily available.  Each external 
packager enters into a confidentiality agreement with the Company.  The 
Company has patent protection on some of its products.  The Company designs 
its own packaging and supplies the external manufacturers with the appropriate 
design and packaging.  The Company utilizes four manufacturers located in four 
states, primarily in the northeastern area of the country.  The Company 
believes that the arrangements with the present manufacturers are adequate for 
its present needs.  In the event the arrangements are discontinued with any 
manufacturer, the Company believes that substitute facilities can be found 
without substantial adverse effect on manufacturing and distribution.

On February 27, 1996, the Registrant, through a wholly-owned operating 
subsidiary, Kinbright, Inc. an Alabama corporation, acquired certain assets of 
Kinpak, Inc., a Georgia corporation ("Kinpak"), and assumed two (2) leases of 
land and facilities (the "Leases") leased by Kinpak from the industrial 
Development Board of the city of Montgomery, Alabama and the Alabama State 


                                   2
<PAGE>

Docks Department.  The leased premises consist of a manufacturing facility 
containing approximately 50,000 square feet located on approximately 20 acres 
of real property and a docking facility located on the Alabama River.  In 
addition, Registrant purchased the machinery, equipment and inventory located 
on the leased premises.

The contract of the Company at its Alabama facility to package antifreeze for 
a third party terminated December 31, 1996.  Gross packaging revenues from 
this operation amounted to approximately $2,100,000 during fiscal 1996.  The 
Company has no prospects of a third party to replace the terminated 
operations.  However, the Company intends to produce a private label line of 
antifreeze commencing in 1997.  At this time the Company cannot estimate the 
amount of sales for its product.

On December 20, 1996, the registrant entered a new agreement with the 
Industrial Development Board of the City of Montgomery, Alabama to issue new 
Industrial Development Bonds in the amount of $4,990,000 to repay certain 
financing costs and to expand the capacity of the Alabama facility.  

Marketing:   The Company's marine products and recreational products are sold 
through national retail chains such as Wal-mart and K mart and through 
specialized marine retailers such as  West Marine and Boat America 
Corporation.  The Company also uses distributors who in turn sell its products 
to specialized retail outlets for that specific market.  Currently the Company 
has no customer to which  sales  exceed 10% of  consolidated  revenues.  The 
Company markets its products through  internal salesmen and approximately 250 
independent sales representatives who work on an independent 
contractor-commission basis.  The Officers of the Company also participate in 
sales.  The Company also aids marketing through advertising campaigns in 
national magazines related to specific marketplaces.  The products are 
distributed primarily from public warehouse facilities.  As of this date the 
Company has no significant backlog of orders.  The registrant does not give 
customers the right to return product.  The majority of the Company's products 
are non-seasonal and are sold throughout the year.

Competition:  The Company has two major and a number of smaller regional 
competitors in the marine marketplace.  The principal elements of competition 
are brand recognition, price, service and the ability to deliver products on a 
timely basis.  In the opinion of management no one or few competitors holds a 
dominant market share.  Management believes that it can increase market share 
through its present methods of advertising and distribution.  

The recreation vehicle appearance and maintenance market is parallel to the 
marine.  In this market the Company competes with two major and a number of 
smaller competitors none of which singly or as a few have a dominant market 
share.  Management is of the opinion that it can increase the Company's market 
share by employing the same methods as in the marine market.  

Personnel:  The Company employs approximately 28 full time employees at its 
Ft. Lauderdale office.  These employees are engaged in administration, 
clerical and accounting areas.  The Company contracts with approximately 250 
independent sales representatives who, along with the management and internal 
sales staff of the Company, represent the sales staff.  An additional 12 
persons are employed at the manufacturing facility in Alabama.


                                   3
<PAGE>

New Product Development:  The Company continues to develop specialized 
products for the marine and recreational trade.  The Company believes that 
current operations are sufficient to meet development expenditures without 
securing external funding.


Financial Information Relating to 
Approximate Domestic and Canadian Total Sales

<TABLE>
     Year Ended December 31,
<S>                       <C>            <C>            <C>
                             1996           1995           1994
United States:
  Northeast               $3,065,000     $2,776,000     $2,608,000 
  Southeast                3,623,000      1,115,000        991,000 
  Central                  3,678,000      3,992,000      4,164,000 
  West Coast               1,612,000      1,248,000      1,289,000 
                         -----------     ----------     ----------
                          11,978,000      9,131,000      9,052,000 

Canada (US Dollars)          459,000        569,000        410,000 
                         -----------     ----------     ----------
                         $12,437,000     $9,700,000     $9,462,000 
                         ===========     ==========     ==========
</TABLE>

Item 2, Properties
------------------

The Registrant's executive offices and warehouse are located in Fort 
Lauderdale, Florida and held under a lease with an entity  owned by officers 
of the Company which expires April 30, 1998.  The lease covers approximately 
12,000 square feet of office and warehouse space at an annual rental of 
approximately $84,000 including applicable sales taxes and subject to annual 
increases/decreases based on the prevailing prime lending rate.   This space 
has been leased since 1988.

In November 1994 the Company leased approximately a 10,000 square foot 
building for manufacturing, warehousing and office space.  The agreement calls 
for a one year rental renewable yearly for five years.  The cancellation 
requires a one year notification.  The annual rental is approximately $69,000 
which can be increased at each annual lease anniversary for the change in the 
consumer price index for the Miami area.

The Kinpak facility contains approximately 50,000 square feet of office, plant 
and warehouse space located on approximately 20 acres of land (the "Plant") 
and also includes a leased 1.5 acre docking facility on the Alabama River 
located eleven miles from the Plant.  On December 20, 1996 the Registrant 
obtained an industrial revenue bond in the amount of $4,990,000 (of which 
$4,000,000 was taxable) to repay certain amounts used in the financing of the 
facility and for expansion of such facility to meet the Registrant's expected 
future capacity.  This bond, to the extent of $4,000,000, was refinanced with 
a tax exempt industrial revenue bond in March 1997.  Of this amount, 
approximately $3,100,000 is held in trust for the construction and equipping 
of an additional 60,000 square foot building.





                                     4
<PAGE>

Item 3.  Legal Proceedings
---------------------------

The Company was involved in two related lawsuits:

1.  Duane H. Newville and the Boden Co., d/b/a Adjust-A-Brush v. Star brite 
Distributing, Inc. ("Star brite") and Peter Dornau Sr. ("Dornau") in the 
United States District Court, Middle District of Florida filed in 1994.  This 
action arose out of Star brite's use of a product called Extend-A-Brush.  
Plaintiff seeks injunctive relief and damages.  Registrant and Dornau have 
filed a counterclaim for declaratory relief and antitrust violations.  On 
February 10, 1997, the Court dismissed both parties' suits without any 
damages.

2.  Star brite Distributing, Inc. v. The Boden Co., d/b/a Adjust-A-Brush 
(Boden), pending in the Circuit Court in and for Pinellas County, Florida was 
filed in 1993.  This action involves the break-up of a business arrangement 
whereby Star brite was to market adjustable brushes manufactured by Boden, to 
the marine industry.  Star brite has sued Boden for damages and injunctive 
relief.  Boden has filed a counterclaim against Star brite and Dornau, seeking 
damages and injunctive relief.  The registrant believes that this case which 
has been stayed pending the outcome of the related case set forth in paragraph 
(1) above, will be dismissed by theCourt

The Registrant does not believe that the results of this litigation would have 
a material adverse effect on its future results of operations, and it has not 
accrued any amounts for loss contingencies in this litigation based on its 
evaluation of the merits thereof.

Item 4. Submission of Matters to a Vote of Security Holders
-----------------------------------------------------------
None

Item 5. Market For the Registrant's Common Equity and Related Stockholder 
-------------------------------------------------------------------------
Matters
-------
A.  The Registrant's Common Stock was sold to the public initially on March 
26, 1981.  The Common Stock of the Company is traded on the NASDAQ National 
Market System under the symbol OBCI.  A summary of the trading ranges during 
each quarter of 1996 and 1995 is presented below.

<TABLE>
<CAPTION>
  Market Range of
  Common Stock Bid:
<S>                    <C>          <C>          <C>           <C>
                        1st Qtr.      2nd Qtr     3rd Qtr.      4th Qtr.
                       ---------    ---------    ---------     ---------

1996            High     $3.38         $3.25       $2.75          $2.75
                Low      $2.38         $2.19       $2.25          $2.03

1995            High     $2.88         $4.75       $4.00          $3.88
                Low      $2.50         $2.75       $2.88          $2.50
</TABLE>

The quotations reflect inter-dealer prices without retail mark-up, mark-down 
or commission and may not represent actual transactions.


                                  5
<PAGE>

B.  The approximate number of Common Stock owners was 600 at December 31, 
1996.  The aforementioned number was calculated from a list provided by the 
transfer agent and registrar and indications from broker dealers of shares 
held by them as nominee for actual shareholders.

C.  The Registrant has not paid any dividends since it has been organized.  

D.  The Company has no other dividend policy except as stated in (C) directly 
above.
Item 6. Selected Financial Data

The following tables set forth selected financial data as of, and for the 
years ending December 31,   

<TABLE>
<S>          <C>          <C>         <C>         <C>         <C>
                 1996        1995        1994        1993        1992 
             -----------  ----------  ----------  ----------  ----------
Income
Statement     

Gross Sales  $12,436,918  $9,700,193  $9,462,547  $8,326,496  $7,114,873 
Net Sales    $11,826,340  $9,042,181  $8,915,154  $7,702,687  $6,524,952

Net Income   $   354,672  $  540,542  $  694,616  $  558,210  $  229,438
Net Income 
per share    $       .09  $      .15  $      .19  $      .15  $      .07

Balance Sheet

Working 
Capital      $ 2,737,817  $2,736,587  $2,355,195  $2,108,696  $1,092,332

Total Assets $11,955,397  $6,747,770  $5,722,028  $4,822,530  $4,314,746

Long Term 
Obligation   $ 4,710,000       -      $    7,501  $  118,734  $   64,177

Total 
Liabilities  $ 7,410,913  $2,571,765  $2,257,408  $2,059,291  $2,083,180

Shareholders' 
Equity       $ 4,544,484  $4,176,005  $3,464,620  $2,763,239  $2,231,566
</TABLE>

Net income per share for the years prior to 1996 has been restated to reflect 
a 5% stock dividend given in 1996 and a 5% dividend given in 1995.



                             6
<PAGE>

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

Liquidity and Capital Resources

The primary sources of the Registrant's liquidity are its operations and 
short-term borrowings from a commercial bank.  During 1996 the Registrant's 
line of credit commitment was increased from $2 million to $2.9 million by its 
commercial bank.    The total borrowings  under such line can aggregate up to 
$2,900,000 and are subject to renewal in April 1997.  The Registrant is 
required to maintain minimum working capital of $1,500,000, debt to tangible 
net worth of 2 to 1 and debt service coverage of 1.7 times.  As of year end 
Registrant was in compliance with all terms.

Pursuant to the purchase and expansion of the Alabama facility, the Registrant 
closed on an industrial revenue bond for the repayment of certain advances 
used to purchase the Alabama facility and to expand such facility for the 
Registrant's future needs.  On December 20, 1996 the Registrant closed on 
$4,990,000 of such bonds of which $3,100,000 is held in trust for construction 
of the expansion.

The bonds are marketed weekly at the prevailing rates for such instruments.  
Of the amount financed $990,000 were issued as tax free bonds while $4,000,000 
were issued as taxable.  In March of 1997 the Registrant refinanced the 
$4,000,000 to non-taxable status.  Currently such bonds carry interest between 
5¼% to 5¾% annually.  Interest and principal are payable 
quarterly.  The Registrant feels that current operations are sufficient to 
meet these obligations.

The Registrant is involved in making sales in the Canadian market and must 
deal with the currency fluctuations of the Canadian currency.  The Registrant 
does not engage in currency hedging and deals with such currency risk as a 
pricing issue.

During the past few years Registrant has introduced various new products to 
the marketplace.  This has required the Registrant 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 the overall 
operations of Registrant.  Registrant believes that all required capital to 
maintain such increases can continue to be provided from operations and 
current lending arrangements.

Fourth Quarter Results:
-----------------------

For the fourth quarter ended December 31, 1996 and 1995, Gross Margin 
percentages were  32% and 38%.  This is primarily due to the product sales mix 
during these quarters.  The Alabama operation's lower margin operations 
changed the sales mix ratio's during this quarter.

Results of Operations:  

Calendar Year 1996/1995:  Sales and earnings varied when comparing the year 
ended 1996 to 1995 principally due to the factors enumerated below.

Gross Sales - Gross sales increased approximately 49% or $2,736,000 for the 
year ended 1996 over 1995.  This is due to primarily to the inclusion of the 
temporary operating results of the Alabama facility. 

                                7
<PAGE>

Cost of Goods Sold - Cost of goods sold increased approximately 49% or 
$2,568,000 as a percentage of gross sales when comparing 1996 to 1995.  
Management attributes this to the change in the product sales mix enunciated 
above.

Advertising and Promotion - Advertising expense decreased approximately 
$131,000 or 16% when comparing 1996 to 1995.  This was primarily due to 
changes in advertising media and aggressive pricing opportunities taken by 
Registrant.

Selling, General and Administrative - Selling, general and administrative 
expenses increased    approximately $507,000 or 25% when compared to 1995.  
Such increase was not attributable to any one particular category but 
consisted of increases in salaries, selling expenses, litigation, new 
facilities expense and general operating expenses.

Interest Expense - Interest expense increased by approximately $155,000 or 
162% over 1995.  The increase was primarily due to increased borrowing levels 
and interest on debt assumed for the purchase of the new facility.

Calendar Year 1995/1994:  Sales and earnings varied when comparing the year 
ended 1995 to 1994 principally due to the factors enumerated below.

Gross Sales - Gross sales increased 2.5% or approximately $238,000 for the 
year ended 1995 over 1994.  This is due to the results of the record sales 
levels experienced in the first quarter.  Marine and RV sales in the U.S. 
remained relatively even with last year while Canadian sales increased by 
approximately 39%.

Cost of Goods Sold - Cost of goods sold decreased 1.2% or approximately 
$11,000 as a percentage of gross sales when comparing 1995 to 1994.  
Management attributes this to a change in the product sales mix.

Advertising and Promotion - Advertising expense increased approximately 
$121,000 or 17% when comparing 1995 to 1994.  This was primarily due to 
increased expenditures in catalog advertising and television advertising for 
the year.

Selling, General and Administrative - Selling, general and administrative 
expenses rose approximately $244,000 or 13.4% when compared to 1994.  Such 
increase was not attributable to any one particular category but consisted of 
increases in sales representative costs, salaries and general operating 
expenses.

Interest Expense - Interest expense increased by approximately $31,000 or 
47.9% over 1994.  The increase was primarily due to increased borrowing levels 
and increased rates on the Registrant's line of credit.

Item 8.  Financial Statements and Supplementary Data
-----------------------------------------------------
See financial statement as set forth in item 14.



                                    8
<PAGE>

Item 9.  Changes in and Disagreements on Accounting and Financial Disclosure
----------------------------------------------------------------------------
None.

                              PART III
                              --------

Item 10.  Executive Officer and Directors of the Registrant
------------------------------------------------------------

The following tables set forth the names and ages of all elected directors and 
officers of the Registrant, as of December 31, 1996.

All directors will serve until the next annual meeting of shareholders or 
until their successors are duly elected and qualified.  Each officer serves at 
the pleasure of the board of directors.

There are no arrangements or understandings between any of the officers or 
directors of the Company and the Company and any other persons pursuant to 
which any officer or director was or is to be selected as a director or 
officer.

<TABLE>
<S>                    <C>                                   <C>
    NAME                      OFFICE                          AGE
---------------        ----------------------------------    -----
Peter G. Dornau        President and Director                  57
                            Since 1973

Jeffrey Tieger         Vice President-Secretary & Director     53
                            Since 1977

Julio DeLeon           Vice President, Finance                 45
                            Since 1994
</TABLE>

Peter Dornau, a founder of the Company, has been President and a Director 
since 1973.

Jeffrey Tieger joined the Company in June 1977 as Vice 
President-Advertising.  

Julio DeLeon joined the Company in June 1988 as Corporate Controller.  In 1994 
the Board of Directors elected Mr. DeLeon to serve as  Vice President of 
Finance.

Item 11. Management Remuneration and Transactions
--------------------------------------------------

The information required by this section has been incorporated by reference to 
the Registrant's proxy statement in conjunction to the annual stockholder's 
meeting which shall be sent out to stockholders prior to 120 days past the 
Registrant's year end of December 31, 1996.

Item 12. Security Ownership of Certain Beneficial Owners and Management
------------------------------------------------------------------------

The following table sets forth information at December 31, 1996 with respect 
to the beneficial ownership of the Registrant's Common Stock by holders of 
more than 5% of such stock and by all directors and officers of the Registrant 
as a group:


                                  9
<PAGE>

<TABLE>
<S>       <C>                                    <C>                <C>
Title             Name and Address of            Amount and Nature  Percent
 of                   Beneficial                  of Beneficial       of
Class                    Owner                      Ownership        Class  
------    ------------------------------------   -----------------   ------
Common    Peter G. Dornau, President, Director     2,333,956*         57.6%
          4041 S. W. 47 Avenue
          Ft. Lauderdale, FL 33314

Common    All Directors and officers as a group    2,465,723          60.9%
          3 individuals  

Common    First Wilshire                             237,629           6.4%
          Securities Management, Inc.
          727 West Seventh Street                           
          Los Angeles, CA
</TABLE>

*Includes Options to purchase 287,000 shares as follows:

On February 3, 1993 the Company granted Mr. Dornau an option to purchase 
100,000 shares of the Company's common stock at $1.38 per share. The option 
expires 5 years from grant. The option was granted in consideration of Mr. 
Dornau personally guaranteeing $1,300,000 of bank loans to the Company.  The 
option exercise price of $1.38 is 100% of the price of the Company's common 
stock on the date of grant.  

On April 13, 1994 the Company granted Mr. Dornau a five year option for 
150,000 shares at a price of $2.25 representing 100% of the price at the time 
of grant in consideration of his personally guaranteeing the Company's 
$1,500,000 loan from its commercial bank.

Pursuant to the Company's various stock option plans Mr. Dornau may exercise 
37,000 shares within 60 days of the issuance of the Registrant's financial 
statements.

Item 13. Certain Relationships and Related Transactions
--------------------------------------------------------

On April 4, 1988, the Company entered a five year lease with a five year 
option for approximately 12,000 square feet of office and warehouse facilities 
in Ft. Lauderdale, Florida  from  an  entity  owned  by officers of the 
Registrant. The lease  requires a minimum rental of $84,000 with provision for 
yearly increases based on the Consumer Price Index (base: March 1988=100) and 
has provision for real estate taxes, operating and maintenance charge pass 
through.  Additionally, the annual rental can increase or decrease 7% annually 
for every 1% increase or decrease in the lessor's commercial bank's rate from 
a base of 8.5%.

The Registrant has rights to the "Star brite" name and products only for the 
United States and Canada as a condition to its original public offering.  The 
President of the Registrant is the beneficial owner of three companies which 
market Star brite  products outside the United States. Registrant has advanced 
monies to assist in such foreign marketing in order to establish an 
international trademark.  As of December 31, 1996 and 1995 amounts owed to 
Registrant by the two companies was approximately $596,000 and $547,000, 
respectively.  These amounts have 


                                10
<PAGE>


been advanced by the Registrant on open account with requirements of repayment 
between five and seven years.  Advances bear interest at the rate of interest 
charged to the Registrant on its bank line of credit. 

A subsidiary of the Registrant currently uses the services of an entity which 
is owned by the President of the Registrant to conduct product research and 
development. The entity received $30,000 per year for the years 1996, 1995 and 
1994 under such relationship.

Item 14.  Exhibits and Financial Statement Schedules  
----------------------------------------------------

The following documents are filed as a part of this report.

     (A)  Consolidated Financial Statements.

           (I) Consolidated Balance Sheets, December 31, 1996 and 1995.

          (ii) Consolidated Statements of Income for each of the three years 
               ended December 31, 1996, 1995, and 1994.

         (iii) Consolidated Statement of Shareholders' Equity for each of the 
               three years  ended December 31, 1996, 1995, and 1994.

          (iv) Consolidated Statements of Cash Flows for each of the three years
               ended December 31, 1996, 1995 and 1994.  
                              
           (v) Notes to Consolidated Financial Statements.

          (vi) Schedules for each of the three years Ended December 31, 1996, 
               1995 and 1994.

               (a) All other schedules are omitted because either they  are 
                   not applicable or the required information is shown in the 
                   Consolidated Financial Statements or the Notes thereto.
      
     (B)  Exhibits

           (3) Articles of Incorporation and by-laws are incorporated by  
               reference to the Company's Registration statement on Form S-18
               filed on March 26, 1981.

          (22) Subsidiaries of the Registrant.                       







                                      11
<PAGE>

  
                              SIGNATURES

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

                               OCEAN BIO-CHEM, INC.
                               ---------------------
                               Registrant


                               By: /S/ PETER G. DORNAU          
                                   PETER G. DORNAU
                                   Chairman of the Board of Directors
                                   and Chief Executive Officer 

                                   March 26, 1997


                               By: /S/ PETER G. DORNAU
                                   PETER G. DORNAU
                                   Chief Financial Officer

                                   March 26, 1997

                           SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, this 
report has been signed by the following persons on behalf of the Registrant 
and in the capacities and on the dates indicated.


                               By: /S/ JEFFREY TIEGER
                                   JEFFREY TIEGER
                                   Director

                                   March 26, 1997

Pursuant to the requirements of the Securities Exchange Act of 1934, the 
Registrant has not sent an annual report or proxy material to security-holders 
as of this date.  Subsequent to this filing the Registrant will produce an 
annual report and proxy for its yearly security-holders meeting.  Copies of 
such shall be sent to the SEC pursuant to current requirements.





                                12
<PAGE>



EXHIBIT (See 22)


The following is a list of the Registrant's subsidiaries:

      Name                                            Ownership %     

Star brite Distributing, Inc.                            100
Star brite Distributing Canada, Inc.                     100
D & S Advertising Services, Inc.                         100
Star brite Sta-Put, Inc.                                 100
Star brite Service Centers, Inc.                         100  
Star brite Marine, Inc.                                  100
Kinpak Inc.                                              100

                                13
<PAGE>








                 OCEAN BIO-CHEM INC. AND SUBSIDIARIES

                 CONSOLIDATED FINANCIAL STATEMENTS

            YEARS ENDED DECEMBER 31, 1996, 1995 and 1994





                                 14

<PAGE>


                OCEAN BIO-CHEM, INC. AND SUBSIDIARIES
              INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
             YEARS ENDED DECEMBER 31, 1996, 1995 and 1994


<TABLE>
<S>                                                   <C>
                                                      Page 
                                                      ----

Accountants' report                                     1

Consolidated balance sheets                             2

Consolidated statements of income                       3

Consolidated statement of shareholders' equity          4

Consolidated statements of cash flow                    5

Notes to financial statements                        6-13



<PAGE>

                      INFANTE, LAGO & COMPANYILC 
                     CERTIFIED PUBLIC ACCOUNTANTS
A. ROGER INFANTE, C.P.A.                            Biscayne Centre  Suite 288
JESUS A. LAGO, JR., C.P.A.                          11900 Biscayne Boulevard
                                                    North Miami, Florida 33181
                                                    Telephone [305] 893-4341
                                                    Fax [305] 893-4507




                   REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
                   ----------------------------------------
To the Shareholders and Directors
Ocean Bio-Chem, Inc.


We have audited the accompanying consolidated balance sheets of Ocean 
Bio-Chem, Inc. ("the Company") and its subsidiaries as of December 31, 1996 
and 1995, and the related consolidated statements of income, shareholders' 
equity and cash flows for each of the two years in the period ended December 
31, 1996.  These consolidated financial statements are the responsibility of 
the Company's management.  Our responsibility is to express an opinion on 
these consolidated financial statements based on our audits.  The consolidated 
financial statements of the Company as of and for the year ended December 31, 
1994,  were audited by other auditors whose report dated February 22, 1995, 
expressed an unqualified opinion on those statements.

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

In our opinion, the consolidated financial statements referred to above 
present fairly, in all material respects, the consolidated financial position 
of Ocean Bio-Chem, Inc. and its subsidiaries as of December 31, 1996 and 1995, 
and the consolidated results of its operations and their cash flows for each 
of the two years in the period ended December 31, 1996, in conformity with 
generally accepted accounting principles.




/S/ INFANTE, LAGO & COMPANY


May 20, 1997
 



                                         1

<PAGE>


</TABLE>
<TABLE>
<CAPTION>

                 OCEAN BIO-CHEM, INC. AND SUBSIDIARIES
                    CONSOLIDATED BALANCE SHEETS
                     DECEMBER 31, 1996 and 1995

     
                            ASSETS
<S>                                             <C>              <C>
                                                    1996              1995
                                                ------------     ------------
Current assets:                
 Cash                                           $    394,569     $    997,309  
 Trade accounts receivable net of allowance for
    doubtful accounts of approximately $27,000           
    and $48,000, respectively (Note 3)             2,235,183        2,006,418 
 Inventories (Note 3)                              2,534,862        2,038,750 
 Due from Officers                                   141,880          154,420 
Prepaid expenses and other current assets            132,238          111,455 
                                                ------------      -----------
   Total current assets                            5,438,732        5,308,352
                                                ------------      -----------

Property, plant and equipment , net (Note 2)       2,138,815          321,475 

Other assets:
 Funds held in escrow for construction (Note 8)    3,100,001             -
 Trademarks, trade names, and patents, net      
   of accumulated amortization (Note 1)              443,754          466,746 
 Due from affiliated companies, net (Note 7)         648,866          632,379 
 Deposits and other assets                           185,229           18,818 
                                                 -----------       ----------
    Total other assets                             4,377,850        1,117,943
                                                 -----------       ----------
       Total Assets                              $11,955,397       $6,747,770 
                                                 ===========       ==========

                   LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
 Accounts payable trade                          $   643,409       $  485,105 
 Note payable  bank (Note 3)                       1,658,001        1,990,000 
 Current portion of long-term debt (Note 4)          280,000            7,592 
 Accrued expenses payable (Note 5)                   119,503           89,068
                                                 -----------       ----------
   Total current liabilities                       2,700,913        2,571,765 
                                                 -----------       ----------

Long-term debt less current portion (Note 4)       4,710,000            -
                                                 -----------       ----------

Commitments and contingencies (Notes 5, 8, 9 and 10)     

Shareholders' equity (Note 10):
 Common stock - $.01 par value, 10,000,000
  shares authorized, 3,702,078 and 3,512,964
  shares issued and outstanding at December 31,
  1996 and 1995 respectively                          37,020           35,130 
 Additional paid-in capital                        3,172,337        2,650,754 
 Foreign currency translation adjustment           (  82,887)       (  78,525)
 Retained Earnings                                 1,418,014        1,568,646
                                                 -----------      -----------
   Total shareholders' equity                      4,544,484        4,176,005
                                                 -----------      -----------
      Total Liabilities and Shareholders Equity  $11,955,397      $ 6,747,770 
                                                 ===========      ===========
</TABLE>

The accompanying notes are an integral part of these financial statements.

                                   2
<PAGE>

<TABLE>
<CAPTION>
                 OCEAN BIO-CHEM, INC. AND SUBSIDIARIES
                  CONSOLIDATED STATEMENTS OF INCOME
               YEARS ENDED DECEMBER 31, 1996, 1995, and 1994

<S>                                 <C>             <C>             <C>
                                       1996            1995            1994   
                                    -----------     ----------      ----------

Gross sales                         $12,436,918     $9,700,193      $9,462,547 

Less returns and allowances             610,578        658,012         547,393 
                                    -----------     ----------      ----------
Net sales                            11,826,340      9,042,181       8,915,154 

Cost of goods sold                    7,786,510      5,218,566       5,207,675 
                                    -----------     ----------      ----------
Gross profit                          4,039,830      3,823,615       3,707,479 

Operating expenses:
Advertising and promotion               697,533        828,302         707,543 
Selling and administrative            2,567,295      2,060,409       1,816,196 
Interest (Notes 3 and 4)                250,050         95,280          64,423 
                                    -----------     ----------      ----------
    Total Operating Expenses          3,514,878      2,983,991       2,588,162
                                    -----------     ----------      ----------
Operating profit                        524,952        839,624       1,119,317 

Interest income                          43,416         26,755           5,503 
                                    -----------     ----------      ----------
Income before provision for income
taxes                                   568,368        866,379       1,124,820 

Provision for income taxes              213,696        325,837         430,204 
                                    -----------     ----------      -----------
                                           
Net income                          $   354,672     $  540,542      $  694,616 
                                    ===========     ==========      ===========
Net earnings per common and
  common equivalent share, diluted  $       .09     $      .15      $      .19 
                                    ===========     ==========      ===========
</TABLE>

Net earnings per share for the years prior to 1996 has been restated to
reflect a 5% stock dividend distributed on May 1, 1996.





The accompanying notes are an integral part of these financial statements.



                                  3
<PAGE>


<TABLE>
<CAPTION>
                    OCEAN BIO-CHEM, INC. AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                YEARS ENDED DECEMBER 31, 1996, 1995, and 1994          


<S>            <C>       <C>     <C>         <C>        <C>         <C>
                                                            Foreign
                Common Stock     Additional                currency
                ----------------    paid-in    Retained translation
Balances        Shares    Amount    capital    Earnings adjustments      Total  
               --------- ------- ----------  ---------- ----------- ----------
January 1,     2,824,841 $28,248 $1,648,270  $1,126,308   ($39,587) $2,763,239 
  1994     
 
Net income                                      694,616                694,616 

Stock Dividend   141,821   1,418    334,698  (  336,116)                  -  

Stock Issue       78,150     782     33,947                             34,729 

Foreign
currency
translation
adjustment
                                                          ( 27,964)   ( 27,964)
December 31,   --------- ------- ----------  ----------   --------- -----------
  1994         3,044,812 $30,448 $2,016,915  $1,484,808   ($67,551) $3,464,620 

Net Income                                      540,542                540,542 

Stock Dividend   152,122   1,521    454,839  (  456,704)              (    344)

Stock Issue      316,030   3,161    179,000                            182,161

Foreign
currency
translation
adjustment
                                                          ( 10,974)   ( 10,974)
December 31,   --------- ------- ----------  -----------  --------- -----------
  1995         3,512,964 $35,130 $2,650,754  $1,568,646   ($78,525) $4,176,005 

Net Income                                      354,672                354,672 

Stock Dividend   175,648   1,756    503,217  (  505,304)              (    331)

Stock Issue       13,466     134     18,366                             18,500

Foreign
currency
translation
adjustment                                                 ( 4,362)   (  4,362)

December 31,   --------- ------- ----------  ----------    -------- ----------
  1996         3,702,078 $37,020 $3,172,337  $1,418,014    (82,887) $4,544,484 
               ========= ======= ==========  ==========    ======== ==========

</TABLE>
The accompanying notes are an integral part of these financial statements.


                                      4

<PAGE>

<TABLE>
<CAPTION>
                    OCEAN BIO-CHEM, INC. AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                YEARS ENDED DECEMBER 31, 1995, 1994, and 1993

<S>                                         <C>         <C>        <C>
                                                1996       1995        1994
                                            ----------  ---------  ----------
Cash flows from operating activities
 Net income                                 $  354,672 $  540,542 $   694,616 
Adjustments to reconcile net income
 to net cash (used) provided by operations:
   Depreciation and amortization               203,580     97,376      83,802 
Change in assets and liabilities:
   Increase in accounts receivable          (  228,765) (  15,860) (  113,279)
   Increase in inventory                    (  496,112) ( 111,104) (  312,285)
   Increase in prepaid expense              (  174,654) ( 156,884) (   33,019)
   Increase (decrease) in accounts payable
    and accrued expenses                       188,739  (  79,497) (  190,049)
                                            ----------- ----------  ----------
    Net cash (used) provided by operating
      activities:                           (  152,540)   274,573      129,786 
                                            ----------- ----------  ----------
Cash flows from financing activities:
 Net borrowings under line of credit        (  331,999)   423,333      636,667 
 Borrowings in trust for construction       (3,100,001)      -            -  
 Issuance of bonds                           4,990,000       -            -   
 Advances to affiliates, net                (   16,487) ( 261,632) (   316,896)
 Payments on debt                           (    7,592) (  29,479) (   248,502)
 Issuance of common stock                       18,169    181,817       34,730 

     Net cash provided                      ----------- ----------  ----------
      by financing activities:               1,552,090    314,039      105,999 
                                            ----------- ----------  ----------
Cash flows from investing activities:
 Purchase of property, plant and equip.     (1,997,928) ( 151,740) (   153,302)
                                            ----------- ----------  -----------
     Net cash used by investing activities: (1,997,928) ( 151,740) (   153,302)
                                            ----------- ----------  -----------
Increase (decrease) in cash prior to
 effect of exchange rate on cash            (  598,378)   436,872       82,483 
Effect of exchange rate on cash             (    4,362) (  10,974) (    27,964)
                                            ----------- ----------  -----------
Net increase (decrease) in cash             (  602,740)   425,898       54,519 
Cash at beginning of year                      997,309    571,411      516,892 
                                            ----------- ----------  -----------
Cash at end of year                          $ 394,569  $ 997,309   $  571,411
                                            =========== ==========  ===========
Supplemental Information
 Cash used for interest during period        $ 241,184  $  90,029   $   59,257
 Cash used for income taxes during period    $ 249,000  $ 399,096   $  363,320 
                                            ----------- ----------  -----------
</TABLE>

The Company had no cash equivalents at December 31, 1996, 1995 and 1994.

The accompanying notes are an integral part of these financial statements.


                                   5
<PAGE>

                    OCEAN BIO-CHEM, INC. AND SUBSIDIARIES
                        NOTES TO FINANCIAL STATEMENTS
                 YEARS ENDED DECEMBER 31, 1996, 1995, and 1994

Note 1 - Organization and summary of significant accounting policies:

Organization - The Company was organized during November, 1973 under the laws 
of the State of Florida and operates as a manufacturer and distributor of 
products to the recreational vehicle and marine aftermarkets.  On October 11, 
1984, the Board of Directors approved a change in the corporate name to Ocean 
Bio-Chem, Inc., (the parent corporation) from the former name Star Brite 
Corporation.

Principles of consolidation - The consolidated financial statements include 
the accounts of the Company and its wholly owned subsidiaries.  All 
significant intercompany accounts and transactions have been eliminated in 
consolidation.

Inventories - Inventories are primarily composed of finished goods and is 
stated at the lower of cost, using the first-in, first-out method, or market.

Prepaid advertising and promotion - During the years ended December 31, 1996 
and 1995, the Company introduced several new products in the marine and 
recreational vehicle aftermarket industries.  In connection therewith, the 
Company produced new promotional items to be distributed over a period of time 
and increased its catalog advertising.  The Company follows the policy of 
amortizing these costs over a one year basis.  At December 31, 1996 and 1995, 
the accumulated cost of materials on hand and other deferred promotional costs 
that will be charged against subsequent years operations amounted to $60,568 
and $23,396, respectively.

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

Property and Plant - On February 27, 1996, the Registrant purchased the assets 
of Kinpak, Inc., a subsidiary of Kinark, Inc.  The assets consist of a plant 
facility of approximately 50,000 square feet on approximately 20 acres in 
Montgomery, Alabama.  The facility has filling and blow-molding capacity.  The 
cost of the facility was $1,850,000 including an assumption of debt of 
$990,000.

Stock Based Compensation - The Company follows the rules 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.  The 
Company has not adopted Statement of Financial Accounting Standards No. 123. 
To record such compensation costs Statement No. 123 requires accounting for 
such cost at fair value using an option pricing model such as Black-Scholes or 
bimodal distribution. 

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

                                 6

<PAGE>

Concentration of Credit Risk - Financial instruments that potentially subject 
the Company to concentration of credit risk consist primarily of accounts 
receivable.  Concentrations of credit with respect to accounts receivable are 
limited because the majority of the accounts receivable are with large retail 
customers and no one customers's receivable exceeds 10% of the total balance.  
As of December 31, 1996, the Company had no significant concentration of 
credit risk.

Fair Value of Financial Instruments - The carrying amount of cash approximates 
fair value.  The fair value of long-term debt is based on current rates at 
which the Company could borrow funds with similar remaining maturities, and 
the carrying amount approximates fair value.

Income taxes - The Company and its subsidiaries file consolidated income tax 
returns.  During February 1992, the Financial Accounting Standard Board issued 
Statement of Financial Accounting Standards 109, "Accounting for Income 
Taxes."  The statement is required to be implemented for fiscal years 
beginning after December 15, 1992.  The application of SFAS 109 caused no 
material changes on the financial statements.  There are no significant 
temporary differences.


The Components of income taxes are as follows:

<TABLE>
           Year ended December 31, 
<S>                       <C>        <C>          <C>
                            1996       1995         1994
     Current:  
          Federal         $182,711   $278,461     $367,574
          State             30,985     47,376       62,630
                          --------   --------     --------
          Total           $213,696   $325,837     $430,204
                          --------   --------     --------
</TABLE>

The reconciliation of income tax expense at  the statutory rate to the 
reported income tax expense is as follows:

<TABLE>
                    Year Ended December 31,
<S>                                     <C>          <C>       <C>
                                          1996        1995      1994
                                        -------      ------    ------
Computed at statutory rate                34.0%       34.0%     34.0%
     State tax, net of federal benefit     3.6         3.6       3.6   
     Other, net                             -           -         .6   
                                         ------      ------    ------
     Effective tax rate                   37.6%       37.6%     38.2%
                                         ------      ------    ------

Trademarks, trade names and patents - The Star brite trade name and trademark 
were purchased in 1980 for $880,000.  The cost of trademarks and trade names 
is being amortized on a straight-line basis over the prescribed useful life of 
40 years.  The Registrant has two patents which it believes are valuable in 
limited product lines, but not material to its success or competitiveness in 
general.  There are no capitalized costs for these two patents.  The 
Registrant's trade name has been trademarked and the Registrant has had no 
incidents of infringement.




                                     7
<PAGE>


Earnings per share - Earnings per share for the year ended December 31, 1996, 
1995, and 1994 were calculated on the basis of 3,799,126, 3,506,580 and 
3,599,692 weighted average common stock and common stock equivalent 
outstanding, respectively.  The common stock equivalent consists of options to 
purchase common stock.  The weighted average shares outstanding for the year 
ended 1995 and 1994 have been restated to reflect a 5% stock dividend given in 
1996 and a 5% stock dividend given in 1995.

Translation of Canadian currency - The accounts of the Company's Canadian 
subsidiary are translated in accordance with Statement of Financial Accounting 
Standard 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 rates 
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 cumulative translation adjustment in 
shareholders' equity.  Realized gains and losses from foreign currency 
transactions are included in net earnings for the period.  Fluctuations 
arising from inter-company transactions that are of a long term in nature are 
accumulated as cumulative translation adjustments.

Reclassifications - Certain financial statement items for the years ended 
December 31, 1995 and 1994 have been reclassified to conform with the 1996 
presentation.

Note 2 - Office equipment and furnishings:

The Company's office equipment and furnishings consisted of the following:


</TABLE>
<TABLE>

                                                   December 31,
<S>                                          <C>           <C>
                                                 1996           1995
                                             -----------   -----------

     Land                                    $   278,325   $      -       
     Manufacturing and warehouse equipment     1,828,186       211,821
     Office equipment and furniture              457,781       356,532
     Leasehold improvements                       60,739        58,750     
                                             -----------   -----------
                                               2,625,031       627,103
     Accumulated depreciation                    486,216       305,628
                                             -----------   -----------
     Property, plant and equipment, net      $ 2,138,815   $   321,475
                                             -----------   -----------

</TABLE>

Depreciation expense for the years ended December 31, 1996, 1995 and 1994 was
$180,588, $74,384 and $58,683 respectively.

On February 27, 1996, the Registrant purchased the assets of Kinpak, Inc. a 
subsidiary of Kinark, Inc.  The assets consist of a plant facility of 
approximately 50,000 square feet.  In order to meet the Registrant's future 
need, the Registrant entered into an agreement with the City of Montgomery to 
issue Industrial Revenue Bonds to cover the expansion of the Alabama facility 
(see Note 4).  The expansion consists of an additional building on the site of 
approximately 60,000 square feet to facilitate the filling operation.  



                                    8
<PAGE>


Note 3 - Note payable, bank:

During 1996 the Registrant received an increase of $900,000 to the line from 
$2 to $2.9 million.  The line of credit was extended to April 1997.  Under the 
new agreement, Registrant is required to maintain a minimum working capital of 
$1.5 million, debt to tangible net worth of 2.0 to 1.0 and debt coverage of 
1.7 times.  The line is secured by the Registrant's inventory and accounts 
receivable.  As of year end 1996, Registrant was in compliance with all the 
requirements.

Note 4 - Long-term debt:

Long term debt at December 31, 1996 consisted of the following:  

Obligation pursuant to capital lease financed through Industrial Revenue 
Bonds; principal payable quarterly at various specified amounts.  Interest 
computed weekly at market rates.  Interest and principal payable quarterly.

<TABLE>
<S>       <C>                 <C>
                              Long-Term 
          Current Portion     Portion      
          ---------------     -------------
            $ 280,000         $ 4,710,000
</TABLE>
     Payment obligation attributable to the foregoing are tabulated below:

<TABLE>

     Year Ending December 31,
<S>        <C>         <C>
                 1997  $  280,000
                 1998     340,000
                 1999     300,000
                 2000     310,000
                 2001     320,000
           Thereafter   3,440,000
                       ----------
           Total       $4,990,000     

                       ==========

</TABLE>

Note 5 - Income taxes:

Accrued state and federal income taxes were approximately $3,000 in 1995.

Note 6 - Litigation                             

The Company was involved in two related lawsuits. 

1.  Duane H. Newville and the Boden Co., d/b/a Adjust-A-Brush v. Star brite 
Distributing, Inc. (Star brite) and Peter Dornau Sr. (Dornau) in the United 
States District Court, Middle District of Florida filed in 1994.  This action 
arose out of Star brite's use of a product called Extend-A-Brush.  Plaintiff 
seeks injunctive relief and damages.  Registrant and Dornau have filed a 
counterclaim for declaratory relief and antitrust violations.  On February 10, 
1997, the Court dismissed both parties' suits without any damages.

                                     9
<PAGE>


2.  Star brite Distributing, Inc. v. The Boden Co., d/b/a Adjust-A-Brush 
("Boden"), pending in the Circuit Court in and for Pinellas County, Florida 
was filed in 1993.  This action involves the break-up of a business 
arrangement whereby Star brite was to market adjustable brushes manufactured 
by Boden, to the marine industry.  Star brite has sued Boden for damages and 
injunctive relief.  Boden has filed a counterclaim against Star brite and 
Dornau, seeking damages and injunctive relief.  Registrant believes this case 
which has been stayed pending the outcome of the related case set forth in 
paragraph (1) above will be dismissed by this Court.

The Registrant does not believe that the results of this litigation would have 
a material adverse effect on its future results of operations, and it has not 
accrued any amounts for loss contingencies in this litigation based on its 
evaluation of the merits thereof.

Note 7 - Related party transactions:

At December 31, 1996 and 1995, the Company had amounts due from affiliated 
companies aggregating $649,000 and $632,000, respectively.  Such advances were 
made primarily to international affiliates that are in the process of 
expanding sales of the Registrant's products in Europe, Asia and South 
America.  These amounts have been advanced by the Registrant on open account 
with requirements of repayment between five and seven years.  Advances bear 
interest at the rate of interest charged to the Registrant in its bank line of 
credit.

Note 8 - Commitments:

On April 4, 1988, the Company entered a five year lease with a five year 
renewal option for approximately 12,000 square feet of office and warehouse 
facilities in Ft. Lauderdale, Florida from an entity owned by officers of the 
Company.  The lease provides for a yearly increase based on the Consumer Price 
Index (base: March 1988=100) and has provision for real estate taxes, 
operating and maintenance charge pass through.  Additionally, the annual 
rental can increase or decrease 7% annually for every l% increase or decrease 
in the lessor's commercial bank's rate from a base of 8.5%.  Such decrease 
provision will not cause the minimal annual rental to fall below $84,000.

In November 1994 the Company leased an approximately 10,000 square foot 
building for manufacturing, warehousing and office space. The agreement calls 
for a one year rental renewable yearly for five years.  The cancellation 
requires a one year notification.  The annual rental is approximately $69,000 
which can be increased at each annual lease anniversary for the change in the 
consumer price index for the Miami area.

On December 20, 1996 the Registrant issued $4,990,000 of Industrial Revenue 
Bonds in order to finance the expansion of the Alabama property and to 
refinance the acquisition costs.  Certain portion of these bonds were reissued 
in March of 1997 in order to take advantage of tax free financing.  The Bonds 
have varying maturities beginning on June 1, 1997 and ending on June 1, 2006.  
Interest is computed weekly at market rates.  Interest and principal are 
payable quarterly.





                                   10
<PAGE>


The following represents the use of the Bonds' proceeds as of December 31, 
1996:
<TABLE>
<S>                                               <C>
          Refinancing of Alabama Project          $1,890,000
          Funds Held in Trust for Expansion        3,100,000
                                                  ----------
                                                  $4,990,000
                                                  ----------

The following is a schedule by years of minimum future rentals on the
noncancellable operating lease as of December 31, 1996:

                        1997       $153,000
                        1998         90,000          
                        1999         69,000
                     Thereafter        -       
                                   --------
                                   $312,000

Note 9 - Licensing agreement:     

During 1984, the Company entered into a licensing agreement for an indefinite 
period whereby the Company will market a marine anti-fouling product.  Such 
agreement requires the Company to pay the licensor a royalty equal to the 
greater of 7% of net sales plus 3% of net sales to fund future research and 
development costs of the covered product or a minimum of $8,000 per year. 

Note 10 - Stock options/warrants:

During 1991 the Company adopted a non-qualified employee stock option plan 
covering 200,000 shares of common stock.  The following schedule shows the 
status of outstanding options under the plan.


</TABLE>
<TABLE>
<S>                          <C>               <C>
     Options Outstanding     Option Price      Expiration Date
     -------------------     ------------      -----------------
      64,000                  $1.37            December  3, 1997
     120,000                  $2.25-2.48       November 28, 1998
</TABLE>

During 1992 the Company adopted an incentive stock option plan covering 
200,000 shares of common stock.  The following schedule shows the status of 
outstanding options under this plan.

<TABLE>
<S>                          <C>              <C>
     Options Outstanding     Option Price     Expiration Date
     -------------------     ------------     -----------------
      10,000                  $2.25           November 28, 1998

</TABLE>





                                11
<PAGE>


In 1994 the Company adopted a non-qualified employee stock option plan 
covering 400,000 shares of common stock.  The following schedule shows the 
status of outstanding options under the plan.

<TABLE>
<S>                          <C>              <C>
     Options Outstanding     Option Price     Expiration Date
     -------------------     ------------     ----------------
      92,000                  $2.00           January 22, 2000
      97,000                  $2.00           January 29, 2001
</TABLE>

On February 3, 1993 the Company granted the President an option to purchase 
100,000 shares of the Company's common stock at $1.38 per share.  The option 
expires in 5 years.  The option exercise price is 100% of the price of the 
Company's common stock on the date of the grant.  The options were granted to 
Mr. Dornau in connection with his guarantee of the Company's loan from its 
commercial bank.

On April 13, 1994 the Company granted Mr. Dornau an option to purchase 150,000 
shares of the Company's common stock at $2.25 per share.  The option expires 
in 5 years  The option exercise price is 100% of the price of the Company's 
common stock on the date of the grant. The options were granted to Mr. Dornau 
in connection with the guarantee of the Company's current loan from its 
commercial bank.

Financial Accounting Standard No. 123 requires that companies that continue to 
account for employer stock options under APB No. 25 disclose pro forma net 
income and earnings per share as if Statement 123 had been applied.  The 
following is disclosed pursuant to this requirement.

<TABLE>
<S>                                         <C>          <C>          <C>
                                              1996         1995         1994
                                            --------     --------     --------
     Net Income             As reported     $354,672     $540,542     $694,616
                            Pro forma       $314,149     $514,496     $592,929

     Earnings per share     As reported     $    .09     $    .15     $    .19
                            Pro forma       $    .08     $    .15     $    .16

</TABLE>

A summary of the Company's three stock option plans as of December 31, 1996, 
1995 and 1994, and changes during the years ending on those dates, is 
presented below:
<TABLE>
<S>                   <C>                 <C>                <C>
                              1996               1995               1994
                      ------------------  -----------------  -----------------
                           Weighted Avg.      Weighted Avg.      Weighted Avg.
                                Exercise           Exercise           Exercise 
                        Shares  Price      Shares  Price      Shares  Price
                      --------  --------  -------  --------  -------  --------
Options Outstanding
 at beginning of year  665,000    $1.10   710,000     $1.44  536,000     $1.92
Granted                150,000    $2.25    92,000     $2.00   97,000     $2.00
Exercised             (105,000)          (266,000)          ( 10,000)      
                      --------  -------   -------  --------  -------  --------
Outstanding at
 End of Year           710,000    $1.44   536,000     $1.92  623,000     $1.95
                      ========  =======   =======  ========  =======  ========
</TABLE>


                                         12
<PAGE>          




The following table summarizes information about the stock options outstanding 
at December 31, 1996:

<TABLE>
<CAPTION>
                    Options Outstanding                  Options Exercisable  
            --------------------------------------  -------------------------
<S>         <C>         <C>          <C>            <C>          <C>
                        Weighted Avg.
Range of    Number      Remaining    Weighted Avg.  Number       Weighted Avg.
Exercise    Outstanding Contractual  Exercise       Exercisable  Exercis
Price       at 12/31/96 Life         Price          at 12/31/96  Price    
----------- ----------- -----------  -------------  ------------- -----------
$1.38-$2.00     353,000   2.25 yrs.     $1.71          172,400        $1.44
      $2.25     270,000   2.6  yrs.     $2.25          174,000         2.25
               --------                               --------
$1.38-$2.25     623,000   2.4  yrs.     $1.95          346,400        $1.85
               --------                               --------
</TABLE>

Under the three option plans adopted by the Company, at the discretion of the
Board of Directors, grants are given to selected executives and other key 
employees.  Options typically have a five year life with vesting occurring at 
20% per year on a cumulative basis with forfeiture at the end of the option if 
not exercised.

The fair value of each option grant was estimated using the Black-Scholes 
option pricing model with the following assumptions for 1996, 1995 and 1994: 
risk free rate 6.5%, no dividend yield for all years, expected life of five 
years and volatility of 31.62%.     

Note 11 - Major Customers

The Company has one major customer, Wal-mart.  Sales to this customer 
represent less than 10% of revenues.  The Company enjoys good relations with 
this customer.  However, the loss of this customer could have an adverse 
impact on the Company.









                                      13