UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
    OF 1934
                   For the fiscal year ended December 31, 2008
                                       OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

                         Commission file number 000-11102

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

   Florida                             59-1564329               2842,2899,2891
(State or other jurisdiction         (IRS Employer           (Primary Standard
of incorporation or organization)   Identification No.)    Industrial Classific-
                                                            ation Code Number)
                                4041 SW 47 Avenue
                         Fort Lauderdale, FL 33314-4023
              (Address of principal executive offices) (Zip Code)

               Registrant's telephone number, including area code:
                                 (954) 587-6280

        Securities registered pursuant to Section 12(b) of the Act: None
          Securities registered pursuant to Section 12(g) of the Act:
                          Common stock, $0.01 par value

     Indicate by check mark whether the Registrant is a well seasoned issuer, as
defined in Rule 405 of the Securities Act. Yes [ ]  No   |X|

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

     Indicate  by check mark  whether the  Registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  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.       |X|

     Indicate by check mark whether the Registrant is a large accelerated filer,
an accelerated  filer, a non-accelerated  filer, or a smaller reporting company.
See definition of " large accelerated filer",  "accelerated filer"' and "smaller
reporting  company"  in Rule  12b-2  of the  Exchange  Act.
    Large accelerated filer [ ]            Accelerated filer  [ ]
    Non-accelerated filer | |              Smaller Reporting Company [X]

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

     As of March 18, 2009, the number of shares of the registrant's Common Stock
outstanding was 7,699,813.  The aggregate  market value of the Common Stock held
by  non-affiliates  of the  registrant  as of March 18,  2009 was  approximately
$1,505,000  based on a closing  sale price of $.57 for the Common  Stock on such
date.

     For  purposes  of  the  foregoing  computation,   all  executive  officers,
directors and 5 percent  beneficial  owners of the  registrant  are deemed to be
affiliates.
                       DOCUMENTS INCORPORATED BY REFERENCE
Part III  of this Form 10-K  incorporates information from portions of our
Definitive Proxy Statement, which will be filed within 120 days of
December 31, 2008 covering our Annual Meeting which will be held on or about
June 12, 2009.
<PAGE>





                     OCEAN BIO-CHEM, INC. AND SUBSIDIARIES


                               TABLE OF CONTENTS



                                                                    Page


PART I
Item 1.   Business                                                     4
Item 1A.  Risk Factors                                                 7
Item 2.   Properties                                                   8
Item 3.   Legal Proceedings                                            8
Item 4.   Submission of Matters to a Vote of Security Holders          8


PART II
Item 5.   Market for Registrant's Common Equity and Related
             Stockholder Matters                                       9
Item 6.   Selected Financial Data                                     10
Item 7.   Management's Discussion and Analysis of Financial Condition
            and Results of Operations                                 10
Item 7A.  Quantitative and Qualitative Disclosures about Market Risk  15
Item 8.   Financial Statements and Supplementary Data                 15
Item 9.   Changes in and Disagreements with Accountants on Accounting
             and Financial Disclosure                                 15
Item 9A.     Controls and Procedures                                  15


PART III
Item 10.     Directors, Executive Officers of the Registrant          16
Item 11.     Executive Compensation                                   18
Item 12.     Security Ownership of Certain Beneficial Owners and
             Management and Related Stockholder Matters               19
Item 13.     Certain Relationships and Related Transactions, and
             Director Independence                                    20
Item 14.     Principal Accounting Fees and Services                   21


PART IV
Item 15. Exhibits and Financial Statements Schedules                  21









<PAGE>




Forward-looking Statements:



     Certain statements  contained in this Annual Report on Form 10-K, 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  Litigation  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  "believe",  "may",  "will",  "expect",  "anticipate",
"intend",  "could"  including  the  negative  or  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 our actual  results,  performance or  achievements to be
materially  different  from any  future  results,  performance  or  achievements
expressed  or implied by such  forward-looking  statements.  Factors,  which may
affect these  results  include,  but are not limited to, the highly  competitive
nature of our industry;  reliance on certain key customers;  consumer demand for
marine recreational vehicle and automotive products; advertising and promotional
efforts; and other factors.

Explanatory note - Restatements:

     The Company adopted SEC Staff Accounting Bulletin No. 108, "Considering the
Effects of Prior Year  Misstatements  when Quantifying  Misstatements in Current
Year  Financial  Statements"  (SAB No.  108),  effective  January  1,  2007.  In
accordance  with the  requirements  of SAB No. 108,  the Company has recorded an
adjustment  in the  amount of  approximately  $70,000  to the  opening  retained
earnings  balance  as of  January  1,  2007  in  the  accompanying  consolidated
financial  statements,  to  correct  errors in the  accounting  of share-  based
compensation and contingent legal liabilities in 2006.

     In 2007,  the Company  made  certain  revisions  in the  valuation of stock
option grants that vested in 2006. The revised valuation resulted in an increase
in  compensation  expense of  approximately  $40,000 for 2006. Also in 2007, the
Company  discovered that a liability in the amount of approximately  $30,000 for
legal costs  incurred in 2006 should have been  recorded as of December 31, 2006
under the criteria of Statement of Financial  Accounting  Standards No. 5. There
was no  corporate  tax  effect  for the  adjustments  due to the  Company's  tax
position in 2006.


     The above  matters are more fully  discussed  in Note 13 to 2008  Financial
Statements - Restatements, to the Consolidated Financial Statements.


     We have also  included  the  aforementioned  restated  amounts  in Item 7 -
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations".  Along  with the  foregoing,  we have  updated  our  Certifications
pursuant to Section 302 of the  Sarbanes-Oxley Act of 2002 presented as Exhibits
31.1 and 31.2 to conform to the current language requirements.














                                       3
<PAGE>

Part I


Item 1.  Business

     General: We were organized on November 13, 1973 under the laws of the state
of Florida.  We are  principally  engaged in the  manufacturing,  marketing  and
distribution of a broad line of appearance and  maintenance  products for boats,
recreational vehicles, automobile and aircraft under the "Star brite"  and other
trademarks  within the United  States of America and  Canada.  In  addition,  we
produce private label formulations of many of our products for various customers
as well as provide  custom  blending and  packaging  services of these and other
products.

     PRODUCTS:  Set forth below is a general description of the products that we
manufacture and market:

     Marine:  Our Marine line consists of polishes,  cleaners,  protectants  and
waxes of  various  formulations  under the "Star  brite"  brand  name as well as
private label  formulations of these and other products.  The line also includes
motor oils, various vinyl protectants, cleaners, teak cleaners, teak oils, bilge
cleaners, hull cleaners, silicone sealants,  polyurethane sealants,  polysulfide
sealants,  gasket materials,  lubricants,  antifouling additives and anti-freeze
coolants. In addition, we manufacture a line of brushes, poles and tie-downs and
other related marine accessories.

     Automotive:  We  manufacture a line of automotive  products under the "Star
brite" brand name including  StarTron  enzyme fuel treatment for both diesel and
gas engines, brake and transmission fluids,  hydraulic, gear and motor oils, and
related items. In addition,  anti-freeze  and windshield  washes are produced in
varying  formulations both under the "Star brite" brand as well as under private
labels for customers.  We also produce a line of automotive  polishes,  cleaners
and associated appearance items.

     Recreational  vehicle/power  sports:  We also market StarTron to the winter
recreational vehicle market, including snow mobiles. With the inclusion of E- 10
(ethanol) into the fuel (gasoline)  snowmobilers' have found StarTron helpful to
displace water in fuel in snow mobiles.  Other recreational vehicle products are
cleaners,  polishes,  detergents,  fabric  cleaners  and  protectors,   silicone
sealants,  water  proofers,  gasket  materials,   degreasers,   vinyl  cleaners,
protectors, toilet treatment fluids and anti-freeze coolants.

     Contract filling and blow molded bottles: We blend and package a variety of
chemical  formulations  to  our  customers'  specifications.   In  addition,  we
manufacture for sale to various  customers  assorted styles of both PVC and HDPE
blow molded bottles.

     Although the above  products are utilized for different  types of vehicles,
boats,  aircrafts and household purposes,  it is management's view that they all
constitute one industry segment.

     MANUFACTURING:

     We produce the  majority of our products at our  manufacturing  facility in
Montgomery,  Alabama. In addition,  we contract with various unrelated companies
located in the  northeastern  and  mid-western  areas of the  country to package
other products, which are manufactured to our specifications, using our provided
formulas. Each third party packager enters into a confidentiality agreement with
us.

     We purchase raw materials  from a wide variety of suppliers,  none of which
is significant to our operations and all raw materials used in manufacturing are
readily  available.   We  design  our  own  packaging  and  supply  our  outside
manufacturers  with the  appropriate  design and packaging.  We believe that our
internal  manufacturing  capacity and our arrangements  with our current outside
manufacturers are adequate for our present needs.
                                       4
<PAGE>

     In  the  event  that  these   arrangements   are   discontinued   with  any
manufacturer,  we  believe  that  substitute  facilities  can be  found  without
substantial adverse effect on our manufacturing and distribution.

     Our  in-house  manufacturing  is  primarily  performed  by our wholly owned
subsidiary, Kinpak Inc, an Alabama corporation ("Kinpak"). On February 27, 1996,
we acquired  certain assets of Kinpak,  Inc., and assumed two (2) leases of land
and  facilities  leased by Kinpak from the Industrial  Development  Board of the
City of Montgomery,  Alabama and the Alabama State Docks Department. On December
20, 1996, we entered into a new agreement with the Industrial  Development Board
of the City of Montgomery,  Alabama to issue Industrial Development Bonds in the
amount of $4,990,000 to repay certain financial costs and to expand the capacity
of the Alabama facility.  The underlying premises,  at that time, consisted of a
manufacturing and distribution facility containing  approximately 110,000 square
feet located on  approximately  20 acres of real property and a docking facility
located on the Alabama River. In addition, we purchased the machinery, equipment
and inventory located on the leased premises.  Subsequent to the acquisition, we
changed the name of our subsidiary to Kinpak Inc.

     During July 2002,  we  completed  an  additional  $3.5  million  Industrial
Development  Bond  financing  through  the  City of  Montgomery,  Alabama.  Such
transaction   funded  an   approximate   70,000  square  foot  addition  to  the
manufacturing  facility  as  well  as  the  requisite  machinery  and  equipment
additions required therein. Such project was substantially  completed during the
year ended December 31, 2003.


     MARKETING:

     Our marine and recreational vehicle products are sold through national mass
merchandisers  such as Wal-mart  and Home Depot and through  specialized  marine
retailers  such as West Marine and Bass Pro Shops.  We also sell to national and
regional  distributors  who in turn  sell our  products  to  specialized  retail
outlets for that specific  market.  Currently we have one customer (West Marine,
Inc.,  which is an unrelated  entity) to whom sales exceeded 37% of consolidated
net  revenues for the year ended  December  31, 2008.  Sales to our five largest
customers for the year ended December 31, 2008 amounted to approximately  58% of
consolidated net revenues and outstanding accounts receivable balances due to us
at December 31, 2008 from our five largest  customers  aggregated  approximately
32% of consolidated trade receivables.

     We market our products  through  internal  salesmen and  approximately  125
sales representatives who work on an independent  contractor-  commission basis.
Our  officers  also  participate  in sales  presentations  and trade  shows.  In
addition, we aid marketing through advertising  campaigns in national magazines,
TV advertising and product catalogs. Our products are distributed primarily from
our manufacturing and distribution facility in Alabama.  During 2008 the Company
and one of its major customers agreed to a vendor management inventory program.

     Backlog,  seasonality,  and selling terms: We had no significant backlog of
orders as of December 31, 2008. We do not give  customers the absolute  right to
return  product.  The  majority  of our  products  is  non-seasonal  and is sold
throughout the year.  Normal trade terms offered to credit  customers range from
30 to 60 days. However, at times special dating and/or discount arrangements are
offered as purchasing  incentives to customers.  Such programs do not materially
distort normal margins.


     COMPETITION:

     Marine:  We have several  national and 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. We believe
that we can increase or maintain our market share through our present methods of
advertising and distribution.


                                       5
<PAGE>
     Automotive: The automotive marketplace into which the Company began selling
various  products  over the past seven years is the largest in which we operate.
There are many entities, both national and regional, which represent competition
to us. Many are more  established and have greater  financial  resources than we
do.  However,  the market is so large that even a minimal  market share could be
significant to us. The principal  elements of competition are brand recognition,
price, service and the ability to deliver products on a timely basis. We believe
that we can establish a reasonable market share with unique products and through
our present methods of advertising and distribution.

     Recreational  Vehicle:  Our recreational vehicle appearance and maintenance
market is parallel to that of the marine marketplace.  In this market we compete
with national and regional competitors,  none of which singly or as a few have a
dominant  market  share.  The  principal   elements  of  competition  are  brand
recognition,  price,  service  and the  ability to deliver  products on a timely
basis.  Management is of the opinion that it can increase or maintain our market
share by utilizing similar methods as those employed in the marine market.


     TRADEMARKS:

     We have obtained  registered  trademarks  for "Star brite" and  other trade
names used on our products. We view our trademarks as significant assets because
they provide product recognition.  We believe that our intellectual  property is
significantly  protected,  but there are no assurances  that these rights can be
successfully asserted in the future or will not be invalidated,  circumvented or
challenged.


     PATENTS:

     We hold two patents which we believe are valuable in limited product lines,
but not material to our success or competitiveness in general.


     NEW PRODUCTS  DEVELOPMENT:

     We continue to develop specialized products for the marine, automotive, and
recreational  vehicle  marketplace.  We believe that our current  operations and
working  capital  financing  arrangement  are  sufficient  to  meet  development
expenditures without securing external funding. The amounts expended toward this
effort  in any  fiscal  period  have not been  significant  and are  charged  to
operations in the year incurred.


     ENVIRONMENTAL  COSTS:

     We adhere to a policy of compliance with applicable  regulatory mandates on
environmental issues.  Amounts expended in this regard have not been significant
and management is not aware of any instances of material non-compliance.


     PERSONNEL:

     We employ  approximately  22 full time employees at our corporate office in
Fort Lauderdale,  Florida. These employees are engaged in administration,  sales
and accounting functions. In addition, we employ manufacturing,  fabrication and
warehouse personnel in both Florida and Alabama.

     The following is a tabulation of the full time number of personnel  working
for the Company and/or its subsidiaries as of December 31, 2008:

                                                                    Full-time
 Location                     Description                           Employees
 ------------------------     -------------------------------       ----------
 Fort Lauderdale, Florida     Administrative                            22
 Fort Lauderdale, Florida     Manufacturing and distribution             9
 Montgomery, Alabama          Manufacturing and distribution            59
                                                                        90
                                       6
<PAGE>


Item 1A.  Risk factors

     An  investment  in our common stock  involves  risks.  If any of the events
anticipated by the risks  described  below occur,  our results of operations and
financial  condition could be adversely affected which could result in a decline
in the market price of our common stock.


     Customers and market

     The recession is expected to increase the  Company's  risk related to sales
and collection of accounts  receivable.  At the time of this filing one customer
has filed for bankruptcy  (Boater's World),  representing a maximum risk of loss
on unrecoverable  receivables of approximately $210 thousand dollars. Their 2008
sales were  approximately  $672 thousand dollars.  We do not know yet and cannot
predict if we will be able to collect accounts receivable with more or less
difficulty  than  in  the  past  in  our  business.   The  Company's  Management
understands  that  the  economic  conditions  in  the  industry  may  result  in
additional difficulties for our customers, but is unable to qualify this risk at
this time.


     Financial Risks

     Our exposure to market risk for changes in interest rates relates primarily
to the interest rates on our bonds and on our line of credit. The interest rates
on our bonds are adjusted weekly.  During the years ended December 31, 2008, and
2007,  interest  rates ranged between 1.5% and 8.6%, and 3.6% and 4.3% annually,
respectively.  The industrial  revenue bonds when tendered bear market  variable
interest rates.  Should the interest rates increase  significantly the Company's
earnings will be negatively impacted by higher interest rates.


     Internal controls

     Failure to achieve and maintain  effective  internal controls in accordance
with section 404 of the  Sarbanes-Oxley act could have a material adverse effect
on our business and operating results.

     If we fail to comply in a timely  manner with the  requirements  of Section
404  of  the  Sarbanes-Oxley  Act  regarding  internal  control  over  financial
reporting or to remedy any material  weaknesses in our internal controls that we
may  identify,  such  failure  could  result in  material  misstatements  in our
financial  statements,  cause  investors  to  lose  confidence  in our  reported
financial  information  and have a negative  effect on the trading  price of our
common stock.

     Pursuant  to  Section  404  of  the  Sarbanes-Oxley  Act  and  current  SEC
regulations  publicly traded companies are required to assess internal  controls
over  financial  reporting and beginning with our annual report on Form 10-K for
our fiscal period ending  December 31, 2007,  prepare a report by our management
on our internal control over financial  reporting.  We have begun the process of
documenting  and testing our  internal  control  procedures  in order to satisfy
these  requirements,  which  is  likely  to  result  in  increased  general  and
administrative  expenses  and may  shift  management  time  and  attention  from
revenue-generating activities to compliance activities.


     International

     We become  exposed  to  foreign  currency  transactions  as a result of our
operations in Canada and we do not hedge such exposure.


                                       7
<PAGE>
     Common stock trading

     Given  exceptional  market  conditions,  NASDAQ has  determined  to suspend
enforcement  of  the  bid  price  and  market  value  of  publicly  held  shares
requirements.  As extended,  the suspension  will remain in effect through April
19, 2009.  After this date, the Company has to regain  compliance with the $1.00
minimum bid price for  continued  listing as required in  Marketplace  Rule 4310
(c)(4).   Following  the  reinstatement  of  these  rules,  in  accordance  with
Marketplace Rule  4310(c)(8)(D),  the Company will be provided 180 calendar days
to regain compliance.  If, at any time before October 20, 2009, the bid price of
the Company's common stock closes at $1.00 per share or more for a minimum of 10
consecutive  business days,  NASDAQ will provide  written  notification  that it
complies with the Rule.

     If compliance with this Rule cannot be demonstrated by July 20, 2009, Staff
will  determine  whether the Company  meets The NASDAQ  Capital  Market  initial
listing  criteria as set forth in Marketplace  Rule 4310(c),  except for the bid
price requirement.  If it meets the initial listing criteria,  Staff will notify
the Company that it may be granted an  additional  180  calendar day  compliance
period.  If the Company is not eligible  for an  additional  compliance  period,
Staff will provide written  notification  that the Company's  securities will be
delisted.  At that time, the Company may appeal Staff's  determination to delist
its securities to a Listing Qualifications Panel (the "Panel").


Item 2.  Properties

     Our executive offices and warehouse located in Fort Lauderdale, Florida are
held under a lease with an entity controlled by our President.  The lease covers
approximately  12,700 square feet of office and warehouse space. On May 1, 1998,
the Company  entered  into a ten year lease which  required a minimum  rental of
$94,800 plus  applicable  taxes for the first year and provided for a maximum 2%
increase on the anniversary of the lease  throughout the term, which were waived
through  April  30,  2008.  Additionally,  the  landlord  was  entitled  to  its
reimbursement of all taxes, assessments,  and any other expenses that arise from
ownership.  On May 1st,  2008 we renewed our lease  agreement  for a term of ten
years, under the same terms. The landlord reserves the right under the agreement
to review the terms of the lease at 3, 6 and 9 year  intervals  in order to make
modifications for market  conditionsRent  charged to operations during the years
ended December 31, 2008, and 2007 amounted to approximately $100,500 each year.

     Our Alabama facility currently contains  approximately  180,000 square feet
of office,  plant and warehouse  space located on 20 acres of land (the "Plant")
and also  includes a leased  1.5 acre  docking  facility  on the  Alabama  River
located  approximately eleven miles from the Plant. This plant has undergone two
separate  expansions  of  60,000  and  70,000  square  feet  in 1998  and  2002,
respectively.  We financed the  facility's  enhancements  and related  equipment
needs with Industrial  Development  Bonds issued through the city of Montgomery,
AL.  Our  manufacturing  facility  and our  manufacturing  equipment  serves  as
collateral to a financial institution,  which issued letters of credit to secure
the bonds.


Item 3.  Legal Proceedings

We were not involved in any significant litigation at December 31, 2008.


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

No matter was submitted for a vote of shareholders during the 4th quarter 2008.


                                       8
<PAGE>

Part II


Item 5.  Market for the Registrant's Common Equity and Related Stockholder
Matters

     Our common stock was sold to the public  initially  on March 26, 1981.  The
common stock of the Company is traded on the NASDAQ  Capital Market System under
the symbol OBCI. A summary of the trading ranges during each quarter of 2008 and
2007 is presented below.


Market Range of
Common Stock Bid:     1st Qtr.     2nd Qtr.     3rd Qtr.     4th Qtr.

2008      High       $ 1.50       $ 1.50       $ 1.18       $ 0.95
          Low        $ 1.24       $ 1.09       $ 0.93       $ 0.62

2007      High       $ 5.11       $ 2.78       $ 2.55       $ 1.98
          Low        $ 1.80       $ 1.64       $ 1.73       $ 1.27




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

B. The number of record holders of our Common Stock owners was approximately 175
at December 31, 2008. In addition,  we believe that there are  approximately 600
beneficial  holders based on  information  obtained from our Transfer  Agent and
Registrar and indications  from broker dealers of shares held by them as nominee
for actual shareholders.

C. We have not paid any cash  dividends  since the Company  has  been  organized
However, during the years ended December 31, 2002 and 2000, the Company declared
and distributed a 10% and a 5% stock dividend,  respectively. The Company has no
other dividend policy except as stated herein.

D. Securities  authorized  for  issuance  at  December  31,  2008  under  equity
compensation plans


<TABLE>
<CAPTION>
                                                                               Number of securities
                                   Number of securities      Weighted average  remaining available
                                     to be issued upon       exercise price of  for future issuance
                                  exercise of outstanding  outstanding options,  under equity com-
                                options, warrants & rights   warrants & rights     pensation plans
<S>                                  <C>                       <C>                     <C>
Equity compensation plans
  approved by security holders:
   Plan stock options granted (1)    1,090,000                 $1.26                   519,500
   Non plan stock options granted (2)  231,000                  0.76                         0

Warrants (3)                         1,000,000                  0.88                         0

Total equity compensation plans
  approved and not approved by
  security holders                   2,321,000                 $1.05                   519,500

</TABLE>

                                       9
<PAGE>

(1) Includes  270,000 options  granted under the 2002 Qualified  Incentive Stock
Option Plan,  185,000  options under the 2002 Non- Qualified  Stock Option Plan,
154,500  options  under the 1994  Qualified  Stock  Option  Plan  (this plan has
expired and no further awards can be made under its provisions), 321,000 options
under the 2007 qualified  incentive stock option plan and 159,500 under the 2008
qualified incentive stock option plan.

(2) Includes  231,000 options granted to Messrs.  Peter G. Dornau and Jeffrey J.
Tieger in conjunction  with a loan made to the Company by an entity 50% owned by
each of them.

(3) Includes 1,000,000 warrants issued to Peter G. Dornau in connection with a $
1.5  million  Subordinated  Revolving  Line of Credit he extended to the Company
during  2005.  Such  warrants  are  exercisable  500,000 at $ 1.03 per share and
500,000  exercisable at $ .88 per share.  The exercise price is equal to 110% of
the fair value of the underlying security at the close of business one day prior
to the date of grant.


Item 6.  Selected Financial Data

N/A


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

     The  following   discussion   should  be  read  in  conjunction   with  our
consolidated financial statements contained herein as Item 15.

     The Company adopted SEC Staff Accounting Bulletin No. 108, "Considering the
Effects of Prior Year  Misstatements  when Quantifying  Misstatements in Current
Year  Financial  Statements"  (SAB No.  108),  effective  January  1,  2007.  In
accordance  with the  requirements  of SAB No. 108,  the Company has recorded an
adjustment  in the  amount of  approximately  $70,000  to the  opening  retained
earnings  balance  as of  January  1,  2007  in  the  accompanying  consolidated
financial  statements,  to  correct  errors  in the  accounting  of  share-based
compensation and contingent legal liabilities in 2006.

     In 2007,  the Company  made  certain  revisions  in the  valuation of stock
option grants that vested in 2006. The revised valuation resulted in an increase
in  compensation  expense of  approximately  $40,000 for 2006. Also in 2007, the
Company  discovered that a liability in the amount of approximately  $30,000 for
legal costs  incurred in 2006 should have been  recorded as of December 31, 2006
under the criteria of Statement of Financial  Accounting  Standards No. 5. There
was no  corporate  tax  effect  for the  adjustments  due to the  Company's  tax
position in 2006.


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.

                                       10
<PAGE>
     Collectability  of  accounts  receivable  -  Included  in the  consolidated
balance  sheets as of December  31, 2008 and 2007 are  allowances  for  doubtful
accounts  aggregating  approximately  $117,600  and $47,000  respectively.  Such
amounts  are based on  management's  estimates  of the  creditworthiness  of its
customers,   current  economic  conditions  and  other  historical  information.
Consolidated  bad debt expense  charged  against  operations for the years ended
December  31,  2008  and  2007  aggregated  approximately  $83,500  and $ 24,000
respectively.  The  foregoing  includes  as of December  31, 2008 an  additional
allowance for doubtful  accounts  aggregating  approximately  $69,000 to reflect
risks related to bankruptcy  filings  occurred in 2009 before this filing.  With
the economic slow down it is expected to increase the Company's  risk related to
sales and collection of accounts receivable.  At the time of this filing we have
incurred,  in  2009,  one  customer  filing  for  bankruptcy  (Boater's  World),
representing   a  maximum  risk  of  loss  on   unrecoverable   receivables   of
approximately  $210  thousand in total,  approximately  $69 thousand  related to
December 31, 2008 receivables.  We do not know yet and cannot predict if we will
be able to collect accounts  receivable with more or less difficulty than in the
past. The Company's  Management  understands that the economic conditions in the
industry may result in additional difficulties for our customers,  but is unable
to qualify this risk at this time.

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

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

     Prepaid  expenses - In any given year we introduce  certain new products to
our customers.  In connection therewith,  we produce new collateral materials to
be  distributed  over an  introduction  period of time.  We follow the policy of
Statement of Position (SOP) 93-7  amortizing  these costs based on actual usage.
Advertising  expenses are expensed in the period the advertising either is aired
on TV or in the month an advertisement  appears in a magazine in accordance with
SOP 93-7.

     Property, plant and equipment - Property, plant and equipment are stated at
cost.  Depreciation  is provided over the estimated  useful lives of the related
assets using the straight-line  method.  Stock based  compensation - At December
31,  2008,  the  Company  had  options   outstanding   under  four   stock-based
compensation  plans and one  non-qualified  plan,  which are described below. On
January 1, 2006, the Company adopted Statement of Financial Accounting Standards
No.  123R  (revised  2004),  "Share-Based  Payment".  ("SFAS No.  123R"),  which
requires  the  measurement   and  recognition  of  compensation   cost  for  all
share-based  payment  awards made to employees and directors  based on estimated
fair values.  Prior to the adoption of SFAS No. 123R, the Company  accounted for
its  stock-based  employee  compensation  related  to stock  options  under  the
intrinsic value recognition and measurement  principles of Accounting Principles
Board Opinion No. 25,  "Accounting for Stock Issued to Employees" ("APB 25") and
the  disclosure   alternative  prescribed  by  SFAS  No.  123,  "Accounting  for
Stock-Based   Compensation,"  as  amended  by  SFAS  No.  148,  "Accounting  for
Stock-Based Compensation - Transition and Disclosure." Accordingly,  The Company
presents  pro- forma  information  for the periods prior to the adoption of SFAS
No. 123R and no employee  compensation  cost was recognized for the stock- based
compensation  plans other than the grant date intrinsic  value,  if any, for the
options granted prior to January 1, 2006.

     Concentration  of cash - At various  times of the year and at December  31,
2008,  we had a  concentration  of cash  in one  bank in  excess  of  prevailing
insurance  offered  through the Federal  Deposit  Insurance  Corporation at such
institution.   Management  does  not  consider  the  excess  deposits  to  be  a
significant risk.

     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.
                                       11
<PAGE>

     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  temporary  differences
included   therein  are   attributable   to  differing   methods  of  reflecting
depreciation and stock based compensation for financial statement and income tax
purposes.  We adopted the provisions of FASB  Interpretation No. 48, "Accounting
for Uncertainty in Income Taxes -- an  Interpretation of FASB Statement No. 109"
("FIN 48"),  which  clarified the  accounting  for  uncertainty  in income taxes
recognized in accordance with SFAS 109, on January 1, 2007. FIN 48 clarifies the
application  of SFAS 109 by defining  criteria that an  individual  tax position
must meet for any part of the benefit of that  position to be  recognized in the
financial statements.

     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
these  intangible  assets  have  indefinite  lives  and  therefore  we no longer
recognize  amortization expense. 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.


Performance Comparisons

     N/A


Liquidity and Capital Resources:

     Cash  decreased in the year to  approximately  $ 527 thousand  dollars from
approximately  $751 thousand dollars,  a decrease of approximately $224 thousand
dollars.  The amount of short-term  borrowings  outstanding at December 31, 2008
was approximately $ 2.80 million dollars.  This is an increase of $ 1.05 million
dollars  from the December 31,  2007,  balance of  approximately  $ 1.75 million
dollars.  The decreased  cash and increased  borrowings  are result of increased
accounts   receivable  due  from   affiliated   companies  and  an  increase  of
inventories.

     During the year ended  December 31, 2008 the Company  continued to focus on
programs to effectively  manage accounts  receivable - trade. In 2008, net sales
and  accounts  receivable  remained  close to their  prior  year  levels:  trade
accounts  receivable  aggregated  approximately  $ 2.0  million  dollars at both
December 31, 2008 and 2007.

     In addition,  inventory levels increased,  from  approximately $6.0 million
dollars to $6.5  million  dollars,  comparing  December  31,  2008 and 2007,  an
increase  of  approximately  $500  thousand  or 8.3%.  The  increase  was mainly
attributable to raw material price increases  (petroleum  based  chemicals) from
our  vendors on key raw  materials  in addition  to a vendor  managed  inventory
program for one of our  customers,  increasing  inventories  approximately  $200
thousand dollars.

     Accounts  payable at December  31, 2008  decreased  to  approximately  $0.9
million  dollars  from $1.0  million  dollars.  This  decrease  was offset by an
increase in accrued payables of approximately $0.9 million.

                                       12
<PAGE>
     The primary sources of our liquidity are our operations and borrowings from
Regions Bank pursuant to a revolving line of credit  aggregating $6 million.  In
2007,  the line carried  interest  based on the 30 day LIBOR rate plus 275 basis
points  (approximately  6.0% at December  31,  2007)  payable  monthly,  and was
collateralized by the Company's  inventory,  trade  receivables,  and intangible
assets. This financing matured on May 31, 2008, and was renewed for three years.
Such line  matures  May 31,  2011,  bears  interest at the 30 Day LIBOR plus 250
basis  points  (approximately  3.6% at December  31, 2008) and is secured by our
trade receivables,  inventory and intangible assets. 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.  At December 31, 2008 and 2007 the
Company was in compliance with its debt covenants.  As of December 31, 2008, and
2007 we were  obligated  under this  arrangement  in the amount of $2.8  million
dollars and $ 1.8 million dollars, respectively.

     In connection with the purchase and expansion of the Alabama  facility,  we
closed on Industrial  Development  Bonds during 1997. 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, 2009,  renewable  annually,  we are required to
maintain a stipulated  level of working  capital,  a designated  maximum debt to
tangible  ratio,  and a required debt service  coverage  ratio.  Such letters of
credit are  secured  by a first  priority  mortgage  on the  underlying  Alabama
facility and equipment.

     The bonds are marketed  weekly at the prevailing  rates for such tax-exempt
instruments. During the year ended December 31, 2008 such bonds carried interest
ranging between 1.5% and 8.6% annually.  The bonds when tendered by Regions Bank
carry an interest rate of prime rate plus 2%. Interest and principal are payable
quarterly.   We  believe  current   operations  are  sufficient  to  meet  these
obligations.  The bonds maturity dates are March 2012 and July 2017 for the 1997
and 2002 series  bonds.  In  September  and  October  2008 both bond issues were
tendered  due  to the  volatility  of  the  credit  markets.  Both  issues  were
successfully remarketed before year end.

     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 December 31, 2008
was  approximately  $133,000 and interest  rate is LIBOR plus 2.5% per annum (or
approximately 3.6% at December 31, 2008).

     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.

     In the year ended  December  31, 2008 the Company  recorded a $71  thousand
dollar foreign currency translation adjustment  (decreasing  shareholders equity
by $71 thousand  dollars) as a result of the weakening of the Canadian dollar in
relationship  to the US dollar,  in the  conversion  of the  Company's  Canadian
subsidiary balance sheet to US dollars.

     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.

                                       13
<PAGE>
     Many of the raw  materials  that we use in the  manufacturing  process  are
petroleum chemical based and commodity chemicals that are subject to fluctuating
prices. The cost of petroleum and related products,  major components in many of
our products,  which were already in an increasing cost spiral, became even more
unstable in 2008.  The  practical  dynamics of our business do not afford us the
same pricing  flexibility  with our customers,  available to our  suppliers.  We
cannot as  immediately  as our suppliers  pass along the price  increases to our
national retailers and distributors.

     As of December 31, 2008 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.


Results of Operations:

     Net sales decreased to $20.9 million dollars from $21.3 million dollars,  a
decrease of $394 thousand  dollars or 1.85%. The 1.85% decrease in net sales was
reflective  of the overall  slowdown of the economy,  the  tightening  of credit
markets for the financing of new/used boats and the historically high prices of
fuel which directly affects  recreational boat usage.  Considering these factors
the Company has made inroads in 2008 expanding  distribution to new customers in
both the boating and automotive  markets. In 2008 the Company also increased its
sales of StarTron(r) to both the automotive as well as the power sports markets.

     Cost of Sales and Gross  Margins - For the  year,  gross  profit  decreased
approximately  $0.8 million dollars or 12.3%,  from  approximately  $6.8 million
dollars in 2007, to  approximately  $6.0 million  dollars in 2008.  Gross margin
percentages  also  decreased  from   approximately  32%  to  29%,  a  change  of
approximately 3%. This was a result of the unprecedented  increase in oil prices
and the resulting increase in the company's raw material costs that could not be
fully passed on to our customers. In addition the Company had a higher sales mix
of lower margin  antifreeze  products in 2008 compared to prior year. In 2009 we
will continue management's initiatives to decrease raw material costs.

     Operating  Expenses - For the year,  total  operating  expenses  aggregated
approximately  $5.6 million dollars,  a decrease of approximately  $359 thousand
dollars from 2007. As a percentage  of net sales  operating  expenses  decreased
from 27.8% to 26.7%.

     Advertising & Promotion  decreased $231 thousand  dollars.  Reduced cost of
advertising,  and placement in trade magazines reduced controllable  advertising
expenses.   Marketing  has  pursued'   initiatives   to  promote  and  advertise
StarTron/Starbrite  products in both the TV Media as well as target  advertising
in specific industry magazines.

     Selling,  general & administrative  expenses  remained flat between the two
years.  The Company reduced its non cash  compensation  expense for stock awards
which was offset by higher operating expenses.

     Interest  expense  decreased  approximately  $96  thousand  dollars to $257
thousand in 2008,  compared to $355 thousand in 2007. This principally  resulted
from lower interest rates in 2008.

     Operating  Profit -  Operating  profits  decreased  to  approximately  $423
thousand dollars in 2008 from an operating profit of approximately $907 thousand
in 2007, a decrease of $483 thousand dollars or 53%.

     Income Taxes - The Company fully utilized its net operating  losses (NOL's)
in 2007. As a result the Company had a tax expense of $291  thousand  dollars in
2008.
                                       14
<PAGE>

     Net Income decreased to approximately $154 thousand dollars in 2008, from a
net income of  approximately  $725  thousand in 2007 a decrease of $571 thousand
dollars.  The decrease resulted  primarily from a combination of higher costs of
goods as a result  of the  impact  of higher  material  cost due to  higher  oil
prices. In addition the Company had fully utilized its tax carry forward in 2007
and had an income tax  provision  of $291  thousand  in 2008,  compared  to $200
thousand dollar income tax provision in 2007.


Contractual obligations:

     The following  table  reflects our  contractual  obligations  for the years
ended December 31,


<TABLE>
<CAPTION>
                                                                          2014 &
                              Total           2009      2010 - 2013     thereafter
                            -----------    -----------    -----------   -----------
<S>                         <C>            <C>            <C>           <C>
Long-term debt obligations  $ 3,958,348    $   559,996    $ 1,838,352   $ 1,560,000
Line of credit                2,800,000      2,800,000             -             -
Capital leases                   60,680         24,541         36,139            -
Other                         1,033,324        101,828        428,089       503,407
                            -----------    -----------    -----------   -----------
                            $ 7,852,352    $ 3,486,365    $ 2,302,580   $ 2,063,407
                            ===========    ===========    ===========   ===========
</TABLE>


Item 7A.  Quantitative and Qualitative Disclosure About Market Risk

N/A


Item 8.  Financial Statements and Supplementary Data

The audited financial statements of the Company required pursuant to this Item 8
are  included  in  this  Annual  Report  on Form  10-K,  as a  separate  section
commencing on page F-1 and are incorporated herein by reference.


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

     The  Management  had no  disagreements  with the neither former nor current
Accountants.  During the years  ended  December  31,  2006 and 2007 and  through
August 20, 2008, there were no disagreements with former Accountants  Berenfeld,
Spritzer,  Shechter & Sheer on any matter of accounting principles or practices,
financial  statement  disclosure,  or auditing  scope or procedure,  that if not
resolved to the  satisfaction of Berenfeld,  Spritzer,  Shechter & Sheer,  would
have caused it to make reference to the subject matter of such  disagreements in
its  reports on the  Company's  financial  statements  for such  periods  and no
reportable events (as defined in Item 304(a)( I )(v) of Regulation S-K).


Item 9A(T).  Controls and Procedures:

     Evaluation of Disclosure  Controls and Procedures.  The Company has carried
out an evaluation  under the supervision of management,  including the President
and Chief  Executive  Officer ("CEO") and the Vice President - Finance and Chief
Financial  Officer ("CFO"),  of the effectiveness of the design and operation of
                                       15
<PAGE>
its disclosure  controls and procedures.  Based on that evaluation,  our CEO and
CFO have concluded  that, as of December 31, 2008,  our disclosure  controls and
procedures were effective to ensure that information required to be disclosed by
the  Company  in the  reports  filed or  submitted  by it under  the  Securities
Exchange  Act of 1934,  as  amended,  is  recorded,  processed,  summarized  and
reported  within the time  periods  specified in the rules and forms of the SEC,
and include controls and procedures designed to ensure that information required
to be  disclosed  by us in such  reports  is  accumulated  and  communicated  to
management,  including the CEO and CFO, as appropriate to allow timely decisions
regarding required disclosures.

     Changes  in  Internal  Controls  Over  Financial  Reporting.  No  change in
internal  control over financial  reporting (as defined in rule 13a-15(f)  under
the Exchange Act) occurred  during the fourth  quarter 2008 that has  materially
affected,  or reasonably likely too materially affect, our internal control over
financial reporting.

     Management's  Report on Internal  Control  Over  Financial  Reporting.  Our
management is responsible for  establishing  and maintaining  adequate  internal
control over financial reporting, as defined in Exchange Act Rule 13a-15(f). The
Company's  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,  the Company's 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.

     Our management conducted an evaluation of the effectiveness of our internal
control over financial  reporting  based on the framework in Internal  Control -
Integrated Framework issued by the Committee of Sponsoring  Organizations of the
Treadway Commission. Based on this evaluation, our management concluded that our
internal control over financial reporting was effective as of December 31, 2008.
This Annual  Report on Form 10-K does not include an  attestation  report of our
independent  registered public  accounting firm regarding  internal control over
financial  reporting.  Management's report was not subject to attestation by our
independent registered public accounting firm pursuant to temporary rules of the
Securities and Exchange  Commission that permit us to provide only  management's
report in the Annual Report on Form 10-K.



                                    Part III


Item 10.  Executive Officers and Directors of the Registrant

The  following  tables set forth the name and ages of our elected  directors and
officers, as of December 31, 2008.

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

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

                                       16
<PAGE>
<TABLE>
<CAPTION>
<S>                   <C>                                                           <C>
 NAME                       OFFICER/DIRECTOR                                       AGE

Peter G. Dornau      President, Chief Executive Officer, and                        69
                          Director since 1973

Jeffrey Barocas      Vice President-Finance, Chief Financial                        61
                            Officer and Director since 2007

William W. Dudman    Vice President-Operations and Director since 2007              44

Gregor M. Dornau     Executive Vice President-Sales & Marketing and Director        40
                                            since 2007
Edward Anchel        Director since 1998                                            62

James M. Kolisch     Director since 1998                                            58

Laz L. Schneider     Director since 1998                                            70

John B. Turner       Director since 2000                                            62

Sonia B. Beard       Director since 2002                                            38


</TABLE>


Peter G. Dornau is our  co-founder  and has served as our  President,  CEO,  and
Chairman of Board of Directors since 1973.

Jeffrey  Barocas  joined  our  company in  December  2006 and was  elected  Vice
President-Finance  and Chief Financial Officer in April 2007. For the five years
immediately preceding his employment,  he was a Financial Officer of both public
and privately owned companies.  He was initially  elected to serve as a Director
of the Company in June 2007.

William  W.  Dudman   joined  our   company  in   February   2004  as  our  Vice
President-Operations  and  Director  in  2007.  For the five  years  immediately
preceding his  employment he had held various  management  positions  within the
marine industry, most recently with West Marine, Inc., our largest customer.

Gregor  M.  Dornau  is the son of Peter G.  Dornau,  our  President,  and  Chief
Executive Officer. He has been employed by the Company as a salesman since 1990,
in 2005 was elected to serve as Executive Vice President-  Sales/Marketing,  and
as Director in 2007.

Edward Anchel was elected to serve as an outside  Director of the Company in May
1998.  He joined  the  Company  as Vice  President-Finance  and Chief  Financial
Officer in March 1999, which he held until his retirement on April 1, 2007.

James M. Kolisch  joined our Board of  Directors  as an outside  director in May
1998.  During the past six years,  Mr.  Kolisch  served as an  executive  of USI
Insurance and provides most of our corporate insurance  coverage's.  Mr. Kolisch
serves on the Board of Directors' Audit Committee.

Laz L. Schneider is, and has been for the past six years, an attorney in private
practice and was elected to serve as an outside  Director of the Company  during
May 1998. Mr. Schneider is a partner at Berger, Singerman, P.A., a law firm that
serves as our lead counsel in various corporate, SEC and litigation matters.
                                       17
<PAGE>

John B. Turner  joined our Board of Directors in June 2002.  During the past six
years, Mr. Turner has been retired. Prior to his retirement, he was an insurance
executive. In addition to his insurance credentials,  Mr. Turner held a Series 7
stock brokerage license. His professional experience in the aforementioned areas
spans in  excess  of  twenty-five  years.  Mr.  Turner  serves  on the  Board of
Directors' Audit Committee.

Sonia B. Beard is a Florida Certified Public Accountant  working for Walt Disney
World since 1997.  She  currently  holds the  position as the Manager of Concept
Development  for the Revenue Lines of Business of Walt Disney  World.  Ms. Beard
has in excess of twelve years financial  experience.  She is an outside director
and serves as the  Chairperson  and Financial  Expert of the Board of Directors'
Audit Committee.


Audit Committee

     We have an Audit  Committee,  which  consists  of Sonia B.  Beard,  John B.
Turner and James M. Kolisch as of December 31,  2008.  The Board has  designated
Sonia B. Beard as the "audit  committee  financial  expert,"  as defined by Item
401(h) of Regulation  S-K of the  Securities  Exchange Act of 1934 and serves as
its  chairperson.  The Board has determined that Sonia B. Beard,  John B. Turner
and James M.  Kolisch  are  "independent  directors"  within the  meaning of the
listing standards of the NASDAQ Capital Market.


Nominating Committee

     We do not have a standing  Nominating  Committee of the Board of Directors.
During  the past six  years we have had to  conduct  only one  search  for a new
director and each member  participated  in that  process.  Accordingly,  we have
reached the decision that,  given the size of our Company and Board, all members
of the Board will  actively  participate  in  prospective  searches  rather than
having this function performed by a few members.


Code of Ethics

     We have adopted a Code of Business Conduct and Ethics,  which is applicable
to all directors, officers and employees of the company, including our principal
executive officer,  our principal  financial officer,  our principal  accounting
officer or controller or other persons performing  similar  functions.  We filed
our Code of Ethics as  Exhibit  14.1 to our  Annual  Report on Form 10-K for the
year ended  December 31, 2004 and it is  incorporated  herein by reference.  The
Company  will  provide a copy of this Code of  Ethics to any  person on  written
request to our principal financial officer.

Compliance with Section 16(a) of the Exchange Act

     Based  solely  on  reviews  of  Forms  3 and  4  furnished  to  us  by  the
aforementioned individuals, it was determined that no reporting person failed to
file a timely  submission  of ownership  changes and that we were in  compliance
with Rule 16(a)3(e) of the Exchange Act during our most recent fiscal year.


Item 11.  Executive Compensation

     Executive  Compensation  is  disclosed  in various  filings with the United
States  Securities and Exchange  Commission and is submitted to our shareholders
as a component of our annual Proxy materials for 2008. It is incorporated herein
by reference.


                                       18
<PAGE>
Compensation Committee
     We do not have a standing Compensation Committee of the Board of Directors.
Our Company is controlled by one  shareholder,  our President and CEO,  Peter G.
Dornau.  Mr.  Dornau is actively  involved in the recurring  operations  and has
relied on  setting  compensation  arrangements  in  consultation  with other key
executives of the Company.  All decisions reached by this group are disclosed in
various  filings with the United States  Securities and Exchange  Commission and
are submitted to our  shareholders as a component of our annual Proxy materials.
Accordingly,  we have reached the decision  that,  given the size of our Company
and Board, not to have a standing committee for this purpose


Certain additional disclosures required  under  this  section  are  incorporated
by reference to portions of our Definitive Proxy Statement,  which will be filed
within 120 days of December 31, 2008 covering our Annual Meeting of Shareholders
which will be held on or about June 12, 2009.


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

The following table sets forth  information at December 31, 2008 with respect to
the beneficial  ownership of our common stock by holders of more than 5% of such
stock and by all of our directors and officers as a group:

<TABLE>
<CAPTION>
<S>              <C>                                            <C>                           <C>
Title of         Name and Address of                            Amount and Nature of          Percent
Class            Beneficial Owner                               Beneficial Ownership          of Class

Common           Peter G. Dornau, President, CEO,
                 Chairman Board of Directors
                 Fort Lauderdale, FL 33317                            5,608,870 (1)            71.8%

Common           Edward Anchel
                 Director
                 Boynton Beach, FL 33437                                348,954 (2)             4.5%

Common           Jeffrey S. Barocas,
                 Chief Financial Officer, Director
                 Weston, Fl 33326                                        11,000 (3)              .1%


Common           William W. Dudman, V. P.-Operations, Director
                 Fort Lauderdale, Fl 32314                              104,350 (4)             1.3%

Common           Gregor M. Dornau, Vice President-Sales, Director
                 Fort Lauderdale, FL 33315                              292,360 (5)             3.7%

Common           James M. Kolisch, Director
                 Coral Gables, FL 33114                                  66,167 (6)              .8%

Common           Laz L. Schneider, Director
                 Fort Lauderdale, FL 33305                               50,000 (7)              .6%

Common           John B. Turner, Director
                 Miami, FL 33186                                         79,463 (8)             1.0%

Common           Sonia B. Beard, Director
                 Merritt Island, FL 32952                                20,000 (9)              .3%

Common           All directors and officers as a group
                                                                      ----------               -----
                 10 individuals                                       6,581,161 (10)           84.2%
                                                                      ==========               =====
</TABLE>

(1) Includes 1,176,500 shares that are issuable upon the exercise of stock
options and/or warrants within 60 days of December 31, 2008.

                                       19
<PAGE>
(2) Includes 65,500 shares that are issuable upon the exercise of stock options
within 60 days of December 31, 2008.

(3) Includes  6,000 shares that are issuable upon the exercise of stock options
within 60 days of December 31, 2008.

(4) Includes 40,050 shares that are issuable upon the exercise of stock options
within 60 days of December 31, 2008.

(5) Includes 63,400 shares that are issuable upon the exercise of stock options
within 60 days of December 31, 2008.

(6) Includes 50,000 shares that are issuable upon the exercise of stock options
within 60 days of December 31, 2008.

(7) Includes 50,000 shares that are issuable upon the exercise of stock options
within 60 days of December 31, 2008.

(8) Includes 50,000 shares that are issuable upon the exercise of stock options
within 60 days of December 31, 2008

(9) Includes 20,000 shares that are issuable upon the exercise of stock options
within 60 days of December 31, 2008.

(10) Includes 1,521,450 shares that are issuable upon the exercise of stock
options and/or warrants within 60 days of December 31, 2008.



Item 13.  Certain Relationships and Related Transactions

     Our executive offices and warehouse located in Fort Lauderdale, Florida are
held  under a lease  with an entity  owned by our  President.  The lease  covers
approximately  12,700 square feet of office and warehouse space. On May 1, 2008,
the Company renewed for ten years the existing lease with unchanged  conditions.
The lease still requires a minimum rental of $94,800 plus  applicable  taxes 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
reimbursement of all taxes, assessments,  and any other expenses that arise from
ownership.  The landlord  reserves  the right under the  agreement to review the
terms of the lease at 3, 6 and 9 year  intervals in order to make  modifications
for market  conditions  Total rent charged to operations  during the years ended
December 31, 2008, and 2007 amounted to approximately $100,500 each year.

     We acquired the rights to the Star brite(r)  trademark and related products
for the  United  States  and  Canada in  conjunction  with our  original  public
offering  during  March 1981.  Peter G. Dornau,  our  president is the direct or
beneficial  owner of three companies that market Star brite(r)  products outside
the United  States and Canada.  These  companies  serve as  distributors  of our
products  and the terms of payment are the same as for our other  customers.  At
December 31, 2008 and 2007, we had amounts due from affiliated companies,  which
are directly or beneficially  owned by our president  aggregating  approximately
$911,000  and  $109,000,  respectively.  Such  amounts  result from sales to the
affiliates,  allocations  of  management  fees  incurred  by the  Company on the
affiliates' behalf, and funds advanced to or from the Company.

     Sales to such affiliates,  which act as foreign distributors,  were sold at
cost of material and labor plus an amount to cover manufacturing  overhead costs
and profits.  In addition,  the affiliates are charged for their allocable share
of administrative expenses of the Company. The sales and transfers to affiliates
aggregated approximately $1,208,000 and $732,000 during the years ended December
31,  2008 and  2007,  respectively;  allocable  administrative  fees  aggregated
$275,000 and $333,000, respectively for such periods.

     A subsidiary of ours currently uses the services of an entity that is owned
by our  president  to conduct  product  research  and  development.  Such entity
received $30,000 per year during the year ended December 31, 2008 and 2007 under
such relationship.

     Mr.  Kolisch  a  Director  of the  Company  sources  most of the  Company's
insurance needs at an arm's length basis.

                                       20
<PAGE>

Item 14. Principal Accounting Fees and Services

     The information  required for this item is incorporated by reference to our
Definitive  Proxy Statement to be filed in conjunction  with our upcoming annual
shareholders' meeting which shall be filed with the United States Securities and
Exchange  Commission  and sent out to  shareholders  prior to 120 days  past our
year-end of December 31, 2008.



Part IV

Item 15.  Exhibits, Financial Statements, Schedules and Reports Filed on Form 8K

(A)     Exhibits

Financial Statements F-1 to F-25

3.1   Articles  of  Incorporation  (incorporated by reference  to the  Company's
Registration Statement on Form S-18 filed with the  United States Securities and
Exchange Commission on March 26, 1981).

3.2    Bylaws (incorporated by reference to the Company's Registration Statement
on Form S-18 filed with the United  States  Securities  and Exchange  Commission
on March 26, 1981).

4.1    Form of Certificate for Series 1997 Bonds*

4.2    Form of Certificate for Series 2002 Bond*

4.3    Trust Indenture dated as of December 1, 1996 between the IDB Board
and Regions Bank, as Trustee and Registrar relating to the $4,000,000 1997
IDB Bonds*

4.4    Supplement to Trust Indenture for 1997 Bonds dated March 1, 1997*.

4.5    Trust Indenture dated as of July 22, 2002  between  the  IDB  Board  and
Regions Bank,  as  Trustee  and  Registrar  relating  to the  $3,500,000 Taxable
IDB Bonds Series 2002*

10.1   Restated Lease Agreement dated as of December 1, 1996 between
The Industrial Development Board of the City of Montgomery ("IDB Board")
and Kinpak, Inc.*

10.2   First  Supplemental  Lease  dated  as  of  March 1,  1997   between  the
IDB Board and Kinpak, Inc.*

10.3   Second   Supplemental  Lease  dated  as  of  July 1, 2002  between  the
IDB Board and Kinpak, Inc.*

10.4   Credit  Agreement dated  as  of  July 1, 2002  by  and  among  the
Company, Star-Brite Distributing, Inc., Star Brite-Automotive, Inc.,
Star-Brite Distributing (Canada), Inc., Kinpak Inc. and Regions Bank*

10.5   Amendment  to  Credit  Agreement  dated  June 1, 2004  by and  among the
Company,  Star-Brite  Distributing,  Inc.,   Star-Brite  Automotive,  Inc.,
Star Brite Distributing (Canada), Inc., Kinpak, Inc. and Regions Bank*

10.6   Mortgage,  Assignment  of  Leases  and  Security  Agreement dated as of
July 1, 2002 between Kinpak, Inc. and Regions Bank.*

10.7   Security  Agreement dated  as of  July 22, 2002 between Kinpak, Inc.  and
Regions Bank.*

10.8   Irrevocable Letter of Credit dated July 22, 2002 issued by  Regions Bank
to secure the Series 1991 Bonds*

                                       21
<PAGE>

10.9   Irrevocable Letter of Credit dated July 22, 2002 issued by  Regions Bank
to secure the Series 2002 Bonds*

10.10  Extension  to  Credit  Agreement  dated March  31,  2003 by and among the
Company,  Star-Brite  Distributing,  Inc.,  Star-Brite  Automotive, Inc.,
Star Brite Distributing (Canada), Inc., Kinpak, Inc., and Bank*

10.11  Ocean Bio-Chem, Inc.  1992  Incentive  Stock  Option  Plan  (incorporated
by reference to Form S-8  filed with the United States Securities  and  Exchange
Commission on June 24, 1994).

10.12  Ocean Bio-Chem, Inc.  1994  Non-Qualified Stock Option Plan (incorporated
by reference to Form S-8  filed with the United States Securities  and  Exchange
Commission on June 24, 1994).

10.13  Ocean Bio-Chem,  Inc. 2 002  Incentive  Stock  Option Plan  (incorporated
by reference to an exhibit  contained  in  the  Company's  proxy statement filed
with the United States Securities and Exchange Commission on April 28, 2003).

10.14  Ocean Bio-Chem, Inc.  2007  Incentive  Stock  Option  Plan  (incorporated
by reference to an  exhibit  contained  in  the Company's  proxy statement filed
with the United States Securities and Exchange Commission on June 20, 2007).

10.24  Lease  dated  May 1,  1998  between  Star  Brite  Distributing,  Inc. and
PEJE, Inc *

10.26 Renewal dated May 1, 2008  of  Lease dated May 1, 1998  between Star Brite
Distributing, Inc. and PEJE, Inc. **

14.1   Code of Ethics (incorporated by reference to an exhibit  contained in the
Company's  proxy   statement   filed  with  the  United  States  Securities  and
Exchange Commission on April 13, 2004).

21.    List of Subsidiaries **

23.    Letter of consent received from our  former auditors,  Berenfeld Spritzer
Shechter & Sheer LLP, Certified Public Accountants **

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  pursuant to  Section 906  of
Sarbanes-Oxley  **

32.2   Certification of  Chief  Financial  Officer  pursuant to  Section 906  of
Sarbanes-Oxley  **



 *  Incorporated  by reference in our Annual Report on  Form 10-K  for  the year
ended December 31, 2008.


** Attached hereto.




                                       22
<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, hereunto 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 30, 2009

                           By:      /s/ Jeffrey S. Barocas
                                   Jeffrey S. Barocas
                                   Chief Financial Officer
                                   March 30, 2009



     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.

Signature                  Capacity                              Date
----------------------     ---------------------------------     --------------
/s/ Peter G. Dornau        President, Chief Executive            March 30, 2009
Peter G. Dornau            Officer and Director

/s/Jeffrey S. Barocas      Chief Financial Officer               March 30, 2009
Jeffrey S. Barocas

/s/Greg Dornau             Vice President Sales & Marketing      March 30, 2009
Greg Dornau

/s/William Dudman          Vice President Operations             March 30, 2009
William Dudman

/s/ Edward Anchel          Director                              March 30, 2009
Edward Anchel

/s/ James M. Kolisch       Director                              March 30, 2009
James M. Kolisch

/s/ Laz L. Schneider       Director                              March 30, 2009
Laz Schneider

/s/ John B. Turner         Director                              March 30, 2009
John B. Turner

/s/ Sonia B. Beard         Director                              March 30, 2009
Sonia B. Beard



     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 definitive  proxy  materials for its Annual Meeting of  Shareholders.
Copies of such shall be filed with the United  States  Securities  and  Exchange
Commission pursuant to the current requirements.

<PAGE>
                                                                   Exhibit 10-24


                              OCEAN BIO-CHEM, INC.

                              RENEWAL OF NET LEASE



     This  Renewal to Net Lease is made and  entered  into as of this 1st day of
May 2008,  by and  between  PEJE,  INC.  as  Landlord  and:  TENANT:  STAR BRITE
DISTRIBUTING,  INC.  MAILING  ADDRESS:  4041 S.W.  47th Avenue Fort  Lauderdale,
Florida 33314 PHONE: (954) 587-6280

LEASED PREMISES:
BUILDING:                               TRACT TWELVE, NEW TOWN
                                        COMMERCE CENTER
ADDRESS:                                4041 SW. 47th Avenue
                                        Fort Lauderdale, Florida 33314
LEASE TERM:                             TEN YEARS
ANNUAL MINIMUM RENT:                    $94,800




     The net lease  dated  May 1, 1998 by and  between  Landlord  and  Tenant is
hereby  renewed  for a period of ten years,  without  changes,  as per  Tenant's
notification  of its intention to exercise his option to renew this Net Lease in
conformity with paragraph 30 of the Net Lease amendment signed on July the 12th,
2006.

     The Tenant has not been in default of this lease.  The tenant has occupied,
and occupies all the premises described in the contract.


     The parties agreed to review the terms of this lease at the end of the 3rd,
6th and 9th year, at the request of one or the other party.


     IN WITNESS  WHEREOF,  the parties have  hereunto set their hands and seals,
the day and year first above written to this Net Lease Renewal Agreement.



LANDLORD:                             TENANT:
PEJE, INC.                            STAR BRITE DISTRIBUTING, INC.
By:  /s/ Peter G. Dornau              By: /S/ Jeffrey S. Barocas
As: President                         As:CFO

<PAGE>
                                                                      EXHIBIT 21

     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 StaPut, Inc.                         100
         Star brite Service Centers, Inc.                100
         Star brite Automotive, Inc.                     100
         Kinpak Inc.                                     100





<PAGE>
                                                                      EXHIBIT 23

     Letter of Consent from former  auditors,  Berenfeld,  Spritzer,  Shechter &
Sheer, LLP Certified Punlic Accountants


           CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


Board of Directors
Ocean Bio-Chem, Inc.

     We consent  to the  inclusion  in Form 10-K of Ocean  Bio-Chem,  Inc.  (the
Company)  for the year ended  December  31,  2008 of our report  dated March 31,
2008,  relating to the consolidated  balance sheet of the Company as of December
31, 2007, and the related consolidated  statements of operations,  shareholders'
equity, and cash flows for the year then ended.



/s/ Berenfeld, Spritzer, Shechter & Sheer LLP
Fort Lauderdale, Florida
March 26, 2009













<PAGE>
                                                                  EXHIBIT 32.1/2



                                  CERTIFICATION

     Pursuant  to  18U.S.C.  Section  1350,  the  undersigned  officers of Ocean
Bio-Chem, Inc. (the "Company"),  hereby certify that the Company's Annual Report
on Form 10-K for the year ended December 31, 2008 (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:  March 30, 2009


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




                           /s/ Jeffrey S.Barocas
                           Jeffrey S. Barocas
                           Chief Financial Officer






<PAGE>

                                                                    Exhibit 31.1
                                  CERTIFICATION


         I, Peter G. Dornau certify that:

     1. I have reviewed this Form 10-K of Ocean Bio-Chem, Inc. as of and for the
period ended December 31, 2008;

     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:    March 30, 2009            /s/ Peter G. Dornau
                                    -------------------
                                    Peter G. Dornau
                                    Chairman of the Board and
                                    Chief Executive Officer


<PAGE>

                                                                    Exhibit 31.2
                                  CERTIFICATION

I, Jeffrey S. Barocas certify that:

     1. I have reviewed this Form 10-K of Ocean Bio-Chem, Inc. as of and for the
period ended December 31, 2008;

     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:    March 30, 2009            /s/ Jeffrey S. Barocas
                                    ----------------------
                                    Jeffrey S. Barocas
                                    Chief Financial Officer

<PAGE>
















                      OCEAN BIO-CHEM, INC. AND SUBSIDIARIES

                        CONSOLIDATED FINANCIAL STATEMENTS

                     YEARS ENDED DECEMBER 31, 2008 AND 2007





<PAGE>



                      OCEAN BIO-CHEM, INC. AND SUBSIDIARIES
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED DECEMBER 31, 2008 AND 2007








                                                                      Page

     Reports of independent registered public accounting firms        F-2

     Consolidated balance sheets                                      F-4

     Consolidated statements of operations                            F-5

     Consolidated statements of shareholders' equity                  F-6

     Consolidated statements of cash flows                            F-7

     Notes to consolidated financial statements                    F-8-F-24











<PAGE>


             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM




To the Board of Directors and Shareholders of
Ocean Bio-Chem, Inc.


     We  have   audited  the   accompanying   consolidated   balance   sheet  of
Ocean-Bio-Chem,  Inc. and  Subsidiaries  as of December 31, 2008 and the related
consolidated statements of operations, changes in shareholders' equity, and cash
flows for the year then ended. These consolidated  financial  statements are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these  consolidated  financial  statements  based on our  audit.  The
financial statements of Ocean-Bio, Inc. and Subsidiaries as of December 31, 2007
were audited by other auditors  whose report dated March 31, 2008,  expressed an
unqualified  opinion.


     We  conducted  our audits in  accordance  with the  standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain  reasonable  assurance about whether the
financial  statements  are free of  material  misstatement.  The  Company is not
required  to have,  nor were we engaged  to  perform,  an audit of its  internal
control over financial reporting.  Our audit included  consideration of internal
control over financial  reporting as a basis for designing audit procedures that
are appropriate in the circumstances,  but not for the purposes of expressing an
opinion on the  effectiveness  of the Company's  internal control over financial
reporting.  Accordingly, we express no such opinion. An audit includes examining
on a  test  basis,  evidence  supporting  the  amount  and  disclosures  in  the
consolidated  financial  statements.   An  audit  also  includes  assessing  the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation.  We believe that our
audits provide a reasonable basis for our opinion.


     In our opinion,  the 2008  consolidated  financial  statements  referred to
above  present  fairly,  in all material  respects,  the  financial  position of
Ocean-Bio-Chem,  Inc.  and  Subsidiaries  as  of  December  31,  2008,  and  the
consolidated  results of their operations and their  consolidated cash flows for
the  year  then  ended , in  conformity  with  accounting  principles  generally
accepted in the United States of America.





Kramer Weisman and Associates, LLP
Certified Public Accountants

March 25, 2009
Davie, Florida










                                       F2
<PAGE>


             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM




To the Board of Directors and Shareholders of
Ocean Bio-Chem, Inc.


     We have  audited  the  accompanying  consolidated  balance  sheet  of Ocean
Bio-Chem,  Inc.  and  Subsidiaries  as of  December  31  2007,  and the  related
consolidated statements of operations,  shareholders' equity, and cash flows for
the year then ended.  These financial  statements are the  responsibility of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial statements based on our audit.


     We  conducted  our audit in  accordance  with the  standards  of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain  reasonable  assurance about whether the
financial  statements  are free of  material  misstatement.  The  company is not
required  to have,  nor were we engaged  to  perform,  an audit of its  internal
control over financial reporting.  Our audit included  consideration of internal
control over financial  reporting as a basis for designing audit procedures that
are appropriate in the  circumstances,  but not for the purpose of expressing an
opinion on the  effectiveness  of the company's  internal control over financial
reporting.  Accordingly,  we express  no such  opinion.  An audit also  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial   statements,   assessing  the  accounting  principles  used  and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audit  provides  a
reasonable basis for our opinion.


     In our opinion,  the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Ocean Bio-Chem,
Inc. and  Subsidiaries as of December 31, 2007 and the  consolidated  results of
its  operations  and its  consolidated  cash flows for the year then  ended,  in
conformity with accounting principles generally accepted in the United States of
America.





Berenfeld Spritzer Shechter & Sheer LLP
Certified Public Accountants

March 31, 2008
Ft. Lauderdale, Florida










                                       F3
<PAGE>

                      OCEAN BIO-CHEM, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 2008 AND 2007
<TABLE>
<CAPTION>


                                                                        2008               2007
                                                                    -----------        -----------
<S>                                                                 <C>                <C>
ASSETS
Current Assets:
Cash                                                                $   527,056        $   750,901
Trade accounts receivable net of allowance for doubtful
accounts of approximately $117,600 and $47,000 at December 31 ,
2008 and 2007 respectively                                            1,966,223          1,974,654
Inventories, net                                                      6,564,909          5,993,657
Prepaid expenses and other current assets                               365,982            285,126
                                                                    -----------        -----------
Total Current Assets                                                  9,424,170          9,004,338
                                                                    -----------        -----------
Property, plant and equipment, net                                    5,780,395          6,235,812
                                                                    -----------        -----------
Other Assets:
Trademarks, trade names and patents, net                                330,439            330,439
Due from affiliated companies, net                                      910,553            109,310
Deposits and other assets                                               184,628            253,718
                                                                    ------------       -----------
Total Other Assets                                                    1,425,620            693,467
                                                                    -----------        -----------

Total Assets                                                        $16,630,185        $15,933,617
                                                                    ===========        ===========

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities:
Accounts payable - trade                                            $   894,193        $ 1,010,263
Notes payable - bank                                                  2,800,000          1,750,000
Current portion of long term debt                                       584,537            589,906
Accrued expenses payable                                                883,354            511,758
                                                                    -----------        -----------
Total Current Liabilities                                             5,162,084          3,861,927
                                                                    -----------        -----------
Long term debt, less current portion                                  3,434,491          3,988,978
                                                                    -----------        ----------
Commitments and contingencies                                                 -                  -
                                                                    -----------        ----------
Shareholders' Equity:
Common stock - $.01 par value, 10,000,000 shares authorized;
7,886,816 and 7,871,816 shares issued at
December 31, 2008 and 2007, respectively                                 78,868             78,718
Additional paid in capital                                            7,928,269          7,780,547
Less cost of common stock in treasury, 351,503 and 7,519 shares
at December 31, 2008 and 2007, respectively                            (288,013)            (8,195)
Foreign currency translation adjustment                                (280,123)          (209,049)
Retained earnings                                                       594,609            440,691
                                                                    -----------        -----------
Total Shareholders' Equity                                            8,033,610          8,082,712
                                                                    -----------        -----------

Total Liabilities and Shareholders' Equity                          $16,630,185        $15,933,617
                                                                    ===========        ===========


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

                                       F4
<PAGE>

                      OCEAN BIO-CHEM, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                     YEARS ENDED DECEMBER 31, 2008 AND 2007

<TABLE>
<CAPTION>

                                                 2008              2007
                                             ------------      ------------

<S>                                          <C>               <C>
Gross sales                                  $ 22,898,989      $ 23,308,891

Less: discounts, returns, and allowances        1,980,922         1,996,635
                                             ------------      ------------

Net sales                                      20,918,067        21,312,256

Cost of goods sold                             14,918,333        14,470,397
                                             ------------      ------------

Gross profit                                    5,999,734         6,841,859
                                             ------------      ------------
Operating Expenses:
Advertising and promotion                       1,331,568         1,562,423
Selling and administrative                      3,988,028         4,018,150
Interest expense                                  257,020           354,622
                                             ------------      ------------

Total operating expenses                        5,576,616         5,935,195
                                             ------------      ------------

Operating income                                  423,118           906,664

Other income                                       21,932            18,597
                                             ------------      ------------

Income before income taxes                        445,050           925,261

Provision for income taxes                        291,132           200,260
                                             ------------      ------------

Net income                                        153,918           725,001

Other comprehensive (loss) income, net of tax
Foreign currency translation adjustment           (71,074)          (32,955)
                                             -------------     -------------

Comprehensive income                         $     82,844         $ 692,046
                                             ============      ============


Income per common share - basic              $       0.02      $       0.09
                                             ============      ============

Income per common share - diluted            $       0.02      $       0.08
                                             ============      ============

Weighted average shares - basic                 7,814,466         7,690,191
                                             ============      ============
Weighted average shares - diluted               7,814,466         8,826,259
                                             ============      ============


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

</TABLE>


                                       F5
<PAGE>

                      OCEAN BIO-CHEM, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                     YEARS ENDED DECEMBER 31, 2008 AND 2007




<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,
 2007                    7,621,316  $ 76,213  $ 7,257,447  ($176,094) ($ 213,838)($  8,195) $6,935,533
 Adjustment for SAB 108
 implementation                                    40,200             (   70,472)           (   30,272)

 Net Income                                                              725,001               725,001

 Bonus shares to employees 105,500     1,055      146,850                                      147,905

 Exercise of stock options 145,000     1,450      189,066                                      190,516

 Stock based compensation                         146,984                                      146,984

 Foreign currency
 translation adjustment                                    (  32,955)                       (   32,955)
                         ---------  --------  -----------  ---------- ---------- ---------- -----------
 December 31,
 2007                    7,871,816  $ 78,718  $ 7,780,547  ($209,049) $  440,691 ($  8,195) $8,082,712

 Net Income                                                              153,918               153,918

 Bonus shares to
 employees                  15,000       150       17,250                                       17,400

Stock based compensation                          130,472                                      130,472

 Foreign currency
 translation adjuent                                       (  71,074)                       (   71,074)

 Purchase of 343,984
 treasury shares                                       -                        ( 279,818)  (  279,818)

                          --------  --------  -----------  ---------- ---------- ---------- -----------
 December 31,
 2008                    7,886,816  $ 78,868  $ 7,928,269  ($280,123) $  594,609 ($288,013)  $8,033,610
                         =========  ========  ===========  ========== ========== ========== ===========

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

</TABLE>







                                       F6
<PAGE>

                      OCEAN BIO-CHEM, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                     YEARS ENDED DECEMBER 31, 2008 AND 2007
<TABLE>
<CAPTION>

                                                                    2008             2007
                                                                 ----------       ----------
Cash flows from operating activities:

<S>                                                              <C>              <C>
Net income                                                       $ 153,918        $ 725,001
Adjustment to reconcile net income
to net cash provided by (used in) operations:

Depreciation and amortization                                      787,460          785,064
Other operating non cash items                                     324,009          124,572
Stock Based Compensation                                           147,872          294,889

Changes in assets and liabilities:

Accounts receivable                                                (75,078)         (60,961)
Inventory                                                         (811,752)        (438,377)
Deposits and other assets                                          (64,129)         (50,210)
Prepaid expenses                                                   (11,765)         (66,975)
Accounts payable and other accrued liabilities                     255,527          148,090
                                                                 ----------       ----------

Net cash provided by (used in) operating activities                706,062        1,461,093
                                                                 ----------       ----------
Cash flows from investing activities:

Purchases of property, plant and equipment                        (332,043)         (95,665)
                                                                 ----------       ----------

Net cash provided by (used in) investing activities               (332,043)         (95,665)
                                                                 ----------       ----------
Cash flows from financing activities:

Borrowings line of credit, net                                   1,050,000         (400,000)
Amounts due from affiliates                                       (801,243)         121,890
(Payments of) proceeds from long-term debt                        (559,856)        (565,058)
Proceeds from stock options exercises                                    -          190,516
Purchase of Treasury Stock                                        (279,818)               -
                                                                 ----------       ----------

Net cash provided by (used in) financing activities               (590,917)        (652,652)
                                                                 ----------       ----------


Change in cash prior to effect of exchange rate on cash           (216,898)         712,776
Effect of exchange rate on cash                                     (6,947)         (32,955)
                                                                 ----------       ----------
Net (decrease) increase in cash                                   (223,845)         679,821

Cash at beginning of period                                        750,901           71,080
                                                                 ----------       ----------
Cash at end of period                                            $ 527,056        $ 750,901
                                                                 ==========       ==========

Supplemental disclosure of cash transactions:
Cash paid for interest during period                             $ 257,020        $ 354,621
                                                                 ==========       ==========
Cash paid for income taxes during period                         $ 110,395        $ 200,000
                                                                 ==========       ==========

The company had no cash equivalents at December 31, 2008 and 2007


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

                                       F7
<PAGE>

                      OCEAN BIO-CHEM, INC. AND SUBSIDIARIES
                        NOTES TO CONSOLIDATED STATEMENTS
                     YEARS ENDED DECEMBER 31, 2008 AND 2007


Note 1 - Organization and summary of significant accounting policies:

     Organization - The Company was incorporated during November, 1973 under the
laws of the state of Florida and operates as a manufacturer  and  distributor of
products principally under the Star brite(r) brand to the marine, automotive and
recreational vehicle aftermarkets.

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

     Revenue  recognition  -  Revenue  from  product  sales is  recognized  when
persuasive evidence of a contract exists, delivery to customer has occurred, the
sales  price  is fixed  and  determinable,  and  collectability  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.  The
Company follows the policy of reporting sales taxes as a net amount receipts and
payments recorded in a liability account.

     Collectability  of  accounts  receivable  -  Included  in the  consolidated
balance  sheets as of December  31, 2008 and 2007 are  allowances  for  doubtful
accounts  aggregating  approximately  $117,600 and $47,000,  respectively.  Such
amounts  are based on  management's  estimates  of the  creditworthiness  of its
customers,   current  economic  conditions  and  other  historical  information.
Consolidated  bad debt expense  charged  against  operations for the years ended
December  31,  2008,  and 2007  aggregated  approximately  $83,500  and  $22,000
respectively.

     Severe  economic  times are expected to increase the Company's risk related
to sales and  collection of accounts  receivable.  At the time of this filing we
have incurred,  in 2009, one customer  filing for bankruptcy  (Boater's  World),
representing   a  maximum  risk  of  loss  on   unrecoverable   receivables   of
approximately  $210  thousand in total,  approximately  $69 thousand  related to
December 31, 2008 receivables, and 2008 sales of approximately $672 thousand. We
do not  know  yet and  cannot  predict  if we will be able to  collect  accounts
receivable with more or less  difficulty  than in the past in our business.  The
Company's  Management  understands that the economic  conditions in the industry
may  result  in  additional  difficulties  for our  customers,  but is unable to
qualify this risk at this time.

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

     Shipping and handling  costs - All shipping and handling  costs incurred by
us are included in operating  expenses on the statements of income.  These costs
totaled  approximately  $886,200 and  $834,800 for the years ended  December 31,
2008 and 2007 respectively.

     Prepaid  expenses - During the years ended  December  31, 2008 and 2007 the
Company  introduced  certain  new  products  to  its  customers.  In  connection
therewith,   the  Company  produced  new  product  collateral  materials  to  be
distributed  over a period of time of  approximately  one year.  Accordingly the
Company  follows the policy of SOP 93-7  (Reporting on  Advertising  Costs).  At
December  31,  2008 and 2007 the Company  did not have any  accumulated  cost of
collateral materials on hand.

     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.

                                       F8
<PAGE>

     Stock based  compensation  - 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.

     Staff Accounting Bulletin No. 108 - In September 2006, the SEC staff issued
Staff  Accounting  Bulletin  No.  108,  "Considering  the  Effects of Prior Year
Misstatements   when   Quantifying   Misstatements  in  Current  Year  Financial
Statements"  ("SAB No. 108"). This SAB provides guidance on the consideration of
the  effects  of  prior  year   misstatements   in   quantifying   current  year
misstatements  for  the  purpose  of  a  materiality  assessment.  SAB  No.  108
establishes  an approach that  requires  quantification  of financial  statement
errors based on the effects on each of the Company's  financial  statements  and
related  financial  statement  disclosures.  The  SAB  permits  existing  public
companies to record the cumulative effect of initially applying this approach in
the first year  ending  after  November  15,  2006 by  recording  the  necessary
correcting  adjustments to the carrying  values of assets and  liabilities as of
the  beginning  of that  year with the  offsetting  adjustment  recorded  to the
opening balance of retained  earnings.  Additionally,  the use of the cumulative
effect transition  method requires detailed  disclosure of the nature and amount
of each individual error being corrected  through the cumulative  adjustment and
how and when it arose. At December 31, 2007, the Company  recorded an adjustment
under SAB No. 108.

     The  transition  provisions of SAB No. 108 permit the Company to adjust for
the  cumulative  effect on retained  earnings of immaterial  errors  relating to
prior years.  Such adjustments do not require  previously filed reports with the
SEC to be amended.

     The Company  adopted SAB No. 108  effective  January 1, 2007. In accordance
with the  requirements  of SAB No. 108,  the Company  has  adjusted  the opening
retained  earnings balance for 2007 in the accompanying  consolidated  financial
statements  for adoption of SFAS No.  123-R , in addition to the  recording of a
contingent legal liability.

     At the end of 2007,  the Company  re-evaluated  its Black Scholes model and
the  adoption  of SFAS No.  123 R and  recorded  an  adjustment  to the  opening
retained  earnings of  approximately  $40,000.  In addition under SAB No 108 the
Company recorded an adjustment to record a contingent liability of approximately
$30,000 to opening  retained  earnings.  The adjustments had no impact on income
tax expense.

The Company  considers this adjustment to be immaterial as it did not impact the
consolidated statements of operations and the adjustment was not material to the
consolidated balance sheets in prior periods.

     Use of estimates - The  preparation  of financial  statements in conformity
with U.S. 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.

     Concentration  of credit  risk -  Financial  instruments  that  potentially
subject  the  Company to  concentration  of credit  risk  consist  primarily  of
accounts   receivable.   The  Company's  five  largest   customers   represented
approximately  58% and 51% of  consolidated  net  revenues  for the years  ended
December 31, 2008 and 2007, and 32% and 44% of consolidated  accounts receivable
at December  31,  2008 and 2007,  respectively.  The Company has a  longstanding
relationship  with  each  of  these  entities  and  has  always  collected  open
receivable  balances.  However, the loss of any of these customers could have an
adverse impact on the Company's operations (see Note 14).

                                       F9
<PAGE>

     Concentration  of cash - At various  times of the year and at December  31,
2008,  the  Company  had a  concentration  of cash  in one  bank  in  excess  of
prevailing  insurance offered through the Federal Deposit Insurance  Corporation
at such  institution.  Management  does not consider the excess deposits to be a
significant risk.

     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 the Company  could borrow  funds with similar  remaining
maturities, and the carrying amount approximates fair value.

     Impairment  of  long-lived  assets - Potential  impairments  of  long-lived
assets are reviewed annually or when events and circumstances warrant an earlier
review. In accordance with SFAS No. 144, impairment is determined when estimated
future  undiscounted  cash  flows  associated  with an asset  are less  than the
asset's carrying value.

     Income Taxes - Income taxes are accounted for under the asset and liability
method.  Deferred tax assets and  liabilities  are recognized for the future tax
consequences   attributable  to  differences  between  the  financial  statement
carrying  amounts of existing assets and  liabilities  and their  respective tax
bases and operating loss and tax credit carry- forwards. Deferred tax assets and
liabilities  are measured  using enacted tax rates  expected to apply to taxable
income in the years in which  those  temporary  differences  are  expected to be
recovered  or settled.  The effect on deferred tax assets and  liabilities  of a
change in tax rates is  recognized  in income in the period  that  includes  the
enactment date.

     In  assessing  the  ability to realize a portion of  deferred  tax  assets,
management considers whether it is more likely than not that some portion or all
of the  deferred tax assets will not be realized.  The ultimate  realization  of
deferred tax assets is dependent  upon the  generation of future  taxable income
during the  periods in which  those  temporary  differences  become  deductible.
Management  considers the  scheduled  reversal of deferred tax  liabilities  and
projected future taxable income in making the assessment.

     Effective  January  1,  2007,  the  Company  adopted  Financial  Accounting
Standards Board ("FASB) Interpretation No. (FIN) 48, "Accounting for Uncertainty
in Income Taxes" and FSP FIN 48-1,  which amended certain  provisions of FIN 48.
FIN 48 clarifies the  accounting for  uncertainty in income taxes  recognized in
financial  statements in accordance  with SFAS No. 109,  "Accounting  for Income
Taxes." FIN 48 prescribes a recognition  threshold and measurement attribute for
the financial  statement  recognition and measurement of a tax position taken or
expected to be taken in a tax return. FIN 48 requires that the Company determine
whether the benefits of the  Company's tax positions are more likely than not of
being  sustained  upon audit based on the technical  merits of the tax position.
The   provisions   of  FIN  48  also   provide   guidance   on   de-recognition,
classification,  interest  and  penalties,  accounting  in interim  periods  and
disclosure. The Company did not have any unrecognized tax benefits and there was
no effect on the  financial  condition or results of  operations  for the twelve
months ended December 31, 2007 as a result of implementing  FIN 48, or FIN 48-1.
In  accordance  with  FIN 48 the  Company  adopted  the  policy  of  recognizing
penalties in selling and administrative  expenses and interest,  if any, related
to  unrecognized  tax positions as income tax expense.  The tax years  2005-2008
remain subject to examinations by major tax jurisdictions.

     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, the Company has determined
that these  intangible  assets have indefinite  lives and therefore we no longer
recognize  amortization expense. In addition,  the Company owns two patents that
it believes  are  valuable in limited  product  lines,  but not  material to its
success or competitiveness  in general.  There are no capitalized costs of these
two patents.
                                      F10
<PAGE>

     Translation of Canadian  currency - The accounts of the Company's  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.

     Earnings Per Share - The Company computes  earnings per share in accordance
with the  provisions  of SFAS No. 128,  Earnings  per share,  which  establishes
standards  for computing and  presenting  basic and diluted  earnings per share.
Basic  earnings  per share is computed by dividing  net  earnings  available  to
common  shareholders by the weighted average number of shares outstanding during
the period.  Diluted  earnings  per share is computed  assuming  the exercise of
stock  options  under the  treasury  stock  method and the related  income taxes
effects,  if not  anti-dilutive.  For loss periods common share  equivalents are
excluded from the calculation, as their effect would be anti- dilutive. See Note
11 Earnings per share computation of basic and diluted number of shares.

     Reclassifications   -  Certain  items  in  the  accompanying   consolidated
financial   statements   for  the  years  ended  December  31,  2007  have  been
reclassified to conform to the 2008 presentation.


Note 2 - Inventories:

     The  composition  of  inventories  at  December  31,  2008  and 2007 are as
follows:

<TABLE>
<CAPTION>
                               2008            2007
                               ----            ----
<S>                         <C>             <C>
Raw materials               $3,254,212      $3,247,359
Finished goods               3,541,908       2,821,861
                            -----------     -----------
                             6,796,120       6,069,220
Inventory reserves          (  231,211)     (   75,563)
                            -----------     -----------
Inventory, net              $6,564,909      $5,993,657
                            ===========     ===========
</TABLE>


     At December  31, 2008 and 2007 and for the years then ended,  approximately
$231,000 and $76,000 respectively is reflected in the accompanying  consolidated
financial statements as a reserve for slow moving inventory.

     The Company  implemented  a program with one of its  customers to alter the
manner in which it transacts business.  The Company manages the inventory levels
at this customer's  warehouses and will be paid as the products are sold by such
customer.  This  program was  initiated  in the 3rd  quarter  2008 and was fully
implemented  in November  2008.  The total sales credit issued  initially to the
customer was approximately  $300,000. The inventories managed at this customer's
warehouses amounted to approximately $146,000 at December 31, 2008.


                                      F11
<PAGE>
Note 3 - Property, plant and equipment:

     The Company's property, plant and equipment consisted of the following:

<TABLE>
<CAPTION>
                                         Estimated
                                         Useful Life           2008         2007
                                           Years
                                       -------------      -----------    ----------
<S>                                     <c>                <C>           <C>
Land                                                       $  278,325    $  278,325
Building                                 30 years           4,389,154     4,389,154
Manufacturing and warehouse equipment    6-20 years         6,592,558     6,367,884
Office equipment and furniture           3-5 years            525,734       509,496
Construction in process                                        71,929        21,079
Leasehold improvement                    10-15 years          122,644       122,644
                                                          -----------    -----------
                                                           11,980,344    11,688,582

Less accumulated depreciation                               6,199,949     5,452,770
                                                          -----------    -----------

Total property, plant and equipment, net                   $5,780,395    $6,235,812
</TABLE>

     Depreciation  expense for the years ended December 31, 2008 and 2007, which
includes  amortization  of  capitalized  lease assets,  amounted to $787,460 and
$785,064 respectively.

     A substantial  amount of the Company's assets are at its Kinpak  facilities
in  Alabama.  At  December  31,  2008  and  2007  approximately  $5,625,000  and
$6,062,000 respectively of net property, plant, and equipment were at the Kinpak
facilities.

     During February 1996, the Company  purchased the assets of Kinpak,  Inc. In
order to finance the expansion contemplated by the purchase, the Company entered
into an agreement  with the City of  Montgomery,  Alabama,  to issue  Industrial
Development  Bonds.  The Alabama facility  expansion  consisted of an additional
building,  which was completed  during October 1997,  bringing the facility,  at
that time, to  approximately  110,000 square feet.  Such facility  serves as the
Company's primary manufacturing and distribution center.

     During the year ended  December  31,  2002,  the  Company  entered  into an
agreement with the City of Montgomery to issue an additional  series  Industrial
Development  Bonds  aggregating  $3,500,000  to finance the  construction  of an
additional  70,000 square feet of warehousing  and  manufacturing  space and the
related equipment requirements.  Such project was substantially completed during
2003.

     Management  has  considered  the impact of the loss sustained for the years
ended  December 31, 2007 and 2008 in Kinpak in order to determine if a permanent
impairment of value of these assets has been experienced. The underlying reasons
for the loss are not  viewed as  permanent  in nature  and  management  does not
believe  that  a  permanent  impairment  has  been  realized.   Accordingly,  no
adjustment has been made.

     Obligations for future payments  attributable to these  capitalized  leases
are discussed in Note 5, below.


Note 4 - Note payable, bank:

     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.  During 2002, the Company secured a revolving line of credit,  which
provides  a  maximum  of $6  million  financing  of  working  capital  from  the
commercial  bank providing the financing for the expansion  discussed in Notes 3
and 5. The line carried  interest  based on the 30 day LIBOR rate plus 275 basis
points  (approximately  6.0% at December  31,  2007)  payable  monthly,  and was
collateralized by the Company's  inventory,  trade  receivables,  and intangible
assets.
                                      F12
<PAGE>

     This  financing  matured on May 31, 2008,  and was renewed for three years.
Such line  matures  May 31,  2011,  bears  interest at the 30 Day LIBOR plus 250
basis  points  (approximately  3.6% at December  31, 2008) and is secured by our
trade  receivables,  inventory,  and  intangible  assets.  The terms,  including
required  financial  covenants  relating to maintaining  minimum working capital
levels,  maintaining  stipulated debt to tangible net worth and adhering to debt
coverage ratios, and collaterals were substantially  unchanged.  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.  At December 31, 2008 and
2007 the Company was in  compliance  with all  financial  covenants  of the loan
agreement.

As of December  31, 2008 and 2007 the Company was  obligated  to its  commercial
lender  under this  arrangement  in the  amounts of  $2,800,000  and  $1,750,000
respectively.  The average outstanding loan balances at the years ended December
31,  2008  and 2007  were  approximately  $2,415,000  and  $2,380,000;  interest
incurred  for the years  ended  December  31,  2008 and 2007 were  approximately
$121,000, and $170,000, respectively.


Note 5 - Long-term debt:

     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 December 31, 2008,  $1,105,000 and $2,720,000 were
outstanding attributable to the 1997 and 2002 series,  respectively.  During the
years ended December 31, 2008, and 2007,  interest rates ranged between 1.5% and
8.6%, and 3.6% and 4.3% annually, respectively. At December 31, 2007, $1,445,000
and  $2,840,000  were  outstanding  attributable  to the 1997  and 2002  series,
respectively.  During the year ended  December  31, 2007  interest  rates ranged
between  3.7% and 4.3%.  Interest  expense for 2008 and 2007 were  approximately
$138,000 and $184,000, respectively. 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.  On
September  26th and October  6th,  2008 the Company was  notified by its primary
commercial  bank,  that both the 1997 and 2002 series bonds were being tendered.
There has been no default on these bonds by the Company. It is the understanding
of the Company that due to the tight credit markets,  these bonds were tendered.
As a result the Company has been temporarily obligated to its primary commercial
bank, for a few weeks during the fourth  quarter 2008,  until the credit markets
improved  sufficiently  to remarket these bonds.  The interest rate on the loans
during this period was prime rate plus 2% or 7%.

     During 2008 and 2007, 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  $60,680 and $60,540 at December 31, 2008, and 2007  respectively,
have varying maturities through 2012 and carry interest rates ranging from 7% to
12% for both years.

     On April 12, 2005 the Company  entered  into a  financing  obligation  with
Regions Bank whereby the bank advanced the Company $500,000 to finance equipment
acquisitions  at  the  Kinpak  facility.  Such  obligation  is  due  in  monthly
installments of principal  aggregating  approximately $8,300 plus interest.  The
outstanding  balance and interest  rate on this  obligation at December 31, 2008
and 2007 were approximately $133,000 and $233,000 respectively. Interest rate is
calculated at LIBOR plus 2.5% per annum,  respectively 3.6% at December 31, 2008
and 6.0% at December 31, 2007, through the maturity on April 15, 2010.  Interest
incurred for 2008 and 2007 was approximately $10,000 and $27,000 respectively.

                                      F13
<PAGE>
The  composition  of these  obligations  at  December  31, 2008 and 2007 were as
follows:

<TABLE>
<CAPTION>
                                        2008          2007           2008            2007
                                      --------      --------      ----------     ----------
<S>                                   <C>           <C>           <C>            <C>
Industrial Development Bonds          $460,000      $460,000      $3,365,000     $3,825,000
Notes payable                           99,996        99,996          33,352        133,348
Capitalized equipment leases            24,541        29,910          36,139         30,630
                                      --------      --------      ----------     ----------
                                      $584,537      $589,906      $3,434,491     $3,988,978
</TABLE>

     Required  principal payment  obligations  attributable to the foregoing are
tabulated below:

     Year ending December 31,

         2009               $  584,537
         2010                  508,685
         2011                  473,857
         2012                  451,949
         2013                  440,000
         Thereafter          1,560,000
                            ----------
         Total              $4,019,028
                            ==========


     Note 6 - Income taxes:

     The  Components of the Company's  consolidated  income tax provision are as
follows:

                                                    2008          2007
                                                  --------      --------
          Income tax provision:
               Federal - current                  $291,132      $200,260
                       - deferred                    -              -
               State                                 -              -
                                                  --------      --------
               Total                              $291,132      $200,260
                                                  ========      ========


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

<TABLE>
<CAPTION>
                                                2008                  2007
                                       --------------------      -----------------
<S>                                    <C>             <C>       <C>          <C>
Income Taxes at statutory rate         $     151,317    34%      $   314,602   34%
Increase (reduction) in Income Taxes
  resulting from:
  Share based compensation                    50,276    11%          100,300   11%
  Change in deferred taxes and
    valuation allowance                      118,407    27%      (   382,237) (41%)
  Other - permanent adjustments -
    State Taxes                                  -                    50,892    6%
  Other - permanent adjustments               12,051     2%          116,703   13%
  Tax credits and prior year taxes     (      40,919)   (9%)              -
                                       --------------  -----     -----------  -----
                                       $     291,132    65%      $   200,260   22%
                                       ==============  =====     ===========  =====
</TABLE>

                                      F14
<PAGE>

     For the year 2007 the Company used available tax loss carryovers  available
to offset current  taxable  income  aggregating  approximately  none for federal
taxes and  approximately  $218,000 for state tax  purposes,  expiring in various
years through 2026.

     The Company's  deferred tax asset and liability  accounts  consisted of the
following at December 31:

<TABLE>
<CAPTION>
                                             2008            2007
                                       -------------      -----------
Deferred tax assets:
<S>                                    <C>                <C>
  Depreciation of property and
    equipment                          $         -        ($    9,666)
  Reserves for bad debts, inventory
    and other accruals                 (     203,710)     (    43,891)
  Net operating loss carryforwards               -        (    11,990)

Deferred tax liabilities:
  Depreciation of property and
    equipment                                199,643              -
                                       --------------     ------------
                                       (       4,067)     (    65,547)

Less Valuation Allowance                       4,067           65,547
                                       --------------     ------------
Net deferred taxes                     $         -        $       -
                                       ==============     ============
</TABLE>


     The Company has provided for a valuation allowance against the deferred tax
asset,  as there is no assurance  that the company will generate  future taxable
income to derive  benefit  from all or a part of the  deferred tax assets at the
time when such tax assets  would  become  current.  The change in the  valuation
allowance was an increase of approximately $61,500 and a decrease of $382,200 in
2008 and 2007, respectively.


Note 7 - Related party transactions:

     At December 31, 2008 and 2007, 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
$911,000  and  $109,000,  respectively.  Such  amounts  result from sales to the
affiliates,  allocations  of  management  fees  incurred  by the  Company on the
affiliates' behalf, and funds advanced to or from the Company.

     Sales to such  affiliates  were sold at cost of  material  and labor plus a
profit covering  manufacturing  overhead costs. In addition,  the affiliates are
charged for their allocable share of administrative expenses of the Company. The
sales and  transfers  to  affiliates  aggregated  approximately  $1,208,000  and
$732,000  during the years ended  December  31,  2008,  and 2007,  respectively;
allocable  administrative fees aggregated $275,000 and $333,000 respectively for
such periods.

     Such transactions were made in the ordinary course of business but were not
made on  substantially  the same terms and conditions as those prevailing at the
same time for comparable transactions with other customers.  Management believes
that the sales  transactions  did not involve  more than  normal  credit risk or
present other unfavorable features.

                                      F15
<PAGE>
     A subsidiary of ours currently uses the services of an entity that is owned
by our  president  to conduct  product  research  and  development.  Such entity
received  $30,000  per year during the years  ended  December  31, 2008 and 2007
under such relationship.

     Mr.  Kolisch,  a Director of the  Company,  sources  most of the  Company's
insurance needs at an arm's length competitive basis.


Note 8 - Commitments

     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 plus applicable taxes for the first year and
provides for a maximum 2% increase on the  anniversary  of the lease  throughout
the term,  which has been waived through  December 31, 2007.  Additionally,  the
landlord was entitled to its pro-rata share of all taxes,  assessments,  and any
other expenses that arise from ownership.

     On May 1, 2008,  the Company  renewed for ten years the existing lease with
unchanged conditions.  The lease still requires a minimum rental of $94,800 plus
applicable  taxes 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 reimbursement of all taxes, assessments, and any other expenses that
arise from  ownership.  The landlord  reserves the right under the  agreement to
review  the  terms of the  lease at 3, 6 and 9 year  intervals  in order to make
modifications  for market conditions Total rent charged to operations during the
years ended December 31, 2008, and 2007 amounted to approximately  $100,500 each
year.

     The  Company  had entered  into a  corporate  guaranty  of a mortgage  note
obligation of such affiliate.  The obligation aggregated  approximately $274,000
at  December  31,  2007,  primarily  secured  by the real  estate  leased to the
Company.  The  property  was  refinanced  in the 2nd  quarter  2008,  without  a
corporate guaranty.

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

Twelve month period ending December 31,
     2009         $101,828
     2010          103,864
     2011          105,942
     2012          108,061
     2013          110,222
     Thereafter    503,407
                -----------
                $1,033,324


Note 9 - Stock options:

     During 1992,  the Company  adopted an incentive  stock option plan covering
200,000 shares of its common stock.

     During 1994, the Company adopted a non-qualified employee stock option plan
covering  400,000  shares of its  common  stock  (this plan has  expired  and no
further awards can be made under its provisions).

     During  2002,  the Company  adopted a qualified  employee  incentive  stock
option plan and a non-qualified  stock option plan covering  400,000 and 200,000
shares of its common stock, respectively.

                                      F16
<PAGE>

     During 2007,  the Company  adopted a qualified  employee  stock option plan
covering 400,000 shares of its common stock.

     During  2008,  the Company  adopted a qualified  employee  incentive  stock
option plan and a non-qualified  stock option plan covering  400,000 and 200,000
shares of its common stock, respectively.


     The following schedules reflect the status of outstanding options under the
Company's four stock option qualified and non-qualified plans as of December 31,
2008, and 2007.


<TABLE>
<CAPTION>

Year-end December 31, 2008:
 <S>         <C>           <C>           <C>          <C>          <C>             <C>
              Date          Options      Exercisable   Exercise     Expiration       Wt. Av.
    Plan      granted      outstanding     options       price         date       remaining life
 --------    ----------    ----------    -----------  --------     -------------- --------------
 Non Plan    03/25/1999       231,000       231,000      0.76         03/24/2009          -
     1994    10/26/2004       154,500       131,325      1.05         10/25/2009         .8
     2002    03/02/2004       137,000       130,150      1.62         03/01/2009         .2
     2002    11/06/2006       133,000        53,200      0.93         11/08/2011        2.9
     2007    05/17/2007       162,500        44,250      1.66         05/16/2012        4.1
     2007    10/08/2007         2,000           400      1.87         10/07/2012        3.8
     2007    12/17/2007       156,500        30,700      1.32         12/16/2007        4.0
     2008    08/25/2008       159,500         -           .97         08/21/2013        4.6
   2002NQ    10/22/2002        35,000        35,000      1.26         10/22/2012        3.8
   2002NQ    06/20/2003        30,000        30,000      1.03         06/20/2013        4.5
   2002NQ    05/25/2004        40,000        40,000      1.46         05/25/2014        5.4
   2002NQ    04/03/2006        30,000        30,000      1.08         04/03/2016        7.3
   2002NQ    12/17/2007        50,000        50,000      1.32         12/16/2017        9.0
                            ---------      --------                                    ----
                            1,321,000       806,025                                     2.8
                            =========      ========                                    ====




Year-end December 31, 2007:
               Date          Options     Exercisable   Exercise   Expiration       Wt. Av.
    Plan      granted      outstanding     options       price       date      remaining life
 --------   ----------       -------    ------------  --------     ------------ --------------
 Non Plan   03/25/1999       231,000        231,000      0.76      03/24/2009        1.2
     1994   10/26/2004       154,500         92,700      1.05      10/25/2009        1.8
     2002   03/02/2004       137,000         82,200      1.62      03/01/2009        1.2
     2002   11/06/2006       133,000         26,600      0.93      11/08/2011        3.9
     2007   05/17/2007       162,500          -          1.68      05/16/2012        4.4
     2007   10/08/2007         2,000          -          1.87      10/07/2012        4.8
     2007   12/17/2007       156,500          -          1.32      12/16/2007          5
   2002NQ   10/22/2002        35,000         35,000      1.26      10/22/2012        4.8
   2002NQ   06/20/2003        30,000         30,000      1.03      06/20/2013        5.5
   2002NQ   05/25/2004        40,000         40,000      1.46      05/25/2014        6.4
   2002NQ   04/03/2006        30,000         30,000      1.08      04/03/2016        8.3
   2002NQ   12/17/2007        50,000         50,000      1.32      12/16/2017         10
                           ---------       --------                                 ----
                           1,161,500        617,500                                  3.5
                           =========       ========                                 ====

</TABLE>



                                      F17
<PAGE>

     In addition to the foregoing,  on March 25, 1999,  the Company  granted two
officers a  five-year  option for  115,500  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.


     As of December 31, 2008, the number of options  outstanding  and the number
of  shares   available  for  grant  under  each  Stock  Options   qualified  and
non-qualified plan options is presented below:

                                          Options Available
Plan              Options Outstanding         for Grant
----------         ---------------         --------------
 NON-PLAN:          231,000 shares           N/A
 1994 PLAN          154,500 shares           None
 2002 PLAN          270,000 shares           None
 2007 PLAN          321,000 shares          79,000 shares
 2008 PLAN          159,500 shares         240,500 shares
 2002 PLAN NQ       185,000 shares           None
 2008 PLAN NQ          None                200,000 shares
                  ----------------         --------------
 Total            1,321,000 shares         519,500 shares
                  ================         ==============


     A summary of the Company's stock options as of December 31, 2008, and 2007,
and changes during the years ending on these dates, is presented below:

<TABLE>
<CAPTION>

                                    2008                        2007
                              Shares   Weighted Average     Shares  Weighted Average
                                       Exercise Price               Exercise Price
                           ----------  ----------------   ---------  ---------------
<S>                        <C>            <C>            <C>           <C>
Options outstanding
beginning of the year         930,500      $1.31            714,500     $1.22

Options granted               159,500       0.97            373,000      0.97
Options exercised                   -          -           -145,000         -
Options forfeited or expired        -          -            -12,000         -

Options outstanding at     ----------     ------         ----------    ------
end of the year             1,090,000      1.26             930,500      1.31

Non Plan Options              231,000      0.76             231,000      0.76
                           ----------     ------         ----------    -------
               Totals       1,321,000      $1.17          1,161,500     $1.05
                           ==========     ======         ==========    =======

</TABLE>


     Stock options are granted annually to selective executives,  key employees,
directors and others pursuant to the terms of the Company's  various plans. Such
grants are made at the discretion of the Board of Directors.  Qualified  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. Non
qualified  options  granted  to  outside  Directors  have a 10 year life and are
immediately  exercisable.  Compensation  cost  recognized  during the year ended
December  31,  2008  and  2007   attributable  to  stock  options   amounted  to
approximately $130,500 and $147,000, respectively.

                                      F18
<PAGE>

     The fair value of each option grant was estimated  using the  Black-Scholes
option pricing model with the following assumptions for the years 2008 and 2007;
risk free rate  ranging  from 3.57% to 4.88%,  no dividend  yield for all years,
expected  life from three years to five years and  volatility  of  approximately
100.0% to 108.0%.

     As of December  31,  2008,  and 2007 there was  approximately  $389,732 and
$241,672 of  unrecognized  compensation  cost  related to  unvested  share based
compensation  arrangements.  That cost will be charged against operations as the
respective options vest through December, 2013.


Note 10 - Major customers

The Company has one major customer, West Marine, Inc., with sales
in excess of 10% of consolidated net revenue for the years ended
December 31, 2008 and 2007. Sales to this customer represented
approximately 38%, and 43% of consolidated net revenues for such
periods, respectively.

     The Company's top five customers represented  approximately 58% and 51%, of
consolidated net revenues for the years ended December 31, 2008 and 2007 and 32%
and 44% of consolidated  trade receivables for the years ended December 31, 2008
and 2007 at the balance sheet date for the years then ended,  respectively.  The
Company enjoys good relations with these customers.  However, the loss of any of
these  customers  could have an adverse impact on the Company's  operations (see
note 14).  The Company  has  included in the  consolidated  balance  sheet as of
December 31, 2008 an  additional  allowance  for doubtful  accounts  aggregating
approximately $69,000 to reflect risks related to bankruptcy filings occurred in
2009 before this filing.  The  recession  is expected to increase the  Company's
risk related to sales and collection of accounts receivable. At the time of this
filing we have  incurred in 2009 one customer  filing for  bankruptcy  (Boater's
World),  representing  a maximum risk of loss on  unrecoverable  receivables  of
approximately  $210  thousand in total,  approximately  $69 thousand  related to
December 31, 2008 receivables, and 2008 sales of approximately $672 thousand.


Note 11 - Earnings per share:

     Earnings per share are reported  pursuant to the provisions of Statement of
Financial Standards No. 128. Accordingly,  basic earnings per share reflects the
weighted  average  number of shares  outstanding  during the year,  and  diluted
shares adjusts that figure by the additional  hypothetical  shares that would be
outstanding if all  exercisable  outstanding  common stock  equivalents  with an
exercise  price  below the current  market  value of the  underlying  stock were
exercised.  Common stock equivalents consist of stock options and warrants.  The
following  tabulation  reflects the number of shares utilized to determine basic
and diluted earnings per share for the years ended December 31, 2008 and 2007:


                                                    2008          2007
                                                  ---------     ---------
   Basic weighted-average common shares
   outstanding                                    7,814,466     7,690,191

   Dilutive effect of stock plans, other
   options & conversion rights                          -       1,136,068
                                                  ---------     ---------
   Dilutive weighted-average shares outstanding   7,814,466     8,826,259
                                                  =========     =========


                                      F19
<PAGE>
Note 12 - Shareholders' equity:

     During the years  ended  December  31,  2008 and 2007 the  Company  granted
15,000 and 105,500 shares of restricted  common stock,  respectively  to certain
executives,  key  employees  and others as a component  of annual  compensation.
Charges to  operations  attributable  to such  awards  aggregated  approximately
$17,400 and $148,000 for each period, respectively.

     During  October  2007  certain  employees  of the Company  exercised  stock
options scheduled to expire during the respective  current year covering 145,000
shares of its common stock  respectively.  The aggregate  exercise price of such
transactions  amounted  to  approximately  $191,000  and  is  reflected  in  the
accompanying  financial  statements  as  common  stock  and  additional  paid-in
capital.

     Compensation  costs recognized during the years ended December 31, 2008 and
2007   attributable  to  stock  options   amounted  to  $130,472  and  $146,984,
respectively  and is  reflected  in the  accompanying  financial  statements  as
increase in additional paid-in capital.

     In 2007,  the Company  made  certain  revisions  in the  valuation of stock
option grants that vested in 2006. The revised valuation resulted in an increase
in  compensation  expense of $40,200,  reflected in the  accompanying  financial
statements as 2007 increase in additional paid-in capital.

     In  accordance  with the  requirements  of SAB No.  108,  the  Company  has
recorded an  adjustment  in the amount of $70,200  decreasing  opening  retained
earnings  balance  as of  January  1,  2007  in  the  accompanying  consolidated
financial  statements,  to  correct  errors  in the  accounting  of  share-based
compensation and contingent legal liabilities in 2006.


Note 13 - Restatements to the Consolidated Financial Statements

     Year ended  December 31,  2007:  the Company  adopted SEC Staff  Accounting
Bulletin  No. 108,  "Considering  the Effects of Prior Year  Misstatements  when
Quantifying  Misstatements in Current Year Financial  Statements" (SAB No. 108),
effective  January 1, 2007. In accordance with the  requirements of SAB No. 108,
the Company has recorded an  adjustment  in the amount of $70,200 to the opening
retained earnings balance as of January 1, 2007 in the accompanying consolidated
financial  statements,  to  correct  errors  in the  accounting  of  share-based
compensation and contingent legal liabilities in 2006.

     In 2007,  the Company  made  certain  revisions  in the  valuation of stock
option grants that vested in 2006. The revised valuation resulted in an increase
in  compensation  expense  of  $40,200  for  2006.  Also in  2007,  the  Company
discovered that a liability in the amount of $30,000 for legal costs incurred in
2006 should have been  recorded  as of December  31, 2006 under the  criteria of
Statement of Financial  Accounting  Standards  No. 5. There was no corporate tax
effect for the adjustments due to the Company's tax position in 2006.


     The cumulative  effect of the adjustment  above on the opening  balances of
the balance sheet is as follows, as of January 1, 2007:
                                                          Liabilities and
                                                           Shareholders'
                                         Assets               Equity
                                       -------------      ----------------
Balance Sheet accounts, as
adjusted Increase (Decrease)           $      -           $       -

 Retained earnings   -                                             70,472
 Additional Paid in Capital                               (        40,200)
 Accrued Liabilities                                      (        30,272)
                                       -------------      ----------------
                                       $      -           $       -
      Total                            =============      ================

                                      F20
<PAGE>

Note 14 - Subsequent Events

     The Company has included in the  consolidated  balance sheet as of December
31, 2008 an additional allowance for doubtful accounts aggregating approximately
$69,000 to reflect risks related to bankruptcy  filings  occurred in 2009 before
this filing.  The slow down of the economy is expected to increase the Company's
risk related to sales and collection of accounts receivable. At the time of this
filing we have  incurred in 2009 one customer  filing for  bankruptcy  (Boater's
World),  representing  a maximum risk of loss on  unrecoverable  receivables  of
approximately  $210  thousand in total,  approximately  $69 thousand  related to
December  31,  2008  receivables  of a total  2008 sales of  approximately  $672
thousand.  We do not know yet and  cannot  predict if we will be able to collect
accounts  receivable  with  more or  less  difficulty  than  in the  past in our
business.  The Company's Management  understands that the economic conditions in
the industry may result in additional  difficulties  for our  customers,  but is
unable to qualify this risk at this time.  It is too early to determine  how the
economic  conditions  affecting the marine and recreational  vehicle industry in
2009 may or may not  affect the  Company in the  future.  The  estimates  of the
creditworthiness  of Company's  customers may differ in 2009 from the historical
information.

     On January  12,  2009,  the Board of  Directors  resolved  to grant  50,000
options to acquire  shares of this  Corporation's  Common Stock pursuant to this
Corporation's 2008 Non-Qualified Stock Option Plan to Directors, to be priced at
the  closing  price  ($0.69)  of OBCI  Common  Stock  on  January  09,  2009 and
conditions and subject to the provisions of the 2008 Non-Qualified  Stock Option
Plan.  Such options are  exercisable  from January 12, 2009 through  January 11,
2019.

     On February  10, 2009 the Company  received  notification  that its City of
Montgomery,  AL Series 1997 and Series  2002  Industrial  Revenue  Bonds with an
approximate balance of $2,720,000 and $1,105,000, respectively, were tendered by
various bondholders. The Company has filed an 8-K, disclosing such information.


Note -15 - Summary of significant accounting changes

     In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements".
This statement clarifies the definition of fair value of assets and liabilities,
establishes a framework for measuring fair value of assets and  liabilities  and
expands the  disclosures on fair value  measurements.  SFAS No. 157 is effective
for fiscal years beginning after November 15, 2007.  However,  the FASB deferred
the  effective  date of SFAS No.  157 until the  fiscal  years  beginning  after
November 15, 2008 as it relates to the fair value  measurement  requirements for
Nonfinancial  assets and liabilities that are initially  measured at fair value,
but not measured at fair value in subsequent periods.  These nonfinancial assets
include  trademarks and other intangible  assets which are included within other
assets.  In accordance with SFAS No. 157, the Company has adopted the provisions
of SFAS No. 157 with respect to financial assets and liabilities effective as of
January 1, 2008 and its adoption  did not have a material  impact on its results
of operations or financial condition.  The adoption of this standard has not had
a material effect on the consolidated results of operations and
financial position of the Company for the reporting period.

     In February  2007, the FASB issued SFAS No. 159, "The Fair Value Option for
Financial  Assets and  Financial  Liabilities  - including  an amendment of FASB
Statement  No.  115." SFAS No. 159 permits  entities  to choose to measure  many
financial  instruments and certain other items at fair value.  Unrealized  gains
and losses on items for which the fair value  option  has been  elected  will be
recognized  in  earnings  at each  subsequent  reporting  date.  SFAS No. 159 is
effective for us on January 1, 2008. The adoption of this standard has not had a
material effect on the consolidated results of operations and financial position
of the Company for the reporting period.

                                      F21
<PAGE>

     In December 2007, the Securities and Exchange Commission (SEC) issued Staff
Accounting  Bulletin (SAB) No. 110. This guidance allows  companies,  in certain
circumstances,  to utilize a simplified  method in determining the expected term
of stock option grants when calculating the compensation  expense to be recorded
under Statement of Financial Accounting Standards (SFAS) No. 123(R), Share-Based
Payment.  The  simplified  method can be used after  December 31, 2007 only if a
company's stock option exercise  experience does not provide a reasonable  basis
upon which to estimate the expected  option term.  Through 2007, we utilized the
simplified  method to determine the expected option term, based upon the vesting
and original contractual terms of the option. We continued to use the simplified
method during 2008, in accordance with SAB No. 110.


Note -16 - Recent Accounting Pronouncements

     The  Financial  Accounting  Standards  Board  ("FASB") has recently  issued
several new accounting pronouncements which may apply to the company.

     In December  2007,  the FASB issued SFAS No. 141 (revised  2007)  "Business
Combinations"  ("FASB No.  141(R)")  FASB No.  141(R)  retains  the  fundamental
requirements of the original pronouncement requiring that the purchase method be
used for all business combinations.  FASB No. 141(R) defines the acquirer as the
entity  that  obtains  control  of  one  or  more  businesses  in  the  business
combination,  establishes  the  acquisition  date as the date that the  acquirer
achieves  control and requires the  acquirer to recognize  the assets  acquired,
liabilities assumed and any non-controlling  interest at their fair values as of
the  acquisition  date.  FASB No. 141(R) also requires that  acquisition-related
costs  be  recognized  separately  from the  acquisition.  FASB  No.  141(R)  is
effective  for the Company for the fiscal  year 2010.  The Company is  currently
assessing the impact of FASB No. 141(R) on its consolidated  financial  position
and results of operations.

     In December  2007,  the FASB  issued  Statement  No.  160,  "Noncontrolling
Interests in Consolidated Financial Statements an amendment of ARB No. 51 ("FASB
No.  160")."  The  objective  of  FASB  No.  160 is to  improve  the  relevance,
comparability,  and  transparency of the financial  information that a reporting
entity  provides  in  its  consolidated  financial  statements  by  establishing
accounting  and  reporting  standards  for  the  Noncontrolling  interest  in  a
subsidiary and for the  deconsolidation of a subsidiary.  This Statement applies
to  all  entities  that  prepare  consolidated   financial  statements,   except
not-for-profit organizations. FASB No. 160 amends ARB 51 to establish accounting
and reporting standards for the Noncontrolling  interest in a subsidiary and for
the   deconsolidation   of  a  subsidiary.   It  also  amends   certain  of  ARB
51'sconsolidation  procedures for consistency  with the requirements of FASB No.
141 (R).  This  Statement is effective  for fiscal  years,  and interim  periods
within those  fiscal  years,  beginning on or after  December 15, 2008 (that is,
January 1, 2009,  for entities with  calendar  year-ends).  Earlier  adoption is
prohibited.  The  effective  date of this  Statement  is the same as that of the
related Statement141(R). FASB No. 160 will be effective for the Company's fiscal
2010. This Statement shall be applied  prospectively  as of the beginning of the
fiscal  year in which  this  Statement  is  initially  applied,  except  for the
presentation  and  disclosure  requirements.  The  presentation  and  disclosure
requirements shall be applied retrospectively for all periods presented.

     In March 2008, the FASB issued SFAS No. 161,  "Disclosures about Derivative
Instruments and Hedging  Activities"  ("SFAS No. 161").  SFAS No. 161 amends and
expands the  disclosure  requirement  for FASB  Statement  No. 133,  "Derivative
Instruments  and Hedging  Activities"  ("SFAS No.  133").  It requires  enhanced
disclosure about (i) how and why an entity uses derivative instruments, (ii) how
derivative instruments and related hedged items are accounted for under SFAS No.
133 and its related  interpretations,  and (iii) how derivative  instruments and
related  hedged  items  affect  an  entity's   financial   position,   financial
performance,  and cash flows.  SFAS No. 161 is  effective  for the Company as of
January 1, 2009.

                                      F22
<PAGE>

     In April 2008, the FASB issued FSP 142-3, "Determination of the Useful Life
of Intangible Assets",  (FSP 142-3). FSP 142-3 amends the factors that should be
considered in developing renewal or extension  assumptions used to determine the
useful life of a recognized  intangible asset under SFAS No. 142,  "Goodwill and
Other  Intangible  Assets".  FSP 142-3 is effective  for fiscal years  beginning
after  December  15,  2008.  The Company is  currently  assessing  the impact of
FSP142-3 on its consolidated financial position and results of operations.

     In May 2008,  the FASB issued SFAS No. 162,  "The  Hierarchy  of  Generally
Accepted  Accounting  Principles."  SFAS  No.  162  identifies  the  sources  of
accounting  principles and provides  entities with a framework for selecting the
principles  used in  preparation  of  financial  statements  that are  presented
inconformity  with GAAP. The current GAAP hierarchy has been criticized  because
it is  directed to the auditor  rather  than the entity,  it is complex,  and it
ranks FASB Statements of Financial Accounting Concepts, which are subject to the
same level of due process as FASB Statements of Financial Accounting  Standards,
below industry  practices that are widely  recognized as generally  accepted but
that are not  subject to due  process.  The Board  believes  the GAAP  hierarchy
should be directed to entities  because it is the entity (not its auditors) that
is responsible for selecting accounting principles for financial statements that
are presented in conformity  with GAAP. The adoption of FASB 162 is not expected
to have a material impact on the Company's  consolidated  financial position and
results of operations.

     In  May,  2008  the  FASB  issued  FASB  Staff  Position  (FSP)  APB  14-1,
"Accounting for Convertible  Debt  Instruments  That May Be Settled in Cash upon
Conversion (Including Partial Cash Settlement)." APB 14-1 requires the issuer to
separately  account for the liability and equity  components of convertible debt
instruments in a manner that reflects the issuer's nonconvertible debt borrowing
rate. The guidance will result in companies  recognizing higher interest expense
in the statement of operations due to  amortization of the discount that results
from separating the liability and equity components.  APB 14-1 will be effective
for financial  statements  issued for fiscal years  beginning after December 15,
2008, and interim  periods  within those fiscal years.  The Company is currently
evaluating  the  impact  of  adopting  APB  14-1 on its  consolidated  financial
statements.

     In June 2008,  the FASB issued FSP No. EITF  03-6-1,  "Determining  Whether
Instruments  Granted  in  Share-Based  Payment  Transactions  Are  Participating
Securities".  This FASB  Staff  Position  (FSP)  addresses  whether  instruments
granted in share-based payment  transactions are participating  securities prior
to vesting and,  therefore,  need to be included in the earnings  allocation  in
computing  earnings  per share (EPS) under the  two-class  method  described  in
paragraphs  60 and 61 of FASB  Statement No. 128,  Earnings per Share.  This FSP
provides that unvested  share-based  payment awards that contain non forfeitable
rights to  dividends  or  dividend  equivalents  (whether  paid or  unpaid)  are
participating  securities  and  shall  be  included  in the  computation  of EPS
pursuant to the  two-class  method.  The  provisions  of FSP No. 03-6-1 shall be
effective  for  financial  statements  issued for fiscal years  beginning  after
December 15, 2008, and interim periods within those years.  All prior-period EPS
data presented shall be adjusted  retrospectively  (including  interim financial
statements,  summaries of earnings,  and selected  financial data) to conform to
the provisions of this FSP. Early  application is not permitted.  The provisions
of FSP No.  03-6-1 are  effective  for the  Company  retroactively  in the first
quarter ended March 31, 2009.  The Company is currently  assessing the impact of
FSP No. EITF 03-6-1 on the calculation and presentation of earnings per share in
its consolidated financial statements.

     In October 2008, the FASB issued FSP FAS No. 157-3,  "Determining  the Fair
Value of a Financial  Asset When the Market for That Asset is Not Active."  This
FSP clarifies the application of SFAS No. 157, "Fair Value  Measurements,"  in a
market that is not active.  The FSP also provides  examples for  determining the
fair value of a financial  asset when the market for that financial asset is not
active.  FSP FAS No. 157-3 was effective upon issuance,  including prior periods
for which financial  statements have not been issued. The impact of adoption was
not material to the  Company's  consolidated  financial  condition or results of
operations.
                                      F23
<PAGE>

     In September  2008,  the FASB issued EITF Issue No. 08-5 ("EITF No. 08-5"),
"Issuer's  Accounting for Liabilities  Measured at Fair Value with a Third-Party
Credit  Enhancement."  This FSP  determines an issuer's unit of accounting for a
liability issued with an inseparable  third-party  credit enhancement when it is
measured or disclosed at fair value on a recurring  basis.  FSP EITF No. 08-5 is
effective on a prospective  basis in the first reporting  period beginning on or
after  December 15, 2008.  The Company is currently  assessing the impact of FSP
EITF No. 08-5 on its consolidated financial position and results of operations.

     In September  2008, the FASB issued FSP FAS No. 133-1,  "Disclosures  about
Credit  Derivatives and Certain  Guarantees:  An Amendment of FASB Statement No.
133 and FASB  Interpretation  No. 45; and Clarification of the Effective Date of
FASB Statement No. 161." This FSP amends FASB Statement No. 133, "Accounting for
Derivative  Instruments  and  Hedging  Activities,"  to require  disclosures  by
sellers of credit derivatives, including credit derivatives embedded in a hybrid
instrument.  The FSP  also  amends  FASB  Interpretation  No.  45,  "Guarantor's
Accounting  and  Disclosure  Requirements  for  Guarantees,  Including  Indirect
Guarantees  of  Indebtedness  of Others," to require and  additional  disclosure
about  the  current  status  of the  payment/performance  risk  of a  guarantee.
Finally,  this FSP clarifies the Board's intent about the effective date of FASB
Statement  No.  161,  "Disclosures  about  Derivative  Instruments  and  Hedging
Activities."  FSP FAS No.  133-1 is  effective  for fiscal  years  ending  after
November 15, 2008. The Company is currently  assessing the impact of FSP FAS No.
133-1 on its consolidated financial position and results of operations.

     The  Company has  reviewed  all  recently  issued,  but not yet  effective,
accounting  pronouncements  and does not believe the future adoption of any such
pronouncements  will cause a material  impact on its financial  condition or the
results of its operations.





































                                      F24