SECURITIES AND EXCHANGE COMMISSION
                            Washington, D. C. 20549

                                    Form 10K

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

For the Fiscal Year Ended December 31, 2002

Commission File 2-70197
                              OCEAN BIO-CHEM, INC.
             (Exact Name of Registrant as specified in its charter)

            Florida                                               59-1531532
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)

4041 S. W. 47 Avenue, Fort Lauderdale, Florida                      33314
(Address of principal executive offices)                          (Zip Code)

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

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

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

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

                    Yes |X|                     No |_|

      Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

      Indicate by check mark whether the Registrant is an accelerated filed (as
defined in Exchange Act Rule 12b-2.

                    Yes |_|                     No |X|

      State the aggregate market value of the voting stock held by
non-affiliates of the Registrant computed by reference by reference to the price
at which the common stock was last sold, or the average bid and asked prices of
such stock, as of the last business day of the Registrant's most recently
completed second fiscal quarter.

                         $3,260,682 as of March 1, 2003

      Indicate the number of shares outstanding of Registrant's common stock as
of March 1, 2003.

           4,805,843 shares of common stock, par value $.01 per share

                       DOCUMENTS INCORPORATED BY REFERENCE

Proxy Statement to be filed within 120 days of December 31, 2002.


<PAGE>


                                     PART 1

Item 1. Business

General: The Company was organized on November 13, 1973 under the laws of the
state of Florida. The Company is principally engaged in the manufacturing,
marketing and distribution of a broad line of appearance and maintenance
products for boats, recreational vehicles, automotive and aircraft under the
"Star brite" name within the United States of America and Canada. In addition,
the Company produces private label formulations of many of its products for
various customers as well as provides custom blending and packaging services of
these and other products to customer specifications.

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

Products of the Company:

Set forth is a general description of the products which the Company
manufactures and markets:

      Marine: The Marine line consists of polishes, cleaners, protectants and
waxes of various formulations. The line also includes various vinyl protectants,
cleaners, teak cleaners, teak oils, bilge cleaners, hull cleaners, silicone
sealants, polyurethane sealants, polysulfide sealants, gasket materials,
lubricants, antifouling additives and anti-freeze coolants. In addition, the
Company manufactures a line of brushes, poles and tie-downs.

      Automotive: The company manufactures a line of automotive products under
the Star brite brand name including brake and transmission fluids, hydraulic,
gear and motor oils, and related items. In addition, antifreeze and windshield
washes are produced in varying formulations both under the Star brite brand as
well as private labeled for customers. The Company also has a line of automotive
polishes, cleaners and associated appearance items.

Recreational vehicle: The recreational vehicle products are made up of cleaners,
polishes, detergents, fabric cleaners and protectors, silicone sealants,
waterproofers, gasket materials, degreasers, vinyl cleaners, protectors and
anti-freeze coolants.

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

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

Manufacturing: The Company manufactures the majority of its products as well as
contracts with unrelated companies to package other products which are
manufactured to the Company's specifications, using Company provided formulas.
All raw materials used in manufacturing are readily available. Each third party
packager enters into a confidentiality agreement with the Company. The Company
has patent protection on two of its products. The Company designs its own
packaging and supplies the external manufacturers with the appropriate design
and packaging. Manufacturing is primarily performed by the Company and two
independent entities located in the northeastern and mid-western areas of the
country. The Company believes that its internal manufacturing capacity as well
as the arrangements with the present outside manufacturers are adequate for its
present needs. In the event that these arrangements are discontinued with any
manufacturer, the Company believes that substitute facilities can be found
without substantial adverse effect on manufacturing and distribution.


                                       2
<PAGE>


On February 27, 1996, the Registrant, through a wholly-owned operating
subsidiary, Kinbright, Inc. (an Alabama corporation), acquired certain assets of
Kinpak, Inc., (a Georgia corporation) ("Kinpak"), and assumed two (2) leases of
land and facilities leased by Kinpak from the Industrial Development Board of
the City of Montgomery, Alabama and the Alabama State Docks Department. On
December 20, 1996, the Registrant entered 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
consist 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, Registrant purchased
the machinery, equipment and inventory located on the leased premises.
Subsequent to the acquisition, the Registrant changed the name of its
subsidiary, Kinbright, Inc. to Kinpak Inc. (an Alabama corporation).

During July, 2002, the Registrant completed a $3.5 million Industrial
Development Bond financing through the City of Montgomery, Alabama. Such
transaction will fund an approximate 70,000 square foot addition to the
manufacturing facility as well as the requisite machinery and equipment
additions required therein.

Marketing: The Company's marine products 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 Boat America
Corporation. The Company also uses distributors who in turn sell its products to
specialized retail outlets for that specific market. Currently the Company has
one customer (West Marine, Inc.) to which sales exceed 10% of consolidated
revenues. The Company markets its products through internal salesmen and
approximately 250 independent sales representatives who work on an independent
contractor-commission basis. The Officers of the Company also participate in
sales. The Company also aids marketing through advertising campaigns in national
magazines related to specific marketplaces. The products are distributed
primarily from the Company's manufacturing and distribution facility in Alabama.
As of this date, the Company has no significant backlog of orders. The
Registrant does not give customers the right to return product. The majority of
the Company's products are non-seasonal and are sold throughout the year. 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: The Company has 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.
Management believes that it can increase or maintain its market share through
its present methods of advertising and distribution.

      Automotive: The automotive marketplace into which the Company began
selling various products during 2001 is the largest in which the Company
operates. There are many entities, both national and regional, which represent
competition to the Company. Many are more established and have greater financial
resources than the Company. However, the market is so large that even a minimal
market share could be significant to the Company. The principal elements of
competition are brand recognition, price, service and the ability to deliver
products on a timely basis. Management believes that it can establish a
reasonable market share through its present methods of advertising and
distribution.


                                       3
<PAGE>


      Recreational Vehicle: The recreation vehicle appearance and maintenance
market is parallel to that of the marine market. In this market the Company
competes with national and regional competitors. None of these singly or as a
few have a dominant market share. Management is of the opinion that it can
increase or maintain the Company's market share by utilizing similar methods as
those employed in the marine market.

Personnel: The Company employs approximately 23 full time employees at its
corporate office in Fort Lauderdale, Florida. These employees are engaged in
administration, clerical, and accounting functions. In addition, the Company has
manufacturing and fabrication personnel in both Florida and Alabama.

      The following is a tabulation of the total number of personnel working for
the Company and/or its subsidiaries:

                                                                 Full-time
Location                      Description                        Employees
--------                      -----------                        ---------

Montgomery, Alabama           Manufacturing and distribution          80
Fort Lauderdale, Florida      Manufacturing and distribution          37
                                                                     ---
                                                                     117
                                                                     ===

New Product Development: The Company continues to develop specialized products
for the marine, automotive, and recreational vehicle trade. During fiscal 2001,
the Registrant launched a line of automotive oils, fluids and related products.
During late 2001 and early 2002 the Company started production and shipment of a
line of marine engine oils. The Company believes that its 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: The Registrant adheres 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
non-compliance.

Financial Information Relating to Approximate Domestic and Canadian Gross Sales:

                                        Year ended December 31,
                                        -----------------------
                                2002             2001             2000
                                ----             ----             ----
United States:
     Northeast              $ 4,258,000      $ 3,709,000      $ 3,429,000
     Southeast                6,242,000        5,520,000        4,863,000
     Central                  6,454,000        5,684,000        5,075,000
     West Coast               4,960,000        4,354,000        3,929,000
                            -----------      -----------      -----------
                             21,915,000       19,267,000       17,296,000

Canada (US Dollars)             798,000          609,000          777,000
                            -----------      -----------      -----------

                            $22,713,000      $19,876,000      $18,073,000
                            ===========      ===========      ===========


                                       4
<PAGE>


Forward-looking Statements:

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

Item 2, Properties

The Registrant's executive offices and warehouse are located in Fort Lauderdale,
Florida and are held under a lease with an entity owned by certain officers of
the Company. The lease covers approximately 12,700 square feet of office and
warehouse space. On May 1, 1998, the Registrant renewed its lease agreement for
a term of ten years. The lease calls for an initial annual rental of $94,800
increasing by 2% per annum on the annual anniversary of the lease for the term
thereof. Additionally, the landlord is entitled to collect from the Company its
pro-rata share of all taxes, assessments, insurance premiums, operating changes,
maintenance charges and any other expenses which arise from ownership. Rent
charged to operations during the years ended December 31, 2002, 2001 and 2000
amounted to approximately $ 100,500, $100,500 and $100,000, respectively.

During November 1994, the Company leased an approximately 10,000 square foot
building in Fort Lauderdale, Florida for manufacturing, warehousing and office
space from an unrelated third party. Such lease terminates on October 31, 2003.
Rent charged to operations during the year ended December 31, 2002 amounted to
approximately $92,800.

The Montgomery, Alabama facility contains approximately 110,000 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
eleven miles from the Plant. The Registrant financed the facility and its
improvements with an Industrial Revenue Bond in the amount of $4,900,000.

During July, 2002, the Registrant completed a $3.5 million Industrial
Development Bond financing through the City of Montgomery, Alabama. Such
transaction will fund an approximate 70,000 square foot addition to the
manufacturing facility as well as the requisite machinery and equipment
additions required therein. At December 31, 2002, approximately $1,161,200 was
held in trust to pay for equipping future equipment required at the facility.

Item 3. Legal Proceedings

During the year ended December 31, 2002 the Company was a party to litigation
associated with a patent it holds on one of its products. (North American Oil
Company, Inc. v. Star brite Distributing,


                                       5
<PAGE>


Inc., Case No. 01-1575-1576, pending in the United States Court of Appeals for
the Federal Circuit (on appeal from the United States District Court for the
Northern District of Georgia, Atlanta Division, Civil Action No.
1-98-cv-1589-RWS). The U.S. District Court issued an Order granting North
American Oil Company, Inc.'s motion for a partial summary judgement finding
against the Company during March, 2001. On September 17, 2002, such Order was
reversed by the Federal Circuit Court of Appeals. During February, 2003, both
parties agreed to settle this protracted and costly litigation. Costs incurred
during 2003 in settling this matter, principally accrued and reimbursed legal
fees, are reflected as a fourth quarter adjustment in the accompanying financial
statements. During the years ended December 31, 2002, 2001, and 2000, the
Company incurred approximately $356,000, $255,500, and $621,400, respectively,
in legal costs substantially attributable to this matter which were charged to
operations.

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

      Shareholders will vote at the Annual Meeting to be held during June, 2003
to ratify adoption of a qualified incentive stock option plan and a
non-qualified stock option plan covering 400,000 and 200,000 shares of the
Registrant's common stock, respectively. Such plans were approved by the
Registrant's Board of Directors on October 22, 2002.

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

A. The Registrant's common stock was sold to the public initially on March 26,
1981. The common stock of the Company is traded on the NASDAQ National Market
System under the symbol OBCI. A summary of the trading ranges during each
quarter of 2001 and 2000 is presented below.

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

2002           High               $1.77       $1.65       $1.70       $1.90
               Low                $1.31       $1.31       $1.35       $1.10

2001           High               $1.00       $1.00       $1.88       $1.82
               Low                 $.62        $.53        $.84       $1.11

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

B. The approximate number of Common Stock owners was 800 at December 31, 2002.
The aforementioned number was calculated from a list provided by the Transfer
Agent and Registrar and indications from broker dealers of shares held by them
as nominee for actual shareholders.

C. The Registrant has not paid any cash dividends since it 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.


                                       6
<PAGE>


D. Securities authorized for issuance under equity compensation plans:

<TABLE>
<CAPTION>
                                          Number of                                   Number of securities
                                       securities to be         weighted average      remaining available
                                     issued upon exercise       exercise price of     for future issuance
                                    of outstanding options,    outstanding options,      under equity
                                      warrants & rights         warrants & rights      compensation plans

<S>                                         <C>                      <C>                     <C>
Equity compensation plans
  approved by security holders:

  1991 Plan                                 161,700                  $ .758                       --
  1992 Plan                                 204,875                  $ .970                       --
  1994 Plan                                 294,635                  $ .620                  105,365

Equity compensation plans not
  approved by security holders:

  2002 Qualified Plan                       155,000                  $1.260                  245,000
  2002 Non-qualified Plan                    35,000                  $1.260                  165,000
</TABLE>

The Ocean Bio-Chem, Inc. 2002 Incentive Stock Option Plan adopted October 22,
2002 has not yet been approved by the Shareholders. The Plan, by its terms, is
contingent upon approval by the Shareholders and will be submitted for vote by
the Shareholders at the Annual Meeting for 2003. The Plan will be attached in
its entirety with Proxy material to be filed within one hundred twenty (120)
days of the end of Registrant's Fiscal Year Ended December 31, 2002 and is
incorporated herein by reference.

The Ocean Bio-Chem, Inc. 2002 Non-Qualified Stock Option Plan adopted October
22, 2002 has not yet been approved by the Shareholders. The Plan, by its terms,
is contingent upon approval by the Shareholders and will be submitted for vote
by the Shareholders at the Annual Meeting for 2003. The Plan will be attached in
its entirety with Proxy material to be filed within one hundred twenty (120)
days of the end of Registrant's Fiscal Year Ended December 31, 2002 and is
incorporated herein by reference.

During the years ended December 31, 2002, 2001 and 2000 the Company awarded
129,000, 134,000, and 88,000 shares, respectively to certain executives, key
employees and others as a component of annual compensation. Charges to
operations aggregated approximately $67,700, $36,200, and $ 49,000 for each of
such periods, respectively.


                                       7
<PAGE>


Item 6. Selected Financial Data

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

<TABLE>
<CAPTION>
                          2002          2001            2000            1999           1998
                          ----          ----            ----            ----           ----
<S>                   <C>            <C>           <C>               <C>            <C>
Operations

Gross sales           $22,712,991    $19,876,095    $ 18,072,784     $15,952,165    $14,077,993

Net sales             $20,585,898    $18,013,393    $ 16,139,256     $14,317,485    $12,705,473

Net income (loss)     $   134,518    $   106,384   ($    244,823)    $   431,484    $    83,059

Earnings (loss) per
  common share        $       .03    $       .03   ($        .06)    $       .11    $       .02

Balance sheet

Working capital       $ 2,212,872    $ 1,385,016    $  1,724,043     $ 2,797,708    $ 1,956,647

Total assets          $18,650,237    $15,030,206    $ 15,410,264     $13,547,452    $12,846,794

Long term
  obligations         $ 6,745,232   $  3,843,515    $  3,963,145     $ 4,152,332    $ 4,070,000

Total liabilities     $13,727,315    $10,268,884    $ 10,737,972     $ 8,629,991    $ 8,390,036

Shareholders'
  equity              $ 4,922,922    $ 4,761,322    $  4,672,292     $ 4,917,461    $ 4,456,758
</TABLE>

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

The following discussion should be read in conjunction with the Company's
consolidated financial statements contained herein as Item 15.

Liquidity and Capital Resources:

The primary sources of the Registrant's liquidity are its operations and
short-term borrowings from a commercial bank pursuant to a revolving line of
credit aggregating $5 million. Such line matures May 31, 2003 and bears interest
at prime and is secured by the Registrant's trade receivables and inventory. The
Registrant is required to maintain a minimum working capital of $1.5 million and
meet other financial covenants during the term of the agreement. As of December
31, 2002 the Company was not in compliance with certain of such covenants. The
bank has agreed to waive such non compliance. As of December 31, 2002, the
Company was obligated under this arrangement in the amount of $4,250,000.

In connection with the purchase and expansion of the Alabama facility, the
Registrant closed on Industrial Revenue Bonds during 1997 which were utilized
for the repayment of certain advances used to purchase the Alabama facility and
to expand such facility for the Registrant's future needs. During July, 2002,
the Registrant completed a $3.5 million Industrial Revenue Bond financing
through the City of Montgomery, Alabama. Such transaction will fund an
approximate 70,000 square foot addition to the manufacturing facility as well as
the requisite machinery and equipment additions required therein. At December
31, 2002, approximately $1,161,200 was held in trust to pay for equipping future
equipment required at the facility.


                                       8
<PAGE>


In order to market its Alabama Industrial Revenue Bonds at favorable rates, the
Registrant obtained a substitute irrevocable letter of credit for its 1997 issue
and a new irrevocable letter of credit for the 2002 issue. Under such letters of
credit agreement maturing on July 31, 2005, the Company is 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 instruments.
Currently such bonds carry interest ranging between 1.2 % and 1.5 % annually.
Interest and principal are payable quarterly. The Registrant believes that
current operations are sufficient to meet these obligations.

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

During the past few years, the Registrant has introduced various new products to
the marketplace. This has required the Registrant to carry greater amounts of
overall inventory and has resulted in lower inventory turnover rates. The
effects of such inventory turnover have not been material to the overall
operations of the Registrant. The Registrant believes that all required capital
to maintain such increases can continue to be provided by operations and current
financing arrangements.

At December 31, 2002, the Registrant was a party to litigation which commenced
in 1998 and was associated with a patent it holds on one of its products. The
U.S. District Court issued a partial Summary Judgement Order against the Company
during March, 2001. On September 17, 2002, such Order was reversed by the
Federal Circuit Court of Appeals. During March, 2003, both parties agreed to
settle this litigation. Costs incurred during 2003 in settling this matter,
principally accrued and reimbursed legal fees, are reflected as a fourth quarter
adjustment in the accompanying financial statements. During the years ended
December 31, 2002, 2001, and 2000, the Company incurred approximately $356,000,
$255,500, and $621,400, respectively in legal costs substantially attributable
to this matter which were charged to operations.

Results of Operations:

Fourth Quarter ended December 31, 2002:

Comparing the quarters ended December 31, 2002 and 2001, net sales increased
approximately $926,300 or 20%. This was primarily due to increased sales of
antifreeze, oils, automotive fluids, and private label products. Although there
is no significant seasonality associated with a typical fourth quarter's
revenues or costs, certain noteworthy factors influenced the current year's
quarter. Specifically, the quarter ended December 31, 2002 was impacted by
increasing cost of petroleum related raw materials, a larger than normal skewing
towards lower margin contracting sales, year end inventory and trade receivable
adjustments, and costs associated with settling outstanding litigation.

As a result of the foregoing, cost of goods sold increased to 80.1% for the
three months ended December 31, 2002 as compared to 73.8% for the comparable
period in 2001, and total costs and expenses increased approximately $387,700 or
33% comparing these two periods.


                                       9
<PAGE>


Years ended December 31, 2002 and 2001:

Sales and earnings varied when comparing the year ended December 31, 2002 to
2001 principally due to the factors enumerated below.

Net sales - Net sales increased 14.3% or approximately $ 2,572,500 comparing the
year ended December 31, 2002 with the 2001 period. This was primarily due to
increased sales of Star brite and private labeled marine products, anti-freeze,
automotive fluids and other contract packaging.

Cost of goods sold - Cost of goods sold increased from 76.3% to 77.5 % as a
percentage of net sales when comparing 2002 to 2001. This was primarily
attributable to a differing product mix which was impacted by the increasing
cost of petroleum related raw materials and an increase in private label and
contract packaging revenues which typically yield lower margins.

Advertising and promotion - Advertising expense increased approximately $105,400
or 15.9% when comparing 2002 to 2001. This was primarily due to planned
increases in media advertising expenditures and lower customer co-op
advertising.

Selling, general and administrative - Selling, general and administrative
expenses increased approximately $337,200 or11.4% when comparing 2002 to 2001.
The most significant single item reflected therein was an increase in legal fees
and costs associated with settling outstanding litigation. Increased personnel
costs and other administrative expenses in line with increased overall revenues
also affected the change for the year.

Interest expense - Interest expense incurred during 2002 decreased by
approximately $125,200 compared to 2001. The decrease was primarily due to
reductions in prevailing interest rates.

Years ended December 31, 2001 and 2000:

Sales and earnings varied when comparing the year ended December 31, 2001 to
2000 principally due to the factors enumerated below.

Net sales - Net sales increased 11.6% or approximately $ 1,874,000 comparing the
year ended December 31, 2001 with the 2000 period. This was primarily due to
increased sales of anti-freeze, private label products, automotive fluids, and
marine items.

Cost of goods sold - Cost of goods sold increased from 73.4% to 76.3 % as a
percentage of net sales when comparing 2001 to 2000. This was primarily
attributable to a differing product mix which was impacted by introductory
pricing of the Company's new automotive fluids and an increase in private
packaging revenues which typically yield lower margins.

Advertising and promotion - Advertising expense decreased approximately $ 30,800
or 4.4% when comparing 2001 to 2000. This was primarily due to planned decreases
in media advertising expenditures and lower customer co-op advertising.

Selling, general and administrative - Selling, general and administrative
expenses decreased approximately $ 470,000 or 13.8 % when comparing 2001 to
2000. The most significant single item reflected therein was a decrease in legal
fees. Increased personnel costs and anticipated increases in other
administrative expenses also affected the change for the year.

Interest expense - Interest expense incurred during 2001 decreased by
approximately $ 62,600 over 2000. The decrease was primarily due to recently
announced reductions in prevailing interest rates.


                                       10
<PAGE>


Item 8. Financial Statements and Supplementary Data

     See consolidated financial statements as set forth in Item 15.

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

      None

Item 10. Executive Officers and Directors of the Registrant

The following tables set forth the name and ages of all elected directors and
officers of the Registrant, as of December 31, 2002.

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 the Company and the Company and any other persons pursuant to which
any officer or director was or is to be selected as a director or officer.

     NAME                             OFFICE                                 AGE
     ----                             ------                                 ---

Peter G. Dornau          President, Chief Executive Officer, and              63
                         Director since 1973

Jeffrey Tieger           Vice President, Secretary and Director               59
                         since 1977

Edward Anchel            Vice President-Finance, Chief Financial              56
                         Officer since 1999 and Director since 1998

James Kolisch            Director since 1998                                  51

Laz Schneider            Director since 1998                                  63

John B. Turner           Director since 2000                                  55

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

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

Edward Anchel joined the Company in March 1999 as Vice President-Finance. For
the five years immediately preceding his employment, he was an officer of a
privately owned manufacturing company and in private practice as a Certified
Public Accountant. He was elected to serve as an outside Director of the Company
during May, 1998.

James Kolisch is engaged in the insurance industry and was elected to serve as
an outside Director of the Company during May, 1998. Mr. Kolisch provides
services to the Company in the capacity of insurance agent.

Laz Schneider is 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 in
the law firm that serves as the Company's lead counsel in various corporate and
litigation matters.


                                       11
<PAGE>


John B. Turner is a retired insurance executive and was elected to serve as an
outside Director of the Company during June, 2000. In addition to his insurance
credentials, Mr. Turner holds a Series 7 stock brokerage license. His
professional experience in the aforementioned areas spans in excess of
twenty-five years.

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

Item 11. Management Remuneration and Transactions

The information required by this section has been incorporated by reference to
the Registrant's proxy statement in conjunction to the annual shareholders'
meeting which shall be sent out to shareholders prior to 120 days past the
Registrant's year end of December 31, 2002.

Item 12. Security Ownership of Certain Beneficial Owners and Management

The following table sets forth information at December 31, 2002 with respect to
the beneficial ownership of the Registrant's Common Stock by holders of more
than 5% of such stock and by all directors and officers of the Registrant as a
group:

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

<S>          <C>                                          <C>                  <C>
Common       Peter G. Dornau, President, Director         2,852,588 *          54.9%
             4041 S. W. 47 Avenue
             Ft. Lauderdale, FL 33314

Common       All directors and officers as a group
             6 individuals                                3,397,964 *          65.4%
</TABLE>

* Includes options to purchase shares of the Company's common stock as follows:

On March 25, 1999, the Company granted Messrs. Dornau and Tieger 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
their making a loan to the Company in the amount of $400,000 from an affiliated
company in which they are each 50% co-shareholders.

As of December 31, 2002, pursuant to the Company's various stock option plans,
Mr. Dornau has options to acquire 126,200 shares of the Company's common stock
of which 44,220 shares are exercisable within 60 days of the issuance of the
Registrant's December 31, 2002 financial statements.

As of December 31, 2002, pursuant to the Company's various stock option plans,
the Company's directors and officers, as a group, have options to acquire
437,475 shares of the Company's common stock of which 161,535 shares are
exercisable within 60 days of the issuance of the Registrant's December 31, 2002
financial statements.


                                       12
<PAGE>


Item 13. Certain Relationships and Related Transactions

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 officers of the Registrant. The lease required a
minimum rental of $94,800 the first year increasing by 2% on the anniversary of
the lease throughout the term. Additionally, the landlord is entitled to collect
from the Company its pro-rata share of all taxes, assessments, insurance
premiums, operating charges, maintenance charges and any other expenses which
arise from ownership. The Registrant believes that the terms of this lease are
comparable to those of similar properties in the same geographic area of the
Company available from unrelated third parties. Rent charged to operations
during the years ended December 31, 2002, 2001 and 2000 amounted to
approximately $ 100,500, $100,500 and $100,000, respectively.

The Registrant acquired the rights to the "Star brite" name and products only
for the United States and Canada in conjunction with its original public
offering during March, 1981. The president of the Registrant is the beneficial
owner of three companies which market Star brite products outside the United
States. The Registrant has advanced monies to assist in such foreign marketing
in order to establish an international trademark. At December 31, 2002 and 2001,
the Company had amounts due from affiliated companies which are directly or
beneficially owned by the Company's president aggregating approximately $612,275
and $563,700, respectively. Such advances were made primarily to international
affiliates that are in the process of expanding sales of Star brite products in
Europe, Asia and South America. These amounts had been advanced by the Company
on open account and, through December 31, 2002, carried interest at the same
rate charged to the Company on its line of credit.

Subsequent to December 31, 2002, such affiliates repaid $425,000 to the Company.
Effective January, 2003, payments of open receivables to such affiliates will
approximate those terms offered to the Company's larger non-affiliated customers
and, accordingly, will not bear interest, unless they are delinquent.

Sales of Star brite products to such affiliates aggregated approximately
$317,100 and $344,600 during the years ended December 31, 2002 and 2001,
respectively.

A subsidiary of the Registrant currently uses the services of an entity which is
owned by its President to conduct product research and development. Such entity
received $30,000 per year during the years ended December 31, 2002, 2001 and
2000 under such relationship.

Item 14. Controls and Procedures

Management of the Registrant has conducted a review of the Company's disclosure
controls and procedures and has determined that they are adequate to produce
periodic reports which present financial condition and results of operations
free of material misstatements. In addition, there have been no significant
changes in the Registrant's underlying internal controls during the period
covered by this report.


                                       13
<PAGE>


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

The following documents are filed as part of this report:

      (A)   Consolidated financial statements:

            (i)   Consolidated balance sheets, December 31, 2002 and 2001.

            (ii)  Consolidated statements of operations for each of the three
                  years ended December 31, 2002, 2001 and 2000.

            (iii) Consolidated statement of shareholders' equity for each of the
                  three years ended December 31, 2002, 2001 and 2000.

            (iv)  Consolidated statements of cash flows for each of the three
                  years ended December 31, 2002, 2001 and 2000.

            (v)   Notes to consolidated financial statements.

                  (a)   All schedules are omitted because either they are not
                        applicable or the required information is shown in the
                        consolidated financial statement or the notes thereto.

             Exhibits:

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

            (22)  Subsidiaries of the Registrant.

      (B)   Reports Filed on Form 8K

                  On March 14, 2003, the Registrant filed a Form 8K disclosing
                  as item 5, Other Items, the settlement of longstanding legal
                  actions between the Registrant and North American Oil Company,
                  Inc.


                                       14
<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 27, 2003


                                          By: /s/ Edward Anchel
                                              -------------------
                                              EDWARD ANCHEL
                                              Chief Financial Officer

                                              March 27, 2003

SIGNATURES

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


                                          By: /s/ Jeffrey Tieger
                                              -------------------
                                              JEFFREY TIEGER
                                              Director

                                              March 27, 2003

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


                                       15
<PAGE>


                                 CERTIFICATIONS

I, Peter Dornau certify that:

      1.    I have reviewed this annual report on Form 10-K of Ocean Bio-Chem,
            Inc.;

      2.    Based on my knowledge, this annual 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 annual report;

      3.    Based on my knowledge, the financial statements, and other financial
            information included in this annual report, fairly present in all
            material respects the financial condition, results of operation and
            cash flows of the Registrant as of, and for, the periods presented
            in this annual 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 - 14 and 15d - 14) for the
            Registrant and we have:

            a)    Designed such disclosure controls and procedures to ensure
                  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 annual report is being prepared;

            b)    Evaluated the effectiveness of the Registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this annual report (the "Evaluation Date");
                  and

            c)    Presented in this annual report our conclusions about the
                  effectiveness of the disclosure controls and procedures based
                  on our evaluations as of the Evaluation Date;

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

            a)    All significant deficiencies in the design or operation of
                  internal controls which could adversely affect the
                  Registrant's ability to record, process, summarize and report
                  financial data and have identified for the Registrant's
                  auditors any material weakness in internal controls; and

            b)    Any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  Registrant's internal controls; and

      6.    The Registrant's other certifying officer and I have indicated in
            this annual report whether or not there were significant changes in
            internal controls or in other factors that could significantly
            affect internal controls subsequent to the date of our most recent
            evaluation, including any corrective actions with regard to
            significant deficiencies and material weaknesses.

                                              OCEAN BIO-CHEM, INC.

Date: March 27, 2003                          /s/ Peter Dornau
      ----------------                        ----------------------------------
                                              Peter G. Dornau
                                              Chairman of the Board of Directors
                                              and Chief Executive Officer


<PAGE>


                                 CERTIFICATIONS

I, Edward Anchel certify that:

      1.    I have reviewed this annual report on Form 10-K of Ocean Bio-Chem,
            Inc.;

      2.    Based on my knowledge, this annual 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 annual report;

      3.    Based on my knowledge, the financial statements, and other financial
            information included in this annual report, fairly present in all
            material respects the financial condition, results of operation and
            cash flows of the Registrant as of, and for, the periods presented
            in this annual 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 - 14 and 15d - 14) for the
            Registrant and we have:

            a)    Designed such disclosure controls and procedures to ensure
                  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 annual report is being prepared;

            b)    Evaluated the effectiveness of the Registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this annual report (the "Evaluation Date");
                  and

            c)    Presented in this annual report our conclusions about the
                  effectiveness of the disclosure controls and procedures based
                  on our evaluations as of the Evaluation Date;

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

            a)    All significant deficiencies in the design or operation of
                  internal controls which could adversely affect the
                  Registrant's ability to record, process, summarize and report
                  financial data and have identified for the Registrant's
                  auditors any material weakness in internal controls; and

            b)    Any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  Registrant's internal controls; and

      6.    The Registrant's other certifying officer and I have indicated in
            this annual report whether or not there were significant changes in
            internal controls or in other factors that could significantly
            affect internal controls subsequent to the date of our most recent
            evaluation, including any corrective actions with regard to
            significant deficiencies and material weaknesses.

                                               OCEAN BIO-CHEM, INC.

Date:  March 27, 2003                          /s/ Edward Anchel
       --------------------                    ---------------------------------
                                               Edward Anchel
                                               Chief Financial Officer

<PAGE>


                                EXHIBIT (See 22)

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

        Name                                            Ownership %
        ----                                            -----------

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


<PAGE>


                      OCEAN BIO-CHEM, INC. AND SUBSIDIARIES

                        CONSOLIDATED FINANCIAL STATEMENTS

                  YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000


<PAGE>


                      OCEAN BIO-CHEM, INC. AND SUBSIDIARIES
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
                  YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000

                                                                            Page
                                                                            ----

Report of independent auditors                                                 1

Consolidated balance sheets                                                    2

Consolidated statements of operations                                          3

Consolidated statement of shareholders' equity                                 4

Consolidated statements of cash flows                                          5

Notes to consolidated financial statements                                  6-14


<PAGE>

                         REPORT OF INDEPENDENT AUDITORS
                         ------------------------------


To the Board of Directors and Shareholders
Ocean Bio-Chem, Inc. and its Subsidiaries
Ft. Lauderdale, Florida


We have audited the consolidated balance sheets of Ocean Bio-Chem, Inc. (the
"Company") and its Subsidiaries as of December 31, 2002 and 2001, and the
related consolidated statements of operations, shareholders' equity, and cash
flows for each of the three years in the period ended December 31, 2002. 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 audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Ocean Bio-Chem,
Inc. and its Subsidiaries at December 31, 2002 and 2001, and the consolidated
results of its operations and its cash flows for each of the three years in the
period ended December 31, 2002, in conformity with accounting principles
generally accepted in the United States of America.


                         BERKOVITS, LAGO & COMPANY, LLP

Plantation, Florida
March 7, 2003


                                       1
<PAGE>

                      OCEAN BIO-CHEM, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 2002 AND 2001

<TABLE>
<CAPTION>
                                     ASSETS
                                                           2002             2001
                                                           ----             ----
<S>                                                    <C>            <C>
Current Assets:
   Cash                                                $ 1,093,826    $    82,000
   Trade accounts receivable net of allowance for
      doubtful accounts of approximately $200,700
      and $152,500, respectively                         3,190,357      3,286,848
   Inventories                                           4,541,150      4,296,183
   Prepaid expenses and other current assets               129,622        145,354
   Recoverable income taxes                                240,000           -
                                                       -----------    -----------
      Total current assets                               9,194,955      7,810,385
                                                       -----------    -----------

Property, plant and equipment, net                       6,977,003      6,002,445
                                                       -----------    -----------
Other assets:
   Funds held in escrow for equipment                    1,161,194          9,084
   Trademarks, trade names, and patents, net
      of accumulated amortization                          330,439        330,439
   Due from affiliated companies, net                      612,275        563,731
   Deposits and other assets                               374,371        314,122
                                                       -----------    -----------
      Total other assets                                 2,478,279      1,217,376
                                                       -----------    -----------

      Total assets                                     $18,650,237    $15,030,206
                                                       ===========    ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
   Accounts payable trade                              $ 1,833,895    $ 2,163,245
   Note payable bank                                     4,250,000      3,665,860
   Current portion of long-term debt                       601,766        470,994
   Accrued expenses payable                                296,422        125,270
                                                       -----------    -----------
      Total current liabilities                          6,982,083      6,425,369
                                                       -----------    -----------

Deferred income taxes payable                              183,139        124,639
                                                       -----------    -----------

Long-term debt less current portion                      6,562,093      3,718,876
                                                       -----------    -----------
Commitments and contingencies

Shareholders' equity:
   Common stock - $.01 par value, 10,000,000 shares
      authorized, 4,805,843 and 4,239,889 shares
      issued and outstanding at December 31, 2002
      and 2001, respectively                                48,058         42,399
   Additional paid-in capital                            4,341,629      3,755,219
   Foreign currency translation adjustment                (303,575)      (262,933)
   Retained earnings                                       845,005      1,234,832
                                                       -----------    -----------
                                                         4,931,117      4,769,517
   Less treasury stock 7,519 shares,
    at cost                                                 (8,195)        (8,195)
                                                       -----------    -----------
      Total shareholders' equity                         4,922,922      4,761,322
                                                       -----------    -----------

Total liabilities and shareholders' equity             $18,650,237    $15,030,206
                                                       ===========    ===========
</TABLE>

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


                                       2
<PAGE>


                      OCEAN BIO-CHEM, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                  YEARS ENDED DECEMBER 31, 2002, 2001, AND 2000

<TABLE>
<CAPTION>
                                            2002           2001           2000
                                            ----           ----           ----

<S>                                     <C>            <C>            <C>
Gross sales                             $22,712,991    $19,876,095    $18,072,784

Less returns and allowances               2,127,093      1,862,702      1,933,528
                                        -----------    -----------    -----------

Net sales                                20,585,898     18,013,393     16,139,256

Cost of goods sold                       15,961,692     13,744,703     11,852,435
                                        -----------    -----------    -----------

Gross profit                              4,624,206      4,268,690      4,286,821
                                        -----------    -----------    -----------

Operating expenses:
Advertising and promotion                   769,275        663,922        694,729
Selling and administrative                3,284,652      2,947,489      3,417,378
Interest                                    386,109        511,292        573,882
                                        -----------    -----------    -----------
    Total Operating Expenses              4,440,036      4,122,703      4,685,989
                                        -----------    -----------    -----------

Operating profit (loss)                     184,170        145,987       (399,168)

Interest and other income                     8,848            897         14,345
                                        -----------    -----------    -----------

Income (loss) before provision
  (benefit) for income taxes                193,018        146,884       (384,823)

Provision (benefit) for income taxes         58,500         40,500       (140,000)
                                        -----------    -----------    -----------

Net income (loss)                           134,518        106,384       (244,823)
Other comprehensive income:
   Foreign currency translation,
      net of taxes                          (40,642)       (53,535)       (48,526)
                                        -----------    -----------    -----------

Comprehensive Income (loss)             $    93,876    $    52,849    ($  293,349)
                                        ===========    ===========    ===========

Earnings (loss) per share:
   Basic                                $       .03    $       .03    ($      .06)
                                        ===========    ===========    ===========
   Diluted                              $       .03    $       .03    ($      .06)
                                        ===========    ===========    ===========
</TABLE>

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


                                       3
<PAGE>


                      OCEAN BIO-CHEM, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
                     ENDED DECEMBER 31, 2002, 2001 AND 2000

<TABLE>
<CAPTION>
                                                                Foreign
                           Common stock        Additional       currency      Retained       Treasury
                        Shares      Amount   paid-in capital   adjustment     earnings       stock            Total
                        ------------------   ---------------   ----------     --------       -----            -----


<S>                    <C>         <C>         <C>             <C>           <C>            <C>            <C>
January 1, 2000        3,822,499   $ 38,225    $ 3,282,932     ($ 160,872)   $ 1,764,051    ($   6,875)    $ 4,917,461

Net loss                                                                      (244,823)           --        (244,823)

Issuances of
  stock                  283,390      2,835        437,445                      (390,780)                       49,500

Acquisition of
  treasury stock,
  6,875 shares                                                                                  (1,320)         (1,320)

Foreign currency
  translation
  adjustment                                                      (48,526)                                     (48,526)

                       ---------   --------    -----------     ----------    -----------    ----------     -----------
December 31, 2000      4,105,889     41,060      3,720,377       (209,398)     1,128,448        (8,195)      4,672,292


Net income                                                                       106,384                       106,384

Issuances of
  stock                  134,000      1,339         34,842                                                      36,181

Foreign currency
  translation
  adjustment                                                      (53,535)                                     (53,535)

                       ---------   --------    -----------     ----------    -----------    ----------     -----------
December 31, 2001      4,239,889     42,399      3,755,219       (262,933)     1,234,832        (8,195)      4,761,322

Net income                                                                       134,518                       134,518

Issuances of
  stock                  565,954      5,659        586,410                      (524,345)                       67,724

Foreign currency
  translation
  adjustment                                                      (40,642)                                     (40,642)

                       ---------   --------    -----------     ----------    -----------    ----------     -----------
December 31, 2002      4,805,843   $ 48,058    $ 4,341,629     ($ 303,575)   $   845,005    ($   8,195)    $ 4,922,922
                       =========   ========    ===========     ==========    ===========    ==========     ===========
</TABLE>

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


                                       4
<PAGE>

                     OCEAN BIO-CHEM, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                  YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000

<TABLE>
<CAPTION>
                                                                   2002            2001            2000
                                                                   ----            ----            ----
<S>                                                            <C>             <C>             <C>
Cash flows from operating activities:
  Net income (loss)                                            $   134,518     $   106,384     ($  244,823)
  Adjustments to reconcile net income (loss)
    to net cash provided (used) by operations:
  Depreciation and amortization                                    601,064         494,901         410,855
  Issuance of common stock to employees                             67,725          36,181          49,500
  Changes in assets and liabilities:
    (Increase) decrease in accounts receivable                      96,491         130,979        (613,755)
    (Increase) decrease in inventory                              (244,967)        210,804        (776,666)
    (Increase) decrease in prepaid expense and other               (44,517)        265,737        (169,797)
    Increase (decrease) in accounts payable and
    accrued taxes and other expenses                              (339,699)        172,931         976,921
                                                               -----------     -----------     -----------

Net cash provided (used) by operating activities                   270,615       1,417,917        (367,765)
                                                               -----------     -----------     -----------

Cash flows from financing activities:
  Net borrowings (reductions) under line of credit                 584,140        (584,140)      1,350,000
  Repayment of amounts due from advances to affiliates, net        (48,544)         34,506         248,743
  Increases in (payments on) long term debt, net                 2,973,989         (57,881)       (218,940)
                                                               -----------     -----------     -----------
     Net cash provided (used) by financing activities            3,509,585        (607,515)      1,379,803
                                                               -----------     -----------     -----------

Cash flows used by investing activities:
  Purchase of property, plant and equipment                     (1,575,622)       (830,804)     (1,516,108)
  Purchases of treasury shares of common stock                          --              --          (1,320)
  Utilization of (additions to) trust funds for
    equipment purchased, net                                          (1,152,110)         32,422         243,659
                                                               -----------     -----------     -----------

     Net cash used by investing activities                      (2,727,732)       (798,382)     (1,273,769)
                                                               -----------     -----------     -----------

Increase (decrease) in cash prior to effect of
  exchange rate on cash                                          1,052,468          12,020        (261,731)
Effect of exchange rate on cash                                    (40,642)        (53,535)        (48,526)
                                                               -----------     -----------     -----------

Net increase (decrease) in cash                                  1,011,826         (41,515)       (310,257)
Cash at beginning of year                                           82,000         123,515         433,772
                                                               -----------     -----------     -----------
Cash at end of year                                            $ 1,093,826     $    82,000     $   123,515
                                                               ===========     ===========     ===========

Supplemental information
  Cash used for interest during period                         $   434,869     $   511,292     $   573,882
                                                               ===========     ===========     ===========
  Cash used for income taxes during period                     $   240,000     $        --     $   123,447
                                                               ===========     ===========     ===========
</TABLE>

The Company had no cash equivalents at December 31, 2002, 2001 and 2000.

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


                                       5
<PAGE>


                      OCEAN BIO-CHEM, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000

Note 1 - Organization and summary of significant accounting policies:

      Organization - The company was organized during November, 1973 under the
      laws of the state of Florida and operates as a manufacturer and
      distributor of products to the marine, automotive, and recreational
      vehicle aftermarkets. During 1984, the Company changed its corporate name
      to Ocean Bio-Chem, Inc. (the parent company) from its former name, Star
      brite Corporation.

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

      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.

      Prepaid advertising and promotion - During the years ended December 31,
      2002 and 2001, the Company introduced certain new products in the marine
      and recreational vehicle aftermarket industries. In connection therewith,
      the Company produced new promotional items to be distributed over a period
      of time and increased its catalog advertising. The Company follows the
      policy of amortizing these costs over a one year basis. At December 31,
      2002 and 2001, the accumulated cost of materials on hand and other
      deferred promotional costs which will be charged against the subsequent
      year's operations amounted to approximately $53,400 and $24,800,
      respectively.

      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 - The Company follows the provisions of APB
      Opinion No. 25, Accounting for Stock Issued to Employees, to record
      compensation costs. Opinion No. 25 requires that compensation cost be
      based on the difference, if any, between the quoted market price of the
      stock and the price the employee must pay to acquire the stock depending
      on the terms of the award. The company has not adopted Statement of
      Financial Accounting Standards No. 123 to record such compensation costs.

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

      Concentration of credit risk - Financial instruments that potentially
      subject the Company to concentration of credit risk consist primarily of
      accounts receivable. Concentrations of credit with respect to accounts
      receivable are limited because the majority of the accounts receivable are
      with large retail and commercial customers. The single largest customer's
      receivable represents approximately 21.5% of the consolidated balance at
      December 31, 2002.

      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.


                                       6
<PAGE>


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

      Trademarks, trade names and patents - The Star brite trade name and
      trademark were purchased in 1980 for $880,000. The cost of trademarks and
      trade names were 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 the carrying value of such intangible
      assets relating to its Star brite brand does not require further
      amortization. In addition, the Company owns two patents which it believes
      are valuable in limited product lines, but not material to its success or
      competitiveness in general. There are no capitalized costs for these two
      patents.

      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 cumulative
      translation adjustment in shareholders' equity. Realized gains and losses
      from foreign currency transactions are included in net earnings or the
      period. Fluctuations arising from inter-company transactions that are of a
      long term in nature are accumulated as cumulative translation adjustments.

      Reclassifications - Certain items in the accompanying consolidated
      financial statements for the years ended December 31, 2001 and 2000 have
      been reclassified to conform with the 2002 presentation.

Note 2 - Property, plant and equipment:

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

                                                          December 31,
                                                  --------------------------
                                                     2002            2001
                                                     ----            ----

Land                                              $  278,325      $  278,325
Building                                           2,936,543       2,936,543
Manufacturing and warehouse equipment              4,356,336       3,888,467
Office equipment and furniture                       583,049         577,681
Construction in process                            1,079,779          76,831
Leasehold improvement                                141,375         141,375
                                                  ----------      ----------
                                                   9,375,407       7,899,222
Less accumulated depreciation                      2,398,404       1,896,777
                                                  ----------      ----------
Total property, plant and equipment, net          $6,977,003      $6,002,445
                                                  ==========      ==========

      Depreciation expense for the years ended December 31, 2002, 2001 and 2000
      amounted to $601,064, $471,909 and $387,864, respectively. Depreciation
      expense includes the amortization of capitalized lease assets.


                                       7
<PAGE>


Included in property, plant and equipment are the following assets held under
capitalized leases:

                                                    2002             2001
                                                    ----             ----

Land                                             $  278,325       $  278,325
Building                                          2,936,543        2,936,543
Manufacturing and warehouse equipment             3,885,571        3,565,056
Construction in process                           1,079,779           76,831
                                                 ----------       ----------
                                                  8,180,218        6,856,755
Less accumulated amortization                     1,583,811        1,124,264
                                                 ----------       ----------
Total                                            $6,596,407       $5,732,491
                                                 ==========       ==========

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

      In addition to the Kinpak facility, the Company has routinely leased
      additional warehouse space in Alabama to store certain manufacturing raw
      materials and inventory component items. Consolidating such space to the
      Kinpak campus improves material logistics and manufacturing efficiency.
      The prevailing level of interest rates offered an opportunity to reduce
      overall cash flow attributable to this space. Accordingly, during the year
      ended December 31, 2002, the Company entered into an agreement with the
      City of Montgomery to issue an additional series Industrial Revenue Bonds
      aggregating $3,500,000.

      This financing reimbursed the Company $1,000,000 for manufacturing
      equipment purchased during the eighteen (18) months preceding its closing
      and will also fund a 70,000 square foot addition to the current facility
      and the related requisite equipment. Unexpended funds available pursuant
      to this financing are being held in an income bearing trust account and
      amounted to $1,161,194 at December 31, 2002.

      Obligations for future payments attributable to this capitalized lease are
      discussed in Note 4.

Note 3 - Note payable, bank:

      During 2000, the Company secured a revolving line of credit with a maximum
      of $5 million from a commercial bank carrying an annual interest rate at
      the lender's prime rate. This line was collateralized by the Company's
      inventory, trade receivables, and intangible assets. On July 1, 2002, the
      Company replaced such line with another offered by the commercial bank
      financing the expansion discussed in Notes 2 and 4. The new line
      aggregates $5 million, matures on May 31, 2003, bears an adjustable
      interest rate approximating prime , and is secured by the Company's trade
      receivables and inventory. Pursuant to such agreements, the Company was
      and is required to maintain minimum working capital levels, maintain
      stipulated debt to tangible net worth and debt coverage ratios. At
      December 31, 2002, the Company was not in compliance with certain of such
      covenants. The bank has agreed to waive such non compliance.


                                       8
<PAGE>


Note 4 - Long-Term debt:

      Long term debt at December 31, 2002 consisted of the following:

      The Company is obligated pursuant to two capital leases financed through
      Industrial Revenue 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 which adjust weekly. At December 31, 2002, $3,120,000 and
      $3,440,000 were outstanding attributable to the 1997 and 2002 series,
      respectively. During the year ended December 31,2002 interest rates ranged
      between 1.2 %and 1.6%. 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.

      The Company is obligated to an affiliated entity owned by certain officers
      of the Company pursuant to a note payable aggregating $378,570 at December
      31, 2002. Such obligation requires monthly installments of $3,357
      including principal and interest at 5.25% through April 1, 2004 when a
      projected balloon payment of $366,750 will be due.

      During 2002 and 2001, the Company, through certain subsidiaries, entered
      into various capital lease agreements covering equipment utilized in the
      Company's Alabama plant and its corporate offices. Such obligations,
      aggregating approximately $48,000 at December 31, 2002, have varying
      maturities through 2005 and carry interest rates ranging from 7% to 12%.

      During the 2001, the Company financed the acquisition of approximately
      $484,000 of equipment through a financial institution. The obligation
      requires monthly installments of $11,097 including principal and interest
      at 8.4% per annum through maturity in May, 2004. The obligation is secured
      by the underlying equipment purchased. At December 31, 2002, $177,308 was
      outstanding.

      The composition of these obligations at December 31, 2002 and 2001 were as
      follows:

                                    Current Portion         Long Term portion
                                   -----------------        -----------------
                                   2002         2001        2002         2001
                                   ----         ----        ----         ----
Industrial Revenue Bonds         $440,000   $  320,000   $6,120,000   $3,120,000
Notes payable                     132,927      118,996      422,952      555,831
Capitalized equipment leases       28,839       31,998       19,141       43,045
                                 --------   ----------   ----------   ----------
                                 $601,766   $  470,994   $6,562,093   $3,718,876
                                 ========   ==========   ==========   ==========

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

Year ending December 31,
                        2003              $601,766
                        2004               891,702
                        2005               465,391
                        2006               460,000
                        2007               460,000
                  Thereafter             4,285,000
                                        ----------

                       Total            $7,163,859


                                       9
<PAGE>


Note 5 - Income taxes:

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

                                              Year ended December 31,
                                              -----------------------

                                          2002         2001          2000
                                          ----         ----          ----
Income tax provision (benefit):
   Federal - current                    $    --      $    --      ($164,000)
           - deferred                    58,500       40,500         24,000
   State                                     --           --             --
                                        -------      -------      ---------
                 Total                  $58,500      $40,500      ($140,000)
                                        =======      =======      =========

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

                                                  Year Ended December 31,
                                                  -----------------------
                                               2002        2001        2000
                                               ----        ----        ----
Computed at statutory rate                     34.0%       34.0%      (34.0%)
State tax, net of federal benefit                --          --          --
Other, net                                     (3.7%)      (6.4%)      (2.4%)
                                              -----       -----       -----
Effective tax rate                             30.3%       27.6%      (36.4%)
                                              =====       =====       =====

      At December 31, 2002 and 2001, deferred income taxes payable aggregating
      $183,189 and $124,639, respectively are reflected on the accompanying
      consolidated balance sheets.  Such amounts are attributable to the timing
      differences between financial statement and income tax treatment of
      depreciation.

Note 6 - Litigation and subsequent event:

      At December 31, 2002, the Company was a party to litigation which
      commenced in 1998 and was associated with a patent it holds on one of its
      products. The U.S. District Court issued a partial Summary Judgement Order
      against the Company during March, 2001. On September 17, 2002, such Order
      was reversed by the Federal Circuit Court of Appeals. During February,
      2003, the Company entered into a settlement agreement to terminate this
      protracted and costly litigation. Costs incurred during 2003 in settling
      this matter, principally accrued and reimbursed legal fees, are reflected
      as a fourth quarter adjustment in the accompanying financial statements.
      During the years ended December 31, 2002, 2001, and 2000, the Company
      incurred approximately $356,000, $255,500, and $621,400, respectively in
      legal costs substantially attributable to this matter which were charged
      to operations.

Note 7 - Related party transactions:

      At December 31, 2002 and 2001, the Company had amounts due from affiliated
      companies which are directly or beneficially owned by the Company's
      president aggregating approximately $612,300 and $563,700, respectively.
      Such advances were made primarily to international affiliates that are in
      the process of expanding sales of Star brite products in Europe, Asia and
      South America. These amounts have been advanced by the Company on open
      account and, through December 31, 2002, carried interest at the same rate
      charged to the Company on its line of credit.

      Subsequent to the balance sheet date, such affiliates repaid $425,000 to
      the Company. Effective January, 2003, payments of open receivables to such
      affiliates will approximate those terms offered to the Company's larger
      non-affiliated customers and, accordingly, will not bear interest, unless
      they are delinquent.


                                       10
<PAGE>


      Sales of Star brite products to such affiliates aggregated approximately
      $317,100 and $344,600 during the years ended December 31, 2002 and 2001,
      respectively.

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 for the first year
      increasing by 2% on the anniversary of the lease throughout the term.
      Additionally, the landlord is entitled to its pro-rata share of all taxes,
      assessments, insurance premiums, operating charges, maintenance charges
      and any other expenses which arise from ownership. Rent charged to
      operations during the years ended December 31, 2002, 2001 and 2000
      amounted to approximately $ 100,500, $100,500 and $100,000, respectively.

      The Company has entered into a corporate guaranty of the mortgage note
      obligations of such affiliate. The obligations are primarily secured by
      the real estate leased to the Company.

      In November, 1994, the Company leased an approximately 10,000 square foot
      building in Fort Lauderdale, Florida for manufacturing, warehousing and
      office space from an unrelated third party. Such lease terminates on
      October 31, 2003. Rent charged to operations under this lease during the
      year ended December 31, 2002, 2001 and 2000 amounted to approximately
      $92,800, $90,800 and $90,200, respectively.

      The following is a schedule of minimum future rentals on the
      noncancellable operating leases:

      Year ending December 31,
                       2003                 205,436
                       2004                 102,498
                       2005                 104,548
                       2006                 106,639
                       2007                 108,771
                 Thereafter                 254,922
                                          ---------
                      Total               $ 882,814
                                          =========

      During January, 2002, the Company entered into an agreement with a
      financial institution to provide financial advisory and investment banking
      services to the Company for a one year period ending January, 2003. Such
      agreement required a monthly retainer of $5,000, reimbursement of Company
      approved expenses and the issuance of warrants to purchase 250,000 shares
      of the Company's common stock at an exercise price of $1.40 per share. In
      addition to the foregoing, the Company has agreed to compensate the
      Investment Banker based on completion of certain financing arrangements
      and/or transactions. This agreement was renewed on a month-to-month basis
      during February, 2003 with a revised monthly fee of $4,000 for the
      aforementioned services.

Note 9 - Stock options:

      During 1991, the Company adopted a non-qualified employee stock option
      plan covering 200,000 shares of its common stock. 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. During
      2002, the Company adopted, subject to shareholder approval, 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.


                                       11
<PAGE>


      The following schedule shows the status of outstanding options under the
      Company's stock option plans as of December 31, 2002, as adjusted for the
      Company's stock dividend distributions of 2000 and 2002:

<TABLE>
<CAPTION>
                                                                          Weighted
        Date       Options       Exercisable   Exercisable   Expiration   Average
Plan    granted    outstanding   Options       price         date         remaining life
----    -------    -----------   -----------   -----------   ----------   --------------

<S>     <C>          <C>           <C>           <C>          <C>            <C>
1991    11/12/99     161,700        97,020       $ .758       11/11/04       1.83
1992    03/01/99      28,875        28,875       $ .727       02/28/04       1.17
1992    12/20/01     176,000        35,200       $1.009       12/20/06       3.92
1994    05/04/99     135,135        81,081       $ .684       05/03/04       1.33
1994    12/20/00     159,500        63,800       $ .573       12/19/05       2.92
2002    10/22/02     155,000            --       $1.260       10/21/07       4.83
2002    10/22/02      35,000            --       $1.260       10/21/07       4.83
                     -------       -------                                   --------
                     851,210       305,976                                   2.65 yrs
                     =======       =======                                   ========
</TABLE>

      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 their making a loan to the Company in the amount of
      $400,000 from an affiliated company in which they are each 50%
      co-shareholders.

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

                                               2002        2001          2000
                                               ----        ----          ----
Net income (loss)            As reported     $177,718    $106,384    ($ 244,823)
                             Pro forma       $145,125    $ 94,981      (278,734)

Earnings (loss) per share    As reported     $    .04    $    .03    ($     .06)
                             Pro forma       $    .03    $    .02    ($     .06)


      A summary of the Company's stock options as of December 31, 2002, 2001 and
      2000, and changes during the years ending on those dates, is presented
      below:

<TABLE>
<CAPTION>
                                       2002                        2001                         2000
                            --------------------------   -------------------------   --------------------------
                                           Weighted                   Weighted                     Weighted
                            Optioned       average       Optioned      average       Optioned       average
                             shares     exercise price    shares    exercise price    shares     exercise price
                            --------    --------------   --------   --------------   --------    --------------

<S>                         <C>              <C>          <C>            <C>          <C>            <C>
Options Outstanding
  at beginning of year        794,000        $ .89        730,500        $ .92        655,500        $1.10
Granted                       190,000         1.26        160,000         1.11        145,000          .63
Expired                        (7,500)         .68        (96,500)       (1.73)       (70,000)       (2.00)
Exercises                          --           --             --           --             --           --
Adjustment for stock
  dividend distributions      105,710           --             --           --             --           --
                           ----------        -----       --------        -----       --------        -----
Outstanding at
  end of year               1,082,210        $1.03        794,000        $ .89        730,500        $ .92
                           ==========        =====       ========        =====       ========        =====
</TABLE>


                                       12
<PAGE>


      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. Options
      typically have a five year life with vesting occurring at 20% per year on
      a cumulative basis with forfeiture at the end of the option, if not
      exercised.

      The fair value of each option grant was estimated using the Black-Scholes
      option pricing model with the following assumptions for the years ended
      2002, 2001 and 2000; risk free rate 6.5%, no dividend yield for all years,
      expected life of five years and volatility of 31.6%.

Note 10 - Major customers:

      The Company has one major customer, West Marine, Inc., with sales in
      excess of 10% of consolidated revenue for the year ended December 31,
      2002. Sales to this customer represent approximately 22.5% of consolidated
      revenues. Subsequent to December 31, 2002, West Marine purchased another
      customer of the Company whose sales aggregated 3.4% of the Company's
      consolidated revenues.

      The Company's top five customers represent approximately 42% of
      consolidated revenues and 44% of consolidated trade receivables. 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.

Note 11 - Earnings per share:

      Earnings (loss) per share are reported pursuant to the provisions of
      Statement of Financial Standards No. 128. Accordingly, basic earnings
      (loss) 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 (loss) per share for the years ended December
      31, 2002, 2001, and 2000:

                   2002            2001             2000
                 ---------       ---------        ---------
Basic            4,438,207       4,169,870        4,058,657

Diluted          4,760,487       4,169,870        4,058,657

Note 12 - Shareholders' equity:

      During the years ended December 31, 2002 and 2000 the Company declared and
      distributed stock dividends of 10% and 5%, respectively.

      During the years ended December 31, 2002, 2001 and 2000 the Company
      awarded 129,000, 134,000, and 88,000 shares, respectively to certain
      executives, key employees and others as a component of annual
      compensation. Charges to operations aggregated approximately $67,700,
      $36,200, and $ 49,000 for each of such periods, respectively.


                                       13
<PAGE>


Note 13 - Subsequent events and fourth quarter results of operations:

      The Company reports its quarterly results of operations through its
      periodic reporting to its shareholders and the U.S. Securities and
      Exchange Commission. However, the fourth quarter is not reported
      separately and its results are incorporated within the year end financial
      statements. Although there is no significant seasonality associated with a
      typical fourth quarter's revenues or costs, certain noteworthy factors
      influenced the current year's quarter.

      The quarter ended December 31, 2002 was impacted by increasing cost of
      petroleum related raw materials, a larger than normal skewing towards
      lower margin contracting sales, year end inventory adjustments, and costs
      associated with settling outstanding litigation and trade receivable
      collectibility.

      Subsequent to year end certain events occurred which impacted operations
      and required reflection in the accompanying financial statements.
      Specifically, the litigation discussed in Note 6 above, and resolution of
      questionable trade receivables. During March, 2003, a certain customer's
      Chapter II proceeding was finalized and the ultimate amount to be realized
      by the Company attributable to its obligation became ascertainable. Such
      amount is lower than representations made to the Company prior thereto.
      The effect of the foregoing adjustments aggregated approximately $308,000
      and was charged against operations of the quarter ended December 31, 2002.


                                       14