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

                                   FORM 10-K/A
(Mark one)
|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
    OF 1934
                   For the fiscal year ended December 31, 2005

                                       OR

|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934      For the transition period from           to

                         Commission file number 0-11102

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

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

                                4041 SW 47 Avenue
                         Fort Lauderdale, FL 33314-4023
              (Address of principal executive offices)  (Zip Code)

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

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

     Indicate by check mark whether the Registrant is a well seasoned issuer, as
defined in Rule 405 of the Securities Act.

                        Yes              No   |X|

     Indicate by check mark if the  Registrant  is not  required to file reports
pursuant to Section 13 or Section 15(d) of the Exchange Act.

                        Yes              No   |X|

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

                        Yes  |X|         No

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

                        Yes  |X|         No

     Indicate by check mark whether the Registrant is a large accelerated filer,
an accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large  accelerated  filer" in Rule 12b-2 of the Exchange  Act.  (Check
one)

Large accelerated filer       Accelerated filer        Non-accelerated filer |X|

     Indicated  by check mark  whether  the  Registrant  is a shell  company (as
defined in Rule 12b-2 of the Exchange Act.

                        Yes              No  |X|

     Aggregate market value of Registrant's  common stock held by non-affiliates
of the Registrant,  based upon the closing price of a share of the  Registrant's
common stock on March 2, 2006 as reported by the NASDAQ  Capital  Market on that
date:  $2,353,657  For purposes of this  disclosure,  the Registrant has assumed
that  all  directors,  officers,  and  beneficial  owners  of 5% or  more of the
Registrant's common stock are affiliates of the Registrant.

        Number of shares of the Registrant's common stock outstanding as
                               of March 2, 2006:

                5,849,316 shares common stock, $0.01 par value.

                       DOCUMENTS INCORPORATED BY REFERENCE

     Part III of this Form 10-K  incorporates  information  from portions of the
Registrant's  Definitive  Proxy Statement for the Annual Meeting of Shareholders
which was held on June 15,  2006, and was filed within 120 days of December 31,
2005
<PAGE>
Forward-looking Statements:

     Certain  statements  contained  in  this  Annual  Report  on  Form  10-K/A,
including  without  limitation  expectations  as to future  sales and  operating
results,  constitute  forward-looking  statements  pursuant  to the safe  harbor
provisions of the Private  Securities  Litigation  Reform Act of 1995.  For this
purpose,  any  statements  contained in this report that are not  statements  of
historical fact may be deemed forward-looking  statements.  Without limiting the
generality of the foregoing,  words such as "believe",  "may", "will", "expect",
"anticipate",  "intend",  "could'  including  the  negative or other  variations
thereof or  comparable  terminology  are  intended to  identify  forward-looking
statements.  These statements involve known and unknown risks, uncertainties and
other factors which may cause our actual results, performance or achievements to
be materially  different from any future  results,  performance or  achievements
expressed  or implied by such  forward-looking  statements.  Factors,  which may
affect these  results  include,  but are not limited to, the highly  competitive
nature of our industry;  reliance on certain key customers;  consumer demand for
marine recreational vehicle and automotive products; advertising and promotional
efforts; and other factors.

Explanatory note - Restatements/Amendment:

     As disclosed in our Form 8-K filed with the United  States  Securities  and
Exchange Commission on August 14, 2006, in this Form 10-K/A we are restating our
financial  statements as of December 31, 2005 and 2004 and the years then ended.
The  substantive  changes  to  be  reflected  in  this  amendment  are  (a)  the
recognition  of the  compensation  cost  associated  with stock options of which
certain terms were modified  during the year ended December 31, 2004 and (b) the
reclassification  between debt and additional  paid-in capital of certain of the
proceeds  from the Revolving  Subordinated  Obligation to our President and CEO,
Peter G. Dornau  received  during the year ended  December 31, 2005.  Neither of
these items have an impact on our previously  reported cash flows. These matters
are  more  fully  discussed  in  Note  12 -  Restatements,  to the  Consolidated
Financial Statements.

     We have also  included  restated  amounts in Item 6 -  "Selected  Financial
Data" and Item 7 - "Management's  Discussion and Analysis of Financial Condition
and  Results of  Operations".  Along with the  foregoing,  we have  updated  our
Certifications  pursuant  to  Section  302 of  the  Sarbanes-Oxley  Act of  2002
presented  as  Exhibits  31.1 and 31.2 to  conform  with  the  current  language
requirements.

                                     Part I
Item 1.  Business

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

Products:

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

     Marine:  Our Marine line consists of polishes,  cleaners,  protectants  and
waxes of  various  formulations  under the Star  brite(R)  brand name as well as
private label formulations of these and other products. The motor oils 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, we manufacture a line of brushes, poles and tie-downs and
other related marine accessories.


                                        2
<PAGE>
     Automotive:  We  manufacture a line of automotive  products  under the Star
brite(R) brand name including brake and transmission fluids, hydraulic, gear and
motor oils, and related items. In addition,  anti-freeze  and windshield  washes
are produced in varying  formulations both under the Star brite(R) brand as well
as under  private  labels for  customers.  We also produce a line of  automotive
polishes, cleaners and associated appearance items.

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

     Aircraft:  Our  Aircraft  product line  consists  primarily of polishes and
cleaners.  Although  the above  products are  utilized  for  different  types of
vehicles,  boats, aircrafts and household purposes, it is management's view that
they all constitute one industry segment.

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

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

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

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

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

     Marketing:  Our marine and  recreational  vehicle products are sold through
national  mass  merchandisers  such as  Wal-mart  and  Home  Depot  and  through
specialized  marine  retailers such as West Marine and Boater's  World.  We also
sell to national  and  regional  distributors  who in turn sell our  products to
specialized  retail  outlets for that  specific  market.  Currently  we have one
customer  (West  Marine,  Inc.,  which is an  unrelated  entity)  to whom  sales
exceeded  10% of  consolidated  revenues  for the year ended  December 31, 2005.
Sales  to our five  largest  customers  for the year  ended  December  31,  2005
amounted to  approximately  43% of  consolidated  gross revenues and outstanding
balances  due  us  at  year-end  from  our  five  largest  customers  aggregated
approximately  26% of  consolidated  trade  receivables.  We market our products
through internal salesmen and approximately 250 sales  representatives  who work
on an independent  contractor-commission basis. Our officers also participate in
sales  presentations  and trade shows.  In addition,  we aid  marketing  through
advertising  campaigns in national  magazines related to specific  marketplaces.
Our products are distributed  primarily from our  manufacturing and distribution
facility in Alabama.

     Backlog,  seasonality,  and selling terms: We had no significant backlog of
orders as of December 31, 2005. We do not give  customers the absolute  right to
return  product.  The  majority of our 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.

                                        3

<PAGE>
Competition:

     Marine:  We have several  national and regional  competitors  in the marine
marketplace. The principal elements of competition are brand recognition, price,
service and the ability to deliver products on a timely basis. In the opinion of
management no one or few  competitors  holds a dominant market share. We believe
that we can increase or maintain our market share through our present methods of
advertising and distribution.

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

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

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

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

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

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

Financial Information Relating to Approximate Domestic and Canadian Gross Sales:

                                    Year ended December 31,
                          2005                2004                   2003
United States:            ----                ----                   ----
        Northeast     $ 3,585,000          $ 4,455,000          $  4,054,000
        Southeast       5,468,000            6,832,000             6,218,000
        Central         5,655,000            7,015,000             6,384,000
        West Coast      4,148,000            5,197,000             4,730,000
                      -----------          -----------          ------------
                       15,856,000           23,499,000            21,386,000

Canada (US Dollars)       850,000              862,000               792,000
                      -----------          -----------           -----------
                      $19,706,000          $24,361,000           $22,178,000
                      ===========          ===========           ===========



                                        4

<PAGE>
     Personnel:  We employ approximately 21 full time employees at our corporate
office  in  Fort   Lauderdale,   Florida.   These   employees   are  engaged  in
administration,  clerical  and  accounting  functions.  In  addition,  we employ
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 as of
December 31, 2005:

                                                                       Full-time
Location                      Description                              Employees
Fort Lauderdale, Florida      Administrative                              21
Fort Lauderdale, Florida      Manufacturing and distribution               7
Montgomery, Alabama           Manufacturing and distribution              80
                                                                         ---
                                                                         108
                                                                         ===

Item 1A.  Risk factors

     Concentration  of credit  risk -  Financial  instruments  that  potentially
subject  the  Company to  concentration  of credit  risk  consist  primarily  of
accounts receivable.  Our five largest customers represented  approximately 43%,
55% and 55% of  consolidated  gross  revenues  for the years ended  December 31,
2005,  2004 and 2003;  and 26% and 77% of  consolidated  accounts  receivable at
December  31,  2005  and  2004,   respectively.   We  have  had  a  longstanding
relationship  with  each of  these  entities  and  have  always  collected  open
receivable  balances.  However, the loss of any of these customers could have an
adverse impact on our operations.

     As  disclosed in our Form 10-Q for the quarter  ended March 31,  2005,  our
largest customer,  West Marine, publicly announced their adoption of a policy to
reduce their  overall  inventory  levels.  This has  resulted in an  approximate
$4,294,000  decrease  in  sales to them for the year  ended  December  31,  2005
compared to 2004.

     Concentration  of cash - At various  times of the year and at December  31,
2005,  we had a  concentration  of cash  in one  bank in  excess  of  prevailing
insurance  offered  through the Federal  Deposit  Insurance  Corporation at such
institution.   Management  does  not  consider  the  excess  deposits  to  be  a
significant risk.

     Operating  losses at Alabama  subsidiary - A major  component of the losses
sustained  during the year ended  December  31,  2005 is the  operations  at our
manufacturing  subsidiary,  Kinpak Inc.  Corporate  management  has enhanced its
analysis,  supervision and overall involvement with our manufacturing  facility.
We have identified several areas that require  improvement and through increased
on-site  management  presence,  major  personnel  changes,  adoption  of certain
strategic  enhancements to our manufacturing  process,  and a renewed commitment
from personnel in Alabama to strive for improved efficiency and cost savings, we
believe that we will achieve a material  reduction in manufacturing cost thereby
improving product margins and operating profits (losses) during 2006.


Item 2.  Properties

     Our executive offices and warehouse located in Fort Lauderdale, Florida are
held under a lease with an entity fifty  percent each owned by Messrs.  Peter G.
Dornau and Jeffrey J.  Tieger,  our  President  and Vice  President-Advertising,
respectively.  The lease covers  approximately  12,700 square feet of office and
warehouse  space.  On May 1, 1998, we renewed our lease  agreement for a term of
ten years.  The lease  required an initial annual rental of $94,800 and provides
for a maximum  increase of 2% per annum on the annual  anniversary  of the lease
for the term thereof.  Additionally, the landlord is entitled to collect from us
its pro-rata  share of all taxes,  assessments,  insurance  premiums,  operating
charges,  maintenance  charges and any other  expenses which normally arise from
ownership.  Rent charged to operations during the years ended December 31, 2005,
2004 and 2003 amounted to approximately $100,500 each year.




                                        5

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

Item 3. Legal Proceedings

     We were not involved in any significant litigation at December 31, 2005.

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

     No matter  was  submitted  for a vote of  shareholders  during  the  fourth
quarter of 2005. Shareholders voted at the Annual Meeting held during June, 2006
to elect  members  of the  Board of  Directors,  ratify  the  engagement  of the
Company's Independent  Certified Public Accountants,  and other matter presented
at such  meeting.  The results of such voting was disclosed in our Form 10-Q for
the quarter ended June 30, 2006.

                                     Part II

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


     A. Our common stock was sold to the public initially on March 26, 1981. The
common stock of the Company is traded on the NASDAQ  Capital Market System under
the symbol OBCI. A summary of the trading ranges during each quarter of 2005 and
2004 is presented below.
<TABLE>
<CAPTION>

Market Range of
Common Stock Bid:                          1st Qtr.              2nd Qtr.              3rd Qtr.              4th Qtr.
<S>                  <C>                    <C>                   <C>                   <C>                   <C>
2005                 High                   $3.11                 $2.04                 $1.63                 $1.35
                     Low                    $1.07                 $1.45                 $1.14                 $ .76

2004                 High                   $1.89                 $1.85                 $1.49                 $1.40
                     Low                    $1.53                 $1.31                 $1.13                 $ .93
</TABLE>
     A. The quotations  reflect  inter-dealer  prices  without  retail  mark-up,
markdown or commission and may not represent actual transactions.

     B.  The  number  of  record   holders  of  our  Common   Stock  owners  was
approximately  200 at December 31, 2005. In addition,  we believe that there are
approximately  600  beneficial  holders based on  information  obtained from our
Transfer Agent and Registrar and indications  from broker dealers of shares held
by them as nominee for actual shareholders.

     C. We have  not  paid any  cash  dividends  since  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 at December 31, 2005 under equity
compensation plans:
<TABLE>
<CAPTION>
                                                                                                             Number of securities
                                      Number of securities                   Weighted average                 remaining available
                                        to be issued upon                    exercise price of                 for future issuance
                                    exercise of outstanding                 outstanding options,              under equity com-
                                   options, warrants & rights                warrants & rights                   pensation plans

<S>                                            <C>                               <C>                               <C>
Equity compensation plans
  approved by security holders:
       Plan stock options granted (1)          733,500                           $1.23                             466,500
       Non plan stock options granted (2)      231,000                             .76                                  -

Equity compensation plans
   not approved by security holders:
      Stock options and restricted
      stock awards                                 -                               -                                   -
 Total equity compensation plans
  approved and not approved by                 -------                           -----                             -------
  security holders                             964,500                           $1.12                             466,500
                                               =======                           =====                             =======
</TABLE>

     (1) Includes  290,000  options  granted under the 2002 Qualified  Incentive
Stock Option Plan,  115,000  options under the 2002  Non-Qualified  Stock Option
Plan, 174,500 options under the 1994 Non-Qualified Stock Option Plan and 154,000
options under the 1992 Qualified Incentive Stock Option Plan.

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

     (3)During  the quarter  ended  December 31, 2005,  we finalized a revolving
credit facility with our president and CEO, Peter G. Dornau.  In connection with
his  offering  to loan a maximum  of $1.5  million  to the  Company  in order to
bolster working capital,  we issued warrants to Mr. Dornau to purchase a maximum
of 1 million shares of our common stock.  Such warrants are exercisable  500,000
shares at $1.13 and 500,000 shares at $.863. The exercise prices were determined
by the closing bid of our stock plus ten (10) percent on each date of grant.  In
addition, he has the right, at his sole discretion,  to convert such debt into a
maximum  of 1.5  million  shares  of our  common  stock at the rate of $1.00 per
share.  Potential  shares  to be issued  pursuant  to this  arrangement  are not
reflected in the foregoing tabulation.

     (4) During April 2005 we issued  122,000 shares of our common stock bearing
a restricted  legend to certain  officers and other key employees as a component
of their  compensation.  At the date of grant the shares  had a market  value of
$1.53 each. Shares were awarded as follows:

    Officers:
    Peter G. Dornau, President and CEO                   30,000 shares
    Edward Anchel, Vice President and CFO                30,000 shares
    Jeffrey J. Tieger, Vice President and Secretary      15,000 shares
    William Dudman, Vice President                       15,000 shares
    Gregor M. Dornau, Vice President                     15,000 shares
                                                        -------
                                                        105,000 shares
    Other employees, as a group (7 individuals)          17,000 shares
                                                        -------
    Total restricted shares awarded                     122,000 shares
                                                        =======





                                        7

<PAGE>
Item 6.  Selected Financial Data

     As more fully  discussed  in Note 12 -  Restatements,  to the  Consolidated
Financial  Statements,  we are filing this amended Form 10-K/A  including  these
substantive  changes:  (a) the recognition of the  compensation  cost associated
with stock options of which  certain  terms were modified  during the year ended
December  31,  2004 and (b) the  reclassification  between  debt and  additional
paid-in  capital of  certain of the  proceeds  from the  Revolving  Subordinated
Obligation to our President and CEO,  Peter G. Dornau  received  during the year
ended December 31, 2005. Neither of these items have an impact on our previously
reported cash flows.

     The following  tables set forth selected  financial data as of, and for the
years ended December 31,
<TABLE>
<CAPTION>

                                           2005              2004              2003             2002              2001
                                                          (Restated)        (Restated)
<S>                                     <C>               <C>              <C>               <C>              <C>
Operations
Gross sales                             $19,706,469       $24,361,056      $22,178,352       $22,712,991      $19,876,095

Net sales                               $17,651,905       $21,657,083      $19,997,702       $20,585,898      $18,013,393

Net income (loss)                       ($1,813,193)      $    17,222      $   345,071       $   134,518      $   106,384

Earnings (loss) per
  common share                          ($     .32)       $       -        $       .07       $       .03      $       .03

Balance Sheet
Working capital                         $ 2,713,123       $ 3,464,574      $ 2,869,172       $ 2,212,872      $ 1,385,016

Total assets                            $16,903,022       $19,398,344      $18,303,184       $18,650,237      $15,030,206

Long-term
 obligations                            $ 5,950,958       $ 5,840,250      $ 5,883,302       $ 6,745,232      $ 3,843,515

Total liabilities                       $12,240,427       $13,448,849      $12,899,189       $13,727,315      $10,268,884

Shareholders'
 equity                                 $ 4,662,595       $ 5,949,495      $ 5,403,995       $ 4,922,922      $ 4,761,322

Cash dividends declared
  per share of common stock             $       -         $        -       $        -        $        -       $       -
</TABLE>


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

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

     As more fully  discussed  in Note 12 -  Restatements,  to the  Consolidated
Financial  Statements,  we are filing this amended Form 10-K/A  including  these
substantive  changes:  (a) the recognition of the  compensation  cost associated
with stock options of which  certain  terms were modified  during the year ended
December  31,  2004 and (b) the  reclassification  between  debt and  additional
paid-in  capital of  certain of the  proceeds  from the  Revolving  Subordinated
Obligation to our President and CEO,  Peter G. Dornau  received  during the year
ended December 31, 2005. Neither of these items have an impact on our previously
reported cash flows.




                                        8

<PAGE>
Overview:

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

Critical accounting policies and estimates:

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

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

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

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

     Stock based  compensation - We follow 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.  For the years ended
December 31,  2005,  2004 and 2003,  we have not adopted  Statement of Financial
Accounting Standards No. 123 to record such compensation costs.

     Concentration  of credit  risk -  Financial  instruments  that  potentially
subject  the  Company to  concentration  of credit  risk  consist  primarily  of
accounts receivable.  Our five largest customers represented  approximately 43%,
55% and 55% of  consolidated  gross  revenues  for the years ended  December 31,
2005,  2004 and 2003;  and 26% and 77% of  consolidated  accounts  receivable at
December  31,  2005  and  2004,   respectively.   We  have  had  a  longstanding
relationship  with  each of  these  entities  and  have  always  collected  open
receivable  balances.  However, the loss of any of these customers could have an
adverse impact on our operations.

     Concentration  of cash - At various  times of the year and at December  31,
2005,  we had a  concentration  of cash  in one  bank in  excess  of  prevailing
insurance  offered  through the Federal  Deposit  Insurance  Corporation at such
institution.   Management  does  not  consider  the  excess  deposits  to  be  a
significant risk.

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

     Income taxes - We file  consolidated  federal and state income tax returns.
We have  adopted  Statement  of Financial  Accounting  Standards  No. 109 in the
accompanying  consolidated financial statements.  The only temporary differences
included   therein  are   attributable   to  differing   methods  of  reflecting
depreciation for financial statement and income tax purposes.
                                       9
<PAGE>

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

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

Liquidity and Capital Resources:

     The primary  sources of our liquidity  are our  operations  and  short-term
borrowings from Regions Bank pursuant to a revolving line of credit  aggregating
$6 million.  Such line matures May 31, 2006,  bears interest at the 30 Day LIBOR
plus 275 basis points  (approximately 7.14% at December 31, 2005) and is secured
by our trade  receivables,  inventory and intangible  assets. We are required to
maintain  a minimum  working  capital of $1.5  million  and meet  certain  other
financial  covenants during the term of the agreement.  As of December 31, 2005,
we were obligated under this arrangement in the amount of $4,000,000.

     In connection with the purchase and expansion of the Alabama  facility,  we
closed on Industrial  Development  Bonds during 1997. The proceeds were utilized
for both the repayment of certain advances used to purchase the Alabama facility
and to expand such facility for our future needs. During July 2002, we completed
second  Industrial  Development Bond financing  aggregating $3.5 million through
the City of Montgomery,  Alabama.  Such transaction funded an approximate 70,000
square foot  addition  to the  manufacturing  facility as well as the  remaining
machinery  and  equipment   additions   required   therein.   This  project  was
substantially completed during 2003.

     In order to market the Industrial  Development Bonds at favorable rates, we
obtained a substitute  irrevocable letter of credit for the 1997 issue and a new
irrevocable  letter of credit for the 2002 issue.  Under such  letters of credit
agreements  maturing on July 31, 2006,  we are required to maintain a stipulated
level of working  capital,  a designated  maximum debt to tangible ratio,  and a
required debt service  coverage  ratio.  Such letters of credit are secured by a
first priority mortgage on the underlying Alabama facility and equipment.

     The bonds are marketed  weekly at the prevailing  rates for such tax-exempt
instruments. During the year ended December 31, 2005 such bonds carried interest
ranging  between  1.8% and 3.3%  annually.  Interest and  principal  are payable
quarterly.   We  believe  current   operations  are  sufficient  to  meet  these
obligations.

     On April 12, 2005 we entered into a financing  obligation with Regions Bank
whereby  they  advanced  us $500,000 to finance  equipment  acquisitions  at our
Kinpak  facility.  Such  obligation is due in monthly  installments of principal
aggregating   approximately  $8,300  plus  interest  at  prevailing  rates  (the
outstanding  balance and interest  rate on this  obligation at December 31, 2005
were  approximately  $ 433,300  and prime  plus  2.5% per  annum,  respectively)
through maturity on April 15, 2010.

     During the quarter ended December 31, 2005, we finalized a revolving credit
facility  with our president and CEO,  Peter G. Dornau.  In connection  with his
offering  to loan a maximum of $1.5  million to the  Company in order to bolster
working  capital,  we issued  warrants to Mr.  Dornau to purchase a maximum of 1
million shares of our common stock. Such warrants are exercisable 500,000 shares
at $1.13 and 500,000 shares at $.863. The exercise prices were determined by the

                                       10
<PAGE>
closing  bid of our  stock  plus ten (10)  percent  on each  date of  grant.  In
addition, he has the right, at his sole discretion,  to convert such debt into a
maximum  of 1.5  million  shares  of our  common  stock at the rate of $1.00 per
share.  At  December  31,  2005,  $1,150,000  was  outstanding  pursuant to this
obligation  which is due in October 2010 along with accrued interest at the rate
of prime plus 2%. Such  obligation is subordinate to all borrowings from Regions
Bank.

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

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

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

     As of December 31, 2005 and through the date hereof,  we did not and do not
have any material commitments for capital expenditures, nor do we have any other
present  commitment  that is likely to result  in our  liquidity  increasing  or
decreasing in any material way. In addition,  except for our need for additional
capital to finance inventory purchases,  we know of no trend, additional demand,
event or uncertainty that will result in, or that is reasonably likely to result
in, our liquidity  increasing or decreasing in any material way. Our  operations
during the year ended  December  31, 2005 have been  adversely  impacted by four
significant  challenges;  an  increasingly  unstable  commodity  market  causing
increased cost for petroleum related  products,  the announcement by our largest
customer that they have adopted a policy of reducing their inventory levels, our
immediate  geographic area  sustaining  three separate major  hurricanes,  and a
decrease in our manufacturing efficiency resulting in higher product costs. As a
result of the foregoing, we have sustained material losses during the year ended
December 31, 2005.  Management  has  analyzed  the  foregoing  and has adopted a
necessary,  but  flexible  strategy to provide the required  working  capital to
cover  these  losses,  maintain a pricing  model that more  closely  follows the
commodity  fluctuations  that we are exposed to, and address  those areas of our
operations that can be improved.

     As  disclosed in our Form 10-Q for the quarter  ended March 31,  2005,  our
largest customer,  West Marine, publicly announced their adoption of a policy to
reduce their  overall  inventory  levels.  This has  resulted in an  approximate
$4,294,000  decrease  in  sales to them for the year  ended  December  31,  2005
compared to 2004.  Our  products  have  historically  sold well at their  retail
stores  and  they  have  indicated  to us that  such is the  case  during  2005.
Accordingly,  it appears that they are approaching their inventory goals as they
relate to our products and we expect that our historical  recurring sales levels
to them will resume during 2006.

     Fortunately this season's  hurricanes caused only minimal direct damages to
our  facilities  and  operations,  principally  power  outages  and the  related
down-time.  However, the devastation sustained in the geographic areas that were
impacted were  significant and contributed to a reduction in sales to our retail
and distribution customers both in that region and nationally.  In addition, the
cost of petroleum  related  products,  major components in many of our products,
which were already in an increasing cost spiral, became even more unstable.  The
practical dynamics of our business do not afford us the same pricing flexibility
available to our  suppliers,  i.e. a major  petroleum  supplier tells us the new
price,  however we cannot as immediately pass along the increase to our national
retailers  and  distributors.  Aside from our  previously  reported  sales price
increase  to our  customers,  we have  recently  announced  another  sales price
increase which become  effective during the fourth quarter of 2005. In addition,
we have alerted customers who purchase products,  which are heavily dependent on
this  petroleum  related  issue,  that we will be more  responsive  to commodity
pricing and they must be  receptive  to  short-term  price  swings or accept our
refusal to ship at previously established pricing.
                                       11
<PAGE>
     Corporate  management  has enhanced its analysis,  supervision  and overall
involvement with our manufacturing  facility.  We have identified  several areas
that require  improvement and through  increased  on-site  management  presence,
major  personnel  changes,  adoption of certain  strategic  enhancements  to our
manufacturing  process,  and a renewed  commitment  from our team in  Alabama to
strive for improved efficiency and cost savings, we believe that we will achieve
a material reduction in manufacturing cost thereby improving product margins and
operating profits during 2006.

Results of Operations:

Years ended December 31, 2005 and 2004:

     Sales and earnings  varied when  comparing the year ended December 31, 2005
to 2004 principally due to the factors enumerated below.

     Net sales decreased 18.5% to  approximately  $17,652,000 for the year ended
December  31, 2005  compared  to  approximately  $21,657,100  for the year ended
December 31, 2004.  Management  attributes  such decrease  significantly  to our
largest  customer  adopting a policy of reducing  their  inventory  levels,  the
unusually  cold  weather  earlier in the year in various  regions of our country
resulting in a delay in the start of the 2005 recreational  boating season,  and
the hurricanes experienced during the third and fourth quarters of this year.

     Cost of goods  sold  increased  to 82.9% of net  sales  for the year  ended
December 31, 2005 compared to 77.0% of net sales for the year ended December 31,
2004.  Such  increase is attributed  to  increasing  raw material  costs and the
impact of spreading fixed overhead items to a reduced level of sales.

     Advertising  and promotion  expenses  increased  approximately  $167,300 or
17.7% for the 2005 period when compared to comparable  expenses in the same time
period in the previous year. This resulted  primarily from planned  increases in
media and co-op advertising programs for the current year.

     Selling  and   administrative   expenses,   as   restated,   increased   by
approximately  $168,600 or 5% for the year ended  December 31, 2005  compared to
the year ended  December 31, 2004.  Such change was  primarily  due to increased
personnel  costs and other normal  recurring  increases  in  operating  expenses
offset by the recognition  compensation cost associated with the modification of
certain stock options during 2004 with no comparable item in 2005.

     Interest   expense  for  the  year  ended   December  31,  2005   increased
approximately  $191,600  when compared to 2004.  This  resulted from  increasing
interest rates and higher levels of borrowing  under our working capital line of
credit and other financing obligations.

     Our loss before  income  taxes was  approximately  $2,347,700  for the year
ended  December  31,  2005  compared  to  a  pre-tax  profit,   as  restated  of
approximately $122,000 for the year ended December 31, 2004.

     Our estimated benefit from income taxes amounted to approximately  $534,500
for the year ended  December  31,  2005,  and  reflects  available  tax net loss
carry-back  provisions  based on the  operations  of the  Company as well as the
reversal of deferred income tax liabilities  attributable to timing  differences
between our book and income tax methods of accounting  that are  anticipated  to
reverse during the available carryover period.

     As a result  of the  foregoing,  our net  loss  amounted  to  approximately
$1,813,200  for the year ended  December 31, 2005  compared to a net income,  as
restated of approximately $17,200 for the year ended December 31, 2004.



                                       12

<PAGE>

Years ended December 31, 2004 and 2003:

     Sales and earnings  varied when  comparing the year ended December 31, 2004
to 2003 principally due to the factors enumerated below.

     Gross sales  increased 9% to  approximately  $24,361,000 for the year ended
December 31, 2004 compared to $22,178,000  for the year ended December 31, 2003.
Management  attributes  this  increase  in sales to gains made  during the third
quarter  of the  current  year as well as  increased  sales  promotions  and the
related increase in revenues during the fourth quarter of 2004.

     Cost of  goods  sold  increased  to 77% of net  sales  for the  year  ended
December 31, 2004 compared to 75.7% of net sales in the year ended  December 31,
2003.  This change  resulted  from  various  factors,  some of which  negatively
impacted  margins and  others,  which  mitigated  these  factors.  Specifically,
petroleum  product  costs are higher than those  experienced  in prior years and
currently represent a higher portion of our manufacturing expenses. In addition,
a price  increase was passed  along on certain of our products  during the first
and second  quarters of 2004. In addition,  margins were  favorably  impacted by
spreading the fixed elements of overhead over an increased revenue base.

     Advertising and promotion expenses increased approximately $201,000 for the
2004  period when  compared to expenses in the same time period in the  previous
year.  This  increase  resulted   primarily  from  increased  co-op  advertising
associated with increased  sales to certain  customers and the timing of various
advertising programs in 2004.

     Selling  and   administrative   expenses,   as   restated,   increased   by
approximately $277,300 or 8% in the year ended December 31, 2004 compared to the
year ended  December  31,  2003.  Such  change was  primarily  due to  increased
personnel costs,  compensation  cost associated with the modification of certain
stock options, and other normal recurring increases in operating expenses.

     Interest   expense  for  the  year  ended   December  31,  2004   increased
approximately  $17,000 when  compared to the same  twelve-month  period of 2003.
This  change  was  primarily  due to the  impact  of higher  interest  rates and
increased borrowings.

Contractual obligations:

     The following  table  reflects our  contractual  obligations  for the years
ended December 31,:
<TABLE>
<CAPTION>

                                           Total            2006             2007-09             2010         Thereafter
                                        ----------        --------         -----------       -----------      ----------
<S>                                     <C>               <C>              <C>                <C>             <C>
  Long-term debt obligations            $6,786,448        $559,996         $ 1,679,992        $1,643,352      $2,903,108
  Capital leases                            56,264          20,856              35,408               -                -
  Operating leases                         319,833         104,507             215,326               -                -
  Purchase obligations                         -               -                   -                 -                -
  Other                                        -               -                   -                 -                -
                                        ----------        --------         -----------       -----------      ----------
Total                                   $7,162,545        $685,359         $ 1,930,726        $1,643,352      $2,903,108
                                        ==========        ========         ===========        ==========      ==========
</TABLE>

Item 7A.  Quantitative and Qualitative Disclosure About Market Risk

     We do not engage in derivative  transactions.  We become exposed to foreign
currency  transactions  as a result of our  operations  in Canada  and we do not
hedge such  exposure.  Our exposure to market risk for changes in interest rates
relates  primarily to the interest rate on our bonds.  The interest rates on our
bonds  adjusted  weekly and ranged  between  1.8% and 3.3% during the year ended
December 31, 2005.

                                       13

<PAGE>

Item 8.  Financial Statements and Supplementary Data

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

     As more fully  discussed  in Note 12 -  Restatements,  to the  Consolidated
Financial  Statements,  we are filing this amended Form 10-K/A  including  these
substantive  changes:  (a) the recognition of the  compensation  cost associated
with stock options of which  certain  terms were modified  during the year ended
December  31,  2004 and (b) the  reclassification  between  debt and  additional
paid-in  capital of  certain of the  proceeds  from the  Revolving  Subordinated
Obligation to our President and CEO,  Peter G. Dornau  received  during the year
ended December 31, 2005. Neither of these items have an impact on our previously
reported cash flows.

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

None.

Item 9A.  Controls and Procedures:

     Evaluation of Disclosure  Controls and Procedures.  The Company has carried
out an evaluation  under the supervision of management,  including the President
and Chief  Executive  Officer ("CEO") and the Vice President - Finance and Chief
Financial  Officer ("CFO"),  of the effectiveness of the design and operation of
its disclosure  controls and procedures.  Based on that evaluation,  our CEO and
CFO have concluded  that, as of December 31, 2005,  our disclosure  controls and
procedures were effective to ensure that information required to be disclosed by
the  Company  in the  reports  filed or  submitted  by it under  the  Securities
Exchange  Act of 1934,  as  amended,  is  recorded,  processed,  summarized  and
reported  within the time  periods  specified in the rules and forms of the SEC,
and include controls and procedures designed to ensure that information required
to be  disclosed  by us in such  reports  is  accumulated  and  communicated  to
management,  including the CEO and CFO, as appropriate to allow timely decisions
regarding required disclosures.

     Changes in Internal  Controls.  Since the evaluation  date by the Company's
management of its internal  controls over  financial  reporting,  there have not
been any changes in our internal  controls over  financial  reporting  that have
materially affected,  or are reasonably likely to materially affect our internal
controls over financial reporting.

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


                                    Part III

Item 10.  Executive Officers and Directors of the Registrant

     The following  tables set forth the name and ages of our elected  directors
and officers, as of December 31, 2005.

     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.

                                       14

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

    NAME                   OFFICE                                            AGE

Peter G. Dornau        President, Chief Executive Officer, and                66
                         Director since 1973

Edward Anchel          Vice President-Finance, Chief Financial                59
                         Officer since 1999 and Director since 1998

Jeffrey J. Tieger      Vice President-Advertising and Marketing,
                                Secretary and Director since 1977             62

William W. Dudman      Vice President-Operations since 2004                   41

Gregor M. Dornau       Vice President-Sales since 2005                        37

James M. Kolisch       Director since 1998                                    54

Laz L. Schneider       Director since 1998                                    66

John B. Turner         Director since 2000                                    58

Sonia B. Beard         Director since 2002                                    35

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

     Edward  Anchel  joined  our  company  as Vice  President-Finance  and Chief
Financial  Officer in March 1999. 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 initially elected to
serve as an outside Director of the Company in May 1998.

     Jeffrey  J.   Tieger   joined  our   company  in  June  1977  as  our  Vice
President-Advertising and has served in that position through the present date.

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

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

     James M. Kolisch  joined our Board of  Directors as an outside  director in
May 1998.  During  the past five  years,  Mr.  Kolisch  has been  engaged in the
insurance industry and served as president of USI Florida an entity that sources
most of the our insurance  needs.  Mr. Kolisch serves on the Board of Directors'
Audit Committee.

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




                                       15

<PAGE>
     John B. Turner joined our Board of Directors in June 2002.  During the past
five years,  Mr. Turner has been  retired.  Prior to his  retirement,  he was an
insurance executive. 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. Mr. Turner serves on
the Board of Directors' Audit Committee.

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

Audit Committee

     We have an Audit  Committee,  which  consists  of Sonia B.  Beard,  John B.
Turner and James M. Kolisch as of December 31,  2005.  The Board has  designated
Sonia B. Beard as the "audit  committee  financial  expert,"  as defined by Item
401(h) of Regulation  S-K of the  Securities  Exchange Act of 1934 and serves as
its  chairperson.  The Board has determined that Sonia B. Beard,  John B. Turner
and James M.  Kolisch  are  "independent  directors"  within the  meaning of the
listing standards of the Nasdaq Capital Market.

Code of Ethics

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

Compliance with Section 16(a) of the Exchange Act

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

Item 11.  Management Remuneration and Transactions

     The information  required for this item is incorporated by reference to our
Definitive   Proxy  Statement  to  be  filed  in  conjunction  with  the  annual
shareholders'  meeting that shall be filed with the United States Securities and
Exchange  Commission  and sent out to  shareholders  prior to 120 days  past our
year-end of December 31, 2005.

Item 12.  Security Ownership of Certain Beneficial Owners and Management

     The  following  table sets forth  information  at  December  31,  2005 with
respect to the beneficial  ownership of our common stock by holders of more than
5% of such stock and by all of our directors and officers as a group:
<TABLE>
<CAPTION>

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

Common            Peter G. Dornau, President, CEO,
                  Chairman Board of Directors
                  Fort Lauderdale, FL 33317                        3,982,868 (1)         54.0%

Common            Edward Anchel, Vice President-Finance,
                  CFO, Director
                  Boynton Beach, FL 33437                            272,951 (2)          3.7%

Common            Jeffrey J. Tieger, Vice President-Advertising,
                  Secretary, Director
                  Plantation, FL 33314                               379,280 (3)         5.14%
                                       16
<PAGE>
Common            William W. Dudman, Vice President-Operations
                  Plantation, FL 33317                                37,300 (4)          .51%

Common            Gregor M. Dornau, Vice President-Sales
                  Fort Lauderdale, FL 33315                          238,380 (5)         3.23%

Common            James M. Kolisch, Director
                  Coral Gables, FL 33114                              46,167 (6)          .63%

Common            Laz L. Schneider, Director
                  Fort Lauderdale, FL 33305                           30,000 (7)          .41%

Common            John B. Turner, Director
                  Miami, FL 33186                                     59,463 (8)          .81%

Common            Sonia B. Beard, Director
                  Merritt Island, FL 32952                            20,000 (9)          .27%
                                                                   --------------     --------
Common            All directors and officers as a group
                  9 individuals                                    5,066,409 (10)       68.71%
                                                                   ==============     ========

</TABLE>
     (1) Includes  1,162,500 shares that are issuable upon the exercise of stock
options and/or warrants within 60 days of December 31, 2005.

     (2) Includes  47,000  shares that are  issuable  upon the exercise of stock
options within 60 days of December 31, 2005.

     (3) Includes  162,500  shares that are issuable  upon the exercise of stock
options within 60 days of December 31, 2005.

     (4)  Includes  3,000  shares that are  issuable  upon the exercise of stock
options within 60 days of December 31, 2005.

     (5) Includes  39,600  shares that are  issuable  upon the exercise of stock
options within 60 days of December 31, 2005.

     (6) Includes  30,000  shares that are  issuable  upon the exercise of stock
options within 60 days of December 31, 2005.

     (7) Includes  30,000  shares that are  issuable  upon the exercise of stock
options within 60 days of December 31, 2005.

     (8) Includes  30,000  shares that are  issuable  upon the exercise of stock
options within 60 days of December 31, 2005.

     (9) Includes  20,000  shares that are  issuable  upon the exercise of stock
options within 60 days of December 31, 2005.

     (10) Includes 1,524,600 shares that are issuable upon the exercise of stock
options and/or warrants within 60 days of December 31, 2005.
                                       17

<PAGE>
Item 13.  Certain Relationships and Related Transactions

     On May 1, 1998, we entered into a ten-year lease for  approximately  12,700
square feet of office and warehouse facilities in Fort Lauderdale,  Florida from
an entity  fifty  percent  owned each by Messrs.  Peter G. Dornau and Jeffrey J.
Tieger, our President and Vice  President-Advertising,  respectively.  The lease
required a minimum  rental of $94,800 the first year and  provides for a maximum
2% increase on the anniversary of the lease  throughout the term.  Additionally,
the  landlord is entitled to collect  from us its  pro-rata  share of all taxes,
assessments,  insurance premiums, operating charges, maintenance charges and any
other expenses,  which normally arise from ownership.  We believe 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, 2005,  2004 and 2003
amounted to approximately $100,500 each year.

     We acquired the rights to the Star brite(R)  trademark and related products
for the  United  States  and  Canada in  conjunction  with our  original  public
offering  during  March 1981.  Peter G. Dornau,  our  president is the direct or
beneficial  owner of three companies that market Star brite(R)  products outside
the United  States and Canada.  These  companies  serve as  distributors  of our
products  and the terms of payment are the same as for our other  customers.  At
December 31, 2005 and 2004, we had amounts due from affiliated companies,  which
are directly or beneficially  owned by our president  aggregating  approximately
$29,022 and $408,500, respectively.

     Sales of Star brite products to such  affiliates  aggregated  approximately
$826,898,  $616,800 and $373,600  during the years ended December 31, 2005, 2004
and 2003, respectively.

     A subsidiary of ours currently uses the services of an entity that is owned
by our  president  to conduct  product  research  and  development.  Such entity
received  $30,000 per year during the years ended  December 31,  2005,  2004 and
2003 under such relationship.

Item 14. Principal Accounting Fees and Services

     The information  required for this item is incorporated by reference to our
Definitive   Proxy  Statement  to  be  filed  in  conjunction  with  the  annual
shareholders' meeting which shall be filed with the United States Securities and
Exchange  Commission  and sent out to  shareholders  prior to 120 days  past our
year-end of December 31, 2005.

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

     As more fully  discussed  in Note 12 -  Restatements,  to the  Consolidated
Financial  Statements,  we are filing this amended Form 10-K/A  including  these
substantive  changes:  (a) the recognition of the  compensation  cost associated
with stock options of which  certain  terms were modified  during the year ended
December  31,  2004 and (b) the  reclassification  between  debt and  additional
paid-in  capital of  certain of the  proceeds  from the  Revolving  Subordinated
Obligation to our President and CEO,  Peter G. Dornau  received  during the year
ended December 31, 2005. Neither of these items have an impact on our previously
reported cash flows.

     (A) Consolidated financial statements:

     (i) Consolidated balance sheets as of December 31, 2005 and 2004.

     (ii)  Consolidated  statements  of  operations  for each of the three years
ended December 31, 2005, 2004 and 2003.

     (iii) Consolidated  statement of shareholders' equity for each of the three
years ended December 31, 2005, 2004 and 2003.

     (iv)  Consolidated  statements  of cash  flows for each of the three  years
ended December 31, 2005, 2004 and 2003.

     (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.

                                       18
<PAGE>

     (B) Exhibits

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

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

     4.1 Form of Certificate for Series 1997 Bonds*

     4.2 Form of Certificate for Series 2002 Bond*

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                                       19

<PAGE>
     10.13 Ocean Bio-Chem,  Inc. 2002 Incentive Stock Option Plan  (incorporated
by reference to an exhibit contained in the Company's proxy statement filed with
the United States Securities and Exchange Commission on April 28, 2003).

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

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

     21. List of Subsidiaries **

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

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

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

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


* Incorporated by reference to our Annual Report on Form 10-K for the year ended
December 31, 2004.

** Attached hereto.



































                                       20
<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

                                August  31, 2006


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

                                August  31, 2006


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

Signature                           Capacity                          Date
-------------------             -----------------------------   ----------------
/s/ Peter G. Dornau             President, Chief Executive      August  31, 2006
Peter G. Dornau                 Officer and Director

/s/ Edward Anchel               Vice President Finance, Chief   August  31, 2006
Edward Anchel                   Financial Officer, Director

/s/ Jeffrey J. Tieger           Vice President, Secretary       August  31, 2006
Jeffrey J. Tieger               and Director

/s/ James M. Kolisch            Director                        August  31, 2006
James M. Kolisch

/s/ Laz L. Schneider            Director                        August  31, 2006
Laz Schneider

/s/ John B. Turner              Director                        August  31, 2006
John B. Turner

/s/ Sonia B. Beard              Director                        August  31, 2006
Sonia B. Beard

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
Registrant has not sent an annual report or proxy  material to  security-holders
as of this date. Subsequent to this filing the Registrant will produce an annual
report and definitive  proxy  materials for its Annual Meeting of  Shareholders.
Copies of such shall be filed with the United  States  Securities  and  Exchange
Commission pursuant to the current requirements.




                                       21

<PAGE>


                                                                      EXHIBIT 21
         The following is a list of the Registrant's subsidiaries:


                  Name:                                    Ownership %

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










































                                       22

<PAGE>
                                                                  EXHIBIT 32.1/2



                                  CERTIFICATION

     Pursuant  to  18U.S.C.  Section  1350,  the  undersigned  officers of Ocean
Bio-Chem, Inc. (the "Company"),  hereby certify that the Company's Annual Report
on Form 10-K for the year ended December 31, 2005 (the "Report")  fully complies
with  the  requirements  of  Section  13(a)  or  15(d),  as  applicable,  of the
Securities Exchange Act of 1934 and that the information contained in the Report
fairly presents,  in all material respects,  the financial condition and results
of operation of the Company.

Dated: August  31, 2006


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




                                /s/ Edward Anchel
                                Edward Anchel
                                Chief Financial
                                Officer




























                                       23
<PAGE>
                                                                    Exhibit 31.1
                                  CERTIFICATION


I, Peter G. Dornau certify that:

     1. I have reviewed this Form 10-K/A of Ocean  Bio-Chem,  Inc. as of and for
the period ended December 31, 2005;


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

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

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

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

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

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

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

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

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

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


Dated: August  31, 2006         /s/ Peter G. Dornau
                                Peter G. Dornau
                                Chairman of the Board and
                                Chief Executive Officer







<PAGE>

                                                                    Exhibit 31.2
                                  CERTIFICATION

I, Edward Anchel certify that:


1. I have reviewed this Form 10-K/A of Ocean  Bio-Chem,  Inc. as of and for
the period ended December 31, 2005;


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

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

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

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

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

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

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

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

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

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


Dated: August  31, 2006         /s/ Edward Anchel
                                Edward Anchel
                                Chief Financial Officer



<PAGE>











                      OCEAN BIO-CHEM, INC. AND SUBSIDIARIES

                        CONSOLIDATED FINANCIAL STATEMENTS

                  YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003


<PAGE>

                      OCEAN BIO-CHEM, INC. AND SUBSIDIARIES
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
                  YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003




                                                                        Page

         Reports of independent registered public accounting firms    F-2-F-3

         Consolidated balance sheets                                    F-4

         Consolidated statements of operations                          F-5

         Consolidated statement of shareholders' equity                 F-6

         Consolidated statements of cash flows                          F-7

         Notes to consolidated financial statements                   F-8-F-16











<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


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

     We have  audited  the  accompanying  consolidated  balance  sheets of Ocean
Bio-Chem,  Inc. (the  "Company") and  subsidiaries,  as of December 31, 2005 and
2004,  and the related  consolidated  statements  of  operations,  shareholders'
equity, and cash flows for the years then ended. These financial  statements are
the responsibility of the company's management. Our responsibility is to express
an opinion on these  financial  statements  based on our audits.  The  financial
statements of Ocean  Bio-Chem,  Inc for the year ending  December 31, 2003, were
audited by other auditors whose report thereon,  dated March 25, 2004, expressed
an unqualified opinion.

     We  conducted  our audits in  accordance  with the  standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain  reasonable  assurance about whether the
financial  statements  are free of  material  misstatement.  The  company is not
required  to have,  nor were we engaged  to  perform,  an audit of its  internal
control over financial reporting.  Our audit included  consideration of internal
control over financial  reporting as a basis for designing audit procedures that
are appropriate in the  circumstances,  but not for the purpose of expressing an
opinion on the  effectiveness  of the company's  internal control over financial
reporting.  Accordingly,  we express  no such  opinion.  An audit also  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial   statements,   assessing  the  accounting  principles  used  and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  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  subsidiaries  as of December  31, 2005 and 2004 and the  consolidated
results of its  operations  and its  consolidated  cash flows for the years then
ended, in conformity with accounting principles generally accepted in the United
States of America.


LEVI, CAHLIN & CO.
North Miami Beach, Florida
March 22, 2006, except as to note 12, as to which
  the date is August 25, 2006


















                                       F-2

<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM




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


     We have audited the  consolidated  statements of operations,  shareholders'
equity,  and cash  flows  for  Ocean  Bio-Chem,  Inc.  (the  "Company")  and its
subsidiaries  for the year ended December 31, 2003.  These financial  statements
are the  responsibility of the Company's  management.  Our  responsibility is to
express an opinion on these financial statements based on our audit.

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

     In our opinion,  the financial statements referred to above present fairly,
in all material respects,  the consolidated results of operations and cash flows
of Ocean Bio-Chem,  Inc. and  Subsidiaries for the year ended December 31, 2003,
in conformity with accounting principles generally accepted in the United States
of America.



Berkovits, Lago & Company, LLP
Fort Lauderdale, Florida
March 25, 2004




















                                       F-3


<PAGE>


                      OCEAN BIO-CHEM, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 2005 AND 2004
<TABLE>
<CAPTION>

                                     ASSETS
                                                                         2005               2004
                                                                     -----------         -----------
                                                                      (Restated)          (Restated)
 <S>                                                                 <C>                 <C>
 Current Assets
 Cash                                                                $   204,543         $   988,106
 Trade accounts receivable net of allowance for
   doubtful accounts of approximately $131,000
   and $201,000, respectively                                          2,027,162           4,652,144
 Inventories                                                           6,260,813           5,218,431
 Refundable income taxes                                                 274,500                 -
 Prepaid expenses and other current assets                               235,574             214,492
                                                                     -----------         -----------
   Total current assets                                                9,002,592          11,073,173
                                                                     -----------         -----------
 Property, plant and equipment, net                                    7,310,640           7,337,600
                                                                     -----------         -----------
 Other assets:
 Funds held in escrow for equipment                                        -                   1,853
 Trademarks, trade names, and patents                                    330,439             330,439
 Due from affiliated companies                                            29,022             408,476
 Deposits and other assets                                               230,329             246,803
                                                                     -----------         -----------
   Total other assets                                                    589,790             987,571
                                                                     -----------         -----------
   Total assets                                                      $16,903,022         $19,398,344
                                                                     ===========         ===========
                      LIABILITIES AND SHAREHOLDERS' EQUITY
 Current liabilities:
 Accounts payable trade                                              $ 1,256,640         $ 2,251,287
 Note payable bank                                                     4,000,000           4,500,000
 Current portion of long-term debt                                       580,852             483,112
 Accrued expenses payable                                                451,977             374,200
                                                                     -----------         ------------
   Total current liabilities                                           6,289,469           7,608,599
                                                                     -----------         ------------
 Deferred income taxes payable                                              -                260,000
                                                                     -----------         ------------
 Long-term debt less current portion                                   5,950,958           5,580,250
                                                                     -----------         ------------
 Commitments and contingencies                                              -                  -

 Shareholders' equity:
 Common stock - $.01 par value, 10,000,000 shares
   authorized, 5,849,316 and 5,417,813 shares
   issued and outstanding at December 31,
   2005 and 2004, respectively                                            58,493              54,178
 Additional paid-in capital                                            5,397,845           4,901,078
 Foreign currency translation adjustment                             (   179,653)        (   204,864)
 Retained earnings (deficit)                                         (   605,895)          1,207,298
                                                                     ------------        ------------
                                                                       4,670,790           5,957,690
 Less treasury stock 7,519 shares, at cost                           (     8,195)        (     8,195)
                                                                     ------------        ------------
   Total shareholders' equity                                          4,662,595           5,949,495
                                                                     ------------        ------------
   Total liabilities and shareholders' equity                        $16,903,022         $19,398,344
                                                                     ============        ============
</TABLE>

      The accompanying notes are an integral part of these financial statements.
                                                                     F-4
<PAGE>

                      OCEAN BIO-CHEM, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                  YEARS ENDED DECEMBER 31, 2005, 2004, AND 2003

<TABLE>
<CAPTION>

                                                        2005             2004                2003
                                                    -----------      -----------         -----------
                                                                      (Restated)
<S>                                                 <C>              <C>                 <C>
 Gross Sales                                        $19,706,469      $24,361,056         $22,178,352

 Less discounts, returns and allowances               2,054,564        2,703,973           2,180,650
                                                    ------------     -----------         -----------
 Net sales                                           17,651,905       21,657,083          19,997,702

 Cost of goods sold                                  14,640,883       16,675,780          15,131,775
                                                    ------------     -----------         -----------
 Gross profit                                         3,011,022        4,981,303           4,865,927
                                                    ------------     -----------         -----------
 Operating expenses:
    Advertising and promotion                         1,110,258          942,991             742,167
    Selling and administrative                        3,775,848        3,607,205           3,329,904
    Interest                                            499,433          307,840             290,856
                                                    ------------     -----------         -----------
    Total operating expenses                          5,385,539        4,858,036           4,362,927
                                                    ------------     -----------         -----------
 Operating profit (loss)                            ( 2,374,517)         123,267             503,000

 Interest and other income                               26,824              955              19,871
                                                    ------------     -----------         -----------
 Income (loss) before provision (benefit)
    for income taxes                                ( 2,347,693)         124,222             522,871

 Provision (benefit) for income taxes               (   534,500)         107,000             177,800
                                                    ------------     -----------         -----------
 Net income (loss)                                  ( 1,813,193)          17,222             345,071

 Other comprehensive income:
    Foreign currency translation,
    net of taxes                                         25,211           32,459              66,252
                                                    ------------     -----------         -----------
 Comprehensive income (loss)                        ($1,787,982)     $    49,681         $   411,323
                                                    ============     ===========         ===========
 Earnings (loss)  per share:
    Basic                                           ($      .32)     $      -            $       .07
                                                    ============     ===========         ===========
    Diluted                                         ($      .32)     $      -            $       .07
                                                    ============     ===========         ===========
</TABLE>








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


                                       F-5

<PAGE>

                      OCEAN BIO-CHEM, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
                     ENDED DECEMBER 31, 2005, 2004 AND 2003
<TABLE>
<CAPTION>

                                                                       Foreign           Retained
                                   Common stock         Additional     currency          earnings        Treasury
                               Shares      Amount    paid-in capital  adjustment         (deficit)        stock           Total
                              ---------    -------   ---------------  ----------        ----------       --------       ----------
                                                        (Restated)                      (Restated)                      (Restated)

<S>                           <C>          <C>          <C>           <C>               <C>              <C>            <C>
January 1,                    4,805,843    $48,058      $4,341,629    ($ 303,575)       $  845,005       ($ 8,195)      $4,922,922
 2003

Net income                                                                                 345,071                         345,071

Issuances of
  common stock                  155,000      1,550          68,200                                                          69,750

Foreign currency
   translation
   adjustment                                                             66,252                                            66,252
                              ---------    -------      ----------    -----------       -----------      ---------      ----------
December 31,
 2003                         4,960,843     49,608       4,409,829    (  237,323)        1,190,076       (  8,195)       5,403,995

Net income                                                                                  17,222                          17,222

Issuances of
  common stock                  456,970      4,570         312,917                                                         317,487

Compensation
   cost associated
   stock option
   modifications
                                                           178,332                                                         178,332

Foreign currency
   translation
   adjustment                                                             32,459                                            32,459
                              ---------    -------      ----------    -----------       -----------      ---------      ----------
December 31,
 2004                         5,417,813     54,178       4,901,078    (  204,864)        1,207,298       (  8,195)       5,949,495

Net (loss)                                                                              (1,813,193)                     (1,813,193)

Issuances of
  common stock                  431,503      4,315         185,869                                                         190,184

Compensation cost
  associated with
  warrants issued
  pursuant to
  Subordinated
  Revolving Note                                           310,898                                                         310,898

Foreign currency
   translation
   adjustment                                                             25,211                                            25,211
                              ---------    -------      ----------    -----------       -----------      ---------      ----------
December 31,
 2005                         5,849,316    $58,493      $5,397,845    ($ 179,653)       ($ 605,895)      ($ 8,195)      $4,662,595
                              =========    =======      ==========    ===========       ===========      =========      ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.

                                       F-6

<PAGE>

                      OCEAN BIO-CHEM, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                  YEARS ENDED DECEMBER 31, 2005, 2004, AND 2003
<TABLE>
<CAPTION>

                                                        2005             2004                2003
                                                    -----------      -----------         -----------
                                                                      (Restated)
 <S>                                                <C>              <C>                 <C>
 Cash flows from operating activities:
 Net income (loss)                                  ($1,813,193)     $    17,222        $    345,071
 Adjustments to reconcile net income (loss)
   to net cash provided (used) by operations:
   Depreciation and amortization                        762,943          735,103             674,955
   Issuance of common stock to employees                 97,265           87,813              69,750
   Compensation cost associated with stock
     option modifications                                   -            178,332                 -
   Changes in assets and liabilities:
     (Increase) decrease in accounts receivable       2,624,982      (   319,121)        ( 1,142,666)
     (Increase) decrease in inventory               ( 1,042,381)          97,310         (   774,591)
     (Increase) in recoverable income taxes         (   274,500)             -                   -
     (Increase) decrease in prepaid expenses        (    21,083)     (    21,120)            268,740
     (Decrease) increase in accounts payable
        and accrued taxes and other                 ( 1,160,393)       1,148,030         (   540,922)
                                                    ------------     ------------        ------------
 Net cash provided (used) by operating activities   (   826,360)       1,923,569         ( 1,099,663)
                                                    ------------     ------------        ------------
 Cash flows from financing activities:
   Net borrowings (reductions) under line of credit (   500,000)     (    50,000)            300,000
   (Increase)decrease in amounts due from affiliates    379,454      (   235,551)            439,350
   Increases in (reductions to) long-term debt, net (   370,655)     (   513,293)        (   587,203)
   Increase in notes payable - Peter Dornau and
     affiliates                                       1,150,000              -                   -
   Issuance of common stock from exercised
     stock options                                       92,919          229,674                 -
                                                    ------------     ------------        ------------
 Net cash provided (used) by financing activities       751,718      (   569,170)            152,147
                                                    ------------     ------------        ------------

 Cash flows used by investing activities:
   Purchases of property, plant and equipment       (   735,983)     (   566,117)        ( 1,204,538)
   Utilization of (additions to) trust funds for
     equipment purchased, net                             1,851          124,442           1,034,899
                                                    ------------     ------------        ------------
 Net cash used by investing activities              (   734,132)     (   441,675)        (   169,639)
                                                    ------------     ------------        ------------
 Increase (decrease) in cash prior to effect of
   exchange rate on cash                            (   808,774)         912,724         ( 1,117,155)
   Effect of exchange rate on cash                       25,211           32,459              66,252
                                                    ------------     ------------        ------------
 Net increase (decrease) in cash                    (   783,563)         945,183         ( 1,050,903)
 Cash at beginning of year                              988,106           42,923           1,093,826
                                                    ------------     ------------        ------------
 Cash at end of year                                $   204,543      $   988,106         $    42,923
                                                    ============     ============        ============

 Supplemental information
  Cash paid for interest during year                $   499,433      $   307,840         $   290,856
                                                    ============     ============        ============
  Cash paid for income taxes during year            $      -         $   149,000         $    60,000
                                                    ============     ============        ============
  Non-cash transactions - compensation cost
    associated with stock options and warrants      $   310,898      $   178,332         $       -
                                                    ============     ============        ============
</TABLE>

 The Company had no cash equivalents at December 31, 2005, 2004, and 2003.

 The accompanying notes are an integral part of these financial statements.
                                       F-7


<PAGE>

                      OCEAN BIO-CHEM, INC. AND SUBSIDIARIES
                        NOTES TO CONSOLIDATED STATEMENTS
                  YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003

Note 1 - Organization and summary of significant accounting policies:

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

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

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

     Inventories  -  Inventories  are  primarily  composed of raw  materials and
finished  goods  and are  stated  at the  lower of  cost,  using  the  first-in,
first-out method, or market. The composition of inventories at December 31, 2005
and 2004 are as follows:

                                             2005         2004
                  Raw materials          $3,235,086    $3,111,394
                  Finished goods          3,025,727     2,107,038
                                         ----------    ----------
                                         $6,260,813    $5,218,432
                                         ==========    ==========

     Prepaid  advertising  and  promotion - During the years ended  December 31,
2005,  2004 and  2003,  the  Company  introduced  certain  new  products  to its
customers.  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, 2005 and 2004,  the  accumulated  cost of materials on hand and
other  deferred  promotional  costs  that were or will be  charged  against  the
subsequent  year's  operations  amounted to  approximately  $16,486 and $25,900,
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.
For the years  ended  December  31,  2005,  2004 and 2003,  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 amount of assets,  liabilities,  revenues and
expenses  during the reporting  period.  Actual  results could differ from those
estimates.

     Concentration  of credit  risk -  Financial  instruments  that  potentially
subject  the  Company to  concentration  of credit  risk  consist  primarily  of
accounts   receivable.   The  Company's  five  largest   customers   represented
approximately  43%,  55% and 55% of  consolidated  gross  revenues for the years
ended December 31, 2005, 2004 and 2003; and 26% and 77% of consolidated accounts
receivable  at  December  31,  2005 and 2004,  respectively.  The  Company has a
longstanding  relationship  with each of these entities and has always collected
open receivable balances. However, the loss of any of these customers could have
an adverse impact on the Company's operations.

                                       F-8

<PAGE>

     Concentration  of cash - At various  times of the year and at December  31,
2005,  the  Company  had a  concentration  of cash  in one  bank  in  excess  of
prevailing  insurance offered through the Federal Deposit Insurance  Corporation
at such  institution.  Management  does not consider the excess deposits to be a
significant risk.

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

     Income taxes - The Company and its subsidiaries file  consolidated  federal
and state  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 such  intangible
assets was amortized on a straight-line  basis over an estimated  useful life of
40 years through  December 31, 2001.  Effective  January 1, 2002 and pursuant to
Statement of Financial  Accounting Standards No. 142, the Company has determined
that the carrying value of such intangible  assets relating to its Star brite(R)
brand does not require further amortization.  In addition,  the Company owns two
patents that it believes are valuable in limited product lines, but not material
to its success or competitiveness in general.  There are no capitalized costs of
these two patents.  Management  has  considered the impact of the loss sustained
for the year  ended  December  31,  2005 in order to  determine  if a  permanent
impairment of value of these assets has been experienced. The underlying reasons
for the loss are not viewed as  permanent  in nature  and,  management  does not
believe  that  a  permanent  impairment  has  been  realized.   Accordingly,  no
adjustment has been made.

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

     Reclassifications   -  Certain  items  in  the  accompanying   consolidated
financial  statements  for the years ended  December 31, 2004 and 2003 have been
reclassified to conform with the 2005 presentation.

Note 2 - Property, plant and equipment:

     The Company's  property,  plant and equipment  consisted of the  following:
December 31, 2005 2004

  Land                                          $   278,325     $   278,325
  Building                                        4,390,894       4,390,894
  Manufacturing and warehouse equipment           6,044,138       5,359,009
  Office equipment and furniture                    652,940         623,825
  Construction in process                           278,239         261,693
  Leasehold improvement                             145,505         151,976
                                                -----------     -----------
                                                 11,790,041      11,065,722
  Less accumulated depreciation                   4,479,401       3,728,122
                                                -----------     -----------
  Total property, plant and equipment, net      $ 7,310,640     $ 7,337,600
                                                ===========     ===========

     Depreciation  expense for the years ended December 31, 2005, 2004 and 2003,
which  includes   amortization   of  capitalized   lease  assets,   amounted  to
approximately $762,900, $735,100 and $675,100, respectively.

                                      F-9
<PAGE>

     Included in property,  plant and equipment are the following  assets at the
Company's Alabama  subsidiary and which are substantially held under capitalized
leases securing certain City of Montgomery, AL Industrial Development Bonds:

                                                         December 31,
                                                     2005            2004
                                                -----------     -----------
  Land                                          $   278,325     $   278,325
  Building                                        4,390,894       4,390,894
  Manufacturing and warehouse equipment           5,747,411       4,867,141
  Construction in process                           274,843         261,693
                                                -----------     -----------
                                                 10,691,473       9,798,053
  Less accumulated depreciation                   3,557,788       2,773,757
                                                -----------     -----------
    Total                                       $ 7,133,685      $7,024,296
                                                ===========     ===========

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

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

     Management  has  considered  the impact of the loss  sustained for the year
ended December 31, 2005 in order to determine if a permanent impairment of value
of these assets has been  experienced.  The underlying  reasons for the loss are
not viewed as  permanent  in nature  and,  management  does not  believe  that a
permanent  impairment  has been  realized.  Accordingly,  no adjustment has been
made.

     Obligations for future payments  attributable to these  capitalized  leases
are discussed in Note 4, below.

Note 3 - Note payable, bank:

     During 2002, the Company secured a revolving line of credit, which provided
a maximum of $5 million of working  capital from the  commercial  bank providing
the  financing for the  expansion  discussed in Note 2, above.  The line carries
interest  based on the 30 day LIBOR  rate plus 275 basis  points  (approximately
7.14% at  December  31,  2005)  payable  monthly  and is  collateralized  by the
Company's inventory, trade receivables, and intangible assets. During May, 2004,
the Company and its  commercial  bank  agreed to  increase  the maximum  allowed
borrowing under the line to $6 million.  The remaining terms including  required
financial  covenants  relating to maintaining  minimum  working  capital levels,
maintaining  stipulated debt to tangible net worth and adhering to debt coverage
ratios were  substantially  unchanged.  At December 31, 2005 the bank has waived
the  Company's  non-compliance  with certain of its  financial  covenants.  This
financing  matures on May 31, 2006.  As of December  31,  2005,  the Company was
obligated  to its  commercial  lender  under this  arrangement  in the amount of
$4,000,000.

Note 4 - Long -Term debt:

     Long-term debt at December 31, 2005 consisted of the following:

     The  Company is  obligated  pursuant  to capital  leases  financed  through
Industrial  Development  Bonds.  Such  obligations were incurred during 1997 and
2002 in  connection  with  building and  equipment  expansion  at the  Company's
Alabama manufacturing and distribution facility.  Both bear interest at tax-free
rates that adjust weekly.  At December 31, 2005,  $2,125,000 and $3,080,000 were
outstanding attributable to the 1997 and 2002 series,  respectively.  During the
year ended  December  31, 2005  interest  rates  ranged  between  1.8% and 3.3%.
Principal  and  accrued  interest  retiring  the  underlying  bonds are  payable
quarterly  through  March,  2012 and  July,  2017 for the 1997 and 2002  series,

                                      F-10
<PAGE>

respectively.  Repayment of the bonds is guaranteed by a Letter of Credit issued
by the Company's primary commercial bank. Security for the Letter of Credit is a
priority  first  mortgage on the Kinpak  facility and  manufacturing  equipment.
During 2005 and 2004,  the Company,  through its  subsidiary,  Kinpak Inc.,  was
obligated  pursuant  to various  capital  lease  agreements  covering  equipment
utilized  in  the  Company's  Alabama  plant.   Such  obligations,   aggregating
approximately $56,300 at December 31, 2005, have varying maturities through 2009
and carry interest rates ranging from 7% to 12%.

     On April 12, 2005 we entered into a financing  obligation with Regions Bank
whereby  they  advanced  us $500,000 to finance  equipment  acquisitions  at our
Kinpak  facility.  Such  obligation is due in monthly  installments of principal
aggregating   approximately  $8,300  plus  interest  at  prevailing  rates  (the
outstanding  balance and interest  rate on this  obligation at December 31, 2005
were  approximately  $ 433,300  and prime  plus  2.5% per  annum,  respectively)
through maturity on April 15, 2010.

     During the quarter  ended  December 31,  2005,  we finalized a $1.5 million
revolving  credit  facility  with our  president  and CEO,  Peter G. Dornau.  At
December 31, 2005,  $1,150,000 was outstanding pursuant to this obligation which
is due in October 2010 along with accrued interest at the rate of prime plus 2%.
Such  obligation  is  subordinate  to  all  borrowings  from  Regions  Bank.  In
connection with his offering to loan a maximum of $1.5 million to the Company in
order to bolster working capital, we issued warrants to Mr. Dornau to purchase a
maximum of 1 million shares of our common stock.  Such warrants are  exercisable
500,000  shares at $1.13 and 500,000 shares at $.863.  The exercise  prices were
determined by the closing bid of our stock plus ten (10) percent on each date of
grant. In addition,  he has the right, at his sole  discretion,  to convert such
debt into a maximum of 1.5  million  shares of our  common  stock at the rate of
$1.00 per share.

     The composition of these  obligations at December 31, 2005 and 2004 were as
follows:
<TABLE>
<CAPTION>

                                                     Current Portion                   Long Term Portion
                                                    2005          2004                2005              2004
                                                   --------      --------          ----------        ----------
                                                                                   (Restated)
  <S>                                              <C>           <C>               <C>               <C>
  Industrial Development Bonds                     $460,000      $460,000          $4,745,000        $5,205,000
  Notes payable                                      99,996         7,180             331,448           354,152
  Capitalized equipment leases                       20,856        15,932              35,408            21,098
  Subordinated note payable-P. Dornau                    -             -            1,150,000               -
                                                   --------      --------          ----------        ----------
                                                    580,852       483,112           6,261,856         5,580,250
                                                         -             -              310,898               -
                                                   --------      --------          ----------        ----------
                                                   $580,852      $483,112          $5,950,958        $5,580,250
                                                   ========      ========          ==========        ==========
</TABLE>

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

     Year ending December 31,
        2006                  $  580,852
        2007                     579,279
        2008                     571,757
        2009                     564,360
        2010                   1,643,352
        Thereafter             2,903,108
                              ----------
        Total                 $6,842,708
                              ==========
Note 5 - Income taxes:

     The  Components of the Company's  consolidated  income tax provision are as
follows:
<TABLE>
<CAPTION>

                                                          Year ended December 31,
                                                       2005          2004         2003
                                                   -----------   ----------     --------
      <S>                                          <C>           <C>            <C>
      Income tax provision (benefit):                            (Restated)

         Federal - current                         ($ 274,500)   $  46,600      $140,000
                 - deferred                        (  260,000)      54,400        37,800
         State                                            -          6,000          -
                                                   -----------   ---------      --------
         Total                                     ($ 534,500)   $ 107,000      $177,800
                                                   ===========   =========      ========
</TABLE>

                                      F-11
<PAGE>

     The  reconciliation  of income tax provision at the  statutory  rate to the
reported income tax expense is as follows: Year ended December 31,
<TABLE>
<CAPTION>

                                                                        2005              2004             2003
                                                                      ----------        ----------       --------
           <S>                                                         <C>                <C>              <C>
           Computed at statutory rate                                  (34.0%)            34.0%            34.0%
           State tax, net of federal benefit                               -               5.5                -
           Not being able to utilize entire tax benefit
               as a carry-back                                          11.2%                -                -
           Other, principally deferred income
                    taxes attributable to depreciation                     -              16.0                -
                                                                      ----------        ----------       --------
           Effective tax rate                                          (22.8%)            55.5 %           34.0%
                                                                      ==========        ==========       ========
</TABLE>

     At  December  31,  2005 the  Company  had  available  tax  loss  carryovers
available as offsets  against future taxable  income  aggregating  approximately
$776,800 and $2,315,700 for federal and Florida purposes,  respectively expiring
in 2025. If fully  utilizable,  such  carryovers  would result in a deferred tax
asset of  approximately  $264,100 as of December 31, 2005. There is no assurance
that the  Company  will ever avail  itself of all or a portion of such  credits,
accordingly,  a valuation  allowance has been established  against this deferred
asset. The Company's  deferred tax asset and liability accounts consisted of the
following at December 31:

                                                            2005         2004
                                                        ----------    ----------
               Deferred tax asset                       $  264,100    $     -
               Less valuation allowance                 (  264,100)         -
               Deferred Tax Liability                          -      ( 260,000)
                                                        -----------   ----------
                 Total                                  ($     -  )   ($260,000)
                                                        ===========   ==========

     During the year ended December 31, 2005, we reversed  deferred income taxes
payable aggregating  $260,000 as the underlying reason for such deferral was the
timing differences  between our financial  statement and income tax treatment of
depreciation  expense and such differences are anticipated to reverse during the
available  time of existing  income tax loss  carryovers.  At December  31, 2004
deferred  income  taxes  payable  aggregated  $260,000  and is  reflected on the
accompanying consolidated balance sheet.

Note 6 - Related party transactions:

     At December 31, 2005 and 2004, the Company had amounts  receivable from and
payable to affiliated companies, which are directly or beneficially owned by the
Company's president, aggregating on a net basis to a receivable of approximately
$29,000  and  $408,500,  respectively.  Such  amounts  result  from sales to the
affiliates,  allocations of expenses  incurred by the Company on the affiliates'
behalf and funds advanced to or from the Company.

     Sales to such affiliates aggregated  approximately $826,900,  $616,800, and
$373,600 during the years ended December 31, 2005, 2004, and 2003, respectively.

     Subseqent  to the  balance  sheet date,  on March 10,  2006,  an  affiliate
offered to forgive the Company's  indebtedness to such entity in the approximate
amount of $295,000.  Accordingly,  during the first quarter of 2006, the Company
will reflect this transaction.








                                      F-12

<PAGE>

Note 7 - Commitments and subsequent event:

     On May 1, 1998, the Company entered into a ten year lease for approximately
12,700  square  feet of office  and  warehouse  facilities  in Fort  Lauderdale,
Florida  from an entity  owned by certain  officers  of the  Company.  The lease
required a minimum  rental of  $94,800  for the first  year and  provides  for a
maximum  2%  increase  on the  anniversary  of the  lease  throughout  the term.
Additionally,  the  landlord  is entitled  to its  pro-rata  share of all taxes,
assessments,  and any other expenses that arise from ownership.  Rent charged to
operations  during the years ended December 31, 2005, 2004, and 2003 amounted to
approximately $100,500 each year.

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

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

           Year ending December 31,
                  2006        $  104,507
                  2007           106,597
                  2008           108,729
                  2009-10            -
                  Thereafter         -
                              ----------
                  Total       $  319,833
                              ==========

     In  conjunction  with an  agreement  with an  investment  banker to provide
financial  advisory and other services,  we issued warrants to purchase  275,000
shares of the  Company's  common stock at an exercise  price of $1.27 per share.
The covered  shares and the exercise  price were  adjusted  for stock  dividends
distributed  during  the year  ended  December  31,  2002.  This  agreement  was
terminated  during 2004. During February 2005, the Company issued 150,003 shares
of its  common  stock to its former  investment  banker  pursuant  to a cashless
exercise of warrants granted during 2002.

Note 8 - Stock options:

     During 1992,  the Company  adopted an incentive  stock option plan covering
200,000  shares  of its  common  stock.  During  1994,  the  Company  adopted  a
non-qualified  employee stock option plan covering  400,000 shares of its common
stock.  During 2002, the Company  adopted a qualified  employee  incentive stock
option plan and a non-qualified  stock option plan covering  400,000 and 200,000
shares of its common stock, respectively.

     The following schedule reflects the status of outstanding options under the
Company's  four stock option plans as of December 31, 2005,  as adjusted for the
Company's stock dividend distributions of 2000 and 2002.
<TABLE>
<CAPTION>

                                                                                         Weighted
                  Date         Options   Exercisable     Exercise     Expiration          Average
  Plan            granted    outstanding   options         price         date         remaining life
  ----            --------   ----------- -----------    ----------    ----------      --------------
  <S>             <C>         <C>          <C>              <C>         <C>                 <C>
  1992            12/20/01      154,000    123,200          $1.009      12/19/06            1.00
  1994            10/26/04      174,500     34,900          $1.050      10/25/09            3.83
  2002            10/22/02      135,000     81,000          $1.260      10/21/07            1.75
  2002            03/02/04      155,000     31,000          $1.620      03/01/09            3.25
  2002            10/22/02       35,000     35,000          $1.260      10/21/07            1.75
  2002            06/20/03       40,000     40,000          $1.030      06/19/08            2.50
  2002            05/25/04       40,000     40,000          $1.460      05/04/09            3.50
                              ---------    -------                                          ----
                                733,000    385,100                                          2.54
                              =========    =======                                          ====
</TABLE>



                                      F-13

<PAGE>

     On March 25, 1999, the Company granted two officers a five-year  option for
115,500 shares each, as adjusted for the Company's stock dividend  distributions
of 2000 and 2002, at an exercise price of $.758 representing the market price at
the time of grant.  Such grants were awarded in  consideration  of a loan to the
Company in the amount of $400,000 from an  affiliated  company in which they are
each 50%  co-shareholders.  During  2004,  the  underlying  loan was modified to
extend the maturity  date and,  accordingly,  the options  were  extended for an
additional five years expiring March 25, 2009.

     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 presented pursuant to such requirement.
<TABLE>
<CAPTION>

                                                           2005          2004              2003
                                                        ----------    ----------        ----------
                                                                      (Restated)
  <S>                         <C>                       <C>           <C>               <C>
  Net (loss) income           As reported               ($1,813,193)   $  17,222        $  345,071
                              Pro forma                 ($1,858,710)  ($  18,604)       $  301,887

  Earnings (loss) per share   As reported               ($      .32)   $     -          $      .07
                              Pro forma                 ($      .32)   $     -          $      .06
</TABLE>

     A summary of the Company's  stock options as of December 31, 2005, 2004 and
2003, and changes during the years ending on these dates, is presented below:

<TABLE>
<CAPTION>
                                      2005                       2004                            2003
                                  -------------             ---------------                 -----------------
                                           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       1,183,000      $1.12       1,106,210         $ .95         1,082,210          $1.03
  Granted                           -                      412,500                          40,000
  Expired                     (  59,000)                (   19,240)                     (   16,000)
  Exercised                   ( 159,500)                (  316,470)                            -
                              ----------     -----      -----------        -----        -----------         -----
  Options outstanding at
    end of year                 964,500      $1.12       1,183,000         $1.12         1,106,210          $ .95
                              ==========     =====       =========         =====        ===========         =====
</TABLE>

     Stock options are granted annually to selective executives,  key employees,
directors and others pursuant to the terms of the Company's  various plans. Such
grants are made at the discretion of the Board of Directors.  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 2005, 2004 and
2003;  risk free rate 6.5%,  no dividend  yield for all years,  expected life of
five years and volatility of 31.6%.

     During the quarter  ended  December 31,  2005,  we finalized a $1.5 million
revolving  credit  facility  with our  president  and CEO,  Peter G. Dornau.  In
connection  with his  offering  to loan  such  funds to the  Company,  we issued
warrants to Mr.  Dornau to purchase a maximum of 1 million  shares of our common
stock. Such warrants are exercisable  500,000 shares at $1.13 and 500,000 shares
at $.863.  The exercise  prices were  determined by the closing bid of our stock
plus ten (10) percent on each date of grant.  In addition,  he has the right, at
his sole  discretion,  to convert such debt into a maximum of 1.5 million shares
of our  common  stock at the rate of  $1.00  per  share.  The  potential  shares
issuable under this arrangement are not reflected in the foregoing tabulations.

  Note 9 - Major customers:

     The Company has one major customer, West Marine, Inc., with sales in excess
of 10% of  consolidated  gross  revenue for the years ended  December  31, 2005,
2004, and 2003. Sales to this customer  represented  approximately  26%, 39% and
36% of consolidated gross revenues for such periods, respectively.


                                      F-14

<PAGE>



     The Company's top five customers  represented  approximately  43%, 55%, and
55%  of  consolidated  revenues  and  26%,77%  and  76%  of  consolidated  trade
receivables  for the years ended  December 31, 2005,  2004, and 2003, and at the
balance sheet date for the years then ended,  respectively.  The Company  enjoys
good relations with these customers. However, the loss of any of these customers
could have an adverse impact on the Company's operations.

Note 10 - Earnings per share:

     Earnings per share are reported  pursuant to the provisions of Statement of
Financial Standards No. 128. Accordingly,  basic earnings per share reflects the
weighted  average  number of shares  outstanding  during the year,  and  diluted
shares adjusts that figure by the additional  hypothetical  shares that would be
outstanding if all  exercisable  outstanding  common stock  equivalents  with an
exercise  price  below the current  market  value of the  underlying  stock were
exercised.  Common stock equivalents consist of stock options and warrants.  The
following  tabulation  reflects the number of shares utilized to determine basic
and diluted  earnings per share for the years ended December 31, 2005, 2004, and
2003:

                                 2005         2004         2003
                              ---------    ---------    ---------
 Basic                        5,700,774    5,356,316    4,888,133
 Diluted                      5,844,750    5,500,113    5,338,015


Note 11 - Shareholders' equity:

     During the years ended December 31, 2005, 2004 and 2003 the Company awarded
122,000, 140,500 and 155,000 shares of restricted common stock,  respectively to
certain  executives,   key  employees  and  others  as  a  component  of  annual
compensation.  Charges to  operations  attributable  to such  awards  aggregated
approximately $97,300, $87,800 and $67,500 for each period, respectively.

     During  August  2005,  certain  employees  of the Company  exercised  stock
options  scheduled to expire during 2005 covering  159,500  shares of its common
stock.   The  aggregate   exercise  price  of  such   transaction   amounted  to
approximately $92,900 and is reflected in the accompanying  financial statements
as additional paid-in capital.

Note 12 - Restatements:

Year ended December 31, 2005:

     During the fourth  quarter of 2005,  we  finalized a financing  arrangement
with our President and Chief Executive  Officer,  Peter G. Dornau.  The terms of
such financing are disclosed above in Note 4 - Long-term debt and Note 8 - Stock
options.  In our  original  Form 10-K filing we treated  all of the  proceeds we
received from draws against this revolving loan as debt. At that time we did not
compute the fair value of the warrants  issued to Mr. Dornau and reclassify such
amount as additional paid-in capital along with a related "compensation cost" or
imputed  interest  to be  amortized  over the five year life of the  obligation.
Utilizing a  Black-Scholes  pricing model,  the allocation that should have been
made  during  December  2005   aggregates   $310,898.   This   reclassification,
incorporated  herein,  did not  impact  our  previously  reported  cash flows or
operating  results  for the year  ended  December  31,  2005.  However,  had the
reclassification  been made on a timely basis,  long-term obligations would have
been reduced and shareholders'  equity would have been increased by the $310,898
at December 31, 2005.










                                      F-15

<PAGE>

ear ended December 31, 2004:

     During March 1999, the Company granted two officers five-year stock options
covering115,500  shares each, in  consideration of a loan made to the Company in
the amount of  $400,000  from an  affiliated  company in which they are each 50%
co-shareholders.  During March 2004, the underlying  loan was modified to extend
the  maturity  date and,  accordingly,  the options  were also  extended  for an
additional  five years  expiring  March 25, 2009. As the options were granted at
fair market  value on the  original  date of grant,  there was no  "compensation
cost" to be recognized.  However, at the date of modification,  the market value
of our stock exceeded the options'  exercise  price.  Accordingly,  there was an
"intrinsic  value"  aggregating  $178,332  that should  have been  recorded as a
charge  against  operations  during  the year  ended  December  31,  2004.  This
adjustment,  incorporated  herein,  did not impact our previously  reported cash
flows ended December 31, 2004.

     The  effect of the  foregoing  on our  consolidated  balance  sheet and the
consolidated  statement of  operations  as of December 31, 2005 and 2004 and the
years then ended is as follows:

     Consolidated Balance Sheet at December 31, 2005 and 2004:
<TABLE>
<CAPTION>

                                                             Long- term debt             Shareholders' equity
                                                            2005         2004             2005              2004
                                                        ----------    ----------        ----------       ----------
      <S>                                               <C>           <C>               <C>              <C>
      As originally reported                            $6,261,856    $5,580,250        $4,290,697       $5,888,495

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

      Recognition of compensation cost associated with
        stock options granted to Messrs. Dornau and
        Tieger as to which certain terms were modified        -              -              61,000           61,000
                                                        ----------    ----------        ----------       ----------
      As restated                                       $5,950,958    $5,580,250        $4,662,595       $5,949,495
                                                        ==========    ==========        ==========       ==========

      Consolidated Statement of Operations for year ended December 31, 2005 and 2004:

                                                                  2005                             2004
                                                          --------------------              ---------------------
      Income (loss) before provision for income taxes,
             as originally reported                                   ($2,347,693)                       $  302,554

      Recognition of compensation cost associated with
        stock options granted to Messrs. Dornau and Tieger
        as to which  certain terms were modified                              -                             178,332
                                                                      ------------                       ----------
      Income (loss) before provision for income taxes,
             as restated                                              ( 2,347,693)                          124,222

      Provision (benefit)for Income Taxes, as
        originally  reported                            ($534,500)                      $  168,000

        Reduction in provision for Income Taxes
          attributable to the foregoing                       -       (   534,500)      (   61,000)         107,000
                                                        ----------    ------------      -----------      ----------
      Net income (loss), as restated                                  ($1,813,193)                       $   17,222
                                                                      ============                       ==========
       Earnings (loss)per share:
                                                           Basic        Diluted            Basic          Diluted
       As originally reported                             ($.32)        ($.32)              $.03          $.02

       Adjustment for "compensation cost"                     -             -               (.03)        ( .02)
                                                          ------        ------              -----        ------
       As restated                                        ($.32)        ($.31)              $ -           $  -
                                                          ======        ======              =====        =======

</TABLE>





                                                                    F-16