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

                                    FORM 10-K
 (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, 2003

                                       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 2-70197

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

             Florida                                              59-1564329
             -------                                              ----------
    (State of 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  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
Registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.    Yes |X|    No

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

     Indicate by check mark whether the Registrant is an  accelerated  filer (as
defined in Exchange Act Rule 12b-2).         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 10, 2004 as  reported  by the NASDAQ  Small Cap Market on
that date:  $3,621,927.

     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
10, 2004: 5,277,313 shares Common stock, $0.01 par value.

                       DOCUMENTS INCORPORATED BY REFERENCE

     Portions of the  Registrant's  Definitive  Proxy  Statement  for the Annual
Meeting of Shareholders scheduled to be held on June 3, 2004 which will be filed
within 120 days of December 31, 2003 are  incorporated  by reference to Part III
of this Form 10-K.


<PAGE>


Forward-looking Statements:

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

                                     Part I

1. Business

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

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

Products of the Company:

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

     Marine:  The Marine line consists of polishes,  cleaners,  protectants  and
waxes of various  formulations  under the Star  brite  brand name as well as the
Company's  customers'  private  label.  The line  also  includes  various  vinyl
protectants,  cleaners, teak cleaners, teak oils, bilge cleaners, hull cleaners,
silicone  sealants,   polyurethane   sealants,   polysulfide  sealants,   gasket
materials,  lubricants,  antifouling additives and anti-freeze coolants. Many of
these products include Teflon(R)  pursuant to an exclusive  licensing  agreement
with E.I.  Dupont De Nemours and Company.  Teflon(R) is a trademark of Dupon and
is used under license to the  Company.In  addition,  the Company  manufactures a
line of brushes, poles and tie-downs and other related marine accessories.

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

     Recreational  vehicle:  The  recreational  vehicle  products are made up of
cleaners,  polishes,  detergents,  fabric  cleaners  and  protectors,   silicone
sealants,   waterproofers,   gasket  materials,   degreasers,   vinyl  cleaners,
protectors,  toliet treatment fluids,  and anti-freeze  coolants.  Many of these
products include  Teflon(R)  pursuant to an exclusive  licensing  agreement with
E.I.  Dupont De Nemours and  Company.  Teflon(R)  is a trademark of Dupon and is
used under license to the Company.

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

     Although the above  products are utilized for different  types of vehicles,
boats and household  purposes,  it is management's view that they all constitute
one industry segment.
                                       2

<PAGE>

Manufacturing:       The Company  manufactures the majority of its products as
well as contracts with  unrelated  companies to package other products which are
manufactured to the Company's  specifications,  using Company provided formulas.
The Company  purchases its raw materials from a wide variety of suppliers,  none
of which are  significant to the  Registrant's  operations and all raw materials
used in manufacturing  are readily  available.  Each third party packager enters
into a  confidentiality  agreement  with the  Company.  The  Company  has patent
protection  on two of its  products.  The Company  designs its own packaging and
supplies the external  manufacturers  with the appropriate design and packaging.
Manufacturing is primarily performed by the Company and two independent entities
located in the  northeastern and mid-western  areas of the country.  The Company
believes that its internal  manufacturing  capacity as well as the  arrangements
with the present  outside  manufacturers  are adequate for its present needs. In
the event that these  arrangements are discontinued with any  manufacturer,  the
Company  believes that  substitute  facilities can be found without  substantial
adverse effect on manufacturing and distribution.

     On February 27, 1996,  the  Registrant  acquired  certain assets of Kinpak,
Inc., (a Georgia corporation) ("Kinpak"), and assumed two (2) leases of land and
facilities leased by Kinpak from the Industrial Development Board of the City of
Montgomery,  Alabama and the Alabama  State Docks  Department.  On December  20,
1996,  the Registrant  entered a new agreement  with the Industrial  Development
Board of the City of Montgomery,  Alabama to issue Industrial  Development Bonds
in the amount of $4,990,000 to repay certain  financial  costs and to expand the
capacity  of the  Alabama  facility.  The  underlying  premises,  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, Registrant purchased
the  machinery,   equipment  and  inventory  located  on  the  leased  premises.
Subsequent to the acquisition, the Registrant changed the name of its subsidiary
to Kinpak Inc. (an Alabama corporation).

     During July 2002,  the  Registrant  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  and  continues  to fund  the  requisite  machinery  and
equipment additions required therein as well.

Marketing:       The Company's marine products and recreational vehicle products
are sold through national mass merchandisers such as Wal-mart and Home Depot and
through specialized marine retailers such as West Marine and Boater's World. The
Company also sells to national and  regional  distributors  who in turn sell its
products to specialized  retail outlets for that specific market.  Currently the
Company has one customer (West Marine,  Inc.,  which is an unrelated  entity) to
whom sales exceeded 10% of consolidated revenues for the year ended December 31,
2003. Sales to the Company's five largest  customers for the year ended December
31, 2003  amounted to  approximately  55% of  consolidated  gross  revenues  and
outstanding balances due the Company at year-end from these customers aggregated
approximately  76% of consolidated  trade  receivables.  The Company markets its
products through internal salesmen and  approximately 250 sales  representatives
who work on an  independent  contractor-commission  basis.  The  Officers of the
Company also  participate in sales  presentations  and trade shows.  The Company
also aids marketing through advertising  campaigns in national magazines related
to specific  marketplaces.  The  products  are  distributed  primarily  from the
Company's  manufacturing and distribution  facility in Alabama. As of this date,
the Company has no significant  backlog of orders.  The Registrant does not give
customers the absolute  right to return  product.  The majority of the Company's
products are non-seasonal  and are sold throughout the year.  Normal trade terms
offered to credit customers range from 30 to 60 days.  However, at times special
dating and/or  discount  arrangements  are offered as  purchasing  incentives to
customers. Such programs do not materially distort normal margins.

Competition:

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

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

                                       3


<PAGE>


Recreational  Vehicle:       The recreational vehicle appearance and maintenance
market is parallel to that of the marine marketplace. In this market the Company
competes  with national and regional  competitors.  None of these 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 the
Company's  market share by utilizing  similar  methods as those  employed in the
marine market.

Personnel:       The Company employs approximately 25 full time employees at its
corporate  office in Fort  Lauderdale,  Florida.  These employees are engaged in
administration,  clerical and accounting functions. In addition, the Company has
manufacturing and fabrication personnel in both Florida and Alabama.

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

<TABLE>
<CAPTION>

                                                                       Full-time
Location                            Description                        Employees
--------                            -----------                        ---------
<S>                                 <C>                                <C>
Fort Lauderdale, Florida            Administrative                        25
Fort Lauderdale, Florida            Manufacturing and distribution        17
Montgomery, Alabama                 Manufacturing and distribution        80
                                                                       ---------
                                                                         122
                                                                       =========
</TABLE>

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

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

Financial Information Relating to Approximate Domestic and Canadian Gross Sales:
<TABLE>
<CAPTION>

                                    Year ended December 31,
                               2003            2002              2001
                               ----            ----              ----
United States:
        <S>               <C>             <C>               <C>
        Northeast         $ 4,054,000     $ 4,258,000       $ 3,709,000
        Southeast           6,218,000       6,242,000         5,520,000
        Central             6,384,000       6,454,000         5,684,000
        West Coast          4,730,000       4,960,000         4,354,000
                          -----------     -----------       -----------
                           21,386,000      21,915,000        19,267,000

Canada (US Dollars)           792,000         798,000           609,000
                          -----------     -----------       -----------

                          $22,178,000     $22,713,000       $19,876,000
                          ===========     ===========       ===========
</TABLE>


Item 2.  Properties

     The  Registrant's   executive   offices  and  warehouse   located  in  Fort
Lauderdale,  Florida  are held  under a lease  with an entity  owned by  certain
officers of the Company.  The lease covers  approximately  12,700 square feet of
office and warehouse  space.  On May 1, 1998, the  Registrant  renewed its lease
agreement for a term of ten years.  The lease  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  the  Company  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,  2003,   2002  and  2001  amounted  to
approximately $100,500 each year.

                                        4


<PAGE>

     During  November 1994, the Company  leased an  approximately  10,000 square
foot building in Fort  Lauderdale,  Florida for  manufacturing,  warehousing and
office space from an unrelated third party. Such lease terminates on October 31,
2004.  Rent  charged  to  operations  during the year ended  December  31,  2003
amounted to approximately $95,500.

     The Company's 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  eleven miles from the Plant.  This facility has undergone
two separate  expansions  of 60,000 and 70,000  square feet,  respectively.  The
Registrant  financed the facility  enhancements and related equipment needs with
Industrial Development Bonds issued through the city of Montgomery, AL.

     During  July 2002,  the  Registrant  completed  a $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.  At December 31, 2003 the construction was complete
and approximately $126,300 was held in trust to be utilized for equipping future
equipment additions at the facility.

Item 3.  Legal Proceedings

     The Company was not involved in any significant  litigation at December 31,
2003.


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 2003.  Shareholders will vote at the Annual Meeting to be held during
June, 2004 to elect members of the Board of Directors,  ratify the engagement of
the Company's  Independent  Certified Public  Accountants,  and any other matter
presented at such meeting.

                                     Part II

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

     A. The Registrant's  common stock was sold to the public initially on March
26,  1981.  The common  stock of the  Company is traded on the NASDAQ  Small Cap
Market System under the symbol OBCI. A summary of the trading ranges during each
quarter of 2003 and 2002 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>
2003            High        $2.00         $1.20         $1.69          $1.98
                Low         $1.30         $0.90         $0.97          $1.30

2002            High        $1.77         $1.65         $1.70          $1.90
                Low         $1.31         $1.31         $1.35          $1.10
</TABLE>

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

     B. The  approximate  number of Common  Stock owners was 800 at December 31,
2003.  The  aforementioned  number  was  calculated  from data  provided  by the
Company's  Transfer Agent and Registrar and  indications  from broker dealers of
shares held by them as nominee for actual shareholders.

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



                                        5


<PAGE>

     D. Securities authorized for issuance under equity compensation plans:
<TABLE>
<CAPTION>

Equity compensation plans approved by security holders:

                                                                           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>
  1991 Plan                     161,700                 $ .758                       -
  1992 Plan                     193,875                 $1.039                    6,125
  1994 Plan                     294,635                 $ .624                  105,365
  2002 Plan - Qualified         150,000                 $1.260                  250,000
  2002 Plan - Non-qualified      75,000                 $1.137                  125,000

</TABLE>

     In addition to the above stock options, during the years ended December 31,
2003, 2002, and 2001 the Company awarded 155,000, 129,000, and 134,000 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,  $67,500, $67,700, and $36,200 for each
of such periods, respectively.

Item 6.  Selected Financial Data

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

                                    2003              2002              2001             2000           1999
                                    ----              ----              ----             ----           ----
Operations:
<S>                             <C>                <C>              <C>               <C>             <C>
Gross sales                     $22,178,352        $22,712,991      $19,876,095       $18,072,784     $15,952,165

Net sales                       $19,997,702        $20,585,898      $18,013,393       $16,139,256     $14.317,485

Net income (loss)               $   345,071        $   134,518      $   106,384      ($   244,823)    $   431,484

Earnings (loss) per
  Common share                  $     .07          $     .03        $     .03        ($     .06  )    $     .11

Balance Sheet:

Working capital                 $ 2,869,172        $ 2,212,872      $ 1,385,016       $  ,724,043     $ 2,797,708

Total assets                    $18,303,184        $18,650,237      $15,030,206       $15,410,264     $13,547,452

Long-term
 obligations                    $ 5,883,302        $ 6,745,232     $  3,843,515       $ 3,963,145     $ 4,152,332

Total liabilities               $12,899,189        $13,727,315      $10,268,884       $10,737,972     $ 8,629,991

Shareholders'
 equity                         $ 5,403,995        $ 4,922,922      $ 4,761,322       $ 4,672,292     $ 4,917,461

Cash dividends declared
  per share of common stock     $       -          $       -        $       -         $       -       $       -

</TABLE>


                                        6


<PAGE>


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


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

Liquidity and Capital Resources:

     The primary  sources of the  Registrant's  liquidity are its operations and
short-term  borrowings  from a commercial  bank pursuant to a revolving  line of
credit aggregating $5 million. Such line matures May 31, 2004, bears interest at
approximately  prime and is secured by the  Registrant's  trade  receivables and
inventory.  The Registrant is required to maintain a minimum  working capital of
$1.5 million and meet certain other financial  covenants  during the term of the
agreement.  As of December 31, 2003, the Company was not in compliance  with the
requirement of maintaining a current ratio of at least 1.5:1 The bank has waived
such  non-compliance.  As of December 31, 2003, the Company was obligated  under
this arrangement in the amount of $4,550,000.

     The Registrant has conducted discussions with its lender related to renewal
of the line of credit and extending the maximum borrowings to $6 million.  It is
anticipated that these discussions will be finalized during April, 2004.

     During March,  2004,  certain  employees of the Registrant  exercised stock
options  scheduled to expire during 2004 covering  316,470  shares of its common
stock.  Such  transaction  resulted in an  approximate  $229,700  of  additional
paid-in capital.

     In connection with the purchase and expansion of the Alabama facility,  the
Registrant 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 the Registrant's  future needs.  During
July 2002, the Registrant completed another $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 remaining machinery and equipment additions required therein. At December
31,  2003,  approximately  $126,300  was  held in  trust  to pay  for  remaining
equipment required at the facility.

     In order to market its Alabama  Industrial  Development  Bonds at favorable
rates, the Registrant obtained a substitute irrevocable letter of credit for its
1997 issue and a new irrevocable letter of credit for the 2002 issue. Under such
letters of credit agreements  maturing on July 31, 2005, the Company is required
to maintain a stipulated level of working capital,  a designated maximum debt to
tangible  ratio,  and a required debt service  coverage  ratio.  Such letters of
credit are  secured  by a first  priority  mortgage  on the  underlying  Alabama
facility and equipment.

     The bonds are marketed weekly at the prevailing rates for such instruments.
Currently  such bonds carry  interest  ranging  between 1.2% and 1.5%  annually.
Interest and  principal  are payable  quarterly.  The  Registrant  believes that
current operations are sufficient to meet these obligations.

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

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

     Many  of the raw  materials  used by the  Registrant  in the  manufacturing
process are commodities that are subject to fluctuating  prices.  The Registrant
reacts  to  long-term  increases  by  passing  along  all or a  portion  of such
increases to its customers.


                                        7

<PAGE>

Contractual obligations:
<TABLE>
<CAPTION>
  <S>                           <C>              <C>             <C>             <C>             <C>
                                                 Less than       One - three     Three - five     More than
                                   Total          one year          years          years         five years
                                ----------       ----------      ----------      ----------      ----------
  Long-term debt obligations    $6,547,608       $  882,238      $1,380,370      $  920,000      $3,365,000
  Capital leases                    29,048           16,726          12,322              -               -
  Operating leases                 860,050          185,672         313,685         219,717         140,976
  Purchase obligations                  -                -               -               -               -
  Other                                 -                -               -               -               -
                                ----------       ----------      ----------      -----------     ----------
Total                           $7,436,706       $ 1084,636      $1,706,377       $1,139,717     $3,505,976
                                ==========       ==========      ==========      ===========     ==========
</TABLE>


Results of Operations:

     Sales and earnings  varied when  comparing the year ended December 31, 2003
to 2002 principally due to the factors enumerated below.

     Net sales - Net sales decreased approximately $588,000 or 3 % comparing the
year ended  December 31, 2003 with the 2002 period.  This was  primarily  due to
decreased  sales of the  Company's  marine  anti-freeze  and certain  automotive
products.  The anti-freeze  decrease was attributed to commodity  pricing of raw
materials and related freight issues, and the automotive  decrease resulted from
initial customer reaction to the Company's  strategic decision to achieve higher
margins on these products.

     Cost of  goods  sold - Gross  margins  improved  and  cost  of  goods  sold
decreased as a percentage of net sales when  comparing the years ended  December
31, 2003 and 2002. The cost of goods sold  percentages  were 75.7% and 77.5% for
the periods during 2003 and 2002, respectively. This change was primarily due to
management's  on-going initiatives towards improving operating margins including
a general  sales  price  increase,  utilization  of cash  discounts  offered  by
suppliers, and product pricing in response to current commodity costs.

     Advertising  and promotion - Advertising  expense  decreased  approximately
$27,000 or 4% when  comparing  2003 to 2002.  This was  primarily due to planned
decreases  in  media   advertising   expenditures   and  lower   customer  co-op
advertising.

     Selling,  general and administrative - Selling,  general and administrative
expenses increased approximately $45,000 or1% when comparing 2003 to 2002.

     Interest  expense - Interest  expense  incurred  during 2003  decreased  by
approximately  $95,000  compared to 2002.  The  decrease  was  primarily  due to
prevailing interest rates.

     Years ended December 31, 2002 and 2001:

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

     Net sales - Net sales increased  approximately  $2,572,500 or 14% comparing
the year ended December 31, 2002 with the 2001 period. This was primarily due to
increased sales of Star brite and private labeled marine  products,  antifreeze,
automotive fluids and other contract packaging.

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

                                        8
<PAGE>

     Advertising  and promotion - Advertising  expense  increased  approximately
$105,400 or 16% when comparing 2002 and 2001.  This was primarily due to planned
increases  in  media   advertising   expenditures   and  lower   customer  co-op
advertising.

     Selling,  general and administrative - Selling,  general and administrative
expenses increased  approximately $337,200 or 11.4% when comparing 2002 to 2001.
The most significant single item reflected therein was an increase in legal fees
and costs associated with settling outstanding  litigation.  Increased personnel
costs and other administrative  expenses in line with increased overall revenues
also affected the change for the year.

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

Item 8.  Financial Statements and Supplementary Data

         See consolidated financial statements as set forth in Item 15.

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

         None

Item 9a.  Controls and Procedures

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

                                    Part III

Item 10.  Executive Officers and Directors of the Registrant

     The following  tables set forth the name and ages of all elected  directors
and officers of the Registrant, as of December 31, 2003.

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

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

     NAME                                        OFFICE                                    AGE
     ----                                        ------                                    ---
<S>                                 <C>                                                    <C>
Peter G. Dornau                     President, Chief Executive Officer, and                64
                                            Director since 1973

Edward Anchel                       Vice President-Finance, Chief Financial                57
                                    Officer since 1999 and Director since 1998

Jeffrey Tieger                      Vice President, Secretary and Director                 60
                                    Since 1977

James Kolisch                       Director since 1998                                    52

Laz L. Schneider                    Director since 1998                                    64

John B. Turner                      Director since 2000                                    56

Sonia B. Beard                      Director since 2002                                    33
</TABLE>

                                        9

<PAGE>
     Peter G.  Dornau,  a founder  of the  Company,  has been  President,  Chief
Executive Officer and a Director since 1973.

     Edward  Anchel  joined the Company in March 1999 as Vice  President-Finance
and Chief  Financial  Officer.  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 during May 1998.

Jeffrey Tieger joined the Company in June 1977 as Vice President-Advertising and
has served in that office since 1977.

     James Kolisch is engaged in the insurance  industry and serves as president
of USI Florida an entity that sources most of the Registrant's  insurance needs.
Mr.  Kolisch was elected to serve as an outside  Director of the Company  during
May 1998. Mr. Kolisch serves on the Board of Directors' Audit Committee.

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

     John B.  Turner  has for the past five  years  been  retired.  Prior to his
retirement, he was an insurance executive. He was elected to serve as an outside
Director  of the  Company  during  June  2000.  In  addition  to  his  insurance
credentials,   Mr.  Turner  holds  a  Series  7  stock  brokerage  license.  His
professional   experience  in  the  aforementioned  areas  spans  in  excess  of
twenty-five years. 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.  Her current  position  is their  Domestic  Programs
Manager. 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.

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

     The Company has  adopted a Code of Ethics and the  information  required by
Item 406 of  Regulation  SK is  incorporated  by reference  to the  Registrant's
Definitive  Proxy  Statement,  which  will  be  filed  with  the  United  States
Securities and Exchange Commission within 120 days of December 31, 2003

Item 11.  Management Remuneration and Transactions

     The information  required for this item is incorporated by reference to the
Registrant's  Definitive  Proxy  Statement  to be filed with the  United  States
Securities and Exchange Commission in conjunction with the Annual  Shareholders'
Meeting  that  shall be sent  out to  shareholders  prior  to 120 days  past the
Registrant's year-end of December 31, 2003.

Item 12.  Security Ownership of Certain Beneficial Owners and Management

     The  following  table sets forth  information  at  December  31,  2003 with
respect to the beneficial  ownership of the Registrant's common stock by holders
of  more  than  5% of  such  stock  and by all  directors  and  officers  of the
Registrant as a group:
<TABLE>
<CAPTION>

Title of                        Name and Address of                        Amount and Nature of      Percent
Class                            Beneficial Owner                          Beneficial Ownership*     of Class
--------                   ----------------------------------------        ---------------------     --------
<S>                        <C>                                                  <C>                    <C>
Common                     Peter G. Dornau, President, Director                 2,969,568*             52.3%
                           Fort Lauderdale, FL 33317

Common                     Edward Anchel, Vice President - Finance,
                           Director
                           Boynton Beach, FL 33437                                316,026*              5.6%

                                       10


<PAGE>

Title of                        Name and Address of                        Amount and Nature of      Percent
Class                            Beneficial Owner                          Beneficial Ownership*     of Class
--------                   ----------------------------------------        ---------------------     --------
Common                     Jeffrey Tieger, Vice President, Secretary,
                           Director
                           Plantation, FL 33314                                   423,480*              7.5%

Common                     James Kolisch, Director
                           Coral Gables, FL 33114                                  36,167*               .6%

Common                     Laz L. Schneider, Director
                           Fort Lauderdale, FL 33305                               20,000*               .4%

Common                     John B. Turner, Director
                           Miami, FL 33186                                         28,663*               .5%

Common                     Sonia B. Beard, Director
                           Merritt Island, FL 32952                                10,000*               .2%

Common            All directors and officers as a group
                           7 individuals                                        3,803,904*             67.1%

</TABLE>

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

     On March  25,  1999,  the  Company  granted  Messrs.  Dornau  and  Tieger a
five-year  option for 115,500  shares each, as adjusted for the Company's  stock
dividend distributions of 2000 and 2002, at an exercise price of $.758 per share
representing the market price at the time of grant.  Such grants were awarded in
consideration  of their  making a loan to the  Company in the amount of $400,000
from an affiliated company in which they are each 50% co-shareholders.

     As of December 31, 2003,  pursuant to the  Company's  various  stock option
plans,  and other,  Mr.  Dornau has  options  to acquire  241,700  shares of the
Company's common stock of which 194,200 shares are exercisable at prices ranging
between  $.57 and  $1.39  within  60 days of the  issuance  of the  Registrant's
December 31, 2003 financial statements.

     As of December 31, 2003,  pursuant to the  Company's  various  stock option
plans, and other, the Company's  directors and officers as a group, have options
to acquire 708,475 shares of the Company's  common stock of which 501,975 shares
are  exercisable  at prices  ranging  between $.57 and $1.39 per share within 60
days of the issuance of the Registrant's December 31, 2003 financial statements.

Item 13.  Certain Relationships and Related Transactions

     On May 1, 1998, the Company entered into a ten year lease for approximately
12,700  square  feet of office  and  warehouse  facilities  in Fort  Lauderdale,
Florida from an entity owned by certain  officers of the  Registrant.  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 the Company its pro-rata  share of all
taxes, assessments,  insurance premiums,  operating charges, maintenance charges
and any other  expenses,  which  normally arise from  ownership.  The Registrant
believes  that the  terms  of this  lease  are  comparable  to those of  similar
properties in the same geographic  area of the Company  available from unrelated
third  parties.  Rent charged to operations  during the years ended December 31,
2003, 2002 and 2001 amounted to approximately $100,500 each year.

     The  Registrant  acquired  the rights to the "Star  brite" name and related
products  for the  United  States and Canada in  conjunction  with its  original
public  offering  during  March 1981.  The  president of the  Registrant  is the
beneficial  owner of three companies that market Star brite products outside the
United States and Canada.  The Registrant has advanced  monies to assist in such
foreign marketing in order to establish an international  trademark. At December
31, 2003 and 2002, the Company had amounts due from affiliated companies,  which
are  directly  or  beneficially  owned by the  Company's  president  aggregating
approximately  $172,900 and  $612,300,  respectively.  Such  advances  were made
primarily to international affiliates that are in the process of expanding sales
of Star brite products in Europe, Asia and South America. These amounts had been
advanced by the Company on open account and, through December 31, 2002,  carried
interest at the same rate charged to the Company on its line of credit.

                                       11
<PAGE>

     Sales of Star brite products to  such affiliates aggregated  approximately
$373,600, $317,100 and $344,600  during the years ended December 31, 2003,  2002
and 2001, respectively.

     A subsidiary  of the  Registrant  currently  uses the services of an entity
that is owned by its President to conduct product research and development. Such
entity received  $30,000 per year during the years ended December 31, 2003, 2002
and 2001 under such relationship.

Item 14. Principal Accounting Fees and Services

     The information  required for this item is incorporated by reference to the
Registrant's  Definitive  Proxy  Statement  to be filed with the  United  States
Securities and Exchange Commission in conjunction with the annual  shareholders'
meeting  that  shall be sent  out to  shareholders  prior  to 120 days  past the
Registrant's year-end of December 31, 2003.


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

The following documents are filed as part of this report:

(A) Consolidated financial statements:

        (i)      Consolidated balance sheets as of December 31, 2003 and 2002.

        (ii)     Consolidated statements of operations for each of the three
                   years ended December 31, 2003, 2002 and 2001.

        (iii)    Consolidated statement of shareholders' equity for each of the
                   three years ended December 31, 2003, 2002 and 2001.

        (iv)     Consolidated statements of cash flows for each of the three
                   years ended December 31, 2003, 2002 and 2001.

        (v)      Notes to consolidated financial statements.

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

        Exhibits:

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

        (22) Subsidiaries of the Registrant.

(B) Reports Filed on Form 8-K

         On December 29, 2003, the Registrant filed a Form 8-K with the United
             States Securities and Exchange Commission disclosing that it had
             entered into a Letter of Intent to purchase certain assets of Clear
             Cote Corporation of St.Petersburg, FL.

         On February 19, 2004 the Registrant filed a Form 8-K with the United
             States Securities and Exchange Commission disclosing that it had
             terminated the Letter of Intent and contemplated asset purchase
             with Clear Cote Corporation of St. Petersburg,FL without reaching
             a successful completion.






                                       12


<PAGE>



                                   SIGNATURES

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

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


                                              By:/s/ Peter G. Dornau
                                              --------------------------------
                                              PETER G. DORNAU
                                              Chairman of the Board of Directors
                                              and Chief Executive Officer

                                              March  29, 2004


                                              By:/s/ Edward Anchel
                                              ________________________________
                                              EDWARD ANCHEL
                                              Chief Financial Officer
                                              March  29, 2004

                                   SIGNATURES

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

                                              By:/s/ Jeffrey Tieger
                                              --------------------------------
                                              JEFFREY TIEGER
                                              Director
                                              March   29, 2004


     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.

















                                       13


<PAGE>


                                 CERTIFICATIONS

I, Peter Dornau certify that:

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

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

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

     4. The  Registrant's  other  certifying  officer and I are  responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a - 14 and 15d - 14) for the Registrant and we have:

     a) Designed such  disclosure  controls and  procedures  to ensure  material
information relating to the Registrant, including its consolidated subsidiaries,
is made known to us by others  within those  entities,  particularly  during the
period in which this annual report is being prepared;

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

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

     5. The Registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the Registrant's auditors and the Audit Committee
or  Registrant's  Board of  Directors  (or  persons  performing  the  equivalent
function);

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

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

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

OCEAN BIO-CHEM, INC.

Date:  March 29, 2004                          /s/ Peter G. Dornau
                                              --------------------------------
                                              Peter G. Dornau
                                              Chairman of the Board of Directors
                                              and Chief Executive Officer


<PAGE>


                                 CERTIFICATIONS

I, Edward Anchel certify that:

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

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

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

     4. The  Registrant's  other  certifying  officer and I are  responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a - 14 and 15d - 14) for the Registrant and we have:

     a) Designed such  disclosure  controls and  procedures  to ensure  material
information relating to the Registrant, including its consolidated subsidiaries,
is made known to us by others  within those  entities,  particularly  during the
period in which this annual  report is being  prepared;

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

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

     5. The Registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the Registrant's auditors and the Audit Committee
or  Registrant's  Board of  Directors  (or  persons  performing  the  equivalent
function);

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

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

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

OCEAN BIO-CHEM, INC.

Date:  March  29, 2004                         /s/ Edward Anchel
                                              --------------------------------
                                              Edward Anchel
                                              Chief Financial Officer


<PAGE>





                                EXHIBIT (See 22)

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


                           Name:                       Ownership %

         Star brite Distributing, Inc.                    100
         Star brite Distributing Canada, Inc.             1000
         D & S Advertising Services, Inc.                 100
         Star brite Staput, Inc.                          100
         Star brite Service Centers, Inc.                 100
         Star brite Automotive, Inc.                      100
         Kinpak, Inc.                                     100



<PAGE>























                      OCEAN BIO-CHEM, INC. AND SUBSIDIARIES

                        CONSOLIDATED FINANCIAL STATEMENTS

                  YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001


<PAGE>



                      OCEAN BIO-CHEM, INC. AND SUBSIDIARIES
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
                  YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001




                                                                 Page

         Report of independent auditors                            1

         Consolidated balance sheets                               2

         Consolidated statements of operations                     3

         Consolidated statement of shareholders' equity            4

         Consolidated statements of cash flows                     5

         Notes to consolidated financial statements              6-12


<PAGE>



1

                         REPORT OF INDEPENDENT AUDITORS




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


     We have audited the  consolidated  balance sheets of Ocean  Bio-Chem,  Inc.
(the  "Company") and its  Subsidiaries as of December 31, 2003 and 2002, and the
related consolidated  statements of operations,  shareholders'  equity, and cash
flows for each of the three years in the period 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 audits.

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

     In our opinion,  the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Ocean Bio-Chem,
Inc. and its  Subsidiaries  at December 31, 2003 and 2002, and the  consolidated
results of its  operations and its cash flows for each of the three years in the
period  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




<PAGE>





                      OCEAN BIO-CHEM, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 2003 AND 2002

                                     ASSETS
<TABLE>
<CAPTION>
         <S>                                                         <C>                  <C>
         Current Assets                                                 2003                  2002
                                                                      ---------            ---------
           Cash                                                      $    42,923          $ 1,093,826
           Trade accounts receivable net of allowance for
             doubtful accounts of approximately $206,000 and
             $200,700, respectively                                    4,333,023            3,190,357
           Inventories                                                 5,315,741            4,541,150
           Prepaid expenses and other current assets                     193,372              129,622
           Recoverable income taxes                                          -                240,000
                                                                     ------------         ------------
                 Total current assets                                  9,885,059            9,194,955
                                                                     ------------         ------------

         Property, plant and equipment, net                            7,506,586            6,977,003
                                                                     ------------         ------------

         Other assets:
           Funds held in escrow for equipment                            126,295            1,161,194
           Trademarks, trade names, and patents                          330,439              330,439
            Due from affiliated companies                                172,925              612,275
           Deposits and other assets                                     281,880              374,371
                                                                     ------------         ------------
                Total other assets                                       911,539            2,478,279
                                                                     ------------         ------------

                Total assets                                         $18,303,184          $18,650,237
                                                                     ============         ===========

                      LIABILITIES AND SHAREHOLDERS' EQUITY

         Current liabilities:
            Accounts payable trade                                   $ 1,305,484          $ 1,833,895
            Note payable bank                                          4,550,000            4,250,000
            Current portion of long-term debt                            898,964              601,766
            Income taxes payable - current                                80,000                  -
            Accrued expenses payable                                     181,439              296,422
                                                                     ------------         ------------
                Total current liabilities                              7,015,887            6,982,083
                                                                     ------------         ------------

         Deferred income taxes payable                                   205,610              183,139
                                                                     ------------         ------------

         Long-term debt less current portion                           5,677,692            6,562,093
                                                                     ------------         =-----------

         Commitments and contingencies
                                                                             -                    -

         Shareholders' equity:
            Common stock - $.01 par value, 10,000,000 shares
               authorized,  4,960,843 and 4,805,843 shares
               issued and outstanding at December 31,2003 and
               2002, respectively                                         49,608               48,058
            Additional paid-in capital                                 4,409,829            4,341,629
            Foreign currency translation adjustment                  (   237,323)         (   303,575)
            Retained earnings                                          1,190,076              845,005
                                                                     ------------         ------------
                                                                       5,412,190            4,931,117
             Less treasury stock 7,519 shares, at cost               (     8,195)         (     8,195)
                                                                     ------------         ------------
                Total shareholders' equity                             5,403,995            4,922,922
                                                                     ------------         ------------

                Total liabilities and shareholders' equity           $18,303,184          $18,650,237
                                                                     ============         ============
</TABLE>

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



                                        2


<PAGE>


                      OCEAN BIO-CHEM, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                  YEARS ENDED DECEMBER 31, 2003, 2002, AND 2001

<TABLE>
<CAPTION>


                                                                2003                2002                 2001
                                                                ----                ----                 ----
      <S>                                                    <C>                <C>                  <C>
      Gross Sales                                            $22,178,352        $22,712,991          $19,876,095

      Less discounts, returns and allowances                  2,180,650           2,127,093            1,862,702
                                                             -----------        -----------          -----------

      Net sales                                               19,997,702         20,585,898           18,013,393

      Cost of goods sold                                      15,131,775         15,961,692           13,744,703
                                                             -----------        -----------          -----------

      Gross profit                                             4,865,927          4,624,206             ,268,690
                                                             -----------        -----------          -----------

      Operating expenses:
         Advertising and promotion                               742,167            769,275              663,922
         Selling and administrative                            3,329,904          3,284,652            2,947,489
         Interest                                                511,292            290,856               86,109
                                                             -----------        -----------          -----------

         Total operating expenses                              4,362,927          4,440,036            4,122,703
                                                             -----------        -----------          -----------

      Operating profit                                           503,000            184,170              145,987

      Interest income                                             19,871              8,848                  897
                                                             -----------        -----------          -----------

      Income before provision
         for income taxes                                        522,871            193,018              146,884

      Provision for income taxes                                 177,800             58,500               40,500
                                                             -----------        -----------          -----------

      Net income                                                 345,071            134,518              106,384

      Other comprehensive income:
         Foreign currency translation,
         net of taxes                                             66,252        (    40,642)         (    53,535)
                                                             -----------        -----------          -----------

      Comprehensive income                                   $   411,323        $    93,876          $    52,849
                                                             ===========        ===========          ===========

      Earnings per share:
         Basic                                               $     .07          $     .03            $     .03
                                                             ===========        ===========          ===========

         Diluted                                             $     .07          $     .03            $     .03
                                                             ===========        ===========          ===========

</TABLE>










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

                                        3


<PAGE>


                      OCEAN BIO-CHEM, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
                     ENDED DECEMBER 31, 2003, 2002 AND 2001
<TABLE>
<CAPTION>

                                                                       Foreign
                                 Common stock         Additional       currency          Retained        Treasury
                             Shares       Amount    paid-in capital   adjustment         earnings          stock          Total
                            ------------------      ---------------   ----------        ----------      ----------      ----------
<S>                         <C>          <C>          <C>                <C>            <C>             <C>             <C>
January 1,                  4,105,889    $41,060      $3,720,377         ($209,398)     $1,128,448      ($  8,195)      $4,672,292
 2001

Net income                                                                                 106,384                         106,384

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

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

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

Net income                                                                                 134,518                         134,518

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

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

December 31,
 2002                       4,805,843     48,058       4,341,629         ( 303,575)        845,005      (   8,195)       4,922,922

Net income                                                                                 345,071                         345,071

Issuances of
   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
                            =========    =======      ==========         ==========     ==========      ==========      ==========

</TABLE>


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









                                        4


<PAGE>


                      OCEAN BIO-CHEM, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                  YEARS ENDED DECEMBER 31, 2003, 2002, AND 2001

<TABLE>
<CAPTION>


                                                                       2003               2002              2001
                                                                      ------             ------            ------    -

<S>                                                                <C>                 <C>               <C>
Cash flows from operating activities:
   Net income                                                      $   345,071         $  134,518        $ 106,384
   Adjustments to reconcile net income
    to net cash provided (used) by operations:
      Depreciation and amortization                                    674,955            601,064          494,901
      Issuance of common stock to employees                             69,750             67,724           36,181
      Changes in assets and liabilities:
        (Increase) decrease in accounts receivable                 ( 1,142,666)            96,491          130,979
        (Increase) decrease in inventory                               774,591)        (  244,967)         210,804
        (Increase) decrease in prepaid expenses and other              268,740         (   44,517)         265,737
        (Decrease) in accounts payable and
            accrued taxes and other                                (   540,922)        (  339,698)         172,931
                                                                   ------------        -----------       ---------

   Net cash provided (used) by operating activities                ( 1,099,663)           270,615        1,417,917
                                                                   ------------        -----------       ---------

Cash flows from financing activities:
   Net borrowings (reductions) under line of credit                    300,000            584,140        ( 584,140)
   Repayment of amounts due from advances to affiliates, net           439,350         (   48,544)          34,506
   Increases in (payments on) long-term debt, net                  (   587,203)         2,973,989        (  57,881)
                                                                   ------------        -----------       ----------
   Net cash provided (used) by financing activities                    152,147          3,509,585        ( 607,515)
                                                                   ------------        -----------       ----------

Cash flows used by investing activities:
   Purchases of property, plant and equipment                      ( 1,204,538)        (1,575,622)       ( 830,804)
   Utilization of (additions to) trust funds for
     equipment purchased, net                                        1,034,899         (1,152,110)          34,422
                                                                                       -----------       ----------

   Net cash used by investing activities                           (   169,639)        (2,727,732)       ( 798,382)
                                                                   ------------        -----------       ----------

Increase (decrease) in cash prior to effect of
   exchange rate on cash                                           ( 1,117,155)         1,052,468           12,020

Effect of exchange rate on cash                                         66,252         (   40,642)       (  53,535)
-----------------                                                  ------------        -----------

Net increase (decrease) in cash                                    ( 1,050,903)         1,011,826        (  41,515)
Cash at beginning of year                                            1,093,826             82,000          123,515
                                                                   ------------        -----------       ----------
Cash at end of year                                                $    42,923         $1,093,826        $  82,000
                                                                   ============        ===========       ==========

Supplemental information
  Cash used for interest during period                             $   290,856         $  434,869        $ 511,292
                                                                   ===========         ==========        =========
  Cash used for income taxes during period                         $    60,000         $  240,000        $     -
                                                                   ===========         ==========        =========

</TABLE>


The Company had no cash equivalents at December 31, 2003, 2002, and 2001.

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








                                        5


<PAGE>


                      OCEAN BIO-CHEM, INC. AND SUBSIDIARIES
                        NOTES TO CONSOLIDATED STATEMENTS
                  YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001

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 to the marine, automotive and recreational vehicle aftermarkets. During
1984, the Company changed its corporate name to Ocean Bio-Chem, Inc. (the parent
company) from its former name, Star brite Corporation.

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

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

     Prepaid  advertising  and  promotion - During the years ended  December 31,
2003, 2002 and 2001, the Company  introduced certain new products in the marine,
automotive  and  recreational  vehicle  aftermarket  industries.  In  connection
therewith,  the Company produced new promotional  items to be distributed over a
period of time and increased its catalog  advertising.  The Company  follows the
policy of amortizing these costs over a one-year basis. At December 31, 2003 and
2002, 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 $43,500 and $53,400, respectively.

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

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

     Use of estimates - The  preparation  of financial  statements in conformity
with  generally  accepted  accounting  principles  requires  management  to make
estimates that affect the reported 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   represent
approximately 55% of 2003 consolidated revenues and 76% of consolidated accounts
receivable  at December 31, 2003.  The Company has a  longstanding  relationship
with each of these entities and has always  collected open receivable  balances.
Company  management  believes that the credit  worthiness of these  customers is
excellent.

     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.



                                        6


<PAGE>

     Trademarks,  trade  names  and  patents  - The Star  brite  trade  name and
trademark were purchased in 1980 for $880,000.  The cost of trademarks and trade
names were amortized on a straight-line  basis over an estimated  useful life of
40 years through  December 31, 2001.  Effective  January 1, 2002 and pursuant to
Statement of Financial  Accounting Standards No. 142, the Company has determined
that the carrying  value of such  intangible  assets  relating to its Star brite
brand does not require further amortization.  In addition,  the Company owns two
patents 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.

     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 are included in net earnings
or the period.

     Reclassifications   -  Certain  items  in  the  accompanying   consolidated
financial  statements  for the years ended  December 31, 2002 and 2001 have been
reclassified to conform with the 2003 presentation.

Note 2 - Property, plant and equipment:

         The Company's property, plant and equipment consisted of the following:
<TABLE>
<CAPTION>

                                                                   December 31,
                                                               2003            2002

         <S>                                               <C>              <C>
         Land                                              $   278,325      $  278,325
         Building                                            4,390,894       2,936,543
         Manufacturing and warehouse equipment               4,750,972       4,356,336
         Office equipment and furniture                        591,024         583,049
         Construction in process                               400,800       1,079,779
         Leasehold improvement                                 141,826         141,375
                                                           -----------      ----------
                                                            10,553,841       9,375,407
         Less accumulated depreciation                       3,047,255       2,398,404
                                                           -----------      ----------
         Total property, plant and equipment, net          $ 7,506,586      $6,977,003
                                                           ===========      ==========
</TABLE>

     Depreciation  expense for the years ended December 31, 2003,  2002 and 2001
amounted  to  approximately  $675,000,  $601,100  and  $471,900,   respectively.
Depreciation expense includes the amortization of capitalized lease assets.

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

<TABLE>
<CAPTION>
                                                               2003            2002
         <S>                                               <C>              <C>
         Land                                              $   278,325      $  278,325
         Building                                            4,390,894       2,936,543
         Manufacturing and warehouse equipment               4,304,271       3,885,571
         Construction in process                               331,469       1,079,779
                                                           -----------      ----------
                                                             9,304,959       8,180,218
         Less accumulated amortization                       2,447,100       1,583,811
                                                           -----------      ----------
           Total                                           $ 6,857,859      $6,596,407
                                                           ===========      ==========
</TABLE>

     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.

                                       7


<PAGE>


     In  addition to the Kinpak  facility,  the  Company  has  routinely  leased
additional  warehouse  space in  Alabama  to  store  certain  manufacturing  raw
materials and inventory component items.  Consolidating such space to the Kinpak
campus  improves  material  logistics and  manufacturing  efficiency.  Also, the
prevailing level of interest rates offered an opportunity to reduce overall cash
flow attributable to this space. Accordingly, during the year ended December 31,
2002, the Company entered into an agreement with the City of Montgomery to issue
an additional  series Industrial  Development  Bonds  aggregating  $3,500,000 to
construct an additional  70,000  square feet of  warehousing  and  manufacturing
space.

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

Note 3 - Note payable, bank:

     During 2000, the Company  secured a revolving line of credit with a maximum
of $5 million from a commercial  bank  carrying an annual  interest  rate at the
lender's prime rate. This line was  collateralized  by the Company's  inventory,
trade receivables,  and intangible assets. On July 1, 2002, the Company replaced
such line with another  offered by the  commercial  bank financing the expansion
discussed in Notes 2 and 4. The new line  aggregates $5 million,  matures on May
31, 2004, bears an adjustable interest rate approximating  prime, and is secured
by the Company's trade  receivables  and inventory.  Pursuant to such agreement,
the Company is required to maintain  minimum working  capital  levels,  maintain
stipulated debt to tangible net worth and debt coverage  ratios.  As of December
31, 2003, the Company was not in compliance  with the current ratio  requirement
of   maintaining  a  ratio  of  at  least  1.5:1.   The  bank  has  waived  such
non-compliance.  As of December 31, 2003,  the Company was obligated  under this
arrangement in the amount of $4,550,000.

Note 4 - Long -Term debt:

     Long-term debt at December 31, 2003 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, 2003, $ 2,800,000 and $3,320,000 were
outstanding attributable to the 1997 and 2002 series,  respectively.  During the
year ended  December  31, 2003  interest  rates  ranged  between 1.2% and 1.45%.
Principal  and  accrued  interest  retiring  the  underlying  bonds are  payable
quarterly  through  March,  2012 and  July,  2017 for the 1997 and 2002  series,
respectively.  Repayment of the bonds is guaranteed by a Letter of Credit issued
by the Company's primary commercial bank. Security for the Letter of Credit is a
priority first mortgage on the Kinpak facility and manufacturing equipment.

     The Company is obligated to an affiliated  entity owned by certain officers
of the Company pursuant to a note payable  aggregating  $368,457 at December 31,
2003.  Such  obligation  requires  monthly   installments  of  $4,357  including
principal  and interest at 5.25%  through  April 1, 2004 when a balloon  payment
will be due. The terms of this obligation are identical to that of an underlying
obligation of the affiliated entity to a financial institution. Accordingly, the
entire balance is reflected as a current liability.  Subsequent to year-end, the
affiliate obtained a commitment to refinance the underlying  obligation and once
such transaction is completed,  the repayment terms of the Company's debt to the
affiliate will be revised to conform with the refinanced obligation.

     During 2003 and 2002, the Company,  through certain  subsidiaries,  entered
into  various  capital  lease  agreements  covering  equipment  utilized  in the
Company's Alabama plant and its corporate offices. Such obligations, aggregating
approximately $29,000 at December 31, 2003, have varying maturities through 2006
and carry interest rates ranging from 7% to 12%.

     During 2001, the Company financed the acquisition of approximately $484,000
of equipment through a financial  institution.  The obligation  requires monthly
installments  of $11,097  including  principal  and  interest  at 8.4% per annum
through  maturity  in May 2004.  The  obligation  is secured  by the  underlying
equipment   purchased.   At  December  31,  2003,   approximately   $54,300  was
outstanding.


                                        8

<PAGE>



     The composition of these  obligations at December 31, 2003 and 2002 were as
follows:
<TABLE>
<CAPTION>

                                                           Current Portion                  Long Term Portion
                                                           ---------------                  -----------------
                                                           2003          2002              2003           2002
                                                           ----          ----              ----           ----
         <S>                                               <C>        <C>               <C>               <C>
         Industrial Development Bonds                     $455,000    $440,000          $5,665,000     $6,120,000
         Notes payable                                     427,238     132,927                  -          22,952
         Capitalized equipment leases                       16,726      28,839              12,692          9,141
                                                          --------    ---------         ----------     ----------
                                                          $898,964    $601,766          $5,677,692     $6,562,093
                                                          ========    =========         ==========     ==========
</TABLE>

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

        Year ending December 31,

                           2004      $  898,964
                           2005         469,772
                           2006         462,920
                           2007         460,000
                           2008         460,000
                       Thereafter     3,825,000
                                     ----------

                            Total    $6,576,656
                                     ==========
Note 5 - Income taxes:

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

                                                                       Year ended December 31,

                                                            2003          2002         2001
                                                            ----          ----         ----
           <S>                                            <C>           <C>           <C>
           Income tax provision (benefit):
               Federal - current                          $140,000      $    -        $    -
                            - deferred                      37,800       58,000        40,500
               State                                            -            -             -                       -
                                                          --------      -------       -------
                            Total                         $177,800      $58,500       $40,500
                                                          ========      =======       =======
</TABLE>

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

<TABLE>
<CAPTION>
                                                                      Year Ended December 31,
                                                                 2003              2002             2001
                                                                 ----              ----             ----

           <S>                                            <C>           <C>           <C>
           Computed at statutory rate                        34.0%        34.0%         34.0%
           State tax, net of federal benefit                   -            -             -
           Other, net                                          -        (  3.7%)      (  6.4%)
                                                          --------      --------      --------
           Effective tax rate                                34.0%        30.3%         27.6%
                                                          ========      ========      ========
</TABLE>

     At December 31, 2003 and 2002  deferred  income taxes  payable  aggregating
$205,610  and  $183,139,   respectively   are  reflected  on  the   accompanying
consolidated  balance  sheets.  Such  amounts  are  attributable  to the  timing
differences   between   financial   statement   and  income  tax   treatment  of
depreciation.

Note 6 - Subsequent event:

     During  March 2004,  the  Company  received  approximately  $229,700 in the
aggregate from the exercise of employee stock options scheduled to expire during
2004 covering 316,470 shares of common stock.

                                        9
<PAGE>

Note 7 - Related party transactions:

     At December 31, 2003 and 2002, the Company had amounts due from  affiliated
companies  which are directly or beneficially  owned by the Company's  president
aggregating  approximately  $172,900 and $612,300,  respectively.  Such advances
were made  primarily  to  international  affiliates  that are in the  process of
expanding sales of Star brite products in Europe, Asia and South America.  These
amounts have been advanced by the Company on open account and,  through December
31, 2002,  carried  interest at the same rate charged to the Company on its line
of credit.  Effective  January 2003,  repayment terms of these open  receivables
were  modified to those terms  offered to the  Company's  larger  non-affiliated
customers  and,  accordingly,  no  longer  bear  interest,  unless  they  become
delinquent.

     Sales of Star brite products to such  affiliates  aggregated  approximately
$373,600, $317,100, and $344,600 during the years ended December 31, 2003, 2002,
and 2001, respectively.

  Note 8 - Commitments:

     On May 1, 1998, the Company entered into a ten year lease for approximately
12,700  square  feet of office  and  warehouse  facilities  in Fort  Lauderdale,
Florida  from an entity  owned by certain  officers  of the  Company.  The lease
required a minimum  rental of  $94,800  for the first  year 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,  insurance premiums, operating charges, maintenance charges and any
other expenses which arise from ownership. Rent charged to operations during the
years  ended  December  31,  2003,  2002,  and 2001  amounted  to  approximately
$100,500 each year.

     The Company has entered  into a  corporate  guaranty of the  mortgage  note
obligations  of  such  affiliate.  The  obligations  aggregating   approximately
$368,500 at December 31, 2003 are primarily secured by the real estate leased to
the Company.

     In November,  1994, the Company leased an approximately  10,000 square foot
building in Fort Lauderdale,  Florida for manufacturing,  warehousing and office
space from an unrelated third party.  Such lease terminates on October 31, 2004.
Rent charged to operations  under this lease during the year ended  December 31,
2003,  2002 and 2001  amounted to  approximately  $95,500,  $92,800 and $90,800,
respectively.

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

           Year ending December 31,
                             2004           $185,672
                             2005            102,498
                             2006            104,548
                             2007            106,639
                             2008            108,771
                       Thereafter            251,922
                                             -------

                               Total        $860,050
                                            ========

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


                                       10

<PAGE>
Note 9 - Stock options:

     During 1991, the Company adopted a non-qualified employee stock option plan
covering 200,000 shares of its common stock. During 1992, the Company adopted an
incentive stock option plan covering 200,000 shares of its common stock.  During
1994, the Company  adopted a  non-qualified  employee stock option plan covering
400,000 shares of its common stock. During 2002, the Company adopted 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 shows the status of  outstanding  options under the
Company's  stock  option  plans as of December  31,  2003,  as adjusted  for the
Company's stock dividend distributions of 2000 and 2002

<TABLE>
<CAPTION>
                                                                                                                          Weighted
                         Date        Options    Exercisable     Exercisable   Expiration         Average
           Plan         granted    outstanding    Options          price         date         remaining life
           ----         --------   -----------    -------         ------       --------       --------------
           <S>          <C>          <C>          <C>             <C>          <C>                <C>
           1991         11/12/99     161,700      129,360         $ .758       11/11/04             .88
           1992         03/01/99      28,875       28,875         $ .757       02/28/04             .17
           1992         12/20/01     165,000       66,000         $1.009       12/20/06            3.00
           1994         05/04/99     135,135      108,108         $ .684       05/03/04             .33
           1994         12/20/00     159,500       95,700         $ .573       12/19/05            1.95
           2002         10/22/02     150,000       30,000         $1.260       10/21/07            3.83
           2002         10/22/02      35,000        7,000         $1.260       10/21/07            3.83
           2002         06/20/03      40,000           -          $1.030       06/19/08            4.46
                                     -------      -------                                         -----
                                     875,210      465,043                                         2.15 yrs.
                                     =======      =======                                         =====
</TABLE>

     On March 25, 1999, the Company granted two officers a five-year  option for
115,000 shares each, as adjusted for the Company's stock dividend  distributions
of 2000 and 2002, at an exercise price of $.758 representing the market price at
the time of grant.  Such grants were awarded in  consideration of their making a
loan to the  Company in the amount of  $400,000  from an  affiliated  company in
which they are each 50% co-shareholders.

     Statement of Financial Accounting Standards No. 123 requires that companies
that  continue to account for employer  stock  options under APB No. 25 disclose
pro forma net  income  and  earnings  per  share as if such  Statement  had been
applied. The following table is disclosed pursuant to such requirement.
<TABLE>
<CAPTION>
                                                                   2003          2002          2001
                                                                   ----          ----          ----
           <S>                           <C>                    <C>          <C>             <C>
           Net income                    As reported            $345,071     $  134,518      $106,384
                                         Pro forma              $301,887     $  101,925        94,981

           Earnings per share            As reported             $  .07         $  .03       $  .03
                                         Pro forma               $  .06         $  .03       $  .02
</TABLE>

     A summary of the Company's  stock options as of December 31, 2003, 2002 and
2001, and changes during the years ending on these dates, is presented below:
<TABLE>
<CAPTION>

                                       2003                               2002                            2001
                              ----------------------         ---------------------             -------------------
                         2001
                                           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   1,082,210         $1.03           794,000       $ .89            730,500       $  .92
     Granted                    40,000          1.03           190,000        1.26            160,000         1.11
     Expired                 (  16,000)        (1.09)        (   7,500)      ( .68)           (96,500)      ( 1.73)
     Exercised                      -             -                 -           -                  -            -
     Adjustment for stock
      dividend distributions        -             -            105,710          -                  -            -
                             ---------         -----         ---------       -----            -------       ------
     Options outstanding at
       end of year           1,106,210         $ .95         1,082,210       $1.03            794,000       $  .92
                             =========         =====         =========       =====            =======       ======
</TABLE>
                                       11
<PAGE>



     Stock options are granted annually to selective executives,  key employees,
directors and others pursuant to the terms of the Company's  various plans. Such
grants are made at the discretion of the Board of Directors.  Options  typically
have a five year life with  vesting  occurring  at 20% per year on a  cumulative
basis with forfeiture at the end of the option, if not exercised.

     The fair value of each option grant was estimated  using the  Black-Scholes
option pricing model with the following assumptions for the years 2003, 2002 and
2001;  risk free rate 6.5%,  no dividend  yield for all years,  expected life of
five years and volatility of 31.6%.

Note 10 - Major customers:

     The Company has one major customer, West Marine, Inc., with sales in excess
of 10% of  consolidated  revenue for the year ended December 31, 2003.  Sales to
this customer represent approximately 36% of consolidated revenues.

     The  Company's  top  five   customers   represent   approximately   55%  of
consolidated  revenues and 76% of consolidated  trade  receivables.  The Company
enjoys good relations with these  customers.  However,  the loss of any of these
customers could have an adverse impact on the Company's operations.

Note 11 - Earnings per share:

     Earnings 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, 2003, 2002, and
2001:
<TABLE>
<CAPTION>

                                               2003                  2002                2001
                                             ---------            ---------            --------

           <S>                               <C>                  <C>                  <C>
           Basic                             4,888,133            4,438,207            4,169,870

           Diluted                           5,338,015            4,760,487            4,169,870
</TABLE>

Note 12 - Shareholders' equity:

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

     During the years ended December 31, 2003, 2002 and 2001 the Company awarded
155,000, 129,000 and 134,000 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 $ 67,500, 67,700 and $36,200 for each period, respectively.

     During March,  2004,  certain  employees of the Registrant  exercised stock
options  scheduled to expire during 2004 covering  316,470  shares of its common
stock.  Such  transaction  resulted in an  approximate  $229,700  of  additional
paid-in capital.











                                       12