8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

________________________________

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report: December 23, 2002
(Date of earliest event reported)

________________________________

ACTION PRODUCTS INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)

________________________________

Florida
(State or other jurisdiction of
incorporation or organization) 000-13118
(Commission File Number) 59-2095427
(IRS Employer
Identification No.)

390 N. ORANGE AVENUE, SUITE 2185
ORLANDO, FLORIDA 32801
(Address of principal executive offices, zip code)

(407) 481-8007
(Registrant’s telephone number, including area code)

TABLE OF CONTENTS

Pro Forma Condensed Consolidated Balance Sheet

Item 5.  Other Events.

     On November 26, 2002, Action Products International, Inc., a Florida corporation (the “Company”) issued a press release concerning the investment by the Kaplan family, the Company’s founders, of over $1,100,000 in the Company by December 31, 2002. This investment was part of the Company’s plan to bring the Company back into compliance with the stockholders’ equity requirement for continued listing on Nasdaq’s SmallCap Market. The Company is filing an unaudited, pro forma balance sheet as of November 30, 2002, in an attempt to evidence its current compliance with the stockholders’ equity requirement of Nasdaq’s SmallCap Market.

     The Company appeared before a Nasdaq Hearing Panel on November 22, 2002, to present its plan to regain compliance with the continued listing standard for stockholders’ equity. A key component of the Company’s plan was the investment of $1,120,500 by the Kaplan family no later than December 31, 2002. The Kaplan family investment included (i) the payment in full of approximately $520,500 in stock subscriptions receivable owed to the Company by Warren Kaplan, Judy Kaplan, Ron Kaplan and Elissa Paykin; and (ii) the exercise of common stock purchase warrants held by Ron Kaplan and Elissa Paykin for an aggregate total of approximately $600,000. As of November 30, 2002, the Kaplan family has invested $932,800 into the Company. On or about December 19, 2002, the Kaplan Family completed this investment. The Company is currently awaiting the Hearing Panel’s final determination.

Item 7.  Financial Statements and Exhibits

(c)  Exhibits

Exhibit No.	Item
99.1	Unaudited balance sheet of the Company as of November 30, 2002.

SIGNATURES

     Pursuant to the requirement of the Securities Exchange Act of 1934, the Registrant has duly caused this amended report to be signed on its behalf by the undersigned hereunto duly authorized.

	ACTION PRODUCTS INTERNATIONAL, INC.
Date: December 23, 2002	By:	/s/Robert L. Burrows
		Robert L. Burrows Chief Financial Officer

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EXHIBIT INDEX

Exhibit No.	Item
99.1	Unaudited balance sheet of the Company as of November 30, 2002.

-3- EX-99.1 3 g79911exv99w1.htm PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

EXHIBIT 99.1

ACTION PRODUCTS INTERNATIONAL, INC. AND SUBSIDIARY
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)

							Adjustment
							Receipts		Pro Forma
				November 30,			Equity		November 30,
				2002			Investment		2002
ASSETS
CURRENT ASSETS
Cash and cash equivalents				$	591,800		$	187,700	$	779,500
Accounts receivable, net of an allowance for doubtful accounts of $67,400					1,434,200					1,434,200
Inventories, net					1,075,300					1,075,300
Prepaid expenses and other assets					329,048					329,048
			TOTAL CURRENT ASSETS		3,430,348					3,618,048
PROPERTY, PLANT AND EQUIPMENT					2,153,875					2,153,875
Less accumulated depreciation and amortization					(1,150,229	)				(1,150,229	)
		NET PROPERTY, PLANT AND EQUIPMENT			1,003,646					1,003,646
EXCESS OF COST OVER FAIR VALUE OF ASSETS ACQUIRED, NET					782,400					782,400
OTHER ASSETS					774,100					774,100
			TOTAL ASSETS	$	5,990,494				$	6,178,194
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Current portion of installment notes payable and obligation under capital lease				$	85,800				$	85,800
Accounts payable					395,800					395,800
Accrued expenses, payroll and related expenses					114,600					114,600
Borrowings under lines of credit					1,279,000					1,279,000
Other Current Liabilities					46,100					46,100
			TOTAL CURRENT LIABILITIES		1,921,300					1,921,300
MORTGAGE PAYABLE & OBLIGATION UNDER CAPITAL LEASE					744,342					744,342
DEFERRED INCOME TAXES					7,500					7,500
DEFERRED REVENUE					102,100					102,100
			TOTAL LIABILITIES		2,775,242					2,775,242
SHAREHOLDERS’ EQUITY
Preferred Stock - 10,000,000 shares authorized, zero shares issued and outstanding										—
Common stock — $.001 par value; 15,000,000 shares authorized; 3,267,070 shares issued					3,200					3,200
Treasury Stock — $.001 par value; 40,600 shares					(41	)				(41	)
Additional paid-in capital					4,449,341					4,449,341
Accumulated Deficit					(1,049,548	)				(1,049,548	)
Stock subscriptions receivable					(187,700	)		187,700		—
			TOTAL SHAREHOLDERS’ EQUITY		3,215,252					3,402,952
	TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY			$	5,990,494				$	6,178,194

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EX-99.1

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