<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   Form 10-QSB

                  (Mark One)

         [X]      Quarterly  Report under Section 13 or 15(d) of the  Securities
                  Exchange Act of 1934
                  For the quarter ended June 30, 2003

                                       or

         [ ]      Transition   Report  under  Section  13  or  15(d)  of  the
                  Securities Exchange Act of 1934
                  For the transition period from _________ to _________

                                    000-13118
                              (Commission File No.)

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


             Florida                                    59-2095427
             -------                                    ----------
(State or other jurisdiction of              (IRS Employer Identification No.)
 incorporation or organization)

             390 N. Orange Ave., Suite 2185, Orlando, Florida, 32801
--------------------------------------------------------------------------------
               (Address of principal executive offices, Zip Code)


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


Check 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
                           ---         ---


State the number of shares outstanding of each of the issuer's classes of common
stock, as of last practicable date.


Class                                           Outstanding at July 25, 2003
-----                                           ----------------------------
Common Stock, $.001 par value                   3,099,300



         Transitional Small Business Disclosure Format (check one): YES NO X




                                       1
<PAGE>


                                    I N D E X



<TABLE>
<CAPTION>
   PART I.  FINANCIAL INFORMATION                                                                Page
                                                                                                 Number
                                                                                                 ------
   Item 1.    Financial Statements
<S>                                                                                               <C>
   Condensed Consolidated Balance Sheet at June 30, 2003 (unaudited)                              3

   Condensed Consolidated Statements of Operations - Three months
       and Six months ended June 30, 2003 and 2002 (unaudited)                                    4

   Condensed Consolidated Statements of Cash Flows - Six months
         ended June 30, 2003 and 2002 (unaudited)                                                 5

   Notes to unaudited Condensed Consolidated Financial Statements                                 6

   Item 2.    Management's Discussion and Analysis of Financial Condition
              and Results of Operations                                                           7

   Item 3.    Controls and Procedures                                                             9


   PART II.  OTHER INFORMATION

   Item 2.    Changes in Securities                                                               9

   Item 4.    Submission of Matters to Vote of Shareholders                                      10

   Item 6.    Exhibits and Reports on Form 8-K                                                   10

   SIGNATURE PAGE                                                                                11
</TABLE>



                                       2
<PAGE>

PART I.  FINANCIAL INFORMATION

ITEM 1.  Financial Statements

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


<TABLE>
<CAPTION>
                                                                                          June 30, 2003
                                                                                          -------------
                                     ASSETS
CURRENT ASSETS
<S>                                                                                        <C>
Cash and cash equivalents                                                                  $   459,500
Accounts receivable, net of an allowance for doubtful accounts of $120,000                   1,744,500
Inventories, net                                                                             1,120,600
Prepaid expenses and other assets                                                              393,300
                                                                                           -----------
    TOTAL CURRENT ASSETS                                                                     3,717,900

PROPERTY, PLANT AND EQUIPMENT                                                                2,157,800
Less accumulated depreciation and amortization                                              (1,236,300)
                                                                                           -----------
    NET PROPERTY, PLANT AND EQUIPMENT                                                          921,500
GOODWILL                                                                                       782,400
OTHER ASSETS                                                                                   657,000
                                                                                           -----------
    TOTAL ASSETS                                                                           $ 6,078,800
                                                                                           ===========

                      LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of obligation under capital lease                                          $    88,100
Accounts payable                                                                               486,200
Accrued expenses, payroll and related expenses                                                 315,100
Current portion of mortgage payable                                                             23,600
Borrowings under line of credit                                                              1,573,000
Other Current Liabilities                                                                       25,000
                                                                                           -----------
    TOTAL CURRENT LIABILITIES                                                                2,511,000
                                                                                           -----------


OBLIGATION UNDER CAPITAL LEASE                                                                  45,900
MORTGAGE PAYABLE                                                                               638,000
DEFERRED INCOME TAXES                                                                           14,400
DEFERRED REVENUE                                                                                87,500
                                                                                           -----------
    TOTAL LIABILITIES                                                                        3,296,800
                                                                                           -----------

SHAREHOLDERS' EQUITY

Preferred Stock - 10,000,000 shares authorized, zero shares issued and outstanding                  --
Common stock - $.001 par value; 15,000,000 shares authorized; 3,272,300 shares
issued                                                                                           3,300
Treasury Stock - $.001 par value; 173,000 shares                                                  (200)
Additional paid-in capital                                                                   4,333,500
Accumulated Deficit                                                                         (1,554,600)
                                                                                           -----------
    TOTAL SHAREHOLDERS' EQUITY                                                               2,782,000
                                                                                           -----------
    TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                             $ 6,078,800
                                                                                           ===========
</TABLE>

                             See Accompanying Notes


                                       3
<PAGE>


ITEM 1. Financial Statements (cont.)


               ACTION PRODUCTS INTERNATIONAL, INC. AND SUBSIDIARY
           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

<TABLE>
<CAPTION>
                                                         Three Months Ended June 30th               Six Months Ended June 30th
                                                       --------------------------------          --------------------------------
                                                           2003                 2002                 2003                 2002
                                                       -----------          -----------          -----------          -----------
<S>                                                    <C>                  <C>                  <C>                  <C>
NET SALES                                              $ 2,265,700          $ 1,479,600          $ 3,650,800          $ 2,937,800

COST OF SALES                                            1,317,100              903,400            2,107,000            1,749,600
                                                       -----------          -----------          -----------          -----------

GROSS PROFIT                                               948,600              576,200            1,543,800            1,188,200

OPERATING EXPENSES
Selling                                                    248,900              312,200              409,000              712,400
General and administrative                                 646,900              600,200            1,184,800            1,207,500
                                                       -----------          -----------          -----------          -----------
       TOTAL OPERATING EXPENSES                            895,800              912,400            1,593,800            1,919,900
                                                       -----------          -----------          -----------          -----------

INCOME (LOSS) FROM OPERATIONS                               52,800             (336,200)             (50,000)            (731,700)

OTHER INCOME (EXPENSE)
Interest expense                                           (30,400)             (35,700)             (55,300)             (73,900)
Other                                                        3,700               13,200                1,400               15,800
                                                       -----------          -----------          -----------          -----------
                                                           (26,700)             (22,500)             (53,900)             (58,100)
                                                       -----------          -----------          -----------          -----------
INCOME (LOSS) BEFORE BENEFIT (PROVISION) FROM               26,100             (358,700)            (103,900)            (789,800)
INCOME TAXES

BENEFIT (PROVISION) FROM INCOME TAXES                            0              (21,000)                   0               37,700
                                                       -----------          -----------          -----------          -----------

NET INCOME (LOSS)                                      $    26,100          ($  379,700)         ($  103,900)         ($  752,100)
                                                       ===========          ===========          ===========          ===========

INCOME (LOSS) PER SHARE
Basic                                                  $      0.01          ($     0.17)         ($     0.03)         ($     0.34)
Diluted                                                $      0.01          ($     0.17)         ($     0.03)         ($     0.34)

Weighted average number of common shares outstanding:

Basic                                                    3,099,100            2,190,700            3,126,300            2,196,900

Diluted                                                  3,101,400            2,190,700            3,126,300            2,196,900
</TABLE>


                             See Accompanying Notes

                                       4
<PAGE>


ITEM 1. Financial Statements (cont.)

               ACTION PRODUCTS INTERNATIONAL, INC. AND SUBSIDIARY
           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)


<TABLE>
<CAPTION>
                                                                                    Six Months Ended June 30th
                                                                                     2003               2002
                                                                                   ---------          ---------
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                                                <C>                <C>
Net Loss                                                                           $(103,900)         $(752,100)
Adjustments to reconcile net loss to net cash used in operating activities

   Depreciation                                                                       73,200             83,400

   Amortization                                                                      157,600             88,100

   Loss on disposal of property plant and equipment                                       --             58,500

   Warrant issued for services                                                        16,600             58,500

   Provision for bad debts                                                            22,500             24,100

   Deferred income tax provision                                                          --            (37,700)
Changes in:

   Accounts  receivable                                                             (971,100)           405,900

   Inventories                                                                        32,000            388,400

   Prepaid expenses                                                                 (112,800)          (108,000)

   Other assets                                                                      (15,600)          (304,000)

   Accounts payable                                                                  132,600            440,100

   Accrued expenses, payroll and related expenses                                    209,800           (475,600)

   Income taxes receivable/ (payable)                                                     --            152,400

   Deferred revenue                                                                  (12,500)           (12,500)
                                                                                   ---------          ---------

     NET CASH USED IN OPERATING ACTIVITIES                                          (571,600)             9,500
                                                                                   ---------          ---------

CASH FLOWS FROM INVESTING ACTIVITIES

Acquisition of property, plant and equipment                                          (3,900)           (10,900)

Exit and integration costs incurred                                                       --                 --
                                                                                   ---------          ---------

     NET CASH USED IN INVESTING ACTIVITIES                                            (3,900)           (10,900)
                                                                                   ---------          ---------

CASH FLOWS FROM FINANCING ACTIVITIES

Purchase of Treasury Stock                                                          (141,300)           (41,800)

Proceeds from Common Stock Options and Warrants                                        9,400                 --
Repayment of notes payable and obligation under capital lease                        (53,700)           (72,300)
Net change in borrowings under line of credit                                        657,200           (217,000)
                                                                                   ---------          ---------
     NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES                             471,600           (331,100)
                                                                                   ---------          ---------

     NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS                           (103,900)          (332,500)

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                                       563,400            482,800
                                                                                   ---------          ---------

CASH AND CASH EQUIVALENTS AT END OF YEAR                                           $ 459,500          $ 150,300
                                                                                   =========          =========

Supplemental disclosures - cash paid for:
    Interest                                                                       $  55,300          $  73,900
    Income Taxes                                                                   $       0          $       0
</TABLE>


                             See Accompanying Notes


                                       5
<PAGE>




               ACTION PRODUCTS INTERNATIONAL, INC. AND SUBSIDIARY
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1.            Condensed  consolidated  financial  statements.  In the opinion of
              management,  the  accompanying  unaudited  condensed  consolidated
              financial  statements  contain  all normal  recurring  adjustments
              necessary  to present  fairly  the  financial  position  of Action
              Products International,  Inc. and its subsidiary,  Action Products
              Canada Ltd.  (collectively,  the "Company"),  at June 30, 2003 and
              the  results  of its (i)  operations  for the three  month and six
              month periods ended June 30, 2003 and 2002 and (ii) cash flows for
              the six month periods ended June 30, 2003 and 2002.  The financial
              information included herein is taken from the books and records of
              the Company and is unaudited.

              Certain information and footnote  disclosures normally included in
              financial   statements   prepared  in  accordance  with  generally
              accepted  accounting  principles  have been  condensed or omitted.
              These condensed financial statements should be read in conjunction
              with the audited  financial  statements and notes thereto included
              in the  Company's  annual report on Form 10-KSB for the year ended
              December 31,  2002.  The results of  operations  for the six month
              period ended June 30, 2003 are not  necessarily  indicative of the
              operating results for the full year.

2.            Line  of  credit.  In  June  2003,  the  Company  entered  into an
              agreement  with a  financial  institution,  to renew  an  existing
              revolving line of credit (the  "Revolver") for up to $2 million at
              Prime   plus1/2%.   The   borrowings   under  the   Revolver   are
              collateralized by inventory and accounts  receivable.  The Company
              utilizes the Revolver to finance  accounts  receivable,  inventory
              and other operating and capital requirements. The renewed Revolver
              matures  June 30,  2005 and  contains  covenants  relating  to the
              financial  condition  of the  Company.  If the  Company  fails  to
              maintain  compliance with the financial covenants contained in the
              Revolver,  the maturity date could be accelerated.  The Company is
              currently in compliance with all of the covenants.

3.            Mortgage Payable.  In November 1998, the Company borrowed $750,000
              in the form of a mortgage payable.  The mortgage is collateralized
              by real estate and  improvements  comprising the Company's  35,000
              sq. ft. product distribution center. The mortgage contains certain
              restrictive covenants, which provide that, among other things, the
              Company  maintain  a minimum  working  capital,  net  worth,  debt
              service  coverage and a maximum  debt to net worth  ratio.  If the
              Company fails to maintain  compliance with the financial covenants
              contained in the note, the maturity date could be accelerated.  At
              December 31, 2002, the Company was not in compliance with the debt
              service  coverage and debt to net worth  covenants.  However,  the
              Company has obtained a waiver of non-compliance from the financial
              institution for the twelve month period ending December 31, 2003.

4.            Earnings per share.  Common stock equivalents were not included in
              the computation of diluted  earnings per share for the three month
              period ending June 30, 2002 and six month periods  ending June 30,
              2003 and 2002, as their effect would have been anti-dilutive.  The
              average number of common stock equivalents that were excluded from
              the calcualtion for the three month period ended June 30, 2002 and
              six month  periods  ending June 30, 2003 and 2002 were  1,036,300,
              900 and 1,036,300 respectively.

5.            Common  Stock and Equity  Securities.  During the six month period
              ended June 30, 2003, the Company repurchased 126,700 of its common
              shares, at a cost of $141,300.

              On April 24, 2003 the Company announced a Warrant  distribution to
              all shareholders of record as of June 12, 2003.  Shareholders were
              issued one warrant for each share of common  stock owned as of the
              record date.  The warrant  entitles the holder to purchase  common
              stock at an exercise price of $2.00 per share and expires June 11,
              2004.  As of June 30, 2003  approximately  3,272,100  warrants had
              been issued.

              In May 2003,  the  Company  issued a warrant  for  services  which
              entitles the holder to purchase  60,000  shares common stock at an
              exercise price of $2.00 per share.  The warrant expires on May 14,
              2004.  The Company has accounted for the issuance of these options
              under the recognition and measurement principles of FASB Statement
              No.  123,  Accounting  for  Stock-Based  Compensation  and related
              Interpretations.



                                       6
<PAGE>

         NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (cont.)

              Common Stock and Equity Securities (cont.)
              In June 2003,  a director  exercised  an option to purchase  5,000
              shares of common stock at a price of $1.88 per share.  The Company
              received $9,400 in proceeds from the exercise.

              At  June  30,  2003,  the  Company  has one  stock-based  employee
              compensation  plan.  The Company  accounts  for the plan under the
              recognition  and  measurement  principles  of APB  Opinion No. 25,
              Accounting   for   Stock   Issued   to   Employees   and   related
              Interpretations.  No  stock-based  employee  compensation  cost is
              reflected in net income, as all options granted under the plan had
              an exercise price not less than the market value of the underlying
              common  stock on the date of grant.  The  effect on net income and
              earnings  per share if the  Company  had  applied  the fair  value
              recognition  provisions of FASB Statement No. 123,  Accounting for
              Stock-Based Compensation, to stock-based employee compensation was
              not significant.

6.            Reclassifications. Certain amounts from the prior period have been
              reclassified to conform to the current period presentation.


         ITEM 2. Management's Discussion and Analysis of Financial Condition
                 and Results of Operations

         Forward-looking Statements:
         Forward-looking  statements  in this  Form  10-QSB  including,  without
         limitation,  statements relating to our plans, strategies,  objectives,
         expectations,  intentions and adequacy of resources,  are made pursuant
         to the safe  harbor  provisions  of the Private  Securities  Litigation
         Reform Act of 1995.  All  statements  made in this  report,  other than
         statements of historical fact, are  forward-looking  statements.  These
         forward-looking   statements   involve   known   and   unknown   risks,
         uncertainties  and other  factors  that may cause our  actual  results,
         performance or achievements to be materially  different from any future
         results,  performance  or  achievements  expressed  or  implied  by the
         forward-looking  statements. The following factors, among others, could
         cause actual results to differ  materially  from those set forth in the
         forward-looking  statements:  our ability to  successfully  develop our
         brands and proprietary products through internal development, licensing
         and/or mergers and acquisitions.  Additional  factors include,  but are
         not limited to the following: the size and growth of the market for our
         products,  competition,  pricing  pressures,  market  acceptance of our
         products,  the effect of  economic  conditions,  intellectual  property
         rights, the results of financing efforts, risks in product development,
         other risks  identified in this report and our other  periodic  filings
         with the Securities and Exchange Commission.

         Results of Operations:

         Three Months Ended June 30, 2003 Compared With Three Months Ended
         June 30, 2002

         Net sales for the three  months  ended June 30,  2003 were  $2,265,700,
         compared with net sales of  $1,479,600  for the three months ended June
         30,  2002.  Management  attributes  the $786,100 or 53% increase in net
         sales to an approximately $1.3 million increase in sales of our Jay Jay
         The Jet Plane brand which was  released in October  2002.  Sales of Jay
         Jay  products  to Toys R Us,  Inc.  accounted  for  approximately  $1.1
         million of the total.
         Gross  profit  increased  by $372,400 to $948,600  for the three months
         ended June 30, 2003,  compared with $576,200 for the three months ended
         June 30, 2002. The gross profit percentage improved to 42% from 39% for
         the three month periods ended June 30, 2003 and 2002 respectively.  The
         increase  in gross  profit is mainly  attributable  to the  increase in
         sales discussed above. The increase in gross profit percentage compared
         to the same period in 2002, was mainly attributable to increased profit
         margins on newer items, fewer sales discounts and lower freight costs.



                                       7
<PAGE>


         NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (cont.)

         ITEM  2.   Management's   Discussion  and  Analysis  of  Financial
         Condition and Results of Operations (Continued)

         Selling,  general  and  administrative  (SG&A)  expenses  decreased  by
         $16,600 to $895,800 for the three month period ended June 30, 2003 from
         $912,400  for the three  month  period  ended  June 30,  2002.  This 2%
         decrease  in  SG&A   expenses  is  due   primarily  to  a  decrease  in
         compensation  costs of $106,000  resulting from  reductions in staffing
         partially offset by increases in:

         o        Sales commissions of $23,000 resulting from increased sales

         o        Advertising and promotion of $24,000  resulting from increased
                  merchandising promotion and trade show participation

         o        Professional   Services  and  printing  of  $32,000  resulting
                  principally   from  contract   staffing  and  expanded  public
                  relations activities.

         Interest  expense related to current and long-term debt was $30,400 and
         $35,700  for the three  month  periods  ended  June 30,  2003 and 2002,
         respectively.  The decrease of $5,300 is due to lower  borrowings under
         our line of credit, combined with a lower rate of interest.

         Other income and  (expense)  during the three month  periods ended June
         30,  2003 and 2002 was $3,700  and  $13,200,  respectively.  The $9,500
         change was mainly attributable to a decrease in service charges.

         Income before provision for income taxes and net income: as a result of
         the  foregoing,  the income before taxes was $26,100 and the net income
         after  taxes was  $26,100  for the three  months  ended June 30,  2003,
         compared  with a loss before taxes of $358,700 and net loss after taxes
         of $379,700 for the three months ended June 30, 2002.

         Six months Ended June 30, 2003  Compared With Six months Ended June 30,
         2002

         Net sales  for the six  months  ended  June 30,  2003 were  $3,650,800,
         compared with net sales of $2,937,800 for the six months ended June 30,
         2002.  Management  attributes the $713,000 or 24% increase in net sales
         to an  approximately  $1.5 million increase in sales of our Jay Jay The
         Jet Plane brand which was  released in October  2002.  Sales of Jay Jay
         products to Toys R Us, Inc. accounted for approximately $1.1 million of
         the total.
         Gross  profit  increased by $355,600 to  $1,543,800  for the six months
         ended June 30, 2003,  compared with $1,188,200 for the six months ended
         June 30, 2002. The gross profit percentage improved to 42% from 40% for
         the six month  periods ended June 30, 2003 and 2002  respectively.  The
         increase  in gross  profit is mainly  attributable  to the  increase in
         sales discussed above. The increase in gross profit percentage compared
         to the same period in 2002,  was mainly  attributable  to lower product
         and freight costs.

         Selling,  general  and  administrative  (SG&A)  expenses  decreased  by
         $326,100 to  $1,593,800  for the six month  period  ended June 30, 2003
         from  $1,919,900 for the six month period ended June 30, 2002. This 17%
         decrease  in  SG&A   expenses  is  due   primarily  to  a  decrease  in
         compensation  costs of $283,000  due to  reductions  in staffing  and a
         decrease  in travel  and  living of  $45,000  resulting  from  improved
         airfare costs and reduced  international  travel.  These decreases were
         partially  offset by an  increase of $24,000 in  advertising  and sales
         promotion   resulting  from  increased   merchandising   promotion  and
         marketing communication programs.

         Interest  expense related to current and long-term debt was $55,300 and
         $73,900  for the six  month  periods  ended  June 30,  2003  and  2002,
         respectively.  The decrease of $18,600 is due to lower borrowings under
         our line of credit, combined with a lower rate of interest.

         Other income and (expense)  during the six month periods ended June 30,
         2003 and 2002 was $1,400 and $15,800,  respectively. The $14,400 change
         was mainly attributable to a decrease in service charges.





                                       8
<PAGE>

         NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (cont.)

         ITEM 2. Management's Discussion and Analysis of Financial Condition and
         Results of Operations (Continued)

         Income before provision for income taxes and net income: as a result of
         the  foregoing,  the loss before  taxes was  $103,900  and the net loss
         after  taxes was  $103,900  for the six  months  ended  June 30,  2003,
         compared  with a loss before taxes of $789,800 and net loss after taxes
         of $752,100 for the six months ended June 30, 2002.

         Financial Condition, Liquidity, and Capital Resources:
         As of June 30,  2003,  the  Company  had cash and cash  equivalents  of
         $459,500  representing a decrease of $103,900  compared to December 31,
         2002.

         After taking account of non-cash items and other adjustments,  our cash
         requirements for operations for the six months ended June 30, 2003 were
         $588,200.  The principal  source of cash from Operating  activities for
         the six months ended June 30, 2003 was an increase in accrued  expenses
         of  $209,900  due to  deferred  payment  terms  for  royalty  and sales
         commission expenses and an increase in accounts payable of $132,600 due
         to a seasonal increase in inventory  purchases.  Principal uses of cash
         from Operating  activities in the first six months of fiscal 2003 were:
         an increase of $971,100 in accounts  receivable  resulting  principally
         from increased sales and an increase of $112,800 in prepaid expenses.

         To meet a portion of our operating cash requirements,  we increased our
         borrowing under our line of credit by $657,200. After applying $141,300
         to the  repurchase of common stock and $53,700 to repayment of mortgage
         and  capital  lease  principal,  this  left  net  cash  from  financing
         activities of $488,200.

         At June 30, 2003, borrowing under our line of credit was $1,573,000, an
         increase of $97,300 from  $1,475,700  as of June 30, 2002.  Our line of
         credit  provides for  borrowings up to $2,000,000 at the prime rate and
         matured  June 30,  2003.  Under  the line of credit  agreement,  we are
         subject to financial  covenants  relating to certain asset balances and
         financial  ratios.  As of June  30,  2003 we were  eligible  to  borrow
         $1,983,900  under our line of credit  and were in  compliance  with our
         financial covenants.  In June 2003, we signed an agreement to renew the
         line of credit at a lending  rate of prime plus  1/2%.  The new line of
         credit will mature on June 30, 2005.

         ITEM 3.  Controls and Procedures

         Action Products  management,  including the Chief Executive Officer and
         Chief   Financial   Officer,   have  conducted  an  evaluation  of  the
         effectiveness  of  disclosure   controls  and  procedures  pursuant  to
         Exchange Act Rule 13a-14. Based on that evaluation, the Chief Executive
         Officer  and Chief  Financial  Officer  concluded  that the  disclosure
         controls and  procedures  are  effective in ensuring  that all material
         information required to be filed in this quarterly report has been made
         known to them in a  timely  fashion.  There  have  been no  significant
         changes in internal  controls,  or in factors that could  significantly
         affect  internal  controls,  subsequent to the date the Chief Executive
         Officer and Chief Financial Officer completed their evaluation.

         PART II.  OTHER INFORMATION

         ITEM 2. Changes in Securities

         On May 15, 2003,  the Company  entered into an agreement  with CEOCast,
         Inc.  whereby  CEOCast  provides  the  Company  with  certain  investor
         relations and related services.  As part of the consideration for these
         services,  the  Company  issued  CEOCast a warrant to  purchase  60,000
         shares of the  Company's  common stock at $2.00 per share.  The warrant
         expires on May 14, 2004.  The issuance is exempt from  registration  by
         virtue of the exemption  under Section 4(2) for issuances not involving
         a public offering.





                                       9
<PAGE>

         ITEM 2. Changes in Securities (cont.)

         On June 30,  2003,  the Company  made a  distribution  of common  stock
         purchase  warrants to its  shareholders  of record as of June 12, 2003.
         The Company distributed a total of 3,272,092 warants. For each share of
         common stock held as of the record date, the shareholders  received one
         warrant.  Each  warrant  entitles  the holder to purchase  one share of
         common  stcok at an  exercise  price of $2.00 per share.  The  warrants
         expire on June 11,  2004.  The  issuance  is exempt  from  registration
         because the  distribution  of the warrants do not consitute an offer or
         sale of the warrants.

         ITEM 4. Submission of Matters to Vote of Shareholders

         The annual meeting of shareholders was held in the Company's offices at
         390 North Orange Ave. Suite 2185,  Orlando,  Florida 32801 on Thursday,
         June 5, 2003. The sole proposal brought before the shareholders was the
         election, as nominated by the Board of Directors,  of Judith Kaplan and
         Scott Runkel as Class I Directors  and Warren  Kaplan for election as a
         Class II Director.  The total number of shares  entitled to vote at the
         meeting  was  3,100,100.  As a result of the votes cast,  as  described
         below,  all three nominees were elected for two year terms to expire at
         the Annual Shareholders' Meeting in 2005 and 2004 respectively:

         Name           For             Against         Abstained
         -------------------------------------------------------------
         Judith Kaplan  2,239,528       2,923           16,436
         Warren Kaplan  2,239,528       2,923           16,436
         Scott Runkel   2,242,451       -0-             16,436

         Ronald  Kaplan and Neil Swartz were the two remaining  Directors  whose
         terms will continue to the Annual Meeting of  Shareholders' in 2004. No
         other business was brought before the Annual Meeting.

         ITEM 6.  Exhibits and Reports on Form 8-K

         A. Exhibits

         Exhibit No.     Description

         10.11    Loan  Agreement  by and  between  Mercantile  Bank and  Action
                  Products International, Inc. dated June 20, 2003.

         99.1     Chief  Executive  Officer -  Sarbanes-Oxley  Act  Section  906
                  Certification

         99.2     Chief  Financial  Officer -  Sarbanes-Oxley  Act  Section  906
                  Certification


         B. Reports on Form 8-K

         A Form 8-K dated  July 9, 2003 was  filed on July 11,  2003  announcing
         revenues for the quarter ended June 30, 2003.



                                       10
<PAGE>


                                   SIGNATURES

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
         the  registrant  has duly caused this report to be signed on its behalf
         by the undersigned thereunto duly authorized.



                                         Action Products International, Inc.


         Date: July 25, 2003             By: /s/ RONALD S. KAPLAN
               -------------                 ---------------------------------
                                             Ronald Kaplan
                                             Chief Executive Officer (Principal
                                             Executive Officer)


         Date: July 25, 2003             By: /s/ ROBERT L. BURROWS
               -------------                 ---------------------------------
                                             Robert L. Burrows
                                             Chief Financial Officer (Principal
                                             Accounting Officer)



                                       11
<PAGE>




     Chief Executive Officer - Sarbanes-Oxley Act Section 302 Certification

         I, Ronald S. Kaplan, certify that:

         1.       I have reviewed this quarterly report on Form 10-QSB of Action
                  Products International, Inc.;

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

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

         4.       The  registrant's   other   certifying   officers  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 have:

                           (a) designed such disclosure  controls and procedures
                  to  ensure   that   material   information   relating  to  the
                  registrant,  including its consolidated subsidiaries,  is made
                  known to us by  others  within  those  entities,  particularly
                  during  the  period in which  this  quarterly  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  quarterly  report  (the
                  "Evaluation Date"); and

                           (c)   presented   in  this   quarterly   report   our
                  conclusions about the effectiveness of the disclosure controls
                  and  procedures  based on our  evaluation as of the Evaluation
                  Date;

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

                           (a) all  significant  deficiencies  in the  design or
                  operation of internal  controls which could  adversely  affect
                  the  registrant's  ability to record,  process,  summarize and
                  report financial data and have identified for the registrant's
                  auditors any material weaknesses 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   officers  and  I  have
                  indicated  in  this   quarterly   report  whether  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.


Date: July 25, 2003                       By: /s/ RONALD S. KAPLAN
                                              --------------------
                                              Ronald Kaplan
                                              Chief Executive Officer
                                              (Principal Executive
                                              Officer)




                                       12
<PAGE>


     Chief Financial Officer - Sarbanes-Oxley Act Section 302 Certification

         I, Robert L. Burrows, certify that:

         1.       I have reviewed this quarterly report on Form 10-QSB of Action
                  Products International, Inc.;

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

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

         4.       The  registrant's   other   certifying   officers  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 have:

                           (a) designed such disclosure  controls and procedures
                  to  ensure   that   material   information   relating  to  the
                  registrant,  including its consolidated subsidiaries,  is made
                  known to us by  others  within  those  entities,  particularly
                  during  the  period in which  this  quarterly  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  quarterly  report  (the
                  "Evaluation Date"); and

                           (c)   presented   in  this   quarterly   report   our
                  conclusions about the effectiveness of the disclosure controls
                  and  procedures  based on our  evaluation as of the Evaluation
                  Date;

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

                           (a) all  significant  deficiencies  in the  design or
                  operation of internal  controls which could  adversely  affect
                  the  registrant's  ability to record,  process,  summarize and
                  report financial data and have identified for the registrant's
                  auditors any material weaknesses 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   officers  and  I  have
                  indicated  in  this   quarterly   report  whether  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.


        Date: July 25, 2003                 By: /s/ ROBERT L. BURROWS
                                                ---------------------
                                                Robert L. Burrows
                                                Chief Financial Officer
                                                (Principal Accounting Officer)