Action Products to Extend Life of Warrants; APII Satisfies Debentures Associated with Acquisition of Curiosity Kits.

Business Editors

ORLANDO, Fla.--(BUSINESS WIRE)--June 4, 2004

Action Products International, Inc. (Nasdaq:APII), a leading toy designer and manufacturer of educational and positive, non-violent branded toys for pre-school children through pre-teens, today announced that the Board of Directors has elected to extend the life of the warrants, issued in conjunction with a warrant dividend granted to Company shareholders in June 2003, that were due to expire on Friday June 11, 2004 at 5:00 PM E.S.T. The new expiration date is Friday June 9, 2006 at 5:00 PM E.S.T. There is no other change in the terms of the warrant.

The overall financial condition of the Company remains strong. Moreover, Action Products is persisting in identifying prospective acquisition candidates and hopes to complete another acquisition before the end of the year. The integration of Curiosity Kits(R) is progressing, with new support staff being hired, new overseas supply sources being sought and manufacturing terms being negotiated. "Our primary objectives associated with Curiosity Kits remains focused on improving the profit margins on its extensive product line and enhancing service to its customers. We are confident that we will accomplish both tasks," stated Warren Kaplan, Chairperson.

In other news, the Company reported that it has repaid all loans associated with the asset purchase of Curiosity Kits.

The acquisition, which was completed and announced on April 6, 2004, required cash payment of $1.3 million, which provided for the purchase of discounted working capital, finished goods and associated brands and trademarks. To complete the acquisition on a timely basis, Action Products borrowed $600,000 of an available $1,000,000 credit line provided by Company founders and Board members. Those now satisfied loans were repaid through a combination of general operating cash flow and new capital received through the exercise of warrants and stock options.

The unsecured loan carried an annual interest rate of 6% and granted debenture holders a total of 120,000 warrants to acquire common shares at an exercise price of $4.50 each.

"The speed and terms of the loan made this acquisition possible," stated Ronald Kaplan, CEO of Action Products. "We are happy to have fully repaid this debenture in just six weeks time." Concluding, he added, "I am proud of our management team for their work in effecting this very strategic and synergistic acquisition in only 65 days (from initial contact to closing). With the debenture satisfied, the Company will continue to seek out other strategic and synergistic acquisitions designed to increase our profitability, deliver accretion earnings and help us to address the growing consumer demand for healthy and positive playthings. We wish to thank our loyal and growing retail dealer customers for their continued support as we grow our world of quality brands to educate and entertain(TM)."

About Action Products International, Inc.

Action Products is a leading designer and manufacturer of educational and positive branded toys emphasizing fun, quality brands including JAY JAY THE JET PLANE Wooden Adventure System(TM), I DIG Dinosaurs(R) and I DIG Treasures(R) excavation activity kits, Space Voyagers(R) ("The most authentic Space Toys on Earth"), Wild Climbers(TM) and Climb@Tron(TM) window-climbing animals and robots, Play and Store(TM) themed playsets, Kidz Workshop(TM) wooden projects, and Drop Zone Extreme(TM) parachute toys. Its products are marketed and sold worldwide to specialty retailers, museums, toy stores, theme parks, attractions, zoos, catalog companies, Internet retailers and educational markets. For more information on Action Products' toys, email [e-mail] or visit the Company's web site at www.apii.com.

Any statements that are not historical facts contained in this release are forward-looking statements. It is possible that the assumptions made by management for purposes of such statements may not materialize. Actual results may differ materially from those projected or implied in any forward-looking statements. Such statements may involve risks and uncertainties, including but not limited to those relating to product demand, pricing, market acceptance, the effect of economic conditions, and intellectual property rights and the outcome of competitive products, risks in product development, the results of financing efforts, the ability to complete transactions, and other factors discussed from time to time in the Company's Securities and Exchange Commission filings. The Company undertakes no obligation to update or revise any forward-looking statement for events or circumstances after the date on which such statement is made.