SOURCE: Action Products International, Inc.

Action Products International, Inc.

September 20, 2010 15:37 ET

APII Receives Investment Offer of $20 Million to Fund Acquisitions

SCOTTSDALE, AZ--(Marketwire - September 20, 2010) - Action Products International, Inc. (PINKSHEETS: APII) announced today that the Company has received an investment proposal for the purchase of six million shares of stock providing the company with $20 million in cash ($3.33 per share) to acquire two real estate properties, a 468 unit apartment complex with 60% occupancy in Michigan and an operating marina in Florida. Combined the properties generate nearly $21 million annually in revenues, over $4 million in net operating income before taxes. The offer from JMN Equity Ventures of Michigan also includes additional financial support to service the existing real estate loan debt on the marina (an expense of a little more than $1 million annually).

The offer is contingent upon a the negotiation and settlement of two judgments against the company currently held by a former Chief Financial Officer and former Chief Executive Officers for over $500,000. In addition, the company has been asked to negotiate and is working on conversion of the debt to equity for the company's outstanding liabilities of nearly $1.6 million. If successful in negotiating settlements, the investment will provide the Company with much needed capital to continue operations and avoid bankruptcy proceedings.

"We hope to be able to within the time period allowed come to resolutions acceptable to all parties," said Raul Martinez, President of APII. "While it would have been nice to have the offer include cash to pay off the debts, JMN desired to have all of the capital they invest to go towards future expenses not past debts of the company." The offer came to the company in a letter over the weekend after several weeks of discussions. 

The company plans to pursue bridge or alternative funding to pay off the debts as an alternative to those transactions which it cannot settle, but makes no assurances settlements will be reached. The offer from JMN Equity Ventures expires in 30 days and the Company is confident yet reserved regarding resolution of the outstanding matters and as a result may or may not be successful in negotiating a satisfactory result. If completed, the Company would work to re-establish itself as a fully reporting publically traded company. The Company is also working on a plan to honor outstanding warrants held by current shareholders which may have been canceled when the company lost its NASDAQ listing in 2009. An alternative plan is expected to be put in place for shareholders of record prior to the closing of any agreement with JMN Equity Ventures to replace those warrants.

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are based on the current plans and expectations of management and are subject to a number of uncertainties and risks that could significantly affect the company's current plans and expectations, as well as future results of operations and financial condition. A more extensive listing of risks and factors that may affect the company's business prospects and cause actual results to differ materially from those described in the forward-looking statements can be found in the reports and other documents filed by the company with the Securities and Exchange Commission. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Contact Information

  • Investor Relations and Creditors

    Raul Martinez
    Action Products International, Inc.
    Office: 407.442.0402