In November 2006, a final judgment, in the amount of $5.1 million, bearing interest at 9% annually, was entered in favor of Action Products International, Inc. in the Circuit Court for Alachua County, Florida, in a civil lawsuit against defendants Kid Galaxy, Inc. and its parent company Lung Cheong International Holdings Ltd., and Timothy L. Young. The Court has received $6.1 million in escrow from defendants. The defendants appealed the Court’s ruling.

On November 30, 2007, the First District State Court of Appeal filed its decision affirming the judgment and in January 2008 the First District Court of Appeal denied the petition to issue an opinion. On February 11, 2008, the Company announced it has filed a joint motion requesting the Circuit Court to release the funds deposited in escrow. The company expects to receive approximately $5.66M in gross proceeds. A copy of the press release is annexed as Exhibit 99.1 to this Form 8-K.

(a) Financial Statements of Business Acquired: None

(b) Pro Forma Financial Information: None

(c) Exhibits:

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Form 8-K to be signed on its behalf by the undersigned hereunto duly authorized.

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