apt20250630_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File No.001-15725

Alpha Pro Tech, Ltd.

(Exact Name of Registrant as Specified in Its Charter)

Delaware, U.S.A.	63-1009183
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

53 Wellington Street East	L4G 1H6
Aurora, Ontario, Canada	(Zip Code)
(Address of Principal Executive Offices)

Registrant’s telephone number, including area code: (905) 479-0654

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	APT	NYSE American

Indicate by check mark 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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☒

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class		Outstanding August 4, 2025
Common Stock, $0.01 par value		10,472,902 shares

Alpha Pro Tech, Ltd.

Index

PART I.	FINANCIAL INFORMATION

ITEM 1.	Financial Statements	page

	Condensed Consolidated Balance Sheets (Unaudited)	1

	Condensed Consolidated Statements of Income (Unaudited)	2

	Condensed Consolidated Statements of Comprehensive Income (Unaudited)	3

	Condensed Consolidated Statements of Shareholders’ Equity (Unaudited)	4

	Condensed Consolidated Statements of Cash Flows (Unaudited)	5

	Notes to Condensed Consolidated Financial Statements (Unaudited)	6

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16

ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	24

ITEM 4.	Controls and Procedures	24

PART II.	OTHER INFORMATION

ITEM I.	Legal Proceedings	24

ITEM IA.	Risk Factors	25

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	26

ITEM 5.	Other Information	26

ITEM 6.	Exhibits	27

SIGNATURES		28

Alpha Pro Tech, Ltd.

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Condensed Consolidated Balance Sheets (Unaudited)

	June 30,			December 31,
	2025			2024
Assets
Current assets:
Cash and cash equivalents	$	14,464,000		$	18,636,000
Accounts receivable, net		8,363,000			3,692,000
Accounts receivable, related party		1,417,000			1,202,000
Inventories, net		22,361,000			22,733,000
Prepaid expenses		3,938,000			4,376,000
Total current assets		50,543,000			50,639,000

Property and equipment, net		8,310,000			8,520,000
Goodwill		55,000			55,000
Right-of-use assets		8,252,000			8,714,000
Equity investment in unconsolidated affiliate		6,005,000			5,814,000
Total assets	$	73,165,000		$	73,742,000

Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable	$	1,380,000		$	1,283,000
Accrued liabilities		694,000			947,000
Current portion of lease liabilities		941,000			893,000
Total current liabilities		3,015,000			3,123,000

Lease liabilities, net of current portion		7,399,000			7,882,000
Deferred income tax liabilities, net		503,000			503,000
Total liabilities		10,917,000			11,508,000
Commitments and contingencies
Shareholders' equity:
Common stock, $.01 par value: 50,000,000 shares authorized; 10,414,365 and 10,816,878 shares outstanding as of June 30, 2025 and December 31, 2024, respectively		104,000			108,000
Additional paid-in capital		16,008,000			16,368,000
Retained earnings		47,722,000			47,257,000
Accumulated other comprehensive loss		(1,586,000	)		(1,499,000	)
Total shareholders' equity		62,248,000			62,234,000
Total liabilities and shareholders' equity	$	73,165,000		$	73,742,000

The condensed consolidated balance sheet as of December 31, 2024, has been prepared using information from the audited consolidated balance sheet as of that date.

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

Alpha Pro Tech, Ltd.

Condensed Consolidated Statements of Income (Unaudited)

	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2025		2024		2025		2024

Net sales	$	16,672,000	$	16,289,000	$	30,494,000	$	29,772,000

Cost of goods sold, excluding depreciation and amortization		10,541,000		9,448,000		18,971,000		17,513,000
Gross profit		6,131,000		6,841,000		11,523,000		12,259,000

Operating expenses:
Selling, general and administrative		4,556,000		4,884,000		9,250,000		9,732,000
Depreciation and amortization		240,000		245,000		483,000		489,000
Total operating expenses		4,796,000		5,129,000		9,733,000		10,221,000

Income from operations		1,335,000		1,712,000		1,790,000		2,038,000

Other income:
Equity in income of unconsolidated affiliate		137,000		200,000		278,000		338,000
Interest income, net		139,000		207,000		315,000		465,000
Total other income		276,000		407,000		593,000		803,000

Income before provision for income taxes		1,611,000		2,119,000		2,383,000		2,841,000

Provision for income taxes		367,000		475,000		526,000		621,000

Net income	$	1,244,000	$	1,644,000	$	1,857,000	$	2,220,000


Basic earnings per common share	$	0.12	$	0.15	$	0.18	$	0.20

Diluted earnings per common share	$	0.12	$	0.15	$	0.18	$	0.20

Basic weighted average common shares outstanding		10,501,865		11,137,066		10,407,287		11,281,739

Diluted weighted average common shares outstanding		10,611,052		11,226,341		10,517,652		11,375,701

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

Alpha Pro Tech, Ltd.

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

	For the Three Months Ended						For the Six Months Ended
	June 30,						June 30,
	2025			2024			2025			2024

Net income	$	1,244,000		$	1,644,000		$	1,857,000		$	2,220,000
Other comprehensive income - foreign currency translation loss		(22,000	)		(58,000	)		(87,000	)		(52,000	)
Comprehensive income	$	1,222,000		$	1,586,000		$	1,770,000		$	2,168,000

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

Alpha Pro Tech, Ltd.

Condensed Consolidated Statements of Shareholders’ Equity (Unaudited)

For the Six Months Ended June 30, 2025													Accumulated
							Additional						Other
	Common Stock						Paid-in			Retained			Comprehensive
	Shares			Amount			Capital			Earnings			Income (Loss)			Total
Balance as of December 31, 2024		10,816,878		$	108,000		$	16,368,000		$	47,257,000		$	(1,499,000	)	$	62,234,000
Net income		-			-			-			613,000			-			613,000
Common stock repurchased and retired		(221,413	)		(2,000	)		(335,000	)		(841,000	)		-			(1,178,000	)
Treasury stock excise tax		-			-			(12,000	)		-			-			(12,000	)
Stock-based compensation expense		-			-			136,000			-			-			136,000
Other comprehensive loss		-			-			-			-			(65,000	)		(65,000	)
Balance as of March 31, 2025		10,595,465			106,000			16,157,000			47,029,000			(1,564,000	)		61,728,000

Net income		-			-			-			1,244,000			-			1,244,000
Common stock repurchased and retired		(181,100	)		(2,000	)		(277,000	)		(551,000	)		-			(830,000	)
Treasury stock excise tax		-			-			(8,000	)		-			-			(8,000	)
Stock-based compensation expense		-			-			136,000			-			-			136,000
Other comprehensive loss		-			-			-			-			(22,000	)		(22,000	)
Balance as of June 30, 2025		10,414,365		$	104,000		$	16,008,000		$	47,722,000		$	(1,586,000	)	$	62,248,000

For the Six Months Ended June 30, 2024													Accumulated
							Additional						Other
	Common Stock						Paid-in			Retained			Comprehensive
	Shares			Amount			Capital			Earnings			Income (Loss)			Total
Balance as of December 31, 2023		11,416,212		$	114,000		$	16,339,000		$	46,552,000		$	(1,437,000	)	$	61,568,000
Net income		-			-			-			576,000			-			576,000
Common stock repurchased and retired		(270,000	)		(2,000	)		(386,000	)		(1,029,000	)		-			(1,417,000	)
Treasury stock excise tax		-			-			(14,000	)		-			-			(14,000	)
Stock-based compensation expense		-			-			109,000			-			-			109,000
Options exercised		226,666			2,000			813,000			-			-			815,000
Other comprehensive income		-			-			-			-			6,000			6,000
Balance as of March 31, 2024		11,372,878			114,000			16,861,000			46,099,000			(1,431,000	)		61,643,000
Net income		-			-			-			1,644,000			-			1,644,000
Common stock repurchased and retired		(245,000	)		(3,000	)		(363,000	)		(918,000	)		-			(1,284,000	)
Treasury stock excise tax		-			-			(13,000	)		-			-			(13,000	)
Stock-based compensation expense		-			-			109,000			-			-			109,000
Other comprehensive loss		-			-			-			-			(58,000	)		(58,000	)
Balance as of June 30, 2024		11,127,878		$	111,000		$	16,594,000		$	46,825,000		$	(1,489,000	)	$	62,041,000

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

Alpha Pro Tech, Ltd.

Condensed Consolidated Statements of Cash Flows (Unaudited)

	For the Six Months Ended June 30,
	2025			2024
Cash Flows From Operating Activities:
Net income	$	1,857,000		$	2,220,000
Adjustments to reconcile net income to net cash and cash equivalents used in operating activities:
Stock-based compensation		272,000			218,000
Depreciation and amortization		483,000			489,000
Equity in income of unconsolidated affiliate		(278,000	)		(338,000	)
Non-cash lease expense		462,000			434,000
Changes in operating assets and liabilities:
Accounts receivable, net		(4,671,000	)		(2,760,000	)
Accounts receivable, related party		(215,000	)		458,000
Inventories, net		372,000			(654,000	)
Prepaid expenses		438,000			(742,000	)
Accounts payable and accrued liabilities		(156,000	)		(923,000	)
Lease liabilities		(435,000	)		(444,000	)

Net cash and cash equivalents used in operating activities		(1,871,000	)		(2,042,000	)

Cash Flows From Investing Activities:
Purchases of property and equipment		(273,000	)		(216,000	)

Cash Flows From Financing Activities:
Proceeds from exercise of stock options		-			815,000
Repurchase of common stock		(2,008,000	)		(2,701,000	)
Treasury stock excise tax		(20,000	)		(27,000	)

Net cash and cash equivalents used in financing activities		(2,028,000	)		(1,913,000	)

Decrease in cash and cash equivalents		(4,172,000	)		(4,171,000	)

Cash and cash equivalents, beginning of the period		18,636,000			20,378,000

Cash and cash equivalents, end of the period	$	14,464,000		$	16,207,000

Supplemental disclosure of non-cash transactions:
Net non-cash changes to operating leases	$	-		$	4,803,000

See accompanying Notes to Condensed Consolidated Financial Statements (Unaudited).

Alpha Pro Tech, Ltd.

Notes to Condensed Consolidated Financial Statements (Unaudited)

1.	The Company

Alpha Pro Tech, Ltd. (“Alpha Pro Tech,” the “Company,” “we”, “us” or “our”) is in the business of protecting people, products and environments. The Company accomplishes this by developing, manufacturing and marketing a line of building supply products for the new home and re-roofing markets and a line of disposable protective apparel for the cleanroom, industrial, pharmaceutical, medical and dental markets.

The Building Supply segment consists of construction weatherization products, such as housewrap, housewrap accessories including window and door flashing, seam tape, synthetic roof underlayment and synthetic roof underlayment accessories, as well as other woven materials.

The Disposable Protective Apparel segment consists of a complete line of disposable protective garments (shoecovers, bouffant caps, coveralls, gowns, frocks and lab coats), face masks and face shields. All of our disposable protective apparel products, including face masks and face shields, are sold through similar distribution channels, are single-use and disposable, have the purpose of protecting people, products and environments, and have to be produced in Food and Drug Administration approved facilities, regardless of the market served.

The Company’s products are sold under the “Alpha Pro Tech” brand name as well as under private label and are predominantly sold in the United States of America (“U.S.”).

2.	Basis of Presentation and Revenue Recognition Policy

The interim financial information included in this report is unaudited; however, the information reflects all adjustments (consisting of normal recurring adjustments) that are, in the opinion of management, necessary for the fair presentation of the consolidated financial position, results of operations and cash flows for the interim periods reflected herein. These interim condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“the SEC”) and, therefore, omit certain information and note disclosures that would be necessary to present the statements in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). The interim condensed consolidated financial statements should be read in conjunction with the Company’s current year SEC filings, as well as the Company’s consolidated financial statements for the year ended December 31, 2024, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Form 10-K”), filed with the SEC on March 12, 2025. The results of operations for the three and six months ended June 30, 2025, in this Quarterly Report on Form 10-Q are not necessarily indicative of the results to be expected for the full year. The condensed consolidated balance sheet as of December 31, 2024 was prepared using information from the audited consolidated balance sheet contained in the 2024 Form 10-K; however, it does not include all disclosures required by U.S. GAAP for annual consolidated financial statements.

Net sales include revenue from products and shipping and handling charges, net of estimates for product returns and any related sales incentives. Our customer contracts have a single performance obligation: transfer control of products to customers. Revenue is measured as the amount of consideration that we expect to receive in exchange for transferring control of products. All revenue is recognized when we satisfy our performance obligations under the applicable contract. We recognize revenue in connection with transferring control of the promised products to the customer, with revenue being recognized at the point in time when the customer obtains control of the products, which is generally when title passes to the customer upon delivery to a third-party carrier for FOB shipping point arrangements and to the customer for FOB destination arrangements, at which time a receivable is created for the invoice sent to the customer. Shipping and handling activities are performed prior to the customer obtaining control of the goods and are accounted for as fulfillment activities and are not a promised good or service. Shipping and handling charges billed to customers are included in revenue. Shipping and handling costs, associated with the distribution of the Company’s product to the customers, are recorded in cost of goods sold and are recognized when control of the product is transferred to the customer, which is generally when title passes to the customer upon delivery to a third-party carrier for FOB shipping point arrangements and to the customer for FOB destination arrangements. We estimate product returns based on historical return rates and estimate rebates based on contractual agreements. Using probability assessments, we estimate sales incentives expected to be paid over the term of the contract. Sales taxes and value added taxes in foreign and domestic jurisdictions that are collected from customers and remitted to governmental authorities are accounted for on a net basis and, therefore, are excluded from net sales. The Company manufactures certain private label goods for customers and has determined that control does not pass to the customer at the time of manufacture, based upon the nature of the private labeling. The Company has determined as of June 30, 2025, that it had no material contract assets, and concluded that its contract liabilities (primarily rebates) had the right of offset against customer receivables. See Note 10 and Note 11 of these Notes to Condensed Consolidated Financial Statements (Unaudited) for information on revenue disaggregated by type and by geographic region.

Alpha Pro Tech, Ltd.

Notes to Condensed Consolidated Financial Statements (Unaudited)

3.	Shareholder’s Equity

Repurchase Program

During the three months ended June 30, 2025, the Company repurchased and retired 181,100 shares of its common stock for $830,000. During the three months ended June 30, 2024, the Company repurchased and retired 245,000 shares of its common stock for $1,284,000. During the six months ended June 30, 2025, the Company repurchased and retired 402,513 shares of its common stock for $2,008,000. During the six months ended June 30, 2024, the Company repurchased and retired 515,000 shares of its common stock for $2,701,000. As of June 30, 2025, the Company had $2,735,000 available to repurchase common shares under the repurchase program. The excess of repurchase price over par value is allocated between additional paid-in capital and retained earnings.

Option Activity

The Company previously granted stock options to employees and non-employee directors under the 2004 Stock Option Plan (the “2004 Plan”). Options vest and expire according to terms established at the grant date. The 2004 Plan provided for a total of 5,000,000 common shares eligible for issuance. Under the 2004 Plan, approximately 5,009,750 options (taking into account cancelled, forfeited, and expired options that were added back to the plan reserve) had been granted as of December 31, 2020.

At the Company’s 2020 Annual Meeting of Shareholders held on June 9, 2020, the Company’s shareholders approved the Alpha Pro Tech, Ltd. 2020 Omnibus Incentive Plan (the “2020 Incentive Plan”). The 2020 Incentive Plan provides for the grant of incentive and nonqualified stock options, stock appreciation rights, awards of restricted stock and restricted stock units, performance share awards, cash awards and other equity-based awards to employees (including officers), consultants and non-employee directors of the Company and its affiliates. A total of 1,800,000 shares of the Company’s common stock are reserved for issuance under the 2020 Incentive Plan, plus the number of shares underlying any award granted under the 2004 Option Plan that expires or is cancelled or forfeited under the terms of the 2004 Option Plan. As a result of the approval of the 2020 Incentive Plan, no future equity awards will be made pursuant to the 2004 Option Plan. Although no new awards may be granted under the 2004 Option Plan, all previously granted awards under the 2004 Option Plan will continue to be governed by the terms of the 2004 Option Plan.

The Company records compensation expense for the fair value of stock-based awards determined as of the grant date, including employee stock options, restricted stock, and restricted stock units (“RSUs”), over the determined requisite service period, which is generally ratably over the vesting term.

The following table summarizes RSUs awards activity for the six months ended June 30, 2025:

				Weighted Average
				Grant Date Price
	RSUs			of Awards

Outstanding, December 31, 2024		256,675		$	4.38
Granted to employees and non-employee directors		9,870			5.79
Vested		(10,715	)		5.32
Outstanding, June 30, 2025		255,830			4.40

Alpha Pro Tech, Ltd.

Notes to Condensed Consolidated Financial Statements (Unaudited)

During the six months ended June 30, 2025 and 2024, 9,870 and 10,715 RSUs were granted under the 2020 Incentive Plan, respectively. The Company recognized $243,000 and $189,000 in stock-based compensation expense associated with outstanding RSUs for the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025, $453,000 of total unrecognized compensation cost related to the RSU grants was expected to be recognized over a weighted average remainder period of 1.13 years.

The Company uses the Black-Scholes option-pricing model to value the options. The Company uses historical data to estimate the expected life of the options. The risk-free interest rate for periods within the contractual life of an award is based on the US Treasury yield curve in effect at the time of grant. The estimated volatility is based on historical volatility and management’s expectations of future volatility. The Company uses an estimated dividend payout of zero, as the Company has not paid dividends in the past and, at this time, does not expect to do so in the future. The Company accounts for option forfeitures as they occur.

The following table summarizes option activity for the six months ended June 30, 2025:

			Weighted Average
			Exercise Price
	Options		Per Option

Options outstanding, December 31, 2024		61,100	$	4.17
Exercised		-		0.00
Options outstanding, June 30, 2025		61,100		4.17
Options exercisable, June 30, 2025		25,264		4.14

As of June 30, 2025, $59,000 of total unrecognized compensation cost related to the stock option grants was expected to be recognized over a weighted average remainder period of 1.17 years.

4.	Recent Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. These amendments address investor requests for enhanced transparency regarding income tax information. Specifically, they improve income tax disclosures related to rate reconciliation and income taxes paid. ASU 2023-09 became effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires disclosure about the types of costs and expenses included in certain expense captions presented on the income statement. The new disclosure requirements are effective for the Company’s annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently in the process of evaluating the impact of this pronouncement on its related disclosures.

Management periodically reviews new accounting standards that are issued. Management has not identified any other new standards that it believes merit further discussion at this time.

Alpha Pro Tech, Ltd.

Notes to Condensed Consolidated Financial Statements (Unaudited)

5.	Inventories

As of June 30, 2025 and December 31, 2024, inventories net of reserves consisted of the following:

	June 30,		December 31,
	2025		2024

Raw materials	$	10,339,000	$	10,948,000
Work in process		3,466,000		2,934,000
Finished goods		8,556,000		8,851,000
	$	22,361,000	$	22,733,000

6.	Equity Investment in Unconsolidated Affiliate

In 2005, Alpha ProTech Engineered Products, Inc. (a subsidiary of Alpha Pro Tech, Ltd.) entered into a joint venture with a manufacturer in India, Maple Industries and associates, for the production of building products. Under the terms of the joint venture agreement, a private company, Harmony Plastics Private Limited (“Harmony”), was created with ownership interests of 41.7% owned by Alpha ProTech Engineered Products, Inc. and 58.3% owned by Maple Industries and associates.

This joint venture positions Alpha ProTech Engineered Products, Inc. to respond to current and expected increased product demand for housewrap and synthetic roof underlayment and provides future capacity for sales of specialty roofing component products and custom products for industrial applications requiring high quality extrusion coated fabrics. In addition, the joint venture now supplies products for the Company’s Disposable Protective Apparel segment.

The capital from the initial funding and a bank loan, which is guaranteed exclusively by the individual shareholders of Maple Industries and associates and collateralized by the assets of Harmony, were utilized to purchase the original manufacturing facility in India. Harmony currently has four facilities in India (three owned and one rented), consisting of: (1) a 139,000 square foot building for manufacturing building products; (2) a 121,000 square foot building for manufacturing coated material and sewing proprietary disposable protective apparel; (3) a 23,000 square foot facility for sewing proprietary disposable protective apparel; and (4) a 159,000 square foot facility (rented) for manufacturing Building Supply segment products. All additions have been financed by Harmony with no guarantees from the Company.

In accordance with ASC 810, Consolidation, the Company assesses whether or not related entities are variable interest entities (“VIEs”). For those related entities that qualify as VIEs, ASC 810 requires the Company to determine whether the Company is the primary beneficiary of the VIE, and, if so, to consolidate the VIE. The Company has determined that Harmony is not a VIE and is, therefore, considered to be an unconsolidated affiliate.

The Company records its investment in Harmony as “equity investment in unconsolidated affiliate” in the accompanying consolidated balance sheets. The Company records its equity interest in Harmony’s results of operations as “equity in income of unconsolidated affiliate” in the accompanying consolidated statements of income. The Company periodically reviews its investment in Harmony for impairment. Management has determined that no impairment was required as of June 30, 2025, or December 31, 2024. Under the equity method, since the Company’s reporting currency is different from of Harmony’s reporting currency, the Company is required to translate our proportionate share of equity for effects of translations in foreign currency and adjust the investment accordingly and accrue the adjustment as a component of Accumulated other comprehensive loss (“AOCL”).

For the three months ended June 30, 2025 and 2024, the Company purchased $5,159,000 and $5,849,000 of inventories, respectively, from Harmony. For the six months ended June 30, 2025 and 2024, the Company purchased $9,914,000 and $11,179,000 of inventories, respectively, from Harmony. For the three months ended June 30, 2025 and 2024, the Company sold $415,000 and $240,000 of inventories, respectively, to Harmony. For the six months ended June 30, 2025 and 2024, the Company sold $415,000 and $240,000 of inventories, respectively, to Harmony. For the three months ended June 30, 2025 and 2024, the Company recorded equity in income of unconsolidated affiliate of $137,000 and $200,000, respectively, related to Harmony. For the six months ended June 30, 2025 and 2024, the Company recorded equity in income of unconsolidated affiliate of $278,000 and $338,000, respectively, related to Harmony.

Alpha Pro Tech, Ltd.

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of June 30, 2025, the Company’s investment in Harmony was $6,005,000, which consisted of its original $1,450,000 investment and cumulative equity in income of unconsolidated affiliate of $7,160,000, less $942,000 in repayments of an advance, $77,000 in payments of dividends, and $1,586,000 in AOCL on foreign currency translations.

7.	Accrued Liabilities

As of June 30, 2025 and December 31, 2024, accrued liabilities consisted of the following:

	June 30,		December 31,
	2025		2024

Payroll expenses and taxes payable	$	196,000	$	221,000
Commissions and bonuses payable and general accrued liabilities		498,000		726,000
Total accrued liabilities	$	694,000	$	947,000

8.	Basic and Diluted Earnings Per Common Share

The following table provides a reconciliation of both net income and the number of shares used in the computation of “basic” earnings per common share (“EPS”), which utilizes the weighted average number of common shares outstanding without regard to dilutive shares, and “diluted” EPS, which includes all such dilutive shares, for the three and six months ended June 30, 2025 and 2024:

	For the Three Months Ended				For the Six Months Ended
	June 30,				June 30,
	2025		2024		2025		2024
Net income (numerator)	$	1,244,000	$	1,644,000	$	1,857,000	$	2,220,000

Shares (denominator):
Basic weighted average common shares outstanding		10,501,865		11,137,066		10,407,287		11,281,739
Add: dilutive effect of common stock options		109,187		89,275		110,365		93,962

Diluted weighted average common shares outstanding		10,611,052		11,226,341		10,517,652		11,375,701

Earnings per common share:
Basic	$	0.12	$	0.15	$	0.18	$

SEC Form 10-Q filed by Alpha Pro Tech Ltd.