Company: APT
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001437749-25-033545
Chunk: 9

Company: ALPHA PRO TECH LTD
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 1
Chunk 9
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000  
  2028                                                          1,489,000  
  2029                                                          1,520,000  
  2030                                                            644,000  
  Thereafter                                                    4,212,000  
  Total future minimum lease payments                          11,166,000  
  Less imputed interest                                       ( 3,061,000  
  Total lease liabilities                  $                    8,105,000  

As of September 30, 2025, the weighted average remaining lease term of the Company’s operating leases was9.57years. During the nine months ended September 30, 2025, the weighted average discount rate with respect to these leases was7.0%.

  14.      Income taxes  
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The Company accounts for income taxes using the asset and liability method. A valuation allowance is recorded to reduce the carrying amounts of deferred income tax assets unless it is more likely than not that such assets will be realized. The Company’s policy is to record any interest and penalties assessed by the Internal Revenue Service as a component of the provision for income taxes. The Company provides allowances for uncertain income tax positions when it is more likely than not that the position will not be sustained upon examination by the tax authority.

Alpha Pro Tech, Ltd. and its subsidiaries file income tax returns in the U. S. federal jurisdiction, and in various state and foreign jurisdictions.

On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was enacted. Key income tax-related provisions of the OBBBA include the repeal of mandatory capitalization of domestic research and development expenditures under Internal Revenue Code (IRC) Section 174 (reinstating full expensing beginning in 2025), extension of bonus depreciation, and revisions to international tax regimes. The company recognized the income tax effects of the OBBBA in its third quarter 2025 financial statements.

An employer generally does not claim a corporate income tax deduction (which would be in an amount equal to the amount of income recognized by the employee) upon the exercise of its employee's incentive stock options (“ ISOs”) unless the employee does not meet the holding period requirements and sells early, making a disqualifying disposition, or if the options otherwise do not qualify as ISOs under applicable tax laws. With non-qualified stock options (“ NQSOs”), on the other hand, the employer is typically eligible to claim a deduction upon its employee's exercise of the NQSOs.

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