Company: APT
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001437749-25-033545
Chunk: 5

Company: ALPHA PRO TECH LTD
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 1
Chunk 5
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        $                   9,652,000      $                 10,948,000  
  Work in process                          3,507,000                         2,934,000  
  Finished goods                          10,320,000                         8,851,000  
                       $                  23,479,000      $                 22,733,000  

  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 of41.7% owned by Alpha ProTech Engineered Products, Inc. and58.3% 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 fourfacilities in India ( threeowned and onerented), consisting of: (1) a139,000square foot building for manufacturing building products; (2) a121,000square foot building for manufacturing coated material and sewing proprietary disposable protective apparel; (3) a23,000square foot facility for sewing proprietary disposable protective apparel; and (4) a159,000square 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 un