** **

**SECURITIES AND EXCHANGECOMMISSION**

**WASHINGTON,D.C. 20549**

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**FORM 10-Q**

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**Quarterly Report pursuant toSection 13 or 15(d)of the Securities Exchange Act of 1934**

**For the Quarter Ended June 30, 2006**

**Commission File No. 01-15725**

**Alpha Pro Tech, Ltd.**

(exact name ofregistrant as specified in its charter)

| **Delaware, U.S.A.**                            | ** ** | **63-1009183**                        |
|-------------------------------------------------|------------|---------------------------------------|
| (State or other  jurisdiction of incorporation) |       | (I.R.S. Employer  Identification No.) |
|                                            |       |                                  |
| **Suite 112, 60 Centurian Drive**               |       | **L3R 9R2**                           |
| **Markham,  Ontario, Canada**                   |       | (Zip Code)                            |
| (Address of  principal executive offices)       |       |                                  |

 

Registrant’s telephonenumber, including area code:  **(905) 479-0654**

Indicate by check markwhether the registrant (1) has filed all reports required to be filed bySection 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding12 months (or for such shorter period that the registrant was required to filesuch reports) and (2) has been subject to such filing requirements for the past90 days.

Yes  x No o

Indicate by check markwhether the registrant is a large accelerated filer, an accelerated filer, or anon-accelerated filer (as defined in Rule 12b-2).

| Large accelerated filer o |   | Accelerated filer o |   | Non-accelerated filer x |
|---------------------------|--------|---------------------|--------|-------------------------|

 

Indicate by check markwhether the registrant is a shell company (as defined in Rule 12b-2 of theExchange Act.)

 Yes o   No x

Indicate the number ofshares outstanding of each of the issuer’s classes of common stock, as ofAugust 7, 2006.

24,095,953 sharesof common stock, $.01 par value

 

 

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**Alpha ProTech, Ltd.**

Table of Contents

| PART I. FINANCIAL  INFORMATION                        |   |                                                         |   |
|-------------------------------------------------------|--------|--------------------------------------------------------------|--------|
|                                                  |   |                                                         |   |   |   |   |   |
| ITEM  1 Consolidated Financial Statements (Unaudited) |   |                                                         |   |
|                                                  |   |                                                         |   |   |   |   |   |
|                                                  |   | a)                                                           |   | Consolidated Balance Sheets -  June 30, 2006 and December 31, 2005 |   |   |   |
|                                                  |   |                                                         |   |   |   |   |   |
|                                                  |   | b)                                                           |   | Consolidated Statements of Operations   for the three and six months ended June 30, 2006  and June 30, 2005 |   |   |   |
|                                                  |   |                                                         |   |   |   |   |   |
|                                                  |   | c)                                                           |   | Consolidated Statement of Shareholders’ Equity  for the six months ended June 30, 2006 |   |   |   |
|                                                  |   |                                                         |   |   |   |   |   |
|                                                  |   | d)                                                           |   | Consolidated Statements of Cash Flows  for the six months ended June 30, 2006  and June 30, 2005 |   |   |   |
|                                                  |   |                                                         |   |   |   |   |   |
|                                                  |   | e)                                                           |   | Notes to Consolidated Financial Statements |   |   |   |
|                                                  |   |                                                         |   |   |   |   |   |
| ITEM 2                                                |   | Management’s Discussion and Analysis of Financial       |   |   |   |
|                                                  |   | Condition and Results of Operations                          |   |   |   |
|                                                  |   |                                                         |   |   |   |   |   |
|                                                  |   | Cautionary Statements Regarding Forward-Looking  Information |   |   |   |
|                                                  |   |                                                         |   |   |   |   |   |
|                                                  |   | New  Accounting Standards                                    |   |   |   |
|                                                  |   |                                                         |   |   |   |   |   |
| ITEM 3                                                |   | Quantitative and Qualitative Disclosures About Market Risk   |   |   |   |
|                                                  |   |                                                         |   |   |   |   |   |
| ITEM 4                                                |   | Controls and Procedures                                      |   |   |   |
|                                                  |   |                                                         |   |   |   |   |   |
| PART  II.                                             |   | OTHER  INFORMATION                                           |   |   |   |
|                                                  |   |                                                         |   |   |   |   |   |
| ITEM 5                                                |   | Submission of Matters to a Vote Security Holders             |   |   |   |
|                                                  |   |                                                         |   |   |   |   |   |
| ITEM 6                                                |   | Exhibits and Reports on Form 8-K                             |   |   |   |
|                                                  |   |                                                         |   |   |   |   |   |
| SIGNATURES                                            |   |                                                         |   |
|                                                  |   |                                                         |   |   |   |   |   |
| EXHIBITS                                              |   |                                                         |   |
|                                                  |   |                                                         |   |   |   |   |
|                                                  |   | Exhibit 31.1:                                                |   | Certification by CEO pursuant to Rule 13a-14(b) and  Rule 15d-14(b)  of the Exchange Act (filed herewith) |   |   |
|                                                  |   |                                                         |   |   |   |   |
|                                                  |   | Exhibit 31.2:                                                |   | Certification by CFO pursuant to Rule 13a-14(b) and  Rule 15d-14(b)  of the Exchange Act (filed herewith) |   |   |
|                                                  |   |                                                         |   |   |   |   |
|                                                  |   | Exhibit 32.1:                                                |   | Certification by CEO pursuant to Section 906 of the  Sarbanes-Oxley Act (filed herewith) |   |   |
|                                                  |   |                                                         |   |   |   |   |
|                                                  |   | Exhibit 32.2:                                                |   | Certification by CFO pursuant to Section 906 of the  Sarbanes-Oxley Act (filed herewith) |   |   |
|                                                  |   |                                                         |   |   |   |   |
|                                                       |        |                                                              |        |  |  |  |  |  |  |  |  |

 

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**Alpha Pro Tech, Ltd.**

##### **PART I. FINANCIAL INFORMATION**

#### **ITEM 1.  FINANCIAL STATEMENTS**

We have preparedthe following unaudited interim consolidated financial statements pursuant tothe rules and regulations of the Securities and Exchange Commission. Certain informationand footnote disclosures normally included in financial statements prepared inaccordance with accounting principles generally accepted in the United Statesof America have been condensed or omitted pursuant to these rules andregulations.

You should readthe following unaudited interim consolidated financial statements and theaccompanying notes together with our Annual Report on Form 10-K for the yearended December 31, 2005. Our 2005 Annual Report contains information that maybe helpful in analyzing the financial information contained in this report andin comparing our results of operations for the three and six months ended June30, 2006 with the same period in 2005.

1

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### **ConsolidatedBalance Sheets (Unaudited)**

|                                                                                                                                                                     | ** ** | **June 30,   2006** | ** ** | **December 31,  2005 (1)** | ** ** |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-------------------------------|------------|--------------------------------------|------------|
| **Assets**                                                                                                                                                          |       |                          |       |                                 |       |
| Current assets:                                                                                                                                                     |       |                          |       |                                 |       |
| Cash and cash  equivalents                                                                                                                                          |       | $                             | 349,000    |                                 | $          | 1,163,000 |   |
| Accounts  receivable, net of allowance for doubtful accounts of $80,000 at June 30,  2006 and $76,000 at December 31, 2005                                          |       | 5,609,000                     |       | 3,954,000                            |       |
| Inventories, net                                                                                                                                                    |       | 11,323,000                    |       | 10,612,000                           |       |
| Prepaid expenses  and other current assets                                                                                                                          |       | 561,000                       |       | 715,000                              |       |
| Deferred income  taxes                                                                                                                                              |       | 430,000                       |       | 430,000                              |       |
| Total current  assets                                                                                                                                               |       | 18,272,000                    |       | 16,874,000                           |       |
|                                                                                                                                                                |       |                          |       |                                 |       |
| Property and equipment,  net                                                                                                                                        |       | 3,382,000                     |       | 3,389,000                            |       |
| Goodwill, net                                                                                                                                                       |       | 55,000                        |       | 55,000                               |       |
| Intangible assets, net                                                                                                                                              |       | 133,000                       |       | 119,000                              |       |
| Equity investments in  and advances to unconsolidated affiliates                                                                                                    |       | 1,414,000                     |       | 1,434,000                            |       |
| Total assets                                                                                                                                                        |       | $                             | 23,256,000 |                                 | $          | 21,871,000 |   |
|                                                                                                                                                                |       |                          |       |                                 |       |
| **Liabilities and Shareholders’  Equity**                                                                                                                      |       |                          |       |                                 |       |
| Current liabilities:                                                                                                                                                |       |                          |       |                                 |       |
| Accounts payable                                                                                                                                                    |       | $                             | 524,000    |                                 | $          | 648,000 |   |
| Accrued  liabilities                                                                                                                                                |       | 1,313,000                     |       | 1,928,000                            |       |
| Total current  liabilities                                                                                                                                          |       | 1,837,000                     |       | 2,576,000                            |       |
|                                                                                                                                                                |       |                          |       |                                 |       |
| Deferred income taxes                                                                                                                                               |       | 652,000                       |       | 652,000                              |       |
| Total  liabilities                                                                                                                                                  |       | 2,489,000                     |       | 3,228,000                            |       |
|                                                                                                                                                                |       |                          |       |                                 |       |
| Shareholders’ equity                                                                                                                                           |       |                          |       |                                 |       |
| Common stock,  $.01 par value, 50,000,000 shares authorized, 24,095,955 and 23,787,955  issued and outstanding at June 30, 2006 and December 31, 2005, respectively |       | 241,000                       |       | 238,000                              |       |
| Additional  paid-in capital                                                                                                                                         |       | 25,029,000                    |       | 24,683,000                           |       |
| Accumulated  deficit                                                                                                                                                |       | (4,503,000                    | )          | (6,278,000                           | )          |
| Total  shareholders’ equity                                                                                                                                    |       | 20,767,000                    |       | 18,643,000                           |       |
| Total liabilities and  shareholders’ equity                                                                                                                    |       | $                             | 23,256,000 |                                 | $          | 21,871,000 |   |

 

(1)                                  Thecondensed consolidated balance sheet as of December 31, 2005 has been preparedusing information from the audited financial statements at that date.

The accompanying notes are an integral part of these consolidatedfinancial statements.

2

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### **ConsolidatedStatements of Operations (Unaudited)**

|                                                                           | ** ** | **For the Three Months Ended  June 30,** | ** ** | **For the Six Months Ended  June 30,** | ** ** |
|---------------------------------------------------------------------------|------------|-------------------------------------------------------------------|------------|-----------------------------------------------------------------|------------|
| ** **                                                                | ** ** | **2006**                                                          | ** ** | **2005**                                                        | ** ** | **2006** | ** ** | **2005** | ** ** |
| Net sales                                                                 |       | 9,879,000                                                         |       | $                                                               | 9,040,000  |   | $ | 17,850,000 |   | $ | 16,022,000 |   |
|                                                                      |       |                                                              |       |                                                            |       |   |   |   |   |
| Cost of goods sold,  excluding depreciation and amortization              |       | 5,256,000                                                         |       | 4,813,000                                                       |       | 9,586,000 |   | 8,634,000 |   |
|                                                                      |       |                                                              |       |                                                            |       |   |   |   |   |
| Gross margin                                                              |       | 4,623,000                                                         |       | 4,227,000                                                       |       | 8,264,000 |   | 7,388,000 |   |
|                                                                      |       |                                                              |       |                                                            |       |   |   |   |   |
| Expenses:                                                                 |       |                                                              |       |                                                            |       |   |   |   |   |
| Selling, general  and administrative                                      |       | 2,719,000                                                         |       | 2,516,000                                                       |       | 5,214,000 |   | 4,868,000 |   |
| Depreciation and  amortization                                            |       | 112,000                                                           |       | 123,000                                                         |       | 223,000 |   | 246,000 |   |
|                                                                      |       |                                                              |       |                                                            |       |   |   |   |   |
| Income from operations                                                    |       | 1,792,000                                                         |       | 1,588,000                                                       |       | 2,827,000 |   | 2,274,000 |   |
|                                                                      |       |                                                              |       |                                                            |       |   |   |   |   |
| Other income (expense)                                                    |       |                                                              |       |                                                            |       |   |   |   |   |
| Equity in income  (loss) of unconsolidatedaffiliates, net of eliminations |       | (10,000                                                           | )          | —                                                          |       | (20,000 | ) | — |   |
| Interest, net                                                             |       | 6,000                                                             |       | 7,000                                                           |       | 11,000 |   | 23,000 |   |
|                                                                      |       |                                                              |       |                                                            |       |   |   |   |   |
| Income before provision  for income taxes                                 |       | 1,788,000                                                         |       | 1,595,000                                                       |       | 2,818,000 |   | 2,297,000 |   |
|                                                                      |       |                                                              |       |                                                            |       |   |   |   |   |
| Provision for income  taxes                                               |       | 662,000                                                           |       | 592,000                                                         |       | 1,043,000 |   | 850,000 |   |
|                                                                      |       |                                                              |       |                                                            |       |   |   |   |   |
| Net income                                                                |       | $                                                                 | 1,126,000  |                                                            | $          | 1,003,000 |   | $ | 1,775,000 |   | $ | 1,447,000 |   |
|                                                                      |       |                                                              |       |                                                            |       |   |   |   |   |
| Basic net income per  share                                               |       | $                                                                 | 0.05       |                                                            | $          | 0.04 |   | $ | 0.07 |   | $ | 0.06 |   |
|                                                                      |       |                                                              |       |                                                            |       |   |   |   |   |
| Diluted net income per  share                                             |       | $                                                                 | 0.05       |                                                            | $          | 0.04 |   | $ | 0.07 |   | $ | 0.06 |   |
|                                                                      |       |                                                              |       |                                                            |       |   |   |   |   |
| Basic weighted average  shares outstanding                                |       | 24,092,384                                                        |       | 23,678,955                                                      |       | 24,081,010 |   | 23,662,572 |   |
|                                                                      |       |                                                              |       |                                                            |       |   |   |   |   |
| Diluted weighted average shares outstanding                               |       | 24,987,217                                                        |       | 25,075,759                                                      |       | 25,012,983 |   | 25,059,376 |   |

 

The accompanying notesare an integral part of these consolidated financial statements.

3

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### **ConsolidatedStatement of Shareholders’ Equity (Unaudited)**

|                               | ** ** | ** **            | ** ** | ** **  | ** ** | **Additional**  | ** ** | ** **  | ** ** | ** **  | ** ** |
|-------------------------------|------------|-----------------------|------------|-------------|------------|-----------------|------------|-------------|------------|-------------|------------|
| ** **                    | ** ** | **Common Stock** | ** ** | **Paid-in** | ** ** | **Accumulated** | ** ** | ** **  | ** ** |
| ** **                    | ** ** | **Shares**            | ** ** | **Amount**  | ** ** | **Capital**     | ** ** | **Deficit** | ** ** | **Total**   | ** ** |
| Balance at December 31,  2005 |       | 23,787,955            |       | $           | 238,000    |            | $          | 24,683,000  |       | ($6,278,000 | )          | $ | 18,643,000 |   |
| Options exercised             |       | 308,000               |       | 3,000       |       | 346,000         |       | —      |       | 349,000     |       |
| Net income                    |       | —                |       | —      |       | —          |       | 1,775,000   |       | 1,775,000   |       |
| Balance at June 30, 2006      |       | 24,095,955            |       | $           | 241,000    |            | $          | 25,029,000  |       | ($4,503,000 | )          | $ | 20,767,000 |   |

 

The accompanying notesare an integral part of these consolidated financial statements

4

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### **ConsolidatedStatements of Cash Flows (Unaudited)**

|                                                                                | ** ** | **For the Six months Ended  June 30,** | ** ** |
|--------------------------------------------------------------------------------|------------|-----------------------------------------------------------------|------------|
| ** **                                                                     | ** ** | **2006**                                                        | ** ** | **2005** | ** ** |
| **Cash Flows From Operating  Activities:**                                     |       |                                                            |       |   |   |
| Net income                                                                     |       | $                                                               | 1,775,000  |   | $ | 1,447,000 |   |
| Adjustments to  reconcile net income to net cash used in operating activities: |       |                                                            |       |   |   |
| Depreciation and  amortization                                                 |       | 223,000                                                         |       | 246,000 |   |
| Equity in loss  of unconsolidated affiliate                                    |       | 20,000                                                          |       |   |   |
| Changes in  assets and liabilities:                                            |       |                                                            |       |   |   |
| Accounts  receivable, net                                                      |       | (1,655,000                                                      | )          | (1,569,000 | ) |
| Inventories, net                                                               |       | (711,000                                                        | )          | (3,552,000 | ) |
| Prepaid expenses  and other current assets                                     |       | 154,000                                                         |       | 182,000 |   |
| Accounts payable  and accrued liabilities                                      |       | (739,000                                                        | )          | 237,000 |   |
|                                                                           |       |                                                            |       |   |   |
| Net cash used in  operating activities:                                        |       | (933,000                                                        | )          | (3,009,000 | ) |
|                                                                           |       |                                                            |       |   |   |
| **Cash Flows From Investing  Activities:**                                     |       |                                                            |       |   |   |
| Purchase of  property and equipment                                            |       | (196,000                                                        | )          | (451,000 | ) |
| Purchase of  intangible assets                                                 |       | (34,000                                                         | )          | (10,000 | ) |
| Investment in  Joint Venture                                                   |       | —                                                          |       | (550,000 | ) |
|                                                                           |       |                                                            |       |   |   |
| Net cash used in  investing activities                                         |       | (230,000                                                        | )          | (1,011,000 | ) |
|                                                                           |       |                                                            |       |   |   |
| **Cash Flows From Financing  Activities:**                                     |       |                                                            |       |   |   |
| Proceeds from  the exercise of stock options                                   |       | 349,000                                                         |       | 289,000 |   |
| Payments for the  repurchase of common stock                                   |       | —                                                          |       | (21,000 | ) |
| Net cash provided by  financing activities                                     |       | 349,000                                                         |       | 268,000 |   |
|                                                                           |       |                                                            |       |   |   |
| Decrease in cash during  the period                                            |       | (814,000                                                        | )          | (3,752,000 | ) |
|                                                                           |       |                                                            |       |   |   |
| Cash and cash  equivalents, beginning of period                                |       | 1,163,000                                                       |       | 4,875,000 |   |
| Cash and cash equivalents, end of period                                       |       | $                                                               | 349,000    |   | $ | 1,123,000 |   |

 

The accompanyingnotes are an integral part of these consolidated financial statements.

 

5

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### **Notesto Consolidated Financial Statements (Unaudited)**

**1.****                                      TheCompany**

Alpha Pro Tech,Ltd. (Alpha ProTech, the Company, we, our, us) manufactures and distributes aline of disposable protective apparel and a line of infection control productsfor the cleanroom, industrial, pharmaceutical, medical and dental markets. Thedisposable protective apparel consists of a complete line of shoecovers,bouffant caps, coveralls, gowns, frocks and lab coats. The infection controlline of products includes a line of face masks and eye shields. The Companyalso manufactures and distributes a line of medical bed pads and accessories aswell as a line of pet beds.  The Company’sproducts are sold both under the “Alpha Pro Tech” brand name as well as underprivate label and are predominantly sold in the United States of America.

During the firstquarter of 2005, the Company commenced sales from a new business segment, AlphaProTech Engineered Products, Inc., a wholly-owned subsidiary of Alpha Pro Tech.This new segment consists of a line of construction supply weatherizationproducts as well as a line of paint with antimicrobials. The constructionsupply weatherization products consist of house wrap and synthetic roofunderlayment.

**2.****                                      Basisof Presentation**

The interim financial information included herein is unaudited;however, the information reflects all adjustments (consisting of normalrecurring adjustments) that are, in the opinion of management, necessary forthe fair presentation of the consolidated financial position, results ofoperations and cash flows for the interim periods. The consolidated financialstatements should be read in conjunction with the consolidated financialstatements for the year ended December 31, 2005, which are included in theCompany’s Annual Report on Form 10-K for the year ended December 31, 2005 (“200510-K”). The results of operations for the three and six months ended June 30,2006 are not necessarily indicative of the results to be expected for the fullyear. The consolidated balance sheet at December 31, 2005 was extracted fromthe audited consolidated financial statements contained in the 2005 10-K anddoes not include all disclosures required by accounting principles generallyaccepted in the United States of America for annual consolidated financialstatements.

Certain December 31, 2005 balances have been reclassified to conform tothe current year’s presentation.

**3.****                                      StockBased Compensation**

The Company maintains two stock option plans under which the Companymay grant incentive stock options and non-qualified stock options to employeesand non-employee directors.  Stockoptions have been granted with exercise prices at or above the fair marketvalue on the date of grant.  Options vestand expire according to terms established at the grant date.

The Companyadopted Statement of Financial Accounting Standards No. 123R, Share-BasedPayment (“SFAS 123R”) effective January 1, 2006, using the modified prospectiveapplication method. SFAS 123R requires companies to record compensation expensefor the value of all outstanding and unvested share-based payments, includingemployee stock options and similar awards. As of December 31, 2005, the Companyhad no outstanding and unvested share-based awards. After December 31, 2005, nonew awards of any kind have been granted under any of the option plans. As aresult, the Company did not recognize any share-based compensation expense inits consolidated financial statements for the six months ended June 30, 2006.

Prior to theadoption of SFAS 123R, the Company accounted for its stock-based employeecompensation plans using the intrinsic value method prescribed by AccountingPrinciples Board Opinion No. 25, Accounting for Stock Issued to Employees. Nostock-based employee compensation cost was reflected in net income as alloptions granted under those stock-based 

6

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employeecompensation plans had exercise prices equal to the market values of theunderlying common shares on the dates of grant. The following table illustratesthe effect on net income and earnings per share as if the Company had appliedthe fair value recognition provisions of SFAS 123R to stock-based employeecompensation.

|                                                                                                                                              | ** ** | **For the Three Months  Ended  June 30,** | ** ** | **For the Six Months  Ended  June 30,** | ** ** |
|----------------------------------------------------------------------------------------------------------------------------------------------|------------|---------------------------------------------------------------|------------|-------------------------------------------------------------|------------|
|                                                                                                                                         |       | **2005**                                                      |       | **2005**                                                    |       |
| Net income, as  reported                                                                                                                     |       | $                                                             | 1,003,000  |                                                        | $          | 1,447,000 |   |
| Add: Total  stock-based employee compensation expense included in reported net income,  net of related tax effects                           |       | —                                                        |       | —                                                      |       |
| Deduct: Total  stock-based employee compensation expense determined using the fair value  method for all rewards, net of related tax effects |       | (93,000                                                       | )          | (183,000                                                    | )          |
| Pro forma net  income                                                                                                                        |       | $                                                             | 910,000    |                                                        | $          | 1,264,000 |   |
|                                                                                                                                         |       |                                                          |       |                                                        |       |
| Net income per  share:                                                                                                                       |       |                                                          |       |                                                        |       |
| Basic — as  reported                                                                                                                    |       | $                                                             | 0.04       |                                                        | $          | 0.06 |   |
| Basic — pro  forma                                                                                                                      |       | 0.04                                                          |       | 0.05                                                        |       |
| Diluted — as  reported                                                                                                                  |       | 0.04                                                          |       | 0.06                                                        |       |
| Diluted — pro forma                                                                                                                     |       | 0.04                                                          |       | 0.05                                                        |       |

 

Stock options topurchase 2,505,000 and 2,972,000 shares of common stock were outstanding atJune 30, 2006 and 2005, respectively. Of these outstanding stock options, allof the options to purchase common stock at June 30, 2006 and 2005 were includedin the computation of diluted earnings per share because the exercise prices ofthe stock options were greater than the average share price of the Company’scommon stock and, therefore, the effect would have been dilutive.  Based on the application of the treasurystock method, the dilutive effect of stock options was 894,834 and $931,973 forthe three and six months ended June 30, 2006.

Thefollowing table summarizes stock option activity during the six months endedJune 30, 2006:

|                                                        | ** ** | **# of Options** | ** ** | **Weighted-Average Price** | ** ** |
|--------------------------------------------------------|------------|------------------|------------|----------------------------|------------|
| Options outstanding and  exercisable December 31, 2005 |       | 2,813,000        |       | $1.03                      |       |
| Exercised                                              |       | (308,000         | )          | 1.13                       |       |
| Forfeited or expired                                   |       | 0                |       | 0.00                       |       |
| Options outstanding and  exercisable at June 30, 2006  |       | 2,505,000        |       | $1.02                      |       |

 

7

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Theweighted-average contractual life of stock options outstanding and exercisableat June 30, 2006 was 2.45 years. At June 30, 2006, the aggregate intrinsicvalue of stock options outstanding and exercisable was $3,418,000. The intrinsicvalue is the amount by which the market value of the underlying common stockexceeds the exercise price of the respective stock option. The intrinsic valueof stock options exercised during the three and six months ended June 30, 2006was $7,000 and $ 352,000, respectively.

**4.****                                     ****New Accounting Standards**

Based on theCompany’s review of new accounting standards released during the quarter endedJune 30, 2006 the Company did not identify any standards requiring adoptionthat would have a significant impact on its consolidated financial statements.

We adoptedStatement of Financial Accounting Standards No. 123R, Share-Based Payment (SFAS123R) effective January 1, 2006, using the modified prospective applicationmethod. SFAS 123R requires companies to record compensation expense for thevalue of all outstanding and unvested share-based payments, including employeestock options and similar awards. As of January 1, 2006, we had no outstandingand unvested share-based awards. As a result, we did not recognize any compensation expense related toshare-based payments in our consolidated financial statements for the sixmonths ended June 30, 2006.

**5.****                                      Inventories**

Inventoriesconsist of the following:

|                                                               | ** ** | **June 30,  2006** | ** ** | **December 31,  2005** | ** ** |
|---------------------------------------------------------------|------------|-------------------------|------------|-----------------------------|------------|
| Raw materials                                                 |       | $                       | 8,706,000  |                        | $          | 7,489,000 |   |
| Work in process                                               |       | 130,000                 |       | 325,000                     |       |
| Finished goods                                                |       | 2,798,000               |       | 3,124,000                   |       |
|                                                          |       | 11,634,000              |       | 10,938,000                  |       |
|                                                          |       |                    |       |                        |       |
| Less reserve for  slow-moving, obsolete or unusable inventory |       | (311,000                | )          | (326,000                    | )          |
|                                                          |       | $                       | 11,323,000 |                        | $          | 10,612,000 |   |

 

**6.****                                      Investmentin and Advances to Unconsolidated Affiliates**

On June 14, 2005,Alpha ProTech Engineered Products, Inc. entered into a joint venture with amanufacturer in India for the production of building products.  Under terms of the joint venture agreement, aprivate company, Harmony Plastics Private Limited (“Harmony”), was created withownership interests of 41.66% by Alpha ProTech Engineered Products, Inc. and58.34% by Maple Industries and Associates. Alpha ProTech Engineered Products, Inc. contributed $508,000 for sharecapital and Maple Industries and Associates contributed $708,000.

This joint venturepositions Alpha ProTech Engineered Products to respond to current and expectedincreased product demand for house wrap and synthetic roofing underlayment, andfuture capacity for sales of specialty roofing component products and customproducts for industrial applications requiring high quality extrusion coatedfabrics.

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The capital fromthe initial funding along with a bank loan, which is guaranteed exclusively byMaple Industries and Associates and the assets of Harmony Plastics PrivateLimited, was utilized to purchase an existing 33,000 square-foot manufacturingfacility in India; this facility includes manufacturing equipment necessary toproduce roof underlayment.  Harmony hasalso built a new 60,000 square-foot facility for the manufacturing of housewrap and other building products.

The Company issubject to the provisions of FIN 46 which defines the criteria by which theCompany determines the proper accounting for its investments in relatedentities.  Specifically, FIN 46 requiresthe Company to assess whether or not related entities are variable interestentities (VIEs), as defined.  For thoserelated entities that qualify as variable interest entities, FIN 46 requiresthe Company to determine whether or not the Company is the primary beneficiaryof the VIE, and if so, to consolidate the VIE.

The Company hasdetermined that Harmony is not a VIE and is therefore considered to be anunconsolidated affiliate.

The Companyrecords its investment in Harmony as “Equity investments in and advances tounconsolidated affiliates” on the accompanying Consolidated BalanceSheets.  The Company records its equityinterest in Harmony’s results of operations as equity in income (loss) ofunconsolidated affiliates on the accompanying Consolidated Statements ofOperations.  The Company has not receiveddistributions from Harmony related to its investment.

The Companyreviews its investment in Harmony for impairment in accordance with APB No. 18,“The Equity Method of Accounting for Investments in Common Stock.” APB No. 18requires recognition of a loss when the decline in an investment isother-than-temporary.  In determiningwhether the decline is other-than-temporary, the Company considers the natureof the industry in which Harmony operates, their historical performance, theirperformance in relation to their peers and the current economic environment.

As of June 30,2006, Alpha ProTech Engineered Products has invested $1,450,000 in the jointventure; $508,000 for share capital and a $942,000 long term advance.  The $942,000 long term advance for materialsis to be fifty percent repaid monthly over a six year term commencing in July2006 and the balance is to be paid in the seventh year.  Effective April 2006, interest of 3.5% is tobe paid on this advance.

Harmony commencedoperations in August of 2005.  For thethree and six months ended June 30, 2006, Alpha ProTech Engineered Productspurchased $1,762,000 and $3,618,000, respectively from Harmony.  For the three months ended June 30, 2006, werecorded an equity loss in unconsolidated affiliate of $10,000.  For the six months ended June 30, 2006, werecorded an equity loss in unconsolidated affiliate of $20,000.  As of June 30, 2006, our investment inHarmony is $1,414,000 which comprised our original $1,450,000 investment less$36,000 in total equity loss in unconsolidated affiliate.

**7.****                                      AccruedLiabilities**

Accruedliabilities consist of the following:

|                               | ** ** | **June 30,  2006** | ** ** | **December 31,  2005** | ** ** |
|-------------------------------|------------|-------------------------|------------|-----------------------------|------------|
| Payroll accrual               |       | $                       | 182,000    |                        | $          | 188,000 |   |
| Commission and  bonus accrual |       | 465,000                 |       | 669,000                     |       |
| Accrued  professional fees    |       | 117,000                 |       | 160,000                     |       |
| Accrued rebates  and other    |       | 172,000                 |       | 354,000                     |       |
| Income taxes  payable         |       | 377,000                 |       | 557,000                     |       |
|                          |       | $                       | 1,313,000  |                        | $          | 1,928,000 |   |

 

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**8.****                                      Basicand Diluted Net Income Per Share**

The following table provides a reconciliation of both net income andthe number of shares used in the computation of “basic” earnings per share(EPS), which utilizes the weighted average number of shares outstanding withoutregard to potential shares, and “diluted” EPS, which includes all such dilutiveshares:

|                                                     | ** ** | **For the Three Months Ended  June 30,** | ** ** | **For the Six Months Ended  June 30,** | ** ** | ** ** |
|-----------------------------------------------------|------------|-------------------------------------------------------------------|------------|-----------------------------------------------------------------|------------|------------|
|                                                |       | **2006**                                                          |       | **2005**                                                        |       | **2006**   |   | **2005** |   |   |
| Net income  (Numerator)                             |       | $                                                                 | 1,126,000  |                                                            | $          | 1,003,000  |   | $ | 1,775,000 |   | $ | 1,447,000 |   |   |
|                                                |       |                                                              |       |                                                            |       |       |   |   |   |   |
| Shares  (Denominator):                              |       |                                                              |       |                                                            |       |       |   |   |   |   |
|                                                |       |                                                              |       |                                                            |       |       |   |   |   |   |
| Basic weighted  average shares outstanding          |       | 24,092,384                                                        |       | 23,678,955                                                      |       | 24,081,010 |   | 23,662,572 |   |   |
| Add: Dilutive  effect of stock options and warrants |       | 894,833                                                           |       | 1,396,804                                                       |       | 931,973    |   | 1,396,804 |   |   |
| Diluted weighted  average shares outstanding        |       | 24,987,217                                                        |       | 25,075,759                                                      |       | 25,012,983 |   | 25,059,376 |   |   |
|                                                |       |                                                              |       |                                                            |       |       |   |   |   |   |
| Net income per  share:                              |       |                                                              |       |                                                            |       |       |   |   |   |   |
| Basic                                               |       | $                                                                 | 0.05       |                                                            | $          | 0.04       |   | $ | 0.07 |   | $ | 0.06 |   |   |
| Diluted                                             |       | $                                                                 | 0.05       |                                                            | $          | 0.04       |   | $ | 0.07 |   | $ | 0.06 |   |   |

 

**9.****                                      Activityof Business Segments**

The Company operates through four segments:

DisposableProtective Apparel Products: consisting of a complete line of disposableprotective clothing such as shoecovers (including the Aqua Track and spunbondshoecovers), bouffant caps, coveralls, frocks, lab coats and hoods, for thepharmaceutical, cleanroom, industrial and medical markets.

Infection ControlProducts: consisting of a line of face masks and eye shields principally forthe medical, dental and industrial markets.

Extended Care Products: consisting of a line ofmedical bed pads using Unreal Lambskin ® (synthetic lambskin).  The Unreal Lambskin ® is used to producemedical bed pads, which prevent decubitus ulcers or bedsores on long term carepatients.  The Unreal Lambskin ® is alsoused to manufacture bedrail pads, knee and elbow protectors, as well aswheelchair accessories. The Company also manufactures a line of pet beds andpet toy accessories with this material.

Engineered Products: this fourth segment was formedduring the second quarter 2004 with the establishment of Alpha ProTechEngineered Products, Inc., a wholly-owned subsidiary. This segment consists ofa line of construction supply weatherization products as well as a line ofpaint with antimicrobials. The construction supply weatherization productsconsist of building wrap, 

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synthetic roof underlayment and antimicrobial moldresistant framing sealant. The line of paint with antimicrobials is designed toinhibit growth of bacteria, fungi and algae on the painted surfaces inhospitals, surgical rooms and cleanrooms and associated controlledenvironments.  Of note, our equity inincome (loss) of unconsolidated affiliates (Harmony) is included in the totalsegment income for Engineered products in the table below.

The accountingpolicies of the segments are the same as those described previously under “Summaryof Significant Accounting Policies” in the 2005 10-K.  Segment data excludes charges allocated tohead office and corporate sales/marketing departments and income taxes.  The Company evaluates the performance of itssegments and allocates resources to them based primarily on net sales

The following table shows net sales for each segmentfor the three months ended June 30, 2006 and 2005:

|                                | ** ** | **For the Three Months Ended  June 30,** | ** ** | **For the Six Months Ended  June 30,** | ** ** |
|--------------------------------|------------|-------------------------------------------------------------------|------------|-----------------------------------------------------------------|------------|
| ** **                     | ** ** | **2006**                                                          | ** ** | **2005**                                                        | ** ** | **2006** | ** ** | **2005** | ** ** |
|                           |       |                                                              |       |                                                            |       |   |   |   |   |
| Disposable  protective apparel |       | $                                                                 | 5,518,000  |                                                            | $          | 6,419,000 |   | $ | 9,588,000 |   | $ | 10,662,000 |   |
| Infection  control             |       | 1,833,000                                                         |       | 1,165,000                                                       |       | 3,516,000 |   | 2,381,000 |   |
| Engineered  products           |       | 2,210,000                                                         |       | 1,115,000                                                       |       | 3,992,000 |   | 2,105,000 |   |
| Extended care                  |       | 318,000                                                           |       | 341,000                                                         |       | 754,000 |   | 874,000 |   |
| Consolidated total net  sales  |       | $                                                                 | 9,879,000  |                                                            | $          | 9,040,000 |   | $ | 17,850,000 |   | $ | 16,022,000 |   |

 

The following table shows the reconciliation of totalsegment income to total consolidated net income for the three months and sixmonths ended June 30, 2006 and 2005:

|                                          | ** ** | **For the Three Months Ended  June 30,** | ** ** | **For the Six Months Ended  June 30,** | ** ** |
|------------------------------------------|------------|-------------------------------------------------------------------|------------|-----------------------------------------------------------------|------------|
| ** **                               | ** ** | **2006**                                                          | ** ** | **2005**                                                        | ** ** | **2006** | ** ** | **2005** | ** ** |
| Disposable  protective apparel           |       | $                                                                 | 2,083,000  |                                                            | $          | 2,574,000 |   | $ | 3,453,000 |   | $ | 4,057,000 |   |
| Infection  control                       |       | 895,000                                                           |       | 482,000                                                         |       | 1,688,000 |   | 959,000 |   |
| Engineered  products                     |       | 290,000                                                           |       | 34,000                                                          |       | 415,000 |   | (81,000 | ) |
| Extended care                            |       | 25,000                                                            |       | 17,000                                                          |       | 83,000 |   | 105,000 |   |
|                                     |       |                                                              |       |                                                            |       |   |   |   |   |
| Total segment  income                    |       | 3,293,000                                                         |       | 3,107,000                                                       |       | 5,639,000 |   | 5,040,000 |   |
| Unallocated  corporate overhead expenses |       | (1,505,000                                                        | )          | (1,512,000                                                      | )          | (2,821,000 | ) | (2,743,000 | ) |
| Provision for  income taxes              |       | (662,000                                                          | )          | (592,000                                                        | )          | (1,043,000 | ) | (850,000 | ) |
| Consolidated net income                  |       | $                                                                 | 1,126,000  |                                                            | $          | 1,003,000 |   | $ | 1,775,000 |   | $ | 1,447,000 |   |

 

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**ITEM 2****                                        MANAGEMENT’SDISCUSSION AND ANALYSIS OF FINANCIALCONDITION AND RESULTS OF OPERATIONS**

You should read thefollowing discussion and analysis together with our consolidated financialstatements and the notes to our consolidated financial statements, which appearelsewhere in this report.

**CAUTIONARYSTATEMENTS REGARDING FORWARD-LOOKING INFORMATION**

This report on Form 10-Q contains “forward-lookingstatements” that are made pursuant to the safe-harbor provisions of the PrivateSecurities Litigation Reform Act of 1995. Forward-looking statements includestatements concerning plans, objectives, goals, strategies, future events,future revenues or performance, capital expenditures and other information thatis not historical information. When used in this report, the words “estimates,”“expects,” “anticipates,” “forecasts,” “plans,” “intends,” “believes” andvariations of such words or similar expressions are intended to identifyforward-looking statements. Additional forward-looking statements may be madeby us from time to time. All such subsequent forward-looking statements,whether written or oral and whether made by or on behalf of us, are alsoexpressly qualified by these cautionary statements.

Our forward-looking statements are based upon ourcurrent expectations and various assumptions. Our expectations, beliefs andprojections are expressed in good faith and we believe there is a reasonablebasis for them, including without limitation, management’s examination ofhistorical operating trends, data contained in our records and other dataavailable from third parties. However, we cannot assure you that management’sexpectations; beliefs and projections will result or be achieved oraccomplished. Our forward-looking statements apply only as of the date made.Except as required by law, we undertake no obligation to publicly update orrevise forward-looking statements which may be made to reflect events orcircumstances after the date made or to reflect the occurrence of unanticipatedevents.

**Whereto find more information about us.** We make available free of charge on our Internet website(http://www.alphaprotech.com) our most recent Annual Report on Form 10-K, ourmost recent Quarterly Report on Form 10-Q, any current reports on Form 8-Kfiled since our most recent Annual Report on Form 10-K and any amendments tosuch reports as soon as reasonably practicable following the electronic filingof such report with the SEC. In addition, we provide electronic or paper copiesof our filings free of charge upon request.

**Critical Accounting Policies**

The preparation of ourfinancial statements in conformity with accounting principles generallyaccepted in the United States of America requires us to make estimates andassumptions that affect the reported amounts of assets and liabilities anddisclosure of contingent assets and liabilities at the dates of the financialstatements and the reported amounts of net sales and expenses during thereported periods.  We base estimates onpast experience and on various other assumptions that are believed to bereasonable under the circumstances.  Theapplication of these accounting policies on a consistent basis enables us toprovide timely and reliable financial information.  Our critical accounting polices include thefollowing:

Inventories:Inventories include freight-in, materials, labor and overhead costs and arestated at the lower of cost (computed on a standard cost basis, whichapproximates average cost) or market. Provision is made for slow-moving, obsolete or unusable inventory. Weassess our inventory for estimated obsolescence or unmarketable inventory and,if necessary, write down the difference between the cost of inventory and theestimated market value based upon assumptions about future sales and supplyon-hand. If actual market conditions are less favorable than those projected bymanagement, additional inventory write-downs may be required.

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RevenueRecognition: For sales transactions, we comply with the provisions of the SEC’sStaff Accounting Bulletin (“SAB”) No. 104, “Revenue Recognition,” which statesthat revenue should be recognized when the following revenue recognitioncriteria are met: (1) persuasive evidence of an arrangement exists; (2) theproduct has been shipped and the customer takes ownership and assumes the riskof loss; (3) the selling price is fixed or determinable; and (4) collection ofthe resulting receivable is reasonably assured. These criteria are satisfiedupon shipment of product and revenues are recognized accordingly.

Sales are reduced for anyanticipated sales returns, rebates and allowances based on historicalexperience.  Since our return policy isonly 90 days and our products are not generally susceptible to external factorssuch as technological obsolescence or significant changes in demand, we areable to make a reasonable estimate for returns. We offer end-user productspecific and sales volume rebates to select distributors.  Our rebates are based on actual sales andaccrued monthly.

Stock Based Compensation:The Company adopted Statement of Financial Accounting Standards No. 123R,Share-Based Payment (“SFAS 123R”) effective January 1, 2006, using themodified prospective application method. SFAS 123R requires companies to recordcompensation expense for the value of all outstanding and unvested share-basedpayments, including employee stock options and similar awards. As ofJanuary 1, 2006, the Company had no outstanding and unvested share-basedpayments.  The Company did not recognizeany share-based compensation expense in its consolidated financial statementsfor the six months ended June 30, 2006.

Prior to the adoption of SFAS123R, the Company accounted for its stock-based employee compensation plansusing the intrinsic value method prescribed by Accounting Principles BoardOpinion No. 25, Accounting for Stock Issued to Employees. No stock-basedemployee compensation cost was reflected in net income as all options grantedunder those stock-based employee compensation plans had exercise prices equalto the market values of the underlying common shares on the dates of grant.

The fair values of stockoption grants are determined using the Black-Scholes option pricing model andthe following assumptions: expected stock price volatility based on historicand management’s expectations of future volatility, risk-free interest ratesfrom published sources, weighted average expected option lives based onhistorical data and no dividend yield, as management currently does not intendto pay dividends in the near future. The Black-Scholes option valuation modelwas developed for use in estimating the fair value of traded options that haveno vesting restrictions and that are fully transferable. In addition, optionvaluation models require the input of highly subjective assumptions includingexpected stock price volatility.  Ourstock options have characteristics significantly different from those of tradedoptions and changes in the subjective input assumptions can materially affecttheir fair value.

**OVERVIEW**

Alpha Pro Tech is in thebusiness of protecting people, products and environments. We accomplish this bydeveloping, manufacturing and marketing a line of high-value disposableprotective apparel and infection control products for the cleanroom,industrial, pharmaceutical, medical and dental markets. We also manufacture anddistribute a line of medical bed pads and accessories as well as a line of petbeds.  Our products are sold both underthe “Alpha Pro Tech” brand name as well as under private label.

During the first quarterof 2005, we commenced sales from a new business segment, Alpha ProTechEngineered Products, Inc. (Engineered Products), a wholly-owned subsidiary ofAlpha Pro Tech. This new segment consists of a line of construction supplyweatherization products as well as a line of paint with antimicrobials.  The construction supply weatherizationproducts consists of house wrap (Perma WrapTM) and a synthetic roof underlayment(AlphaProtectorTM — SUL).  The line ofpaint with antimicrobials is designed to inhibit growth of bacteria, fungi andalgae on the painted surfaces in hospitals, surgical rooms and cleanrooms andassociated controlled environments.  Inaddition to our paint with antimicrobials, we have also developed a line ofsealants with antimicrobials to be used for mold remediation. The EngineeredProducts segment is expected to contribute significantly to revenue growth in2006.

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This line of products isa natural extension of our core capabilities: creating proprietary productsdesigned to protect people and environments. The house wrap offers a weather resistant barrier designed to lowerenergy consumption costs.  Theproprietary synthetic roof underlayment is designed to resist the environment,as opposed to conventional roofing underlayment that is prone to rapiddegradation and mold growth.

Our products areclassified into six groups:  Disposableprotective apparel, consisting of a complete line of shoecovers, bouffant caps,gowns, coveralls and lab coats; infection control products, consisting of a lineof face masks and eye shields; extended care products, consisting of a line ofmedical bed pads, wheelchair covers, geriatric chair surfaces, operating room ;and a line of paint with antimicrobials designed to inhibit growth of bacteria,fungi and algae on painted surfaces.

Our products asclassified above are grouped into four business segments.  The Disposable Protective Apparel segment,consisting of disposable protective apparel; the Infection Control segment,consisting of face masks and eye shields; the Extended Care segment, consistingof extended care products, namely medical bed pads and pet beds; and theEngineered Products segment, consisting of construction weatherization productssuch as house wrap and synthetic roof underlayment as well as a line ofantimicrobial paint.

Our target markets arepharmaceutical manufacturing, bio-pharmaceutical manufacturing and medicaldevice manufacturing, lab animal research, high technology electronicsmanufacturing which includes the semi-conductor market, medical and dental distributors,pet stores and pet distributors and construction supply and roofingdistributors.

Our products are usedprimarily in cleanrooms, industrial safety manufacturing environments, healthcare facilities such as hospitals, laboratories and dental offices, as well asconstruction supply sites. Our pet beds are used by pet owners andveterinarians.  Our products aredistributed principally in the United States through a network consisting ofpurchasing groups, national distributors, local distributors, independent salesrepresentatives and our own sales and marketing force.

Consolidated sales forthe quarter ended June 30, 2006 increased to a record $9,879,000 from$9,040,000 for the same quarter of 2005, representing an increase of $839,000or 9.3%.  Consolidated sales for the sixmonths ended June 30, 2006 increased to $17,850,000 from $16,022,000 for thesix months ended June 30, 2005, representing an increase of $1,828,000 or11.4%.

Engineered Productssegment sales of house wrap and synthetic roof underlayment during the secondquarter of 2006 was $2,210,000 compared to $1,115,000 for the same period of2005, an increase of 98.2%.  For the sixmonths ended June 30, 2006 sales increased by $1,187,000 or 89.6% to $3,992,000from $2,105,000 in the same period of 2005. This segment is expected to continue to grow significantly in 2006.

Sales in our DisposableProtective Apparel segment that services the pharmaceutical, cleanroom andindustrial safety markets declined by 14.0% or $901,000 to $5,518,000 for thequarter ended June 30, 2006 compared to $6,419,000 for the quarter ended June30, 2005.  For the six months ended June30, 2006 sales were $9,588,000 compared to $10,662,000 for the same period of2005, a decrease of $1,074,000 or 10.1%. Although sales were down in the second quarter of 2006 as compared tothe same period of 2005, sales during this past quarter of $5.5 million were infact the second highest in company history next only to the second quarter of2005.  In addition, sales during thispast quarter increased sequentially quarter over quarter by 34.1%.  For the six months, sales have decreased butshipments by our largest distributor to its end users were up slightly.  Even though sales are down year to date, weexpect that the second half of 2006 will be significantly better than thesecond half of last year.

Infection Control segmentsales increased by $668,000 or 57.3% to $1,833,000 for the second quarter endedJune 30, 2006 compared to $1,165,000 for the same period of 2005.  For the six months ended 

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June 30, 2006 salesincreased by $1,135,000 or 47.7% to $3,516,000 from $2,381,000 in the sameperiod of 2005.  This is primarily due tostrong N-95 Respirator mask sales as a result of concerns about Avian Flu.

# **RESULTS OF OPERATIONS**

The following table setsforth certain operational data as a percentage of sales for the periodsindicated:

|                                           | ** ** | **For the Three Months Ended  June 30,** | ** ** | **For the Six Months Ended  June 30,** | ** ** |
|-------------------------------------------|------------|-------------------------------------------------------------------|------------|-----------------------------------------------------------------|------------|
| ** **                                | ** ** | **2006**                                                          | ** ** | **2005**                                                        | ** ** | **2006** | ** ** | **2005** | ** ** |
| Sales                                     |       | 100.0                                                             | %          | 100.0                                                           | %          | 100.0 | % | 100 | % |
|                                      |       |                                                              |       |                                                            |       |   |   |   |   |
| Gross profit                              |       | 46.8                                                              |       | 46.7                                                            |       | 46.3 |   | 46.1 |   |
|                                      |       |                                                              |       |                                                            |       |   |   |   |   |
| Selling, general  and administrative      |       | 27.5                                                              |       | 27.8                                                            |       | 29.2 |   | 30.4 |   |
|                                      |       |                                                              |       |                                                            |       |   |   |   |   |
| Income from  operations                   |       | 18.1                                                              |       | 17.5                                                            |       | 15.8 |   | 14.2 |   |
|                                      |       |                                                              |       |                                                            |       |   |   |   |   |
| Income before  provision for income taxes |       | 18.1                                                              |       | 17.6                                                            |       | 15.8 |   | 14.3 |   |
|                                      |       |                                                              |       |                                                            |       |   |   |   |   |
| Net income                                |       | 11.4                                                              |       | 11.1                                                            |       | 9.9 |   | 9.0 |   |

 

## **Three months and six months ended June 30,2006, compared to the three and six months ended June 30, 2005**

**Sales.**  Consolidated sales for thequarter ended June 30, 2006 increased to a record $9,879,000 from $9,040,000for the quarter ended June 30, 2005, representing an increase of $839,000 or9.3%.  We attribute the increaseprimarily to increased sales of construction supply weatherization products of$1,095,000 and to increased infection control segment sales of $668,000,partially offset by decreased sales of disposable protective apparel productsof $901,000 and decreased sales from our Extended Care Unreal Lambskin segmentof $23,000.

Sales for the DisposableProtective Apparel segment for the quarter ended June 30, 2006 decreased by$901,000 or 14.0% to $5,518,000 compared to $6,419,000 for the same period of2005.  Although the Disposable ProtectiveApparel segment sales were down in the second quarter of 2006 as compared tothe same period of 2005, sales during this past quarter of $5.5 million were infact the second highest in company history next only to the second quarter of2005.  Sales in the second quarter of2005 were unusually high due to a back-order situation that occurred in thefirst quarter of 2005.  In addition,sales during this past quarter increased sequentially quarter over quarter by34.1%.  We expect growth in this segmentin 2006 as we launch our ComforTech® line of products.

Infection Control segmentsales for the quarter ended June 30, 2006 increased by $668,000 or 57.3% to$1,833,000 compared to $1,165,000 for the same period of 2005.  Mask sales in this segment, especially salesof our N-95 NIOSH approved Respirator mask, were very strong in the secondquarter of 2006 as concerns about Avian Flu continued.  We expect continued strength in this segmentif the Avian Flu continues to be a worldwide concern.

The Engineered Productssegment consists of a line of construction supply weatherization products(house wrap, roof underlayment) as well as a line of paint withantimicrobials.  Engineered Productssales for the quarter ended June 30, 2006 increased by $1,095,000 or 98.2% to$2,210,000 compared to 

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$1,115,000 for the sameperiod of 2005.  The breakdown of theEngineered Products sales is as follows for the quarter ended June 30, 2006:69% house wrap and 31% roof underlayment. Roof underlayment sales increased to 31% of total Engineered Productssales in the second quarter of 2006 from 25% for fiscal 2005.  In addition, roof underlayment salesincreased by 54% in the second quarter of 2006 as compared to the first quarterof 2006.  We expect continued significantgrowth from the roof underlayment product line.

Sales by quarter forEngineered Products are as follows: first quarter 2005 was $1.0 million, secondquarter 2005 was $1.1 million, third quarter 2005 was $1.4 million, fourthquarter 2005 was $1.2 million and first quarter 2006 was $1.8 million andsecond quarter 2006 was $2.2 million.  Weare working very closely with our exclusive distributor and are encouraged bythe response to our product line.  Weexpect significant growth from this segment in 2006.

Sales from ourExtended Care segment, which includes a line of medical bed pads as well as petbeds, decreased by $23,000 or 6.7% to $318,000 for the quarter ended June 30,2006 from $341,000 for the quarter ended June 30, 2005.  The decrease in sales is primarily the resultof less medical bed pad sales, partially offset by increased pet bedsales.  This line of products is notexpected to be a growth segment for the Company.

Consolidatedsales for the six months ended June 30, 2006 increased to $17,850,000 from$16,022,000 for the six months ended June 30, 2005, representing an increase of$1,828,000 or 11.4%.  We attribute the increase primarily to increasedsales of construction supply weatherization products of $1,887,000 and toincreased infection control segment sales of $1,135,000, partially offset bydecreased sales of disposable protective apparel products of $1,074,000 anddecreased sales from our Extended Care segment of $120,000.

Sales for the DisposableProtective Apparel segment for the six months ended June 30, 2006 were$9,588,000 compared to $10,662,000 for the same period of 2005, a decrease of$1,074,000 or 10.1%.  Although segmentsales have decreased for the six months ended June 30, 2006, shipments by ourlargest distributor to its end users were up slightly.  Even though the Apparel segment is down yearto date, we expect that the second half of 2006 will be significantly betterthan the second half of last year.  Salesfor the last six months of 2005 were the lowest of any six month period since2003.  Although our sales droppedsignificantly in the latter half of 2005, our largest distributor’s sales totheir end users were fairly consistent with prior periods.  The decline in sales to this distributor canbe attributed to slowdown in orders from them to reduce their inventory levels.  We anticipate long-term growth from thissegment.

Infection Control segmentsales for the six months ended June 30, 2006 increased by $1,135,000 or 47.7%to $3,516,000 from $2,381,000 in the same period of 2005.  Sales of our N-95 NIOSH approved Respiratormask have been very strong in the six months ended June 30, 2006 due toconcerns about Avian Flu.  We havesignificant manufacturing capacity for the N-95 Respirator mask in the eventthat demand surges.

The Engineered Productssegment sales for the six months ended June 30, 2006 increased by $1,887,000 or89.6% to $3,992,000 from $2,105,000 in the same period of 2005.  The breakdown of the construction supplyweatherization products is as follows for the six months ended June 30, 2006:72% house wrap and 28% roof underlayment. The construction supply weatherization products account for almost allof the sales for the six months ended June 30, 2006.  Management expects this segment to contributesignificantly to overall consolidated revenue growth.

Sales of the Company’sExtended Care segment decreased by $120,000 or 13.7% to $754,000 for the sixmonths ended June 30, 2006 from $874,000 for the six months ended June 30, 2005..  This decrease of $120,000 in sales isprimarily the result of a decrease in medical bed pad sales.

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**Gross Profit**   Gross profit increased by 9.4% to $4,623,000for the quarter ended June 30, 2006 from $4,227,000 for the same period in2005.  Gross profit margin remainedbasically flat at 46.8% for the quarter ended June 30, 2006 as compared to46.7% for the same period in 2005.  Grossprofit margin was relatively unchanged at 46.3% for the six months ended June30, 2006 from 46.1% for the same period in 2005.

Gross profit margin on the Engineered Products segmentwas 31.0% for the quarter ended June 30, 2006 as compared to 25.2% for the sameperiod of 2005.  Gross profit margin was30.3% for the six months ended June 30, 2006 as compared to 23.0% for the sameperiod of 2005.  Gross profit by quarterfor Engineered Products is as follows: first quarter 2005 was 20.6%, secondquarter 2005 was 25.2%, third quarter 2005 was 28.2%, fourth quarter 2005 was25.1%, first quarter 2006 was 29.5% and second quarter 2006 was 31.0%.  Gross profit on this product line is expectedto be in low to mid 30% range for the second half of this year.

**Selling,General and Administrative Expenses.**  Selling, general and administrative expensesincreased by $203,000 or 8.1% to $2,719,000 for the quarter ended June 30, 2006from $2,516,000 for the quarter ended June 30, 2005.  As a percentage of net sales, selling,general and administrative expenses decreased slightly to 27.5% for the quarterended June 30, 2006 from 27.8% for the same period in 2005.  We believe that we have built theinfrastructure required to substantially grow our business and as our revenuegrows our expenses are expected to continue to decrease as a percentage ofsales.

The increase of$203,000 in selling, general and administrative expenses primarily consists ofincreased employee compensation expense of $79,000, increased expenses forEngineered Products of $131,000, increased expense for the executive bonusprogram of $22,000 and increased general office expenses of $16,000, partiallyoffset by decreased Sarbanes-Oxley Corporate Governance costs of $45,000.

Selling, general andadministrative expenses increased by $346,000 or 7.1% to $5,214,000 for the sixmonth ended June 30, 2006 from $4,868,000 for the six months ended June 30,2005.  As a percentage of net sales,selling, general and administrative expenses decreased to 29.2% for the sixmonths ended June 30, 2006 from 30.4% for the same period in 2005.  The increase in selling, general andadministrative expenses primarily consists of increased payroll costs of$239,000, increased expenses for Engineered Products of $190,000, increasedexpense for the executive bonus program of $58,000 and increased generalexpenses of $1,000, partially offset by decreased Sarbanes-Oxley CorporateGovernance costs of $89,000, decreased non Engineered Products marketingexpenses of $53,000.

The chiefexecutive officer and president are each entitled to a bonus equal to 5% of thepre-tax profits of the Company.  Bonusesof $199,000 were accrued for the quarter ended June 30, 2006 as compared to$177,000 in the same period of 2005. Total bonuses of $313,000 were accrued forthe six months ended June 30, 2006 as compared to $255,000 in the same periodof 2005.

**Depreciation and Amortization.**  Depreciation and amortization expensedecreased by $11,000 or 8.9% to $112,000 for the quarter ended June 30, 2006from $123,000 for the same period in 2005. Depreciation and amortizationexpense decreased by $23,000 to $223,000 for the six months ended June 30, 2006from $246,000 for the same period in 2005. The decrease is primarily attributable to a reduction in depreciationfor office equipment, computers and software, partially offset by increaseddepreciation for Engineered Products.

**Income from Operations.**  Income from operations increased by $204,000or 12.8%, to $1,792,000 for the quarter ended June 30, 2006 as compared to incomefrom operations of $1,588,000 for the quarter ended June 30, 2005.  The increase in income from operations is dueto an increase in gross profit of $396,000 and a decrease in depreciation andamortization of $11,000, partially offset by an increase in selling, generaland administrative expenses of $203,000.

Income from operationsincreased by $553,000 or 24.3%, to $2,827,000 for the six months ended June 30,2006 as compared to income from operations of $2,274,000 for the six monthsended June 30, 2005.

 

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The increase in income from operations is primarily due to an increasein gross profit of $876,000 and a decrease in depreciation and amortization of$23,000, partially offset by an increase in selling, general and administrativeexpenses of $346,000.

 

**Net Interest.**  For the quarter ended June 30, 2006, we hadnet interest income of $6,000 compared to net interest income of $7,000 for thequarter ended June 30, 2005.  Interestexpense remained flat at $2,000 for the quarter ended June 30, 2006 compared tothe same period of 2005.  Interest incomedecreased to $8,000 for the quarter ended June 30, 2006 as compared to $9,000for the same period of 2005.

 

For the six months ended June 30, 2006, we had net interest income of$11,000 compared to net interest income of $23,000 for the quarter ended June30, 2005.  Interest expense remainedunchanged at $4,000 for the six months ended June 30, 2006 compared to $4,000for the same period of 2005.  Interestincome decreased by $12,000 to $15,000 for the six months ended June 30, 2006as compared to $27,000 for the same period of 2005.

 

**Equity in income (loss) of unconsolidatedaffiliates, net of eliminations.**  On June 14, 2005 Alpha ProTech EngineeredProducts, Inc. entered into a joint venture with a manufacturer in India forthe production of building products. Under terms of the joint venture agreement, a private company, HarmonyPlastics Private Limited (Harmony), was created with ownership interests of41.66% by Alpha ProTech Engineered Products, Inc. and 58.34% by MapleIndustries and Associates. Alpha ProTech Engineered Products has invested$1,450,000 in the joint venture; $508,000 for share capital and $942,000 in along term advance.  Effective April 2006,interest of 3.5 % is to be paid on this advance. Half of this $942,000 advanceis to be repaid monthly over a six year term commencing in July 2006 and thebalance is to be paid in the seventh year.

 

The Company is subject to the provisions of FASBInterpretation (“FIN”) No. 46, “Consolidation of Variable Interest Entities—aninterpretation of ARB No. 51,” which redefines the criteria by which theCompany determines the proper accounting for its investments in relatedentities.  Specifically, FIN 46 requiresthe Company to assess whether or not related entities are variable interestentities (“VIE”s), as defined.  For thoserelated entities that qualify as variable interest entities, FIN 46 requiresthe Company to determine whether or not the Company is the primary beneficiaryof the VIE, and if so, to consolidate the VIE. The Company has determined that Harmony is not a VIE and is thereforeconsidered to be an unconsolidated affiliate.

 

Harmony commenced operations in August of 2005.  For the three months ended June 30, 2006, werecorded an equity loss in unconsolidated affiliate of $10,000.  For the six months ended June 30, 2006, werecorded an equity loss in unconsolidated affiliate of $20,000.

 

**Income Before Provision for Income Taxes.**  Income before provision for income taxes forthe quarter ended June 30, 2006 was $1,788,000 compared to $1,595,000 for thequarter ended June 30, 2005, representing an increase of $193,000 or12.1%.  The increase in income beforeprovision for income taxes is due to an increase in gross profit of $396,000, adecrease in depreciation and amortization of $11,000, partially offset by anincrease in selling, general and administrative expenses of $203,000, adecrease in net interest income of $1,000 and a loss of $10,000 from ourunconsolidated affiliate.

 

Income before provision for income taxes for the six months ended June30, 2006 was $2,818,000 compared to $2,297,000 for the six months ended June30, 2005, representing an increase of $521,000 or 22.7%.  The increase in income from operations isprimarily due to an increase in gross profit of $876,000 and a decrease indepreciation and amortization of $23,000, partially offset by an increase inselling, general and administrative expenses of $346,000, a decrease in netinterest income of $12,000 and a loss of $20,000 from our unconsolidatedaffiliate.

 

For the EngineeredProducts segment, income from operations for the three months ended June 30,2006 was $290,000 as compared to $34,000 for the second quarter of 2005.  Engineered Products income from operationsfor six months ended June 30, 2006 was $415,000 as compared to a loss from

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operations of $81,000 forthe same period of 2005.  We expectprofitability on this segment to continue to improve as our sales grow.

**Provision for Income Taxes**The provision for income taxes for the quarter ended June 30, 2006 was $662,000compared to $592,000 for the quarter ended June 30, 2005.   The increase in income taxes is due tohigher income before provision for income taxes in 2006.  The effective tax rate was 37.0% for thequarter ended June 30, 2006 as compared to 37.1% for the same period in 2005.

The provision for incometaxes for the six months ended June 30, 2006 was $1,043,000, as compared to$850,000 for the six months ended June 30, 2005.  The increase in income taxes is due to higherincome before provision for income taxes in 2005.  The effective tax rate was approximately37.0% for both the six months ended June 30, 2006 and the same period in 2005.

**Net Income.**  Net income for the quarter ended June 30,2006 was $1,126,000 compared to net income of $1,003,000 for the quarter endedJune 30, 2005, an increase of $123,000 or 12.3%.  The net income increase was primarily due toan increase in income before provision for income taxes of $193,000, partiallyoffset by an increase in income taxes of $70,000.  Net income as a percentage of sales for thequarter ended June 30, 2006 and 2005 was 11.4% and 11.1% respectively.  Basic and diluted income per share for thequarter ended June 30, 2006 and 2005 were $0.05 and $0.04, respectively.

Net income for the sixmonths ended June 30, 2006 was $1,775,000 compared to net income of $1,447,000for the same period of 2005, an increase of $328,000 or 22.7%.  The net income increase was primarily due toan increase in income before provision for income taxes of $521,000, partiallyoffset by an increase in income taxes of $193,000.  Basic and diluted income per share for thesix months ended June 30, 2006 and 2005 were $0.07 and $0.06, respectively

**LIQUIDITY AND CAPITAL RESOURCES**

As of June 30, 2006, wehad cash and cash equivalents of $349,000 and working capital of $16,435,000,an increase in working capital of 14.9% or $2,137,000 since December 31,2005.  As of June 30, 2006, our currentratio was 9.95:1 as compared to 6.55:1 as of December 30, 2005.  Cash decreased by $814,000 to $349,000 as ofJune 30, 2006 as compared to $1,163,000 as of December 31, 2005.  The decrease in cash is primarily due to cashused in operating activities of $933,000, the purchase of property andequipment of $196,000 and the purchases of intangible assets of $34,000,partially offset by cash proceeds of $349,000 from the exercise of stockoptions.

We have a $3,500,000 credit facility with a bank,consisting of a line of credit with interest at prime plus 0.5%.  At June 30, 2006, the prime interest rate was8.25%.  The line of credit was renewed inMay 2005 and expires in May 2007.  TheCompany’s borrowing capacity on the line of credit was $3,500,000 at June 30,2006.  The available line of credit isbased on a formula of eligible accounts receivable and inventories.  As of June 30, 2006, we had not borrowed onthis line of credit.  As of June 30,2006, we did not have any debt.

Net cash used inoperating activities was $933,000 for the six months ended June 30, 2006compared to $3,009,000 net cash used in operating activities for the quarterended June 30, 2005.  The net cash usedin operating activities of $933,000 for the quarter ended June 30, 2006 is dueto an increase in inventory of $711,000, an increase in accounts receivable of$1,655,000, and a decrease in accounts payable and accrued liabilities of$739,000, partially offset by net income of $1,775,000, a decrease in prepaidexpenses of $154,000, depreciation and amortization of $223,000 and equity inloss of unconsolidated affiliate of $20,000. The net cash used in operating activities of $3,009,000 for the quarterended June 30, 2005 is due to an increase in inventory of $3,552,000 and anincrease in accounts receivable of $1,569,000, and partially offset by net incomeof $1,447,000, an increase in accounts payable and

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accrued liabilities of$237,000 a decrease in prepaid expenses of $182,000 and depreciation andamortization of $246,000.

Accounts receivableincreased by $1,655,000 or 41.9% to $5,609,000 for the six months ended June30, 2006 from $3,954,000 as of December 31, 2005.  This increase is due to increased sales of40.8% for the second quarter of 2006 as compared to the fourth quarter of 2005  The number of day’s sales outstanding as ofJune 30, 2006 was 52 days as compared to the same 51 days as of December 31,2005.

Inventory increased by$711,000 to $11,323,000 for the six months June 30, 2006 from $10,612,000 as ofDecember 31, 2005.  The increase isprimarily attributable to an increase of $1.4 million in inventory for theEngineered Product segment, partially offset by a decrease in DisposableApparel inventory of $0.7 million. Current inventory levels of $6.2 million for the Engineered Productsegment are high based on present sales levels. With anticipated sales growth, and reduced purchases from our jointventure in India, inventory levels for Engineered Products are expected to belower by year end.

Prepaid expenses andother current assets decreased by $154,000 to $561,000 for the six months endedJune 30, 2006 from $715,000 as of December 31, 2005.  The decrease of $154,000 is primarily due toa decrease in prepaid expenses Engineered Products of $255,000, and partiallyoffset by an increase in prepaid rent of $51,000, an increase in prepaid insurancefor Engineered Products of $43,000 and an increase of $6,000 in prepaid tradeshows.

Accounts payable andaccrued liabilities as of June 30, 2006 decreased by $739,000 to $1,837,000from $2,576,000.  The net change in 2006was primarily due to a decrease in trade payables of $124,000, a decrease inaccrued commission/bonus payable of $204,000, a decrease in accrued rebates andother of $182,000, a decrease in income tax payable of $180,000, a decrease inaccrued professional fees of $43,000 and a decrease in payroll accrual of$6,000.

Net cash used ininvesting activities was $230,000 and $1,011,000 for the six months ended June30, 2006 and 2005, respectively.  Ourinvesting activity in 2006 consisted primarily of expenditures for property andequipment of $196,000 and the purchase of intangible assets of $34,000.  This compared to expenditures for propertyand equipment of $451,000 and purchases of intangible assets of $10,000.  The expenditures for property and equipmentin 2006 and 2005 were principally for the purchase of equipment for ourEngineered Products segment.

In 2005, Alpha ProTechEngineered Products, Inc. entered into a joint venture with a manufacturer inIndia for the production of building products. Under terms of the joint venture agreement, a private company, HarmonyPlastics Private Limited (Harmony), was created with ownership interest of41.66% by Alpha ProTech Engineered Products, Inc. and 58.34% by MapleIndustries and Associates.  Alpha ProTechEngineered Products, Inc. contributed $508,000 and Maple Industries andAssociates contributed $708,000 for share capital.  The Company has determined that itsinvestment in Harmony is not a variable interest entity and is considered anunconsolidated affiliate.

Alpha ProTech EngineeredProducts has invested $1,450,000 in Harmony; $508,000 for share capital and a$942,000 advance.  Effective April 2006,interest of 3.5 % is to be paid on this advance.  Half of this $942,000 advance is to be repaidmonthly over a six year term commencing in July 2006 and the balance is to bepaid in the seventh year.  Harmonycommenced operations in August of 2005. For the six months ended June 30, 2006, we recorded an equity loss inunconsolidated affiliate of $20,000.

We expect to purchaseapproximately $225,000 of equipment in 2006. These expenditures will beprimarily for equipment for the Engineered Products and Infection Controlsegments.

In August 2004, weannounced that our Board of Directors had approved the buy-back of up to anadditional $500,000 of the Company’s outstanding common stock.  This share repurchase program is the sixth$500,000 buyback authorized by the Board of Directors.  In all instances,we are retiring the shares.  For thequarter ended June 30, 2006, we did not buy back any shares of commonstock.  As of June 30,

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2006, we have bought backa total of 2,333,800 shares of common stock at a cost of $2,518,000 since theend of 1999.

For the quarter endedJune 30, 2006, net cash provided by financing activities was $349,000 compared tocash provided by financing activities of $268,000 for the same period of2005.  Our financing activities in 2006consisted of cash proceeds of $349,000 from the exercise of 308,000 stockoptions.  Our financing activities in2005 consisted primarily of cash proceeds of $289,000 from the exercise of232,106 stock options, partially offset by payments of $21,000 for therepurchase of 10,000 shares of common stock.

As shown below, at June30, 2006, our contractual cash obligations totaled approximately $1,313,000.

**Contractual Obligations**
| ** **                          | ** ** | **Payments Due by Period** | ** ** |
|-------------------------------------|------------|-------------------------------------------|------------|
| ** **                          | ** ** | **Total**                                 | ** ** | **1 Year** | ** ** | **2-3 Years** | ** ** | **4-5 Years** | ** ** | **After 5 years** | ** ** |
|                                |       |                                      |       |   |   |   |   |   |   |   |   |
| Operating leases                    |       | $                                         | 1,313,000  |   | $ | 352,000 |   | $ | 740,000 |   | $ | 221,000 |   | — |   |
|                                |       |                                      |       |   |   |   |   |   |   |   |   |
| Line of credit                      |       | —                                    |       | — |   | — |   | — |   | — |   |
|                                |       |                                      |       |   |   |   |   |   |   |   |   |
| Total contractual cash  obligations |       | $                                         | 1,313,000  |   | $ | 352,000 |   | $ | 740,000 |   | $ | 221,000 |   | — |   |

 

We believe that cashgenerated from operations, our current cash balance and the funds availableunder our credit facility will be sufficient to satisfy our projected workingcapital and planned capital expenditures for the foreseeable future.

**New Accounting Standards**

Based on the Company’sreview of new accounting standards released during the quarter ended June 30,2006, the Company did not identify any standards requiring adoption that wouldhave a significant impact on its consolidated financial statements.

We adopted Statement ofFinancial Accounting Standards No. 123R, Share-Based Payment (SFAS 123R)effective January 1, 2006, using the modified prospective application method.SFAS 123R requires companies to record compensation expense for the value ofall outstanding and unvested share-based payments, including employee stockoptions and similar awards. As of January 1, 2006, we had no outstanding andunvested share-based payments.  As aresult, we did not recognize any compensation expense related to share-basedpayments in our consolidated financial statements for the six months ended June30, 2006.

**Item 3.  Quantitative andQualitative Disclosures About Market Risk**

We subcontract themanufacture of products in China and Mexico and have a joint venture inIndia.  The Company’s results ofoperations could be negatively affected by factors such as changes in foreigncurrency exchange rates due to stronger economic conditions in those countries.

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The Company doesn’texpect any significant effect on its results of operations from inflationary orinterest and currency rate fluctuations. The Company does not hedge its interest rate or foreign exchange risks.

**ITEM 4.  CONTROLS AND PROCEDURES**

Disclosure Controls andProcedures

The Company’s chiefexecutive officer and its chief financial officer, after evaluating theeffectiveness of the Company’s disclosure controls and procedures as of June30, 2006, have concluded that the Company’s disclosure controls and procedureswere designed to ensure that information required to be disclosed by theCompany in the reports that it files or submits under the Securities ExchangeAct of 1934 is recorded, processed, summarized and reported, within the timeperiods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controlsand procedures designed to ensure that information required to be disclosed bythe Company in the reports that it files or submits under the Act isaccumulated and communicated to the Company’s management, including its chiefexecutive and chief financial officers as appropriate to allow timely decisionsregarding required disclosure.

 Changes in Internal Control Over FinancialReporting.

There has been no changein our internal control over financial reporting (as defined in Rules 13a-15(f)and 15d-15(f) under the Exchange Act) that occurred during our fiscal quarterended June 30, 2006, that has materially affected, or is reasonably likely tomaterially affect, our internal control over financial reporting.

**PART II - OTHER INFORMATION**

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** **

**Item 5  Submission of Matters to a Vote of Security Holders**

(a)            Registrantheld its Annual Meeting of Shareholders June 12, 2006.

(b)           Thefollowing persons were elected Directors pursuant to the votes indicated:

| Name                 | ** ** | **For**    | ** ** | **Withheld** | ** ** |
|----------------------|------------|------------|------------|--------------|------------|
| Sheldon Hoffman      |       | 22,161,237 |       | 440,994      |       |
| Alexander Millar     |       | 22,165,387 |       | 436,844      |       |
| Donald Bennett,  Jr. |       | 22,238,537 |       | 363,694      |       |
| Robert Isaly         |       | 22,187,211 |       | 415,020      |       |
| John Ritota          |       | 21,913,281 |       | 688,950      |       |
| Russell Manock       |       | 22,187,461 |       | 414,770      |       |
| David Anderson       |       | 21,930,561 |       | 671,670      |       |

 

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(c)            Theonly other matter to be voted upon was the ratification of the appointment ofPricewaterhouseCoopers LLP as the Registrant’s independent registered publicaccountants as follows:

| For        | **Against** | **Abstain** |
|------------|-------------|-------------|
| 22,570,374 | 12,650      | 19,207      |

** **

**ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K**

(a)            Exhibits

31.1 Certification Pursuant to Rule 13a-14(b) and Rule15d-14(b) of the Exchange Act, Signed by Chief Executive Officer (filedherewith)

31.2 Certification Pursuant to Rule 13a-14(b) and Rule15d-14(b) of the Exchange Act, Signed by Chief Financial Officer (filedherewith)

32.1 Certification Pursuant to 18 U.S.C Section 1350,as Adopted Pursuant to Section 906 of        the Sarbanes-Oxley Act of 2002, Signed by Chief Executive Officer (filedherewith)

32.2 CertificationPursuant to 18 U.S.C Section 1350, as Adopted Pursuant to Section 906 of theSarbanes-Oxley Act of 2002, Signed by Chief Financial Officer (filed herewith)

(b)           Reportson Form 8-K

On May 8, 2006 registrant issued a release announcing its financialresults for the first quarter of 2006.

**SIGNATURES**

Pursuantto the requirements of Section 13 or 15 (d) of the Securities Exchange Act of1934, the Registrant has fully caused this report to be signed on its behalf bythe undersigned, thereunto duly authorized.

 
|        | ** ** | ** **     |   | **ALPHA PRO TECH, LTD**. |
|--------|------------|----------------|--------|--------------------------|
|   | ** ** | ** **     |   |                     | ** ** |
| DATE:  | ** ** | August 9, 2006 |   | BY:                      | /s/ SHELDON  HOFFMAN |
|   |       |           |   |                     | Sheldon Hoffman |
|   |       |           |   |                     | *Chief Executive Officer and Director* |
|   |       |           |   |                     |   |
| DATE:  | ** ** | August 9, 2006 |   | BY:                      | /s/ LLOYD  HOFFMAN |
|   |       |           |   |                     | Lloyd Hoffman |
|   |       |           |   |                     | *Chief Financial Officer and Senior Vice President* |

 

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