**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, 2007**

**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**         | ** ** | ** **  |
|-------------------------------------------|------------|-------------|
| **Markham,  Ontario, Canada**             | ** ** | **L3R 9R2** |
| (Address of  principal executive offices) |       | (Zip Code)  |

 

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 xNo 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 of August8, 2007.

25,580,953 shares ofcommon stock, $.01 par value

 

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**Alpha Pro Tech, Ltd.**

Table of Contents
| PART I. FINANCIAL  INFORMATION                                                                      |          |
|-----------------------------------------------------------------------------------------------------|---------------|
|                                                                                                |          |
| ITEM 1 Consolidated  Financial Statements (Unaudited)                                               |          |
|                                                                                                |          |
|                                                                                                | a)            | Consolidated  Balance Sheets - June 30, 2007 and December 31, 2006 |   |
|                                                                                                |          |   |   |
|                                                                                                | b)            | Consolidated  Income Statements for the six months ended June 30, 2007 and June 30, 2006 |   |
|                                                                                                |          |   |   |
|                                                                                                | c)            | Consolidated  Statement of Shareholders’ Equity for the six months ended June 30, 2007 |   |
|                                                                                                |          |   |   |
|                                                                                                | d)            | Consolidated  Statements of Cash Flows for the six months ended June 30, 2007 and June 30,  2006 |   |
|                                                                                                |          |   |   |
|                                                                                                | 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.**

##### **PARTI.  FINANCIAL INFORMATION**

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

Alpha Pro Tech,Ltd. (Alpha Pro Tech, the Company) prepared the following unaudited interimconsolidated financial statements pursuant to the rules and regulations of theSecurities and Exchange Commission. Certain information and footnotedisclosures normally included in financial statements prepared in accordancewith accounting principles generally accepted in the United States of Americahave been condensed or omitted pursuant to these rules and regulations.

You should readthe following unaudited interim consolidated financial statements and theaccompanying notes together with the Company’s Annual Report on Form 10-K forthe year ended December 31, 2006. The Company’s 2006 Annual Report containsinformation that may be helpful in analyzing the financial informationcontained in this report and in comparing its results of operations for thethree and six months ended June 30, 2007 with the same period in 2006.

1

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### **Alpha Pro Tech, Ltd.**

### **Consolidated Balance Sheets (Unaudited)**

| ** **                                                                                                                                                          | ** ** | **June 30,  2007** | ** ** | **December 31,  2006 (1)** | ** ** |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-------------------------|------------|--------------------------------------|------------|
|                                                                                                                                                                |       |                    |       |                                 |       |
| **Assets**                                                                                                                                                          |       |                    |       |                                 |       |
| Current assets:                                                                                                                                                     |       |                    |       |                                 |       |
| Cash  and cash equivalents                                                                                                                                          |       | $                       | 1,600,000  |                                 | $          | 1,837,000 |   |
| Accounts  receivable, net of allowance for doubtful accounts of $63,000 at June 30,  2007 and $61,000 at December 31, 2006                                          |       | 5,483,000               |       | 6,157,000                            |       |
| Inventories,  net                                                                                                                                                   |       | 14,919,000              |       | 12,713,000                           |       |
| Prepaid  expenses and other current assets                                                                                                                          |       | 1,373,000               |       | 1,195,000                            |       |
| Deferred  income taxes                                                                                                                                              |       | 403,000                 |       | 395,000                              |       |
| Total  current assets                                                                                                                                               |       | 23,778,000              |       | 22,297,000                           |       |
|                                                                                                                                                                |       |                    |       |                                 |       |
| Property and equipment,  net                                                                                                                                        |       | 3,227,000               |       | 3,355,000                            |       |
| Goodwill, net                                                                                                                                                       |       | 55,000                  |       | 55,000                               |       |
| Intangible assets, net                                                                                                                                              |       | 176,000                 |       | 151,000                              |       |
| Equity investments in  and advances to unconsolidated affiliates                                                                                                    |       | 1,060,000               |       | 994,000                              |       |
| Total  assets                                                                                                                                                       |       | $                       | 28,296,000 |                                 | $          | 26,852,000 |   |
|                                                                                                                                                                |       |                    |       |                                 |       |
| **Liabilities  and Shareholders’ Equity**                                                                                                                      |       |                    |       |                                 |       |
| Current liabilities:                                                                                                                                                |       |                    |       |                                 |       |
| Accounts  payable                                                                                                                                                   |       | $                       | 796,000    |                                 | $          | 1,213,000 |   |
| Accrued  liabilities                                                                                                                                                |       | 1,093,000               |       | 1,466,000                            |       |
| Total  current liabilities                                                                                                                                          |       | 1,889,000               |       | 2,679,000                            |       |
|                                                                                                                                                                |       |                    |       |                                 |       |
| Deferred income taxes                                                                                                                                               |       | 701,000                 |       | 693,000                              |       |
| Total  liabilities                                                                                                                                                  |       | 2,590,000               |       | 3,372,000                            |       |
|                                                                                                                                                                |       |                    |       |                                 |       |
| Shareholders’ equity                                                                                                                                           |       |                    |       |                                 |       |
| Common  stock, $.01 par value, 50,000,000 shares authorized, 25,580,955 and  24,509,580 issued and outstanding at June 30, 2007 and December 31, 2006, respectively |       | 255,000                 |       | 245,000                              |       |
| Additional  paid-in capital                                                                                                                                         |       | 26,947,000              |       | 25,774,000                           |       |
| Accumulated  deficit                                                                                                                                                |       | (1,496,000              | )          | (2,539,000                           | )          |
| Total  shareholders’ equity                                                                                                                                    |       | 25,706,000              |       | 23,480,000                           |       |
| Total  liabilities and shareholders’ equity                                                                                                                    |       | $                       | 28,296,000 |                                 | $          | 26,852,000 |   |

 

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(1)                                  Thecondensed consolidated balance sheet as of December 31, 2006 has been preparedusing information from the audited financial statements at that date.

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

2

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### **Alpha Pro Tech, Ltd.**

### **Consolidated Income Statements (Unaudited)**

| ** **                                                   | ** ** | **For the Three Months Ended  June 30,** | ** ** | **For the Six Months Ended  June 30,** | ** ** |
|--------------------------------------------------------------|------------|-------------------------------------------------------------------|------------|-----------------------------------------------------------------|------------|
| ** **                                                   | ** ** | **2007**                                                          | ** ** | **2006**                                                        | ** ** | **2007** | ** ** | **2006** | ** ** |
| Net sales                                                    |       | $                                                                 | 9,149,000  |                                                            | $          | 9,879,000 |   | $ | 18,193,000 |   | $ | 17,850,000 |   |
|                                                         |       |                                                              |       |                                                            |       |   |   |   |   |
| Cost of goods sold, excluding depreciation and  amortization |       | 4,880,000                                                         |       | 5,256,000                                                       |       | 9,759,000 |   | 9,586,000 |   |
|                                                         |       |                                                              |       |                                                            |       |   |   |   |   |
| Gross margin                                                 |       | 4,269,000                                                         |       | 4,623,000                                                       |       | 8,434,000 |   | 8,264,000 |   |
|                                                         |       |                                                              |       |                                                            |       |   |   |   |   |
| Expenses:                                                    |       |                                                              |       |                                                            |       |   |   |   |   |
| Selling, general and administrative                          |       | 3,385,000                                                         |       | 2,719,000                                                       |       | 6,608,000 |   | 5,214,000 |   |
| Depreciation and amortization                                |       | 119,000                                                           |       | 112,000                                                         |       | 234,000 |   | 223,000 |   |
|                                                         |       |                                                              |       |                                                            |       |   |   |   |   |
| Income from operations                                       |       | 765,000                                                           |       | 1,792,000                                                       |       | 1,592,000 |   | 2,827,000 |   |
|                                                         |       |                                                              |       |                                                            |       |   |   |   |   |
| Other income                                                 |       |                                                              |       |                                                            |       |   |   |   |   |
| Equity in income (loss) of unconsolidated affiliates         |       | 41,000                                                            |       | (10,000                                                         | )          | 66,000 |   | (20,000 | ) |
| Interest, net                                                |       | 13,000                                                            |       | 6,000                                                           |       | 29,000 |   | 11,000 |   |
|                                                         |       |                                                              |       |                                                            |       |   |   |   |   |
| Income before provision for income taxes                     |       | 819,000                                                           |       | 1,788,000                                                       |       | 1,687,000 |   | 2,818,000 |   |
|                                                         |       |                                                              |       |                                                            |       |   |   |   |   |
| Provision for income taxes                                   |       | 312,000                                                           |       | 662,000                                                         |       | 644,000 |   | 1,043,000 |   |
|                                                         |       |                                                              |       |                                                            |       |   |   |   |   |
| Net income                                                   |       | $                                                                 | 507,000    |                                                            | $          | 1,126,000 |   | $ | 1,043,000 |   | $ | 1,775,000 |   |
|                                                         |       |                                                              |       |                                                            |       |   |   |   |   |
| Basic net income per share                                   |       | $                                                                 | 0.02       |                                                            | $          | 0.05 |   | $ | 0.04 |   | $ | 0.07 |   |
|                                                         |       |                                                              |       |                                                            |       |   |   |   |   |
| Diluted net income per share                                 |       | $                                                                 | 0.02       |                                                            | $          | 0.05 |   | $ | 0.04 |   | $ | 0.07 |   |
|                                                         |       |                                                              |       |                                                            |       |   |   |   |   |
| Basic weighted average shares outstanding                    |       | 25,251,724                                                        |       | 24,092,384                                                      |       | 25,044,019 |   | 24,081,010 |   |
|                                                         |       |                                                              |       |                                                            |       |   |   |   |   |
| Diluted weighted average shares outstanding                  |       | 25,819,663                                                        |       | 24,987,217                                                      |       | 25,624,061 |   | 25,012,983 |   |

 

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

3

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### **Alpha Pro Tech, Ltd.**

### **Consolidated Statement of Shareholders’Equity (Unaudited)**

| ** **                                      | ** ** | ** **            | ** ** | **Additional** | ** ** | ** **      | ** ** | ** **  | ** ** |
|-------------------------------------------------|------------|-----------------------|------------|----------------|------------|-----------------|------------|-------------|------------|
| ** **                                      | ** ** | **Common Stock** | ** ** | **Paid-in**    | ** ** | **Accumulated** | ** ** | ** **  | ** ** |
| ** **                                      | ** ** | **Shares**            | ** ** | **Amount**     | ** ** | **Capital**     | ** ** | **Deficit** | ** ** | **Total** | ** ** |
| Balance at December 31, 2006                    |       | 24,509,580            |       | $              | 245,000    |            | $          | 25,774,000  |       | $ | (2,539,000 | ) | $ | 23,480,000 |   |
|                                            |       |                  |       |           |       |            |       |        |       |   |   |
| Share- based compensation expense               |       | —                |       | —         |       | 62,000          |       | —      |       | 62,000 |   |
|                                            |       |                  |       |           |       |            |       |        |       |   |   |
| Options exercised                               |       | 1,021,375             |       | 10,000         |       | 875,000         |       | —      |       | 885,000 |   |
|                                            |       |                  |       |           |       |            |       |        |       |   |   |
| Options forfeited                               |       | 50,000                |       | —         |       | —          |       | —      |       | — |   |
|                                            |       |                  |       |           |       |            |       |        |       |   |   |
| Income tax benefit from stock options exercised |       | —                |       | —         |       | 236,000         |       | —      |       | 236,000 |   |
|                                            |       |                  |       |           |       |            |       |        |       |   |   |
| Net income                                      |       | —                |       | —         |       | —          |       | 1,043,000   |       | 1,043,000 |   |
|                                            |       |                  |       |           |       |            |       |        |       |   |   |
| Balance at June 30, 2007                        |       | 25,580,955            |       | $              | 255,000    |            | $          | 26,947,000  |       | $ | (1,496,000 | ) | $ | 25,706,000 |   |

 

The accompanyingnotes are an integral part of these consolidated financial statements

4

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### **Alpha Pro Tech, Ltd.**

### **Consolidated Statements of Cash Flows(Unaudited)**

| ** **                                                                     | ** ** | **For the Six Months Ended  June 30,** | ** ** |
|--------------------------------------------------------------------------------|------------|-----------------------------------------------------------------|------------|
| ** **                                                                     | ** ** | **2007**                                                        | ** ** | **2006** | ** ** |
| **Cash Flows From Operating Activities:**                                      |       |                                                            |       |   |   |
| Net income                                                                     |       | $                                                               | 1,043,000  |   | $ | 1,775,000 |   |
| Adjustments to reconcile net income to net cash used  in operating activities: |       |                                                            |       |   |   |
| Share-based compensation expense                                               |       | 62,000                                                          |       | — |   |
| Depreciation and amortization                                                  |       | 234,000                                                         |       | 223,000 |   |
| Equity in (income) loss of unconsolidated affiliates                           |       | (66,000                                                         | )          | 20,000 |   |
| Changes in assets and liabilities:                                             |       |                                                            |       |   |   |
| Accounts receivable, net                                                       |       | 674,000                                                         |       | (1,655,000 | ) |
| Inventories, net                                                               |       | (2,206,000                                                      | )          | (711,000 | ) |
| Prepaid expenses and other current assets                                      |       | (178,000                                                        | )          | 154,000 |   |
| Accounts payable and accrued liabilities                                       |       | (790,000                                                        | )          | (739,000 | ) |
|                                                                           |       |                                                            |       |   |   |
| Net cash used in operating activities:                                         |       | (1,227,000                                                      | )          | (933,000 | ) |
|                                                                           |       |                                                            |       |   |   |
| **Cash Flows From Investing Activities:**                                      |       |                                                            |       |   |   |
| Purchase of property and equipment                                             |       | (94,000                                                         | )          | (196,000 | ) |
| Purchase of intangible assets                                                  |       | (37,000                                                         | )          | (34,000 | ) |
|                                                                           |       |                                                            |       |   |   |
| Net cash used in investing activities                                          |       | (131,000                                                        | )          | (230,000 | ) |
|                                                                           |       |                                                            |       |   |   |
| **Cash Flows From Financing Activities:**                                      |       |                                                            |       |   |   |
| Income tax benefit from stock options exercised                                |       | 236,000                                                         |       | — |   |
| Proceeds from the exercise of stock options                                    |       | 885,000                                                         |       | 349,000 |   |
| Net cash provided by financing activities                                      |       | 1,121,000                                                       |       | 349,000 |   |
|                                                                           |       |                                                            |       |   |   |
| Decrease in cash during the period                                             |       | (237,000                                                        | )          | (814,000 | ) |
|                                                                           |       |                                                            |       |   |   |
| Cash and cash equivalents, beginning of period                                 |       | 1,837,000                                                       |       | 1,163,000 |   |
| Cash and cash equivalents, end of period                                       |       | $                                                               | 1,600,000  |   | $ | 349,000 |   |

 

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

5

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### **Alpha Pro Tech, Ltd.**

### **Notes to Consolidated Financial Statements(Unaudited)**

**1.****                                      TheCompany**

Alpha Pro Tech,Ltd. (Alpha ProTech, the Company) is in the business of protecting people,products and environments.  The Companyaccomplishes this by developing, manufacturing and marketing a line ofdisposable protective apparel for the cleanroom, industrial and pharmaceuticalmarkets, a line of infection control products for the medical and dentalmarkets and a line of construction weatherization products.  The disposable protective apparel consists ofa complete line of shoecovers, bouffant caps, coveralls, gowns, frocks and labcoats. The infection control line of products includes a line of face masks andeye shields.  The line of constructionsupply weatherization products consists of house wrap, synthetic roofunderlayment and mold resistant framing sealant.  The Company also manufactures and distributesa line of medical bed pads and accessories as well as a line of pet beds.  The Company’s products are sold both underthe “Alpha Pro Tech” brand name as well as under private label and arepredominantly sold in the United States of America.

**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, 2006, which are included in theCompany’s Annual Report on Form 10-K for the year ended December 31, 2006 (“200610-K”). The results of operations for the six months ended June 30, 2007 arenot necessarily indicative of the results to be expected for the full year. Theconsolidated balance sheet at December 31, 2006 was extracted from the auditedconsolidated financial statements contained in the 2006 10-K and does notinclude all disclosures required by accounting principles generally accepted inthe United States of America for annual consolidated financial statements.

**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 Company 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.  During2006, 490,000 stock options were granted under the option plan.  During the first six months of 2007, therewere no stock options granted under the option plan. The Company recognized$62,000 in share-based compensation expense in its consolidated financialstatements for the six months ended June 30, 2007 related to previously issuedoptions.

Stock options to purchase1,510,000 and 2,505,000 shares of common stock were outstanding at June 30,2007 and 2006, respectively. Of these outstanding stock options, all of theoptions to purchase common stock at June 30, 2007 and 2006 were included in thecomputation of diluted earnings per share because the exercise prices of thestock options were less than the average share price of the Company’s commonstock and, therefore, the effect would have been dilutive.

6

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### **Alpha Pro Tech, Ltd.**

### **Notes to Consolidated Financial Statements(Unaudited)**

The Company used theBlack-Scholes option pricing model to value the options.  The table below presents the weighted averageexpected life in years.  In March 2005,the Securities and Exchange Commission (the “SEC”) issued Staff AccountingBulletin No. 107 (“SAB 107”) regarding the SEC’s interpretation of SFAS 123Rand the valuation of share-based payments for public companies. The Companyapplied the provisions of SAB 107 in its adoption of SFAS 123R.The Company usedSAB 107’s simplified method for estimating the expected life of theoptions.  The risk-free interest rate forperiods within the contractual life of the award is based on the US Treasuryyield curve in effect at the time of grant. The expected volatility is based onhistorical volatility of the expected life in years.

Thefollowing table summarizes stock option activity during the six months endedJune 30, 2007:
|                                           | ** ** | **Options** | ** ** | **Weighted –  Average  Exercise  Price** | ** ** | **Weighted –  Average  Remaining  Contractual  Term (in  years)** | ** ** | **Aggregate  Intrinsic  Value** | ** ** |
|-------------------------------------------|------------|-------------|------------|----------------------------------------------------|------------|----------------------------------------------------------------------------------|------------|---------------------------------|------------|
| Options  outstanding at December 31, 2006 |       | 2,581,000   |       | $                                                  | 1.21       |                                                                             | 2.77       |                            | $          | 4,100,00 |   |
| Exercised                                 |       | (1,021,000  | )          | 0.87                                               |       |                                                                             |       |                            |       |
| Granted                                   |       | —      |       | —                                             |       | —                                                                           |       | —                          |       |
| Forfeited or  expired                     |       | (50,000     | )          | —                                             |       | —                                                                           |       | —                          |       |
| Options  outstanding at June 30, 2007     |       | 1,510,000   |       | $                                                  | 1.42       |                                                                             | 3.71       |                            | $          | 1,981,000 |   |
| Options exercisable at  June 30, 2007     |       | 1,070,000   |       | $                                                  | 1.19       |                                                                             | 3.53       |                            | $          | 1,650,000 |   |

 

The intrinsic value isthe amount by which the market value of the underlying common stock exceeds theexercise price of the respective stock option. The intrinsic value of stockoptions exercised during the six months ended June 30, 2007 was $1,856,000.

As of June 30, 2007$293,000 of total unrecognized compensation cost related to stock options isexpected to be recognized over a weighted average period of 2.20 years. Cashreceived from options exercised for the six months ended June 30, 2007 was$885,000.

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

In September 2006,the SEC issued Staff Accounting Bulletin No. 108, “Considering the Effects ofPrior Year Misstatements when Quantifying Misstatements in Current YearFinancial Statements” (“SAB 108”). SAB 108 provides guidance on how prior yearmisstatements should be taken into consideration when quantifying misstatementsin current year financial statements for purposes of determining whether thecurrent year’s financial statements are materially misstated. SAB 108 permitsregistrants to record the cumulative effect of initial adoption by recordingthe necessary “correcting” adjustments to the carrying values of assets andliabilities as of the beginning of that year with the offsetting adjustmentrecorded to the opening balance of retained earnings only if material under thedual method. SAB 108 is effective for fiscal years ending on or after November15, 2006. The adoption of SAB 108 did not have a material impact on the Company’sfinancial condition or results of operations.

The FinancialAccounting Standards Board (“FASB”) issued FASB Interpretation No. 48, “Accountingfor Uncertainty in Income Taxes” (“FIN 48”) in June 2006. The interpretationclarifies

7

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### **Alpha Pro Tech, Ltd.**

### **Notes to Consolidated Financial Statements(Unaudited)**

the accounting foruncertainty in income taxes recognized in the Company’s financial statements inaccordance with SFAS No. 109, “Accounting for Income Taxes.”  On January1, 2007, the Company adopted the provisions of FIN 48.  The Company doesnot have any uncertain tax positions which require recognition under thecriteria established by FIN 48.  The amount of unrecognized tax benefitsdid not change during the six months ended June 30, 2007.

The Company andits subsidiaries file income tax returns in the U.S. federal jurisdiction, andvarious states and foreign jurisdictions.  The Company is no longersubject to U.S. federal, state and local, income tax examination by taxauthorities for years before 2002.  The Company is not currently underexamination in any of its jurisdictions in which it operates.

In September 2006,the FASB issued SFAS No. 157, “Fair Value Measurements.” SFAS No. 157 definesfair value, establishes a framework for measuring fair value in generallyaccepted accounting principles, and expands disclosures about fair valuemeasurements.  This statement addresseshow to calculate fair value measurements required or permitted under otheraccounting pronouncements.  Accordingly,this statement does not require any new fair value measurements.  However, for some entities, the applicationof this statement will change current practice. SFAS No. 157 is effective for the Company beginning January 1,2008.  The Company is currentlyevaluating the impact of this standard.

In February 2007,the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets andFinancial Liabilities—Including an amendment of FASB Statement No. 115.” SFAS No. 159 permits entities to choose to measure many financialinstruments and certain other items at fair value. The objective is to improvefinancial reporting by providing entities with the opportunity tomitigate volatility in reported earnings caused by measuring related assets andliabilities differently without having to apply complex hedge accountingprovisions. This Statement is expected to expand the use of fair valuemeasurement, which is consistent with the FASB’s long-term measurementobjectives for accounting for financial instruments.  SFAS No. 159is effective as of the beginning of an entity’s first fiscal yearthat begins after November 15, 2007.  The Company does not expect SFAS No.159 to have a material impact on the Company’s consolidated financial position,results of operations or cash flows.

**5.****                                      Inventories**

Inventories consist ofthe following:
|                                                               | ** ** | **June 30,  2007** | ** ** | **December 31,  2006** | ** ** |
|---------------------------------------------------------------|------------|-------------------------|------------|-----------------------------|------------|
| Raw materials                                                 |       | $                       | 10,149,000 |                        | $          | 9,632,000 |   |
| Work in process                                               |       | 384,000                 |       | 182,000                     |       |
| Finished goods                                                |       | 4,698,000               |       | 3,217,000                   |       |
|                                                          |       | 15,231,000              |       | 13,031,000                  |       |
| Less reserve for  slow-moving, obsolete or unusable inventory |       | (312,000                | )          | (318,000                    | )          |
|                                                          |       | $                       | 14,919,000 |                        | $          | 12,713,000 |   |

 

8

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### **Alpha Pro Tech, Ltd.**

### **Notes to Consolidated Financial Statements(Unaudited)**

**6.****                    Investment inand Advances to Unconsolidated Affiliates**

On June 14, 2005, Alpha ProTech Engineered Products,Inc. entered into a joint venture with a manufacturer in India for theproduction of building products.  Underterms of the joint venture agreement, a private company, Harmony PlasticsPrivate Limited (“Harmony”), was created with ownership interests of 41.66% byAlpha ProTech Engineered Products, Inc. and 58.34% by Maple Industries andAssociates.  Alpha ProTech EngineeredProducts, Inc. contributed $508,000 for share capital and Maple Industries andAssociates contributed $708,000.

This joint venture positions Alpha ProTech EngineeredProducts to respond to current and expected increased product demand for housewrap and synthetic roofing underlayment, and future capacity for sales ofspecialty roofing component products and custom products for industrialapplications requiring high quality extrusion coated fabrics.

The capital from the initial funding along with a bankloan, which is guaranteed exclusively by Maple Industries and Associates andthe assets of Harmony Plastics Private Limited, was utilized to purchase anexisting 33,000 square–foot manufacturing facility in India; this facilityincludes manufacturing equipment necessary to produce synthetic roofunderlayment.  Harmony has also built anew 60,000 square—foot facility for the manufacturing of house wrap and otherbuilding products.

The Company is subject to the provisions of FIN 46which defines the criteria by which the Company determines the properaccounting for its investments in related entities.  Specifically, FIN 46 requires the Company toassess whether or not related entities are variable interest entities (VIEs), asdefined.  For those related entities thatqualify as variable interest entities, FIN 46 requires the Company to determinewhether or not the Company is the primary beneficiary of the VIE, and if so, toconsolidate the VIE.

The Company has determined that Harmony is not a VIEand is therefore considered to be an unconsolidated affiliate.

The Company records its investment in Harmony as “Equityinvestments in and advances to unconsolidated affiliates” on the accompanyingConsolidated Balance Sheets.  The Companyrecords its equity interest in Harmony’s results of operations as “Equity inincome (loss) of unconsolidated affiliates” on the accompanying ConsolidatedIncome Statements.

The Company reviews its investment in Harmony forimpairment in accordance with APB No. 18, “The Equity Method of Accounting forInvestments in Common Stock.” APB No. 18 requires recognition of a loss whenthe decline in an investment is other-than-temporary.  In determining whether the decline is other-than-temporary,the Company considers the nature of the industry in which Harmony operates,their historical performance, their performance in relation to their peers andthe current economic environment.

Alpha ProTech Engineered Products initially invested$1,450,000 in the joint venture; $508,000 for share capital and $942,000 as along term advance.  Fifty percent of the$942,000 long term advance for materials is to be repaid over a six year termcommencing in July 2006 and the balance is to be paid in the seventh year.  During the third and fourth quarter of 2006,Harmony repaid $39,000 in scheduled payments and $461,000 in additionalpayments for a total of $500,000, leaving a balance of $442,000.  Harmony did not make any further payments inthe first or second quarter of 2007. Effective April 2006, interest of 3.5% is to be paid annually in Januaryon this advance and $19,000 was paid during the first quarter of 2007.

Harmony commenced operations in August of 2005.  For the six months ended June 30, 2007 and2006, Alpha ProTech Engineered Products purchased $1,735,000 and $3,618,000,respectively from Harmony.  For the sixmonths ended June 30, 2007, the Company recorded equity income inunconsolidated affiliates of $66,000. For the six months ended June 30, 2006, the Company

9

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### **Alpha Pro Tech, Ltd.**

### **Notes to Consolidated Financial Statements(Unaudited)**

recorded an equity loss in unconsolidated affiliatesof $20,000.  As of June 30, 2007, theCompany’s investment in Harmony is $1,060,000 which comprises its original$1,450,000 investment and cumulative equity in income of unconsolidatedaffiliates of $110,000 less $500,000 in repayments of the advance.

**7. Accrued Liabilities**

Accrued liabilities consist of the following:

|                               | ** ** | **June 30,  2007** | ** ** | **December  31, 2006** | ** ** |
|-------------------------------|------------|-------------------------|------------|------------------------|------------|
| Payroll accrual               |       | $                       | 208,000    |                   | $          | 199,000 |   |
| Commission and  bonus accrual |       | 362,000                 |       | 986,000                |       |
| Accrued  professional fees    |       | 145,000                 |       | 153,000                |       |
| Accrued rebates  and other    |       | 378,000                 |       | 128,000                |       |
|                          |       | $                       | 1,093,000  |                   | $          | 1,466,000 |   |

 

**8. Basic and 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,** | ** ** |
|---------------------------------------------|------------|-------------------------------------------------------------------|------------|---------------------------------------------------------------------|------------|
| ** **                                  | ** ** | **2007**                                                          | ** ** | **2006**                                                            | ** ** | **2007** | ** ** | **2006** | ** ** |
|                                        |       |                                                              |       |                                                                |       |   |   |   |   |
| Net income  (Numerator)                     |       | $                                                                 | 507,000    |                                                                | $          | 1,126,000 |   | $ | 1,043,000 |   | $ | 1,775,000 |   |
|                                        |       |                                                              |       |                                                                |       |   |   |   |   |
| Shares  (Denominator):                      |       |                                                              |       |                                                                |       |   |   |   |   |
|                                        |       |                                                              |       |                                                                |       |   |   |   |   |
| Basic weighted average shares outstanding   |       | 25,251,724                                                        |       | 24,092,384                                                          |       | 25,044,019 |   | 24,081,000 |   |
|                                        |       |                                                              |       |                                                                |       |   |   |   |   |
| Add: Dilutive effect of stock options       |       | 567,939                                                           |       | 894,833                                                             |       | 580,042 |   | 931,973 |   |
|                                        |       |                                                              |       |                                                                |       |   |   |   |   |
| Diluted weighted average shares outstanding |       | 25,819,663                                                        |       | 24,987,217                                                          |       | 25,624,061 |   | 25,012,983 |   |
|                                        |       |                                                              |       |                                                                |       |   |   |   |   |
| Net income per  share:                      |       |                                                              |       |                                                                |       |   |   |   |   |
|                                        |       |                                                              |       |                                                                |       |   |   |   |   |
| Basic                                       |       | $                                                                 | 0.02       |                                                                | $          | 0.05 |   | $ | 0.04 |   | $ | 0.07 |   |
|                                        |       |                                                              |       |                                                                |       |   |   |   |   |
| Diluted                                     |       | $                                                                 | 0.02       |                                                                | $          | 0.05 |   | $ | 0.04 |   | $ | 0.07 |   |

 

10

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### **Alpha Pro Tech, Ltd.**

### **Notes to Consolidated Financial Statements(Unaudited)**

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

The Companyoperates through four segments:

DisposableProtective Apparel Products: consisting of a line of disposable protectiveclothing such as shoecovers (including the Aqua Trak® and spunbond shoecovers),bouffant caps, coveralls, frocks, lab coats and hoods, for the pharmaceutical,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 UnrealLambskin® is used to produce medical bed pads, which prevent decubitus ulcersor bedsores on long term care patients. The Unreal Lambskin® is also used to manufacture bedrail pads, knee andelbow protectors, as well as wheelchair accessories. The Company alsomanufactures a line of pet beds and pet toy accessories with this material.

Engineered Products: consisting of a line ofconstruction supply weatherization.  Theconstruction supply weatherization products consist of building wrap, syntheticroof underlayment and antimicrobial mold resistant framing sealant.  Of note, the Company’s equity in income(loss) of unconsolidated affiliates (Harmony) is included in the total segmentincome 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 2006 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 segment for the three and sixmonths ended June 30, 2007 and 2006:
|                                | ** ** | **For the Three Months Ended  June 30,** | ** ** | **For the Six Months Ended  June 30,** | ** ** |
|--------------------------------|------------|-------------------------------------------------------------------|------------|-----------------------------------------------------------------|------------|
| ** **                     | ** ** | **2007**                                                          | ** ** | **2006**                                                        | ** ** | **2007** | ** ** | **2006** | ** ** |
|                           |       |                                                              |       |                                                            |       |   |   |   |   |
| Disposable  Protective Apparel |       | $                                                                 | 5,838,000  |                                                            | $          | 5,518,000 |   | $ | 11,214,000 |   | $ | 9,588,000 |   |
| Infection  Control             |       | 1,553,000                                                         |       | 1,833,000                                                       |       | 3,564,000 |   | 3,516,000 |   |
| Engineered  Products           |       | 1,530,000                                                         |       | 2,210,000                                                       |       | 2,846,000 |   | 3,992,000 |   |
| Extended Care                  |       | 228,000                                                           |       | 318,000                                                         |       | 569,000 |   | 754,000 |   |
|                           |       |                                                              |       |                                                            |       |   |   |   |   |
| Consolidated total net  sales  |       | $                                                                 | 9,149,000  |                                                            | $          | 9,879,000 |   | $ | 18,193,000 |   | $ | 17,850,000 |   |

 

11

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### **Alpha Pro Tech, Ltd.**

### **Notes to Consolidated Financial Statements(Unaudited)**

The following table shows the reconciliation of total segment income tototal consolidated net income for the three and six months ended June 30, 2007and 2006:
|                                          | ** ** | **For the Three Months Ended  June 30,** | ** ** | **For the Six Months Ended  June 30,** | ** ** |
|------------------------------------------|------------|-------------------------------------------------------------------|------------|-----------------------------------------------------------------|------------|
| ** **                               | ** ** | **2007**                                                          | ** ** | **2006**                                                        | ** ** | **2007** | ** ** | **2006** | ** ** |
|                                     |       |                                                              |       |                                                            |       |   |   |   |   |
| Disposable  Protective Apparel           |       | $                                                                 | 2,119,000  |                                                            | $          | 2,083,000 |   | $ | 3,987,000 |   | $ | 3,453,000 |   |
| Infection  Control                       |       | 665,000                                                           |       | 895,000                                                         |       | 1,511,000 |   | 1,688,000 |   |
| Engineered  Products                     |       | (111,000                                                          | )          | 290,000                                                         |       | (434,000 | ) | 415,000 |   |
| Extended Care                            |       | (15,000                                                           | )          | 25,000                                                          |       | (3,000 | ) | 83,000 |   |
|                                     |       |                                                              |       |                                                            |       |   |   |   |   |
| Total segment  income                    |       | 2,658,000                                                         |       | 3,293,000                                                       |       | 5,061,000 |   | 5,639,000 |   |
| Unallocated  corporate overhead expenses |       | (1,839,000                                                        | )          | (1,505,000                                                      | )          | (3,374,000 | ) | (2,821,000 | ) |
| Provision for  income taxes              |       | (312,000                                                          | )          | (662,000                                                        | )          | (644,000 | ) | (1,043,000 | ) |
|                                     |       |                                                              |       |                                                            |       |   |   |   |   |
| Consolidated net income                  |       | $                                                                 | 507,000    |                                                            | $          | 1,126,000 |   | $ | 1,043,000 |   | $ | 1,775,000 |   |

 

12

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### **Alpha Pro Tech, Ltd.**

**ITEM 2     MANAGEMENT’SDISCUSSION AND ANALYSIS OF FINANCIAL  CONDITIONAND 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**

Thisreport on Form 10-Q contains “forward-looking statements” that are madepursuant to the safe-harbor provisions of the Private Securities LitigationReform Act of 1995. Forward-looking statements include statements concerningplans, objectives, goals, strategies, future events, future revenues orperformance, capital expenditures and other information that is not historicalinformation. When used in this report, the words “estimates,” “expects,” “anticipates,”“forecasts,” “plans,” “intends,” “believes” and variations of such words orsimilar expressions are intended to identify forward-looking statements.Additional forward-looking statements may be made by us from time to time. Allsuch subsequent forward-looking statements, whether written or oral and whethermade by or on behalf of us, are also expressly qualified by these cautionarystatements.

Ourforward-looking statements are based upon our current expectations and variousassumptions. Our expectations, beliefs and projections are expressed in goodfaith and we believe there is a reasonable basis for them, including withoutlimitation, management’s examination of historical operating trends, datacontained in our records and other data available from third parties. However,we cannot assure you that management’s expectations; beliefs and projectionswill result or be achieved or accomplished. Our forward-looking statementsapply only as of the date made. Except as required by law, we undertake noobligation to publicly update or revise forward-looking statements which may bemade to reflect events or circumstances after the date made or to reflect theoccurrence of unanticipated events.

**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-K filedsince our most recent Annual Report on Form 10-K and any amendments to suchreports as soon as reasonably practicable following the electronic filing ofsuch report with the SEC. In addition, we provide electronic or paper copies ofour 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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**Alpha Pro Tech, Ltd.**

Revenue Recognition: Forsales transactions, we comply with the provisions of the SEC’s Staff AccountingBulletin (“SAB”) No. 104, “Revenue Recognition,” which states that revenueshould be recognized when the following revenue recognition criteria are met:(1) persuasive evidence of an arrangement exists; (2) the product has beenshipped and the customer takes ownership and assumes the risk of loss; (3) theselling price is fixed or determinable; and (4) collection of the resultingreceivable is reasonably assured. These criteria are satisfied upon shipment ofproduct 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 BasedCompensation:  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. During 2006, 490,000 stock options were grantedunder the option plan.  No options weregranted during the six months ended June 30, 2007.  We recognized $62,000 in share-basedcompensation expense in our consolidated financial statements for the sixmonths ended June 30, 2007 related to previously issued options.

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 on historicaldata and no dividend yield, as management currently does not intend to paydividends in the near future. The Black-Scholes option valuation model wasdeveloped for use in estimating the fair value of traded options that have novesting 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**

AlphaPro Tech is in the business of protecting people, products and environments. Weaccomplish this by developing, manufacturing and marketing a line of high-valuedisposable protective apparel and infection control products for the cleanroom,industrial, pharmaceutical, medical and dental markets. We also manufacture aline of construction weatherization products and a line of medical bed pads andaccessories as well as a line of pet beds. Our products are sold both under the “Alpha Pro Tech” brand name as wellas under private label.

Our products areclassified into six groups:  Disposableprotective apparel, consisting of a line of shoecovers, bouffant caps, gowns,coveralls and lab coats; infection control products, consisting of a line offace masks and eye shields; extended care products, consisting of a line ofmedical bed pads, wheelchair covers, geriatric chair surfaces, operating roomtable surfaces and pediatric surfaces;  aline of pet beds; and construction weatherization products, consisting of housewrap and synthetic roof underlayment.

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

14

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**Alpha Pro Tech, Ltd.**

face masks and eyeshields; the Extended Care segment, consisting of extended care products,namely medical bed pads and pet beds; and the Engineered Products segment,consisting of construction weatherization products such as house wrap andsynthetic roof underlayment.

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 dentaldistributors, pet stores and pet distributors and construction supply androofing distributors.

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.

# **RESULTS OF OPERATIONS**

## **Three and six months ended June 30, 2007,compared to the three and six months ended June 30, 2006**

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,** | ** ** |
|-------------------------------------------|------------|-------------------------------------------------------------------|------------|-----------------------------------------------------------------|------------|
| ** **                                | ** ** | **2007**                                                          | ** ** | **2006**                                                        | ** ** | **2007** | ** ** | **2006** | ** ** |
| Sales                                     |       | 100.0                                                             | %          | 100.0                                                           | %          | 100.0 | % | 100.0 | % |
|                                      |       |                                                              |       |                                                            |       |   |   |   |   |
| Gross profit                              |       | 46.7                                                              |       | 46.8                                                            |       | 46.4 |   | 46.3 |   |
|                                      |       |                                                              |       |                                                            |       |   |   |   |   |
| Selling, general  and administrative      |       | 37.0                                                              |       | 27.5                                                            |       | 36.3 |   | 29.2 |   |
|                                      |       |                                                              |       |                                                            |       |   |   |   |   |
| Income from  operations                   |       | 8.4                                                               |       | 18.1                                                            |       | 8.6 |   | 15.8 |   |
|                                      |       |                                                              |       |                                                            |       |   |   |   |   |
| Income before  provision for income taxes |       | 9.0                                                               |       | 18.1                                                            |       | 9.3 |   | 15.8 |   |
|                                      |       |                                                              |       |                                                            |       |   |   |   |   |
| Net income                                |       | 5.5                                                               |       | 11.4                                                            |       | 5.7 |   | 9.9 |   |

 

**Sales.** Consolidated sales for the quarter ended June 30, 2007 decreased to$9,149,000 from $9,879,000 for the quarter ended June 30, 2006, representing adecrease of $730,000 or 7.4%.  Weattribute the decrease to decreased Engineered Products segment sales of$680,000, decreased Infection Control segment sales of $280,000 and decreasedsales from our Extended Care segment of $90,000, partially offset by increasedDisposable Protective Apparel segment sales of $320,000

Sales for the DisposableProtective Apparel segment for the quarter ended June 30, 2007 increased by$320,000 or 5.8% to $5,838,000 compared to $5,518,000 for the same period of2006.  The increase is primarily relatedto increased sales to cleanroom distributors other than our largestdistributor.  In September 2006, weannounced the signing of a new distribution contract with our largestdistributor in which they retained the exclusive right to sell our privatelabel Critical Cover® products, but have also allowed us the right to sellAlpha Pro Tech branded products to other distributors.  This will enable us to gain additional marketshare as we develop relationships with other industrial and cleanroomdistributors.

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**Alpha Pro Tech, Ltd.**

We are encouraged by theacceptance of our product line by our expanded distribution channel and expectcontinued growth in the coming quarters.

Infection Control segmentsales for the quarter ended June 30, 2007 decreased by $280,000 or 15.3% to$1,553,000 compared to $1,833,000 for the same period of 2006.  Mask sales in this segment were down by$312,000 and shield sales were up by $32,000. Mask sales this quarter were down primarily due to lower sales of ourN-95 NIOSH approved Respirator mask as recent concerns about Avian Flu haveabated and were much stronger during the second quarter of 2006.  Unless worldwide concerns about Avian Flu increase,we expect N-95 Respirator mask sales to be weaker in 2007 than in 2006.

Engineered Productssegment sales for the quarter ended June 30, 2007 decreased by $680,000 or30.8% to $1,530,000 compared to $2,210,000 for the same period of 2006.  The decrease is the result of a change indistribution channel strategy in which we decided to move forward on a nonexclusive basis with our distributor, which led them to source product fromother suppliers and to ultimately discontinue purchasing from us.  The decrease is primarily due to a 50.5% decreasein sales of house wrap, partially offset by an 18.9% increase in sales of roofunderlayment.  The breakdown of theEngineered Products sales is as follows for the quarter ended June 30, 2007:52% roof underlayment and 48% house wrap.  Our marketing efforts are primarily focused on our REX SynfeltTM roofunderlayment and we expect continued significant growth from this productline.  Our house wrap sales should startto improve as we sign up new distributors and as our vendor agreement with ABCSupply Co. and its division, Amcraft Building Products starts to gain traction.

Sales from our ExtendedCare segment, which includes a line of medical bed pads as well as pet beds,decreased by $90,000 or 28.3% to $228,000 for the quarter ended June 30, 2007from $318,000 for the quarter ended June 30, 2006.  The decrease in sales is primarily the resultof lower medical bed pad sales.  Thisline of products is not expected to be a growth segment for us.

Consolidatedsales for the six months ended June 30, 2007 increased to $18,193,000 from$17,850,000 for the six months ended June 30, 2006, representing an increase of$343,000 or 1.9%.  We attribute theincrease to increased Disposable Protective Apparel segment sales of $1,626,000and increased Infection Control segment sales of $48,000, partially offset bydecreased Engineered Products segment sales of $1,146,000 and decreased salesfrom our Extended Care segment of $185,000.

Sales for the DisposableProtective Apparel segment for the six month ended June 30, 2007 increased by$1,626,000 or 17.0% to $11,214,000 compared to $9,588,000 for the same periodof 2006.   The increase is primarilyrelated to increased sales to cleanroom distributors and partly due toincreased sales of our largest distributor.  We anticipate long-term growth from this segment.

Infection Control segmentsales for the six months ended June 30, 2007 increased slightly by $48,000 or1.4% to $3,564,000 compared to $3,516,000 for the same period of 2006.  Shield sales in this segment were up by $620,000and mask sales were down by $572,000. Shield sales were strong primarily due to a large non-recurring order inthe first quarter of 2007 and mask sales were down primarily due to lower salesof our N-95 NIOSH approved Respirator mask as concerns about Avian Flu haveabated.

Engineered Productssegment sales for the six months ended June 30, 2007 decreased by $1,146,000 or28.7% to $2,846,000 compared to $3,992,000 for the same period of 2006.  As noted above, the decrease is the result ofa change in distribution channel strategy in which we decided to move forwardon a non exclusive basis with our distributor, which led them to source productfrom other suppliers and to ultimately discontinue purchasing from us.  The decrease is primarily due to a 38.8%decrease in sales of house wrap, partially offset by a small increase of 1.4%in sales of roof underlayment.  Thebreakdown of the Engineered Products segment is as follows for the six monthsended June 30, 2007: 61% house wrap and 39% roof underlayment.

We believe that our newdistribution channel strategy will significantly broaden our marketopportunities for synthetic roof underlayment and house wrap.  During 2007, we have increased our salesteam, launched a marketing campaign to introduce our new synthetic roof underlaymentunder the name of

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**Alpha Pro Tech, Ltd.**

REX SynfeltTM and launchedour new house wrap under the name of REX WrapTM. We also attended a number of trade shows and are very encouraged by theresponse to our product line.  In the shortterm, due to this change in distribution channel strategy, we anticipate thatour sales will likely continue to be affected as compared to 2006 but, we doanticipate significant growth in 2008.

Sales from our ExtendedCare segment, which includes a line of medical bed pads as well as pet beds,decreased by $185,000 or 24.5% to $569,000 for the six months ended June 30,2007 from $754,000 for the six months ended June 30, 2006.  The decrease in sales is primarily the resultof lower medical bed pad sales.

**Gross Profit**   Gross profit decreased by 7.7% to $4,269,000for the quarter ended June 30, 2007 from $4,623,000 for the same period in2006.  Gross profit margin was relativelyflat at 46.7% for the quarter ended June 30, 2007 as compared to 46.8% for thesame period in 2006.  Gross profit marginwas also relatively flat at 46.4% for the six months ended June 30, 2007 from46.3% for the same period in 2006.

Gross profit margin onthe Engineered Products segment improved in the second quarter of 2007 and forthe six months ended June 30, 2007 as compared to the same periods of 2006.  Although the gross profit margin in theEngineered Products segment is lower than the overall company margin, we expectit to continue to improve.

**Selling, General andAdministrative Expenses.** Selling, general and administrative expenses increased by $666,000 or24.5% to $3,385,000 for the quarter ended June 30, 2007 from $2,719,000 for thequarter ended June 30, 2006.  Thisincrease is primarily due to increased expenses for Engineered Products and aseverance agreement.

The biggest increase inselling, general and administrative expenses is primarily related to increasedEngineered Products expenses of $359,000. This can be broken down as follows: a $93,000 increase in employeecompensation, a $41,000 increase in marketing expenses in relation to the launchour new line of synthetic roof underlayment and house wrap under the names REXSynFeltTM and REX WrapTM, a $47,000 increase in tradeshow expenses, an increaseof $29,000 in advertising in relation to REX SynFeltTM, a $27,000 increase incommission for independent sales reps,  a$19,000 increase in business taxes, a $11,000 increase in travel costsprimarily related to our increased sales team, a $7,000 increase in researchand development expenses, a $17,000 increase in insurance, a $17,000 increasein sample expense, an $8,000 increase in professional fees and a $43,000increase in miscellaneous expenses.

The other increase inselling, general and administrative expenses is a $320,000 severance agreementfor our previous Senior VP of Manufacturing in April 2007.  This position was filled by Danny Montgomerywho has taken on this responsibility in addition to his roll as Senior VP ofEngineered products.

Included in this filingare references to certain financial performance measures excluding the effectof the aforementioned severance agreement.  These are noted to be non-GAAP measures which are provided in order torepresent how the Board of Directors and management analyze the operatingresults for the period when comparing it to prior periods.  These measures are not intended to be asubstitute for the corresponding GAAP measures in determining our operatingperformance in accordance with generally accepted accounting principles.  The only reconciling item noted between thesemeasures and those calculated under GAAP is the exclusion of the aforementionedseverance transaction.

Excluding the severanceagreement, expenses in the second quarter of 2007 were $3,065,000 an increaseof $346,000 or 12.3% compared to the same quarter of 2006, and a decrease of $158,000or 4.9% from the first quarter of 2007.

As a percentage of netsales, selling, general and administrative expenses increased to 37.0% for thequarter ended June 30, 2007 from 27.5% for the same period in 2006.  Excluding the severance agreement, selling,general and administrative expenses increased to 33.5% for the quarter endedJune 30, 2007 from 27.5% for the same period in 2006.  We believe that we have built theinfrastructure

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**Alpha Pro Tech, Ltd.**

required to substantiallygrow our business and as our revenue grows in the coming year our expenses areexpected to decrease as a percentage of sales.

Selling, general andadministrative expenses increased by $1,394,000 or 26.7% to $6,602,000 for thesix months ended June 30, 2007 from $5,214,000 for the six months ended June30, 2006.  The increase in selling,general and administrative expenses primarily consists of increased EngineeredProducts expenses of $746,000, a severance agreement of $320,000, increasedpayroll costs of $147,000, increased travel costs of $110,000 and increasedprofessional fees of $52,000.  As apercentage of net sales, selling, general and administrative expenses increasedto 36.3% for the six months ended June 30, 2007 from 29.2% for the same periodin 2006.

Excluding the severanceagreement, expenses for the six months ended June 30, 2007 were $6,288,000 anincrease of $1,074,000 or 20.6% compared to the same period of 2006.  Excluding the severance agreement, selling,general and administrative expenses increased to 34.6%, as a percentage of netsales, for the six months ended June 30, 2007 from 29.2% for the same period in2006

The chief executiveofficer and president are each entitled to a bonus equal to 5% of the pre-taxprofits of the Company.  Bonuses of$92,000 were accrued for the quarter ended June 30, 2007 as compared to$199,000 in the same period of 2006. Total bonuses of $188,000 were accrued forthe six months ended June 30, 2007 as compared to $313,000 in the same periodof 2006.

**Income from Operations.**  Income from operations decreased by$1,027,000 or 57.3%, to $765,000 for the quarter ended June 30, 2007 ascompared to income from operations of $1,792,000 for the quarter ended June 30,2006.  The decrease in income fromoperations is due to a decrease in gross profit of $354,000 and an increase inselling, general and administrative expenses of $666,000.

Income from operationsdecreased by $1,235,000 or 43.7%, to $1,598,000 for the six months ended June30, 2007 as compared to income from operations of $2,827,000 for the six monthsended June 30, 2006.  The decrease inincome from operations is due to an increase in selling, general andadministrative expenses of $1,394,000, partially offset by a decrease in grossprofit of $170,000.

**Equity in income (loss) ofunconsolidated affiliates.** On June 14, 2005 Alpha ProTech Engineered Products, Inc. entered into ajoint venture with a manufacturer in India for the production of buildingproducts.  Under terms of the jointventure agreement, a private company, Harmony Plastics Private Limited(Harmony), was created with ownership interests of 41.66% by Alpha ProTechEngineered Products, Inc. and 58.34% by Maple Industries and Associates. AlphaProTech Engineered Products invested $1,450,000 in the joint venture; $508,000for share capital and $942,000 in a long term advance.  Effective April 2006, interest of 3.5% ispaid on this advance. Contractually, half of this $942,000 advance is to berepaid monthly over a six year term which commenced in July 2006 with the balanceto be paid in the seventh year.  However,we expect that this advance will be paid in advance of the contractual term asHarmony paid $500,000 towards the advance in the second half of 2006.

We are subject to theprovisions of FASB Interpretation (“FIN”) No. 46, “Consolidation of VariableInterest Entities—an interpretation of ARB No. 51,” which redefines thecriteria by which we determine the proper accounting for our investments inrelated entities.  Specifically, FIN 46requires us 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 requires usto determine whether or not we are the primary beneficiary of the VIE, and ifso, to consolidate the VIE.  We havedetermined that Harmony is not a VIE and is therefore considered to be anunconsolidated affiliate.

Harmony commencedoperations in August of 2005.  For thequarter ended June 30, 2007, we recorded equity in income of unconsolidatedaffiliates of $41,000 as compared to equity in loss of unconsolidatedaffiliates of $10,000 for the same period of 2006.  For the six months ended June 30, 2007, werecorded equity in income of unconsolidated affiliates of $66,000 as comparedto equity in loss of unconsolidated affiliates of $20,000 for the same periodof 2006.

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**Alpha Pro Tech, Ltd.**

**Income before Provision forIncome Taxes.**  Incomebefore provision for income taxes for the quarter ended June 30, 2007 was$819,000 compared to $1,788,000 for the quarter ended June 30, 2006,representing a decrease of $969,000 or 54.2%. The decrease in income before provision for income taxes is dueprimarily to a decrease in income from operations of $1,027,000, partiallyoffset by a net change of $51,000 from our unconsolidated affiliate (Harmony).

Income before provisionfor income taxes for the six months ended June 30, 2007 was $1,687,000 comparedto $2,818,000 for the six months ended June 30, 2006, representing a decreaseof $1,131,000 or 40.2%.  The decrease inincome before provision for income taxes is due primarily to a decrease inincome from operations of $1,235,000, partially offset by a net change of$86,000 from our unconsolidated affiliate (Harmony).

Based on the segmentanalysis, a primary reason for the decline in income before provision forincome tax was due to a net decrease of $849,000 in income before provision forincome taxes for the Engineered Products segment.  This segment experienced a loss of $434,000for the six months ended June 30, 2007 as compared to income of $415,000 forthe same quarter of 2006.

**Provision for Income Taxes**The provision for income taxes for the quarter ended June 30, 2007 was $312,000compared to $662,000 for the quarter ended June 30, 2006.   The decrease in income taxes is due to lowerincome before provision for income taxes in 2007.  The effective tax rate was 38.1% for thequarter ended June 30, 2007 and was 37.0% for the same quarter of 2006.

The provision for incometaxes for the six months ended June 30, 2007 was $644,000 compared to$1,043,000 for the six months ended June 30, 2006.   The decrease in income taxes is due to lowerincome before provision for income taxes in 2007.  The effective tax rate was 38.2% for the sixmonths ended June 30, 2007 and was 37.0% for the same period of 2006.

**Net Income.**  Net income for the quarter ended June 30,2007 was $507,000 compared to net income of $1,126,000 for the quarter endedJune 30, 2006, a decrease of $619,000 or 55.0%. The net income decrease was primarily due to a decrease in income beforeprovision for income taxes of $969,000, partially offset by a decrease inincome taxes of $350,000.  Net income asa percentage of sales for the quarters ended June 30, 2007 and 2006 was 5.5%and 11.4% respectively.  Basic anddiluted income per share for the quarters ended June 30, 2007 and 2006 was$0.02 and $0.05, respectively.

Excluding the severanceagreement, net income for the quarter ended June 30, 2007 would be $685,000compared to net income of $1,126,000 for the quarter ended June 30, 2006, adecrease of $441,000 or 39.2%.  Basic anddiluted income per share for the quarters ended June 30, 2007 and 2006 would be$0.03 and $0.05, respectively.

Net income for the sixmonths ended June 30, 2007 was $1,043,000 compared to net income of $1,775,000for the six months ended June 30, 2006, a decrease of $732,000 or 41.2%.  The net income decrease was primarily due toa decrease in income before provision for income taxes of $1,131,000, partiallyoffset by a decrease in income taxes of $399,000.  Net income as a percentage of sales for thequarter ended June 30, 2007 and 2006 was 5.7% and 9.9% respectively.  Basic and diluted income per share for thequarter ended June 30, 2007 and 2006 was $0.04 and $0.07, respectively.

Excluding the severanceagreement, net income for the six months ended June 30, 2007 would be$1,221,000 compared to net income of $1,775,000 for the six months ended June30, 2006, a decrease of $554,000 or 31.2%. Basic and diluted income per share for the quarter ended June 30, 2007and 2006 would be $0.05 and $0.07, respectively.

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**Alpha Pro Tech, Ltd.**

**LIQUIDITY AND CAPITAL RESOURCES**

As of June 30, 2007, wehad cash and cash equivalents of $1,600,000 and working capital of $21,915,000,an increase in working capital of 11.7% or $2,297,000 since December 31,2006.  As of June 30, 2007, our currentratio was 12.64:1 as compared to 8.32:1 as of December 31, 2006.  Cash decreased by $237,000 to $1,600,000 asof June 30, 2007 as compared to $1,837,000 as of December 31, 2006.  The decrease in cash is due to cash used inoperating activities of $1,227,000, the purchase of property and equipment of$94,000 and the purchases of intangible assets of $37,000, partially offset bycash proceeds of $885,000 from the exercise of stock options and income taxbenefit from stock options exercised of $236,000.

We have a $3,500,000credit facility with a bank, consisting of a line of credit with interest atprime plus 0.5%.  At June 30, 2007, theprime interest rate was 8.25%.  The lineof credit was renewed in May 2007 and expires in May 2009 and we intend torenew it.  Our borrowing capacity on theline of credit was $3,500,000 at June 30, 2007. The available line of credit is based on a formula of eligible accountsreceivable and inventories.  As of June30, 2007, we had not borrowed on this line of credit.  As of June 30, 2007, we did not have anydebt.

Net cash used inoperating activities was $1,227,000 for the six months ended June 30, 2007compared to $933,000 net cash used in operating activities for the six monthsended June 30, 2006.  The net cash usedin operating activities of $1,227,000 for the six months ended June 30, 2007 isdue to net income of $1,043,000, adjusted by the following: an increase ininventory of $2,206,000, a decrease in accounts receivable of $674,000, anincrease in prepaid expenses of $178,000, a decrease in accounts payable andaccrued liabilities of $790,000, equity in income of unconsolidated affiliatesof $66,000, $62,000 in amortization of share-based compensation, anddepreciation and amortization of $234,000.

Accounts receivabledecreased by $674,000 or 11.0% to $5,483,000 as of June 30, 2007 from$6,157,000 as of December 31, 2006.  Thisdecrease is primarily due to decreased sales in second quarter of 2007 ascompared to the fourth quarter of 2006. The number of days of sales outstanding was 55 days as of June 30, 2007and 54 days as of December 31, 2006.

Inventory increased by$2,206,000 or 17.4% to $14,919,000 as of June 30, 2007 from $12,713,000 as ofDecember 31, 2006.  The increase ininventory as of June 30, 2007 compared to March 31, 2007 was $139,000 or0.9%.  In order to support increasedsales within the Disposable Protective Apparel segment, inventory in thatsegment increased by $1.6 million for the quarter.  As of June 30, 2007, the Engineered Productssegment inventory was $7,552,000, up marginally by $82,000 as compared to March31, 2007 and up $705,000 since December 31, 2006.

Prepaid expenses andother current assets increased by $178,000 to $1,373,000 as of June 30, 2007from $1,195,000 as of December 31, 2006. The increase of $178,000 is due to, an increase in prepaid inventoryfrom China of $194,000, an increase in prepaid tax payments of $87,000,partially offset by a decrease in prepaid expenses for Engineered Products of$44,000, a decrease in general prepaid expenses of $44,000 and a decrease of$15,000 in marketing expenses.

Accounts payable andaccrued liabilities as of June 30, 2007 decreased by $790,000 or 29.5% to$1,889,000 from $2,679,000, as of December 31, 2006.  The net change in 2007 was due primarily to adecrease in accrued commission/bonus payable of $624,000 and a decrease intrade payables of $417,000, partially offset by an increase in accrued rebatesof $250,000.

Net cash used ininvesting activities was $131,000 and $230,000 for the six months ended June30, 2007 and 2006, respectively.  Ourinvesting activity in 2007 consisted primarily of expenditures for property andequipment of $94,000 and the purchase of intangible assets of $37,000.  This compared to expenditures for propertyand equipment of $196,000 and the purchases of intangible assets of $34,000during the six months ended June 30, 2006.

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**Alpha Pro Tech, Ltd.**

For the six months ended June30, 2007, net cash provided by financing activities was $1,121,000 compared tocash provided by financing activities of $349,000 for the same period of2006.  Our financing activities in 2007consisted of cash proceeds of $885,000 from the exercise of 1,021,000 stockoptions and an income tax benefit from stock options exercised of$236,000.  Our financing activities in2006 consisted of cash proceeds of $349,000 from the exercise of 308,000 stockoptions.

In August 2004, our Boardof Directors approved the buy-back of up to an additional $500,000 of ouroutstanding common stock.  This sharerepurchase program is the sixth $500,000 buyback authorized by the Board ofDirectors.  In all instances, we are retiring the shares.  For the six months ended June 30, 2007, wedid not buy back any shares of common stock. As of June 30, 2007, we have bought back a total of 2,333,800 shares ofcommon stock at a cost of $2,518,000 since the end of 1999.

As shown below, at June30, 2007, our contractual cash obligations totaled approximately $1,460,000.

**Contractual Obligations**
|                                     | ** ** | **Payments Due by Period** | ** ** |
|-------------------------------------|------------|-------------------------------------------|------------|
| ** **                          | ** ** | **Total**                                 | ** ** | **1 Year** | ** ** | **2-3 Years** | ** ** | **4-5 Years** | ** ** | **After 5 years** | ** ** |
|                                |       |                                      |       |   |   |   |   |   |   |   |   |
| Operating leases                    |       | $                                         | 1,460,000  |   | $ | 345,000 |   | $ | 996,000 |   | $ | 119,000 |   | — |   |
|                                |       |                                      |       |   |   |   |   |   |   |   |   |
| Total contractual cash  obligations |       | $                                         | 1,460,000  |   | $ | 345,000 |   | $ | 996,000 |   | $ | 119,000 |   | — |   |

 

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.

**NewAccounting Standards**

Based on our review ofnew accounting standards released during the quarter ended June 30, 2007, wedid not identify any standards requiring adoption that would have a significantimpact on our consolidated financial statements.

The Financial AccountingStandards Board (“FASB”) issued FASB Interpretation No. 48, “Accounting forUncertainty in Income Taxes” (“FIN 48”) in June 2006. The interpretation clarifiesthe accounting for uncertainty in income taxes recognized in the Company’sfinancial statements in accordance with SFAS No. 109, “Accounting for IncomeTaxes.”  On January 1, 2007, the Company adopted the provisions of FIN 48. The Company does not have any uncertain tax positions which requirerecognition under the criteria established by FIN 48.  The amount ofunrecognized tax benefits did not change during the six months ended June 30,2007.

The Company and itssubsidiaries file income tax returns in the U.S. federal jurisdiction, andvarious states and foreign jurisdictions.  The Company is no longersubject to U.S. federal, state and local, income tax examination by taxauthorities for years before 2002.  TheCompany is not currently under examination in any of its jurisdictions in whichit operates.

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**Alpha Pro Tech, Ltd.**

# **Item 3.****  Quantitativeand Qualitative Disclosures About Market Risk**

We subcontract themanufacture of products in China and Mexico and have a joint venture inIndia.  Our results of operations couldbe negatively affected by factors such as changes in foreign currency exchangerates due to stronger economic conditions in those countries.

We do not expect anysignificant effect on our results of operations from inflationary or interestand currency rate fluctuations.  We donot hedge our interest rate or foreign exchange risks.

# **ITEM 4.****  CONTROLS AND PROCEDURES**

Disclosure Controls andProcedures

Our chief executiveofficer and chief financial officer, after evaluating the effectiveness of ourdisclosure controls and procedures as of June 30, 2007, have concluded that ourdisclosure controls and procedures were designed to ensure that informationrequired to be disclosed by us in the reports that we file or submit under theSecurities Exchange Act of 1934 is recorded, processed, summarized andreported, within the time periods specified in the SEC’s rules and forms.  Disclosure controls and procedures include,without limitation, controls and procedures designed to ensure that informationrequired to be disclosed by us in the reports that we file or submit under theAct is accumulated and communicated to our management, including our chiefexecutive and chief financial officers as appropriate to allow timely decisionsregarding required disclosure.

Changes in InternalControl Over Financial Reporting.

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, 2007, that has materially affected, or is reasonably likely tomaterially affect, our internal control over financial reporting.

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**Alpha Pro Tech, Ltd.**

**PART II – OTHER INFORMATION**

# **Item 5****           Submission of Mattersto a Vote of Security Holders**

(a)  Registrantheld its Annual Meeting of Shareholders June 4, 2007.

(b)                                 The following persons were elected Directorspursuant to the votes indicated:
| Name             | ** ** | **For**    | ** ** | **Withheld** | ** ** |
|------------------|------------|------------|------------|--------------|------------|
|             |       |       |       |         |       |
| Sheldon Hoffman  |       | 20,743,485 |       | 1,016,362    |       |
|             |       |       |       |         |       |
| Alexander Millar |       | 20,692,485 |       | 1,067,362    |       |
|             |       |       |       |         |       |
| Danny Montgomery |       | 21,045,145 |       | 714,702      |       |
|             |       |       |       |         |       |
| Robert Isaly     |       | 21,081,610 |       | 678,237      |       |
|             |       |       |       |         |       |
| John Ritota      |       | 21,086,325 |       | 673,522      |       |
|             |       |       |       |         |       |
| Russell Manock   |       | 21,221,765 |       | 538,082      |       |
|             |       |       |       |         |       |
| David Anderson   |       | 21,173,225 |       | 586,622      |       |

 

(c)                                  The only other matter to be voted upon wasthe ratification of the appointment of PricewaterhouseCoopers LLP as theRegistrant’s independent registered public accountants as follows:

| For        | ** ** | **Against** | ** ** | **Abstain** | ** ** |
|------------|------------|-------------|------------|-------------|------------|
| 21,718,072 |       | 34,659      |       | 7,116       |       |

 

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**Alpha Pro Tech, Ltd.**

**ITEM 6EXHIBITS 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 byChief Executive Officer (filed herewith)

32.2 Certification Pursuant to 18 U.S.C Section 1350,as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, Signed byChief Financial Officer (filed herewith)

(b) Reports on Form 8-K

A Form 8-K was filed during the quarter covered by this report,reporting the issuance of a release dated April 16, 2007 announcing thetermination of Donald Bennett Jr. from his position of Sr. VP Manufacturing andhis resignation from the Board of Directors effective April 16, 2007

A Form 8-K was filed during the quarter covered by this report,reporting the issuance of a release dated May 9, 2007 announcing its financialresults for the first quarter ended March 31, 2007.

A Form 8-K was filed during the quarter covered by this report,reporting the issuance of a release dated May 24, 2007 announcing the “CoolProducts Award” form PCBC.

A Form 8-K was filed during the quarter covered by this report,reporting the issuance of a release dated May 29, announcing the signing of anew distribution agreement with ABC Supply Co.

**SIGNATURES**

Pursuant to therequirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934,the Registrant has fully caused this report to be signed on its behalf by theundersigned, thereunto duly authorized.

**ALPHA PRO TECH, LTD**.
| DATE:  | ** ** | **August 14, 2007** |   | BY:    |   | **/s/****Sheldon Hoffman**           | ** ** |
|--------|------------|---------------------|--------|--------|--------|--------------------------------------|------------|
|   | ** ** | ** **          |   |   |   | ** **                           |
|   |       |                |   |   |   | Sheldon Hoffman                      |
|   |       |                |   |   |   | Chief Executive Officer and Director |
|   |       |                |   |   |   |                                 |
| DATE:  | ** ** | **August 14, 2007** |   | BY:    |   | **/s/****Lloyd Hoffman**             | ** ** |
|   | ** ** | ** **          |   |   |   | ** **                           |
|   | ** ** | ** **          |   |   |   | Lloyd Hoffman                        |
|   | ** ** | ** **          |   |   |   | Chief Financial Officer              |

 

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