# EDGAR Filing Document

**Accession Number:** 0000884269
**File Stem:** 0001437749-25-033545
**Filing Date:** 2025-11
**Character Count:** 110274
**Document Hash:** 40ca60e6dd57d0a6368abf39c8c676ee
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001437749-25-033545.hdr.sgml**: 20251106

**ACCESSION NUMBER**: 0001437749-25-033545

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 63

**CONFORMED PERIOD OF REPORT**: 20250930

**FILED AS OF DATE**: 20251106

**DATE AS OF CHANGE**: 20251106

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** ALPHA PRO TECH LTD
- **CENTRAL INDEX KEY:** 0000884269
- **STANDARD INDUSTRIAL CLASSIFICATION:** ORTHOPEDIC, PROSTHETIC & SURGICAL APPLIANCES & SUPPLIES [3842]
- **ORGANIZATION NAME:** 08 Industrial Applications and Services
- **EIN:** 631030494
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-15725
- **FILM NUMBER:** 251457284

**BUSINESS ADDRESS:**
- **ADDRESS IS A NON US LOCATION:** YES
- **STREET 1:** 53 WELLINGTON STREET EAST
- **CITY:** AURORA
- **PROVINCE COUNTRY:** A6
- **ZIP:** L4G 1H6
- **BUSINESS PHONE:** 9054790654

**MAIL ADDRESS:**
- **ADDRESS IS A NON US LOCATION:** YES
- **STREET 1:** 53 WELLINGTON STREET EAST
- **CITY:** AURORA
- **PROVINCE COUNTRY:** A6
- **ZIP:** L4G 1H6

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** BFD INDUSTRIES INC
- **DATE OF NAME CHANGE:** 19930328

?xml version='1.0' encoding='ASCII'? apt20250930_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

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FORM 10-Q<br>

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

For the quarterly period ended September 30, 2025

OR

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

For the transition period from to

<u>Commission File No.001-15725</u>

<u>Alpha Pro Tech, Ltd.</u>

(Exact Name of Registrant as Specified in Its Charter)

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| | |
|:---|:---|
| <u>Delaware, U.S.A.</u> | <u>63-1009183</u> |
| (State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) |

---

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| | |
|:---|:---|
| 53 Wellington Street East<br> <u>Aurora, Ontario, Canada</u> | <u>L4G 1H6</u> |
| (Address of Principal Executive Offices) | (Zip Code) |

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

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

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| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp; Title of each class | &nbsp;&nbsp;&nbsp; Trading Symbol(s) | &nbsp;&nbsp;&nbsp; Name of each exchange on which registered |
| &nbsp;&nbsp;&nbsp; Common Stock,<br> $0.01 par value | &nbsp;&nbsp;&nbsp; APT | &nbsp;&nbsp;&nbsp; NYSE American |

---

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

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

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

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

Emerging growth company ☐

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

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

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

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| | |
|:---|:---|
| Class | Outstanding November 3, 2025 |
| Common Stock, $0.01 par value | 10,360,062 shares |

---

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**Alpha Pro Tech, Ltd.**

Index

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| | | |
|:---|:---|:---|
| PART I. | FINANCIAL INFORMATION |  |
| ITEM 1. | Financial Statements | page |
|  | Condensed Consolidated Balance Sheets (Unaudited) | 1 |
|  | Condensed Consolidated Statements of Income (Unaudited) | 2 |
|  | Condensed Consolidated Statements of Comprehensive Income (Unaudited) | 3 |
|  | Condensed Consolidated Statements of Shareholders' Equity (Unaudited) | 4 |
|  | Condensed Consolidated Statements of Cash Flows (Unaudited) | 5 |
|  | Notes to Condensed Consolidated Financial Statements (Unaudited) | 6 |
| ITEM 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 16 |
| ITEM 3. | Quantitative and Qualitative Disclosures about Market Risk | 24 |
| ITEM 4. | Controls and Procedures | 25 |
| PART II. | OTHER INFORMATION |  |
| ITEM I. | Legal Proceedings | 25 |
| ITEM IA. | Risk Factors | 25 |
| ITEM 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 26 |
| ITEM 5. | Other Information | 26 |
| ITEM 6. | Exhibits | 27 |
| SIGNATURES | SIGNATURES | 28 |

---

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Alpha Pro Tech, Ltd.

**PART I. FINANCIAL INFORMATION**

**ITEM 1. FINANCIAL STATEMENTS**

**Condensed Consolidated Balance Sheets (Unaudited)**

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| | | |
|:---|:---|:---|
|  | **September 30,** | **December 31,** |
|  | **2025** | **2024** |
| **Assets** |  |  |
| Current assets: |  |  |
| Cash and cash equivalents | $17658000 | $18636000 |
| Accounts receivable, net | 5499000 | 3692000 |
| Accounts receivable, related party | 1630000 | 1202000 |
| Inventory, net | 23479000 | 22733000 |
| Prepaid expenses | 3482000 | 4376000 |
| Total current assets | 51748000 | 50639000 |
| Property and equipment, net | 8207000 | 8520000 |
| Goodwill | 55000 | 55000 |
| Right-of-use assets | 8016000 | 8714000 |
| Equity investment in unconsolidated affiliate | 5842000 | 5814000 |
| Total assets | $73868000 | $73742000 |
| **Liabilities and Shareholders' Equity** |  |  |
| Current liabilities: |  |  |
| Accounts payable | $1730000 | $1283000 |
| Accrued liabilities | 989000 | 947000 |
| Current portion of lease liabilities | 951000 | 893000 |
| Total current liabilities | 3670000 | 3123000 |
| Lease liabilities, net of current portion | 7154000 | 7882000 |
| Deferred income tax liabilities, net | 503000 | 503000 |
| Total liabilities | 11327000 | 11508000 |
| Commitments and contingencies |  |  |
| Shareholders' equity: |  |  |
| Common stock, $.01 par value: 50,000,000 shares authorized; 10,284,565 and 10,816,878 shares outstanding as of September 30, 2025 and December 31, 2024, respectively | 103000 | 108000 |
| Additional paid-in capital | 15938000 | 16368000 |
| Retained earnings | 48275000 | 47257000 |
| Accumulated other comprehensive loss | (1775000) | (1499000) |
| Total shareholders' equity | 62541000 | 62234000 |
| Total liabilities and shareholders' equity | $73868000 | $73742000 |

---

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

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

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Alpha Pro Tech, Ltd.

**Condensed Consolidated Statements of Income (Unaudited)**

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended** | **For the Three Months Ended** | **For the Nine Months Ended** | **For the Nine Months Ended** |
|  | **September 30,** | **September 30,** | **September 30,** | **September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Net sales | $14785000 | $14251000 | $45279000 | $44023000 |
| Cost of goods sold, excluding depreciation and amortization | 8917000 | 8767000 | 27888000 | 26280000 |
| Gross profit | 5868000 | 5484000 | 17391000 | 17743000 |
| Operating expenses: |  |  |  |  |
| Selling, general and administrative | 4568000 | 4502000 | 13818000 | 14234000 |
| Depreciation and amortization | 203000 | 245000 | 686000 | 734000 |
| Total operating expenses | 4771000 | 4747000 | 14504000 | 14968000 |
| Income from operations | 1097000 | 737000 | 2887000 | 2775000 |
| Other income: |  |  |  |  |
| Equity in income of unconsolidated affiliate | 27000 | 97000 | 305000 | 435000 |
| Gain on sale of asset |  | 30000 |  | 30000 |
| Interest income, net | 169000 | 235000 | 484000 | 700000 |
| Total other income | 196000 | 362000 | 789000 | 1165000 |
| Income before provision for income taxes | 1293000 | 1099000 | 3676000 | 3940000 |
| Provision for income taxes | 317000 | 237000 | 843000 | 858000 |
| Net income | $976000 | $862000 | $2833000 | $3082000 |
| Basic earnings per common share | $0.09 | $0.08 | $0.27 | $0.28 |
| Diluted earnings per common share | $0.09 | $0.08 | $0.27 | $0.28 |
| Basic weighted average common shares outstanding | 10354289 | 11075527 | 10525957 | 11103467 |
| Diluted weighted average common shares outstanding | 10485088 | 11173739 | 10642957 | 11194178 |

---

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

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Alpha Pro Tech, Ltd.

**Condensed Consolidated Statements of Comprehensive Income (Unaudited)**

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended** | **For the Three Months Ended** | **For the Nine Months Ended** | **For the Nine Months Ended** |
|  | **September 30,** | **September 30,** | **September 30,** | **September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Net income | $976000 | $862000 | $2833000 | $3082000 |
| Other comprehensive income - foreign currency translation gain (loss) | (189000) | 75000 | (276000) | 23000 |
| Comprehensive income | $787000 | $937000 | $2557000 | $3105000 |

---

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

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Alpha Pro Tech, Ltd.

**Condensed Consolidated Statements of Shareholders**' **Equity (Unaudited)**

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **For the Nine Months Ended September 30, 2025** | **For the Nine Months Ended September 30, 2025** |  |  |  | **Accumulated** |  |
|  |  |  | **Additional** |  | **Other** |  |
|  | **Common Stock** | **Common Stock** | **Paid-in** | **Retained** | **Comprehensive** |  |
|  | **Shares** | **Amount** | **Capital** | **Earnings** | **Income (Loss)** | **Total** |
| Balance as of December 31, 2024 | 10816878 | $108000 | $16368000 | $47257000 | $(1499000) | $62234000 |
| Net income |  |  |  | 613000 |  | 613000 |
| Common stock repurchased and retired | (221413) | (2000) | (335000) | (841000) |  | (1178000) |
| Treasury stock excise tax |  |  | (12000) |  |  | (12000) |
| Stock-based compensation expense |  |  | 136000 |  |  | 136000 |
| Other comprehensive loss |  |  |  |  | (65000) | (65000) |
| Balance as of March 31, 2025 | 10595465 | 106000 | 16157000 | 47029000 | (1564000) | 61728000 |
| Net income |  |  |  | 1244000 |  | 1244000 |
| Common stock repurchased and retired | (181100) | (2000) | (277000) | (551000) |  | (830000) |
| Treasury stock excise tax |  |  | (8000) |  |  | (8000) |
| Stock-based compensation expense |  |  | 136000 |  |  | 136000 |
| Other comprehensive loss |  |  |  |  | (22000) | (22000) |
| Balance as of June 30, 2025 | 10414365 | 104000 | 16008000 | 47722000 | (1586000) | 62248000 |
| Net income |  |  |  | 976000 |  | 976000 |
| Common stock repurchased and retired | (129800) | (1000) | (200000) | (423000) |  | (624000) |
| Treasury stock excise tax |  |  | (6000) |  |  | (6000) |
| Stock-based compensation expense |  |  | 136000 |  |  | 136000 |
| Other comprehensive loss |  |  |  |  | (189000) | (189000) |
| Balance as of September 30, 2025 | 10284565 | $103000 | $15938000 | $48275000 | $(1775000) | $62541000 |

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **For the Nine Months Ended September 30, 2024** | **For the Nine Months Ended September 30, 2024** |  |  |  | **Accumulated**  |  |
|  |  |  | **Additional** |  | **Other** |  |
|  | **Common Stock** | **Common Stock** | **Paid-in** | **Retained** | **Comprehensive** |  |
|  | **Shares** | **Amount** | **Capital** | **Earnings** | **Income (Loss)** | **Total** |
| Balance as of December 31, 2023 | 11416212 | $114000 | $16339000 | $46552000 | $(1437000) | $61568000 |
| Net income |  |  |  | 576000 |  | 576000 |
| Common stock repurchased and retired | (270000) | (2000) | (386000) | (1029000) |  | (1417000) |
| Treasury stock excise tax |  |  | (14000) |  |  | (14000) |
| Stock-based compensation expense |  |  | 109000 |  |  | 109000 |
| Options exercised | 226666 | 2000 | 813000 |  |  | 815000 |
| Other comprehensive income |  |  |  |  | 6000 | 6000 |
| Balance as of March 31, 2024 | 11372878 | 114000 | 16861000 | 46099000 | (1431000) | 61643000 |
| Net income |  |  |  | 1644000 |  | 1644000 |
| Common stock repurchased and retired | (245000) | (3000) | (363000) | (918000) |  | (1284000) |
| Treasury stock excise tax |  |  | (13000) |  |  | (13000) |
| Stock-based compensation expense |  |  | 109000 |  |  | 109000 |
| Other comprehensive loss |  |  |  |  | (58000) | (58000) |
| Balance as of June 30, 2024 | 11127878 | 111000 | 16594000 | 46825000 | (1489000) | 62041000 |
| Net income |  |  |  | 862000 |  | 862000 |
| Common stock repurchased and retired | (180000) | (2000) | (267000) | (761000) |  | (1030000) |
| Treasury stock excise tax |  |  | (10000) |  |  | (10000) |
| Stock-based compensation expense |  |  | 109000 |  |  | 109000 |
| Options exercised | 5000 | 1000 | 16000 |  |  | 17000 |
| Other comprehensive income |  |  |  |  | 75000 | 75000 |
| Balance as of September 30, 2024 | 10952878 | $110000 | $16442000 | $46926000 | $(1414000) | $62064000 |

---

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

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Alpha Pro Tech, Ltd.

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

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| | | |
|:---|:---|:---|
|  | **For the Nine Months Ended**<br> **September 30,** | **For the Nine Months Ended**<br> **September 30,** |
|  | **2025** | **2024** |
| **Cash Flows From Operating Activities:** |  |  |
| Net income | $2833000 | $3082000 |
| Adjustments to reconcile net income to net cash and cash equivalents used in operating activities: |  |  |
| Stock-based compensation | 408000 | 327000 |
| Depreciation and amortization | 686000 | 734000 |
| Equity in income of unconsolidated affiliate | (305000) | (435000) |
| Gain on sale of asset |  | (30000) |
| Non-cash lease expense | 698000 | 674000 |
| Changes in operating assets and liabilities: |  |  |
| Accounts receivable, net | (1807000) | (123000) |
| Accounts receivable, related party | (428000) | 397000 |
| Inventory, net | (746000) | (946000) |
| Prepaid expenses | 894000 | 342000 |
| Accounts payable and accrued liabilities | 489000 | (70000) |
| Lease liabilities | (670000) | (667000) |
| Net cash and cash equivalents provided by operating activities | 2052000 | 3285000 |
| **Cash Flows From Investing Activities:** |  |  |
| Purchases of property and equipment | (372000) | (2363000) |
| Proceeds from sale of asset |  | 30000 |
| Net cash and cash equivalents used in investing activities | (372000) | (2333000) |
| **Cash Flows From Financing Activities:** |  |  |
| Proceeds from exercise of stock options |  | 832000 |
| Repurchase of common stock | (2632000) | (3731000) |
| Treasury stock excise tax | (26000) | (37000) |
| Net cash and cash equivalents used in financing activities | (2658000) | (2936000) |
| Decrease in cash and cash equivalents | (978000) | (1984000) |
| Cash and cash equivalents, beginning of the period | 18636000 | 20378000 |
| Cash and cash equivalents, end of the period | $17658000 | $18394000 |
| Supplemental disclosure of non-cash transactions: |  |  |
| Net non-cash changes to operating leases | $- | $4803000 |

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

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Alpha Pro Tech, Ltd.

Notes to Condensed Consolidated Financial Statements (Unaudited)

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**1.** **The Company**

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

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

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

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

**2.** **Basis of Presentation and Revenue Recognition Policy**

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

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

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Alpha Pro Tech, Ltd.

Notes to Condensed Consolidated Financial Statements (Unaudited)

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**3.** **Shareholder**'**s Equity**

**Repurchase Program**

During the three months ended September 30, 2025, the Company repurchased and retired 129,800 shares of its common stock for $624,000. During the three months ended September 30, 2024, the Company repurchased and retired 180,000 shares of its common stock for $1,030,000. During the nine months ended September 30, 2025, the Company repurchased and retired 532,313 shares of its common stock for $2,632,000. During the nine months ended September 30, 2024, the Company repurchased and retired 695,000 shares of its common stock for $3,731,000. As of September 30, 2025, the Company had $2,111,000 available to repurchase common shares under the repurchase program. The excess of repurchase price over par value is allocated between additional paid-in capital and retained earnings.

**Option Activity**

At the Company's 2020 Annual Meeting of Shareholders held on June 9, 2020, the Company's shareholders approved the Alpha Pro Tech, Ltd. 2020 Omnibus Incentive Plan (the "2020 Incentive Plan"). The 2020 Incentive Plan provides for the grant of incentive and nonqualified stock options, stock appreciation rights, awards of restricted stock and restricted stock units, performance share awards, cash awards and other equity-based awards to employees (including officers), consultants and non-employee directors of the Company and its affiliates. A total of 1,800,000 shares of the Company's common stock are reserved for issuance under the 2020 Incentive Plan.

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

The following table summarizes RSUs awards activity for the nine months ended September 30, 2025:

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| | | |
|:---|:---|:---|
|  |  | **Weighted Average** |
|  |  | **Grant Date Price** |
|  | **RSUs** | **of Awards** |
| Outstanding, December 31, 2024 | 256675 | $4.38 |
| Granted to employees and non-employee directors | 32330 | 5.11 |
| Vested | (29675) | 5.56 |
| Outstanding, September 30, 2025 | 259330 | 3.92 |

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Alpha Pro Tech, Ltd.

Notes to Condensed Consolidated Financial Statements (Unaudited)

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During the nine months ended September 30, 2025 and 2024, 32,330 and 29,675 RSUs were granted under the 2020 Incentive Plan, respectively. The Company recognized $364,000 and $283,000 in stock-based compensation expense associated with outstanding RSUs for the nine months ended September 30, 2025 and 2024, respectively. As of September 30, 2025, $332,000 of total unrecognized compensation cost related to the RSU grants was expected to be recognized over a weighted average remainder period of 0.98 years.

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

The following table summarizes option activity for the nine months ended September 30, 2025:

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| | | |
|:---|:---|:---|
|  |  | **Weighted Average** |
|  |  | **Exercise Price** |
|  | **Options** | **Per Option** |
| Options outstanding, December 31, 2024 | 61100 | $4.17 |
| Exercised |  |  |
| Options outstanding, September 30, 2025 | 61100 | 4.17 |
| Options exercisable, September 30, 2025 | 45632 | 3.10 |

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As of September 30, 2025, $45,000 of total unrecognized compensation cost related to the stock option grants was expected to be recognized over a weighted average remainder period of 0.99 years.

**4.** **Recent Accounting Pronouncements**

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

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

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

**5.** **Inventory**

As of September 30, 2025 and December 31, 2024, inventory net of reserves consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **September 30,** | **December 31,** |
|  | **2025** | **2024** |
| Raw materials | $9652000 | $10948000 |
| Work in process | 3507000 | 2934000 |
| Finished goods | 10320000 | 8851000 |
|  | $23479000 | $22733000 |

---

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Alpha Pro Tech, Ltd.

Notes to Condensed Consolidated Financial Statements (Unaudited)

------

**6.** **Equity Investment in Unconsolidated Affiliate**

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

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

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

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

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

For the three months ended September 30, 2025 and 2024, the Company purchased $5,723,000 and $5,465,000 of inventory, respectively, from Harmony. For the nine months ended September 30, 2025 and 2024, the Company purchased $15,637,000 and $16,644,000 of inventory, respectively, from Harmony. For the three months ended September 30, 2025 and 2024, the Company sold $213,000 and $61,000 of inventory, respectively, to Harmony. For the nine months ended September 30, 2025 and 2024, the Company sold $628,000 and $301,000 of inventory, respectively, to Harmony. For the three months ended September 30, 2025 and 2024, the Company recorded equity in income of unconsolidated affiliate of $27,000 and $97,000, respectively, related to Harmony. For the nine months ended September 30, 2025 and 2024, the Company recorded equity in income of unconsolidated affiliate of $305,000 and $435,000, respectively, related to Harmony.

As of September 30, 2025, the Company's investment in Harmony was $5,842,000, which consisted of its original $1,450,000 investment and cumulative equity in income of unconsolidated affiliate of $7,186,000, less $942,000 in repayments of an advance, $77,000 in payments of dividends, and $1,775,000 in AOCL on foreign currency translations.

------

Alpha Pro Tech, Ltd.

Notes to Condensed Consolidated Financial Statements (Unaudited)

------

**7.** **Accrued Liabilities**

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

---

| | | |
|:---|:---|:---|
|  | **September 30,** | **December 31,** |
|  | **2025** | **2024** |
| Payroll expenses and taxes payable | $354000 | $221000 |
| Commissions and bonuses payable and general accrued liabilities | 635000 | 726000 |
| Total accrued liabilities | $989000 | $947000 |

---

**8.** **Basic and Diluted Earnings Per Common Share**

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

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended** | **For the Three Months Ended** | **For the Nine Months Ended** | **For the Nine Months Ended** |
|  | **September 30,** | **September 30,** | **September 30,** | **September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Net income (numerator) | $976000 | $862000 | $2833000 | $3082000 |
| Shares (denominator): |  |  |  |  |
| Basic weighted average common shares outstanding | 10354289 | 11075527 | 10525957 | 11103467 |
| Add: dilutive effect of common stock options | 130799 | 98212 | 117000 | 90711 |
| Diluted weighted average common shares outstanding | 10485088 | 11173739 | 10642957 | 11194178 |
| Earnings per common share: |  |  |  |  |
| Basic | $0.09 | $0.08 | $0.27 | $0.28 |
| Diluted | $0.09 | $0.08 | $0.27 | $0.28 |

---

**9.** **Accumulated Other Comprehensive Loss**

AOCL, a component of shareholders' equity, consists of foreign currency translation adjustments related to foreign currency gains or losses on our unconsolidated affiliate as its functional currency is other than the U.S. dollar. The resulting foreign currency translation gains or losses are deferred as AOCL and reclassified to earnings only upon sale or liquidation of that business. The AOCL on equity in unconsolidated affiliate was $1,775,000 and $1,499,000 as of September 30, 2025 and December 31, 2024, respectively.

**10.** **Segments Reporting** 

The Company has determined that it has two reporting segments, which are also operating segments:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) **Building Supply:** consisting of construction weatherization products, such as housewrap, housewrap accessories including window and door flashing, seam tape, synthetic roof underlayment and synthetic roof underlayment accessories, as well as other woven materials. The majority of the Company's equity in income of unconsolidated affiliate (Harmony) is included in the total segment income for the Building Supply segment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) **Disposable Protective Apparel**: consisting of a complete line of disposable protective garments, including shoecovers (including the Aqua Trak® and spunbond shoecovers), bouffant caps, coveralls, frocks, lab coats, gowns and hoods, as well as face masks and face shields for the pharmaceutical, cleanroom, industrial, medical and dental markets. A portion of the Company's equity in income of unconsolidated affiliate (Harmony) is included in the total segment income for the Disposable Protective Apparel segment.

------

Alpha Pro Tech, Ltd.

Notes to Condensed Consolidated Financial Statements (Unaudited)

------

The chief operating decision maker ("CODM") of the Company is the Company's chief executive officer. The CODM assesses performance and decides how to allocate resources, including (1) employees, and (2) financial or capital resources, based on segment net sales.

Segment data excludes charges allocated to the principal executive office and other unallocated corporate overhead expenses and income tax. The Company evaluates the performance of its segments and allocates resources to them based primarily on segment net sales.

The accounting policies of the segments are the same as those described previously under Summary of Significant Accounting Policies (see Note 2 in the notes to our consolidated financial statements in Item 8 of the 2024 Form 10-K).

The following provides segment information as described below:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended** | **For the Three Months Ended** | **For the Nine Months Ended** | **For the Nine Months Ended** |
|  | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** |
|  | **Building Supply**  | **Disposable** <br> **Protective Apparel** | **Building Supply**  | **Disposable** <br> **Protective Apparel** |
| Segment sales | $9274000 | $5511000 | $28729000 | $16550000 |
| Less: |  |  |  |  |
| Cost of goods sold | 5900000 | 3016000 | 18430000 | 9458000 |
| Selling, general and administrative | 1795000 | 1368000 | 5422000 | 4117000 |
| Depreciation and amortization | 152000 | 26000 | 527000 | 80000 |
| Other income | (23000) | (4000) | (259000) | (46000) |
| Segment net income | $1450000 | $1105000 | $4609000 | $2941000 |

---

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Alpha Pro Tech, Ltd.

Notes to Condensed Consolidated Financial Statements (Unaudited)

------

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended** | **For the Three Months Ended** | **For the Nine Months Ended** | **For the Nine Months Ended** |
|  | **September 30, 2024** | **September 30, 2024** | **September 30, 2024** | **September 30, 2024** |
|  | **Building Supply**  | **Disposable** <br> **Protective Apparel** | **Building Supply**  | **Disposable** <br> **Protective Apparel** |
| Segment sales | $8798000 | $5453000 | $26979000 | $17044000 |
| Less: |  |  |  |  |
| Cost of goods sold | 5665000 | 3102000 | 17216000 | 9064000 |
| Selling, general and administrative | 1736000 | 1323000 | 5491000 | 4069000 |
| Depreciation and amortization | 185000 | 31000 | 556000 | 92000 |
| Other income | (82000) | (15000) | (370000) | (65000) |
| Segment net income | $1294000 | $1012000 | $4086000 | $3884000 |

---

The following table presents consolidated net sales for each segment for the three and nine months ended September 30, 2025 and 2024:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended** | **For the Three Months Ended** | **For the Nine Months Ended** | **For the Nine Months Ended** |
|  | **September 30,** | **September 30,** | **September 30,** | **September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Building Supply | $9274000 | $8798000 | $28729000 | $26979000 |
| Disposable Protective Apparel | 5511000 | 5453000 | 16550000 | 17044000 |
| Consolidated net sales | $14785000 | $14251000 | $45279000 | $44023000 |

---

The following table presents the reconciliation of consolidated segment net income to consolidated net income for the three and nine months ended September 30, 2025 and 2024:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended** | **For the Three Months Ended** | **For the Nine Months Ended** | **For the Nine Months Ended** |
|  | **September 30,** | **September 30,** | **September 30,** | **September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Building Supply | $1450000 | $1294000 | $4609000 | $4086000 |
| Disposable Protective Apparel | 1105000 | 1012000 | 2941000 | 3884000 |
| Total segment income | 2555000 | 2306000 | 7550000 | 7970000 |
| Unallocated corporate overhead expenses | 1262000 | 1207000 | 3874000 | 4030000 |
| Provision for income taxes | 317000 | 237000 | 843000 | 858000 |
| Consolidated net income | $976000 | $862000 | $2833000 | $3082000 |

---

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Alpha Pro Tech, Ltd.

Notes to Condensed Consolidated Financial Statements (Unaudited)

------

The following table presents the consolidated net property and equipment, goodwill and definite-lived intangible assets ("consolidated assets") by segment as of September 30, 2025 and December 31, 2024:

---

| | | |
|:---|:---|:---|
|  | **September 30,** | **December 31,** |
|  | **2025** | **2024** |
| Building Supply | $5770000 | $6069000 |
| Disposable Protective Apparel | 1356000 | 1424000 |
| Total segment assets | 7126000 | 7493000 |
| Unallocated corporate assets | 1136000 | 1082000 |
| Total consolidated assets | $8262000 | $8575000 |

---

**11.** **Financial Information about Geographic Areas**

The following table summarizes the Company's net sales by geographic region for the three and nine months ended September 30, 2025 and 2024:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended** | **For the Three Months Ended** | **For the Nine Months Ended** | **For the Nine Months Ended** |
|  | **September 30,** | **September 30,** | **September 30,** | **September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Net sales by geographic region |  |  |  |  |
| United States | $14683000 | $14124000 | $44800000 | $43551000 |
| International | 102000 | 127000 | 479000 | 472000 |
| Consolidated net sales | $14785000 | $14251000 | $45279000 | $44023000 |

---

Net sales by geographic region are based on the countries in which our customers are located. For the three and nine months ended September 30, 2025 and 2024, the Company did not generate sales from any single country, other than the United States, that were significant to the Company's consolidated net sales.

The following table summarizes the locations of the Company's long-lived assets by geographic region as of September 30, 2025 and December 31, 2024:

---

| | | |
|:---|:---|:---|
|  | **September 30,** | **December 31,** |
|  | **2025** | **2024** |
| Long-lived assets by geographic region |  |  |
| United States | $7006000 | $7325000 |
| International | 1201000 | 1195000 |
| Consolidated total long-lived assets | $8207000 | $8520000 |

---

**12.** **Related Party Transactions**

As of September 30, 2025, the Company had no related party transactions, other than the Company's transactions with its unconsolidated affiliate, Harmony. See Note 6 of these Notes to Condensed Consolidated Financial Statements (Unaudited).

**13.** **Leases**

The Company has operating leases for the Company's corporate office and manufacturing facilities, which expire at various dates through 2034. The Company's primary operating lease commitments as of September 30, 2025, related to the Company's manufacturing facilities in Valdosta, Georgia and Nogales, Arizona, as well as the Company's corporate headquarters in Aurora, Ontario, Canada.

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Alpha Pro Tech, Ltd.

Notes to Condensed Consolidated Financial Statements (Unaudited)

------

As of September 30, 2025, the Company had operating lease right-of-use assets of $8,016,000 and operating lease liabilities of $8,105,000. As of September 30, 2025, we did not have any finance leases recorded on the Company's consolidated balance sheet. Operating lease expense was approximately $1,132,000 during the nine months ended September 30, 2025.

The aggregate future minimum lease payments and reconciliation to lease liabilities as of September 30, 2025 were as follows:

---

| | |
|:---|:---|
|  | **September 30,** |
|  | **2025** |
| Remaining three months of 2025 | $369000 |
| 2026 | 1473000 |
| 2027 | 1459000 |
| 2028 | 1489000 |
| 2029 | 1520000 |
| 2030 | 644000 |
| Thereafter | 4212000 |
| Total future minimum lease payments | 11166000 |
| Less imputed interest | (3061000) |
| Total lease liabilities | $8105000 |

---

As of September 30, 2025, the weighted average remaining lease term of the Company's operating leases was 9.57 years. During the nine months ended September 30, 2025, the weighted average discount rate with respect to these leases was 7.0%.

**14.** **Income taxes**

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

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

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

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

**15.** **Contingencies**

The Company is subject to various pending and threatened litigation actions in the ordinary course of business. Although it is not possible to determine with certainty at this point in time what liability, if any, the Company will have as a result of such litigation, based on consultation with legal counsel, management does not anticipate that the ultimate liability, if any, resulting from such litigation will have a material effect on the Company's financial condition and results of operations.

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Alpha Pro Tech, Ltd.

Notes to Condensed Consolidated Financial Statements (Unaudited)

------

**16.** **Subsequent Events**

The Company has reviewed and evaluated whether subsequent events have occurred from the condensed consolidated balance sheet date of September 30, 2025 through the filing date of this Quarterly Report on Form 10-Q that would require recognition or disclosure and has concluded that there are no such subsequent events.

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Alpha Pro Tech, Ltd.

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**ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

You should read the following discussion and analysis together with our unaudited condensed consolidated financial statements and the notes to our unaudited condensed consolidated financial statements, which appear elsewhere in this report, as well as our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 12, 2025 (the "2024 Form 10-K").

**Special Note Regarding Forward-Looking Statements**

Certain information set forth in this Quarterly Report on Form 10-Q contains "forward-looking statements" within the meaning of federal securities laws. Forward-looking statements include statements concerning our plans, objectives, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans or intentions, including, without limitation, our expected orders, production levels and sales in 2025 and 2026, and other information that is not historical information. When used in this report, the words "estimates," "expects," "anticipates," "forecasts," "plans," "intends," "believes" and variations of such words or similar expressions are intended to identify forward-looking statements. We may make additional forward-looking statements from time to time. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future developments or otherwise. All forward-looking statements, whether written or oral and whether made by us or on our behalf, are expressly qualified by this special note.

The following are some of the risks that could affect our financial performance or that could cause actual results to differ materially from those expressed or implied in our forward-looking statements:

● We are exposed to foreign currency exchange risks related to our unconsolidated affiliate operations in India.

● We are subject to risks associated with our joint venture.

● The loss of any large customer or a reduction in orders from any large customer could reduce our net sales and harm our operating results.

● We rely on suppliers and contractors, and our business could be seriously harmed if these suppliers and contractors are not able to meet our requirements.

● Risks associated with international manufacturing could have a significant effect on our business.

● Our success depends in part on protection of our intellectual property, and our failure to protect our intellectual property could adversely affect our competitive advantage, our brand recognition and our business.

● Tariff policies and potential countermeasures could increase our costs and disrupt our global supply chain, which could negatively impact the results of our operations.

● Our industry is highly competitive, which may negatively affect our ability to grow our customer base and generate sales.

● The Company's results are affected by competitive conditions and customer preferences.

● Environmental laws and regulations may subject us to significant liabilities.

● The Company's growth objectives are largely dependent on the timing and market acceptance of our new product offerings, including our ability to continually renew our pipeline of new products and to bring those products to market.

● Global economic conditions could adversely affect the Company's business and financial results.

● We are subject to risks related to climate change and natural disasters or other events beyond our control.

● Uncertainties with respect to the development, deployment, and use of artificial intelligence.

● Security breaches and other disruptions to the Company's information technology infrastructure could interfere with the Company's operations, compromise information belonging to the Company and our customers and suppliers and expose the Company to liability, which could adversely impact the Company's business and reputation.

● The Company's future results may be affected by various legal and regulatory proceedings and legal compliance risks.

● Our common stock price is volatile, which could result in substantial losses for individual shareholders.

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Alpha Pro Tech, Ltd.

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The foregoing list of risks is not exclusive. For a more detailed discussion of the risk factors associated with our business, see the risks described in Part I, Item IA, "Risk Factors," in the 2024 Form 10-K. These and many other factors could affect the Company's future operating results and financial condition and could cause actual results to differ materially from expectations based on forward-looking statements made in this document or elsewhere by the Company or on its behalf.

**Special Note Regarding Smaller Reporting Company Status**

We are filing this report as a "smaller reporting company" (as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended). As a result of being a smaller reporting company, we are allowed and have elected to omit certain information from this Management's Discussion and Analysis of Financial Condition and Results of Operations; however, we have provided all information for the periods presented that we believe to be appropriate.

**Where to find more information about us.** We make available, free of charge, on our website (<u>http://www.alphaprotech.com</u>) our most recent Annual Report on Form 10-K, any Current Reports on Form 8-K furnished or filed since our most recent Annual Report on Form 10-K, and any amendments to such reports, as soon as reasonably practicable following the electronic filing of such reports with the SEC. In addition, in accordance with SEC rules, we provide paper copies of our filings free of charge upon request.

**Critical Accounting Policies and Estimates**

The preparation of our financial statements in conformity with U.S. generally accepted accounting principles ("U.S. GAAP") requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of net sales and expenses during the periods reported. We base estimates on past experience and on various other assumptions that are believed to be reasonable under the circumstances. The application of these accounting policies on a consistent basis enables us to provide timely and reliable financial information. Our significant accounting policies and estimates are more fully described in Note 2 – "Summary of Significant Accounting Policies" in the notes to our consolidated financial statements in Item 8 of the 2024 Form 10-K. Since December 31, 2024, there have been no material changes to our critical accounting policies and estimates as described in the 2024 Form 10-K.

**OVERVIEW**

Alpha Pro Tech is in the business of protecting people, products and environments. We accomplish this by developing, manufacturing and marketing a line of high-value, disposable protective apparel products for the cleanroom, industrial, pharmaceutical, medical and dental markets. We also manufacture a line of building supply construction weatherization products. Our products are sold under the "Alpha Pro Tech" brand name, as well as under private label.

Our products are grouped into two business segments: (i) the Building Supply segment, consisting of construction weatherization products, such as housewrap, housewrap accessories, synthetic roof underlayment and synthetic roof underlayment accessories, as well as other woven material; and (ii) the Disposable Protective Apparel segment, consisting of disposable protective garments (including shoecovers, bouffant caps, coveralls, gowns, frocks and lab coats), face masks and face shields.

Our target markets include construction companies and building supply and roofing distributors; companies in pharmaceutical manufacturing, bio-pharmaceutical manufacturing, medical device manufacturing, lab animal research, and high technology electronics manufacturing (which includes the semi-conductor market); and medical and dental distributors.

Our products are used primarily in cleanrooms, industrial safety manufacturing environments, health care facilities, such as hospitals, laboratories and dental offices, and building and re-roofing sites. Our products are distributed principally in the United States through a network consisting of purchasing groups, national distributors, local distributors, independent sales representatives and our own sales and marketing force.

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Alpha Pro Tech, Ltd.

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Recent developments in U.S. trade policy have introduced uncertainty regarding the future of global trade relations. On February 1, 2025, President Trump announced the imposition of additional substantial tariffs on imports from various countries, including China, Canada and Mexico, and the subject countries indicated their intention to impose counter measures. Under the announced measures, tariffs will be applied to certain products from Mexico, Vietnam, India, Canada, Sri Lanka, and China, among other countries. The current tariffs, especially those imposed on imports from India and Sri Lanka, have increased the costs of certain products sourced from non-U.S. countries. Sales of certain of our products, for example, disposable protective garments, have experienced volatility in demand related to customers securing high order rates in prior periods, only to enter a period of destocking in more recent periods. This significant level of volatility in demand levels, input and transportation costs, and material and labor availability, have pressured our ability to operate efficiently in recent periods. We will continue to take actions to mitigate such impacts, including implementing commercial pricing adjustments, holding extra inventory, resourcing to alternate suppliers and insourcing of previously sourced products. Although we believe we generally may be able to mitigate the impact of higher commodity costs over time, we may experience additional material costs and disruptions in supply in the future and may not be able to pass along higher costs to our customers in the form of price increases or otherwise mitigate the impacts to our operating results.

In August 2025, the U.S. government imposed a 25% tariff on India in response to its continued importation of Russian oil, which is in addition to the pre-existing 25% individualized reciprocal tariff on India. Increased tariffs by the United States have led, and may continue to lead, to the imposition of retaliatory tariffs or other measures taken by foreign jurisdictions, which may in turn lead to additional tariffs imposed or measures taken by the United States. In August 2025, however, the U.S. Court of Appeals for the Federal Circuit ruled that many of the tariffs imposed under the Trump Administration exceed presidential authority and therefore are invalid, though the decision has been stayed pending U.S. Supreme Court review. This ruling introduces additional uncertainty as to the scope and durability of existing and future tariff measures. While the U.S. government has announced various trade deals, many such agreements are preliminary and may be subject to change.

Any new or increased tariffs, quotas, embargoes, or other trade barriers affecting other countries from which we do source supplies or our global network of third-party suppliers could impact our supply chain and cost structure. Additionally, retaliatory measures by affected countries could further disrupt our operations or reduce our competitiveness in international markets. An escalation in trade tensions or the implementation of broader tariffs, trade restrictions or retaliatory measures on our products or components originating from countries outside the U.S. could adversely impact our ability to source necessary components, manufacture products at competitive cost, or sell our products at prices customers are willing to pay. Any such developments could materially and adversely affect our business operations, results of operations and cash flows. We continue to monitor these changing tariffs and trade restrictions. If new tariffs or trade restrictions are imposed, we may need to adjust our pricing, increase inventory levels, or seek alternative suppliers, any of which could materially affect our revenue, gross margins, and overall financial performance.

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Alpha Pro Tech, Ltd.

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**RESULTS OF OPERATIONS** 

The following table sets forth certain operational data as a percentage of net sales for the periods indicated:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended September 30,**  | **For the Three Months Ended September 30,**  | **For the Nine Months Ended September 30,**  | **For the Nine Months Ended September 30,**  |
|  | **2025** | **2024** | **2025** | **2024** |
| Net sales | 100.0% | 100.0% | 100.0% | 100.0% |
| Gross profit | 39.7% | 38.5% | 38.4% | 40.3% |
| Selling, general and administrative expenses | 30.9% | 31.6% | 30.5% | 32.3% |
| Income from operations | 7.4% | 5.2% | 6.4% | 6.3% |
| Income before provision for income taxes | 8.7% | 7.7% | 8.1% | 8.9% |
| Net income | 6.6% | 6.0% | 6.3% | 7.0% |

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**Three and Nine months ended September 30, 2025, compared to Three and Nine months ended September 30, 2024** 

**Sales**. **Consolidated sales for the three months ended September 30, 2025**, increased to $14,785,000, from $14,251,000 for the three months ended September 30, 2024, representing an increase of $534,000, or 3.7%. This increase consisted of increased sales in the Building Supply segment of $476,000 and increased sales in the Disposable Protective Apparel segment of $58,000.

**Building Supply segment sales for the three months ended September 30, 2025**, increased by $476,000, or 5.4%, to $9,274,000 compared to $8,798,000 for the three months ended September 30, 2024.

The Building Supply segment increase during the three months ended September 30, 2025, was primarily due to a 12.7% increase in sales of housewrap, a 17.4% increase in sales of other woven material, partially offset by a 11.0% decrease in sales of synthetic roof underlayment as compared to the same period of 2024.

Sales of other woven material increased by $214,000, or 17.4%, to $1,446,000 compared to $1,232,000 for the three months ended September 30, 2025 compared to the same period of 2024. The Company is continuing pursuing new opportunities for other woven material that could improve sales.

The sales mix of the Building Supply segment for the three months ended September 30, 2025, was approximately 35% for synthetic roof underlayment, 51% for housewrap and 14% for other woven material. This compared to approximately 41% for synthetic roof underlayment, 46% for housewrap and 13% for other woven material for the three months ended September 30, 2024. Our synthetic roof underlayment product line primarily includes REX SynFelt®, REX TECHNOply® and TECHNO SB and our synthetic roof underlayment accessories consist of our new self-adhered TECHNOplus Ice & Water and REX Hi Temp. Our housewrap product line primarily consists of REX Wrap®, REX Wrap Plus® and REX™ Wrap Fortis. Housewrap accessories consist of REXTREME Window and Door Flashing and REX™ Premium Seam Tape.

The housing market continued to show weakness in the third quarter of 2025 with single-family housing starts down 2.6% compared to the same quarter in 2024. These figures only include July and August, as the census bureau did not publish a report for September 2025 due to the US government shutdown. During the third quarter of 2025, we again outperformed the market, as our core building products (housewrap and synthetic roof underlayment) were up 3.5%, driven primarily by housewrap sales, compared to the same period of 2024. Although synthetic roof underlayment sales were down in the third quarter of 2025, our decrease in the shipments was lower than the Asphalt Roofing Manufacturers Association ("ARMA") decline in shipments for the third quarter 2025, compared to the same period of 2024.

There continues to be uncertainty in housing starts, volatility and uncertainty in the economy as well as a stronger than normal hurricane season in the latter part of 2024 which could affect this segment in the coming quarter. The increase in tariffs have created notable pricing and supply volatility within the market. In addition, declining builder confidence and ongoing price volatility have resulted in reduced inventory positions among our primary customers.

Management attributes its success in a down market to our national builder partnerships. While the building sector is currently experiencing a significant downturn, we recognize that substantial opportunities for continued expansion still exist. Looking ahead to 2026, we anticipate new product introductions as we continue to expand our self-adhered roofing and flashing categories.

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Alpha Pro Tech, Ltd.

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**Disposable Protective Apparel segment sales for the three months ended September 30, 2025**, increased by $58,000, or 1.1%, to $5,511,000, compared to $5,453,000 for the three months ended September 30, 2024. This increase was due to a 10.4% increase in sales of disposable protective garments, partially offset by a 46.5% decrease in sales of face masks and a 33.6% decrease in sales of face shields.

The sales mix of the Disposable Protective Apparel segment for the three months ended September 30, 2025, was approximately 90% for disposable protective garments, 7% for face masks and 3% for face shields. This sales mix is compared to approximately 82% for disposable protective garments, 13% for face masks and 5% for face shields for the three months ended September 30, 2024.

Sales of disposable protective garments in the three months ended September 30, 2025, were up 10.4%, rebounding nicely across all product categories. Sales of shoe covers, coveralls, lab coats, caps and gowns all grew in the third quarter of 2025 compared to the same quarter of 2024. Moreover, our third quarter results pushed our year-to-date performance into positive territory. Management anticipates and is working to uncover new growth opportunities with our customers and to continue this current trend into the fourth quarter. Tariffs have added uncertainty and volatility to the marketplace, but we remain hopeful that tariffs will be significantly reduced soon. We currently are not making any changes to form, fit, function, or material basis weight of our products in an effort to mitigate these tariff challenges. We plan to continue to deliver our high-quality products and remain agile in our pricing strategies to maintain our leadership position and to differentiate Alpha Pro Tech in the disposable protective garments marketplace.

Sales of our face mask and face shield products in the third quarter of 2025 continue to lag behind prior year. We have promotions and pricing incentives for our customers to attempt to turn the tide and will continue to seek out and close new sales opportunities. Our inventory position is strong and much of this segment is not burdened by tariffs. We will continue our efforts to move the trend lines in a positive direction for both face masks and face shields.

**Consolidated sales for the nine months ended September 30, 2025** increased to $45,279,000 from $44,023,000 for the nine months ended September 30, 2024, representing an increase of $1,256,000, or 2.9%. This increase consisted of increased sales in the Building Supply segment of $1,750,000, partially offset by decreased sales in the Disposable Protective Apparel segment of $494,000.

**Building Supply segment sales for the nine months ended September 30, 2025** increased by $1,750,000, or 6.5%, to $28,729,000, compared to $26,979,000 for the same period of 2024.

The Building Supply segment sales increase during the nine months ended September 30, 2025, was primarily due to a 6.7% increase in sales of synthetic roof underlayment, a 2.6% increase in sales of housewrap and a 18.8% increase in sales of other woven material compared to the same period of 2024.

The sales mix of the Building Supply segment for the nine months ended September 30, 2025 was 49% for housewrap, 40% for synthetic roof underlayment and 11% for other woven material. This compared to 50% for housewrap, 40% for synthetic roof underlayment and 10% for other woven material for the nine months ended September 30, 2024.

We continue to be encouraged by our year-to-date increase in core building product sales of 3.5%, especially since single-family housing starts were down 4.9% during year-to-date through August 2025. As stated above, the census bureau did not publish a report for September 2025 due to the US government shutdown. Additionally, we have achieved the highest year-to-date sales on seam tape, flashing and lumber wrap. Sales of other woven material were up 18.8% year-to-date, primarily due to increased sales to our largest customer for this product line.

Management expects growth in the Building Supply segment, however continued uncertainty in housing starts, tariffs and the economy in general could negatively affect this segment.

**Disposable Protective Apparel segment sales for the nine months ended September 30, 2025** decreased by $494,000, or 2.9%, to $16,550,000, compared to $17,044,000 for the same period of 2024. This segment decrease was due to a 2.5% increase in sales of disposable protective garments, offset by a 43.1% decrease in sales of face masks, and a 13.2% decrease in sales of face shields.

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Alpha Pro Tech, Ltd.

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The sales mix of the Disposable Protective Apparel segment for the nine months ended September 30, 2025 was 90% for disposable protective garments, 6% for face masks and 4% for face shields. This sales mix is compared to 86% for disposable protective garments, 10% for face masks and 4% for face shields for the nine months ended September 30, 2024.

**Gross Profit**. Gross profit increased by $384,000, or 7.0%, to $5,868,000 for the three months ended September 30, 2025, from $5,484,000 for the three months ended September 30, 2024. The gross profit margin was 39.7% for the three months ended September 30, 2025, compared to 38.5% for the three months ended September 30, 2024.

Gross profit decreased by $352,000, or 2.0%, to $17,391,000 for the nine months ended September 30, 2025, from $17,743,000 for the nine months ended September 30, 2024. The gross profit margin was 38.4% for the nine months ended September 30, 2025, compared to 40.3% for the nine months ended September 30, 2024.

The gross profit margin in the nine months ended September 30, 2025 was negatively affected by a margin decrease primarily in the Disposable Protective Apparel segment and lesser degree in the Building Supply segment. Gross profit margin has been negatively affected in 2025, primarily by increased US tariffs, higher sales rebates and ocean freight rates.

Management expects that tariffs will have a negative effect on gross profit in the fourth quarter of 2025, as we have experienced three tariff increases on many of our products. There was a 10% baseline tariff on goods shipped from our joint venture partner after April 5th, a reciprocal tariff of an additional 15% on goods shipped after August 1st and an additional 25% on goods shipped after August 27. Management has increased selling prices in July 2025 and is expected to do so again in November, to partially mitigate the impact of the first two tariffs increases. There have been some positive developments of late regarding tariffs and management is hopeful that some of the tariff increases may be rolled back.

**Selling, General and Administrative Expenses**. Selling, general and administrative expenses increased by $66,000, or 1.5%, to $4,568,000 for the three months ended September 30, 2025, from $4,502,000 for the three months ended September 30, 2024. As a percentage of net sales, selling, general and administrative expenses decreased to 30.9% for the three months ended September 30, 2025, from 31.6% for the same period of 2024.

The change in expenses by segment for the three months ended September 30, 2025, was as follows: Building Supply expenses were up by $59,000, or 3.4%; Disposable Protective Apparel expenses were up by $45,000, or 3.4%; and corporate unallocated expenses were down by $38,000, or 2.6%.

The increase in the Building Supply segment expenses was primarily related to increased employee compensation, marketing, insurance and sales travel expenses, partially offset by decreased general factory expenses. The increase in the Disposable Protective Apparel segment expenses was primarily related to increased general office expenses, partially offset by decreased rent and marketing. The decrease in corporate unallocated expenses was primarily due to decreased professional fees, partially offset by increased employee compensation and general office expenses in the three months ended September 30, 2025 compared to the same period of 2024.

Selling, general and administrative expenses decreased by $416,000, or 2.9%, to $13,818,000 for the nine months ended September 30, 2025, from $14,234,000 for the nine months ended September 30, 2024. As a percentage of net sales, selling, general and administrative expenses decreased to 30.5% for the nine months ended September 30, 2025, from 32.3% for the same period of 2024.

The change in expenses by segment for the nine months ended September 30, 2025, was as follows: Building Supply expenses were down by $69,000, or 1.3%; Disposable Protective Apparel expenses were up by $47,000, or 1.2%; and corporate unallocated expenses were down by $394,000, or 8.4%.

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Alpha Pro Tech, Ltd.

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The decrease in the Building Supply segment expenses was primarily related to decreased employee compensation and general factory expenses, partially offset by increased insurance expenses. The increase in the Disposable Protective Apparel segment expenses was primarily related to increased employee compensation, marketing, sales travel expenses, partially offset by lower rent and utilities, general office and factory expenses. The decrease in corporate unallocated expenses was primarily due to decreased professional fees, insurance expenses, and reorganization costs in the nine months ended September 30, 2025 compared to the same period of 2024. The reorganization costs in 2024 were incurred in connection with moving our face mask manufacturing facility from Utah to Arizona.

In accordance with the terms of his employment agreement, the Company's current President and Chief Executive Officer is entitled to an annual bonus equal to 5% of the pre-tax profits of the Company, excluding bonus expense, up to a maximum of $1.0 million. A bonus amount of $69,000 was accrued for the three months ended September 30, 2025, compared to $58,000 for the three months ended September 30, 2024. A bonus amount of $194,000 was accrued for the nine months ended September 30, 2025, compared to $207,000 for the nine months ended September 30, 2024.

**Depreciation and Amortization**. Depreciation and amortization expense decreased by $42,000, or 17.1%, to $203,000 for the three months ended September 30, 2025, from $245,000 for the three months ended September 30, 2024. Depreciation and amortization expense decreased by $48,000, or 6.5%, to $686,000 for the nine months ended September 30, 2025, from $734,000 for the nine months ended September 30, 2024.

**Income from Operations.** Income from operations increased by $360,000, or 48.8%, to $1,097,000 for the three months ended September 30, 2025, compared to $737,000 for the three months ended September 30, 2024. The increased income from operations was primarily due to an increase in gross profit of $384,000 and a decrease in depreciation and amortization expenses of $42,000, partially offset by an increase in selling, general and administrative expenses of $66,000. Income from operations as a percentage of net sales for the three months ended September 30, 2025, was 7.4%, compared to 5.2% for the three months ended September 30, 2024.

Income from operations increased by $112,000, or 4.0%, to $2,887,000 for the nine months ended September 30, 2025, compared to $2,775,000 for the nine months ended September 30, 2024. The increased income from operations was primarily due to a decrease in selling, general and administrative expenses of $416,000 and a decrease in depreciation and amortization expenses of $48,000, partially offset by a decrease in gross profit of $352,000. Income from operations as a percentage of net sales for the nine months ended September 30, 2025, was 6.4%, compared to 6.3% for the nine months ended September 30, 2024.

**Other Income**. Other income decreased by $166,000 to income of $196,000 for the three months ended September 30, 2025, compared to $362,000 for the same period of 2024. The decrease was primarily due to a decrease in interest income of $66,000, a decrease in equity in income of unconsolidated affiliate of $70,000 and a decrease in gain on sale of assets of $30,000.

Other income decreased by $376,000 to income of $789,000 for the nine months ended September 30, 2025, compared to $1,165,000 for the same period of 2024. The decrease was primarily due to a decrease in interest income of $216,000, a decrease in equity in income of unconsolidated affiliate of $130,000 and a decrease in gain on sale of assets of $30,000.

**Income before Provision for Income Taxes**. Income before provision for income taxes for the three months ended September 30, 2025, was $1,293,000, compared to income before provision for income taxes of $1,099,000 for the same period of 2024, representing an increase of $194,000, or 17.7%. This increase in income before provision for income taxes was due to an increase in income from operations of $360,000, partially offset by a decrease in other income of $166,000.

Income before provision for income taxes for the nine months ended September 30, 2025, was $3,676,000, compared to income before provision for income taxes of $3,940,000 for the same period of 2024, representing a decrease of $264,000, or 6.7%. This decrease in income before provision for income taxes was due to a decrease in other income of $376,000, partially offset by an increase in income from operations of $112,000.

**Provision for Income Taxes**. The provision for income taxes for the three months ended September 30, 2025, was $317,000, compared to $237,000 for the same period of 2024. The estimated effective tax rate was 24.5% for the three months ended September 30, 2025, compared to 21.6% for the three months ended September 30, 2024.

The provision for income taxes for the nine months ended September 30, 2025, was $843,000, compared to $858,000 for the same period of 2024. The estimated effective tax rate was 22.9% for the nine months ended September 30, 2025, compared to 21.8% for the nine months ended September 30, 2024.

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Alpha Pro Tech, Ltd.

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On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted, which includes permanent extensions of most expiring Tax Cuts and Jobs Act provisions and international tax changes. The Company is still evaluating the potential impacts of the OBBBA; however, the Company does not anticipate it will have a material impact on the Company's financial statements.

The Company does not record a tax provision on equity in income of unconsolidated affiliate, which reduces the effective tax rate.

**Net Income**. Net income for the three months ended September 30, 2025, was $976,000 compared to net income of $862,000 for the same period of 2024, representing an increase of $114,000, or 13.2%. The net income increase between the three months ended September 30, 2025 and the same period of 2024 was due to an increase in income before provision for income taxes of $194,000, partially offset by an increase in provision for income taxes of $80,000. Net income as a percentage of net sales was 6.6% for the three months ended September 30, 2025, compared to 6.0% for the same period of 2024. Basic and diluted earnings per common share for each of the three months ended September 30, 2025 and 2024, was $0.09 and $0.08, respectively.

Net income for the nine months ended September 30, 2025, was $2,833,000 compared to net income of $3,082,000 for the same period of 2024, representing a decrease of $249,000, or 8.1%. The net income decrease between the nine months ended September 30, 2025 and the same period of 2024 was due to a decrease in income before provision for income taxes of $264,000, partially offset by a decrease in provision for income taxes of $15,000. Net income as a percentage of net sales was 6.3% for the nine months ended September 30, 2025, compared to 7.0% for the same period of 2024. Basic and diluted earnings per common share for each of the nine months ended September 30, 2025 and 2024, was $0.27 and $0.28, respectively.

**LIQUIDITY AND CAPITAL RESOURCES**

As of September 30, 2025, the Company had cash and cash equivalents ("cash") of $17,658,000 and working capital of $48,078,000. As of September 30, 2025, the Company's current ratio (current assets/current liabilities) was 14:1. Cash decreased by 5.2%, or $978,000, to $17,658,000 as of September 30, 2025, compared to $18,636,000 as of December 31, 2024, and working capital increased by $562,000, to $48,078,000 from $47,516,000 as of December 31, 2024. The decrease in cash from December 31, 2024, was due to cash used in investing activities of $372,000 and cash used in financing activities of $2,658,000 offset by cash provided by operating activities of $2,052,000.

Net cash provided by operating activities of $2,052,000 for the nine months ended September 30, 2025 was due to net income of $2,833,000, as adjusted primarily by the following: stock-based compensation expense of $408,000, depreciation and amortization expense of $686,000, equity in income of unconsolidated affiliate of $305,000, operating lease asset amortization of $698,000, an increase in accounts receivable of $2,235,000, a decrease in prepaid expenses of $894,000, an increase in inventory of $746,000, an increase in accounts payable and accrued liabilities of $489,000, and a decrease in lease liabilities of $670,000, all compared to December 31, 2024.

Accounts receivable increased by $2,235,000, or 45.7%, to $7,129,000 as of September 30, 2025, from $4,894,000 as of December 31, 2024. The increase in accounts receivable was primarily related to increased sales in the third quarter of 2025 compared to the latter part of 2024 and due to a higher percentage of receivables with extended terms. The number of days that sales remained outstanding as of September 30, 2025, calculated by using an average of accounts receivable outstanding and annual revenue, was 37 days, compared to 36 days as of December 31, 2024.

Inventory increased by $746,000, or 3.3%, to $23,479,000 as of September 30, 2025, from $22,733,000 as of December 31, 2024. The increase was due to an increase in inventory for the Building Supply segment of $969,000, or 8.9%, to $11,900,000, partially offset by a decrease in inventory for the Disposable Protective Apparel Building Supply segment of $223,000, or 1.9%, to $11,579,000.

Prepaid expenses decreased by $894,000, or 20.4%, to $3,482,000 as of September 30, 2025, from $4,376,000 as of December 31, 2024. The decrease was primarily due to a decrease in prepaid insurance and prepaid taxes partially offset by increase in prepaid inventory for Building Supply segment.

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Alpha Pro Tech, Ltd.

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Right-of-use-assets as of September 30, 2025, decreased by $698,000 to $8,016,000 from $8,714,000 as of December 31, 2024, as a result of amortization of the right-of- use-assets.

Lease liabilities as of September 30, 2025, decreased by $670,000 to $8,105,000 from $8,775,000 as of December 31, 2024. The decrease in lease liabilities was the result of lease payments made during the period.

Accounts payable and accrued liabilities as of September 30, 2025, increased by $489,000, or 21.9%, to $2,719,000, from $2,230,000 as of December 31, 2024. The increase was primarily due to increases in trade payables, partially offset by decreases in accrued bonuses.

Net cash used in investing activities was $372,000 for the nine months ended September 30, 2025, compared to net cash used in investing activities of $2,333,000 for the same period of 2024. Investing activities for the nine months ended September 30, 2025 and 2024 consisted primarily of the purchase of equipment.

Net cash used in financing activities was $2,658,000 for the nine months ended September 30, 2025, compared to net cash used in financing activities of $2,936,000 for the same period of 2024. Net cash used in financing activities for the nine months ended September 30, 2025 resulted from the payment of $2,632,000 for the repurchase of common stock and $26,000 for treasury stock excise tax. Net cash used in financing activities for the nine months ended September 30, 2024 resulted from the payment of $3,731,000 for the repurchase of common stock and $37,000 for treasury stock excise tax, partially offset by $832,000 in proceeds from the exercise of stock options.

As of September 30, 2025, we had $2,111,000 available for stock purchases under our stock repurchase program. During the nine months ended September 30, 2025, we repurchased 532,313 shares of common stock at a cost of $2,632,000. As of September 30, 2025, we had repurchased a total of 21,774,940 shares of common stock at a cost of approximately $57,410,000 through our repurchase program which commenced in 1999. We retire all stock upon repurchase. Future repurchases are expected to be funded from cash on hand and cash flows from operating activities.

We believe that our current cash balance and expected cash flow from operations will be sufficient to satisfy our projected working capital and planned capital expenditures for the foreseeable future.

**Recent Accounting Pronouncements** 

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

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

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

**ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

As a smaller reporting company, we are not required to provide the information otherwise required by this Item.

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Alpha Pro Tech, Ltd.

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**ITEM 4. CONTROLS AND PROCEDURES**

**Evaluation of Disclosure Controls and Procedures**.

Under the supervision and with the participation of our management, including our President and Chief Executive Officer (principal executive officer) and our Chief Financial Officer (principal financial officer), we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act")) as of September 30, 2025, pursuant to the evaluation of these controls and procedures required by Rule 13a-15 of the Exchange Act. Disclosure controls and procedures are the controls and other procedures that we have designed to ensure that we record, process, summarize and report in a timely manner the information that we must disclose in reports that we file with or submit to the SEC under the Exchange Act, and such controls include, without limitation, controls and procedures designed to ensure that information required to be disclosed is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow for timely decisions regarding required disclosure.

In designing and evaluating our disclosure controls and procedures, we recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives and that we are required to apply our judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Based on the evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of the end of the period covered by this report.

**Changes in Internal Control Over Financial Reporting**

During the quarter to which this report relates, there was no change in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) and Rule 15d-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

**PART II. OTHER INFORMATION**

**ITEM 1. LEGAL PROCEEDINGS**

The Company is subject to various pending and threatened litigation actions in the ordinary course of business. Although it is not possible to determine with certainty at this point in time what liability, if any, the Company will have as a result of such litigation, based on consultation with legal counsel, management does not anticipate that the ultimate liability, if any, resulting from such litigation will have a material effect on the Company's financial condition and results of operations.

**ITEM 1A. RISK FACTORS**

A list of factors that could materially affect our business, financial condition or operating results is described in Part I, Item 1A, "Risk Factors" in the 2024 Form 10-K. Other than the risk factor set forth below, there have been no material changes to our risk factors from those disclosed in Part I, Item 1A, "Risk Factors" in the 2024 Form 10-K.

**Tariff policies and potential countermeasures could increase our costs and disrupt our global supply chain, which could negatively impact the results of our operations.**

On February 1, 2025, President Trump announced the imposition of additional substantial tariffs on imports from various countries, including China, Canada and Mexico, and the subject countries indicated their intention to impose counter measures. Under the announced measures, tariffs will be applied to certain products from Mexico, Vietnam, India Canada, and China, among other countries.

On April 2, 2025, President Trump announced a 10% "baseline" reciprocal tariff on nearly all U.S. trading partners, effective April 5, 2025, and additional, higher reciprocal tariffs on specific countries, effective April 9, 2025. Currently, the 10% baseline reciprocal tariff announced in April 2025 remains in effect, in addition to the other tariffs on China (a minimum of an additional 20% as of July 15, 2025, with additional tariffs pending subject to negotiations) and Canada and Mexico (25% as of July 15, 2025, for goods that are not covered by the USMCA).

As it pertains to the countries where we manufacture products, the additional, country-specific tariffs would apply to Vietnam, India, and Mexico. If the additional, higher tariffs on imports from these countries go into effect, it would increase the costs of our products manufactured in these countries with respect to our U.S. market. Further, such circumstances may impact our ability to sell certain products into the United States and therefore may also impact the operational status of certain of our international manufacturing facilities. As a result, our operating results could be adversely impacted if these tariffs are imposed.

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Alpha Pro Tech, Ltd.

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In August 2025, the U.S. government imposed a 25% tariff on India in response to its continued importation of Russian oil, which is in addition to the pre-existing 25% individualized reciprocal tariff on India. Increased tariffs by the United States have led, and may continue to lead, to the imposition of retaliatory tariffs or other measures taken by foreign jurisdictions, which may in turn lead to additional tariffs imposed or measures taken by the United States. In August 2025, however, the U.S. Court of Appeals for the Federal Circuit ruled that many of the tariffs imposed under the Trump Administration exceed presidential authority and therefore are invalid, though the decision has been stayed pending U.S. Supreme Court review. This ruling introduces additional uncertainty as to the scope and durability of existing and future tariff measures. While the U.S. government has announced various trade deals, many such agreements are preliminary and may be subject to change.

Certain of the tariffs have increased the cost of raw materials and components necessary for our operations and caused us in some cases to raise prices to our customers. To the extent these tariffs remain in effect, the tariffs and any countermeasures could also cause further increases in the costs of finished goods, raw materials and components necessary for our operations, disrupt our global supply chain and create additional operational challenges. We have experienced some adverse effects on our sales and costs due to the effects of actual and potential tariffs, and such effects could continue and potentially increase. Further, it is possible that government policy changes and related uncertainty about policy changes could increase market volatility and currency exchange rate fluctuations. Because of these dynamics, we cannot predict the impact of any future changes to the U.S.'s or other countries' trading relationships or the impact of new laws or regulations adopted by the U.S. or other countries on our business. Such changes in tariffs and trade regulations could have a material adverse effect on our financial condition, results of operations and cash flows.

**ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS**

**ISSUER PURCHASES OF EQUITY SECURITIES**

The following table sets forth purchases made by or on behalf of the Company or any "affiliated purchaser," as defined in Rule 10b-18(a)(3) of the Exchange Act:

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| | | | | |
|:---|:---|:---|:---|:---|
| **Issuer Purchases of Equity Securities** | **Issuer Purchases of Equity Securities** | **Issuer Purchases of Equity Securities** | **Issuer Purchases of Equity Securities** | **Issuer Purchases of Equity Securities** |
| **Period** | **Total Number of** <br> **Shares Purchased (1)** | **Average Price Paid** <br> **per Share** | **Total Number of** <br> **Shares Purchased** <br> **as Part of Publicly** <br> **Announced** <br> **Program (1)** | **Approximate Dollar** <br> **Value of Shares that** <br> **May Yet Be** <br> **Purchased Under** <br> **the Program (1)** |
| July 1 - 31, 2025 | 33700 | $4.79 | 33700 | $2572000 |
| August 1 - 31, 2025 | 49600 | 4.72 | 49600 | 2336000 |
| September 1 - 30, 2025 | 46500 | 4.82 | 46500 | 2111000 |
|  | 129800 | 4.77 | 129800 |  |

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(1) All of the shares included in this table were purchased pursuant to the Company's existing share repurchase program. Since the inception of the program in 1999, the Company has authorized the repurchase of $59,402,000 of common stock, including the most recent expansion of $2,000,000 approved by the Board of Directors on June 27, 2025. As of September 30, 2025, $2,111,000 was available for repurchase under the program. The stock repurchase plan expires on December 15, 2026.

**UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS**

We did not sell any unregistered equity securities during the periods covered by this Quarterly Report on Form 10-Q.

**ITEM 5. OTHER INFORMATION**

(a) None.

(b) None.

(c) During the period covered by this report, none of the Company's directors or executive officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (each as defined in Item 408 of Regulation S-K under the Securities Exchange Act of 1934, as amended).

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Alpha Pro Tech, Ltd.

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**ITEM 6. EXHIBITS** 

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| | |
|:---|:---|
| &nbsp;&nbsp; 3.1.1(P) | Certificate of Incorporation of Alpha Pro Tech, Ltd., incorporated by reference to Exhibit 3(f) to Form 10-K for the year ended December 31, 1994, filed on March 31, 1995 (File No. 000-19893). |
| &nbsp;&nbsp; 3.1.2(P) | Certificate of Amendment of Certificate of Incorporation of Alpha Pro Tech, Ltd., incorporated by reference to Exhibit 3(j) to Form 10-K for the year ended December 31, 1994, filed on March 31, 1995 (File No. 000-19893). |
| &nbsp;&nbsp; 3.1.3(P) | Certificate of Ownership and Merger (BFD Industries, Inc. into Alpha Pro Tech, Ltd.), incorporated by reference to Exhibit 3(l) to Form 10-K for the year ended December 31, 1994, filed on March 31, 1995 (File No. 000-19893). |
| 3.2 | [Amended and Restated Bylaws of Alpha Pro Tech, Ltd., incorporated by reference to Exhibit 3.1 to Form 8-K, filed on December 19, 2022 (File No. 001-15725).](http://www.sec.gov/Archives/edgar/data/884269/000143774922029334/ex_457219.htm) |
| 31.1 | [Certification of President and Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.](ex_880734.htm) |
| 31.2 | [Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.](ex_880735.htm) |
| 32.1 | [Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 – President and Chief Executive Officer.](ex_880736.htm) |
| 32.2 | [Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 – Chief Financial Officer.](ex_880737.htm) |
| &nbsp;&nbsp; 101 | Interactive Data Files for Alpha Pro Tech, Ltd's Form 10-Q for the period ended September 30, 2025, formatted in Inline XBRL. |
| &nbsp;&nbsp; 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
|  | (P) Indicates a paper filing with the SEC. |

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Alpha Pro Tech, Ltd.

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

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| | | | |
|:---|:---|:---|:---|
|  |  |  | ALPHA PRO TECH, LTD. |
| DATE: | &nbsp;&nbsp;&nbsp;November 6, 2025 | BY: | &nbsp;&nbsp;&nbsp;/s/ Lloyd Hoffman |
|  |  |  | Lloyd Hoffman |
|  |  |  | President and Chief Executive Officer |
| DATE: | &nbsp;&nbsp;&nbsp;November 6, 2025 | BY: | &nbsp;&nbsp;&nbsp;/s/ Colleen McDonald |
|  |  |  | Colleen McDonald |
|  |  |  | Chief Financial Officer |

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## Exhibit 31.1

**Alpha Pro Tech, Ltd.**

---

| | |
|:---|:---|
| **Certification Under Exchange Act Rules 13a** – **14(a) and 15d** – **14(a)** | **EXHIBIT 31.1** |

---

I, Lloyd Hoffman, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this Quarterly Report on Form 10-Q of Alpha Pro Tech, Ltd.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | | |
|:---|:---|:---|:---|
| DATE: | &nbsp;&nbsp;&nbsp;November 6, 2025 | BY: | &nbsp;&nbsp;&nbsp;/s/ Lloyd Hoffman |
|  |  |  | Lloyd Hoffman |
|  |  |  | President and Chief Executive Officer<br> (Principal Executive Officer) |

---

## Exhibit 31.2

**Alpha Pro Tech, Ltd.**

---

| | |
|:---|:---|
| **Certification Under Exchange Act Rules 13a** – **14(a) and 15d** – **14(a)** | **EXHIBIT 31.2** |

---

I, Colleen McDonald, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this Quarterly Report on Form 10-Q of Alpha Pro Tech, Ltd.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | | |
|:---|:---|:---|:---|
| DATE: | &nbsp;&nbsp;&nbsp;November 6, 2025 | BY: | &nbsp;&nbsp;&nbsp;/s/ Colleen McDonald |
|  |  |  | Colleen McDonald |
|  |  |  | Chief Financial Officer<br> (Principal Financial and Accounting Officer) |

---

## Exhibit 32.1

**Alpha Pro Tech, Ltd.**

**EXHIBIT 32.1**

Alpha Pro Tech, Ltd.

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Alpha Pro Tech, Ltd. (the "Company") on Form 10-Q for the quarter ended September 30, 2025, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Lloyd Hoffman, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| | | | |
|:---|:---|:---|:---|
| DATE: | &nbsp;&nbsp;&nbsp;November 6, 2025 | BY: | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;/s/ Lloyd Hoffman |
|  |  |  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Lloyd Hoffman |
|  |  |  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;President and Chief Executive Officer |

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## Exhibit 32.2

**Alpha Pro Tech, Ltd.**

**EXHIBIT 32.2**

Alpha Pro Tech, Ltd.

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Alpha Pro Tech, Ltd. (the "Company") on Form 10-Q for the quarter ended September 30, 2025, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Colleen McDonald, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

---

| | | | |
|:---|:---|:---|:---|
| DATE: | &nbsp;&nbsp;&nbsp;November 6, 2025 | BY:  | &nbsp;&nbsp;&nbsp; /s/ Colleen McDonald |
|  |  |  | Colleen McDonald |
|  |  |  | Chief Financial Officer |

---