UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

☒ Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended December 31, ~~2023~~2024

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission file number: 001-15725

ALPHA PRO TECH, LTD.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	63-1009183
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

53 Wellington Street East, Aurora Ontario, L4G 1H6

(Address of Principal Executive Offices, including zip code)

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

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

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock,

$0.01 par value

APT

NYSE American

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

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 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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b). ☐

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

The aggregate market value of voting stock held by non-affiliates of the registrant as of June 30, ~~2023~~2024, was $4152,~~586~~318,~~479~~013.

As of ~~March~~February 128, ~~2024~~2025, the registrant had outstanding 1110,~~462~~873,~~034~~415 shares of common stock.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive Proxy Statement for the ~~2024~~2025 Annual Meeting of Shareholders are incorporated by reference into Part III of this Form 10-K.

ALPHA PRO TECH, LTD.

INDEX TO ANNUAL REPORT ON FORM 10-K

Page Special Note Regarding Forward-Looking Statements 3 Special Note Regarding Smaller Reporting Company Status 3 PART I: 3 Item 1. Business 3 General 3 Business 3 Strategy 4 Products 4 Markets 5 Distribution 5 Financial Information About Geographic Areas 6 Manufacturing 6 Competition 7 Regulatory Requirements 7 Patents and Trademarks 7 Human Capital 7 Available Information 8 Item 1A. Risk Factors 8 Item 1B. Unresolved Staff Comments 11 Item 1C. Cybersecurity Disclosure 11 Item 2. Properties 13 Item 3. Legal Proceedings 13 Item 4. Mine Safety Disclosures 14 PART II: 14 Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities 14 Item 6. (Reserved) 14 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 14 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 20 Item 8. Financial Statements and Supplementary Data 21 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 51 Item 9A. Controls and Procedures 51 Item 9B. Other Information 51 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 51 PART III: 52 Item 10. Directors, Executive Officers and Corporate Governance 52 Item 11. Executive Compensation 52 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters 52 Item 13. Certain Relationships and Related Transactions, and Director Independence 53 Item 14. Principal Accountant Fees and Services 53 PART IV: 53 Item 15. Exhibits and Financial Statement Schedules 53 Item 16. Form 10-K Summary 53 Exhibit Index 54 Signatures 55

		Page
Special Note Regarding Forward-Looking Statements		3
Special Note Regarding Smaller Reporting Company Status		3

PART I:		3

Item 1.	Business	3
	General	3
	Business	3
	Strategy	4
	Products	4
	Markets	5
	Distribution	5
	Financial Information About Geographic Areas	6
	Manufacturing	6
	Competition	7
	Regulatory Requirements	7
	Patents and Trademarks	7
	Human Capital	7
	Available Information	8
Item 1A.	Risk Factors	8
Item 1B.	Unresolved Staff Comments	12
Item 1C.	Cybersecurity	13
Item 2.	Properties	14
Item 3.	Legal Proceedings	14
Item 4.	Mine Safety Disclosures	14

PART II:		15

Item 5.	Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities	15
Item 6.	(Reserved)	15
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	22
Item 8.	Financial Statements and Supplementary Data	22
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	45
Item 9A.	Controls and Procedures	45
Item 9B.	Other Information	45
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	45

PART III:		46

Item 10.	Directors, Executive Officers and Corporate Governance	46
Item 11.	Executive Compensation	46
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters	46
Item 13.	Certain Relationships and Related Transactions, and Director Independence	47
Item 14.	Principal Accountant Fees and Services	47

PART IV:		47

Item 15.	Exhibits and Financial Statement Schedules	47
Item 16.	Form 10-K Summary	47


Exhibit Index		48

Signatures		49

PART I

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains forward-looking statements that are made pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks, uncertainties and assumptions as described from time to time in registration statements, annual reports and other periodic reports and filings of the Company (as defined below) filed with the Securities and Exchange Commission (“SEC”). 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, new products, production levels and sales in ~~2024~~2025 and other information that is not historical information. All statements, other than statements of historical facts that address the Company’s expectations of sources of capital or that express the Company’s expectations for the future with respect to financial performance or operating strategies or results can be identified as forward-looking statements. As a result, there can be no assurance that the Company’s future results will not be materially different from those described herein as “expected,” “anticipated,” “forecasted,” “estimated,” “believed,” “predicted,” “intended,” “planned,” “potential,” “may,” “continue” or “should,” or using variations of such words or similar expressions, which reflect the current views of the Company with respect to future events. We caution readers that these forward-looking statements speak only as of the date hereof. The Company hereby expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any such statements to reflect any change in the Company’s expectations or any change in events, conditions or circumstances on which such statements are based.

Any expectations based on these forward-looking statements are subject to risks and uncertainties. These risks and other factors include, but are not limited to, those listed in this report under “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere in this report. 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 Annual Report on Form 10-K as a “smaller reporting company” (as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended) based on our public float (the aggregate market value of our common stock equity held by non-affiliates of the Company) as of the last business day of our second fiscal quarter of ~~2023~~2024. As a result of being a smaller reporting company, we are not required to provide certain disclosure in this Annual Report on Form 10-K. Where information is being omitted or reduced in this Annual Report on Form 10-K based on our smaller reporting company status, we have made a special notation herein.

Item 1. Business.

GENERAL

ALPHA PRO TECH, LTD. (“Alpha Pro Tech,” the “Company,” “we,” “our” or “us”) is the parent company of Alpha Pro Tech, Inc. and Alpha ProTech Engineered Products, Inc. The Company was incorporated in the State of Delaware on July 1, 1994, as a successor to a business that was organized in 1983. Our executive offices are located at 53 Wellington Street East, Aurora, Ontario, Canada L4G 1H6, and our telephone number is (905) 479-0654. Our website is located at www.alphaprotech.com.

The Company continued to qualify as a smaller reporting company at the measurement date for determining such qualification during ~~2023~~2024. According to the disclosure requirements for smaller reporting companies, the Company has included consolidated balance sheets as of December 31, ~~2023~~2024 and ~~2022~~2023, and consolidated statements of income, comprehensive income, shareholders’ equity and cash flows for each of the two years in the period ended December 31, ~~2023~~2024.

BUSINESS

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 and infection control products for the cleanroom, industrial, pharmaceutical, medical and dental markets through our wholly-owned subsidiary, Alpha Pro Tech, Inc. We also manufacture a line of building supply construction weatherization products through our wholly-owned subsidiary, Alpha ProTech Engineered Products, Inc. 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: (1) the Building Supply segment, consisting of construction weatherization products, such as housewrap, housewrap accessories including window and door flashing, and seam tape, synthetic roof underlayment and synthetic roof underlayment accessories, as well as other woven materials; and (2) 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. All financial information presented in this report reflects the current segmentation.

STRATEGY

Our principal strategy focuses on developing, producing and marketing differentiated, innovative high value products that protect people, products and environments. Our key sales growth strategies are based on communicating directly with end users and developing innovative products to suit individual end users’ needs.

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

PRODUCTS

Our principal products are grouped into two business segments:

Building Supply:

● Housewrap

● Housewrap accessories: window and door flashing and seam tape

● Synthetic roof underlayment

● Synthetic roof underlayment accessories: self-adhered roof underlayment

● Other woven material

Disposable Protective Apparel:

● Shoecovers

● Bouffant caps

● Gowns

● Coveralls

● Lab coats

● Frocks

● Face masks

● Face shields

Building Supply

The Building Supply segment consists of a line of construction supply weatherization products, namely housewrap, housewrap accessories, ~~and~~ synthetic roof underlayment and synthetic roof underlayment accessories, as well as other woven material. This line of products is a natural extension of our core capabilities: creating proprietary products designed to protect people and environments.

The usage of these construction supply weatherization products offers great advantages in decreasing the time that it takes to construct a home, as well as reducing costs. The housewrap, under the trademark REX™, offers a weather resistant barrier and, to the homeowner, years of lower energy consumption. REX Wrap® and REX Wrap Plus® are woven and coated polypropylene micro perforated weather resistant barriers, and REX™ Wrap Fortis with JX ALTA 360° Drainage Technology™ is a one-of-a-kind breathable product that uniquely enables the drainage of water in every direction to protect buildings from the elements much better, we believe, than a traditional housewrap, while decreasing job site material waste, simplifying installation to reduce labor and allowing fewer products to be carried onto the job site. Our housewrap accessories ~~includes~~include REXTREME Window and Door Flashing, which provides a tight seal from air and moisture around windows and doors and REX™ Premium Seam Tape which is a high-strength film that helps to seal all seams on housewrap applications.

The proprietary synthetic roof underlayment, REX SynFelt®, has the ability to resist the environment, as opposed to conventional organic roofing underlayment that is prone to rapid degradation and mold growth. We also manufacture and distribute REX TECHNOply® and TECHNO SB®, economy versions of our synthetic roof underlayment, to capture market share in the lower end of the market. These products are manufactured in our manufacturing facility in Valdosta, Georgia and through our joint venture in India, as described in more detail below under “Manufacturing.” Our synthetic roof underlayment accessories consist of our new self-adhered TECHNOplus which provides ~~and~~an additional layer of protection and aids in prevention of damage caused by ice dams and wind driven rain, and REX Ultra HT which is designed to deal with roofing’s most demanding installation conditions and high temperature applications.

Disposable Protective Apparel

Our goal in the design and manufacture of all our disposable protective garments is to keep the wearer cool, clean and comfortable and to provide the right level of protection for the wearer and the wearer’s environment. To achieve this, we offer a comprehensive selection of materials and garment designs to meet a wide range of application requirements. Our materials are clean and durable and offer the wearer a great comfort level. Our products are offered using proprietary materials such as ChemTech®, BarrierTech®, ComforTech®, AlphaGuard®, GenPro®, UltraGrip™, SafeStep®, MaxGrip®, AquaTrak®, SureGrip®, NuTech® and NaviTrak®.

The vast majority of the disposable protective garments are manufactured through our joint venture in India, and, to a much lesser extent, by other contract manufacturers in Asia and Mexico, as described in more detail below under “Manufacturing.” Certain proprietary products are made using materials supplied by us.

Our face masks come in a wide variety of filtration efficiencies and styles. Our patented Positive Facial Lock® feature provides a custom fit to the face to prevent blow-by for better protection. The term "blow-by" is used to describe the potential for infectious material to enter or escape a face mask without going through the filter as a result of gaps or openings in the face mask. Our Magic Arch® feature holds the mask away from the nose and mouth, creating a comfortable breathing chamber.

Our N-95 Particulate Respirator National Institute for Occupational Safety and Health (“NIOSH”) approved face mask, which incorporates both the Positive Facial Lock® feature and the Magic Arch® feature, has historically experienced increased demand during outbreaks of infectious disease, such as SARS in 2003, Bird Flu in 2006, H1N1 in 2009 and COVID-19 in 2020, to combat the spread of these diseases.

All eye shields are made from an optical-grade polyester film and have a permanent anti-fog feature. This provides the wearer with extremely lightweight, distortion-free protection that can be worn for hours, and the eye shields will not fog up from humidity and/or perspiration. An important feature of all face masks and eye and face shields is that they are disposable, which eliminates the possibility of cross infection between patients and saves consumers, such as hospitals, the expense of sterilization after every use.

As described in more detail below under “Manufacturing,” our face masks are primarily manufactured in our facility in ~~Salt Lake City~~Nogales, ~~Utah~~Arizona. Our eye shields are also produced in our facility in Nogales, Arizona and assembled by a subcontractor in Mexico.

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 (“FDA”) approved facilities, regardless of the market served.

The Company’s products are sold under the “Alpha Pro Tech” brand name and under private label, and they are predominantly sold in the U.S.

Financial information related to the two segments can be found in ~~Activity of Business Segments (~~Note ~~15)~~14 ~~of the Notes~~ to our consolidated financial statements ~~included in Item 8~~.

MARKETS

Our products are sold to the following markets: (i) construction weatherization products (building supply products) are sold to construction supply and roofing distributors, and (ii) disposable protective apparel products are sold to the industrial, cleanroom, medical and dental markets.

Our target customers are construction 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.

DISTRIBUTION

We rely primarily on a network of independent distributors for the sale of our products. We generally do not have a material amount of backlog orders, as orders are usually placed for shipment and shipped within 30 days. Appropriate levels of inventories are maintained to supply distributors on a timely basis. From time to time, we will stockpile inventory for periods of unusually high demand.

WeDisruptions ~~generally~~in dothe ~~not~~supply chain have acreated ~~material~~occasional ~~amount~~backlogs of ~~backlog~~unfulfilled orders, asfor ~~orders~~our ~~are~~personal ~~usually~~protective ~~placed~~equipment ~~for~~(“PPE”) ~~shipment~~products and ~~shipped~~certain ~~within 30 days. Appropriate levels~~ of ~~inventories~~our ~~are~~building ~~maintained to~~ supply ~~distributors~~products, onand auncertainty ~~timely~~in ~~basis.~~the ~~From~~timing ~~time~~of todeliveries ~~time,~~and wefulfillment ~~will~~of ~~stockpile~~backlogged ~~inventory~~orders ~~for~~can ~~periods~~occur offrom ~~unusually~~time ~~high~~to ~~demand~~time.

~~Disruptions~~Standard inpayment ~~the~~terms ~~supply~~are ~~chain~~net ~~have~~30 ~~created~~days ~~occasional~~from ~~backlogs~~the date of ~~unfulfilled~~shipment. ~~orders~~All pricing and payment for our ~~personal~~products ~~protective~~are ~~equipment~~in ~~(“PPE”)~~U.S. ~~products~~dollars. ~~and~~Authorized ~~certain~~returns ofmust ~~our~~be ~~building~~unopened, ~~supply~~in ~~products,~~good condition and ~~uncertainty~~ in the ~~timing~~original carton and may be returned within 90 days of ~~deliveries~~the ~~and~~original ~~fulfillment~~date of ~~backlogged~~shipment. ~~orders~~All ~~can~~authorized ~~occur~~returns ~~from~~are ~~time~~subject to ~~time~~a restocking fee of 20% of the original invoice.

Standard payment terms are net 30 days from the date of shipment. All pricing and payment for our products are in U.S. dollars. Authorized returns must be unopened, in good condition and in the original carton and may be returned within 90 days of the original date of shipment. All authorized returns are subject to a restocking fee of 20% of the original invoice.5

5FINANCIAL INFORMATION ABOUT GEOGRAPHIC AREAS

~~FINANCIAL~~The ~~INFORMATION~~following ~~ABOUT~~table ~~GEOGRAPHIC~~summarizes ~~AREAS~~the Company’s net sales by geographic region for the Company’s last two years. All amounts have been rounded to the nearest thousand.

The following table summarizes the Company’s net sales by geographic region for the Company’s last two years. All amounts have been rounded to the nearest thousand.

	Years Ended December 31,
	2024		2023

Net sales by geographic region
United States	$	57,211,000	$	60,882,000
International		629,000		350,000

Consolidated net sales	$	57,840,000	$	61,232,000

	Years Ended December 31,
	2023		2022
Net sales by geographic region
United States	$	60,882,000	$	60,489,000
International		350,000		1,492,000
Consolidated net sales	$	61,232,000	$	61,981,000

Net sales by geographic region are based on the countries in which our customers are located. International sales include sales primarily to Canada and Costa Rica during 2024 and Canada and Japan in 2023. All sales are in U.S. dollars. For the years ended December 31, 2024 and 2023, the Company did not generate sales from any single country, except the United States, that were significant to the Company’s consolidated net sales.

~~Net~~The ~~sales~~following bytable ~~geographic~~summarizes ~~region~~the ~~are~~locations ~~based~~of on the ~~countries~~Company’s inlong-lived ~~which~~assets ~~our~~by ~~customers~~geographic ~~are~~region ~~located.~~as ~~International~~of ~~sales include sales primarily to Canada and Japan. All sales are in U.S. dollars. For the years ended~~ December 31, ~~2023~~2024 and ~~2022, the Company did not generate sales from any single country, except the United States, that were significant to the Company’s consolidated net sales~~2023.

The following table summarizes the locations of the Company’s long-lived assets by geographic region as of December 31, 2023 and 2022.

	As of December 31,
	2024		2023
Long-lived assets, net by geographic region
United States	$	7,325,000	$	4,340,000
International		1,195,000		1,247,000

Consolidated total long-lived assets, net	$	8,520,000	$	5,587,000

	As of December 31,
	2023		2022
Long-lived assets by geographic region
United States	$	4,340,000	$	4,380,000
International		1,247,000		1,362,000
Consolidated total long-lived assets	$	5,587,000	$	5,742,000

MANUFACTURING

~~MANUFACTURING~~Our wholly-owned subsidiary, Alpha ProTech Engineered Products, Inc., manufactures and distributes a line of construction weatherization products for the Building Supply segment, comprised primarily of housewrap, housewrap accessories, synthetic roof underlayment and synthetic roof underlayment accessories. Alpha ProTech Engineered Products, Inc. operates in a 165,400 square foot facility in Valdosta, Georgia.

~~Our wholly-owned subsidiary,~~ Alpha ProTech Engineered Products, Inc., ~~manufactures~~has ~~and~~a ~~distributes~~41.66% ownership interest in a ~~line~~joint ofventure ~~construction~~with ~~weatherization~~Maple ~~products~~Industries and associates, a manufacturer in India, for the production of Building Supply segment products, ~~comprised~~such ~~primarily~~as of housewrap, ~~housewrap~~and ~~accessories,~~ synthetic roof underlayment products, in a semi-finished state, and ~~synthetic~~the ~~roof~~production ~~underlayment~~of ~~accessories~~Disposable Protective Apparel segment products. ~~Alpha~~The ~~ProTech~~name ~~Engineered~~of ~~Products~~the joint venture is Harmony Plastics Private Limited (“Harmony”). For a description of our relationship with Harmony see Note 6 to our consolidated financial statements. Harmony has four facilities in India, ~~Inc~~three owned and one rented. ~~operates~~The owned facilities consist of (i) a 139,000 square foot building for use in the manufacturing of building products, (ii) a ~~165~~121,~~400~~000 square foot facility for use in ~~Valdosta~~the manufacturing of coated material and the sewing of proprietary disposable protective apparel, ~~Georgia~~and (iii) a 23,000 square foot facility for use in the sewing of proprietary disposable protective apparel. The rented building is a 159,000 square foot facility for use in the manufacturing of Building Supply segment products.

~~Alpha~~We ~~ProTech~~manufacture, ~~Engineered Products~~cut, ~~Inc.~~warehouse ~~has a 41.66% ownership interest in a joint venture with Maple Industries~~ and ~~associates,~~ship adisposable ~~manufacturer~~protective inapparel ~~India, for the production of Building Supply segment~~ products, ~~such as housewrap~~ and ~~synthetic~~face ~~roof~~shields ~~underlayment products,~~ in a ~~semi-finished state~~137,500 ~~and~~square ~~the~~foot ~~production~~facility ofin ~~Disposable~~Nogales, ~~Protective Apparel segment products~~Arizona. The ~~name~~majority of the ~~joint~~apparel ~~venture~~products isare ~~Harmony~~manufactured ~~Plastics~~by ~~Private~~contract ~~Limited~~manufacturers ~~(“Harmony”). For a description of our relationship with Harmony see Note 6 to the Notes to our consolidated financial statements included~~ in ~~Item~~Asia ~~8 of this report. Harmony has four facilities in India~~and, ~~three~~to ~~owned~~a ~~and~~much ~~one~~lesser ~~rented. The owned facilities consist of (i) a 139~~extent,~~000~~ ~~square foot building for use in~~ the ~~manufacturing~~face ofshields ~~building~~are ~~products,~~manufactured ~~(ii)~~by a ~~121,000~~contract ~~square~~manufacturer ~~foot facility for use~~ in ~~the~~Mexico. ~~manufacturing~~These ofgoods ~~coated~~are ~~material~~manufactured ~~and~~pursuant ~~the~~to ~~sewing~~our ofspecifications ~~proprietary disposable protective apparel,~~ and ~~(iii)~~quality aassurance ~~23,000~~guidelines. ~~square~~Certain ~~foot facility for use in the sewing of~~ proprietary ~~disposable~~products ~~protective~~are ~~apparel.~~being ~~The~~made ~~rented building is a 159,000 square foot facility for use~~ in ~~the~~Asia ~~manufacturing~~using ofmaterials ~~Building~~supplied ~~Supply~~by ~~segment products~~us.

We ~~cut,~~have ~~warehouse~~encountered ~~and~~over ~~ship~~the ~~disposable~~last ~~protective~~several ~~apparel~~years ~~products~~a ~~and~~number ~~face~~of ~~shields~~constraints inwithin aour ~~60,000~~supply ~~square~~chain ~~foot~~due ~~facility~~to inraw ~~Nogales,~~material ~~Arizona.~~and ~~The~~labor ~~majority~~shortages, ofas ~~the~~well ~~apparel~~as ~~products~~shipping ~~are~~delays. ~~manufactured~~At bytimes, ~~contract~~these ~~manufacturers~~constraints inhave ~~Asia~~limited ~~and,~~our ability to asatisfy ~~much~~customer ~~lesser~~demand. ~~extent,~~Although ~~the~~we ~~face~~continue ~~shields~~to ~~are~~work ~~manufactured~~to alleviate these supply chain issues by asecuring ~~contract~~additional ~~manufacturer~~supply sources, in ~~Mexico.~~the ~~These~~event ~~goods~~of ~~are~~subsequent ~~manufactured~~shutdowns, ~~pursuant~~shortages toor delays, our ~~specifications~~production and ~~quality~~sales ~~assurance~~could ~~guidelines~~be further impacted. ~~Certain~~Our ~~proprietary~~business ~~products~~is ~~are~~not ~~being~~subject ~~made~~to insignificant ~~Asia~~seasonal ~~using~~considerations, ~~materials~~although ~~supplied~~it byis necessary for us to have adequate raw materials and finished inventory in stock.

~~Our mask production facility is located in a 34,500 square foot building in Salt Lake City, Utah.~~6

WeCOMPETITION have encountered over the last several years a number of constraints within our supply chain due to raw material and labor shortages, as well as shipping delays. At times, these constraints have limited our ability to satisfy customer demand. Although we continue to work to alleviate these supply chain issues by securing additional supply sources, in the event of subsequent shutdowns, shortages or delays, our production and sales could be further impacted. Our business is not subject to significant seasonal considerations, although it is necessary for us to have adequate raw materials and finished inventory in stock.

6We face substantial competition from numerous companies, including many companies with greater marketing and financial resources. Our major competitors in the construction supply weatherization market are DuPont and Berry Global for housewrap and Owens Corning and GAF for synthetic roof underlayment. Our major competitor in the medical and dental markets is Kimberly-Clark Corporation of Fort Worth, Texas. Other large competitors include 3M Company, Johnson & Johnson, White Knight Engineered Products (Precept Medical Products, Inc.), Cardinal Health, Inc. and Medline Industries Inc. Our major competitors in the industrial and cleanroom market are our former largest distributor, VWR International, LLC, Kimberly-Clark Corporation, 3M Company, Kappler, Inc., DuPont and Allegiance Healthcare Corporation. VWR International, LLC, Cardinal Health, Inc. and Medline Industries Inc. are also distributors of our products. The principal methods and elements of competition include brand recognition and loyalty, product innovation, quality and performance, price, and marketing and distribution capabilities. We believe that we have been able to compete successfully, driven by the combination of our brand and product dependability and quality, manufacturing capabilities, and product innovations, as well as on the breadth of our offerings to customers.

~~COMPETITION~~For additional discussion of the competitive environment in which we conduct our business, see Part I, Item 1A, “Risk Factors – Risks Related to Our Industry.”

WeREGULATORY face substantial competition from numerous companies, including many companies with greater marketing and financial resources. Our major competitors in the construction supply weatherization market are DuPont and Berry Global for housewrap and Owens Corning and GAF for synthetic roof underlayment. Our major competitor in the medical and dental markets is Kimberly-Clark Corporation of Fort Worth, Texas. Other large competitors include 3M Company, Johnson & Johnson, White Knight Engineered Products (Precept Medical Products, Inc.), Cardinal Health, Inc. and Medline Industries Inc. Our major competitors in the industrial and cleanroom market are our former largest distributor, VWR International, LLC, Kimberly-Clark Corporation, 3M Company, Kappler, Inc., DuPont and Allegiance Healthcare Corporation. VWR International, LLC, Cardinal Health, Inc. and Medline Industries Inc. are also distributors of our products. The principal methods and elements of competition include brand recognition and loyalty, product innovation, quality and performance, price, and marketing and distribution capabilities. We believe that we have been able to compete successfully, driven by the combination of our brand and product dependability and quality, manufacturing capabilities, and product innovations, as well as on the breadth of our offerings to customers.REQUIREMENTS

~~For~~We ~~additional~~are ~~discussion~~not ofrequired to obtain regulatory approval from the ~~competitive~~U.S. ~~environment~~FDA inwith ~~which~~respect weto ~~conduct~~the sale of our ~~business,~~products. ~~see~~Our ~~Part~~products Iare, ~~Item~~however, 1Asubject to prescribed good manufacturing practices as defined by the FDA, ~~“Risk~~and ~~Factors~~our –manufacturing ~~Risks~~facilities ~~Related~~are inspected by the FDA every two years to ~~Our~~ensure ~~Industry~~compliance with such good manufacturing practices.” We are marketing an N-95 Particulate Respirator face mask that meets the Occupational Safety and Health Administration (OSHA) respirator guidelines and has been approved by the National Institute for Occupational Safety and Health (NIOSH). This product is designed to help prevent the inhalation of the tuberculosis bacteria.

~~REGULATORY~~Our ~~REQUIREMENTS~~operations are subject to federal, state and local laws, regulations and ordinances relating to various environmental, health and safety matters. We believe that our operations are in compliance with, or we are taking actions designed to ensure compliance with, these laws, regulations, and ordinances. However, the nature of our operations exposes us to the risk of claims concerning non-compliance with environmental, health, and safety laws or standards, and there can be no assurance that material costs or liabilities will not be incurred in connection with those claims. We are not currently named as a party in any judicial or administrative proceeding relating to environmental, health, and safety matters, and we currently have no anticipated capital expenditures for environmental projects that are expected to have a material effect on our financial condition, results of operations or liquidity.

WePATENTS ~~are~~AND not required to obtain regulatory approval from the U.S. FDA with respect to the sale of our products. Our products are, however, subject to prescribed good manufacturing practices as defined by the FDA, and our manufacturing facilities are inspected by the FDA every two years to ensure compliance with such good manufacturing practices. We are marketing an N-95 Particulate Respirator face mask that meets the Occupational Safety and Health Administration (OSHA) respirator guidelines and has been approved by the National Institute for Occupational Safety and Health (NIOSH). This product is designed to help prevent the inhalation of the tuberculosis bacteria.TRADEMARKS

Our operations are subject to federal, state and local laws, regulations and ordinances relating to various environmental, health and safety matters. We believe that our operations are in compliance with, or we are taking actions designed to ensure compliance with, these laws, regulations, and ordinances. However, the nature of our operations exposes us to the risk of claims concerning non-compliance with environmental, health, and safety laws or standards, and there can be no assurance that material costs or liabilities will not be incurred in connection with those claims. We are not currently named as a party in any judicial or administrative proceeding relating to environmental, health, and safety matters, and we currently have no anticipated capital expenditures for environmental projects that are expected to have a material effect on our financial condition, results of operations or liquidity.Patents

~~PATENTS~~Our ~~AND~~policy ~~TRADEMARKS~~is to protect our intellectual property rights, products, designs and processes through the filing of patents in the United States and, where appropriate, in Canada and other countries. At present, we have ten United States patents relating to several of our products. In addition, we have a United States patent on a method to fold and put on sterile garments. We believe that our patents may offer a competitive advantage, but there can be no assurance that any patents, issued or in process, will not be circumvented or invalidated. We also rely on trade secrets and proprietary know-how to maintain and develop our commercial position. The United States patents issued expired on February 4, 2024, and cannot be extended.

~~Patents~~Trademarks

~~Our~~Many ~~policy~~of ~~is to protect~~ our ~~intellectual property rights,~~ products, ~~designs~~are ~~and~~sold ~~processes~~under ~~through~~various ~~the~~trademarks ~~filing of patents in the United States~~ and, ~~where~~trade ~~appropriate~~names, inincluding ~~Canada~~Alpha ~~and~~Pro ~~other countries~~Tech. AtWe ~~present,~~believe wethat ~~have~~many ~~ten United States patents relating to several~~ of our ~~products. In~~trademarks ~~addition, we have a United States patent on a method to fold~~ and ~~put~~trade onnames ~~sterile~~have ~~garments.~~significant Werecognition ~~believe~~in ~~that~~ our ~~patents~~principal ~~may offer a competitive advantage~~markets, ~~but~~and ~~there~~we ~~can~~take becustomary nosteps ~~assurance~~to ~~that~~register ~~any patents, issued~~ or inotherwise ~~process,~~protect ~~will~~our ~~not~~rights bein ~~circumvented or invalidated. We also rely on trade secrets and proprietary know-how to maintain and develop~~ our ~~commercial~~trademarks ~~position. The United States patents issued expired on February 4, 2024,~~ and ~~cannot~~trade ~~be extended~~names.

~~Trademarks~~HUMAN CAPITAL

~~Many~~As of ~~our~~March ~~products~~1, ~~are~~2025, ~~sold~~we ~~under~~had ~~various~~130 ~~trademarks~~full-time employees and ~~trade~~one ~~names~~part-time employee, including ~~Alpha~~21 ~~Pro~~employees ~~Tech.~~at Weour ~~believe~~principal ~~that~~executive ~~many~~office ofin ~~our~~Aurora, ~~trademarks~~Ontario, ~~and~~Canada; ~~trade~~42 ~~names~~employees ~~have~~at ~~significant~~our ~~recognition~~Disposable inProtective ~~our~~Apparel ~~principal~~segment ~~markets~~facility in Nogales, ~~and~~Arizona; we48 ~~take~~employees ~~customary~~at ~~steps~~our toBuilding ~~register~~Supply orsegment ~~otherwise~~facility ~~protect~~in Valdosta, Georgia; 18 employees on our ~~rights~~sales and marketing team, located in ~~our~~various ~~trademarks~~areas throughout the United States; and ~~trade~~1 ~~names~~employee in China.

~~HUMAN~~None ~~CAPITAL~~of our employees are subject to collective bargaining agreements. We have had no labor-related work stoppages, and we believe that our relations with our employees are good.

~~As of March 1, 2024, we had 124 full-time employees and one part-time employee, including 22 employees at our principal executive office in Aurora, Ontario, Canada;~~ 7 employees at our face mask production facility in Salt Lake City, Utah; 27 employees at our Disposable Protective Apparel segment cutting, warehouse and shipping facility in Nogales, Arizona; 47 employees at our Building Supply segment facility in Valdosta, Georgia; 20 employees on our sales and marketing team, located in various areas throughout the United States; and 1 employee in China.

~~None~~Workplace ofHealth ~~our employees are subject to collective bargaining agreements. We have had no labor-related work stoppages,~~ and ~~we believe that our relations with our employees are good.~~Safety

7The health, safety, and wellness of our employees is a priority in which we have always invested, and we will continue to do so. The Company maintains a variety of programs to reduce and eliminate injuries and promote safety and regularly measures progress against those programs. These programs promote personal responsibility for workplace safety and encourage associates to set a meaningful example as safety ambassadors.

~~Workplace~~Company ~~Health and Safety~~Culture

~~The~~We ~~health~~strive to foster a culture where mutual respect, ~~safety~~inclusive behavior, and ~~wellness~~dignity ofare core to our ~~employees~~individual isexpectations. aWe ~~priority~~remain committed to fostering an inclusive environment in which weour ~~have~~differing ~~always~~backgrounds, ~~invested~~life experiences, and ~~will~~perspectives ~~continue~~join to dopositively ~~so.~~impact ~~The~~the ~~Company~~communities ~~maintains~~in awhich ~~variety~~we oflive ~~programs~~and toserve. ~~reduce~~We ~~and~~do ~~eliminate~~this ~~injuries~~by ~~and~~leading ~~promote~~with ~~safety~~inclusion and ~~regularly~~empowering ~~measures~~everyone ~~progress~~to ~~against~~do ~~those~~their ~~programs.~~best ~~These~~work ~~programs~~as ~~promote~~their ~~personal~~most ~~responsibility~~authentic ~~for~~selves. ~~workplace~~We ~~safety~~are ~~and~~united ~~encourage~~by ~~associates~~our tocollective purpose and common set aof ~~meaningful~~organizational ~~example~~values asthat ~~safety~~are ~~ambassadors~~core to our mission and culture.

~~Diversity~~AVAILABLE ~~and Inclusion~~INFORMATION

We ~~strive~~make toavailable ~~foster~~free aof ~~culture~~charge ~~where~~on ~~mutual~~our ~~respect,~~Internet ~~inclusive~~website ~~behavior,~~(http://www.alphaprotech.com) ~~and~~our ~~dignity~~most ~~are~~recent ~~core~~Annual toReport ~~our~~on ~~individual~~Form ~~expectations.~~10-K, Weour ~~remain~~Quarterly ~~committed~~Reports toon ~~fostering~~Form an10-Q ~~inclusive~~filed ~~environment~~since ~~in which~~ our ~~differing~~most ~~backgrounds,~~recent ~~life~~Annual ~~experiences,~~Report ~~and~~on ~~perspectives~~Form ~~join~~10-K, toany ~~positively~~current ~~impact~~reports ~~the~~on ~~communities~~Form in8-K ~~which~~furnished weor ~~live~~filed ~~and~~since ~~serve.~~our Wemost dorecent ~~this~~Annual byReport ~~leading~~on ~~with~~Form ~~inclusion~~10-K and ~~empowering~~any ~~everyone~~amendments to dosuch ~~their~~reports, ~~best~~as ~~work~~well as ~~their~~our most ~~authentic~~recent ~~selves—regardless~~proxy ~~of race~~statement, ~~color,~~as ~~national~~soon ~~origin,~~as ~~religion,~~reasonably ~~sex,~~practicable ~~sexual~~following ~~orientation,~~the ~~gender~~electronic ~~identity~~filing ~~and~~of ~~expression,~~such ~~age,~~documents ~~disability,~~with orthe ~~military service status~~SEC. WeThese ~~are~~filings ~~united by our collective purpose and common set of organizational values that~~ are ~~core~~also toavailable ~~our~~on ~~mission~~the ~~and~~SEC’s ~~culture~~website (http://www.sec.gov).

~~AVAILABLE~~The ~~INFORMATION~~Company is not including the information contained on or available through its website as a part of, or incorporating such information into, this Annual Report on Form 10-K.

WeItem ~~make available free of charge on our Internet website (http://www~~1A.~~alphaprotech.com)~~ ~~our~~Risk most recent Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q filed since 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 well as our most recent proxy statement, as soon as reasonably practicable following the electronic filing of such documents with the SECFactors. ~~These filings are also available on the SEC’s website (http://www.sec.gov).~~

~~The~~Making or continuing an investment in common stock issued by the Company isinvolves ~~not~~certain ~~including~~risks that you should carefully consider. The risks and uncertainties described below are not the ~~information~~only ~~contained~~risks that may have a material adverse effect on orthe ~~available~~Company. ~~through~~Additional ~~its~~risks ~~website~~and asuncertainties also could adversely affect our business and our results. If any of the following risks actually occur, our business, financial condition and results of operations could be negatively affected, the market price of our common stock could decline, and you could lose all or a part of your investment. Further, orto ~~incorporating~~the ~~such~~extent that any of the information ~~into,~~contained in this Annual Report on Form 10-K constitutes forward-looking statements, the risk factors set forth below also are cautionary statements identifying important factors that could cause the Company’s actual results to differ materially from those expressed in any forward-looking statements made by or on behalf of the Company.

~~Item~~Risks ~~1A.~~Related ~~Risk~~to ~~Factors.~~our Unconsolidated Affiliate Operations in India and Foreign Currency Translations

~~Making~~Our orunconsolidated ~~continuing~~affiliate an investment in common stock issued by the Company involves certain risks that you should carefully consider. The risks and uncertainties described below are not the only risks that may have a material adverse effect on the Company. Additional risks and uncertainties also could adversely affect our business and our results. If any of the following risks actually occur, our business, financial condition and results of operations ~~could be negatively affected, the market price of our common stock could decline, and you could lose all or a part of your investment. Further, to the extent that any of the information contained~~ in ~~this~~India ~~Annual~~expose us Report on Form 10-K constitutes forward-looking statements, the risk factors set forth below also are cautionary statements identifying important factors that could cause the Company’s actual results to foreign ~~differ~~currency exchange ~~materially from those expressed in any forward-looking statements made by or on behalf of the Company~~risks.

~~Risks~~Our ~~Related~~unconsolidated toaffiliate operations are in India, so we are impacted by changes in foreign currency exchange rates. We determine the functional currency of our ~~Unconsolidated~~joint ~~Affiliate~~venture ~~Operations~~based upon the primary currency used to generate and expend cash, which is the currency of the country in ~~India~~which the joint venture is located. For joint ventures with functional currencies other than the U.S. dollar, our investment in that joint venture is translated into U.S. dollars using period-end exchange rates. The resulting foreign currency translation gains or losses are deferred as accumulated other comprehensive loss (“AOCL”) and ~~Foreign~~reclassified ~~Currency~~to ~~Translations~~earnings only upon sale or liquidation of that business.

Our ~~unconsolidated~~joint ~~affiliate~~venture, ~~operations~~as inwell ~~India~~as ~~expose us~~any ~~to foreign~~additional ~~currency exchange~~joint ventures, may present risks.

~~Our~~We ~~unconsolidated~~currently ~~affiliate~~participate ~~operations~~in ~~are~~a joint venture in India and may in the future enter into joint ventures with other companies or enterprises in international markets, soincluding joint ventures in which we ~~are~~may ~~impacted~~have bya ~~changes~~lesser indegree ~~foreign~~of ~~currency~~control ~~exchange~~over ~~rates~~the business operations, which may expose us to additional operational, financial, legal or compliance risks. We ~~determine~~may ~~the~~be ~~functional~~dependent ~~currency~~on ofa ~~our~~ joint venture ~~based~~counterparty ~~upon~~for ~~the~~product ~~primary~~distribution, ~~currency~~local ~~used~~market knowledge or other resources. If we are unable to ~~generate~~effectively ~~and~~cooperate ~~expend~~with ~~cash~~joint venture partners, ~~which~~or isany ~~the~~joint ~~currency~~venture ofpartner ~~the~~fails ~~country~~to inmeet ~~which~~its obligations under the joint venture isarrangement, ~~located.~~encounters ~~For~~financial ~~joint~~difficulty, ~~ventures~~or ~~with~~elects ~~functional~~to ~~currencies~~alter, ~~other~~modify ~~than~~or terminate the ~~U.S. dollar~~relationship, we may be unable to achieve our ~~investment~~objectives inand ~~that~~our ~~joint~~results ~~venture~~of isoperations ~~translated~~may ~~into~~be Unegatively impacted thereby.S. ~~dollars~~Furthermore, ~~using~~as ~~period-end~~the ~~exchange~~joint ~~rates.~~venture ~~The~~is ~~resulting~~in a foreign ~~currency~~country, ~~translation~~social ~~gains~~and oreconomic ~~losses~~events ~~are~~in ~~deferred~~that ascountry ~~accumulated~~could ~~other~~also ~~comprehensive~~affect ~~loss~~the ~~(“AOCL”)~~value ~~and~~of ~~reclassified~~our toinvestment ~~earnings~~and ~~only~~our ~~upon~~ability ~~sale~~to orconduct ~~liquidation~~business ofin that ~~business~~country.

~~Our joint venture, as well as any additional joint ventures, may present risks.~~8

WeRisks ~~currently~~Related participate in a joint venture in India and may in the future enter into joint ventures with other companies or enterprises in international markets, including joint ventures in which we may have a lesser degree of control over the business operations, which may expose us to ~~additional~~Our operational, financial, legal or compliance risks. We may be dependent on a joint venture counterparty for product distribution, local market knowledge or other resources. If we are unable to effectively cooperate with joint venture partners, or any joint venture partner fails to meets its obligations under the joint venture arrangement, encounters financial difficulty, or elects to alter, modify or terminate the relationship, we may be unable to achieve our objectives and our results of operations may be negatively impacted thereby. Furthermore, as the joint venture is in a foreign country, social and economic events in that country could also affect the value of our investment and our ability to conduct business in that country.Industry

8The loss of any large customer or a reduction in orders from any large customer could reduce our net sales and harm our operating results.

~~Risks~~Our ~~Related~~operating toresults could be negatively affected by the loss of revenue from one or more large customers. Our ~~Industry~~customers are not contractually obligated to purchase any fixed quantities of products, and they may stop placing orders with us at any time. We are subject to the risk of losing large customers or incurring significant reductions in sales to these customers.

~~The~~We ~~loss~~rely ofon ~~any~~suppliers ~~large~~and ~~customer~~contractors, orand aour ~~reduction~~business incould ~~orders~~be ~~from~~seriously ~~any~~harmed ~~large~~if ~~customer~~these ~~could~~suppliers ~~reduce~~and ~~our~~contractors ~~net~~are ~~sales~~not ~~and~~able ~~harm~~to meet our ~~operating results~~requirements.

~~Our~~We ~~operating~~rely ~~results~~on ~~could~~a belimited ~~negatively~~number ~~affected~~of bysuppliers and contractors for the ~~loss~~manufacture of ~~revenue~~our ~~from~~products. ~~one~~If orwe ~~more~~lose ~~large~~the ~~customers.~~services ~~Our~~of ~~customers~~these key suppliers and contractors, or if they are not ~~contractually~~willing ~~obligated~~or able to ~~purchase~~satisfy ~~any~~our ~~fixed~~requirements, ~~quantities~~finding ofsubstitute ~~products,~~suppliers ~~and~~or ~~they~~contractors may ~~stop~~be ~~placing~~time-consuming ~~orders~~and ~~with~~would usaffect atour ~~any~~results ~~time~~of operations in the near term. WeChanges ~~are~~in ~~subject~~business toconditions, pandemics, wars, including the ~~risk~~Russian invasion of ~~losing~~Ukraine ~~large~~and ~~customers~~world sanctions on Russia, Belarus, and related parties, governmental changes, and other factors beyond our control or ~~incurring~~which ~~significant~~we ~~reductions~~do innot ~~sales~~presently anticipate could negatively affect our suppliers and contractors, as well as our ability to ~~these~~receive ~~customers~~components.

WeThere ~~rely~~are onrisks ~~suppliers~~associated ~~and~~with ~~contractors,~~international ~~and~~manufacturing ~~our~~that ~~business~~ could behave ~~seriously~~a ~~harmed~~significant ifeffect ~~these~~on ~~suppliers and contractors are not able to meet~~ our ~~requirements~~business.

We ~~rely~~subcontract onthe amanufacturing ~~limited number~~ of ~~suppliers~~some ~~and contractors for the manufacture~~ of our ~~products.~~goods Ifto weAsia ~~lose the services of these key suppliers~~ and ~~contractors,~~Mexico. orThese ifgoods ~~they~~ are ~~not~~manufactured ~~willing~~pursuant ~~or able~~ to ~~satisfy~~ our ~~requirements,~~specifications ~~finding substitute suppliers or contractors may be time-consuming~~ and ~~would~~quality ~~affect~~assurance ~~our~~guidelines. ~~results~~Certain ofproprietary ~~operations~~products inare ~~the~~being ~~near~~made ~~term. Changes~~ in ~~business~~Asia ~~conditions,~~using ~~pandemics,~~materials ~~wars,~~supplied ~~including~~by the Russian invasion of Ukraine and world sanctions on Russia, Belarus, and related parties, governmental changes, and other factors beyond our control or which we do not presently anticipate could negatively affect our suppliers and contractors, as well as our ability to receive componentsus.

~~There~~We ~~are~~expect ~~risks~~that ~~associated~~a ~~with~~significant ~~international~~portion of our product sales will be derived from the sale of products for which we subcontract the manufacturing to Asia, but we cannot be certain that ~~could~~we ~~have~~will abe ~~significant~~able ~~effect~~to onmaintain such subcontracting at current levels. If our ability to subcontract some of our manufacturing to Asia were to decline significantly, our business, results of operations and financial condition could be materially adversely affected. International manufacturing is subject to a number of risks, including the following:

We● ~~subcontract~~changes ~~the~~in ~~manufacturing~~foreign ofgovernment ~~some~~regulations ~~of our goods to Asia~~ and ~~Mexico.~~technical ~~These goods are manufactured pursuant to our specifications and quality assurance guidelines. Certain proprietary products are being made in Asia using materials supplied by us.~~standards;

We● ~~expect~~difficulty ~~that a significant portion~~ of ~~our~~protecting ~~product~~intellectual sales will be derived from the sale of products for which we subcontract the manufacturing to Asia, but we cannot be certain that we will be able to maintain such subcontracting at current levels. If our ability to subcontract some of our manufacturing to Asia were to decline significantly, our business, results of operations and financial condition could be materially adversely affected. International manufacturing is subject to a number of risks, including the following:property;

● ~~changes~~requirements inor preferences of foreign ~~government~~nations ~~regulations~~for ~~and~~the ~~technical~~manufacture ~~standards~~of domestic products;

● ~~difficulty~~the imposition of ~~protecting~~duties, ~~intellectual~~border ~~property~~adjustment taxes or tariffs and other barriers to trade;

● ~~requirements~~fluctuations orin ~~preferences~~currency ofexchange ~~foreign~~rates ~~nations~~relative ~~for~~to the ~~manufacture~~U.S. ~~of domestic products~~dollar; and

● ~~the~~political ~~imposition of duties, border adjustment taxes or tariffs~~ and ~~other~~economic ~~barriers to trade;~~instability.

●In ~~fluctuations~~particular, if another pandemic or other events result in ~~currency~~a ~~exchange~~prolonged ~~rates~~period ~~relative~~of travel, commercial and other similar restrictions, we could experience global supply disruptions. These restrictions have disrupted and could continue to ~~the~~disrupt Uour ability to receive manufactured products from China and may disrupt our suppliers located elsewhere who rely on products from China.S If we experience additional supply disruptions, we may not be able to develop alternate sourcing quickly. ~~dollar;~~Any ~~and~~disruption of our production schedule caused by an unexpected shortage of supplies even for a relatively short period of time could cause us to alter production schedules or suspend production entirely, which could cause a loss of revenues, which would adversely affect our operations.

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

InOn ~~particular~~February 1, if2025, ~~another~~President ~~pandemic~~Trump orannounced ~~other~~the ~~events~~imposition ~~result~~of inadditional asubstantial ~~prolonged~~tariffs ~~period~~on ofimports ~~travel~~from various countries, ~~commercial~~including ~~and~~China, ~~other~~Canada ~~similar~~and ~~restrictions~~Mexico, weand ~~could~~the ~~experience~~subject ~~global~~countries ~~supply~~indicated ~~disruptions.~~their ~~These~~intention ~~restrictions~~to ~~have~~impose ~~disrupted~~counter ~~and~~measures. ~~could~~Under ~~continue~~the toannounced ~~disrupt~~measures, ~~our~~a ~~ability~~25% tariff will tobe ~~receive~~applied ~~manufactured~~to certain products from ~~China~~Canada and ~~may~~Mexico, ~~disrupt~~while ~~our~~a ~~suppliers~~10% tariff will ~~located~~be ~~elsewhere~~imposed ~~who rely~~ on ~~products~~certain imports from China. If weimplemented, ~~experience~~these ~~additional~~tariffs ~~supply~~and ~~disruptions~~countermeasures could increase the cost of raw materials and components necessary for our operations, wedisrupt ~~may~~our ~~not~~global besupply ~~able~~chain toand ~~develop~~create ~~alternate~~additional ~~sourcing~~operational ~~quickly~~challenges. ~~Any~~Tariffs ~~disruption~~may ofincrease our ~~production~~manufacturing ~~schedule~~costs ~~caused~~and bymake anour ~~unexpected~~products ~~shortage~~less competitive than those of ~~supplies~~our ~~even~~competitors ~~for~~whose ainputs ~~relatively~~are ~~short~~not ~~period~~subject ofto ~~time~~these tariffs. Further, it is possible that government policy changes and related uncertainty about policy changes could ~~cause~~increase usmarket volatility and currency exchange rate fluctuations. Because of these dynamics, we cannot predict the impact of any future changes to ~~alter~~the ~~production~~U.S.’s ~~schedules~~or other countries’ trading relationships or ~~suspend~~the ~~production~~impact ~~entirely,~~of ~~which~~new laws or regulations adopted by the U.S. or other countries on our business. Such changes in tariffs and trade regulations could ~~cause~~have a ~~loss~~material ofadverse ~~revenues,~~effect ~~which~~on ~~would~~our ~~adversely~~financial ~~affect~~condition, ~~our~~results of operations and cash flows.

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.

The success and competitiveness of our products depend in part upon our ability to protect our current and future technology, manufacturing processes and brand names, including Alpha Pro Tech, through a combination of patent, trademark, trade secret and unfair competition laws. Our patents expired in February 2024, which may make it more difficult to protect our intellectual property. Of particular concern are developing countries, such as China and India, where the laws, courts, and administrative agencies may not protect our intellectual property rights as fully as in the United States.

We enter into confidentiality and non-disclosure of intellectual property agreements with certain of our employees, consultants and vendors and generally control access to and distribution of our proprietary information. Despite these precautions, it may be possible for a third party to copy or otherwise obtain and use our proprietary information without authorization or to develop similar information independently.9

~~Policing~~We ~~unauthorized~~enter ~~use~~into ofconfidentiality ~~intellectual~~and ~~property~~non-disclosure ~~is difficult. The laws~~ of ~~other~~intellectual ~~countries~~property ~~may~~agreements ~~afford~~with ~~little~~certain ~~or no effective protection~~ of our ~~technology.~~employees, Weconsultants ~~cannot~~and ~~assure~~vendors ~~you~~and ~~that~~generally ~~the~~control ~~steps~~access ~~taken~~to byand usdistribution ~~will prevent misappropriation~~ of our ~~technology~~proprietary orinformation. These ~~that~~ agreements ~~entered~~may ~~into for that purpose will~~ be ~~enforceable.~~breached Inor ~~addition,~~we ~~litigation~~ may benot ~~necessary~~have inadequate ~~the~~remedies ~~future~~for toany ~~enforce~~breach. ~~our~~In ~~intellectual property rights~~addition, todespite ~~protect~~these ~~our~~precautions, ~~trade~~it ~~secrets~~may ~~and~~be topossible ~~determine~~for ~~the~~a ~~validity~~third ~~and~~party ~~scope~~to ofcopy ~~the~~or ~~proprietary~~otherwise ~~rights~~obtain ~~of others. Litigation may result in substantial costs~~ and ~~diversion~~use ofour ~~resources,~~proprietary ~~which~~information ~~could~~without ~~have~~authorization aor ~~material~~to ~~adverse~~develop ~~effect~~similar oninformation ~~our business, results of operations and financial condition~~independently.

9Policing unauthorized use of intellectual property is difficult. The laws of other countries may afford little or no effective protection of our technology. We cannot assure you that the steps taken by us will prevent misappropriation of our technology or that agreements entered into for that purpose will be enforceable. In addition, litigation may be necessary in the future to enforce our intellectual property rights, to protect our trade secrets and to determine the validity and scope of the proprietary rights of others. Litigation may result in substantial costs and diversion of resources, which could have a material adverse effect on our business, results of operations and financial condition.

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

The markets for our products are intensely competitive. We currently experience competition from numerous companies in each of the markets in which we participate. Many of our competitors are more established, benefit from greater market recognition and have substantially greater financial, development, manufacturing and marketing resources than we have. Additionally, the Company’s competitors may adopt new technologies and technological advancements, such as using artificial intelligence and machine learning to pursue new products and approaches more quickly, successfully and effectively than the Company. The Company may not be able to compete successfully with existing competitors or with new competitors. If we do not compete successfully with respect to these or other companies, it could materially adversely affect our business, results of operations and financial condition.

IfThe weCompany’s doresults ~~not~~are ~~compete~~affected ~~successfully~~by ~~with~~competitive ~~respect~~conditions ~~to these or other companies, it could materially adversely affect our business, results of operations~~ and ~~financial~~customer ~~condition~~preferences.

~~The~~Demand for the Company’s ~~results~~products, ~~are~~which impacts revenue and profit margins, is affected by (i) the development and timing of the introduction of competitive ~~conditions~~products; (ii) the Company’s response to downward pricing to stay competitive; (iii) changes in customer order patterns, such as changes in the levels of inventory maintained by customers and the timing of customer purchases; and (iv) changes in customers’ preferences. for our products, including the success of products offered by our competitors and changes in customer designs for our competitors’ products that can affect the demand for the Company’s products.

~~Demand~~Environmental ~~for~~laws ~~the Company’s products, which impacts revenue~~ and ~~profit~~regulations ~~margins,~~may issubject ~~affected~~us ~~by (i) the development and timing of the introduction of competitive products; (ii) the Company’s response~~ to ~~downward~~significant pricing to stay competitive; (iii) changes in customer order patterns, such as changes in the levels of inventory maintained by customers and the timing of customer purchases; and (iv) changes in customers’ preferences for our products, including the success of products offered by our competitors and changes in customer designs for our competitors’ products that can affect the demand for the Company’s productsliabilities.

~~The~~Our ~~Company’s~~U.S. ~~growth~~operations, ~~objectives~~including our manufacturing facilities, are ~~largely~~subject ~~dependent~~to onfederal, state and local environmental laws and regulations relating to the ~~timing~~discharge, storage, treatment, handling, disposal and ~~market~~remediation ~~acceptance~~of certain materials, substances and wastes. Any violation of ~~our~~any ~~new~~of ~~product~~those ~~offerings~~laws and regulations could cause us to incur substantial liability to the U.S. Environmental Protection Agency, ~~including~~to ~~our~~the ~~ability~~state environmental agencies in any affected state or to ~~continually~~any ~~renew~~individuals ~~our~~affected ~~pipeline~~by any such violation. If hazardous substances are released from or located on any of ~~new~~our ~~products~~properties, we could incur substantial costs and todamages. ~~bring~~Any ~~those~~such ~~products~~liability tocould ~~market~~have a material adverse effect on our financial condition and results of operations.

~~Our~~By ~~ability~~way toof ~~continually~~example, ~~renew~~but ~~our~~not ~~pipeline~~limitation, governmental authorities in the U.S. and in other jurisdictions are increasingly focused on potential contamination resulting from the use of ~~new~~so-called ~~products~~“forever chemicals,” most notable at present are per- and topolyfluoroalkyl, ~~bring~~substances ~~those~~(PFAS). ~~products~~Products tocontaining ~~market~~PFAS ~~may~~have bebeen ~~adversely~~used ~~affected~~in bymanufacturing, ~~difficulties~~industrial, orand ~~delays~~consumer applications over many decades, including in ~~product~~some ~~development~~of our engineered materials and components, ~~such~~and asare virtually ubiquitous in parts of the ~~inability~~environment. toUntil ~~identify~~recently, ~~viable~~these ~~new~~substances ~~products~~were largely unregulated. Nevertheless, ~~obtain~~over ~~adequate~~the ~~intellectual~~last ~~property~~few ~~protection~~years, orPFAS ~~gain~~regulation ~~market~~has ~~acceptance~~been ofevolving rapidly. In 2023, the U.S. EPA issued a new ~~products~~rule under the Toxic Substances Control Act, requiring manufacturers and importers of PFAS to submit additional reporting information about production volumes, industrial uses, byproducts, worker exposure, and disposal. ~~There~~In ~~are~~2023, nocertain ~~guarantees~~EU ~~that~~member ~~new~~states ~~products~~submitted ~~will~~a ~~prove~~proposal to bethe ~~commercially~~European ~~successful~~Chemicals Agency calling for the phase out of the manufacture, import, sale, and use of PFAS substances beginning in late 2025. In ~~addition~~2024, ~~our~~among ~~product~~other ~~development~~things, U.S. EPA issued new regulations regarding PFAS in drinking water, PFAS reporting obligations under Toxic Substances Control Act, and ~~distribution~~designated ~~activities~~two ~~are~~PFAS ~~subject~~chemicals to(Perfluorooctanoic ~~inherent~~acid ~~risks~~and ~~related~~Perfluorooctane sulfonic acid) as hazardous substances under Comprehensive Environmental Response, Compensation, and Liability Act. While PFAS regulation continues to ~~natural~~advance ~~disasters~~at the federal level and in many states, ~~including~~the ~~earthquakes~~full scope of such asregulation is still being developed. In some cases, PFAS compounds are regulated at, or even below, the ~~one~~ability ~~that~~of ~~occurred~~current ~~near~~technology ~~our~~to ~~facility~~detect their presence, making remediation difficult and complex. We may therefore incur costs in ~~Utah~~connection ~~during~~with ~~2020~~any obligations to transition away from the usage of PFAS-containing products, to dispose of PFAS-containing waste or to remediate any PFAS contamination, which could ~~disrupt~~have a negative effect on our ~~supply~~financial ~~chain~~position, results of operations and ~~impair~~cash ~~our~~flows. ~~ability~~We may incur costs in connection with any obligations to ~~manufacture~~transition away from the usage of PFAS-containing products, to dispose of PFAS-containing waste or ~~sell~~to remediate any PFAS contamination, which could have a negative effect on our ~~products~~financial position, results of operations and cash flows.

~~General Risks~~10

~~Global~~In ~~economic~~addition, ~~conditions~~some ~~could~~environmental ~~adversely~~laws ~~affect~~impose ~~the~~liability, ~~Company’s~~sometimes ~~business~~without fault, for investigating and/or ~~financial~~cleaning ~~results~~up contamination on, or emanating from, properties currently or formerly owned, leased or operated by a person, as well as for damages to property or natural resources and personal injury arising out of such contamination. Such liability may be joint and several, meaning that we could be held responsible for more than our share of the liability involved, or even the entire liability.

~~Unfavorable~~The ~~economic conditions, including the impact of recessions and general economic downturns in the United States and throughout the world, may negatively affect the~~ Company’s ~~business~~growth ~~and~~objectives ~~financial~~are ~~results. These~~largely ~~economic~~dependent ~~conditions~~on ~~could negatively impact (i) demand for our products, (ii)~~ the ~~number~~timing and ~~types~~market acceptance of ~~products sold, (iii)~~ our ~~ability~~new toproduct ~~collect accounts receivable on a timely basis from certain customers~~offerings, ~~and~~including ~~(iv)~~our ~~the~~ ability ~~of certain suppliers~~ to ~~fill~~continually renew our ~~orders~~pipeline ~~for~~of ~~raw~~new ~~materials~~products ~~or other goods~~ and ~~services. A prolonged recession could result in decreased revenue, margins and earnings. Additionally, the war between Russia and Ukraine has led~~ to ~~economic~~bring ~~sanctions~~those ~~imposed~~products ~~against Russia by the U.S. and certain European nations. Such sanctions may impact companies in many sectors and could lead~~ to ~~volatility of prices in the global energy industry~~market. The extent and strength of the sanctions are still developing, and the corresponding effect on the Company remains uncertain. In addition, the war in Ukraine has further increased existing global supply chain, logistics, and inflationary challenges.

~~Climate~~Our ~~change~~ability to continually renew our pipeline of new products and to bring those products to market may be adversely affected by difficulties or delays in product development, such as the inability to identify viable new products, obtain adequate intellectual property protection or gain market acceptance of new products. There are no guarantees that new products will prove to be commercially successful. In addition, our product development and distribution activities are subject to inherent risks related to natural disasters, orincluding ~~other~~earthquakes ~~events~~such ~~beyond~~as the one that occurred near our ~~control~~facility in Utah during 2020, which could disrupt our ~~business~~supply chain and ~~result~~impair inour ~~loss~~ability ofto ~~revenue~~manufacture or ~~higher~~sell ~~expenses~~our products.

~~Global~~General climate change could result in certain types of natural disasters occurring more frequently or with more intense effects. The impacts of climate change may include physical risks (such as frequency and severity of extreme weather conditions), social and human effects (such as population dislocations or harm to health and well-being), compliance costs, transition risks, shifts in market trends, and other adverse effects. Such impacts may disrupt parties in our supply chain, our customers, and our operations.Risks

~~Physical~~Global ~~risks~~economic associated with climate change are subject to increasing societal, regulatory, and political focus in the U.S. and globally. Shifts in weather patterns caused by climate change are expected to increase the frequency, severity, or duration of certain adverse weather conditions ~~and natural disasters, such as hurricanes, tornadoes, earthquakes, wildfires, droughts, extreme temperatures, or flooding, which~~ could ~~cause~~adversely ~~more~~affect ~~significant business and supply chain interruptions, damage to our products and facilities as well as~~ the ~~infrastructure~~Company’s ofbusiness ~~our customers, reduced workforce availability, increased costs of raw materials~~ and ~~components,~~financial ~~increased liabilities, and decreased revenues than what we have experienced in the past from such events~~results.

~~Security~~Unfavorable ~~breaches~~economic conditions, including the impact of recessions and ~~other~~general ~~disruptions~~economic todownturns in the ~~Company’s~~United ~~information~~States ~~technology~~and ~~infrastructure~~throughout ~~could~~the ~~interfere~~world, ~~with~~may negatively affect the Company’s ~~operations,~~business ~~compromise~~and ~~information~~financial ~~belonging~~results. These toeconomic conditions could negatively impact (i) demand for our products, (ii) the ~~Company~~number and types of products sold, (iii) our ability to collect accounts receivable on a timely basis from certain customers, and (iv) the ability of certain suppliers to fill our orders for raw materials or other goods and ~~expose~~services. A prolonged recession could result in decreased revenue, margins and earnings. Additionally, the ~~Company~~war between Russia and Ukraine has led to ~~liability,~~economic ~~which~~sanctions ~~could~~imposed ~~adversely~~against Russia by the U.S. and certain European nations. Such sanctions may impact companies in many sectors and could lead to volatility of prices in the global energy industry. The extent and strength of the sanctions are still developing, and the corresponding effect on the Company’s ~~business~~remains uncertain. In addition, the war in Ukraine has further increased existing global supply chain, logistics, and ~~reputation~~inflationary challenges.

InClimate ~~the~~change ~~ordinary course of business, the Company relies on information technology networks~~ and ~~systems,~~natural ~~some~~disasters ~~of which are managed by third parties, to process, transmit and store electronic information, and to manage~~ or ~~support~~other aevents ~~variety~~beyond ofour ~~business~~control ~~processes and activities. Additionally, the Company collects and stores sensitive data, including proprietary business information. It is possible we or a third party that we rely on~~ could ~~incur~~disrupt ~~interruptions from a loss of communications, hardware or software failures, a cybersecurity attack or an incident relating to~~ our IT systems or technology, ransomware, phishing attacks, computer viruses or malware. In the current environment, there are numerous and evolving risks to cybersecurity and privacy, including criminal hackers, hacktivists, state-sponsored intrusions, industrial espionage, employee malfeasance and human or technological error. High-profile cybersecurity incidents at other companies and in government agencies have increased in recent years, and security industry experts and government officials have warned about the risks of hackers and cyberattacks targeting businesses such as ours. Despite security measures and business ~~continuity plans, the Company’s information technology networks~~ and infrastructure may be vulnerable to damage, disruptions or shutdowns due to attack by hackers, breaches, employee error or malfeasance, power outages, computer viruses, telecommunication or utility failures, systems failures, natural disasters or other catastrophic events. While we have not experienced any material losses related to cyber-attacks or information security breaches to date, any such event could result in ~~legal~~loss ~~claims~~of orrevenue ~~proceedings, liability~~ or ~~penalties~~higher ~~under privacy laws, disruption in operations and damage to the Company’s reputation, which could adversely affect the Company’s business~~expenses.

10Global climate change could result in certain types of natural disasters occurring more frequently or with more intense effects. The impacts of climate change may include physical risks (such as frequency and severity of extreme weather conditions), social and human effects (such as population dislocations or harm to health and well-being), compliance costs, transition risks, shifts in market trends, and other adverse effects. Such impacts may disrupt parties in our supply chain, our customers, and our operations.

~~The~~Physical ~~Company’s~~risks ~~future~~associated ~~results~~with ~~may~~climate bechange ~~affected~~are subject to increasing societal, regulatory, and political focus in the U.S. and globally. Shifts in weather patterns caused by ~~various~~climate ~~legal~~change are expected to increase the frequency, severity, or duration of certain adverse weather conditions and ~~regulatory~~natural ~~proceedings~~disasters, such as hurricanes, tornadoes, earthquakes, wildfires, droughts, extreme temperatures, or flooding, which could cause more significant business and ~~legal~~supply ~~compliance~~chain ~~risks.~~interruptions, damage to our products and facilities as well as the infrastructure of our customers, reduced workforce availability, increased costs of raw materials and components, increased liabilities, and decreased revenues than what we have experienced in the past from such events.

~~From~~Security ~~time~~breaches toand ~~time,~~other ~~the~~disruptions ~~Company is subject~~ to ~~certain legal and regulatory proceedings in~~ the ~~ordinary course of business and otherwise. The outcome of these legal proceedings may differ from the~~ Company’s ~~expectations~~information ~~because~~technology ~~the~~infrastructure ~~outcomes of litigation, including regulatory matters, are often difficult to reliably predict. Various factors or developments~~ could ~~lead~~interfere ~~the~~with Company to change current estimates of liabilities and related insurance receivables where applicable, or make such estimates for matters previously not susceptible to reasonable estimates, such as a significant judicial ruling or judgment, settlement, regulatory development or change in applicable law. A future adverse ruling, settlement or unfavorable development could result in charges that could have a material adverse effect on the Company’s ~~results of~~ operations, orcompromise ~~cash~~information ~~flows~~belonging ~~in any particular period. Manufacturers are required~~ to ~~certify that neither convicted, forced or indentured labor (as defined under U.S. law) nor child labor (as defined by law in~~ the ~~manufacturer’s~~Company ~~country) is used in the production process, that compensation is paid in accordance with local law~~ and ~~that their factories are in compliance with local safety regulations. Although we promote ethical business practices and~~ our ~~sourcing~~customers ~~personnel periodically visit~~ and ~~monitor the operations of our independent contract manufacturers,~~ suppliers and ~~licensees,~~expose wethe doCompany ~~not~~to ~~control them or their labor practices. If one of our independent contract manufacturers~~liability, ~~suppliers~~which ~~or licensees violates labor or other laws or diverges from those labor practices generally accepted as ethical in the U.S., it~~ could ~~result~~adversely inimpact ~~adverse publicity for us, damage our reputation in~~ the ~~U.S.,~~Company’s ~~or render our conduct of~~ business inand ~~a particular foreign country undesirable or impractical, any of which could harm our business~~reputation.

~~Our~~In ~~common~~the ~~stock~~ordinary ~~price~~course isof ~~volatile~~business, the Company relies on information technology networks and systems, some of which are managed by third parties, to process, transmit and store electronic information, and to manage or support a variety of business processes and activities. Additionally, the Company collects and stores sensitive data, including proprietary business information. It is possible we or a third party that we rely on could ~~result~~incur interruptions from a loss of communications, hardware or software failures, a cybersecurity attack or an incident relating to our IT systems or technology, ransomware, phishing attacks, computer viruses or malware. In the current environment, there are numerous and evolving risks to cybersecurity and privacy, including criminal hackers, hacktivists, state-sponsored intrusions, industrial espionage, employee malfeasance and human or technological error. High-profile cybersecurity incidents at other companies and in ~~substantial~~government agencies have increased in recent years, and security industry experts and government officials have warned about the risks of hackers and cyberattacks targeting businesses such as ours. Despite security measures and business continuity plans, the Company’s information technology networks and infrastructure may be vulnerable to damage, disruptions or shutdowns due to attack by hackers, breaches, employee error or malfeasance, power outages, computer viruses, telecommunication or utility failures, systems failures, natural disasters or other catastrophic events. While we have not experienced any material losses ~~for~~related ~~individual~~to ~~shareholders~~cyber-attacks or information security breaches to date, any such event could result in legal claims or proceedings, liability or penalties under privacy laws, disruption in operations and damage to the Company’s reputation, which could adversely affect the Company’s business.

The market price of our common stock has been volatile, and we expect that it will continue to be volatile. In particular, our common stock may be subject to significant fluctuations in response to a variety of factors, including:11

●Uncertainties ~~general~~with ~~economic~~respect to the development, deployment, and use of artificial intelligence in our business ~~conditions;~~and products may result in harm to our business and reputation.

●We ~~changing~~are ~~market~~in ~~conditions~~the initial stages of incorporating artificial intelligence (“AI”) into our business activities and our product and service offerings. As with many innovations, AI presents risks and challenges that could adversely impact our business. The development, adoption, and use of AI technologies are still in ~~the~~their ~~industries~~early stages and ineffective or inadequate AI development or deployment practices could result in unintended consequences. For example, AI algorithms may be flawed or may be based on datasets that are biased or insufficient. In addition, any disruption or failure in the AI functionality we ~~serve;~~have incorporated or may in the future incorporate into our business activities, products or services could adversely impact our business or result in delays or errors in our offerings. The legal and regulatory landscape surrounding AI technologies is rapidly evolving and uncertain, including in the areas of intellectual property, cybersecurity and privacy and data protection. Compliance with new or changing laws, regulations or industry standards relating to AI may impose significant costs and may limit our ability to develop, deploy or use AI technologies. We also work with vendors that incorporate artificial intelligence tools into their offerings and the providers of these artificial intelligence tools may not meet existing or rapidly evolving regulatory or industry standards with respect to privacy and data protection. Failure to appropriately respond to this evolving landscape may result in legal liability, regulatory action, or brand and reputational harm.

●The ~~monetary~~Company’s ~~and~~future ~~fiscal~~results ~~policies,~~may ~~laws~~be ~~and~~affected ~~regulations~~by ~~and~~various ~~other~~legal ~~activities~~and ofregulatory ~~government~~proceedings ~~agencies~~ and ~~similar~~legal ~~organizations;~~compliance risks.

●From ~~conditions~~time to time, the Company is subject to certain legal and regulatory proceedings in the ordinary course of business and otherwise. The outcome of these legal proceedings may differ from the Company’s expectations because the outcomes of litigation, including regulatory matters, are often difficult to reliably predict. Various factors or developments could lead the Company to change current estimates of liabilities and related insurance receivables where applicable, or make such estimates for matters previously not susceptible to reasonable estimates, such as a significant judicial ruling or judgment, settlement, regulatory development or change in applicable law. A future adverse ruling, settlement or unfavorable development could result in charges that could have a material adverse effect on the Company’s results of operations or cash flows in any particular period. Manufacturers are required to certify that neither convicted, forced or indentured labor (as defined under U.S. law) nor child labor (as defined by law in the manufacturer’s country) is used in the production process, that compensation is paid in accordance with local law and ~~global~~that ~~securities~~their ~~markets~~factories are in compliance with local safety regulations. Although we promote ethical business practices and our sourcing personnel periodically visit and monitor the operations of our independent contract manufacturers, suppliers and licensees, we do not control them or their labor practices. If one of our independent contract manufacturers, suppliers or licensees violates labor or other ~~capital~~laws ~~markets;~~or diverges from those labor practices generally accepted as ethical in the U.S., it could result in adverse publicity for us, damage our reputation in the U.S., or render our conduct of business in a particular foreign country undesirable or impractical, any of which could harm our business.

●Our ~~actual~~common orstock ~~anticipated~~price ~~variations~~is volatile, which could result in ~~quarterly~~substantial ~~operating~~losses ~~results;~~for individual shareholders.

●The ~~failure~~market toprice ~~meet~~of ~~analyst~~our ~~predictions~~common stock has been volatile, and ~~projections;~~we expect that it will continue to be volatile. In particular, our common stock may be subject to significant fluctuations in response to a variety of factors, including:

● ~~costs~~general ~~and~~economic ~~other effects of legal~~ and ~~administrative~~business ~~proceedings, claims, settlements and judgments~~conditions;

● ~~additions~~changing ormarket ~~departures~~conditions ofin ~~key~~the ~~personnel~~industries that we serve;

● ~~announcements~~monetary ofand ~~innovations~~fiscal orpolicies, ~~new~~laws ~~services~~and byregulations usand orother ~~our~~activities ~~competitors~~of government agencies and similar organizations;

● ~~domestic~~conditions in U.S. and ~~international~~global ~~health~~securities ~~crises~~markets and ~~pandemics~~other capital markets;

● ~~our~~actual ~~sales of common stock~~ or ~~other~~anticipated ~~securities~~variations in ~~the~~quarterly ~~future;~~operating ~~and~~results;

● ~~other~~failure ~~events~~to ormeet ~~factors,~~analyst ~~many~~predictions ofand ~~which are beyond our control.~~projections;

~~Due~~● tocosts ~~these~~and ~~factors,~~other ~~you~~effects ~~may~~of ~~not~~legal beand ~~able~~administrative toproceedings, ~~sell your stock at or above the price you paid for it~~claims, ~~which~~settlements ~~could~~and ~~result in substantial losses.~~judgments;

~~Item~~● ~~1B.~~additions ~~Unresolved~~or ~~Staff~~departures ~~Comments.~~of key personnel;

~~None.~~● announcements of innovations or new services by us or our competitors;

~~Item~~● ~~1C.~~domestic ~~Cybersecurity~~and international health crises and pandemics;

~~Cybersecurity~~● ~~Risk~~our ~~Management~~sales ~~and~~of ~~Strategy~~common stock or other securities in the future; and

We● recognize the importance of assessing, identifying, and managing material risks associated with cybersecurity threats, as such term is defined in Item 106(a) of Regulation S-K. These risks include, among other ~~things,~~events ~~operational disruption; intellectual property theft; fraud; extortion; harm to employees~~ or ~~customers;~~factors, ~~violation~~many of ~~privacy~~which orare ~~security~~beyond ~~laws and other litigation and legal risk; and reputational risks. We have implemented several cybersecurity processes, technologies, and controls to aid in~~ our ~~efforts to assess, identify, and manage such material risks~~control.

11Due to these factors, you may not be able to sell your stock at or above the price you paid for it, which could result in substantial losses.

ToItem identify and assess material risks from cybersecurity threats, our enterprise risk management program considers cybersecurity threat risks alongside other company risks as part of our overall risk assessment process1B. ~~Our~~Unresolved ~~enterprise~~Staff risk professionals collaborate with subject matter specialists, as necessary, to gather insights for identifying and assessing material cybersecurity threat risks, their severity, and potential mitigationsComments. We employ a range of tools and services, including regular network and endpoint monitoring, vulnerability assessments, penetration testing, to inform our professionals’ risk identification and assessment.

We also have a cybersecurity specific risk assessment process, which helps identify our cybersecurity threat risks by comparing our program to best practices, as well as by engaging experts to attempt to infiltrate our information systems (as such term is defined in Item 106(a) of Regulation S-K)None. ~~We test and review the result on a semi-annual basis.~~

Our cybersecurity program includes controls designed to identify, protect against, detect, respond to and recover from cybersecurity incidents (as such term is defined in Item 106(a) of Regulation S-K), and to provide for the availability of critical data and systems and to maintain regulatory compliance. These controls include the following activities:12

●Item ~~monitor~~1C. ~~emerging data protection laws and implement changes to our processes designed to comply;~~Cybersecurity

●Cybersecurity ~~conduct~~Risk ~~regular~~Management ~~cybersecurity management~~ and ~~incident~~Strategy ~~training for employees involved in our systems and processes that handle sensitive data;~~

●We ~~conduct~~recognize ~~regular~~the ~~phishing~~importance ~~email~~of ~~simulations~~assessing, ~~for~~identifying, ~~all~~and ~~employees~~managing ~~and~~material ~~all~~risks ~~contractors~~associated with ~~access~~cybersecurity tothreats, ~~corporate~~as ~~email~~such ~~systems~~term is defined in Item 106(a) of Regulation S-K. These risks include, among other things, operational disruption; intellectual property theft; fraud; extortion; harm to ~~enhance~~employees ~~awareness~~or customers; violation of privacy or security laws and ~~responsiveness~~other litigation and legal risk; and reputational risks. We have implemented several cybersecurity processes, technologies, and controls to aid in our efforts to assess, identify, and manage such ~~possible~~material ~~threats;~~risks.

●To ~~through~~identify ~~policy~~and assess material risks from cybersecurity threats, ~~practice~~our ~~and~~enterprise ~~contract~~risk (management program considers cybersecurity threat risks alongside other company risks as ~~applicable)~~part ~~require~~of ~~employees~~our overall risk assessment process. Our enterprise risk professionals collaborate with subject matter specialists, as ~~well~~necessary, asto ~~third-parties~~gather ~~who~~insights ~~provide~~for identifying and assessing material cybersecurity threat risks, their severity, and potential mitigations. We employ a range of tools and services, onincluding ~~our~~regular ~~behalf~~network and endpoint monitoring, vulnerability assessments, penetration testing, to ~~treat~~inform ~~customer~~our ~~information~~professionals’ ~~and~~risk ~~data~~identification ~~with~~and ~~care;~~assessment.

●We ~~leverage~~also ~~the~~have ~~NIST~~a ~~incident~~cybersecurity ~~handling~~specific ~~framework~~risk toassessment ~~help~~process, uswhich helps identify, ~~protect,~~our ~~detect,~~cybersecurity ~~respond~~threat risks by comparing our program to best practices, ~~and~~as ~~recover~~well ~~when~~as ~~there~~by engaging experts to attempt to infiltrate our information systems (as such term is andefined ~~actual~~in orItem ~~potential~~106(a) ~~cybersecurity~~of ~~incident;~~Regulation S-K). We test and review the result on a semi-annual basis.

●Our ~~maintain~~cybersecurity ~~multiple~~program ~~layers~~includes of controls designed to identify, ~~including~~protect ~~embedding~~against, ~~security~~detect, ~~into~~respond ~~our~~to ~~technology~~and ~~investments,~~recover ~~multi-factor~~from ~~authentication~~cybersecurity ~~tools,~~incidents ~~apply~~(as ~~policy~~such ofterm ~~least~~is ~~privilege~~defined toin ~~data~~Item ~~and~~106(a) ~~systems~~of ~~access~~Regulation S-K), ~~monitor~~and ~~logins~~to ~~both~~provide atfor ~~network~~the ~~perimeter~~availability ~~and~~of ~~within,~~critical ~~segment~~data and ~~firewall~~systems ~~system~~and ~~access~~to ~~within~~maintain ~~the~~regulatory ~~network~~compliance. ~~perimeter~~These ~~not~~controls ~~solely~~include atthe ~~network~~following ~~edge or perimeter;~~activities:

● ~~perform~~monitor ~~annual~~emerging ~~system~~data ~~access~~protection ~~audit~~laws ~~with~~and ~~all~~implement ~~departments~~changes ~~and~~to ~~personnel~~our processes designed to comply;

● ~~review~~conduct ~~access~~regular ~~logs~~cybersecurity onmanagement ~~all~~and ~~perimeter,~~incident ~~security~~training for employees involved in our systems and processes that handle sensitive data ~~areas~~;

We● ~~perform~~conduct ~~periodic~~regular ~~internal~~phishing ~~assessments~~email tosimulations ~~test~~for ~~our cybersecurity controls~~all ~~and~~employees ~~regularly evaluate our policies~~ and ~~procedures~~all ~~surrounding~~contractors ~~our~~with ~~handling~~access ~~and~~to ~~control~~corporate ofemail ~~personal data and the~~ systems ~~we have in place~~ to ~~help~~enhance ~~protect~~awareness ~~us from cybersecurity or personal data breaches,~~ and weresponsiveness ~~perform periodic internal assessments~~ to ~~test~~such ~~our~~possible ~~controls and to help us identify areas for continued focus, improvement, and/or compliance.~~threats;

We● ~~have~~through ~~established a cybersecurity risk management process that includes internal reporting of significant cybersecurity risk to our board when found. In addition~~policy, ~~our~~practice ~~incident response plan coordinates the activities we take to prepare for, detect, respond to~~ and ~~recover~~contract ~~from~~(as ~~cybersecurity~~applicable) ~~incidents,~~require ~~which include processes to triage~~employees, ~~assess~~as ~~severity~~well ~~for,~~as ~~escalate,~~third-parties ~~contain,~~who ~~investigate,~~provide ~~and~~services ~~remediate~~on ~~the~~our ~~incident~~behalf, ~~as well as~~ to ~~comply~~treat ~~with~~customer ~~potentially~~information ~~applicable legal obligations~~ and ~~mitigate~~data ~~brand~~with ~~and reputational damage.~~care;

~~Our~~● ~~processes~~leverage ~~also~~the ~~address~~NIST ~~cybersecurity~~incident ~~threat~~handling ~~risks~~framework ~~associated~~to ~~with~~help ~~our~~us ~~use of third-party service providers~~identify, ~~including those in our supply chain or who have access to our customer and employee data or our systems. Third-party risks are included within our enterprise risk management program~~protect, ~~as well as our cybersecurity-specific risk identification program~~detect, ~~both of which are discussed above. In addition~~respond, ~~cybersecurity~~and ~~considerations~~recover ~~affect~~when ~~the~~there ~~selection~~is ~~and~~an ~~oversight~~actual ofor ~~our~~potential ~~third-party~~cybersecurity ~~service providers.~~incident;

We● ~~describe~~maintain ~~whether~~multiple ~~and~~layers ~~how~~of ~~risks from identified cybersecurity threats~~controls, including asembedding asecurity ~~result~~into ofour ~~any~~technology ~~previous cybersecurity incidents~~investments, ~~have~~multi-factor ~~materially~~authentication ~~affected or are reasonably likely to materially affect us~~tools, ~~including~~apply ~~our~~policy ~~business strategy, results~~ of ~~operations,~~least orprivilege ~~financial~~to ~~condition,~~data ~~under the heading “Security breaches~~ and ~~other~~systems ~~disruptions to the Company’s information technology infrastructure could interfere with the Company’s operations~~access, ~~compromise~~monitor ~~information~~logins ~~belonging~~both toat ~~the~~network ~~Company~~perimeter and ~~our~~within, ~~customers~~segment and ~~suppliers~~firewall ~~and~~system ~~expose~~access ~~the~~within ~~Company to liability, which could adversely impact~~ the ~~Company’s~~network ~~business~~perimeter ~~and~~not ~~reputation”~~solely ~~included as part of our risk factor disclosures~~ at ~~Item~~network 1Aedge ofor ~~this Annual Report on Form 10-K which disclosures are incorporated by reference herein.~~perimeter;

In● ~~the~~perform ~~last~~annual ~~fifteen~~system ~~fiscal~~access ~~years,~~audit wewith ~~have~~all ~~not~~departments ~~experienced any material cybersecurity incidents~~ and ~~the expenses we have incurred from cybersecurity incidents were immaterial. This includes penalties and settlements, of which there were none.~~personnel

~~Cybersecurity~~● ~~Governance~~review access logs on all perimeter, security and sensitive data areas

~~Cybersecurity~~We isperform anperiodic ~~important~~internal ~~part~~assessments ofto test our cybersecurity controls ~~enterprise risk management program~~ and anregularly ~~area~~evaluate ~~of increasing focus for~~ our ~~Board~~policies and ~~management.~~procedures ~~Our~~surrounding ~~Audit~~our ~~Committee~~handling isand ~~responsible~~control ~~for the oversight~~ of ~~risks~~personal ~~from~~data ~~cybersecurity threats. Management is informed about~~ and ~~monitors~~ the ~~prevention,~~systems ~~mitigation,~~we ~~detection,~~have ~~and remediation of cybersecurity incidents through their management of, and participation~~ in, ~~the~~place ~~cybersecurity~~to ~~risk~~help ~~management~~protect ~~process~~us ~~described above, including the operation of our incident response plan. Annually, the Audit Committee receives an overview~~ from ~~management of our~~ cybersecurity ~~threat~~or ~~risk~~personal ~~management~~data ~~process~~breaches, and ~~strategy~~we ~~covering~~perform ~~topics~~periodic ~~such~~internal ~~as data security posture, results from third-party~~ assessments, ~~progress~~to ~~towards~~test ~~pre-determined risk-mitigation-related goals,~~ our ~~incident~~controls ~~response plan,~~ and ~~material cybersecurity threat risks or incidents and developments, as well as the steps management has taken~~ to ~~respond~~help tous ~~such~~identify ~~risks.~~areas Infor ~~such~~continued ~~sessions~~focus, ~~the Audit Committee generally receives materials~~improvement, ~~including current~~ and/or ~~emerging material cybersecurity threat risks and describing the company’s ability to mitigate those risks, and discusses such matters with our IT Manager~~compliance.

12We have established a cybersecurity risk management process that includes internal reporting of significant cybersecurity risk to our board when found. In addition, our incident response plan coordinates the activities we take to prepare for, detect, respond to and recover from cybersecurity incidents, which include processes to triage, assess severity for, escalate, contain, investigate, and remediate the incident, as well as to comply with potentially applicable legal obligations and mitigate brand and reputational damage.

~~Members~~Our ofprocesses ~~the~~also ~~Audit~~address ~~Committee~~cybersecurity ~~are~~threat ~~also~~risks ~~encouraged~~associated towith ~~regularly~~our ~~engage~~use inof adthird-party ~~hoc~~service ~~conversations~~providers, ~~with~~including ~~management~~those onin ~~cybersecurity-related~~our ~~news~~supply ~~events~~chain ~~and~~or ~~discuss~~who ~~any~~have ~~updates~~access to our ~~cybersecurity~~customer ~~risk~~and ~~management~~employee ~~process.~~data ~~Material~~or ~~cybersecurity~~our ~~threat~~systems. Third-party risks are ~~also~~included ~~considered~~within ~~during~~our ~~separate~~enterprise ~~Board~~risk ~~meeting~~management ~~discussions~~program, ofas ~~important~~well ~~matters~~as ~~like~~our ~~enterprise~~cybersecurity-specific risk ~~management~~identification program, ~~operational~~both ~~budgeting,~~of ~~business~~which ~~continuity~~are ~~planning,~~discussed ~~mergers~~above. ~~and~~In ~~acquisitions~~addition, ~~brand~~cybersecurity ~~management,~~considerations affect the selection and ~~other~~oversight ~~relevant~~of ~~matters~~our third-party service providers.

~~Our~~We ~~cybersecurity~~describe ~~risk~~whether ~~management~~and ~~process~~how risks from identified cybersecurity threats, ~~which~~including isas ~~discussed~~a inresult ~~greater~~of ~~detail~~any ~~above~~previous cybersecurity incidents, ishave ~~led~~materially byaffected ~~our~~or ITare ~~Manager.~~reasonably ~~Such~~likely ~~individual~~to ~~has~~materially ~~over~~affect ~~twenty~~us, ~~five~~including ~~years~~our business strategy, results of ~~prior~~operations, ~~work~~or ~~experience~~financial incondition, ~~various~~under ~~roles~~the ~~involving~~heading ~~managing~~“Security breaches and other disruptions to the Company’s information ~~security~~technology infrastructure could interfere with the Company’s operations, ~~developing~~compromise ~~cybersecurity~~information ~~strategy~~belonging to the Company and our customers and suppliers and expose the Company to liability, ~~implementing~~which ~~effective~~could ~~information~~adversely impact the Company’s business and ~~cybersecurity~~reputation” ~~programs~~included as part of our risk factor disclosures at Item 1A of this Annual Report on Form 10-K which disclosures are incorporated by reference herein.

~~Our~~In ITthe ~~manager~~last ~~skills~~fifteen ~~are~~fiscal ~~further~~years, ~~enhanced~~we byhave ~~MCSA~~not ~~and~~experienced ~~MCSE~~any ~~certifications~~material ~~and~~cybersecurity aincidents ~~foundation~~and inthe ~~Computer~~expenses ~~Engineering~~we ~~studies~~have atincurred ~~university.~~from ~~Our~~cybersecurity ITincidents ~~manager~~were ~~has~~immaterial. aThis ~~strong~~includes ~~track~~penalties ~~record of working with major vendors' security, firewall, identity management,~~ and ~~other platforms~~settlements, ~~ensuring~~of ~~robust~~which ~~and~~there ~~resilient~~were ~~IT infrastructures~~none.

~~Item 2. Properties.~~13

~~The~~Cybersecurity ~~Company’s~~Governance principal executive office is located at 53 Wellington Street East, Aurora, Ontario, Canada, L4G 1H6. The approximate monthly rent is $6,600 for 2,568 square feet under a lease which expires August 31, 2026. Working out of the principal executive office are the President and Chief Executive Officer, Lloyd Hoffman, and the Chief Financial Officer, Colleen McDonald.

~~The~~Cybersecurity ~~Building~~is ~~Supply~~an ~~segment~~important ~~manufacturing~~part ~~facility~~of our enterprise risk management program and an area of increasing focus for our Board and management. Our Audit Committee is ~~located~~responsible for the oversight of risks from cybersecurity threats. Management is informed about and monitors the prevention, mitigation, detection, and remediation of cybersecurity incidents through their management of, and participation in, ~~Valdosta~~the cybersecurity risk management process described above, ~~Georgia~~including the operation of our incident response plan. ~~The~~ ~~approximate~~Annually, ~~average~~the ~~monthly~~Audit ~~rent~~Committee isreceives ~~$39~~an overview from management of our cybersecurity threat risk management process and strategy covering topics such as data security posture,~~000~~ ~~for~~results ~~165~~from third-party assessments,~~400~~ ~~square~~progress ~~feet~~towards pre-determined risk-mitigation-related goals, our incident response plan, and material cybersecurity threat risks or incidents and developments, as well as the steps management has taken to respond to such risks. ~~This~~ ~~lease~~In ~~expires~~such onsessions, ~~December~~the 31Audit Committee generally receives materials if necessary, ~~2034~~including current and emerging material cybersecurity threat risks and describing the company’s ability to mitigate those risks, and discusses such matters with our IT Manager.

~~The~~Members ~~Disposable~~of ~~Protective~~the ~~Apparel~~Audit ~~segment~~Committee ~~has~~are ~~its~~also ~~cutting~~encouraged ~~operation,~~to ~~warehousing~~regularly ~~and~~engage ~~shipping~~in ~~facility~~ad inhoc ~~Nogales,~~conversations ~~Arizona. The~~with ~~approximate~~management ~~monthly~~on ~~rent~~cybersecurity-related isnews ~~$30,600~~events ~~for~~and ~~60,000~~discuss ~~square~~any ~~feet. This~~updates ~~lease~~to ~~expired~~our oncybersecurity ~~December~~risk ~~31,~~management ~~2023~~process. ~~The~~Material ~~Disposable~~cybersecurity ~~Protective~~threat ~~Apparel~~risks ~~segment~~are also ~~has~~considered anduring ~~additional~~separate ~~warehousing~~Board ~~facility~~meeting ~~located~~discussions inof ~~Nogales,~~important ~~Arizona.~~matters ~~The~~like ~~approximate~~enterprise ~~monthly~~risk ~~rent is $6~~management,~~600~~ ~~for~~operational 16budgeting,~~500~~ ~~square~~business ~~feet~~continuity planning, ~~the~~mergers ~~lease~~and ~~expired in February 2024. We will remain in these two locations as we transition to our new leased space in Nogales Arizona beginning in March of 2024. Our new space is 137~~acquisitions,~~500~~ ~~square~~brand ~~feet~~management, ~~approximate monthly rent is $ 76,000~~ and ~~expires~~other onrelevant ~~February 28, 2029~~matters.

~~The~~Our ~~Company~~cybersecurity ~~manufactures~~risk ~~its~~management ~~surgical~~process, ~~face~~which ~~masks~~is atdiscussed ~~a facility located~~ in ~~Salt~~greater ~~Lake~~detail ~~City~~above, ~~Utah. The monthly rent~~ is ~~$19,200~~led ~~for~~by ~~34,500~~our ~~square~~IT ~~feet~~Manager. ~~This~~ ~~lease~~Such ~~expires~~individual onhas ~~July~~over ~~31,~~twenty ~~2024.~~five Weyears ~~will~~of ~~not~~prior bework ~~renewing~~experience ~~this~~in ~~lease~~various asroles weinvolving ~~will~~managing beinformation ~~moving~~security, ~~our~~developing ~~face~~cybersecurity ~~mask~~strategy, ~~facility~~implementing toeffective ~~our~~information ~~new~~and ~~Nogales,~~cybersecurity ~~Arizona leased space~~programs.

~~The~~Our ~~Company~~IT ~~believes~~manager’s ~~that~~skills ~~these~~are ~~arrangements~~further ~~are~~enhanced ~~suitable~~by MCSA and ~~adequate~~MCSE ~~for~~certifications ~~its~~and ~~present~~a ~~needs~~foundation ~~and~~in ~~that~~Computer ~~other~~Engineering ~~premises~~studies at university. Our IT manager has a strong track record of working with major vendors' security, iffirewall, ~~required~~identity management, ~~are~~and ~~readily~~other ~~available~~platforms, ensuring robust and resilient IT infrastructures.

Item 32. ~~Legal Proceedings~~Properties.

On June 7, 2022, the Company filed a lawsuit (the “Lawsuit”) in Utah naming as defendants the vendors from which the Company ordered equipment for its facility in Utah (collectively the “Defendants”). The ~~Lawsuit relates to certain equipment ordered from Defendants and paid for by the~~ Company,’s ~~which~~principal ~~Defendants~~executive ~~never~~office ~~delivered. In the Lawsuit the Company~~ is ~~seeking~~located ~~the~~at ~~following~~53 ~~relief:~~Wellington ~~compensatory~~Street ~~damages~~East, ~~in the amount $490~~Aurora,~~000,~~ ~~representing the money the Company paid for the machines it never received~~Ontario, ~~lost profits in the form of mask sales it could have made if Defendants had delivered the machines on the promised date~~Canada, ~~and~~L4G ~~other monetary and equitable relief~~1H6. InThe ~~2022,~~approximate ~~the~~monthly ~~Company~~rent ~~wrote~~is ~~off the~~ $~~490~~6,~~000~~600 ~~balance of the deposit paid~~ for ~~the equipment~~2,568 ~~pending~~square ~~any~~feet ~~recovery~~under ina ~~the~~lease ~~Lawsuit.~~which Asexpires ofAugust ~~the date hereof~~31, ~~no counterclaims have been asserted against the Company~~2026. ~~The~~Working ~~Company~~out ~~believes~~of ~~there would not be any meritorious claims against~~ the ~~Company~~principal inexecutive ~~the~~office ~~Lawsuit.~~are ~~The final outcome of~~ the ~~Lawsuit,~~President ~~including~~and ~~the~~Chief ~~potential~~Executive ~~amount of any recovery for the Company’s claims~~Officer, isLloyd ~~uncertain. Any potential recovery represents a gain contingency in accordance with ASC 450~~Hoffman, ~~Contingencies,~~and ~~that has not been recorded as~~ the ~~matter~~Chief ~~was~~Financial ~~not resolved as of December 31~~Officer, ~~2023.~~Colleen ~~Any recovery will be recorded when received~~McDonald.

The ~~Company~~Building isSupply ~~subject~~segment tomanufacturing ~~various~~facility ~~pending~~is ~~and~~located ~~threatened litigation actions~~ in ~~the~~Valdosta, ~~ordinary~~Georgia. ~~course~~The ofapproximate ~~business.~~average ~~Although~~monthly itrent is ~~not possible to determine with certainty at this point in time what liability~~$39,000 iffor ~~any~~165,400 ~~the~~square ~~Company~~feet. ~~will~~This ~~have~~lease asexpires ~~a result of such litigation, based~~ on ~~consultation~~December ~~with legal counsel~~31, ~~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~~2034.

13The Disposable Protective Apparel segment has its cutting operation, production, warehousing and shipping facility in Nogales, Arizona. The approximate monthly rent is $76,000 for 137,500 square feet. This lease expires on February 28, 2029.

~~Item~~The 4.Company ~~Mine~~believes ~~Safety~~that ~~Disclosures~~these arrangements are suitable and adequate for its present needs and that other premises, if required, are readily available.

~~N/A~~Item 3. Legal Proceedings.

~~PART~~On IIJune 7, 2022, the Company filed a lawsuit (the “Lawsuit”) in Utah naming as defendants the vendors from which the Company ordered equipment for its facility in Utah (collectively the “Defendants”). The Lawsuit relates to certain equipment ordered from Defendants and paid for by the Company, which Defendants never delivered. In the Lawsuit the Company is seeking the following relief: compensatory damages in the amount $490,000, representing the money the Company paid for the machines it never received, lost profits in the form of mask sales it could have made if Defendants had delivered the machines on the promised date, and other monetary and equitable relief. In 2022, the Company wrote off the $490,000 balance of the deposit paid for the equipment, pending any recovery in the Lawsuit. As of the date hereof, no counterclaims have been asserted against the Company. The Company believes there would not be any meritorious claims against the Company in the Lawsuit. The final outcome of the Lawsuit, including the potential amount of any recovery for the Company’s claims, is uncertain. Any potential recovery represents a gain contingency in accordance with ASC 450, Contingencies, that has not been recorded as the matter was not resolved as of December 31, 2024. Any recovery will be recorded when received.

~~Item~~The 5Company is subject to various pending and threatened litigation actions in the ordinary course of business. ~~Market~~Although ~~For~~it ~~Registrant’s~~is ~~Common~~not ~~Equity~~possible to determine with certainty at this point in time what liability, ~~Related~~if ~~Shareholder~~any, ~~Matters~~the ~~and~~Company ~~Issuer~~will ~~Purchases~~have as a result of ~~Equity~~such ~~Securities~~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.

~~MARKET~~Item ~~INFORMATION~~4. Mine Safety Disclosures.

~~The Company’s common stock trades on the NYSE American (formerly the NYSE MKT, the NYSE Amex and the American Stock Exchange) (the “NYSE American”) under the symbol “APT.”~~N/A

~~As of March 1, 2024, the Company’s common stock was held by 102 shareholders of record and approximately 12,437 beneficial owners.~~14

~~Dividends~~PART II

~~The~~Item holders of the Company’s common stock are entitled to receive such dividends as may be declared by the Board of Directors of the Company from time to time to the extent that funds are legally available for payment thereof5. ~~The~~Market ~~Company~~For ~~has never declared or paid any dividends on any of its outstanding shares of common stock. The Board of Directors~~Registrant’ ~~current policy is not to pay dividends but rather to use available funds to repurchase common shares in accordance with the Company’~~s ~~repurchase~~Common ~~program~~Equity, ~~and~~Related toShareholder ~~fund~~Matters ~~the continued development~~ and ~~growth~~Issuer Purchases of ~~the~~Equity ~~Company~~Securities. ~~Consequently, the Company currently has no plans to pay cash dividends in the foreseeable future.~~

~~ISSUER~~MARKET ~~PURCHASES OF EQUITY SECURITIES~~INFORMATION

The ~~following~~Company’s ~~table~~common ~~sets~~stock ~~forth~~trades ~~purchases~~on ~~made~~the byNYSE orAmerican on(formerly ~~behalf of~~ the ~~Company~~NYSE orMKT, ~~any~~the ~~“affiliated~~NYSE ~~purchaser,”~~Amex asand ~~defined~~the inAmerican ~~Rule~~Stock ~~10b-18 (a~~Exchange)~~(3)~~ of (the ~~Securities~~“NYSE ~~Exchange~~American”) ~~Act~~under ~~of 1934, during~~ the ~~fourth~~symbol ~~quarter of 2023~~“APT.”

	Issuer Purchases of Equity Securities
Period	Total Number of Shares Purchased (1)		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Program (1)
October 1 - 31, 2023		120,400	$	4.14		120,400
November 1 - 30, 2023		31,800		4.17		31,800
December 1 - 31, 2023		74,700		5.14		74,700
		226,900		4.48		226,900

As of February 28, 2025, the Company’s common stock was held by 89 shareholders of record and approximately 12,437 beneficial owners.

(1) On November 27, 2023, the Company announced that the Board of Directors had authorized a $2,000,000 expansion of the Company’s existing share repurchase program. All of the shares included in this table were purchased pursuant to this program. Since the inception of the share repurchase program in 1999, the Company has authorized the repurchase of $52,402,000 of common stock, of which $2,194,000 was available for repurchase as of December 31, 2023. The stock repurchase plan expires on December 15, 2024.Dividends

~~UNREGISTERED~~The ~~SALES~~holders OFof ~~EQUITY~~the ~~SECURITIES~~Company’s ~~AND~~common ~~USE~~stock OFare ~~PROCEEDS~~entitled to receive such dividends as may be declared by the Board of Directors of the Company from time to time to the extent that funds are legally available for payment thereof. The Company has never declared or paid any dividends on any of its outstanding shares of common stock. The Board of Directors’ current policy is not to pay dividends but rather to use available funds to repurchase common shares in accordance with the Company’s repurchase program and to fund the continued development and growth of the Company. Consequently, the Company currently has no plans to pay cash dividends in the foreseeable future.

WeISSUER ~~did~~PURCHASES ~~not~~OF ~~sell~~EQUITY ~~any unregistered equity securities during the periods covered by this Annual Report on Form 10-K.~~SECURITIES

~~Item~~The 6.following table sets forth purchases made by or on behalf of the Company or any “affiliated purchaser,” as defined in Rule 10b-18 (~~Reserved~~a)(3) of the Securities Exchange Act of 1934, during the fourth quarter of 2024.

N/A

	Issuer Purchases of Equity Securities
Period	Total Number of Shares Purchased (1)		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Program (1)
October 1 - 31, 2024		0	$	0.00		0
November 1 - 30, 2024		57,100		5.36		57,100
December 1 - 31, 2024		78,900		5.19		78,900
		136,000		5.26		136,000

~~Item~~(1) 7.On ~~Management~~December 23, 2024, the Company announced that the Board of Directors had authorized a $2,000,000 expansion of the Company’s ~~Discussion~~existing ~~and~~share ~~Analysis~~repurchase program. All of ~~Financial~~the ~~Condition~~shares ~~and~~included ~~Results~~in this table were purchased pursuant to this program. Since the inception of ~~Operations~~the share repurchase program in 1999, the Company has authorized the repurchase of $57,402,000 of common stock, of which $2,742,000 was available for repurchase as of December 31, 2024. The stock repurchase plan expires on December 15, 2026.

~~You~~UNREGISTERED ~~should~~SALES ~~read~~OF ~~the~~EQUITY ~~following~~SECURITIES ~~discussion~~AND ~~and~~USE ~~analysis~~OF ~~together with our consolidated financial statements and the notes to our consolidated financial statements, which appear elsewhere in this report.~~PROCEEDS

14We did not sell any unregistered equity securities during the periods covered by this Annual Report on Form 10-K.

~~Special~~Item ~~Note~~6. ~~Regarding Forward-Looking Statements~~(Reserved)

Certain information set forth in this Annual Report on Form 10-K 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, new products, production levels and sales in 2024, and other information that is not historical information. When used in this report, the words “estimates,” “expects,” “anticipates,” “forecasts,” “plans,” “intends,” “believes,” “predicts,” “potential,” “may,” “continue” or “should,” 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 caution readers that these forward-looking statements speak only as of the date hereof. The Company hereby expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any such statements to reflect any change in the Company’s expectations or any change in events, conditions or circumstances on which such statements are based. All forward-looking statements, whether written or oral and whether made by us or on our behalf, are expressly qualified by this special note.N/A

~~Any~~Item ~~expectations based on these forward-looking statements are subject to risks and uncertainties~~7. ~~These risks and other factors include, but are not limited to, those listed below and under “Risk Factors,” and elsewhere in this report. These and many other factors could affect the Company~~Management’s ~~future~~Discussion ~~operating~~and ~~results~~Analysis ~~and~~of ~~financial~~Financial ~~condition~~Condition and ~~could~~Results ~~cause~~of ~~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~~Operations.

~~Special~~You ~~Note~~should ~~Regarding~~read ~~Smaller~~the ~~Reporting~~following ~~Company~~discussion ~~Status~~and analysis together with our consolidated financial statements and the notes to our consolidated financial statements, which appear elsewhere in this report.

We are filing this Annual Report on Form 10-K as a “smaller reporting company” (as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended) based on our public float (the aggregate market value of our common equity held by non-affiliates of the Company) as of the last business day of our second fiscal quarter of 2023. 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 and necessary to aid in an understanding of the current consolidated financial position, changes in financial position and results of operations of the Company.15

~~Critical~~Special ~~Accounting~~Note ~~Policies~~Regarding ~~and~~Forward-Looking ~~Estimates~~Statements

~~The~~Certain ~~preparation~~information ofset ~~our~~forth ~~financial statements~~ in ~~conformity~~this ~~with~~Annual ~~U.S.~~Report ~~generally~~on ~~accepted~~Form ~~accounting~~10-K ~~principles~~contains (“~~U.S.~~forward-looking ~~GAAP~~statements”) ~~requires~~within usthe tomeaning ~~make~~of ~~estimates~~federal ~~and~~securities ~~assumptions~~laws. ~~that~~Forward-looking ~~affect~~statements ~~the~~include ~~reported~~statements ~~amounts~~concerning ofour ~~assets~~plans, ~~and~~objectives, ~~liabilities~~goals, ~~the~~strategies, ~~disclosure~~future ofevents, ~~contingent~~future ~~assets~~revenues ~~and~~or ~~liabilities~~performance, atcapital ~~the~~expenditures, ~~dates~~financing ofneeds, ~~the~~plans ~~financial~~or ~~statements~~intentions, ~~and~~including, ~~the~~without ~~reported~~limitation, ~~amounts~~our ofexpected ~~net~~orders, new products, production levels and sales in 2025, and ~~expenses~~other ~~during~~information ~~the~~that ~~periods~~is ~~reported~~not historical information. WeWhen ~~base~~used in this report, the words “estimates,” on“expects,” ~~past~~“anticipates,” ~~experience~~“forecasts,” “plans,” “intends,” “believes,” “predicts,” “potential,” “may,” “continue” or “should,” and onvariations ~~various~~of ~~other~~such ~~assumptions~~words ~~that~~or similar expressions are ~~believed~~intended to beidentify ~~reasonable~~forward-looking ~~under~~statements. ~~the~~We ~~circumstances.~~may ~~The~~make ~~application~~additional offorward-looking ~~these~~statements ~~accounting~~from ~~policies~~time onto atime. ~~consistent~~We ~~basis~~caution ~~enables~~readers usthat tothese ~~provide~~forward-looking ~~timely~~statements ~~and~~speak ~~reliable~~only ~~financial~~as ~~information~~of the date hereof. ~~Our~~The ~~significant~~Company ~~accounting~~hereby ~~policies~~expressly ~~and~~disclaims ~~estimates~~any ~~are~~obligation ~~more~~or ~~fully~~undertaking ~~described~~to inrelease ~~Note~~publicly 2any –updates ~~“Summary~~or ofrevisions ~~Significant~~to ~~Accounting~~any ~~Policies”~~such statements to reflect any change in the ~~notes~~Company’s toexpectations ~~our~~or ~~consolidated~~any ~~financial~~change ~~statements~~ in ~~Item~~events, 8conditions or circumstances on which such statements are based. ~~Our~~All ~~critical~~forward-looking ~~accounting~~statements, ~~policies~~whether written or oral and ~~estimates~~whether ~~include~~made ~~the~~by ~~following:~~us or on our behalf, are expressly qualified by this special note.

~~Accounts~~Any ~~Receivable:~~expectations ~~Accounts~~based ~~receivable~~on ~~are~~these ~~recorded~~forward-looking atstatements ~~the~~are ~~invoice~~subject ~~amount~~to risks and ~~do not bear interest~~uncertainties. ~~The~~These ~~allowance~~risks ~~for~~and ~~credit~~other ~~losses~~factors ~~is the Company’s best estimate of the amount of expected credit losses in the Company’s existing accounts receivable; however~~include, ~~changes~~but inare ~~circumstances~~not ~~relating~~limited to, ~~accounts~~those ~~receivable~~listed ~~may~~below ~~result~~and inunder a“Risk ~~requirement~~Factors,” ~~for~~and ~~additional~~elsewhere ~~allowances~~ in ~~the~~this ~~future~~report. ~~The~~These ~~Company pools accounts receivable based on risk characteristics, which include type of customer~~ and ~~age~~many ofother ~~open~~factors ~~receivable~~could ~~balance.~~affect ~~The~~the ~~allowance for credit losses pool is estimated based on historical write-off experience and known conditions, adjusted for management~~Company’s ~~reasonable and supportable expectations of~~ future ~~conditions.~~operating ~~Account~~results ~~balances~~and ~~are~~financial ~~charged~~condition ~~against~~and ~~the~~could ~~allowance~~cause ~~when~~actual ~~management~~results ~~determines~~to ~~that~~differ ~~the~~materially ~~probability~~from ~~for~~expectations ~~collection~~based ~~of an account balance is remote. As of December 31, 2023, the Company had recorded an allowance for credit losses~~ on ~~accounts~~forward-looking ~~receivable~~statements ofmade ~~$35,000.~~in Asthis ofdocument ~~December~~or ~~31,~~elsewhere ~~2022,~~by the Company ~~had~~or ~~recorded an allowance for doubtful accounts~~ on ~~accounts~~its ~~receivable of $45,000~~behalf.

~~Inventories:~~Special ~~Inventories~~Note ~~include~~Regarding ~~freight-in,~~Smaller ~~materials,~~Reporting ~~labor~~Company and overhead costs and are stated at the lower of cost or net realizable value. Allowances are recorded for slow-moving, obsolete or unusable inventory. We assess our inventory for estimated obsolescence or unmarketable inventory and write-down the difference between the cost of inventory and the estimated net realizable value based upon assumptions about future sales and supply on-hand, if necessary. If actual market conditions are less favorable than those projected by management, additional inventory write-downs may be required. In 2023 and 2022, we recorded approximately $292,000 and $152,000, respectively, in write-downs of inventory.Status

~~Foreign~~We ~~currency~~are ~~translation:~~filing ~~Our~~this ~~unconsolidated~~Annual ~~affiliate~~Report ~~operations~~on ~~are~~Form in10-K ~~India,~~as soa ~~U.S.~~“smaller ~~GAAP~~reporting ~~requires~~company” (as defined in Rule 12b-2 of the ~~Company~~Securities toExchange ~~adjust~~Act of 1934, as amended) based on our public float (the aggregate market value of ~~its~~our ~~investment~~common ~~for~~equity ~~changes~~held inby ~~foreign~~non-affiliates ~~currency~~of ~~exchange~~the ~~rates.~~Company) Weas ~~determine~~of the ~~functional~~last ~~currency~~business day of our ~~joint~~second ~~venture~~fiscal ~~based~~quarter ~~upon~~of ~~the~~2024. ~~primary~~As ~~currency~~a ~~used~~result toof ~~generate~~being ~~and~~a ~~expend~~smaller ~~cash~~reporting company, ~~which~~we isare ~~the~~allowed ~~currency~~and ofhave ~~the~~elected ~~country~~to inomit ~~which~~certain ~~the~~information ~~joint~~from ~~venture~~this isManagement’s ~~located.~~Discussion ~~For~~and ~~joint~~Analysis ~~ventures~~of ~~with~~Financial ~~functional~~Condition ~~currencies~~and ~~other~~Results ~~than~~of ~~the~~Operations; ~~U.S. dollar~~however, ~~our~~we ~~investment~~have inprovided ~~that~~all ~~joint~~information ~~venture~~for isthe ~~translated~~periods ~~into~~presented ~~U.S.~~that ~~dollars~~we ~~using~~believe ~~period-end~~to ~~exchange~~be ~~rates.~~appropriate ~~The~~and ~~resulting~~necessary ~~foreign~~to ~~currency~~aid ~~translation~~in ~~gains~~an orunderstanding ~~losses~~of ~~are~~the ~~deferred~~current asconsolidated ~~AOCL~~financial ~~and~~position, ~~reclassified~~changes toin ~~earnings~~financial ~~only~~position ~~upon~~and ~~sale~~results orof ~~liquidation~~operations of ~~that~~the ~~business~~Company.

15Critical Accounting Policies and Estimates

~~Leases:~~The Wepreparation ~~determine~~of ifour anfinancial ~~arrangement~~statements isin aconformity ~~lease~~with ~~at its inception~~U.S. ~~Operating~~generally ~~leases~~accepted ~~are~~accounting ~~included~~principles ~~as right-of-use~~ (“~~ROU~~U.S. GAAP”) ~~assets~~requires ~~and~~us ~~lease~~to ~~liabilities~~make onestimates ~~our consolidated balance sheet. ROU assets~~ and ~~lease~~assumptions ~~liabilities~~that ~~are~~affect ~~recognized based on~~ the ~~present~~reported ~~value~~amounts of ~~the~~assets ~~future~~and ~~minimum~~liabilities, ~~lease payments over~~ the ~~lease~~disclosure ~~term~~of atcontingent ~~the~~assets ~~commencement date. Our leases do not provide an implicit interest rate,~~ and, ~~therefore,~~liabilities weat ~~estimate our collateralized borrowing rate under similar terms based on~~ the ~~information~~dates ~~available~~of at the ~~commencement~~financial ~~date~~statements inand ~~determining~~ the ~~present~~reported ~~value~~amounts of ~~future~~net ~~minimum~~sales ~~lease~~and ~~payments.~~expenses ~~Our~~during ~~lease terms may include options to extend or terminate~~ the ~~lease~~periods ~~when it is reasonably certain that we will exercise such options~~reported. We dobase ~~not~~estimates ~~record leases~~ on ~~our~~past ~~consolidated~~experience ~~balance~~and ~~sheet~~on ~~with~~various aother ~~term~~assumptions ofthat ~~one~~are ~~year~~believed orto ~~less.~~be Wereasonable ~~elected a package of transition practical expedients permitted~~ under the ~~standards~~circumstances. ofThe ~~the~~application ~~Financial~~of ~~Accounting~~these ~~Standards~~accounting ~~Board~~policies ~~(“FASB”),~~on ~~which~~a ~~included~~consistent ~~not~~basis ~~reassessing~~enables ~~whether~~us ~~any~~to ~~expired~~provide ortimely ~~existing~~and ~~contracts~~reliable ~~are~~financial orinformation. ~~contain~~Our ~~leases,~~significant ~~not~~accounting ~~reassessing~~policies ~~the lease classification of expired or existing leases,~~ and ~~not~~estimates ~~reassessing~~are ~~initial~~more ~~direct~~fully ~~costs~~described ~~for~~in ~~existing~~Note ~~leases.~~2 We– ~~also~~“Summary ~~elected~~of aSignificant ~~practical~~Accounting ~~expedient~~Policies” toin ~~not separate lease and non-lease components. We did not elect~~ the ~~practical~~notes ~~expedient~~ to ~~use hindsight in determining~~ our ~~lease~~consolidated ~~terms~~financial orstatements ~~assessing~~in ~~impairment~~Item ~~of our ROU assets~~8. AsOur ofcritical ~~December~~accounting ~~31,~~policies ~~2023, we had $4.8 million in ROU assets~~ and ~~$4.8~~estimates ~~million~~include inthe ~~lease liabilities.~~following:

~~Revenue~~Accounts ~~Recognition~~Receivable: ~~Net~~Accounts ~~sales~~receivable ~~includes~~are ~~revenue~~recorded ~~from~~at ~~products~~the ~~and~~invoice ~~shipping~~amount and ~~handling~~do ~~charges,~~not ~~net~~bear ofinterest. The ~~estimates~~allowance for ~~product~~credit ~~returns~~losses ~~and~~is ~~any~~the ~~related~~Company’s ~~sales~~best ~~incentives.~~estimate ~~Our customer contracts have a single performance obligation: transfer control~~ of ~~products to customers. Revenue is measured as~~ the amount of ~~consideration~~expected ~~that~~credit welosses ~~expect to receive~~ in ~~exchange for transferring control of products. All revenue is recognized when we satisfy our performance obligations under~~ the ~~applicable~~Company’s ~~contract.~~existing Weaccounts ~~recognize~~receivable; ~~revenue in connection with transferring control of the promised products to the customer~~however, ~~with~~changes ~~revenue being recognized at the point~~ in ~~time~~circumstances ~~when~~relating ~~the customer obtains control of the products, which is generally when title passes~~ to ~~the~~accounts ~~customer~~receivable ~~upon~~may ~~delivery~~result toin a ~~third~~requirement ~~party carrier~~ for ~~FOB~~additional ~~shipping~~allowances ~~point~~in ~~arrangements and to~~ the ~~customer~~future. The ~~for~~Company ~~FOB~~pools ~~destination~~accounts ~~arrangements, at which time a~~ receivable isbased ~~created~~on ~~for~~risk ~~the~~characteristics, ~~invoice~~which ~~sent~~include totype ~~the~~of customer. ~~Shipping~~ and ~~handling~~age ~~activities are performed prior to the customer obtaining control~~ of ~~the~~open ~~goods,~~receivable ~~and~~balance. ~~are~~The ~~accounted~~allowance for ascredit ~~fulfillment~~losses ~~activities~~pool ~~and~~is ~~are~~estimated ~~not~~based aon ~~promised~~historical ~~good~~write-off orexperience ~~service. Shipping~~ and ~~handling~~known ~~charges billed to customers are included in revenue. Shipping and handling costs~~conditions, ~~associated~~adjusted ~~with~~for ~~the distribution of the Company~~management’s ~~product~~reasonable ~~to the customers, are recorded in cost of goods sold~~ and ~~are~~supportable ~~recognized~~expectations ~~when control~~ of ~~the~~future ~~product~~conditions. isAccount ~~transferred~~balances toare ~~the~~charged ~~customer,~~against ~~which is at~~ the ~~time~~allowance ~~products~~when ~~are~~management ~~delivered~~determines tothat the ~~third~~probability ~~party carrier~~ for ~~FOB~~collection ~~shipping~~of ~~point~~an ~~arrangements~~account ~~and~~balance tois ~~the customer for FOB destination arrangements~~remote. WeAs ~~estimate~~of ~~product~~December ~~returns~~31, ~~based~~2024, on2023, ~~historical return rates~~ and ~~estimate rebates based on contractual agreements. Using probability assessments~~2022, ~~we estimate sales incentives expected to be paid over~~ the ~~term~~Company ofhad ~~the~~accounts ~~contract.~~receivable ~~Sales~~totaling ~~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~~$4,894,000, ~~therefore~~$6,545,000 ~~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~~$6,973,000, ~~based upon the nature of the private labelling~~respectively. ~~The~~As ~~Company has determined that, as~~ of December 31, ~~2023~~2024, itand ~~had no material contract assets~~2023, ~~and~~the ~~concluded~~Company ~~that~~had ~~its~~recorded ~~contract~~an ~~liabilities~~allowance ~~(primarily~~for ~~rebates)~~credit ~~had~~losses ~~the~~on ~~right~~accounts receivable of ~~offset~~$35,000 ~~against~~for ~~customer~~both ~~receivables~~periods respectively.

~~Sales~~Inventories: ~~Returns~~Inventories include freight-in, ~~Rebates~~materials, labor and ~~Allowances:~~overhead ~~Sales~~costs ~~revenues~~and are ~~reduced~~stated ~~for~~at ~~any~~the ~~anticipated~~lower ~~sales~~of ~~returns,~~cost ~~rebates~~or ~~and~~net ~~allowances~~realizable ~~based~~value. onAllowances ~~historical~~are ~~experience~~recorded for slow-moving, obsolete or unusable inventory. ~~Since~~We assess our ~~return~~inventory ~~policy~~for isestimated ~~only~~obsolescence 90or ~~days~~unmarketable inventory and ~~our~~write-down ~~products~~the ~~are~~difference ~~not~~between ~~generally~~the ~~susceptible~~cost toof ~~external~~inventory ~~factors~~and ~~such~~the asestimated ~~technological~~net ~~obsolescence~~realizable orvalue ~~significant~~based ~~changes~~upon inassumptions ~~demand,~~about wefuture ~~are~~sales ~~able~~and tosupply ~~make~~on-hand, aif ~~reasonable~~necessary. ~~estimate~~If ~~for~~actual ~~returns.~~market Weconditions ~~offer~~are ~~end-user~~less ~~product~~favorable ~~specific~~than ~~and~~those ~~sales~~projected ~~volume~~by ~~rebates~~management, toadditional ~~select~~inventory ~~distributors~~write-downs may be required. ~~Our~~In ~~rebates~~2024 ~~are~~and ~~based~~2023, onwe ~~actual~~recorded ~~sales~~approximately $416,000 and ~~are~~$292,000, ~~accrued~~respectively, ~~monthly~~in write-downs of inventory.

~~Stock-Based~~Foreign ~~Compensation~~currency translation: ~~The~~Our unconsolidated affiliate operations are in India, so U.S. GAAP requires the Company ~~accounts~~to ~~for~~adjust ~~stock-based~~the ~~awards~~value ~~using~~of ~~FASB~~its ~~Accounting~~investment ~~Standards~~for ~~Codification~~changes ~~(“ASC”)~~in ~~718,~~foreign ~~Stock~~currency ~~Compensation~~exchange rates. ~~ASC~~We ~~718~~determine ~~requires~~the ~~companies~~functional currency of our joint venture based upon the primary currency used to ~~record~~generate ~~compensation~~and ~~expense~~expend ~~for~~cash, which is the ~~value~~currency of ~~all~~the ~~outstanding~~country ~~and~~in ~~unvested~~which ~~share-based~~the ~~payments~~joint venture is located. For joint ventures with functional currencies other than the U.S. dollar, ~~including~~our ~~employee~~investment ~~stock~~in ~~options~~that joint venture is translated into U.S. dollars using period-end exchange rates. The resulting foreign currency translation gains or losses are deferred as AOCL and ~~similar~~reclassified ~~awards~~to earnings only upon sale or liquidation of that business.

The fair values of stock option grants are determined using the Black-Scholes option-pricing model and are based on the following assumptions: expected stock price volatility based on historical data and management’s expectations of future volatility, risk-free interest rates from published sources, expected term based on historical data, and no dividend yield, as the Board of Directors currently has no plans to pay dividends in the foreseeable future. The Company accounts for option forfeitures as they occur. The Black-Scholes option-pricing model was developed for use in estimating the fair value of traded options that have no vesting restrictions and that are fully transferable. In addition, the option-pricing model requires the input of highly subjective assumptions, including expected stock price volatility. Our stock options have characteristics significantly different from those of traded options, and changes in the subjective input assumptions can materially affect the fair value of such options. In 2023 and 2022, we recorded $170,000 and $147,000, respectively, in compensation expense for share-based awards.16

~~OVERVIEW~~Leases: We determine if an arrangement is a lease at its inception. Operating leases are included as right-of-use (“ROU”) assets and lease liabilities on our consolidated balance sheet. ROU assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. Our leases do not provide an implicit interest rate, and, therefore, we estimate our collateralized borrowing rate under similar terms based on the information available at the commencement date in determining the present value of future minimum lease payments. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise such options. We do not record leases on our consolidated balance sheet with a term of one year or less. We elected a package of transition practical expedients permitted under the standards of the Financial Accounting Standards Board (“FASB”), which included not reassessing whether any expired or existing contracts are or contain leases, not reassessing the lease classification of expired or existing leases, and not reassessing initial direct costs for existing leases. We also elected a practical expedient to not separate lease and non-lease components. We did not elect the practical expedient to use hindsight in determining our lease terms or assessing impairment of our ROU assets. As of December 31, 2024, we had $8.7 million in ROU assets and $8.8 million in lease liabilities.

~~Alpha~~Revenue ~~Pro~~Recognition: ~~Tech~~Net sales includes 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 ~~business~~applicable contract. We recognize revenue in connection with transferring control of ~~protecting~~the ~~people~~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 ~~environments~~to the customer for FOB destination arrangements, at which time a receivable is created for the invoice sent to the customer. WeShipping ~~accomplish~~and ~~this~~handling byactivities ~~developing~~are performed prior to the customer obtaining control of the goods, ~~manufacturing~~and are accounted for as fulfillment activities and ~~marketing~~are not a ~~line~~promised ofgood ~~high-value~~or service. Shipping and handling charges billed to customers are included in revenue. Shipping and handling costs, ~~disposable~~associated ~~protective~~with ~~apparel~~the ~~products~~distribution ~~for~~of the ~~cleanroom,~~Company’s ~~industrial~~product to the customers, ~~pharmaceutical~~are recorded in cost of goods sold and are recognized when control of the product is transferred to the customer, ~~medical~~which is at the time products are delivered to the third party carrier for FOB shipping point arrangements and ~~dental~~to ~~markets~~the customer for FOB destination arrangements. We ~~also~~estimate ~~manufacture~~product areturns ~~line~~based ofon ~~building~~historical ~~supply~~return ~~construction~~rates ~~weatherization~~and ~~products~~estimate rebates based on contractual agreements. ~~Our~~Using ~~products~~probability ~~are~~assessments, ~~sold~~we ~~under~~estimate sales incentives expected to be paid over the ~~“Alpha~~term ~~Pro~~of ~~Tech”~~the ~~brand~~contract. ~~name~~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, astherefore, ~~well~~are asexcluded ~~under~~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 labelling. The Company has determined that, as of December 31, 2024, it had no material contract assets, and concluded that its contract liabilities (primarily rebates) had the right of offset against customer receivables.

16Sales Returns, Rebates and Allowances: Sales revenues are reduced for any anticipated sales returns, rebates and allowances based on historical experience. Since our return policy is only 90 days and our products are not generally susceptible to external factors such as technological obsolescence or significant changes in demand, we are able to make a reasonable estimate for returns. We offer end-user product specific and sales volume rebates to select distributors. Our rebates are based on actual sales and are accrued monthly.

~~Our~~Stock-Based ~~products are grouped into two business segments~~Compensation: ~~(i)~~The ~~the~~Company ~~Building~~accounts ~~Supply~~for ~~segment,~~stock-based ~~consisting~~awards ofusing ~~construction~~FASB ~~weatherization~~Accounting ~~products,~~Standards ~~such~~Codification as(“ASC”) ~~housewrap~~718, ~~housewrap~~Stock ~~accessories,~~Compensation. ~~synthetic~~ASC ~~roof~~718 ~~underlayment~~requires ~~and~~companies ~~synthetic~~to ~~roof~~record ~~underlayment~~compensation ~~accessories,~~expense asfor ~~well~~the asvalue ~~other~~of ~~woven~~all ~~material;~~outstanding and ~~(ii)~~unvested ~~the~~share-based ~~Disposable Protective Apparel segment~~payments, ~~consisting of disposable protective garments (~~including ~~shoecovers,~~employee ~~bouffant~~stock ~~caps,~~options ~~coveralls, gowns, frocks~~ and ~~lab~~similar ~~coats), face masks and face shields~~awards.

~~Our~~The ~~target~~fair ~~markets~~values ~~include~~of ~~pharmaceutical~~stock ~~manufacturing,~~option ~~bio~~grants are determined using the Black-~~pharmaceutical~~Scholes ~~manufacturing~~option-pricing model and ~~medical~~are ~~device~~based ~~manufacturing~~on the following assumptions: expected stock price volatility based on historical data and management’s expectations of future volatility, ~~lab~~risk-free ~~animal~~interest ~~research~~rates from published sources, ~~high~~expected ~~technology~~term ~~electronics~~based ~~manufacturing~~on ~~(which~~historical ~~includes~~data, and no dividend yield, as the ~~semi~~Board of Directors currently has no plans to pay dividends in the foreseeable future. The Company accounts for option forfeitures as they occur. The Black-~~conductor~~Scholes ~~market),~~option-pricing ~~medical~~model was developed for use in estimating the fair value of traded options that have no vesting restrictions and ~~dental~~that ~~distributors~~are fully transferable. In addition, the option-pricing model requires the input of highly subjective assumptions, including expected stock price volatility. Our stock options have characteristics significantly different from those of traded options, and ~~construction~~changes in the subjective input assumptions can materially affect the fair value of such options. In 2024 and 2023, ~~building~~we ~~supply~~recorded $463,000 and ~~roofing~~$170,000, ~~distributors~~respectively, in compensation expense for share-based awards.

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.OVERVIEW

~~RESULTS~~Alpha OFPro ~~OPERATIONS~~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.

~~The~~Our ~~following~~products ~~table~~are ~~sets~~grouped ~~forth~~into ~~certain~~two ~~operational~~business ~~data~~segments: as(i) athe ~~percentage~~Building Supply segment, consisting of ~~sales~~construction ~~for~~weatherization products, such as housewrap, housewrap accessories, synthetic roof underlayment and synthetic roof underlayment accessories, as well as other woven material; and (ii) the ~~years~~Disposable ~~indicated:~~Protective Apparel segment, consisting of disposable protective garments (including shoecovers, bouffant caps, coveralls, gowns, frocks and lab coats), face masks and face shields.

	2023			2022
Net sales		100.0	%		100.0	%
Gross profit		37.3	%		35.0	%
Selling, general and administrative expenses		29.0	%		26.2	%
Income from operations		6.7	%		7.5	%
Income before provision for income taxes		8.9	%		7.1	%
Net income		6.8	%		5.3	%

~~Year~~Our ~~ended~~target ~~December~~markets 31include construction, ~~2023~~building ~~compared~~supply toand ~~year~~roofing ~~ended~~distributors; ~~December~~companies 31in pharmaceutical manufacturing, ~~2022~~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.

~~Sales.~~Our ~~Consolidated~~products ~~sales~~are ~~for~~used ~~the~~primarily ~~year~~in ~~ended December 31~~cleanrooms, ~~2023,~~industrial ~~decreased~~safety tomanufacturing ~~$61~~environments,~~232,000,~~ ~~from~~health ~~$61~~care facilities,~~981,000~~ ~~for~~such ~~the~~as ~~year~~hospitals, ~~ended~~laboratories ~~December~~and ~~31,~~dental ~~2022~~offices, ~~representing~~and abuilding ~~decrease~~and ofre-roofing ~~$749,000, or 1~~sites.~~2%.~~ ~~This~~Our ~~decrease~~products ~~consisted~~are ofdistributed ~~decreased~~principally ~~sales~~ in the ~~Disposable~~United ~~Protective~~States ~~Apparel~~through ~~segment~~a network consisting of $4purchasing groups,~~208,000,~~ ~~partially~~national ~~offset~~distributors, bylocal ~~increased~~distributors, independent sales inrepresentatives ~~the~~and ~~Building~~our ~~Supply~~own ~~segment~~sales ofand ~~$3,459,000~~marketing force.

~~Building~~Recent ~~Supply~~developments ~~Segment~~in U.S. trade policy have introduced uncertainty regarding the future of global trade relations. Following the inauguration of the second Trump administration, there have been numerous announcements made and actions taken related to tariff increases and other trade restrictions regarding imports into the U.S. President Trump has indicated that his administration is likely to impose significant tariffs on imported goods, including a 60% tariff on Chinese imports, a 25% tariff on goods from Canada and Mexico and up to 10% or 20% on all other U.S. imports. Given that we currently source very little from China, this may be a benefit in regards to our competition that does import from China, but 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. 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

~~Building~~RESULTS ~~Supply~~OF ~~segment~~OPERATIONS sales for the year ended December 31, 2023, increased by $3,459,000, or 9.4%, to a record sales year of $40,396,000 compared to $36,937,000 for the year ended December 31, 2022. The Building Supply segment increase during the year ended December 31, 2023, was primarily due to a 22.2% increase in sales of housewrap and a 18.0% increase in sales of other woven material, partially offset by a decrease in sales of synthetic roof underlayment of 3.0% and an increase in rebates compared to the same period of 2022. We have experienced the six highest quarters on record for the Building Supply segment over the past eight quarters: the second, third, and fourth quarters of 2023 and the first, second and third quarters of 2022.

The ~~sales~~following ~~mix~~table ofsets ~~the~~forth ~~Building~~certain ~~Supply~~operational ~~segment~~data ~~for~~as ~~the~~a ~~year~~percentage ~~ended~~of ~~December~~sales ~~31, 2023, was approximately 42%~~ for synthetic roof underlayment, 47% for housewrap and 11% for other woven material. This compared to approximately 47% for synthetic roof underlayment, 43% for housewrap and 10% for other woven material for the ~~year~~years ended December 31, 2022. Our synthetic roof underlayment product line primarily includes REX SynFelt®, REX TECHNOply® TECHNO SB and 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 and our synthetic roof underlayment accessories consist of our new self- adhered TECHNOplus and REX Ultra HT.indicated:

The housewrap market continues to be soft, as housing starts in 2023 in the United States decreased by 8.8% compared to the same period a year ago. We experienced a 22.2% increase in housewrap and accessories sales, as we continue to significantly outperform the market through market diversification and product development. Sales of our REX Wrap® and REX Wrap Plus®, our entry-level housewrap products, were up by 15.1% over the prior year, despite the decrease in housing starts, as we continue to form relationships with new dealers. Management also expects to see growth opportunities with REX™ Wrap Fortis, our premium housewrap line, as we continue to make inroads into the multi-family and commercial construction sector, evidenced by a 33.9% increase in sales for this product in 2023. We also experienced a 180.5% increase in sales of housewrap accessories in 2023. Management expects that we will continue to see positive trends relative to the industry for both our entry level and premium housewrap and housewrap accessories product lines.

	2024			2023
Net sales		100.0	%		100.0	%
Gross profit		39.6	%		37.3	%
Selling, general and administrative expenses		32.2	%		29.0	%
Income from operations		6.0	%		6.7	%
Income before provision for income taxes		8.7	%		8.9	%
Net income		6.8	%		6.8	%

~~The~~Year ~~synthetic~~ended ~~roof~~December ~~underlayment market has also been affected by the continued decrease in new home starts~~31, ~~economic~~2024 uncertainty, more offshore competition and a push in the market to reduce product selling prices. Despite these pressures, our synthetic roof underlayment sales also outperformed the market despite being down 3.0% in 2023 compared to ~~2022.~~year Weended ~~launched~~December ~~our new line of self-adhered roofing products in late 2023~~31, which we expect to result in revenue growth within our current customer base and allow for expansion into new markets and business segments. We continue to work closely with our customers to develop and expand our product lines. Other woven material sales increased by 18.0% in 2023 ~~compared to the same period of 2022, due to increased sales to our major customer, but management does not expect this to be a growth driver in the coming year.~~

17Sales. Consolidated sales for the year ended December 31, 2024, decreased to $57,840,000, from $61,232,000 for the year ended December 31, 2023, representing a decrease of $3,392,000, or 5.5%. This decrease consisted of decreased sales in the Building Supply segment of $4,431,000, partially offset by increased sales in the Disposable Protective Apparel segment of $1,039,000.

~~Management~~Building ~~expects~~Supply growth in the building supply segment in the coming year, especially in housewrap sales. While housing starts have trended down nationally, we have continued to grow market share. We also hope to build on our success within the multi-family and commercial segment and the single-family segment. However, there continues to be uncertainty in housing starts and the economy in general that could affect this segment.Segment

~~Disposable~~Building ~~Protective~~Supply ~~Apparel~~segment ~~Segment~~sales for the year ended December 31, 2024, decreased by $4,431,000, or 11.0%, to $35,965,000 compared to $40,396,000 for the year ended December 31, 2023. The Building Supply segment decrease during the year ended December 31, 2024, was primarily due to a 6.4% decrease in sales of housewrap, an 8.8% decrease in sales of synthetic roof underlayment and a 28.2% decrease in sales of other woven material compared to the same period of 2023.

~~Sales~~The ~~for~~sales ~~the~~mix ~~Disposable~~of ~~Protective~~the ~~Apparel~~Building Supply segment for the year ended December 31, ~~2023~~2024, ~~decreased~~was byapproximately $442% for synthetic roof underlayment,~~208,000,~~ or49% ~~16.8~~for housewrap and 9%, tofor ~~$20,836,000,~~other woven material. This compared to ~~$25~~approximately 42% for synthetic roof underlayment,~~044,000~~ 47% for ~~2022.~~housewrap ~~This~~and ~~segment~~11% ~~decrease~~for ~~was~~other ~~due~~woven tomaterial afor 4the year ended December 31, 2023.0% ~~increase~~Our insynthetic ~~sales~~roof ofunderlayment ~~disposable~~product ~~protective~~line ~~garments~~primarily ~~that~~includes ~~was~~REX ~~more~~SynFelt®, ~~than~~REX ~~offset~~TECHNOply® byand aTECHNO 62SB and our synthetic roof underlayment accessories consist of our new self-adhered TECHNOplus and REX Ultra HT.3% ~~decrease~~Our inhousewrap ~~sales~~product line primarily consists of ~~face~~REX ~~masks~~Wrap®, REX Wrap Plus® and aREX™ 75Wrap Fortis.5% ~~decrease~~Housewrap inaccessories ~~sales~~consist of ~~face~~REXTREME ~~shields~~Window and Door Flashing and REX™ Premium Seam Tape.

The ~~sales~~housing ~~mix~~market ofcontinues ~~the~~to ~~Disposable~~be ~~Protective~~weak, ~~Apparel~~with ~~segment~~housing ~~for~~starts ~~the~~down ~~year~~4.4% ~~ended~~in ~~December~~2024 ~~31,~~compared to 2023,. ~~was~~Although ~~approximately~~sales ~~88%~~of ~~for~~the ~~disposable~~core ~~protective~~building ~~garments,~~products (housewrap and synthetic roof underlayment) were down 7.9% ~~for~~in ~~face~~2024, ~~masks~~which ~~and~~exceeds 3%the ~~for~~decline ~~face~~in ~~shields~~housing starts, a closer look reveals the issues we faced. ~~This~~Excluding ~~sales~~the ~~mix~~decline isof ~~compared~~sales to ~~approximately~~two ~~71%~~private ~~for~~label ~~disposable~~distributors, ~~protective~~which ~~garments~~were beyond our control, ~~19%~~the ~~for~~2024 ~~face~~sales ~~masks~~performance ~~and~~of ~~10%~~our ~~for~~core ~~face~~building ~~shields~~products ~~for~~would have resulted in a lower percentage decline than the ~~year~~reduction ~~ended~~in ~~December~~housing 31starts, ~~2022~~indicating that we otherwise outperformed the market. In addition, the percentage change in sales for all of 2024 improved slightly over the first nine months of 2024. Synthetic roof underlayment sales in the fourth quarter of 2024 exceeded sales in the same quarter of 2023.

Sales of disposable protective garments in 2023 were up by 4.0% as our channel partners and our end customers are continuing to work through their excess inventory, which had accumulated as a result of the pandemic. Our sales have been positively affected as we can now meet face-to-face with our distribution partners and end customers, something we have not been able to do since 2020. Disposable protective garment sales in 2023 were up by approximately 19% as compared to pre-pandemic levels. We expect continued growth for disposable protective garments in 2024.18

~~Face~~Housewrap ~~mask~~sales ~~and~~were ~~face~~encouraging ~~shield~~through ~~sales~~the ~~are~~first ~~still~~nine ~~suffering~~months ~~from~~of 2024 especially since the ~~post~~percentage ~~COVID-19~~decline ~~residual~~of ~~excess~~housing ~~inventories~~starts atwas higher than the ~~distributor~~percentage ~~level,~~decline ~~but~~of housewrap sales. Lower housewrap sales in the ~~fourth~~final quarter of ~~2023~~2024 ~~showed~~were ~~improvement~~primarily ~~and~~due ~~approximately~~to ~~doubled~~one asof ~~compared~~our tolarger ~~the~~distributors ~~prior~~losing ~~quarter.~~some ~~The~~end ~~market~~user’s ~~continues~~business tobut bewe ~~saturated~~have not lost share with ~~products~~this ~~but~~distributor. ~~we’re~~Presenting ~~cautiously~~an ~~optimistic~~additional ~~that~~challenge ~~face~~in ~~mask~~2024, ~~and~~multi-family ~~face~~housing ~~shield~~starts ~~sales~~in ~~will~~2024 ~~show~~were down 11.3% compared to 2023 with 2024 being the lowest in ten years. Management expects growth with this distributor and in the housewrap category in the coming year, when uncertainty in the housing market is expected to abate.

~~Gross~~Sales ~~Profit.~~of ~~Gross~~synthetic ~~profit~~roof ~~increased~~underlayment bywhich ~~$1,146,000,~~were ordown ~~5.3%,~~double todigits ~~$22~~through the first nine months of 2024,~~829,000~~ ~~for~~ended the year ~~ended~~down ~~December~~single ~~31,~~digits. ~~2023,~~After ~~from~~hurricanes ~~$21~~Helene and Milton,~~683,000~~ ~~for~~we saw a surge in synthetic roof underlayment orders in the ~~year~~fourth ~~ended~~quarter ~~December~~of ~~31,~~2024 ~~2022~~to assist in the southeast rebuild. ~~The~~Sales ~~gross~~of ~~profit~~this ~~margin~~product ~~was~~line ~~37.3%~~continue ~~for~~to ~~the~~be ~~year~~affected ~~ended~~by ~~December~~the 31uncertain economic conditions, more offshore competition and a push in the market to reduce product selling prices. We launched our new line of self-adhered roofing products in late 2023 and have achieved revenue in 2024, ~~compared~~and towe 35expect continued growth within our current customer base and into new markets.0% ~~for~~We are exploring additional products in the ~~year~~roofing ~~ended~~market ~~December~~and ~~31,~~expect ~~2022~~growth in 2025 in the synthetic roof underlayment category.

~~The~~Despite ~~gross~~the ~~profit~~challenges ~~margin~~faced in ~~2023~~2024, ~~was~~our ~~positively~~efforts ~~affected~~are bynow ~~ocean~~focused ~~freight~~on ~~rates~~builders ~~that~~and ~~have~~contractors ~~come~~and ~~down~~we ~~since~~are educating the ~~latter~~industry ~~part~~on ofour ~~2022~~extensive manufacturing capabilities which are expected to contribute to future growth. ~~Management~~Our ~~expects~~top ~~the~~fifteen ~~gross~~accounts ~~profit~~have ~~margin~~increased compared to be2023, inexcluding one of our top accounts mentioned above. This is a ~~similar~~testament ~~range~~to inthe ~~2024,~~hard ~~although~~work ~~gross~~and ~~margin~~commitment ~~could~~of beour ~~negatively~~sales ~~affected~~team. byLate in the ~~ongoing~~year, ~~wars~~we added two Territory Mangers who will assist in ~~Ukraine~~strengthening relationships with our customers and driving new business. We also created the ~~middle~~position ~~east,~~of ~~which~~Director ~~have~~of ~~resulted~~Product and Business Development. This role will be instrumental in ~~increased~~helping ~~freight~~APT ~~rates~~expand its product offerings and explore new opportunities and industries where we currently do not have a presence.

~~Selling,~~Sales ~~General~~of ~~and~~other ~~Administrative~~woven ~~Expenses.~~material ~~Selling,~~sales ~~general~~decreased ~~and administrative expenses increased~~ by $1,~~553~~326,000, or 928.62%, in 2024 compared to ~~$17~~2023,~~772,000~~ ~~for~~primarily ~~the~~due ~~year~~to ~~ended~~one ~~December~~of ~~31,~~our ~~2023,~~customers ~~from~~being ~~$16,219,000~~acquired ~~for~~by ~~the~~another ~~year~~company. ~~ended~~The ~~December~~Company ~~31,~~is ~~2022.~~pursuing Asnew aopportunities ~~percentage~~for ofother ~~net~~woven ~~sales,~~material ~~selling,~~that ~~general~~could ~~and~~improve ~~administrative~~sales, ~~expenses~~and ~~increased~~as tomentioned ~~29.0%~~above, ~~for~~we ~~the~~have ~~year~~hired ~~ended~~a ~~December~~Director ~~31,~~of ~~2023,~~Product ~~from~~and ~~26.2%~~Business ~~for 2022~~Development.

~~The~~Management ~~change~~expects growth in ~~expenses by segment for~~ the ~~year ended December 31, 2023, was as follows: Disposable Protective Apparel was down by $55,000, or 1.1%;~~ Building Supply ~~was~~segment ~~up by $1,244,000, or 19.3%; and corporate unallocated expenses were up by $364,000, or 7.3%. The decrease~~ in the ~~Disposable~~coming ~~Protective Apparel segment expenses was primarily related to decreased employee compensation~~year, ~~partially~~as ~~offset~~the byprojected ~~increased~~number ~~marketing~~of ~~expenses,~~housing ~~travel~~starts ~~expenses and sales commission. The increase~~ in ~~the~~2025 ~~Building~~is ~~Supply~~expected ~~segment expenses was related~~ to ~~increased~~increase. ~~employee compensation~~However, ~~sales~~there ~~commission,~~continues ~~travel,~~to ~~insurance,~~be ~~and~~uncertainty ~~general factory expenses. The increase~~ in ~~corporate~~housing ~~unallocated~~starts ~~expenses was primarily due to increased employee compensation, accrued bonuses, stock option~~ and ~~restricted~~the ~~stock~~economy ~~expenses,~~in ~~professional fees, and~~ general ~~office~~that ~~expenses,~~could ~~partially~~affect ~~offset~~this ~~by decreased insurance expenses~~segment.

InDisposable ~~accordance~~Protective ~~with~~Apparel 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 $286,000 was accrued for the year ended December 31, 2023, compared to $231,000 for the year ended December 31, 2022.Segment

~~Depreciation~~Sales ~~and~~for ~~Amortization.~~the ~~Depreciation~~Disposable ~~and~~Protective ~~amortization~~Apparel ~~expense~~segment for the year ended December 31, 2024, increased by $~~111~~1,039,000, or 135.60%, to $~~925~~21,875,000, compared to $20,836,000 for ~~the~~2023. ~~year~~This ~~ended~~segment ~~December~~increase ~~31,~~was ~~2023,~~due ~~from~~to ~~$814,000~~a ~~for~~0.8% ~~the~~increase ~~year~~in ~~ended~~sales ~~December~~of ~~31,~~disposable ~~2022.~~protective ~~The~~garments and a 43.5% increase ~~was~~in ~~primarily~~sales ~~attributable~~of toface ~~increased~~shields, ~~depreciation~~partially ~~for~~offset ~~machinery~~by ~~and~~a ~~equipment~~34.6% decrease in ~~the~~sales ~~Building~~of ~~Supply~~face ~~segment~~masks.

~~Income~~The ~~from~~sales ~~Operations.~~mix ~~Income~~of ~~from~~the ~~operations~~Disposable ~~decreased~~Protective byApparel ~~$518,000,~~segment ~~or 11.1%, to $4,132,000~~ for the year ended December 31, ~~2023~~2024, ~~compared~~was toapproximately ~~$4,650,000~~85% for ~~the~~disposable ~~year~~protective ~~ended December 31~~garments, ~~2022.~~11% ~~The~~for ~~decreased~~face ~~income~~masks ~~from~~and ~~operations~~4% ~~was~~for ~~primarily~~face ~~due~~shields. toThis ansales ~~increase~~mix inis ~~gross~~compared ~~profit~~to ofapproximately ~~$1,146,000,~~88% ~~offset~~for bydisposable anprotective ~~increase in selling~~garments, ~~general~~9% ~~and~~for ~~administrative~~face ~~expenses~~masks ~~of $1,553,000~~ and an3% ~~increase~~for inface ~~depreciation~~shields ~~and amortization expense of $111,000. Income from operations as a percentage of net sales~~ for the year ended December 31, 2023~~, was 6~~.~~7%, compared to 7.5% for 2022.~~

~~Other~~Sales ~~Income.~~of ~~Other~~disposable ~~income~~protective ~~increased~~garments byin ~~$1,548,000~~2024 towere ~~income~~up ofapproximately ~~$1,293,000~~19% ~~for~~as ~~the~~compared ~~year~~to ~~ended~~pre-pandemic ~~December 31~~levels, ~~2023,~~increasing ~~from~~due ato ~~loss~~further ofintegration ~~$255,000~~and ~~for~~growth ~~2022.~~among ~~The~~some ~~increase~~of ~~was~~our ~~primarily~~largest ~~due~~regional tochannel anpartners. ~~increase~~We inhave ~~equity~~signed innew ~~income~~distribution ofagreements ~~unconsolidated~~with ~~affiliate~~regional ofand ~~$390~~national channel partners,~~000~~ ~~and~~which anshould ~~increase~~provide infor ~~interest~~an ~~income~~enhanced level of ~~$668,000.~~engagement and mutual growth incentives. In addition, ~~there~~we ~~was~~signed a ~~loss~~new onagreement ~~fixed~~with ~~assets~~our oflargest ~~$490,000~~international inchannel ~~2022~~partners ~~due~~and toachieved ~~equipment~~elevated ~~for~~status ~~the~~and ~~Disposable~~were ~~Protective~~named ~~Apparel~~as ~~segment~~a ~~that~~preferred ~~was~~supplier ~~not~~going ~~delivered~~forward. ~~The~~We ~~Company~~believe ~~has~~this ~~filed~~achievement awill ~~lawsuit~~provide insome ~~this~~growth ~~matter. See Part I~~opportunities, and ~~Item~~management 3,expects ~~“Legal~~continued ~~Proceedings,”~~growth for ~~more~~disposable ~~information~~protective ongarments ~~the~~in ~~Lawsuit~~2025.

18The significant growth in face masks and shields was a direct result of a return to a pre-pandemic business model. Together, with both our dental and medical channel partners, we have overcome the negative impact of excess inventories. Our partnerships in this segment remain strong and, through further integration and buy-side incentives, we anticipate a steady growth trajectory going forward.

~~Income~~Gross ~~before~~Profit. ~~Provision~~Gross ~~for~~profit ~~Income~~increased ~~Taxes.~~by ~~Income~~$104,000, ~~before~~or ~~provision~~0.5%, ~~for~~to ~~income~~$22,933,000 ~~taxes~~ for the year ended December 31, ~~2023~~2024, ~~was~~from $522,~~425~~829,000, ~~compared to income before provision~~ for ~~income~~the ~~taxes~~year ofended ~~$4,395,000~~December ~~for 2022~~31, ~~representing~~2023. anThe ~~increase~~gross ofprofit ~~$1,030,000,~~margin orwas 2339.46%. ~~This increase in income before provision~~ for ~~income~~the ~~taxes~~year ~~was~~ended ~~due~~December to31, ~~an increase in other income of $1~~2024,~~548,000,~~ ~~partially~~compared ~~offset~~to by37.3% afor ~~decrease~~the inyear ~~income~~ended ~~from~~December ~~operations of $518~~31,~~000~~ 2023.

~~Provision~~The ~~for~~gross ~~Income~~profit ~~Taxes.~~margin ~~The~~in ~~provision~~2024 ~~for~~was ~~income~~positively ~~taxes~~affected ~~for~~by ~~the~~a ~~year~~margin ~~ended~~increase ~~December~~in ~~31,~~both ~~2023,~~the ~~was~~Disposable ~~$1,236,000,~~Protective ~~compared~~Apparel toand ~~$1,113,000~~Building ~~for~~Supply ~~2022~~segments. ~~The~~However, ~~estimated~~management ~~effective~~expects ~~tax~~that ~~rate~~the ~~was~~gross ~~22.8%~~profit ~~for~~margin ~~the~~could ~~year~~be ~~ended~~negatively ~~December~~affected ~~31,~~next ~~2023,~~year ~~compared~~by toocean ~~25.3%~~freight ~~for~~rates ~~the~~that ~~year~~experienced ~~ended~~significant ~~December~~volatility 31in 2024, ~~2022.~~due ~~The~~to ~~Company~~factors ~~does~~such ~~not~~as ~~record~~geopolitical atensions, ~~tax~~labor ~~provision~~disputes onand ~~equity~~market indynamics. ~~income~~As ofwe ~~unconsolidated~~progress ~~affiliate,~~into ~~which~~next ~~reduces~~year, the ~~effective~~outlook ~~tax~~suggests ~~rate~~both challenges and potential easing of freight rates.

~~Net Income. Net income for the year ended December 31~~Selling, ~~2023,~~General ~~was~~and ~~$4,189,000~~Administrative ~~compared~~Expenses. ~~to net income of $3~~Selling,~~282,000~~ ~~for~~general ~~2022,~~and ~~representing~~administrative anexpenses ~~increase~~increased ofby $~~907~~839,000, or 274.67%~~. The net income increase between 2023 and 2022~~, ~~was due~~ to ~~an increase in income before provision for income taxes of~~ $118,~~030~~611,000, ~~partially~~for ~~offset~~the byyear anended ~~increase~~December in31, ~~provision~~2024, ~~for~~from ~~income taxes of~~ $~~123~~17,772,000. ~~Net income as a percentage of net sales~~ for the year ended December 31, 2023~~, was 6~~.~~8%,~~ ~~and~~As ~~net income as~~ a percentage of net sales, ~~for~~selling, ~~2022~~general ~~was 5.3%. Basic~~ and ~~diluted~~administrative ~~earnings~~expenses ~~per~~increased ~~common~~to ~~share~~32.2% for the ~~years~~year ended December 31, ~~2023 and 2022~~2024, ~~were~~from $029.350% ~~and~~for $02023.~~26, respectively.~~

~~LIQUIDITY AND CAPITAL RESOURCES~~ 19

AsThe ofchange ~~December~~in ~~31,~~expenses ~~2023,~~by ~~the~~segment ~~Company~~for ~~had~~the ~~cash~~year ~~and~~ended ~~cash equivalents (“cash”) of $20,378,000 and working capital of $50,498,000. As of~~ December 31, ~~2023~~2024, ~~the Company’s current ratio (current assets/current liabilities)~~ was ~~21:1,~~as ~~compared to a current ratio of 22~~follows:1 asDisposable ofProtective ~~December~~Apparel ~~31,~~expenses ~~2022.~~were ~~Cash~~up ~~increased~~ by ~~25.1%, or~~ $4672,~~088,~~000, toor ~~$20,378,000~~14.3%; asBuilding ofSupply ~~December~~expenses ~~31,~~were ~~2023,~~down ~~compared to $16,290,000 as of December 31, 2022, and working capital increased~~ by $~~342~~505,000 ~~from $50~~,~~156,000~~ asor ~~of December 31, 2022~~6.6%; ~~The~~and ~~increase~~corporate inunallocated ~~cash~~expenses ~~from~~were ~~December~~up ~~31, 2022, was due to cash provided~~ by ~~operating activities of~~ $8672,~~458,~~000, ~~partially~~or ~~offset by cash used in investing activities of $792,000 and cash used in financing activities of $3,578,000~~12.5%.

~~Net~~The ~~cash~~decrease ~~provided~~in bythe ~~operating~~Building ~~activities~~Supply ofsegment ~~$8,458,000~~expenses ~~for~~was ~~the~~primarily ~~year~~related ~~ended~~to ~~December~~decreased 31employee compensation, ~~2023~~travel ~~was~~and ~~due~~insurance toexpenses. ~~net~~The ~~income~~increase ofin ~~$4,189,000,~~the asDisposable ~~adjusted~~Protective ~~primarily~~Apparel bysegment ~~the~~expenses ~~following:~~was ~~stock-based~~primarily ~~compensation~~related ~~expense~~to ofincreased ~~$170~~employee compensation,~~000,~~ ~~depreciation~~marketing and ~~amortization~~rent ~~expense~~expenses. ofThe ~~$925,000,~~increase ~~equity~~ in ~~income~~corporate ofunallocated ~~unconsolidated~~expenses ~~affiliate~~was ofprimarily ~~$477,000,~~due ~~operating~~to ~~lease~~increased ~~asset~~employee ~~amortization~~compensation, ofstock ~~$774,000,~~option aand ~~decrease~~restricted instock ~~accounts~~expenses, ~~receivable~~reorganization ofcosts, ~~$428~~professional fees,~~000,~~ aninsurance ~~increase~~expenses inand ~~prepaid~~general office expenses. ofThe ~~$1,108,000,~~reorganization acosts ~~decrease~~were incurred in ~~inventory~~connection ofwith ~~$4,266,000,~~moving anour ~~increase~~face inmask ~~accounts~~manufacturing ~~payable~~facility ~~and~~from ~~accrued~~Utah ~~liabilities~~to ofArizona ~~$398,000,~~during ~~and~~2024. anThis ~~decrease~~relocation inof ~~lease~~our ~~liabilities~~face ofmask ~~$785,000,~~manufacturing ~~all~~facility ~~compared~~is expected to ~~December~~result ~~31,~~in ~~2022~~lower expenses for this product line.

~~Accounts~~In ~~receivable~~accordance ~~decreased~~with bythe ~~$428,000,~~terms ~~or 6.1%, to $6,545,000 as~~ of ~~December~~his ~~31,~~employment ~~2023~~agreement, ~~from~~the ~~$6,973,000~~Company’s ascurrent ofPresident ~~December~~and ~~31,~~Chief ~~2022.~~Executive ~~The~~Officer ~~decrease~~is inentitled ~~accounts~~to ~~receivable~~an ~~was~~annual ~~primarily~~bonus ~~related~~equal to ~~decreased~~5% ~~receivables from our related party. The number~~ of ~~days~~the ~~that~~pre-tax ~~sales~~profits ~~remained outstanding as~~ of ~~December~~the 31Company, ~~2023,~~excluding ~~calculated~~bonus byexpense, ~~using~~up anto ~~average~~a maximum of ~~accounts~~$1.0 ~~receivable~~million. ~~outstanding~~A ~~and~~bonus ~~annual~~amount ~~revenue~~of $264,000 was 40accrued ~~days,~~for ~~compared~~the toyear 35ended ~~days as of~~ December 31, ~~2022. The~~2024, ~~increase~~compared ~~in days was due~~ to ~~higher~~$286,000 ~~sales~~for in the ~~last~~year ~~months~~ended ofDecember ~~2023~~31, ~~compared to the same period of 2022~~2023.

~~Inventory~~Depreciation and Amortization. Depreciation and amortization expense decreased by $452,~~266,~~000, or ~~17.~~5.6%, to $20873,~~131,~~000 asfor ofthe year ended December 31, ~~2023~~2024, from $24925,~~397,~~000 asfor ofthe year ended December 31, ~~2022~~2023. The decrease was primarily due to a decrease in ~~inventory~~depreciation ~~for the Disposable Protective Apparel segment of $1,224,000, or 8.5%, to $13,161,000, and a decrease~~ in ~~inventory for~~ the Building Supply segment ~~of $3,042,000, or 30~~.~~4%, to $6,970,000.~~

~~Prepaid~~Income ~~expenses~~from ~~increased~~Operations. Income from operations decreased by $1683,~~108,~~000, or 2216.65%, to $63,~~010~~449,000 asfor ofthe year ended December 31, ~~2023~~2024, ~~from~~compared to $4,~~902~~132,000 asfor ofthe year ended December 31, ~~2022~~2023. The ~~increase~~decreased income from operations was primarily due to ~~increased~~an ~~prepaid~~increase ~~inventory~~in selling, general and ~~equipment~~administrative expenses of $839,000, partially offset by an increase in gross profit of $104,000 and ~~increased~~a ~~prepayments~~decrease in depreciation and amortization expenses of $52,000. Income from operations as a percentage of net sales for ~~insurance~~the year ended December 31, 2024, was 6.0%, compared to 6.8% for 2023.

~~Right-of-use~~Other ~~assets~~Income. asOther ofincome ~~December 31, 2023~~ increased by $3278,~~085,~~000 to ~~$4,810,000~~income ~~from~~of $1,~~725~~571,000 asfor ofthe year ended December 31, ~~2022~~2024, compared to $1,293,000 for 2023. The increase was primarily asdue ato ~~result~~an increase in equity in income of ~~renewing~~unconsolidated ~~our~~affiliate ~~Valdosta~~of ~~Georgia~~$152,000, ~~lease~~an ~~offset~~increase byin ~~amortization~~interest income of ~~the~~$96,000 ~~balance~~and ~~sheet~~a gain on sale of assets of $30,000.

~~Lease~~Income ~~liabilities~~before asProvision offor ~~December~~Income ~~31,~~Taxes. ~~2023~~Income ~~increased~~before byprovision ~~$3,074,000~~for toincome $4taxes for the year ended December 31,~~848~~ 2024,~~000~~ ~~from~~was $15,~~774~~020,000, ascompared ofto ~~December~~income ~~31,~~before ~~2022.~~provision ~~The~~for ~~increase~~income intaxes ~~the~~of ~~lease~~$5,425,000 ~~liabilities~~for ~~was~~2023, ~~primarily~~representing ~~the~~a ~~result~~decrease of ~~renewing~~$405,000, ~~our~~or ~~Valdosta,~~7.5%. ~~Georgia~~This ~~lease~~decrease in ~~December~~income ~~2023~~before ~~and~~provision ~~the~~for ~~assumption~~income wetaxes ~~will~~was ~~continue~~due to ~~lease~~a ~~that~~decrease ~~facility~~in ~~for~~income atfrom ~~least~~operations 16of ~~years~~$683,000, partially offset by ~~lease~~an ~~payments~~increase ~~made~~in ~~during~~other ~~the~~income ~~year~~of $278,000.

~~Accounts~~Provision ~~payable~~for ~~and~~Income ~~accrued~~Taxes. ~~liabilities~~The asprovision offor income taxes for the year ended December 31, ~~2023~~2024, ~~increased~~was by $~~398~~1,091,000, orcompared ~~26.4%,~~ to $1,~~905~~236,000, ~~from~~for $12023. The estimated effective tax rate was 21.8% for the year ended December 31,~~507~~ 2024,~~000~~ ascompared ofto 22.8% for the year ended December 31, ~~2022~~2023. The ~~increase~~Company ~~was~~does ~~primarily~~not ~~due~~record toa antax ~~increase~~provision on equity in ~~accrued~~income ~~bonuses~~of ~~and~~unconsolidated ~~payroll~~affiliate, which reduces the effective tax rate.

Net ~~cash~~Income. ~~used~~Net inincome ~~investing~~for ~~activities~~the year ended December 31, 2024, was $~~792~~3,929,000 ~~for~~compared ~~the~~to ~~year~~net ~~ended~~income ~~December~~of 31$4,189,000 for 2023, ~~compared~~representing toa decrease of $261,000, or 6.2%. The net ~~cash~~income ~~used~~decrease between 2024 and 2023 was due to a decrease in ~~investing~~income ~~activities~~before provision for income taxes of $~~492~~405,000, partially offset by a decrease in provision for ~~2022~~income taxes of $145,000. ~~Investing~~Net ~~activities~~income as a percentage of net sales was 6.8% for ~~the~~both ~~year~~years ended December 31, 2024 and 2023. Basic and ~~2022,~~diluted ~~consisted~~earnings ofper common share for the ~~purchase~~years ofended ~~property~~December 31, 2024 and ~~equipment~~2023, were $0.35.

~~Net~~LIQUIDITY ~~cash~~AND ~~used~~CAPITAL inRESOURCES financing activities was $3,578,000 for the year ended December 31, 2023, compared to net cash used in financing activities of $3,802,000 for 2022. Net cash used in financing activities for the year ended December 31, 2023 resulted from the payment of $4,002,000 for the repurchase of common stock and $40,000 for treasury stock excise tax, partially offset by $464,000 in proceeds from the exercise of stock options. Net cash used in financing activities for the year ended December 31, 2022 resulted from the payment of $3,882,000 for the repurchase of common stock, partially offset by $80,000 in proceeds from the exercise of stock options.

19As of December 31, 2024, the Company had cash and cash equivalents (“cash”) of $18,636,000 and working capital of $47,516,000. As of December 31, 2024, the Company’s current ratio (current assets/current liabilities) was 16:1, compared to a current ratio of 21:1 as of December 31, 2023. Cash decreased by 8.5%, or $1,742,000, to $18,636,000 as of December 31, 2024, compared to $20,378,000 as of December 31, 2023, and working capital decreased by $2,982,000, to $47,516,000 from $50,498,000 as of December 31, 2023. The decrease in cash from December 31, 2023, was due to cash used in investing activities of $3,776,000 and cash used in financing activities of $3,664,000, partially offset by cash provided by operating activities of $5,698,000.

AsNet cash provided by operating activities of $5,698,000 for the year ended December 31, ~~2023,~~2024 wewas ~~had~~due to net income of $23,~~194~~922,000, ~~available~~as ~~for~~adjusted ~~stock~~primarily ~~purchases~~by ~~under~~the ~~our~~following: stock-based ~~repurchase~~compensation ~~program.~~expense ~~During~~of ~~the~~$463,000, ~~year~~depreciation ~~ended~~and ~~December~~amortization ~~31,~~expense ~~2023~~of $873,000, weequity ~~repurchased~~in ~~951,010~~income ~~shares~~of unconsolidated affiliate of ~~common~~$629,000, ~~stock~~gain aton asale ~~cost~~of assets of $430,~~002,~~000., Asoperating oflease ~~December~~asset ~~31,~~amortization ~~2023~~of $899,000, weand ~~had~~increase ~~repurchased~~in adeferred ~~total~~income taxes of 20$61,~~411~~000,~~627~~ ~~shares~~a ofdecrease ~~common~~in ~~stock~~accounts atreceivable of $1,651,000, a ~~cost~~decrease ofin ~~approximately~~prepaid expenses of $501,~~326~~635,000, ~~through~~an ~~our~~increase ~~repurchase~~in ~~program~~inventory ~~which~~of ~~commenced~~$2,602,000, inan ~~1999.~~increase Wein ~~retire~~accounts ~~all~~payable ~~stock~~and ~~upon~~accrued ~~repurchase.~~liabilities ~~Future~~of ~~repurchases~~$325,000, ~~are~~and ~~expected~~a todecrease bein ~~funded~~lease ~~from~~liabilities ~~cash~~of on$876,000, ~~hand~~all ~~and~~compared ~~cash~~to ~~flows~~December ~~from~~31, ~~operating activities~~2023.

WeAccounts ~~believe~~receivable ~~that~~decreased ~~our~~by ~~current~~$1,651,000, ~~cash~~or ~~balance~~25.2%, ~~and~~to ~~expected~~$4,894,000 ~~cash~~as ~~flow~~of December 31, 2024, from ~~operations~~$6,545,000 ~~will~~as beof ~~sufficient~~December 31, 2023. The decrease in accounts receivable was primarily related to ~~satisfy~~decreased ~~our~~sales ~~projected~~in ~~working~~the ~~capital~~latter ~~and~~part ~~planned~~of ~~capital~~2024 ~~expenditures~~compared ~~for~~to the ~~foreseeable~~same ~~future~~period of 2023. The number of days that sales remained outstanding as of December 31, 2024, calculated by using an average of accounts receivable outstanding and annual revenue, was 36 days, compared to 40 days as of December 31, 2023.

~~Related Parties~~20

~~During~~Inventory ~~2023~~increased ~~and~~by ~~2022~~$2,602,000, ~~the~~or ~~Company~~12.9%, ~~had~~to no$22,733,000 ~~related~~as ~~party~~of ~~transactions~~December 31, ~~other~~2024, ~~than~~from ~~the~~$20,131,000 ~~Company’s~~as ~~transactions~~of ~~with~~December ~~its non-consolidated affiliate~~31, ~~Harmony~~2023. ~~See~~The ~~Note~~increase 7was –due ~~“Equity~~to ~~Investments~~an increase in ~~Unconsolidated~~inventory ~~Affiliate”~~for in the ~~notes~~Building toSupply ~~our~~segment ~~consolidated~~of ~~financial~~$3,961,000, ~~statements~~or in56.8%, ~~Item~~to 8$10,931,000, ~~for~~partially ~~more~~offset ~~information~~by ona ~~our~~decrease ~~relationship~~in ~~with~~inventory ~~our~~for ~~non-consolidated~~the ~~affiliate~~Disposable ~~Harmony~~Protective ~~Plastics~~Apparel ~~Private~~segment ~~Limited~~of $1,359,000, or 10.3%, to $11,802,000.

~~New~~Prepaid ~~Accounting~~expenses ~~Standards~~decreased by $1,634,000, or 27.2%, to $4,376,000 as of December 31, 2024, from $6,010,000 as of December 31, 2023. The decrease was primarily due to decreased prepaid equipment and prepayments for insurance, partially offset by increased prepaid tax payments.

InRight-of-use ~~December~~assets ~~2023,~~as ~~the~~of ~~FASB~~December ~~issued~~31, ~~ASU 2023-09~~2024, ~~Income~~increased ~~Taxes~~by ~~(Topic~~$3,904,000 ~~740): Improvements~~ to ~~Income~~$8,714,000 ~~Tax~~from ~~Disclosures.~~$4,801,000 ~~These~~as ~~amendments~~of ~~address~~December ~~investor requests for enhanced transparency regarding income tax information. Specifically~~31, ~~they improve income tax disclosures related to rate reconciliation and income taxes paid. ASU~~ 2023~~-09~~, ~~becomes~~primarily ~~effective~~as ~~for~~a ~~fiscal~~result ~~years~~of ~~beginning~~our ~~after~~new ~~December 15~~Nogales, ~~2024~~Arizona lease, ~~with~~partially ~~early~~offset ~~adoption~~by ~~permitted.~~amortization ~~The~~of ~~Company is evaluating~~ the ~~impact~~right ~~the adoption~~ of ~~this~~use ~~guidance will have on its consolidated financial statements~~asset.

InLease ~~November~~liabilities ~~2023,~~as ~~the~~of ~~FASB~~December ~~issued~~31, ~~ASU 2023-07~~2024, ~~Segment~~increased ~~Reporting~~by ~~(Topic~~$3,927,000 ~~280): Improvements~~ to ~~Reportable~~$8,775,000 ~~Segment~~from ~~Disclosures.~~$4,848,000 ~~This~~as ~~ASU~~of ~~improves~~December ~~reportable segment disclosure requirements~~31, ~~primarily~~2023. ~~through~~The ~~enhanced~~increase ~~disclosures~~in ~~about~~the ~~significant~~lease ~~expenses,~~liabilities ~~and~~was isprimarily ~~effective~~the ~~for~~result ~~fiscal~~of ~~years~~our ~~beginning~~new ~~after~~lease ~~December~~in 15Nogales, ~~2023,~~Arizona onstarting aMarch ~~retrospective~~1, ~~basis.~~2024, ~~The~~partially ~~Company~~offset isby ~~currently~~lease ~~evaluating~~payments ~~the~~made ~~impact~~during ~~of this standard on~~ the ~~consolidated financial statements~~period.

InAccounts ~~June~~payable ~~2016,~~and ~~the~~accrued ~~FASB~~liabilities ~~issued~~as ~~ASU 2016-13, Financial Instruments –Credit Losses (Topic 326): Measurement~~ of ~~Credit~~December ~~Losses on Financial Instruments~~31, ~~which~~2024 ~~replaces~~increased ~~the~~by ~~existing~~$325,000, ~~incurred~~or ~~loss~~17.1%, ~~impairment model with an expected credit loss model and requires a financial asset measured at amortized cost~~ to be$2,230,000, ~~presented~~from at$1,905,000 ~~the net amount expected to be collected. Public business entities classified~~ as ~~smaller reporting companies are required to apply the provision~~ of ~~ASU 2016-13 with annual reporting periods after~~ December 1531, ~~2022~~2023. The ~~Company~~increase ~~adopted~~was ~~Topic~~primarily ~~326~~due ~~effective~~to ~~January~~an 1,increase ~~2023,~~in ~~which~~trade ~~did~~payables ~~not~~and ~~have~~accrued apayroll, ~~material~~partially ~~impact~~offset onby ~~the~~a ~~Company’s~~decrease ~~consolidated~~in ~~financial~~accrued ~~statements~~bonuses.

~~Management~~Net ~~periodically~~cash ~~reviews~~used ~~new~~in ~~accounting~~investing ~~standards~~activities ~~that~~was ~~are~~$3,776,000 ~~issued~~for the year ended December 31, 2024, compared to net cash used in investing activities of $792,000 for 2023. ~~Management~~Investing ~~has~~activities ~~not~~for ~~identified~~the ~~any~~year ~~other~~ended ~~new~~December ~~standards~~31, ~~that~~2024 itand ~~believes~~2023 ~~merit~~consisted ~~further~~primarily ~~discussion~~of atthe ~~this~~purchase ~~time~~of property and equipment.

~~Item~~Net 7Acash used in financing activities was $3,664,000 for the year ended December 31, 2024, compared to net cash used in financing activities of $3,578,000 for 2023. ~~Quantitative~~Net cash used in financing activities for the year ended December 31, 2024 resulted from the payment of $4,452,000 for the repurchase of common stock and ~~Qualitative~~$44,000 ~~Disclosures~~for ~~About~~treasury ~~Market~~stock ~~Risk~~excise tax, partially offset by $832,000 in proceeds from the exercise of stock options. Net cash used in financing activities for the year ended December 31, 2023 resulted from the payment of $4,002,000 for the repurchase of common stock and $40,000 for treasury stock excise tax, partially offset by $464,000 in proceeds from the exercise of stock options.

WeAs ~~subcontract the manufacturing~~ of ~~products~~December ~~in Sri Lanka~~31, ~~China and~~2024, towe ahad ~~lesser extent~~$2,742,000 inavailable ~~Mexico,~~for ~~and~~stock ~~have~~purchases aunder ~~joint~~our ~~venture~~stock inrepurchase ~~India~~program. InDuring ~~addition,~~the ~~our~~year ~~principal~~ended ~~executive~~December ~~office~~31, ~~with 22 employees~~2024, iswe ~~located~~repurchased in831,000 ~~Canada.~~shares Weof docommon ~~not~~stock ~~believe~~at ~~that we have~~ a ~~material~~cost ~~foreign~~of ~~currency~~$4,452,000. ~~exposure~~As inof ~~relation~~December to31, ~~our~~2024, ~~purchase~~we ~~agreements~~had ~~with~~repurchased ~~companies~~a intotal ~~Sri~~of ~~Lanka~~21, ~~China~~242,627 ~~India~~shares ~~and~~of ~~Mexico~~common asstock ~~they~~at ~~are~~a ~~settled~~cost inof ~~U.S.~~approximately ~~dollars. In addition~~$54, ~~all sales transactions are in U.S. dollars. In Canada~~778,000 through our ~~foreign~~repurchase ~~currency~~program ~~exposure~~which iscommenced ~~not material because we do not conduct manufacturing operations~~ in ~~Canada~~1999. ~~Our exposure is limited to payroll expenses in the Canadian branch office.~~ We doretire ~~have~~all ~~potential~~stock ~~material~~upon ~~foreign currency exposure in relation to equity in our unconsolidated affiliate in India~~repurchase. ~~The~~Future ~~strengthening~~repurchases ofare ~~the~~expected ~~U.S. dollar relative~~ to ~~the~~be ~~foreign~~funded ~~currency~~from incash ~~India results is an unfavorable currency translation impact~~ on ~~the~~hand ~~value of our equity of unconsolidated affiliate~~ and iscash ~~reported~~flows infrom ~~AOCL.~~operating ~~The resulting foreign currency translation gains or losses are deferred as AOCL and reclassified to earnings only upon sale or liquidation of that business~~activities.

We dobelieve ~~not~~that ~~expect~~our ~~any~~current ~~significant~~cash ~~effect~~balance onand ~~our~~expected ~~consolidated~~cash ~~results~~flow offrom operations ~~from~~will ~~interest~~be orsufficient ~~currency~~to ~~rate~~satisfy ~~fluctuations.~~our Weprojected doworking ~~not~~capital ~~hedge~~and ~~interest~~planned ~~rates~~capital orexpenditures ~~foreign~~for ~~exchange~~the ~~risks~~foreseeable future.

20Related Parties

~~Alpha~~During ~~Pro~~2024 ~~Tech~~and 2023, ~~Ltd~~the Company had no related party transactions, other than the Company’s transactions with its non-consolidated affiliate, Harmony. See Note 6 to our consolidated financial statements for more information on our relationship with our non-consolidated affiliate Harmony Plastics Private Limited.

~~Item~~New 8.Accounting ~~Financial~~Standards ~~Statements and Supplementary Data.~~

	Page
Management’s Annual Report on Internal Control over Financial Reporting	22
Report of Independent Registered Public Accounting Firm (PCAOB ID 270)	23
Consolidated Financial Statements:
Consolidated Balance Sheets as of December 31, 2023 and 2022	25
Consolidated Statements of Income for the Years Ended December 31, 2023 and 2022	26
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2023 and 2022	27
Consolidated Statements of Shareholders’ Equity for the Years Ended December 31, 2023 and 2022	28
Consolidated Statements of Cash Flows for the Years Ended December 31, 2023 and 2022	29
Notes to Consolidated Financial Statements	30

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 becomes effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

~~All~~Management ~~schedules~~periodically ~~are~~reviews ~~omitted~~new ~~because~~accounting ~~they~~standards that are ~~not~~issued. ~~applicable~~Management orhas ~~the~~not ~~required~~identified ~~information~~any isother ~~shown~~new instandards ~~the~~that ~~consolidated~~it ~~financial~~believes ~~statements~~merit orfurther ~~notes~~discussion ~~thereto~~at this time.

~~Management’s~~Item ~~Report~~7A. onQuantitative ~~Internal~~and ~~Control~~Qualitative ~~over~~Disclosures ~~Financial~~About ~~Reporting~~Market Risk.

~~Our~~We ~~management~~subcontract isthe ~~responsible~~manufacturing ~~for~~of ~~establishing~~products in Sri Lanka, China and, ~~maintaining~~to ~~adequate~~a ~~internal~~lesser ~~control~~extent, ~~over~~in ~~financial~~Mexico, ~~reporting~~and have a joint venture in India. ~~Internal~~In ~~control~~addition, ~~over~~our ~~financial~~principal ~~reporting~~executive office, with 21 employees, is ~~defined~~located in ~~Rule~~Canada. ~~13a-15(f)~~We ~~and~~do ~~Rule~~not ~~15d-15(f)~~believe ~~under~~that ~~the~~we ~~Securities~~have ~~Exchange~~a ~~Act~~material offoreign ~~1934~~currency exposure in relation to our purchase agreements with companies in Sri Lanka, China, India and Mexico as athey ~~process~~are ~~designed~~settled byin U.S. dollars. In addition, orall ~~under~~sales ~~the~~transactions ~~supervision~~are ofin U.S. dollars. In Canada, our ~~principal~~foreign ~~executive~~currency ~~and~~exposure ~~principal~~is ~~financial~~not ~~officers,~~material ~~and~~because ~~effected~~we bydo ~~our~~not ~~Board~~conduct ofmanufacturing ~~Directors,~~operations ~~management~~in ~~and~~Canada. ~~other~~Our ~~personnel,~~exposure tois ~~provide~~limited ~~reasonable~~to ~~assurance~~payroll ~~regarding~~expenses in the ~~reliability~~Canadian ofbranch ~~financial~~office. ~~reporting~~We ~~and~~do ~~the~~have ~~preparation~~potential ofmaterial ~~financial~~foreign ~~statements~~currency ~~for~~exposure ~~external~~in ~~purposes~~relation to equity in ~~accordance~~our ~~with~~unconsolidated affiliate in India. The strengthening of the U.S. ~~generally~~dollar ~~accepted~~relative ~~accounting~~to ~~principles~~the foreign currency in India results is an unfavorable currency translation impact on the value of our equity of unconsolidated affiliate and ~~includes~~is ~~those~~reported ~~policies~~in AOCL. The resulting foreign currency translation gains or losses are deferred as AOCL and ~~procedures~~reclassified to earnings only upon sale or liquidation of that: business.

•We ~~pertain~~do tonot ~~the~~expect ~~maintenance~~any significant effect on our consolidated results of ~~records~~operations ~~that,~~from ininterest ~~reasonable~~or ~~detail,~~currency ~~accurately~~rate ~~and~~fluctuations. ~~fairly~~We ~~reflect~~do ~~our~~not ~~transactions~~hedge ~~and~~interest ~~dispositions~~rates ofor ~~our~~foreign ~~assets;~~exchange risks.

•Alpha ~~provide~~Pro ~~reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles~~Tech, ~~and that our receipts and expenditures are being made only in accordance with authorizations of management and directors; and~~Ltd.

•Item ~~provide~~8. ~~reasonable~~Financial ~~assurance~~Statements ~~regarding~~and ~~prevention~~Supplementary ~~or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements~~Data.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

	Page

Management’s Annual Report on Internal Control over Financial Reporting	23

Report of Independent Registered Public Accounting Firm (PCAOB ID 270)	24


Consolidated Financial Statements:

Consolidated Balance Sheets as of December 31, 2024 and 2023	26

Consolidated Statements of Income for the Years Ended December 31, 2024 and 2023	27

Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2024 and 2023	28

Consolidated Statements of Shareholders’ Equity for the Years Ended December 31, 2024 and 2023	29

Consolidated Statements of Cash Flows for the Years Ended December 31, 2024 and 2023	30

Notes to Consolidated Financial Statements	31

~~Under~~All ~~the~~schedules ~~supervision~~are ~~and~~omitted ~~with~~because ~~the~~they ~~participation~~are ofnot ~~our~~applicable ~~management,~~or ~~including our principal executive and principal financial officers, we assessed, as of December 31, 2023,~~ the ~~effectiveness~~required ofinformation ~~our~~is ~~internal~~shown ~~control over financial reporting. This assessment was based on criteria established~~ in ~~accordance with~~ the ~~Internal~~consolidated Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Based on this assessment, our management concluded that our internal control over financial ~~reporting~~statements ~~was~~or ~~effective~~notes ~~as of December 31, 2023~~thereto.

~~REPORT~~Management’s OFReport ~~INDEPENDENT~~on ~~REGISTERED~~Internal ~~PUBLIC~~Control ~~ACCOUNTING~~over ~~FIRM~~Financial Reporting

ToOur ~~the~~management ~~Shareholders~~is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) and Rule 15d-15(f) under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, our principal executive and principal financial officers, and effected by our Board of Directors, ofmanagement ~~Alpha~~and ~~Pro~~other ~~Tech~~personnel, ~~Ltd~~to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles and includes those policies and procedures that:

~~Opinion~~• onpertain to the ~~Consolidated~~maintenance ~~Financial~~of ~~Statements~~records that, in reasonable detail, accurately and fairly reflect our transactions and dispositions of our assets;

We• ~~have~~provide ~~audited~~reasonable ~~the~~assurance ~~accompanying~~that ~~consolidated~~transactions ~~balance~~are ~~sheets~~recorded ~~of Alpha Pro Tech, Ltd. and subsidiaries (collectively, the Company)~~ as ofnecessary ~~December~~to ~~31,~~permit ~~2023~~preparation ~~and 2022, the related consolidated statements~~ of ~~income, comprehensive income, shareholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2023, and the related notes (collectively referred to as the~~ financial statements). ~~In our opinion, the financial statements referred to above present fairly,~~ in ~~all~~accordance ~~material~~with ~~respects,~~U.S. ~~the~~generally ~~consolidated~~accepted ~~financial~~accounting ~~position of the Company as of December 31~~principles, ~~2023~~ and ~~2022,~~that ~~and~~our ~~the~~receipts ~~consolidated results of its operations~~ and ~~its~~expenditures ~~cash~~are ~~flows~~being ~~for~~made ~~each~~only ~~of the years~~ in ~~the~~accordance ~~two-year period ended December 31, 2023, in conformity~~ with ~~accounting~~authorizations ~~principles~~of ~~generally~~management ~~accepted~~and indirectors; ~~the United States of America.~~and

~~Basis~~• ~~for~~provide ~~Opinion~~reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

~~These~~Because ~~financial statements are the responsibility~~ of ~~the~~its ~~Company’s~~inherent ~~management.~~limitations, ~~Our~~internal ~~responsibility~~control isover tofinancial ~~express~~reporting anmay ~~opinion~~not onprevent ~~the~~or ~~Company’s~~detect ~~financial statements based on our audits~~misstatements. WeAlso, ~~are~~projections aof ~~public~~any ~~accounting~~evaluation ~~firm~~of ~~registered~~effectiveness ~~with~~to ~~the~~future ~~Public~~periods ~~Company Accounting Oversight Board (United States) (PCAOB) and~~ are ~~required~~subject to bethe ~~independent~~risk ~~with~~that ~~respect~~controls tomay ~~the~~become ~~Company~~inadequate inbecause ~~accordance~~of ~~with~~changes ~~the~~in ~~U.S.~~conditions, ~~federal~~or ~~securities~~that ~~laws and~~ the ~~applicable~~degree ~~rules~~of ~~and~~compliance ~~regulations~~with of the ~~Securities~~policies ~~and~~or ~~Exchange~~procedures ~~Commission~~may ~~and the PCAOB~~deteriorate.

WeUnder ~~conducted~~the ~~our~~supervision ~~audits~~and ~~in accordance~~ with the ~~standards~~participation of ~~the~~our ~~PCAOB.~~management, ~~Those~~including ~~standards~~our ~~require~~principal ~~that~~executive ~~we plan~~ and ~~perform~~principal ~~the audits to obtain reasonable assurance about whether the~~ financial ~~statements~~officers, ~~are~~we ~~free of material misstatement~~assessed, ~~whether~~as ~~due~~of toDecember ~~error or fraud. The Company is not required to have~~31, ~~nor were we engaged to perform~~2024, anthe ~~audit~~effectiveness of ~~its~~our internal control over financial reporting. AsThis ~~part~~assessment ofwas ~~our~~based ~~audits,~~on wecriteria ~~are~~established ~~required~~in toaccordance ~~obtain~~with anthe ~~understanding~~Internal ofControl-Integrated ~~internal~~Framework ~~control~~issued ~~over~~by ~~financial~~the ~~reporting,~~Committee ~~but~~of ~~not~~Sponsoring ~~for~~Organizations of the ~~purpose~~Treadway ofCommission ~~expressing~~(2013 anframework). ~~opinion~~Based on ~~the~~this ~~effectiveness~~assessment, ofour ~~the~~management ~~Company’s~~concluded that our internal control over financial reporting. ~~Accordingly,~~was weeffective ~~express~~as noof ~~such~~December ~~opinion~~31, 2024.

Our audits included performing procedures to assess the risk of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.23

~~Critical~~REPORT ~~Audit~~OF ~~Matters~~INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

~~The~~To ~~critical audit matters communicated below are matters arising from~~ the ~~current~~Shareholders ~~period audit of the financial statements that were communicated or required to be communicated to the audit committee~~ and ~~that: (1) relates to accounts or disclosures that are material to~~ the ~~financial~~Board ~~statements~~of ~~and~~Directors ~~(2) involved our especially challenging, subjective, or complex judgments. The communication~~ of ~~the~~Alpha ~~critical~~Pro ~~audit matters does not alter in any way our opinion on the financial statements~~Tech, ~~taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which they relate~~Ltd.

~~Valuation~~Opinion ofon ~~Equity~~the ~~Investment~~Consolidated inFinancial ~~Unconsolidated~~Statements ~~Affiliate~~

AsWe ~~more~~have ~~fully~~audited ~~described~~the inaccompanying ~~Notes~~consolidated 3balance sheets of Alpha Pro Tech, Ltd. and 7subsidiaries to(collectively, the ~~consolidated~~Company) ~~financial~~as ~~statements~~of December 31, 2024 and 2023, the ~~Company~~related ~~holds~~consolidated astatements ~~noncontrolling~~of income, comprehensive income, shareholders’ equity, ~~investment~~and cash flows for each of the years in athe ~~foreign~~two-year ~~entity~~period ~~which~~ended ~~produces~~December 31, 2024, and ~~sales~~the ~~certain~~related ~~products~~notes (collectively referred to as the ~~Company~~financial statements). AsIn aour ~~global~~opinion, ~~organization~~the ~~with~~financial anstatements ~~international~~referred ~~affiliate~~to above present fairly, in all material respects, the consolidated financial position of the Company ~~needs~~as toof ~~properly~~December ~~value~~31, 2024 and 2023, and the consolidated results of its ~~noncontrolling~~operations ~~equity~~and ~~basis~~its cash flows for each of the years in the two-year period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

23Basis for Opinion

~~Auditing~~These financial statements are the responsibility of the Company’s ~~noncontrolling~~management. ~~equity~~Our ~~investment~~responsibility inis to express an opinion on the Company’s financial statements based on our audits. We are a ~~foreign~~public ~~entity~~accounting ~~was~~firm ~~complex~~registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required ~~significant~~to ~~auditor~~be ~~judgement~~independent ~~due~~with respect to the ~~complexities~~Company ~~inherent~~in accordance with athe ~~foreign~~U.S. ~~domiciled~~federal ~~investment~~securities ~~with~~laws ~~related~~and ~~party~~the ~~transactions,~~applicable ~~foreign~~rules ~~currency~~and ~~translation~~regulations ~~adjustments,~~of the Securities and ~~the~~Exchange ~~potential~~and ofthe ~~impairment~~PCAOB.

~~Our~~We ~~testing~~conducted our audits in accordance with the standards of the ~~Company’s~~PCAOB. ~~noncontrolling~~Those ~~equity~~standards ~~investment~~require inthat awe ~~foreign~~plan ~~entity~~and ~~included,~~perform ~~among~~the ~~other~~audits ~~procedures,~~to ~~testing~~obtain ~~data~~reasonable ~~for~~assurance about whether the ~~foreign~~financial ~~entity~~statements are free of material misstatement, ~~evaluating~~whether ~~and~~due ~~testing~~to ~~the~~error ~~significant~~or ~~assumptions~~fraud. ~~and~~The ~~operating~~Company ~~data~~is ~~used~~not required to ~~eliminate~~have, ~~intercompany~~nor ~~transactions,~~were ~~and~~we ~~evaluating~~engaged ~~management’s~~to ~~method~~perform, ~~for~~an ~~accounting~~audit ~~for~~of ~~the~~its ~~foreign~~internal ~~currency~~control ~~transactions~~over financial reporting. WeAs ~~also~~part ~~visited~~of ~~the~~our ~~factories~~audits, inwe ~~India~~are required to ~~test~~obtain ~~the~~an ~~existence~~understanding of ~~the~~internal ~~factories,~~control ~~equipment,~~over ~~and~~financial ~~inventory~~reporting, ~~and~~but tonot ~~observe~~for ~~operations~~the purpose of expressing an opinion on the ~~affiliated~~effectiveness ~~entity~~of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

~~Provision~~Our audits included performing procedures to assess the risk of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for ~~Income~~our ~~Taxes~~opinion.

AsCritical ~~more~~Audit fully described in Note 11 to the consolidated financial statements, the Company’s net deferred income tax liabilities were $442,000 as of December 31, 2023, and income tax expense was $1,236,000 for the year ended December 31, 2023. As a global organization, the Company files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions.Matters

~~Auditing~~The ~~the~~critical ~~Company’s~~audit ~~provision~~matters ~~for~~communicated ~~income~~below ~~taxes~~are ~~was~~matters ~~complex~~arising ~~and~~from ~~required~~the acurrent ~~high~~period ~~degree~~audit of ~~auditor~~the ~~judgment,~~financial ~~subjectivity~~statements ~~and~~that ~~effort~~were incommunicated ~~performing~~or ~~procedures~~required ~~and~~to ~~evaluating~~be communicated to the audit ~~evidence~~committee ~~relating~~and tothat: (i1) ~~management’s~~relates ~~assessment~~to ofaccounts ~~complex~~or ~~tax~~disclosures ~~laws~~that ~~and~~are ~~regulations~~material asto itthe ~~relates~~financial tostatements ~~determining~~and ~~the~~(2) ~~provision~~involved ~~for~~our ~~income~~especially ~~taxes~~challenging, ~~(ii)~~subjective, ~~management’s~~or ~~assessment~~complex judgments. The communication of the ~~realizability~~critical ofaudit ~~deferred~~matters ~~tax~~does ~~assets,~~not ~~specifically~~alter ~~related~~in toany ~~available~~way ~~tax~~our ~~planning~~opinion ~~strategies~~on ~~and~~the ~~(iii)~~financial ~~evaluating~~statements, ~~whether~~taken ~~the~~as ~~data~~a ~~utilized~~whole, inand ~~the~~we ~~calculations~~are ofnot, by communicating the ~~provision~~critical ~~for~~audit ~~income~~matters ~~taxes~~below, ~~and~~providing ~~deferred~~a ~~tax~~separate ~~assets~~opinion ~~and~~on ~~liabilities~~the ~~were~~critical ~~appropriate~~audit ~~and~~matter ~~consistent~~or ~~with~~on ~~evidence~~the ~~obtained~~accounts inor ~~other~~disclosures ~~areas~~to ofwhich ~~the~~they ~~audit~~relate.

~~Our~~Equity ~~testing~~Investment of the Company’s provision for income taxes included, among others (i) testing the accuracy of the provision for income taxes, which included the effective tax rate reconciliation and permanent and temporary differences, (ii) evaluating whether the data utilized in ~~the~~Unconsolidated calculations of the provision for income taxes and deferred tax assets and liabilities were appropriate and consistent with evidence obtained in other areas of the audit, (iii) evaluating the identification of accruals for unrecognized tax benefits and the reasonableness of the more likely than not determination in consideration of court decisions, legislative actions, statutes of limitations, and developments in tax examinations by jurisdiction, and (iv) evaluating the reasonableness of management’s assessment of the realizability of its deferred tax assets based on expectations of the ability to utilize its tax attributes through testing of historical and estimated future taxable income.Affiliate

~~/s/~~As ~~Tanner~~more ~~LLC~~fully ~~Lehi,~~described ~~Utah~~in ~~March~~Notes ~~13,~~2 ~~2024~~and We6 ~~have~~to ~~served~~the asconsolidated financial statements, the Company’s ~~auditors~~holds ~~since~~a ~~2011~~noncontrolling equity investment in a foreign entity which produces and sales certain products to the Company. ~~(PCAOB~~As IDa ~~270)~~global organization with an international affiliate, the Company needs to properly value its noncontrolling equity basis investment.

24Auditing the Company’s noncontrolling equity investment in a foreign entity was complex and required significant auditor judgement due to the complexities inherent with a foreign domiciled investment with related party transactions, foreign currency translation adjustments, and the potential of impairment.

~~Alpha~~Our ~~Pro~~testing ~~Tech~~of the Company’s noncontrolling equity investment in a foreign entity included, ~~Ltd~~among other procedures, testing data for the foreign entity, evaluating and testing the significant assumptions and operating data used to eliminate intercompany transactions, and evaluating management’s method for accounting for the foreign currency transactions. We also visited the factories in India to test the existence of the factories, equipment, and inventory, and to observe operations of the affiliated entity.

~~Consolidated Balance Sheets~~24

	December 31,			December 31,
	2023			2022
Assets
Current assets:
Cash and cash equivalents	$	20,378,000		$	16,290,000
Accounts receivable, net		5,503,000			5,382,000
Accounts receivable, related party		1,042,000			1,591,000
Inventories, net		20,131,000			24,397,000
Prepaid expenses		6,010,000			4,902,000
Total current assets		53,064,000			52,562,000
Property and equipment, net		5,587,000			5,742,000
Goodwill		55,000			55,000
Definite-lived intangible assets, net		-			1,000
Right-of-use assets		4,810,000			1,725,000
Equity investment in unconsolidated affiliate		5,247,000			4,718,000
Total assets	$	68,763,000		$	64,803,000
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable	$	802,000		$	674,000
Accrued liabilities		1,103,000			833,000
Lease liabilities		661,000			899,000
Total current liabilities		2,566,000			2,406,000
Lease liabilities, net of current portion		4,187,000			875,000
Deferred income tax liabilities, net		442,000			764,000
Total liabilities		7,195,000			4,045,000
Commitments and contingincies
Shareholders' equity:
Common stock, $.01 par value: 50,000,000 shares authorized; 11,416,212 and 12,226,306 shares outstanding as of December 31, 2023 and December 31, 2022, respectively		114,000			123,000
Additional paid-in capital		16,339,000			17,099,000
Retained earnings		46,552,000			45,025,000
Accumulated other comprehensive loss		(1,437,000	)		(1,489,000	)
Total shareholders' equity		61,568,000			60,758,000
Total liabilities and shareholders' equity	$	68,763,000		$	64,803,000

Provision for Income Taxes

~~The~~As ~~accompanying~~more ~~notes~~fully ~~are~~described anin ~~integral~~Note ~~part~~10 ofto ~~these~~the consolidated financial statements, the Company’s net deferred income tax liabilities were $503,000 as of December 31, 2024, and income tax expense was $1,091,000 for the year ended December 31, 2024. As a global organization, the Company files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions.

25Auditing the Company’s provision for income taxes was complex and required a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating audit evidence relating to (i) management's assessment of complex tax laws and regulations as it relates to determining the provision for income taxes, (ii) management's assessment of the realizability of deferred tax assets, specifically related to available tax planning strategies and (iii) evaluating whether the data utilized in the calculations of the provision for income taxes, and deferred tax assets and liabilities were appropriate and consistent with evidence obtained in other areas of the audit.

~~Alpha~~Our ~~Pro~~testing ~~Tech~~of the Company’s provision for income taxes included, ~~Ltd~~among others (i) testing the accuracy of the provision for income taxes, which included the effective tax rate reconciliation and permanent and temporary differences, (ii) evaluating whether the data utilized in the calculations of the provision for income taxes and deferred tax assets and liabilities were appropriate and consistent with evidence obtained in other areas of the audit, (iii) evaluating the identification of accruals for unrecognized tax benefits and the reasonableness of the more likely than not determination in consideration of court decisions, legislative actions, statutes of limitations, and developments in tax examinations by jurisdiction, and (iv) evaluating the reasonableness of management’s assessment of the realizability of its deferred tax assets based on expectations of the ability to utilize its tax attributes through testing of historical and estimated future taxable income.

~~Consolidated~~/s/ ~~Statements~~Tanner ofLLC ~~Income~~Lehi, Utah March 12, 2025 We have served as the Company’s auditors since 2011. (PCAOB ID 270)

	Years Ended December 31,
	2023		2022
Net sales	$	61,232,000	$	61,981,000
Cost of goods sold, excluding depreciation and amortization		38,403,000		40,298,000
Gross profit		22,829,000		21,683,000
Operating expenses:
Selling, general and administrative		17,772,000		16,219,000
Depreciation and amortization		925,000		814,000
Total operating expenses		18,697,000		17,033,000
Income from operations		4,132,000		4,650,000
Other income (expense):
Equity in income of unconsolidated affiliate		477,000		87,000
Impairment on deposit		-		(490,000	)
Interest income, net		816,000		148,000
Total other income (expense), net		1,293,000		(255,000	)
Income before provision for income taxes		5,425,000		4,395,000
Provision for income taxes		1,236,000		1,113,000
Net income	$	4,189,000	$	3,282,000
Basic earnings per common share	$	0.35	$	0.26
Diluted earnings per common share	$	0.35	$	0.26
Basic weighted average common shares outstanding		11,856,356		12,713,533
Diluted weighted average common shares outstanding		11,856,356		12,781,004

~~The~~Alpha ~~accompanying~~Pro ~~notes~~Tech, ~~are an integral part of these consolidated financial statements~~Ltd.

26 Consolidated Balance Sheets

Alpha Pro Tech, Ltd.

	December 31,			December 31,
	2024			2023
Assets
Current assets:
Cash and cash equivalents	$	18,636,000		$	20,378,000
Accounts receivable, net		3,692,000			5,503,000
Accounts receivable, related party		1,202,000			1,042,000
Inventories, net		22,733,000			20,131,000
Prepaid expenses		4,376,000			6,010,000
Total current assets		50,639,000			53,064,000

Property and equipment, net		8,520,000			5,587,000
Goodwill		55,000			55,000
Right-of-use assets		8,714,000			4,810,000
Equity investment in unconsolidated affiliate		5,814,000			5,247,000
Total assets	$	73,742,000		$	68,763,000

Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable	$	1,283,000		$	802,000
Accrued liabilities		947,000			1,103,000
Lease liabilities		893,000			661,000
Total current liabilities		3,123,000			2,566,000

Lease liabilities, net of current portion		7,882,000			4,187,000
Deferred income tax liabilities, net		503,000			442,000
Total liabilities		11,508,000			7,195,000
Commitments and contingencies
Shareholders' equity:
Common stock, $.01 par value: 50,000,000 shares authorized; 10,816,878 and 11,416,212 shares outstanding as of December 31, 2024 and December 31, 2023, respectively		108,000			114,000
Additional paid-in capital		16,368,000			16,339,000
Retained earnings		47,257,000			46,552,000
Accumulated other comprehensive loss		(1,499,000	)		(1,437,000	)
Total shareholders' equity		62,234,000			61,568,000
Total liabilities and shareholders' equity	$	73,742,000		$	68,763,000

~~Consolidated~~The ~~Statements~~accompanying notes are an integral part of ~~Comprehensive~~these ~~Income~~consolidated financial statements.

	Years Ended December 31,
	2023		2022
Net Income	$	4,189,000	$	3,282,000
Other comprehensive income (loss)- foreign currency translation gain (loss)		52,000		(620,000	)
Comprehensive Income	$	4,241,000	$	2,662,000

~~The~~Alpha ~~accompanying~~Pro ~~notes~~Tech, ~~are an integral part of these consolidated financial statements~~Ltd.

27 Consolidated Statements of Income

Alpha Pro Tech, Ltd.

	Years Ended December 31,
	2024		2023

Net sales	$	57,840,000	$	61,232,000

Cost of goods sold, excluding depreciation and amortization		34,907,000		38,403,000
Gross profit		22,933,000		22,829,000

Operating expenses:
Selling, general and administrative		18,611,000		17,772,000
Depreciation and amortization		873,000		925,000
Total operating expenses		19,484,000		18,697,000
Income from operations		3,449,000		4,132,000

Other income:
Equity in income of unconsolidated affiliate		629,000		477,000
Gain on sale of property and equipment		30,000		-
Interest income, net		912,000		816,000
Total other income, net		1,571,000		1,293,000


Income before provision for income taxes		5,020,000		5,425,000
Provision for income taxes		1,091,000		1,236,000

Net income	$	3,929,000	$	4,189,000


Basic earnings per common share	$	0.35	$	0.35

Diluted earnings per common share	$	0.35	$	0.35

Basic weighted average common shares outstanding		11,137,873		11,856,356

Diluted weighted average common shares outstanding		11,235,046		11,856,356

~~Consolidated~~The ~~Statements~~accompanying notes are an integral part of ~~Shareholders’~~these ~~Equity~~consolidated financial statements.

													Accumulated
							Additional						Other
	Common Stock						Paid-in			Retained			Comprehensive
	Shares			Amount			Capital			Earnings			Loss			Total
Balance as of December 31, 2021		13,115,341		$	132,000		$	18,131,000		$	44,357,000		$	(869,000	)	$	61,751,000
Common stock repurchased and retired		(910,700	)		(9,000	)		(1,259,000	)		(2,614,000	)		-			(3,882,000	)
Options exercised		21,665			-			80,000			-			-			80,000
Share-based compensation expense		-			-			147,000			-			-			147,000
Total comprehensive income (loss)		-			-			-			3,282,000			(620,000	)		2,662,000
Balance as of December 31, 2022		12,226,306			123,000			17,099,000			45,025,000			(1,489,000	)		60,758,000
Common stock repurchased and retired		(951,010	)		(10,000	)		(1,330,000	)		(2,662,000	)		-			(4,002,000	)
Cancellation of stock options		-			-			(23,000	)		-			-			(23,000	)
Treasury stock excise tax		-			-			(40,000	)		-			-			(40,000	)
Options exercised		140,916			1,000			463,000			-			-			464,000
Share-based compensation expense		-			-			170,000			-			-			170,000
Total comprehensive income		-			-			-			4,189,000			52,000			4,241,000
Balance as of December 31, 2023		11,416,212		$	114,000		$	16,339,000		$	46,552,000		$	(1,437,000	)	$	61,568,000

~~The~~Alpha ~~accompanying~~Pro ~~notes~~Tech, ~~are an integral part of these consolidated financial statements~~Ltd.

28 Consolidated Statements of Comprehensive Income

Alpha Pro Tech, Ltd.

	Years Ended December 31,
	2024			2023

Net income	$	3,929,000		$	4,189,000
Other comprehensive income (loss)- foreign currency translation gain (loss)		(62,000	)		52,000
Comprehensive income	$	3,867,000		$	4,241,000

~~Consolidated~~The ~~Statements~~accompanying notes are an integral part of ~~Cash~~these ~~Flows~~consolidated financial statements.

	Years Ended December 31,
	2023			2022
Cash Flows From Operating Activities:
Net income	$	4,189,000		$	3,282,000
Adjustments to reconcile net income to net cash provided by operating activities:
Share-based compensation		170,000			147,000
Depreciation and amortization		925,000			814,000
Equity in income of unconsolidated affiliate		(477,000	)		(87,000	)
Non-cash lease expense		744,000			923,000
Deferred income taxes		(322,000	)		(27,000	)
Changes in operating assets and liabilities:
Accounts receivable, net		(121,000	)		(1,985,000	)
Accounts receivable, related party		549,000			(208,000	)
Inventories, net		4,266,000			572,000
Prepaid expenses		(1,108,000	)		2,043,000
Accounts payable and accrued liabilities		398,000			(271,000	)
Lease liabilities		(785,000	)		(926,000	)
Net cash provided by operating activities		8,458,000			4,277,000
Cash Flows From Investing Activities:
Purchases of property and equipment		(792,000	)		(492,000	)
Cash Flows From Financing Activities:
Proceeds from exercise of stock options		464,000			80,000
Repurchase of common stock		(4,002,000	)		(3,882,000	)
Treasury stock excise tax		(40,000	)		-
Net cash used in financing activities		(3,578,000	)		(3,802,000	)
Increase (decrease) in cash and cash equivalents		4,088,000			(17,000	)
Cash and cash equivalents, beginning of the year		16,290,000			16,307,000
Cash and cash equivalents, end of the year	$	20,378,000		$	16,290,000
Supplemental disclosure of cash flow information:
Cash paid for income taxes	$	1,524,000		$	443,000
Supplemental disclosure of non-cash transactions:
Net non-cash changes to operating leases	$	3,859,000		$	-

~~The~~Alpha ~~accompanying~~Pro ~~notes~~Tech, ~~are an integral part of these consolidated financial statements~~Ltd.

29 Consolidated Statements of Shareholders’ Equity

Alpha Pro Tech, Ltd.

													Accumulated
							Additional						Other
	Common Stock						Paid-in			Retained			Comprehensive
	Shares			Amount			Capital			Earnings			Loss			Total
Balance as of December 31, 2022		12,226,306		$	123,000		$	17,099,000		$	45,025,000		$	(1,489,000	)	$	60,758,000
Common stock repurchased and retired		(951,010	)		(10,000	)		(1,330,000	)		(2,662,000	)		-			(4,002,000	)
Cancellation of stock options		-			-			(23,000	)		-			-			(23,000	)
Treasury stock excise tax		-			-			(40,000	)		-			-			(40,000	)
Options exercised		140,916			1,000			463,000			-			-			464,000
Stock-based compensation expense		-			-			170,000			-			-			170,000
Total comprehensive income		-			-			-			4,189,000			52,000			4,241,000
Balance as of December 31, 2023		11,416,212			114,000			16,339,000			46,552,000			(1,437,000	)		61,568,000
Common stock repurchased and retired		(831,000	)		(8,000	)		(1,220,000	)		(3,224,000	)		-			(4,452,000	)
Treasury stock excise tax		-			-			(44,000	)		-			-			(44,000	)
Options exercised		231,666			2,000			830,000			-			-			832,000
Stock-based compensation expense		-			-			463,000			-			-			463,000
Total comprehensive income (loss)		-			-			-			3,929,000			(62,000	)		3,867,000
Balance as of December 31, 2024		10,816,878		$	108,000		$	16,368,000		$	47,257,000		$	(1,499,000	)	$	62,234,000

~~Notes~~The toaccompanying ~~Consolidated~~notes ~~Financial~~are ~~Statements~~an integral part of these consolidated financial statements.

~~1. The Company~~29

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~~ Consolidated Statements of ~~construction~~Cash weatherization products, such as housewrap, housewrap accessories, namely tape and flashing, synthetic roof underlayment and synthetic roof underlayment accessories, namely self-adhered underlayment, as well as other woven material.Flows

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 (“FDA”) approved facilities, regardless of the market served.

	Years Ended December 31,
	2024			2023
Cash Flows From Operating Activities:
Net income	$	3,929,000		$	4,189,000
Adjustments to reconcile net income to net cash and cash equivalents provided by operating activities:
Share-based compensation		463,000			170,000
Depreciation and amortization		873,000			925,000
Equity in income of unconsolidated affiliate		(629,000	)		(477,000	)
Gain on sale of property and equipment		(30,000	)		-
Non-cash lease expense		899,000			774,000
Deferred income taxes		61,000			(322,000	)
Changes in operating assets and liabilities:
Accounts receivable, net		1,811,000			(121,000	)
Accounts receivable, related party		(160,000	)		549,000
Inventories, net		(2,602,000	)		4,266,000
Prepaid expenses		1,634,000			(1,108,000	)
Accounts payable and accrued liabilities		325,000			398,000
Lease liabilities		(876,000	)		(785,000	)

Net cash provided by operating activities		5,698,000			8,458,000

Cash Flows From Investing Activities:
Purchases of property and equipment		(3,806,000	)		(792,000	)
Proceeds from sale of property and equipment		30,000			-

Net cash used in investing activities		(3,776,000	)		(792,000	)

Cash Flows From Financing Activities:
Proceeds from exercise of stock options		832,000			464,000
Repurchase of common stock		(4,452,000	)		(4,002,000	)
Treasury stock excise tax		(44,000	)		(40,000	)

Net cash used in financing activities		(3,664,000	)		(3,578,000	)

Increase (decrease) in cash and cash equivalents		(1,742,000	)		4,088,000

Cash and cash equivalents, beginning of the year		20,378,000			16,290,000

Cash and cash equivalents, end of the year	$	18,636,000		$	20,378,000

Supplemental disclosure of cash flow information:
Cash paid for income taxes	$	1,435,000		$	1,524,000

Supplemental disclosure of non-cash transactions:
Net non-cash changes to operating leases	$	4,803,000		$	3,859,000

The ~~Company’s~~accompanying ~~products~~notes are ~~sold~~an ~~under~~integral ~~the~~part ~~“Alpha~~of ~~Pro~~these ~~Tech”~~consolidated ~~brand~~financial ~~name as well as under private label and are predominantly sold in the United States of America (“U~~statements.~~S.”).~~

~~2. Revised Prior Period Financial Statements~~30

~~During~~Alpha ~~the~~Pro ~~financial close for the fiscal year ended December 31~~Tech, ~~2023, the Company discovered certain errors related to its accounting policy for the accounting for share repurchases~~Ltd. Since the release of the Financial Accounting Standards Board Accounting Standards Codification (the “ASC” or the “Codification”), the Company should have allocated excess repurchase price over par value between additional paid-in capital and retained earnings, rather than entirely to additional paid-in capital.

InNotes ~~periods prior~~ to ~~January~~Consolidated 1,Financial 2022, the Company should have allocated $18,131,000 from additional paid-capital to retained earnings, related to previously recording the repurchase price paid in excess of par value to additional paid-in capital instead of allocating the repurchase price paid in excess of par value between additional paid-in capital and retained earnings. For the year ended December 31, 2022, the Company should have allocated an additional $1,032,000 in excess repurchase price to additional paid-capital, resulting in a balance of $17,099,000 of additional paid-in capital and total of retained earnings of $45,025,000 at December 31, 2022. As a result, the Company adjusted the values of additional paid-in capital and retained earnings in shareholders’ equity on the balance sheet, and on the consolidated statements of shareholders’ equity. There was no impact on the statement of income, total consolidated balance sheet or total statement of shareholders’ equity. The only change in the consolidated balance sheet is between additional paid-in capital and retained earnings as total shareholders’ equity did not change.Statements

These revisions resulted in an increase in additional paid-in capital and a decrease in retained earnings but no effect on total assets, total liabilities, total shareholders’ equity, net income, earnings per share or cash flows1. ~~Management~~The has determined that this revision was not material on a quantitative or qualitative basis to the prior period financial statements based on its analysis performed in accordance with the guidance provided by SEC Staff Accounting Bulletins No. 99 – Materiality and No. 108 –Considering the Effects of Prior Year Misstatements. Management has determined that the cumulative effect of the error was immaterial on the current year balance sheet.Company

~~The~~Alpha ~~Company~~Pro ~~has~~Tech, determined that the impact of adjustments relating to the corrections of this accounting error is not material to previously issued annual audited and unaudited financial statements and as such no restatement was necessaryLtd. ~~Correcting~~(“Alpha ~~prior~~Pro ~~year~~Tech,” ~~financial statements for immaterial errors would not require previously filed reports to be amended. Such a correction may be made~~ the ~~next~~“Company,” ~~time the registrant files the prior year financial statements~~“we”, as“us” ~~wells~~or as“our”) ~~correcting~~is ~~the cumulative error~~ in the ~~current~~business ~~year~~of ~~would~~protecting ~~also be immaterial to the current year. Accordingly~~people, ~~these~~products ~~misstatements were corrected,~~ and ~~the~~environments. ~~adjustments~~The ~~are~~Company ~~reflected~~accomplishes inthis ~~the~~by ~~related~~developing, ~~periods~~manufacturing asand ~~noted~~marketing ~~below.~~a ~~The~~line ~~correction~~ of ~~these~~building ~~errors~~supply ~~and~~products ~~the adjustments~~ for ~~these changes to~~ the ~~Company’s~~new ~~previously~~home ~~issued~~and ~~audited~~re-roofing ~~annual~~markets ~~consolidated financial statements are shown in the table below,~~ and ~~the~~a ~~correction~~line of ~~these~~disposable ~~errors~~protective ~~and~~apparel ~~the~~for ~~adjustments to~~ the ~~previously~~cleanroom, ~~issued~~industrial, ~~unaudited~~pharmaceutical, ~~quarterly~~medical ~~consolidated~~and ~~financial~~dental ~~statements are shown in Note 19 to the financial statements~~markets.

30The Building Supply segment consists of construction weatherization products, such as housewrap, housewrap accessories, namely tape and flashing, synthetic roof underlayment and synthetic roof underlayment accessories, namely self-adhered underlayment, as well as other woven material.

~~Alpha~~The ~~Pro~~Disposable ~~Tech~~Protective Apparel segment consists of a complete line of disposable protective garments (shoecovers, ~~Ltd~~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 (“FDA”) approved facilities, regardless of the market served.

~~Notes~~The toCompany’s ~~Consolidated~~products ~~Financial~~are ~~Statements~~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.”).

~~Consolidated~~2. ~~Balance~~Summary ~~Sheets~~of Significant Accounting Policies

	Previously			(1)
	Reported			Adjustments			Revised
As of December 31, 2022
Shareholders' equity:
Common stock, $.01 par value: 50,000,000 shares authorized; 12,226,306 and 13,115,341 shares outstanding as of December 31, 2022 and December 31, 2021, respectively	$	123,000		$	-		$	123,000
Additional paid in capital		-			17,099,000			17,099,000
Retained earnings		62,124,000			(17,099,000	)		45,025,000
Accumulated other comprehensive loss		(1,489,000	)		-			(1,489,000	)
Total shareholders' equity		60,758,000			-			60,758,000
Total liabilities and shareholders' equity	$	64,803,000		$	-		$	64,803,000

Principles of Consolidation

~~(1)~~The ~~Additional~~consolidated ~~paid~~financial statements of the Company include the accounts of the Company and its wholly-inowned ~~capital~~subsidiaries, Alpha Pro Tech, Inc. and ~~retained~~Alpha ~~earnings~~ProTech Engineered Products, Inc. All significant intercompany accounts and transactions have been ~~changed~~eliminated byin ~~$17,099,000~~consolidation.

~~Consolidated~~Events ~~Statements~~that occurred after December 31, 2024, through the date on which these financial statements were filed with the Securities and Exchange Commission (“SEC”) were considered in the preparation of ~~Shareholder's~~these ~~Equity~~financial statements.

													Accumulated
							Additional						Other
	Common Stock						Paid-in			Retained			Comprehensive
	Shares			Amount			Capital*			Earnings**			Loss			Total
Balance as of December 31, 2021 as revised		13,115,341		$	132,000		$	18,131,000		$	44,357,000		$	(869,000	)	$	61,751,000
Common stock repurchased and retired as revised		(910,700	)		(9,000	)		(1,259,000	)		(2,614,000	)		-			(3,882,000	)
Options exercised		21,665			-			80,000			-			-			80,000
Share-based compensation expense		-			-			147,000			-			-			147,000
Total comprehensive income (loss)		-			-			-			3,282,000			(620,000	)		2,662,000
Balance as of December 31, 2022 as revised		12,226,306		$	123,000		$	17,099,000		$	45,025,000		$	(1,489,000	)	$	60,758,000

Use of Estimates

*ThisThe ~~was~~preparation ~~previously~~of ~~reported~~financial asstatements $0in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect the ~~total~~reported ~~column~~amounts ~~has~~of ~~been~~assets ~~updated~~and toliabilities ~~show~~and the ~~change~~disclosure inof ~~additional~~contingent ~~paid-in~~assets ~~capital~~and ~~from~~liabilities $0at tothe ~~$17,099,000,~~date ~~common~~of ~~stock~~the ~~repurchased~~financial statements and ~~retired~~the ~~has~~reported ~~been~~amounts ~~changed~~of ~~from~~revenues ~~$227,000~~and toexpenses ~~$1,259,000~~for the reporting period. Actual results could differ from these estimates.

**Periods ~~This was previously reported as $62,124,000 and the total column has been updated to show the change in common stock repurchased and retired from $3,646,000 to $ 2,614,000.~~Presented

All amounts have been rounded to the nearest thousand with the exception of the per share data. The ~~correcting~~Company ~~adjustments~~qualified ~~have~~as noa ~~effect~~smaller onreporting ~~prior~~company ~~year’s~~at ~~consolidated~~the measurement date for determining such qualification during 2024. According to the disclosure requirements for smaller reporting companies, the Company has included balance sheets as of the end of the two most recent years and statements of income, comprehensive income, orshareholders’ equity and cash flows for each of the two most recent years.

3.Cash ~~Summary~~and ofCash ~~Significant Accounting Policies~~Equivalents

~~Principles~~The Company considers all highly liquid investments purchased with an original maturity of ~~Consolidation~~three months or less to be cash equivalents. The Company’s cash and cash equivalents primarily consists of cash in bank and money market accounts.

The consolidated financial statements of the Company include the accounts of the Company and its wholly-owned subsidiaries, Alpha Pro Tech, Inc. and Alpha ProTech Engineered Products, Inc. All significant intercompany accounts and transactions have been eliminated in consolidation.Investments

~~Events~~Investments are classified as available-for-sale in accordance with U.S. GAAP. The Company does not have any investments in securities that ~~occurred~~are ~~after~~classified ~~December~~as ~~31,~~held-to-maturity ~~2023,~~or ~~through~~trading. ~~the~~Available-for-sale ~~date~~investments onare ~~which~~carried ~~these~~at ~~financial~~their ~~statements~~fair ~~were~~values ~~filed~~using ~~with~~quoted ~~the~~prices ~~Securities~~in active markets for identical securities, with realized and ~~Exchange~~unrealized ~~Commission~~gains ~~(“SEC”)~~and ~~were~~losses ~~considered~~reported in ~~the~~net ~~preparation~~income. The cost of ~~these~~securities ~~financial~~sold ~~statements~~is based on the specific identification method. Investments that the Company intends to hold for more than one year are classified as long-term investments in the accompanying consolidated balance sheets.

~~Use of Estimates~~31

~~The~~Alpha ~~preparation~~Pro ofTech, ~~financial statements in conformity with U~~Ltd.S. generally accepted accounting principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the reporting period. Actual results could differ from these estimates.

31Notes to Consolidated Financial Statements

~~Alpha~~Accounts ~~Pro Tech, Ltd.~~Receivable

~~Notes~~Accounts receivable are recorded at the invoice amount and do not bear interest. The allowance for credit losses on accounts receivable is the Company’s best estimate of the amount of expected credit losses in the Company’s existing accounts receivable; however, changes in circumstances relating to ~~Consolidated~~accounts ~~Financial~~receivable ~~Statements~~may result in a requirement for additional allowances in the future. The Company pools accounts receivable based on risk characteristics, which include type of customer and age of open receivable balance. The allowance for each credit loss pool is estimated based on historical write-off experience and known conditions, adjusted for management’s reasonable and supportable expectations of future conditions. Account balances are charged against the allowance when management determines that the probability for collection of an account balance is remote. As of December 31, 2024, 2023, and 2022, the Company had accounts receivable totally $4,894,222, $6,545,000 and $6,973,000, respectively. As of December 31, 2024 and 2023, the Company had recorded an allowance for credit losses on accounts receivable of $35,000 for both periods respectively.

~~Periods Presented~~Inventories

~~All~~Inventories ~~amounts~~include ~~have~~freight-in, ~~been~~materials, ~~rounded~~labor toand ~~the~~overhead ~~nearest~~costs ~~thousand~~and ~~with~~are stated at the ~~exception~~lower of ~~the~~cost ~~per~~or ~~share~~net ~~data~~realizable value. ~~The~~Allowances ~~Company~~are ~~qualified~~recorded asfor aslow-moving, ~~smaller~~obsolete ~~reporting~~or ~~company~~unusable atinventories. ~~the~~The ~~measurement~~Company ~~date~~assesses inventories for ~~determining~~estimated ~~such~~obsolescence ~~qualification~~or ~~during~~unmarketable ~~2023.~~products ~~According~~and towrites down the ~~disclosure~~difference ~~requirements~~between ~~for~~the ~~smaller~~cost ~~reporting~~of ~~companies,~~ the ~~Company~~inventories ~~has~~and ~~included~~the ~~balance~~estimated ~~sheets~~net asrealizable ofvalues ~~the~~based ~~end~~upon ofassumptions ~~the~~about ~~two~~future ~~most~~sales ~~recent~~and ~~years~~supplies ~~and~~on-hand. ~~statements~~As of ~~income~~December 31, ~~comprehensive~~2024 ~~income~~and 2023, ~~shareholders’~~the ~~equity~~Company ~~and~~had ~~cash~~recorded ~~flows~~an allowance for ~~each~~excess ofand ~~the~~obsolete ~~two~~inventories ~~most~~of ~~recent~~$416,000 ~~years~~and $292,000, respectively.

~~Cash~~Property and ~~Cash Equivalents~~Equipment

Property and equipment are stated at cost less accumulated depreciation and amortization. Costs to develop internal use software are charged to expense as incurred until the preliminary project stage has been completed and application development begins. The Company ~~considers~~discontinues ~~all~~capitalization ~~highly~~upon ~~liquid~~entering ~~investments~~the ~~purchased~~post-implementation ~~with~~stage anand ~~original~~expenses ~~maturity~~ongoing maintenance and support costs. Property and equipment are depreciated or amortized using the straight-line method over the shorter of ~~three~~the ~~months~~respective useful lives of the assets or ~~less~~the torelated belease ~~cash~~terms ~~equivalents.~~as follows:

Investments

Buildings (in years)	25
Machinery and equipment (in years)	5	-	15
Office furniture and equipment (in years)	2	-	7
Leasehold improvements (in years)	4	-	5
Software (in years)	5

~~Investments~~Expenditures ~~are classified as available-~~for~~-sale~~ inrenewals ~~accordance~~and ~~with~~betterments ~~U.S. GAAP. The Company does not have any investments in securities that~~ are ~~classified as held-to-maturity or trading. Available-for-sale investments are carried at their fair values using quoted prices in active markets for identical securities~~capitalized, ~~with~~whereas ~~realized~~costs ~~and~~of ~~unrealized~~maintenance ~~gains~~ and ~~losses~~repairs ~~reported~~are incharged ~~net income. The cost of securities sold is based on the specific identification method. Investments that the Company intends~~ to ~~hold~~operations ~~for more than one year are classified as long-term investments~~ in the ~~accompanying~~period ~~consolidated balance sheets~~incurred.

~~Accounts~~Goodwill ~~Receivable~~and Intangible Assets

~~Accounts receivable are recorded at the invoice amount and do not bear interest.~~ The ~~allowance for credit losses is the~~ Company’s ~~best estimate of the amount of expected credit losses in the Company’s existing~~ accounts ~~receivable;~~for ~~however,~~goodwill ~~changes~~and indefinite-lived ~~circumstances~~intangible ~~relating~~assets ~~to accounts receivable may result~~ in aaccordance ~~requirement~~with ~~for~~Financial ~~additional~~Accounting ~~allowances~~Standards inBoard ~~the~~(“FASB”) ~~future.~~Accounting ~~The~~Standards ~~Company~~Codification ~~pools~~(“ASC”) ~~accounts receivable based on risk characteristics~~350, ~~which~~Intangibles ~~include~~– ~~type~~Goodwill ~~of customer~~ and ~~age of open receivable balance~~Other. ~~The~~Goodwill ~~allowance~~is ~~for~~not ~~each~~amortized, ~~credit~~but ~~losses~~rather ~~pool~~ is ~~estimated~~tested ~~based~~annually ~~on historical write-off experience and known conditions, adjusted~~ for ~~management’s~~impairment. ~~reasonable~~Intangible ~~and~~assets ~~supportable~~with ~~expectations~~finite oflives ~~future conditions. Account balances~~ are ~~charged~~amortized ~~against~~over ~~the~~their ~~allowance~~useful ~~when~~lives ~~management~~(see ~~determines~~Note ~~that the probability for collection of an account balance is remote~~5). AsThe ofCompany’s ~~December~~patents ~~31,~~and ~~2023,~~trademarks ~~the~~are ~~Company had~~ recorded anat ~~allowance~~cost ~~for~~and ~~credit~~are ~~losses~~amortized onusing ~~accounts receivable of $35,000. As of December 31, 2022,~~ the ~~Company~~straight-line ~~had~~method ~~recorded~~over antheir ~~allowance~~estimated ~~for~~useful ~~doubtful~~lives ~~accounts on accounts receivable~~ of ~~$45,000~~5-17 years.

~~Inventories~~Fair Value of Financial Instruments

Inventories include freight-in, materials, labor and overhead costs and are stated at the lower of cost or net realizable value. Allowances are recorded for slow-moving, obsolete or unusable inventories. The ~~Company assesses inventories for~~ estimated ~~obsolescence~~fair orvalues ~~unmarketable products and writes down the difference between the cost~~ of ~~the~~financial ~~inventories~~instruments ~~and~~are ~~the~~determined ~~estimated net realizable values~~ based ~~upon~~on ~~assumptions~~relevant ~~about~~market ~~future~~information ~~sales~~ and ~~supplies~~cannot ~~on-hand.~~be Asdetermined ofwith ~~December~~precision. ~~31,~~The ~~2023 and 2022, the~~ Company’s ~~had~~financial ~~recorded~~instruments anconsist ~~allowance~~primarily ~~for excess and obsolete inventories~~ of ~~$292,000~~cash and ~~$152,000,~~cash ~~respectively~~equivalents.

~~Property~~Impairment ~~and~~of ~~Equipment~~Long-Lived Assets

~~Property~~The ~~and~~Company ~~equipment~~reviews ~~are~~long-lived ~~stated~~assets atfor ~~cost~~impairment ~~less~~whenever ~~accumulated~~events ~~depreciation~~or ~~and~~changes ~~amortization~~in its business circumstances indicate that the carrying amounts of the assets may not be fully recoverable. ~~Costs~~If toit ~~develop~~is ~~internal~~determined ~~use~~that ~~software~~the undiscounted future net cash flows are ~~charged~~not sufficient to ~~expense~~recover asthe ~~incurred~~carrying ~~until~~values of the ~~preliminary~~assets, ~~project~~an ~~stage~~impairment ~~has~~loss ~~been~~is ~~completed~~recognized ~~and~~for ~~application~~the ~~development~~excess ~~begins.~~of ~~The~~the ~~Company~~carrying ~~discontinues~~values ~~capitalization~~over ~~upon~~the ~~entering~~fair ~~the~~values ~~post-implementation~~of ~~stage~~the ~~and~~assets. ~~expenses~~The ~~ongoing~~Company ~~maintenance~~believes ~~and~~that ~~support~~the ~~costs.~~future ~~Property~~undiscounted ~~and~~net ~~equipment~~cash ~~are~~flows ~~depreciated~~to orbe ~~amortized~~received ~~using~~from ~~the~~its ~~straight~~long-~~line~~lived ~~method~~assets ~~over~~exceed the ~~shorter~~assets’ ofcarrying values and, accordingly, the ~~respective~~Company ~~useful~~has ~~lives~~not ofrecognized ~~the~~any ~~assets~~impairment orlosses for the ~~related~~years ~~lease~~ended ~~terms~~December as31, ~~follows:~~2024 and 2023.

Buildings (in years)	25
Machinery and equipment (in years)	5	-	15
Office furniture and equipment (in years)	2	-	7
Leasehold improvements (in years)	4	-	5
Software (in years)	5

~~Expenditures~~Alpha ~~for~~Pro ~~renewals and betterments are capitalized~~Tech, ~~whereas costs of maintenance and repairs are charged to operations in the period incurred~~Ltd.

32Notes to Consolidated Financial Statements

~~Alpha~~Revenue ~~Pro Tech, Ltd.~~Recognition

~~Notes~~Net sales includes 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 ~~Consolidated~~customers. ~~Financial~~Revenue ~~Statements~~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 labelling. The Company has determined as of December 31, 2024, 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 14 for information on revenue disaggregated by type and by geographic region.

~~Goodwill~~Shipping and ~~Intangible~~Handling ~~Assets~~Costs

The ~~Company~~costs ~~accounts~~of ~~for~~shipping ~~goodwill~~products ~~and~~to ~~definite-lived~~distributors intangible assets in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 350, Intangibles – Goodwill and Other. Goodwill is not amortized, but rather is tested annually for impairment. Intangible assets with finite lives are ~~amortized over their useful lives (see Note 6). The Company’s patents and trademarks are~~ recorded atin cost ~~and are amortized using the straight-line method over their estimated useful lives~~ of ~~5-17~~goods ~~years~~sold.

~~Fair~~Stock-Based ~~Value of Financial Instruments~~Compensation

The ~~estimated~~Company maintains the 2020 Incentive Plan under which the Company may grant incentive stock options, non-qualified stock options, restricted stock, restricted stock units and other equity-based compensation to employees and non-employee directors. Stock options have been granted with exercise prices at or above the fair ~~values~~market value of ~~financial~~the ~~instruments~~underlying ~~are~~shares ~~determined~~of ~~based~~common stock on ~~relevant~~the ~~market~~date ~~information~~of grant. Options vest and ~~cannot~~expire beaccording ~~determined~~to ~~with~~terms ~~precision~~established at the grant date. ~~The~~Restricted ~~Company’s~~stock ~~financial~~and ~~instruments~~restricted ~~consist~~stock ~~primarily~~units ofhave ~~cash~~been granted, ~~cash~~and ~~equivalents~~the ~~and~~fair ~~marketable~~market ~~securities~~value of these awards equals the closing stock price on the date of grant.

~~Impairment~~The Company accounts for share-based awards in accordance with ASC 718, Stock Compensation. ASC 718 requires companies to record compensation expense for the value of ~~Long~~all outstanding and unvested share-~~Lived~~based ~~Assets~~awards, including employee stock options.

~~The~~For ~~Company~~the ~~reviews~~years ~~long-lived~~ended ~~assets~~December ~~for~~31, ~~impairment~~2024 ~~whenever~~and ~~events~~2023, orthere ~~changes~~were in0 ~~its~~and ~~business~~46,400 ~~circumstances~~stock ~~indicate~~options ~~that~~granted, ~~the~~respectively, ~~carrying~~under ~~amounts of~~ the ~~assets~~Company’s ~~may~~stock ~~not~~option ~~be fully recoverable~~plan. IfThe itCompany isrecognized ~~determined~~$59,000 ~~that~~and ~~the~~$25,000 ~~undiscounted~~in ~~future~~stock-based ~~net~~compensation ~~cash~~expense ~~flows~~for ~~are not sufficient to recover~~ the ~~carrying~~years ~~values~~ended ofDecember ~~the assets~~31, an2024 ~~impairment~~and ~~loss~~2023, isrespectively, ~~recognized~~related ~~for~~to ~~the~~outstanding ~~excess~~options. ofFor the ~~carrying~~years ~~values~~ended ~~over~~December ~~the~~31, ~~fair~~2024 ~~values~~and of2023, ~~the~~29,675 ~~assets.~~and ~~The~~227,000 ~~Company~~restricted ~~believes~~stock ~~that~~equity ~~the~~awards, ~~future~~respectively, ~~undiscounted~~were ~~net~~granted ~~cash~~under ~~flows to be received from its long-lived assets exceed~~ the ~~assets’~~2020 ~~carrying~~Incentive ~~values~~Plan and, ~~accordingly,~~ the ~~Company~~compensation ~~has~~expense ~~not~~associated ~~recognized~~with ~~any~~these ~~impairment~~awards ~~losses~~was ~~for~~$404,000 ~~the~~and ~~years~~$145,000 ~~ended~~in ~~December~~2024 ~~31,~~and 2023, ~~and 2022~~respectively.

~~Revenue~~Income ~~Recognition~~Taxes

~~Net~~The ~~sales~~Company ~~includes~~accounts ~~revenue~~for ~~from~~income ~~products~~taxes ~~and~~using ~~shipping~~the ~~and~~asset ~~handling charges, net of estimates for product returns~~ and ~~any~~liability ~~related sales incentives~~method. ~~Our~~A ~~customer~~valuation ~~contracts~~allowance ~~have a single performance obligation: transfer control of products to customers. Revenue~~ is ~~measured~~recorded ~~as the amount of consideration that we expect~~ to ~~receive~~reduce ~~in exchange for transferring control of products. All revenue is recognized when we satisfy our performance obligations under~~ the ~~applicable~~carrying ~~contract.~~amounts ~~We recognize revenue in connection with transferring control~~ of ~~the~~deferred ~~promised~~income ~~products~~tax toassets ~~the~~unless ~~customer,~~it ~~with revenue being recognized at the point in time when the customer obtains control of the products, which~~ is ~~generally~~more ~~when~~likely ~~title~~than 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 athat ~~promised~~such ~~good~~assets orwill ~~service.~~be ~~Shipping and handling charges billed to customers are included in revenue~~realized. ~~Shipping~~The ~~and handling costs, associated with the distribution of the~~ Company’s ~~product~~policy ~~to the customers, are recorded in cost of goods sold and are recognized when control of the product~~ is ~~transferred~~ to ~~the~~record ~~customer,~~any ~~which~~interest isand ~~generally~~penalties ~~when~~assessed ~~title~~by ~~passes to~~ the ~~customer~~Internal ~~upon~~Revenue ~~delivery~~Service toas a ~~third-party~~component 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.~~provision ~~Sales taxes and value added taxes in foreign and domestic jurisdictions that are collected from customers and remitted to governmental authorities are accounted~~ for onincome ~~a net basis and, therefore, are excluded from net sales~~taxes. The Company ~~manufactures~~provides ~~certain~~allowances ~~private label goods~~ for ~~customers~~uncertain ~~and~~income ~~has~~tax ~~determined~~positions ~~that~~when ~~control does not pass to the customer at the time of manufacture, based upon the nature of the private labelling. The Company has determined as of December 31, 2023, that~~ it ~~had~~is nomore ~~material~~likely ~~contract~~than ~~assets,~~not ~~and concluded~~ that ~~its contract liabilities (primarily rebates) had~~ the ~~right~~position ofwill ~~offset~~not ~~against~~be ~~customer~~sustained ~~receivables.~~upon ~~See~~examination ~~Note 15 of these Notes to Consolidated Financial Statements for information on revenue disaggregated~~ by ~~type~~the ~~and~~tax ~~by geographic region~~authority.

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

~~The costs of shipping products to distributors are recorded in cost of goods sold.~~33

~~Stock-Based~~Alpha ~~Compensation~~Pro Tech, Ltd.

~~The~~Notes Company maintains the 2020 Incentive Plan under which the Company may grant incentive stock options, non-qualified stock options, restricted stock, restricted stock units and other equity-based compensation to ~~employees~~Consolidated ~~and~~Financial non-employee directors. Stock options have been granted with exercise prices at or above the fair market value of the underlying shares of common stock on the date of grant. Options vest and expire according to terms established at the grant date. Restricted stock and restricted stock units have been granted, and the fair market value of these awards equals the closing stock price on the date of grant.Statements

33Earnings Per Common Share

~~Alpha~~The ~~Pro~~following ~~Tech~~table provides a reconciliation of both net income and the number of shares used in the computation of “basic” earnings per common share (“EPS”), ~~Ltd~~which utilizes the weighted average number of common shares outstanding without regard to potential common shares, and “diluted” EPS, which includes all potential common shares which are dilutive for the years ended December 31, 2024 and 2023.

Notes to Consolidated Financial Statements

	Years Ended December 31,
	2024		2023

Net income (numerator)	$	3,929,000	$	4,189,000

Shares (denominator):
Basic weighted average common shares outstanding		11,137,873		11,856,356
Add: Dilutive effect of common stock options		97,173		-

Diluted weighted average common shares outstanding		11,235,046		11,856,356

Earnings per common share:
Basic	$	0.35	$	0.35
Diluted	$	0.35	$	0.35

~~The~~Translation ~~Company accounts for share-based awards in accordance with ASC 718, Stock Compensation. ASC 718 requires companies to record compensation expense for the value~~ of ~~all~~Foreign ~~outstanding and unvested share-based awards, including employee stock options.~~Currencies

~~For~~Transactions ~~the~~in ~~years~~foreign ~~ended~~currencies ~~December~~are ~~31,~~translated ~~2023~~into ~~and~~U.S. ~~2022,~~dollars ~~there~~at ~~were~~the ~~46,400~~exchange ~~and~~rate ~~19,600~~prevailing ~~stock~~at ~~options granted, respectively, under~~ the ~~Company’s~~transaction ~~stock option plan~~date. ~~The~~Monetary ~~Company~~assets ~~recognized $25,000~~ and ~~$43,000~~liabilities in ~~stock-based~~foreign ~~compensation~~currencies ~~expense~~at ~~for~~each ~~the~~period ~~years~~end ~~ended~~are ~~December~~translated ~~31,~~at ~~2023~~the ~~and~~exchange ~~2022,~~rate ~~respectively,~~in ~~related~~effect toat ~~outstanding~~that ~~options~~date. ~~For~~Transaction ~~the~~gains ~~years~~or ~~ended~~losses ~~December~~on ~~31,~~foreign ~~2023~~currencies ~~and~~are ~~2022,~~reflected ~~227,000~~in ~~and 21~~selling,~~772~~ ~~restricted~~general ~~stock~~and ~~equity~~administrative ~~awards,~~expenses ~~respectively,~~and were ~~granted~~not ~~under~~material ~~the~~for ~~2020 Incentive Plan and~~ the ~~compensation~~years ~~expense~~ended ~~associated~~December ~~with these awards was $145~~31,~~000~~ ~~and~~2024 ~~$104,000 in 2023~~ and ~~2022, respectively~~2023.

~~Income~~The ~~Taxes~~Company does not have a material foreign currency exposure in regards to purchase agreements with companies in Asia and Mexico as the agreements are in U.S. dollars. In addition, all sales transactions are in U.S. dollars. The Company has a foreign currency exposure with respect to its Canadian branch office. The foreign currency exposure is not material due to the fact that the Company does not manufacture products in Canada. The exposure primarily relates to payroll expenses in the Company’s administrative branch office in Canada. The Company also has potentially material foreign currency exposure in regards to its equity in its unconsolidated affiliate in India. The Company’s unconsolidated affiliate operations are in India; therefore, U.S. GAAP requires the Company to adjust the value of its investment for changes in foreign currency exchange rates. The Company determines the functional currency of its joint venture based upon the primary currency used to generate and expend cash, which is the currency of the country in which the joint venture is located. For joint ventures with functional currencies other than the U.S. dollar, the investment in that joint venture is translated into U.S. dollars using period-end exchange rates. The resulting foreign currency translation losses are deferred as accumulated other comprehensive loss (“AOCL”) and reclassified to earnings only upon sale or liquidation of that business. The foreign currency translations reduced the balance of equity in unconsolidated affiliated by $1,499,000 and $1,437,000 as of December 31, 2024 and 2023, respectively, and the loss was recorded in AOCL.

~~The~~Research ~~Company accounts for income taxes using the asset~~ and ~~liability~~Development 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.Costs

~~Alpha~~Research ~~Pro~~and ~~Tech,~~development ~~Ltd.~~costs ~~and~~are ~~its~~expensed ~~subsidiaries~~as ~~file~~incurred ~~income~~and ~~tax~~are ~~returns~~included in ~~the~~selling, Ugeneral and administrative expenses.S. ~~federal~~Such ~~jurisdiction,~~costs ~~and~~were innot ~~various~~material ~~state~~for ~~and~~the ~~foreign~~years ~~jurisdictions~~ended December 31, 2024 and 2023.

~~Earnings~~Advertising ~~Per Common Share~~Costs

The ~~following~~Company ~~table~~expenses ~~provides~~advertising aand ~~reconciliation~~promotional ofcosts ~~both~~as ~~net~~incurred. ~~income~~These ~~and~~costs ~~the~~are ~~number~~included ~~of shares used~~ in ~~the computation of “basic” earnings per common share (“EPS”)~~selling, ~~which~~general ~~utilizes~~and ~~the~~administrative ~~weighted~~expenses ~~average~~and ~~number~~were ~~of common shares outstanding without regard to potential common shares~~$65,000 and ~~“diluted” EPS~~$60,000 ~~which includes all potential common shares which are dilutive~~ for the years ended December 31, ~~2023~~2024 and ~~2022~~2023, respectively.

	Years Ended December 31,
	2023		2022
Net income (numerator)	$	4,189,000	$	3,282,000
Shares (denominator):
Basic weighted average common shares outstanding		11,856,356		12,713,533
Add: Dilutive effect of common stock options		-		67,471
Diluted weighted average common shares outstanding		11,856,356		12,781,004
Earnings per common share:
Basic	$	0.35	$	0.26
Diluted	$	0.35	$	0.26

~~Translation~~Alpha ofPro ~~Foreign~~Tech, ~~Currencies~~Ltd.

~~Transactions~~Notes into ~~foreign~~Consolidated ~~currencies~~Financial are translated into U.S. dollars at the exchange rate prevailing at the transaction date. Monetary assets and liabilities in foreign currencies at each period end are translated at the exchange rate in effect at that date. Transaction gains or losses on foreign currencies are reflected in selling, general and administrative expenses and were not material for the years ended December 31, 2023 and 2022.Statements

34Loss Contingencies

~~Alpha~~The ~~Pro~~outcomes ~~Tech~~of legal proceedings and claims brought against the Company are subject to uncertainty. An estimated loss from a loss contingency such as a legal proceeding or claim is accrued if it is probable that an asset has been impaired or a liability has been incurred and the amount of the loss can be reasonably estimated. In determining whether a loss should be accrued, ~~Ltd~~we evaluate, among other factors, the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of loss.

~~Notes~~Fair toValue ~~Consolidated Financial Statements~~Measurements

~~The~~ASC ~~Company~~820, ~~does~~Fair ~~not~~Value ~~have~~Measurements aand ~~material~~Disclosures, ~~foreign~~establishes ~~currency~~a ~~exposure~~framework infor ~~regards~~measuring tofair ~~purchase~~value ~~agreements with companies~~ in ~~Asia~~accordance ~~and~~with ~~Mexico as the agreements are in~~ U.S. ~~dollars. In addition~~GAAP, ~~all~~clarifies ~~sales~~the ~~transactions~~definition ~~are~~of infair ~~U.S.~~value ~~dollars.~~within ~~The Company has a foreign currency exposure with respect to its Canadian branch office. The foreign currency exposure is not material due to the fact~~ that ~~the~~framework ~~Company~~and ~~does~~expands ~~not~~disclosures ~~manufacture~~about ~~products in Canada. The exposure primarily relates to payroll expenses in~~ the ~~Company’s~~use ~~administrative~~of ~~branch~~fair ~~office~~value ~~in Canada~~measurements. ~~The~~On ~~Company~~a ~~also~~quarterly ~~has potentially material foreign currency exposure in regards to its equity in its unconsolidated affiliate in India. The Company’s unconsolidated affiliate operations are in India; therefore~~basis, ~~U.S. GAAP requires~~ the Company tomeasures ~~adjust~~at ~~the~~fair value ofcertain ~~its~~financial ~~investment~~assets ~~for~~using ~~changes~~a inhierarchy ~~foreign currency exchange rates. The Company determines the functional currency~~ of ~~its~~valuation ~~joint~~techniques ~~venture~~ based ~~upon~~on whether the ~~primary~~inputs ~~currency used~~ to ~~generate~~those ~~and~~valuation ~~expend~~techniques ~~cash,~~are ~~which~~observable isor ~~the currency of the country in which the joint venture is located~~unobservable. ~~For~~Observable ~~joint~~inputs ~~ventures~~reflect ~~with~~market ~~functional~~data ~~currencies~~obtained ~~other~~from ~~than~~independent ~~the U.S. dollar~~sources, ~~the~~while ~~investment~~unobservable ininputs ~~that~~reflect ~~joint~~the ~~venture~~Company’s isown ~~translated into U~~assumptions.S. ~~dollars using period-end exchange rates.~~ The ~~resulting~~fair ~~foreign~~value ~~currency~~hierarchy ~~translation~~prioritizes ~~losses are deferred as accumulated other comprehensive loss (“AOCL”) and reclassified to earnings only upon sale or liquidation of that business. The foreign currency translations reduced~~ the ~~balance~~inputs ofinto ~~equity~~three inbroad ~~unconsolidated affiliated by $1,437,000 and $1,489,000 as of December 31, 2023 and 2022, respectively, and the loss was recorded in AOCL~~levels.

~~Research~~This hierarchy requires the Company to minimize the use of unobservable inputs and ~~Development~~to ~~Costs~~use observable market data, if available, when determining fair value. There were no fair values of the Company’s financial assets as of December 31, 2024 and 2023.

~~Research~~New ~~and~~Accounting ~~development costs are expensed as incurred and are included in selling, general and administrative expenses. Such costs were not material for the years ended December 31, 2023 and 2022.~~Standards

~~Advertising~~In ~~Costs~~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. The Company is evaluating the impact the adoption of this guidance will have on its consolidated financial statements.

~~The~~Management ~~Company~~periodically ~~expenses~~reviews ~~advertising~~new ~~and~~accounting ~~promotional~~standards ~~costs~~that asare ~~incurred~~issued. ~~These~~Management ~~costs~~has ~~are~~not ~~included~~identified inany ~~selling,~~other ~~general~~new ~~and~~standards ~~administrative~~that ~~expenses~~it ~~and~~believes ~~were~~merit ~~$60,000~~further ~~and~~discussion ~~$102,000~~at ~~for~~this ~~the years ended December 31, 2023 and 2022, respectively~~time.

~~Loss~~3. ~~Contingencies~~Inventories

~~The~~Inventories ~~outcomes~~consisted of ~~legal proceedings and claims brought against~~ the Company are subject to uncertainty. An estimated loss from a loss contingency such as a legal proceeding or claim is accrued if it is probable that an asset has been impaired or a liability has been incurred and the amount of the loss can be reasonably estimated. In determining whether a loss should be accrued, we evaluate, among other factors, the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of loss.following:

Fair Value Measurements

	December 31,
	2024		2023

Raw materials	$	10,948,000	$	10,470,000
Work in process		2,934,000		2,236,000
Finished goods		8,851,000		7,425,000
Total inventory	$	22,733,000	$	20,131,000

ASC 820, Fair Value Measurements and Disclosures, establishes a framework for measuring fair value in accordance with U.S. GAAP, clarifies the definition of fair value within that framework and expands disclosures about the use of fair value measurements. On a quarterly basis, the Company measures at fair value certain financial assets using a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s own assumptions. The fair value hierarchy prioritizes the inputs into three broad levels.35

~~This~~Alpha ~~hierarchy~~Pro ~~requires the Company to minimize the use of unobservable inputs and to use observable market data~~Tech, ~~if available, when determining fair value~~Ltd. ~~There were no fair values of the Company’s financial assets as of December 31, 2023 and 2022.~~

~~New~~Notes ~~Accounting~~to ~~Standards~~Consolidated Financial Statements

~~In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures~~4. ~~These~~Property ~~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 becomes effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is evaluating the impact the adoption of this guidance will have on its consolidated financial statements.Equipment

InProperty November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This ASU improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant expenses, and isequipment ~~effective~~consisted ~~for fiscal years beginning after December 15, 2023, on a retrospective basis. The Company is currently evaluating the impact~~ of ~~this standard on~~ the ~~consolidated financial statements.~~following:

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which replaces the existing incurred loss impairment model with an expected credit loss model and requires a financial asset measured at amortized cost to be presented at the net amount expected to be collected. Public business entities classified as smaller reporting companies were required to apply the provision of ASU 2016-13 with annual reporting periods after December 15, 2022. The Company adopted Topic 326 effective January 1, 2023, which did not have a material impact on the Company’s consolidated financial statements.

	December 31,
	2024			2023

Buildings	$	493,000		$	493,000
Machinery and equipment		16,732,000			15,461,000
Office furniture and equipment		2,927,000			2,541,000
Leasehold improvements		690,000			658,000
Software		-			3,000

		20,842,000			19,156,000
Less accumulated depreciation and amortization		(12,322,000	)		(13,569,000	)

Total net property and equipment	$	8,520,000		$	5,587,000

~~Management~~Depreciation ~~periodically~~and ~~reviews~~amortization ~~new~~expense ~~accounting~~for ~~standards~~property ~~that~~and ~~are~~equipment ~~issued.~~was ~~Management~~$873,000 ~~has~~and ~~not~~$925,000 ~~identified~~for ~~any~~the ~~other~~years ~~new~~ended ~~standards~~December ~~that~~31, it2024 ~~believes~~and ~~merit~~2023, ~~further discussion at this time~~respectively.

355. Goodwill and Intangible Assets

~~Alpha~~Management ~~Pro~~evaluates ~~Tech~~goodwill for impairment on an annual basis (in the fourth quarter), ~~Ltd~~and no impairment charge was identified for the years presented.

~~Notes~~Definite-lived intangible assets, consisting of patents and trademarks, are amortized over their useful lives. Amortization expense for intangible assets was $0 and $1,000 for the years ended December 31, 2024 and 2023, respectively. There is no estimated future amortization expense related to ~~Consolidated~~definite-lived ~~Financial~~intangible ~~Statements~~assets as of December 31, 2024.

46. ~~Inventories~~Equity Investments in Unconsolidated Affiliate

~~Inventories~~In ~~consisted~~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 ~~following:~~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 41.66% owned by Alpha ProTech Engineered Products, Inc. and 58.34% owned by Maple Industries and associates.

	December 31,
	2023		2022
Raw materials	$	10,470,000	$	13,018,000
Work in process		2,236,000		2,225,000
Finished goods		7,425,000		9,154,000
Total inventory	$	20,131,000	$	24,397,000

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.

5The capital from the initial funding and a bank loan, which loan 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. ~~Property~~Harmony currently has four facilities in India (three owned and ~~Equipment~~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.

~~Property~~In ~~and~~accordance ~~equipment~~with ~~consisted~~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 ~~following:~~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.

	December 31,
	2023			2022
Buildings	$	493,000		$	493,000
Machinery and equipment		15,461,000			14,948,000
Office furniture and equipment		2,541,000			2,393,000
Leasehold improvements		658,000			606,000
Software		3,000			3,000
		19,156,000			18,443,000
Less accumulated depreciation and amortization		(13,569,000	)		(12,701,000	)
Total net property and equipment	$	5,587,000		$	5,742,000

~~Depreciation~~Alpha ~~and~~Pro ~~amortization expense for property and equipment was $925~~Tech,~~000~~ ~~and $814,000 for the years ended December 31, 2023 and 2022, respectively~~Ltd.

6.Notes ~~Goodwill~~to ~~and~~Consolidated ~~Intangible~~Financial ~~Assets~~Statements

~~Management~~The ~~evaluates~~Company ~~goodwill~~records ~~for~~its ~~impairment~~investment onin anHarmony ~~annual~~as ~~basis~~“equity (investment in unconsolidated affiliate” in the ~~fourth~~ ~~quarter),~~accompanying ~~and~~consolidated nobalance 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. ~~charge~~Management has determined that no impairment was ~~identified~~required as of December 31, 2024, or December 31, 2023. Under the equity method, since the Company’s reporting currency is different from that 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 ~~years~~investment ~~presented~~accordingly, and accrue the adjustment as a component of AOCL.

36For the years ended December 31, 2024 and 2023, the Company purchased $22,080,000 and $18,822,000 of inventories, respectively, from Harmony. For the years ended December 31, 2024 and 2023, the Company recorded equity in income of unconsolidated affiliate of $629,000 and $477,000, respectively. For the years ended December 31, 2024 and 2023, the Company sold $839,000 and $266,000 of inventories, respectively, to Harmony.

~~Alpha~~As ~~Pro~~of ~~Tech~~December 31, ~~Ltd~~2024, the Company’s investment in Harmony was $5,814,000, which consisted of its original $1,450,000 investment and cumulative equity in income of unconsolidated affiliate of $6,882,000, less $942,000 in repayments of an advance, payments of $77,000 in dividends and AOCL on foreign currency translations of $1,499,000.

~~Notes~~7. toAccrued ~~Consolidated Financial Statements~~Liabilities

~~Definite-lived~~Accrued ~~intangible~~liabilities ~~assets, consisting of patents and trademarks, are amortized over their useful lives. Intangible assets~~ consisted of the following:

	December 31, 2023									December 31, 2022
	December 31,
	Weighted Average Amortization Period (Years)		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Weighted Average Amortization Period (Years)		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
	2024		2023
Patents and Trademarks		0.0	$	474,000	$	(474,000	)	$	0		1.0	$	474,000	$	(473,000	)	$	1,000
Payroll expenses and tax payable	$	221,000	$	157,000
Commission and bonuses payable and general accrued liabilities		726,000		946,000
Total accrued liabilities	$	947,000	$	1,103,000

~~Amortization~~Contract ~~expense~~liabilities ~~for~~were ~~intangible assets was~~ $13,224,000 and $23,129,000 ~~for~~as ~~the~~of ~~years ended~~ December 31, ~~2023~~2024 and ~~2022~~2023, respectively., which are netted against the related accounts receivable due to the legal right of offset.

~~There~~8. isShareholders’ ~~no estimated future amortization expense related to definite-lived intangible assets for the year ending December 31, 2024.~~Equity

7.Repurchase ~~Equity Investments in Unconsolidated Affiliate~~Program

InDuring ~~2005,~~the ~~Alpha~~year ~~ProTech~~ended ~~Engineered~~December ~~Products~~31, ~~Inc.~~2024, (athe ~~subsidiary~~Company ofrepurchased ~~Alpha~~and ~~Pro~~retired ~~Tech~~831,000 ~~Ltd.)~~shares ~~entered~~of ~~into~~its acommon ~~joint~~stock ~~venture~~for ~~with~~$4,452,000. aDuring ~~manufacturer~~the inyear ~~India,~~ended ~~Maple~~December ~~Industries~~31, ~~and associates~~2023, ~~for~~ the ~~production~~Company ofrepurchased ~~building~~and ~~products.~~retired ~~Under~~951,010 ~~the~~shares ~~terms~~ of ~~the~~its ~~joint~~common ~~venture~~stock ~~agreement~~for $4,002,000. aAs ~~private~~of ~~company~~December 31, ~~Harmony~~2024, ~~Plastics~~the ~~Private~~Company ~~Limited~~had ~~(“Harmony”)~~$2,742,000 ~~was~~available ~~created~~to ~~with~~repurchase ~~ownership~~common ~~interests~~shares ofunder 41the repurchase program.~~66%~~ ~~owned~~The byexcess ~~Alpha~~of ~~ProTech~~repurchase ~~Engineered~~price ~~Products,~~over ~~Inc.~~par ~~and~~value ~~58.34%~~is ~~owned~~allocated bybetween ~~Maple~~additional ~~Industries~~paid-in capital and ~~associates~~retained earnings.

~~This~~Option 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.Activity

The ~~capital~~2004 ~~from~~Stock Option Plan (the ~~initial~~“2004 ~~funding~~Plan”) ~~and~~is aan ~~bank~~equity ~~loan,~~compensation ~~which~~plan ~~loan~~that isprovided ~~guaranteed~~for ~~exclusively~~grants of stock options to eligible individuals. The 2004 Plan was intended to recognize the contributions made to the Company by key employees of the ~~individual~~Company, ~~shareholders~~provide key employees with additional incentive to devote themselves to the future success of ~~Maple~~the ~~Industries~~Company and ~~associates~~improve ~~and~~the ~~collateralized~~ability byof the ~~assets~~Company ofto ~~Harmony~~attract, ~~were~~retain ~~utilized~~and motivate individuals. The 2004 Plan also is intended as an incentive to ~~purchase~~certain members of the ~~original~~Board ~~manufacturing~~of ~~facility~~Directors inof ~~India.~~the ~~Harmony~~Company ~~currently~~to ~~has~~continue ~~four~~to ~~facilities~~serve inon ~~India~~the ~~(three~~Board ~~owned~~of Directors and ~~one~~to ~~rented),~~devote ~~consisting~~themselves ~~of:~~to ~~(1)~~the afuture ~~139,000~~success ~~square~~of ~~foot~~the ~~building~~Company. ~~for~~The ~~manufacturing~~2004 ~~building~~Plan ~~products;~~provided ~~(2)~~for a ~~121~~total of 5,000,000 ~~square~~common ~~foot~~shares ~~building~~eligible for ~~manufacturing~~issuance. ~~coated~~Under ~~material~~the ~~and~~2004 ~~sewing~~Plan, ~~proprietary~~approximately ~~disposable~~5,009,750 ~~protective~~options ~~apparel;~~had ~~(3)~~been agranted ~~23,000~~as ~~square~~of ~~foot~~December ~~facility~~31, ~~for~~2020. ~~sewing~~Under ~~proprietary~~the ~~disposable~~2004 ~~protective~~Plan, ~~apparel;~~option ~~and~~grants ~~(4)~~have a ~~159~~three-year vesting period and,~~000~~ ~~square~~since ~~foot~~2005, ~~facility~~expire ~~(rented)~~no ~~for~~later ~~manufacturing~~than ~~Building~~the ~~Supply~~fifth ~~segment~~anniversary ~~products~~from the date of grant. ~~All~~The ~~additions~~exercise ~~have~~price ~~been~~of ~~financed~~the byoptions ~~Harmony~~was ~~with~~determined nobased ~~guarantees~~on ~~from~~the fair market value of the ~~Company~~stock on the date of grant.

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.37

~~The~~Alpha ~~Company~~Pro 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 December 31Tech, ~~2023, or December 31, 2022~~Ltd. 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 AOCL.

~~For~~Notes ~~the~~to ~~years~~Consolidated ~~ended~~Financial December 31, 2023 and 2022, the Company purchased $18,822,000 and $22,877,000 of inventories, respectively, from Harmony. For the years ended December 31, 2023 and 2022, the Company recorded equity in income of unconsolidated affiliate of $477,000 and $87,000, respectively. For the years ended December 31, 2023 and 2022, the Company sold $266,000 and $570,000 of inventories, respectively, to Harmony.Statements

37At 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, plus the number of shares underlying any award granted under the 2004 Option Plan that expires, terminates or is cancelled or forfeited under the terms of the 2004 Option Plan. As a result of the approval of the 2020 Incentive Plan, no future equity awards will be made pursuant to the 2004 Option Plan. Although no new awards may be granted under the 2004 Option Plan, all previously granted awards under the 2004 Option Plan will continue to be governed by the terms of the 2004 Option Plan.

~~Alpha~~The ~~Pro~~following ~~Tech~~table summarizes restricted stock awards activity for the years ended December 31, ~~Ltd.~~2024 and 2023:

Notes to Consolidated Financial Statements

				Weighted-Average
				Grant Date Price
	Shares			Restricted stock awards

Outstanding, December 31, 2022		18,372		$	4.00
Granted to employees and directors		227,000			4.23
Vested		(10,200	)		3.99
Outstanding, December 31, 2023		235,172			4.21
Granted to employees and directors		29,675			5.56
Vested		(8,172	)		4.02
Outstanding December 31, 2024		256,675			4.38

AsDuring ofthe years ended December 31, 2024, and 2023, 29,675 ~~the~~and ~~Company’s~~227,000 ~~investment~~restricted instock ~~Harmony~~awards ~~was~~were $5granted under the 2020 Incentive Plan,~~247,000,~~ ~~which~~respectively. ~~consisted~~The ofCompany ~~its~~recognized ~~original~~$404,000 and $1145,~~450,~~000 ~~investment~~in ~~and~~compensation ~~cumulative~~expense ~~equity~~associated inwith ~~income~~outstanding ofrestricted ~~unconsolidated~~stock ~~affiliate~~awards offor $6the years ended December 31,~~253,000,~~ ~~less~~2024 ~~$942~~and 2023,~~000~~ inrespectively. ~~repayments~~As of anDecember ~~advance~~31, ~~payments~~2024, of $77639,000 inof ~~dividends~~total ~~and~~unrecognized ~~AOCL~~compensation oncost ~~foreign~~related ~~currency~~to ~~translations~~the restricted stock grants was expected to be recognized over a weighted-average remainder period of $1~~,437,000~~.74 years.

8.The ~~Accrued~~following ~~Liabilities~~table summarizes option activity for the years ended December 31, 2024 and 2023:

Accrued liabilities consisted of the following:

				Weighted
				Average
				Exercise Price
	Shares			Per Option

Options outstanding, December 31, 2022		410,615		$	3.50
Granted to employees and directors		46,400			4.23
Exercised		(140,916	)		3.29
Canceled/expired/forfeited		(23,333	)		3.53
Options outstanding, December 31, 2023		292,766			3.71
Exercised		(231,666	)		3.59
Options outstanding, December 31, 2024		61,100			4.17
Options exercisable, December 31, 2024		25,264			4.14

	December 31,
	2023		2022
Payroll expenses and tax payable	$	157,000	$	138,000
Commission and bonuses payable and general accrued liabilities		946,000		695,000
Total accrued liabilities	$	1,103,000	$	833,000

Stock options to purchase 61,100 and 292,766 shares of common stock were outstanding as of December 31, 2024 and 2023, respectively. All of the stock options were included in the computation of the weighted-average number of dilutive common shares outstanding for the year ended December 31, 2024. All except 46,400 of the stock options, which were anti-dilutive, were included in the computation of the weighted-average number of dilutive common shares outstanding for the year ended December 31, 2023.

~~Contract liabilities were $3,129,000 and $2,598,000 as of December 31, 2023 and 2022, respectively, which are netted against the related accounts receivable due to the legal right of offset.~~38

9.Alpha ~~Shareholders’~~Pro ~~Equity~~Tech, Ltd.

~~Repurchase~~Notes ~~Program~~to Consolidated Financial Statements

~~During~~The Company used the ~~year~~Black-Scholes ~~ended~~option-pricing ~~December~~model ~~31,~~to ~~2023,~~value the options. The Company ~~repurchased~~uses ~~and~~historical ~~retired~~data ~~951,010~~to ~~shares~~estimate the expected term of ~~its~~the ~~common~~options. ~~stock~~The risk-free interest rate for ~~$4,002,000.~~periods ~~During~~consistent with the ~~year~~expected ~~ended~~term ~~December~~of ~~31,~~the ~~2022,~~award is based on the ~~Company~~U.S. ~~repurchased~~Treasury ~~and~~rates ~~retired~~in ~~910,700~~effect ~~shares~~at the time of ~~its~~grant. ~~common~~The ~~stock~~expected ~~for~~volatility ~~$3,882,000~~is based on historical volatility. AsThe ofCompany ~~December~~uses ~~31,~~an ~~2023~~estimated dividend payout ratio of zero, as the Company ~~had~~has ~~$2,194,000~~not ~~available~~paid todividends ~~repurchase~~in ~~common~~the ~~shares~~past ~~under~~and, ~~the~~at ~~repurchase~~this ~~program. The~~time, ~~excess~~does ofnot ~~repurchase~~expect ~~price~~to ~~over~~do ~~par~~so ~~value~~in isthe ~~allocated~~foreseeable ~~between~~future. ~~additional~~The ~~paid-in~~Company ~~capital~~accounts ~~and~~for ~~retained~~option ~~earnings~~forfeitures as they occur.

~~Option~~The ~~Activity~~following table summarizes information about stock options as of December 31, 2024:

The 2004 Stock Option Plan (the “2004 Plan”) is an equity compensation plan that provides for grants of stock options to eligible individuals. The 2004 Plan is intended to recognize the contributions made to the Company by key employees of the Company, provide key employees with additional incentive to devote themselves to the future success of the Company and improve the ability of the Company to attract, retain and motivate individuals. The 2004 Plan also is intended as an incentive to certain members of the Board of Directors of the Company to continue to serve on the Board of Directors and to devote themselves to the future success of the Company.

Options Outstanding

Options Exercisable

Range of

Exercise

Prices

Options

Weighted

Average Exercise

Price

Weighted

Average

Remaining

Contract Life

(in years)

Aggregate

Intrinsic Value

Options

Weighted

Average Exercise

Price

Weighted

Average

Remaining

Contract Life

(in years)

Aggregate

Intrinsic

Value

$3.99

$4.23

61,100

4.17

3.5

68,000

25,264

4.14

3.35

29,000

The ~~2004~~intrinsic ~~Plan~~value ~~provides~~is ~~for~~the aamount ~~total~~by ofwhich ~~5,000,000 common shares eligible for issuance. Under~~ the ~~2004~~market ~~Plan,~~value ~~approximately 5,009,750 options had been granted as~~ of ~~December 31, 2020. Under~~ the ~~2004~~underlying ~~Plan,~~common ~~option~~stock ~~grants~~exceeds ~~have a three-year vesting period and, since 2005, expire no later than~~ the ~~fifth~~exercise ~~anniversary~~price ~~from~~of the ~~date~~respective ofstock ~~grant~~options. The ~~exercise~~aggregate ~~price~~intrinsic value of ~~the~~stock options isexercised ~~determined~~during ~~based on~~ the ~~fair~~years ~~market~~ended ~~value~~December of31, ~~the~~2024 ~~stock~~and on2023, ~~the~~was ~~date~~$497,000 ofand ~~grant~~$109,000, respectively.

AtAs ~~the Company’s 2020 Annual Meeting~~ of ~~Shareholders~~December ~~held on June 9~~31, ~~2020~~2024, ~~the Company’s shareholders approved the Alpha Pro Tech~~$88,000 ~~Ltd.~~of ~~2020~~total ~~Omnibus~~unrecognized ~~Incentive~~compensation ~~Plan~~cost ~~(the~~related ~~“2020~~to ~~Incentive Plan”). The 2020 Incentive Plan provides for the grant of incentive and nonqualified~~ stock options, ~~stock~~was ~~appreciation~~expected ~~rights, awards of restricted stock and restricted stock units, performance share awards, cash awards and other equity-based awards~~ to ~~employees~~be ~~(including~~recognized ~~officers),~~over ~~consultants~~a ~~and non~~weighted-~~employee~~average ~~directors~~remaining period of ~~the~~1.59 ~~Company and its affiliates~~years. ACash ~~total~~received offrom 1231,~~800,000~~666 ~~shares~~options ofexercised ~~the Company’s common stock are reserved~~ for ~~issuance under~~ the ~~2020~~year ~~Incentive~~ended ~~Plan,~~December ~~plus the number of shares underlying any award granted under the 2004 Option Plan that expires~~31, ~~terminates or is cancelled or forfeited under the terms of the 2004 Option Plan. As a result of the approval of the 2020 Incentive Plan~~2024, nowas ~~future equity awards will be made pursuant to the 2004 Option Plan. Although no new awards may be granted under the 2004 Option Plan~~$832, ~~all previously granted awards under the 2004 Option Plan will continue to be governed by the terms of the 2004 Option Plan~~000.

38Dividends

~~Alpha~~The ~~Pro~~holders ~~Tech~~of the Company’s common stock are entitled to receive such dividends as may be declared by the Board of Directors of the Company from time to time to the extent that funds are legally available for payment thereof. The Company has never declared or paid any dividends on any of its outstanding shares of common stock. The Board of Directors’ current policy is not to pay dividends but rather to use available funds to repurchase common shares in accordance with the Company’s repurchase program and to fund the continued development and growth of the Company. Consequently, ~~Ltd~~the Company currently has no plans to pay cash dividends in the foreseeable future.

~~Notes~~9. toAccumulated ~~Consolidated~~Other ~~Financial~~Comprehensive ~~Statements~~Loss

~~The~~Accumulated ~~following~~other ~~table~~comprehensive ~~summarizes~~loss, ~~restricted~~a ~~stock~~component ~~awards~~of ~~activity~~shareholders’ ~~for~~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 ~~years~~U.S. ~~ended~~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 accumulated other comprehensive loss on equity in unconsolidated affiliate was $1,499,000 and $1,437,000 as of December 31, ~~2023~~2024 and ~~2022:~~2023, respectively.

				Weighted-Average
				Grant Date Price
	Shares			Restricted stock awards
Outstanding, December 31, 2021		15,140		$	7.14
Granted to employees and directors		21,772			4.00
Vested		(18,540	)		6.56
Canceled/expired/forfeited		-			-
Outstanding, December 31, 2022		18,372			4.00
Granted to employees and directors		227,000			4.23
Vested		(10,200	)		3.99
Canceled/expired/forfeited		-			-
Outstanding December 31, 2023		235,172			4.21

~~During~~Alpha ~~the~~Pro ~~years ended December 31~~Tech, ~~2023, and 2022, 227,000 and 21,772 restricted stock awards were granted under the 2020 Incentive Plan, respectively~~Ltd. The Company recognized $145,000 and $104,000 in compensation expense associated with outstanding restricted stock awards for the years ended December 31, 2023 and 2022, respectively. As of December 31, 2023, $878,000 of total unrecognized compensation cost related to the restricted stock grants was expected to be recognized over a weighted-average remainder period of 2.61 years.

~~The~~Notes ~~following~~to ~~table~~Consolidated ~~summarizes~~Financial ~~option activity for the years ended December 31, 2023 and 2022:~~Statements

				Weighted
				Average
				Exercise Price
	Shares			Per Option
Options outstanding, December 31, 2021		427,580		$	3.50
Granted to employees and directors		19,600			3.99
Exercised		(21,665	)		3.70
Canceled/expired/forfeited		(14,900	)		3.93
Options outstanding, December 31, 2022		410,615			3.50
Granted to employees and directors		46,400			4.23
Exercised		(140,916	)		3.29
Canceled/expired/forfeited		(23,333	)		3.53
Options outstanding, December 31, 2023		292,766			3.71
Options exercisable, December 31, 2023		236,565			3.60

10.

Income Taxes

~~Stock~~The ~~options~~provision to(benefit) purchase 292,766 and 410,615 shares of common stock were outstanding as of December 31, 2023 and 2022, respectively. All except 46,400 of the stock options, which were anti-dilutive, were included in the computation of the weighted-average number of dilutive common shares outstanding for ~~the~~income ~~year~~taxes ~~ended~~consisted ~~December 31, 2023. All~~ of the ~~stock options were included in the computation of the weighted-average number of dilutive common shares outstanding for the year ended December 31, 2022.~~following:

	For the Years Ended December 31,
	2024		2023

Current	$	1,030,000	$	1,558,000
Deferred		61,000		(322,000	)

Provision for income taxes	$	1,091,000	$	1,236,000

~~Alpha~~Deferred ~~Pro~~income ~~Tech,~~tax ~~Ltd.~~assets (liabilities) consisted of the following:

Notes to Consolidated Financial Statements

	December 31,
	2024			2023
Temporary differences:
Property and equipment	$	(1,234,000	)	$	(858,000	)
Intangible assets		158,000			102,000
Inventory reserve		87,000			61,000
Accrued expenses and inventory		392,000			199,000
Right of Use Asset		(1,872,000	)		(1,281,000	)
Foreign exchange		29,000			16,000
Lease Liability		1,885,000			1,289,000
AMT/Foreign tax credits		188,000			141,000
State income taxes		(136,000	)		(111,000	)

Net deferred income tax liabilities	$	(503,000	)	$	(442,000	)

The ~~Company~~provision ~~used~~for ~~the~~income ~~Black-Scholes~~taxes ~~option-pricing~~differs ~~model~~from ~~to value~~ the ~~options.~~amount ~~The~~that ~~Company~~would ~~uses~~be ~~historical~~obtained ~~data~~by toapplying ~~estimate~~ the ~~expected term of the options. The risk-free interest rate for periods consistent with the expected term of the award is based on the~~ U.S. ~~Treasury~~statutory ~~rates~~rate into ~~effect~~income atbefore ~~the~~income ~~time~~taxes ofas ~~grant.~~a ~~The~~result ~~expected volatility is based on historical volatility. The Company uses an estimated dividend payout ratio~~ of ~~zero, as~~ the ~~Company has not paid dividends in the past and, at this time, does not expect to do so in the foreseeable future. The Company accounts for option forfeitures as they occur.~~following:

The following table summarizes information about stock options as of December 31, 2023:

	For the Years Ended December 31,
	2024			2023
Income taxes based on U.S. statutory rate of 21%	$	1,054,000		$	1,150,000
Non-deductible meals & entertainment		9,000			12,000
FDII deduction		(5,000	)		(6,000	)
Foreign taxes		(136,000	)		(82,000	)
State taxes		200,000			169,000
Stock Compensation		(33,000	)		18,000
Other		2,000			(25,000	)

Provision for income taxes	$	1,091,000		$	1,236,000

			Options Outstanding								Options Exercisable
Range of Exercise Prices			Options		Weighted Average Exercise Price		Weighted Average Remaining Contract Life (in years)		Aggregate Intrinsic Value		Options		Weighted Average Exercise Price		Weighted Average Remaining Contract Life (in years)		Aggregate Intrinsic Value
$3.42	-	$4.23		292,766	$	3.71		1.17	$	462,000		236,565	$	3.60		0.36	$	400,000

11.

Leases

Operating Lease Commitments: The ~~intrinsic~~Company ~~value~~leases isits ~~the~~facilities ~~amount~~under bynon-cancelable ~~which~~operating ~~the~~leases ~~market~~expiring ~~value~~on ofvarious ~~the~~dates ~~underlying~~through ~~common~~December ~~stock~~31, ~~exceeds~~2034. ~~the~~The ~~exercise~~Company ~~price~~has ofoperating leases for the ~~respective~~Company’s ~~stock~~corporate ~~options~~office and manufacturing facilities, which expire at various dates through 2034. The ~~aggregate~~Company’s ~~intrinsic~~primary ~~value~~operating lease commitments as of December ~~stock~~31, ~~options~~2024, ~~exercised~~related ~~during~~to the ~~years~~Company’s ~~ended~~manufacturing ~~December~~facilities 31in Valdosta, ~~2023~~Georgia and ~~2022~~Nogales, ~~was $109~~Arizona,~~000~~ ~~and~~as ~~$12~~well as the Company’s corporate headquarters in Aurora,~~000~~ Ontario, ~~respectively~~Canada.

As of December 31, ~~2023~~2024, the Company had operating lease right-of-use assets of $~~147~~8,714,000 and ofoperating ~~total~~lease ~~unrecognized~~liabilities ~~compensation~~of $8,775,000. ~~cost~~As ~~related~~of December to31, ~~stock~~2024, ~~options~~the ~~was~~Company ~~expected~~did tonot behave ~~recognized~~any ~~over~~finance aleases ~~weighted-average~~recorded ~~remaining~~on ~~period~~the ofconsolidated ~~2.5~~balance ~~years~~sheet. Operating ~~Cash~~lease ~~received~~expenses ~~from~~were ~~140~~approximately $1,~~916~~650,000 ~~options~~and ~~exercised~~$1,285,000 for the ~~year~~years ended December 31, ~~2023,~~2024 ~~was~~and ~~$464~~2023,~~000~~ respectively.

~~Dividends~~40

~~The~~Alpha ~~holders~~Pro of the Company’s common stock are entitled to receive such dividends as may be declared by the Board of Directors of the Company from time to time to the extent that funds are legally available for payment thereof. The Company has never declared or paid any dividends on any of its outstanding shares of common stock. The Board of Directors’ current policy is not to pay dividends but rather to use available funds to repurchase common shares in accordance with the Company’s repurchase program and to fund the continued development and growth of the Company. ConsequentlyTech, ~~the Company currently has no plans to pay cash dividends in the foreseeable future~~Ltd.

~~10.~~Notes ~~Accumulated~~to ~~Other~~Consolidated ~~Comprehensive~~Financial ~~Loss~~Statements

Accumulated other comprehensive loss, 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~~aggregate ~~foreign~~future ~~currency~~minimum ~~translation~~lease ~~gains~~payments ~~or losses are deferred as AOCL~~ and ~~reclassified~~reconciliation to ~~earnings~~lease ~~only~~liabilities ~~upon sale or liquidation of that business. The accumulated other comprehensive loss on equity in unconsolidated affiliate was $1,437,000 and $1,489,000~~ as of December 31, ~~2023~~2024, ~~and~~were ~~2022,~~as ~~respectively.~~follows:

	December 31,
2025	$	1,471,000
2026		1,473,000
2027		1,459,000
2028		1,489,000
2029		1,520,000
Thereafter		4,856,000
Total future minimum lease payments		12,268,000
Less imputed interest		(3,493,000	)
Total lease liabilities	$	8,775,000

~~Alpha~~As ~~Pro~~of ~~Tech~~December 31, ~~Ltd~~2024, the weighted average remaining lease term of the Company’s operating leases was 10.04 years. During the year ended December 31, 2024, the weighted average discount rate with respect to these leases was 7.00%.

~~Notes~~12. ~~to Consolidated Financial Statements~~Legal

~~11.~~Legal ~~Income Taxes~~Proceedings:

~~The~~On ~~provision~~June 7, 2022, the Company filed a lawsuit (~~benefit~~the “Lawsuit”) ~~for~~in ~~income~~the ~~taxes~~Fourth ~~consisted~~Judicial District Court of Utah naming as defendants Mechanized Concepts, LLC, Matthew D. Collegee, Collegee Machine, Engineering, Design, LLC, Joseph Collegee d/b/a/ Collegee Machine, and Justin Staub (collectively, the “Defendants”). The Lawsuit relates to certain equipment ordered from Defendants and paid for by the Company, which Defendants never delivered. In the Lawsuit the Company is seeking the following relief: compensatory damages in the amount $490,000, representing the money the Company paid for the machines it never received, lost profits in the form of mask sales it could have made if Defendants had delivered the machines on the promised date and other monetary and equitable relief. In 2022, the Company had written off the $490,000 balance of the deposit paid for the equipment, pending any recovery in the Lawsuit. As of the date hereof, no counterclaims have been asserted against the Company. The Company believes there would not be any meritorious claims against the Company in the Lawsuit. The Lawsuit is in its early stages and the final outcome, including the potential amount of any recovery for the Company’s claims, is uncertain.

	For the Years Ended December 31,
	2023			2022
Current	$	1,558,000		$	1,140,000
Deferred		(322,000	)		(27,000	)
Provision for income taxes	$	1,236,000		$	1,113,000

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.

~~Deferred~~13. ~~income~~Employee ~~tax~~Benefit ~~assets (liabilities) consisted of the following:~~Plans

	December 31,
	2023			2022
Temporary differences:
Property and equipment	$	(858,000	)	$	(920,000	)
Intangible assets		102,000			(11,000	)
Inventory reserve		61,000			32,000
Accrued expenses and inventory		199,000			191,000
Right of Use Asset		(1,281,000	)		-
Foreign exchange		16,000			12,000
Lease Liability		1,289,000			-
AMT/Foreign tax credits		141,000			128,000
State income taxes		(111,000	)		(196,000	)
Net deferred income tax liabilities	$	(442,000	)	$	(764,000	)

The Company has certain benefit plans. Under the plans, employees may contribute up to 12% of their gross earnings subject to certain limitations. The Company contributes an additional 0.5% of gross earnings for those employees contributing 1% of their gross earnings and contributes 1% of gross earnings for those employees contributing between 2% and 12% of their gross earnings. The total amounts contributed to the plans by the Company were $46,000 and $48,000 for the years ended December 31, 2024 and 2023, respectively.

The ~~provision~~Company does not have any other significant pension, profit sharing or similar plans established for ~~income~~its ~~taxes~~employees. ~~differs~~Pursuant to his employment agreement with the Company, Lloyd Hoffman, our President and Chief Executive Officer, is contractually entitled to receive from the Company at the conclusion of each fiscal year a cash bonus in an amount ~~that~~equal ~~would~~to be5% ~~obtained~~pre-tax byprofits ~~applying~~of the ~~U.S.~~Company, ~~statutory~~excluding ~~rate~~bonus toexpense, ~~income~~as ~~before~~presented in the Company’s au

Filing Compare · ALPHA PRO TECH LTD