Repurchase Program

During the three months ended June 30, 2026, the Company repurchased and retired 21,800 shares of its common stock for $99,000. During the three months ended June 30, 2025, the Company repurchased and retired 181,100 shares of its common stock for $830,000. During the six months ended June 30, 2026, the Company repurchased and retired 21,800 shares of its common stock for $99,000. During the six months ended June 30, 2025, the Company repurchased and retired 402,513 shares of its common stock for $2,008,000. As of June 30, 2026, the Company had $1,298,000 available to repurchase common shares under the repurchase program. The excess of repurchase price over par value is allocated between additional paid-in capital and retained earnings.

Option Activity

The Company previously granted stock options to eligible individuals under the 2004 Stock Option Plan (the “ 2004 Option Plan ”).  Grants made under the 2004 Option Plan were intended to recognize the contributions made to the Company by key employees, 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.  Grants made under the 2004 Option Plan also were 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. The 2004 Option Plan provided for a total of 5,000,000 common shares eligible for issuance. Under the 2004 Option Plan, approximately 5,009,750 options (taking into account cancelled, forfeited and expired options that were added back to the plan reserve) had been granted as of December 31, 2020.  Under the 2004 Option Plan, option grants had a three-year vesting period and, since 2005, expired no later than the fifth anniversary from the date of grant. The exercise price of the options was determined based on the fair market value of the stock on the date of grant.

At the Company’s 2020 Annual Meeting of Shareholders held on June 9, 2020, the Company’s shareholders approved the Alpha Pro Tech, Ltd. 2020 Omnibus Incentive Plan (the “2020 Incentive Plan”). The 2020 Incentive Plan provides for the grant of incentive and nonqualified stock options, stock appreciation rights, awards of restricted stock and restricted stock units (“RSU”), 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 were 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 will continue to be governed by the terms of the 2004 Option Plan.

The following table summarizes restricted stock unit (“RSU”) awards activity for the six months ended June 30, 2026:

During the six months ended June 30, 2026 and 2025, 12,425 and 9,870 RSU awards were granted under the 2020 Incentive Plan, respectively. The Company recognized $236,000 and $243,000 in stock-based compensation expense associated with outstanding RSU awards for the six months ended June 30, 2026 and 2025, respectively. As of June 30, 2026, $128,000 of total unrecognized compensation cost related to the RSU awards was expected to be recognized over a weighted average remainder period of 0.31 years.

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

The following table summarizes stock option activity for the six months ended June 30, 2026:

The Company recognized $23,000 and $29,000 in stock-based compensation expense associated with the outstanding stock option awards for the six months ended June 30, 2026 and 2025, respectively. As of June 30, 2026, $11,000 of total unrecognized compensation expense related to the stock options was expected to be recognized over a weighted average remainder period of 0.25 years.