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STOCK-BASED COMPENSATION | 3 Months Ended
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Mar. 31, 2022
STOCK-BASED COMPENSATION [Abstract] |
STOCK-BASED COMPENSATION | 4. STOCK-BASED COMPENSATION The Tandy Leather Factory, Inc. 2013 Restricted Stock Plan (the “2013 Plan”) was adopted by our Board of Directors in January 2013 and approved by our stockholders in June 2013. The 2013 Plan initially reserved up to 300,000 shares for restricted stock and restricted stock unit (“RSU”) awards to our executive officers, non-employee directors and other key employees. In June 2020, our stockholders approved an increase to the plan reserve to 800,000 shares of our common stock and extended the 2013 Plan to June 2023. As of March 31, 2022, there were 567,382 shares available for future awards. Awards granted under the 2013 Plan may be service-based awards or performance-based awards, and may be subject to a graded vesting schedule with a minimum vesting period of four years, unless otherwise determined by the Compensation Committee of the Board of Directors that administers the plan. In January 2022, we granted a total of 27,249 RSUs to the Company’s Chief Executive Officer (“CEO”), which vested immediately. These shares were granted in lieu of $0.1 million in salary that the CEO declined in 2020 during the period of COVID-related store closures and business uncertainty. The timing of the grant was conditioned on the Company becoming fully current in its periodic SEC filings, which occurred in December 2021. In addition to grants under the Company’s 2013 Restricted Stock Plan, in October 2018, we granted a total of 644,000 RSUs to the Company’s CEO, of which (i) 460,000 are service-based RSUs that vest ratably over a period of five years from the grant date based on our CEO’s continued employment in her role, (ii) 92,000 are performance-based RSUs that will vest if the Company’s operating income exceeds $12 million dollars two fiscal years in a row, and (iii) 92,000 are performance-based RSUs that will vest if the Company’s operating income exceeds $14 million dollars in one fiscal year. A summary of the activity for non-vested restricted stock and RSU awards as of March 31, 2022 is presented below:
|  | Shares (in thousands) |  |  | Weighted Average Share Price |
Balance, January 1, 2022 |  |  | 419 |  |  | $ | 7.05 |
Granted |  |  | 27 |  |  |  | 5.08 |
Forfeited |  |  | - |  |  |  | - |
Vested |  |  | (47 | ) |  |  | 5.00 |
Balance, March 31, 2022 |  |  | 399 |  |  | $ | 7.16 |
The Company’s stock-based compensation relates primarily to RSU awards. For these service-based awards, our stock-based compensation expense, included in operating expenses, was $0.3 million and $0.2 million for the three months ended March 31, 2022 and 2021, respectively. As of March 31, 2022, the Company has concluded it is not probable that the performance conditions related to performance-based RSUs granted to our CEO will be achieved, and as a result no compensation expense related to performance-based RSUs has been recorded. As of March 31, 2022, there was unrecognized compensation cost related to non-vested, service-based RSU awards of $1.1 million, which will be recognized in each of the following years (dollars in thousands):
Unrecognized Expense |  |  |
2022 |  | $ | 576 |
2023 |  |  | 534 |
2024 |  |  | 21 |
2025 |  |  | 5 |
|  | $ | 1,136 |
We issue shares from authorized shares upon the lapsing of vesting restrictions on restricted stock and RSUs. For the three months ended March 31, 2022 and 2021, we issued 47,423 and 16,080 shares, respectively, resulting from the vesting of RSUs. We do not use cash to settle equity instruments issued under stock-based compensation awards.

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