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STOCKHOLDERS' EQUITY | 12 Months Ended
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Dec. 31, 2023
STOCKHOLDERS' EQUITY [Abstract] |
STOCKHOLDERS' EQUITY | 10. STOCKHOLDERS’ EQUITY Equity Compensation Plans 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 of our common stock for 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 through June 2023. 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 June 2022, as part of their annual director compensation, certain of our non-employee directors were granted a total of 14,000 service-based RSUs under the 2013 Plan, which will vest ratably over the next four years provided that the participant is still on the board on the vesting date. The Tandy Leather Factory, Inc. 2023 Incentive Stock Plan (the “2023 Plan”) was adopted by our Board of Directors in April 2023 and approved by our stockholders in June 2023. The 2023 Plan initially reserved up to 1,000,000 shares of our common stock for a variety of equity awards (including, but not limited to, RSUs, the only type of awards that have been granted to date) to our executive officers, non-employee directors and other key employees. In June 2023, as part of their annual director compensation, certain of our non-employee directors were granted a total of 12,993 service-based RSUs under the 2023 Plan, which will vest ratably over the next four years, subject to each participant’s continues service on the board as of each vesting date. In October 2023, the Company granted to Ms. Carr a total of 276,000 service-based RSUs under the 2023 Plan, which will vest ratably over the next three years, subject to Ms. Carr’s continued employment as of each vesting date. In addition to grants under the Company’s equity compensation plans, in October 2018 we granted a total of 644,000 RSUs to the Company’s Chief Executive Officer (“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. As of December 31, 2023, the Company has concluded that the performance conditions related to these performance-based RSUs was not achieved, and as a result no compensation expense related to these performance-based RSUs has been recorded. A summary of the activity for restricted stock and RSU awards is as follows:
| Shares |  | Weighted Average |
| (in thousands) |  | Share Price |
Balance, January 1, 2023 |  |  | 441 |  |  | $ | 6.46 |
Granted |  |  | 290 |  |  |  | 4.25 |
Forfeited |  |  | (2 | ) |  |  | 5.00 |
Vested |  |  | (106 | ) |  |  | 6.51 |
Balance, December 31, 2023 |  |  | 623 |  |  | $ | 5.12 |
The Company’s stock-based compensation relates to restricted stock and RSU awards. For these service-based awards, our stock-based compensation expense, included in operating expenses, was $0.8 million and $1.1 million in 2023 and 2022, respectively. As of December 31, 2023, the Company has concluded it is not probable that the performance conditions related to the performance-based RSUs described above will be achieved, and as a result no compensation expense related to performance-based RSUs has been recorded. As of December 31, 2023, there was unrecognized compensation cost related to non-vested, service-based awards of $1.4 million which will be recognized over 3.1 weighted average years in each of the following years:
Unrecognized Expense |
2024 |  |  | 571 |
2025 |  |  | 468 |
2026 |  |  | 314 |
2027 |  |  | 7 |
|  | $ | 1,360 |
We issue shares from authorized shares upon the lapsing of vesting restrictions on restricted stock and RSUs. In 2023 and 2022, we issued 108,796 and 140,277 shares, respectively net of shares withheld to pay participants’ income taxes, resulting from the vesting of restricted stock and RSUs. We do not use cash to settle equity instruments issued under stock-based compensation awards. Share Repurchase Program On August 9, 2020, the Board of Directors approved a program to repurchase up to $5.0 million of its common stock between August 9, 2020 and July 31, 2022. This program expired in July 2022. On August 8, 2022, the Board of Directors approved a new program to repurchase up to $5.0 million of the Company’s common stock between that date and August 31, 2024. As of December 31, 2022 and December 31, 2023, $5.0 million remained available for repurchase under this new program. On April 11, 2022, we entered into an agreement with two institutional shareholders of the Company to repurchase 359,500 shares of our common stock, par value $0.0024 in a private transaction. The purchase price was $5.00 per share for a total of $1.8 million. The closing of the repurchases took place on April 22, 2022, and these shares were subsequently cancelled. Prior to the repurchase, the shares represented approximately 4.2% of our outstanding common stock. The direct share repurchase transactions were separately authorized by our Board of Directors and did not reduce the remaining amount authorized to be repurchased under the plans described above. In July 2022, the Company repurchased 600 shares of stock under the open market plan.

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