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STOCK-BASED COMPENSATION | 3 Months Ended
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Mar. 31, 2025
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. 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. All shares remaining ungranted under the 2013 Plan were canceled upon the adoption of the new 2023 Plan described below. The Tandy Leather Factory, Inc. 2023 Incentive Stock Plan (the “2023 Plan” and, together with the 2013 Plan, the “Plans”) 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 800,000 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 continued service on the board as of each vesting date. In March 2024, the Company granted to certain employees a total of 59,649 RSUs under the 2023 Plan, which will vest ratably over the next three years, subject to the recipients’ continued employment as of each vesting date. In June 2024, the Company granted 14,000 shares to various members of the Board of Directors, which will vest ratably over the next four years, subject to each participant’s continued service on the board as of each vesting date. A summary of the activity for restricted stock and RSU awards as of March 31, 2025 is presented below:
|  | Shares (in thousands) |  |  | Weighted Average Share Price |
Balance, January 1, 2025 |  |  | 409 |  |  | $ | 4.32 |
Granted(1) |  |  | 1000 |  |  |  | 4.61 |
Forfeited |  |  | (308 | ) |  |  | 4.26 |
Vested |  |  | (16 | ) |  |  | 4.36 |
Balance, March 31, 2025 |  |  | 1,085 |  |  | $ | 4.01 |
(1) | Grant of 900,000 shares pending approval of the Company’s stockholders at the 2025 annual meeting.
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 $0.1 million and $0.2 million for the three months ended March 31, 2025 and March 31, 2024 respectively. As of March 31, 2025, there was unrecognized compensation cost related to non-vested, RSU awards of $0.6 million, which will be recognized in each of the following years (dollars in thousands):
Unrecognized Expense |  |  |
2025 |  | $ | 399 |
2026 |  |  | 185 |
2027 |  |  | 34 |
2028 |  |  | 5 |
|  | $ | 623 |
We issue shares from authorized shares upon the lapsing of vesting restrictions on restricted stock and RSUs. For the three months ended March 31, 2025 and 2024, we issued 15,973 and 2,727 shares, respectively, resulting from the vesting of RSUs. We do not use cash to settle equity instruments issued under stock-based compensation awards. The payment of the employees’ tax liability for a portion of the vested shares may be satisfied by withholding shares with a fair value equal to the tax liability.

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