8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 8-K

CURRENT REPORT

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

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see

  General Instruction A.2. below\):

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

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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.  ☐

Item 2.02.  Results of Operations and Financial Condition

On July 21, 2021, Tandy Leather Factory, Inc. (the “Company”) issued a press release (the “Press Release”) announcing certain financial results as described in the next paragraph.  A copy of the Press Release is attached as Exhibit 99.1.

As previously reported, the Company recently completed a restatement of prior financial statements and is now focusing on completing its financial statements for 2020 and the first two quarters of 2021.  It is not currently reporting its regular financial results until this process has been completed.  For this reason, the press release includes only certain limited financial results, primarily relating to sales and cash, for three months ended June 30, 2021.

The information furnished pursuant to Item 2.02 of this report and the exhibits attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 as amended (the “Exchange Act”, or otherwise subject to liabilities under that section, nor shall they be deemed incorporated by reference in any filing of the Company with the Securities and Exchange Commission under the Exchange Act or the Securities Act of 1933, as amended (the “Securities Act”), whether made before or after the date hereof, except as shall be expressly set forth by specific reference in such filing.

Item 8.01.  Other Events

The Press Release also announced that the Company has entered into a settlement with the U.S. Securities and Exchange Commission (the “SEC”).  This settlement resolves a previously-announced investigation related to accounting issues that resulted in the Company’s announcement on October 21, 2019 that its financial results reported in its annual report on Form 10-K for the year 2018 and its quarterly report on Form 10-Q for the quarter ended March 31, 2019 should not be relied upon.  The Company restated those financial statements in its Annual Report on 10-K for the year 2019, filed with the SEC on June 22, 2021.  Under the terms of the settlement, in addition to other non-monetary settlement terms, (1) the Company has agreed to pay a civil monetary penalty of $200,000, and (2) Shannon Greene, the Company’s former Chief Financial Officer and Chief Executive Officer, has agreed to pay a civil monetary penalty of $25,000.  In accepting the Company’s settlement offer, the SEC took into account remedial actions the Company took promptly after learning of the issues detailed in the SEC’s order. A copy of the Press Release is attached as Exhibit 99.1.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Forward Looking Statements

Certain statements contained in this report and other materials the Company files with the SEC, as well as information included in oral statements or other written statements made or to be made by the Company, other than statements of historical fact, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements generally are accompanied by words such as “may,” “will,” “could,” “should,” “anticipate,” “believe,” “budgeted,” “expect,” “intend,” “plan,” “project,” “potential,” “estimate,” “continue,” “outlook,” “forecast” or “future,” variations thereof or other similar statements. Please refer to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2018 for additional information concerning these and other uncertainties that could negatively impact the Company. The Company assumes no obligation to update or otherwise revise its forward-looking statements, except as required by law.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Exhibit 99.1

FOR IMMEDIATE RELEASE

July 21, 2021

Tandy Leather Factory Announces Certain Second Quarter Operating Results and Settlement of Previously Disclosed Securities and Exchange Commission Matter

FORT WORTH, TEXAS – July 21, 2021 (GLOBE NEWSWIRE) – Tandy Leather Factory, Inc. (Pink: TLFA) today reported certain preliminary financial information for its second quarter ended June 30, 2021.  Sales for the second quarter of 2021 are expected to range between $18.5 million and $18.8 million, an increase of about 100% compared to the second quarter of 2020, when nearly all of the Company’s retail stores were closed due to COVID-19.  Web sales were down compared to 2020 but were up more than 50% over the same period in 2019.  Total sales for the second quarter 2021 were up about 8% compared to the second quarter of 2019, despite operating 11 fewer stores.  As of June 30, 2021, the Company had $0.4 million of debt and $5.9 million of cash and cash equivalents.

Commenting on these preliminary results, Janet Carr, the Company’s Chief Executive Officer, said, “We are pleased with the continued strength of our business, as the economy continues its ongoing but still sporadic recovery from COVID-19.  In particular, the sales growth with commercial customers reflects the targeted efforts our team has made to serve the unique needs of our largest customers and present Tandy as the destination of choice again for expert and professional leathercrafters.  While we expected some decline in year-over-year web sales, as our reopened stores were again available to customers who could only purchase online a year ago, the more than 50% growth from 2019 reflects what we believe is a permanent shift to our customers embracing online shopping for our products.  This was made possible by the significantly improved quality and consistency of our product, especially leather, and the significant investments in our web platform, fulfillment and dedicated customer service team.”

The Company also announced that it has entered into a settlement with the U.S. Securities and Exchange Commission (the “SEC”).  This settlement resolves a previously-announced investigation related to accounting issues that resulted in the Company’s announcement on October 21, 2019 that its financial results reported in its annual report on Form 10-K for the year 2018 and its quarterly report on Form 10-Q for the quarter ended March 31, 2019 should not be relied upon.  The Company restated those financial statements in its Annual Report on 10-K for the year 2019, filed with the SEC on June 22, 2021.  Under the terms of the settlement, in addition to other non-monetary settlement terms, (1) the Company has agreed to pay a civil monetary penalty of $200,000, and (2) Shannon Greene, the Company’s former Chief Financial Officer and Chief Executive Officer, has agreed to pay a civil monetary penalty of $25,000.  In accepting the Company’s settlement offer, the SEC took into account remedial actions the Company took promptly after learning of the issues detailed in the SEC’s order.

Ms. Carr stated, “Our settlement with the SEC and the filing of our restated and 2019 financial statements last month represent significant milestones in putting behind us the legacy accounting issues that led to our restatement and suspension of reporting.  With our efforts to file our reports for 2020 and the first two quarters of 2021 still ongoing, we remain unable to provide detailed financial information beyond our sales and cash balance at this time.  But we are optimistic that this process will finally be completed soon.”

Tandy Leather Factory, Inc., (http://www.tandyleather.com), headquartered in Fort Worth, Texas, is a specialty retailer of a broad product line, including leather, leatherworking tools, buckles and adornments for belts, leather dyes and finishes, saddle and tack hardware, and do-it-yourself kits.  The Company distributes its products through its 105 North American stores located in 40 US states and six Canadian provinces, and one store located in Spain.  Its common stock trades over-the-counter “pink sheets” with the symbol “TLFA”.  To be included on Tandy Leather Factory's email distribution list, go to: http://www.b2i.us/irpass.asp?BzID=1625&to=ea&s=0.

Contact:  Janet Carr, Tandy Leather Factory, Inc.  (817) 872-3200 or janet.carr@tandyleather.com

This news release may contain statements regarding future events, occurrences, circumstances, activities, performance, outcomes and results that are considered "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Actual results and events may differ from those projected as a result of certain risks and uncertainties. These risks and uncertainties include but are not limited to: changes in general economic conditions, negative trends in general consumer-spending levels, failure to realize the anticipated benefits of opening retail stores; availability of hides and leathers and resultant price fluctuations; change in customer preferences for our product, and other factors disclosed in our filings with the Securities and Exchange Commission.  These forward-looking statements are made only as of the date hereof, and except as required by law, we do not intend to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Importers, Exporters, Manufacturers, Distributors, Retailers of Leathers, Leathercraft Supplies, Hardware, Findings and Finishes