Item 2.02. Results of Operations and Financial Condition
On January 11, 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 is undertaking a restatement of prior
financial statements and is not currently reporting its regular financial
results until the restatement has been completed. For this reason, the press
release includes only certain limited financial results, primarily relating to
sales, cash and strategic initiatives, for three and 12 months ended December
31, 2020.
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 5.02. Departure of Directors or Certain Officers, Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On January 6, 2021, Steve Swank resigned as Chief Financial Officer of the
Company, effective as of January 8, 2021. Mr. Swank's resignation was not the
result of any dispute or disagreement with the Company relating to the Company's
operations, policies or practices. Mr. Swank has agreed to remain with the
Company for one month, at his current salary, to provide assistance with the
transition of his role.
On January 8, 2021, the Company appointed Michael Galvan to the position of
Chief Financial Officer of the Company, effective January 11, 2021. On January
11, 2021, the Company announced Mr. Galvan's appointment in the Press Release.
Mr. Galvan, 51, first joined the Company in May 2020, serving as Interim Chief
Financial Officer until Mr. Swank's arrival in July 2020; since then, he has
remained with the Company on a full-time consulting basis. Mr. Galvan brings
over 25 years of finance and accounting experience to the Company, including
executive leadership roles serving as Interim Chief Financial Officer, Chief
Accounting Officer and Treasurer for a variety of publicly traded companies.
Prior to joining the Company, Mr. Galvan served as Senior Vice President, Chief
Accounting Officer and Treasurer of Nextier Oilfield Solutions, Inc., from 2014
until April 2020, including serving as Interim Chief Financial Officer from
March - September 2018.
In connection with Mr. Galvan's employment, his offer letter provides that Mr.
Galvan will receive an initial annual base salary of $300,000; he is eligible to
receive an annual bonus under the Company's executive bonus plan, with a target
bonus of 30% percent of his base salary (dependent on Company and individual
performance). Upon completion of the Company's financial restatement and the
filing of all of its outstanding annual and quarterly reports with the SEC, Mr.
Galvan will receive a grant of 9,000 restricted stock units (each convertible
into one share of the Company's common stock), which will vest on the first
anniversary of such grant, subject to his continued employment with the Company
on that date. He will be eligible to receive future equity grants under the
Company's 2013 Restricted Stock Plan, with a target annual grant value of 30% of
his base salary (dependent on Company and individual performance).
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If Mr. Galvan's employment is terminated by the Company without "cause" or he
resigns his position for "good reason" on or before the first anniversary of his
start date, the Company will pay him salary continuation and allow him continued
participation in the Company's health and welfare benefit programs for six
months after his departure. For purposes of Mr. Galvan's employment terms, (1)
"cause" means that he is terminated for: acts of fraud, dishonesty or criminal
conduct; gross negligence, insubordination or willful refusal or to perform his
duties; or unsatisfactory job performance that continues even after a warning
from his immediate supervisor; and (2) "good reason" would mean without his
consent: (i) a material diminution in his duties, authority, or responsibilities
or a material breach of his offer letter by the Company; or (ii) requiring him
to relocate his principal place of employment to a location that is more than
fifty (50) miles from the current location of the Company's principal office in
Fort Worth and from his current residence in Houston.
There are no other arrangements or understandings between Mr. Galvan and any
other persons pursuant to which he was named Chief Financial Officer of the
Company, except the Company expects to make a payment of approximately $30,000
to The CFO Suite, LLC, the consulting firm through which Mr. Galvan had provided
his services to the Company. Mr. Galvan does not have any family relationships
with any of the Company's directors or executive officers or any persons
nominated or chosen by the Company to be a director or executive officer. Mr.
Galvan does not have any direct or indirect material interest in any transaction
or proposed transaction required to be reported under item 404(a) of Regulation
S-K.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
No. Exhibit
99.1 Press Release dated January 11, 2021
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.
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