UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2025

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period ________ to ________

Commission File Number 1-12368

Delaware		75-2543540
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

7602 SW LOOP 820 STE 101 Benbrook, Texas 76126		76126
(Address of Principal Executive Offices)		(Zip Code)

817-872-3200

(Registrant’s telephone number, including area code)

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

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $0.0024	TLF	The Nasdaq Capital Market

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☒ 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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

Indicate by check mark whether the registrant has ﬁled a report on and attestation to its management’s assessment of the eﬀectiveness of its internal control over ﬁnancial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting ﬁrm that prepared or issued its audit report. ☐

The aggregate market value of the common stock held by non-affiliates of the registrant was approximately $15,907,771 at December 31, 2025 (based on the price at which the common stock was last traded on the last business day of its most recently completed second fiscal quarter).

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. As of February 19, 2026, there were 8,072,875 shares of the registrant’s common stock outstanding..

TABLE OF CONTENTS

PART I	3

ITEM 1. BUSINESS	3
TEM 1A. RISK FACTORS	8
ITEM 1B. UNRESOLVED STAFF COMMENTS	14
ITEM 1C. CYBERSECURITY	14
ITEM 2. PROPERTIES	15
ITEM 3. LEGAL PROCEEDINGS	16
ITEM 4. MINE SAFETY DISCLOSURES	16

PART II	17

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	17
ITEM 6. SELECTED FINANCIAL DATA	17
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	17
ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	25
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	51
ITEM 9A. CONTROLS AND PROCEDURES	51
ITEM 9B. OTHER INFORMATION	52

PART III	52

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE*	52
ITEM 11. EXECUTIVE COMPENSATION*	52
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS*	52
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE*	52
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES*	52

PART IV	53

ITEM 15 EXHIBITS, FINANCIAL STATEMENT SCHEDULE	53

EXHIBIT INDEX	53

ITEM 16. FORM 10-K SUMMARY	56

SIGNATURES	57

Name		Age		Executive Since		Position
Johan Hedberg		59		2025		Chief Executive Officer

U. S. Locations:
Alabama	1	Missouri	3
Alaska	1	Montana	1
Arizona	3	Nebraska	1
Arkansas	1	Nevada	2
California	7	New Jersey	1
Colorado	4	New Mexico	2
Connecticut	1	New York	2
Florida	4	North Carolina	2
Georgia	2	Ohio	3
Idaho	1	Oklahoma	2
Illinois	1	Oregon	2
Indiana	1	Pennsylvania	2
Iowa	1	South Dakota	1
Kansas	1	Tennessee	3
Kentucky	1	Texas	18
Louisiana	2	Utah	4
Maryland	1	Washington	3
Massachusetts	1	Wisconsin	1
Michigan	2	Wyoming	1
Minnesota	2	Virginia	1

Canadian Locations:
Alberta	3	Ontario	2
British Columbia	1	Saskatchewan	1
Manitoba	1
Nova Scotia	1

International Locations:
Spain	1

	Twelve Months Ended December 31,
(in thousands)	2025			2024			$ Change			% Change
Sales	$	76,324		$	74,391		$	1,933			2.6	%
Gross profit		43,539			41,804			1,735			4.1	%
Gross margin percentage		57.0	%		56.2	%					0.8	%
Operating expenses		44,502			41,176			3,326			8.1	%
(Loss) Income from operations	$	(963	)	$	628		$	(1,591	)		(253.3	)%

(amounts in thousands)	2025			2024
Net cash (used in) provided by operating activities	$	(556	)	$	4,548
Net cash provided by (used in) investing activities		17,360			(2,983	)
Net cash used in financing activities		(14,108	)		(1	)
Effect of exchange rate changes on cash and cash equivalents		120			(452	)
Net increase in cash and cash equivalents	$	2,816		$	1,112

	December 31,			December 31,
	2025			2024

ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	16,087		$	13,271
Accounts receivable-trade, net of allowance for credit losses of $51 at December 31, 2025 and $49 at December 31, 2024		425			331
Inventory		33,238			35,556
Income tax receivable		-			384
Prepaid expenses		721			898
Other current assets		111			96
Total current assets		50,582			50,536

Property and equipment, at cost		26,203			31,655
Less accumulated depreciation		(15,978	)		(19,320	)
Property and equipment, net		10,225			12,335

Operating lease assets		24,736			10,323
Deferred income taxes		380			1,213
Other assets		710			517
TOTAL ASSETS	$	86,633		$	74,924

LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable-trade	$	2,154		$	3,110
Accrued expenses and other liabilities		3,704			3,571
Income taxes payable		428			-
Current portion of operating lease liabilities		3,512			3,205
Total current liabilities		9,798			9,886

Uncertain tax positions		227			248
Other non-current liabilities		149			76
Operating lease liabilities, non-current		23,868			7,561

COMMITMENTS AND CONTINGENCIES (Note 6)

STOCKHOLDERS’ EQUITY:
Common stock, $0.0024 par value; 25,000,000 shares authorized; 9,497,251 and 9,920,957 shares issued at December 31, 2025 and December 31, 2024, respectively; 8,072,875 and 8,496,581 shares outstanding at December 31, 2025 and December 31, 2024, respectively		22			23
Paid-in capital		3,651			4,529
Retained earnings		60,843			64,486
Treasury stock at cost (1,424,376 shares at December 31, 2025 and December 31, 2024)		(9,773	)		(9,773	)
Accumulated other comprehensive loss, net of tax		(2,152	)		(2,112	)
Total stockholders’ equity		52,591			57,153
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	86,633		$	74,924

	For the Years Ended December 31,
	2025			2024

Net sales	$	76,324		$	74,391
Cost of sales		32,785			32,587
Gross profit		43,539			41,804

Operating expenses		44,502			41,176

(Loss) Income from operations		(963	)		628

Other income (expense):
Interest income		552			331
Gain on disposal of headquarter (see footnote 11)		16,225			-
Other, net		(3,514	)		132
Total other income		13,263			463

Income before income taxes		12,300			1,091

Income tax provision		3,198			264

Net income	$	9,102		$	827

Foreign currency translation adjustments, net of tax		(40	)		(568	)

Comprehensive income	$	9,062		$	259

Net income per common share:
Basic	$	1.11		$	0.10
Diluted	$	1.10		$	0.09

Weighted average number of shares outstanding:
Basic		8,234,862			8,493,989
Diluted		8,264,174			8,783,063

SEC Form 10-K filed by Tandy Leather Factory Inc.