Tandy Leather Factory (TLFA)

Risks

• The COVID-19 pandemic has had, and likely may continue to have, a material adverse effect on our business and liquidity.
• Disruptions in the operation of our Fort Worth distribution center or manufacturing facility due to disease, including COVID-19, natural disaster, fire, or other crises, could have an adverse effect on our ability to supply our retail stores, fulfill web orders and/or manufacture product, resulting in possible decreases in sales and margin.
• Our continued delisting from the Nasdaq Market or a continued suspension of broker trading of our common stock could reduce liquidity or impair the value of your investment.
• Material weaknesses in our system of internal controls were identified during our investigation and financial restatement. Some of these material weaknesses are still in the process of remediation. If not remediated, these material weaknesses could result in additional material misstatements in our Consolidated Financial Statements. We may be unable to develop, implement and maintain appropriate controls in future periods.
• If our cash from operations falls short and we are unable to raise additional working capital, we might be unable to fully fund our operations or to otherwise execute our business plan.
• Failure to protect the integrity and security of personal information of our customers and employees could result in substantial costs, expose us to litigation and damage our reputation.
• Unreliable or inefficient information technology or the failure to successfully implement or invest in technology initiatives in the future could adversely impact operating results.
• Our business may be negatively impacted by general economic conditions in the United States and abroad.
• Foreign currency fluctuations could adversely impact our financial condition and results of operations.
• We face risks related to the effect of economic uncertainty.
• If the United States maintains current tariffs on products manufactured in China, or if additional tariffs or trade restrictions are implemented by other countries or by the U.S., the cost of our products manufactured in China or other countries and imported into the U.S. or other countries could increase. This could in turn adversely affect the profitability for these products and have an adverse effect on our business, financial condition and results of operations.
• Our success depends on the continued protection of our trademarks and other proprietary intellectual property rights.
• The successful execution of our multi-year transformation and operational efficiency initiatives is key to the long-term growth of our business.
• Our business is subject to the risks inherent in global sourcing activities.
• Increases in the price of leather and other items we sell or a reduction in availability of those products could increase our cost of goods and decrease our profitability.
• We are subject to risks associated with leasing retail space under long-term and non-cancelable leases. We may be unable to renew leases on acceptable terms. If we close a leased retail space, we might remain obligated under the applicable lease.
• We may be unable to sustain our financial performance or our past growth, which could have a material adverse effect on our future operating results.
• Competition, including internet-based competition, could negatively impact our business.
• Declines in foot traffic in our retail store locations could negatively impact our sales and profits.
• Our business could be harmed if we are unable to maintain our brand image.
• Changes in customer demand could materially adversely affect our sales, results of operations and cash flow.
• Our success depends, in part, on attracting, developing and retaining qualified employees, including key personnel.