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

Date of report (Date of earliest event reported): August 11, 2009

Tandy Leather Factory, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware

(State or Other Jurisdiction of Incorporation

1-12368	75-2543540
(Commission File Number)	(IRS Employer Identification Number)

1900 Southeast Loop 820, Fort Worth, Texas	76140
(Address of Principal Executive Offices)	(Zip Code)

(817) 872-3200

(Registrant’s Telephone Number, Including Area Code)

(Former Name or Former Address, if Changed Since Last Report)

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:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01  Entry into a Material Definitive Agreement

On August 11, 2009, Tandy Leather Factory, Inc. (the “Company”) announced that it has entered into an agreement with Ronald C. Morgan, founder and former Chief Executive Officer, to purchase a total of 500,000 shares of the Company’s outstanding stock from Mr. Morgan and his wife.  The shares represent approximately 4.7% of the Company total outstanding common stock.  The shares will be purchased for $2.85 per share, or a total purchase price of $1.425 million.  This price represents a 6.5% discount to the August 7, 2009 closing price.  The Company intends to fund the stock purchase transaction out of currently available cash.  This transaction is expected to be completed as soon as possible, subject to certain customary closing conditions.

The full text of the press release is furnished as Exhibit 99.1 to this report.

Item 9.01 Financial Statements and Exhibits.

Exhibit No.                                Description

99.1 Press Release, dated August 11, 2009

99.2 Stock Purchase Agreement

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.

	TANDY LEATHER FACTORY, INC.
Date:  August 11, 2009	BY:  /s/ Shannon L. Greene
	Chief Financial Officer & Treasurer

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE                                                                                                                 August 11, 2009

Tandy Leather Factory, Inc. Agrees to Repurchase Stock from Founder

FORT WORTH, TEXAS – Tandy Leather Factory, Inc. (NYSE Amex: TLF) announced today that it has entered into an agreement to purchase a total of 500,000 shares of the Company's outstanding stock from Ronald C. Morgan, founder and former Chief Executive Officer, and his wife, Robin L. Morgan. The shares represent approximately 4.7% of the Company's total outstanding Common Stock. The shares will be purchased for $2.85 per share, or a total purchase price of $1.425 million. This price represents a 6.5% discount to the August 7, 2009 closing price.  The Company intends to fund the stock repurchase transaction out of currently available cash. This transaction is expected to be completed as soon as possible, subject to certain customary closing conditions.  The stock repurchase transaction was negotiated and approved by the company’s Board of Directors.

Tandy Leather Factory expects this stock repurchase transaction to be accretive to earnings per share and book value per share.  Following the transaction, basic shares outstanding will be approximately 10.16 million.  Cash and short-term investments are approximately $9.5 million after this transaction, which is sufficient to maintain the company’s growth plans as well as continue with its previously announced one million share repurchase program.  As this purchase was made outside of that plan, the company still has the authorization to buyback approximately 975,000 shares.  The Company plans to retire the purchased shares.

Tandy Leather Factory, Inc., (http://www.tandyleatherfactory.com), headquartered in Fort Worth, Texas, is a specialty retailer and wholesale distributor 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 29 Leather Factory stores, located in 19 states and 3 Canadian provinces, 75 Tandy Leather retail stores, located in 36 states and 5 Canadian provinces, one combination wholesale/retail store located in the United Kingdom, and Mid-Continent Leather Sales, one store located in Oklahoma.  Its common stock trades on the NYSE Amex with the symbol "TLF".  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:	Shannon L. Greene, Tandy Leather Factory, Inc.	(817) 872-3200 or sgreene@tandyleather.com
	Mark Gilbert, Magellan Fin, LLC	(317) 867-2839 or MGilbert@MagellanFin.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.

EX-99.2

EXHIBIT 99.2

STOCK PURCHASE AGREEMENT

 THIS STOCK PURCHASE AGREEMENT is dated this 10th day of August, 2009 (the “Agreement"), by and among Ronald C. and Robin L. Morgan ("Seller") and Tandy Leather Factory, Inc., a Delaware corporation (the "Company").

WITNESSETH:

WHEREAS, Seller currently owns an aggregate of 1,798,932 shares of the Common Stock of the Company; and

WHEREAS, Seller desires to sell 500,000 shares (the "Shares") to the Company and the Company desires to purchase the Shares from Seller.

NOW, THEREFORE, in consideration of the premises and the mutual promises contained in this Agreement, the parties hereto agree as follows:

1. INCORPORATION OF RECITALS. The foregoing recitals are specifically incorporated in this Agreement by this reference.

2. PURCHASE AND SALE OF THE SHARES. Subject to the terms of this Agreement, Seller agrees to sell to the Company, and the Company agrees to purchase from Seller, a total of 500,000 Shares.

3. PURCHASE CONSIDERATION. The purchase price for the Shares (the "Purchase Price") shall be $2.85 per share in cash, or an aggregate purchase price to Seller of $1,425,000.

4. CLOSING.

(a) The consummation of the transactions contemplated under this Agreement (the "Closing") shall occur at the offices of the Company contemporaneously with the execution of this Agreement (the "Closing Date"), unless otherwise agreed to by the parties.

(b) At the Closing, the Seller will deliver to the Company a certificate or certificates representing 500,000 Shares of the Common Stock of the Company, with certificates duly endorsed, or with stock powers attached, transferring the Shares to the Company. The Company will pay to Seller the Purchase Price for Seller's Shares by wire transfer.

5. REPRESENTATIONS AND WARRANTIES OF THE SELLER. Seller hereby represents and warrants to the Company as follows:

(a) Seller is the legal owner of the Shares to be sold above;

(b) Seller holds or, as of the Closing will hold, his Shares free and clear of all liens, pledges, encumbrances and adverse claims;

(c) Seller is duly authorized to enter into the Agreement and to sell the Shares, and this Agreement is a legal, valid and binding agreement of Seller, enforceable in accordance with its terms;

(d) The execution, delivery and performance of this Agreement does not and will not constitute a breach or violation of, or a default under, any agreement binding upon any Seller, and does not require any consent or approval of any third party; and

(e) Upon the delivery to the Company of the certificates for the Shares, properly endorsed or with appropriate stock powers sufficient for transfer of the Shares to the Company, the Company will have acquired good and valid title thereto, free and clear of all liens, pledges, encumbrances and adverse claims.

6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby represents and warrants to the Seller as follows:

(a) The Company has been duly organized and is validly existing under the laws of the State of Delaware. The Company has the full corporate power and authority to execute, deliver and perform its obligations under this Agreement;

(b) This Agreement and the transactions contemplated hereby have been authorized by the Company by all necessary corporate action of the Company, and this Agreement is a legal, valid and binding agreement of the Company, enforceable in accordance with its terms; and

(c) The execution, delivery and performance of this Agreement does not and will not constitute a breach or violation of, or a default under, the Company's Articles of Incorporation and          By-Laws, or require any consent or approval of any third party, except such consents or approvals as shall have been obtained on or before the Closing Date.

7. CONDITIONS TO THE COMPANY'S OBLIGATIONS. The obligations of the Company to complete the Closing are contingent upon the occurrence of each of the following events:

(a) Certificates for all of the Shares, together with all appropriate endorsements, stock powers, assurances and such other documents as the Company may reasonably request, in a form reasonably satisfactory to the Company, must be delivered to the Company at the Closing;

(b) Each of the representations and warranties of the Seller in Section 5 above shall be true and correct on the Closing Date with the same effect as though all such representations and warranties had been made on the Closing Date; and

8. CONDITIONS TO THE SELLER'S OBLIGATIONS.

(a) The Purchase Price shall have been delivered to the Seller in the form and manner described in Section 4 above;

(b) Each of the representations and warranties of the Company set forth in Section 5 above shall be true on the Closing Date with the same effect as though all such representations and warranties had been made on the Closing Date; and

9. NOTICES. All notices and other communications given under this Agreement shall be in writing and shall be deemed given (a) on the date of delivery, if delivered personally, (b) on the date of transmission, if sent via facsimile transmission to the number given below, and telephonic confirmation of receipt is obtained promptly after completion of transmission, (c) on the date after delivery to a reputable nationally recognized overnight courier service, or (d) three days after being mailed by registered or certified mail (return receipt requested) to the parties at the following addresses (or such other address for a party as shall be specified by like notice):

(i) if to the Company:	Tandy Leather Factory, Inc.
	1900 Southeast Loop 820
	Fort Worth, Texas  76140
	Attention:  Jon Thompson, Chief Executive Officer and President
	Tandy Leather Factory, Inc.
	1900 Southeast Loop 820
	Fort Worth, Texas  76140
	Attention:  William M. Warren, Secretary and General Counsel
(ii) if to Seller:	Ronald C. and Robin L. Morgan
	7200 Lake Havasu Court
	Fort Worth, Texas  76016

Such addresses may be changed, from time to time, by means of a notice given in the manner provided in this Section (provided that no such notice shall be effective until it is received by the other parties hereto).

10. MISCELLANEOUS.

(a) This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

(b) The parties to this Agreement shall each bear their own expenses incurred in connection with this Agreement.

(c) The representations and warranties contained in Sections 5 and 6 hereof shall survive the Closing for so long as any statute of limitations applicable to the matters addressed by such representations and warranties remains open, in whole or in part, including without limitation by reason of waiver of such statute of limitations.

(d) The construction, interpretation and validity of this Agreement shall be governed by and determined in accordance with the laws of the State of Delaware, without regard to the conflict of law principles thereof.

(e) Each of the parties hereto and their respective agents, attorneys and advisors will maintain the confidentiality of all information provided in connection herewith. Through the Closing Date, the Company and the Seller will cooperate in the preparation and dissemination of any press releases, announcements and other disclosures to others relating to the transactions contemplated by the Agreement; provided, that this subsection shall not preclude the Company or Seller from making any disclosure that the Company or Seller reasonably believes is required by applicable law.

(f) This Agreement contains the final, complete and exclusive statement of the agreement between the parties with respect to the transactions contemplated herein, and all prior or contemporaneous agreements, written or oral, with respect to the subject matter hereof are merged herein. No change, amendment, qualification or cancellation hereof shall be effective unless in writing and executed by each of the parties hereto by their duly authorized officers.

11. This Agreement may be executed in any number of counterparts, which together shall constitute one and the same Agreement. The parties may execute more than one copy of the Agreement, each of which shall constitute an original.

IN WITNESS WHEREOF, the Seller and the Company each have caused this Agreement to be duly executed under seal as of the day and year first above written.

TANDY LEATHER FACTORY, INC.

By: /s/ Jon Thompson

Jon Thompson

Chief Executive Officer and President

By: /s/ William M. Warren

William M. Warren

Secretary and General Counsel

SELLER:

By: /s/ Ronald C. Morgan

Ronald C. Morgan

By: /s/ Robin L. Morgan

Robin L. Morgan