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AUBURN HILLS, Mich. - SPAR Group, Inc. (NASDAQ:SGRP), a merchandising services provider with a market capitalization of $23.5 million whose stock has declined over 53% in the past year, issued a statement Wednesday responding to claims made by company founder Robert G. Brown in a recent press release and public filing. According to InvestingPro analysis, the company’s shares are currently trading near their 52-week low of $1.00.
The merchandising services provider said Brown, 83, who founded the company in 1967, has made several demands including a $15 million payment, $900,000 in annual consulting fees, and a service agreement with his defunct business that would provide him an estimated $1 million personally. These demands come as InvestingPro data shows the company facing significant challenges, with revenue declining 25% and negative earnings in the last twelve months.
According to the company, Brown’s specific requests included a $75,000 monthly consulting agreement for "mergers and strategic planning," rehiring his bankrupt company Spar Business Services, and acquiring his Infotech company for $15 million despite it having "no clients, no revenue, no identifiable value."
SPAR Group stated that Brown’s actions appear to be "for his sole benefit and not the benefit of all stockholders," noting that his behavior has previously led to the resignation of multiple CEOs, directors, and all independent directors in June 2021.
The company also claimed Brown is currently in violation of Section 16(b) of the Securities Exchange Act of 1934 and has not responded to demands to return short-swing profits from trades made within the same six-month period.
SPAR Group noted that Brown already has representation on the current board through two contractually dedicated seats occupied by his brother James Brown and associate Panos Lazaretos.
The company’s board of directors continues to recommend that stockholders vote according to the recommendations outlined in SGRP’s definitive proxy statement filed with the SEC on June 12, 2025.
This article is based on a press release statement from SPAR Group, Inc.
In other recent news, SPAR Group has announced its compliance with Nasdaq’s requirements for its Annual Report on Form 10-K for the fiscal year ended December 31, 2024. However, the company faces a new challenge with a delay in filing its Quarterly Report on Form 10-Q for the quarter ended March 31, 2025. Nasdaq has notified SPAR Group of this non-compliance, but the company’s stock listing remains unaffected for now. SPAR Group has been given a 60-day period to submit a compliance plan, which could extend the deadline to October 13, 2025, if accepted. Meanwhile, Highwire Capital has confirmed its ongoing commitment to acquiring SPAR Group, a transaction that received stockholder approval in October 2024. The acquisition, which involves an all-cash purchase, aims to leverage SPAR Group’s services to enhance Highwire’s portfolio. The completion of this deal is subject to customary closing conditions, with both parties working to finalize the process. These recent developments reflect SPAR Group’s ongoing efforts to manage compliance and strategic growth initiatives.
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