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Spar Group, Inc. (NASDAQ:SGRP), a $23.38 million market cap company with annual revenues of $143.5 million, announced Thursday that it has entered into an Eighth Modification Agreement with North Mill Capital, LLC, d/b/a SLR Business Credit, to extend and expand its existing revolving credit facilities in the United States and Canada. According to InvestingPro analysis, the company appears undervalued at current levels, though it faces some operational challenges with rapid cash burn.
According to a press release statement and an SEC filing, the new agreement, effective October 9, 2025, extends the maturity date of the company’s credit facilities from October 10, 2025 to October 10, 2027. The modification increases the US revolving credit facility from $28 million to $30 million and the Canadian facility from US$2 million to US$6 million. The cap on eligible unbilled accounts in the US borrowing base was raised to $15 million, up from $7 million, while the Canadian cap was increased to $2 million from CDN$800,000. This expansion comes as the company maintains a current ratio of 1.36, indicating sufficient liquid assets to meet short-term obligations.
The agreement also adjusts the minimum interest charges for the Canadian facility, which are now based on a minimum outstanding balance of $1 million, up from $500,000. The interest rate for both facilities remains set at the Wells Fargo Bank prime rate plus 1.25%, or a minimum of 6.75% per year. Facility fees for the US and Canadian credit lines are set at 0.60% of benchmark advance amounts, with additional fees for each $1 million increment above the benchmark.
As part of the modification, Spar Group executed new promissory notes reflecting the increased facility sizes. The agreement includes customary financial and restrictive covenants, such as requirements to maintain positive trailing EBITDA and limitations on certain payments, indebtedness, compensation increases, and capital expenditures.
The lender also provided limited waivers for certain previous covenant defaults related to delayed financial statement deliveries and specific Canadian credit card indebtedness, subject to post-closing conditions. All other covenants remain in effect.
This information is based on a press release statement and Spar Group’s filing with the Securities and Exchange Commission. The company’s stock has faced significant pressure, declining by 56% over the past year. Discover more detailed insights and 6 additional key ProTips about SGRP’s financial health with InvestingPro, including comprehensive analysis available in the Pro Research Report, part of the coverage of 1,400+ US stocks.
In other recent news, Spar Group has undergone significant leadership changes. Michael R. Matacunas has retired from his roles as Chief Executive Officer and board member, with his resignation not stemming from any disagreements with the company. William Linnane has been appointed as the interim CEO while continuing his role as President. Additionally, the company has announced the appointment of Josh Jewett as Chief Technology Officer as part of its strategic repositioning. These leadership changes come after nearly two years of restructuring and divestment of offshore operations. In a related development, Spar Group and Matacunas have entered into a transition agreement that includes a $2 million retention bonus for him and the extension of his stock option exercise period. The agreement also results in the immediate vesting of restricted stock units and the termination of a prior severance agreement, removing a $4 million potential liability for the company. The board has yet to name a permanent successor for the CEO position.
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