Core Points - A group of large shareholders of SPAR Group, Inc. is demanding that two directors, Linda Houston and John Bode, who were not re-elected at the 2024 Annual Shareholders' Meeting, comply with the company's Bylaws regarding their resignation [2][4] - The Bylaws state that a director must submit a written irrevocable letter of resignation prior to their election or re-election, which becomes effective if they fail to receive the required majority vote [2] - The voting results showed that Linda Houston received 8,041,083 votes for and 9,714,561 against, while John Bode received 8,023,093 votes for and 9,747,031 against, indicating their failure to be re-elected [3] Shareholder Actions - The shareholders, led by Robert G. Brown, have formally notified SPAR's legal counsel that Houston and Bode should have resigned immediately following the Shareholder Meeting on June 12, 2025 [3][5] - As of July 22, 2025, neither Houston nor Bode has resigned, prompting the shareholders to urge the Board to respect the voting outcomes and adhere to the Bylaws [4][5]

[SPAR Group, Inc. Q1 2025 Earnings Release](index=1&type=section&id=SPAR%20Group%2C%20Inc.%20Q1%202025%20Earnings%20Release) [Executive Summary & Business Outlook](index=1&type=section&id=Executive%20Summary%20%26%20Business%20Outlook) The core US and Canada business saw 6% revenue growth and positive net income, supported by a record business pipeline exceeding $200 million - The core U.S. and Canada business grew **6% in revenue**, with improved operating margins and reduced SG&A, leading to a **net income of $0.5 million** from continuing operations ($0.02 EPS)[3](index=3&type=chunk) - The company reports its largest-ever pipeline of new business opportunities, valued at **over $200 million**[3](index=3&type=chunk) - The merger agreement with Highwire Capital was terminated due to Highwire's inability to secure funding, and SPAR Group's Board intends to **pursue the termination fee**[4](index=4&type=chunk) - The 10-K and 10-Q filings were delayed because the company expected to be private following the merger and will be current upon submission of the 10-Q[5](index=5&type=chunk) [First Quarter 2025 Financial Highlights](index=1&type=section&id=First%20Quarter%202025%20Financial%20Highlights) The company reported $34.0 million in revenue, $0.5 million in net income from continuing operations, and maintained a solid liquidity position Q1 2025 Key Financial Metrics | Metric | Q1 2025 | Q1 2024 | Note | | :--- | :--- | :--- | :--- | | **Net Revenues** | $34.0M | $49.4M (incl. int'l JVs) | - | | **Consolidated Gross Margin** | 21.4% | 19.7% | Improvement YoY | | **Net Income (Continuing Ops)** | $0.5M | $6.6M | Q1 2024 included a $7.2M gain on sale | | **Diluted EPS (Continuing Ops)** | $0.02 | $0.26 | - | | **Adjusted EBITDA** | $1.5M | $2.5M | - | Financial Position as of March 31, 2025 | Metric | Value | | :--- | :--- | | **Total Worldwide Liquidity** | $23.4 million | | **Cash and Cash Equivalents** | $17.9 million | | **Unused Availability** | $5.5 million | | **Net Working Capital** | $15.7 million | [Financial Statements](index=4&type=section&id=Financial%20Statements) Unaudited statements show decreased revenue due to divestitures but an improved gross margin percentage for Q1 2025 [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q1 2025 revenue was $34.0 million, with net income falling to $0.5 million due to a large prior-year gain on a business sale Q1 2025 vs Q1 2024 Statement of Operations (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Net revenues** | $34,041 | $49,396 | | **Gross profit** | $7,275 | $9,712 | | **Operating income** | $1,036 | $8,671 | | **Income from continuing operations** | $462 | $6,796 | | **Net income attributable to SPAR Group, Inc.** | $462 | $6,627 | | **Diluted EPS from continuing operations** | $0.02 | $0.26 | - The significant decrease in operating and net income compared to the prior year is primarily due to a one-time **$7.2 million gain on the sale of a business** recorded in Q1 2024[18](index=18&type=chunk) [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets grew to $70.2 million, driven by higher accounts receivable, while liabilities also increased Balance Sheet Comparison (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total current assets** | $59,062 | $45,996 | | **Total assets** | $70,164 | $56,431 | | **Total current liabilities** | $43,402 | $30,050 | | **Total liabilities** | $45,458 | $32,125 | | **Total stockholders' equity** | $24,706 | $24,306 | - The increase in current assets was primarily due to a rise in Accounts Receivable to **$38.2 million** from $24.8 million, while the increase in current liabilities was driven by higher Lines of Credit ($20.4 million vs $16.1 million) and Accounts Payable ($13.8 million vs $8.8 million)[20](index=20&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The company experienced a $4.0 million cash outflow from operations, primarily due to an increase in accounts receivable Cash Flow Summary for Three Months Ended March 31 (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | **Net cash (used in) provided by operating activities** | $(4,044) | $615 | | **Net cash used in investing activities** | $(525) | $(878) | | **Net cash provided by financing activities** | $4,290 | $6,344 | | **Net (decrease) increase in cash** | $(279) | $5,910 | | **Cash and cash equivalents at end of period** | $17,942 | $16,629 | [Reconciliation of GAAP to Non-GAAP Financial Measures](index=7&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Financial%20Measures) The company reported Q1 2025 Adjusted Net Income of $0.5 million and Adjusted EBITDA of $1.5 million Adjusted Net Income Reconciliation (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Net Income attributable to SPAR Group Inc.** | $462 | $6,627 | | Adjustments to Consolidated EBITDA (net of taxes) | $73 | $(5,292) | | **Adjusted Net income attributable to SPAR Group, Inc.** | $535 | $1,335 | Adjusted EBITDA Reconciliation (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Consolidated net income from continuing operations** | $462 | $6,796 | | Depreciation and amortization | $367 | $475 | | Interest expense | $469 | $475 | | Income tax expense | $114 | $1,393 | | Other adjustments (Gain on Sale, Strategic Review, etc.) | $84 | $(6,699) | | **Adjusted EBITDA attributable to SPAR Group, Inc.** | $1,496 | $2,466 | [Company Overview](index=1&type=section&id=Company%20Overview) SPAR Group is a leading merchandising and marketing services company in the US and Canada with over 50 years of experience - SPAR Group is a leading merchandising and marketing services company in North America[9](index=9&type=chunk) - The company has over 50 years of experience and averages **more than 30,000 store visits weekly**[9](index=9&type=chunk) [Forward-Looking Statements](index=2&type=section&id=Forward-Looking%20Statements) This section contains a standard legal disclaimer regarding forward-looking statements and associated risks - The press release contains "forward-looking statements" within the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995[11](index=11&type=chunk) - Investors are advised to carefully consider the company's risk factors and other disclosures in its SEC reports, as actual performance may differ materially from expectations[13](index=13&type=chunk)[14](index=14&type=chunk)

PART I: FINANCIAL INFORMATION This section presents the unaudited condensed consolidated financial statements, management's discussion, and disclosures on market risk and internal controls for the quarter [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=2&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) The unaudited condensed consolidated financial statements for Q1 2025 reflect decreased net revenue and net income, primarily due to the strategic exit from international operations and a shift to a single North American segment [Condensed Consolidated Statements of Operations and Comprehensive Income](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) For the three months ended March 31, 2025, SPAR Group reported net revenue of **$34.0 million**, a sharp decline from **$49.4 million** in the prior-year period, with net income significantly lower at **$0.46 million** Q1 2025 vs Q1 2024 Statement of Operations Highlights (in thousands, except per share amounts) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Net Revenues** | **$34,041** | **$49,396** | | Gross Profit | $7,275 | $9,712 | | Operating Income | $1,036 | $8,671 | | Gain on sale of business | - | $(7,157) | | **Net Income Attributable to SPAR Group, Inc.** | **$462** | **$6,627** | | Diluted EPS | $0.02 | $0.28 | - The significant decrease in operating income and net income year-over-year is largely attributable to a one-time gain on the sale of a business of **$7.16 million** recognized in Q1 2024, which was not present in Q1 2025[7](index=7&type=chunk) [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets increased to **$70.2 million** from **$56.4 million** at year-end 2024, driven by a significant rise in accounts receivable, while total liabilities also increased to **$45.5 million** Balance Sheet Summary (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | **$59,062** | **$45,996** | | Accounts Receivable, net | $38,219 | $24,766 | | **Total Assets** | **$70,164** | **$56,431** | | **Total Current Liabilities** | **$43,402** | **$30,050** | | Lines of credit and short-term loans | $20,373 | $16,082 | | **Total Liabilities** | **$45,458** | **$32,125** | | **Total Stockholders' Equity** | **$24,706** | **$24,306** | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) In Q1 2025, the company experienced a net cash outflow from operating activities of **$4.0 million**, a reversal from the **$0.6 million** inflow in Q1 2024, mainly due to a large increase in accounts receivable Cash Flow Summary for the Three Months Ended March 31 (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(4,044) | $615 | | Net cash used in investing activities | $(525) | $(878) | | Net cash provided by financing activities | $4,290 | $6,344 | | **Net change in cash and cash equivalents** | **$(279)** | **$5,910** | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail significant accounting policies and events, including the company's shift to a single reportable segment, debt facilities, and the termination of a 'going private' merger agreement - Following the exit from substantially all international operations in 2024, the company has changed its reporting structure to a single segment as of March 31, 2025, with the CEO as the Chief Operating Decision Maker (CODM) managing all activities on a consolidated basis[24](index=24&type=chunk) - The company's revolving credit facility with North Mill Capital was extended to October 10, 2025, with an outstanding balance of approximately **$20.4 million** as of March 31, 2025[44](index=44&type=chunk)[46](index=46&type=chunk) - The company terminated its merger agreement with Highwire Capital on May 23, 2025, and is now actively pursuing a termination fee from Highwire Capital[88](index=88&type=chunk) - During 2024, the company sold its joint venture interests in South Africa, China, Brazil, Japan, India, and Mexico, marking a strategic shift to focus on North American operations[72](index=72&type=chunk)[73](index=73&type=chunk)[74](index=74&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=16&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the **31.1%** decrease in Q1 2025 net revenues to the strategic exit from international markets, while gross profit margin improved from **19.7%** to **21.4%** Q1 2025 vs Q1 2024 Key Metrics | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Revenues | $34.0M | $49.4M | | Revenue Change | -31.1% | N/A | | Gross Profit Margin | 21.4% | 19.7% | | Cost of Revenues (% of Net Revenue) | 78.6% | 80.3% | - The decrease in net revenues, cost of revenues, and SG&A expenses is primarily due to the exit of operations in South Africa, Mexico, China, Japan, and India during 2024[104](index=104&type=chunk)[106](index=106&type=chunk)[107](index=107&type=chunk) Adjusted EBITDA Reconciliation (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Consolidated net income from continuing operations | $462 | $6,796 | | Consolidated EBITDA | $1,403 | $10,083 | | **Adjusted EBITDA attributable to SPAR Group, Inc.** | **$1,496** | **$2,466** | - The company believes that its sources of cash availability should be manageable and sufficient to support working capital and capital expenditure requirements over the next 12 months, contingent on the continuation of its existing credit facilities[114](index=114&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=20&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) As a smaller reporting company, SPAR Group, Inc. is not required to provide information for this item - As a smaller reporting company, SPAR Group, Inc. is not required to provide quantitative and qualitative disclosures about market risk[118](index=118&type=chunk) [Item 4. Controls and Procedures](index=20&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were not effective as of March 31, 2025, due to identified material weaknesses in internal control over financial reporting - Management concluded that disclosure controls and procedures were not effective as of the end of the period due to material weaknesses in internal control over financial reporting[119](index=119&type=chunk) - Material weaknesses were identified in the financial statement close process, specifically regarding balance sheet reconciliations, and in controls over non-recurring transactions like the deconsolidation and sale of international businesses[120](index=120&type=chunk)[121](index=121&type=chunk) - Remediation efforts include implementing a new ERP system, hiring an Assistant Controller, consolidating the finance team, and simplifying the organizational structure by divesting foreign operations[122](index=122&type=chunk) PART II: OTHER INFORMATION This section covers legal proceedings, risk factors, and a list of exhibits filed with the quarterly report [Item 1. Legal Proceedings](index=21&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal actions and administrative proceedings that arise in the normal course of business, which management does not expect to have a material adverse effect - The Company is party to various legal actions arising in the normal course of business, but management does not anticipate these to have a material adverse effect[126](index=126&type=chunk) [Item 1A. Risk Factors](index=21&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the company's risk factors since the filing of its 2024 Annual Report on Form 10-K/A - No material changes have occurred in the Company's risk factors since the 2024 Annual Report on Form 10-K/A[128](index=128&type=chunk) [Item 6. Exhibits](index=22&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications pursuant to the Sarbanes-Oxley Act of 2002 and Inline XBRL documents - The report includes required CEO and CFO certifications under Sections 302 and 906 of the Sarbanes-Oxley Act, as well as XBRL data files[135](index=135&type=chunk)

Core Viewpoint - SPAR Group, Inc. reported a strong first quarter of 2025, achieving 6% topline growth in the U.S. and Canada, despite the absence of international joint ventures, and has a significant pipeline of future business opportunities valued at over $200 million [2][3][10]. Financial Performance - Net revenues for the first quarter of 2025 were $34.0 million, a decrease from $49.4 million in the same period of 2024 [10][18]. - The consolidated gross margin improved to 21.4% of sales, compared to 19.7% in the prior year [10]. - Net income from continuing operations was $0.5 million, or $0.02 per diluted share, down from $6.6 million, or $0.26 per diluted share in the prior year [10][18]. - Adjusted EBITDA attributable to SPAR Group was $1.5 million, or 4.4% of sales, compared to $2.5 million, or 5.0% of sales in the previous quarter [10][28]. Operational Highlights - The company ended the quarter with total worldwide liquidity of $23.4 million, including $17.9 million in cash and cash equivalents [7]. - The company has the largest pipeline of opportunities in its history, with more than $200 million in potential future business [2]. Corporate Developments - The merger agreement with Highwire Capital was terminated due to their inability to secure funding, and the company is pursuing a termination fee or greater value for shareholders [3]. - The company experienced delays in filing its 10-K and 10-Q reports but expects to be current with all filings soon [4]. Balance Sheet Position - As of March 31, 2025, total assets were $70.2 million, up from $56.4 million at the end of 2024 [20]. - Total liabilities increased to $45.5 million from $32.1 million at the end of the previous year [20].

Core Viewpoint - SPAR Group, Inc. is under scrutiny as a large shareholder, Mr. Robert G. Brown, has requested the production of the company's books and records to investigate potential breaches of fiduciary duty by the Board of Directors and management [1]. Group 1: Shareholder Actions - On March 13, 2025, Mr. Brown formally demanded to inspect the company's books and records [2]. - Following a lack of compliance, Mr. Brown sent additional letters expressing concerns on April 16, 2025, and a supplemental demand on June 5, 2025, after the termination of a merger transaction with Highwire [2]. - On July 1, 2025, the company acknowledged Mr. Brown's request, stating that "a material initial production of the books and records of the Company will be made available" [3]. Group 2: Requested Documentation - The requested documentation includes all Board materials, documents, and communications related to Highwire Capital, financing commitments, shareholder meeting minutes, and Form 10-K filings from January 1, 2022, to the present [5][6]. - Additional requests cover financial statements, tax returns, general ledgers, bank statements, and any documents related to mergers or asset sales from 2022 to the present [6][7]. - Specific inquiries also include communications regarding related-party transactions, legal bills related to shareholder meetings, and any discussions about the Highwire merger and its subsequent termination [7][13]. Group 3: Governance and Compliance Issues - The documentation request highlights potential governance issues, including the company's failure to maintain the required number of board members and compliance with bylaws [7][9]. - There are concerns regarding the relationship between the CEO and related parties, as well as the company's due diligence efforts related to the Highwire merger [8][9]. - The request also seeks clarity on the company's financial practices, including cash flow projections and the handling of subsidiary acquisitions [8][9].

Core Viewpoint - SPAR Group, Inc. is experiencing a decline in share price and is expected to report lower earnings in the upcoming earnings disclosure, indicating potential challenges ahead for the company [1][2]. Company Performance - SPAR Group, Inc. closed at $1.03, down 1.91% from the previous trading session, underperforming compared to the S&P 500's gain of 0.8% [1]. - Prior to the recent trading day, the company's shares had gained 1.45%, which was better than the Business Services sector's loss of 0.89% but lagged behind the S&P 500's gain of 5.12% [1]. Earnings Forecast - Analysts forecast an EPS of $0.03 for SPAR Group, reflecting a 50% decrease from the same quarter last year [2]. - For the entire year, Zacks Consensus Estimates predict earnings of $0.12 per share and revenue of $0 million, indicating no change compared to the previous year [2]. Analyst Revisions - Recent revisions to analyst forecasts for SPAR Group, Inc. are important as they reflect short-term business trends, with positive revisions being a good sign for the business outlook [3]. Valuation Metrics - SPAR Group, Inc. has a Forward P/E ratio of 8.75, which is significantly lower than the industry average Forward P/E of 20.41, indicating a valuation discount [6]. - The Business Services industry, to which SPAR Group belongs, ranks in the top 27% of all industries according to the Zacks Industry Rank [6]. Zacks Rank - SPAR Group, Inc. currently holds a Zacks Rank of 3 (Hold), with the consensus EPS estimate remaining unchanged over the last 30 days [5]. - The Zacks Rank system has a strong track record, with stocks rated 1 (Strong Buy) producing an average annual return of +25% since 1988 [5].

Core Viewpoint - The SPAR Group's recent Annual Shareholders' Meeting raised significant concerns regarding the governance practices of its Board of Directors, particularly the re-election process and the continued service of directors who were not re-elected by shareholders [1][6]. Governance and Board Composition - At the 2025 Shareholder Meeting, three out of seven nominees for the Board were not re-elected, including two members of the Governance Committee responsible for nominating directors [1][5]. - The Bylaws stipulate that directors must submit a written irrevocable resignation to be eligible for re-election, which raises questions about the governance standards when directors not re-elected continue to serve [1][4]. - The Board's composition was reduced to five directors from January 1, 2024, to December 31, 2024, following the non-re-election of three directors, and there was no annual shareholder meeting in 2024, limiting shareholder input [4][6]. Voting Results - The voting results for the directors not re-elected were as follows: - Linda Houston: 8,041,083 votes For; 9,714,561 votes Against - John Bode: 8,023,093 votes For; 9,747,031 votes Against - Michael R. Matacunas: 7,282,163 votes For; 10,473,481 votes Against [2]. Governance Committee Concerns - The Governance Committee, which includes two directors who were not re-elected, is responsible for vetting and recommending new nominees, raising concerns about conflicts of interest [5][6]. - There are substantive reasons to believe that the Board may not be adhering to good governance practices by allowing non-re-elected directors to remain in their positions while having the authority to nominate their successors [6].

Company Performance - SPAR Group, Inc. closed at $1.08, with a daily increase of 1.89%, outperforming the S&P 500's gain of 0.38% [1] - Over the past month, the stock has risen by 1.92%, which is below the Business Services sector's gain of 3.09% and the S&P 500's gain of 6.6% [1] Earnings Report - The upcoming earnings report is projected to show earnings of $0.03 per share, reflecting a year-over-year decline of 50% [2] - For the annual period, the Zacks Consensus Estimates anticipate earnings of $0.12 per share and revenue of $0 million, indicating no change from the previous year [2] Analyst Estimates - Recent adjustments to analyst estimates for SPAR Group, Inc. are important as they reflect short-term business dynamics [3] - Positive changes in estimates suggest a favorable outlook on the company's health and profitability [3] Valuation Metrics - SPAR Group, Inc. has a Forward P/E ratio of 8.83, which is a discount compared to the industry average Forward P/E of 19.94 [6] - The Business Services industry, which includes SPAR Group, has a Zacks Industry Rank of 66, placing it in the top 27% of over 250 industries [6] Zacks Rank System - The Zacks Rank system, which ranges from 1 (Strong Buy) to 5 (Strong Sell), has a strong track record, with 1 stocks averaging an annual return of +25% since 1988 [5] - Currently, SPAR Group, Inc. holds a Zacks Rank of 3 (Hold) [5]

Core Viewpoint - Robert G. Brown, a founder and significant shareholder of SPAR Group, Inc., has responded to the company's press release, emphasizing the need for the Board to address the decline in stock price and consider his recommendations for improving shareholder value [1][3][4]. Company Response and Stock Performance - The SPAR June 11 Release did not explain the stock price drop from $2.97 on June 3, 2024, to $1.02 on May 29, 2025, nor did it outline a strategy to increase the stock price [3][4]. - Mr. Brown holds 6,469,683 shares of common stock in SPAR Group, indicating his vested interest in the company's performance [1]. Recommendations by Mr. Brown - Mr. Brown proposed five key actions for the Board's consideration: 1. A buyback of 6,000,000 shares [6]. 2. A quarterly dividend of $0.02 per share [6]. 3. A review of the Company's Amended and Restated Bylaws to ensure alignment with shareholder interests [6]. 4. An evaluation of Board compensation, suggesting that a portion be tied to share price performance [6]. 5. A review of management compensation to ensure it is aligned with delivering shareholder value [6]. Board's Response to Recommendations - The SPAR June 11 Release did not address Mr. Brown's recommendations, which he believes are crucial for the benefit of all shareholders [4][7]. - Mr. Brown criticized the company's response for focusing on personal attacks rather than addressing substantive issues [7]. Call for Transparency - Mr. Brown urged the Board to be transparent and communicate its position on his recommendations to shareholders [8].

Core Viewpoint - SPAR Group, Inc. is responding to false claims made by Robert G. Brown, a former chairman, regarding the company's board and management, asserting that his demands are self-serving and not in the interest of all shareholders [1][2][3]. Group 1: Background on Robert G. Brown - Robert G. Brown, who founded SPAR in 1967, has a history of disrupting the board for personal gain, leading to the resignation of independent directors and multiple CEOs [4]. - Brown's recent demands include $15 million in cash, $900,000 annually in consulting fees, and a long-term service agreement with his defunct business, which the board views as solely benefiting him [3][4]. Group 2: Board's Position and Actions - The board emphasizes that Brown has significant influence, holding two dedicated seats on the board and the ability to remove a director to gain further control [6][7]. - The board has stated that it is in compliance with its by-laws and has not improperly refused other candidates for director nominations [10]. Group 3: Financial and Legal Context - Brown is currently in violation of Section 16(b) of the Securities Exchange Act of 1934, and the company has demanded he return profits from short-swing trades [5]. - The company reported a loss in 2024 due to accounting treatment related to a joint venture sale, but asserts that its balance sheet remains strong [10]. Group 4: Shareholder Engagement and Recommendations - The board encourages shareholders to support the proposed Stock Compensation Plan, which aims to align executive compensation with performance [9]. - The company has set June 12, 2025, as the date for the annual meeting of stockholders and continues to welcome nominations that comply with its by-laws [10][12].