Apollo Capital Notes Deficiencies of SPAR Group Take-Private By Highwire

Core Viewpoint - Apollo Technology Capital Corp. expresses concerns regarding the proposed take-private transaction of SPAR Group, Inc. by Highwire Capital, highlighting issues related to financing credibility and potential harm to SPAR stockholders [1][2][5]. Financing Concerns - Apollo Capital raises serious questions about the credibility and certainty of Highwire's financing for the take-private transaction, noting that Highwire is only obligated to pay a fee of $1.76 million if financing fails, which is insufficient compensation for SPAR and its stockholders [2][4]. - The transaction is contingent upon SPAR maintaining a balance sheet cash of no less than $14.2 million, but SPAR has not disclosed its current cash expectations at closing [2][4]. Disclosure Issues - Apollo Capital calls for the SPAR Board to provide full and fair disclosure regarding Highwire's proposed financing and SPAR's cash balance expectations, as the lack of this information prevents stockholders from making an informed vote [3][5]. - The merger agreement allows Highwire to use "commercially reasonable efforts" to secure financing, but there is no commitment of equity from Highwire, raising concerns about the transaction's viability [4][5]. Board Recommendations - Despite the uncertainties surrounding the financing, SPAR's Board has recommended that stockholders vote in favor of the transaction, which Apollo Capital believes is not in the best interest of SPAR's public stockholders [5][6].