The following table sets forth selected financial data for the years indicated (dollars in millions):

Net revenues for the year ended December 31, 2023, were $262.7 million compared to $261.3 million for the year ended December 31, 2022, ("~~Form 10-K~~~~"), originally filed with~~an increase of $1.4 million or 1%. This increase in revenue was primarily driven by stronger performance in the ~~Securities~~Americas, particularly Canada, Brazil and ~~Exchange Commission (the "~~~~SEC") on April 17,~~US SPAR owned business, partially offset by lower performance at Asia Pacific and EMEA and US Joint Ventures. Foreign Currency rates were also a negative headwind in 2023.

The Americas net revenues totaled $203.7 million and $198.6 million for the years ended December 31, 2023 ~~which are incorporated herein~~and 2022, respectively. The increase of $5.1 million or 2.6% is the result of 51% growth in the Canadian business, 10% growth in our Brazil joint venture revenue and 3% growth in our US SPAR owned business, partially offset by ~~reference.~~a 37% and 43% drop in our US Joint Ventures, Resource Plus and NMS respectively. These results reflect growth in our core merchandising services business offset by delays in retail remodel projects to later in the year or early next year by our clients. Core merchandising had a strong growth in the US SPAR owned business, in Brazil and in Canada.

The Asia-Pacific net revenues totaled $24.5 million and $26.0 million for the years ended December 31, 2023 and 2022, respectively. The decrease of $1.5 million or 5.9% is primarily the result of negative foreign exchange rate movement as well as other extraneous conditions.

The EMEA net revenues totaled $34.6 million and $36.7 million for the years ended December 31, 2023 and 2022, respectively. The decrease of $2.1 million or 5.8% is driven by unfavorable foreign exchange rates in South Africa, when compared to 2022 rates. South Africa local currency net revenues increased 5% in 2023 compared to 2022.

The Company's cost of revenues consists of its in-store labor and field management wages, related benefits, travel and other direct labor-related expenses and was 78.9% of net revenue for the year ended December 31, 2023 compared to 80.5% of net revenues for the year ended December 31, 2022. We delivered a (159)-basis point improvement in gross margins against the global pressure of recruiting and wages.

The Americas cost of revenue as a percent of net revenue was 79.8% and 81.5% for the years ended December 31, 2023 and 2022, respectively. The decrease in cost of 1.6% was the result of 2.5% lower costs in our owned U.S. business and U.S. joint ventures and 1.4% lower cost in Brazil, partially offset by a 230-basis point increase in costs in Mexico. These results were achieved through our persistent emphasis on contract pricing, stabilization of market wages, enhancement of our higher-margin service offerings, and diminution of travel expenditures associated with remodel projects.

The Asia-Pacific cost of revenue as a percent of net revenue was 74.7% and 77.3% for the years ended December 31, 2023 and 2022, respectively. This improvement in cost of 2.6% was partially due to operating fully in China compared to the slow recovery from the zero-tolerance policy in 2022, which inflated cost of revenue ratios in 2022.

The EMEA cost of revenue as a percent of net revenue was 76.3% and 77.4% for the years ended December 31, 2023 and 2022, respectively. The decrease in cost of 1.1% was primarily the result of the service mix during the quarter and our ability to manage gross margins.

The Americas selling, general and administrative expenses totaled $32.2 million and $28.4 million for the years ended December 31, 2023 and 2022, respectively. The increase of $3.7 million, or 13.1% is primarily the result of consulting and legal charges associated with the review of strategic alternatives, higher compensation related expenses, and the annualization of our investment in recruiting and moving our technology to the cloud.

The Asia-Pacific selling, general and administrative expenses totaled $6.5 million and $7.4 million for the years ended December 31, 2023 and 2022, respectively. The decrease of $0.9 million, or 12.0% is primarily attributable to reduction in China and Japan's SG&A's expenses as we carefully manage these businesses in response to the broader economic trends.

The EMEA selling, general and administrative expenses totaled $5.0 million and $5.3 million for the years ended December 31, 2023 and 2022, respectively. SG&A for EMEA was flat compared to 2022.

Depreciation and amortization expense was approximately $2.0 million and $2.0 million for the years ended December 31, 2023 and 2022, respectively

The Company's interest expense was $1.9 million and $1.0 million for the years ended December 31, 2023 and 2022, respectively.

The America interest expense was $1.4 million and $0.7 million for the years ended December 31, 2023 and 2022, respectively. The increase was a result of higher interest rates.

The Asia-Pacific interest expense of $0.1 for the year ended December 31, 2023 versus $0.0 for the year ended December 31, 2022.

The EMEA incurred interest expense of $0.4 million versus $0.3 million for the years ended December 31, 2023 and 2022, respectively.

Other expense, net was $0.3 million versus income of $0.5 million for the years ended December 31, 2023 and 2022, respectively.

The Company had income tax expense of $2.4 million with an effective tax rate of 33.0% and $2.8 million with an effective rate of 56.6%, for the years ended December 31, 2023 and 2022, respectively. For the year ended December 31, 2023, our effective income tax rate of 33.0% varied from the U.S. federal statutory rate of 21% primarily as a result of foreign rate differential, sale of membership interest disposition of National Merchandising Services, LLC and permanent differences.

Net income attributable to noncontrolling interest was $0.9 million and $2.9 million for the years ended December 31, 2023 and 2022, respectively.

The Company’s critical accounting policies, including the assumptions and judgments underlying them, are disclosed in Note 2 to the Company’s consolidated financial statements included elsewhere in this Annual Report on Form 10-K. These policies have been consistently applied in all material respects and address matters such as impairment of long-lived assets, intangible assets, and goodwill, revenue recognition, allowance for credit losses, and internal use software. While the estimates and judgments associated with the application of these policies may be affected by different assumptions or conditions, the Company believes the estimates and judgments associated with the reported amounts are appropriate under the circumstances.

The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of the Company’s property and equipment and may not be recoverable. When indicators of potential impairment exist, the Company assesses the recoverability of the assets by estimating whether the Company will recover its carrying value through the undiscounted future cash flows generated by the use of the asset and its eventual disposition. Based on this analysis, if the Company does not believe that it will be able to recover the carrying value of the asset, the Company records an impairment loss to the extent that the carrying value exceeds the estimated fair value of the asset. If any assumptions, projections or estimates regarding any asset change in the future, the Company may have to record an impairment to reduce the net book value of such individual asset.

When facts and circumstances indicate that the carrying value of definite-lived intangible assets may not be recoverable, the Company assesses the recoverability of the carrying value by preparing estimates of sales volume and the resulting profit and cash flows expected to result from the use of the asset or asset group and its eventual disposition. If the sum of the expected future cash flows (undiscounted and without interest charges) is less than the carrying amount, the Company recognizes an impairment loss. The impairment loss recognized is the amount by which the carrying amount of the asset or asset group exceeds the fair value. The Company uses a variety of methodologies to determine the fair value of these assets, including discounted cash flow models, which are consistent with the assumptions hypothetical marketplace participants would use.

Goodwill is subject to annual impairment tests and interim impairment tests if impairment indicators are present. The Company performs the annual impairment test during the third quarter each year. The impairment tests require the Company to first assess qualitative factors to determine whether it is necessary to perform a quantitative goodwill impairment test. The Company is not required to calculate the fair value of a reporting unit unless it determines, based on a qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. If it is determined that it is more likely than not, or if the Company elects not to perform a qualitative assessment, the Company proceeds with the quantitative assessment. Under the quantitative test, if the fair value of a reporting unit exceeds its carrying amount, then goodwill of the reporting unit is considered to not be impaired. If the carrying amount of the reporting unit exceeds its fair value, then an impairment loss is recognized in an amount equal to the excess, up to the value of the goodwill.

The Company generates its revenues by providing merchandising services to its clients. Revenues are recognized when the Company satisfies a performance obligation by transferring services promised in a contract to a customer and in an amount that reflects the consideration that the Company expects to receive in exchange for those services. Performance obligations in the Company’s contracts represent distinct or separate services that we provide to the Company’s customers; generally, the Company’s contracts have a single performance obligation. If, at the outset of an arrangement, the Company determines that a contract with enforceable rights and obligations does not exist, revenues are deferred until all criteria for an enforceable contract are met.

Customer deposits, which are considered advances on future work, are deferred and recorded as revenue in the period in which the services are provided.

Based on management’s assessment, the Company established an allowance for credit losses of $1.5 million and $1.6 million at December 31, 2023, and 2022, respectively. Bad debt expense was $0.3 million and $1.3 million for the years ended December 31, 2023 and 2022, respectively.

The Company capitalizes certain costs associated with its internally developed software. The Company capitalizes the costs of materials and services incurred in developing or obtaining internal use software and such costs include, but are not limited to: the cost to purchase software, the cost to write program code, and payroll and related benefits and travel expenses for those employees who are directly involved with and who devote time to the Company’s software development projects. Capitalization of such costs begins during the application development stage once the preliminary project stage is complete, management authorizes and commits to funding the project, and it is probable that the project will be completed and that the software will be used to perform the function intended. Capitalization ceases when the project is substantially complete and ready for its intended purpose. Costs incurred during preliminary project and post-implementation stages, as well as software maintenance and training costs, are expensed in the period in which they are incurred.

The Company capitalized approximately $1.0 million and $1.5 million of costs related to software developed for internal use in 2023 and 2022, respectively, and recognized approximately $1.3 million of amortization of capitalized software for the years ended December 31, 2023 and 2022.

See the sections titled "Summary of Significant Accounting Policies—Recent Accounting Pronouncements” and "—Recently issued accounting pronouncements not yet adopted” in Note 2 to the Company's Consolidated Financial Statements, Summary of Significant Accounting Policies, included elsewhere in this Annual Report on Form 10‑K.

Management believes that based upon the continuation of the Company's existing credit facilities, projected results of operations, vendor payment requirements and other financing available to the Company (including amounts due to affiliates), sources of cash availability should be manageable and sufficient to support ongoing operations over the next year. However, delays in collection of receivables due from any of the Company's major clients, a significant reduction in business from such clients, or a negative economic downturn could have a material adverse effect on the Company's business, cash resources and ongoing ability to fund operations.

The Company is a party to various domestic and international credit facilities. These various domestic and international credit facilities require compliance with their respective financial covenants. For the year ended December 31, 2023, the Company was in compliance with all financial covenants under these arrangements. See Note 4 to the Company's Consolidated Financial Statements, Debt, included elsewhere in this Annual Report on Form 10-K.

Net cash provided by operating activities was $6.8 million for the year ended December 31, 2023 and net cash used in operating activities was $5.0 million for the year ended December 31, 2022. The year-over-year increase in net cash provided by operating activities was primarily due to improved working capital management.

Net cash used in investing activities for the years ended December 31, 2023 and 2022, was $2.3 million and $1.8 million, respectively. The net cash used in investing activities was primarily attributable to capitalization of internal use software.

Net cash used in financing activities for the year ended December 31, 2023 was approximately $3.0 million compared to $3.5 million provided in 2022. The year-over-year decrease in net cash provided by financing activities during 2023 was primarily due to repayment of lines of credit.

For the year ended December 31, 2023, the company experienced a net increase in cash and cash equivalents amounting to approximately $1.4 million. This positive change reflects foreign exchange rate fluctuations, which contributed a decrease of $0.2 million. In contrast, the prior fiscal year ending December 31, 2022, recorded a net decrease in cash and cash equivalents of $4.1 million, inclusive of a $0.8 million impact due to foreign exchange rate variations. These figures highlight the significant turnaround in our liquidity position, driven by both improved operational outcomes and favorable exchange rate movements.

The Company is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information required under this item.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act) are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission and to ensure that information required to be disclosed is accumulated and communicated to management, including our principal executive and financial officers, to allow timely decisions regarding disclosure. The Chief Executive Officer and the Chief Financial Officer, as our principal financial and accounting officer, have reviewed the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Annual Report on Form 10-K and, based on their evaluation, have concluded that the disclosure controls and procedures were effective as of such date.

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Our internal control over financial reporting is a process designed under the supervision of our Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Because of its inherent limitations, internal control over financial reporting may not detect or prevent misstatements. Also, projections of any evaluation of the effectiveness to future periods are subject to risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management utilized the criteria established in the Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) to conduct an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2023. Based on this evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2023.

Remediation of previous year Material Weakness in Internal Control Over Financial Reporting

In the fiscal year ending December 31, 2022, Management identified a material weakness within our internal control over financial reporting, specifically relating to non-recurring transactions with international components. Although this deficiency did not directly lead to any material misstatements in our financial statements for that year or interim periods, it raised the possibility that such misstatements could remain undetected.

In response, during 2023, we implemented our previously disclosed remediation plan that included the appointment of a new Chief Financial Officer, a new Vice President Controller, the creation of a Director of Accounting position and the engagement of an external consultant specializing in SOX compliance. Additionally, we implemented a review process and controls with more precise levels of review for non-recurring transactions with international components including policies and procedures to ensure documentary evidence is maintained, particularly for management review controls.

These controls were in place as of December 31, 2023, and based on management’s evaluation, the previously identified material weakness has been remediated.

Except for the changes in connection with our implementation of the remediation plan discussed above, there was no changes in the Company's internal controls over financial reporting that occurred during the Company's quarter ended December 31, 2023, that materially affected, or are reasonably likely to materially affect, the Company's internal controls over financial reporting.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Reference is made below to SGRP’s definitive Proxy Statement respecting its 2024 Annual Meeting of Stockholders currently scheduled to be held in April of 2024, as and when filed with the SEC, which SGRP plans to file pursuant to Regulation 14A in April of 2024, but not later than 120 days after the end of the Company’s 2024 fiscal year (the "2024 Proxy Statement”), For clarity (and without limitation), information appearing in the sections in such 2024 Proxy Statement entitled "PROPOSAL 3 – ADVISORY VOTE ON EXECUTIVE COMPENSATION”, "PROPOSAL 4 – ADVISORY VOTE ON THE FREQUENCY THAT THE CORPORATION HOLDS THE ADVISORY VOTE ON EXECUTIVE COMPENSATION”, and "REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS” shall not be deemed to be incorporated by reference in this Annual Report.

~~The~~Reference is made to the information set forth under the captions "The Board of Directors of the ~~Corporation~~Corporation”, "Executives and Officers of the Corporation”, "Security Ownership of Certain Beneficial Owners and Management” and "Corporate Governance” in the 2024 Proxy Statement.

Reference is ~~responsible for overseeing~~made to the ~~management, policies and direction of the Corporation and its subsidiaries (collectively, the "Company"), both directly and through its committees (See "~~~~Corporate Governance~~~~", below). The members of the Board and referenced Committees as of December 31, 2022, were as~~information set forth ~~below (7):~~under the captions "Security Ownership of Certain Beneficial Owners and Management”, "Executive Compensation, Directors and Other Information”, "Executive Compensation, Equity Awards and Options” and "Compensation Plans” in the 2024 Proxy Statement.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Reference is made to the information set forth under the captions "Security Ownership of Certain Beneficial Owners and Management”, "Executive Compensation, Equity Awards and Options” and "Compensation Plans” in the 2024 Proxy Statement.

Item 13. Certain Relationships and Related Transactions, and Director Independence

Reference is made to the information set forth under the caption "Transactions with Related Persons, Promoters and Certain Control Persons” in the 2024 Proxy Statement.

Reference is made to the information set forth under the caption "PROPOSAL 2 – RATIFICATION, ON AN ADVISORY BASIS, OF THE APPOINTMENT OF BDO USA, LLP AS THE COMPANY’S PRINCIPAL INDEPENDENT ACCOUNTANTS” in the 2024 Proxy Statement.

PART IV

Item 15. Exhibits and Financial Statement Schedules

F. Index to Financial Statements filed as part of this report:

~~Name~~Report of Independent Registered Public Accounting Firm (BDO USA, P.C.; Troy, Michigan; PCAOB ID#243)	~~Age~~	~~Position with SPAR Group, Inc~~.40
~~Michael Wager (3) (4)~~	71	~~Chairman of the Board and Director~~
~~Michael R. Matacunas~~Consolidated Statements of Operations and Comprehensive (Loss) Income for the years ended December 31, 2023 and 2022	55	~~Chief Executive Officer, President and Director~~42
~~Sean M. Whelan (3) (4) (5)~~	52	~~Director and Chairman of the Audit Committee~~
~~Robert G. Brown (1)~~	79	~~Director~~
~~William H. Bartels~~Consolidated Balance Sheets as of December 31, 2023 and 2022	78 43
	~~Director~~
~~Peter W. Brown (2) (4) (5) (6)~~Consolidated Stockholders' Equity for the years ended December 31, 2023 and 2022	44

Consolidated Statements of Cash Flows for the years ended December 31, 2023 and 2022	45

Notes to Consolidated Financial Statements	46

~~Director~~Exhibits

~~(1)~~Exhibit Number		~~Chairman~~Description

3.1		Certificate of Incorporation of SPAR Group, Inc. (referred to therein under its former name of PIA Merchandising Services, Inc.), as amended, incorporated by reference to the Corporation’s Registration Statement on Form S-1 (Registration No. 33-80429), as filed with the SEC on December 14, 1995, and the Certificate of Amendment filed with the Secretary of State of the State of Delaware on July 8, 1999 (which, among other things, changes the Corporation’s name to SPAR Group, Inc.), (incorporated by reference to Exhibit 4.1 to the Corporation’s Registration Statement on Form S-8 (Registration No. 33-80429) as filed with the SEC on April 2, 2021).

3.2		Certificate of Elimination of the Certificate of Designation of Series "A" Preferred Stock of SPAR Group, Inc., adopted as of January 25, 2022 (incorporated by reference to Exhibit 3.1 to SGRP's Current Report on Form 8-K, as filed with the SEC on January 28, 2022).

3.3		Certificate of Designation of Series "B” Convertible Preferred Stock of SPAR Group, Inc., adopted January 25, 2022 (incorporated by reference to Exhibit 3.2 to SGRP's Current Report on Form 8-K, as filed with the SEC on January 28, 2022).

3.4		Amended and Restated By-Laws of SPAR Group, Inc., as adopted, restated, effective and dated January 18, 2019 and as further amended through January 25, 2022 (incorporated by reference to Exhibit 3.3 to SGRP's Current Report on Form 8-K, as filed with the SEC on January 28, 2022).

3.5		Amended and Restated Charter of the Audit Committee of the Board ~~through January 25, 2022.~~of Directors of SPAR Group, Inc., adopted, restated, effective and dated August 12, 2020, (incorporated by reference to Exhibit 3.4 to the First Amendment to SGRP's Annual Report on Form 10-K/A for the fiscal year ended December 31, 2020, as filed with the SEC on April, 29, 2021 ("SGRP's 2020 Annual Report Amendment").


~~(2)~~3.6		~~Vice Chairman~~Charter of the Compensation Committee of the Board ~~through January 25, 2022.~~of Directors of SPAR Group, Inc., Amended, Restated and Dated (as of) August 11, 2020, (incorporated by reference to Exhibit 3.5 to the First Amendment to SGRP's Annual Report on Form 10-K/A for the fiscal year ended December 31, 2020, as filed with the SEC on April, 29, 2021 ("SGRP's 2020 Annual Report Amendment").

~~(3)~~3.7	~~Member~~	Charter of the Governance Committee of the Board of Directors of SPAR Group, Inc., Dated (as of) April 23, 2020 and As Amended through March 18, 2021 (incorporated by reference to Exhibit 3.6 to the First Amendment to SGRP's Annual Report on Form 10-K/A for the fiscal year ended December 31, 2020, as filed with the SEC on April, 29, 2021 ("SGRP's 2020 Annual Report Amendment").

3.08		SPAR Group, Inc. Statement of Policy Respecting Stockholder Communications with Directors, adopted on May 18, 2004 (incorporated by reference to SGRP's Current Report on Form 8-K, as filed with the SEC on May 27, 2004).

3.9		SPAR Group, Inc. Statement of Policy Regarding Director Qualifications and Nominations, adopted on May 18, 2004 (incorporated by reference to SGRP's Current Report on Form 8-K, as filed with the SEC on May 27, 2004).

3.10		SPAR Group, Inc. Statement of Policy Respecting Complaints and Communications by Employees and Others as Amended and Restated as of August 13, 2015 (also known as the Whistleblower Policy) (incorporated by reference to SGRP's Annual Report on Form 10-K for the fiscal year ended December 31, 2017, as filed with the SEC on April 2, 2018).

3.11		SGRP 2022 Stock Repurchase Program as approved by SGRP's Audit Committee and adopted by its Board of Directors on May 12, 2022 (incorporated by reference to SGRP's Current Report on Form 8-K, as filed with the SEC on May 24, 2022).

4.1		Form of SGRP's Common Stock Certificate (incorporated by reference to SGRP's Pre-Effective Amendment No. 1 to its Registration Statement on Form S-3 (Registration No. 333-162657) as filed with the SEC on February 7, 2011).

4.2		Form of SGRP's Series B Preferred Stock Certificate (incorporated by reference to SGRP’s Annual Report on Form 10-K, as filed with the SEC on April 17, 2023).

4.3		Registration Rights Agreement entered into as of January 21, 1992, by and between SGRP (as successor to, by merger in 1996 with, PIA Holding Corporation, f/k/a RVM Holding Corporation, the California Limited Partnership, The Riordan Foundation and Creditanstalt-Bankverine (incorporated by reference to the Form S-1).

4.4		Summary Description and Prospectus dated August 24, 2009, respecting the SPAR Group, Inc. 2008 Stock Compensation Plan, as amended (incorporated by reference to Exhibit 99(a)(1)(G) to SGRP's SC TO-I).

10.1		2021 Stock Compensation Plan of SPAR Group, Inc., effective as of August 12, 2021 (incorporated by reference to Appendix A to the Corporation’s Definitive Proxy Statement filed with the SEC on July 13, 2021).

10.2		2020 Stock Compensation Plan of SPAR Group, Inc., effective as of January 19, 2021 (incorporated by reference to Annex B to the Corporation’s Definitive Proxy Statement filed with the SEC on December ~~31, 2022.~~10, 2020).

10.3		2018 Stock Compensation Plan of SGRP, effective as of May 2, 2018 (incorporated by reference to Annex A to SGRP's Definitive Proxy Statement filed with the SEC on April 18, 2018).

10.4		2008 Stock Compensation Plan, effective as of May 29, 2008, and as amended through May 28, 2009 (the "SGRP 2008 Plan") (incorporated by reference to SGRP's Current Report on Form 8-K dated June 4, 2009, as filed with the SEC on June 4, 2009).

10.5		2000 Stock Option Plan, as amended through May 16, 2006 (incorporated by reference to SGRP's Quarterly Report on Form 10-Q for the quarter ended September 30, 2006, as filed with the SEC on November 14, 2006).

10.6		Phantom Stock Unit Grant and Agreement entered into and is effective as of April 3, 2023, between SGRP and Kori G. Belzer (as filed herewith).

10.7		Phantom Stock Unit Grant and Agreement entered into and is effective as of March 24, 2022, between SGRP and Kori G. Belzer (as filed herewith).

~~(4)~~10.8

~~Member~~Phantom Stock Unit Grant and Agreement entered into and is effective as of ~~the Audit Committee on December 31, 2022.~~April 3, 2023, between SGRP and Antonio Calisto Pato (as filed herewith).


~~(5)~~10.9		~~Member~~Phantom Stock Unit Grant and Agreement entered into and is effective as of ~~the Compensation Committee on December 31, 2022.~~April 3, 2023, between SGRP and William Linnane (as filed herewith).


~~(6)~~10.10		~~Chairman~~Phantom Stock Unit Grant and Agreement entered into and is effective as of March 24, 2022, between SGRP and William Linnane (as filed herewith).

10.11		Phantom Stock Unit Grant and Agreement entered into and is effective as of April 3, 2023, between SGRP and Ron Lutz (as filed herewith).

10.12		Phantom Stock Unit Grant and Agreement entered into and is effective as of March 24, 2022, between SGRP and Ron Lutz (as filed herewith).

10.13		Phantom Stock Unit Grant and Agreement entered into and is effective as of April 3, 2023, between SGRP and Mike Matacunas (as filed herewith).

10.14		Inducement RSU Contract between SPAR Group, Inc. and Antonio Calisto Pato dated March 10, 2023 (as filed herewith).

10.15		Inducement RSU Contract, between SPAR Group, Inc. and William Linnane, dated August 2, 2021 (incorporated by reference to Exhibit 10.6 to the ~~Governance Committee through~~Corporation’s Annual Report on Form 10-K as filed with the SEC on April 15, 2022).

10.16		Inducement RSU Contract, between SPAR Group, Inc. and Ron Lutz, dated August 2, 2021 (incorporated by reference to Exhibit 10.7 to the Corporation’s Annual Report on Form 10-K as filed with the SEC on April 15, 2022).

10.17		Inducement Nonqualified Stock Option Contract, between SPAR Group, Inc. and Mike Matacunas, dated February 22, 2021 (incorporated by reference to Exhibit 4.5 to the Corporation’s Registration Statement on Form S-8 (Registration No. 33-80429) as filed with the SEC on April 2, 2021).

10.18		Inducement RSU Contract, between SPAR Group, Inc. and Mike Matacunas, dated February 22, 2021 (incorporated by reference to Exhibit 10.9 to the Corporation’s Annual Report on Form 10-K as filed with the SEC on April 15, 2022).

10.19		Inducement Nonqualified Stock Option Contract, between SPAR Group, Inc. and Fay DeVriese, dated August 31, 2020 (incorporated by reference to Exhibit 4.4 to the Corporation’s Registration Statement on Form S-8 (Registration No. 33-80429) as filed with the SEC on April 2, 2021).

10.20		2001 Employee Stock Purchase Plan (incorporated by reference to SGRP's Proxy Statement for SGRP's annual stockholders meeting held on August 2, 2001, as filed with the SEC on July 12, 2001).

10.21		2001 Consultant Stock Purchase Plan (incorporated by reference to SGRP's Proxy Statement for SGRP's Annual meeting held on August 2, 2001, as filed with the SEC on July 12, 2001).

10.22		Consulting Agreement dated January 27, 2022, effective February 1, 2022, between SGRP and Thenablers, Ltd., which is wholly owned by and will provide certain consulting services from Panagiotis ("Panos") N. Lazaretos (who retired as a SGRP director effective January 25, ~~2022.~~ 2022) to SGRP regarding global sales and new markets’ expansion (incorporated by reference to Exhibit 10.3 to SGRP's Current Report on Form 8-K, as filed with the SEC on January 28, 2022).
~~(7)~~
10.23		Consulting Agreement dated January 25, 2022, and effective January 26, 2022, between SGRP and James R. Brown, Sr. ~~and Panagiotis (“Panos”) N. Lazaretos were directors~~(who retired as a SGRP director effective January 25, 2022) (incorporated by reference to Exhibit 10.2 to SGRP's Current Report on Form 8-K, as filed with the SEC on January ~~1, 2022, but retired from the Board and its Committees on January 25, 2022. See Item 13 –~~ 28, 2022).

10.24		Change of Control, Voting and Restricted Stock Agreement, effective January 28, 2022, by and among SGRP, Robert G. Brown, William H. Bartels, SPAR Administrative Services, Inc., ~~below.~~a Nevada corporation, and SPAR Business Services, Inc., a Nevada corporation (incorporated by reference to Exhibit 10.1 to SGRP's Current Report on Form 8-K, as filed with the SEC on January 28, 2022).

10.25		Change of Control Severance Agreement between SGRP and Antonio Calisto Pato dated as of February 28, 2023 (as filed herewith).

10.26		Corrective Global Amendment to Change of Control Severance Agreements between SGRP, Fay DeVriese, William Linnane and Ron Lutz made and entered into and effective as of August 10, 2022 (as filed herewith).

10.27		Amended and Restated Change of Control Severance Agreement (the "CICSA”) between SPAR Group, Inc. ("SGRP”) and Fay DeVriese made and entered into effective as of August 13, 2021 (incorporated by reference to Exhibit 10.1 to SGRP's Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, as filed with the SEC on November 15, 2021).

10.28		Change of Control Severance Agreement between SGRP and William Linnane dated as of July 12, 2021 (incorporated by reference to Exhibit 10.18 to the Corporation’s Annual Report on Form 10-K as filed with the SEC on April 15, 2022.

10.29		Change of Control Severance Agreement between SGRP and Ron Lutz dated as of July 12, 2021 (incorporated by reference to Exhibit 10.19 to the Corporation’s Annual Report on Form 10-K as filed with the SEC on April 15, 2022).

10.30		Change of Control Severance Agreement by and among SPAR Group, Inc., SPAR Marketing Force, Inc. and Mike Matacunas dated as of January 26, 2021 (incorporated by reference to Exhibit 10.1 to SGRP's Current Report on Form 8-K, as filed with the SEC on February 16, 2021).

10.31		Amended and Restated Change of Control Severance Agreement between Kori G. Belzer and SGRP, dated as of August 10, 2022 (incorporated by reference to Exhibit 10.2 to SGRP's Quarterly Report on Form 10-Q, as filed with the SEC on August 15, 2022).

10.32		Amended and Restated Change of Control Severance Agreement between Lawrence David Swift and SGRP dated as of August 10, 2022 (incorporated by reference to Exhibit 10.3 to SGRP's Current Report on Form 8-K, as filed with the SEC on August 14, 2022).

10.33		Trademark License Agreement dated as of July 8, 1999, by and between SPAR InfoTech, Inc., and SPAR Trademarks, Inc. (incorporated by reference to SGRP's Annual Report on Form 10-K for the fiscal year ended December 31, 2002, as filed with the SEC on March 31, 2003).

10.34		Trademark License Agreement dated as of July 8, 1999, by and between SPAR Marketing Services, Inc., and SPAR Trademarks, Inc. (incorporated by reference to SGRP's Annual Report on Form 10-K for the fiscal year ended December 31, 2002, as filed with the SEC on March 31, 2003).

10.35		Business Manager Agreement (re joint ownership of certain software) dated as of July 8, 1999, among SPAR Business Services, Inc. (f/k/a SPAR Marketing Services, Inc.), SPAR InfoTech, Inc., and SPAR Marketing Force, Inc.(incorporated by reference to SGRP's Annual Report on Form 10-K/A for the fiscal year ended December 31, 1999, as filed with the SEC on May 1, 2000).

10.36		Joint Venture Agreement dated as of September 13, 2016, by and between JK Consultoria Empresarial Ltda.-ME, a limitada formed under the laws of Brazil, Earth Investments, LLC, a Nevada limited liability company, and SGRP Brasil Participações Ltda., a limitada formed under the laws of Brazil (incorporated by reference to SGRP's Annual Report on Form 10-K for the fiscal year ended December 31, 2017, as filed with the SEC on April 2, 2018).

10.37		Joint Venture Contract dated July 4, 2014, among SPAR China Inc., established and existing under the laws of Hong Kong, Wedone Shanghai, Co., Ltd., organized and existing under the laws of P.R. China, Shanghai Gold Pack Investment Management Co., Ltd., organized and existing under the laws of P.R. China, and XU Gang, an Australian citizen (incorporated by reference to SGRP's Annual Report on Form 10-K for the fiscal year ended December 31, 2016, as filed with the SEC on April 17, 2017).

10.38		Joint Venture Agreement dated as of September 3, 2012, by and between Combined Manufacturers National (Pty) Ltd and SGRP Meridian (Pty) Ltd, respecting SGRP's additional consolidated subsidiary in South Africa (incorporated by reference to SGRP's Annual Report on Form 10-K, as filed with the SEC on April 2, 2013).

10.39		Joint Venture Agreement dated as of August 30, 2012, by and between National Merchandising of America, Inc., a Georgia corporation, SPAR NMS Holdings, Inc., a Nevada corporation and consolidated subsidiary of SGRP, and National Merchandising Services, LLC, a Nevada limited liability company and consolidated subsidiary of SGRP (incorporated by reference to SGRP's Quarterly Report on Form 10-Q, as filed with the SEC on November 9, 2012).

10.40		Joint Venture Agreement dated as of August 2, 2011, by and among Todopromo, S.A. de C.V., Sepeme, S.A. de C.V., Top Promoservicios, S.A. de C.V., Conapad, S.C., Mr. Juan Francisco Medina Domenzain, Mr. Juan Francisco Medina Staines, Mr. Jorge Carlos Medina Staines, Mr. Julio Cesar Hernandez Vanegas, and SPAR Group International, Inc., respecting SGRP's consolidated subsidiary in Mexico (incorporated by reference to SGRP's Annual Report on Form 10-K, as filed with the SEC on April 2, 2013).

10.41		Joint Venture Agreement dated as of March 29, 2006, by and between FACE AND COSMETIC TRADING SERVICES PTY LIMITED and SPAR International Ltd., respecting the Company's subsidiary in Australia (incorporated by reference to SGRP's Annual Report on Form 10-K for the fiscal year ended December 31, 2006, as filed with the SEC on April 2, 2007).

10.42		Joint Venture Shareholders Agreement between Friedshelf 401 (Proprietary) Limited, SPAR Group International, Inc., Derek O'Brien, Brian Mason, SMD Meridian CC, Meridian Sales & Merchandising (Western Cape) CC, Retail Consumer Marketing CC, Merhold Holding Trust in respect of SGRP Meridian (Proprietary) Limited, dated as of June 25, 2004, respecting SGRP's consolidated subsidiary in South Africa (incorporated by reference to SGRP's Annual Report on Form 10-K for the fiscal year ended December 31, 2004, as filed with the SEC on April 12, 2005).

10.43		$100,000.00 secured Promissory Note from SMF to Richard Justus dated as of January 1, 2018 (the "Resource Justus Note") (incorporated by reference to SGRP's Current Report on Form 8-K, as filed with the SEC on January 16, 2018).

10.44		Securities Pledge and Escrow Agreement securing the Resource Justus Note between SMF and Richard Justus dated as of January 1, 2018 (incorporated by reference to SGRP's Current Report on Form 8-K, as filed with the SEC on January 16, 2018).

10.45		Executive Officer Employment Terms and Severance Agreement between RPI and Richard Justus dated as of January 1, 2018 (incorporated by reference to SGRP's Current Report on Form 8-K, as filed with the SEC on January 16, 2018).

10.46		Stock Purchase Agreement as of October 13, 2017, by and between SMF, as buyer, and Richard Justus, as seller (the "Resource Justus SPA") (incorporated by reference to SGRP's Current Report on Form 8-K, as filed with the SEC on January 16, 2018).

10.47		Guaranty of the Resource Paulk Note by SPAR Group, Inc. ("SGRP"), in favor of Joseph L. Paulk dated as of January 1, 2018 (incorporated by reference to SGRP's Current Report on Form 8-K, as filed with the SEC on January 16, 2018).

10.48		$2,600,000.00 secured promissory note from SMF to Joseph L. Paulk dated as of January 1, 2018 (the "Resource Paulk Note") (incorporated by reference to SGRP's Current Report on Form 8-K, as filed with the SEC on January 16, 2018).

10.49		Securities Pledge and Escrow Agreement securing the Resource Paulk Note between SMF and Joseph L. Paulk dated as of January 1, 2018 (incorporated by reference to SGRP's Current Report on Form 8-K, as filed with the SEC on January 16, 2018).

10.50		Stock Purchase Agreement as of October 13, 2017, by and between the SPAR Marketing Force, Inc. ("SMF"), as buyer and Joseph L. Paulk, as seller (the "Resource Paulk SPA") (incorporated by reference to SGRP's Current Report on Form 8-K, as filed with the SEC on January 16, 2018).

10.51		Collateral Assignment (Security Agreement) (Trademarks) effective: April 10, 2019, from SPAR Trademarks, Inc., to North Mill, (incorporated by reference to SGRP's Annual Report on Form 10-K/A for the fiscal year ended December 31, 2018, as filed with the SEC on April 24, 2019).

10.52		Collateral Pledge Agreement dated as of April 10, 2019, by SGRP, the US NM Borrower and SPAR Acquisition, Inc., in favor of North Mill, (incorporated by reference to SGRP's Annual Report on Form 10-K/A for the fiscal year ended December 31, 2018, as filed with the SEC on April 24, 2019).

10.53		Corporate Guaranty dated as of April 10, 2019, from the NM Guarantors to North Mill, (incorporated by reference to SGRP's Annual Report on Form 10-K/A for the fiscal year ended December 31, 2018, as filed with the SEC on April 24, 2019).

10.54		Loan and Security Agreement entered into as of April 10, 2019, by and among North Mill Capital LLC, a Delaware limited liability company ("North Mill"), SPAR Marketing Force, Inc., a Nevada corporation (the "US NM Borrower"), SPAR Canada Company, an unlimited company organized under the laws of Nova Scotia (the "Canadian NM Borrower"), and each of SPAR Group, Inc., a Delaware corporation ("SGRP"), and SPAR Acquisition, Inc., SPAR Canada, Inc., SPAR Trademarks, Inc., and SPAR Assembly & Installation, Inc., each a Nevada corporation (including SGRP, each as a "NM Guarantor"), (incorporated by reference to SGRP's Annual Report on Form 10-K/A for the fiscal year ended December 31, 2018, as filed with the SEC on April 24, 2019).

10.55		Waiver and Modification Agreement entered in as of January 4, 2021, and effective as of December 31, 2020 (the "Modification Agreement"), among North Mill Capital, LLC ("NM"), SPAR Group, Inc. ("SGRP") and certain of its direct and indirect subsidiaries in the United States and Canada, namely SPAR Marketing Force, Inc. ("SMF"), and SPAR Canada Company ("SCC"), and SPAR Canada, Inc., SPAR Acquisition, Inc., SPAR Assembly and Installation, Inc., and SPAR Trademarks, Inc. (together with SGRP, each a "NM Guarantor" and collectively, the "NM Guarantors", and together with SMF and SCC, each a "NM Loan Party" and collectively, the "NM Loan Parties" (incorporated by reference to Exhibit 99.1 to SGRP's Current Report on Form 8-K as filed with the SEC on January 11, 2021).

10.56		Second Modification Agreement dated as of March 22, 2021, and effective as of April 1, 2021 (the "Second Modification Agreement"), among North Mill Capital, LLC ("NM"), d/b/a SLR Business Credit, SPAR Group, Inc. ("SGRP") and certain of its direct and indirect subsidiaries in the United States and Canada, namely SPAR Marketing Force, Inc. ("SMF"), and SPAR Canada Company ("SCC"), and SPAR Canada, Inc., SPAR Acquisition, Inc., SPAR Assembly and Installation, Inc., and SPAR Trademarks, Inc. (together with SGRP, each a "NM Guarantor" and collectively, the "NM Guarantors", and together with SMF and SCC, each a "NM Loan Party" and collectively, the "NM Loan Parties") (incorporated by reference to Exhibit 99.1 to SGRP’s Current Report on Form 8-K as filed with the SEC on March 29, 2021).

10.57		Third Modification Agreement dated as of December 16, 2021, and effective as of December 1, 2021 (the "Third Modification Agreement"), among North Mill Capital, LLC ("NM"), d/b/a SLR Business Credit, SPAR Group, Inc. ("SGRP") and certain of its direct and indirect subsidiaries in the United States and Canada, namely SPAR Marketing Force, Inc. ("SMF"), and SPAR Canada Company ("SCC"), and SPAR Canada, Inc., SPAR Acquisition, Inc., SPAR Assembly and Installation, Inc., and SPAR Trademarks, Inc. (together with SGRP, each a "NM Guarantor" and collectively, the "NM Guarantors", and together with SMF and SCC, each a "NM Loan Party" and collectively, the "NM Loan Parties") (as filed herewith).

10.58		Fourth Modification Agreement dated as of July 1, 2022, and effective as of June 30, 2022 (the "Fourth Modification Agreement"), among North Mill Capital, LLC ("NM"), d/b/a SLR Business Credit, SPAR Group, Inc. ("SGRP") and certain of its direct and indirect subsidiaries in the United States and Canada, namely SPAR Marketing Force, Inc. ("SMF"), and SPAR Canada Company ("SCC"), and SPAR Canada, Inc., SPAR Acquisition, Inc., SPAR Assembly and Installation, Inc., and SPAR Trademarks, Inc. (together with SGRP, each a "NM Guarantor" and collectively, the "NM Guarantors", and together with SMF and SCC, each a "NM Loan Party" and collectively, the "NM Loan Parties") (incorporated by reference to Exhibit 10.1 to SGRP's Current Report on Form 10-Q for the quarter ended June 30, 2022, as filed with the SEC on August 15, 2022).

10.59		Fifth Modification Agreement entered into as of August 9, 2022 (the "Fifth Modification Agreement"), among North Mill Capital, LLC ("NM"), d/b/a SLR Business Credit, SPAR Group, Inc. ("SGRP") and certain of its direct and indirect subsidiaries in the United States and Canada, namely SPAR Marketing Force, Inc. ("SMF"), and SPAR Canada Company ("SCC"), and SPAR Canada, Inc., SPAR Acquisition, Inc., SPAR Assembly and Installation, Inc., and SPAR Trademarks, Inc. (together with SGRP, each a "NM Guarantor" and collectively, the "NM Guarantors", and together with SMF and SCC, each a "NM Loan Party" and collectively, the "NM Loan Parties") (as filed herewith).

10.60		Sixth Modification Agreement entered into as of February 1, 2023 (the "Sixth Modification Agreement"), among North Mill Capital, LLC ("NM"), d/b/a SLR Business Credit, SPAR Group, Inc. ("SGRP") and certain of its direct and indirect subsidiaries in the United States and Canada, namely SPAR Marketing Force, Inc. ("SMF"), and SPAR Canada Company ("SCC"), and SPAR Canada, Inc., SPAR Acquisition, Inc., SPAR Assembly and Installation, Inc., and SPAR Trademarks, Inc. (together with SGRP, each a "NM Guarantor" and collectively, the "NM Guarantors", and together with SMF and SCC, each a "NM Loan Party" and collectively, the "NM Loan Parties") (incorporated by reference to Exhibit 10.1 to SGRP's Current Report on Form 8-K as filed with the SEC on March 2, 2023).

10.61		US$28 million Fourth Amended and Restated Revolving Credit Master Promissory Note executed and delivered by SMF to NM and dated as of February 1, 2023 (incorporated by reference to Exhibit 10.2 to SGRP’s Current Report on Form 8-K as filed with the SEC on March 2, 2023).

10.62		CDN$2 million Fourth Amended and Restated Revolving Credit Master Promissory Note executed and delivered by SCC to NM and dated as of February 1, 2023 (incorporated by reference to Exhibit 10.3 to SGRP’s Current Report on Form 8-K as filed with the SEC on March 2, 2023).

10.63		Letter of Offer dated September 29, 2011, and General Business Factoring Agreement (undated) between Oxford Funding Pty Ltd and SPARFACTS Pty Ltd (incorporated by reference to SGRP's Annual Report on Form 10-K, as filed with the SEC on April 2, 2013).

10.64		Limited Mutual Release Agreement, dated as of January 18, 2019, among Robert G. Brown, William H. Bartels, Christiaan Olivier, Lorrence T. Kellar, Jack W. Partridge, Arthur B. Drogue and R. Eric McCarthey (incorporated by reference to Exhibit 10.1 to SGRP's Current Report on Form 8-K, as filed with the SEC on January 25, 2019).

10.65		Stipulation of Dismissal, dated as of January 18, 2019 (incorporated by reference to Exhibit 10.2 to SGRP's Current Report on Form 8-K, as filed with the SEC on January 25, 2019).

10.66		Text of Letter to SPAR Group, Inc. ("SGRP"), from the Nasdaq Stock Market, Inc. ("Nasdaq"), dated July 16, 2021 (incorporated by reference to Exhibit 99.1 to SGRP’s Current Report on Form 8-K, as filed with the SEC on July 30, 2021).

10.67		Text of Letter to SPAR Group, Inc. ("SGRP"), from the Nasdaq Stock Market, Inc. ("Nasdaq"), dated June 15, 2021, stating that SGRP no longer complies with Nasdaq's majority independent director and audit committee requirements as set forth in Nasdaq Listing Rule 5605 (incorporated by reference to Exhibit 17.1 to SGRP’s Current Report on Form 8-K, as filed with the SEC on June 22, 2021).

14.1		SPAR Group Code of Ethical Conduct for its Directors, Executives, Officers, Employees, Consultants and other Representatives Amended and Restated (as of) March 15, 2018 (incorporated by reference to SGRP's Annual Report on Form 10-K for the fiscal year ended December 31, 2017, as filed with the SEC on April 2, 2018).

14.2		Statement of Policy Regarding Personal Securities Transactions in SGRP Stock and Non-Public Information, as adopted, restated, effective and dated as of May 1, 2004, and as further amended through March 10, 2011 (incorporated by reference to SGRP's Annual Report on Form 10-K for the year ended December 31, 2010, as filed with the SEC on March 15, 2011).

21.1		List of Subsidiaries (as filed herewith).

23.1		Consent of BDO USA, P.C. (as filed herewith).

31.1		Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (as filed herewith).

31.2		Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (as filed herewith).

32.1		Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (as filed herewith).

32.2		Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (as filed herewith).

101.INS*		Inline XBRL Instance

101.SCH*		Inline XBRL Taxonomy Extension Schema

101.CAL*		Inline XBRL Taxonomy Extension Calculation

101.DEF*		Inline XBRL Taxonomy Extension Definition

101.LAB*		Inline XBRL Taxonomy Extension Labels

101.PRE*		Inline XBRL Taxonomy Extension Presentation

104		Cover Page Interactive Data File (embedded within the Inline XBRL and contained in Exhibit 101)

~~Michael Wager~~ ~~was elected Chairman~~

* XBRL information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the ~~Board on September 15, 2022. He was appointed on October 21, 2021,~~Securities Act of 1933, as ~~a Director and a member~~amended, is deemed not filed for purposes of section 18 of the ~~Audit Committee by the Board. Mr. Wager~~Securities Exchange Act of 1934, as amended, and otherwise is an attorney who has specialized in securities, reorganizations, M&A and regulatory compliance throughout his career. He is currently a Senior Counsel with Taft Stettinius & Hollister LLP serving in an advisory role and the Chief Strategy Officer for Byrna Technologies. Mr. Wager is also currently a member of the board and has served as the Chairman of the Audit and Governance Committees for Michael Anthony Holdings. Mr. Wager earned his Bachelor of Arts, Political Science Degree at the American University, College of Public Affairs, his Master of Arts, Political Science Degree at Columbia University, Graduate School of Arts and Sciences, and his Juris Doctor Degree at New York University School of Law.not subject to liability under these sections.

~~Michael R. Matacunas~~ Item 16. Form 10-K Summaryserves as the Chief Executive Officer, President and a Director of SGRP and has held such positions since his appointment as Chief Executive Officer of SGRP on February 16, 2021. He is a Fortune 500 veteran with more than 30 years of relevant leadership experience. He has worked in public and private companies, developed and led international business growth, driven exceptional operational results and built world-class teams. Mr. Matacunas was previously the Chief Administrative Officer at Dollar Tree, Inc., where he helped lead the successful multi-billion-dollar acquisition and integration of Family Dollar Stores, including, among other things, merchandising, sourcing, operational and executive improvements. Prior to this, Mr. Matacunas was CEO of a successful retail professional services business that transformed leading global retailers, wholesalers and consumer packaged goods companies. Mike's experience also includes strategy, consulting and world-wide roles at leading technology companies, including IBM and Manhattan Associates. Mr. Matacunas earned a BA in Economics from Boston University and an MBA from the College of William & Mary Mason School of Business.

None.

~~Sean M. Whelan~~SIGNATURES ~~was appointed~~

Pursuant to the ~~Governance Committee on September 15, 2022. He was appointed on October 21, 2021, as a Director and a member~~requirements of Section 13 or 15(d) of the ~~Audit Committee and Compensation Committee~~Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the Board, and on October 25, 2021, the Audit Committee elected him as its Chairman. Mr. Whelan is currently the Chief Executive Officer, and was previously the Chief Financial Officer, for Encore Rehabilitation Services. He has also held the Chief Financial Officer role for several other public and private companies including Smile America Partners, Bedrock Manufacturing, LLC, Diplomat Pharmacy and InfuSystem Holdings, Inc. Mr. Whelan is currently a Board member and Chairman of the Audit Committee with Zomedica Corp (NYSE American: ZOM) and also a Board member with OptioRx; he previously served as an Executive Board member with Diplomat Pharmacy and InfuSystem Holding, Inc. Mr. Whelan earned his Bachelor of Business Administration Degree and his Master of Accounting Degree at the University of Michigan's Ross School of Business and is a CPA.

~~Robert G. Brown~~ rejoined the Board on April 24, 2020. As one (1) of the two (2) founders of the company, Mr. Brown served as Director of SGRP from July 8, 1999 until his retirement on May 3, 2018. Prior to 1999, Mr. Robert G. Brown served as the Chairman, President and Chief Executive Officer of the SPAR Companies since certain of its predecessors were formed in 1979 through 2005. During his tenure, Mr. Brown oversaw the change from a software and consulting company into a merchandising company in the 1980's and in the 1990's converted the reporting and data collection work to the Internet from mainframes and PC's which gave SPAR a strategic cost and quality advantage. In 1999, he executed a reverse merger making SPAR a public company.

~~William H. Bartels~~ has served as Director of SGRP since July 8, 1999. As one (1) of the two (2) founders of the Company, he was responsible for sales, marketing and developing client relationships across the globe for more than 40 years. He was also responsible for marketing/sales for the SPARLINE technology and its related consulting business for evaluating trade promotion spending and strategies for top tier CPG companies, domestic and international. He gained industry-wide recognition as reported through numerous industry publications and guest speeches at major industry conferences, while also negotiating partnerships with research companies in the U.K. and Australia for using the SPARLINE system. Prior to July 8, 1999, Mr. Bartels served as Vice Chairman, Secretary, Treasurer and Senior Vice President of the SPAR Marketing Companies, since 1967. He retired as an employee of the Company on January 1, 2020.

~~Peter W. Brown~~ joined the Board of SGRP in May 2018. He was appointed to the Audit Committee by the Board on July 31, 2022. Mr. Brown served as a Board Observer to the Corporation's Board of Directors from 2014 through December 2016. He also serves as a director of and is a consultant to the Corporation's Brazilian subsidiary, SPAR BSMT, and owns EILLC (which owns 10% of SPAR BSMT). Mr. Brown received a BS from the University of Massachusetts's School of Natural Science and an MBA from the University of Massachusetts's Isenberg School of Management.

~~Executives and Officers of the Corporation~~

Set forth in the table below are the names, ages and offices held by all Executives and Officers of the Corporation as of December 31, 2022. For biographical information regarding Michael R. Matacunas, See the ~~Board of Directors of the Corporation~~~~, above. Antonio Calisto Pato (Age 44) joined SGRP and became Chief Financial Officer, Secretary and Treasurer on February 27, 2023, and his biographical information is included below.~~undersigned, thereunto duly authorized.

~~Name~~	~~Age~~		~~Position with~~ SPAR Group, Inc. ~~(1) (2)~~

	By:	/s/ Michael R. Matacunas	55
		Michael R. Matacunas
		President and Chief Executive Officer ~~President and a Director~~
~~Fay DeVriese~~	57	~~Chief Financial Officer, Secretary and Treasurer (3) (4)~~
~~Kori G. Belzer~~	57Dated as of: April [ ], 2024		~~Global Chief Operating Officer~~
~~William Linnane~~	48	~~Chief Strategy and Growth Officer~~
~~Ron Lutz~~	63	~~Chief Global Commercial Officer~~

KNOW ALL THESE PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Antonio Calisto Pato and Michael R. Matacunas and each of them, jointly and severally, his attorneys-in-fact, each with full power of substitution, for each of them in any and all capacities, to sign any and all amendments to this Report on Form 10-K, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each said attorneys-in-fact or his substitute or substitutes, may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated.

~~(1)~~SIGNATURE

Under the Corporation's 2022 By-Laws and the resolutions of the Board, each of the following individuals have been designated as both an "Executive" and an "Officer" of the Corporation except as otherwise noted below. An Executive is generally an executive officer of the Corporation and part of its senior management.

~~(2)~~	~~Each named individual is an "at will" employee of the Company. Each has a Potential Severance Payment upon a Change-In-Control and Termination, below.~~TITLE
~~(3)~~	~~Ms. DeVriese departed SGRP effective as of January 31, 2023.~~
~~(4)~~ /s/ Michael R. Matacunas	~~Mr.~~	President, Chief Executive Officer and Director,
Michael R. Matacunas		(Principal Executive Officer)
Dated as of: April 1^st, 2024

/s/ James R. Gillis		Director
James R. Gillis
Dated as of: April 1^st, 2024

/s/ John Bode		Director
John Bode
Dated as of: April 1^st, 2024

/s/ Linda Houston		Director
Linda Houston
Dated as of: April 1^st, 2024

/s/ William H. Bartels		Director
William H. Bartels
Dated as of: April 1^st, 2024


/s/ Antonio Calisto Pato ~~joined SGRP and became its~~		Chief Financial Officer,
Antonio Calisto Pato		Treasurer and Secretary (Principal Financial and ~~Treasurer on February 27, 2023.~~Accounting Officer)
Dated as of: April 1^st, 2024

~~Antonio Calisto Pato~~ joined SGRP and became its Chief Financial Officer, Secretary and Treasurer on February 27, 2023. He has leadership experience in business, finance and international and strategy, tax and operational expertise. Most recently, Mr. Calisto Pato held CFO roles and directed all aspects of finance, accounting, treasury and tax as CFO for Earth Shoes and interim CFO for Street Trend. Prior to these roles, he held increasing leadership positions at Chiquita Brands International from 2011 to 2021. Mr. Calisto Pato also held financial and business leadership roles at Cemex in Switzerland and PWC in Luxembourg. He speaks four languages (including those principally used in the Company's Brazilian and Mexican offices) and successfully earned a combined 5-year undergraduate and law degree in Portugal, and went on to complete his post-graduate degree in Tax from the Lisbon Business School. Mr. Calisto Pato also completed a Master of Advanced Studies in International Tax Law in the Netherlands at Leiden University and is completing his MBA from the University of North Carolina, Kenan-Flagler Business School at Chapel Hill, NC.

~~Fay DeVriese~~ served as the Chief Financial Officer of SGRP from August 2020 to January 31, 2023. Prior to joining SGRP, she served as Chief Financial Officer at Letica Corporation and served in financial leadership roles at DSM Engineering Plastics, Eaton Corporation, Continental Automotive Systems and Motorola. Ms. DeVriese is a certified public accountant, licensed in the State of New York. She earned a Bachelor of Business Administration degree from the State University of New York.

~~Kori G. Belzer~~ became the Global Chief Operating Officer of SGRP in July 2021 and has served as Chief Operating Officer of SGRP since January 1, 2004. From August 7, 2020, through February 21, 2021, she also served as acting Chief Executive Officer of SGRP. From 2000 through 2003, Ms. Belzer served as the Chief Operating Officer of SPAR Administrative Services, Inc. (then known as SPAR Management Services, Inc.) ("~~SAS"), and SPAR Business Services, Inc. (then known as SPAR Marketing Services, Inc.), each an affiliate of SGRP (see~~ ~~Transactions with Related Persons, Promoters and Certain Control Persons~~, below). From 1997 to 2000, Ms. Belzer served as Vice President Operations of SAS and as Regional Director of SAS from 1995 to 1997. Prior to 1995, she served as Client Services Manager for SPAR/Servco, Inc.

~~William Linnane~~ joined SGRP in July 2021 as its Chief Strategy and Growth Officer. He is an internationally experienced business, merchandising, retail, and finance leader with more than 20 years of relevant leadership experience. He has worked in the US, in Europe and in Australia; leading multi-billion-dollar businesses and driving exceptional operational results with different market conditions. He was recently the CEO of a successful advisory and investment firm focused on M&A and retail restructurings. Prior to that, Mr. Linnane was President of Kmart's Pharmacy, Drugstore and Grocery businesses in the U.S. and Puerto Rico, Chief Merchant at a leading book retailer in Europe, and led the Beverage, Candy and Snacks business for Tesco in the UK, working with Coca-Cola, PepsiCo, Nestle, Mars, Mondelez and others to drive branded growth opportunities via merchandising and other initiatives, including digital strategies. Mr. Linnane is a qualified accountant and started his career in finance working in the UK and Ireland at Kingfisher PLC (LSE: KGFL) and Tesco PLC (LSE:TSCO). He has strong experience in strategy, finance, operations, merchandising, sourcing, and leadership roles. Mr. Linnane holds an MA in Economics from Trinity College, University of Dublin.

~~Ron Lutz~~ joined SGRP joined SGRP in July 2021 as its Chief Global Commercial Officer. He built a 35-year executive career guiding Fortune 100 companies and private organizations in the retail customer experience space. He has led retail organizations through transformational growth, change management and market expansions. Throughout his career he has held responsibilities in the areas of sales, operations, strategy, marketing, omni-channel customer experience development, international expansion, and acquisitions. Most recently, Ron was consulting as an international strategic retail advisor. Prior to this, he was the Chief Client Officer at a private retail services and solutions company. With his extensive background in the industry, Ron has served in the capacity and/or held titles such as Chief Marketing Officer, Chief Customer Officer, VP Customer Experience Deployment, VP New Store – Remerchandising, VP Enterprise Print /Fixtures, and VP Store Service Solutions. Earlier in his career, he served as a Vice President with Lowe's Companies (NYSE: LOW), where he led the deployment of an omni-channel customer experience solution across 2,000+ North American retail store locations. He also had responsibility for new store development in emerging markets and store renovations across the US, Canada, and Mexico.

~~-3-~~39

Report of Independent Registered Public Accounting Firm

Shareholders and Board of the Directors

SPAR Group, Inc. and Subsidiaries

Auburn Hills, Michigan

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of SPAR Group, Inc. and subsidiaries (the “Company”) as of December 31, 2023, and 2022, the related consolidated statements of operations and comprehensive (loss) income, stockholders’ equity, and cash flows for the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

~~CORPORATE GOVERNANCE~~

Revenue Recognition

~~Board Structure, Leadership and Risk Oversight~~

~~The Board of Directors of the Corporation (the~~ ~~Board") is responsible for overseeing the Corporation and its subsidiaries (collectively, the "Company"), both directly and through its committees (as described below), pursuant~~As indicated in Note 2 to the authority conferred by the Corporation's 2022 By-Laws, charters and policies and by applicable law. The Board's responsibilities include (without limitation) the appointment and oversight of the Company's Chief Executive Officer. The Board also provides oversight of risks that could affectconsolidated financial statements, the Company ~~both directly and through~~generates revenues by providing merchandising services to its ~~committees with respect to~~customers, generally on a daily, weekly, or monthly basis. The Company recognizes revenues as the ~~most significant risks facing~~services are performed based on the ~~Company (including material operational~~contractually-specified rate-per-driver metric(s) (i.e., rate per hour, rate per store visit or ~~financial risks)~~rate per unit stocked). Pursuant to their respective charters, the Board has established and delegated various oversight and other responsibilities to the Audit Committee, the Compensation Committee and the Governance Committee, as such committees are defined and more fully described below under the headings "Audit Committee", "Compensation Committee" and "Governance Committee".

~~The Board is comprised of Independent Directors, Super Independent Directors (See~~ ~~Board Size, Quorum and Voting~~, ~~Director Nominations: Experience, Integrity, Diversity and other Criteria~~ ~~and~~ ~~2022 By Laws~~, below) and Non- Independent Directors. The Governance Committee is responsible for determining and recommending to the full Board whether a Director satisfies the applicable Nasdaq independent requirements or the more comprehensive super-independence requirements established in the 2022 By-Laws. The super-independence requirement establishes specific criteria to ensure a Director is unaffiliated with any specific significant stockholder. In addition, the Board has established the position of Chairman of the Board, which is a non-executive position, and Chief Executive Officer (who is also President). Per the 2022 By-Laws, the Chairman, the Vice Chairman and Chairman of any Committee must be Super Independent Directors. The Board believes these definitions and criteria ensure a strong, experienced and independent Board to provide oversight on behalf of all stockholders.

To assist the Board and its Committees in their respective oversight roles, the Company's Chief Executive Officer brings members of the Company's management from various business or administrative areas into meetings of the Board or applicable Committee from time to time to make presentations, answer questions and provide insight to the members, including insights into areas of potential risk. Each Committee endeavors to satisfy its responsibilities through: (i) its receipt and review of regular reports directly from officers responsible for oversight of particular risks within the Company; (ii) direct communications by the Committee or its Chairman with the Corporation's senior management; (iii) independent registered public accounting firm (in the case of the Audit Committee) and counsel respecting such matters and related risks; (iv) its executive sessions; (v) its reports (generally through its Chairman) to the full Board respecting the Committee's considerations; and (vi) if applicable, actions and recommendations regarding such matters and risks as deemed appropriate.

Risk oversight is conducted primarily through the Audit Committee, but also is conducted through the Compensation Committee or Governance Committee, as applicable. The Audit Committee is responsible for overseeing the accounting, auditing and financial reporting and disclosure principles, policies, practices and controls of the Company and regularly considers (among other things) financial, reporting, internal control, related party, legal and other issues and related risks and uncertainties material to the Company. The Compensation Committee is responsible for overseeing the performance and compensation of the executives, director compensation and the other compensation, equity incentive, related policies, and material benefits of the Company. The Governance Committee is responsible for overseeing the finding, vetting and nomination of directors and committee members for the Board and senior Executives for SGRP, and the content and application of the 'Ethics Code, corporate documents and governance policies and practices.

Each of the Committee charters requires the Board to determine that each of its members satisfy applicable Nasdaq requirements for the respective Committee and be free from any relationship which may interfere with the exercise of his or her independent judgment as a member. The 2022 By-Laws also require that the Chairman of each Committee and at least two (2) of its members be a Super Independent Director (See ~~Board Size, Quorum and Voting~~, ~~and Director Nominations: Experience, Integrity, Diversity and other Criteria,~~ ~~below).~~

~~Board Meetings~~

~~The Board meets regularly to receive and discuss operating and financial reports presented by management of SGRP and its advisors. During~~For the year ended December 31, ~~2022,~~2023, the ~~Board held sixteen (16) meetings. Each incumbent Director is required to attend 75% of the board meetings. In 2022, all then current members attended at least 75% of the meetings.~~Company’s net revenues were $262.7 million.

~~Board Size, Quorum~~We identified revenue recognition from merchandising services as a critical audit matter due to the large volume of customer contracts and ~~Voting~~

~~Under~~transactions. The principal consideration for our determination is the ~~2022 By-Laws:~~increased extent of auditor effort involved in performing procedures and evaluating audit evidence related to the current Board size is fixed at seven (7) directors as of January 25, 2022; the Chairman and at least three (3) of the Board members must be Super Independent Directors (as defined therein), and the Chairman, Vice Chairman and Chairman of each Committee and at least two (2) of each Committee's members must be a Super Independent Director.Company’s revenue recognition.

The ~~Board size can only be changed from time~~primary procedures we performed to ~~time by amending the 2022 By-Laws.~~

~~Board meetings require an attendance quorum of at least 70% of its members, including a majority of the Super Independent Directors.~~

~~-4-~~

Except as noted below: each director shall be entitled to one (1) vote; and the vote of the majority of the directors present at any meeting at which a quorum is present shall be the act of the Board.

~~However, in the event the Board:~~

~~(i)~~

Includes two (2) Super Independent Directors and the Chief Executive Officer, the director with the least tenure on the Board who is not a Super- Independent Director (other than the Chief Executive Officer) shall lose the right to vote on any matters that come before the Board;

~~(ii)~~

Includes one (1) Super Independent Director and the Chief Executive Officer, then two (2) of the then-serving directors who have the least tenure on the Board and are not Super Independent Directors (other than the Chief Executive Officer) shall lose the right to vote on any matters that come before the Board; or

~~(iii)~~

Includes no Super Independent Directors and the Chief Executive Officer, all of the then-serving directors who are not Super Independent Directors (other than the Chief Executive Officer) shall lose the right to vote on any matters that come before the Board.

In addition, Section 3.12 of the 2022 By-Laws requires that certain actions by the Board be approved by a super-majority of the Board consisting of at least 70% of the directors then in office, including a majority of the Super Independent Directors. Those super-majority actions include any amendment to the 2022 By-Laws, any Committee Charter, or SGRP's Ethics Code, and the issuance of more than 250,000 shares of SGRP's Common Stock or any right to acquire them (See ~~Director Nominations: Experience, Integrity, Diversity and other Criteria,~~ ~~below).~~

~~Board Committees~~

From time to time the Board may establish permanent standing committees and temporary special committees to assist the Board in carrying out its responsibilities, and may delegate Board power and authority pursuant to charters approved by the Board. Under the 2022 By-Laws (see below), a "super majority" vote of at least 70% of all SGRP directors is now required for any new committee, change in any committee charter, or certain other actions (meaning any such Board action brought before a Board consisting of seven directors can be blocked by any three (3) directors), and an absolute majority of the Board is now required for the appointment to or removal of any director from any committee (meaning any such Board action brought before a Board consisting of seven directors can be blocked by any four (4) directors). Currently, SGRP has three (3) permanent standing committees; the Audit Committee, the Compensation Committee, and the Governance Committee. Anaddress this critical audit ~~committee is required by the Nasdaq Stock Market, Inc. ("Nasdaq~~"), the SEC, and applicable law. While SGRP is not similarly required to have either a compensation committee or governance committee, certain responsibilities assigned to these committees in their respective charters are required to be fulfilled by independent directors by Nasdaq Rules or SEC Rules.

Each of the Committee charters requires the Board to determine that each of its members satisfy applicable Nasdaq requirements for such a Committee and be free from any relationship would interfere with the exercise of his or her independent judgment as a member. The 2022 By-Laws also require that the Chairman of each Committee and at least two (2) of the members of the Audit Committee and Governance Committee be a Super Independent Director (See ~~Board Size, Quorum and Voting~~~~, above, and~~ ~~Director Nominations: Experience, Integrity, Diversity and other Criteria,~~ ~~and~~ ~~2022 By-Laws~~~~, below).~~

~~The standing committees of the Board are the Audit Committee of the Board (the "Audit Committee"), the Compensation Committee of the Board (the "Compensation Committee"), and the Governance Committee of the Board (the "Governance Committee"), as provided in the Corporation's 2022 By-Laws and their respective charters (See~~ ~~Limitation of Liability and Indemnification Matters~~~~, below).~~

~~-5-~~

~~Audit Committee~~

The Audit Committee assists the Board in fulfilling its oversight responsibilities respecting the accounting, auditing and financial reporting and disclosure principles, policies, practices and controls of the Company, the integrity of the Company's consolidated financial statements, the audits of the financial statements of the Company and the Company's compliance with legal and regulatory requirements and disclosure. The specific functions and responsibilities of the Audit Committee are set forth in the written Amended and Restated Charter of the Audit Committee of the Board of Directors of SPAR Group, Inc., dated (as of) May 18, 2004 (the "~~Audi~~t ~~Charte~~r"), approved and recommended by the Audit Committee and Governance Committee and adopted by the Board on May 18, 2004. The Audit Committee also is given specific functions and responsibilities by and is subject to Nasdaq Rules, SEC Rules, the Sarbanes-Oxley Act of 2002 ("~~Sarbanes-Oxley~~"), and other applicable law, which are reflected in the Audit Charter. You can obtain and review a current copy of the Audit Charter on the Company's web site (www.sparinc.com), on which it is posted and available to stockholders and the public under the Investor Relations tab and Corporate Governance sub-tab. The Audit Charter was amended and restated to reflect the evolution of the Audit Committee's expanding responsibilities, the adoption of Sarbanes-Oxley, and changes in Nasdaq Rules, SEC Rules, securities laws and other applicable law pertaining to all audit committees. The Audit Committee reviews and reassesses the Audit Charter annually and recommends any needed changes to the Board for approval.

~~The Audit Committee (among other things and as more fully provided in the Audit Charter):~~

	~~(a)~~	~~Serves as an independent and objective party to monitor the Company's financial reporting process and internal accounting and disclosure control system and their adequacy and effectiveness;~~

	~~(b)~~	Is directly responsible for the appointment, compensation, retention and oversight of the work of any registered public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Company;

	~~(c)~~	~~Resolves disagreements between the Company's senior management and the Company's independent registered public accounting firm regarding financial reporting;~~

	~~(d)~~	~~Communicates directly with the Company's independent registered public accounting firm;~~

	~~(e)~~	Reviews and appraises the audit efforts of the Company's independent registered public accounting firm, including the plans for and scope of the audit, the audit procedures to be utilized and results of the audit;

	~~(f)~~	~~Provides an open avenue of communication among the Company's independent registered public accounting firm, the Company's financial and senior management and the Board;~~

	~~(g)~~	Reviews and approves, in advance, all non-audit services to be performed by the Company's independent registered public accounting firm, either individually or through policies and procedures for particular types of services to be performed within specified periods;

	~~(h)~~	~~Reviews the performance, qualifications and independence of the Company's independent registered public accounting firm;~~

	~~(i)~~	~~Reviews the financial reports and other financial information provided by SGRP to any governmental body or the public;~~

	~~(j)~~	~~Encourages continuous improvement of, and fosters adherence to, the Company's accounting controls, disclosure controls, risk management and similar policies, procedures and practices at all levels;~~

	~~(k)~~	~~Reviews and approves the overall fairness to the Company of all material related-party transactions; and~~

	~~(l)~~	May retain independent counsel, accountants or others to assist it in the conduct of an investigation or such other action as the Audit Committee may otherwise determine as necessary to carry out its duties under its Charter and applicable law, the fees and expenses of all of which will be paid by the Corporation.

As of December 31, 2022, the Audit Committee consisted of Mr. Sean M. Whelan (its Chairman), Mr. Peter W. Brown, and Michael Wager, each of whom has been determined by the Governance Committee and the Board to meet the independence requirements for Audit Committee members under Nasdaq Rules and SEC Rules and the 2022 By-Laws require that its Chairman and at least two (2) of the members of the Audit Committee and Governance Committee be Super Independent Directors. In connection with his appointment as a Director, the Governance Committee and the Board determined that Mr. Whelan was qualified to be the "Audit Committee financial expert" as required by Nasdaq Rules, SEC Rules and other applicable law.

~~During the year ended December 31, 2022, the Audit Committee met five (5) times. All then current members attended at least 75% of the meetings.~~

~~-6-~~

~~Compensation Committee~~

The Compensation Committee assists the Board in fulfilling its oversight responsibilities respecting the compensation of the named executive officers and the other related policies of the Company, through which the Company endeavors to attract, motivate and retain the executive talent needed to optimize stockholder value in a competitive environment while facilitating the business strategies and long-range plans of the Company. The specific functions and responsibilities of the Compensation Committee are set forth in the written Charter of the Compensation Committee of the Board of Directors of SPAR Group, Inc., dated (as of) May 18, 2004, and amended through August 12, 2020 (the "~~Compensation Charter~~"), approved and recommended by the Compensation Committee and Governance Committee and adopted by the Board on May 18, 2004, and amended on August 12, 2020. The Compensation Committee also is given specific functions and responsibilities by and is subject to Nasdaq Rules, SEC Rules, Sarbanes-Oxley and other applicable law. You can obtain and review a current copy of the Compensation Charter on the Company's web site (www.sparinc.com), on which it is posted and available to stockholders and the public under the Investor Relations tab and Corporate Governance sub-tab. The Compensation Charter was adopted to reflect the evolution of the Compensation Committee's informal responsibilities, the adoption of Sarbanes- Oxley, and changes in Nasdaq Rules, SEC Rules, securities laws and other applicable law pertaining to compensation committees. The Compensation Committee reviews and reassesses the Compensation Charter annually and recommends any needed changes to the Board for approval.

~~The Compensation Committee (among other things and as more fully provided in the Compensation Charter):~~

~~(a)~~

Reviews the existing and proposed compensation plans, policies and practices of the Company, and reviews and recommends any desirable changes or additions to any such plan, policy or practice, all in order to: (i) attract and retain quality directors, executives and employees; (ii) provide total compensation competitive with similar companies; (iii) reward and reinforce the attainment of the Company's performance objectives; and (iv) align the interests of SGRP's directors and the Company's executives and employees with those of SGRP's stockholders (the "~~Company's Compensation Objectives");~~

~~(b)~~

~~Reviews the Company's existing and proposed Compensation Objectives from time to time;~~

~~(c)~~

~~Reviews the performance of and establishes the compensation for the Company's named executive officers;~~

~~(d)~~

Oversees the Company's equity awards, employee stock purchase plan and other benefit plans and severance policies, and reviews and recommends any necessary or desirable changes or additions to any such plan, policy or practice; and

~~(e)~~

May retain independent counsel, accountants or others to assist it in the conduct of an investigation or such other action as the Compensation Committee may otherwise determine as necessary to carry out its duties under its Charter and applicable law, the fees and expenses of all of which will be paid by the Corporation.

As of December 31, 2022, the Compensation Committee consisted of Mr. Peter W. Brown and Mr. Sean M. Whelan, each of whom has been determined by the Governance Committee and the Board to meet the independence requirements for Compensation Committee members under Nasdaq Rules and SEC Rules.

~~During the year ended December 31, 2022, the Compensation Committee met six (6) times. All then current members attended at least 75% of the meetings.~~

~~Governance Committee~~

The Governance Committee assists the Board in fulfilling its oversight responsibilities respecting the nomination of directors and committee members for the Board and the corporate documents and governance policies and practices of the Corporation. The specific functions and responsibilities of the Governance Committee are set forth in the written Charter of the Governance Committee of the Board of Directors of SPAR Group, Inc., Dated (as of) May 18, 2004 (the "~~Governance Charte~~r"), approved and recommended by the Governance Committee and adopted by the Board on May 18, 2004, and amended on March 18, 2021. The Governance Committee also is given specific functions and responsibilities by and is subject to the Nasdaq Rules, SEC Rules, Sarbanes-Oxley, and other applicable law, which are reflected in the Governance Charter. You can obtain and review a current copy of the Governance Charter on the Company's web site (www.sparinc.com), on which it is posted and available to stockholders and the public under the Investor Relations tab and Corporate Governance sub-tab. The Governance Charter was adopted to reflect the evolution of the Governance Committee's informal responsibilities, the adoption of Sarbanes-Oxley, and changes in Nasdaq Rules, SEC Rules, securities laws, and other applicable law pertaining to governance committees. The Governance Committee reviews and reassesses the Governance Charter, Nomination Policy and Ethics Code (as such terms are defined below), as well as the 2022 By-Laws of the Corporation and the other Committee Charters, annually and recommends any needed changes to the Board for approval.

~~The Governance Committee (among other things and as more fully provided in the Governance Charter):~~

~~(a)~~

Oversees the identification, vetting and nomination of candidates for directors of SGRP and the selection of committee members, reviews their qualifications (including outside director independence) and recommends any proposed nominees to the Board;

~~(b)~~

~~Oversees SGRP's organizational documents and policies and practices on corporate governance and recommends any proposed changes to the Board for approval;~~

~~(c)~~

Oversees the Ethics Code and other internal policies and guidelines and monitors the Corporation's enforcement of them and incorporation of them into the Corporation's culture and business practices; and

~~(d)~~

May retain independent counsel, accountants or others to assist it in the conduct of an investigation or such other action as the Governance Committee may otherwise determine as necessary to carry out its duties under its Charter and applicable law, the fees and expenses of all of which will be paid by the Corporation.

~~-7-~~

As of December 31, 2022, the Governance Committee consisted of Mr. Peter W. Brown, Mr. Michael Wager, and Mr. Sean M. Whelan, each of whom has been determined by the Governance Committee and the Board to meet the independence requirements for Governance Committee members under Nasdaq Rules and SEC Rules. Mr. Michael Wager also has been determined by the Governance Committee and the Board to be a Super Independent Director satisfying the new stricter requirements of the 2022 By-Laws. The 2022 By-Laws require that the Governance Committee's Chairman and at least two (2) of the members of the Audit Committee and Governance Committee to be a Super Independent Director. See ~~Board Size, Quorum and Voting~~~~, above, and~~ ~~2022 By-Laws~~~~, below.~~

~~During the year ended December 31, 2022, the Governance Committee met seven (7) times. All then current members attended at least 75% of the meetings.~~

~~Director Nominations: Experience, Integrity, Diversity and other Criteria~~

The Governance Committee oversees the identification, vetting and nomination of candidates for directors and the selection of committee members, the review of their qualifications (including outside director independence), and recommends any proposed nominees to the Board in accordance with the Governance Charter and with the SPAR Group, Inc. Statement of Policy Regarding Director Qualifications and Nominations dated as of May 18, 2004 (the "~~Nomination Policy~~"), as approved and recommended by the Governance Committee and adopted by the Board on May 18, 2004. You can obtain and review a current copy of this policy on the Company's web site (www.sparinc.com), on which it is posted and available to stockholders and the public under the Investor Relations tab and Corporate Governance sub-tab.

The Nomination Policy, applicable law and exchange rules require that a majority of the directors satisfy the independence requirements under the applicable Nasdaq Rules and SEC Rules and Delaware law. Each of the Committee charters requires the Board to determine that each of the members satisfy applicable Nasdaq requirements for such a Committee and be free from any relationship would interfere with the exercise of his or her independent judgment as a member. The By- Laws also require that the Chairman of the Board, at least three (3) Board members and the Chairman and at least two (2) members of each Committee be a Super- Independent Director (See ~~Board Size, Quorum and Voting,~~ ~~above).~~

The Nomination Policy identifies numerous characteristics believed important by the Board for any nominee for director and provides that each nominee for director should possess as many of them as practicable. These desirable characteristics include (among other things) the highest professional and personal ethics and integrity, sufficient time and attention to devote to Board and Committee duties and responsibilities, strong relevant business and industry knowledge and contacts, and business and financial sophistication, common sense and wisdom, the contribution to the diversity of perspectives in the Board and its Committees, and the ability to make informed judgments on a wide range of issues, the ability and willingness to exercise and express independent judgments, and the apparent ability and willingness to meet or exceed the Board's performance expectations. The Nomination Policy specifically recognizes the desirability of ethnic, racial, gender and geographic diversity for the Board but does not specify any metrics for evaluating potential candidates in that regard. However, the Governance Committee takes all relevant factors (including such diversity) into account when identifying and evaluating candidates for Board membership.

Performance expectations for each director have also been established by the Board in the Nomination Policy, including (among other things) the director's regular preparation for, attendance at and participation in all meetings (including appropriate questioning), support and advice to management in his areas of expertise, maintenance of focus on the Board's agenda, understanding the business, finances, plans and strategies of Company, professional and collegial interaction, acting in the best interests of the Company and the stockholders, and compliance with the Company's Ethics Code.

Candidates for vacant positions on the Board may be suggested to the Governance Committee from time to time by its members or by officers or other directors of the Corporation. The Governance Committee from time to time also has used and may use recruiting firms to consider as director candidates. The Governance Committee generally will consider recommending the re-nomination of incumbent directors in accordance with the Nomination Policy, provided that they continue to satisfy the applicable personal characteristic criteria and performance expectations. The Nomination Policy reflects the Board's belief that qualified incumbent directors are generally uniquely positioned to provide stockholders the benefit of continuity of leadership and seasoned judgment gained through experience as a director of SGRP, and that the value of these benefits may outweigh many other factors. However, the Governance Committee is not required to recommend to the Board the nomination of any eligible incumbent director for re-election (See ~~Stockholder Communications - Submission of Stockholder Proposals and Director Nominations~~~~, below).~~

~~Each nominee for director was required to complete and submit a Directors' and Officers' Questionnaire as part of the process for making director nominations and preparation of this Proxy Statement.~~

In considering the potential director nominee slate (including incumbent directors) to recommend to the Board, the Nomination Policy directs the Governance Committee to take into account: (i) the benefits of incumbency, as noted above; (ii) any perceived needs of Board, any Committee or the Company at the time for business contacts, skills or experience or other particular desirable personal characteristics; (iii) the collegiality of Board members; (iv) the need for independent directors or financial experts under that Policy or applicable law for the Board or its Committees; (v) any other requirements of applicable law or exchange rules; and (vi) the desirability of ethnic, racial, gender and geographic diversity. The Governance Committee will consider proposed nominees from any source, including those properly submitted by stockholders (See ~~Stockholder Communications - Submission of Stockholder Proposals and Director Nominations~~~~, below).~~

At least three of the seven directors on the Board must be Super Independent Directors as defined in the 2022 By-Laws. All of the non-Super Independent Director positions must be filled pursuant to contracts with SGRP. Under the CIC Agreement (See ~~Change of Control, Voting and Restricted Stock Agreement~~ in ~~Domestic Related Party Transactions~~~~, below, and~~ ~~Board Size, Quorum and Voting,~~ above), Mr. Robert G. Brown is entitled to nominate two (2) directors (including himself), and Mr. William H. Bartels is entitled to nominate one (1) director (including himself). Under the terms of his employment as SGRP's Chief Executive Officer, Michael R. Matacunas is entitled to be a director.

~~There is currently one vacancy on the SGRP Board, which under the 2022 By-Laws must be filled with a Super Independent Director. See~~ ~~Board Size, Quorum and Voting~~, ~~and Director Nominations: Experience, Integrity, Diversity and other Criteria,~~ ~~above, and~~ ~~2022 By-Laws~~~~, below.~~

~~-8-~~

Based on the prior Directors' and Officers' Questionnaires of each director, as required by the Nominations Policy and the committee charters, the Governance Committee and Board each determined that: (i) Mr. Sean M. Whelan, Mr. Peter W. Brown and Mr. Michael Wager each satisfies the independence requirements for Audit Committee members under Nasdaq Rules and SEC Rules and the Audit Committee Charter, and Mr. Sean M. Whelan is an "audit committee financial expert" under SEC Rules, as required by such rules and the Audit Charter; (ii) Mr. Sean M. Whelan and Mr. Michael Wager are Super Independent Directors under the 2022 By-Laws (See ~~Board Size, Quorum, and Voting~~, above); (iii) Mr. Michael Wager, Mr. Sean Whelan and Mr. Peter W. Brown each satisfies the independence requirements for Governance Committee members under Nasdaq Rules and SEC Rules and the Governance Committee Charter; (iv) Mr. Sean M. Whelan and Mr. Peter W. Brown each satisfies the independence requirements for Compensation Committee members under Nasdaq Rules and SEC Rules and the Compensation Committee Charter; and (v) Mr. Robert G. Brown satisfies the general independence requirements for independent directors of the Board under Nasdaq Rules and SEC Rules and the 2022 By-Laws.

~~2022 By-Laws~~

~~On January 25, 2022, the Board adopted and approved amendments to SGRP's then existing Amended 2022 By-Laws in connection with the entry into the CIC Agreement (the "Amendments", and as amended, the "2022 By-Laws"). The Amendments include the following:~~

~~(i)~~

~~The size of the Board is set at seven (7) directors, which shall include at least three (3) "Super Independent Directors", as defined in the 2022 By-Laws (See~~ ~~Board Size, Quorum and Voting~~~~, above).~~

~~(ii)~~

The 2022 By-Laws now require 70% (or five (5) of seven (7)) of the directors, including a majority of Super Independent Directors to establish quorum, set the annual meeting agenda, issue or sell more than 250,000 shares of common stock (other than through stockholder approved plans) or any preferred stock, declare dividends, amend SGRP's certificate of incorporation, the 2022 By-Laws, any committee charter or SGRP's Ethics Code (See ~~Board Size, Quorum and Voting~~~~, above).~~

~~(iii)~~

~~The threshold for the stockholders to amend the 2022 By-Laws is increased from a majority to 75% of the outstanding stock of the Corporation.~~

~~(iv)~~

~~Officers are allowed to adjourn shareholder meetings at their discretion.~~

~~(v)~~

The 2022 By-Laws establish voting rules to maintain "super" independence if there are less than three (3) Super Independent Directors (effectively reducing the votes held by certain other directors - See ~~Board Size, Quorum and Voting~~~~, above).~~

~~(vi)~~

~~The 2022 By-Laws establish that only Super Independent Directors can be the Chairman or Vice Chairman of the Board or the Chairman of a committee.~~

~~(vii)~~

~~The Chairman no longer automatically holds the position of Chief Executive Officer upon a vacancy.~~

~~(viii)~~

On or before December 31, 2026, the threshold to call a special meeting of the Corporation is increased from 20% to 75% of the outstanding stock of the Corporation entitled to vote. On or after January 1, 2027, the threshold to call a special meeting of the Corporation is decreased from 75% to 25% of the outstanding stock of the Corporation.

The 2022 By-Laws continue to require that each candidate for director sign a written irrevocable letter of resignation and retirement effective upon such person failing to be re-elected by the required majority stockholder vote.

The foregoing description is only a summary of the Amendments and is qualified in its entirety by reference to a copy of 2022 By-Laws, which is incorporated by reference into this Annual Report as Exhibit 3.3 hereto.

~~Limitation of Liability and Indemnification Matters~~

The Corporation's Certificate of Incorporation, as amended, eliminates the liability of all directors to the Corporation and its stockholders for monetary damages for breaches of their fiduciary duties as directors to the maximum extent such liability can be eliminated or limited under the Delaware General Corporation Law, as amended (the "~~DGCL~~"), which applies to the Corporation as a Delaware corporation. The DGCL permits a certificate of incorporation to include a provision eliminating such personal liability of its directors, and such elimination is effective under the DGCL, except that such liability currently may not be eliminated or limited under the DGCL: (i) for any breach of their duty of loyalty to the Corporation or its stockholders; (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; (iii) for unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in Section 174 of the DGCL; or (iv) for any transaction from which the director derived an improper personal benefit.

The 2022 By-Laws (unchanged in this regard by the latest restatement) provide that the Corporation must indemnify each of its current and former directors, executive officers and other designated persons (including those serving its affiliates in such capacities at the Corporation's request), and may in the Board's discretion indemnify the other current and former officers, employees and other agents of the Company, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with any threatened, pending or completed action, suit or proceeding against them in such capacity to the fullest extent permitted by DGCL. The 2022 By-Laws also provide that the Corporation must advance the expenses (including attorneys' fees) actually and reasonably incurred by any director in defending any such action, suit or proceeding in advance of its final disposition, subject to such person's agreement to the extent required by the DGCL under the circumstances to reimburse the Corporation if such person is not entitled to indemnification. The 2022 By-Laws and these mandatory indemnification provisions were approved and recommended by the Governance Committee and adopted by the Board of Directors of the Corporation in order to conform to the current practices of most public companies and to attract and maintain quality candidates for its directors and management, and are included in the 2022 By-Law is (see above). A current copy of the 2022 By-Laws is posted and available to stockholders and the public on the Corporation's web site (~~www.sparinc.com~~).

~~-9-~~

Section 145 of the DGCL provides that the Corporation (as a Delaware corporation) has the power to indemnify under various circumstances anyone who is or was serving as a director, officer, employee or agent of the Corporation or (at its request) another corporation, partnership, joint venture, trust or other enterprise, which includes indemnification against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation), but only if: (i) such person acted in good faith and in a manner reasonably believed to be in or not opposed to the best interests of the Corporation; (ii) in the case of any criminal action or proceeding, such person had no reasonable cause to believe his or her conduct was unlawful; and (iii) in the case of any suit by or in the right of the Corporation in which the person is adjudged to be liable to the Corporation, the applicable court determines such person is nevertheless fairly and reasonably entitled to such indemnification under the circumstances. Section 145 of the DGCL also permits the Corporation to pay or advance the expenses (including attorneys' fees) actually and reasonably incurred by any such person in defending any such action, suit or proceeding, and requires that the Corporation indemnify such person for such unpaid expenses upon a successful defense of such action, suit or proceeding.

The Company maintains director and officer liability insurance that (subject to deductibles, maximums and exceptions) covers most liabilities arising out of the acts or omissions of any officer, director, employee or other covered person, both for the benefit of the Company and the direct benefit of its directors and officers, regardless of whether the 2022 By-Laws or DGCL Section 145 would permit indemnification of the matters covered by such insurance. The 2022 By-Laws (and DGCL Section 145) expressly permit the Corporation to secure such insurance and expressly provide that their respective indemnification provisions are not exclusive of any other rights to which the indemnified party may be entitled, including such insurance.

~~There is no pending action, suit or proceeding involving any director, officer, employee or agent of the Company in such capacity in which advancement or indemnification may be required or permitted.~~

~~Ethics Codes~~

SGRP has adopted codes of ethical conduct applicable to all of its directors, officers and employees, as approved and recommended by the Governance Committee and Audit Committee and adopted by the Board, in accordance with Nasdaq Rules and SEC Rules. These codes of conduct (collectively, the " ~~Ethics Code") consist of: (1) the SPAR Group Code of Ethical Conduct for its Directors, Executives, Officers, Employees, Consultants and other Representatives Amended and Restated (as of) March 15, 2018 (the "Restated Ethical Code~~"); and (2) Statement of Policy Regarding Personal Securities Transactions in SGRP Stock and Non-Public Information, as amended and restated on May 1, 2004, and as further amended through March 10, 2011. Both Committees were involved because general authority over the Ethics Codes shifted from the Audit Committee to the Governance Committee with the adoption of the committee charters on May 18, 2004. However, the Audit Committee retained the express duty to review and approve the overall fairness of all material related-party transactions. You can obtain and review current copies of such code and policy on the Company's web site (www.sparinc.com), which are posted and available to stockholders and the public under the Investor Relations tab and Corporate Governance sub-tab.

The Ethics Code is intended to promote and reward honest, ethical, respectful and professional conduct by each director, executive, officer, employee, consultant and other representative of any of SGRP and its subsidiaries (together with SGRP, the "~~Company~~") and each other Covered Person (as defined in the Ethics Code) in his or her position with the Company anywhere in the world, including (among other things) serving each customer, dealing with each vendor and treating each other with integrity and respect, and behaving honestly, ethically and professionally with each customer, each vendor, each other and the Company. Article II of the Ethics Code specifically prohibits various forms of self-dealing (including dealing with relatives) and collusion and Article V of the Ethics Code generally prohibits each "~~Covered Person~~" (including SGRP's officers and directors) from using or disclosing the Confidential Information of the Company or any of its customers or vendors, seeking or accepting anything of value from any competitor, customer, vendor, or other person relating to doing business with the Company, or engaging in any business activity that conflicts with his or her duties to the Company, and directs each "~~Covered Person" to avoid any activity or interest that is inconsistent with the best interests of the SPAR Group, in each case except for any "Approved Activity~~" (as such terms are defined in the Ethics Code). Examples of violations include (among other things) having any ownership interest in, acting as a director or officer of or otherwise personally benefiting from business with any competitor, customer or vendor of the Company other than pursuant to any Approved Activity. Approved Activities include (among other things) any contract with an affiliated person (each an "~~Approved Affiliate Contrac~~t") or anything else disclosed to and approved by SGRP's Audit Committee, as well as the ownership, board, executive and other positions held in and services and other contributions to affiliates of SGRP and its subsidiaries by certain directors, officers or employees of SGRP, any of its subsidiaries or any of their respective family members. The Company's senior management is generally responsible for monitoring compliance with the Ethics Code and establishing and maintaining compliance systems, including those related to the oversight and approval of conflicting relationships and transactions, subject to the review and oversight of SGRP's Governance Committee as provided in Part I Sections 2, 3, 11 and 12 of the Governance Committee's Charter, and SGRP's Audit Committee as provided in Part IV Section 15 of the Audit Committee's Charter.

~~Significant Stockholder Governance Limitations~~

~~In consideration and as part of the CIC Agreement, the Majority Stockholders agreed that they and their affiliates will not directly or indirectly take any of the listed actions (the "Covered Matters~~") during the term of the CIC Agreement respecting their SGRP Shares (including voting, consents, proxies or other corporate actions), alone or in conjunction with other stockholders of the Corporation, unless any of the matters are the subject of a vote at a meeting of the Corporation's stockholders called by the Board.

~~The Covered Matters include taking or attempting any of the following:~~

~~(i)~~

~~Action by written stockholder consent;~~

~~(ii)~~

~~Submission of any stockholder proposals in advance of any annual or special stockholders meeting of the Corporation;~~

~~(iii)~~

~~Stockholder call for any special meetings of the Corporation's stockholders;~~

~~(iv)~~

~~Continuation or commencement of any legal claims against the Company;~~

~~(v)~~

~~Changing the size of the Board;~~

~~(vi)~~

~~Appointing or removing any director or officer of the Corporation, except as expressly permitted in the CIC Agreement;~~

~~(vii)~~

~~Amending the Corporation's Certificate of Incorporation or 2022 By-Laws; or~~

~~(viii)~~

~~Entering any agreement, arrangement or understanding (written or otherwise) with any other Person in an effort to take any action in furtherance of the foregoing.~~

~~-10-~~

The foregoing description is only a summary of the CIC Agreement and is qualified in its entirety by reference to a copy of the CIC Agreement, which is incorporated by reference into this Annual Report as Exhibit 10.9.

~~Item 11. Executive Compensation~~

~~Summary Compensation Table~~

~~The following table sets forth all compensation for services rendered to the Company in all capacities for the years ended December 31, 2022 and 2021 (but See -~~ ~~Transactions with Related Persons, Promoters and Certain Control Persons,~~ below), by: (i) the Corporation's Chief Executive Officer; and (ii) each of the other persons named below, which include the two (2) most highly compensated Executives or other Officers of the Company. "~~Named Executive Officers~~" shall mean each of the individuals listed below, other than Mr. Bartels. The Company does not have any Non-Equity Incentive Compensation Plans other than as part of its individual Incentive Bonus Plans, any pension plans or any non-qualified deferred compensation plans, and accordingly those columns have been omitted.

Effective as of February 22, 2021, SGRP appointed Mr. Mike Matacunas as its Chief Executive Officer and President and as a Director of SGRP. Ms. Fay DeVriese departed SGRP effective as of January 31, 2023. Mr. Antonio Calisto Pato joined SGRP and became Chief Financial Officer, Secretary and Treasurer on February 27, 2023 (4). Effective July 13, 2021, SGRP appointed Ron Lutz as its Chief Global Commercial Officer and William Linnane as its Chief Strategy and Growth Officer of SGRP. Effective as of August 31, 2020, Ms. Fay DeVriese became the Chief Financial Officer of SGRP. Mr. Steven J. Adolph resigned as President International of SGRP effective April 23, 2021. Mr. Gerard Marrone retired as Chief Revenue Officer of SGRP effective June 15, 2021.

Name and Principal Positions

Year

Salary ($)

Bonus ($) (1)

Option and RSU Compensation
($) (2)
All Other
Compensation
($) (3)

Total ($)
Michael R. Matacunas 2022 407,813 200,000 -- 4,800 612,613
Chief Executive Officer, President and Director 2021 250,000 50,000 -- 4,086 304,086

Fay DeVriese (4) (5) 2022 329,583 72,233 54,304 4,800 460,920
Chief Financial Officer, Treasurer and Secretary 2021 278,750 -- 37,445 2,400 318,595

Kori Belzer (6)
2022
306,042
68,244 10,359 4,800 389,445
Global Chief Operating Officer
2021
261,848
-- 94,026
4,800
360,674

William Linnane
2022
296,042
85,000
30,914
4,800 416,756
Chief Strategy and Growth Officer
2021 110,833 50,000 -- 2,400 163,233

Ron Lutz
2022
296,042
62,500 30,914 4,800 394,256
Chief Global Commercial Officer
2021 110,833 50,000 -- 2,400 163,233

~~(1)~~

~~These are the bonuses paid in the referenced year (2022 or 2021) respecting performance in the preceding year (2021 or 2020).~~

~~(2)~~	These are not amounts actually paid to or received by the Named Executive or Officer. These are "compensation expenses" for restricted stock unit or stock option awards recognized by the Corporation under generally accepted accounting principles computed in accordance with ASC-718- 10.
~~(3)~~	~~"Other Compensation" primarily represents allowances for automobiles, cell phone and internet service.~~

~~(4)~~	~~Ms. DeVriese departed SGRP effective as of January 31, 2023.~~
~~(5)~~	~~Mr. Antonio Calisto Pato joined SGRP and became Chief Financial Officer, Secretary and Treasurer on February 27, 2023.~~
~~(6)~~	~~Ms. Belzer's salary includes an additional increment in 2021 for her services as acting Chief Executive Officer of SGRP, which position she held from August 7, 2020, through February 21, 2021.~~

~~Narrative to Summary Compensation Table~~

~~Compensation Elements~~

~~As indicated in the Summary Compensation Table above, in addition to base salary, we provide the following compensation and benefits to our Named Executive Officers:~~matter included:

●

~~Cash Bonuses. Annually,~~Testing the ~~Company enters into bonus plans with key management~~accuracy and ~~administrators based on specified goals. The bonuses noted in the above table that were paid in 2020 were in fact earned in 2019.~~existence of revenue recognized for a sample of revenue transactions by obtaining and inspecting source documents such as customer contracts, invoices, cash receipts, and other documents for each applicable per-driver metric (i.e., hours worked, store visits, or units stocked).

●

~~Stock~~Testing the cut off of revenue recognized for a sample of revenue transactions prior to and ~~Option Awards. The Corporation grants our Named Executive Officers awards of stock options and restricted stock units from time~~subsequent to time. Such options were issued with an exercise price equal to the fair market value on the date of grant and vest and become exercisable 25% on each of the first four anniversaries of the date of grant, provided that the recipient remains employed through the vesting date.December 31, 2023.

●

~~Retirement Benefits. The only retirement plan the Company maintains~~Performing analytical procedures to evaluate trends in the ~~United States is its 401(k) Profit Sharing Plan,~~Company’s recognized revenues.

/s/ BDO USA, P.C.

We have served as the Company's auditor since 2013.

Troy, Michigan USA

April 1, 2024

See accompanying notes to the Company's consolidated financial statements.

See accompanying notes to the Company's consolidated financial statements.

See accompanying notes to the Company's consolidated financial statements.

SPAR Group, Inc. ("SGRP" or the "Corporation"), and its subsidiaries (and SGRP together with its subsidiaries may be referred to as "SPAR Group", the "Company", "SPAR", "We", or "Our") is a global merchandising and brand marketing services company, providing a broad range of services to retailers, consumer goods manufacturers and distributors around the world. 

The Company consolidates its 100%-owned subsidiaries and all of the 51%-owned joint ventures in which the Company has a controlling financial interest. All significant intercompany transactions have been eliminated in the consolidated financial statements.

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States ("US GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the amounts disclosed for contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting year. Significant balances subject to such estimates and assumptions include carrying amounts of property and equipment and intangible assets, valuation allowances for receivables, carrying amounts for deferred tax assets and liabilities, and liabilities incurred from operations and customer incentives. Actual results could differ from those estimates.

Reportable segments are components of the Company for which separate financial information is available that is evaluated on a regular basis by the Chief Operating Decision Maker ("CODM”) in deciding how to allocate resources and in assessing performance. The Company's CODM is the Chief Executive Officer.

The Company provides similar merchandising, marketing and business services throughout the world and has three reportable regional segments: (i) Americas, which is comprised of United States, Canada, Brazil and Mexico; (ii) Asia-Pacific ("APAC”), which is comprised of Japan, China, and India; and (iii) Europe, Middle East and Africa ("EMEA”), which is comprised of South Africa. Certain corporate expenses have been allocated to segments based on each segment’s revenue as a percentage of total company revenue.

The Company consolidates all entities where a controlling financial interest exists. The Company has considered its relationships with its 51%-owned joint ventures to determine whether the Company has a variable interest in these entities, and if so, whether the Company is the primary beneficiary of the relationship. US GAAP requires variable interest entities ("VIEs”) to be consolidated if an entity’s interest in the VIE is a controlling financial interest. Under the variable model, a controlling financial interest is determined based on which entity, if any, has (i) the power to direct the activities of the VIE that most significantly impacts the VIE’s economic performance and (ii) the obligations to absorb losses that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

Management performs ongoing reassessments of whether changes in the facts and circumstances regarding the Company’s involvement with a VIE will cause the consolidation conclusion to change. The consolidation status of a VIE may change as a result of such reassessments. Changes in consolidation status are applied prospectively in accordance with US GAAP.

SPAR Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

The Company considers all short-term, highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents. Cash equivalents are stated at cost, which approximates fair value.

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents. The Company maintains cash balances with high quality financial institutions and periodically evaluates the creditworthiness of such institutions. At times, the Company’s cash and cash equivalents balances with individual banking institutions are in excess of insured limits. The Company does not believe it is exposed to significant credit risk and the Company has not experienced any losses related to its cash and cash equivalents balances. No customer accounted for more than 10% of the Company’s net revenue for the years ended December 31, 2023 and December 31, 2022. No customer accounted for more than 10% of the Company’s accounts receivable, net as of December 31, 2023 and December 31, 2022.

The Company generates its revenues by providing merchandising services to its clients. Revenues are recognized when the Company satisfies a performance obligation by transferring services promised in a contract to a customer and in an amount that reflects the consideration that the Company expects to receive in exchange for those services. Performance obligations in the Company’s contracts represent distinct or separate services that we provide to the Company’s customers; generally, the Company’s contracts have a single performance obligation. If, at the outset of an arrangement, the Company determines that a contract with enforceable rights and obligations does not exist, revenues are deferred until all criteria for an enforceable contract are met.

The Company’s merchandising services are provided over time, generally on a daily, weekly, or monthly basis, and transaction price is based on the contractually-specified rate-per-driver metric (i.e., rate per hour, rate per store visit, or rate per unit stocked). The Company recognizes revenues for its contracts based on the contractually-specified rate-per-driver metric(s) utilizing the right-to-invoice practical expedient because the Company has a right to consideration for merchandising services completed to date. In general, (i) Standard Merchandising Service Contracts have a duration of 1 to 3 years with indexed rate increases while individual brand projects can be added with less than 6 months duration. (ii) Retail Remodel Contracts typically auto-renew with annual project SOWs, with regional awards typically granted 6 to 12 months in advance and individual projects assigned quarterly/monthly. (iii) Fulfillment Contracts are typically an annual award and selected projects can be less than 6 months. (iv) Standard Assembly Service Agreements are 1 to 3 years in duration with indexed rates increases. Customer deposits, which are considered advances on future work, are deferred and recorded as revenue in the period in which the services are provided.

Unbilled accounts receivable represents services performed but not billed and are included as accounts receivable.

The Company continually monitors the collectability of its accounts receivable based upon current client credit information and financial condition. Balances that are deemed to be uncollectible after the Company has attempted reasonable collection efforts are written off through a charge to the allowance for credit losses and a credit to accounts receivable. Accounts receivable balances, net of any applicable reserves or allowances, are stated at the amount that management expects to collect from the outstanding balances. The Company provides for probable uncollectible amounts through a charge to earnings and a credit to allowance for credit losses based in part on management’s assessment of the current status of individual accounts. Based on management’s assessment, the Company established an allowance for credit losses of $1.5 million and $1.6 million at December 31, 2023, and 2022, respectively. Credit loss expense was $0.3 million and $1.3 million for the years ended December 31, 2023 and 2022, respectively.

SPAR Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

The Company determines if a contract contains a lease at inception. The Company’s material operating leases consist of office space and equipment. The Company recognizes a right-of-use ("ROU”) asset and lease liability for operating leases with a term of greater than one year. The ROU asset is measured as the sum of (1) the present value of all remaining fixed and in-substance fixed payments using the rate implicit in the lease whenever that is readily determinable or the Company’s incremental borrowing rate, (2) any lease payments made at or before the commencement date (less any lease incentives received) and (3) any initial direct costs incurred. The lease liability is measured similarly to the ROU asset, but excludes any payments made before the commencement date and initial direct costs incurred. Lease terms include options to extend or terminate the lease if it is reasonably certain the Company will exercise these options. Expense for operating leases and leases with a term of one year or less is recognized on a straight-line basis over the term of the lease, unless another systematic and rational basis is more representative of the derivation of benefit from use of the leased property. Variable lease payments are recognized in the period in which the related obligation is incurred and consist primarily of payments for insurance and property taxes. Operating lease expense and variable lease payments are recorded in selling, general and administrative expense in the consolidated statements of operations and comprehensive income (loss).

Property and equipment, including leasehold improvements, are stated at cost, net of accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets, which range from three to seven years for equipment, three to seven years for furniture and fixtures, and three to five years for capitalized software costs. Leasehold improvements are depreciated over the shorter of their estimated useful lives or the related lease terms, which range from three to fifteen years. Maintenance and minor repairs are expensed as incurred.

The Company capitalizes certain costs associated with its internally developed software. The Company capitalizes the costs of materials and services incurred in developing or obtaining internal use software and such costs include, but are not limited to: the cost to purchase software, the cost to write program code, and payroll and related benefits for those employees who are directly involved with and who devote time to the Company’s software development projects. Capitalization of such costs begins during the application development stage once the preliminary project stage is complete, management authorizes and commits to funding the project, and it is probable that the project will be completed and that the software will be used to perform the function intended. Capitalization ceases when the project is substantially complete and ready for its intended purpose. Costs incurred during preliminary project and post-implementation stages, as well as software maintenance and training costs, are expensed in the period in which they are incurred.

The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of the Company’s property and equipment and may not be recoverable. When indicators of potential impairment exist, the Company assesses the recoverability of the assets by estimating whether the Company will recover its carrying value through the undiscounted future cash flows generated by the use of the asset and its eventual disposition. Based on this analysis, if the Company does not believe that it will be able to recover the carrying value of the asset, the Company records an impairment loss to the extent that the carrying value exceeds the estimated fair value of the asset. If any assumptions, projections or estimates regarding any asset change in the future, the Company may have to record an impairment to reduce the net book value of such individual asset.

Intangible assets consist primarily of customer contracts and lists, trade names, patents and non-compete agreements, all of which have a finite useful life. Intangible assets are amortized based on the pattern in which the economic benefits of the intangible assets are estimated to be realized. When facts and circumstances indicate that the carrying value of definite-lived intangible assets may not be recoverable, the Company assesses the recoverability of the carrying value by preparing estimates of sales volume and the resulting profit and cash flows expected to result from the use of the asset or asset group and its eventual disposition. If the sum of the expected future cash flows (undiscounted and without interest charges) is less than the carrying amount, the Company recognizes an impairment loss. The impairment loss recognized is the amount by which the carrying amount of the asset or asset group exceeds the fair value.

SPAR Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

Goodwill may result from business acquisitions. Goodwill is assigned to reporting units based on the expected benefit from the synergies arising from each business combination, determined by using certain financial metrics, including the forecast discounted cash flows associated with each reporting unit. The goodwill acquired in a business combination is allocated to the appropriate reporting unit as of the acquisition date. Goodwill is subject to annual impairment tests and interim impairment tests if impairment indicators are present. The Company performs the annual impairment test as of October 31^steach year. The impairment tests require the Company to first assess qualitative factors to determine whether it is necessary to perform a quantitative goodwill impairment test. The Company is not required to calculate the fair value of a reporting unit unless it determines, based on a qualitative assessment, that it is more likely than not that its fair value is less than its carrying amount. If it is determined that it is more likely than not, or if the Company elects not to perform a qualitative assessment, the Company proceeds with the quantitative assessment. Under the quantitative test, if the fair value of a reporting unit exceeds its carrying amount, then goodwill of the reporting unit is considered to not be impaired. If the carrying amount of the reporting unit exceeds its fair value, then an impairment loss is recognized in an amount equal to the excess, up to the value of the goodwill.

The Company records treasury stock activities under the cost method whereby the cost of the acquired stock is recorded as treasury stock. The Company’s accounting policy upon the formal retirement of treasury stock is to deduct the par value from the Company’s common stock and to reflect any excess of cost over par value as a reduction to additional paid-in capital (to the extent created by previous issuances of the shares).

The Company recognizes noncontrolling interest related to VIEs, in which the Company is the primary beneficiary, as equity in the consolidated financial statements separate from the parent entity’s equity. The amount of net income or loss attributable to noncontrolling interests is included in consolidated net income on the face of the consolidated statements of operations and comprehensive loss. Changes in the parent entity’s ownership interest in a subsidiary that do not result in deconsolidation are treated as equity transactions if the parent entity retains its controlling financial interest. In addition, when a subsidiary is deconsolidated, any retained noncontrolling equity investment in the former subsidiary will be initially measured at fair value and the difference between the carrying value and fair value of the retained interest will be recorded as a gain or loss. Because these transactions take place between entities under common control, any gains or losses attributable to these transactions are required to be included within additional paid-in-capital on the consolidated balance sheets.

Advertising and promotional expenses are included in selling, general and administrative expenses within the consolidated statements of operations and comprehensive loss and are expensed when incurred. Advertising and promotional expenses were $9,466 and $19,549 during the years ended December 31, 2023 and 2022, respectively.

The Company measures all share-based awards granted to employees and directors based on the fair value on the date of the grant and recognizes compensation expense for those awards, over the requisite service period, which is generally the vesting period of the respective award, on a straight-line basis for the entire award. The fair value of stock options is estimated on the date of grant using the Black-Scholes option-pricing model, which requires inputs based on certain subjective assumptions, including the fair market value of the Company’s common stock, expected stock price volatility, the expected term of the option, the risk-free interest rate for a period that approximates the expected term of the option, and the Company’s expected dividend yield.

SPAR Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

The Company classifies share-based compensation expense in its consolidated statements of operations and comprehensive (loss) income in the same manner in which the award recipient’s payroll costs are classified or in which the award recipient’s service payments are classified. The Company made a policy election to estimate the number of share-based compensation awards that are expected to vest to determine the amount of compensation expense recognized in earnings. Forfeiture estimates are revised if subsequent information indicates that the actual number of forfeitures is likely to differ from previous estimates.

Excess tax benefits are realized from the exercise of stock options and are reported as a financing cash inflow in the consolidated statement of cash flows.

Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The US GAAP fair value framework uses a three-tiered approach. Fair value measurements are classified and disclosed in one of the following three categories:

If the inputs used to measure the fair value fall within different levels of the hierarchy, the fair value is determined based upon the lowest level input that is significant to the fair value measurement. Whenever possible, the Company uses quoted market prices to determine fair value. In the absence of quoted market prices, the Company uses independent sources and data to determine fair value.

Due to their short-term nature, the carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses approximated the fair values (Level 1) as of December 31, 2023 and 2022. The carrying value of the Company’s long-term debt with variable interest rates approximates fair value based on instruments with similar terms (Level 2).

Income tax provisions and benefits are made for taxes currently payable or refundable, and for deferred income taxes arising from future tax consequences of events that were recognized in the Company’s financial statements or tax returns and tax credit carry forwards. The effects of income taxes are measured based on enacted tax laws and rates applicable to periods in which the differences are expected to reverse. If necessary, a valuation allowance is established to reduce deferred income tax assets to an amount that will more likely than not be realized.

The calculation of income taxes involves dealing with uncertainties in the application of complex tax regulations. The Company recognizes liabilities for uncertain tax positions based on a two-step process. The first step involves evaluating the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step involves estimating and measuring the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. It is inherently difficult and subjective to estimate such amounts, as the Company has to determine the probability of various possible outcomes. The Company’s evaluation of uncertain tax positions is based on factors including, but not limited to, changes in facts or circumstances, changes in tax law, effectively settled issues under audit, and new audit activity. Such a change in recognition or measurement would result in the recognition of a tax benefit or an additional charge to the tax provision.

In June 2016, the FASB issued ASU No.2016-13,Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU No.2016-13”), which replaced the incurred loss impairment model with an expected credit loss model. The Company adopted ASU No.2016-13 on January 1, 2023. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements or disclosures for the year ended December 31, 2023.

SPAR Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

In August 2023, the FASB issued ASU No.2023-05,Business Combinations – Joint Venture Formations (Subtopic 805):Recognition and Initial Measurement, which will require joint ventures to recognize and initially measure its assets and liabilities at fair value upon formation. The guidance will be effective for the Company prospectively for all joint venture formations on or after January 1, 2025. Early adoption and retrospective application is permitted. The Company does not believe adoption will have a material effect on its consolidated financial statements and related disclosures.

In November 2023, the FASB issued ASU No.2023-07, Segment Reporting (Topic 280):Improvements to Reportable Segment Disclosures, which will require Companies to report additional segment information, including certain significant segment expenses, and permit the disclosure of additional measures of a segment’s profit or loss. The guidance will be effective for the Company’s fiscal year beginning January 1, 2024 and for interim periods thereafter. The Company is currently evaluating the impact adoption will have on its consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU No.2023-09, Income Taxes (Topic 740):Improvements to Income Tax Disclosures, which will require Companies to report specific categories of rate-reconciliation, certain details of income taxes paid and of certain information by tax jurisdictions. The guidance will be effective for the Company’s fiscal year beginning January 1, 2025. The Company is currently evaluating the impact adoption will have on its consolidated financial statements and related disclosures.

SPAR Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

Depreciation expense (including amortization of internal use software and intangible assets as described below) was $2.0 million and $2.0 million for the years ended December 31, 2023 and 2022, respectively. The Company capitalized $1.0 million and $1.5 million of costs related to internal use software in the years ended December 31, 2023 and 2022, respectively. The Company recognized approximately $1.1 million and $1.2 million of amortization expense related to internal use software for the years ended December 31, 2023 and 2022, respectively.

Goodwill is generally deductible for tax purposes, except for the portion related to purchase accounting step-up goodwill. For the years ended December 31, 2023 and 2022, impairment losses of goodwill were $0 million and $2.5 million, respectively.

The Company acquired Resource Plus of North Florida, Inc. ("Resource Plus”) in 2018 as a joint venture partnership and owns 51% of the Resource Plus business. At the time of the acquisition, the Company recorded $2.0 million of goodwill. Due to the loss of a significant customer, during the year ended December 31, 2022, Resource Plus did not meet original forecast and reduced forecasts. The Company tested recorded goodwill for impairment using a combination of discounted cash flow and guideline public company methodologies.

Key assumptions include management's estimates of forecasted revenue and forecasted cash flows. Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions, estimates, and market factors. Estimating the fair value of individual reporting units requires the Company to make assumptions and estimates regarding its future plans, as well as industry, economic, and regulatory conditions. These assumptions and estimates include estimated future annual net cash flows, income tax considerations, discount rates, growth rates, and other market factors. The Company’s expectations also include certain assumptions that could be negatively impacted if the Company is unable to meet its cost expectations in relation to inflation. If current expectations of future growth rates and margins are not met, if market factors outside of the Company’s control, such as discount rates, income tax rates, foreign currency exchange rates, inflation, or any other factors, change, or if management’s expectations or plans otherwise change, including updates to the Company’s long-term operating plans, then one or more of our reporting units might become impaired in the future.

The impairment test indicated the goodwill of Resource Plus was fully impaired and the Company recorded an impairment loss of $2.0 million during the year ended December 31, 2022.

The Company acquired SPAR TODOPROMO, SAPI, de CV ("SPAR Mexico”) in 2011 as a joint venture partnership and currently owns 51% of the SPAR Mexico business. At time of acquisition, the Company recorded $0.5 million of goodwill. During year ended December 31, 2022, SPAR Mexico did not meet original forecasts due to labor law changes in Mexico. The Company tested recorded goodwill for impairment using a combination of discounted cash flow and guideline public company methodologies. The impairment test indicated that the goodwill of SPAR Mexico was fully impaired and the Company recorded an impairment loss of $0.5 million during the year ended December 31, 2022.

SPAR Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

The decline in gross intangible assets of $1.1 million is due to the sale of NMS and Australia. Please see note 10. Related Party Transactions for more information.

The Company is amortizing its intangible assets over lives ranging from 5 to 25 years. Amortization expense for the years ended December 31, 2023 and 2022 was approximately $0.4 and $0.4, respectively.

The annual amortization for each of the following years succeeding December 31, 2023 is summarized as follows (in thousands):

SPAR Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

The Company, through SPAR Marketing Force, Inc. ("SMF") and SPAR Canada Company ULC ("SCC", and collectively with SMF, the “NM Borrowers”), has a secured revolving credit facility in the United States (the "US Revolving Credit Facility") and Canada (the "Canada Revolving Credit Facility", and collectively with the US Revolving Credit Facility, the "NM Credit Facility") with North Mill Capital, LLC, d/b/a SLR Business Credit ("NM").In order to obtain, document and govern the NM Credit Facility, SMF, SCC, SGRP and certain of SGRP's direct and indirect subsidiaries in the United States and Canada (including SMF and SCC as borrowers and SGRP as a guarantor, collectively, the "NM Loan Parties") entered into a Loan and Security Agreement with NM dated as of April 10, 2019, which, as amended from time to time (as amended, the "NM Loan Agreement"), governs the NM Credit Facility. Pursuant to the NM Loan Agreement, the NM Borrowers agreed to reimburse NM for legal and documentation fees incurred in connection with the NM Loan Agreement and such amendments.

On July 1, 2022, the NM Loan Parties and NM executed and delivered a Fourth Modification Agreement, effective as of June 30, 2022 (the "Fourth Modification Agreement"), pursuant to which the NM Loan Parties and NM agreed to extend the NM Credit Facility from October 10, 2023, to October 10, 2024, and increased the amount of the US Revolving Credit Facility to $17.5 million while the Canada Revolving Credit Facility remained at CDN$1.5 million. In addition, the Fourth Modification Agreement permanently increased SMF's borrowing base availability for billed receivables to up to 90% from 85%, and unbilled receivables to up to 80% from 70%, and increased the cap on unbilled accounts for SMF to $6.5 million from $5.5 million.

On August 9, 2022, the NM Loan Parties and NM executed and delivered a Fifth Modification Agreement, effective immediately (the "Fifth Modification Agreement"), pursuant to which the NM Loan Parties and NM agreed to temporarily increase the borrowing base availability under the NM Credit Facility, and the NM Borrowers agreed to pay certain additional fees.

On February 1, 2023, the NM Loan Parties and NM executed and delivered a Sixth Modification Agreement, effective immediately (the "Sixth Modification Agreement"), pursuant to which the NM Loan Parties and NM agreed to increase the amount of the US Revolving Credit Facility to $28.0 million and increase the Canada Revolving Credit Facility to CDN$2.0 million. In addition, the Sixth Modification Agreement increased the cap on unbilled accounts in the borrowing base for SMF to $7.0 million from $6.5 million.

On March 27, 2024, the NM Loan Parties and NM executed and delivered a Seventh Modification Agreement, effective immediately (the "Seventh Modification Agreement"), pursuant to which the NM Loan Parties and NM agreed to extend the NM Credit Facility from October 10, 2024 to October 10, 2025.

The Restated US Note and Restated Canadian Note (together, the "NM Notes") and the NM Loan Agreement together require the NM Borrowers to pay interest on the loans thereunder equal to: (i) the Prime Rate designated from time to time by Wells Fargo Bank; plus (ii) one and nine-tenths percentage points (1.90%) or an aggregate minimum of 6.75% per annum. In addition, the NM Borrowers are paying a facility fee to NM in an amount equal to: (i) for the year commencing on October 10, 2022, approximately $0.1 million plus 0.80% of the amount of any advances other than under the US Revolving Credit Facility plus an additional facility fee of $15,000 for every incremental $1.0 million of loan balance in excess of $21.0 million, and (ii) for the year commencing on October 10, 2023, approximately $0.2 million plus 0.80% of the amount of any advances other than under the US Revolving Credit Facility plus an additional facility fee of $15,000 for every incremental $1.0 million of loan balance in excess of $21.0 million. For the Sixth Modification Agreement, the NM Borrowers paid NM a fee of approximately $28,000 for the US and $3,000 for Canada.

As of December 31, 2023, the aggregate interest rate was 10.40% per annum and the aggregate outstanding loan balance was approximately $12.5 million, which is included within lines of credit and short-term loans in the condensed consolidated balance sheets. The aggregate outstanding loan balance is divided between the US Revolving Credit Facility and the Canada Revolving Credit Facility as follows: (i) the outstanding loan balance under the US Revolving Credit Facility was approximately $11.9 million; and (ii) the outstanding loan balance under the Canada Revolving Credit Facility was approximately $0.6 million.

SPAR Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

The NM Credit Facility contains certain financial and other restrictive covenants and also limits certain expenditures by the NM Loan Parties, including maintaining a positive trailing EBITDA for each the NM Borrowers (i.e., SMF and SCC) and imposes limits on all of the NM Loan Parties (including SGRP) on non-ordinary course payments and transactions, incurring or guaranteeing indebtedness, increases in executive, officer or director compensation, capital expenditures and certain other investments. The NM Loan Parties were in compliance with such covenants as of December 31, 2023. The obligations of the NM Borrowers are secured by the receivables and other assets of the NM Borrowers and substantially all of the assets of the other NM Loan Parties, however, the obligations are not secured by any equity in, financial asset respecting or asset of any Excluded Subsidiary (as such term is defined in the NM Loan Agreement). Pursuant to the NM Loan Agreement, Excluded Subsidiary means each of the following direct or indirect subsidiaries of SGRP: (i) Resource Plus of North Florida, Inc. (“Resource Plus”), Mobex of North Florida, Inc., and Leasex, LLC, and their respective subsidiaries; (ii) NMS Retail Services ULC, which is an inactive Nova Scotia ULC; (iii) SPAR Group International, Inc.; (iv) SPAR FM Japan, Inc.; (v) SPAR International, Ltd.; (vi) each other subsidiary formed outside of the United States or Canada; and (vii) any other entity in which any such subsidiary is a partner, joint venture or other equity investor.

Effective with the closing of the Company's acquisition of Resource Plus in 2018, the Company issued into promissory notes with the sellers of $2.7 million. As of December 31, 2023, the annual interest rate was 1.85% and the balance outstanding under the promissory notes was approximately $1.1 million, payable in January 2024, which is included in lines of credit and short-term loans in the consolidated balance sheets.

In December 2020, SPAR China secured a loan with Industrial Bank for 2.0 million Chinese Yuan. The loan was renewed in December 22 2023, with an expiration date in December 2024.

In December 2021, SPAR China secured a loan with Industrial and Commercial Bank of China for 2.0 million Chinese Yuan. The loan was paid in July 2023 and a new loan was secured in November 2023 for 2.0 million Chinese Yuan with expiration date of November 2024.

In March 2022, SGRP Meridian (Pty), Ltd. secured loans with Investec Bank Ltd, for 105 million South African Rand which expires July 2025. This loan is secured by the company's available cash and Accounts Receivable and is being repaid in monthly installments commensurate with an amortization schedule. The interest rate of 11.75% is calculated based on the South African Prime rate. As part of the agreement, SGRP Meridian is subject to covenant restrictions that mandate minimum levels of Debt to EBITDA, Asset and Accounts Receivable balances, and coverage ratios.

Summary of the Company’s lines of credit and short-term loans (in thousands):

SPAR Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

Summary of Unused Company Credit and Other Debt Facilities (in thousands):

Beginning in 2018, the Tax Cuts and Jobs Act (the "Act”) included two (2) new U.S. corporate tax provisions, the global intangible low-taxed income regime ("GILTI”) and the base-erosion and anti-abuse tax ("BEAT”). The GILTI provision requires the Company to include in its U.S. income tax return non-U.S. subsidiary earnings in excess of an allowable return on the non-U.S. subsidiary’s tangible assets. The Company has elected to treat GILTI as a period cost. The Company evaluated the GILTI provision resulting in a financial statement impact of approximately $0 and $0.3 million for the year ended December 31, 2023 and December 31, 2022 respectively. The Company is below the three-year average gross receipts threshold for BEAT to apply.

SPAR Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

The provision for income taxes is different from that which would be obtained by applying the statutory federal income tax rate to income before income taxes. The items causing this difference are as follows (dollars in thousands):

In 2023, our effective income tax rate of 33.0% varied from the U.S. federal statutory rate of 21% primarily as a result of foreign rate differential, sale of membership interest disposition of National Merchandising Services, LLC, and permanent differences.

SPAR Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

As of December 31, 2023, the Company’s deferred tax assets were primarily the result of U.S. Net Operating Loss ("NOL”) and Brazil NOL. The Company has gross U.S. Federal NOL carryforwards of $5.0 million and tax effected amount of $1.1 million. Of the $1.1 million U.S. Federal NOL carryforward, approximately $0.6 million has no expiration date, and the remaining balance, if unused, will expire in years 2027 through 2031. The Company has a U.S. State NOL deferred tax asset of $0.1 million of varying expiration dates from 2024 to 2041. The Company has gross $0.3 million of US Capital Loss carryforwards with expiration date of 2028. The tax effected amount of US Capital Loss carryforward is $0.1 million. The Company has $0.2 million US Research and Development credits with expiration dates ranging 2031 to 2035. The Company has additional gross NOL carryforwards of $1.7 million in Brazil, all of which has no expiration date. The tax effected amount of the Brazil NOL carryforwards is $0.6 million. The Company has additional gross NOL carryforwards of $1.0 million in China, and $1.1 million in Mexico with expiration dates beginning in 2028, and 2033, respectively. The tax effected amounts of China, and Mexico NOL carryforwards are $0.2 million, and $0.3 million respectively.

Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing net deferred tax assets. U.S.-based net deferred tax assets are approximately $2.3 million. Management continues to monitor its operating performance and currently believes that the achievement of the required future taxable income necessary to realize these deferred assets is more likely than not. Key considerations in this assessment include our expectation of continued improvements in U.S. operating results and the period of time available to generate future taxable income. For Brazil, and Mexico losses it is expected to be more likely than not that there will be sufficient taxable income to utilize the losses in future years. For China management does not expect its more likely than not deferred tax assets can be realized and therefore a full valuation allowance is recorded with respect to these jurisdictions.

A reconciliation of the beginning and ending amount of uncertain tax position reserves is as follows (in thousands):

The provision for income taxes includes the impact of uncertain tax position reserves and changes to reserves that are considered appropriate. As of December 31, 2023, included in the balance of uncertain tax position reserves are $0.05 million of reserves that, if recognized, would affect the effective rate of income from continuing operations. Interest and penalties that the tax law requires to be paid on the underpayment of taxes should be accrued on the difference between the amount claimed or expected to be claimed on the return and the tax benefit recognized in the financial statements. The Company's policy is to record this interest and penalties as additional tax expense. We accrued penalties of $1 thousand and interest of $.4 thousand during 2023 and in total, as of December 31, 2023 recognized a liability related to the uncertain tax position reserves noted above for penalties of $15 thousand and interest of $17 thousand. During 2022, we accrued penalties of $.8 thousand and interest of $.3 thousand and in total, as of December 31, 2022, recognized a liability of penalties of $14 thousand and interest of $16 thousand. Management does not expect in the next 12 months that the uncertain tax position reserves will significantly increase or decrease. Consistent with that expectation, interest and penalties related to the uncertain tax position reserve should not significantly increase.

SPAR Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

In management's view, the Company's tax reserves at December 31, 2023 and 2022, for potential domestic state tax liabilities were sufficient. The Company has evaluated the tax liabilities of its international subsidiaries and does not believe a reserve is necessary at this time.

SPAR and its subsidiaries file numerous consolidated, combined and separate company income tax returns in the U.S. Federal jurisdiction and in many U.S. states and foreign jurisdictions. With few exceptions, SPAR is subject to U.S. Federal, state and local income tax examinations for the years 2020 through the present. Foreign entities are subject to tax audits that vary based on jurisdiction. However, tax authorities have the ability to review years prior to the position taken by the Company to the extent that SPAR utilized tax attributes carried forward from those prior years.

The Company is a party to various legal actions and administrative proceedings arising in the normal course of business. In the opinion of Company's management, resolution of these matters is not anticipated to have a material adverse effect on the Company or its estimated or desired affiliates, assets, business, clients, capital, cash flow, credit, expenses, financial condition, income, legal costs, liabilities, liquidity, locations, marketing, operations, prospects, sales, strategies, taxation or other achievement, results or condition.

In the year ended December 31, 2022, prior open and potential claims between significant stockholders and the Company were released mutually upon execution of the Change of Control, Voting and Restricted Stock Agreement ("CIC Agreement"), as of January 28, 2022. See Note 10,Related Party Transactions.

All prior litigations associated with the Company through SPAR Business Services, Inc., a corporation ("SBS") and its independent contractors have been resolved, including the claims of SBS and the Company in the SBS bankruptcy and settlement, and all additional related claims raised later by SBS and Robert G Brown were released by them in the CIC Agreement.

In the year ended December 31, 2022, final payment of the prior SBS Clothier litigation settlement was paid in full.

As of December 31, 2023, the Corporation's certificate of incorporation authorized the Corporation to issue 47,000,000 shares of common stock, par value $0.01 per share. The voting, dividend and liquidation rights of the holders of the Corporation's common stock are subject to and qualified by the rights, powers and preferences of the holders of the Corporation's Series B convertible preferred stock. Each share of the Corporation's common stock are entitled to one vote on all matters submitted to a vote of the Corporation's stockholders. Holders of the Corporation's common stock are entitled to receive dividends as may be declared by the Corporation's board of directors (the "Board"), if any, subject to the preferential dividend rights of the Corporation's Series B convertible preferred stock. No cash dividends had been declared or paid during the periods presented.

In May 2022, the Board authorized the Corporation to repurchase up to 500,000 shares of the Corporation's common stock pursuant to the 2022 Stock Repurchase Program (the "2022 Stock Repurchase Program"), which ended May 2023. During the year ended December 31, 2022, there were 151,156 shares of common stock repurchased for $187,427 under the 2022 Stock Repurchase Program. There were no share repurchases that were significantly in excess of the current market price at time of repurchase.

SPAR Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

The Corporation’s certificate of incorporation authorizes it to issue 3,000,000 shares of preferred stock with a par value of $0.01 per share, which may have such preferences and priorities over the Corporation’s common stock and other rights, powers and privileges as the Board of may establish in its discretion.

In January 2022, the Corporation filed a Certificate of Elimination for its "Certificate of Designation of Series "A” Preferred Stock of SPAR Group, Inc.” (the "Certificate of Elimination”). Pursuant to the Certificate of Elimination, the previous Series A convertible preferred stock designation was cancelled and withdrawn. As a result, all 3,000,000 shares of the previously authorized Series A convertible preferred stock were returned to the Corporation's authorized "blank check” preferred stock. There were no shares of Series A convertible preferred stock outstanding at the time of the cancellation.

Subsequent to filing the Certificate of Elimination, in January 2022, the Corporation filed a "Certificate of Designation of Series "B” Preferred Stock of SPAR Group, Inc.” (the "Preferred Designation”) with the Secretary of State of Delaware, which designation had been approved by the Board in January 2022. The Preferred Designation created a series of 2,000,000 shares of convertible preferred stock designated as "Series B” convertible preferred stock, par value of $0.01 per share.

The Series B convertible preferred stock do not carry any voting or dividend rights and upon vesting converted into the Corporation's common stock at a ratio of 1-to-1.5. SeeNote 10. The holders of the Series B convertible preferred stock had a liquidation preference over the Corporation's common stock and voted together for matters pertaining only to the Series B convertible preferred stock where only the holders of the Series B convertible preferred stock are entitled to vote. The holders of outstanding Series B Preferred Stock do not have the right to vote for directors or other matters submitted to the holders of the Corporation's common stock.

In January 2022, 2,000,000 shares of Series B convertible preferred stock were issued to the majority stockholders and related parties pursuant to the Change of Control, Voting and Restricted Stock Agreement. See Note 10.

During the year ended December 31, 2022, 1,145,247 shares of Series B convertible preferred stock converted to 1,717,870 shares of the Corporation's common stock. As of the year ended December 31, 2022, 854,753 shares of Series B convertible preferred stock were outstanding, which upon vesting would automatically convert into 1,282,129 shares of the Corporation's common stock.

During the year ended December 31, 2023, all of the remaining 854,753 shares of Series B convertible preferred stock vested and automatically became convertible into 1,282,129 shares of the Corporation's common stock of which 307,129 shares of the Corporation's Common Stock were issued prior to December 31, 2023. However, at December 31, 2023, 975,000 shares of SGRP Common Stock were in the process of being issued and the remaining shares of Series B Preferred Stock were in the process of being returned and cancelled.

Once the shares of Series B Preferred Stock are fully retired, SGRP may change or cancel the authorized Series B Preferred Stock, and to the extent it reduces such authorization without issuance, it can create other series of Preferred Stock with potentially different dividends, preferences and other terms.

The Company has a 401(k) Profit Sharing Plan covering substantially all eligible domestic employees. The Company made discretionary contributions of $0.1 million and $0.1 million for the years ended December 31, 2023 and 2022, respectively.

SPAR Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

The Change of Control, Voting and Restricted Stock Agreement (the "CIC Agreement") became effective on January 28, 2022, when signed by the Company and Robert G. Brown, ("Mr. Brown"), William H. Bartels, ("Mr. Bartels"), SPAR Administrative Services, Inc., a corporation ("SAS"), and collectively with Mr. Brown, Mr. Bartels and SAS, the ("Majority Stockholders"). Mr. Bartels and Mr. Brown are Directors of the Corporation. Mr. Brown was the Chairman of the Board of Directors of SGRP (the "Board"), but ceased holding that position when the 2022 By-Laws (as defined below) became effective on January 25, 2022.

The execution of the CIC Agreement was conditional upon making the changes to and restatement of the Corporation's 2022 By-Laws, which were approved by the Board and became effective on January 25, 2022 (the "2022 By-Laws").

The financial terms of the CIC Agreement to the Majority Stockholders, totaled $4,477,585, consisting of the following:

On January 25, 2022, the Company entered into a consulting agreement with Mr. James R. Brown, Sr., effective January 26, 2022, following his retirement as a director of SGRP on January 25, 2022, pursuant to which Mr. Brown will serve as a Board advisor to SGRP from time to time for a term of one (1) year (the "Brown Advisor Agreement"). As compensation for his services, Mr. Brown was entitled to receive compensation at a rate of $55,000 for the term of the Brown Advisor Agreement. Payments will be made in equal quarterly installments and will be pro-rated for partial quarters. The agreement expired in the year ended December 31, 2022.

On January 27, 2022, the Corporation entered into a consulting agreement with Thenablers, Ltd. effective February 1, 2022 (the " Lazaretos Consulting Agreement"). Thenablers, Ltd. is wholly owned by Mr. Panagiotis Lazaretos, a retired director of the Corporation. Following Mr. Lazaretos' retirement as a director on January 25, 2022, Thenablers, Ltd. agreed to provide the consulting services of Mr. Lazaretos to the Corporation regarding global sales and new markets' expansion. The Lazaretos Consulting Agreement cannot be terminated by the consent of either party for the firsttwelve (12) months, and automatically expires on January 31, 2024. As compensation for its services, Thenablers, Ltd. is entitled to receive: (i) base compensation at a rate of $10,000 per month for the term of the Consulting Agreement; (ii) incentive based compensation as calculated in Exhibit A of the Lazaretos Consulting Agreement; and (iii) the outstanding options granted to Mr. Panagiotis ("Panos") N. Lazaretos on February 4, 2022 will continue to be outstanding and vest according to their terms under the agreement. As permitted by that agreement, on February 2, 2023, the Corporation gave notice that it was terminating that agreement effective July 31, 2023.

SPAR Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

Resource Plus, is a consolidated domestic subsidiary of the Company and is owned jointly by the Company and by Mr. Richard Justus. Mr. Justus has an ownership interest in RJ Holdings which owns the buildings where Resource Plus is headquartered and operates. Both buildings are subleased to Resource Plus.

On December 1, 2021, the Corporation entered into the Agreement for Marketing and Advertising Services (the "WB Agreement") with WB Marketing, Inc. (the "Agent", and together with the Company, the "Parties"). The Agent is an entity owned and controlled by Mrs. Jean Matacunas who is the wife of President and Chief Executive Officer, Michael R. Matacunas. Mr. Matacunas is also a minority owner of the Agent. The service fees paid to WB Marketing for the years ended December 31, 2023 and 2022, were $103,000 and $189,000, respectively.

Prior to December 31, 2023, National Merchandising Services, LLC ("NMS"), was a consolidated domestic subsidiary of the Company owned jointly by SGRP and by National Merchandising of America, Inc. ("NMA"). Mr. Edward Burdekin was the Chief Executive Officer and President and a director of NMS and also an executive officer and director of NMA. Ms. Andrea Burdekin, Mr. Burdekin's wife, was the sole stockholder and also a director of both NMA and NMS. NMA was a related party of the Company but is not under the control of or consolidated with the Company. Mr. Burdekin's wife also owns National Remodel & Setup Services, LLC ("NRSS"). During the years ended December 31, 2022 and 2023, NRSS provided substantially all of the domestic merchandising specialist field force used by NMS. For those services, NMS reimbursed NRSS certain costs for providing those services plus a premium ranging from 4.0% to 10.0% of certain costs. NMS also leased office space from Mr. Burdekin's personal property. In December 2023, the Company sold its ownership interest in NMS.

On December 22, 2023, the Company entered into an agreement with National Retail Remodel Services (the "Buyer") to sell its 51% ownership interest in National Merchandising Services, LLC ("NMS") to the Buyer for total consideration of $1,441,004. The transaction closed on December 31, 2023. Per the agreement, the purchase price is due from the Buyer as follows: (1) a payment of $700,000 due immediately to the escrow agent upon closing, releasable to the Company in January 2024; (2) $523,000 in the form of the Buyer's promissory note due and payable on January 31, 2024; and (3) a payment of up to $209,004 contingent upon collection of an outstanding receivable. The $700,000 and $523,000 portions of consideration for this transaction are recorded in "Other Receivables" at December 31, 2023. The Company’s December 31, 2023 financial results include a loss on this sale of approximately $427,000, primarily reflecting the write-off of remaining goodwill related to NMS. The Company has not included the contingent purchase price payment in the determination of the amount of the loss as collection of that receivable is not known as of filing date.

The Company's principal Brazilian subsidiary, SPAR BSMT, is owned 51% by the Company. Mr. Jonathan Dagues Martins, ("JDM") is the Chief Executive Officer and President of each SPAR Brazil subsidiary pursuant to a Management Agreement between JDM and SPAR BSMT dated September 13, 2016. JDM also is a director of SPAR BSMT. Accordingly, JDM is a related party of the Company. EILLC is owned by Mr. Peter W. Brown, a director of SPAR BSMT and the Corporation.

Prior to December 31, 2023, SPARFACTS was a consolidated international subsidiary of the Company owned 51% by SGRP. Ms. Lydna Chapman was a director of SPARFACTS. Her various companies provide office lease, accounting and consultant services to SPARFACTS. In December 2023, the Company sold its ownership interest in SPARFACTS.

On December 22, 2023, the Company entered into an agreement with Sabizz Pty Ltd CAN (the buyer) to sell its 51 percent interest in SPARfacts Pty Limited CAN for (1) one dollar; (2) assumption of all liabilities and obligations related to ownership of the shares; and (3) $75 thousand AUD for the rights to use the SPARfacts brand and name for up to 6 months following the closing date. The transaction closed on December 31, 2023. The Company’s 2023 year end financial results include a $19,000 gain on the sale.

SPAR Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

(1) Represent loans from the local investors into the Company's subsidiaries (representing their proportionate share of working capital loans). The loans have no payment terms and are due on demand.

(2) These expenses are reflected in "Selling, general, and administrative expense" expense in the consolidated statements of operations and comprehensive (loss) income.

(3) Represent loans from the local investors into the Company's subsidiaries (representing their proportionate share of working capital loans). The loans have no payment terms and are due on demand.

William H. Bartels retired as an employee of the Company as of January 1, 2020. However, he continues to serve as a member of SPAR's Board. Mr. Bartels is also one of the founders and a significant stockholder of SGRP.

Effective as of January 18, 2020, SPAR's Governance Committee proposed and unanimously approved retirement benefits for the five-year period commencing January 1, 2020, and ending December 31, 2024 (the "Five-Year Period"), for Mr. Bartels. The aggregate value of benefits payable to Mr. Bartels is approximately $220,558 per year and a total of $1,102,790 for the Five-Year Period. The Company recognized $700,000 of retirement benefits during the year ended December 31, 2020, representing the present value of the future Retirement Compensation, Supplemental Fees and Medical Benefits payments due Mr. Bartels. As of December 31, 2023 $200,923 of retirement benefits remains outstanding and is included within Accrued expenses and other current liabilities on the consolidated balance sheets.

~~-11-~~63

~~Chief Executive Officer (PEO) Pay Versus Performance Table~~

Year

Summary
Compensation Table
Total for
Michael R.
Matacunas

Summary
Compensation Table
Total for
Kori G. Belzer

Compensation Actually
Paid (3) to
Michael R.
Matacunas

Compensation
Actually Paid (3) to
Kori G. Belzer

Average Summary
Compensation Table
Total for
Non-PEO NEOs

Average
Compensation Actually
Paid (3) to
Non-PEO NEOs

Total
Shareholder
Return

Company’s
Net Income

2022
$ 612,613 N/A $ 749,718 N/A $ 415,344 $ 384,882 113.04 $ 2,126,000
2021
$ 304,086 (1) $ 60,112 (2) $ 722,932 (1) 50,878 (2) $ 348,448 $ 324,647 106.96 $ 2,000,000

~~(1) Ms. Belzer was acting Chief Executive Officer of SGRP through February, 2021.~~

~~(2) Mr. Matacunas became Chief Executive Office of SGRP on February 22, 2021.~~

~~(3) Amount includes non-cash compensation respecting certain stock-based awards adjusted for changes in equity award values.~~

~~Potential Severance Payments upon a Change-In-Control~~SPAR Group, Inc. and ~~Termination~~Subsidiaries
Notes to Consolidated Financial Statements (continued)

~~In order to retain and motivate certain highly qualified executives in the event of a "Change-in-Control", the Corporation entered into separate Change of Control Severance Agreements (each a "CICSA") with Messrs. Michael R. Matacunas, Antonio Calisto Pato, William Linnane, Ron Lutz and Ms. Kori Belzer. Ms. Fay DeVriese had a CICSA which ended and was released as part of her departure.~~

~~Each CICSA provides that the applicable executive will receive a lump sum severance payment if both: (1) a "Change in Control" occurs; and (2) within the "Protected Period" the executive is terminated other than in a "Termination For Cause~~". The Protected Period is equal to the Term or 24 months from the then most recent Change in Control. The term is 36 months and automatically extends daily for another day unless the Corporation gives notice of non-renewal (in which case the Term ends on the third anniversary of such notice). The CICSA severance payment is equal to the sum of: (i) two (2) (Mr. Matacunas), or one (1) times the executive's annual salary plus (ii) the maximum bonus paid to such executive in either of the last two (2) years.

~~Outstanding Equity Awards at Fiscal Year-End~~

~~The following table sets forth unexercised options, unvested stock options and certain related information for each Named Officer outstanding as of December 31, 2022.~~

~~Stock Option Awards~~

Name

Grant
Date
Number of
Securities
Underlying
Unexercised
Options
Exercisable
at 12/31/22 (#)
Number of
Securities
Underlying
Unexercised
Options Not
Exercisable
at 12/31/22 (#)

Option
Price ($)

Option
Date
Kori Belzer
08/06/13
35,000
--
$              2.14
08/06/23

05/07/17
6,250
--(1)
$              0.90
05/17/27

05/03/18
15,000
5,000(1)
$              1.23
05/03/28

04/05/19
--
12,500(2)
$              0.64
04/05/29
Fay DeVriese
08/31/20
--
150,000(3)
$              0.85
08/31/30
William Linnane -- -- -- -- --
Ron Lutz -- -- -- -- --
Michael Matacunas 02/22/21 -- 630,000(1) $              1.90 02/22/31

~~(1)~~

~~Amounts vest on the anniversary of the grant date in 2022.~~

~~(2)~~

~~Amounts vest on the anniversary of the grant date, one half in 2022 and 2023.~~

~~(3)~~

~~Amounts vest on the anniversary of the grant date, one third in each 2022, 2023, and 2024.~~

~~Compensation of Directors~~

The following table sets forth all compensation costs of the Corporation for services rendered to it by its directors (other than any Named Officer), and certain other amounts that may have been received by or allocated to them, for the year ended December 31, 2022. The Corporation has not given restricted stock unit awards to its directors and does not have pension plans or non-qualified deferred compensation plans for its directors, so those columns have been omitted.

Name

Year
Fees Earned
or Paid in
Cash ($)

RSU and Option Awards
($)(1)

All Other
Compensation ($)

Total ($)
William H. Bartels (7) (8)
2022
180,000 --
--
180,000
James R. Brown, Sr. (2)
2022
56,243
--
--
56,243
Peter W. Brown (5)
2022
131,613
--
-- 131,613
Robert G. Brown (8)
2022
132,726 --
--
132,726
Panagiotis N. Lazaretos (6)
2022
-- --
--
--
Michael Wager (3)
2022
142,500 --
--
142,500
Sean M. Whelan (4)
2022
140,000 --
--
140,000

~~(1)~~

These are not amounts actually paid to or received by the named director. These are "compensation expenses" for restricted stock unit or stock option awards recognized by the Corporation under generally accepted accounting principles computed in accordance with ASC- 718-10.

~~(2)~~

Mr. James R. Brown, Sr.'s tenure as a director of SGRP started on January 19, 2021 and ended on January 25, 2022. His compensation does not include any consulting fees payable to him as a consultant by SGRP after January 25, 2022. See Item 13 --~~James R. Brown, Sr. Advisor Agreement~~, ~~below.~~

~~(3)~~

~~Mr. Michael Wager tenure as a director of SGRP started on October 21, 2021.~~

~~(4)~~

~~Mr. Sean M. Whelan tenure as a director of SGRP started on October 21, 2021.~~

~~(5)~~

Mr. Peter W. Brown received other compensation in 2022 for consulting work for the Corporation's Brazilian subsidiary SPAR BSMT, and indirectly for dividends declared and paid by SPAR BSMT to Mr. Brown's company, EILLC.

~~(6)~~

Mr. Panagiotis N. Lazaretos retired from the SGRP Board effective January 25, 2022. His compensation does not include any consulting fees payable to him as a consultant by SGRP after January 25, 2022. See Item 13 -- ~~Panagiotis Lazaretos Consulting Agreement~~~~, below.~~

~~(7)~~	Mr. William H. Bartels' compensation does not include the cash payments made to him respecting his retirement as an officer of SGRP as of January 1, 2020, consisting in 2022 of $100,000 and $15,588 for reimbursement of certain health insurance costs.
~~(8)~~	Mr. Robert G. Brown's compensation does not include the cash payments or the value of the Preferred Stock received by Mr. Brown, Mr. Bartels and their affiliates as stockholders under the CIC Agreement. See Item 13 -- ~~Change of Control, Voting and Restricted Stock Agreement~~~~, below.~~

~~-12-~~

~~Discussion of Directors' Compensation~~

The Compensation Committee administers the compensation of directors pursuant to SGRP's Director Compensation Plan for its outside Directors, as approved and amended by the Committee from time to time (the "~~Directors Compensation Plan"), as well as the compensation for SGRP's executives. The Directors Compensation Plan was modified in the March 16, 2017, quarterly meeting of the Compensation Committee, effective April 1, 2017.~~

Under the Directors Compensation Plan taking effect for all periods on and after April 1, 2017: (i) each Independent Director and Non- Employee Director is entitled to receive director's fees of $55,000 per annum and a one-time cash fee of $75,000 for 2022; (ii) each applicable Independent Director is entitled to receive for chairing the applicable committee an additional $10,000 per annum fee in the case of the Audit Committee Chairman; and (iii) an additional $7,500 per annum fee in the case of the Chairman of each of the Governance or Compensation Committees in each case payable quarterly in cash. The Compensation Committee in May 2018 approved total compensation of $90,000 per year for the Corporation's Chairman.

In addition to their cash compensation, in the past, each Independent Director received options to purchase 10,000 SGRP Shares upon acceptance of the directorship, options to purchase 10,000 additional SGRP Shares after one (1) year of service, and options to purchase 10,000 additional SGRP Shares for each additional year of service thereafter (typically granted by the Corporation at the regularly scheduled board meeting which coincided with the Annual Meeting). All such options have an exercise price equal to 100% of the fair market value of a SGRP Share at the date of grant and prior to 2020 vested 100% on the first anniversary of the Award's grant date and for grants in 2020 or later over four (4) years, with one fourth of the original grant amount vesting on each anniversary of the grant date, if the Participant 's relationship as a director of SGRP or employee of the Company has not terminated by such anniversary.

All stock options and restricted stock awards to Independent Directors have been granted under the 2018 Plan and Prior Plans, under which each member of the Board is eligible to participate. Independent Directors will be reimbursed for all reasonable expenses incurred during the course of their duties. There is no additional compensation for committee participation, phone meetings, or other Board activities.

~~Compensation Plans~~

~~Equity Compensation Plans~~

The following table contains a summary of the number of shares of Common Stock of SGRP to be issued upon the vesting of the RSU's (if SGRP elects to issue shares instead of paying cash) or the exercise of stock options outstanding at December 31, 2022, under the Inducement Plans, 2020 Plan, 2018 Plan, 2008 Plan and the Prior Plans, the weighted-average exercise price of those outstanding stock options, and the number of additional shares of Common Stock remaining available for future issuance of stock options and other stock-based awards.

~~Equity Compensation Plan Information~~

Plan Category

Number of securities to
be issued upon exercise
of outstanding stock
options and
stock rights (#)

Weighted average
exercise price of
outstanding stock
options and
stock rights ($)
Number of securities
remaining available
for future issuance of
options, rights and
other stock- based
awards (#)
Equity compensation plans approved by security holders:
2008 Plan
691,162
1.53
–
2018 Plan
160,000
.93
–
2020 Plan
385,000
1.55
–
CFO Option Inducement
150,000
.85
–
CEO Option Inducement
630,000
1.90
–
CEO RSU Inducement 26,315 1.90 –
CEO RSU Inducement
89,286
1.12 –

~~Inducement Stock Based Award Summary~~10. Related Party Transactions (continued)

~~On August 2, 2021, as an inducement to Ron Lutz to become the Corporation's Chief Global Commercial Officer, the~~

2022 Deferred Compensation Agreement

The Corporation ~~granted to Mr. Lutz's RSU Awards issued and effective on that date having~~prepared a ~~fair market value of $50,000 (representing 26,882 SGRP Shares at $1.86 per share) as of that date and vesting in one (1) year. On August 2,~~ 2022 those RSUs automatically vested and converted and became payable either, at the option of SGRP, in cash or SGRP's Common Stock issued directly from SGRP. On September 30, 2022, SGRP elected to issue Common Stock in a letter to Mr. Lutz, giving rise to Mr. Lutz's right to receive such Common Stock but no exercise price or other payment for such shares was required.

On August 2, 2021, as an inducement to William Linnane to become the Corporation's Chief Strategy and Growth Officer, the Corporation granted to Mr. Linnane RSU Awards issued and effective on that date having a fair market value of $50,000 (representing 26,882 SGRP Shares at $1.86 per share) as of that date and vesting in one (1) year. On August 2, 2022, those RSUs automatically vested and converted and became payable either, at the option of SGRP, in cash or SGRP's Common Stock issued directly from SGRP. On September 30, 2022, SGRP elected to issue Common Stock in a letter to Mr. Linnane, giving rise to Mr. Linnane 's right to receive such Common Stock but no exercise price or other payment for such shares was required.

~~On February 22, 2021, Michael R. Matacunas received the following inducement awards approved by SGRP's (the Issuer) Board of Directors for:~~

1. Options to purchase 630,000 shares of the Common Stock of the Issuer at an exercise price of $1.90 per share (which was the market price on February 22, 2021, the date the options were issued). Subject to certain conditions (including Mr. Matacunas' continued employment by the Issuer at such time), the options were scheduled to automatically vest in one year. On February 22, 2022, the options automatically vested and became exercisable at the option of the Reporting Person, which requires notice and payment of $1.90 per share to SGRP to effect such exercise. The options automatically expire on February 22, 2031.

2. Restricted Stock Units (RSUs) for $50,000 of shares of SGRP's Common Stock representing 26,315 shares of SGRP's Common Stock based on the market price of $1.90 per share on February 22, 2021 (the RSU issuance date). On February 22, 2022, those RSUs automatically vested and converted and became payable either, at the option of SGRP, in cash or SGRP's Common Stock issued directly from SGRP. On September 30, 2022, SGRP elected to issue Common Stock in a letter to Mr. Matacunas, giving rise to Mr. Matacunas' right to receive such Common Stock but no exercise price or other payment for such shares was required.

3. RSUs for $100,000 of shares of SGRP's Common Stock issuable on May 15 of each year he remains employed by SGRP, commencing in 2022. On May 15, 2022, Mr. Matacunas automatically received from SGRP for RSUs for 89,286 shares of the SGRP's Common Stock based on the market price of $1.12 per share on May 13, 2022 (the last trading day preceding the RSU issuance date). Subject to certain conditions (including Mr. Matacunas' continued employment by the Issuer at such time), those RSUs (and each of the anniversary issuances) are scheduled to automatically vest one year after their May 15 issuance and convert and become payable either (at the option of SGRP) in cash or Common Stock issued directly from the Issuer, but no exercise price or other payment for such shares is required.

On August 31, 2020, as an inducement to Fay DeVriese to become the Corporation's Chief Financial Officer, Treasurer and Secretary, the Corporation granted to Ms. DeVriese an Award consisting of nonqualified options to acquire 200,000 SGRP shares at $0.85 per share, vesting twenty-five percent (25%) of the total number of shares of Common Stock subject hereto on August 31, 2021, and the balance of the Option shall thereafter were to have vested and become exercisable in a series of three (3) successive equal annual installments upon the Optionee's completion of each additional year of employment over the three-year period following August 31, 2021. An additional twenty-five percent (25%) of the total number of shares of Common Stock subject to such option vested on August 31, 2022. The remaining unvested balance of the fifty percent (50%) of shares subject to such options expired when Ms. DeVriese left employment with the Company on February 27, 2023. None of Ms. DeVriese's vested options have been exercised.

~~2021 Plan~~

~~On June 4, 2021, the Board and the Board's Compensation Committee (the "Compensation Committee") approved the revised proposed 2021~~ Stock Compensation Plan ~~of SPAR Group, Inc. (the "2021 Plan") for submission, approval and ratification by the Corporation's stockholders at their Annual Meeting on August 12, 2021. At~~ that ~~meeting, the 2021 Plan was ratified and approved by the Corporation's stockholders and became effective immediately on August 12, 2021 (the "2021 Plan Effective Date"), through May 31, 2022 (the "2021 Plan Period"). The 2021 Plan terminated on May 31, 2022.~~

~~The 2021 Plan provides for the issuance of~~would have included Awards for NQSOs and RSUs (as defined below) ~~respecting shares~~, but that plan was never submitted to its shareholders for approval. However, the Board had previously approved, for certain key executives, incentive stock based awards for 2022 using RSUs or cash. Since there were no plan based RSUs available, those executives instead received deferred compensation.

On and effective as of March 24, 2022, the Corporation issued an award of 111,111 Phantom Stock Units to each of its executives: Kori G. Belzer; William Linnane; and Ron Lutz. Each Phantom Stock Unit represents the right of the grantee to receive cash payments based on the fair market value of SGRP's Common Stock ("~~SGRP Shares") covering up to a total of 400,000 SGRP Shares ("Maximum Award") under the 2021 Plan ("New Awards") to, in or otherwise respecting SGRP Shares ("New Award Shares") so long as the New Award Shares covered by each proposed New Award or group of New Awards in the aggregate (NQSOs plus RSUs) do not~~ at the time of vesting. Vesting will occur in three tranches of one-third each over the ~~proposed issuance exceed~~three (3) year period following the ~~Maximum Award~~Grant Date, provided that (i) the Grantee is an employee of the Company at the time and (ii) the ~~RSU component does~~ Corporation has achieved 90% of the agreed upon the applicable financial target for the year commencing with 2022 (which was EBITDA for 2022), but tranches will rollover to the following year and be payable upon achievement of 120% of the agreed upon the applicable financial target for such following year. The Phantom Stock Units do not ~~exceed 150,000 New Award Shares.~~ possess the rights of common stockholders of the Corporation, including any voting or dividend rights, and cannot be exercised or traded for the SGRP's Common Stock. Due to the cash settlement feature, the Phantom Stock Units are classified as liabilities in accrued expenses and other current liabilities and other long-term liabilities in the consolidated balance sheet. Accrued expenses and other current liabilities on the Consolidated Balance Sheet included $555 thousand and $0 related to Phantom Stock Units as of December 31, 2023 and December 31, 2022, respectively.

~~No Option Awards were granted in 2022 or 2021~~Other Related Party Transactions and Arrangements

SPAR Business Services, Inc. ("SBS"), and SPAR InfoTech, Inc. ("Infotech"), are related parties and affiliates of SGRP, but are not under the ~~2021 Plan.~~control or part of the consolidated Company. SBS is an affiliate and related party because it is owned by SBS LLC, which in turn is beneficially owned by Robert G. Brown, Director and significant shareholder of SGRP. Infotech is an affiliate and related party because it is owned principally by Robert G. Brown. SPAR Administrative Services, Inc. ("SAS"), is a related party and affiliate of SGRP, but is not under the control or part of the consolidated Company. SAS is an affiliate and related party because it is beneficially owned by William H Bartels (a Director and significant stockholder of SGRP) and family members of Robert G. Brown. See Change of Controls, Voting and Restricted Stock Agreement, above.

In July 1999 SMF, SBS and Infotech entered into a perpetual software ownership agreement providing that each party independently owned an undivided share of, and has the right to unilaterally license and exploit, certain portions of the Company's proprietary scheduling, tracking, coordination, reporting and expense software and each of SBS and Infotech entered into non-exclusive royalty-free licenses from the Company to use certain "SPAR" trademarks in the United States. SAS uses the "SPAR name through the SBS License.

11. Share Based Compensation

As of December 31, ~~2021, RSU Awards covering 58,011 SGRP Shares had been~~2023, the Company has outstanding stock options and unvested restricted stock units granted under ~~the 2021~~its 2008 Stock Compensation Plan, 2018 Stock Compensation Plan, 2020 Stock Compensation Plan and ~~no RSU Awards were granted in 2022~~2021 Stock Compensation Plan, which generally permitted stock-based awards under terms determined by the ~~2021 Plan. RSU Awards covering 14,502. SGRP Shares granted under the 2021 Plan vested during 2022, which the Corporation elected~~Company’s board of directors. Stock options and RSUs generally provided for vesting over service periods of one to ~~satisfy through the issuance of SGRP Shares, and RSU Awards covering 29,004 SGRP Shares granted under the 2021 Plan remained unvested at December 31, 2022.~~

~~Option Awards under the 2021 Plan expire~~four years, with option exercise prices generally equal to fair market value on the fifth anniversary of grant or sooner as provided in the 2021 Plan, whether or not vested. Once vested under the 2021 Plan, RSU Awards do not expire. Under the 2021 Plan: (i) each stock option Award must vest over a four-year period following the date of ~~grant in four (4) equal amounts annually starting on the first anniversary~~grant. As of the grant date; (ii) any RSU Award granted to an employee shall vest over a three-year period following the date of grant annually in three (3) equal amounts starting on the first anniversary of the RSU grant date; and (iii) any RSU Award granted to a Director shall vest over a one-year period following the date of grant in four (4) equal amounts quarterly with one (1) installment vesting at the end of each three-month period following the date of the RSU grant date.

~~2020 Plan~~

~~The Board authorized and approved the revised proposed 2020 stock compensation plan of SGRP (the "~~December 31, 2023, ~~2020 Plan~~no~~"), which was submitted to and approved by SGRP's stockholders at the Special Meeting of SGRP's stockholders on January 19, 2021 (the "2020 Plan Effective Date"). The 2020 Plan became effective immediately upon such approval.~~

~~The 2020 Plan: (a) has a four-month term from the 2020 Plan Effective Date (as defined below) through May 1, 2021 (the "2020 Plan Period"); and (b) provides for the issuance of "non-qualified" option awards to purchase~~ further shares ~~of SGRP's Common Stock ("SGRP Shares") aggregating: (i) 550,000 SGRP Shares;~~ ~~plus~~ ~~(ii) 50,000 SGRP Shares for each of up to the first three (3) additional new Directors during the period December 1, 2020, to April 30, 2021 (for a possible total of 700,000 SGRP Shares)~~were available under these plans for future ~~Awards during the 2020 Plan Period~~awards. The Company also granted stock options and restricted stock units as ~~outlined below (the "20-21 Maximum~~")inducements under ~~2020 Plan. Since one (1) new director joined the Board on the 2020 Plan Effective Date, 600,000 SGRP Shares were available for Awards on the 2020 Plan Effective Date.~~

The 2020 Plan required the Corporation to issue as of the plan effective date new awards for options to purchase: (i) an aggregate of 125,000 SGRP Shares to 19 employees (other than the Named Executive Officers) in individual amounts designated by the Board; (ii) 10,000 SGRP Shares to each of Panagiotis N. Lazaretos, Igor Novgorodtsev, Robert G. Brown and Arthur H. Baer (each a director); and (iii) 50,000 SGRP Shares to each member of the Board of Directors on the Effective Date of the Plan. Those options were granted by the Board on February 4, 2021. The 2020 Plan was terminated on May 1, 2021, and no further options were granted under it.contracts with selected executives.

~~-13-~~

SPAR Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

11. Share Based Compensation (continued)

Stock options

2008Plan Summary

2008 Plan Stock option award activity for the years ended December 31, ~~2022~~ 2023 and ~~2021~~2022 is summarized below for the periods presented:

Weighted-

Weighted-

Average

Aggregate

Average

Remaining

Intrinsic

Exercise

Contractual

Value

Option Awards

Shares

Price

Term (Years)

(thousands)

Outstanding at January 1, 2021

1,457,936

$
1.31

3.63

$
113

Granted

–

–

–

–

Exercised/cancelled

679,062

1.08

–

295

Forfeited or expired

(87,712
)

–

–

–

Outstanding at December 31, 2021

691,162

$
1.53

2.60

$
72

Granted

–

–

–

–

Exercised

57,500

1.07

–

10

Forfeited or expired

(120,562
)

–

–

–

Outstanding at December 31, 2022

513,100

$
1.63

2.16

$
68

Exercisable at December 31, 2022

513,100

$
1.63

2.15

$
68

						*Weighted-*
				*Weighted-*		*Average*		*Aggregate*
				*Average*		*Remaining*		*Intrinsic*
				*Exercise*		*Contractual*		*Value*
Option Awards	*Shares*			*Price*		*Term (Years)*		*(thousands)*
Outstanding at January 1, 2022		691,162		$	1.53		2.60	$	72
Granted		–			–		–		–
Exercised / cancelled		(57,500	)		1.07		–		10
Forfeited or expired		(120,562	)		–		–		–
Outstanding at December 31, 2022		513,100			1.63		2.16		68
Granted		–			–
Exercised / cancelled		–			–
Forfeited or expired		(291,100	)		2.10
Outstanding at December 31, 2023	$	222,000		$	1.01		3.27	$	12
Exercisable at December 31, 2023		222,000		$	1.01		3.27	$	12

The Company recognized no stock-based compensation expense relating to stock option awards during the years ended December 31, 2023 and 2022.

2018Plan Summary

2018 Plan Stock option award activity for the years ended December 31, 2023 and 2022 are summarized below:

Weighted-

Average

Aggregate

Average

Remaining

Intrinsic

Exercise

Contractual

Value

Option Awards

Shares

Price

Term (Years)

(thousands)

Outstanding at January 1, 2022

160,000

$0.93

6.82

$31

Granted

–

Exercised/cancelled

(12,500

)

0.76

–

Forfeited or expired

(2,500

)

–

Outstanding at December 31, 2022

145,000

$0.94

5.79

$52

Granted

–

Exercised

–

Forfeited or expired

–

Outstanding at December 31, 2023

145,000

$0.94

4.79

$26

Exercisable at December 31, 2023

145,000

$0.94

4.79

$26

SPAR Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

11. Share Based Compensation (continued)

No stock options were granted in 2023 under the 2018 Plan. The total intrinsic value of stock options awards exercised during the year ended December 31, 2023 and 2022 was $0 and ~~$13,000~~$8,000, respectively.

The Company recognized $1,000 and $6,000 in stock-based compensation expense relating to stock option awards during the years ended December 31, ~~2022~~ 2023 and ~~2021,~~2022, respectively. The recognized tax benefit on stock-based compensation expense related to stock options during the years ended December 31, ~~2022~~ 2023 and ~~2021,~~2022 was approximately $0 and ~~$3,000,~~$2,000, respectively.

As of December 31, ~~2022, total~~2023, there was no unrecognized stock-based compensation expense related to stock options ~~was $0.~~granted under the 2018 Plan.

~~-14-~~

~~2018~~ 2020Plan Summary

~~2018~~2020 Plan Stock option award activity for the years ended December 31, ~~2022~~ 2023 and ~~2021~~2022 are summarized below:

						Weighted-							*Weighted-*
				Weighted-		Average		Aggregate				*Weighted-*	*Average*	*Aggregate*
				Average		Remaining		Intrinsic				*Average*	*Remaining*	*Intrinsic*
				Exercise		Contractual		Value				*Exercise*	*Contractual*	*Value*
Option Awards	Shares			Price		Term (Years)		(thousands)		*Shares*		*Price*	*Term (Years)*	*(thousands)*
Outstanding at January 1, 2021		430,000		$	0.90		7.87	$	8
Outstanding at January 1, 2022										385,000		$1.55	4.10	$-
Granted		–			-		–		–	–		–	–	–
Exercised/cancelled		230,000			0.85		–		235	–		–	–	–
Forfeited or expired		(40,000	)		–		–		–	(10,000	)	–	–	–
Outstanding at December 31, 2021		160,000		$	0.93		6.82	$	31
Outstanding at December 31, 2022										375,000		$1.55	3.10	$-
Granted		–			–		–		–					–
Exercised		12,500			0.76		–		8					–
Forfeited or expired		(2,500	)		-		–		–	(20,000	)	–	–	–
Outstanding at December 31, 2022		145,000		$	0.94		5.79	$	52
Exercisable at December 31, 2022		135,000		$	0.98		5.64	$	44
Outstanding at December 31, 2023										355,000		$1.55	2.10	$-
Exercisable at December 31, 2023										177,500		$1.55	2.10	$-

No stock options were granted in ~~2022~~2023 under the ~~2018~~2020 Plan. The total intrinsic value of stock ~~options~~option awards exercised during the ~~year~~years ended December 31, ~~2022~~ 2023 and ~~2021~~2022 was ~~$8,000 and $235,000, respectively.~~$0.

The Company recognized ~~$6,000~~$47,000 and ~~$23,000~~$58,000 in stock-based compensation expense relating to stock option awards during the years ended December 31, ~~2022~~ 2023 and ~~2021,~~2022, respectively. The recognized tax benefit on stock-based compensation expense related to stock options during the years ended December 31, ~~2022~~ 2023 and ~~2021~~2022 was approximately ~~$2,000~~$12,000 and ~~$6,000,~~$15,000, respectively.

As of December 31, ~~2022, there was no unrecognized stock-based compensation expense related to stock options granted under the 2018 Plan.~~

~~2020 Plan Summary~~

~~Following are the specific valuation assumptions used for options granted in 2021 for the 2020 Plan:~~

	~~2021~~
~~Expected volatility~~	~~52.8%~~
~~Expected dividend yields~~	~~0.0%~~
~~Expected term (in years)~~	5
~~Risk free interest rate~~	~~1.0%~~
~~Expected forfeiture rate~~	~~4.0%~~

~~2020 Plan Stock option award activity for the years ended December 31, 2022 and 2021 are summarized below:~~

Weighted-

Weighted-

Average

Aggregate

Average

Remaining

Intrinsic

Exercise

Contractual

Value

Option Awards

Shares

Price

Term (Years)

(thousands)

Outstanding at January 1, 2021

–

$
–

–

$
–

Granted

565,000

1.55

4.10

–

Exercised/cancelled

–

–

–

–

Forfeited or expired

(180,000
)

–

–

–

Outstanding at December 31, 2021

385,000

$
1.55

4.10

$
–
Granted

–

–

–

–

Exercised

–

–

–

–

Forfeited or expired

(10,000
)

–

–

–

Outstanding at December 31, 2022

375,000

$
1.55

3.10

$
–

Exercisable at December 31, 2022

91,250

$
1.55

3.10

$
–

~~No stock options were granted in 2022 under the 2020 Plan. The total intrinsic value of stock option awards exercised during the years ended December 31, 2022 and 2021 was $0.~~
The Company recognized $58,000 and $57,000 in stock-based compensation expense relating to stock option awards during the years ended December 31, 2022 and 2021, respectively. The recognized tax benefit on stock-based compensation expense related to stock options during the years ended December 31, 2022 and 2021 was approximately $15,000 and $16,000, respectively.

~~As of December 31, 2022,~~ 2023, total unrecognized stock-based compensation expense related to stock options was ~~$121,000.~~$58,000. This expense is expected to be recognized over a weighted average period of approximately ~~2.1~~1.1 years.

~~-15-~~

SPAR Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

11. Share Based Compensation (continued)

CFO Inducement ~~Award Stock Option~~Plan Summary

CFO Inducement ~~Award stock~~Plan Stock option award activity for the years ended December 31, ~~2022~~ 2023 and ~~2021~~2022 are summarized below:

					Weighted-									Weighted-
			Weighted-		Average		Aggregate					*Weighted-*		*Average*		*Aggregate*
			Average		Remaining		Intrinsic					*Average*		*Remaining*		*Intrinsic*
			Exercise		Contractual		Value					*Exercise*		*Contractual*		*Value*
Option Awards	Shares		Price		Term (Years)		(thousands)		*Shares*			*Price*		*Term (Years)*		(thousands)
Outstanding at January 1, 2021		200,000	$	0.85		9.67	$	60.00
Outstanding at January 1, 2022										150,000			0.85		8.67		57
Granted		–		–		–		–		–			–		–		–
Exercised/cancelled		50,000		0.85		–		–		(50,000	)		0.85		–		–
Forfeited or expired		–		–		–		–		–			–		–		–
Outstanding at December 31, 2021		150,000	$	0.85		8.67	$	57
Outstanding at December 31, 2022										100,000		$	0.85		7.67	$	45
Granted		–		–		–		–
Exercised		50,000		0.85		–		–
Forfeited or expired		–		–		–		–		(100,000	)	$	0.85		–		–
Outstanding at December 31, 2022		100,000	$	0.85		7.67	$	45
Exercisable at December 31, 2022		–	$	–		–	$	–
Outstanding at December 31, 2023									$	-		$	-	$	-	$	-
Exercisable at December 31, 2023									$	-		$	-	$	-	$	-

No stock options were granted in ~~2022~~2023 under the CFO Inducement Plan. The total intrinsic value of stock option awards exercised during the years ended December 31, ~~2022~~ 2023 and ~~2021~~2022 was ~~$45,000~~$0 and ~~$37,000.~~

$45,000.

The Company recognized ~~$19,000~~a benefit of $6,000 and ~~$22,000 in stock-based compensation~~ expense of $19,000 relating to stock option awards during the years ended December 31, ~~2022~~ 2023 and ~~2021,~~2022, respectively. The recognized tax benefit on stock-based compensation expense related to stock options during the years ended December 31, ~~2022~~ 2023 and ~~2021,~~2022 was approximately ~~$5,000~~$0 and $5,000 respectively.

As of December 31, ~~2022, total unrecognized stock-based compensation expense related to stock options was $32,000. This expense is expected to be recognized over a weighted average period of approximately 1.7 years.~~
~~CEO Inducement Award Stock Option Summary~~
~~Following are the specific valuation assumptions used for the stock option awards granted in 2021 for the CEO Inducement Award:~~
~~2021~~
~~Expected volatility~~
~~52.7%~~
~~Expected dividend yields~~
~~0.0%~~
~~Expected term (in years)~~
1
~~Risk free interest rate~~
~~0.76%~~
~~Expected forfeiture rate~~
~~6.0%~~
~~CEO Inducement Award stock option activity for the years ended December 31, 2022 and 2021 are summarized below:~~

Weighted-

Weighted-

Average

Aggregate

Average

Remaining

Intrinsic

Exercise

Contractual

Value

Option Awards

Shares

Price

Term (Years)

(thousands)

Outstanding at January 1, 2021

–

$
–

–

$
–

Granted

630,000

1.90

9.15

–

Exercised/cancelled

–

–

–

–

Forfeited or expired

–

–

–

–

Outstanding at December 31, 2021

630,000

$
1.90

9.15

$
–
Granted

–

–

–

–

Exercised

–

–

–

–

Forfeited or expired

–

–

–

–

Outstanding at December 31, 2022

630,000

$
1.90

8.15

$
–

Exercisable at December 31, 2022

630,000

$
1.90

8.15

$
–

~~No stock options were granted in 2022 under the CEO Inducement Award. The total intrinsic value of stock option awards exercised during the years ended December 31, 2022 and 2021 was $0.~~
The Company recognized $85,000 and $509,000 in stock-based compensation expense relating to stock option awards during the years ended December 31, 2022 and 2021, respectively. The recognized tax benefit on stock-based compensation expense related to stock options during the years ended December 31, 2022 and 2021, was $21,000 and $126,000, respectively.

~~As of December 31, 2022,~~ 2023, there was no unrecognized share-based compensation expense related to stock options granted under the ~~CEO~~CFO Inducement ~~Award.~~

Plan.

~~CEO Inducement~~Summary of Certain Related Party Transactions

The following costs of affiliates were charged to the Company (in thousands):

	Year Ended December 31,
	2023		2022
Services provided by affiliates:
National Remodel & Setup Services (NRSS) (1)	$	5,173	$	8,565
Consulting and administrative services (RJ Holdings) (2)		472		477
Office lease expenses (RJ Holdings) (2)		8		248
Consulting and administrative fees (SPARFACTS) (2)		112		431
Other (2)		178		157
Total services provided by affiliates	$	5,943	$	9,878

Due to affiliates consists of the following (in thousands):	*December 31,*
	*2023*		*2022*
Loans from local investors:(3)
China	$	2,316	$	1,382
Mexico		623		623
Australia		-		693
Resource Plus		266		266
Total due to affiliates	$	3,205	$	2,964

(1) Represent loans from the local investors into the Company's subsidiaries (representing their proportionate share of working capital loans). The loans have no payment terms and are due on demand.

(2) These expenses are reflected in "Selling, general, and administrative expense" expense in the consolidated statements of operations and comprehensive (loss) income.

(3) Represent loans from the local investors into the Company's subsidiaries (representing their proportionate share of working capital loans). The loans have no payment terms and are due on demand.

Bartels' Retirement and Director Compensation

SPAR Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

10. Related Party Transactions (continued)

2022 Deferred Compensation Agreement

The Corporation prepared a 2022 Stock Compensation Plan that would have included Awards for NQSOs and RSUs (as defined below), but that plan was never submitted to its shareholders for approval. However, the Board had previously approved, for certain key executives, incentive stock based awards for 2022 using RSUs or cash. Since there were no plan based RSUs available, those executives instead received deferred compensation.

On and effective as of March 24, 2022, the Corporation issued an award of 111,111 Phantom Stock Units to each of its executives: Kori G. Belzer; William Linnane; and Ron Lutz. Each Phantom Stock Unit represents the right of the grantee to receive cash payments based on the fair market value of SGRP's Common Stock at the time of vesting. Vesting will occur in three tranches of one-third each over the three (3) year period following the Grant Date, provided that (i) the Grantee is an employee of the Company at the time and (ii) the Corporation has achieved 90% of the agreed upon the applicable financial target for the year commencing with 2022 (which was EBITDA for 2022), but tranches will rollover to the following year and be payable upon achievement of 120% of the agreed upon the applicable financial target for such following year. The Phantom Stock Units do not possess the rights of common stockholders of the Corporation, including any voting or dividend rights, and cannot be exercised or traded for the SGRP's Common Stock. Due to the cash settlement feature, the Phantom Stock Units are classified as liabilities in accrued expenses and other current liabilities and other long-term liabilities in the consolidated balance sheet. Accrued expenses and other current liabilities on the Consolidated Balance Sheet included $555 thousand and $0 related to Phantom Stock Units as of December 31, 2023 and December 31, 2022, respectively.

Other Related Party Transactions and Arrangements

SPAR Business Services, Inc. ("SBS"), and SPAR InfoTech, Inc. ("Infotech"), are related parties and affiliates of SGRP, but are not under the control or part of the consolidated Company. SBS is an affiliate and related party because it is owned by SBS LLC, which in turn is beneficially owned by Robert G. Brown, Director and significant shareholder of SGRP. Infotech is an affiliate and related party because it is owned principally by Robert G. Brown. SPAR Administrative Services, Inc. ("SAS"), is a related party and affiliate of SGRP, but is not under the control or part of the consolidated Company. SAS is an affiliate and related party because it is beneficially owned by William H Bartels (a Director and significant stockholder of SGRP) and family members of Robert G. Brown. See Change of Controls, Voting and Restricted Stock Agreement, above.

11. Share Based Compensation

As of December 31, 2023, the Company has outstanding stock options and unvested restricted stock units granted under its 2008 Stock Compensation Plan, 2018 Stock Compensation Plan, 2020 Stock Compensation Plan and 2021 Stock Compensation Plan, which generally permitted stock-based awards under terms determined by the Company’s board of directors. Stock options and RSUs generally provided for vesting over service periods of one to four years, with option exercise prices generally equal to fair market value on the date of grant. As of December 31, 2023, no further shares were available under these plans for future awards. The Company also granted stock options and restricted stock units as inducements under contracts with selected executives.

SPAR Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

11. Share Based Compensation (continued)

Stock options

2008 ~~Award RSU~~Plan Summary

~~The following table summarizes the~~2008 Plan Stock option award activity for ~~Restricted Stock Unit (RSU) CEO~~the years ended December 31, 2023 and 2022 is summarized below for the periods presented:

						*Weighted-*
				*Weighted-*		*Average*		*Aggregate*
				*Average*		*Remaining*		*Intrinsic*
				*Exercise*		*Contractual*		*Value*
Option Awards	*Shares*			*Price*		*Term (Years)*		*(thousands)*
Outstanding at January 1, 2022		691,162		$	1.53		2.60	$	72
Granted		–			–		–		–
Exercised / cancelled		(57,500	)		1.07		–		10
Forfeited or expired		(120,562	)		–		–		–
Outstanding at December 31, 2022		513,100			1.63		2.16		68
Granted		–			–
Exercised / cancelled		–			–
Forfeited or expired		(291,100	)		2.10
Outstanding at December 31, 2023	$	222,000		$	1.01		3.27	$	12
Exercisable at December 31, 2023		222,000		$	1.01		3.27	$	12

The Company recognized no stock-based compensation expense relating to stock option awards during the years ended December 31, ~~2022~~ 2023 and ~~2021:~~2022.

Weighted-

Average

Grant Date

Fair Value

Shares

per Share

Unvested at January 1, 2021

–

$
–

Granted

138,090

1.87

Vested

–

–

Forfeited

–

–

Unvested at December 31, 2021

138,090

$
1.85

Granted
-
–

Vested

99,415

1.86

Forfeited

–

–

Unvested at December 31, 2022

38,675

$
1.81

2018Plan Summary

~~During~~2018 Plan Stock option award activity for the years ended December 31, ~~2022~~ 2023 and ~~2021,~~2022 are summarized below:

Weighted-

Average

Aggregate

Average

Remaining

Intrinsic

Exercise

Contractual

Value

Option Awards

Shares

Price

Term (Years)

(thousands)

Outstanding at January 1, 2022

160,000

$0.93

6.82

$31

Granted

–

Exercised/cancelled

(12,500

)

0.76

–

Forfeited or expired

(2,500

)

–

Outstanding at December 31, 2022

145,000

$0.94

5.79

$52

Granted

–

Exercised

–

Forfeited or expired

–

Outstanding at December 31, 2023

145,000

$0.94

4.79

$26

Exercisable at December 31, 2023

145,000

$0.94

4.79

$26

SPAR Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

11. Share Based Compensation (continued)

No stock options were granted in 2023 under the2018 Plan. The total intrinsic value of stock options awards exercised during the year ended December 31, 2023 and 2022 was $0 and $8,000, respectively.

The Company recognized ~~approximately $101,000~~$1,000 and ~~$87,000, respectively, of~~$6,000 in stock-based compensation expense ~~related~~relating to ~~RSUs.~~stock option awards during the years ended December 31, 2023 and 2022, respectively. The recognized tax benefit on stock-based compensation expense related to ~~RSUs~~stock options during the years ended December 31, ~~2022~~ 2023 and ~~2021~~2022 was approximately ~~$25,000~~$0 and ~~$21,000, respectively.~~

~~During the years ended December 31, 2022 and 2021, the total fair value of RSUs vested was $120,000 and $0~~$2,000, respectively.

As of December 31, 2023, there was no unrecognized stock-based compensation expense related to stock options granted under the 2018 Plan.

2020Plan Summary

2020 Plan Stock option award activity for the years ended December 31, 2023 and 2022 are summarized below:

Weighted-

Average

Aggregate

Average

Remaining

Intrinsic

Exercise

Contractual

Value

Option Awards

Shares

Price

Term (Years)

(thousands)

Outstanding at January 1, 2022

385,000

$1.55

4.10

Granted

–

Exercised/cancelled

–

Forfeited or expired

(10,000

)

–

Outstanding at December 31, 2022

375,000

$1.55

3.10

Granted

–

Exercised

–

Forfeited or expired

(20,000

)

–

Outstanding at December 31, 2023

355,000

$1.55

2.10

Exercisable at December 31, 2023

177,500

$1.55

2.10

No stock options were granted in 2023 under the 2020 Plan. The total intrinsic value of stock option awards exercised during the years ended December 31, 2023 and 2022 was $0.

The Company recognized $47,000 and $58,000 in stock-based compensation expense relating to stock option awards during the years ended December 31, 2023 and 2022, respectively. The recognized tax benefit on stock-based compensation expense related to stock options during the years ended December 31, 2023 and 2022 was approximately $12,000 and $15,000, respectively.

As of December 31, 2023, total unrecognized stock-based compensation expense related to ~~unvested RSUs awards~~stock options was ~~$56,000.~~$58,000. This expense is expected to be recognized over a weighted average period of approximately ~~1.6~~1.1 years.

~~Share-Based Compensation Expense~~

~~Share-based compensation expense for the years ended December 31, 2022 and 2021 was $346,000 and $711,000, respectively.~~

~~-16-~~

SPAR Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

11. Share Based Compensation (continued)

~~Employee Stock Purchase Plans~~CFO InducementPlan Summary

~~In 2001, SGRP adopted its 2001 Employee~~CFO Inducement Plan Stock ~~Purchase Plan (the "ESP Plan"), which replaced its earlier existing plan,~~ option award activity for the years ended December 31, 2023 and ~~its 2001 Consultant Stock Purchase Plan (the "CSP Plan"). These plans~~2022 are summarized below:

						Weighted-
				*Weighted-*		*Average*		*Aggregate*
				*Average*		*Remaining*		*Intrinsic*
				*Exercise*		*Contractual*		*Value*
Option Awards	*Shares*			*Price*		*Term (Years)*		(thousands)
Outstanding at January 1, 2022		150,000			0.85		8.67		57
Granted		–			–		–		–
Exercised/cancelled		(50,000	)		0.85		–		–
Forfeited or expired		–			–		–		–
Outstanding at December 31, 2022		100,000		$	0.85		7.67	$	45
Granted
Exercised
Forfeited or expired		(100,000	)	$	0.85		–		–
Outstanding at December 31, 2023	$	-		$	-	$	-	$	-
Exercisable at December 31, 2023	$	-		$	-	$	-	$	-

No stock options were each effective as of June 1, 2001. The ESP Plan allows employees of the Company, and the CSP Plan allows employees of the affiliates of the Company to purchase SGRP's Common Stock from SGRP without having to pay any brokerage commissions. On August 8, 2002, the Board approved a 15% discount for employee purchases of Common Stockgranted in 2023 under the ~~ESP Plan and recommended that its affiliates pay 15% of the~~CFO Inducement Plan. The total intrinsic value of ~~the~~ stock ~~purchased as a cash bonus for affiliate consultant purchases of Common Stock under the CSP Plan.~~

~~Audit and Compensation Committee Interlocks and Insider Participation~~

~~No member of the Board's Audit Committee, Compensation Committee or Governance Committee was at any time~~option awards exercised during the ~~year~~years ended December 31, 2021, or at any other time an officer or employee of the Company. No executive officer of the Company or Board member (including any member of SGRP's Board, Audit Committee, Compensation Committee or Governance Committee) serves as a member of the board of directors, audit, compensation or governance committee of any other entity, except for the positions of Messrs. Brown 2023 and ~~Bartels as directors of SGRP~~2022 was $0 and ~~as directors and officers of certain of its affiliates, including SBS, SAS and Infotech (See~~ ~~Transactions with Related Persons, Promoters and Certain Control Persons~~~~, below).~~

$45,000.

~~-17-~~The Company recognized a benefit of $6,000 and expense of $19,000 relating to stock option awards during the years ended December 31, 2023 and 2022, respectively. The recognized tax benefit on stock-based compensation expense related to stock options during the years ended December 31, 2023 and 2022 was approximately $0 and $5,000 respectively.

As of December 31, 2023, there was no unrecognized share-based compensation expense related to stock options granted under the CFO Inducement Plan.

~~Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters~~

The following table sets forth certain information regarding beneficial ownership of SGRP's Common Stock as of December 31, 2022, by: (i) each person who is known by SGRP to own beneficially more than 5% of SGRP's Common Stock; (ii) each of SGRP's directors; and (iii) each of the Named Executive Officers in the Summary Compensation Table. Except as indicated in the footnotes to this table, the persons named in the table, based on information provided by such persons, have sole voting and sole investment power with respect to all shares of common stock shown as beneficially owned by them, subject to community property laws where applicable.

Title of Class
Name and Address
of Beneficial Owner
Number of Shares
Beneficially Owned
See
Note #

Percentage
Common Shares
Robert G. Brown
7,194,789
(1)
30.28%
Common Shares
William H. Bartels
5,309,214
(1)
22.35%
Common Shares
Michael R. Matacunas
645,393 (1) (2)
2.72%
Common Shares
Peter W. Brown
132,694
(1) (3)
*
Common Shares
Kori G. Belzer
74,173
(1) (4)
*
Common Shares
James R. Brown, Sr.
43,084
(1)
*
Common Shares Fay DeVriese 21,471 (1) *
Common Shares
William Linnane
17,909
(1)
*
Common Shares
Ronald Lutz
17,678 (1)
*
Common Shares Michael Wager 12,500 (1) *
Common Shares Sean Whelan 12,500 (1) *
Common Shares
All Executives and Directors
13,481,405
-
56.75%

* Less than 1%

~~(1)~~

~~The address of such owners is c/o SPAR Group, Inc. 1910 Opdyke Court, Auburn Hills, Michigan 48326.~~

~~(2)~~

~~Mr. Matacunas' beneficial ownership includes 630,000 shares issuable upon exercise of options and 26,315 shares upon vesting of restricted stock units.~~

~~(3)~~

~~Mr. Peter Brown's beneficial ownership includes 80,000 shares issuable upon exercise of options.~~

~~(4)~~

~~Ms. Belzer's beneficial ownership includes 67,500 shares issuable upon exercise of options and 16,574 shares upon vesting of restricted stock units.~~

~~Section 16(a) Beneficial Ownership Reporting Compliance~~

~~Section 16(a) of the Exchange Act ("Section 16(a)~~") requires SGRP's directors and certain of its officers and persons who own more than 10% of SGRP's Common Stock to file reports of ownership and changes in their ownership of SGRP's Common Stock with the Commission. Insiders are required by Commission regulations to furnish SGRP with copies of all Section 16(a) forms they file. The following is a report of late Section 16(a) filings by the current officers and directors of SGRP (collectively, "~~Insiders").~~

~~Based solely on its review of the copies of such forms received by it for the year ended December 31, 2019 ("2019~~"), filings by certain Insiders during or for 2019, or written representations from such Insiders for 2019, SGRP believes that its Insiders complied with all applicable Section 16(a) filing requirements for such year, with the exception that: (i) eight (8) Form 4s were filed late by Mr. Robert G. Brown; and (ii) three (3) Form 4s were filed late by Ms. Kori G. Belzer.

~~Based solely on its review of the copies of such forms received by it for the year ended December 31, 2020 ("2020~~"), filings by certain Insiders during or for 2020, or written representations from such Insiders for 2020, SGRP believes that its Insiders complied with all applicable Section 16(a) filing requirements for such year, with the exception that: (i) one (1) Form 4 was filed late by Mr. Robert G. Brown; (ii) one (1) Form 3 was filed late by Mr. Peter W. Brown; and (iii) one (1) Form 4 was filed late by Ms. Kori G. Belzer.

~~Based solely on its review of the copies of such forms received by it for the year ended December 31, 2021 ("2021~~"), filings by certain Insiders during or for 2021, or written representations from such Insiders for 2021, SGRP believes that its Insiders complied with all applicable Section 16(a) filing requirements for such year, with the exception that: (i) four (4) Form 4s were filed late by Mr. Robert G. Brown; (ii) five (5) Form 4s were filed late by Mr. William H. Bartels; (iii) one (1) Form 3 was filed late by Mr. James R. Brown, Sr.; (iv) one (1) Form 3 was filed late by Mr. Michael Wager; (v) one (1) Form 3 was filed late by Mr. Sean Whelan; (vi) one (1) Form 3 was filed late by Mr. Michael R. Matacunas; (vii) four (4) Form 4s were filed late by Ms. Kori G. Belzer; and (viii) one (1) Form 3 was filed late by Ms. Fay DeVriese.

~~Based solely on its review of the copies of such forms received by it for the year ended December 31, 2022 ("2022~~"), filings by certain Insiders during or for 2022, or written representations from such Insiders for 2022, SGRP believes that its Insiders complied with all applicable Section 16(a) filing requirements for such year, with the exception that: (i) one (1) Form 4 was filed late by Mr. Robert G. Brown; (ii) one (1) Form 3 and one (1) Form 4 were filed late by SPAR Business Services, Inc., respecting shares beneficially owned by Mr. Robert G. Brown, and several of his Form 4s were amended in early 2023; (iii) three (3) Form 4s were filed late by Mr. William H. Bartels, which were filed in early 2023; (iv) one (1) Form 4 was filed late by Mr. Michael R. Matacunas, which was filed in early 2023; (v) two (2) Form 4s were filed late by Kori G. Belzer; (vi) one (1) Form 3 and one (1) Form 4 were filed late by Mr. William Linnane; (vii) one (1) Form 3 and one (1) Form 4 were filed late by Mr. Ronald Lutz; and (viii) three (3) Form 4s were filed late by Ms. Fay DeVriese.

~~All such Section 16(a) filing requirements have since been completed by each of the aforementioned Insiders.~~

~~Item 13. Certain Relationships and Related Transactions, and Director Independence~~

~~Related Party Transactions~~

~~SPAR's policy respecting approval of transactions with related persons, promoters and control persons is contained in the Ethics Code (See~~ ~~Ethics Code,~~ above) The Company's senior management is generally responsible for monitoring compliance with the Ethics Code and establishing and maintaining compliance systems, including those related to the oversight and approval of conflicting relationships and transactions, subject to the review and oversight of SGRP's Governance Committee as provided in Part I Sections 2, 3, 11 and 12 of the Governance Committee's Charter, and SGRP's Audit Committee as provided in Part IV Section 15 of the Audit Committee's Charter. The Governance Committee and Audit Committee each consist solely of independent directors. The 2022 By-Laws require that the Chairman of each such Committee and at least two (2) of its members be a Super Independent Director (See Item 10. ~~Board Size, Quorum and Voting, Director Nominations: Experience, Integrity, Diversity and other Criteria, 2022 By-Laws, and Significant Stockholder Governance Limitations~~~~, above).~~

SPAR's Audit Committee has the specific duty and responsibility to review and approve the overall fairness to the Company and terms of all material related- party transactions and payments. The Audit Committee reviews all related party transactions, in accordance with the Audit Committee Charter, the Ethics Code, the Nasdaq rules and other applicable law to ensure that the overall economic and other terms will be (or continue to be) no less favorable to the Company than would be the case in an arms-length contract with an unrelated provider of similar services (i.e., its overall fairness to the Company, including pricing, payments to related parties and the ability to provide services at comparable performance levels).

~~Domestic Related Party Transactions~~

Mr. Robert G. Brown and Mr. William H. Bartels are directors and significant stockholders of SGRP, and thus each is a related party and affiliate of SGRP. Mr. Robert G. Brown was the Chairman of the Board of Directors of SGRP (the "~~Board"), but ceased to be eligible to hold that position when the 2022 By-Laws became effective on January 25, 2022. SPAR Business Services, Inc. ("SBS"), SPAR InfoTech, Inc. ("Infotech"), and SPAR Administrative Services, Inc. ("SAS~~"), are related parties and affiliates of SGRP, but are not under the control or part of the Company. SBS is a related party and affiliate of SGRP because it is owned by SBS LLC, which in turn is beneficially owned by Mr. Robert G. Brown. Infotech is a related party and affiliate because it is owned principally by Mr. Robert G. Brown. SAS is a related party and affiliate of SGRP because it is owned principally by Mr. William H. Bartels and entities owned by affiliates of Mr. Robert G. Brown.

~~-18-~~

~~Change of Control, Voting and Restricted Stock Agreement~~

~~The Change of Control, Voting and Restricted Stock Agreement (the "CIC Agreement") became effective on January 28, 2022, when signed by the Company and Robert G. Brown, ("Mr. Brown"), William H. Bartels, ("Mr. Bartels"), SPAR Administrative Services, Inc., a corporation ("SAS"), and collectively with Mr. Brown, Mr. Bartels and SAS, the ("Majority Stockholders"). Mr. Bartels and Mr. Brown are Directors of the Corporation. Mr. Brown was the Chairman of the Board of Directors of SGRP (the "Board"), but ceased holding that position when the 2022 By-Laws (as defined below) became effective on January 25, 2022.~~

The execution of the CIC Agreement was conditional upon making the changes to and restatement of the Corporation's 2022 By-Laws, which were approved by the Board and became effective on January 25, 2022 (the "~~2022 By-Laws").~~

~~The financial terms of the CIC Agreement to the Majority Stockholders, totaled $4,477,585, consisting of the following:~~

The Corporation issued to the Majority Stockholders 2,000,000 restricted shares of Series B Preferred Stock, which are convertible into 3,000,000 SGRP Shares pursuant to the 1:1.5 conversion ratio set forth in the Preferred Designation and the CIC Agreement, subject to adjustment for a forward or reverse share split, share dividend, or similar transactions. These shares will vest over time upon execution of the CIC Agreement in 5 phases through November 10, 2023, assuming the Majority Stockholders' ongoing compliance with the terms and conditions of the CIC Agreement. Series B Preferred Shares may only be transferred to affiliates and certain related parties of the Majority Stockholders if those affiliates and certain related parties execute a joinder to the CIC Agreement. The Series B Preferred Stock shares was valued at $3,690,000 in total, based on the SGRP stock price on December 31, 2021 of $1.23 per share for the 3,000,000 conversion SGRP shares.

The Corporation made a $250,000 cash payment to Mr. Brown and agreed to reimburse up to $35,000 of the legal expenses of the Majority Stockholders that were incurred after January 1, 2021, in connection with the negotiation and execution of the CIC Agreement.

~~The Corporation assumed financial responsibility for, and paid directly to Affinity Insurance Company, Ltd., $502,585 to settle SAS obligations and the related claim for the 2014-2015 plan year~~

Pursuant to the CIC Agreement, all actions, claims and demands between the Majority Stockholders and the Company were resolved; and the Majority Stockholders and their affiliates during the five-year term of the CIC Agreement have agreed to give up their rights to do any of the following; (i) act or attempt to act by written consent; (ii) submit or attempt to submit any stockholder proposals in advance of any annual or special stockholders meeting of the Corporation; (iii) call or attempt to call any special meetings of the Corporation's stockholders; (iv) continue or commence or attempt to continue or commence any legal claims against the Company; (v) change or attempt to change the size of the Board; (vi) appoint or remove or attempt to appoint or remove any director or officer of the Corporation, except as expressly permitted with in the CIC Agreement; (vii) amend or attempt to amend the Corporation's Certificate of Incorporation or 2022 By-Laws; and (viii) enter or attempt to enter into any agreement, arrangement or understanding with any other person in an effort to take any of those actions.

The Corporation's amended and restated 2022 By-Laws were adopted to increase the independence of the Board by making the following changes (among others): (i) the Board size was fixed at 7 and must consist of at least three (3) Super Independent Directors (as defined below) plus the CEO at all times; (ii) the Chairman, Vice Chairman and all Committee Chairpersons must qualify as Super Independent Directors ; and (iii) to establish a quorum, any Board meeting must have 70% of the Directors including the majority of Super Independent Directors. If there are less than three (3) Super Independent Directors, than the least tenured non-Super Independent Director, other than the CEO, may not vote on Board matters, which helps to ensure that the Board remains under independent governance. As defined in the 2022 By-Laws "Super Independent Director" means a member of the Board who: (1) qualifies as an independent director under applicable laws and regulations; (2) is affirmatively determined to be an independent director by the Governance Committee of the Board; (3) excludes the Majority Stockholders, Spar Administrative Services, Inc. and Spar Business Services, Inc. and any of their respective Relatives, Family Members, or Affiliates; and (4) excludes any Person that is or was a present or past employee or advisor of any company with which any of the Majority Stockholders has been involved and any Person that is, or was in the past, related or affiliated in any way to any of the Majority Stockholders, including, without limitation, any Affiliates of Innovative Global Technologies, LLC or SP/R, Inc. Defined Benefit Pension Trust.

In January 2022, for the CIC Agreement and 2022 By-Law to go into effect, two (2) of the Board members at the time, James R. Brown, Sr. and Panagiotis Lazaretos, who are affiliated with the Majority Stockholders, retired from the Board and assumed other advisory roles with the Company under separate agreements (see below).

~~For the current Board composition and corporate, governance, see Item 10~~ ~~Directors, Executive Officers and Corporate Governance~~~~, above.~~

~~James R. Brown, Sr. Advisor Agreement~~

~~On January 25, 2022,~~ ~~the Corporation~~ entered into a consulting agreement with Mr. James R. Brown, Sr., effective January 26, 2022, following his retirement as a director of SGRP on January 25, 2022, pursuant to which Mr. Brown will serve as a Board advisor to SGRP from time to time for a term of one (1) year (the "Brown Advisor Agreement"). As compensation for his services, Mr. Brown was entitled to receive compensation at a rate of $55,000 for the term of the Brown Advisor Agreement. Payments will be made in equal quarterly installments and will be pro-rated for partial quarters. This agreement has expired.

~~Panagiotis Lazaretos Consulting Agreement~~

~~On January 27, 2022, the Corporation entered into a consulting agreement with Thenablers, Ltd. effective February 1, 2022 (the "~~ ~~Lazaretos Consulting Agreemen~~t"). Thenablers, Ltd. is wholly owned by Mr. Panagiotis Lazaretos, a retired director of the Corporation. Following Mr. Lazaretos' retirement as a director on January 25, 2022, Thenablers, Ltd. agreed to provide the consulting services of Mr. Lazaretos to the Corporation regarding global sales and new markets' expansion. The Lazaretos Consulting Agreement cannot be terminated by the consent of either party for the first twelve (12) months, and automatically expires on January 31, 2024. As compensation for its services, Thenablers, Ltd. is entitled to receive: (i) base compensation at a rate of $10,000 per month for the term of the Consulting Agreement; (ii) incentive-based compensation as calculated in Exhibit A of the Lazaretos Consulting Agreement; and (iii) the outstanding options granted to Mr. Panagiotis ("Panos") N. Lazaretos on February 4, 2022 will continue to be outstanding and vest according to their terms under the agreement. As permitted by that agreement, on February 2, 2023, the Corporation gave notice that it was terminating that agreement effective July 31, 2023.

~~Other Domestic Related Party Transactions~~

~~National Merchandising Services, LLC ("NMS"), is a consolidated domestic subsidiary of the Company and is owned jointly by SGRP and by National Merchandising of America, Inc. ("NMA~~"). Mr. Edward Burdekin is the Chief Executive Officer and President and a director of NMS and also is an executive officer and director of NMA. Ms. Andrea Burdekin, Mr. Burdekin's wife, is the sole stockholder and also a director of both NMA and NMS. NMA is a related party of the Company but is not under the control of or consolidated with the Company. Mr. Burdekin's wife also owns National Store Retail Services ("~~NSRS~~"). Since September 2018 through June of 2021, NSRS provided substantially all of the domestic merchandising specialist field force used by NMS. For those services, NMS agrees to reimburse NSRS certain costs for providing those services plus a premium ranging from 4.0% to 10.0% of certain costs. Starting in July of 2021, the domestic merchandising specialist field force services provided by NSRS was transitioned to National Remodel & Setup Services, LLC ("NRSS") with the same financial arrangement. Ms. Andrea Burdekin is the owner of NRSS. NMS also leases office space from Mr. Burdekin's Personal property.

On December 1, 2021, the Corporation entered into the Agreement for Marketing and Advertising Services (the "WB Agreement") with WB Marketing, Inc. (the "Agent", and together with the Company, the "Parties"). The Agent is an entity owned and controlled by Mrs. Jean Matacunas who is the wife of President and Chief Executive Officer, Michael R. Matacunas. Mr. Matacunas is also a minority owner of the Agent. The service fees paid to WB Marketing for the year ended December 31, 2022 was $189,000.

~~-19-~~

~~International Related Party Services~~

~~SGRP Meridian (Pty), Ltd. ("Meridian") is a consolidated international subsidiary of the Company and is owned 51% by the Company, Mr. Adrian Wingfield, who is a Director of Meridian, is one of the owners of Merhold Holding Trust ("MHT"). MHT owns the building where Meridian is headquartered.~~

~~The Corporation's principal Brazilian subsidiary, SPAR BSMT, is owned 51% by the Company, 39% by JK Consultoria Empresarial Ltda.-ME, a Brazilian limitada ("JKC"), and 10% by Earth Investments, LLC ("EILLC"). JKC is owned by Mr. Jonathan Dagues Martins ("JDM~~") and his sister, Ms. Karla Dagues Martins. JDM is the Chief Executive Officer and President of SPAR BSMT and each of its subsidiaries pursuant to a Management Agreement between JDM and SPAR BSMT dated September 13, 2016. JDM also is a director of SPAR BSMT. Accordingly, JKC and JDM are each a related party respecting the Company. EILLC is owned by Mr. Peter W. Brown, who is a director of SPAR BSMT and SGRP, and who also is the nephew of Robert G. Brown.

SPARFACTS is a consolidated international subsidiary of the Company and is owned 51% by SGRP. Ms. Lynda Chapman is a director of SPARFACTS. Her various companies provide office lease, accounting and consultant services to SPARFACTS.

Summary of Certain Related Party Transactions

The following costs of affiliates were charged to the Company (in thousands):

	Year Ended December 31,				Year Ended December 31,
	2022		2021		2023		2022
Services provided by affiliates:
National Store Retail Services (NSRS) (1)	$	-	$	3,799
National Remodel & Setup Services (NRSS) (1)		8,565		3,484	$	5,173	$	8,565
Consulting and administrative services (RJ Holdings) (2)		477		567		472		477
Office lease expenses (RJ Holdings) (2)		248		248		8		248
Office and vehicle lease expenses (MPT, MCPT, MHT) (2)		-		115
Consulting and administrative fees (SPARFACTS) (2)		431		325		112		431
Other (2)		157		151		178		157
Total services provided by affiliates	$	9,878	$	8,689	$	5,943	$	9,878

Due to affiliates consists of the following (in thousands):	December 31,				*December 31,*
	2022		2021		*2023*		*2022*
Loans from local investors:(3)
China	$	1,382	$	1,784	$	2,316	$	1,382
Mexico		623		623		623		623
Australia		693		597		-		693
Resource Plus		266		266		266		266
Total due to affiliates	$	2,964	$	3,270	$	3,205	$	2,964

~~(1)~~(1) Represent loans from the local investors into the Company's subsidiaries (representing their proportionate share of working capital loans). The loans have no payment terms and are due on demand.

~~(2)~~(2) These expenses are reflected in "Selling, general, and administrative expense" expense in the consolidated statements of operations and comprehensive (loss) income.

~~(3)~~(3) Represent loans from the local investors into the Company's subsidiaries (representing their proportionate share of working capital loans). The loans have no payment terms and are due on demand.

Bartels' Retirement and Director Compensation

Effective as of January 18, 2020, SPAR's Governance Committee proposed and unanimously approved retirement benefits for the ~~five-year~~five-year period commencing January 1, 2020, and ending December 31, 2024 ~~(the "Five-Year Period~~"(the "Five-Year Period"), for Mr. Bartels. The aggregate value of benefits payable to Mr. Bartels is approximately $220,558 per year and a total of $1,102,790 for the Five-Year Period. The Company recognized $700,000 of retirement benefits during the year ended December 31, 2020, representing the present value of the future Retirement Compensation, Supplemental Fees and Medical Benefits payments due Mr. Bartels. As of December 31, ~~2022 $290,917~~2023 $200,923 of retirement benefits remains outstanding and is included within Accrued expenses and other current liabilities on the consolidated balance sheets.

~~-20-~~63

SPAR Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

10. Related Party Transactions (continued)

2022 Deferred Compensation Agreement

The Corporation prepared a 2022 Stock Compensation Plan that would have included Awards for NQSOs and RSUs (as defined below), but that plan was never submitted to its shareholders for approval. However, the Board had previously approved, for certain key executives, incentive ~~stock-based~~stock based awards for 2022 using RSUs or cash. Since there were no plan based RSUs available, those executives instead received deferred compensation.

On and effective as of March 24, 2022, the Corporation issued an award of 111,111 Phantom Stock Units to each of its executives: Kori G. Belzer; William Linnane; and Ron Lutz. Each Phantom Stock Unit represents the right of the grantee to receive cash payments based on the fair market value of SGRP's Common Stock at the time of vesting. Vesting will occur in three tranches of ~~one-third~~one-third each over the three (3) year period following the Grant Date, provided that (i) the Grantee is an employee of the Company at the time and (ii) the Corporation has achieved 90% of the agreed upon the applicable financial target for the year commencing with 2022 (which was EBITDA for ~~2022)~~2022), but tranches will rollover to the following year and be payable upon achievement of 120% of the agreed upon the applicable financial target for such following year. The Phantom Stock Units do not possess the rights of common stockholders of the Corporation, including any voting or dividend rights, and cannot be exercised or traded for the SGRP's Common Stock. Due to the cash settlement feature, the Phantom Stock Units are classified as liabilities in accrued expenses and other current liabilities and other long-term liabilities in the consolidated balance sheet. AsAccrued expenses and other current liabilities on the Consolidated Balance Sheet included $555 thousand and $0 related to Phantom Stock Units as of December 31, 2023 and December 31, 2022, ~~no Phantom Stock Unit had vested and performance targets are not probable of being met, therefore no expense has been recognized for these awards.~~respectively.

Other Related Party Transactions and Arrangements

In July 1999 SMF, SBS and Infotech entered into a perpetual software ownership agreement providing that each party independently owned an undivided share of, and has the right to unilaterally license and exploit, certain portions of the Company's proprietary scheduling, tracking, coordination, reporting and expense software ~~are co-owned with~~and each of SBS and Infotech ~~and each~~ entered into a non-exclusive royalty-free ~~license~~licenses from the Company to use certain "SPAR" trademarks in the United States. SAS uses the "SPAR name through the SBS License.

~~Director Independence~~11. Share Based Compensation

SPAR Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

11. Share Based Compensation (continued)

Stock options

2008Plan Summary

2008 Plan Stock option award activity for the years ended December 31, 2023 and 2022 is summarized below for the periods presented:

						*Weighted-*
				*Weighted-*		*Average*		*Aggregate*
				*Average*		*Remaining*		*Intrinsic*
				*Exercise*		*Contractual*		*Value*
Option Awards	*Shares*			*Price*		*Term (Years)*		*(thousands)*
Outstanding at January 1, 2022		691,162		$	1.53		2.60	$	72
Granted		–			–		–		–
Exercised / cancelled		(57,500	)		1.07		–		10
Forfeited or expired		(120,562	)		–		–		–
Outstanding at December 31, 2022		513,100			1.63		2.16		68
Granted		–			–
Exercised / cancelled		–			–
Forfeited or expired		(291,100	)		2.10
Outstanding at December 31, 2023	$	222,000		$	1.01		3.27	$	12
Exercisable at December 31, 2023		222,000		$	1.01		3.27	$	12

The Company recognized no stock-based compensation expense relating to stock option awards during the years ended December 31, 2023 and 2022.

2018Plan Summary

2018 Plan Stock option award activity for the years ended December 31, 2023 and 2022 are summarized below:

Weighted-

Average

Aggregate

Average

Remaining

Intrinsic

Exercise

Contractual

Value

Option Awards

Shares

Price

Term (Years)

(thousands)

Outstanding at January 1, 2022

160,000

$0.93

6.82

$31

Granted

–

Exercised/cancelled

(12,500

)

0.76

–

Forfeited or expired

(2,500

)

–

Outstanding at December 31, 2022

145,000

$0.94

5.79

$52

Granted

–

Exercised

–

Forfeited or expired

–

Outstanding at December 31, 2023

145,000

$0.94

4.79

$26

Exercisable at December 31, 2023

145,000

$0.94

4.79

$26

SPAR Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

11. Share Based Compensation (continued)

The Company recognized $1,000 and $6,000 in stock-based compensation expense relating to stock option awards during the years ended December 31, 2023 and 2022, respectively. The recognized tax benefit on stock-based compensation expense related to stock options during the years ended December 31, 2023 and 2022 was approximately $0 and $2,000, respectively.

As of December 31, 2023, there was no unrecognized stock-based compensation expense related to stock options granted under the 2018 Plan.

2020Plan Summary

2020 Plan Stock option award activity for the years ended December 31, 2023 and 2022 are summarized below:

Weighted-

Average

Aggregate

Average

Remaining

Intrinsic

Exercise

Contractual

Value

Option Awards

Shares

Price

Term (Years)

(thousands)

Outstanding at January 1, 2022

385,000

$1.55

4.10

Granted

–

Exercised/cancelled

–

Forfeited or expired

(10,000

)

–

Outstanding at December 31, 2022

375,000

$1.55

3.10

Granted

–

Exercised

–

Forfeited or expired

(20,000

)

–

Outstanding at December 31, 2023

355,000

$1.55

2.10

Exercisable at December 31, 2023

177,500

$1.55

2.10

No stock options were granted in 2023 under the 2020 Plan. The total intrinsic value of stock option awards exercised during the years ended December 31, 2023 and 2022 was $0.

As of December 31, 2023, total unrecognized stock-based compensation expense related to stock options was $58,000. This expense is expected to be recognized over a weighted average period of approximately 1.1 years.

SPAR Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

11. Share Based Compensation (continued)

CFO InducementPlan Summary

CFO Inducement Plan Stock option award activity for the years ended December 31, 2023 and 2022 are summarized below:

						Weighted-
				*Weighted-*		*Average*		*Aggregate*
				*Average*		*Remaining*		*Intrinsic*
				*Exercise*		*Contractual*		*Value*
Option Awards	*Shares*			*Price*		*Term (Years)*		(thousands)
Outstanding at January 1, 2022		150,000			0.85		8.67		57
Granted		–			–		–		–
Exercised/cancelled		(50,000	)		0.85		–		–
Forfeited or expired		–			–		–		–
Outstanding at December 31, 2022		100,000		$	0.85		7.67	$	45
Granted
Exercised
Forfeited or expired		(100,000	)	$	0.85		–		–
Outstanding at December 31, 2023	$	-		$	-	$	-	$	-
Exercisable at December 31, 2023	$	-		$	-	$	-	$	-

No stock options were granted in 2023 under the CFO Inducement Plan. The total intrinsic value of stock option awards exercised during the years ended December 31, 2023 and 2022 was $0 and $45,000.

The Company recognized a benefit of $6,000 and expense of $19,000 relating to stock option awards during the years ended December 31, 2023 and 2022, respectively. The recognized tax benefit on stock-based compensation expense related to stock options during the years ended December 31, 2023 and 2022 was approximately $0 and $5,000 respectively.

As of December 31, 2023, there was no unrecognized share-based compensation expense related to stock options granted under the CFO Inducement Plan.

CEO InducementPlan Summary

CEO Inducement Plan stock option award activity for the years ended December 31, 2023 and 2022 are summarized below:

Weighted-

Weighted-

Average

Aggregate

Average

Remaining

Intrinsic

Exercise

Contractual

Value

Option Awards

Shares

Price

Term (Years)

(thousands)

Outstanding at January 1, 2022

630,000

1.90

9.15

Granted

–

Exercised/cancelled

–

Forfeited or expired

–

Outstanding at December 31, 2022

630,000

1.90

8.15

Granted

–

Exercised

–

Forfeited or expired

–

Outstanding at December 31, 2023

630,000

1.90

7.15

Exercisable at December 31, 2023

630,000

1.90

7.15

SPAR Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

11. Share Based Compensation (continued)

No stock options were granted in 2023 under the CEO Inducement Plan. The total intrinsic value of stock option awards exercised during the years ended December 31, 2023 and 2022 was $0.

The Company recognized $0 and $85,000 in stock-based compensation expense relating to stock option awards during the years ended December 31, 2023 and 2022, respectively. The recognized tax benefit on stock-based compensation expense related to stock options during the years ended December 31, 2023 and 2022, was $0 and $21,000, respectively.

As of December 31, 2023, there was no unrecognized share-based compensation expense related to stock options granted under the CEO Inducement Plan.

Restricted Stock Units

The following table summarizes the activity for Restricted Stock Unit (RSU) awards during the years ended December 31, 2023 and 2022

				*Weighted-*
				*Average*
				*Grant Date*
				*Fair Value*
	*Shares*			*per Share*
Unvested at January 1, 2022		138,090		$	1.85
Granted		–			–
Vested		(99,415	)		1.86
Forfeited		–			–
Unvested at December 31, 2022		38,675		$	1.81
Granted		304,513			1.16
Vested		(100,337	)		1.20
Forfeited		(16,575	)		1.81
Unvested at December 31, 2023		226,276		$	1.19

During the years ended December 31, 2023 and 2022, the Company recognized approximately $235,000 and $101,000, respectively, of stock-based compensation expense related to RSUs. During the years ended December 31, 2023 and 2022, the total fair value of RSUs vested was $104,000 and $120,000, respectively. As of December 31, 2023, total unrecognized stock-based compensation expense related to unvested RSUs awards was $78,000, which is expected to be recognized over a weighted average period of approximately 0.3 years.

Phantom Stock Awards

See Note 10,~~Board Size, Quorum and Voting~~Related Party Transactions ~~and~~ ~~Director Nominations: Experience, Integrity, Diversity and other Criteria~~~~, and~~ ~~2022 By-Laws~~~~, above.~~for a description of the Company’s phantom stock awards.

~~Item 14. Principal Accountant Fees and Services~~12. Segment Information

The ~~aggregate fees billed to us for professional accounting services~~Company reports net revenues from operating income by ~~BDO USA, LLP, including the audit~~reportable segment. Reportable segments are components of the ~~Company's annual~~Company for which separate financial ~~statements~~information is available that is evaluated on a regular basis by the chief operating decisionmaker in deciding how to allocate resources and in assessing performance.

The Company provides similar merchandising and marketing services throughout the world, operating within three reportable geographic segments. The Company evaluates those segments to improve its administration and operational and strategic focuses, and it tracks and reports certain financial information separately for each of those segments. The Company measures the ~~years ended December 31, 2022~~performance of its segments and ~~2021, are set~~subsidiaries using the same metrics. The primary measurement utilized by management is operating profits, historically the key indicator of long-term growth and profitability, as the Company may reinvest the operating profits of each of its international subsidiaries in its local markets in an effort to improve market share and continue expansion efforts.

SPAR Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

12. Segment Information (continued)

(in Thousands)		Year Ended December 31,
	*2023*			*2022*
Net revenues
Americas	$	203,705		$	198,581
Asia - Pacific		24,480			26,009
EMEA		34,562			36,678
Total Net revenues	$	262,747		$	261,268

Operating Income (loss)
Americas	$	7,240		$	4,103
Asia - Pacific		(599	)		(1,621	)
EMEA		2,757			2,904
Total Operating Income (loss)	$	9,398		$	5,386

Interest expense
Americas	$	1,388		$	675
Asia - Pacific		122			39
EMEA		409			251
Total Interest expense	$	1,919		$	965

Other expense (income), net
Americas	$	1,070		$	(38	)
Asia - Pacific		(759	)		(62	)
EMEA		35			(382	)
Total Other expense (income), net	$	346		$	(482	)

Income before income tax expense
Americas	$	4,304		$	3,466
Asia - Pacific		236			(1,598	)
EMEA		2,593			3,035
Total Income before income tax expense	$	7,133		$	4,903

Income tax expense
Americas	$	1,543		$	1,949
Asia - Pacific		62			(18	)
EMEA		752			846
Total Income tax expense	$	2,357		$	2,777

Net income
Americas	$	3,236		$	1,517
Asia - Pacific		(24	)		(1,580	)
EMEA		1,564			2,189
Total Net income	$	4,776		$	2,126

Net income (loss) attributable to non-controlling interest
Americas	$	(492	)	$	1,857
Asia - Pacific		33			(650	)
EMEA		1,333			1,651
Total Net income (loss) attributable to non-controlling interest	$	874		$	2,858

Net Income (loss) attributable to SPAR Group, Inc.
Americas	$	3,729		$	(340	)
Asia - Pacific		(57	)		(930	)
EMEA		230			538
Total Net Income (loss) attributable to SPAR Group, Inc.	$	3,902		$	(732	)

Depreciation and amortization:
Americas	$	1,737		$	1,821
Asia - Pacific		94			104
EMEA		170			108
Total Depreciation and amortization:	$	2,001		$	2,033

Impairment of goodwill
Americas	$	-		$	2,458
Asia - Pacific		-			-
EMEA		-			-
Total Impairment of goodwill	$	-		$	2,458

Capital expenditures:
Americas	$	1,077		$	1,805
Asia - Pacific		71			20
EMEA		101			100
Total Capital expenditures:	$	1,249		$	1,925

There were no inter-segment sales for 2023 or 2022.

SPAR Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

12. Segment Information (continued)

	*December 31,*
	*2023*		*2022*
Assets:
Americas	$	71,372	$	75,440
Asia - Pacific		13,361		5,952
EMEA		5,548		13,206
Total assets	$	90,281	$	94,598

Geographic Data (in thousands)

	*Year Ended December 31,*
	*2023*					*2022*
Net international revenue:			% of consolidated net revenue					% of consolidated net revenue

United States	$	104,647		39.8	%	$	112,327		43.0	%
Brazil		74,873		28.5			68,301		26.1	%
South Africa		34,562		13.2			36,678		14.0
Mexico		11,691		4.4			9,706		3.7
China		10,167		3.9			10,931		4.2
Japan		6,256		2.4			7,133		2.7
India		6,148		2.3			6,276		2.4
Canada		12,494		4.8			8,247		3.2
Australia		1,909		0.7			1,669		0.6
Total net international revenue	$	262,747		100.0	%	$	261,268		100.0	%

(in thousands)		Year Ended December 31,
	*2023*		*2022*
Long lived assets:
Americas	$	4,585	$	4,605
Asia - Pacific		1,015		1,244
EMEA		745		315
Total long lived assets	$	6,345	$	6,164

SPAR Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)

13. Earnings Per Share

The following table sets forth in the ~~table below (amounts in thousands)~~computations of basic and diluted earnings per share (in thousands, except per share data):

2022

2021
Audit fees
$
903
640
Audit-related fees
33
50
Tax fees
169
187
Total
$
1,105
$
877

	*Year Ended December 31,*
	*2023*		*2022*
Numerator:
Net income attributable to SPAR Group, Inc.	$	3,902	$	(732	)

Denominator:
Shares used in basic net income per share calculation		23,333		22,110
Effect of diluted securities:
Stock options and unvested restricted shares		147		–
Convertible Series B Preferred Stock		975		–
Shares used in diluted net income per share calculations		24,455		22,110

Basic net income (loss) per common share:	$	0.17	$	(0.03	)
Diluted net income (loss) per common share:	$	0.16	$	(0.03	)

~~For purposes~~The Company excluded 1,753,100 stock options, 38,675 RSUs and 854,753 shares of Series B convertible preferred stock, from the ~~preceding table professional fees are classified as follows:~~

●

~~Audit fees~~ — These are fees for professional services performed for the audit of our annual financial statements and the required review of quarterly financial statements and other procedures performed by the independent registered accounting firm in order for them to be able to form an opinion on our consolidated financial statements. These fees also cover services that are normally provided by independent registered accounting firm in connection with statutory and regulatory filings or engagements.

●

~~Audit-related fees~~ — These are fees for assurance and related services that traditionally are performed by independent registered accounting firm that are reasonably related to the performance of the audit or review of the financial statements. Audit related fees in the above table represent fees for a 401(k) audit and fees for a stand-alone audit of a subsidiary requested by the Company.

●

~~Tax fees~~ — These are fees for all professional services performed by professional staff in our independent registered accounting firm's tax division, except those services related to the audit of our financial statements. These include fees for tax compliance, tax planning and tax advice, including federal, state and local issues. Services may also include assistance with tax audits and appeals before the IRS and similar state and local agencies, as well as federal, state and local tax issues related to due diligence.

Since the Audit Committee's formation in 2003, as required by applicable law and Nasdaq rules, each audit-related or tax or other non-audit service performed by the Company's independent registered accounting firm either: (i) was approved in advance on a case-by-case basis by SGRP's Audit Committee; or (ii) fit within a pre-approved "basket"computation of audit-related or tax and other non-audit services of limited amount, scope and duration established in advance by SGRP's Audit Committee. In connection with the standards for independence of the Company's independent registered accounting firm promulgated by the SEC, the Audit Committee considers (among other things) whether the provision of such services would be compatible with maintaining the independence of the Company's registered independent accounting firm.

~~-21-~~

~~PART IV~~

~~15.~~

~~Amended Exhibits~~

~~Exhibit~~ ~~Number~~		~~Description~~

~~31.1~~		~~Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (as filed herewith).~~

~~31.2~~		~~Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (as filed herewith).~~

~~32.1~~		~~Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (as filed herewith).~~

~~32.2~~		~~Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (as filed herewith).~~

~~104~~		~~Cover Page Interactive Data File (embedded within the Inline XBRL document).~~

~~Please see SGRP's~~~~Exhibits and~~~~Financial Statement Schedules in Part IV in~~ ~~SGRP's Annual Report o~~n ~~Form 10-K~~diluted net loss per share for the year ended December 31, 2022 ("because including them would have had an anti-dilutive effect.

14. Leases

The Company is a lessee under certain operating leases for office space and equipment.

The components of lease expenses consisted of the following for the periods presented (in thousands):

Year Ended

Year Ended

Lease Costs

Classification

December 31, 2023

December 31, 2022

Operating lease cost

Selling, General and Administrative Expense
$ 875 $ 470
Short-term lease cost

Selling, General and Administrative Expense
378 502
Variable costs (1)

Selling, General and Administrative Expense
- 20
Total lease cost
$ 1,253 $ 992
( 1) Variable lease costs consist primarily of property taxes, property insurance, and common area or other maintenance costs for the Company’s leases of office space.
The following includes supplemental information for the periods presented (in thousands).

Year Ended

Year Ended

December 31, 2023

December 31, 2022

Cash paid for amounts included in the measurement of lease liabilities

Operating cash flows from operating leases
$ 875 $ 997

Right-of-use assets obtained in exchange for lease obligations

Operating leases
$ 2,229 $ -
71
SPAR Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (continued)
Balance sheet information related to leases consisted of the following as of the periods presented (in thousands):
Leases

December 31, 2023

December 31, 2022

Assets:

Operating lease right-of-use assets
$ 2,323 $ 969
Liabilities:

Current portion of operating lease liabilities
1,163 363
Non-current portion of operating lease liabilities
1,160 606
Total operating lease liabilities
$ 2,323 $ 969

Weighted average remaining lease term - operating leases (in years)
2.64 2.04
Weighted average discount rate - operating leases
8.8 % 6.4 %
The following table summarizes the maturities of lease liabilities as of December 31, 2023 (in thousands):
For the Year Ended December 31,

Amount

2024
$ 1,315
2025
838
2026
188
2027
155
2028
112
Thereafter
5
Total future operating lease liability
$2,613
Less: present value discount
290
Present value of operating lease liabilities
$2,323
~~Form 10-K~~15. Subsequent Events
")Agreement to sell the Company’s ownership interest in its South African Joint Venture
On February 7, 2024, the Company entered into a Sale of Shares Agreement to sell its 51% ownership interest in SGRP Meridian Proprietary Limited to Friedshelf 401 (Pty) Ltd., ~~originally filed~~Lindicom Proprietary Limited, and Lindicom Empowerment Holdings Proprietary Limited for 180,700,000 South African Rand (approximately $9.9 million using the exchange rates on December 31, 2023), 80% of which would be paid upon closing. Closing of the sale is dependent upon a number of conditions (including the approval by the South African government), and closing is expected in the second quarter of 2024.
Agreement to sell the Company’s ownership interest in its Chinese Joint Venture

On February 23, 2024, the Company entered into an Equity Transfer Agreement to sell its 51% ownership interest in SPAR (Shanghai) Marketing Management Co., Ltd. to Shanghai Jingbo Enterprise Consulting Co., Ltd. and Shanghai Wedone Marketing Management Co. Ltd. The total price to be paid to the Company is $200,000. The sale is deemed completed when the transferred equity is registered in the name of the buyers with the ~~Securities and Exchange Commission (the "~~~~SEC~~~~") on April 17, 2023, which are incorporated herein by reference.~~Chinese Market Supervision Administration.

~~SGRP's Independent Registered Public Accounting Firm is BDO USA, LLP; Troy, Michigan; PCAOB ID#243.~~

~~-22-~~

~~SIGNATURES~~Agreement to sell the Company’s Brazilian subsidiary that owns its interest in its Brazilian Joint Venture

~~Pursuant~~On March 26, 2024, the Company signed a share purchase agreement with JK Consultoria Empresarial Ltda. ("JKC") for JKC to acquire the ~~requirements of Section 13~~Company's Brazilian holding company (which in turn owns the Company's 51 percent interest in its Brazilian joint venture subsidiary) for BRL 58.9 million or ~~15(d)~~approximately $11.8 million. Closing of the ~~Securities Exchange Act~~sale is dependent upon a number of ~~1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.~~

	~~SPAR Group, Inc.~~

	~~By:~~	~~/s/ Michael R. Matacunas~~
		~~Michael R. Matacunas~~
		~~President and Chief Executive Officer~~

	~~Dated as of: May 1, 2023~~

~~KNOW ALL THESE PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes~~conditions and appoints Michael R. Matacunas and Antonio Calisto Pato and each of them, jointly and severally, his attorneys-in-fact, each with full power of substitution, for them in any and all capacities, to sign any and all amendments to this Report on Form 10-K, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each said attorneys-in-fact or his substitute or substitutes, may do or cause to be done by virtue hereof.

~~Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and~~is expected in the ~~capacities indicated.~~

~~SIGNATURE~~		~~TITLE~~

~~/s/ Michael R. Matacunas~~		~~President, Chief Executive Officer and Director,~~
~~Michael R. Matacunas~~		~~(Principal Executive Officer)~~
~~Dated as of: May 1, 2023~~

~~Robert G. Brown~~		~~Director~~
~~Robert G. Brown~~
~~Dated as of: May 1, 2023~~

~~/s/ Sean M. Whelan (1)~~		~~Director~~
~~Sean M. Whelan~~
~~Dated as of: May 1, 2023~~

~~/s/ Michael Wager (1)~~		~~Director~~
~~Michael Wager~~
~~Dated as of: May 1, 2023~~

~~/s/ William H. Bartels (1)~~		~~Director~~
~~William H. Bartels~~
~~Dated as of: May 1, 2023~~

~~/s/ Peter W. Brown (1)~~		~~Director~~
~~Peter W. Brown~~
~~Dated as of: May 1, 2023~~

~~/s/ Antonio Calisto Pato~~		~~Chief Financial Officer,~~
~~Antonio Calisto Pato~~		~~Treasurer and Secretary (Principal Financial and Accounting Officer)~~
~~Dated as of: May 1, 2023~~

~~(1) Executed on his behalf by Michael R. Matacunas pursuant to the power~~second quarter of ~~attorney granted to Mr. Matacunas by such director SGRP's Annual Report on Form 10-K for the year ended December 31, 2022, filed with the Securities and Exchange Commission on April 17, 2023.~~

~~Please see Parts I and II and SGRP's~~~~Financial Statement Schedules in Part IV in~~ ~~SGRP's Annual Report o~~n ~~Form 10-K for the year ended December 31, 2022 ("~~~~Form 10-K~~~~"), originally filed with the Securities and Exchange Commission (the "~~~~SEC~~~~") on April 17, 2023, which are incorporated herein by reference.~~2024.

~~-23-~~72

Delaware	33-0684451
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1910 Opdyke Court,, Auburn Hills,, MI Michigan	48326
(Address of principal executive offices)	(Zip Code)

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $.01 per share	SGRP	The NASDAQ Stock Market LLC

Large Accelerated Filer ☐	Accelerated Filer ☐

Non-Accelerated Filer ☒	Smaller reporting company ☒

Emerging Growth Company ☐

INTERNATIONAL:
Vaughan, Ontario, Canada	Tokyo, Japan	Durban, South Africa
New Delhi, India	Sao Paulo, Brazil	Mexico City, Mexico
Shanghai, China

	Year Ended December 31,
(in thousands)	2023	2022
Consolidated Net Income	$ 4,776	$ 2,126
Depreciation and amortization	2,001	2,033
Interest expense	1,919	965
Income tax expense	2,357	2,777
Other (income), loss	346	(482)
Subtotal of Adjustments to Consolidated Net Income	6,623	5,294
Consolidated EBITDA	$ 11,399	$ 7,420
Costs and other relating to CIC	-	(32)
Review of Strategic Alternatives	544	540
Goodwill impairment	-	2,458
Loss on sale of businesses	408	-
Restructuring costs	28	-
Legal costs / Settlements - non-recurring	289	-
Share Based Compensation	297	-
Board of Directors incremental compensation	-	394
Consolidated Adjusted EBITDA	$ 12,965	$ 10,780
Adjusted EBITDA attributable to non-controlling interest	(3,022)	(4,637)
Adjusted EBITDA attributable to SPAR Group, Inc.	9,943	6,143

INDEX

PART I

		Page

Item 1	Business	5
Item 1A	Risk Factors	11
Item 1B	Unresolved Staff Comments	17
Item 1C	Cybersecurity	17
Item 2	Properties	19
Item 3	Legal Proceedings	19
Item 4	Mine Safety Disclosures	19

PART II

Item 5	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	20
Item 6	[Reserved]	20
Item 7	Management's Discussion and Analysis of Financial Condition and Results of Operations	21
Item 7A	Quantitative and Qualitative Disclosures about Market Risk	28
Item 8	Financial Statements and Supplementary Data	28
Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	28
Item 9A	Controls and Procedures	29
Item 9B	Other Information	30
Item 9C	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	30

PART III

Item 10	Directors, Executive Officers and Corporate Governance	~~-3-~~30
Item 11	Executive Compensation	~~-11-~~30
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	~~-18-~~30
Item 13	Certain Relationships and Related Transactions, and Director Independence	~~-18-~~30
Item 14	Principal Accountant Fees and Services	~~-21-~~30

PART IV

Item 15	~~Amended~~ Exhibits and Financial Statement Schedules	~~-22-~~31
Item 16	Form 10-K Summary	38
	Signatures	~~-23-~~39

Primary Territory	Entity Name	SGRP Percentage Ownership		Principal Office Location
Americas
United States of America	SPAR Marketing Force, Inc.	100	%	Auburn Hills, Michigan
	SPAR Assembly and Installation, Inc.	100	%	Auburn Hills, Michigan
	Resource Plus of North Florida, Inc. ("RPI")	51	%	Jacksonville, Florida
Canada	SPAR Canada Inc,	100	%	Vaughan, Ontario, Canada
Mexico	SPAR TODOPROMO, SAPI, de CV	51	%	Mexico City, Mexico
Brazil	SPAR Brasil Serviços de Merchandising e Tecnologia S.A. and its subsidiaries	51	%	Sao Paulo, Brazil
Asia- Pacific
Japan	SPAR FM Japan, Inc.	100	%	Tokyo, Japan
India	SPAR KROGNOS Marketing Private Limited	51	%	New Delhi, India
	Preceptor Marketing Services Private Limited	51	%	New Delhi, India
China	SPAR (Shanghai) Marketing Management Company Ltd.	51	%	Shanghai, China
Europe, Middle East, Africa (EMEA)
South Africa	SGRP Meridian (PTY), Ltd. and its subsidiaries	51	%	Durban, South Africa

	●	Political and economic risks, including terrorist attacks and political instability;
	●	Various forms of protectionist trade legislation that currently exist or have been proposed;
	●	Expenses associated with customizing services and technology;
	●	Local laws and business practices that favor local competition;
	●	Dependence on local vendors and potential for undisclosed related party transactions;
	●	Multiple conflicting and changing governmental laws, regulations and enforcement;
	●	Potentially adverse tax and employment law consequences;
	●	Local accounting principles, practices and procedures;
	●	Local legal principles, practices and procedures, local contract review and negotiation, and limited familiarity with contract issues (excessive warranties, extra-territoriality, sweeping intellectual property claims and the like);
	●	Limited familiarity or an unwillingness to comply with, or wrongly believing the inapplicability of, generally accepted accounting principles in the USA ("GAAP"), applicable corporate controls and policies of the Company (including its ethics code), or applicable law in the USA (including Nasdaq rules, securities laws, anti-terrorism law, Sarbanes Oxley and the Foreign Corrupt Practices Act) by Local Investors;
	●	Foreign currency exchange rate fluctuations and limits on the export of funds;
	●	Substantial communication barriers, including those arising from language, culture, custom and time zones; and
	●	Supervisory challenges arising from local board deadlocks, agreements, distance, physical absences and such communication barriers.

Name and Principal Positions	Year	Salary ($)	Bonus ($) (1)	Option and RSU Compensation ($) (2)	All Other Compensation ($) (3)	Total ($)
Michael R. Matacunas	2022	407,813	200,000	--	4,800	612,613
Chief Executive Officer, President and Director	2021	250,000	50,000	--	4,086	304,086

Fay DeVriese (4) (5)	2022	329,583	72,233	54,304	4,800	460,920
Chief Financial Officer, Treasurer and Secretary	2021	278,750	--	37,445	2,400	318,595

Kori Belzer (6)	2022	306,042	68,244	10,359	4,800	389,445
Global Chief Operating Officer	2021	261,848	--	94,026	4,800	360,674

William Linnane	2022	296,042	85,000	30,914	4,800	416,756
Chief Strategy and Growth Officer	2021	110,833	50,000	--	2,400	163,233

Ron Lutz	2022	296,042	62,500	30,914	4,800	394,256
Chief Global Commercial Officer	2021	110,833	50,000	--	2,400	163,233

	*December 31, 2023*			*December 31, 2022*
Assets
Current assets:
Cash and cash equivalents	$	10,719		$	9,345
Accounts receivable, net		59,776			63,714
Prepaid expenses and other current assets		5,614			7,861
Total current assets		76,109			80,920

Property and equipment, net		2,871			3,261
Operating lease right-of-use assets		2,323			969
Goodwill		1,382			1,708
Intangible assets, net		1,180			2,040
Deferred income taxes		4,687			3,766
Other assets		1,729			1,934
Total assets	$	90,281		$	94,598

Liabilities and equity
Current liabilities:
Accounts payable	$	9,488		$	10,588
Accrued expenses and other current liabilities		15,274			20,261
Due to affiliates		3,205			2,964
Customer incentives and deposits		1,905			2,399
Lines of credit and short-term loans		17,530			17,980
Current portion of operating lease liabilities		1,163			363
Total current liabilities		48,565			54,555
Operating lease liabilities, less current portion		1,160			606
Long-term debt		310			1,376
Total liabilities		50,035			56,537

Commitments and contingencies – See Note 6

Equity:
SPAR Group, Inc. equity
Preferred stock, Series - A, $.01 par value:
Authorized and available shares– 2,445,598 Issued and outstanding shares– None		–			–
Preferred stock, Series - B. $.01 par value:
Authorized and available shares– 2,000,000 Issued and outstanding shares– 650,000 at December 31, 2023 and 854,753 at December 31, 2022		7			9
Common stock, $.01 par value:
Authorized shares – 47,000,000 Issued and outstanding shares – 23,446,444 at December 31, 2023 and 23,055,633 at December 31, 2022		232			229
Treasury stock, at cost 205,485 shares at December 31, 2023 and 205,485 Shares at December 31, 2022		(285	)		(285	)
Additional paid-in capital		21,004			20,708
Accumulated other comprehensive loss		(3,341	)		(4,941	)
Retained earnings		10,609			6,707
Total SPAR Group, Inc. equity		28,226			22,427
Non-controlling interest		12,020			15,634
Total equity		40,246			38,061
Total liabilities and equity	$	90,281		$	94,598

	*Common Stock*					*Series B Preferred Stock*						*Treasury Stock*					*Additional Paid-In*			*Accumulated Other Comprehensive*			*Retained*			*Non- Controlling*			*Total*
	*Shares*			*Amount*		*Shares*			*Amount*			*Shares*		*Amount*			*Capital*			*Loss*			*Earnings*			*Interest*			*Equity*

Balance at January 1, 2022		21,320		$	213		-		$	-			54	$	(104	)	$	17,231		$	(5,028	)	$	7,439		$	17,597		$	37,348

Share-based compensation		–			–		–			–			–		–			346			–			–			–			346
Exercise of stock options		74			–		–			–			–		–			(118	)		–			–			–			(118	)
Majority shareholder agreement		–			–		2,000			20			–		–			3,249			–			–			–			3,269
Conversion of Series B convertible preferred stock		1,718			16		(1,145	)		(11	)		–		–			–			–			–			–			5
Control change of NCI		–			–		–			–			–		–			–			–			–			(2,558	)		(2,558	)
Distribution to non-controlling investors		–			–		–			–			–		–			–			–			–			(1,785	)		(1,785	)
Repurchases of common stock		–			–		–			–			151		(181	)		–			–			–			–			(181	)
Retirement of shares		(151	)		–		–			–			–		–			–			–			–			–			–
Other comprehensive income (loss), net of tax		–			–		–			–			–		–			–			87			–			(478	)		(391	)
Net (loss) income		–			–		–			–			–		–			–			–			(732	)		2,858			2,126
Balance at December 31, 2022		22,961		$	229		855		$	9			205	$	(285	)	$	20,708		$	(4,941	)	$	6,707		$	15,634		$	38,061

Share-based compensation		–			–		–			–			–		–			297			–			–			–			297
Conversion of Series B convertible preferred stock		307			3		(205	)		(2	)		–		–			(1	)		–			–			–			–
Retirement of Shares		(27	)		–		–			–			–		–			–			–			–			–			–
Payments to Acquire NCI		–			–		–			–			–		–			–			–			–			(460	)		(460	)
Sale of Joint Ventures		–			–		–			–			–		–			–			–			–			(694	)		(694	)
Distribution to non-controlling investors		–			–		–			–			–		–			–			–			–			(3,017	)		(3,017	)
Other comprehensive income (loss), net of tax		–			–		–			–			–		–			–			1,600			–			(317	)		1,283
Net income		–			–		–			–			–		–			–			–			3,902			874			4,776
Balance at December 31, 2023		23,241		$	232	$	650		$	7			205	$	(285	)	$	21,004		$	(3,341	)		10,609		$	12,020		$	40,246

	*December 31,*
Accounts receivable, net, consists of the following:	*2023*			*2022*
(in thousands)
Trade	$	51,567		$	53,658
Unbilled		6,537			10,436
Non-trade		3,133			1,274
Gross Accounts Receivable		61,237			65,368
Less allowance for credit losses		(1,461	)		(1,654	)
Accounts Receivable, net	$	59,776		$	63,714

	*December 31,*
Activity in allowance for credit losses	*2023*			*2022*
(in thousands)
Beginning balance in allowance for credit losses	$	1,654		$	564
Current provision for expected credit losses		261			1,269
Allowances associated with businesses sold		(281	)		-
Write-offs charged against the allowance		(126	)		(179	)
Recoveries of amounts previously written off		(47	)		-
Ending balance in allowance for credit losses	$	1,461		$	1,654

	*December 31,*
Property and equipment consist of the following:	*2023*			*2022*
(in thousands)
Equipment	$	5,062		$	5,109
Furniture and fixtures		2,330			2,319
Leasehold improvements		366			352
Capitalized software development costs		18,336			17,298
		26,094			25,078
Less accumulated depreciation and amortization		(23,223	)		(21,817	)
Property and equipment, net	$	2,871		$	3,261

	*Americas*			*Asia-Pacific*		*EMEA*		*Total*
Goodwill
(in thousands)
Balance at January 1, 2022
Aggregate goodwill acquired	$	3,728		$	-	$	438	$	4,166
Accumulated impairment losses	$	(2,458	)	$	-	$	-	$	(2,458	)
Balance at December 31, 2022	$	1,270		$	-	$	438	$	1,708
Change in goodwill due to impact of foreign currency	$	7		$	-			$	7
Sale of business		(333	)		–		–		(333	)
Balance at December 31, 2023	$	944		$	-	$	438	$	1,382

	*December 31,*
Intangible assets consist of the following:	*2023*			*2022*
(in thousands)
Customer contracts and lists	$	3,011		$	3,543
Trade names		900			900
Patents		870			870
Non-compete		-			520
		4,781			5,833
Less accumulated amortization		(3,601	)		(3,793	)
Intangible assets, net	$	1,180		$	2,040

(in thousands)
Year	*Amount*
2024	$	172
2025		188
2026		188
2027		91
2028		36
Thereafter		504
Total	$	1,180

	*Interest Rate as of*			*Balance as of*		*Interest Rate as of*			*Balance as of*
	*December 31, 2023*			*December 31, 2023*		*December 31, 2022*			*December 31, 2022*
USA - North Mill Capital		10.40	%	$	12,475		5.25	%	$	14,399
USA - Resource Plus Sellers		1.85	%		1,120		1.85	%		1,000
Australia - National Australia Bank		N/A			-		10.60	%		156
South Africa - Investec Bank Ltd.		11.75	%		3,369		10.50	%		1,700
China- Industrial Bank		3.56	%		283		4.00	%		435
China- Industrial and Commercial Bank of China		4.00	%		283		4.15	%		290
Total				$	17,530				$	17,980

	*December 31, 2023*		*December 31, 2022*
Unused Availability:
United States	$	6,525	$	4,601
Mexico		–		1
Australia		–		390
South Africa		2,064		454
Total Unused Availability	$	8,589	$	5,446

	Interest Rate as of			Balance Outstanding		Interest Rate as of			Balance Outstanding
	December 31, 2023			December 31, 2023		December 21, 2022			December 31, 2022
South Africa - Investec Bank Ltd.		11.75	%	$	310		10.50	%	$	1,376
Total				$	310				$	1,376

	*Year Ended December 31,*
	*2023*			*Rate*			*2022*			*Rate*
Provision for income taxes at federal statutory rate	$	1,498			21.0	%	$	1,030			21.0	%
State income taxes, net of federal benefit		123			1.7	%		(125	)		(2.5	)%
Permanent differences		282			4.0	%		(19	)		(0.4	)%
Goodwill adjustment		-			-			517			10.5	%
Section 162(m) adjustment		55			0.8	%		-			-
Return to provision adjustment		(339	)		(4.8	)%		(223	)		(4.5	)%
Foreign tax rate differential		877			12.3	%		1,016			20.7	%
GILTI tax		-			-			323			6.6	%
Sale of membership interest		149			2.1	%		-			-
Change in valuation allowance		(268	)		(3.8	)%		308			6.3	%
Other		(20	)		(0.3	)%		(50	)		(1.1	)%
Net expense	$	2,357			33.0	%	$	2,777			56.6	%

Deferred taxes consist of the following (in thousands):	*December 31,*
	*2023*			*2022*
Deferred tax assets:
Net operating loss carry forwards	$	2,270		$	2,627
Capital loss carry forwards		58			-
Federal Research and Development Credit		240			240
Foreign withholding tax		316			-
Deferred revenue		–			86
Accrued payroll		155			270
Outside basis in domestic partnership		–			16
Allowance for credit losses and other receivable		63			327
Share-based compensation expense		253			326
Business interest limitation		519			340
Operating lease liability		504			134
Capitalized software development costs		63			-
Other		1,371			739
Total deferred tax assets, gross		5,812			5,105
Valuation allowance		(242	)		(611	)
Total deferred tax assets		5,570			4,494

Deferred tax liabilities:
Goodwill & Intangible assets of subsidiaries		324			376
Capitalized software development costs		-			135
Right to Use Asset		504			134
Depreciation		55			83
Total deferred tax liabilities		883			728
Net deferred income taxes	$	4,687		$	3,766

	*Taxes*		*Interest*		*Penalty*		*Total Tax Liability*
Domestic
State	$	54	$	17	$	15	$	86
Federal		–		–		–		–
International		–		–		–		–
Total reserve	$	54	$	17	$	15	$	86

Name	Grant Date	Number of Securities Underlying Unexercised Options Exercisable at 12/31/22 (#)	Number of Securities Underlying Unexercised Options Not Exercisable at 12/31/22 (#)	Option Price ($)	Option Date
Kori Belzer	08/06/13	35,000	--	$ 2.14	08/06/23
	05/07/17	6,250	--(1)	$ 0.90	05/17/27
	05/03/18	15,000	5,000(1)	$ 1.23	05/03/28
	04/05/19	--	12,500(2)	$ 0.64	04/05/29
Fay DeVriese	08/31/20	--	150,000(3)	$ 0.85	08/31/30
William Linnane	--	--	--	--	--
Ron Lutz	--	--	--	--	--
Michael Matacunas	02/22/21	--	630,000(1)	$ 1.90	02/22/31

Name	Year	Fees Earned or Paid in Cash ($)	RSU and Option Awards ($)(1)	All Other Compensation ($)	Total ($)
William H. Bartels (7) (8)	2022	180,000	--	--	180,000
James R. Brown, Sr. (2)	2022	56,243	--	--	56,243
Peter W. Brown (5)	2022	131,613	--	--	131,613
Robert G. Brown (8)	2022	132,726	--	--	132,726
Panagiotis N. Lazaretos (6)	2022	--	--	--	--
Michael Wager (3)	2022	142,500	--	--	142,500
Sean M. Whelan (4)	2022	140,000	--	--	140,000

Plan Category	Number of securities to be issued upon exercise of outstanding stock options and stock rights (#)	Weighted average exercise price of outstanding stock options and stock rights ($)	Number of securities remaining available for future issuance of options, rights and other stock- based awards (#)
Equity compensation plans approved by security holders:
2008 Plan	691,162	1.53	–
2018 Plan	160,000	.93	–
2020 Plan	385,000	1.55	–
CFO Option Inducement	150,000	.85	–
CEO Option Inducement	630,000	1.90	–
CEO RSU Inducement	26,315	1.90	–
CEO RSU Inducement	89,286	1.12	–

	~~2021~~
~~Expected volatility~~	~~52.7%~~
~~Expected dividend yields~~	~~0.0%~~
~~Expected term (in years)~~	1
~~Risk free interest rate~~	~~0.76%~~
~~Expected forfeiture rate~~	~~6.0%~~

			Weighted-
			Average
			Grant Date
			Fair Value
	Shares		per Share
Unvested at January 1, 2021		–	$	–
Granted		138,090		1.87
Vested		–		–
Forfeited		–		–
Unvested at December 31, 2021		138,090	$	1.85
Granted		-		–
Vested		99,415		1.86
Forfeited		–		–
Unvested at December 31, 2022		38,675	$	1.81

Title of Class	Name and Address of Beneficial Owner	Number of Shares Beneficially Owned	See Note #	Percentage
Common Shares	Robert G. Brown	7,194,789	(1)	30.28%
Common Shares	William H. Bartels	5,309,214	(1)	22.35%
Common Shares	Michael R. Matacunas	645,393	(1) (2)	2.72%
Common Shares	Peter W. Brown	132,694	(1) (3)	*
Common Shares	Kori G. Belzer	74,173	(1) (4)	*
Common Shares	James R. Brown, Sr.	43,084	(1)	*
Common Shares	Fay DeVriese	21,471	(1)	*
Common Shares	William Linnane	17,909	(1)	*
Common Shares	Ronald Lutz	17,678	(1)	*
Common Shares	Michael Wager	12,500	(1)	*
Common Shares	Sean Whelan	12,500	(1)	*
Common Shares	All Executives and Directors	13,481,405	-	56.75%

		2022		2021
Audit fees	$	903		640
Audit-related fees		33		50
Tax fees		169		187
Total	$	1,105	$	877

		*Year Ended*		*Year Ended*
Lease Costs	*Classification*	*December 31, 2023*		*December 31, 2022*
Operating lease cost	Selling, General and Administrative Expense	$	875	$	470
Short-term lease cost	Selling, General and Administrative Expense		378		502
Variable costs (1)	Selling, General and Administrative Expense		-		20
Total lease cost		$	1,253	$	992

Leases	*December 31, 2023*			*December 31, 2022*
Assets:
Operating lease right-of-use assets	$	2,323		$	969
Liabilities:
Current portion of operating lease liabilities		1,163			363
Non-current portion of operating lease liabilities		1,160			606
Total operating lease liabilities	$	2,323		$	969

Weighted average remaining lease term - operating leases (in years)		2.64			2.04
Weighted average discount rate - operating leases		8.8	%		6.4	%

For the Year Ended December 31,	*Amount*
2024	$	1,315
2025		838
2026		188
2027		155
2028		112
Thereafter	5
Total future operating lease liability	$2,613
Less: present value discount	290
Present value of operating lease liabilities	$2,323