SPAR Group Announces Resignation of Three Independent Board Members

Rhea-AI Summary

SPAR Group, Inc. (NASDAQ: SGRP) announced the resignation of three board members effective June 9, 2021. The departing directors, Arthur H. Baer, Igor Novgorodtsev, and Jeffrey A. Mayer, cited concerns over potential interference from major shareholders that could undermine board independence and the company's operations. This situation has led SPAR Group to inform Nasdaq that it may not comply with certain listing rules requiring a majority of independent directors. The company is actively seeking three new board members to restore compliance.

Positive

• The management team remains confident despite board changes, indicating stability.
• The company is taking proactive steps to recruit new independent directors.

Negative

• Concerns raised by resigning directors about shareholder interference may affect investor confidence.
• Temporary non-compliance with Nasdaq listing rules regarding board independence and audit committee structure.

AUBURN HILLS, Mich., June 15, 2021 (GLOBE NEWSWIRE) -- SPAR Group, Inc. (NASDAQ: SGRP), a leading global provider of merchandising and marketing services, announced today that Mr. Arthur H. Baer, Mr. Igor Novgorodtsev, and Mr. Jeffrey A. Mayer, have resigned from the Corporation's Board of Directors, effective June 9, 2021.

The management of the Corporation would like to thank Mr. Baer, Mr. Novgorodtsev, and Mr. Mayer for their service on the Board and their professional contributions. They provided experience and counsel that helped shape the Company for the future and rebuilt the Company's leadership team. Their commitment to governance and board independence was highly valued.

Although the resigning Independent Directors expressed confidence in the CEO and the management team, as well as their respect and admiration for the fine leadership of the Company’s international and domestic joint venture partners, in their resignation letter to the Corporation, the resigning Independent Directors said they were concerned over efforts by the Company’s two major shareholders that they believe could weaken Board independence, interfere with the operations of the Company's business, and adversely affect the Company's liquidity and minority shareholders.

The Company has provided Nasdaq with a notice that it would be temporarily out of compliance with Nasdaq Listing Rule 5605(b)(1) requiring that Independent Directors constitute a majority of the Company's Board, and temporarily out of compliance with Nasdaq Listing Rule 5605(c) requiring that an audit committee have at least three members and the members each be independent directors. The Corporation has begun a search for three new directors to fill vacancies on the Board and regain compliance with Nasdaq listing rules.

Additional details are available on a form 8k filed with the Securities and Exchange Commission.

About SPAR Group

SPAR Group is a leading global merchandising and marketing services company, providing a broad range of services to retailers, manufacturers and distributors around the world. With more than 40 years of experience, 25,000+ merchandising specialists around the world, an average of 200,000+ store visits a week and long-term relationships with some of the world’s leading manufacturers and retail businesses. SPAR Group provides specialized capabilities across 9 countries and 4 continents.

For more information, please visit the SPAR Group's website at http://www.sparinc.com.

Contact:
Dave Mossberg
(817) 310-0051

Forward-Looking Statements

This Press Release contains, and the above referenced recorded comments, will contain "forward-looking statements" within the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, made by, or respecting, SPAR Group, Inc. ("SGRP") and its subsidiaries (together with SGRP, “SPAR”, "SPAR Group" or the "Company"), to be filed shortly in a Current Report on Form 10-Q by SGRP with the Securities and Exchange Commission (the "SEC"). There also are forward-looking statements contained in SGRP's Annual Report on Form 10-K for its fiscal year ended December 31, 2020, as filed with the SEC on March 31, 2021, and SGRP's First Amendment to Annual Report on Form 10-K/A for the year ended December 31, 2020, as filed with the SEC on April 29, 2021 (as so amended, the "Annual Report"), in SGRP's definitive Proxy Statement respecting its Annual Meeting of Stockholders to be held in July of 2021, which SGRP plans to file with the SEC in June of 2021 (the "Proxy Statement"), and the SGRP's Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other reports and statements as and when filed with the SEC (including the Quarterly Report, the Annual Report and the Proxy Statement, the Information Statement, the Second Special Meeting Proxy/Information Statement, each a "SEC Report"). "Forward-looking statements" are defined in Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and other applicable federal and state securities laws, rules and regulations, as amended (together with the Securities Act and Exchange Act, the "Securities Laws").

The forward-looking statements made by the Company in this Press Release may include (without limitation) any expectations, guidance or other information respecting the pursuit or achievement of the Company's corporate strategic objectives. The Company's forward-looking statements also include, in particular and without limitation, those made in "Business", "Risk Factors", "Legal Proceedings", and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Annual Report. You can identify forward-looking statements in such information by the Company's use of terms such as "may", "will", "expect", "intend", "believe", "estimate", "anticipate", "continue", "plan", "project" or similar words or variations or negatives of those words.

You should carefully consider (and not place undue reliance on) the Company's forward-looking statements, risk factors and the other risks, cautions and information made, contained or noted in or incorporated by reference into this Press Release, the Annual Report, the Proxy Statement and the other applicable SEC Reports that could cause the Company's actual performance or condition (including its assets, business, clients, capital, cash flow, credit, expenses, financial condition, income, liabilities, liquidity, locations, marketing, operations, performance, prospects, sales, strategies, taxation or other achievement, results, risks, trends or condition) to differ materially from the performance or condition planned, intended, anticipated, estimated or otherwise expected by the Company (collectively, "expectations") and described in the information in the Company's forward-looking and other statements, whether express or implied. Although the Company believes them to be reasonable, those expectations involve known and unknown risks, uncertainties and other unpredictable factors (many of which are beyond the Company's control) that could cause those expectations to fail to occur or be realized or such actual performance or condition to be materially and adversely different from the Company's expectations. In addition, new risks and uncertainties arise from time to time, and it is impossible for the Company to predict these matters or how they may arise or affect the Company. Accordingly, the Company cannot assure you that its expectations will be achieved in whole or in part, that the Company has identified all potential risks, or that the Company can successfully avoid or mitigate such risks in whole or in part, any of which could be significant and materially adverse to the Company and the value of your investment in SGRP's Common Stock.

You should also carefully review the risk factors described in the Annual Report (See Item 1A – Risk Factors) and any other risks, cautions or information made, contained or noted in or incorporated by reference into the Annual Report, the Proxy Statement or other applicable SEC Report. All forward-looking and other statements or information attributable to the Company or persons acting on its behalf are expressly subject to and qualified by all such risk factors and other risks, cautions and information.

The Company does not intend or promise, and the Company expressly disclaims any obligation, to publicly update or revise any forward-looking statements, risk factors or other risks, cautions or information (in whole or in part), whether as a result of new information, risks or uncertainties, future events or recognition or otherwise, except as and to the extent required by applicable law.

FAQ

What caused the resignation of board members at SPAR Group (SGRP)?

The resignations were due to concerns over potential interference from major shareholders that could weaken board independence.

How is SPAR Group (SGRP) addressing board member resignations?

SPAR Group is actively searching for three new directors to fill the vacancies and regain compliance with Nasdaq listing rules.

What impact do the board member resignations have on SPAR Group (SGRP)?

The resignations raise concerns about governance and may affect investor confidence, especially regarding board independence.

When did the board member resignations become effective for SPAR Group (SGRP)?

The resignations became effective on June 9, 2021.