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Note 4 - Credit Facilities | 12 Months Ended
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Dec. 31, 2020
Notes to Financial Statements |
Debt Disclosure [Text Block] | 4. Credit Facilities Domestic Credit Facilities North Mill Capital Credit Facility On April 10, 2019, the Company repaid and replaced its 2018 credit facility with PNC Bank, National Association with a new secured revolving credit facility in the United States and Canada (the " NM Credit Facility ") with North Mill Capital, LLC (" NM "). In order to obtain, document and govern the NM Credit Facility: 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 "), entered into 18 -month individual Loan and Security Agreements with NM dated as of April 10, 2019 ( as amended by the Modification Agreement defined below, the " NM Loan Agreements "), which governs the obligations of the NM Loan Parties to NM and secures them with pledges of substantially all of the assets of the NM Loan Parties (other than SGRP's foreign subsidiaries, certain designated domestic subsidiaries, and their respective equity and assets). On January 5, 2021, the NM Loan Parties and NM executed and delivered a Waiver and Modification Agreement entered in as of January 4, 2021, and effective as of December 31, 2020 ( the " Modification Agreement "), pursuant to which NM and the NM Loan Parties agreed to extend the NM Loan Agreements from October 2021 to April 10, 2022, and increased the amounts of the credit facilities for SMF to $14.5 (USD) million in the USA and decreased the SCC facility to $1.5 (CDN) million in Canada; in addition the Modification Agreement increased SMF's borrowing base availability for unbilled receivables to up to 70% from January 1, 2021 through June 30, 2021, which thereafter reverts to 65%, and increased the unbilled cap for SMF to $4.5 million (USD) from $3.9 million (USD). SCC's facility received similar increases. To evidence the increase in the US Revolving Credit Facility, SMF executed and delivered to NM a $14.5 (USD) million Amended and Restated Revolving Credit Master Promissory Note (the " Restated US Note "), which amends, restates, supersedes and replaces the prior note. To evidence the decrease in the Canadian Revolving Credit Facility, SCC executed and delivered to NM a $1.5 (CDN) million Amended and Restated Revolving Credit Master Promissory Note (the " Restated Canadian Note "), which amends, restates, supersedes and replaces the prior CDN$ note. The Restated US Note and Restated Canadian Note (together, the " NM Notes ") continue to require the NM Borrowers to pay interest on the loans thereunder equal to (A) Prime Rate designated by Wells Fargo Bank, plus (B) one hundred twenty-five basis points ( 1.25% ) or a minimum of 6.75%. In addition, the Company continues to pay a facility fee to NM of 1.5% for the first $10.5 million loan balance, or $157,500 per year over the term of the agreement, plus a $15,000 one -time fee for each incremental $1 million increase in loan balance up to $14.5 million. Additionally, for the Modification Agreement, SGRP paid NM a fee of $7,500 and agreed to reimburse NM's legal and documentation fees. On December 31, 2020, the aggregate interest rate was 6.75% per annum, and the outstanding loan balance was $8.3 million. Outstanding amounts are classified as short-term debt. Revolving loans are available to the Borrowers under the NM Credit Facility based upon the borrowing base formula defined in the NM Loan Agreement. The NM Credit Facility contains certain financial and other restrictive covenants and also limits certain expenditures by the NM Borrowers, including, maintaining a positive trailing EBITDA for each Borrower, limits on executive compensation increases, capital expenditures and other investments. The Company was in compliance of such covenants as of December 31, 2020. Fifth Third Credit Facility On January 9, 2018, the Company completed its acquisition of a 51% interest in its new subsidiaries, Resource Plus of North Florida, Inc., and related companies (collectively, " Resource Plus "). When acquired, Resource Plus was a party to a revolving line of credit facility it secured on May 23, 2016, ( the " Fifth Third Credit Facility ") from Fifth Third Bank for $3.5 million. Effective April 11, 2018, the term of the Fifth Third Credit Facility was extended and was due on April 23, 2020. Subsequently, the term of the Fifth Third Credit Facility has been extended and is currently scheduled to become due on June 16, 2022. Revolving loans of up to $3.5 million are available to Resource Plus under the Fifth Third Credit Facility based upon the borrowing base formula defined in the agreement (principally 80% of "eligible" accounts receivable less certain reserves). As of December 31, 2020 , there was no outstanding balance. The Fifth Third Credit Facility is secured by substantially all assets of Resource Plus. The Fifth Third Credit Facility currently requires Resource Plus to pay interest on the loans there under equal to: (A) the Daily LIBOR Rate (as defined in the agreement) per annum; plus (B) two hundred fifty basis points ( 2.50% ). On December 31, 2020 , the aggregate interest rate under that formula was 5.2% per annum. The Fifth Third Credit Facility contains certain financial and other restrictive covenants. Resource Plus was in compliance with such covenants as of December 31, 2020. Other Debt Effective with the closing of the Resource Plus acquisition in January 2018, the Company entered into promissory notes with the sellers totaling $2.3 million. The notes are payable in annual installments at various amounts due on December 31st of each year starting with December 31, 2018 and continuing through December 31, 2023. As such these notes are classified as both short term and long term based on scheduled maturities. The total balance owed at December 31, 2020 is $1.3 million. International Credit Facilities SPARFACTS Australia Pty. Ltd. has a secured line of credit facility with National Australia Bank, effective October 31, 2017, for $800,000 (Australian) or approximately $617,000 USD (based upon the exchange rate at December 31, 2020 ). The facility provides for borrowing based upon a formula, as defined in the agreement (principally 80% of eligible accounts receivable less certain deductions). The outstanding balance with National Australia Bank as of December 31, 2020 was $200,000 (Australian) or $154,000 USD and is due on demand. On October 5, 2018, SPAR Brazil secured a line of credit facility with Branco Santander for approximately 381,000 Brazilian Real or approximately $73,000 USD (based upon the exchange rate at December 31, 2020 ). The account was closed in September 2020. SPAR China has secured a loan with Industrial Bank for 3.0 million Chinese Yuan or approximately $460,000 USD (based upon exchange rate at December 31, 2020). The loan will expire December 17, 2021. The annual interest rate was 4.65% as of December 31, 2020. The outstanding balance with Industrial Bank as of December 31, 2020 was 3.0 million Chinese Yuan or $460,000 USD and is due on demand. SPAR China has secured a loan with CCB Bank for 1.0 million Chinese Yuan or approximately $153,000 USD (based upon exchange rate at December 31, 2020). The annual interest rate was 4.25% as of December 31, 2020. The outstanding balance with Industrial Bank as of December 31, 2020 was 1.0 million Chinese Yuan or $153,000 USD and is due on demand. The note was subsequently paid and closed on January 7, 2021. SPAR Todopromo has secured a line of credit facility with Ve Por Mos for 5.0 million Mexican Pesos or approximately $262,000 USD (based upon exchange rate at December 31, 2020). The revolving line of credit will expire May 2021. The annual interest rate was 8.00% as of December 31, 2020. There is no outstanding balance at December 31, 2020.
|  | Interest Rate as of |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | December 31, 2020 |  |  | 2021 |  |  | 2022 |  |  | 2023 |  |  | 2024 |  |  | 2025 |
USA - North Mill Capital |  |  | 6.75 | % |  |  | 8,262 |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |
USA - Fifth Third Bank |  |  | 3.60 | % |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |
USA - Resource Plus Sellers |  |  | 1.85 | % |  |  | 300 |  |  |  | 300 |  |  |  | 700 |  |  |  | – |  |  |  | – |
Australia - National Australia Bank |  |  | 6.56 | % |  |  | 154 |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |
China - Industrial Bank |  |  | 4.65 | % |  |  | 460 |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |
China - CCB Bank |  |  | 4.25 | % |  |  | 153 |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |
Mexico - Ve Por Mas |  |  | 8.00 | % |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |
Total |  |  |  |  |  | $ | 9,329 |  |  | $ | 300 |  |  | $ | 700 |  |  | $ | - |  |  | $ | - |
Summary of Unused Company Credit and Other Debt Facilities (in thousands) :
|  | December 31, 2020 |  |  | December 31, 2019 |
Unused Availability: |  |  |  |  |  |  |  |
United States |  | $ | 10,238 |  |  | $ | 3,694 |
Mexico |  |  | 262 |  |  |  | – |
Australia |  |  | 463 |  |  |  | 423 |
Brazil |  |  | – |  |  |  | 49 |
Total Unused Availability |  | $ | 10,963 |  |  | $ | 4,166 |
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, or a significant reduction in business from such clients could have a material adverse effect on the Company's cash resources and its ongoing ability to fund operations.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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