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Note 2 - Business

9 Months Ended

Sep. 30, 2022

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

2.	Business

SPAR Group, Inc., a Delaware corporation (“SGRP”), and its subsidiaries (together with SGRP, “SPAR Group” or the “Company”, “We”, “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. With more than 50 years of experience, a diverse network of merchandising specialists around the world working during the year, and long-term relationships with some of the world’s leading businesses, we provide specialized capabilities across nine (9) countries and five (5) continents. Our unique combination of resource scale, deep expertise, advanced technology and unwavering commitment to excellence, separates us from the competition.

The Company reports under three (3) segments: Americas, Asia-Pacific (“APAC”) and Europe, Middle East and Africa (“EMEA”). The Americas segment is comprised of the United States, Canada, Mexico, and Brazil, APAC is comprised of China, Japan, Australia, and India, and EMEA is comprised of South Africa.

Novel Coronavirus (Covid-19) Outbreak

The COVID-19 pandemic had an effect on the Company’s joint venture operation in China in the second quarter of 2022 The lock-down ended in June of 2022 and the business has been back in operation in most cases; however, there is still restriction in certain areas impacting the third quarter financial results. In March of 2022, China implemented zero tolerance COVID-19 policy and locked down Shanghai Province and surrounding districts, and as a result, operations of the Company's joint venture in China were impacted for most of the second quarter and in the third quarter. In the third quarter of 2022, the joint venture in China generated a net loss attributable to SPAR Group inc. of $73,000 and $348,000 for the three and nine-months ended September 30, 2022, respectively, as compared to net income of $25,000 and $23,000 for the three and nine-months ended September 30, 2021, respectively. The net loss generated by the joint venture was largely due to a decrease in revenues of $276,000 or 7% and $2.3 million or 22% as a result of the lockdown for the three and nine months ended September 30, 2022, respectively, as compared to three and nine months ended September 30, 2021, while expenses continued to be incurred for wages, office rent and administrative expenses. Management continues to actively monitor the situation and assess operational and cashflow impact to determine course of actions.