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Note 3 - Debt | 6 Months Ended
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Jun. 30, 2024
Notes to Financial Statements |
Debt Disclosure [Text Block] |
3. | Debt
North Mill Capital Credit Facility 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 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. As of June 30, 2024, the aggregate interest rate was 10.40% per annum and the aggregate outstanding loan balance was approximately $17.7 million, which is included within lines of credit and short-term loans in the unaudited 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 $16.7 million; and (ii) the outstanding loan balance under the Canada Revolving Credit Facility was approximately $1.0 million. 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, capital expenditures and certain other investments. The NM Loan Parties were in compliance with such covenants as of June 30, 2024. 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. Summary of the Company’s lines of credit and short-term loans (in thousands):
|  | Interest Rate |  |  | Balance |  |  | Interest Rate |  |  | Balance |
|  | as of |  |  | as of |  |  | as of |  |  | as of |
|  | June 30, 2024 |  |  | June 30, 2024 |  |  | December 31, 2023 |  |  | December 31, 2023 |
USA / Canada North Mill Capital |  |  | 10.40 | % |  | $ | 17,711 |  |  |  | 10.40 | % |  | $ | 12,475 |
USA - Resource Plus Seller Notes |  |  | 4.30 | % |  |  | 731 |  |  |  | 1.85 | % |  |  | 1,120 |
China- Industrial Bank |  |  | N/A |  |  |  | - |  |  |  | 3.56 | % |  |  | 283 |
China - Industrial and Commercial Bank of China |  |  | N/A |  |  |  | - |  |  |  | 4.00 | % |  |  | 283 |
South Africa - Investec Bank Ltd. |  |  | N/A |  |  |  | - |  |  |  | 11.75 | % |  |  | 3,369 |
Total |  |  |  |  |  | $ | 18,442 |  |  |  |  |  |  | $ | 17,530 |
Summary of Unused Company Credit and Other Debt Facilities (in thousands):
|  | June 30, |  |  | December 31, |
|  | 2024 |  |  | 2023 |
Unused Availability: |  |  |  |  |  |  |  |
United States / Canada |  | $ | 11,751 |  |  | $ | 6,525 |
South Africa |  |  | - |  |  |  | 2,064 |
Total Unused Availability |  | $ | 11,751 |  |  | $ | 8,589 |
Summary of the Company’s Long- term debt (dollars in thousands):
|  | Interest Rate |  | Balance |  | Interest Rate |  | Balance
|  | as of |  | as of |  | as of |  | as of
|  | June 30, 2024 |  | June 30, 2024 |  | December 31, 2023 |  | December 31, 2023
USA - Resource Plus Seller Notes |  | 4.30% |  | $ 1,711 |  | N/A |  | $ -
South Africa - Investec Bank Ltd. |  | N/A |  | - |  | 11.75% |  | 310
|  |  |  | $ 1,711 |  |  |  | $310

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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://www.xbrl.org/2003/role/disclosureRef -Topic 470 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481544/470-10-50-6 Reference 2: 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