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Note 8 - Related Party Transactions
 9 Months Ended
Sep. 30, 2025
Notes to Financial Statements  
Related Party Transactions Disclosure [Text Block]

8.

Related Party Transactions

 

Domestic Related Party Transactions

 

Bartels' Retirement and Director Compensation

 

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 a significant stockholder of SGRP,  is one of the founders of the Company, and is an affiliate and related party of SGRP.

 

Effective as of  January 18, 2020, SPAR's Governance Committee proposed and unanimously approved retirement benefits for Mr. Bartels, for the five-year period commencing  January 1, 2020, and ended December 31, 2024 (the "Five-Year Period"), for Mr. Bartels. The aggregate value of benefits payable to Mr. Bartels is approximately $0.2 million per year and a total of $1.1 million for the Five-Year Period.  As of September 30, 2025, there are no retirement benefits remaining outstanding. 

 

Pursuant to the 2024 Stock Repurchase Program, on  May 3, 2024, SGRP's Board and its Audit Committee approved SGRP's Repurchase Agreement with William H. Bartels for SGRP's private repurchase of 1,000,000 shares of the Corporation's common stock from William H. Bartels, dated and effective as of  April 30, 2024, at a purchase price of $1.80 per share (the Nasdaq closing price on  April 29, 2024). 

 

Other Related Party Transactions and Arrangements 

 

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 former President and Chief Executive Officer, Michael R. Matacunas. During the three and nine months ended September  30, 2025, the Company has recognized $51,130 and $242,060, respectively, in expenses under this agreement. During the three and nine months ended September 30, 2024, the Company recognized approximately $14,000 and $101,000, respectively, in expenses under this agreement. In 2025, WB Marketing changed its name to Qantm Creative.

 

SBS and Infotech are related parties and affiliates of SGRP but are not under the control or part of the consolidated Company. In July 1999 the Company, 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 SBS and Infotech, and each entered into a non-exclusive royalty-free license from the Company to use certain "SPAR" trademarks in the United States. 

 

International Joint Venture Transactions

 

Agreement to sell the Company’s ownership interest in its South African Joint Venture

 

Prior to  March 31, 2024, SGRP Meridian Proprietary Limited ("Meridian") was a consolidated international subsidiary of the Company and was owned 51% by the Company and 49% by Friedshelf (Pty) Ltd., Lindicom Proprietary Limited, and Lindicom Empowerment Holdings Proprietary Limited ("Local Owners"). On  February 7, 2024, the Company entered into an agreement to sell its 51% ownership interest in Meridian to the Local Owners for 180,700,000 South African Rand, 80% of which would be paid upon closing. 

 

The closing conditions under that agreement were satisfied in all material respects by  March 31, 2024. On  April 29, 2024, the Company received 144,560,000 South African Rand from the Local Buyers (or approximately $7.7 million). The remaining purchase price of approximately $1.9 million is recorded as other receivable on the consolidated balance sheets and will be paid by December 31, 2025, and its payment is secured by an irrevocable unconditional guarantee from Investec Bank Limited. The Company has also licensed certain technology (including SPARView) and trademarks to Meridian in connection with the sale. The Company recognized a pre-tax gain of approximately $7.2 million on this transaction in the first quarter of 2024, which is presented within Gain on sale of business in the Consolidated Statements of Operations and Comprehensive Income.  

 

Agreement to sell the Company’s ownership interest in its Chinese Joint Venture

 

On  February 23, 2024, the Company entered into an 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 paid to the Company was $200,000. The sale was completed in  April 2024. The Company has recognized a loss of $1.1 million in the second quarter of 2024 as a result of this transaction. The Company has no continuing involvement in SPAR (Shanghai) Marketing Management Co., Ltd.

 

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

 

On  March 26, 2024, the Company signed a share purchase agreement with JK Consultoria Empresarial Ltda. ("JKC") for JKC to acquire the Company's Brazilian holding company (which in turn owns the Company's 51% ownership interest in its Brazilian joint venture subsidiary) for BRL 58.9 million or approximately $11.8 million. Closing of the sale occurred in  June 2024. The Company has recognized a loss of $1.2 million in the second quarter of 2024 as a result of this transaction.  The Company has no continuing involvement in the Brazilian joint venture.  

 

Agreement to sell SPAR's 100% ownership interest in SPAR Japan

 

On  July 23, 2024, the Company entered into an agreement to sell its 100% ownership interest in SPAR Japan for $500,000. The sale closed on  August 30, 2024. The Company has recognized a loss of $0.7 million in the third quarter of 2024 as a result of this transaction. The Company has no continuing involvement in SPAR Japan. 

 

Agreement to sell SPAR's 51% ownership interest in its Indian Joint Venture

 

On  August 31, 2024, the Company closed on an agreement to sell its 51% ownership interest in its Indian Joint venture for $500,000. The sale closed on  September 25, 2024. The Company has recognized a loss of $1.4 million in the third quarter of 2024 as a result of this transaction. The Company has no continuing involvement in the Indian joint venture. 

 

Agreement to sell SPAR's 51% ownership interest in its Mexican Joint Venture

 

On  December 19, 2024, the Company closed on an agreement to sell its 51% ownership interest in its Mexican Joint venture for $417,000. The sale closed on December 19, 2024. The Company has recognized a loss of $1.1 million in the fourth quarter of 2024 as a result of this transaction. The Company has no continuing involvement in the Mexican joint venture.