Related Party Transactions Disclosure [Text Block] | 5. Related-Party Transactions SGRP's policy respecting approval of transactions with related persons, promoters and control persons is contained in the SPAR Group Code of Ethical Conduct for its Directors, Executives, Officers, Employees, Consultants and other Representatives Amended and Restated (as of) March 15, 2018 ( Ethics Code Company Approved Affiliate Contract Board may IV.11 I.2 Domestic Related Party Services, International Related Party Services, SBS Bankruptcy, Settlement and March 2020 SGRP's Audit Committee has the specific duty and responsibility to review and approve the overall fairness and terms of all material related-party transactions. The Audit Committee receives affiliate contracts and amendments thereto for its review and approval (to the extent approval is given), and these contracts are periodically (often annually) again reviewed, in accordance with the Audit Committee Charter, the Ethics Code, the rules of the Nasdaq Stock Market LLC (" Nasdaq no Domestic Related Party Services: SPAR Business Services, Inc. (" SBS SAS Infotech not 13D May 3, 2018 ( April 24, 2020, January 1, 2020 ( Bartels' Retirement and Director Compensation 8 Commitments and Contingencies – Legal Matters SBS Bankruptcy, Settlement and March 2020 Infotech Litigation and Settlement, The Company executes its domestic field services through the services of field merchandising, auditing, assembly and other field personnel (each a " Field Specialist third Field Administrator third Due to (among other things) the adverse determination in 2016 third Independent Field Vendor July 27, 2018, third August 1, 2018 ( Independent Field Administrator On May 7, 2018, July 31, 2018, 2016. third Although SAS has not July 31, 2018. not $237,500 $226,000 $ 11,500 not The Company expects that SBS and SAS may 8 Commitments and Contingencies -- Legal Matters SBS Bankruptcy, Settlement and March 2020 Any claim by Robert G. Brown, William H. Bartels, SBS, SAS, any other related party or any third third 8 Commitments and Contingencies Legal Matters, Current material and potentially material legal proceedings impacting the Company are described in Note 8 Commitments and Contingencies Legal Matters, not not Infotech sued the Company in New York seeking reimbursement for approximately $190,000 $900,000 2013 not 8 Commitments and Contingencies Legal Matters, Peter W. Brown was appointed as a Director on the Board as of May 3, 2018, not SPAR BSMT EILLC 10% 13D April 24, 2020, National Merchandising Services, LLC (" NMS 51% NMA 49% not 100% NSRS September 2018, 1.0% Also, NMS leases office and operational space that is owned personally by Mr. Burdekin. The lease expense is $2,000 no no On August 10, 2019, 11 NMS Chapter 11 11 August 11, 2019, 11 11 not not 11 Resource Plus of North Florida, Inc. "Resource Plus", is a consolidated domestic subsidiary of the Company and is owned jointly by SGRP through its indirect ownership of 51% 49% 50% S BS Bankruptcy, Settlement and March 2020 On November 23, 2018, 11 SBS Chapter 11 March 18, 2019, 11 $378,838 $12,963 $1,839,459 Clothier" On August 6, 2019, SMF Bankruptcy Court July 26, 2019 ( Settlement Agreement 11 Rodgers ) On August 6, 2019, 11 Plan of Reorganization not 8 Commitments and Contingencies -- Legal Proceedings -- SBS Bankruptcy, Settlement and March 2020 SBS Rodgers Litigation, . may On August 6, 2019, (i) the Company’s $2.2 $174,097.34 24 $7,254.06 January 1, 2020, Discounted Claim Payments $174,097 (ii) SMF will pay to SBS the Proven Unpaid A/R (as defined in the SBS Settlement Agreement) upon its determination (as described below). In the SBS Settlement Agreement, the parties agreed to have a third The Company has recorded the total settlement amount of $174,097 December 31, 2019. 24 $7,254 January 1, 2020. first six $43,524 On March 6, 2020, $1,707,374 March 2020 March 2020 no March 2020 not 13D April 24, 2020, At SGRP's March 2020 March 17, 2020, $1.3 $3 The March 2020 PAGA Rodgers not no March 2020 July 2019 no one 8 $500,000 Infotech Litigation and Settlement On September 19, 2018, Infotech one Infotech Action $190,000 In 2016, SPAR BSMT 10% May 3, 2018. Mr. Robert G. Brown incurred his alleged expenses associated with the transaction through Infotech, including salary allocations for unauthorized personnel and claims for his "lost tax breaks". Mr. Robert G. Brown submitted his unauthorized, unproven and undocumented "expenses" to SGRP, and SGRP's Audit Committee allowed approximately $50,000 $150,000 $190,000 In 2018, $900,000 2013 not Romanian Claim 2018. In order to avoid the expenses of protracted litigation, SGRP's Management and the Audit Committee agreed that it would be in the best interest of all stockholders to reach a reasonable settlement of both the Infotech Action and the Romanian Claim for installment payments in reasonable amounts and mutual releases of all other related claims. Management had offered $225,000 $275,000. $275,000 October 8, 2019 ( Infotech Settlement Agreement October 30, 2019, The Infotech Settlement Agreement requires the Company to make payments totaling $275,000 four $75,000 $75,000 30 October 30, 2019); ( $75,000 60 $50,000 90 The Company believes that the robust and comprehensive mutual releases in the Infotech Settlement Agreement provide valuable relief from potential future claims and litigation by Infotech respecting the Company's past involvement with Infotech in the Brazilian and Romanian transactions. International Related Party Services: SGRP Meridian (Pty), Ltd. (" Meridian 51% 23% 401 June 2019, 26% 50% MPT 50% MCPT MHT 20 172 4 SPAR Todopromo is a consolidated international subsidiary of the Company and is owned 51% 49% 90% CON 2016. Mr. Juan F. Medina Domenzain (" JFMD December 31, 2020. SPAR Brasil Serviços de Merchandising e Tecnologia S.A., a Brazilian corporation (" SPAR BSMT 51% 39% JKC 10% EILLC JKC is owned by Mr. Jonathan Dagues Martins, a Brazilian citizen and resident (" JDM September 13, 2016. PWB 13D April 24, 2020, SPAR BSMT has contracted with Ms. Karla Dagues Martins, a Brazilian citizen and resident and JDM's sister and a part owner of SPAR BSMT, to handle the labor litigation cases for SPAR BSMT and its subsidiaries. These legal services are being provided to them by Ms. Martins' company, Karla Martins Sociedade de Advogados (" KMSA Summary of Certain Related Party Transactions: The following costs of affiliates were charged to the Company (in thousands): Three Months Ended March 31, 2020 2019 Services provided by affiliates: National Store Retail Services (NSRS) 1,342 125 Office lease expenses (Mr. Burdekin) 6 - Office lease expenses (RJ Holdings) 173 102 Office and vehicle lease expenses (MPT) 16 16 Vehicle rental expenses (MCPT) 299 290 Office and vehicle rental expenses (MHT) 73 64 Consulting and administrative services (CON) 12 37 Legal Services (KMSA) 23 22 Warehousing rental (JFMD) 13 12 Sparfacts 31 - Total services provided by affiliates $ 1,988 $ 668 Due to affiliates consists of the following (in thousands): March 31, December 31, 2020 2019 Loans from local investors:(1) Australia $ 410 $ 467 Mexico 623 623 Brazil 139 139 China 2,217 2,271 South Africa 399 635 Resource Plus 531 531 Total due to affiliates $ 4,319 $ 4,666 ( 1 Represent loans from the local investors into the Company's subsidiaries (representing their proportionate share of working capital loans). The loans have no Affinity Insurance: In addition to the above, through August 1, 2018, Affinity not 1% August 1, 2018, not The Company also advanced money to SAS to prepay Affinity insurance premiums (which in the case of workers compensation insurance are a percentage of payroll). The Company had advanced approximately $226,000 2018 2019 August 2018, one 2018 2019 $150,000 Bartels' Retirement and Director Compensation William H. Bartels retired as an employee of the Company as of January 1, 2020. Board July 8, 1999. Effective as of January 18, 2020, five January 1, 2020, December 31, 2024 ( Five Year Period $100,000 Retirement Compensation Regular Fees $55,000 $50,000 Supplemental Fees December 31, 2019, $15,588 Medical Benefits not The Retirement Compensation, Regular Fees and Supplemental Fees that remain unpaid during the Five Year Period: (i) shall be accelerated and paid to Mr. Bartels (or his heirs or assigns) in full upon the sale to a third Based on current rates and benefits, the aggregate value of such compensation, fees and benefits payable to Mr. Bartels will be approximately $220,558 $1,102,940 may $700,000 three March 31, 2020, In the event of any future business transaction involving Mr. Bartels and SGRP for which Bartels may not Mr. Bartels is one 25.1% 1 December 10, 2019, Information In Connection With Appointment Of Robert G. Brown As A Director Other Related Party Transactions and Arrangements: In July 1999, Co-Owned Software Licensed Marks 11 8 Commitments and Contingencies Legal Matters, Related Party Litigation SBS Bankruptcy Through arrangements with the Company, SBS (owned by Mr. Bartels and Mr. Brown), SAS (owned by Mr. Bartels and family members of Mr. Robert G. Brown), and other companies owned by Mr. Brown participate in various benefit plans, insurance policies and similar group purchases by the Company, for which the Company charges them their allocable shares of the costs of those group items and the actual costs of all items paid specifically for them. All such transactions between the Company and the above affiliates are paid and/or collected by the Company in the normal course of business. |