Robert G. Brown, a Founder of SPAR Group, Inc., (SGRP) Responds to SPAR Group, Inc., June 11, 2025, Press Release

Rhea-AI Summary

Robert G. Brown, a founder and former CEO of SPAR Group (SGRP) holding 6.47M shares, has responded to the company's June 11 press release with five key recommendations: 1) A 6M share buyback program, 2) A $0.02 quarterly dividend, 3) Review of company bylaws against Glass Lewis and ISS best practices, 4) Linking board compensation to share price performance, and 5) Tying management compensation to shareholder value and earnings. Brown criticizes SGRP's failure to address the stock price decline from $2.97 to $1.02 between June 2024 and May 2025, and urges the board to explicitly state their position on his recommendations. He notes that SGRP's response focused on personal attacks rather than addressing substantive issues.

Positive

• Large shareholder (6.47M shares) and company founder advocating for shareholder-friendly initiatives
• Proposed concrete actions to enhance shareholder value including stock buyback and dividend program
• Suggested alignment of management and board compensation with stock performance and earnings

Negative

• Significant stock price decline from $2.97 to $1.02 (66% drop) over the past year
• Apparent conflict between major shareholder and current board/management
• Lack of constructive dialogue between the company and its founder regarding proposed changes

Insights

Corporate Governance Analyst

Large shareholder Brown pushes SGRP for shareholder-friendly actions amid stock decline; Board unresponsive to proposed value-creation measures.

This press release reveals an escalating conflict between Robert G. Brown, a founder and significant shareholder of SPAR Group (holding 6,469,683 shares), and the company's current leadership. Brown is responding to what appears to be a defensive press release from SPAR that attacked him personally rather than addressing his substantive recommendations.

Brown highlights the concerning 66% decline in SGRP's stock price (from $2.97 to $1.02) between June 2024 and May 2025, and notes the company's failure to address this deterioration or present a recovery plan. His five specific recommendations aim to enhance shareholder value:

• A 6 million share buyback program to support the stock price
• Implementation of a $0.02 quarterly dividend (7.8% annual yield at current price)
• Review of corporate bylaws against governance best practices
• Tying Board compensation partially to share price performance
• Restructuring executive compensation to prioritize shareholder value creation

What's particularly telling is Brown's assertion that the company has chosen to attack him personally rather than addressing these substantive governance and capital allocation proposals. This suggests a potential entrenchment issue, where management may be prioritizing control over shareholder returns.

The standoff represents a classic corporate governance tension between a significant shareholder advocating for shareholder-friendly capital allocation and compensation structures versus a Board that appears resistant to these changes. The lack of response to specific proposals rather than addressing the merits of the recommendations raises questions about the Board's willingness to consider actions that could potentially reverse the stock's significant decline.

Palm Beach Gardens, Florida--(Newsfile Corp. - June 12, 2025) - Robert G. Brown, hereinafter referred to as "Mr. Brown", holding directly and indirectly 6,469,683 shares of common stock, $0.01 par value per share ("Common Stock"),^[1] in SPAR Group, Inc., a Delaware corporation (the "Company"), who is a founder of the Company as well as past CEO and Chairman, hereby responds to the Company's press release of June 11, 2025 (the "SPAR June 11 Release").^[2] The SPAR June 11 Release was issued by the Company in response to Mr. Brown's June 10, 2025 press release and related Form PX14A6G, filed with the U.S. Securities & Exchange Commission on June 10, 2025.

This is not a solicitation of authority to vote your proxy. Please DO NOT send your proxy card to Mr. Brown who is not able to vote your proxies, nor does this communication contemplate such an event. Mr. Brown urges shareholders to vote in person or by proxy at the 2025 Annual Meeting in accordance with the instructions provided by the Company in the Proxy Statement filed with the SEC on May 23, 2025 (the "Proxy Statement") and the Proxy Card thereof (the "Proxy Card").

The following information should not be construed as investment advice. Please read the important notices at the end of this document.

Mr. Brown notes that the SPAR June 11 Release does not address the reason(s) for the drop in stock price from $2.97 on June 3, 2024, to $1.02 on May 29, 2025, or how the Board plans to increase the stock price.

Mr. Brown recommended 5 items to the Company's Board of Directors (the "Board") for consideration and implementation. They are:

1. A 6,000,000 share buyback.

2. A $.02/per share quarterly dividend.

3. A review by the Board of the Company's Amended and Restated Bylaws, adopted effective as of January 18, 2022 (the "A&R Bylaws"), and the best practices recommended by Glass Lewis and ISS to determine if the current A&R Bylaws are in the best interest of the shareholders.

4. A review of Board compensation to determine if making the compensation partly dependent (e.g. 50% of compensation) on the share price would be in the best interest of the shareholders.

5. A review by the Compensation Committee to determine if the shareholders would be more effectively served by having a high proportion of management's compensation based on delivering shareholder value (as evidenced by the stock price) and positive net earnings.

In the SPAR June 11 Release, the Company did not address Mr. Brown's recommendations and he still recommends that the Board consider all 5 actions.

Mr. Brown is a large shareholder, and his interests are aligned with the shareholders. Mr. Brown believes that his recommendations should be considered and implemented by the Board for the benefit of all shareholders.

While the SPAR June 11 Release does not address the substantive issues of Mr. Brown's recommendations, it does spend a lot of time attacking him personally. In politics it is said if you cannot win on the substance, attack the person. Much of what is in the SPAR response is unverifiable, out of context, irrelevant or consists only of selected extracts of settlements and other discussions.

Mr. Brown believes that his recommendations are in the best interests of the shareholders. He encourages the Board to be transparent and explicitly advise the shareholders what the Board's position is on all five of his recommendations.

IMPORTANT NOTICES:

THIS IS NOT A PROXY SOLICITATION AND NO PROXY CARDS WILL BE ACCEPTED. PLEASE DO NOT SEND YOUR PROXY TO MR BROWN. TO VOTE YOUR PROXY, PLEASE FOLLOW THE INSTRUCTIONS ON YOUR PROXY CARD.

THE FOREGOING INFORMATION MAY BE DISSEMINATED TO COMPANY SHAREHOLDERS VIA TELEPHONE, U.S. MAIL, E-MAIL, CERTAIN WEBSITES AND CERTAIN SOCIAL MEDIA VENUES, IN ADDITION TO PRESS RELEASE. THIS DOCUMENT SHOULD NOT BE CONSTRUED AS INVESTMENT ADVICE, OR AS A SOLICITATION OF AUTHORITY TO VOTE YOUR PROXY, OR A RECOMMENDATION OF HOW TO VOTE.

THE COST OF DISSEMINATING THE FOREGOING INFORMATION TO SHAREHOLDERS IS BEING BORNE ENTIRELY BY MR. BROWN.

THE INFORMATION CONTAINED HEREIN HAS BEEN PREPARED FROM SOURCES BELIEVED RELIABLE BUT IS NOT GUARANTEED BY MR. BROWN AS TO ITS TIMELINESS OR ACCURACY, AND IS NOT A COMPLETE SUMMARY OR STATEMENT OF ALL AVAILABLE DATA. THIS DOCUMENT IS FOR INFORMATIONAL PURPOSES ONLY AND SHOULD NOT BE CONSTRUED AS A RESEARCH REPORT.

Disclaimers

The views expressed herein are those of Mr. Brown as of the date referenced and are subject to change at any time based on market or other conditions. These views are not intended to be a forecast of future events or a guarantee of future results. These views may not be relied upon as investment advice. The information provided in this material should not be considered a recommendation to buy or sell any of the securities mentioned. It should not be assumed that investments in such securities have been or will be profitable. This document is rendered solely for informational purposes.

Press inquiries: please contact Robert Brown via email at rbrown6@msn.com.

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^[1] Robert G. Brown, Statement of Changes in Beneficial Ownership (Form 4/A) (May 12, 2025).

^[2] SPAR Group, Inc. Responds to False and Disparaging Comments from Former Board Member, Robert G. Brown, Regarding the Company and Its Board, SPAR Group, Inc. (last viewed June 12, 2025) https://investors.sparinc.com/news-releases/news-release-details/spar-group-inc-responds-false-and-disparaging-comments-former.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/255385

FAQ

What are the 5 key recommendations made by Robert Brown to SPAR Group (SGRP)?

Brown recommended: 1) A 6M share buyback, 2) $0.02 quarterly dividend, 3) Review of company bylaws, 4) Linking board compensation to share price, and 5) Tying management compensation to shareholder value and earnings.

How many shares does Robert Brown own in SPAR Group (SGRP)?

Robert Brown holds 6,469,683 shares of SPAR Group common stock, directly and indirectly.

What happened to SPAR Group's (SGRP) stock price between June 2024 and May 2025?

SPAR Group's stock price declined from $2.97 on June 3, 2024, to $1.02 on May 29, 2025, representing a 66% decrease.

What was Robert Brown's previous role at SPAR Group (SGRP)?

Robert Brown was a founder of SPAR Group and served as the company's CEO and Chairman in the past.

Is this a proxy solicitation from Robert Brown for SPAR Group (SGRP)?

No, this is not a proxy solicitation. Brown explicitly states that shareholders should vote according to the company's instructions in the Proxy Statement and Proxy Card.