4.	Credit Facilities and Other Debt

Domestic Credit Facilities

North Mill Capital Credit Facility

The Company has a secured revolving credit facility in the United States and Canada (the "

NM Credit Facility

") with North Mill Capital, LLC, d/b/a SLR Business Credit ("

").

In order to obtain, document and govern the NM Credit Facility: SGRP and certain of its direct and indirect subsidiaries in the United States and Canada, namely SPAR Marketing Force, Inc. ("

SMF

"), and SPAR Canada Company ("

SCC

") and SPAR Canada, Inc., SPAR Acquisition, Inc., SPAR Assembly and Installation, Inc., and SPAR Trademarks, Inc. (together with SGRP, each a "

NM Guarantor

" and collectively, the "

NM Guarantors

", and together with SMF and SCC, each a "

NM Loan Party

" and collectively, the "

NM Loan Parties

"), entered into

-month individual Loan and Security Agreements with NM dated as of

April 10, 2019.

January 5, 2021,

the NM Loan Parties and NM executed and delivered a Waiver and Modification Agreement entered in as of

January 4, 2021,

and effective as of

December 31, 2020 (

the "

First Modification Agreement

"), pursuant to which NM and the NM Loan Parties agreed to extend the NM Loan Agreements from

October 2021

April 10, 2022,

and increased the amounts of the credit facilities for SMF to

$14.5

(USD) million in the USA and decreased the SCC facility to

$1.5

(CDN) million in Canada; in addition the First Modification Agreement increased SMF's borrowing base availability for unbilled receivables to up to

70%

from

January 1, 2021

through

June 30, 2021,

which thereafter reverts to

65%,

and increased the unbilled cap for SMF to

$4.5

million (USD) from

$3.9

million (USD). SCC's facility received similar increases.

The credit facility continues to require the NM Borrowers to pay interest on the loans thereunder equal to (A) Prime Rate designated by Wells Fargo Bank, plus (B)

one hundred twenty-five

basis points (

1.25%

) or a minimum of

6.75%.

In addition, the Company continues to pay a facility fee to NM of

1.5%

for the

first

$10.5

million loan balance, or

$157,500

per year over the term of the agreement, plus a

$15,000

one

-time fee for each incremental

million increase in loan balance up to

$14.5

million. Additionally, for the First Modification Agreement, SPAR paid NM a fee of

$7,500

and agreed to reimburse NM's legal and documentation fees.

March 22, 2021,

NM Loan Parties and NM executed and delivered a Second Modification Agreement entered in as of

March 22, 2021,

and effective as of

April 1, 2021 (

the "

Second

Modification Agreement

"), pursuant to which NM and the NM Loan Parties agreed to extend the NM Loan Agreements from

April 10, 2022

October 10, 2023,

and increased the amounts of the credit facilities for SMF to

$16.5

(USD) million in the USA while the SCC facility remained at

$1.5

(CDN) million in Canada; in addition, the Second Modification Agreement increased SMF's borrowing base availability for unbilled receivables to up to

70%

permanently, and increased the unbilled cap for SMF to

$5.5

(USD) million from

$4.5

(USD) million. The amended agreement (together, the "

NM Notes

") will require the NM Borrowers to pay interest on the loans thereunder equal to: (A) Prime Rate designated by Wells Fargo Bank, plus; (B)

one hundred twenty-five

basis points (

0.95%

) or a minimum of

5.25%.

In addition, the Company continues to pay a facility fee to NM of

0.8%

decreased from

1.5%

for the

first

$10.5

million loan balance, or

$84,000

per year, over the term of the agreement, plus a

$15,000

one

-time fee for each incremental

million increase in loan balance up to

$16.5

million. Additionally, the early termination fee has decreased from

1.0%

0.85%

of the advance limit.

March 31, 2021,

the aggregate interest rate was

6.75%

per annum, and the outstanding loan balance was

$11.8

million. Outstanding amounts are classified as short-term debt.

Revolving loans are available to the Borrowers under the NM Credit Facility based upon the borrowing base formula defined in the NM Loan Agreement.

The NM Credit Facility contains certain financial and other restrictive covenants and also limits certain expenditures by the NM Borrowers, including, maintaining a positive trailing EBITDA for each Borrower, limits on non-ordinary course payments ad transactions, incurring or guarantying indebtedness, increases in executive, officer or director compensation, capital expenditures and other investments. The Company was in compliance of such covenants as of

March 31, 2021.

Fifth Third Credit Facility - Resource Plus

One of the Company's consolidated subsidiaries, Resource Plus of North Florida, Inc. ("

Resource Plus

"), is a party to a revolving line of credit facility (the "Fifth Third Credit Facility") from Fifth Third Bank for

$3.5

million, which is currently scheduled to become due on

June

16,

2022.

Revolving loans of up to

$3.5

million are available to Resource Plus under the Fifth Third Credit Facility based upon the borrowing base formula defined in the agreement (principally

80%

of "eligible" accounts receivable less certain reserves). As of

March 31, 2021

, there was

outstanding balance. The Fifth Third Credit Facility is secured by substantially all assets of Resource Plus.

The Fifth Third Credit Facility currently requires Resource Plus to pay interest on the loans thereunder equal to (A) the Daily LIBOR Rate (as defined in the agreement) per annum, plus (B)

two hundred fifty

basis points (

2.50%

). On

March 31, 2021

, the aggregate interest rate under that formula was

3.6%

per annum. The Fifth Third Credit Facility contains a debt service charge coverage ratio financial covenant requiring Resource Plus to maintain a minimum of ratio of

1.2

for available cash flow to fixed charges, as defined in the agreement. Resource Plus was in compliance of the covenant as of

March 31, 2021.

Resource Plus - Seller Notes

Effective with the closing of the Resource Plus acquisition, the Company entered into promissory notes with the sellers totaling

$2.3

million. The notes are payable in annual installments at various amounts due on

December

31st

of each year starting with

December 31, 2018

and continuing through

December 31, 2023.

As such these notes are classified as both short term and long term for the appropriate amounts. The total balance owed at

March 31, 2021

was approximately

$1.3

million.

International Credit Facilities:

SPARFACTS Australia Pty. Ltd. has a secured line of credit facility with National Australia Bank, effective

October 31, 2017,

for

$800,000

(Australian) or approximately

$608,659

USD (based upon the exchange rate at

March 31, 2021

). The facility provides for borrowing based upon a formula, as defined in the agreement (principally

80%

of eligible accounts receivable less certain deductions). The outstanding balance with National Australia Bank as of

March 31, 2021

was

$12,076

(Australian) or

$9,188

USD and is due on demand.

SPAR China has secured a loan with Industrial Bank for

3.0

million Chinese Yuan or approximately

$460,000

USD (based upon exchange rate at

March

31,

2021

). The loan will expire

December 17, 2021.

The annual interest rate was

6.0%

as of

March 31, 2021.

The outstanding balance with Industrial Bank as of

March 31, 2021

was

3.0

million Chinese Yuan or

$460,000

USD and is due on demand.

SPAR China has secured a loan with CCB Bank for

1.0

million Chinese Yuan or approximately

$153,000

USD (based upon exchange rate at

March 31, 2021).

The annual interest rate was

6.0%

as of

March 31, 2021.

The outstanding balance with Industrial Bank as of

March 31, 2021

was

1.0

million Chinese Yuan or

$153,000

USD and is due on demand.

Effective

February 4, 2020,

SPAR Todopromo established a line of credit facility with Ve Por Mas for

8.0

million Mexican Pesos or approximately

$390,096

USD (based upon the exchange rate at

March 31, 2021).

The line expires on

May 2021.

The variable interest rate is TIIE plus

3.0%

resulting in a rate of

7.3%

as of

March 31, 2021.

There was

outstanding balance as of

March 31, 2021.

SPAR Todopromo has secured a line of credit facility with BBVA Bancomer for

5.0

million Mexican Pesos, or approximately

$243,810

USD (based upon the exchange rate at

March 31, 2021).

The revolving line of credit expires

May 2021.

The variable interest rate is TIIE plus

5.2%

resulting in a rate of

9.6%

as of

March 31, 2021.

The outstanding balance with Bancomer as of

March 31, 2021

was

5.0

million Mexican Pesos or

$243,810

USD and is due on demand.

	Interest Rate
	as of
	March 31, 2021			2021		2022		2023		2024		2025		2026
Australia - National Australia Bank		6.56	%		9		-		-		-		-		-
China - Industrial Bank		6.00	%		460		-		-		-		-		-
China - CCB Bank		6.00	%		153		-		-		-		-		-
Mexico - Ve Por Mas		7.30	%		-		-		-		-		-		-
Mexico - Bancomer Bank		9.60	%		244		-		-		-		-		-
USA - North Mill Capital		6.75	%		11,774		-		-		-		-		-
USA - Fifth Third Bank		3.60	%		-		-		-		-		-		-
USA - Resource Plus Seller Notes		1.85	%		300		300		700		-		-		-
Total				$	12,940	$	300	$	700	$	-	$	-	$	–

Summary of

Unused

Company Credit and Other Debt Facilities (in thousands):

	March 31,		December 31,
	2021		2020
Unused Availability:
United States / Canada	$	6,726	$	10,238
Australia		599		463
Mexico		390		262
Total Unused Availability	$	7,715	$	10,963

Management believes that based upon the continuation of the Company's existing credit facilities, projected results of operations, vendor payment requirements and other financing available to the Company (including amounts due to affiliates), sources of cash availability should be manageable and sufficient to support ongoing operations over the next year. However, delays in collection of receivables due from any of the Company's major clients, or a significant reduction in business from such clients could have a material adverse effect on the Company's cash resources and its ongoing ability to fund operations.