# UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

_________________

# FORM 10-K/A
Amendment No. 2

FOR ANNUAL AND TRANSITIONAL REPORTS
PURSUANT TO SECTIONS 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

# (Mark One)

|X |  | ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the
fiscal year ended December 31, 2005
|- |  | --------------------------------------------------------------------------------------------------------------------------------

OR

|__ |  | TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the
transition period from __________ to __________
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------

Commission file number
0-27824

SPAR GROUP, INC.
(Exact name of registrant as specified in its charter)

|Delaware                                                       | 33-0684451                          
|-------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.)
|
|(Address of principal executive offices)                       | (Zip Code)                          

Registrants
telephone number, including area code: (914) 332-4100

Securities registered
pursuant to Section 12(b) of the Act: None

Securities registered
pursuant to section 12(g) of the Act: Common Stock, par value $.01 per share

Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405
of the Securities Act.  YES    NO

Indicate
by check mark if the  registrant  is not  required  to file  reports  pursuant to Section
13 or Section  15(d) of the Act.  YES    NO

Indicate
by check mark whether the Registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve
months (or for such shorter period that the Registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.  YES  
  NO

Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is
not contained herein, and will not be contained, to the best of Registrants
knowledge, in definitive proxy or information statements incorporated by reference in Part
III of this Form 10-K or any amendment to this Form 10-K.

Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer,
or a non-accelerated filer. See definition of accelerated filer and large
accelerated filer in Rule 12b-2 of the Exchange Act.).

Large Accelerated Filer  
  Accelerated Filer  Non-Accelerated Filer

Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act.) YES    NO

The
aggregate market value of the Common Stock of the Registrant held by non-affiliates of the
Registrant on June 30, 2005, based on the closing price of the Common Stock as reported by
the Nasdaq Capital Market on such date, was approximately $10,083,534.

The
number of shares of the Registrants Common Stock outstanding as of December 31,
2005, was 18,916,847 shares.

DOCUMENTS
INCORPORATED BY REFERENCE: None.

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# Introduction

This Form 10-K/A (Amendment No. 2)
amends and restates certain sections, paragraphs or sentences of the Annual Report for the
Fiscal Year ended December 31, 2005, on Form 10-K to correct certain immaterial
typographical and clerical errors (by substituting the indicated restatements that include
such corrections) for general cleanup purposes, including use in the registrants
annual report to its shareholders.

# Amendments

The next to the last sentence in the
second paragraph of the introduction to Part I is restated as set forth below to insert
the word by.

| | Although
the Company believes that its plans, intentions and expectations reflected in or suggested
by such forward-looking statements are reasonable, it cannot assure
that such plans, intentions or expectations will be achieved in
whole or in part. You should carefully review the risk factors described below (see
Item 1A  Risk Factors) and any other cautionary statements
contained in this Annual Report on Form 10-K. All forward-looking statements attributable
to the Company or persons acting on its behalf are expressly
qualified by all such risk factors and other cautionary statements.
The Company undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by law.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The first sentence of the first
paragraph of Item 1 is restated as set forth below to change the word
Marketing to Merchandising.

| | The
SPAR Group, Inc. (formerly known as PIA Merchandising Services, Inc.), a Delaware
corporation (SGRP), and its subsidiaries (together with SGRP, the SPAR
Group or the Company), is a supplier of merchandising and other
marketing services throughout the United States and internationally. In 2002, the Company
sold its Incentive Marketing Division, SPAR Performance Group, Inc. (SPGI).
The Companys operations are currently divided into two divisions: the Domestic
Merchandising Services Division and the International Merchandising Services Division. The
Domestic Merchandising Services Division provides merchandising and marketing services,
in-store event staffing, product sampling, Radio Frequency Identification
(RFID) services, technology services and marketing research to manufacturers
and retailers in the United States. The various services are primarily performed in mass
merchandisers, electronics store chains, drug store chains and convenience and grocery
stores. The International Merchandising Services Division was established in July 2000 and
currently provides similar merchandising and marketing services through a wholly owned
subsidiary in Canada, through 51% owned joint venture subsidiaries in India, South Africa,
Turkey and Romania, and through 50% owned joint ventures in Japan and China. In September
2005, the Company entered into a 51% owned joint venture subsidiary in Lithuania which is
project to begin operations in April 2006. The Company continues to focus on expanding its
merchandising and marketing services business throughout the world.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The last sentence of the first
paragraph of Item 1. Business, SALES AND MARKETING, International Merchandising
Services Division is restated as set forth below to insert a comma after the
word Third.

| | The
Companys marketing efforts within its International Merchandising Services Division
are three fold. First, the Company endeavors to develop new markets through acquisitions.
The Companys international acquisition team, whose primary focus is to seek out and
develop acquisitions throughout the world, consists of personnel located in the United
States, Greece and Australia. Personnel from information technology, field operations,
client services and finance support the international acquisition team. Second, the
Company offers global merchandising solutions to clients that have worldwide distribution.
This effort is spearheaded out of the Companys headquarters in the United States.
Third, the Company develops local markets through various joint ventures or subsidiaries
throughout the world.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

2

---

The second sentence of the first
paragraph of Item 1A. Risk Factors is restated as set forth below to replace
the word risks with risk.

| | There
are various risks associated with the Companys growth and operating strategy. The
risk factors presented below are the ones that the Company currently considers material
based on best estimates and includes forward-looking statements within the
meaning of the Securities Laws. Forward-looking statements involve known and unknown
risks, uncertainties and other factors that could cause the Companys actual results,
performance and achievements, whether expressed or implied by such forward-looking
statements, to not occur or be realized or to be less than expected. Additional risks may
be facing the Company, the industry, or the economy in general, whether domestically or
internationally. The Company may not be aware of some risks and may currently consider
other risks immaterial, but any risk may develop at any time into actual events that
adversely affect the Company. There also may be risks that a particular investor would
view differently from the Company, and current analysis may be wrong. The Company
expressly disclaims any obligation to update or revise any forward-looking statements or
any of these risks in whole or in part, whether as a result of new information, future
events or otherwise, except as required by law.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Clause (iv) of the second paragraph
of the risk factor entitled Inability to Identify, Acquire and Successfully
Integrate Acquisitions is restated as set forth below to change a
colon to a semicolon preceding clause (v).

| | The
successful integration of these acquisitions also may involve a number of additional
risks, including: (i) the inability to retain the clients of the acquired business; (ii)
the lingering effects of poor client relations or service performance by the acquired
business, which also may taint the Companys existing businesses; (iii) the inability
to retain the desirable management, key personnel and other employees of the acquired
business; (iv) the inability to fully realize the desired efficiencies and economies of
scale; (v) the inability to establish, implement or police the Companys existing
standards, controls, procedures and policies on the acquired business; (vi) diversion of
management attention; and (vii) exposure to client, employee and other legal claims for
activities of the acquired business prior to acquisition. In addition, any acquired
business could perform significantly worse than expected.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The risk factor entitled,
Risks Associated with International Businessis restated as set forth
below by replacing a comma at the end of the first bullet point and a period at the end of
the second bullet point each with a semi-colon.

| |  |  |  | "Political
and economic risks, including political instability;
| |  | - |  | ---------------------------------------------------------------

| |  |  |  | Various
forms of protectionist trade legislation which currently exist, or have been proposed, in
some foreign countries;"
| |  | - |  | --------------------------------------------------------------------------------------------------------------------------

The last sentence of Item 7.
Managements Discussion and Analysis of Financial Condition and Results of
Operations. Results from continuing operations for the twelve months ended December 31,
2004, compared to twelve months ended December 31, 2003, Cost of Revenues is restated as set forth below in order to insert a period at the end of
such sentence.

| | Cost
of revenues from operations consists of in-store labor and field management wages, related
benefits, travel and other direct labor-related expenses. Cost of revenues decreased by
$8.7 million in 2004 and as a percentage of net revenues was 65.5% for the twelve months
ended December 31, 2004, which was consistent with 65.3% for the twelve months ended
December 31, 2003. Approximately 87% and 85% of the field services were purchased from the
Companys affiliate, SMS, in 2004 and 2003, respectively (see Item 13
 Certain Relationships and Related Transactions, below). SMSs increased
share of field services resulted from its more favorable cost structure.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

3



---

The first sentence of the fourth
paragraph of Item 11. Executive Compensation and Other Information of SPAR Group,
Inc., Stock Option and Purchase Plans is restated as set forth below in order to
replace the word specific with specified.

| | The
1995 Plan provided for the granting of either incentive or nonqualified stock options to
specified employees, consultants, and directors of the Company for the purchase of up to
3,500,000 shares of SGRPs common stock. The options had a term of ten years
from the date of issuance, except in the case of incentive stock options granted to
greater than 10% stockholders for which the term was five years. The exercise price of
nonqualified stock options must have been equal to at least 85% of the fair market value
of SGRPs common stock at the date of grant. Since 2000, SGRP has not granted any new
options under this plan. During 2005, 250 options to purchase shares of SGRPs common
stock were exercised. At December 31, 2005, options to purchase 14,375 shares of
SGRPs common stock remain outstanding under this plan. The 1995 Plan was superseded
by the 2000 Plan with respect to all new options issued.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Footnote 1 to the table
Security Ownership of Certain Beneficial Owners of SGRP contained in
Item 12. Security Ownership of Certain Beneficial Owners and Management. is
restated as set forth below in order to insert , Suite 600 following the word
Road.

| | (1) |  | The address of such owners is c/o SPAR Group, Inc. 580 White Plains Road, Suite 600,
Tarrytown, New York 10591.
| | ---- |  | ----------------------------------------------------------------------------------------------------------------

The subheading for Item 6 of the
Notes to the Consolidated Financial Statements appearing on page F-22 is restated as set
forth below in order to replace the word continue with continued.

| |  | 6. Income Taxes (continued)"
| |  | -----------------------------

The subheading entitled Item.
14 Net Income (Loss) Per Share (continued) appearing at the top of page F-32 of the
Notes to the Consolidated Financial Statements is restated as set forth below in order to
change it to the correct subheading.

| |  | 15. Quarterly Financial Data (Unaudited) (continued)"
| |  | ------------------------------------------------------

# Index of Exhibits

|ExhibitNumber |  | Description
|------------- |  | -----------

|31.1 |  | Certification
of the CEO pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002, and filed herewith.
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------

|31.2 |  | Certification
of the CFO pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002, and filed herewith.
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------

|32.1 |  | Certification
of the CEO pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, and filed herewith.
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------

|32.2 |  | Certification
of the CFO pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, and filed herewith.
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------

4



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# SIGNATURES

Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the
Registrant has duly caused this amendment to the report to be signed on its behalf by the
undersigned, thereunto duly authorized.

| | SPAR Group, Inc.                                                                                      
| | ------------------------------------------------------------------------------------------------------
| | /s/ Charles Cimitile
        Charles Cimitile
        Chief Financial Officer, Treasurer and Secretary
| | Date: June 21, 2006                                                                                   

5