1 unchanged sentence
Disclosure Controls and Procedures
−Removed: Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934 as amended (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to
−Removed: allow timely decisions regarding required disclosure.
+Added: Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934 as amended (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2020, as required by the Rule 13a-15(b) under the Exchange Act.
Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of December 31, 2020.
−Removed: Management’s Report on Internal Control Over Financial Reporting
+Added: Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Exchange Act.
3 unchanged sentences
Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2020, as required by Rule 13a-15(c) under the Exchange Act.
−Removed: In making this assessment, we used the criteria set forth in the framework in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
+Added: In making this assessment, we used the criteria set forth in the framework in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
Based on its evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2020.
−Removed: The effectiveness of the Company’s internal control over financial reporting as of December 31, 2019, has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein.
+Added: The effectiveness of the Company’s internal control over financial reporting as of December 31, 2020, has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein.
Changes in Internal Control Over Financial Reporting
8 unchanged sentences
The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
−Removed: Projections of any evaluation of controls’
−Removed: effectiveness to future periods are subject to risks.
+Added: Projections of any evaluation of controls’ effectiveness to future periods are subject to risks.
Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies and procedures.
Other Information
−Removed: Amended and Restated Credit Agreement
−Removed: On March 10, 2020, the Company entered into a second amended and restated senior secured credit facility comprised of a $86,000,000 term loan facility and a $54,000,000 revolving credit facility, amending and restating the senior secured credit facility entered into on December 1, 2016 (“Amended and Restated Credit Agreement”).
−Removed: The material terms of the senior secured credit facility are as follows:
−Removed: Each of the term loan facility and revolving credit facility has a maturity date of March 10, 2025 (the “Maturity Date”).
−Removed: The credit facility is secured by all of the equity interests owned by the Company, and its direct and indirect domestic subsidiaries and, subject to agreed exceptions, the Company’s direct and indirect “first-tier”
−Removed: foreign subsidiaries and a
−Removed: perfected first priority security interest in all of the Company’s and its direct and indirect domestic subsidiaries’
−Removed: tangible and intangible assets.
−Removed: The Company’s direct and indirect existing and future wholly-owned domestic subsidiaries serve as guarantors to the Company’s obligations under the senior secured facility.
−Removed: At the Company’s option, the credit facility bears interest at a rate per annum equal to either (i) the “Base Rate”
−Removed: (which is the highest of (a) the rate publicly announced from time to time by the administrative agent as its “prime rate”, (b) the Federal Funds Rate plus 0.5% per annum and (c) the Eurodollar Rate, plus 1.0%), plus the applicable margin (as defined below) or (ii) Eurodollar Rate (adjusted for maximum reserves) as determined by the Administrative Agent, plus the applicable margin.
−Removed: The applicable margin is adjusted quarterly based upon the Company’s quarterly leverage ratio.
−Removed: Prior to the end of the first quarter following the closing of the credit facility, the applicable margin shall be a percentage per annum equal to 1.25% for the term loans and the revolving loans maintained as Base Rate loans or 2.25% for the term loans and revolving loans maintained as Eurodollar loans.
−Removed: The Term Loan is repayable in quarterly installments each in an amount equal to 1.25% of the original principal amount of the Term Loans outstanding on the Closing Date, commencing June 30, 2020, and a final payment of the outstanding principal amount of the Term Loan on the Maturity Date.
−Removed: Mandatory repayments of term loans shall be required from (subject to agreed exceptions) (i) 100% of the proceeds from asset sales by the Company and its subsidiaries, (ii) 100% of the net proceeds from issuances of debt by the Company and its subsidiaries, and (iii) 100% of the net proceeds from insurance recovery and condemnation events of the Company and its subsidiaries.
−Removed: The senior secured credit facility contains a number of covenants that, among other things, place restrictions on matters customarily restricted in senior secured credit facilities, including restrictions on indebtedness (including guarantee obligations), liens, fundamental changes, sales or disposition of property or assets, investments (including loans, advances, guarantees and acquisitions), transaction with affiliates, dividends and other payments in respect of capital stock, optional payments and modifications of other material debt instruments, negative pledges and agreements restricting subsidiary distributions and changes in line of business.
−Removed: In addition, the Company is required to comply with a total leverage ratio and fixed charge coverage ratio.
−Removed: The senior secured credit facility contains customary events of default, including cross-default to other material agreements, judgment default and change of control.
−Removed: The full text of the credit facility is set forth as Exhibit 10.22 to this Annual Report on Form 10-K and is incorporated herein by reference.
Directors, Executive Officers and Corporate Governance
−Removed: (a) Identification of Directors and Executive Officers.
−Removed: The information required hereunder is incorporated by reference from the sections of our Proxy Statement filed in connection with our 2020 Annual Meeting of Stockholders under the caption “Management.”
−Removed: (b) Code of Ethics.
−Removed: The information required hereunder is incorporated by reference from the sections of our Proxy Statement filed in connection with our 2020 Annual Meeting of Stockholders under the caption “Corporate Governance.”
−Removed: (c) Nominating Committee, Audit Committee, Audit Committee Financial Expert.
−Removed: The information required hereunder is incorporated by reference from the sections of our Proxy Statement filed in connection with our 2020 Annual Meeting of Stockholders under the caption “Corporate Governance.”
+Added: Identification of Directors and Executive Officers.
+Added: The information required hereunder is incorporated by reference from the sections of our Proxy Statement filed in connection with our 2021 Annual Meeting of Stockholders under the caption “Management.”
+Added: Code of Ethics.
+Added: The information required hereunder is incorporated by reference from the sections of our Proxy Statement filed in connection with our 2021 Annual Meeting of Stockholders under the caption “Corporate Governance.”
+Added: Nominating Committee, Audit Committee, Audit Committee Financial Expert.
+Added: The information required hereunder is incorporated by reference from the sections of our Proxy Statement filed in connection with our 2021 Annual Meeting of Stockholders under the caption “Corporate Governance.”
Executive Compensation
−Removed: The information required hereunder is incorporated by reference from the sections of our Proxy Statement filed in connection with our 2020 Annual Meeting of Stockholders under the caption “Corporate Governance,”
−Removed: “Executive Compensation,”
−Removed: “Summary Compensation Table”
−Removed: and “Outstanding Equity Awards At 2019 Fiscal Year End.”
+Added: The information required hereunder is incorporated by reference from the sections of our Proxy Statement filed in connection with our 2021 Annual Meeting of Stockholders under the caption “Corporate Governance,” “Executive Compensation,” “Summary Compensation Table” and “Outstanding Equity Awards At 2020 Fiscal Year End.”
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
−Removed: The information required hereunder is incorporated by reference from the sections of our Proxy Statement filed in connection with our 2020 Annual Meeting of Stockholders under the caption “Security Ownership of Certain Beneficial Owners.”
+Added: The information required hereunder is incorporated by reference from the sections of our Proxy Statement filed in connection with our 2021 Annual Meeting of Stockholders under the caption “Security Ownership of Certain Beneficial Owners.”
Certain Relationships and Related Transactions and Director Independence
−Removed: The information required hereunder is incorporated by reference from the sections in our Proxy Statement filed in connection with our 2020 Annual Meeting of the Stockholders under the caption “Corporate Governance.”
+Added: The information required hereunder is incorporated by reference from the sections in our Proxy Statement filed in connection with our 2021 Annual Meeting of the Stockholders under the caption “Corporate Governance.”
Principal Accounting Fees and Services
−Removed: The information required hereunder is incorporated by reference from the sections in our Proxy Statement filed in connection with our 2020 Annual Meeting of the Stockholders under the caption “Proposal No.
−Removed: 2 Ratification of Engagement of Independent Registered Public Accounting Firm.”
+Added: The information required hereunder is incorporated by reference from the sections in our Proxy Statement filed in connection with our 2021 Annual Meeting of the Stockholders under the caption “Proposal No.
+Added: 2 Ratification of Engagement of Independent Registered Public Accounting Firm.”
Exhibits and Financial Statement Schedule
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Consolidated Balance Sheets as of December 31, 2020 and 2019
−Removed: Consolidated Statement of Comprehensive Income for the years ended December 31, 2019 and 2018
−Removed: Consolidated Statement of Stockholders’
−Removed: Equity as of December 31, 2019 and 2018
+Added: Consolidated Statement of Income and Comprehensive Income for the years ended December 31, 2020 and 2019
+Added: Consolidated Statement of Stockholders’ Equity as of December 31, 2020 and 2019
Consolidated Statement of Cash Flows for the years ended December 31, 2020 and 2019
1 unchanged sentence
(a)(2) Financial Statement Schedule
−Removed: Schedule II—Valuation and Qualifying Accounts for the years ended December 31, 2019, and 2018
+Added: Schedule II—Valuation and Qualifying Accounts for the years ended December 31, 2020, and 2019
(a)(3) Exhibits:
−Removed: We hereby file as part of this Annual Report on Form 10−K the Exhibits listed in the attached Exhibit Index.
+Added: We hereby file as part of this Annual Report on Form 10−K the Exhibits listed in the attached Exhibit Index.
FORM 10-K SUMMARY
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We have audited the accompanying consolidated balance sheets of Information Services Group, Inc.
−Removed: and its subsidiaries (the "Company") as of December 31, 2019 and 2018, and the related consolidated statements of comprehensive income, of stockholders' equity and of cash flows for each of the two years in the period ended December 31, 2019, including the related notes and financial statement schedule listed in the index appearing under Item 15(a)(2) (collectively referred to as the "consolidated financial statements”).
+Added: and its subsidiaries (the “Company”) as of December 31, 2020 and 2019, and the related consolidated statements of income and comprehensive income, of stockholders’ equity and of cash flows for the years then ended, including the related notes and financial statement schedule listed in the index appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”).
We also have audited the Company's internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
−Removed: In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2019 in conformity with accounting principles generally accepted in the United States of America.
+Added: In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
−Removed: Change in Accounting Principle
−Removed: As discussed in Notes 7 and 3 to the consolidated financial statements, respectively, the Company changed the manner in which it accounts for leases in 2019 and the manner in which it accounts for revenue from contracts with customers in 2018.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control Over Financial Reporting appearing under Item 9A.
−Removed: Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits.
+Added: Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits.
We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.
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A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
−Removed: A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
+Added: A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;
2 unchanged sentences
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
+Added: Critical Audit Matters
+Added: The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.
+Added: The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
+Added: Revenue Recognition – Estimated Labor Hours to Complete Fixed Fee Contract Performance Obligations
+Added: As described in Note 2 to the consolidated financial statements, revenues related to fixed fee contracts are recognized as value is delivered to the customer, consistent with the transfer of control to the customer over time.
+Added: Revenue for these contracts is recognized proportionally over the term of the contract using an input method based on the proportion of labor hours incurred as compared to the total estimated labor hours for the fixed fee contract performance obligations, which management considers to be the best available indicator of the pattern and timing in which contract performance obligations are fulfilled and control transfers to the customer.
+Added: This percentage is multiplied by the contracted dollar amount of the project to determine the amount of revenue to recognize in an accounting period.
+Added: Revenue related to fixed fee contracts is a portion of the Company’s total revenue of $249 million for the year ended December 31, 2020.
+Added: The principal considerations for our determination that performing procedures relating to revenue recognition – estimated labor hours to complete fixed fee contract performance obligations is a critical audit matter are the significant judgment by management when developing the total estimated labor hours to complete fixed fee contract performance obligations used to determine the amount of revenue to recognize, which in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures to evaluate the total estimated labor hours to complete performance obligations used in revenue recognition for fixed fee contracts.
+Added: Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.
+Added: These procedures included testing the effectiveness of controls relating to the revenue recognition process, including controls over the determination of total estimated labor hours to complete fixed fee contract performance obligations.
+Added: The procedures also included, among others, (i) evaluating management’s process for determining the total estimate of labor hours to complete performance obligations;
+Added: (ii) evaluating the reasonableness of estimated labor hours used by management for a sample of fixed fee contracts;
+Added: (iii) testing actual hours incurred and recalculating the revenue recognized to date for a sample of fixed fee contracts;
+Added: and (iv) considering the factors that can affect the accuracy of estimated labor hours for a sample of fixed fee contracts.
+Added: Evaluating the revenue recognition for fixed fee contracts involved assessing management’s ability to reasonably estimate labor hours to complete the performance obligations by performing a comparison of the original estimated and actual hours incurred on similar completed fixed fee contracts.
/s/ PricewaterhouseCoopers LLP
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Deferred tax assets
−Removed: LIABILITIES AND STOCKHOLDERS’
+Added: LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
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Commitments and contingencies (Note 13)
−Removed: Stockholders’
+Added: Stockholders’ equity
Preferred stock, $ 0.001 par value;
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Accumulated deficit
−Removed: Total stockholders’
−Removed: Total liabilities and stockholders’
+Added: Total stockholders’ equity
+Added: Total liabilities and stockholders’ equity
The accompanying notes are an integral part of these consolidated financial statements.
INFORMATION SERVICES GROUP, INC.
−Removed: CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
+Added: CONSOLIDATED STATEMENT OF INCOME AND COMPREHENSIVE INCOME
(In thousands, except per share data)
−Removed: Years Ended December 31,
Operating expenses
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Interest expense
−Removed: Foreign currency transaction gain (loss)
+Added: Foreign currency transaction loss
Income before taxes
3 unchanged sentences
Comprehensive income:
−Removed: Foreign currency translation, net of tax (expense) benefit of $(33) and $470, respectively.
+Added: Foreign currency translation, net of tax expense of $ 760 and $ 33 , respectively
Comprehensive income
1 unchanged sentence
INFORMATION SERVICES GROUP, INC.
−Removed: CONSOLIDATED STATEMENT OF STOCKHOLDERS’
−Removed: (in thousands)
+Added: CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
+Added: (In thousands, except per share data)
Comprehensive
−Removed: Stockholders’
+Added: Stockholders’
Balance December 31, 2018
−Removed: Other comprehensive loss
−Removed: Impact of change in accounting policy
+Added: Other comprehensive income
Treasury shares repurchased
−Removed: Proceeds from issuance of ESPP
−Removed: Issuance of treasury shares for RSU vested
+Added: Proceeds from issuance of ESPP shares
+Added: Issuance of treasury shares
Issuance of common stock for contingent earn-out
−Removed: Issuance of common stock for RSU vested
+Added: Issuance of common stock for RSUs vested
Stock based compensation
Balance December 31, 2019
−Removed: Other comprehensive gain
+Added: Other comprehensive income
Treasury shares repurchased
−Removed: Proceeds from issuance of ESPP
+Added: Proceeds from issuance of ESPP shares
Issuance of treasury shares
−Removed: Issuance of common stock for contingent earn-out
−Removed: Issuance of common stock for RSU vested
+Added: Issuance of common stock for RSUs vested
Stock based compensation
4 unchanged sentences
(in thousands)
−Removed: Years Ended December 31,
Cash flows from operating activities
2 unchanged sentences
Amortization of intangible assets
−Removed: Deferred tax expense (benefit) from stock issuances
+Added: Deferred tax expense from stock issuances
+Added: Write-off of deferred financing costs
Amortization of deferred financing costs
2 unchanged sentences
Provisions for accounts receivable
−Removed: Deferred tax provision
+Added: Deferred tax (benefit) provision
Loss on disposal of fixed assets
8 unchanged sentences
Purchase of furniture, fixtures and equipment
+Added: Neuralify acquisition (Note 4)
Net cash used in investing activities
Cash flows from financing activities
−Removed: Proceeds from debt
−Removed: Principal payments on borrowings
−Removed: Payment of Alsbridge Notes
−Removed: Proceeds from issuance of employee stock purchase plan shares
+Added: Principal payments on borrowings, net
Payment of contingent consideration
+Added: Proceeds from issuance of employee stock purchase plan shares
+Added: Debt financing costs
Payments related to tax withholding for stock-based compensation
−Removed: Equity securities repurchased
+Added: Treasury shares repurchased
Net cash used in financing activities
Effect of exchange rate changes on cash
−Removed: Net decrease in cash, cash equivalents, and restricted cash
+Added: Net increase (decrease) in cash, cash equivalents, and restricted cash
Cash, cash equivalents , and restricted cash, beginning of period
9 unchanged sentences
(tabular amounts in thousands, except per share data)
−Removed: NOTE 1—DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIO NS
+Added: NOTE 1—DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIO NS
Information Services Group, Inc.
−Removed: (the “Company”, or “ISG”) was founded in 2006 with the strategic vision to become a high-growth, leading provider of information-based advisory services.
+Added: (the “Company”, or “ISG”) was founded in 2006 with the strategic vision to become a high-growth, leading provider of information-based advisory services.
The Company specializes in digital transformation services, including automation, cloud and data analytics;
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market intelligence and technology research and analysis.
−Removed: NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
+Added: NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Principles of Consolidation
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries.
−Removed: These consolidated financial statements and footnotes are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
+Added: These consolidated financial statements and footnotes are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
All intercompany accounts and transactions have been eliminated in consolidation.
3 unchanged sentences
Actual results may differ from those estimates.
−Removed: The complexity of the estimation process and issues related to the assumptions, risks and uncertainties inherent in the application of the revenue recognition guidance for contracts in which controls is transferred to the customer over time affect the amounts of revenues, expenses, contract assets and contract liabilities.
+Added: The complexity of the estimation process and issues related to the assumptions, risks and uncertainties inherent in the application of the revenue recognition guidance for contracts in which control is transferred to the customer over time affect the amounts of revenues, expenses, contract assets and contract liabilities.
Numerous internal and external factors can affect estimates.
1 unchanged sentence
allowance for doubtful accounts, useful lives of furniture, fixtures and equipment and definite lived intangible assets, depreciation expense, fair value assumptions in evaluating goodwill for impairment, income taxes and deferred tax asset valuation, and the valuation of stock-based compensation.
+Added: On March 11, 2020, the World Health Organization characterized COVID-19 as a pandemic.
+Added: Any future asset impairment charges, increase in allowance for doubtful accounts, or restructuring charges could be more likely if the negative effects of the COVID-19 pandemic continue and will be dependent on the severity and duration of this crisis.
+Added: To date, the Company has not observed any material impairments of its assets or a significant change in the fair value of assets due to the COVID-19 pandemic.
Business Combinations
−Removed: We have acquired businesses critical to the Company’s long‑term growth strategy.
+Added: We have acquired businesses critical to the Company’s long-term growth strategy.
Results of operations for acquisitions are included in the accompanying consolidated statement of comprehensive income from the date of acquisition.
7 unchanged sentences
Restricted Cash
−Removed: Restricted cash consists of cash and cash equivalents which the Company has committed to fulfill certain obligations and are not available for general corporate purposes.
+Added: Restricted cash consists of cash and cash equivalents which the Company has committed for rent deposits and are not available for general corporate purposes.
+Added: INFORMATION SERVICES GROUP, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: (tabular amounts in thousands, except per share data)
Accounts Receivable, Contract Assets and Allowance for Doubtful Accounts
−Removed: Our trade receivables primarily consist of amounts due for services already performed via fixed fee or time and materials arrangements.
+Added: Our trade receivables primarily consist of amounts due for services already performed.
The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of clients to pay fees or for disputes that affect its ability to fully collect billed accounts receivable.
1 unchanged sentence
However, our actual experience may vary from these estimates.
−Removed: If the financial condition of our clients were to deteriorate, resulting in their
−Removed: INFORMATION SERVICES GROUP, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: (tabular amounts in thousands, except per share data)
−Removed: inability or unwillingness to pay their invoices, we may need to record additional allowances or write‑offs in future periods.
−Removed: To the extent the provision relates to a client’s inability or unwillingness to make required payments, the provision is recorded as bad debt expense, which is classified within selling, general and administrative expense in the accompanying consolidated statement of comprehensive income.
−Removed: Historically, the Company’s bad debt reserves and write-offs have not been significant.
+Added: If the financial condition of our clients were to deteriorate, resulting in their inability or unwillingness to pay their invoices, we may need to record additional allowances or write-offs in future periods.
+Added: To the extent the provision relates to a client’s inability or unwillingness to make required payments, the provision is recorded as bad debt expense, which is classified within selling, general and administrative expense in the accompanying consolidated statement of comprehensive income.
+Added: Historically, the Company’s bad debt reserves and write-offs have not been significant.
The provision for unbilled services is recorded as a reduction to revenues to the extent the provision relates to fee adjustments and other discretionary pricing adjustments.
−Removed: Historically, the Company’s unbilled receivable reserves and write-offs have not been significant.
+Added: Historically, the Company’s unbilled receivable reserves and write-offs have not been significant.
Prepaid Expenses and Other Assets
18 unchanged sentences
Subsequent increases in value are not recognized in the financial statements.
−Removed: The Company adopted Accounting Standards Update (“ASU”) 2017-04, "Intangibles - Goodwill and Other (Topic 350):
−Removed: Simplifying the Test for Goodwill Impairment" effective December 30, 2017 which has eliminated Step 2 from the goodwill impairment test.
−Removed: Under this update, if an impairment is identified, an entity should record the goodwill impairment as an amount resulting from the comparison of the fair value of a reporting unit with its carrying amount.
−Removed: There was no impairment of goodwill during the years ended December 31, 2019 and 2018, nor were any indicators identified in 2019 or 2018 that would suggest that it is more likely than not that the Company’s reporting unit is impaired.
+Added: There was no impairment of goodwill during the years ended December 31, 2020 and 2019, nor were any indicators identified in 2020 or 2019 that would suggest that it is more likely than not that the Company’s reporting unit is impaired.
INFORMATION SERVICES GROUP, INC.
2 unchanged sentences
Long-Lived Assets
−Removed: Long lived assets, excluding goodwill and indefinite lived intangibles, to be held and used by the Company are reviewed to determine whether any significant change in the long-lived asset’s physical condition, a change in industry conditions or a reduction in cash flows associated with the asset group that contains the long-lived asset.
+Added: Long lived assets, excluding goodwill and indefinite lived intangibles, to be held and used by the Company are reviewed to determine whether any significant change in the long-lived asset’s physical condition, a change in industry conditions or a reduction in cash flows associated with the asset group that contains the long-lived asset.
If these or other factors indicate the carrying amount of the asset group, which is the lowest level for which identifiable cash flows exist that are separately identifiable from other cash flows, may not be recoverable, the Company determines whether impairment has occurred through the use of an undiscounted cash flow analysis.
4 unchanged sentences
Debt Issuance Costs
−Removed: Costs directly incurred in obtaining long‑term financing, typically bank and attorney fees, are deferred and are amortized over the life of the related loan using the effective interest method.
+Added: Costs directly incurred in obtaining long-term financing, typically bank and attorney fees, are deferred and are amortized over the life of the related loan.
Deferred issuance costs are classified as a direct deduction to the long-term debt in the accompanying consolidated balance sheet.
11 unchanged sentences
In these agreements, the clients acknowledge that they will pay based upon the amount of time spent on the project or an agreed upon fee structure.
−Removed: Revenues for time and materials contracts, which may include capped fees or “not-to-exceed”
−Removed: clauses, are recognized based on the number of hours worked by our advisors at an agreed upon rate per hour and are recognized in the period in which services are performed.
+Added: Revenues for time and materials contracts, which may include capped fees or “not-to-exceed” clauses, are recognized based on the number of hours worked by our advisors at an agreed upon rate per hour and are recognized in the period in which services are performed.
Revenues for time and materials contracts are billed monthly, semimonthly or in accordance with the specific contractual terms of each project.
For contract with capped fees or not-to-exceed clauses, we monitor our performance and fees billed to ensure that revenue is not recognized in excess of the contractually capped fee.
−Removed: Revenues related to fixed fee contracts are recognized into revenue as value is delivered to the customer, consistent with the transfer of control to the customer over time.
−Removed: Revenue for these contracts is recognized proportionally over the term of the contract using an input method based on the proportion of labor hours incurred as compared to the total estimated labor hours for the project, which we consider the best available indicator of the pattern and timing in which contract obligations are fulfilled and control transfers to the customer.
+Added: Revenues related to fixed fee contracts are recognized as value is delivered to the customer, consistent with the transfer of control to the customer over time.
+Added: Revenue for these contracts is recognized proportionally over the term of the contract using an input method based on the proportion of labor hours incurred as compared to the total estimated labor hours for the fixed fee contract performance obligations, which we consider the best available indicator of the pattern and timing in which contract performance obligations are fulfilled and control transfers to the customer.
This percentage is multiplied by the contracted dollar amount of the project to determine the amount of revenue to recognize in an accounting period.
4 unchanged sentences
For ongoing managed services contract, revenue is recognized over time, consistent with the weekly or monthly fee specified within such arrangements.
−Removed: We also derive revenues based on negotiating reductions in network costs of companies with the entity’s related service providers and providing other services such as audits of network and communication expenses, and consultation for network architecture.
+Added: We also derive revenues based on negotiating reductions in network costs of companies with the entity’s related service providers and providing other services such as audits of network and communication expenses, and consultation for network architecture.
These contracts can be fixed in fees or can be based on the level of savings achieved related to its communications costs.
10 unchanged sentences
Conversely, revenue associated with research subscriptions is recognized over time, as the customer accesses our data or related platforms.
−Removed: The agreements entered into in connection with a project typically allow our clients to terminate early due to breach or for convenience with 30 days’
+Added: The agreements entered into in connection with a project typically allow our clients to terminate early due to breach or for convenience with 30 days’ notice.
In the event of termination, the client is contractually required to pay for all time, materials and expenses incurred by us through the effective date of the termination.
8 unchanged sentences
Reimbursable expenditures totaled $ 1.7 million and $ 9.6 million for the years ended December 31, 2020 and 2019, respectively.
+Added: The decrease was attributable to pandemic related travel restrictions that occurred throughout the majority of 2020.
Direct Costs and Expenses for Advisors
11 unchanged sentences
The Company places its cash investments with high quality financial institutions.
−Removed: The Company extends credit to its customers based upon an evaluation of the customer’s financial condition and credit history and generally does not require collateral.
+Added: The Company extends credit to its customers based upon an evaluation of the customer’s financial condition and credit history and generally does not require collateral.
INFORMATION SERVICES GROUP, INC.
3 unchanged sentences
The Company makes treasury stock purchases in the open market pursuant to the share repurchase program, which was most recently approved by the Board of Directors on November 1, 2019.
−Removed: Treasury stock is recorded on the consolidated balance sheet at cost as a reduction of stockholders’
+Added: Treasury stock is recorded on the consolidated balance sheet at cost as a reduction of stockholders’ equity.
Shares are released from Treasury at original cost on a first-in, first-out basis, with any gain on the sale reflected as an adjustment to additional paid-in capital.
1 unchanged sentence
Foreign Currency Translation
−Removed: The assets and liabilities of the Company’s foreign subsidiaries are translated into U.S.
+Added: The assets and liabilities of the Company’s foreign subsidiaries are translated into U.S.
dollars at exchange rates in effect at the end of the reporting period.
Revenue and expense items are translated at average exchange rates for the reporting period.
−Removed: Resulting translation adjustments are included in the accompanying statement of comprehensive income and accompanying statement of stockholders’
−Removed: equity as a component of Accumulated Other Comprehensive Loss .
+Added: Resulting translation adjustments are included in the accompanying statement of comprehensive income and accompanying statement of stockholders’ equity as a component of Accumulated Other Comprehensive Loss .
The functional currency of the Company and its subsidiaries is the respective local currency.
−Removed: The Company has contracts denominated in foreign currencies and therefore, a portion of the Company’s revenues are subject to foreign currency risks.
+Added: The Company has contracts denominated in foreign currencies and therefore, a portion of the Company’s revenues are subject to foreign currency risks.
Transactional currency gains and losses that arise from transactions denominated in currencies other than the functional currencies of our operations are recorded in Foreign Currency Translation in the accompanying consolidated statement of comprehensive income.
Fair Value of Financial Instruments
−Removed: The carrying value of the Company’s cash and cash equivalents, receivables, accounts payable, other current liabilities, and accrued interest approximate fair value.
+Added: The carrying value of the Company’s cash and cash equivalents, receivables, accounts payable, other current liabilities, and accrued interest approximate fair value.
Fair value measurements were applied with respect to our nonfinancial assets and liabilities measured on a nonrecurring basis, which would consist of measurements primarily to goodwill, intangible assets and other long-lived assets, and assets acquired and liabilities assumed in a business combination.
21 unchanged sentences
Contingent consideration (1)
−Removed: (1) Contingent consideration is included in “Accrued expenses and other current liabilities.”
−Removed: The fair value measurement of this contingent consideration is classified within Level 3 of the fair value hierarchy and reflects the Company’s own assumptions in measuring fair values using the income approach.
+Added: The current and noncurrent Contingent consideration is included in “Accrued expenses” and “Other current liabilities,” respectively.
+Added: The fair value measurement of this contingent consideration is classified within Level 3 of the fair value hierarchy and reflects the Company’s own assumptions in measuring fair values using the income approach .
In developing these estimates, the Company considered certain performance projections, historical results, and industry trends.
This amount was estimated through a valuation model that incorporated probability-weighted assumptions related to the achievement of these milestones and the likelihood of the Company making payments.
−Removed: These cash outflow projections have then been discounted using a rate ranging from 14.5% to 28.5%.
+Added: These cash outflow projections have then been discounted using a rate of 2.50 % .
The following table represents the change in the contingent consideration liability during the years ended December 31, 2020 and 2019:
Beginning Balance
+Added: Neuralify contingent consideration accrued
Payment of contingent consideration
−Removed: Change in value of contingent consideration
Accretion of contingent consideration
−Removed: Unrealized (loss) gain related to currency translation
+Added: Unrealized gain (loss) related to currency translation
Ending Balance
2 unchanged sentences
(tabular amounts in thousands, except per share data)
−Removed: The Company’s financial instruments include outstanding borrowings of $86.9 million at December 31, 2019 and $99.1 million at December 31, 2018, which are carried at amortized cost.
+Added: The Company’s financial instruments include outstanding borrowings of $ 78.8 million at December 31, 2020 and $ 86.9 million at December 31, 2019, which are carried at amortized cost.
+Added: The effective interest rate of the outstanding borrowings was 2.5 % and 5.2 % at December 31, 2020 and December 31, 2019, respectively.
The fair value of debt is classified within Level 3 of the fair value hierarchy.
−Removed: The fair value of the Company’s outstanding borrowings is approximately $86.7 million and $98.9 million at December 31, 2019 and 2018, respectively.
+Added: The fair value of the Company’s outstanding borrowings is approximately $ 77.7 million and $ 86.7 million at December 31, 2020 and 2019, respectively.
The fair values of debt have been estimated using a discounted cash flow analysis based on the Company's incremental borrowing rate for similar borrowing arrangements.
8 unchanged sentences
Our provision for income taxes also includes the impact of provisions established for uncertain income tax positions, as well as the related interest.
−Removed: In December 2017, the Tax Cuts and Jobs Act (the “TCJ Act”) legislation was enacted.
−Removed: The TCJ Act includes significant changes to the U.S.
−Removed: corporate tax system, including a U.S.
−Removed: federal corporate income tax rate reduction from 35% to 21% and other changes.
−Removed: Accounting Standards Codification 740, Income Taxes, requires the effects of changes in tax rates and laws on deferred tax balances to be recognized in the period in which the legislation was enacted.
−Removed: However, with respect to the TCJ Act, given the significance of the change and the time of year in which it was enacted, guidance was provided that enabled companies to recognize the impacts on a provisional basis.
−Removed: As such, we have accounted for the tax effects as a result of the enactment of the TCJ Act as of December 31, 2017 on a provisional basis and have updated our provisional assessment of the tax effects of the TCJ Act during the year ended December 31, 2018.
Recently Issued Accounting Pronouncements
−Removed: In September 2018, the FASB issued new guidance which requires a customer in a cloud computing arrangement to determine which implementation costs to capitalize as assets or expense as incurred.
−Removed: Under the new guidance, capitalized implementation costs related to a hosting arrangement that is a service contract will be amortized over the term of the hosting arrangement, beginning when the module or component of the hosting arrangement is ready for its intended use.
−Removed: This update is effective for annual periods beginning after December 15, 2019, and interim periods within those periods, and early adoption is permitted.
−Removed: The Company will adopt prospectively for all arrangements within the scope of ASU 2018-15.
−Removed: In November 2018, the FASB issued guidance to clarify that certain transactions between parties to collaborative arrangements should be accounted for in accordance with FASB revenue guidance when the counterparty is a customer.
−Removed: This guidance also prohibits the presentation of collaborative arrangements as revenues from contracts with customers if the counterparty is not a customer.
−Removed: This guidance, which is required to be applied retrospectively and is effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted, is not expected to have an impact on the Company’s consolidated financial statement.
In June 2016, the FASB issued new guidance on the measurement of credit losses for financial assets measured at amortized cost, which includes accounts receivable, and available-for-sale debt securities.
−Removed: The new guidance replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses.
−Removed: This update is effective for annual periods beginning after December 15, 2019, including interim periods within those annual periods.
−Removed: Early adoption is permitted for annual periods beginning after December 15, 2018, including interim periods within those annual periods.
−Removed: At its July 17th meeting, the FASB voted to propose a deferral of the effective date of this guidance to smaller reporting companies to fiscal years beginning after December 15, 2022.
+Added: The new guidance replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses and additional disclosures.
+Added: As a smaller reporting company, this guidance is effective for fiscal years beginning after December 15, 2022.
The Company is currently evaluating the potential impact of adopting this guidance on its financial statements.
−Removed: INFORMATION SERVICES GROUP, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: (tabular amounts in thousands, except per share data)
−Removed: NOTE 3—REVENUE
−Removed: In May 2014, the FASB issued Accounting Standards Update No.
−Removed: 2014-09 (“ASC Topic 606”), “Revenue from Contracts with Customers”.
−Removed: ASC Topic 606 supersedes the revenue recognition requirements in ASC Topic 605, “Revenue Recognition”
−Removed: (“ASC Topic 605”) and requires the recognition of revenue upon transfer of control of promised services and products to clients in an amount that reflects the consideration we expect to receive in exchange for those services and products.
−Removed: We adopted ASC Topic 606 as of January 1, 2018 using the cumulative catch-up transition method.
+Added: NOTE 3—REVENUE
The majority of our revenue is derived from contracts that can span from a few months to several years.
2 unchanged sentences
A performance obligation is a promise in a contract to transfer a distinct good or service to the client and is the unit of account.
−Removed: A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied.
+Added: A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied.
The majority of our contracts have a single performance obligation as the promise to transfer the individual services is not separately identifiable from other promises in the contracts and, therefore, not distinct.
−Removed: For contracts with multiple performance obligations, including our managed service implementation and software and implementation contract types, the Company allocates the transaction price to each performance obligation using our best estimate of the standalone selling price, or SSP, of each distinct good or service in the contract.
−Removed: We used practical expedients permitted by the standard when applicable.
−Removed: These practical expedients included:
−Removed: applying the new guidance only to contracts that are not completed as of January 1, 2018;
−Removed: expensing the incremental costs to obtain a contract as incurred when the expected amortization period is one year or less;
−Removed: presenting all revenue net of any related sales tax.
+Added: For contracts with multiple performance obligations, including our managed service (GovernX) implementation, software and implementation, and research and subscription contracts, the Company allocates the transaction price to each performance obligation using our best estimate of the standalone selling price, or SSP, of each distinct good or service in the contract.
Our contracts may include promises to transfer multiple services and products to a client.
Determining whether services and products are considered distinct performance obligations that should be accounted for separately versus together may require judgment.
−Removed: Estimates were required to determine the SSP for each distinct performance obligation identified within our managed service implementation contracts, software and implementation contracts, and research and subscription contracts.
+Added: Estimates were required to determine the SSP for each distinct performance obligation identified within our managed service (including GovernX) implementation contracts, software and implementation contracts, and research and subscription contracts.
Contract Balances
5 unchanged sentences
Generally, billing occurs subsequent to revenue recognition, resulting in contract assets.
−Removed: However, we sometimes receive advances or deposits before revenue is recognized, resulting in contract liabilities.
−Removed: Contract assets and liabilities are reported in the current assets and current liabilities sections of the consolidated balance sheet, at the end of each reporting period, based on the timing of the satisfaction of the related performance obligation(s).
+Added: However, we sometimes receive
+Added: INFORMATION SERVICES GROUP, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: (tabular amounts in thousands, except per share data)
+Added: advances or deposits before revenue is recognized, resulting in contract liabilities.
+Added: Contract assets and liabilities are generally reported in the current assets and current liabilities sections of the consolidated balance sheet, at the end of each reporting period, based on the timing of the satisfaction of the related performance obligation(s).
+Added: For multi-year software sales with annual invoicing, we perform a significant financing component calculation and recognize the associated interest income throughout the duration of the financing period.
+Added: In addition, we reclassify the resulting contract asset balances as current and noncurrent receivables as receipt of the consideration is conditional only on the passage of time and there are no performance risk factors present.
See the table below for a breakdown of contract assets and contract liabilities.
2 unchanged sentences
Revenue recognized for the year ended December 31, 2019 that was included in the contract liability balance at January 1, 2019 was $ 5.9 million and represented primarily revenue from our software and implementation contracts, managed services contracts, and research contracts.
+Added: Revenue recognized for the year ended December 31, 2020 that was included in the contract liability balance at January 1, 2020 was $ 4.6 million and represented primarily revenue from our software and implementation contracts, managed services contracts, and research contracts.
+Added: Remaining performance obligations
+Added: As of December 31, 2020, the Company had $ 93.2 million of remaining performance obligations, the majority of which are expected to be satisfied within the next year.
+Added: NOTE 4 — ACQUISITION
+Added: Neuralify Acquisition
+Added: On July 8, 2020, a subsidiary of the Company executed an Asset Purchase Agreement with Neuralify, LLC (“the Agreement”), a firm focused on intelligent automation enablement solutions and services, and consummated the acquisition of substantially all of the assets and assumed certain liabilities of Neuralify, LLC.
+Added: The primary reason for the acquisition was to expand the capabilities of ISG’s pure-play automation service line, ISG Automation.
+Added: The purchase price was comprised of $ 2.3 million of cash consideration paid at closing and certain former employees of Neuralify, LLC will also have the right to receive additional consideration paid via earn-out payments during the next 18 months , if certain financial targets are met.
+Added: At the Agreement date, the Company estimated such earn-out payments would be up to $ 4.9 million.
+Added: The following table summarizes the consideration transferred to acquire Neuralify, LLC and the amounts of identified assets acquired, and liabilities assumed as of the Agreement date:
+Added: Contingent consideration
+Added: Total allocable purchase price
+Added: The primary factors that drove the goodwill recognized, the majority of which is deductible for tax purposes, are the inclusion of legacy Neuralify workforce and know-how which expands the Company’s pure-play automation service line, ISG Automation.
+Added: Costs associated with this acquisition are included in the selling, general and administrative expenses in the Consolidated Statement of Income and Comprehensive Income and totaled $ 0.1 million during the year ended December 31, 2020.
+Added: This business combination was accounted for under the acquisition method of accounting, and as such, the aggregate purchase price was allocated on a preliminary basis to
INFORMATION SERVICES GROUP, INC.
1 unchanged sentence
(tabular amounts in thousands, except per share data)
−Removed: Disaggregation of Revenue
−Removed: The following table presents our revenue disaggregated by geographic area for the year ended December 31, 2019.
−Removed: Geographic area
−Removed: Remaining performance obligations
−Removed: As of December 31, 2019, the Company had $94.6 million of remaining performance obligations, the majority of which are expected to be satisfied within the next year.
−Removed: NOTE 4—
−Removed: NET INCOME PER COMMON SHARE
+Added: the assets acquired and liabilities assumed based on estimated fair values as of the closing date.
+Added: Based on the valuation and other factors as described above, the purchase price assigned to intangible assets and the amortization period were as follows:
+Added: Accounts receivable
+Added: Contract assets
+Added: Intangible assets
+Added: Accounts payable
+Added: Contract liabilities
+Added: Net assets acquired
+Added: The Consolidated Statement of Income and Comprehensive Income includes the results of the Neuralify acquisition subsequent to the closing.
+Added: Had the acquisition occurred as of January 1, 2019, the impact on the Company’s results of operations would not have been material.
+Added: NOTE 5—NET INCOME PER COMMON SHARE
Basic earnings per share is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding for the period.
Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that would share in the net income of the Company.
−Removed: The following tables set forth the computation of basic and diluted earnings (loss) per share:
+Added: The following tables set forth the computation of basic and diluted earnings per share:
Years Ended December 31,
5 unchanged sentences
Diluted earnings per share
−Removed: NOTE 5—ACCOUNTS RECEIVABLE AND CONTRACT ASSETS
+Added: NOTE 6—ACCOUNTS RECEIVABLE AND CONTRACT ASSETS
Accounts receivable and contract assets, net of valuation allowance, consisted of the following:
+Added: Years Ended December 31,
Accounts receivable
4 unchanged sentences
(tabular amounts in thousands, except per share data)
−Removed: NOTE 6—FURNITURE, FIXTURES AND EQUIPMENT
+Added: NOTE 7—FURNITURE, FIXTURES AND EQUIPMENT
Furniture, fixtures and equipment consisted of the following:
+Added: Years Ended December 31,
Computer hardware, software and other office equipment
3 unchanged sentences
Depreciation expense was $ 2.7 million for both the years ended December 31, 2020 and 2019.
−Removed: NOTE 7—LEASES
+Added: NOTE 8—LEASES
In February 2016, the FASB issued Accounting Standards Update No.
−Removed: 2016-02, “Leases”
−Removed: (Topic 842) (“ASC 842”).
+Added: 2016-02, “Leases” (Topic 842) (“ASC 842”).
ASC 842 requires companies to recognize on the balance sheet operating and financing lease liabilities and corresponding right-of-use assets.
10 unchanged sentences
The Company recognizes those lease payments in the consolidated statements of income on a straight-line basis over the lease term.
−Removed: As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of the lease payments.
−Removed: The Company leases its office space and office equipment under long-term operating lease agreements which expire at various dates through August 2026, some of which include options to extend the leases for up to 3 years, and some of which included options to terminate the leases within 1 year.
+Added: As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of the lease payments.
+Added: The Company leases its office space and office equipment under long-term operating lease agreements which expire at various dates through September 2026, some of which include options to extend the leases for up to 3 years , and some of which included options to terminate the leases within 1 year.
Under the operating leases, the Company pays certain operating expenses relating to the office equipment and leased property.
3 unchanged sentences
The components of lease expense were as follows:
+Added: Years Ended December 31,
Operating lease cost
13 unchanged sentences
(In thousands, except lease term and discount rate)
+Added: Years Ended December 31,
Operating leases
14 unchanged sentences
Finance leases
−Removed: Current lease liabilities are included in “Accrued expenses and other current liabilities.”
+Added: (1) Current lease liabilities are included in “Accrued expenses and other current liabilities.”
INFORMATION SERVICES GROUP, INC.
5 unchanged sentences
Less imputed interest
−Removed: The following disclosures relate to periods prior to adoption of the new lease accounting standard, including those operating leases entered into during 2018, but not yet commenced:
−Removed: Total minimum lease payments
−Removed: NOTE 8—INTANGIBLE ASSETS
+Added: NOTE 9—INTANGIBLE ASSETS
The carrying amount of intangible assets, net of accumulated amortization and impairment charges, as of December 31, 2020 and 2019 consisted of the following:
3 unchanged sentences
Trademark and trade names
−Removed: INFORMATION SERVICES GROUP, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: (tabular amounts in thousands, except per share data)
Amortizable intangibles:
2 unchanged sentences
Trademark and trade names
+Added: INFORMATION SERVICES GROUP, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: (tabular amounts in thousands, except per share data)
Amortization expense was $ 3.5 million and $ 4.0 million for the years ended December 31, 2020 and 2019, respectively.
The estimated future amortization expense subsequent to December 31, 2020, is as follows:
−Removed: NOTE 9—GOODWILL
+Added: NOTE 10—GOODWILL
The changes in the carrying amount of goodwill for the year ended December 31, 2020 and 2019 are as follows:
2 unchanged sentences
Net balance as of January 1
−Removed: Foreign currency impact
+Added: Foreign currency impact and adjustments
Balance as of December 31
−Removed: Foreign currency impact
+Added: Foreign currency impact and adjustments
Net balance as of December 31
+Added: NOTE 11—ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
+Added: The components of accrued liabilities at December 31, 2020 and 2019 are as follows:
+Added: Accrued payroll, incentive, and vacation
+Added: Accrued corporate and payroll related taxes
+Added: Contingent consideration—current
+Added: Current operating lease liability
INFORMATION SERVICES GROUP, INC.
1 unchanged sentence
(tabular amounts in thousands, except per share data)
−Removed: NOTE 10—ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
−Removed: The components of accrued liabilities at December 31, 2019 and 2018 are as follows:
−Removed: Accrued payroll and vacation
−Removed: Accrued corporate and payroll related taxes
−Removed: Contingent consideration—current
−Removed: Current lease liability
−Removed: NOTE 11—FINANCING ARRANGEMENTS AND LONG‑TERM DEBT
+Added: NOTE 12—FINANCING ARRANGEMENTS AND LONG-TERM DEBT
Long-term debt consists of the following:
4 unchanged sentences
Aggregate annual maturities of debt obligations by calendar year, are as follows:
−Removed: On December 1, 2016, the Company amended and restated its senior secured credit facility to include a $110.0 million term facility and a $30.0 million revolving facility (the “2016 Credit Agreement”).
+Added: On March 10, 2020, the Company amended and restated its senior secured credit facility to include a $ 86.0 million term facility and to increase the revolving commitments per the revolving facility (the “2020 Credit Agreement”) from $ 30.0 million to $ 54.0 million.
The material terms under the 2020 Credit Agreement are as follows:
−Removed: Each of the term loan facility and revolving credit facility has a maturity date of December 1, 2021 (the “Maturity Date”).
−Removed: The credit facility is secured by all of the equity interests owned by the Company, and its direct and indirect domestic subsidiaries and, subject to agreed exceptions, the Company’s direct and indirect “first-tier”
−Removed: foreign subsidiaries and a perfected first priority security interest in all of the Company’s and its direct and indirect domestic subsidiaries’
−Removed: tangible and intangible assets.
−Removed: The Company’s direct and indirect existing and future wholly-owned domestic subsidiaries serve as guarantors to the Company’s obligations under the senior secured facility.
−Removed: At the Company’s option, the credit facility bears interest at a rate per annum equal to either (i) the “Base Rate”
−Removed: (which is the highest of (a) the rate publicly announced from time to time by the administrative agent as its “prime rate”, (b) the Federal Funds Rate plus 0.5% per annum and (c) the Eurodollar Rate, plus 1.0%), plus the applicable margin (as defined below) or (ii) Eurodollar Rate (adjusted for maximum reserves) as determined by the Administrative Agent, plus the applicable margin.
−Removed: The applicable margin is adjusted quarterly based upon the Company’s quarterly leverage ratio.
−Removed: The Term Loan is repayable in four consecutive quarterly installments of $1,375,000 each, that commenced March 31, 2017, followed by eight consecutive quarterly installments in the amount of $2,062,500 each, that commenced March 31, 2018,
+Added: ● Each of the term loan facility and revolving credit facility has a maturity date of March 10, 2025 (the “Maturity Date”).
+Added: ● The credit facility is secured by all of the equity interests owned by the Company, and its direct and indirect domestic subsidiaries and, subject to agreed exceptions, the Company’s direct and indirect “first-tier” foreign subsidiaries and a perfected first priority security interest in all of the Company’s and its direct and indirect domestic subsidiaries’ tangible and intangible assets.
+Added: ● The Company’s direct and indirect existing and future wholly owned domestic subsidiaries serve as guarantors to the Company’s obligations under the senior secured facility.
+Added: ● At the Company’s option, the credit facility bears interest at a rate per annum equal to either (i) the “Base Rate” (which is the highest of (a) the rate publicly announced from time to time by the administrative agent as its “prime rate”, (b) the Federal Funds Rate plus 0.5 % per annum and (c) the Eurodollar Rate , plus 1.0 % ), plus the applicable margin (as defined below) or (ii) Eurodollar Rate (adjusted for maximum reserves) as determined by the Administrative Agent, plus the applicable margin.
+Added: The applicable margin is adjusted quarterly based upon the Company’s quarterly leverage ratio.
+Added: ● The term loan is repayable in nineteen consecutive quarterly installments of $ 1,075,000 each that commenced on June 30, 2020 and a final payment of the outstanding principal amount of the term loan on the Maturity Date.
+Added: ● Mandatory repayments of term loans shall be required from (subject to agreed exceptions) (i) 100 % of the proceeds from asset sales by the Company and its subsidiaries, (ii) 100 % of the net proceeds from issuances of debt and equity by the Company and its subsidiaries and (iii) 100 % of the net proceeds from insurance recovery and condemnation events of the Company and its subsidiaries.
+Added: ● The senior secured credit facility contains a number of covenants that, among other things, place restrictions on matters customarily restricted in senior secured credit facilities, including restrictions on indebtedness (including guarantee obligations), liens, fundamental changes, sales or disposition of property or assets, investments (including loans, advances, guarantees and acquisitions), transactions with affiliates, dividends and other payments in respect of capital stock, optional
INFORMATION SERVICES GROUP, INC.
1 unchanged sentence
(tabular amounts in thousands, except per share data)
−Removed: followed by seven consecutive quarterly installments of $2,750,000 each, commencing March 31, 2020 and a final payment of the outstanding principal amount of the Term Loan on the Maturity Date.
−Removed: Mandatory repayments of term loans shall be required from (subject to agreed exceptions) (i) 100% of the proceeds from asset sales by the Company and its subsidiaries, (ii) 100% of the net proceeds from issuances of debt and equity by the Company and its subsidiaries and (iii) 100% of the net proceeds from insurance recovery and condemnation events of the Company and its subsidiaries.
−Removed: The senior secured credit facility contains a number of covenants that, among other things, place restrictions on matters customarily restricted in senior secured credit facilities, including restrictions on indebtedness (including guarantee obligations), liens, fundamental changes, sales or disposition of property or assets, investments (including loans, advances, guarantees and acquisitions), transactions with affiliates, dividends and other payments in respect of capital stock, optional payments and modifications of other material debt instruments, negative pledges and agreements restricting subsidiary distributions and changes in line of business.
+Added: payments and modifications of other material debt instruments, negative pledges and agreements restricting subsidiary distributions and changes in line of business.
In addition, the Company is required to comply with a total leverage ratio and fixed charge coverage ratio.
● The senior secured credit facility contains customary events of default, including cross-default to other material agreements, judgment default and change of control.
−Removed: On February 10, 2017, as required by the 2016 Credit Agreement, the Company entered into an agreement to cap the interest rate at 4% on the LIBOR component of its borrowings under the term loan facility until December 31, 2019.
−Removed: This interest rate cap was not designated for hedging or speculative purposes.
−Removed: The expense related to this interest rate cap was not material.
−Removed: On May 9, 2019, ISG amended its 2016 Credit Agreement to increase the maximum permitted leverage ratio through and including September 30, 2019 to 3.75 to 1.00, which then declines to 3.25 to 1.00 until September 30, 2020 and further declines to 3.00 to 1.00 until the Maturity Date.
−Removed: On December 4, 2019, ISG amended its 2016 Credit Agreement to allow the Company to repurchase up to $8 million of its equity in any fiscal year as long as the consolidated leverage ratio is not greater than 3.25 to 1.00 through and including September 30, 2020 which then declines to 3.00 to 1.00 until the Maturity Date and the Consolidated Fixed Charge coverage ratio is not less than 1.25 to 1.00.
−Removed: As of December 31, 2019, the total principal outstanding under the term loan facility was $86.9 million with an effective interest rate of 5.2%.
−Removed: During 2019, the Company paid off all amounts drawn from its revolving credit facility.
−Removed: Refer to Note 17 –
−Removed: Subsequent Event for additional information regarding the Company’s 2016 Credit Agreement.
−Removed: Alsbridge Notes
−Removed: On December 1, 2016, as part of the merger consideration for the acquisition of Alsbridge, we issued an aggregate of $7.0 million in unsecured subordinated promissory notes (the “Alsbridge Notes”).
−Removed: The Alsbridge Notes accrued interest on the principal amount daily at a rate of 2.0%.
−Removed: At maturity, on September 4, 2018, we paid off the full $7.0 million of principal and $0.2 million of interest outstanding under the Alsbridge Notes.
−Removed: NOTE 12—COMMITMENTS AND CONTINGENCIES
−Removed: The Company is involved in certain legal proceedings arising in the ordinary course of business.
−Removed: Management, after review and consultation with legal counsel, believes the ultimate success of parties of the legal proceedings is remote and the ultimate aggregate liability, if any, resulting from such proceedings will not be material to the financial position of the Company.
−Removed: Further, as of December 31, 2019 and 2018, the Company is not a party to any actual or pending litigation with a more than remote likelihood of a material loss.
−Removed: Employee Retirement Plans
−Removed: For the fiscal years ended December 31, 2019 and 2018, we contributed $0.1 million and $2.4 million, respectively, to the 401(k) plan on a fully discretionary basis.
−Removed: INFORMATION SERVICES GROUP, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: (tabular amounts in thousands, except per share data)
−Removed: Experton Contingent Consideration
−Removed: The Company paid the remaining $0.3 million in the second quarter of 2019 related to 2018 performance, of which 50% was paid with shares of ISG common stock.
−Removed: TracePoint Contingent Consideration
−Removed: The Company paid the remaining $1.5 million in the second quarter of 2019 related to 2018 performance, of which 50% was paid with shares of ISG common stock.
−Removed: NOTE 13—RELATED PARTY TRANSACTIONS
+Added: The Company’s financial statements include outstanding borrowings of $ 78.8 million and $ 86.9 million at December 31, 2020 and December 31, 2019, respectively, which are carried at amortized cost.
+Added: The effective interest rate of the outstanding borrowings was 2.5 % and 5.2 % at December 31, 2020 and December 31, 2019, respectively.
+Added: The fair value of debt is classified within Level 3 of the fair value hierarchy.
+Added: The fair value of the Company's outstanding borrowings is approximately $ 77.7 million and $ 86.7 million at December 31, 2020 and December 31, 2019, respectively.
+Added: The fair values of debt have been estimated using a discounted cash flow analysis based on the Company's incremental borrowing rate for similar borrowing arrangements.
+Added: The incremental borrowing rate used to discount future cash flows is 2.49 % .
+Added: The Company also considered recent transactions of peer group companies for similar instruments with comparable terms and maturities as well as an analysis of current market conditions.
+Added: NOTE 13—COMMITMENTS AND CONTINGENCIES
+Added: The Company is subject to contingencies which arise through the ordinary course of business.
+Added: All material liabilities of which management is aware are properly reflected in the financial statements at December 31, 2020 and 2019.
+Added: Neuralify Contingent Consideration
+Added: As of December 31, 2020, the Company has recorded a liability of $ 5.3 million representing the estimated fair value of contingent consideration related to the acquisition of Neuralify, of which $ 2.9 is classified as current and included in accrued expenses on the consolidated balance sheet.
+Added: NOTE 14—RELATED PARTY TRANSACTIONS
From time to time, the Company may have receivables and payables with employees and shareholders.
−Removed: The Company had outstanding receivables from related parties, including shareholders, totaling $0.1 million as of December 31, 2019 and 2018, respectively, and no outstanding payables.
+Added: The Company had outstanding receivables from related parties, including shareholders, totaling $ 0.1 million for both December 31, 2020 and 2019, and no outstanding payables.
These transactions related to personal withholding taxes paid on behalf of expatriate employees.
−Removed: NOTE 14—INCOME TAXES
+Added: NOTE 15—INCOME TAXES
The components of income before income taxes for the years ended December 31, 2020 and 2019 consists of the following:
2 unchanged sentences
The components of the 2020 and 2019 income tax provision are as follows:
−Removed: Years Ended December 31,
−Removed: Total current provision
−Removed: Total deferred benefit
INFORMATION SERVICES GROUP, INC.
1 unchanged sentence
(tabular amounts in thousands, except per share data)
+Added: Years Ended December 31,
+Added: Total current provision
+Added: Total deferred benefit
The differences between the effective tax rates reflected in the total provision for income taxes and the U.S.
7 unchanged sentences
Net increase (decrease) of uncertain tax positions
−Removed: Tax law change impact on transition tax
Income tax provision
Effective income tax rates
−Removed: ________________________________________
−Removed: During the years ended December 31, 2018, the Company reversed an unrealized tax liability of $0.9 million established at the time of the acquisition of Alsbridge.
−Removed: An associated tax indemnity receivable was also reversed and recorded in selling, general and administrative expense.
−Removed: On December 22, 2017, the Tax Cuts and Jobs Act was enacted.
−Removed: The company completed its evaluation of the impact of the new law in the fourth quarter of 2018 and recognized an additional deferred tax liability and tax expense of $1.6 million associated with repatriation of unremitted foreign earnings as required under the new tax law (“transition tax”).
−Removed: The company recorded this amount consistent with its indefinite reinvestment assertion.
INFORMATION SERVICES GROUP, INC.
19 unchanged sentences
Total noncurrent deferred tax liability
−Removed: Net noncurrent deferred tax asset
−Removed: Net deferred tax asset
+Added: Net noncurrent deferred tax (liability) asset
+Added: Net deferred tax (liability) asset
A valuation allowance was established at December 31, 2020 and 2019 due to estimates of future utilization of net operating loss carryovers in the U.S.
and certain foreign jurisdictions, derived primarily from acquisitions and recorded through purchase accounting.
−Removed: The valuation allowance at December 31, 2019 and 2018 also includes a full valuation for the Company’s foreign tax credit carryovers and foreign taxes on its controlled foreign corporation.
+Added: The valuation allowance at December 31, 2020 and 2019 also includes a full valuation for the Company’s foreign tax credit carryovers and foreign taxes on its controlled foreign corporations.
+Added: As of December 31, 2020, the Company has foreign net operating loss (NOL) carryforwards of approximately $ 14.3 million.
+Added: If not utilized, these NOL carryforwards begin to expire in 2021.
+Added: The Company also has a federal tax credit carryforward of approximately $ 1.2 million, which will begin to expire in 2026, if not utilized.
Uncertain tax positions
3 unchanged sentences
Previously recognized tax positions that no longer meet the more likely than not recognition threshold should be derecognized in the first subsequent financial reporting period in which that threshold is no longer met.
−Removed: It is the Company’s policy to accrue for interest and penalties related to its uncertain tax positions within income tax expense.
+Added: It is the Company’s policy to accrue for interest and penalties related to its uncertain tax positions within income tax expense.
INFORMATION SERVICES GROUP, INC.
4 unchanged sentences
Additions as a result of tax positions taken during the current period
−Removed: Reductions as a result of tax positions taken during the current period
−Removed: Additions as a result of tax positions taken during a prior period
+Added: Reductions as a result of tax positions taken during a prior period
Reductions as a result of lapse of statute
6 unchanged sentences
income tax examinations by tax authorities for years before 2013.
−Removed: NOTE 15—STOCK‑BASED COMPENSATION PLANS
−Removed: The Amended and Restated 2007 Equity and Incentive Award Plan (“Incentive Plan”) and Amended and Restated 2007 Employee Stock Purchase Plan (“ESPP”) were approved by the Company’s stockholders at our 2014 annual meeting with a subsequent amendment to the Incentive Plan approved by the Company’s stockholders at our 2017 annual meeting as discussed below.
+Added: NOTE 16—STOCK-BASED COMPENSATION PLANS
+Added: The Amended and Restated 2007 Equity and Incentive Award Plan (“Incentive Plan”) and Amended and Restated 2007 Employee Stock Purchase Plan (“ESPP”) were approved by the Company’s stockholders at our 2014 annual meeting with a subsequent amendment to the Incentive Plan approved by the Company’s stockholders at our 2017 annual meeting as discussed below.
Subject to the terms of the Incentive Plan, the Incentive Plan authorizes the grant of awards, which awards may be made in the form of (i) nonqualified stock options;
−Removed: (ii) stock options intended to qualify as incentive stock options under Section 422 of the Internal Revenue Code (stock options described in clause (i) and (ii), “options”);
−Removed: (iii) stock appreciation rights (“SARs”);
+Added: (ii) stock options intended to qualify as incentive stock options under Section 422 of the Internal Revenue Code (stock options described in clause (i) and (ii), “options”);
+Added: (iii) stock appreciation rights (“SARs”);
(iv) restricted stock and/or restricted stock units;
6 unchanged sentences
The SARs granted under the Incentive Plan are granted with an exercise price equal to the fair market value of the Common Shares at the time the SARs are granted.
−Removed: At the 2017 Annual Meeting, our stockholders approved an amendment to the Incentive Plan to increase the number of shares of common stock available for issuance under the Incentive Plan by 5,300,000 shares (the “Incentive Plan Amendment”).
+Added: At the 2020 Annual Meeting, our stockholders approved an amendment to the Incentive Plan to increase the number of shares of common stock available for issuance under the Incentive Plan by 5,500,000 shares (the “Incentive Plan Amendment”).
As of December 31, 2020, there were 3,455,800 and 1,161,220 shares available for grant under the amended and restated Incentive Plan and ESPP, respectively.
2 unchanged sentences
Restricted Share Awards/Units
−Removed: The Incentive Plan provides for the granting of restricted share awards (“RSA”) or restricted share units (“RSU”), the vesting of which is subject to conditions and limitations established at the time of the grant.
−Removed: Upon the grant of an RSA, the participant has the rights of a shareholder, including but not limited to the right to vote such shares and the right to receive any dividends paid on such shares.
+Added: The Incentive Plan provides for the granting of restricted share units (“RSU”), the vesting of which is subject to conditions and limitations established at the time of the grant.
Recipients of RSU awards will not have the rights of a shareholder of the Company until such date as the Common Shares are issued or transferred to the recipient.
If the employee retires (at the normal retirement age stated in the applicable retirement plan or applicable law, if there is a mandatory retirement age), the restricted shares continue to vest on the same schedule as if the employee remained employed with the Company.
−Removed: Upon a termination of employment due to an employee’s death or permanent disability, the restricted shares become 100% vested.
+Added: Upon a termination of employment due to an employee’s death or permanent disability, the restricted shares become 100 % vested.
Dividends accrue and will be paid if and when the restricted shares vest.
+Added: The Company also granted RSUs to specific employees which have the following characteristics:
+Added: ● Performance-Based RSU Vesting (Stock Price):
+Added: Provided the employee continues to be employed through specific date set forth in the award, the RSUs will vest on such date if specific financial performance is met, otherwise the RSUs will be forfeited.
INFORMATION SERVICES GROUP, INC.
1 unchanged sentence
(tabular amounts in thousands, except per share data)
−Removed: The Company also granted RSUs to specific employees which have the following characteristics:
−Removed: Performance‑Based RSU Vesting (EBITDA):
−Removed: Provided the employee continues to be employed through specific date set forth in the award, the RSUs will vest on such date if specific financial performance is met, otherwise the RSUs will be forfeited.
● Time-Based RSU Vesting:
So long as the employee continues to be employed through the fourth anniversary of the grant date, the RSUs will become 100 % vested on such date.
−Removed: If an employee’s employment is terminated (i) at any time during the vesting period due to the employee’s death, disability or retirement prior to the applicable vesting date or (ii) without cause by the Company after 50% of the relevant period has elapsed, then the RSUs will vest pro rata based on the period of time worked relative to such period.
+Added: If an employee’s employment is terminated (i) at any time during the vesting period due to the employee’s death, disability or retirement prior to the applicable vesting date or (ii) without cause by the Company after 50 % of the relevant period has elapsed, then the RSUs will vest pro rata based on the period of time worked relative to such period.
However, no shares will be distributed until the applicable pro rata vesting date (and, in the case of the Performance-Based RSUs, only if and to the extent that the performance target is achieved).
1 unchanged sentence
Pursuant to the terms of the Incentive Plan, in the event of a change in control, the Compensation Committee of the Board of Directors may accelerate vesting of the outstanding awards of RSUs then held by participants.
−Removed: All RSUs will be payable in shares of the Company’s common stock immediately upon vesting.
+Added: All RSUs will be payable in shares of the Company’s common stock immediately upon vesting.
No dividend equivalents will be paid with respect to any RSUs.
As part of the Incentive Plan Amendment, dividends/dividend equivalents may be paid or credited on other stock-based awards (such as restricted stock units), but those dividends/dividend equivalents must be subject to the same vesting (or more stringent vesting) than the vesting applicable to the underlying awards.
−Removed: The fair value of RSAs and RSUs is determined based on the closing price of the Company’s shares on the grant date.
+Added: The fair value of RSUs is determined based on the closing price of the Company’s shares on the grant date.
The total fair value is amortized to expense on a straight-line basis over the vesting period.
−Removed: There have been no activities for RSAs since December 31, 2011 and none are currently outstanding.
−Removed: A summary of the status of the Company’s RSUs issued under its Incentive Plan as of December 31, 2019 and changes during the years then ended, is presented below:
+Added: A summary of the status of the Company’s RSUs issued under its Incentive Plan as of December 31, 2020 and changes during the years then ended, is presented below:
Non-vested at December 31, 2018
4 unchanged sentences
Employee Stock Purchase Plan
−Removed: The Company uses the Black‑Scholes option pricing model to estimate the fair value of shares expected to be issued under the Company’s employee stock purchase plan.
+Added: The Company uses the Black-Scholes option pricing model to estimate the fair value of shares expected to be issued under the Company’s employee stock purchase plan.
The ESPP provides that a total of 3.6 million shares of Common Stock are reserved for issuance under the plan.
−Removed: The ESPP, which is intended to qualify as an “employee stock purchase plan”
−Removed: under Section 423 of the Internal Revenue Code, is implemented utilizing three-month offerings with purchases occurring at three-month intervals.
−Removed: The ESPP administration is overseen by the Company’s Compensation Committee.
+Added: The ESPP, which is intended to qualify as an “employee stock purchase plan” under Section 423 of the Internal Revenue Code, is implemented utilizing three -month offerings with purchases occurring at three -month intervals.
+Added: The ESPP administration is overseen by the Company’s Compensation Committee.
Employees are eligible to participate if they are employed by the Company for at least 20 hours per week and more than five months in a calendar year.
1 unchanged sentence
The price of Common Stock purchased under the ESPP is 90 % of the fair market value of the Common Stock on the applicable purchase date.
−Removed: Employees may end their participation in an offering at any time during the offering period, and participation ends automatically upon termination of
−Removed: INFORMATION SERVICES GROUP, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: (tabular amounts in thousands, except per share data)
+Added: Employees may end their participation in an offering at any time during the offering period, and participation ends automatically upon termination of employment.
The Compensation Committee may at any time amend or terminate the ESPP, except that no such amendment or termination may adversely affect shares previously granted under the ESPP.
2 unchanged sentences
There were 1,161,220 shares available for purchase at December 31, 2020 under the ESPP.
−Removed: NOTE 16—SEGMENT AND GEOGRAPHICAL INFORMATION
+Added: INFORMATION SERVICES GROUP, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: (tabular amounts in thousands, except per share data)
+Added: NOTE 17—SEGMENT AND GEOGRAPHICAL INFORMATION
The Company operates in one segment, fact-based sourcing advisory services.
The Company operates principally in the Americas, Europe, and Asia Pacific.
−Removed: The Company’s foreign operations are subject to local government regulations and to the economic and political uncertainties of those areas.
+Added: The Company’s foreign operations are subject to local government regulations and to the economic and political uncertainties of those areas.
Geographical information for the segment is as follows:
7 unchanged sentences
The Company does not measure or monitor gross profit or operating income by geography or any other measure or metric, other than consolidated, for the purposes of making operating decisions or allocating resources.
−Removed: NOTE 17 —SUBSEQUENT EVENT
−Removed: On March 10, 2020, the Company amended the 2016 Credit Agreement.
−Removed: The amendment includes a reduction in annual mandatory principal payments, a lowering of borrowing costs, and an extension of the maturity date of the 2016 Credit Agreement to March 10, 2025.
+Added: NOTE 18—RISKS AND UNCERTAINTIES
+Added: On March 11, 2020, the World Health Organization declared the coronavirus (COVID-19) a pandemic, following the rapid spread of the disease from where it was first diagnosed, in China, to nations worldwide.
+Added: The outbreak sparked responses across countries, states and cities worldwide to enforce various measures of social distancing and shelter-in-place orders and temporary closure of non-essential businesses to reduce further transmission of the virus.
+Added: As a result of these measures, the US and global markets have seen significant disruption, the extent and duration of which remains highly uncertain.
+Added: The impact of COVID-19 pandemic continues to evolve and, therefore, the Company cannot predict with certainty the extent to which the pandemic will negatively impact our results of operations, cash flows and financial position, liquidity and ability to remain in compliance with our financial covenants.
+Added: In 2020, the Company experienced a year-over-year revenue decline.
+Added: Given the uncertainty of the marketplace, the Company has implemented business continuity plans to ensure that the Company is able to remain fully operational with a remote workforce, conducted financial modeling scenarios in order to ensure prudent cost containment, and has proactively implemented a series of cash conservation measures.
+Added: These measures include actions taken in the second, third, and fourth quarters of 2020 to reduce personnel costs and other operating expenses, including reductions in staffing and contractor levels, vendor spending, travel, and other measures.
+Added: The Company has financial covenants underlying its debt which require an adjusted Debt to EBITDA ratio of 3.25 .
+Added: In light of the pandemic, there is uncertainty regarding the marketplace demand for the Company’s services and thus the Company’s future revenue
+Added: INFORMATION SERVICES GROUP, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: (tabular amounts in thousands, except per share data)
+Added: Accordingly, in light of this uncertainty, the Company has developed plans to further reduce operating expenses to the extent more prolonged revenue shortfalls are experienced which would prevent the Company from complying with its financial covenants.
+Added: Management's plans would allow the Company to generate sufficient cash flows to reduce the Company's outstanding net debt and enable the Company to comply with the terms of its debt arrangements.
+Added: Accordingly, the Company believes that based upon current facts and circumstances, its existing cash coupled with the cash flows generated from operations will be sufficient to meet its cash needs for 12 months from the date of issuance of these financial statements.
+Added: NOTE 19 — RESTRUCTURING CHARGES
+Added: 2020 Restructuring Plan
+Added: In the third and fourth quarters of 2020, the Company took restructuring actions to lower our operating expenses structurally and permanently relative to revenue and to accelerate the transformation of our business (the “Restructuring Plan”).
+Added: Most of these actions are based on our recent experience and learning in the COVID-19 pandemic and a resulting review of our operations, which continues to address certain operating expenses such as occupancy expense and salaries and related expenses.
+Added: A summary of the activity affecting the Company's accrued contractual termination benefit liability for the year ended December 31, 2020 is as follows:
+Added: Restructuring Plan
+Added: Balance at January 1, 2020
+Added: Amounts accrued
+Added: Amounts paid/incurred
+Added: Balance at December 31, 2020
+Added: The $ 2.3 million of net restructuring charges was primarily related to contractual termination benefits, and was recorded in selling, general and administrative expenses.
+Added: We expect that the remaining actions of the Restructuring Plan will be completed over the next three months .
EXHIBIT INDEX
−Removed: Purchase Agreement, dated as of April 24, 2007, as amended, by and between Registrant and MCP‑TPI Holdings, LLC (previously filed as Annex A to the Registrant’s Definitive Proxy Statement filed with the SEC on October 17, 2007 (Commission File Number:
+Added: Purchase Agreement, dated as of April 24, 2007, as amended, by and between Registrant and MCP-TPI Holdings, LLC (previously filed as Annex A to the Registrant’s Definitive Proxy Statement filed with the SEC on October 17, 2007 (Commission File Number:
001-33287), and incorporated herein by reference).
−Removed: Agreement for the Sale and Purchase of the Entire Issued Share Capital of CCGH Limited, dated as of January 4, 2011, between Registrant and the persons named therein (previously filed as Exhibit 2.1 to the Registrant’s Form 8‑K filed with the SEC on January 4, 2011 (Commission File Number:
+Added: Agreement for the Sale and Purchase of the Entire Issued Share Capital of CCGH Limited, dated as of January 4, 2011, between Registrant and the persons named therein (previously filed as Exhibit 2.1 to the Registrant’s Form 8-K filed with the SEC on January 4, 2011 (Commission File Number:
001-33287), and incorporated herein by reference).
Asset Purchase Agreement, dated as of February 10, 2011, among Registrant (for specific section only), and Salvaggio & Teal Ltd.
−Removed: (d/b/a Salvaggio, Teal & Associates), Salvaggio & Teal II, LLC, Mitt Salvaggio, Kirk Teal, Nathan Frey, International Consulting Acquisition Corp., (previously filed as Exhibit 2.1to the Registrant’s Form 8‑K filed with the SEC on February 11, 2011 (Commission File Number:
+Added: (d/b/a Salvaggio, Teal & Associates), Salvaggio & Teal II, LLC, Mitt Salvaggio, Kirk Teal, Nathan Frey, International Consulting Acquisition Corp., (previously filed as Exhibit 2.1to the Registrant’s Form 8-K filed with the SEC on February 11, 2011 (Commission File Number:
001-33287), and incorporated herein by reference).
−Removed: Agreement and Plan of Merger, dated as of December 1, 2016, by and among Alsbridge Holdings, Inc., ISG Information Services Group Americas, Inc., Gala Acquisition Sub, Inc., and LLR Equity Partners III, L.P., as representative of the equity holders (previously filed as Exhibit 2.1 to the Registrant’s Form 8-K filed with the SEC on December 2, 2016 (Commission File No.
+Added: Agreement and Plan of Merger, dated as of December 1, 2016, by and among Alsbridge Holdings, Inc., ISG Information Services Group Americas, Inc., Gala Acquisition Sub, Inc., and LLR Equity Partners III, L.P., as representative of the equity holders (previously filed as Exhibit 2.1 to the Registrant’s Form 8-K filed with the SEC on December 2, 2016 (Commission File No.
001-33287), and incorporated herein by reference).
Amended and Restated Certificate of Incorporation of the Company (previously filed as Exhibit 3.1 to Amendment No.
−Removed: 5 to the Registrant’s Registration Statement on Form S‑1 filed with the SEC on January 29, 2007 (Commission File Number:
+Added: 5 to the Registrant’s Registration Statement on Form S-1 filed with the SEC on January 29, 2007 (Commission File Number:
333-136536), and incorporated herein by reference).
−Removed: Amended and Restated By‑Laws, dated as of May 13, 2013 (previously filed as Exhibit 3.1 to the Registrant’s Form 8‑K filed with the SEC on May 15, 2013 (Commission File Number:
+Added: Amended and Restated By-Laws, dated as of May 13, 2013 (previously filed as Exhibit 3.1 to the Registrant’s Form 8-K filed with the SEC on May 15, 2013 (Commission File Number:
001-33287), and incorporated herein by reference).
−Removed: Amendment to the Amended and Restated By-Laws, dated as of November 8, 2017 (previously filed as Exhibit 3.1 to the Registrant’s Form 8 K filed with the SEC on November 13, 2017 (Commission File Number:
+Added: Amendment to the Amended and Restated By-Laws, dated as of November 8, 2017 (previously filed as Exhibit 3.1 to the Registrant’s Form 8 K filed with the SEC on November 13, 2017 (Commission File Number:
001-33287), and incorporated herein by reference).
Specimen Common Stock Certificate (previously filed as Exhibit 4.2 to Amendment No.
−Removed: 3 to the Registrant’s Registration Statement on Form S‑1 filed with the SEC on December 22, 2006 (Commission File Number:
−Removed: 333‑136536), and incorporated herein by reference).
−Removed: Description of the Securities of the Registrant
−Removed: Registration Rights Agreement between the Registrant and the existing Stockholders dated as of February 6, 2007 (previously filed as Exhibit 10.9 to Amendment No.
−Removed: 3 to the Registrant’s Registration Statement on Form S‑1 filed with the SEC on December 22, 2006 (Commission File Number:
+Added: 3 to the Registrant’s Registration Statement on Form S-1 filed with the SEC on December 22, 2006 (Commission File Number:
333-136536), and incorporated herein by reference).
−Removed: Form of Indemnification Agreement for Directors and Officers (previously filed as Exhibit 10.1 to the Registrant’s Form 8-K filed with the SEC on December 2, 2016 (Commission File No.
+Added: Description of the Securities of the Registrant (previously filed as Exhibit 4.2 to the Registrant’s Form 10-K filed with the SEC on March 11, 2020 (Commission File Number:
001-33287), and incorporated herein by reference)
−Removed: Amended and Restated 2007 Employee Stock Purchase Plan (previously filed as Annex B to the Registrant’s Definitive Proxy Statement filed with the SEC on March 21, 2014 (Commission File Number:
+Added: Registration Rights Agreement between the Registrant and the existing Stockholders dated as of February 6, 2007 (previously filed as Exhibit 10.9 to Amendment No.
+Added: 3 to the Registrant’s Registration Statement on Form S-1 filed with the SEC on December 22, 2006 (Commission File Number:
333-136536), and incorporated herein by reference).
−Removed: Amended and Restated 2007 Equity and Incentive Award Plan (previously filed as Appendix A to the Registrant’s Definitive Proxy Statement filed with the SEC on March 17, 2017 (Commission File Number:
+Added: Form of Indemnification Agreement for Directors and Officers (previously filed as Exhibit 10.1 to the Registrant’s Form 8-K filed with the SEC on December 2, 2016 (Commission File No.
001-33287), and incorporated herein by reference).
−Removed: Form of Restricted Stock Unit Agreement (Performance and Time Based) (previously filed as Exhibit 10.1 to the Registrant’s Form 10‑Q filed with the SEC on August 7, 2013 (Commission File Number:
+Added: Amended and Restated 2007 Employee Stock Purchase Plan (previously filed as Annex B to the Registrant’s Definitive Proxy Statement filed with the SEC on March 20, 2020 (Commission File Number:
001-33287), and incorporated herein by reference).
−Removed: Amended and Restated Credit Agreement, dated as of December 1, 2016, among Information Services Group, Inc., various lenders and Bank of America, N.A., as Administrative Agent (the “Credit Agreement”) (previously filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8‑K filed with the SEC on December 2, 2016 (Commission File Number:
+Added: Amended and Restated 2007 Equity and Incentive Award Plan (previously filed as Appendix A to the Registrant’s Definitive Proxy Statement filed with the SEC on March 20, 2020 (Commission File Number:
001-33287), and incorporated herein by reference).
−Removed: First Amendment to the Amended and Restated Credit Agreement dated December 8, 2017 (previously filed as Exhibit 10.7 to the Registrant’s Form 10-K filed with the SEC on March 15, 2018 (Commission File Number:
+Added: Form of Restricted Stock Unit Agreement (Performance and Time Based) (previously filed as Exhibit 10.1 to the Registrant’s Form 10-Q filed with the SEC on August 7, 2013 (Commission File Number:
001-33287), and incorporated herein by reference).
Employment Letter dated as of September 24, 2009, between the Company and David E.
−Removed: Berger (previously filed as Exhibit 10.1 to the Registrant’s Form 8‑K filed with the SEC on September 29, 2009 (Commission File Number:
+Added: Berger (previously filed as Exhibit 10.1 to the Registrant’s Form 8-K filed with the SEC on September 29, 2009 (Commission File Number:
001-33287), and incorporated herein by reference).
−Removed: Form of Restricted Stock Unit Award Agreement (Time‑Based), (previously filed as Exhibit 10.2 to the Registrant’s Form 8‑K filed with the SEC on September 29, 2009 (Commission File Number:
+Added: Form of Restricted Stock Unit Award Agreement (Time-Based), (previously filed as Exhibit 10.2 to the Registrant’s Form 8-K filed with the SEC on September 29, 2009 (Commission File Number:
001-33287), and incorporated herein by reference).
−Removed: Form of Restricted Covenant Agreement, (previously filed as Exhibit 10.3 to the Registrant’s Form 8‑K filed with the SEC on September 29, 2009 (Commission File Number:
+Added: Form of Restricted Covenant Agreement, (previously filed as Exhibit 10.3 to the Registrant’s Form 8-K filed with the SEC on September 29, 2009 (Commission File Number:
001-33287), and incorporated herein by reference).
Severance Agreement dated as of October 5, 2009, between the Company and David E.
−Removed: Berger (previously filed as Exhibit 10.4 to the Registrant’s Form 8‑K filed with the SEC on September 29, 2009 (Commission File Number:
+Added: Berger (previously filed as Exhibit 10.4 to the Registrant’s Form 8-K filed with the SEC on September 29, 2009 (Commission File Number:
001-33287), and incorporated herein by reference).
Change in Control Agreement dated as of January 7, 2011, between the Company and Michael P.
−Removed: Connors (previously filed as Exhibit 10.2 to the Registrant’s Form 8‑K filed with the SEC on January 7, 2011 (Commission File Number:
+Added: Connors (previously filed as Exhibit 10.2 to the Registrant’s Form 8-K filed with the SEC on January 7, 2011 (Commission File Number:
001-33287), and incorporated herein by reference).
−Removed: Form of Change in Control Agreement for officers (previously filed as Exhibit 10.15 to the Registrant’s Form 10‑K filed with the SEC on March 15, 2012 (Commission File Number:
+Added: Form of Change in Control Agreement for officers (previously filed as Exhibit 10.15 to the Registrant’s Form 10-K filed with the SEC on March 15, 2012 (Commission File Number:
001-33287), and incorporated herein by reference).
Employment Agreement for Michael P.
−Removed: Connors, dated December 16, 2011 (previously filed as Exhibit 10.1 to the Registrant’s Form 8‑K filed with the SEC on December 21, 2011 (Commission File Number:
+Added: Connors, dated December 16, 2011 (previously filed as Exhibit 10.1 to the Registrant’s Form 8-K filed with the SEC on December 21, 2011 (Commission File Number:
001-33287), and incorporated herein by reference).
1 unchanged sentence
1 to Employment Agreement for Michael P.
−Removed: Connors previously filed as Exhibit 10.21 to the Registrant’s Form 10‑K filed with the SEC on March 7, 2014 (Commission File Number:
+Added: Connors previously filed as Exhibit 10.21 to the Registrant’s Form 10-K filed with the SEC on March 7, 2014 (Commission File Number:
001-33287), and incorporated herein by reference).
Securities Purchase Agreement, dated as of December 1, 2016, by and between Information Services Group, Inc.
−Removed: and Chevrillon & Associés SCA (previously filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on December 2, 2016 (File No.
+Added: and Chevrillon & Associés SCA (previously filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on December 2, 2016 (File No.
001-33287), and incorporated herein by reference).
1 unchanged sentence
2 to Employment Agreement for Michael P.
−Removed: Connors (previously filed as Exhibit 10.1 to the Registrant’s Form 8-K filed with the SEC on December 16, 2016 (Commission File Number:
+Added: Connors (previously filed as Exhibit 10.1 to the Registrant’s Form 8-K filed with the SEC on December 16, 2016 (Commission File Number:
001 33287), and incorporated herein by reference).
−Removed: Employment Letter for Thomas Kucinski, dated May 15, 2017 (previously filed as Exhibit 10.1 to the Registrant’s Form 8‑K filed with the SEC on May 15, 2017 (Commission File Number:
+Added: Employment Letter for Thomas Kucinski, dated May 15, 2017 (previously filed as Exhibit 10.1 to the Registrant’s Form 8-K filed with the SEC on May 15, 2017 (Commission File Number:
001-33287), and incorporated herein by reference).
Form of Restricted Stock Unit Agreement (Performance Based).
−Removed: Second Amendment to Credit Agreement, dated May 9, 2019 (previously filed as Exhibit 10.1 to the Registrant’s Form 10-Q filed with the SEC on May 10, 2019 (Commission File Number:
+Added: Amended and Restated Credit Agreement, dated as of March 10, 2020, among Information Services Group, Inc., various lenders and Bank of America, N.A., as Administrative Agent (previously filed as Exhibit 10.22 to the Registrant’s Form 10-K filed with the SEC on March 11, 2020 (Commission File Number:
001-33287), and incorporated herein by reference).
−Removed: Third Amendment to Credit Agreement, dated December 4, 2019 (previously filed as Exhibit 10.1 to the Registrant’s Form 8-K filed with the SEC on December 6, 2019 (Commission File Number:
+Added: Amendment No.
+Added: 3 to Employment Agreement for Michael P.
+Added: Connors (previously filed as Exhibit 10.1 to the Registrant’s Form 8-K filed with the SEC on December 30, 2020 (Commission File Number:
001-33287), and incorporated herein by reference).
−Removed: Amended and Restated Credit Agreement, dated as of March 10, 2020, among Information Services Group, Inc., various lenders and Bank of America, N.A., as Administrative Agent.
−Removed: Computation of Earnings Per Share (included in Consolidated Statement of Comprehensive Income to the Consolidated Financial Statements included in Part II—Item 8 herein).
−Removed: Code of Ethics and Business Conduct for Directors, Officers and Employees (previously filed as Exhibit 14.1 to the Registrant’s Form 8‑K filed with the SEC on August 7, 2012 (Commission File Number:
+Added: Computation of Earnings Per Share (included in Consolidated Statement of Comprehensive Income to the Consolidated Financial Statements included in Part II—Item 8 herein).
+Added: Code of Ethics and Business Conduct for Directors, Officers and Employees (previously filed as Exhibit 14.1 to the Registrant’s Form 8-K filed with the SEC on August 7, 2012 (Commission File Number:
001-33287), and incorporated herein by reference).
6 unchanged sentences
Certification of Chief Financial Officer Pursuant to 18 U.S.C.
−Removed: The following financial statements from ISG’s Annual Report on Form 10‑K for the year ended December 31, 2019, filed on March 11, 2020, formatted in XBRL (Extensible Business Reporting Language);
−Removed: (i) Consolidated Balance Sheet, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Shareholders’
−Removed: Equity, (iv) Consolidated Statements of Cash Flows and (v) the Notes to Consolidated Financial Statements.
+Added: The following financial statements from ISG’s Annual Report on Form 10-K for the year ended December 31, 2020, filed on March 12, 2021, formatted in XBRL (Extensible Business Reporting Language);
+Added: (i) Consolidated Balance Sheet, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Shareholders’ Equity, (iv) Consolidated Statements of Cash Flows and (v) the Notes to Consolidated Financial Statements.
* Filed herewith.
27 unchanged sentences
INFORMATION SERVICES GROUP, INC.
−Removed: SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS
+Added: SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS
(in thousands)
6 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.