What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2022-03-11 compared with 2021-03-12 · 99 added, 125 removed, 844 unchanged (21% of the section changed)

26 unchanged sentences

Other Information

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

Directors, Executive Officers and Corporate Governance

17 unchanged sentences

Financial Statements of Information Services Group, Inc.:

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm (PCAOB ID 238 )

Consolidated Balance Sheets as of December 31, 2021 and 2020

59 unchanged sentences

(In thousands, except par value)

Years Ended December 31,

Current assets

36 unchanged sentences

(In thousands, except per share data)

Years Ended December 31,

Operating expenses

5 unchanged sentences

Interest expense

Foreign currency transaction loss

Foreign currency transaction gain (loss)

Income before taxes

3 unchanged sentences

Comprehensive income:

Foreign currency translation, net of tax expense of $ 760 and $ 33 , respectively

Foreign currency translation, net of tax expense (benefit) of ($ 724 ) and $ 760 , respectively

Comprehensive income

10 unchanged sentences

Issuance of treasury shares

Issuance of common stock for contingent earn-out

Issuance of common stock for RSUs vested

1 unchanged sentence

Balance December 31, 2020

Other comprehensive income

Other comprehensive loss

Treasury shares repurchased

2 unchanged sentences

Issuance of common stock for RSUs vested

Accrued dividends on unvested shares

Cash dividends paid to shareholders

Stock based compensation

4 unchanged sentences

(in thousands)

Years Ended December 31,

Cash flows from operating activities

2 unchanged sentences

Amortization of intangible assets

Deferred tax expense from stock issuances

Deferred tax (benefit) expense from stock issuances

Write-off of deferred financing costs

2 unchanged sentences

Change in fair value of contingent consideration

Provisions for accounts receivable

Deferred tax (benefit) provision

Loss on disposal of fixed assets

(Benefits) provisions for accounts receivable

Deferred tax provision (benefit)

Changes in operating assets and liabilities:

10 unchanged sentences

Cash flows from financing activities

Principal payments on borrowings, net

Payment of contingent consideration

Principal payments on borrowings

Proceeds from issuance of employee stock purchase plan shares

1 unchanged sentence

Payments related to tax withholding for stock-based compensation

Payment of contingent consideration

Cash dividends paid to shareholders

Treasury shares repurchased

1 unchanged sentence

Effect of exchange rate changes on cash

Net increase (decrease) in cash, cash equivalents, and restricted cash

Net increase in cash, cash equivalents, and restricted cash

Cash, cash equivalents , and restricted cash, beginning of period

39 unchanged sentences

Acquisitions are accounted for using the purchase method of accounting and the purchase price is allocated to the net assets acquired based upon their estimated fair values at the date of acquisition.

The excess of the purchase price over the net assets was recorded as goodwill.

The excess of the purchase price over the net assets are recorded as goodwill.

Acquisition-related costs are expensed as incurred and recorded in selling, general and administrative expenses.

21 unchanged sentences

Furniture, Fixtures and Equipment, net

Furniture, fixtures and equipment is recorded at cost.

Depreciation is computed by applying the straight-line method over the estimated useful life of the assets, which ranges from three to five years .

Leasehold improvements are depreciated over the lesser of the useful life of the underlying asset or the lease term, which generally ranges from three to five years .

Expenditures for renewals and betterments are capitalized.

Furniture, fixtures and equipment are recorded at cost.

Depreciation is computed by applying the straight-line method over the estimated useful life of the assets, which ranges from two to five years .

Leasehold improvements are depreciated over the lesser of the useful life of the underlying asset or the lease term, which generally ranges from two to five years .

Repairs and maintenance are charged to expense as incurred.

25 unchanged sentences

Deferred issuance costs are classified as a direct deduction to the long-term debt in the accompanying consolidated balance sheet.

Amortization of debt issuance costs is included in interest expense and totaled $ 0.4 million and $ 0.6 million for the years ended December 31, 2020 and 2019, respectively.

Amortization of debt issuance costs is included in interest expense and totaled $ 0.4 million for both years ended December 31, 2021 and 2020.

Revenue Recognition

11 unchanged sentences

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.

For contracts 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.

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.

6 unchanged sentences

For ongoing managed services contract, revenue is recognized over time, consistent with the weekly or monthly fee specified within such arrangements.

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.

We also derive revenues based on negotiating reductions in network and software 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.

Additionally, these contracts can also have a fixed component and a contingent component that is based on the savings generated by the Company.

Additionally, these contracts can also have a fixed component and a contingent component that is based on the savings generated by the

INFORMATION SERVICES GROUP, INC.

1 unchanged sentence

(tabular amounts in thousands, except per share data)

contingency contracts with termination for convenience clauses, revenue is recognized over time due to the existence of provisions for payment for progress incurred to date plus a reasonable profit margin.

For network and software contingency contracts with termination for convenience clauses, revenue is recognized over time due to the existence of provisions for payment for progress incurred to date plus a reasonable profit margin.

The contract periods range from a few months to in excess of a year.

We also enter into arrangements for the sale of robotics software licenses and related delivery of consulting or implementation services at the same time or within close proximity to one another.

Such software-related performance obligations include the sale of software licenses and other software-related services.

For software and implementation contracts, revenue associated with the software performance obligation is recognized at the point at which the software is installed, while revenue associated with the implementation service performance obligation is recognized over the software implementation period as a percentage of hours incurred to date as compared to the total expected hours.

Revenue associated with events is recognized at the point of time at which the event occurs.

We also enter into arrangements for the sale of automation software licenses and related delivery of consulting or implementation services at the same time or within close proximity to one another.

Such software-related performance obligations include the sale of on-premise software and software-as-a-service licenses, as well as other software-related services.

Revenue associated with the software performance obligation is primarily recognized at the point at which the software is installed or access is granted, while revenue associated with the implementation service performance obligation is recognized over the software implementation period as a percentage of hours incurred to date as compared to the total expected hours.

Revenue associated with events is recognized at the point of time at which the event occurs and is primarily comprised of sponsorships.

Conversely, revenue associated with research subscriptions is recognized over time, as the customer accesses our data or related platforms.

In addition, we sell research products for which the revenue is recognized at a point in time upon delivery to the client.

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.

2 unchanged sentences

These provisions typically prohibit us from performing a defined range of services that we might otherwise be willing to perform for potential clients.

These provisions are generally limited to six to twelve months and usually apply only to specific employees or the specific project team.

These provisions are generally limited to six to twelve month s and usually apply only to specific employees or the specific project team.

When we recognize revenues in advance of billing, those revenues are recorded as contract assets.

When we receive cash in advance of completing services or earning revenues, those amounts are recorded as contract liabilities.

When we invoice in advance of completing services or earning revenues, those amounts are recorded as contract liabilities.

Reimbursable Expenditures

2 unchanged sentences

Reimbursable expenditures totaled $ 0.3 million and $ 1.7 million for the years ended December 31, 2021 and 2020, respectively.

The decrease was attributable to pandemic related travel restrictions that occurred throughout the majority of 2020.

The decrease was attributable to pandemic-related travel restrictions that occurred throughout the majority of 2021 and 2020.

Direct Costs and Expenses for Advisors

16 unchanged sentences

Treasury Stock

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.

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 August 5, 2021.

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.

Losses are reflected as an adjustment to additional paid-in capital to the extent of gains previously recognized, otherwise as an adjustment to retained earnings or accumulated deficit.

Losses are generally reflected as an adjustment to additional paid-in capital.

Foreign Currency Translation

31 unchanged sentences

Contingent consideration (2)

The current and noncurrent Contingent consideration is included in “Accrued expenses” and “Other current liabilities,” respectively.

Contingent consideration is included in “Accrued expenses and other current liabilities” as of December 31, 2021.

The current and noncurrent Contingent consideration is included in “Accrued expenses and other current liabilities” and “Other liabilities,” respectively, as of December 31, 2020.

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 .

4 unchanged sentences

Beginning Balance

Payments of contingent consideration

Neuralify contingent consideration accrued

Payment of contingent consideration

Accretion of contingent consideration

Unrealized gain (loss) related to currency translation

Ending Balance

3 unchanged sentences

The Company’s financial instruments include outstanding borrowings of $ 74.5 million at December 31, 2021 and $ 78.8 million at December 31, 2020, which are carried at amortized cost.

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.

1 unchanged sentence

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.

The incremental borrowing rate used to discount future cash flows ranged from 2.39 % to 2.49 % .

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.

The incremental borrowing rate used to discount future cash flows is 2.0 % and 2.5 % for December 31, 2021 and 2020, respectively.

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 and interest rates.

As of December 31, 2021 and 2020, there were no borrowings under the revolver.

The Company is currently in compliance with its financial covenants.

We use the asset and liability method to account for income taxes, including recognition of deferred tax assets and liabilities for the anticipated future tax consequences attributable to differences between financial statement amounts and their respective tax basis.

20 unchanged sentences

Determining whether services and products are considered distinct performance obligations that should be accounted for separately versus together may require judgment.

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.

However, we sometimes receive

However, we sometimes receive advances or deposits before revenue is recognized, resulting in contract liabilities.

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

INFORMATION SERVICES GROUP, INC.

1 unchanged sentence

(tabular amounts in thousands, except per share data)

advances or deposits before revenue is recognized, resulting in contract liabilities.

of the satisfaction of the related performance obligation(s).

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.

4 unchanged sentences

Revenue recognized for the year ended December 31, 2021 that was included in the contract liability balance at January 1, 2021 was $ 3.5 million and represented primarily revenue from our software and implementation contracts, managed services contracts, and research contracts.

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.

Remaining performance obligations

4 unchanged sentences

The primary reason for the acquisition was to expand the capabilities of ISG’s pure-play automation service line, ISG Automation.

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.

The purchase price was comprised of $ 2.3 million of cash consideration paid at closing and certain former equity holders 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.

At the Agreement date, the Company estimated such earn-out payments would be up to $ 4.9 million.

4 unchanged sentences

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.

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

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 the assets acquired and liabilities assumed based on estimated fair values as of the closing date.

Based on the valuation and other factors as described above, the purchase price assigned to intangible assets and the amortization period were as follows:

INFORMATION SERVICES GROUP, INC.

1 unchanged sentence

(tabular amounts in thousands, except per share data)

the assets acquired and liabilities assumed based on estimated fair values as of the closing date.

Based on the valuation and other factors as described above, the purchase price assigned to intangible assets and the amortization period were as follows:

Accounts receivable

5 unchanged sentences

The Consolidated Statement of Income and Comprehensive Income includes the results of the Neuralify acquisition subsequent to the closing.

Had the acquisition occurred as of January 1, 2019, the impact on the Company’s results of operations would not have been material.

NOTE 5—NET INCOME PER COMMON SHARE

2 unchanged sentences

The following tables set forth the computation of basic and diluted earnings per share:

Years Ended December 31,

Weighted average common shares

22 unchanged sentences

NOTE 8—LEASES

In February 2016, the FASB issued Accounting Standards Update No.

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.

We adopted ASC 842 using the effective date of January 1, 2019 as the date of our initial application of the standard.

Consequently, financial information for the comparative periods will not be updated.

The Company determines if a contract is, or contains, a lease at contract inception.

The Company elected the package of practical expedients for leases that commenced prior to January 1, 2019 and will not reassess:

(i) whether any expired or existing contracts are or contain leases;

(ii) lease classification for any expired or existing leases;

and (iii) initial direct costs capitalization for any existing leases.

The Company elected upon adoption the use of hindsight in assessing factors that impact determination of the lease term, such as the likelihood that any renewal or purchase options are exercised.

The Company elected to make an accounting policy election to keep leases with an initial term of 12 months or less off the balance sheet.

The Company also elected not to separate non-lease components from lease components and instead to account for each separate lease component and the non-lease components associated with that lease component as a single lease component.

The Company recognizes those lease payments in the consolidated statements of income on a straight-line basis over the lease term.

The Company recognizes lease payments in the consolidated statements of income on a straight-line basis over the lease term.

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.

1 unchanged sentence

Under the operating leases, the Company pays certain operating expenses relating to the office equipment and leased property.

INFORMATION SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(tabular amounts in thousands, except per share data)

The components of lease expense were as follows:

13 unchanged sentences

Financing cash flows from finance leases

INFORMATION SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(tabular amounts in thousands, except per share data)

Supplemental balance sheet information related to leases was as follows:

18 unchanged sentences

(1) Current lease liabilities are included in “Accrued expenses and other current liabilities.”

INFORMATION SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(tabular amounts in thousands, except per share data)

(2) Finance lease right-of-assets are included in “Furniture, fixtures and equipment, net”

Maturities of lease liabilities were as follows:

2 unchanged sentences

Less imputed interest

INFORMATION SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(tabular amounts in thousands, except per share data)

NOTE 9—INTANGIBLE ASSETS

8 unchanged sentences

Trademark and trade names

Amortization expense was $ 2.6 million and $ 3.5 million for the years ended December 31, 2021 and 2020, respectively.

The estimated future amortization expense subsequent to December 31, 2021, is as follows:

INFORMATION SERVICES GROUP, INC.

1 unchanged sentence

(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:

NOTE 10—GOODWILL

13 unchanged sentences

Current operating lease liability

INFORMATION SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(tabular amounts in thousands, except per share data)

NOTE 12—FINANCING ARRANGEMENTS AND LONG-TERM DEBT

4 unchanged sentences

Long-term debt

INFORMATION SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(tabular amounts in thousands, except per share data)

Aggregate annual maturities of debt obligations by calendar year, are as follows:

8 unchanged sentences

● 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.

● 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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(tabular amounts in thousands, except per share data)

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.

1 unchanged sentence

The Company’s financial statements include outstanding borrowings of $ 74.5 million and $ 78.8 million at December 31, 2021 and December 31, 2020, respectively, which are carried at amortized cost.

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.

1 unchanged sentence

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.

The incremental borrowing rate used to discount future cash flows is 2.49 % .

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.

The incremental borrowing rate used to discount future cash flows is 2.0 % and 2.5 % for December 31, 2021 and 2020, respectively.

The Company also considered recent transactions of peer group

INFORMATION SERVICES GROUP, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(tabular amounts in thousands, except per share data)

companies for similar instruments with comparable terms and maturities as well as an analysis of current market conditions and interest rates.

As of December 31, 2021 and 2020, there were no borrowings under the revolver.

The Company is currently in compliance with its financial covenants.

NOTE 13—COMMITMENTS AND CONTINGENCIES

2 unchanged sentences

Neuralify Contingent Consideration

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.

As of December 31, 2021, the Company has recorded a liability of $ 2.4 million representing the estimated fair value of contingent consideration related to the acquisition of Neuralify, all of which is classified as current and included in accrued expenses on the consolidated balance sheet.

NOTE 14—RELATED PARTY TRANSACTIONS

From time to time, the Company may have receivables and payables with employees and shareholders.

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.

The Company had outstanding receivables from related parties, including shareholders, totaling $ 0.2 million and $ 0.1 million for December 31, 2021 and 2020, respectively, and no outstanding payables.

These transactions related to personal withholding taxes paid on behalf of expatriate employees.

9 unchanged sentences

Total current provision

Total deferred benefit

Total deferred (benefit) expense

The differences between the effective tax rates reflected in the total provision for income taxes and the U.S.

6 unchanged sentences

Valuation allowances increase (release)

Net increase (decrease) of uncertain tax positions

Net decrease of uncertain tax positions

Income tax provision

21 unchanged sentences

Total noncurrent deferred tax liability

Net noncurrent deferred tax (liability) asset

Net deferred tax (liability) asset

Net noncurrent deferred tax liability

Net deferred tax liability

A valuation allowance was established at December 31, 2021 and 2020 due to estimates of future utilization of net operating loss carryovers in the U.S.

8 unchanged sentences

Tax positions that previously failed to meet the more likely than not recognition threshold should be recognized in the first subsequent financial reporting period in which that threshold is met.

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.

It is the Company’s policy to accrue for interest and penalties related to its uncertain tax positions within income tax expense.

Previously recognized tax positions that no longer meet the more likely than not recognition threshold should be derecognized in the first subsequent financial reporting

INFORMATION SERVICES GROUP, INC.

1 unchanged sentence

(tabular amounts in thousands, except per share data)

period in which that threshold is no longer met.

It is the Company’s policy to accrue for interest and penalties related to its uncertain tax positions within income tax expense.

A tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period is as follows:

2 unchanged sentences

Reductions as a result of tax positions taken during a prior period

Reductions as a result of lapse of statute

Balance, end of year

28 unchanged sentences

Dividends accrue and will be paid if and when the restricted shares vest.

The Company also granted RSUs to specific employees which have the following characteristics:

● Performance-Based RSU Vesting (Stock Price):

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)

The Company also granted RSUs to specific employees which have the following characteristics:

● Performance-Based RSU Vesting (Stock Price):

● Time-Based RSU Vesting:

5 unchanged sentences

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.

The fair value of RSUs is determined based on the closing price of the Company’s shares on the grant date.

15 unchanged sentences

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.

The Company may issue new shares for the ESPP using treasury shares or newly issued shares.

For the year ended December 31, 2020, the Company issued 237,726 shares for the ESPP.

There were 1,161,220 shares available for purchase at December 31, 2020 under the ESPP.

The Compensation Committee may at any time amend or terminate the ESPP, except that no such amendment or termination

INFORMATION SERVICES GROUP, INC.

1 unchanged sentence

(tabular amounts in thousands, except per share data)

may adversely affect shares previously granted under the ESPP.

The Company may issue new shares for the ESPP using treasury shares or newly issued shares.

For the year ended December 31, 2021, the Company issued 122,707 shares for the ESPP.

There were 1,038,513 shares available for purchase at December 31, 2021 under the ESPP.

NOTE 17—SEGMENT AND GEOGRAPHICAL INFORMATION

3 unchanged sentences

Geographical information for the segment is as follows:

Years Ended December 31,

Asia Pacific (3)

5 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.

NOTE 18—RISKS AND UNCERTAINTIES

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.

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.

As a result of these measures, the US and global markets have seen significant disruption, the extent and duration of which remains highly uncertain.

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.

In 2020, the Company experienced a year-over-year revenue decline.

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.

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.

The Company has financial covenants underlying its debt which require an adjusted Debt to EBITDA ratio of 3.25 .

In light of the pandemic, there is uncertainty regarding the marketplace demand for the Company’s services and thus the Company’s future revenue

INFORMATION SERVICES GROUP, INC.

1 unchanged sentence

(tabular amounts in thousands, except per share data)

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.

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.

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.

NOTE 18 — RESTRUCTURING CHARGES

9 unchanged sentences

The $ 2.3 million of net restructuring charges was primarily related to contractual termination benefits, and was recorded in selling, general and administrative expenses.

We expect that the remaining actions of the Restructuring Plan will be completed over the next three months .

EXHIBIT INDEX

29 unchanged sentences

001-33287), and incorporated herein by reference).

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.

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).

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).

Form of Restricted Unit Agreement for Directors (Time Based).

Form of Restricted Unit Agreement for Executives (Time Based).

Form of Restricted Stock Unit Agreement for Executives (Performance Based).

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.

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).

Retirement Agreement dated as of June 10, 2021, between the Company and David E.

Change in Control Agreement dated as of January 7, 2011, between the Company and Michael P.

19 unchanged sentences

001-33287), and incorporated herein by reference).

Form of Restricted Stock Unit Agreement (Performance Based).

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:

4 unchanged sentences

001-33287), and incorporated herein by reference).

Employment Letter for Humberto P.

Alfonso, dated April 30, 2021 (previously filed as Exhibit 10.1 to the Registrant’s Form 8-K filed with the SEC on May 5, 2021 (Commission File Number:

001-33287), and incorporated herein by reference).

Computation of Earnings Per Share (included in Consolidated Statement of Comprehensive Income to the Consolidated Financial Statements included in Part II—Item 8 herein).

10 unchanged sentences

(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.

Cover Page formatted in Inline XBRL and contained in Exhibit 101 attachments.

* Filed herewith.

9 unchanged sentences

March 11, 2022

/s/ Humberto P.

Executive Vice President, Chief

25 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.

What changed 10-K

Item 9A. Controls and Procedures