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ACQUISITION | 9 Months Ended
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Sep. 30, 2021
ACQUISITION |
ACQUISITION | NOTE 4—ACQUISITION ​ Neuralify Acquisition ​ 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. 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. In October 2021, the 18-month period was extended six months to July 2022. On the date of the Agreement, the Company estimated such earn-out payments would be up to $4.9 million. ​ 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: ​
​ | ​ | ​ | ​
Cash |  | $ | 2,282
Contingent consideration | ​ |  | 4,900
Total allocable purchase price | ​ | $ | 7,182
​ 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. ​ 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 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 were as follows: ​
​ | ​ | ​ | ​
Accounts receivable | ​ | $ | 226
Contract assets | ​ |  | 1
Intangible assets | ​ |  | 1,970
Accounts payable | ​ |  | (79)
Contract liabilities | ​ |  | (280)
Net assets acquired | ​ | $ | 1,838
​ | ​ | ​ | ​
Goodwill | ​ | $ | 5,344
​ 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, 2020, the impact on the Company’s results of operations would not have been material.

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