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ACQUISITIONS | 9 Months Ended
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Sep. 30, 2024
ACQUISITIONS |
ACQUISITIONS | NOTE 4—ACQUISITIONS ​ Ventana Research Acquisition On October 31, 2023, a subsidiary of the Company executed an Asset Purchase Agreement with Ventana Research, Inc. (“Ventana Research”) and consummated the acquisition of substantially all assets, and assumed certain liabilities, of Ventana Research. The purchase price was comprised of $1.0 million of cash consideration paid at closing. Ventana Research will also have the right to receive additional consideration paid via earn-out payments, if certain financial targets are met. At the agreement date, the Company estimated such earn-out payment would be $1.7 million. Please see Note 9—Commitments and Contingencies—Ventana Research Contingent Consideration for more. The following table summarizes the preliminary consideration transferred to acquire Ventana Research, Inc. and the amount of identified assets acquired, and liabilities assumed, as of the agreement date: ​
​ | ​ | ​ | ​
Cash |  | $ | 1,000
Contingent consideration | ​ |  | 1,657
Total allocable purchase price | ​ | $ | 2,657
​ The 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 was as follows: ​
​ | ​ | ​ | ​
Accounts receivable | ​ | $ | 404
Intangible assets | ​ |  | 1,400
Contract liabilities | ​ |  | (1,362)
Net assets acquired | ​ | $ | 442
​ | ​ | ​ | ​
Goodwill | ​ | $ | 2,215
​ The primary factors that drove the goodwill recognized, the majority of which is deductible for tax purposes, were the inclusion of the legacy Ventana Research workforce and allowing the Company to penetrate an entirely new market sector for software technology vendors. Costs associated with this acquisition are included in selling, general and administrative expense in the Consolidated Statements of Income and Comprehensive Income appearing in the Company’s Annual Report on the Form 10-K for the year ended December 31, 2023 and totaled $0.1 million during the year ended December 31, 2023. Based on the valuation and other factors as described above, the purchase price assigned to intangible assets and the amortization period was as follows: ​
​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​
​ |  | Purchase Price |  | Estimated
​ |  | Allocation |  | Useful Lives
Amortizable intangible assets: | ​ | ​ | ​ | ​ | ​
Trademark and trade name | ​ | $ | 600 |  | 3 years
Customer relationships | ​ | ​ | 700 | ​ | 7 years
Noncompete agreements | ​ | ​ | 100 | ​ | 2 years
Total intangible assets | ​ | $ | 1,400 | ​ | ​
​ Change 4 Growth Acquisition ​ On October 31, 2022, a subsidiary of the Company executed an Asset Purchase Agreement with Change 4 Growth, LLC (“Change 4 Growth”) and consummated the acquisition of substantially all the assets, and assumed certain liabilities, of Change 4 Growth. The purchase price was comprised of $3.8 million of cash consideration, $0.6 million of shares of ISG common stock issued promptly after closing and Change 4 Growth will also have the right to receive additional consideration paid via earn-out payments, if certain financial targets are met. At the agreement date, the Company estimated such earn-out payment would be $5.6 million. Please see Note 9—Commitments and Contingencies—Change 4 Growth Contingent Consideration for more. ​ The following table summarizes the consideration transferred to acquire Change 4 Growth and the amounts of identified assets acquired, and liabilities assumed, as of the agreement date: ​
​ | ​ | ​ | ​
Cash |  | $ | 3,450
Accrued working capital adjustment | ​ | ​ | 378
ISG common stock | ​ |  | 600
Contingent consideration | ​ |  | 5,560
Total allocable purchase price | ​ | $ | 9,988
​ This acquisition 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 the fair values as of the closing date. Based on the valuation and other factors as described above, the purchase price assigned to intangible assets was as follows: ​
​ | ​ | ​ | ​
Accounts receivable and contract assets | ​ | $ | 1,841
Intangible assets | ​ |  | 4,300
Accounts payable and accrued expense | ​ | ​ | (428)
Contract liabilities | ​ |  | (85)
Net assets acquired | ​ | $ | 5,628
​ | ​ | ​ | ​
Goodwill | ​ | $ | 4,360
​ The primary factors that drove the goodwill recognized, the majority of which is deductible for tax purposes, were the inclusion of the legacy Change 4 Growth workforce and associated organizational change management expertise to enhance and expand the offerings of the ISG Enterprise Change service line. Costs associated with this acquisition are included in selling, general and administrative expense in the Consolidated Statements of Income and Comprehensive Income appearing in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 and totaled $0.2 million during year ended December 31, 2022. Based on the valuation and other factors as described above, the purchase price assigned to intangible assets and the amortization period was as follows: ​
​ | ​ | ​ | ​ | ​ | ​
​ |  | Purchase Price |  | Estimated
​ |  | Allocation |  | Useful Lives
Amortizable intangible assets: | ​ | ​ | ​ | ​ | ​
Trademark and trade name | ​ | $ | 1,100 |  | 3 years
Customer relationships | ​ | ​ | 2,900 | ​ | 8 years
Noncompete agreements | ​ | ​ | 300 | ​ | 2 years
Total intangible assets | ​ | $ | 4,300 | ​ | ​
​

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