<SEC-DOCUMENT>0001104659-24-070574.txt : 20240717
<SEC-HEADER>0001104659-24-070574.hdr.sgml : 20240717
<ACCEPTANCE-DATETIME>20240611213401
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001104659-24-070574
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20240611

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			Information Services Group Inc.
		CENTRAL INDEX KEY:			0001371489
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-MANAGEMENT CONSULTING SERVICES [8742]
		ORGANIZATION NAME:           	07 Trade & Services
		IRS NUMBER:				205261587
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		2187 ATLANTIC STREET
		CITY:			STAMFORD
		STATE:			CT
		ZIP:			06902
		BUSINESS PHONE:		203-517-3100

	MAIL ADDRESS:	
		STREET 1:		2187 ATLANTIC STREET
		CITY:			STAMFORD
		STATE:			CT
		ZIP:			06902
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<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">June&nbsp;11, 2024</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>VIA EDGAR</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Securities and Exchange Commission</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Division of Corporation Finance</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Office of Trade&nbsp;&amp; Services</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">100 F Street, NE</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Washington, DC 20549</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 10%; text-align: left">Attention:</TD><TD STYLE="text-align: justify; width: 90%">Robert Shapiro</TD>
</TR><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: justify">Doug Jones</TD></TR>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<TD STYLE="width: 10%"></TD><TD STYLE="width: 5%; text-align: left">Re:</TD><TD STYLE="text-align: justify; width: 85%"><B>Information Services Group,&nbsp;Inc.</B></TD>
</TR><TR STYLE="vertical-align: top; text-align: justify">
<TD>&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: justify"><B>Form&nbsp;10-K for Fiscal Year Ended December&nbsp;31,
2023</B></TD></TR>
     <TR STYLE="vertical-align: top; text-align: justify">
<TD>&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: justify"><B>File No.&nbsp;001-33287</B></TD></TR>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Gentlemen:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">This letter is furnished on behalf of Information
Services Group,&nbsp;Inc. (the &ldquo;Company,&rdquo; &ldquo;we&rdquo; or &ldquo;us&rdquo;) in response to the comment from the staff
(the &ldquo;Staff&rdquo;) of the Securities and Exchange Commission (the &ldquo;Commission&rdquo;) received by electronic mail on May&nbsp;29,
2024 that relates to the Company&rsquo;s Form&nbsp;10-K for the fiscal year ended December&nbsp;31, 2023 (File No.&nbsp;001-33287) filed
with the Commission on March&nbsp;8, 2024 (the &ldquo;Form&nbsp;10&ndash;K&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The text of the Staff&rsquo;s comment has been
included in bold and italics for your convenience and we have also set forth the Company&rsquo;s response immediately below the numbered
comment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>Form&nbsp;10-K for Fiscal Year Ended December&nbsp;31,
2023</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>Management's Discussion and Analysis of
Financial Condition and Results of Operations</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>Non-GAAP Financial Measures, page&nbsp;29</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">1.</TD><TD STYLE="text-align: justify"><B><I>Please explain why you believe the adjustment of $4.8 million for the accounts receivable reserves
for the year ended December&nbsp;31, 2023 in determining Adjusted EBITDA and Adjusted Net Income complies with Question 100.01 of the
Compliance and Disclosure Interpretations on Non-GAAP Financial Measures.</I></B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company respectfully acknowledges
the Staff&rsquo;s comment and reference to the guidance set forth in Question 100.01 of the Compliance and Disclosure Interpretations
on Non-GAAP Financial Measures. The Company advises the Staff that the accounts receivables reserve adjustment of $4.8 million solely
consists of reserves directly related to one specific client.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Specific to the $4.8 million
adjustment for the accounts receivable reserve, the Company considered the following in its determination that the specific reserve did
not constitute normal, recurring expenses:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD><TD STYLE="text-align: justify">The client to which this reserve adjustment relates had engaged us for two multi-year projects, which
previously commenced in 2021 and 2022. In Q4 of 2023, they failed to make payments as per the contracted payment schedule and we ceased
performing services under the respective agreements. After unsuccessful negotiations, we provided the client with notice that we would
be terminating the respective projects. Accordingly, during Q4 of 2023, the Company recorded through bad debt expense an allowance for
doubtful accounts reserve of $4.8 million associated with this client.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD><TD STYLE="text-align: justify">Prior to Q4 of 2023, the largest cumulative charge to the allowance for doubtful accounts occurred in
the fiscal year ended December&nbsp;31, 2020 totaling $817K and the average charge to allowance experienced over the last 15 years was
$211K. Since we commenced disclosing our Adjusted EBIDTA and Adjusted Net Income in 2014, this is the only time we have adjusted these
measures for an expense associated with an accounts receivable reserve.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; font-size: 10pt">&middot;</FONT></TD><TD STYLE="text-align: justify">In consideration of the above, the size of the accounts receivable reserve was determined to be outside
the ordinary course of business due the significant magnitude of the specific charge, not only when compared to historical experience
across our portfolio of clients but also when considering that the entire charge related to one client. Given our normal recurring operating
activities, and our portfolio of clients, we would not anticipate an expense of a similar magnitude to recur in the near future. As such,
we do not intend to adjust EBITDA or Net Income for reserve related expenses incurred on a go forward basis.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Given the magnitude of the
charge, and thus its unusual nature, in addition to our discussion in Management&rsquo;s Discussion and Analysis of Financial Condition
and Results of Operations, we disclosed the nature of this adjustment within Note 2 &ndash; Summary of Significant Accounting Policies
 &ndash; Accounts Receivable, Contract Assets and Allowance for Doubtful Accounts to the Notes to Consolidated Financial Statements of
the Form&nbsp;10-K. In addition to the Form&nbsp;10-K disclosure, we further disclosed this adjustment in our earnings release attached
as Exhibit&nbsp;99.1 to our Current Report on Form&nbsp;8-K dated March&nbsp;7, 2024 regarding earnings for the fourth quarter and fiscal
year ended December&nbsp;31, 2023 and referenced the adjustment during the Company&rsquo;s fourth quarter and year-end earnings call held
on May&nbsp;8, 2024. To provide further clarity as to the nature of the accounts receivable reserve adjustment, we plan in future filings
to add the following footnote, &ldquo;Adjustment relates to a specific reserve of $4.8 million related to one client with whom we ceased
performing services during the fourth quarter of 2023, following the client&rsquo;s failure to make payments as per the contracted payment
schedule. Refer to Note 2 of the consolidated financial statements for further detail.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company further notes
that accounts receivable reserves that are determined to be normal, recurring expenses necessary to operate the business are not excluded
when calculating Adjusted EBITDA or Adjusted Net Income. For example, the Company incurred, in the ordinary course of business, accounts
receivable reserves related to clients other than to this specific client. These expenses were deemed normal, recurring operating expenses
and therefore were not excluded in the calculation of Adjusted EBITDA and Adjusted Net Income (i.e., not included within the &ldquo;Accounts
Receivable Reserves&rdquo; adjustment). For reference, the Company, under its internal policy, considers the frequency and magnitude of
expenses when determining whether expenses are not normal, recurring operating expenses and therefore believes it makes appropriate adjustments
when arriving at its non-GAAP measures of Adjusted EBITDA and Adjusted Net Income.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In the period where these
accounts receivable reserves were excluded from Adjusted EBITDA and Adjusted Net Income, such expenses were also excluded by management
for purposes of its operating decision-making activities and to assess its operating performance. Management uses Adjusted EBITDA on an
internal basis, period-over-period, to evaluate its operating performance, to analyze trends within its business, to assess its performance
relative to its competitors, and to establish operational goals and forecasts that are used in allocating resources.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For all of the above reasons,
the Company believes and respectfully submits that the adjustment with respect to accounts receivable reserves expenses related to this
specific client does not cause the Company&rsquo;s Adjusted EBITDA or Adjusted Net Income disclosed in the Form&nbsp;10-K to be misleading
or inconsistent with the guidance in Question 100.01 of the Compliance and Disclosure Interpretations on Non-GAAP Financial Measures.
The Company believes that fully disclosing, explaining, and reconciling this item as part of its presentation of Adjusted EBITDA and Adjusted
Net Income provides a more accurate representation of ongoing operations, enhances comparability of current results to prior periods and
is therefore more useful for investors to analyze the Company&rsquo;s financial performance as it eliminates the impact of an item that
may otherwise obscure trends in the underlying performance of the Company&rsquo;s business</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We appreciate the Staff&rsquo;s time and attention
and we hope that the foregoing has been responsive to the Staff&rsquo;s comment. Should the Staff have additional questions or comments
regarding the foregoing, please do not hesitate to contact Michael Sherrick at (203) 517-3104 or Michael.Sherrick@isg-one.com.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Sincerely,</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">/s/ Michael A. Sherrick</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Michael A. Sherrick, Chief Financial Officer
and Chief Accounting Officer</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">cc: Thomas F. Lamprecht</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Katten Muchin Rosenman LLP</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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