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ACQUISITION

12 Months Ended

Dec. 31, 2024

ACQUISITION

NOTE 4—ACQUISITION

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.

The following table summarizes the final consideration transferred to acquire Ventana Research 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 amount of recognized identifiable assets acquired and liabilities assumed as of the agreement date:


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: software technology vendors.

Costs associated with this acquisition are included in the selling, general and administrative expense in the Consolidated Statement of Income and Comprehensive Income and totaled $0.1 million during the year ended December 31, 2023. 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 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

The Consolidated Statement of Income and Comprehensive Income includes revenue from the Ventana Research acquisition subsequent to the closing. Had the acquisition occurred as of January 1, 2023, approximately $3.9 million of revenue would have been recognized.

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 the right for Change 4 Growth 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.

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 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 the selling, general and administrative expense in the Consolidated Statement of Income and Comprehensive Income 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 were 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

The Consolidated Statement of Income and Comprehensive Income includes revenue from the Change 4 Growth acquisition subsequent to the closing. Had the acquisition occurred as of January 1, 2022, approximately $7.0 million of revenue would have been recognized.