Information Services Group (III) risk factors, FY2024 10-K

Risks Related to Outstanding Debt

1. 01we may not have sufficient liquidity to respond to business opportunities, competitive developments and adverse economic conditions; and
2. 02our results of operations will be adversely affected if interest rates increase because, based on our current outstanding borrowings in the amount of $59.2 million as of December 31, 2024, a 1% increase in interest rates would result in a pre-tax impact on earnings of approximately $0.6 million per year
3. 03Our failure to comply with the covenants in our credit agreement could materially and adversely affect our financial condition and liquidity
4. 04Our variable rate indebtedness subjects us to interest rate risk, which could cause our annual debt service obligations to increase significantly

Risks Related to Acquisitions and Dispositions

1. 05We have risks associated with acquisitions or investments
2. 06Difficulties in integrating businesses we have acquired, or may acquire in the future, may demand time and attention from our senior management
3. 07We have risks associated with dispositions
4. 08Our operating results have in the past been, and may in the future be, adversely affected by worldwide economic conditions and credit tightening
5. 09The rate of growth in the broadly defined business information services and advisory sector and/or the use of technology in business may fall significantly below the levels that we currently anticipate
6. 10We may not be successful in our artificial intelligence initiatives, which could adversely affect our business, reputation or financial results
7. 11Our engagements may be terminated, delayed or reduced in scope by clients at any time
8. 12Our operating results may fluctuate significantly from period to period as a result of factors outside of our control
9. 13We depend on project-based advisory engagements, and our failure to secure new engagements could lead to a decrease in our revenues
10. 14If we are unable to achieve or maintain adequate utilization for our consultants, our operating results could be adversely impacted
11. 15We could lose money on our fixed-fee or capped-fee contracts
12. 16Our contracts with contingent-based revenue may cause unusual variations in our operating results
13. 17We may not be able to maintain our existing services and products
14. 18Expanding our service offerings may not be profitable
15. 19We may not have the ability to develop and offer the new services and products that we need to remain competitive
16. 20We may fail to anticipate and respond to market trends
17. 21We may be unable to protect important intellectual property rights
18. 22We face competition and our failure to compete successfully could materially adversely affect our results of operations and financial condition
19. 23We derive a significant portion of our revenues from our largest clients and could be materially and adversely affected if we lose one or more of our large clients

Risks Related to Management and Employees

1. 24The loss of key executives could adversely affect our business
2. 25We rely heavily on key members of our management team
3. 26We depend upon our ability to attract, retain and train skilled advisors and other professionals
4. 27We may have agreements with certain clients that limit the ability of particular advisors to work on some engagements for a period of time

Macroeconomic Risks

1. 28Our international operations expose us to a variety of risks that could negatively impact our future revenue and growth
2. 29Air travel, telecommunications and entry through international borders are all vital components of our business. If a pandemic, military conflict or terrorist attack were to occur, our business could be disproportionately impacted because of the disruption, including potential cancellation of ISG events
3. 30We operate in a number of international areas which exposes us to significant foreign currency exchange rate risk

Risks Related to Data, Cybersecurity and Confidential Information

1. 31Data protection laws and self-regulatory codes may restrict our activities and increase our costs
2. 32We are exposed to risks related to cybersecurity
3. 33We may be subject to claims for substantial damages by our clients arising out of disruptions to their businesses or inadequate service, and our insurance coverage may be inadequate
4. 34we could incur liability if a process we manage for a client was to result in internal control failures or impair our client’s ability to comply with their own internal control requirements
5. 35We could have liability, or our reputation could be damaged, if we fail to protect client and/or our data from security breaches or cyberattacks
6. 36Client restrictions on the use of client data could adversely affect our activities
7. 37Failure to maintain effective internal control over financial reporting could adversely affect our business and the market price of our common stock
8. 38in all annual reports. This report contains, among other matters, a statement as to whether or not our internal control over financial reporting is effective and the disclosure of any material weaknesses in our internal control over financial reporting identified by management
9. 39Our actual operating results may differ significantly from our guidance