INFORMATION SERVICES GROUP INC. MANAGEMENT REPORT OF FINANCIAL POSITION AND RESULTS OF OPERATIONS (Form 10-Q)

You should read the following discussion and analysis in conjunction with our
financial statements and related notes included elsewhere in this report. Except
for historical information, the discussion in this report contains certain
forward-looking statements that involve risks and uncertainties. We have based
these forward-looking statements on our current expectations and assumptions
about future events. In some cases, you can identify forward-looking statements
by terminology, such as "may," "should," "could," "predict," "potential,"
"continue," "expect," "anticipate," "future," "intend," "plan," "believe,"
"estimate," "forecast" and similar expressions (or the negative of such
expressions.) Forward-looking statements include statements concerning 2022
revenue growth rates and capital expenditures. Forward-looking statements are
based on our beliefs as well as assumptions based on information currently
available to us, including financial and operational information, the volatility
of our stock price, current competitive conditions and the impact of COVID-19.
As a result, these statements are subject to various risks and uncertainties.
For a discussion of material risks and uncertainties that the Company faces, see
the discussion in our 2021 Annual Report on Form 10-K titled "Risk Factors" and
in this Quarterly Report on Form 10-Q under Item 1A of Part II, "Risk Factors."

COMPANY OVERVIEW


ISG (Information Services Group) (Nasdaq: III) is a leading global technology
research and advisory firm. A trusted business partner to over 800 clients,
including more than 75 of the top 100 enterprises in our markets, ISG is
committed to helping corporations, public sector organizations, and service and
technology providers achieve operational excellence and faster growth. The firm
specializes in digital transformation services, including automation, cloud and
data analytics; sourcing advisory; managed governance and risk services; network
carrier services; technology strategy and operations design; change management;
market intelligence and technology research and analysis. Founded in 2006, and
based in Stamford, Conn., ISG employs more than 1,300 digital-ready
professionals operating in more than 20 countries-a global team known for its
innovative thinking, market influence, deep industry and technology expertise,
and world-class research and analytical capabilities based on the industry's
most comprehensive marketplace data. For more information, visit
www.isg-one.com.

Our strategy is to strengthen our existing market position and develop new
services and products to support future growth plans. As a result, we are
focused on growing our existing service model, expanding geographically,
developing new industry sectors, productizing market data assets, expanding our
managed services offerings and growing via acquisitions. Although we do not
expect any adverse conditions that will impact our ability to execute against
our strategy over the next twelve months, the more significant factors that
could limit our ability to grow in these areas include global macro-economic
conditions and the impact on the overall sourcing market, competition, our
ability to retain advisors and reductions in discretionary spending with our top
client accounts or other significant client events. Other areas that could
impact the business would also include natural disasters, pandemics, such as
COVID-19, legislative and regulatory changes and capital market disruptions.

We principally derive revenues from fees for services generated on a project by
project basis. Prior to the commencement of a project, we reach agreement with
the client on rates for services based upon the scope of the project, staffing
requirements and the level of client involvement. Revenues for services rendered
are recognized on a time and materials basis or on a fixed fee or capped fee
basis in accordance with accounting and disclosure requirements for revenue
recognition.

Revenues for time and materials contracts are recognized based on the number of
hours worked by our advisors at an agreed upon rate per hour and are recognized
in the period in which services are performed. Revenues for time and materials
contracts are billed monthly, semimonthly or in accordance with the specific
contractual terms of each project.

We also derive our revenues from certain recurring revenue streams.  These
include such annuity-based ISG offerings as ISG GovernX, Research, Software as a
Subscription (Automation licenses), ISG Inform and the multi-year Public Sector
contracts.  These offerings are characterized by subscriptions (i.e., renewal
centric as opposed to project centric revenue streams) or, in some instances,
multi-year contracts.  Our digital services now span a volume of offerings
and
have become

                                       14

integrated into the very framework of our traditional transaction services. Digital enablement delivers capabilities, digital insights, and better engagement with customers and partners.


Our results are impacted principally by our full-time consultants' utilization
rate, the number of business days in each quarter and the number of our
revenue-generating professionals who are available to work. Our utilization rate
can be negatively affected by increased hiring because there is generally a
transition period for new professionals that result in a temporary drop in our
utilization rate. Our utilization rate can also be affected by seasonal
variations in the demand for our services from our clients. The number of
business workdays is also affected by the number of vacation days taken by our
consultants and holidays in each quarter. We typically have fewer business
workdays available in the fourth quarter of the year, which can impact revenues
during that period. Time-and-expense engagements do not provide us with a high
degree of predictability as to performance in future periods. Unexpected changes
in the demand for our services can result in significant variations in
utilization and revenues and present a challenge to optimal hiring and staffing.
The volume of work performed for any particular client can vary widely from
period to period.

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 2022 AND JUNE 30, 2021

Revenue

The geographic information on segment revenue is as follows:

                          Three Months Ended June 30,
                                                      Percent
Geographic Area      2022        2021      Change     Change

                                 (in thousands)
Americas           $ 39,448    $ 40,339    $ (891)        (2) %
Europe               23,255      23,715      (460)        (2) %
Asia Pacific          7,998       6,543      1,455         22 %
Total revenues     $ 70,701    $ 70,597    $   104          0 %


Revenues increased $0.1 million for the second quarter of 2022.  The decrease in
revenue in the Americas was primarily attributable to a decrease in our
Automation service line, partially offset by an increase in our Advisory,
Research, and GovernX service lines.  The decrease in revenue in Europe was
primarily attributable to a decrease in our Advisory and Network & Software
Advisory Services (NaSa) service lines, partially offset by an increase in our
Automation and Research service lines.  The increase in revenue in Asia Pacific
was primarily attributable to an increase in our Advisory and NaSa service
lines, partially offset by a decrease in our Research service line.  The
translation of foreign currency revenues into U.S. dollars negatively impacted
performance in Europe and Asia Pacific compared to the prior year by $3.5
million.

Functionnary costs


The following table presents a breakdown of our operating expenses by category:

                                                  Three Months Ended June 30,
                                                                               Percent
Operating Expenses                          2022        2021       Change      Change

                                                         (in thousands)
Direct costs and expenses for advisors    $ 41,370    $ 43,007    $ (1,637)        (4) %
Selling, general and administrative         20,885      20,492          393
         2 %
Depreciation and amortization                1,298       1,255           43          3 %
Total operating expenses                  $ 63,553    $ 64,754    $ (1,201)        (2) %


Total operating expenses decreased $1.2 million, or approximately 2%, for the
second quarter of 2022.  The decrease in operating expenses were primarily due
to lower; contract labor of $1.7 million, compensation costs of $1.0 million,
and severance, integration and other expense of $0.8 million.  These costs were
partially offset by higher: travel and

                                       15

entertainment expenses of $1.0 millionexpenses related to the event $0.5 millionnon-cash stock-based compensation of $0.5 millionand professional fees $0.3 million.

Compensation costs consist of a mix of fixed and variable salaries, annual
bonuses, benefits and profit sharing plan contributions. A portion of
compensation expenses for certain billable employees are allocated between
direct costs and selling, general and administrative costs based on relative
time spent between billable and non-billable activities. Bonus compensation is
determined based on achievement against Company financial and individual targets
and is accrued monthly throughout the year based on management's estimates of
target achievement. Statutory and elective profit sharing plans are offered to
employees as appropriate. Direct costs also include employee taxes, health
insurance, workers compensation and disability insurance.

Sales and marketing costs consist principally of compensation expense related to
business development, proposal preparation and delivery and negotiation of new
client contracts. Costs also include travel expenses relating to the pursuit of
sales opportunities, expenses for hosting periodic client conferences, public
relations activities, participation in industry conferences, industry relations,
website maintenance and business intelligence activities. The Company maintains
a dedicated global marketing function responsible for developing and managing
sales campaigns, brand promotion, the ISG Index and assembling proposals.

We maintain a comprehensive program for training and professional development.
Related expenses include product training, updates on new service offerings or
methodologies and development of project management skills. Also included in
training and professional development are expenses associated with the
development, enhancement and maintenance of our proprietary methodologies and
tools and the systems that support them.

General and administrative expenses consist principally of executive management
compensation, allocations of billable employee compensation related to general
management activities, IT infrastructure, and costs for the finance, accounting,
information technology and human resource functions. General and administrative
costs also reflect continued investment associated with implementing and
operating client and employee management systems. Because our billable personnel
operate primarily on client premises or work remotely, all occupancy expenses
are recorded as general and administrative.

Depreciation and amortization expense in the second quarter of 2022 and 2021 was
$1.3 million, respectively.  Our fixed assets consist of furniture, fixtures,
equipment (mainly personal computers) and leasehold improvements. Depreciation
expense is generally computed by applying the straight-line method over the
estimated useful lives of assets. We also capitalize certain costs associated
with the purchase and development of internal-use software, system conversions
and website development costs. These costs are amortized over the estimated
useful life of the software or system.

We amortize our intangible assets (e.g. client relationships and databases) over
their estimated useful lives. Goodwill related to acquisitions is not amortized
but is subject to annual impairment testing and interim impairment tests, if
triggering events are identified.

Other income (expenses), net

The following table provides a breakdown of other income (expenses), net:


                                           Three Months Ended June 30,
                                                                      

Percent

Other income (expense), net           2022       2021      Change     Change

                                                  (in thousands)
Interest income                      $    44    $    60    $  (16)       (27) %
Interest expense                       (610)      (613)          3          0 %
Foreign currency transaction gain         94          8         86      1,075 %
Total other income (expense), net    $ (472)    $ (545)    $    73         13 %


The total decrease in $0.1 millionor around 13%, was mainly the result of higher foreign exchange trading gains.


                                       16

income tax expense

Our quarterly effective tax rate varies from period to period based on the mix
of earnings among the various state and foreign tax jurisdictions in which
business is conducted and the level of non-deductible expenses projected to be
incurred during the current fiscal year.  Our effective tax rate for the quarter
ended June 30, 2022 was 25.7% compared to 22.5% for the quarter ended June 30,
2021.  The difference for the quarter ended June 30, 2022 was primarily due to
the impact of earnings and losses in certain foreign jurisdictions and the
impact of vesting of restricted stock units.  The Company's effective tax rate
for the quarter ended June 30, 2022 was higher than the statutory rate primarily
due to the impact of foreign operations.  There were no significant changes in
uncertain tax position reserves or valuation allowances during the quarter ended
June 30, 2022.

RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2022 AND JUNE 30, 2021

Revenue

The geographic information on segment revenue is as follows:

                            Six Months Ended June 30,
                                                        Percent
Geographic Area      2022         2021       Change     Change

                                  (in thousands)
Americas           $  80,885    $  78,429    $ 2,456          3 %
Europe                46,718       46,457        261          1 %
Asia Pacific          15,661       12,282      3,379         28 %
Total revenues     $ 143,264    $ 137,168    $ 6,096          4 %

Revenues increased $6.1 million, or approximately 4%, for the six months of
2022.  The increase in revenue in the Americas was primarily attributable to an
increase in our Research, and GovernX service lines, partially offset by a
decrease in our Automation service line.  The increase in revenue in Europe was
primarily attributable to an increase in our Automation, Research, and GovernX
service lines, partially offset by a decrease in our NaSa and Advisory service
lines.  The increase in revenue in Asia Pacific was primarily attributable to an
increase in our Advisory and NaSa service lines.  The translation of foreign
currency revenues into U.S. dollars negatively impacted performance in Europe
and Asia Pacific compared to the prior year by $5.5 million.

Functionnary costs


The following table presents a breakdown of our operating expenses by category:

                                                   Six Months Ended June 30,
                                                                               Percent
Operating Expenses                          2022         2021       Change     Change

                                                         (in thousands)
Direct costs and expenses for advisors    $  85,325    $  84,163    $ 1,162          1 %
Selling, general and administrative          40,472       39,532        940
         2 %
Depreciation and amortization                 2,587        2,615       (28)        (1) %
Total operating expenses                  $ 128,384    $ 126,310    $ 2,074          2 %


Total operating expenses increased $2.1 million, or approximately 2%, for the
six months of 2022.  The increase in operating expenses were primarily due to
higher: compensation costs of $2.4 million, travel and entertainment expense of
$1.8 million, event related expenses of $0.9 million, and bad debt expense of
$0.5 million.  These costs were partially offset by lower; contract labor of
$1.9 million, severance, integration and other expense of $0.9 million, and
occupancy expense of $0.3 million.

                                       17

Compensation costs consist of a mix of fixed and variable salaries, annual
bonuses, benefits and profit sharing plan contributions. A portion of
compensation expenses for certain billable employees are allocated between
direct costs and selling, general and administrative costs based on relative
time spent between billable and non-billable activities. Bonus compensation is
determined based on achievement against Company financial and individual targets
and is accrued monthly throughout the year based on management's estimates of
target achievement. Statutory and elective profit sharing plans are offered to
employees as appropriate. Direct costs also include employee taxes, health
insurance, workers compensation and disability insurance.

Sales and marketing costs consist principally of compensation expense related to
business development, proposal preparation and delivery and negotiation of new
client contracts. Costs also include travel expenses relating to the pursuit of
sales opportunities, expenses for hosting periodic client conferences, public
relations activities, participation in industry conferences, industry relations,
website maintenance and business intelligence activities. The Company maintains
a dedicated global marketing function responsible for developing and managing
sales campaigns, brand promotion, the ISG Index and assembling proposals.

We maintain a comprehensive program for training and professional development.
Related expenses include product training, updates on new service offerings or
methodologies and development of project management skills. Also included in
training and professional development are expenses associated with the
development, enhancement and maintenance of our proprietary methodologies and
tools and the systems that support them.

General and administrative expenses consist principally of executive management
compensation, allocations of billable employee compensation related to general
management activities, IT infrastructure, and costs for the finance, accounting,
information technology and human resource functions. General and administrative
costs also reflect continued investment associated with implementing and
operating client and employee management systems. Because our billable personnel
operate primarily on client premises or work remotely, all occupancy expenses
are recorded as general and administrative.

Depreciation and amortization expense in the six months of 2022 and 2021 was
$2.6 million, respectively.  Our fixed assets consist of furniture, fixtures,
equipment (mainly personal computers) and leasehold improvements. Depreciation
expense is generally computed by applying the straight-line method over the
estimated useful lives of assets. We also capitalize certain costs associated
with the purchase and development of internal-use software, system conversions
and website development costs. These costs are amortized over the estimated
useful life of the software or system.

We amortize our intangible assets (e.g. client relationships and databases) over
their estimated useful lives. Goodwill related to acquisitions is not amortized
but is subject to annual impairment testing and interim impairment tests, if
triggering events are identified.

Other income (expenses), net

The following table provides a breakdown of other income (expenses), net:


                                                     Six Months Ended June 

30,

Percent

Other income (expense), net                   2022         2021       Change     Change

                                                           (in thousands)
Interest income                             $      89    $     131    $  (42)       (32) %
Interest expense                              (1,173)      (1,256)         83          7 %
Foreign currency transaction gain (loss)          118          (3)        121      4,033 %
Total other income (expense), net           $   (966)    $ (1,128)    $   

162 14%

The total decrease in $0.2 millionor around 14%, was mainly the result of higher foreign exchange trading gains.


                                       18

income tax expense

Our quarterly effective tax rate varies from period to period based on the mix
of earnings among the various state and foreign tax jurisdictions in which
business is conducted and the level of non-deductible expenses projected to be
incurred during the current fiscal year.  Our effective tax rate for the six
months ended June 30, 2022 was 28.9% compared to 22.6% for the six months ended
June 30, 2021.  The difference for the six months ended June 30, 2022 was
primarily due to the impact of earnings and losses in certain foreign
jurisdictions and the impact of vesting of restricted stock units.  The
Company's effective tax rate for the six months ended June 30, 2022 was higher
than the statutory rate primarily due to the impact of foreign operations.

There were no significant changes in the reserves for uncertain tax position or valuation allowances during the quarter ended June 30, 2022.

NON-GAAP FINANCIAL PRESENTATION

This management's discussion and analysis presents supplemental measures of our
performance that are derived from our consolidated financial information but are
not presented in accordance with accounting principles generally accepted in the
United States of America ("GAAP"). We refer to these financial measures, which
are considered "non-GAAP financial measures" under SEC rules, as adjusted
EBITDA, adjusted net income, and adjusted earnings per diluted share, each as
defined below. See "Non-GAAP Financial Measures" below for information about our
use of these non-GAAP financial measures, including our reasons for including
these measures and reconciliations of each non-GAAP financial measure to the
most directly comparable GAAP financial measure.

NON-GAAP FINANCIAL MEASURES

We use non-GAAP financial measures to supplement the financial information
presented on a GAAP basis.  We provide adjusted EBITDA (defined as net income,
plus interest, taxes, depreciation and amortization, foreign currency
transaction gains/losses, non-cash stock compensation, interest accretion
associated with contingent consideration, acquisition-related costs, and
severance, integration and other expense), adjusted net income (defined as net
income, plus amortization of intangible assets, non-cash stock compensation,
foreign currency transaction gains/losses, interest accretion associated with
contingent consideration, acquisition-related costs, and severance, integration
and other expense on a tax-adjusted basis) and adjusted net income per diluted
share, excluding the net of tax effect of the items set forth in the table
below. These are non-GAAP measures that the Company believes provide useful
information to both management and investors by excluding certain expenses and
financial implications of foreign currency translations that management believes
are not indicative of ISG's core operations. These non-GAAP measures are used by
the Company to evaluate the Company's business strategies and management's
performance.  These non-GAAP financial measures exclude non-cash and certain
other special charges that many investors believe may obscure the user's overall
understanding of the Company's current financial performance and the Company's
prospects for the future. We believe that these non-GAAP measures provide useful
information to investors because they improve the comparability of the financial
results between periods and provide for greater transparency of key measures
used to evaluate the Company's performance.

                                                      Three Months Ended June 30,            Six Months Ended June 30,
                                                         2022               2021              2022               2021

                                                                                (in thousands)
Net income                                          $        4,957      $      4,106      $       9,887      $       7,530
Interest expense (net of interest income)                      566               553              1,084              1,125
Income taxes                                                 1,719             1,192              4,027              2,200
Depreciation and amortization                                1,298             1,255              2,587              2,615
Interest accretion associated with contingent
consideration                                                    8                34                  8                 66
Acquisition-related costs (1)                                    6                13                 16               (32)
Severance, integration and other expense                       340             1,165                450              1,300
Foreign currency transaction (gain) loss                      (94)               (8)              (118)                  3
Non-cash stock compensation                                  1,942         
   1,428              3,445              3,576
Adjusted EBITDA                                     $       10,742      $      9,738      $      21,386      $      18,383


                                       19

                                                       Three Months Ended June 30,            Six Months Ended June 30,
                                                        2022               2021                2022              2021

                                                                                (in thousands)
Net income                                          $      4,957      $         4,106      $       9,887     $       7,530
Non-cash stock compensation                                1,942                1,428              3,445             3,576
Intangible amortization                                      527                  644              1,055             1,358
Interest accretion associated with contingent
consideration                                                  8                   34                  8                66
Acquisition-related costs (1)                                  6                   13                 16              (32)
Severance, integration and other expense                     340                1,165                450             1,300
Foreign currency transaction (gain) loss                    (94)           
      (8)              (118)                 3
Tax effect (2)                                             (873)              (1,048)            (1,554)           (2,007)
Adjusted net income                                 $      6,813      $         6,334      $      13,189     $      11,794


                                                       Three Months Ended June 30,             Six Months Ended June 30,
                                                         2022                2021               2022               2021
Net income per diluted share                        $         0.10      $         0.08      $        0.19      $        0.15
Non-cash stock compensation                                   0.04                0.03               0.07               0.07
Intangible amortization                                       0.01                0.01               0.02               0.03
Interest accretion associated with contingent
consideration                                                 0.00                0.00               0.00               0.00
Acquisition-related costs (1)                                 0.00                0.00               0.00               0.00
Severance, integration and other expense                      0.00                0.02               0.01               0.02
Foreign currency transaction (gain) loss                    (0.00)              (0.00)             (0.00)               0.00
Tax effect (2)                                              (0.02)              (0.02)             (0.03)             (0.04)
Adjusted net income per diluted share               $         0.13      $  

0.12 $0.26 $0.23

_________________________________

(1) Includes acquisition-related charges and non-cash fair value

adjustments to contract liabilities prior to acquisition.

(2) Marginal tax rate of 32%, reflecting WE federal income tax rate of 21% plus

11% attributable to WE Foreign States and Jurisdictions.

CASH AND CAPITAL RESOURCES

Liquidity


Our primary sources of liquidity are cash flows from operations, existing cash
and cash equivalents and our revolving credit facility. Operating assets and
liabilities consist primarily of receivables from billed and unbilled services,
accounts payable, accrued expenses, and accrued payroll and related benefits.
The volume of billings and timing of collections and payments affect these
account balances.

From June 30, 2022our cash, cash equivalents and restricted cash have been
$31.6 milliona marked decrease in $16.1 million of December 31, 2021mainly attributable to the following elements:

? net cash provided by operating activities of $4.9 million;

? treasury shares repurchased from $9.6 million;

? cash dividends paid to shareholders of $3.4 million;

? negative effects of exchange rate variations $2.8 million;

? repayments of principal on borrowings from $2.2 million;



                                       20

? the purchase of furniture, fittings and equipment for $2.1 million; and

? payments related to the withholding tax for stock-based compensation of $1.4

   million.


Capital Resources

On March 10, 2020, the Company amended and restated its senior secured credit
facility to include a $86.0 million term facility and to increase the revolving
commitments per the revolving facility (as amended by that certain First
Amendment to Credit Agreement, dated as of June 1, 2022, the "2020 Credit
Agreement") from $30.0 million to $54.0 million. The material terms under the
2020 Credit Agreement are as follows:

? The Term Loan Facility and the Revolving Credit Facility each have a maturity

date of March 10, 2025 (the due date “).

The credit facility is secured by all equity interests held by the

Company, and its direct and indirect national subsidiaries and, subject to

? agreed exceptions, direct and indirect “first rank” foreigners of the Company

subsidiaries and a first ranking surety over all of the

The tangible and material assets of the Company and its direct and indirect national subsidiaries

intangible assets.

The Company’s existing and future direct and indirect wholly-owned domestic assets

? the subsidiaries guarantee the Company’s obligations with respect to the senior

secure facility.

At the option of the Company, the credit facility bears interest at an annual rate

equal to either (i) the “base rate” (which is the greater of (a) the rate

publicly announced from time to time by the Administrative Agent as its “first

? “, (b) the Federal Funds Rate plus 0.5% per annum and (c) the Eurodollar

rate plus 1.0%), plus the applicable Margin (as defined below) or (ii)

Eurodollar rate (adjusted for maximum reserves) as determined by the

Administrative Agent, plus applicable margin. The applicable margin is

adjusted quarterly based on the Company’s quarterly debt ratio.

The term loan is repayable in nineteen consecutive quarterly installments of

? $1,075,000 everyone who started the June 30, 2020 and a final payment of the

outstanding principal of the term loan on the maturity date.

Compulsory term loan repayments will be required from (subject to

? exceptions) (i) 100% of the net proceeds of issues of debt and equity securities by

the Company and its subsidiaries and (ii) 100% of the net proceeds of

insurance collection and condemnation events of the Company and its subsidiaries.

The Senior Secured Credit Facility contains a number of covenants which, among

other things, impose restrictions on matters usually reserved for seniors

secured credit facilities, including restrictions on indebtedness (including

warranty obligations), liens, fundamental changes, sales or disposal of

? property or assets, investments (including loans, advances, guarantees and

acquisitions), transactions with affiliated companies, dividends and other payments

compliance with share capital, optional payments and changes to other elements

debt instruments, negative pledges and agreements restricting the subsidiary

distributions and industry changes. Additionally, the Company is

respect a total leverage ratio and a fixed charge coverage ratio.

The senior secured credit facility contains customary events of default,

? including cross-default to other material agreements, default in judgment and

change of control.

The Company's financial statements include outstanding borrowings of $72.3
million at June 30, 2022 and $74.5 million at December 31, 2021, which are
carried at amortized cost.  The fair value of debt is classified within Level 3
of the fair value hierarchy. The fair value of the Company's outstanding
borrowings is approximately $70.7 million and $73.6 million at June 30, 2022 and
December 31, 2021, respectively.  The fair values of debt have been estimated
using a discounted cash flow analysis based on the Company's incremental
borrowing rate for similar borrowing arrangements.  The incremental borrowing
rate used to discount future cash flows is 3.8% and 2.0% at June 30, 2022 and
December 31, 2021, respectively. The Company also considered recent transactions
of peer group companies for similar instruments with comparable terms and
maturities as well as an analysis of current market conditions and interest
rates.  As of June 30, 2022 and December 31, 2021, there were no borrowings
under the revolver.

                                       21

We anticipate that our current cash and the ongoing cash flows from our
operations will be adequate to meet our working capital, capital expenditure,
and debt financing needs for at least the next twelve months. The anticipated
cash needs of our business could change significantly if we pursue and complete
additional business acquisitions, if our business plans change, if economic
conditions change from those currently prevailing or from those now anticipated,
or if other unexpected circumstances arise that may have a material effect on
the cash flow or profitability of our business, including the potential impacts
of the COVID-19 pandemic and the severity of the related economic downturn and
length of time of an economic recovery. If we require additional capital
resources to grow our business, either internally or through acquisition, or
maintain liquidity, we may seek to sell additional equity securities or to
secure additional debt financing. The sale of additional equity securities or
certain forms of debt financing could result in additional dilution to our
stockholders. We may not be able to obtain financing arrangements in amounts or
on terms acceptable to us in the future.

The Company is currently meeting its financial commitments.

Dividend program

In May 2022, the Company announced it will pay a second-quarter dividend of
$0.04 per share of common stock.  The Company expects to pay a total cash
dividend of $0.16 per share for the four quarters ending March 2023.  On August
2, 2022, the Board of Directors approved the third-quarter dividend of $0.04 per
share, payable September 19, 2022, to shareholders of record as of September 6,
2022.  The dividends are accounted for as a decrease to Stockholders' Equity.
All future dividends will be subject to Board approval.

Off-balance sheet arrangements

We do not have any off-balance sheet financing arrangements or liabilities,
guarantee contracts, retained or contingent interests in transferred assets or
any obligation arising out of a material variable interest in an unconsolidated
entity.

Recently issued accounting pronouncements

See Note 3 to our condensed consolidated financial statements included elsewhere in this report.

Significant Accounting Policies and Accounting Estimates


Our discussion and analysis of our financial condition and results of operations
is based upon our consolidated financial statements. We prepare these financial
statements in conformity with U.S. generally accepted accounting principles. As
such, we are required to make certain estimates, judgments and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the periods presented. We base our estimates on historical experience, available
information and various other assumptions we believe to be reasonable under the
circumstances. On an on-going basis, we evaluate our estimates; however, actual
results may differ from these estimates under different assumptions or
conditions. There have been no material changes or developments in our
evaluation of the accounting estimates and the underlying assumptions or
methodologies that we believe to be Critical Accounting Policies and Estimates
as disclosed in our Annual Report on Form 10-K, for the year ended December 31,
2021.

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