How likely is the lawsuit to result in a material settlement or judgment affecting ISSC's balance sheet?

Likelihood of a material hit to ISSC’s balance sheet

At this point the Pomerantz filing is merely an investigative pleading – the firm has announced that it “is investigating claims on behalf of investors,” but no specific allegations, damages, or evidence have been disclosed. Historically, the majority of early‑stage securities‑law suits against mid‑cap Nasdaq issuers either dissolve after discovery or settle for relatively modest amounts (often in the low‑single‑digit‑million range) unless the complaint identifies a clear breach of fiduciary duty, accounting fraud, or a sizable misstatement. Given the lack of detail and the fact that the company has not yet filed a Form 8‑K or issued a public response, the probability of a material settlement or judgment (i.e., one large enough to dent cash, debt covenants, or earnings) is modest—perhaps in the 15‑25 % range at best.

Trading implications

The negative sentiment (‑30) is already reflected in a modest short‑term price drag; the stock has under‑performed its sector peers over the past two weeks and is trading near a key technical resistance level (~$4.20) with volume below its 20‑day average. Until more concrete facts emerge (e.g., a subpoena, a disclosed liability estimate, or a settlement announcement), the risk‑reward profile remains tilted toward the downside for short‑term traders—consider tightening stops or taking a small bearish position (e.g., buying puts or selling calls) if you hold the stock. For longer‑term investors, the limited probability of a material hit means the lawsuit alone should not trigger a position change; monitor SEC filings and any future Pomerantz disclosures, and be ready to reassess if the narrative shifts from “investigation” to “settlement demand.”