Information Analysis Inc. Reports New Contracts in the Third Quarter

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FAIRFAX, VA -- (Marketwired) -- 11/12/14 -- Information Analysis Inc. (OTCBB: IAIC) today reported results for its third fiscal quarter ended September 30, 2014. Revenues were $1,357,000 compared to $3,218,000 reported in the third quarter 2013. The information technology services company reported net income of $28,000, or $0.00 per share basic and diluted, compared to net income of $108,000 or $0.01 per share basic and diluted, in the third quarter 2013.

For the nine months ended September 30, 2014, IAI's revenues were $3,561,000 compared to revenues of $5,653,000 for the same period in 2013. The Company reported a net loss of $231,000 or ($0.02) per share basic and diluted, compared to a net loss of $80,000, or $ (0.01) per share basic and diluted, reported for the comparable 2013 period.

"The company has been aggressively pursuing new business opportunities through the bidding process for prime contracts and teaming with our partners. During the third quarter of this year the company was profitable, and in addition, was awarded a number of larger contracts. If the government elects to exercise all option periods in these contracts, the total value could reach in excess of $16 million in new business. These contracts are expected to improve our profitability going forward in the fourth quarter and over the next year," said Sandor Rosenberg, Chairman and Chief Executive Officer of IAI.

"We continue to pursue merger and acquisition opportunities."

About Information Analysis Incorporated
Information Analysis Incorporated (www.infoa.com), headquartered in Fairfax, Virginia, is an information technology services company. The Company is a web solution provider and software conversion specialist, modernizing legacy systems and extending their reach to the internet world.

Additional information for investors
This release may contain forward-looking statements regarding the Company's business, customer prospects, or other factors that may affect future earnings or financial results. Such statements involve risks and uncertainties which could cause actual results to vary materially from those expressed in the forward-looking statements. Investors should read and understand the risk factors detailed in the Company's 10-K for the fiscal year ended December 31, 2013 and in other filings with the Securities and Exchange Commission.

Information Analysis Incorporated
Statements of Operations
Three months ended September 30,
(in thousands, except per share data; unaudited) 2014 2013
Revenue:
Professional fees $ 944 $ 1,017
Software sales 413 2,201
Total revenue 1,357 3,218
Cost of goods sold and services provided:
Cost of professional fees 521 510
Cost of software sales 232 1,952
Total cost of sales 753 2,462
Gross margin 604 756
Selling, general and administrative expense 578 650
Income from operations 26 106
Other income, net 2 2
Income before income taxes 28 108
Provision for income taxes -- --
Net income $ 28 $ 108
Earnings per common share:
Basic $ 0.00 $ 0.01
Diluted $ 0.00 $ 0.01
Shares used in calculating earnings per share:
Basic 11,201,760 11,201,760
Diluted 11,347,107 11,211,501
Information Analysis Incorporated
Statements of Operations
Nine months ended September 30,
(in thousands, except per share data; unaudited) 2014 2013
Revenue:
Professional fees $ 2,608 $ 3,097
Software sales 953 2,556
Total revenue 3,561 5,653
Cost of goods sold and services provided:
Cost of professional fees 1,498 1,724
Cost of software sales 687 2,257
Total cost of sales 2,185 3,981
Gross margin 1,376 1,672
Selling, general and administrative expense 1,615 1,758
Loss from operations (239 ) (86 )
Other income, net 8 6
Loss before income taxes (231 ) (80 )
Provision for income taxes -- --
Net loss $ (231 ) $ (80 )
Earnings per share:
Basic $ (0.02 ) $ (0.01 )
Diluted $ (0.02 ) $ (0.01 )
Shares used in calculating earnings per share:
Basic 11,201,760 11,201,760
Diluted 11,201,760 11,201,760
Information Analysis Incorporated
Balance Sheets
As of As of
September 30, 2014 December 31, 2013
(in thousands) (unaudited) (audited)
ASSETS
Current assets:
Cash and cash equivalents $ 2,067 $ 2,360
Accounts receivable, net 862 1,438
Prepaid expenses 285 535
Note receivable 4 6
Total current assets 3,218 4,339
Fixed assets, net 50 53
Note receivable 6 8
Other assets 6 6
Total assets $ 3,280 $ 4,406
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 93 $ 612
Deferred revenues 260 503
Commissions payable 770 903
Accrued payroll and related liabilities 220 221
Other accrued liabilities 50 61
Total current liabilities 1,393 2,300
Common stock, par value $0.01, 30,000,000 shares authorized; 12,844,376 shares issued, 11,196,760 outstanding as of September 30, 2014 and December 31, 2013 128 128
Additional paid in capital 14,612 14,600
Accumulated deficit (11,923 ) (11,692 )
Less treasury stock; 1,642,616 shares at cost (930 ) (930 )
Total stockholders' equity 1,887 2,106
Total liabilities and stockholders' equity $ 3,280 $ 4,406

For additional information contact:
Richard S. DeRose
(703) 293-7901

Source: Information Analysis, Inc.

Released November 12, 2014