EXHIBIT 99.1
 
  For additional information contact:
Richard S. DeRose
(703) 293-7901
 
For release: August 14, 2012
 

Information Analysis Inc. Reports Profitable Second Quarter Results

FAIRFAX, VIRGINIA – Information Analysis Inc. (OTCBB: IAIC) reported results for the second quarter ended June 30, 2012. Revenues were $2,435,000 compared to $1,620,000 reported in 2011's second quarter. The Company reported net income of $51,000, or $0.00 per share, compared to net income of $47,000, or $0.00 per share in 2011's second quarter. IAI had revenue of $3,949,000 compared to $3,044,000 reported for six months ending June 30, 2011. Net income for the first six months of fiscal 2012 was $29,000, or $0.00 per share, versus net income of $38,000, or $0.00 per share, in the comparable 2011 period.
 
“ The Company has shown substantially increased revenues over last quarter,” Sandor Rosenberg, Chairman and Chief Executive Officer of IAI said. “ We continue to aggressively pursue the modernization and forms business, and have been awarded a number of new contracts in the last quarter. We expect to remain profitable during the second half of the year.
 
“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. These include the failure to obtain sufficient contracts, and to profitably complete those contracts. Investors should read and understand the risk factors detailed in the Company's 10-K for the fiscal year ended December 31, 2011 and in other filings with the Securities and Exchange Commission.
 
 
 
 
 
Information Analysis Reports Second Quarter Results
August 14, 2012
Page 2 of 4
 
Information Analysis Incorporated
Condensed Income Statements
 
    Three months ended June 30,  
(in thousands, except per share data; unaudited)   2012     2011  
             
Sales:
            
Professional fees
   $ 1,363     $ 1,148  
Software sales
     1,072       472  
Total sales
     2,435       1,620  
Cost of goods sold and services provided:
                
Cost of professional fees
     699       692  
Cost of software sales
     1,019       366  
Total cost of sales
     1,718       1,058  
Gross margin
     717       562  
Operating expenses:
                
Selling, general and administrative
    667       517  
Operating income
     50       45  
Other income
    1       2  
Income before income taxes
     51       47  
Provision for income taxes
     --       --  
Net income
   $ 51     $ 47  
Comprehensive income
   $ 51     $ 47  
Net income per share:
                
Basic and diluted
   $ 0.00     $ 0.00  
Shares used in calculating earnings per share:
                
Basic
     11,199,782       11,196,760  
Diluted
     11,211,582       11,213,466  
 
 
 
 
 
Information Analysis Reports Second Quarter Results
August 14, 2012
Page 3 of 4
 
Information Analysis Incorporated
Condensed Income Statements
 
    Six months ended June 30,  
(in thousands, except per share data; unaudited)   2012     2011  
             
Sales:
            
Professional fees
   $ 2,528     $ 2,251  
Software sales
     1,421       793  
Total sales
     3,949       3,044  
Cost of goods sold and services provided:
                
Cost of professional fees
     1,376       1,285  
Cost of software sales
     1,323       642  
Total cost of sales
     2,699       1,927  
Gross margin
     1,250       1,117  
Operating expenses:
                
Selling, general and administrative
    1,224       1,083  
Operating income
     26       34  
Other income
    3       4  
Income before income taxes
     29       38  
Provision for income taxes
     --       --  
Net income
   $ 29     $ 38  
Comprehensive income
   $ 29     $ 38  
Net income per share:
                
Basic and diluted
   $ 0.00     $ 0.00  
Shares used in calculating earnings per share:
                
Basic
     11,198,271       11,196,760  
Diluted
     11,215,117       11,209,229  
 
 
 
 
 
Information Analysis Reports Second Quarter Results
August 14, 2012
Page 4 of 4

Information Analysis Incorporated
Condensed Balance Sheets
 
    As of     As of  
    June 30, 2012     December 31, 2011  
(in thousands)  
(unaudited)
     (audited)  
ASSETS
            
Current assets:
            
Cash and cash equivalents
   $ 2,269     $ 1,281  
Accounts receivable, net
     1,057       2,890  
Prepaid expenses
     446       787  
Notes receivable (current portion)
     17       7  
Total current assets
     3,789       4,965  
Fixed assets, net
     39       40  
Note receivable (long term portion)
     1       4  
Other assets
     6       6  
Total assets
   $ 3,835     $ 5,015  
LIABILITIES & STOCKHOLDERS' EQUITY
                
Current liabilities:
                
Accounts payable
   $ 206     $ 998  
Commissions payable
     782       679  
Deferred Revenues
     443       940  
Accrued payroll and related liabilities
     275       248  
Other accrued liabilities
     56       107  
Income taxes payable
     --       3  
Total liabilities
     1,762       2,975  
Common stock, par value $0.01, 30,000,000 shares authorized;
                
12,844,376 and 12,839,376 shares issued, 11,201,760 and
                
11,196,760 shares outstanding as of June 30, 2012, and
                
December 31, 2011, respectively
     128       128  
Additional paid in capital
     14,578       14,574  
Accumulated deficit
     (11,703 )     (11,732 )
Less treasury stock; 1,642,616 shares at cost
     (930 )     (930 )
Total stockholders' equity
     2,073       2,040  
Total liabilities and stockholders' equity
   $ 3,835     $ 5,015