EXHIBIT 99.1
 
  For additional information contact:
Richard S. DeRose
(703) 293-7901
 
For release: November 10, 2011 at 9:00 a.m.
 

Information Analysis Inc. Reports Third Quarter Profitable Results

FAIRFAX, VIRGINIA – Information Analysis Inc. (IAIC:OTCBB) today reported results for its third fiscal quarter ended September 30, 2011. Revenues were $1,662,000 compared to $1,952,000 reported in the third quarter 2010. The information technology services company reported net income of $63,000, or $0.01 per share basic and diluted, compared to net income of $42,000 or $0.00 per share basic and diluted, in the third quarter 2010.
 
For the nine months ended September 30, 2011, IAI’s revenues were $4,707,000 compared to revenues of $5,655,000 for the same period in 2010. The Company reported net income of $101,000 or $0.01 per share basic and diluted, compared to net income of $225,000, or $0.02 per share basic and diluted, reported for the comparable 2010 period.
 
“There continues to be an increase in opportunities for the modernization business, and we have been aggressively pursuing these opportunities. We have been awarded a number of new contracts in the past few months worth in excess of 2.5 million dollars. These contracts are expected to improve our profitability over the next 12 months,” 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, 2010 and in other filings with the Securities and Exchange Commission.
 
 
 
 
 
Information Analysis Reports Third Quarter Results
November 10, 2011
Page 2 of 4
 
Information Analysis Incorporated
Statements of Operations
 
    Three months ended September 30,  
(in thousands, except per share data; unaudited)   2011     2010  
             
Revenue:
            
Professional fees
   $ 1,329     $ 1,293  
Software sales
     333       659  
Total revenue
     1,662       1,952  
Cost of goods sold and services provided:
                
Cost of professional fees
     702       723  
Cost of software sales
     278       593  
Total cost of sales
     980       1,316  
Gross margin
     682       636  
Selling, general and administrative expense
     621       596  
Income from operations
     61       40  
Other income, net
     2       2  
Income before income taxes
     63       42  
Provision for income taxes
     --       --  
Net income
   $ 63     $ 42  
Earnings per common share:
                
Basic
   $ 0.01     $ 0.00  
Diluted
   $ 0.01     $ 0.00  
Shares used in calculating earnings per share:
                
Basic
     11,196,760       11,196,760  
Diluted
     11,233,313       11,224,521  
 
 
 
 

Information Analysis Reports Third Quarter Results
November 10, 2011
Page 3 of 4

Information Analysis Incorporated
Statements of Operations
 
    Nine months ended September 30,  
(in thousands, except per share data; unaudited)  
2011
    
2010
  
Revenue:
            
Professional fees
   $ 3,581     $ 3,921  
Software sales
     1,126       1,734  
Total revenue
     4,707       5,655  
Cost of goods sold and services provided:
                
Cost of professional fees
     1,987       2,178  
Cost of software sales
     920       1,475  
Total cost of sales
     2,907       3,653  
Gross margin
     1,800       2,002  
Selling, general and administrative expense
     1,705       1,784  
Income from operations
     95       218  
Other income, net
     6       7  
Income before income taxes
     101       225  
Provision for income taxes
     --       --  
Net income
   $ 101     $ 225  
Earnings per share:
                
Basic
   $ 0.01     $ 0.02  
Diluted
   $ 0.01     $ 0.02  
Shares used in calculating earnings per share:
                
Basic
     11,196,760       11,196,760  
Diluted
     11,220,295       11,216,853  
 
 
 
 
 
Information Analysis Reports Third Quarter Results
November 10, 2011
Page 4 of 4

Information Analysis Incorporated
Balance Sheets
 
    As of     As of  
    September 30, 2011     December 31, 2010  
(in thousands)  
(unaudited)
     (audited)  
ASSETS
            
Current assets:
            
Cash and cash equivalents
   $ 1,947     $ 1,968  
Accounts receivable, net
     1,746       772  
Prepaid expenses
     756       571  
Note receivable
     6       6  
Total current assets
     4,455       3,317  
Fixed assets, net
     30       36  
Note receivable
     6       11  
Other assets
     6       6  
Total assets
   $ 4,497     $ 3,370  
LIABILITIES & STOCKHOLDERS' EQUITY
                
Current liabilities:
                
Accounts payable
   $ 781     $ 77  
Deferred revenues
     827       653  
Commissions payable
     583       447  
Accrued payroll and related liabilities
     243       245  
Other accrued liabilities
     76       69  
Total current liabilities
     2,510       1,491  
Common stock, par value $0.01, 30,000,000 shares authorized;
                
12,839,376 shares issued, 11,196,760 outstanding
     128       128  
Additional paid in capital
     14,573       14,567  
Accumulated deficit
     (11,784 )     (11,886 )
Less treasury stock; 1,642,616 shares at cost
     (930 )     (930 )
Total stockholders' equity
     1,987       1,880  
Total liabilities and stockholders' equity
   $ 4,497     $ 3,370