8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) March 18, 2004

INFORMATION ANALYSIS INCORPORATED

(Exact name of registrant as specified in its charter)

Virginia	0-22405	54-1167364
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

11240 Waples Mill Road, Suite 201, Fairfax, Virginia	22030
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (703) 383-3000

11240 Waples Mill Road, Suite 400, Fairfax, Virginia 22030

(Former name or former address, if changed since last report)

Item 7. Financial Statements and Exhibits

(c) Exhibits

The following exhibit is attached hereto:

Exhibit No.	Description
99.1	Press Release dated March 18, 2004 captioned:
	“Information Analysis, Inc. Reports First Quarter Profit”

Item 9. Regulation FD Disclosure

The following information is being furnished pursuant to both Item 9 and item 12 of Form 8-K.

On March 18, 2004, Information Analysis Incorporated issued a press release reporting earnings and other financial results for its first quarter ended March 31, 2004. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.

Item 12. Results of Operations and Financial Condition

The information set forth in Item 9 is incorporated herein by this reference.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		Information Analysis Incorporated                 (Registrant)
Date: March 20, 2004	By:	/S/ Richard S. DeRose
		Richard S. DeRose, Executive Vice
		President, Treasurer, and Chief
		Financial Officer

EX-99.1

Exhibit 99.1

For additional information contact:

Richard S. DeRose (703) 293-7901

For immediate release

Information Analysis, Inc. Reports First Quarter Profit

FAIRFAX, VIRGINIA – Information Analysis, Inc. (IAIC:OTCBB) today reported results for the first fiscal quarter ended March 31, 2004. Revenues were $2,116,000, up 130% from the $920,000 reported in 2003’s first quarter. The Company reported a net profit of $53,000, or $0.01 per share, compared to a loss of $191,000, or $0.02 per share, in 2003’s first quarter.

The Company attributes the improvement in the first quarter in comparison to the first quarter of 2003 to continued sales success and to reducing our cost structure. Sandor Rosenberg, Chairman and Chief Executive Officer of IAI said, “We are pleased with the results of the first quarter. We feel that the Company is continuing to build momentum from the past two quarters of last year which is steering us toward a successful year.

“The Company is continuing the active pursuit of the conversion and system modernization business in addition to developing business opportunities in the area of Web applications. We have been working on some large opportunities which should significantly build our pipeline for the second half of the year and carry us well into 2005.

“We still are in merger and acquisition discussions with a number of firms.”

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-KSB for the fiscal year ended December 31, 2003 and in other filings with the Securities and Exchange Commission.

— more —

Information Analysis Reports First Quarter Results

May 18, 2004

Page 2 of 3

Information Analysis Incorporated

Condensed Consolidated Income Statements

	Three months ended March 31,
(in thousands, except per share data; unaudited)	2004			2003
Net revenue:
Professional fees	$	1,990		$	826
Software sales		126			94
Total revenue		2,116			920
Cost of goods sold and services provided:
Cost of professional fees		1,661			622
Cost of software sales		66			84
Total cost of sales		1,727			706
Gross margin		389			214
Operating expenses:
Sales, general and administrative		328			401
Total operating expenses		328			401
Operating income (loss)		61			(187	)
Other expense		(8	)		(4	)
Income (loss) before income taxes		53			(191	)
Provision for income taxes		—			—
Net income (loss)	$	53		$	(191	)
Net income (loss) per share:
Basic	$	0.01		$	(0.02	)
Diluted	$	0.01		$	(0.02	)
Shares used in calculating earnings per share:
Basic		10,283,515			10,283,515
Diluted		10,944,470			10,283,515

— more —

Information Analysis Reports First Quarter Results

May 18, 2004

Page 3 of 3

Information Analysis Incorporated and Subsidiaries

Consolidated Balance Sheets

	As of: March 31, 2004			As of: December 31, 2003
	(unaudited)			(Audited)
ASSETS
Current assets:
Cash and cash equivalents	$	3		$	318
Accounts receivable, net		1,387			1,521
Prepaid expenses		128			116
Note receivable		85			85
Capitalized software, net		42			63
Other receivables		17			16
Total current assets		1,662			2,119
Fixed assets, net		28			31
Investments		6			6
Other assets		37			37
Total assets	$	1,733		$	2,193
LIABILITIES & STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	1,143		$	1,151
Other accrued liabilities		311			312
Accrued payroll and related payroll items		262			215
Revolving line of credit		158			689
Notes payable		125			125
Deferred revenue		116			136
Total liabilities		2,115			2,628
Common stock, par value $0.01, 30,000,000 shares authorized; 11,788,126 shares issued, 10,283,515 outstanding at March 31, 2004 and December 31, 2003		118			118
Additional paid in capital		14,122			14,122
Accumulated deficit		(13,762	)		(13,815	)
Accumulated other comprehensive income		(6	)		(6	)
Less treasury stock; 1,504,611 shares at cost		(854	)		(854	)
Total stockholders’ equity		(382	)		(435	)
Total liabilities and stockholders’ equity	$	1,733			2,193