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.

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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

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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