8-K

UNITED STATES

SECURITES 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): 03/21/2005

INFORMATION ANALYSIS INC

(Exact Name of Registrant as Specified in its Charter)

Commission File Number: 0-22405

VA	54-1167364
(State or Other Jurisdiction Of Incorporation or Organization)	(I.R.S. Employer Identification No.)

11240 Waples Mill Rd Ste 201

Fairfax, VA 22030

(Address of Principal Executive Offices, Including Zip Code)

703-383-3000

(Registrant’s Telephone Number, Including Area Code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act(17CFR240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act(17CFR240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act(17CFR240.13e-4(c))

Items to be Included in this Report

Item 2.02. Results of Operations and Financial Condition

On March 21, 2005, Information Analysis Incorporated issued a press release reporting earnings and other financial results for its fourth quarter and its year ended December 31, 2004. A copy of this press release, captioned “Information Analysis Inc. Announces Fourth Quarter Results”, is attached as Exhibit 99.1 to this Current Report on Form 8-K. The information in this Current Report on Form 8-K, including the exhibit, shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject of the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01. Financial Statements and Exhibits

(c) Exhibits

99.1	Press Release dated March 21, 2005, captioned:
	“Information Analysis Inc. Announces Fourth Quarter Results”

Signature(s)

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 hereunto duly authorized.

	INFORMATION ANALYSIS INCORPORATED
Date: March 31, 2005.	By:	/s/ Matthew T. Sands
		Matthew T. Sands
		Controller

Exhibit Index

Exhibit No.	Description
EX-99.1	IAI Press Release dated March 31, 2005, captioned: “Information Analysis Inc. Announces Fourth Quarter Results”

EX-99.1

Exhibit 99.1

For additional information contact:

Richard S. DeRose (703) 293-7901

For release:

March 21, 2005 at 9:00 a.m.

Information Analysis Inc. Announces Fourth Quarter Results

FAIRFAX, VIRGINIA – Information Analysis Inc. (IAIC:OTCBB) today reported results for the fourth quarter of its fiscal 2004 ended December 31, 2004. Revenues were $2,597,000, an increase of 46% from the $1,783,000 reported in 2003’s fourth quarter. The Information Technology services company reported a net income of $105,000, compared to a net profit of $20,000 in the comparable period in fiscal year 2003.

For the twelve months ended December 31, 2004, IAI had revenue of $9,309,000 and a net income of $572,000, or $0.06 per share basic and $0.05 per share diluted. The Company had revenue of $5,369,000 and a loss of $234,000 or $(0.02) per share for twelve months ended December 31, 2003.

“IAI had a solid year in 2004 and is well positioned to continue that trend.,” said Sandor Rosenberg, Chairman and Chief Executive Officer of IAI. “Specifically, we accomplished several goals for the year that are critical to our future success. Primarily, we needed to strengthen our financial base and increase our pipeline for future sales. Attaining our first goal, we increased annual revenue by 73% and generated an $806,000 positive swing in profit from 2003. This result allowed the company to return to a position of positive stockholders’ equity. Our second goal was accomplished through new business relationships. By participating in the Mainframe Migration Alliance (MMA), a consortium of organizations, including Microsoft and MicroFocus, that help customers migrate application workload from the mainframe to the Windows platform, we have been able to build our pipeline of potential customers. We expect to convert that pipeline into additional customers during 2005 and future years. As a partner with Adobe, we have sold several enterprise deals to the Department of Veterans Affairs and the Internal Revenue Service. As a result, Adobe has brought IAI into more opportunities that should enhance our future business.

“We expect to continue our strong performance and to grow organically, while we also pursue merger/acquisition opportunities with other organizations.”

—more—

Information Analysis Reports Fourth Quarter Results

March 21, 2005

Page 2 of 4

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, 2004 and in other filings with the Securities and Exchange Commission.

Information Analysis Reports Fourth Quarter Results

March 21, 2005

Page 3 of 4

Information Analysis Incorporated

Condensed Consolidated Statements of Operations

	Three months ended December 31,
(in thousands, except per share data)	2004			2003
Sales
Professional fees	$	2,321		$	1,650
Software sales		276			133
Total sales		2,597			1,783
Cost of goods sold and services provided
Cost of professional fees		1,819			1,353
Cost of software sales		106			107
Total cost of sales		1,925			1,460
Gross profit		672			323
Operating expenses:
Selling, general and administrative		(558	)		(296	)
Income from operations		114			27
Other expenses, net		(9	)		(7	)
Income before provision for income taxes		105			20
Provision for income taxes		—			—
Net income		105			20
Earnings per Common Share – Basic and Diluted
Basic net income	$	0.01		$	0.00
Diluted net income	$	0.01		$	0.00
Shares used in calculating earnings per share:
Basic		10,283,515			10,283,515
Diluted		10,979,100			10,283,515
	Twelve months ended December 31,
(in thousands, except per share data)	2004			2003
Sales
Professional fees	$	8,635		$	4,989
Software sales		674			380
Total sales		9,309			5,369
Cost of goods sold and services provided
Cost of professional fees		6,917			3,963
Cost of software sales		420			350
Total cost of sales		7,337			4,313
Gross profit		1,972			1,056
Selling, general and administrative expenses		(1,656	)		(1,262	)
Other operating income		290			—
Income (loss) from operations		606			(206	)
Other expenses		(34	)		(28	)
Income (loss) before provision for income taxes		572			(234	)
Provision for income taxes		—			—
Net income (loss)		572			(234	)
Earnings per Common Share – Basic and Diluted
Basic net income (loss)	$	0.06		$	(0.02	)
Diluted net income (loss)	$	0.05		$	(0.02	)
Shares used in calculating earnings per share:
Basic		10,283,515			10,283,515
Diluted		11,015,724			10,283,515

Information Analysis Reports Fourth Quarter Results

March 21, 2005

Page 4 of 4

Information Analysis Incorporated

Consolidated Balance Sheets

	As of December 31, 2004			As of December 31, 2003
ASSETS
Current assets
Cash and cash equivalents	$	116		$	318
Accounts receivable, net		2,170			1,521
Note receivable		85			85
Prepaid expenses		47			116
Other receivables		7			16
Capitalized software, net		—			63
Total current assets		2,425			2,119
Fixed assets, net		35			31
Investments		3			6
Other assets		7			37
Total assets	$	2,470		$	2,193
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	1,567		$	1,151
Accrued payroll and related liabilities		277			215
Revolving line of credit		220			689
Notes payable		125			125
Deferred revenue		83			136
Other accrued liabilities		65			312
Total current liabilities		2,337			2,628
Total liabilities		2,337			2,628
Common stock, $0.01 par value, 30,000,000 shares authorized, 11,788,126 shares issued, 10,283,515 shares outstanding at December 31, 2004 and December 31, 2003 respectively		118			118
Additional paid-in capital		14,122			14,122
Accumulated deficit		(13,244	)		(13,815	)
Accumulated other comprehensive income (loss)		(9	)		(6	)
Treasury stock, 1,504,611 shares, at cost		(854	)		(854	)
Total stockholders’ equity		133			(435	)
Total liabilities and stockholders’ equity	$	2,470		$	2,193