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): 08/10/2005

INFORMATION ANALYSIS INCORPORATED

(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 (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Items to be Included in this Report

Item 2.02. Results of Operations and Financial Condition

On August 10, 2005, Information Analysis Incorporated issued a press release reporting earnings and other financial results for its second quarter 2005. A copy of this press release, captioned “Information Analysis, Inc. Reports Second 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 ot 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 August 10, 2005, captioned:

“Information Analysis, Inc. Reports Second 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: August 17, 2005.	By:	/s/ Matthew T. Sands
		Matthew T. Sands
		Controller

Exhibit Index

Exhibit No.	Description
EX-99.1	IAI Press Release dated August 10, 2005, captioned: “Information Analysis, Inc. Reports Second Quarter Results”

EX-99.1

Exhibit 99.1

For additional information contact:          

Sandor Rosenberg (703) 293-7900    

For release: August 10, 2005 at 9:00 a.m.

Information Analysis, Inc. Reports Second Quarter Results

FAIRFAX, VIRGINIA – Information Analysis Inc. (OTCBB: IAIC) reported results for the second quarter ended June 30, 2005. Revenues were $3,006,000 up 39% from the $2,158,000 reported in 2004’s second quarter. The Company reported net income of $148,000, or $0.01 per share, compared to net income of $59,000, or $0.01 per share in 2004’s second quarter. For the six months ended June 30, 2005, IAI had revenue of $5,193,000, up from the $4,274,000 reported for six months ending June 30, 2004. Net income for the first six months of fiscal 2005 was $220,000, or $0.02 per share, versus net income of $112,000, or $0.01 per share, in the comparable 2004 period.

“The Company attributes the improvement in the second quarter in comparison to the second quarter of 2004 to increased sales success. We also experienced an increase in revenue and profit in the second quarter compared to the first quarter of this year,” said Sandor Rosenberg, Chairman and Chief Executive Officer of IAI.

“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. Our alliances with a number of software product companies are beginning to pay off as evidenced by recent revenue increases. We now are able to work on a greater number of opportunities in the area of legacy modernization which should continue to build our pipeline for the second half of the year and forward. Significantly, several of our new accounts are in the commercial sector.

“We continue to pursue 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. 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-KSB for the fiscal year ended December 31, 2004 and in other filings with the Securities and Exchange Commission.

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Information Analysis Reports Second Quarter Results

August 10, 2005

Page 2 of 4

Information Analysis Incorporated

Condensed Income Statements

	Three months ended June 30,
(in thousands, except per share data; unaudited)	2005			2004
Sales:
Professional fees	$	2,371		$	2,069
Software sales		635			89
Total sales		3,006			2,158
Cost of goods sold and services provided:
Cost of professional fees		1,837			1,661
Cost of software sales		564			72
Total cost of sales		2,401			1,733
Gross margin		605			425
Operating expenses:
Selling, general and administrative		452			353
Operating income		153			72
Other expense		(5	)		(13	)
Income before income taxes		148			59
Provision for income taxes		—			—
Net income	$	148		$	59
Comprehensive Income	$	148		$	59
Net income per share:
Basic:
Net income	$	0.01		$	0.01
Diluted:
Net income	$	0.01		$	0.01
Shares used in calculating earnings per share:
Basic		10,296,527			10,283,515
Diluted		11,279,095			11,073,148

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Information Analysis Reports Second Quarter Results

August 10, 2005

Page 3 of 4

Information Analysis Incorporated

Condensed Income Statements

	Six months ended June 30,
(in thousands, except per share data; unaudited)	2005			2004
Sales:
Professional fees	$	4,486		$	4,060
Software sales		707			214
Total sales		5,193			4,274
Cost of goods sold and services provided:
Cost of professional fees		3,519			3,322
Cost of software sales		605			138
Total cost of sales		4,124			3,460
Gross margin		1,069			814
Operating expenses:
Selling, general and administrative		841			681
Operating income		229			133
Other expense		(9	)		(21	)
Income before income taxes		220			112
Provision for income taxes		—			—
Net income	$	220		$	112
Comprehensive Income	$	220		$	112
Net income per share:
Basic:
Net income	$	0.02		$	0.01
Diluted:
Net income	$	0.02		$	0.01
Shares used in calculating earnings per share:
Basic		10,290,057			10,283,515
Diluted		11,144,494			11,021,141

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Information Analysis Reports Second Quarter Results

August 10, 2005

Page 4 of 4

Information Analysis Incorporated

Condensed Balance Sheets

	As of June 30, 2005 (unaudited)			As of December 31, 2004 (audited)
ASSETS
Current assets:
Cash and cash equivalents	$	81		$	116
Accounts receivable, net		2,507			2,170
Prepaid expenses		168			47
Note receivable		85			85
Other receivables		4			7
Total current assets		2,845			2,425
Fixed assets, net		46			35
Other assets		7			7
Investments		3			3
Total assets	$	2,901		$	2,470
LIABILITIES & STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	1,671		$	1,567
Accrued payroll and related liabilities		342			277
Other accrued liabilities		197			65
Deferred revenues		169			84
Notes Payable		125			125
Revolving line of credit		34			219
Total liabilities		2,538			2,337
Common stock, par value $0.01, 30,000,000 shares authorized; 11,788,126 shares issued, 10,283,515 outstanding at June 30, 2005 and December 31, 2004		118			118
Additional paid in capital		14,131			14,122
Accumulated deficit		(13,023	)		(13,244	)
Accumulated other comprehensive income		(9	)		(9	)
Less treasury stock; 1,504,611 shares at cost		(854	)		(854	)
Total stockholders’ equity		363			133
Total liabilities and stockholders’ equity	$	2,901		$	2,470