1.	Summary of Significant Accounting Policies

Organization and Business

Founded in

1979,

Information Analysis Incorporated (the “Company”, “we”), to which we sometimes refer as IAI, is in the business of developing and maintaining information technology (IT) systems, modernizing client information systems, and performing professional IT services to government and commercial organizations. We presently concentrate our technology, services and experience to developing web-based and mobile device solutions (including electronic forms conversions), data analytics, and legacy software migration and modernization for various agencies of the federal government. We provide software and services to government and commercial customers throughout the United States, with a concentration in the Washington, D.C. metropolitan area.

Unaudited Interim Financial Statements

The accompanying unaudited financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions for Form

-Q and Article

of Regulation S-

Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, the unaudited financial statements include all adjustments necessary (which are of a normal and recurring nature) for the fair and

not

misleading presentation of the results of the interim periods presented. These unaudited financial statements should be read in conjunction with our audited financial statements for the year ended

December 31, 2018

included in the Annual Report on Form

-K filed by the Company with the SEC on

April 1, 2019 (

the “Annual Report”), as amended. The accompanying

December 31, 2018,

balance sheet was derived from our audited financial statements included in the Annual Report. The results of operations for any interim periods are

not

necessarily indicative of the results of operations for any other interim period or for a full fiscal year.

There have been

changes in the Company’s significant accounting policies as of

June 30, 2019,

as compared to the significant accounting policies disclosed in Note

"Summary of Significant Accounting Policies" in the Company's Annual Report on Form

-K for the fiscal year ended

December 31, 2018,

that was filed with the SEC on

April 1, 2019,

as amended, except as described in Note

herein.

Use of Estimates and Assumptions

The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results can, and in many cases will, differ from those estimates.

Income Taxes

As of

June 30, 2019,

there have been

material changes to the Company’s uncertain tax position disclosures as provided in Note

of the Annual Report. Through the filing of its

2018

federal income tax return, the Company has net operating loss carryforwards of approximately

$7.4

million, of which

$5.0

million will expire, if unused, on

December 31, 2019.