Information Analysis Incorporated Returns to Profitability with Momentum

Fairfax, Virginia, UNITED STATES

FAIRFAX, Va., Nov. 16, 2020 (GLOBE NEWSWIRE) -- Information Analysis Incorporated (IAIC:OTC MARKETS) today reported results for the three months and nine months ended September 30, 2020. 

The information technology services company’s 2020 third quarter revenues were $3,923,000, an increase of 23% over its 2019 third quarter revenues of $3,183,000. IAI’s net income was $215,000 versus a net loss of ($179,000) for the same period in 2019. Basic and diluted earnings per share were $0.02 for the quarter versus basic and diluted net loss per share of ($0.02) in 2019.

For the nine months ended September 30, 2020, revenues were $10,804,000, an increase of $2,738,000, or 34%, over its 2019 nine months revenues of $8,066,000. IAI produced net income of $54,000 in 2020 versus a net loss of ($579,000) in 2019. Basic and diluted earnings per share were $0.00 for the nine months versus basic and diluted net loss per share of ($0.05) in 2019.

Sandor Rosenberg, President and Chief Executive Officer of IAI, credits Stan Reese, Senior Vice President and Chief Operating Officer, for the 2020 turnaround due to the new contracts he has won and the excellent team he has assembled.

“In the third quarter we completely reversed our losses from the first half of the year,” Reese said. “Since May, we have increased our billable workforce by over 80% under new long-term, large-scale contracts. We anticipate that these contracts will provide a solid foundation of revenue and profitability for the foreseeable future. This has allowed us to shift our focus from maintaining operations to meaningful growth for 2021 and beyond.

“Our capabilities when it comes to modernizing legacy systems such as COBOL-based systems, no matter how large, we believe are second to none. We now turn our attention to investments in corporate infrastructure and business development. Pursuit of strategic partnerships with synergistic emerging technology companies, as well as merger & acquisition opportunities, are also part of our plans.”

Reese further commented, “While COBOL-related legacy system modernization is expected to remain a core competency, we recognize that expanding our service and product offerings is necessary to carry us through the new decade. We believe that our extensive roster of satisfied clients could prove appealing to prospective partners in high-growth fields such as cloud services and cyber security. We remain excited about the Company’s future for the long-term benefit of our shareholders.”

About Information Analysis Incorporated
Information Analysis Incorporated (, headquartered in Fairfax, Virginia, is an information technology product and services company. The Company is a software conversion specialist, modernizing legacy systems and extending their reach to the cloud and more modern platforms.

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-K for the fiscal year ended December 31, 2019 and in other filings with the Securities and Exchange Commission.

For additional information contact:
 Matt Sands
 (703) 293-7925

Information Analysis Incorporated
Statements of Operations
 Three Months Ended September 30,
(in thousands, except per share data; unaudited) 2020   2019 
Professional fees$1,581  $889 
Software sales 2,342   2,294 
Total revenues 3,923   3,183 
Cost of revenues    
Cost of professional fees 1,051   564 
Cost of software sales 2,258   2,235 
Total cost of revenues 3,309   2,799 
Gross Profit 614   384 
Selling, general and administrative expense 343   468 
Commission expense 56   98 
Income (loss) from operations 215   (182)
Other Income, net -   3 
Income before provision for income taxes 215   (179)
Net income (loss)$215  $(179)
Net income (loss) per share:    
Basic$0.02  $(0.02)
Diluted$0.02  $(0.02)
Weighted Average Common Shares Outstanding:    
Basic 11,211,760   11,211,760 
Diluted 11,837,427   11,211,760 

Information Analysis Incorporated
Statements of Operations
 Nine Months Ended September 30,
(in thousands, except per share data; unaudited) 2020   2019 
Professional fees$3,354  $2,412 
Software sales 7,450   5,654 
Total revenues 10,804   8,066 
Cost of revenues    
Cost of professional fees 2,233   1,445 
Cost of software sales 7,289   5,557 
Total cost revenues 9,522   7,002 
Gross Profit 1,282   1,064 
Selling, general and administrative expense 1,050   1,482 
Commission expense 179   169 
Income (loss) from operations 53   (587)
Other income 1   8 
Income (loss) before income taxes 54   (579)
Net Income (loss)$54  $(579)
Net income (loss) per share:    
Basic$0.00  $(0.05)
Diluted$0.00  $(0.05)
Weighted average common shares outstanding:    
Basic 11,211,760   11,207,145 
Diluted 11,810,392   11,207,145 

Information Analysis Incorporated
Balance Sheets
 As of As of
 September 30, 2020 December 31, 2019
(in thousands)
(unaudited)   (unaudited)
Current Assets:   
Cash and cash equivalents$1,469  $1,039 
Accounts receivable, net 1,600   669 
Prepaid expenses 39   500 
Total current assets 3,108   2,208 
Contract assets 89   - 
Right-of-use operating lease asset 77   150 
Fixed assets, net 62   10 
Other assets 6   6 
Total assets$3,342  $2,374 
Current liabilities:   
Accounts payable$533  $216 
Contract liabilities 332   464 
Accrued payroll and related liabilities 316   220 
Other accrued liabilities 296   54 
Commission payable 119   108 
Operating lease liability - current 73   104 
Note payable- current 37   - 
Total current liabilities 1,706   1,166 
Note payable - non-current 413   - 
Operating lease liability - non-current -   46 
Total liabilities 2,119   1,212 
Common stock, par value $0.01, 30,000,000 shares authorized;       
12,854,376 shares issued, 11,211,760 shares outstanding   
as of September 30, 2020, and December 31, 2019 128   128 
Additional paid-in capital 14,690   14,683 
Accumulated deficit (12,665)  (12,719)
Less: treasury stock (1,642,616 shares at cost) (930)  (930)
Total stockholders' equity 1,223   1,162 
Total liabilities and stockholders' equity$3,342  $2,374