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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934
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Virginia
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54-1167364
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(State or other jurisdiction ofincorporation or organization)
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(I.R.S. EmployerIdentification No.)
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Large accelerated filer
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Accelerated filer
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Non-accelerated filer
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Smaller reporting company
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(Do not check if a smaller reporting company)
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PART I. FINANCIAL INFORMATION
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Item 1.
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Financial Statements (unaudited except for the balance sheet as of December 31, 2015)
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3
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Balance Sheets as of June 30, 2016 and December 31, 2015
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3
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Statements of Operations and Comprehensive Loss for the three months ended June 30, 2016 and 2015
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4
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Statements of Operations and Comprehensive Loss for the six months ended June 30, 2016 and 2015
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5
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Statements of Cash Flows for the six months ended June 30, 2016 and 2015
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6
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Notes to Financial Statements
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7
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Item 2.
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Management's Discussion and Analysis of Financial Condition and Results of Operations
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11
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Item 4.
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Controls and Procedures
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14
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PART II. OTHER INFORMATION
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Item 1.
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Legal Proceedings
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15
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Item 1A.
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Risk Factors
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15
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Item 2.
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Unregistered Sales of Equity Securities and Use of Proceeds
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15
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Item 3.
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Defaults Upon Senior Securities
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15
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Item 4.
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Mine Safety Disclosures
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15
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Item 5.
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Other Information
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15
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Item 6.
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Exhibits
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15
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SIGNATURES
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16
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For the six months ended
June 30,
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2016
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2015
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Cash flows from operating activities:
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Net loss
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$
(356,027
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$
(180,480
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Adjustments to reconcile net loss to net cash
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provided by (used in) operating activities:
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Depreciation and amortization
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15,301
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15,360
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Stock-based compensation
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5,472
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5,714
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Bad debt expense
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1,811
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107
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Forgiveness of notes receivable
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-
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7,863
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Changes in operating assets and liabilities:
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Accounts receivable
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153,084
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173,535
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Prepaid expenses and other current assets
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390,675
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419,615
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Accounts payable, accrued payroll and related
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liabilities, and other accrued liabilities
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499,573
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3,736
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Commissions payable
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(86,936
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(65,823
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Deferred revenue
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(414,508
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(422,535
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Net cash provided by (used in) operating activities
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208,445
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(42,908
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Cash flows from investing activities:
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Acquisition of property and equipment
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(9,707
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(9,134
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Increase in notes receivable - employees
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(5,768
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-
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Payments received on notes receivable - employees
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1,227
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1,135
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Net cash used in investing activities
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(14,248
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(7,999
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Net increase (decrease) in cash and cash equivalents
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194,197
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(50,907
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Cash and cash equivalents, beginning of the period
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2,167,928
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2,450,006
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Cash and cash equivalents, end of the period
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$
2,362,125
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$
2,399,099
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Supplemental cash flow information
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Interest paid
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$
-
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$
-
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Income taxes paid
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$
-
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$
-
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Three Months ended
June 30,
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Six Months ended
June 30,
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2016
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2015
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2016
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2015
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Risk free interest rate
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0.70% - 1.73%
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1.61% - 1.97%
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0.70% - 1.73%
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1.61% - 1.97%
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Dividend yield
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0%
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0%
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0%
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0%
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Expected term
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2-10 years
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5-10 years
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2-10 years
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5-10 years
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Expected volatility
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35.9% - 50.4%
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41.2% - 54.2%
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34.9% - 50.4%
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41.2% - 54.2%
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Nonvested
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Number of shares
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Weighted average grant date fair value
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Balance at December 31, 2015
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49,500
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$
0.07
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Granted
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50,000
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0.04
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Vested
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(5,000
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0.08
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Expired before vesting
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-
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-
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Balance at March 31, 2016
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94,500
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$
0.05
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Granted
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235,000
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0.03
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Vested
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(165,000
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0.08
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Expired before vesting
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(35,000
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0.15
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Balance at June 30, 2016
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129,500
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$
0.06
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Exhibit Number
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Description |
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Modification Agreement regarding Line of Credit Agreement with TD Bank, N.A., successor to Commerce Bank, N.A., dated May 25, 2016
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Certification of Chief Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934
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Certification of Chief Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934
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Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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Information Analysis Incorporated
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(Registrant) |
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Date:
August 11, 2016
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By:
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/s/
Sandor Rosenberg
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Sandor Rosenberg |
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Chairman of the Board, Chief Executive Officer, and President |
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Date: August 11, 2016 |
By:
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/s/
Richard S. DeRose
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Richard S. DeRose
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Executive Vice President, Treasurer, and Chief Financial Officer
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