Firefly Neuroscience (AIFF) 10-Q 15 May 15 2015 Q1 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	3 Months Ended
	Mar. 31, 2015	8-May-15
Document And Entity Information
Entity Registrant Name	INFORMATION ANALYSIS INC
Entity Central Index Key	803578
Document Type	10-Q
Document Period End Date	31-Mar-15
Amendment Flag	FALSE
Current Fiscal Year End Date	-19
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		11,201,760
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2015

BALANCE_SHEETS_Unaudited

BALANCE SHEETS (Unaudited) (USD $)	Mar. 31, 2015	Dec. 31, 2014
ASSETS
Cash and cash equivalents	$2,122,914	$2,450,006
Accounts receivable, net	1,110,325	970,621
Prepaid expenses and other current assets	486,810	759,982
Note receivable, current	4,092	3,896
Total current assets	3,724,141	4,184,505
Property and equipment, net	48,254	53,675
Note receivable - long term	4,250	5,102
Other assets	6,281	6,281
Total assets	3,782,926	4,249,563
LIABILITIES & STOCKHOLDERS' EQUITY
Accounts payable	62,531	32,327
Commissions payable	1,004,079	1,017,047
Deferred revenue	451,109	737,994
Accrued payroll and related liabilities	228,345	255,703
Other accrued liabilities	28,427	116,097
Total liabilities	1,774,491	2,159,168
Stockholders' equity:
Common stock, par value $0.01, 30,000,000 shares authorized; 12,844,376 shares issued, 11,201,760 shares outstanding as of March 31, 2015 and December 31, 2014	128,443	128,443
Additional paid-in capital	14,616,758	14,613,887
Accumulated deficit	-11,806,555	-11,721,724
Treasury stock, 1,642,616 shares at cost	-930,211	-930,211
Total stockholders' equity	2,008,435	2,090,395
Total liabilities and stockholders' equity	$3,782,926	$4,249,563

BALANCE_SHEETS_Parenthetical

BALANCE SHEETS (Parenthetical) (USD $)	Mar. 31, 2015	Dec. 31, 2014
Stockholders Equity
Common Stock shares par value	$0.01	$0.01
Common Stock shares Authorized	30,000,000	30,000,000
Common Stock shares Issued	12,844,376	12,844,376
Common Stock shares Outstanding	11,201,760	11,201,760
Treasury Stock	1,642,616	1,642,616

STATEMENTS_OF_OPERATIONS_AND_C

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Revenues
Professional fees	$1,115,096	$875,260
Software sales	361,027	304,550
Total revenues	1,476,123	1,179,810
Cost of revenues
Cost of professional fees	643,284	497,827
Cost of software sales	348,584	227,705
Total cost of revenues	991,868	725,532
Gross profit	484,255	454,278
Selling, general and administrative expenses	432,094	445,819
Commissions expense	139,471	108,677
Loss from operations	-87,310	-100,218
Other income	2,479	2,699
Loss before provision for income taxes	-84,831	-97,519
Provision for income taxes	0	0
Net loss	-84,831	-97,519
Comprehensive income	($84,831)	($97,519)
Loss per common share:
Basic:	($0.01)	($0.01)
Diluted:	($0.01)	($0.01)
Weighted average common shares outstanding
Basic	11,201,760	11,201,760
Diluted	11,201,760	11,201,760

STATEMENTS_OF_CASH_FLOWS_Unaud

STATEMENTS OF CASH FLOWS (Unaudited) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Cash flows from operating activities:
Net loss	($84,831)	($97,519)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	7,805	7,585
Stock option compensation	2,871	5,254
Changes in operating assets and liabilities
Accounts receivable	-139,704	644,025
Prepaid expenses and other current assets	273,172	42,469
Accounts payable, accrued payroll and related liabilities, and other accrued liabilities	-84,824	-572,553
Commissions payable	-12,968	-49,525
Deferred revenue	-286,885	-58,639
Net cash used in operating activities	-325,364	-78,903
Cash flows from investing activities:
Acquisition of furniture and equipment	-2,384	-13,214
Payments received on note receivable	656	1,442
Net cash used in investing activities	-1,728	-11,772
Net decrease in cash and cash equivalents	-327,092	-90,675
Cash and cash equivalents, beginning of the period	2,450,006	2,359,527
Cash and cash equivalents, end of the period	2,122,914	2,268,852
Supplemental cash flow information
Interest paid	0	0
Income taxes paid	$0	$0

1_Basis_of_Presentation

1. Basis of Presentation	3 Months Ended
	Mar. 31, 2015
Basis Of Presentation
1. Basis of Presentation	Organization and Business
	Information Analysis Incorporated (“IAI”, or the “Company”) was incorporated under the corporate laws of the Commonwealth of Virginia in 1979 to develop and market computer applications software systems, programming services, and related software products and automation systems.  The Company provides services to 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 10-Q and Article 8-03 of Regulation S-X.  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.  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, 2014 included in the Annual Report on Form 10-K filed by the Company with the Securities and Exchange Commission on March 20, 2015 (the “Annual Report”).  The accompanying December 31, 2014 financial information was derived from our audited financial statements included in the Annual Report.  The results of operations for any interim period are not necessarily indicative of the results of operations for any other interim period or for a full fiscal year.
	There have been no changes in the Company’s significant accounting policies as of March 31, 2015 as compared to the significant accounting policies disclosed in Note 1, "Summary of Significant Accounting Policies" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31. 2014 that was filed with the SEC on March 20, 2015.
	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 March 31, 2015, there have been no material changes to the Company’s uncertain tax position disclosures as provided in Note 7 of the Annual Report. The Company does not anticipate that total unrecognized tax benefits will significantly change prior to March 31, 2015.

2_Recent_Accounting_Pronouncem

2. Recent Accounting Pronouncements	3 Months Ended
	Mar. 31, 2015
Recent Accounting Pronouncements
2. Summary of Significant Accounting Policies	From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board ("FASB"), or other standard setting bodies that the Company adopts as of the specified effective date.
	In May 2014, FASB issued Accounting Standards Update ("ASU") No. 2014-09 ("Topic 606"), "Revenue from Contracts with Customers." This new standard will replace most existing revenue recognition guidance in U.S. GAAP. The core principle of the ASU is that an entity should recognize revenue for the transfer of goods or services equal to the amount it expects to receive for those goods and services. The ASU requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and estimates and changes in those estimates. The ASU will be effective for the Company beginning January 1, 2017, and allows for both retrospective and modified-retrospective methods of adoption. The Company is in the process of determining the method of adoption it will elect and is currently assessing the impact of this ASU on its financial statements and footnote disclosures.

3_StockBased_Compensation

3. Stock-Based Compensation	3 Months Ended
	Mar. 31, 2015
Stock-based Compensation
3. Stock-Based Compensation	At March 31, 2015, the Company had the stock-based compensation plans described below.  Total compensation expense related to these plans was $2,871 and $5,254 for the quarters ended March 31, 2015 and 2014, respectively, of which $0 and $564, respectively, related to options awarded to non-employees.  The Company estimates the fair value of options granted using a Black-Scholes valuation model to establish the expense.  When stock-based compensation is awarded to employees, the expense is recognized ratably over the vesting period.  When stock-based compensation is awarded to non-employees, the expense is recognized over the period of performance.
	There were 20,000 option awards granted to employees and members of the Board of Directors in the three months ended March 31, 2015 and there were no option awards granted to employees and no option awards granted to non-employees in the three months ended March 31, 2014.  The fair values of option awards granted in the three months ended March 31, 2015 were estimated using the Black-Scholes option pricing model using the following assumptions:
			2015
	Risk free interest rate			1.61 – 1.97	%
	Dividend yield			0	%
	Expected term		5-10 years
	Expected volatility			41.2 – 54.2	%
	The status of the options issued as of March 31, 2015 and changes during the three months ended March 31, 2015 and 2014 were as follows:
			Options outstanding
							Weighted average exercise price per share
			Number of shares
	Balance at December 31, 2014			1,264,000			$	0.26
	Options granted			20,000				0.2
	Options exercised			--				--
	Options expired or forfeited			(1,000	)			0.24
	Balance at March 31, 2015			1,283,000			$	0.26
			Options outstanding
							Weighted average exercise price per share
			Number of shares
	Balance at December 31, 2013			1,187,000			$	0.26
	Options granted			--				--
	Options exercised			--				--
	Options expired or forfeited			--				--
	Balance at March 31, 2014			1,187,000			$	0.26
	The following table summarizes information about options at March 31, 2015:
	Options outstanding												Options exercisable
	Total shares				Weighted average exercise price				Weighted average remaining contractual life in years		Aggregate intrinsic value		Total shares		Weighted average exercise price		Weighted average remaining contractual life in years		Aggregate intrinsic value
		1,283,000			$	0.26				5.36	$	42,258		1,059,500	$	0.28		4.56	$	30,602
	Nonvested stock awards as of March 31, 2015 and changes during the three months ended March 31, 2015 were as follows:
			Nonvested
			Number of shares				Weighted average grant date fair value
	Balance at December 31, 2014			209,500			$	0.07
	Granted			20,000				0.11
	Vested			(5,000	)			0.08
	Expired before vesting			(1,000	)			0.1
	Balance at March 31, 2015			223,500			$	0.08
	As of March 31, 2015 and 2014, unrecognized compensation cost associated with non-vested share-based employee and non-employee compensation totaled $6,801 and $11,469, respectively, which are expected to be recognized over weighted average periods of 6 months and 7 months, respectively.

4_Loss_Per_Share

4. Loss Per Share	3 Months Ended
	Mar. 31, 2015
Loss per common share:
4. Loss Per Share	Basic loss per share excludes dilution and is computed by dividing loss available to common shareholders by the weighted-average number of shares outstanding for the period. Diluted loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock, except for periods when the Company reports a net loss because the inclusion of such items would be antidilutive.
	The following is a reconciliation of the amounts used in calculating basic and diluted net loss per common share:
		Net Income			Shares		Per Share Amount
	Basic net loss per common share for the three months ended March 31, 2015:
	Loss available to common stockholders	$	(84,831	)		11,201,760	$	(0.01	)
	Effect of dilutive stock options		-			-		-
	Diluted net loss per common share for the three months ended March 31, 2015	$	(84,831	)		11,201,760	$	(0.01	)
	Basic net loss per common share for the three months ended March 31, 2014:
	Loss available to common stockholders	$	(97,519	)		11,201,760	$	(0.01	)
	Effect of dilutive stock options		-			-		-
	Diluted net loss per common share for the three months ended March 31, 2014	$	(97,519	)		11,201,760	$	(0.01	)

1_Basis_of_Presentation_Polici

1. Basis of Presentation (Policies)	3 Months Ended
	Mar. 31, 2015
Notes to Financial Statements
Organization and Business	Information Analysis Incorporated (“IAI”, or the “Company”) was incorporated under the corporate laws of the Commonwealth of Virginia in 1979 to develop and market computer applications software systems, programming services, and related software products and automation systems.  The Company provides services to 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 10-Q and Article 8-03 of Regulation S-X.  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.  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, 2014 included in the Annual Report on Form 10-K filed by the Company with the Securities and Exchange Commission on March 20, 2015 (the “Annual Report”).  The accompanying December 31, 2014 financial information was derived from our audited financial statements included in the Annual Report.  The results of operations for any interim period are not necessarily indicative of the results of operations for any other interim period or for a full fiscal year.
	There have been no changes in the Company’s significant accounting policies as of March 31, 2015 as compared to the significant accounting policies disclosed in Note 1, "Summary of Significant Accounting Policies" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31. 2014 that was filed with the SEC on March 20, 2015.
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 March 31, 2015, there have been no material changes to the Company’s uncertain tax position disclosures as provided in Note 7 of the Annual Report. The Company does not anticipate that total unrecognized tax benefits will significantly change prior to March 31, 2015.

3_Stock_Based_Compensation_Tab

3. Stock Based Compensation (Tables)	3 Months Ended
	Mar. 31, 2015
Notes to Financial Statements
Black-Scholes option pricing model assumptions			2015
	Risk free interest rate			1.61 – 1.97	%
	Dividend yield			0	%
	Expected term		5-10 years
	Expected volatility			41.2 – 54.2	%
Options outstanding			Options outstanding
							Weighted average exercise price per share
			Number of shares
	Balance at December 31, 2014			1,264,000			$	0.26
	Options granted			20,000				0.2
	Options exercised			--				--
	Options expired or forfeited			(1,000	)			0.24
	Balance at March 31, 2015			1,283,000			$	0.26
			Options outstanding
							Weighted average exercise price per share
			Number of shares
	Balance at December 31, 2013			1,187,000			$	0.26
	Options granted			--				--
	Options exercised			--				--
	Options expired or forfeited			--				--
	Balance at March 31, 2014			1,187,000			$	0.26
Options Summary	Options outstanding												Options exercisable
	Total shares				Weighted average exercise price				Weighted average remaining contractual life in years		Aggregate intrinsic value		Total shares		Weighted average exercise price		Weighted average remaining contractual life in years		Aggregate intrinsic value
		1,283,000			$	0.26				5.36	$	42,258		1,059,500	$	0.28		4.56	$	30,602
Nonvested Stock awards			Nonvested
			Number of shares				Weighted average grant date fair value
	Balance at December 31, 2014			209,500			$	0.07
	Granted			20,000				0.11
	Vested			(5,000	)			0.08
	Expired before vesting			(1,000	)			0.1
	Balance at March 31, 2015			223,500			$	0.08

4_Earnings_Per_Share_Tables

4. Earnings Per Share (Tables)	3 Months Ended
	Mar. 31, 2015
Notes to Financial Statements
Reconciliation of Loss per Share		Net Income			Shares		Per Share Amount
	Basic net loss per common share for the three months ended March 31, 2015:
	Loss available to common stockholders	$	(84,831	)		11,201,760	$	(0.01	)
	Effect of dilutive stock options		-			-		-
	Diluted net loss per common share for the three months ended March 31, 2015	$	(84,831	)		11,201,760	$	(0.01	)
	Basic net loss per common share for the three months ended March 31, 2014:
	Loss available to common stockholders	$	(97,519	)		11,201,760	$	(0.01	)
	Effect of dilutive stock options		-			-		-
	Diluted net loss per common share for the three months ended March 31, 2014	$	(97,519	)		11,201,760	$	(0.01	)

3_StockBased_Compensation_Deta

3. Stock-Based Compensation (Details)	3 Months Ended
	Mar. 31, 2015
Stock-based Compensation Details
Risk free interest rate, minimum	1.61%
Risk free interest rate, maximum	1.97%
Dividend yield	0.00%
Expected term, minimum	5 years
Expected term, maximum	10 years
Expected volatility, minimum	41.20%
Expected volatility, maximum	54.20%

3_StockBased_Compensation_Deta1

3. Stock-Based Compensation (Details 1) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Weighted average price per share, ending balance	$0.26
Options
Beginning Balance	1,264,000	1,187,000
Options granted	20,000
Options exercised, expired or forfeited	-1,000
Ending Balance	1,283,000	1,187,000
Weighted average price per share, beginning balance	$0.26	$0.26
Weighted average price per share, Options granted	$0.20
Weighted average exercise price per share, Options expired or forfeited	$0.24
Weighted average price per share, ending balance	$0.26	$0.26

3_StockBased_Compensation_Deta2

3. Stock-Based Compensation (Details 2) (USD $)	3 Months Ended
	Mar. 31, 2015
Stock-based Compensation Details 2
Options outstanding	1,283,000
Weighted Average Price per share	$0.26
Weighted average remaing contractual life in years	5 years 4 months 10 days
Aggregate intrinsic value	$42,258
Options exercisable	1,059,500
Options exercisable weighted average exercise price	$0.28
Options exercisable weighted average remaining contractual life	4 years 6 months 22 days
Options exercisable aggregate intrinsic value	$30,602

3_StockBased_Compensation_Deta3

3. Stock-Based Compensation (Details 3) (USD $)	3 Months Ended
	Mar. 31, 2015
Stock-based Compensation Details 3
Nonvested Stock Awards Beginning Balance	209,500
Granted	20,000
Vested	-5,000
Expired before Vesting	-1,000
Nonvested Stock Awards Ending Balance	223,500
Weighted Average Grant Date Fair Value
Nonvested Stock Awards Beginning Balance	$0.07
Granted	$0.11
Vested	$0.08
Expired before Vesting	$0.10
Nonvested Stock Awards Ending Balance	$0.08

3_StockBased_Compensation_Deta4

3. Stock-Based Compensation (Details Narrative) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Stock-based Compensation Details Narrative
Total compensation expense for stock options	$2,871	$5,254
Options awarded to non-employees expense	$0	$564

4_Loss_Per_Share_Details

4. Loss Per Share (Details) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Loss Per Share Details
Basic net loss	($84,831)	($97,519)
Basic shares	11,201,760	11,201,760
Basic net loss per common share	($0.01)	($0.01)
Effect of dilutive stock options	0	0
Diluted Net Loss	($84,831)	($97,519)
Diluted shares	11,201,760	11,201,760
Diluted earnings per share	($0.01)	($0.01)