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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Virginia
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54-1167364
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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Large accelerated filer o
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Accelerated filer o
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Non-accelerated filer o
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Smaller reporting company þ
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(Do not check if a smaller reporting company)
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June 30,
2015
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December 31,
2014
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(Unaudited)
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(see Note 1)
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ASSETS
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Current assets:
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Cash and cash equivalents
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$ | 2,399,099 | $ | 2,450,006 | ||||
Accounts receivable, net
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796,979 | 970,621 | ||||||
Prepaid expenses and other current assets
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340,367 | 759,982 | ||||||
Notes receivable, current
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- | 3,896 | ||||||
Total current assets
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3,536,445 | 4,184,505 | ||||||
Property and equipment, net
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47,449 | 53,675 | ||||||
Notes receivable, long-term
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- | 5,102 | ||||||
Other assets
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6,281 | 6,281 | ||||||
Total assets
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$ | 3,590,175 | $ | 4,249,563 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY
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Current liabilities:
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Accounts payable
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$ | 125,208 | $ | 32,327 | ||||
Commissions payable
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951,224 | 1,017,047 | ||||||
Deferred revenue
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315,459 | 737,994 | ||||||
Accrued payroll and related liabilities
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240,617 | 255,703 | ||||||
Other accrued liabilities
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42,038 | 116,097 | ||||||
Total liabilities
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1,674,546 | 2,159,168 | ||||||
Stockholders' equity:
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Common stock, par value $0.01, 30,000,000 shares authorized;
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12,844,376 shares issued, 11,201,760 shares outstanding as of June 30, 2015 and December 31, 2014
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128,443 | 128,443 | ||||||
Additional paid-in capital
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14,619,601 | 14,613,887 | ||||||
Accumulated deficit
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(11,902,204 | ) | (11,721,724 | ) | ||||
Treasury stock, 1,642,616 shares at cost
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(930,211 | ) | (930,211 | ) | ||||
Total stockholders' equity
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1,915,629 | 2,090,395 | ||||||
Total liabilities and stockholders' equity
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$ | 3,590,175 | $ | 4,249,563 |
For the three months ended
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June 30,
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||||||||
2015
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2014
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Revenues:
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Professional fees
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$ | 997,435 | $ | 789,054 | ||||
Software sales
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312,438 | 235,253 | ||||||
Total revenues
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1,309,873 | 1,024,307 | ||||||
Cost of revenues:
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Cost of professional fees
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592,259 | 479,751 | ||||||
Cost of software sales
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281,411 | 227,387 | ||||||
Total cost of revenues
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873,670 | 707,138 | ||||||
Gross profit
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436,203 | 317,169 | ||||||
Selling, general and administrative expenses
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434,274 | 425,989 | ||||||
Commissions expense
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100,193 | 55,076 | ||||||
Loss from operations
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(98,264 | ) | (163,896 | ) | ||||
Other income
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2,615 | 2,597 | ||||||
Loss before provision for income taxes
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(95,649 | ) | (161,299 | ) | ||||
Provision for income taxes
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- | - | ||||||
Net loss
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$ | (95,649 | ) | $ | (161,299 | ) | ||
Comprehensive loss
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$ | (95,649 | ) | $ | (161,299 | ) | ||
Net loss per common share:
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Basic
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$ | (0.01 | ) | $ | (0.01 | ) | ||
Diluted
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$ | (0.01 | ) | $ | (0.01 | ) | ||
Weighted average common shares outstanding:
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Basic
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11,201,760 | 11,201,760 | ||||||
Diluted
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11,201,760 | 11,201,760 |
For the six months ended
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June 30,
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2015
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2014
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Revenues:
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Professional fees
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$ | 2,112,531 | $ | 1,664,314 | ||||
Software sales
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673,465 | 539,803 | ||||||
Total revenues
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2,785,996 | 2,204,117 | ||||||
Cost of revenues:
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Cost of professional fees
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1,235,543 | 977,579 | ||||||
Cost of software sales
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629,995 | 455,092 | ||||||
Total cost of revenues
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1,865,538 | 1,432,671 | ||||||
Gross profit
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920,458 | 771,446 | ||||||
Selling, general and administrative expenses
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866,368 | 871,808 | ||||||
Commissions expense
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239,664 | 163,752 | ||||||
Loss from operations
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(185,574 | ) | (264,114 | ) | ||||
Other income
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5,094 | 5,296 | ||||||
Loss before provision for income taxes
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(180,480 | ) | (258,818 | ) | ||||
Provision for income taxes
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- | - | ||||||
Net loss
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$ | (180,480 | ) | $ | (258,818 | ) | ||
Comprehensive loss
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$ | (180,480 | ) | $ | (258,818 | ) | ||
Net loss per common share:
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Basic
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$ | (0.02 | ) | $ | (0.02 | ) | ||
Diluted
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$ | (0.02 | ) | $ | (0.02 | ) | ||
Weighted average common shares outstanding:
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Basic
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11,201,760 | 11,201,760 | ||||||
Diluted
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11,201,760 | 11,201,760 |
For the six months ended
June 30,
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2015
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2014
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Cash flows from operating activities:
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Net loss
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$ | (180,480 | ) | $ | (258,818 | ) | ||
Adjustments to reconcile net loss to net cash
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used in operating activities:
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Depreciation and amortization
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15,360 | 15,482 | ||||||
Stock option compensation
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5,714 | 8,805 | ||||||
Bad debt expense
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107 | - | ||||||
Forgiveness of note receivable
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7,863 | - | ||||||
Changes in operating assets and liabilities:
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Accounts receivable
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173,535 | 551,413 | ||||||
Prepaid expenses and other current assets
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419,615 | 98,121 | ||||||
Accounts payable, accrued payroll and related
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liabilities, and other accrued liabilities
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3,736 | (572,855 | ) | |||||
Commissions payable
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(65,823 | ) | (150,039 | ) | ||||
Deferred revenue
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(422,535 | ) | (110,356 | ) | ||||
Net cash used in operating activities
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(42,908 | ) | (418,247 | ) | ||||
Cash flows from investing activities:
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Acquisition of furniture and equipment
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(9,134 | ) | (17,705 | ) | ||||
Payments received on notes receivable
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1,135 | 2,758 | ||||||
Net cash used in investing activities
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(7,999 | ) | (14,947 | ) | ||||
Net decrease in cash and cash equivalents
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(50,907 | ) | (433,194 | ) | ||||
Cash and cash equivalents, beginning of the period
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2,450,006 | 2,359,527 | ||||||
Cash and cash equivalents, end of the period
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$ | 2,399,099 | $ | 1,926,333 | ||||
Supplemental cash flow information
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Interest paid
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$ | - | $ | - | ||||
Income taxes paid
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$ | - | $ | - |
Three Months ended
June 30,
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Six Months ended
June 30,
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2015
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2014
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2015
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2014
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Risk free interest rate
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1.61 – 1.97%
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1.77%
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1.61 – 1.97%
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1.77%
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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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5-10 years
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5 years
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5-10 years
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5 years
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Expected volatility
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41.2 – 54.2%
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47.3%
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41.2 – 54.2%
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47.3%
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Options outstanding
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Number of shares
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Weighted average exercise price per share
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Balance at December 31, 2014
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1,264,000 | $ | 0.26 | |||||
Options granted
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20,000 | 0.20 | ||||||
Options exercised
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-- | -- | ||||||
Options expired or forfeited
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(1,000 | ) | 0.24 | |||||
Balance at March 31, 2015
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1,283,000 | $ | 0.26 | |||||
Options granted
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-- | -- | ||||||
Options exercised
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-- | -- | ||||||
Options expired or forfeited
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(5,000 | ) | 0.52 | |||||
Balance at June 30, 2015
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1,278,000 | $ | 0.25 |
Options outstanding
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Number of shares
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Weighted average exercise price per share
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Balance at December 31, 2013
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1,187,000 | $ | 0.26 | |||||
Options granted
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-- | -- | ||||||
Options exercised
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-- | -- | ||||||
Options expired or forfeited
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-- | -- | ||||||
Balance at March 31, 2014
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1,187,000 | $ | 0.26 | |||||
Options granted
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1,000 | 0.24 | ||||||
Options exercised
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-- | -- | ||||||
Options expired or forfeited
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(3,000 | ) | 0.11 | |||||
Balance at June 30, 2014
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1,185,000 | $ | 0.26 |
Options outstanding
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Options exercisable
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Total shares
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Weighted average exercise price
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Weighted average remaining contractual life in years
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Aggregate intrinsic value
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Total shares
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Weighted average exercise price
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Weighted average remaining contractual life in years
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Aggregate intrinsic value
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1,278,000 | $ | 0.25 | 5.13 | $ | 19,128 | 1,064,500 | $ | 0.27 | 4.40 | $ | 13,777 |
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, 2014
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209,500 | $ | 0.07 | |||||
Granted
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20,000 | 0.11 | ||||||
Vested
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(5,000 | ) | 0.08 | |||||
Expired before vesting
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(1,000 | ) | 0.10 | |||||
Balance at March 31, 2015
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223,500 | $ | 0.08 | |||||
Granted
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-- | -- | ||||||
Vested
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(10,000 | ) | 0.09 | |||||
Expired before vesting
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-- | -- | ||||||
Balance at June 30, 2015
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213,500 | $ | 0.07 |
Net Loss | Shares | Per Share Amount | ||||||||||
Basic net loss per common share for the three months ended June 30, 2015: | ||||||||||||
Loss available to common stockholders | $ | (95,649 | ) | 11,201,760 | $ | (0.01 | ) | |||||
Effect of dilutive stock options | - | - | - | |||||||||
Diluted net loss per common share for the three months ended June 30, 2015 | $ | (95,649 | ) | 11,201,760 | $ | (0.01 | ) | |||||
Basic net loss per common share for the three months ended June 30, 2014: | ||||||||||||
Loss available to common stockholders | $ | (161,299 | ) | 11,201,760 | $ | (0.01 | ) | |||||
Effect of dilutive stock options | - | - | - | |||||||||
Diluted net loss per common share for the three months ended June 30, 2014 | $ | (161,299 | ) | 11,201,760 | $ | (0.01 | ) |
Net Loss | Shares | Per Share Amount | ||||||||||
Basic net loss per common share for the six months ended June 30, 2015: | ||||||||||||
Loss available to common stockholders | $ | (180,480 | ) | 11,201,760 | $ | (0.02 | ) | |||||
Effect of dilutive stock options | - | - | - | |||||||||
Diluted net loss per common share for the six months ended June 30, 2015 | $ | (180,480 | ) | 11,201,760 | $ | (0.02 | ) | |||||
Basic net loss per common share for the six months ended June 30, 2014: | ||||||||||||
Loss available to common stockholders | $ | (258,818 | ) | 11,201,760 | $ | (0.02 | ) | |||||
Effect of dilutive stock options | - | - | - | |||||||||
Diluted net loss per common share for the six months ended June 30, 2014 | $ | (258,818 | ) | 11,201,760 | $ | (0.02 | ) |
●
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changes in the funding priorities of the U.S. federal government;
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●
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changes in the way the U.S. federal government contracts with businesses;
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terms specific to U.S. federal government contracts;
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our failure to keep pace with a changing technological environment;
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intense competition from other companies;
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inaccuracy in our estimates of the cost of services and the timeline for completion of contracts;
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non-performance by our subcontractors and suppliers;
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our dependence on third-party software and software maintenance suppliers;
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our failure to adequately integrate businesses we may acquire;
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fluctuations in our results of operations and the resulting impact on our stock price;
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the limited public market for our common stock;
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changes in the economic health of our non U.S. federal government customers; and
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our forward-looking statements and projections may prove to be inaccurate.
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Exhibit No. | Description | |
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 | |||
(Registrant) | |||
Date: August 14, 2015
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By:
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/s/ Sandor Rosenberg | |
Sandor Rosenberg, Chairman of the Board, Chief Executive Officer, and President | |||
Date: August 14, 2015 |
By:
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/s/ Richard S. DeRose | |
Richard S. DeRose, Executive Vice President, Treasurer, and Chief Financial Officer | |||