FIREFLY NEUROSCIENCE, INC. 10-K

Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures Our management, under the supervision and with the participation of our Chief Executive Office and Chief Financial Officer, and people performing similar functions, has evaluated the effectiveness of the design and operation of our controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of the end of the period reported in this annual report (the “Evaluation Date”). Based upon this evaluation, our Chief Executive Office and Chief Financial Officer have concluded that, as of the Evaluation Date, our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act was recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information required to be disclosed was accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure . Changes in Internal Control over Financial Reporting There were no changes in our internal control over financial reporting during the quarter ended December 31, 2020 that have materially affected, or are reasonably likely to affect, our internal control over financial reporting. Adaptations to preserve the separation of duties following the promotion of existing personnel within the organization to the roles of the principal executive and principal financial officers have been made wherever feasible. Management ’ s Annual Report on Internal Control over Financial Reporting Management is responsible for establishing and maintaining adequate internal control over financial reporting. A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Management, including the Chief Executive Officer and Chief Financial Officer, has conducted an evaluation of the effectiveness of our internal control over financial reporting as of the Evaluation Date, based on the criteria for effective internal control described in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on its assessment, management concluded that our internal control over financial reporting was effective as of the Evaluation Date. This Annual Report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our independent registered public accounting firm. This report shall not be deemed to be filed for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, and is not incorporated by reference into any filing of Information Analysis Incorporated, whether made before or after the date hereof, regardless of any general incorporation language in such filing. 38 Information Analysis Incorporated 2020 Annual Report on Form 10-K Item 9B. Other Information None. PART III Item 10. Directors, Executive Officers and Corporate Governance Directors The following table sets forth the name, age (as of March 30, 2021) and position of each of our directors. Name of director Age Director since Position with the Company Jack L. Johnson, Jr. 64 2021 Director Mark T. Krial 63 2016 Chairman of the Board Charles A. May, Jr. 83 1997 Director William H. Pickle 71 2015 Director Stanley A. Reese 64 2021 Director, CEO & President Bonnie K. Wachtel 65 1992 Director Jack L. Johnson, Jr. , 64, is the CEO and Managing Partner for Jack Johnson and Associates, a strategic consulting firm located in McLean, VA. The firm specializes in providing business and risk consulting to clients domestically and internationally, particularly in the areas of business risk, pre and post-sale merger and acquisition support, business integration as well as in-depth security assessments. Previously he was a Partner and Sector Leader with Guidehouse Consulting, and its legacy firm, PricewaterhouseCoopers (PwC). In this capacity, he led the firm’s Defense Sector Practice, and his portfolio of responsibility includes all service components within the U.S. Department of Defense; Army, Navy, Air Force and Marine Corps; the Office of the Secretary of Defense; all Other Defense Organizations and Other Defense Agencies; as well as the North Atlantic Treaty Organization, along with Commercial Aerospace and Defense. Prior to assuming this role in 2014, he served as the sector leader for the Homeland Security and Law Enforcement sector, overseeing the Department of Homeland Security, Department of Justice and the Intelligence Community. Before joining PwC in 2005, Mr. Johnson served as the first Chief Security Officer (CSO) for the newly formed Department of Homeland Security (DHS). In this capacity, he was directly involved in the establishment of DHS after 9/11 and integrating the 22 agencies that now comprise the Department. He directed all security-related activities for DHS organizations and its over 200,000 employees, including physical, personnel, and information security, as well as counterintelligence and internal investigations. He was designated as the Cognizant Security Authority (CSA) for the Department, having responsibility and authority over all classified programs and information, was the senior representative to the Intelligence Community, and served as the first DHS representative to the National Security Council. His previous government service before his appointment at DHS consisted of over 20 years with the United States Secret Service, rising to the position of Deputy Assistant Director, and serving in a wide range of managerial and executive assignments of increasing responsibility and complexity. His career included the full range of investigative, protective, and intelligence-related duties, both domestically and internationally, as well as assignments with various Presidents, Vice Presidents, Presidential candidates, and foreign heads of state. Prior to being commissioned as a Secret Service Agent in 1983, he was a Police Officer and Detective for Fairfax County, Virginia Police Department, and also is a veteran of the United States Army. Mr. Johnson received his Bachelor of Science degree from the University of Maryland, a Masters in Forensic Science degree from George Washington University and has completed additional post-graduate study at the University of Virginia and Johns Hopkins School of Management. He has previously testified on multiple occasions before Congress on homeland security and national security-related issues and is a frequent speaker at many national and international conferences, seminars, and symposiums. Additionally, he has also been featured on the CBS Morning Show, 60 Minutes, Forensic Files and The Today Show. 39 Information Analysis Incorporated 2020 Annual Report on Form 10-K Mark T. Krial , 63, has been serving as president of Marathon TS, Inc., an information technology and professional services company which serves the federal government and commercial markets, since 2009. Prior to that, he served as president of Cornell Technical Services, an information technology firm, for 15 years. He holds a B.S. degree from Oklahoma A&M State University. Mr. Krial has been a board member of IAI since 2016. Mr. Krial offers over 30 years of achievement within information technology and computer-based disciplines. His management approach emphasizes innovative techniques to achieve high performance, cost effective and profit enhancing solutions. High level experience includes sales, marketing, business development and strategic planning capabilities. Charles A. May, Jr. , 83, has been serving as a national security and strategic business planning consultant for several years. In 1992, he retired as a Lt. General from the Air Force where he last served as Assistant Vice Chief of Staff, Headquarters US Air Force, Washington, D.C. He is a graduate of the U.S. Air Force Academy, where he once served as an Associate Professor of Political Science. General May has also graduated from the NATO Defense College, has a Master’s degree in International Relations from Columbia University, and has completed the course work toward a Ph.D., and has completed the University of Pittsburgh’s Management Program for Executives. General May brings a world of experience relating to strategic planning, the government as a customer, assessment of trends in national security, accountability, and stability to our Board. William H. Pickle , 71, is a government affairs/business development consultant with over 30 years of experience at senior levels within the federal government. Since 2007, Mr. Pickle has served as President of The Pickle Group, LLC, a Washington DC-based business development company. Mr. Pickle served as the 37th Sergeant at Arms (SAA) of the United States Senate. Mr. Pickle was nominated for this senior position by Senate Majority Leader Bill Frist and elected by the Senate in March 2003. He was re-elected in January 2005. In this position, Mr. Pickle served as the Senate's Chief Operating Officer, Chief of Protocol, Chief of Security; and managed over 950 Senate employees and an annual budget exceeding $200 million. As SAA, Mr. Pickle worked closely with Senators, Committees and senior Senate staff on a daily basis. In addition, as the SAA, he served as Chairman of the U.S. Capitol Police Board with direct oversight for a 2200 person police department with a budget of $300 million. Prior to his Senate service, Mr. Pickle served in several Senior Executive Service (SES) positions within the Executive Branch, which included being the first SES Director of the Transportation Security Administration and a Deputy Inspector General of the Department of Labor. The bulk of Mr. Pickle's career was spent with the United States Secret Service where he rose steadily through the ranks from Special Agent to Senior Executive. Mr. Pickle served as Executive Assistant Director responsible for the Congressional and Legislative Affairs program of the Secret Service from 1991 to 1998. Mr. Pickle is a decorated Vietnam Veteran who served with the 1st Cavalry Division in 1968-69. Among his awards are the Bronze Star, Purple Heart, 7 Air Medals (2 for valor), 3 Army Commendation Medals, Vietnamese Cross of Gallantry, and the Combat Infantry Badge. Mr. Pickle served on the President's Medal of Valor Award Committee and currently serves on numerous not-for-profit and corporate boards. He was a member of the 2004 Presidential Election Advisory Committee. Stanley A. Reese , 64, joined the Company in 1993. Mr. Reese has been director since March 11, 2021, and Chief Executive Officer and President since February 17, 2021, after serving in interim capacities for those officer positions from January 1, 2021. He previously served as Senior Vice President beginning in 1997 and Chief Operating Officer beginning in 1999. From 1992 to 1993, he served as Vice President, Technical Services at Tomco Systems, Inc. Prior to Tomco Systems, he served as Senior Program manager at ICF Information Technology, Inc. Mr. Reese has over 35 years of experience managing and marketing large scale mainframe and PC-based applications. Mr. Reese holds a B.A. in History from George Mason University. 40 Information Analysis Incorporated 2020 Annual Report on Form 10-K Bonnie K. Wachtel , 65, is a principal of Wachtel & Co., Inc., a boutique investment firm based in Washington, D.C. Ms. Wachtel has been a director of several local companies since joining her firm in 1984, and currently serves on the Board of VSE Corporation, a provider of engineering services to federal government clients, and ExOne Co., a global provider of 3D printing machines, products, and services to industrial clients. Industry experience includes ten years (2006-2016) on the Hearing Panel for Nasdaq Listing Qualifications. Ms Wachtel holds B.A. and M.B.A. degrees from the University of Chicago and a J.D. from the University of Virginia. She is a Certified Financial Analyst. Ms. Wachtel is a trusted resource with regard to business strategy, public markets, merger and acquisition opportunities, corporate governance, regulatory compliance, and risk management. Given her background and occupation, she is qualified to be the audit committee’s financial expert. Executive Officers The following table sets forth the name, age (as of March 29, 2019) and position of each of our executive officers. Name of executive officer Age Position with the Company Stanley A. Reese 64 Chief Executive Officer and President Matthew T. Sands 50 Chief Financial Officer Stanley A. Reese , 64, joined the Company in 1993. See description under directors above. Matthew T. Sands , 50, joined the Company in 2002 as Controller. Mr. Sands has been Chief Financial Officer since February 4, 2021, after serving in that position in an interim capacity beginning in April 2020. Prior to joining the Company, he was director of finance at an international internet telephony development company. Mr. Sands also has experience in the banking industry and in investment company accounting. Mr. Sands is a graduate of University of Delaware with a Bachelor of Science degree in Accounting and a second major in Finance. Family Relationships There are no family relationships among any of our directors or executive officers. Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Exchange Act requires the Company’s directors and executive officers, and persons who own more than 10% of a registered class of the Company’s equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and other equity securities of the Company. Officers, directors and greater than 10% stockholders are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they file. To the Company’s knowledge, based solely on a review of the copies of such reports furnished to the Company, there were no officers, directors and 10% beneficial owners who failed to file on a timely basis the forms required under Section 16(a) of the Exchange Act during our 2020 fiscal year. Code of Business Conduct and Ethics We have adopted a code of ethics that applies to our Chief Executive Office and all senior financial officers, including our Chief Financial Officer and Controller. The code of ethics is available on our website at www.infoa.com on the Investors page under the Investor Relations heading. Any amendments to the code, or any waivers of its requirements, will be disclosed on our website. 41 Information Analysis Incorporated 2020 Annual Report on Form 10-K Procedures for Stockholder Nominations to the Board of Directors There were no material changes to the procedures for nominating directors by our stockholders made in the year ended December 31, 2020. Audit Committee We have a separately-designated standing audit committee. This committee currently has two members, Bonnie K. Wachtel (Chairman) and Charles A. May, Jr. Our Audit Committee has the authority to retain and terminate the services of our independent registered public accountants, reviews annual financial statements, considers matters relating to accounting policy and internal controls, and reviews the scope of annual audits. All members of the Audit Committee satisfy the current independence standards promulgated by the SEC and by the NASDAQ Stock Market; as such standards apply specifically to members of audit committees. The Board has determined that Ms. Wachtel is our “audit committee financial expert,” as the SEC has defined that term in Item 407 of Regulation S-K. The current audit committee charter is available for viewing on our Web site at www.infoa.com on the Investors page under the Investor Relations heading. Item 11. Executive Compensation The Summary Compensation Table below sets forth individual compensation information for the Chief Executive Officer and the other executive officers serving as executive officers as of December 31, 2020 (collectively “Named Executive Officers”): Summary Compensation Table Name and principal position (a) Year (b) Salary ($) (c) Bonus ($) (d) Option awards 1 ($) (f) All other Compensation 2 ($) (i) Total ($) (j) Sandor Rosenberg 2020 142,000 -- -- 32,654 174,654 Chairman of the Board and Chief Executive Officer through 12/31/2020 2019 142,000 -- -- 15,335 157,335 Stanley A. Reese 2020 161,875 10,000 37,000 21,977 230,852 Chief Operating Officer 2019 154,000 -- -- 9,662 163,662 Richard S. DeRose 2020 20,417 -- -- 850 21,267 Executive Vice President and Chief Financial Officer through 04/19/2020 2019 70,000 -- -- 8,921 78,921 Matthew T. Sands Acting Chief Financial Officer from 04/20/2020 2020 141,500 5,000 37,000 7,351 190,851 1 Assumptions used to determine the fair value of option awards can be found in Note 11 to our financial statements. 2 References to All Other Compensation include employer matching contributions to each individual ’ s 401(k) defined contribution account under our company-wide 401(k) Pension and Profit Sharing Plan, routine payouts of excess vacation accruals, and employer payments for long-term care insurance under an executive carve-out. 42 Information Analysis Incorporated 2020 Annual Report on Form 10-K The following table sets forth the outstanding equity awards for the named executive officers of the Company as of December 31, 2020: OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END OPTION AWARDS Name (a) Number of securities underlying unexercised options (#) exercisable (b) Number of securities underlying unexercised options (#) unexercisable (c) Option exercise price ($) (e) Option expiration date (f) Stanley A. Reese 50,000 0.15 03/20/2022 Stanley A. Reese 100,000 0.35 07/17/2022 Stanley A. Reese 100,000 0.16 02/12/2023 Stanley A. Reese 50,000 0.145 10/07/2023 Stanley A. Reese 25,000 0.25 04/11/2026 Stanley A. Reese 100,000 0.47 02/22/2028 Stanley A. Reese 100,000 0.66 09/02/2030 Matthew T. Sands 8,000 0.16 05/26/2021 Matthew T. Sands 20,000 0.15 06/12/2022 Matthew T. Sands 32,000 0.156 08/08/2023 Matthew T. Sands 20,000 0.17 09/23/2024 Matthew T. Sands 20,000 0.37 06/19/2028 Matthew T. Sands 100,000 0.66 09/02/2030 Each Named Executive Officer is a salaried employee, without any guaranteed incentives. Bonuses and stock option awards are at the discretion of the Compensation Committee of the Board of Directors. Executive officers are eligible to participate in the Information Analysis Incorporated 401(k) Pension and Profit Sharing Plan under the same terms and matching percentages as other salaried employees. Vacation accruals in excess of defined limits are automatically paid out to all salaried employees annually, and may be paid other times upon request. Executive officers receive a perquisite benefit of no-cash-value long-term care insurance paid by the Company. The Company has no outstanding stock awards to any executive officer. Employment Contracts, Termination of Employment and Change-in-Control Arrangements On September 30, 1997, the Company agreed in writing to provide to Stanley A. Reese, Chief Executive Officer and President as of February 17, 2021, and formerly Senior Vice President and Chief Financial Officer, three months’ severance pay of his full-time base salary, payable in normal payroll increments, in the event of the termination of his employment other than for cause. In the event of a change of control or the sale or transfer of substantially all of the Company’s assets, the Company agreed that in the event of Mr. Reese’s termination or substantial reduction of duties, he will receive a six-month severance payment of base salary, payable in lump sum or monthly, at the Company’s discretion. Had the event of termination or change-in-control occurred on December 31, 2020, Mr. Reese’s compensation under the agreement would have been $43,750 or $87,500, respectively. On September 2, 2020, the Company agreed in writing to provide to Matthew T. Sands, Chief Financial Officer as of February 17, 2021, and formerly Controller and acting Chief Financial Officer, three months’ severance pay of his full-time base salary, payable in normal payroll increments, in the event of the termination of his employment other than for cause. In the event of a change of control or the sale or transfer of substantially all of the Company’s assets, the Company agreed that in the event of Mr. Reese’s termination or substantial reduction of duties, he will receive a three-month severance payment of base salary, payable in lump sum or monthly, at the Company’s discretion. Had the event of termination or change-in-control occurred on December 31, 2020, Mr. Sands’ compensation under the agreement would have been $35,375. 43 Information Analysis Incorporated 2020 Annual Report on Form 10-K Retirement Plans The Company has a Cash or Deferred Arrangement Agreement (CODA), which satisfies the requirements of section 401(k) of the Internal Revenue Code. This defined contribution retirement plan covers substantially all employees. Participants can elect to have up to the maximum percentage allowable of their salaries reduced and contributed to the plan. The Company may make matching contributions equal to a discretionary percentage of the participants’ elective deferrals. In 2020, the Company matched 25% of the first 6% of the participants’ elective deferrals. The Company may also make additional contributions to all eligible employees at its discretion. The Company did not make additional contributions during 2020. Compensation of Directors For the year ended December 31, 2020, the Company paid each non-employee director an annual fee of $2,000 to serve on the Board, payable quarterly. Options to purchase shares of common stock may be issued in addition to the director’s annual fee. Expenses incurred in attending Board of Director meetings and committee meetings may be reimbursed. The following Table describes all compensation for each director for the year ended December 31, 2020. Director Compensation Name (a) Fees earned or paid in cash ($) (b) Stock Awards ($) (c) Option Awards ($) (d) Non-equity incentive plan compensation ($) (e) Nonqualified deferred compensation ($) (f) All Other Compensation ($) (g) Total ($) (h) Mark T. Krial 1 2,000 - - - - - 2,000 Charles A. May, Jr. 2 2,000 - - - - - 2,000 William H. Pickle 3 2,000 - - - - - 2,000 Bonnie K. Wachtel 2 2,000 - - - - - 2,000 James D. Wester 2,4 2,000 - - - - - 2,000 1 Had option awards for an aggregate amount of 10,000 shares outstanding at December 31, 2020. 2 Had option awards for an aggregate amount of 30,000 shares outstanding at December 31, 2020. 3 Had option awards for an aggregate amount of 20,000 shares outstanding at December 31, 2020. 4 Retired as a director effective March 10, 2021. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Equity Compensation Plan Information The following table contains information regarding securities authorized and available for issuance under our equity compensation plans for certain employees, directors, and consultants, as of March 15, 2021. Plan Category Number of securities to be issued upon exercise of outstanding options, warrants, and rights Weighted average exercise price of outstanding options, warrants, and rights Number of securities remaining available for future issuance Equity compensation plans approved by security holders 1,2 1,395,000 $ 0.34 369,000 Equity compensation plans not approved by security holders -- -- -- Total 1,395,000 $ 0.34 369,000 1 The Company has a stock incentive plan, which became effective June 1, 2016, and expires April 4, 2026 (the “ 2016 Plan ” ). The 2016 Plan provides for the granting of equity awards to employees and directors. The maximum number of shares for which equity awards may be granted under the 2016 Plan is 1,000,000. Options granted under the 2016 Plan expire no later than ten years from the date of grant or 90 days after employment ceases, whichever comes first, and vest over periods determined by the Board of Directors. 2 The Company had a stock incentive plan, which became effective May 18, 2006, and expired April 12, 2016 (the “ 2006 Plan ” ). The 2006 Plan provided for the granting of equity awards to employees and directors. Options granted under the 2006 Plan expire no later than ten years from the date of grant or 90 days after employment ceases, whichever comes first, and vest over periods determined by the Board of Directors. 44 Information Analysis Incorporated 2020 Annual Report on Form 10-K Security Ownership of Certain Beneficial Owners and Management The following table sets forth the beneficial ownership of our common stock held as of March 25, 2021, by each person who is known by us based on Schedule 13G, Schedule 13D, and Section 16(a) filings to beneficially own more than 5% of the outstanding shares of our common stock, and as of March 25, 2021, by each current director and; (2) each of the named executive officers listed in the Summary Compensation Table included in Part III Item 10 above; and (3) by all current directors and executive officers as a group: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS TITLE OF CLASS: INFORMATION ANALYSIS INCORPORATED COMMON STOCK Name and Address of Beneficial Owner Amount and Nature of Beneficial Ownership Percent Of Class Joseph P. Daly 1,670,500 (1) 14.8 Palm Management (US) LLC 1,050,000 (2) 9.3 Traditions LP 1,000,000 (3) 8.9 Alan Gelband 934,397 (4) 8.3 Estate of Barry T. Brooks 735,043 (5) 6.5 SECURITY OWNERSHIP OF MANAGEMENT TITLE OF CLASS: INFORMATION ANALYSIS INCORPORATED COMMON STOCK Name of Beneficial Owner (6) Amount and Nature of Beneficial Ownership Percent Of Class Stanley A. Reese, Chief Executive Officer and President 525,000 (7) 4.4 Matthew T. Sands, Chief Financial Officer 210,000 (8) 1.8 Jack L. Johnson, Jr., Director - * Mark T. Krial, Chairman of the Board 30,000 (9) * Charles A. May, Jr., Director 70,000 (9) * William H. Pickle, Director 25,000 (10) * Bonnie K. Wachtel, Director 248,800 (9) 2.2 All directors and executive officers as a group 1,108,800 (11) 9.1 * Beneficial Ownership represents less than 1% of the class of shares. (1) The address of Joseph P. Daly is 497 Circle Freeway, Cincinnati, OH 45246. This information was obtained solely from a Form 4 filed by Mr. Daly on July 25, 2019. Mr. Daly owns 450,000 shares directly and 1,183,500 through EssigPR Inc. (2) This information was obtained solely from a Schedule 13G filed with the SEC jointly by Palm Management (US) LLC, Palm Global Small Cap Master Fund LP, Bradley C. Palmer, and Joshua Horowitz on February 17, 2021. The address of Palm Management (US) LLC is 19 West Elm Street, Greenwich, CT 06830. Total shares beneficially owned include 1,050,000 with shared voting power and 1,050,000 with shared dispositive power. (3) The address of record of Traditions LP is 924 Ridge Drive, McLean, VA 22101. (4) This information was obtained solely from a Schedule 13G filed with the SEC on February 2, 2021. The address of the filers is 62 Longwoods Lane, East Hampton, NY 11937. Shares beneficially owned include 378,847 shares with sole voting and sole dispositive power by Alan Gelband, 105,000 shares with sole voting and sole dispositive power by The Alan Gelband Company Defined Contribution Pension Plan and Trust, 440,550 shares with sole voting and sole dispositive power by Alan Gelband Roth IRA, and 10,000 shares with sole voting and sole dispositive power by The Alden Foundation. (5) This information was obtained solely from a Schedule 13G filed with the SEC on March 21, 2011. The address of the filers as recorded was 3843 Jamestown Road, Springfield, OH 45502. Current ownership status of the shares of Barry T. Brooks is unknown following his death in 2014. There has been no subsequent Schedule 13G reporting. (6) The address of all beneficial holders who are directors or management is in care of the Company. (7) Includes 525,000 shares issuable upon the exercise of options to purchase common stock. (8) Includes 200,000 shares issuable upon the exercise of options to purchase common stock. (9) Includes 30,000 shares issuable upon the exercise of options to purchase common stock. (10) Includes 25,000 shares issuable upon the exercise of options to purchase common stock. (11) Includes 840,000 shares issuable upon the exercise of options to purchase common stock. * Less than 1% ownership of class. 45 Information Analysis Incorporated 2020 Annual Report on Form 10-K Item 13. Certain Relationships and Related Transactions, and Director Independence Transactions with Related Persons A "Related Party Transaction" is any transaction directly or indirectly involving any related party that would need to be disclosed under Item 404(a) of Regulation S-K. The Company has determined as a policy that any Related Party Transaction requires the approval by the Board of Directors. For the year ended December 31, 2020, the Company determined that it had not engaged in related party transactions subject to reporting herein. Independence Our Board has determined that the following members of the Board qualify as independent under the definition promulgated by the NASDAQ Stock Market: Mark T. Krial Jack L. Johnson, Jr. Charles A. May, Jr. William H. Pickle Bonnie K. Wachtel There are no family relationships between any directors or executive officers of the Company. Item 14. Principal Accounting Fees and Services The following table presents fees for professional audit services rendered by CohnReznick LLP for the audits of the Company's annual financial statements for the years ended December 31, 2020 and 2019, respectively, and fees billed for other services rendered by our principal accountants during those periods. Fee Category 2020 Fees 2019 Fees Audit Fees $ 95,145 $ 92,284 Audit-Related Fees -- -- Tax Fees 4,632 4,632 All Other Fees -- -- Total Fees and Services $ 99,777 $ 96,916 The Audit Committee directly engages the Independent Registered Public Accountants as it relates to the audit of the Company’s fiscal year and the reviews of its fiscal quarters and the associated fees. In accordance with its written charter, our Audit Committee pre-approves all audit and permissible non-audit services, including the scope of contemplated services and the related fees, that are to be performed by CohnReznick LLP, our independent registered public accounting firm, subject to the de minimis exceptions described in Section 10A(i)(1)(B) of the Exchange Act, which are approved by the Audit Committee prior to the completion of the audit. The Audit Committee's pre-approval of non-audit services involves consideration of the impact of providing such services on CohnReznick LLP's independence. All 2020 and 2019 non-audit services were pre-approved by the Audit Committee. 46 Information Analysis Incorporated 2020 Annual Report on Form 10-K PART IV Item 15. Exhibits, Financial Statement Schedules (a) (1) Financial Statements (as presented in Item 8 of this Annual Report) Page Report of Independent Registered Public Accounting Firm 17 Balance Sheets as of December 31, 2020 and 2019 19 Statements of Operations and Comprehensive Income (Loss) for the years ended December 31, 2020 and 2019 20 Statements of Changes in Stockholders' Equity for the years ended December 31, 2020 and 2019 21 Statements of Cash Flows for the years ended December 31, 2020 and 2019 22 Notes to Financial Statements 23 Exhibit Index Exhibit No. Description Location 3.1 Amended and Restated Articles of Incorporation effective March 18, 1997 Incorporated by reference from the Registrant’s Form 10-KSB/A for the fiscal year ending December 31, 1996 and filed on July 3, 1997 3.2 Articles of Amendment to the Articles of Incorporation Incorporated by reference from the Registrant’s Form 10-KSB for the fiscal year ending December 31, 1997 and filed on March 31, 1998 3.3 Amended By-Laws of the Company Incorporated by reference from the Registrant’s Form S-18 dated November 20, 1986 (Commission File No. 33-9390). 4.1 Copy of Stock Certificate Incorporated by reference from the Registrant’s Form 10-KSB for the fiscal year ending December 31, 1997 and filed on March 31, 1998 10.1 Office Lease for 18,280 square feet at 11240 Waples Mill Road, Fairfax, Virginia 22030. Incorporated by reference from the Registrant’s Form 10-KSB/A for the fiscal year ending December 31, 1996 and filed on July 3, 1997 10.2 Company’s 401(k) Profit Sharing Plan through Aetna Life Insurance and Annuity Company (now VOYA). Incorporated by reference from the Registrant’s Form 10-KSB/A for the fiscal year ending December 31, 1996 and filed on July 3, 1997 10.3 Second Modification of Lease, dated February 10, 2004, to 4,434 square feet at 11240 Waples Mill Road, Fairfax, Virginia 22030 Incorporated by reference from the Registrant’s Form 10-KSB for the period ended December 31, 2003, and filed on March 30, 2004 10.4 Termination and/or change in control arrangement for Richard S. DeRose dated June 18, 1997 Incorporated by reference from the Registrant’s Form 10-KSB for the year ended December 31, 2004, and filed on March 30, 2005 10.5 Line of Credit Agreement with TD Bank, N.A. (formerly Commerce Bank, N.A.) Incorporated by reference from the Registrant’s Form 10-KSB for the year ended December 31, 2005, and filed on March 31, 2006 10.6 Information Analysis Incorporated 2006 Stock Incentive Plan Incorporated by reference from the Registrant’s definitive proxy statement on Schedule 14A filed on April 19, 2006 47 Information Analysis Incorporated 2020 Annual Report on Form 10-K Exhibit No. Description Location 10.7 Modification Agreement regarding Line of Credit Agreement with TD Bank, N.A., successor to Commerce Bank, N.A., dated July 18, 2008. Incorporated by reference from the Registrant’s Form 10-K for the period ended December 31, 2008, and filed on March 31, 2009 10.8 Information Analysis Incorporated 2016 Stock Incentive Plan Incorporated by reference from the Registrant’s definitive proxy statement on Schedule 14A filed on April 11, 2016 10.9 Sixth Modification of Lease, dated December 9, 2016, to extend term of lease four years. Incorporated by reference from the Registrant’s Form 10-K for the year ended December 31, 2016, and filed on March 31, 2017 10.10 Modification Agreement regarding Line of Credit Agreement with TD Bank, N.A., successor to Commerce Bank, N.A., dated May 28, 2017. Incorporated by reference from the Registrant’s Form 10-Q for the period ended June 30, 2017, and filed on August 14, 2017 10.11 Modification Agreement regarding Line of Credit Agreement with TD Bank, N.A., successor to Commerce Bank, N.A., dated August 13,2020. Incorporated by reference from the Registrant’s Form 10-Q for the period ended June 30, 2020, and filed on August 14, 2020 23.1 Consent of Independent Registered Public Accounting Firm, CohnReznick LLP Filed with this Form 10-K 31.1 Rule 13a-14(a) / 15a-14(a) Certification by Chief Executive Officer Filed with this Form 10-K 31.2 Rule 13a-14(a) / 15a-14(a) Certification by Chief Financial Officer Filed with this Form 10-K 32.1 Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Filed with this Form 10-K 32.2 Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Filed with this Form 10-K 101.INS ** 101.SCH ** 101.CAL ** 101.DEF ** 101.LAB ** 101.PRE ** XBRL Instance XBRL Taxonomy Extension Schema XBRL Taxonomy Extension Calculation XBRL Taxonomy Extension Definition XBRL Taxonomy Extension Labels XBRL Taxonomy Extension Presentation Filed with this Form 10-K ** XBRL information is furnished and not filed or a part of a registration statement or prospectus for purposes of sections 11 and 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections. 48 Information Analysis Incorporated 2020 Annual Report on Form 10-K Signatures Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. INFORMATION ANALYSIS INCORPORATED (Registrant) By: /s/ Stanley A. Reese Stanley A. Reese, President March 31, 2021 POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Stanley A. Reese and Matthew T. Sands, jointly and severally, his attorney-in-fact, each with the full power of substitution, for such person, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might do or could do in person hereby ratifying and confirming all that each of said attorneys-in-fact and agents, or his substitute, may do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date By /s/ Stanley A. Reese Chief Executive Officer, March 31, 2021 Stanley A. Reese President, and Director By /s/ Mark T. Krial Chairman of the Board March 31, 2021 Mark T. Krial By /s/ Charles A. May, Jr. Director March 31, 2021 Charles A. May, Jr. By /s/ William Pickle Director March 31, 2021 William Pickle By /s/ Bonnie K. Wachtel Director March 31, 2021 Bonnie K. Wachtel By /s/ Matthew T. Sands Chief Financial Officer, March 31, 2021 Matthew T. Sands Secretary and Treasurer 49