UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



FORM 10-Q



|£                                                                   |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
|------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------
|                                                                    |  |                                                                                         
|For the quarterly period ended March 31, 2011                      
|                                                                    |  |                                                                                         
|OR                                                                 
|                                                                    |  |                                                                                         
|£                                                                   |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|                                                                    |  |                                                                                         
|For the transition period from ________________ to ________________



Commission file number 333-14229



|                                                | INFORMATION SYSTEMS ASSOCIATES, INC.                   |                     
|----------------------------------------------- | ------------------------------------------------------ | --------------------
|                                                | (Exact name of registrant as specified in its charter) |                     
|FLORIDA                                         |                                                        | 65-0493217          
|(State  or other jurisdiction of                |                                                        | (I.R.S.  Employer   
|incorporation  or organization)                 |                                                        | Identification  No.)
|                                                |                                                        |                     
|1151 SW 30TH STREET, SUITE E PALM CITY, FLORIDA |                                                        | 34990               
|(Address  of principal executive offices)       |                                                        | (Zip  Code)         
|                                                |                                                        |                     



Registrant’s telephone
number, including area code: (772) 403-2992



Indicate by check
mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.

Yes
£ No£



Indicate by check
mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File
required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter
period that the registrant was required to submit and post such files).

Yes £
No£



Indicate by check
mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting
company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.



|Large accelerated filer £                                               | Accelerated filer £        
|----------------------------------------------------------------------- | ---------------------------
|                                                                        |                            
|Non-accelerated filer £   (Do not check if a smaller reporting company) | Smaller reporting company £



Indicate by check mark
whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  
			Yes £ No £



|Class C                                 |  | Outstanding at May 16, 2011
|--------------------------------------- |  | ---------------------------
|Common Stock, $0.01 par value per share |  | 25,816,084  shares         

















TABLE OF CONTENTS



|                               | Page                                                                                 
|------------------------------ | -------------------------------------------------------------------------------------
|PART I – FINANCIAL INFORMATION |                                                                                      
|                               |                                                                                      
|Item 1.                        | Condensed  Financial Statements (unaudited)                                          
|                               |                                                                                      
|                               | Condensed   Balance Sheets (unaudited)                                               
|                               |                                                                                      
|                               | Condensed Statements of Operations (unaudited)                                       
|                               |                                                                                      
|                               | Condensed Statements of Cash Flows (unaudited)                                       
|                               |                                                                                      
|                               | Notes to Condensed  Financial Statements (unaudited)                                 
|                               |                                                                                      
|Item 2.                        | Management’s Discussion and Analysis of Financial Condition and Results of Operations
|                               |                                                                                      
|Item 3.                        | Qualitative and Quantitative Disclosures about Market Risk                           
|                               |                                                                                      
|Item 4.                        | Controls and Procedures                                                              
|                               |                                                                                      
|PART II – OTHER INFORMATION    |                                                                                      
|                               |                                                                                      
|Item 1.                        | Legal Proceedings                                                                    
|                               |                                                                                      
|Item 1A.                       | Risk Factors                                                                         
|                               |                                                                                      
|Item 2.                        | Unregistered Sales of Equity Securities and Use of Proceeds                          
|                               |                                                                                      
|Item 3.                        | Defaults Upon Senior Securities                                                      
|                               |                                                                                      
|Item 4.                        | (Removed and Reserved)                                                               
|                               |                                                                                      
|Item 5.                        | Other Information                                                                    
|                               |                                                                                      
|Item 6.                        | Exhibits                                                                             
|                               |                                                                                      
|SIGNATURES                     | 15                                                                                   





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PART 1.	 FINANCIAL STATEMENTS







|
|





|INFORMATION SYSTEMS ASSOCIATES, INC.                                                         
|---------------------------------------------------------------------------------------------
|BALANCE SHEETS                                                                               
|                                                                                             
|ASSETS                                                                                       
|                                                                                             
|                                                                                             
|Current Assets                                                                               
|                                                                                             
|Cash and cash equivalents                                                                    
|Accounts receivable                                                                          
|Prepaid consulting                                                                           
|Prepaid expenses                                                                             
|                                                                                             
|Total Current Assets                                                                         
|                                                                                             
|Property and Equipment (net)                                                                 
|                                                                                             
|                                                                                             
|TOTAL ASSETS                                                                                 
|                                                                                             
|LIABILITIES AND STOCKHOLDERS' EQUITY                                                         
|                                                                                             
|Current Liabilities                                                                          
|                                                                                             
|Accounts payable                                                                             
|Accrued expenses and other liabilities                                                       
|Note payable - line of credit                                                                
|Note payable  - insurance                                                                    
|Deferred revenue                                                                             
|                                                                                             
|Total Current Liabilities                                                                    
|                                                                                             
|Stockholders' Equity                                                                         
|                                                                                             
|Common stock-$.001 par value, 50,000,000 shares                                              
|authorized, 25,816,084 and 22,266,084 issued                                                 
|and outstanding at March 31, 2011 and                                                        
|December 31, 2010, respectively                                                              
|Additional paid in capital                                                                   
|Accumulated deficit                                                                          
|Accumulated other comprehensive (loss)                                                       
|Total Stockholders' Equity                                                                   
|                                                                                             
|                                                                                             
|TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                                   
|                                                                                             
|                                                                                             
|The accompanying unaudited notes are an integral part of these condensed financial statements





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|INFORMATION SYSTEM ASSOCIATES, INC.                                                          
|---------------------------------------------------------------------------------------------
|STATEMENTS OF OPERATIONS                                                                     
|FOR THE THREE MONTHS ENDED MARCH 31,                                                         
|(UNAUDITED)                                                                                  
|                                                                                             
|                                                                                             
|                                                                                             
|Revenue                                                                                      
|                                                                                             
|Cost of Sales                                                                                
|                                                                                             
|Gross Profit                                                                                 
|                                                                                             
|Operating Expenses                                                                           
|Administrative and general                                                                   
|Salaries and employee benefits                                                               
|Professional                                                                                 
|Total Operating Expenses                                                                     
|                                                                                             
|(Loss) Before Other Income (Expense)                                                         
|                                                                                             
|Other Income (Expense)                                                                       
|Miscellaneous income                                                                         
|Interest expense                                                                             
|Total Other Income (Expense)                                                                 
|                                                                                             
|                                                                                             
|Net (Loss)                                                                                   
|                                                                                             
|Other Comprehensive (Loss)                                                                   
|Unrealized gain/(loss) on securities:                                                        
|Arising during the year                                                                      
|Reclassification to net income                                                               
|                                                                                             
|Total other comprehensive (loss)                                                             
|                                                                                             
|Comprehensive (Loss)                                                                         
|                                                                                             
|Basic and Fully Diluted (Loss) per Share:                                                    
|Basic and fully diluted                                                                      
|Weighted average common shares                                                               
|outstanding                                                                                  
|                                                                                             
|                                                                                             
|                                                                                             
|The accompanying unaudited notes are an integral part of these condensed financial statements







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|INFORMATION SYSTEMS ASSOCIATES, INC.                                                         
|---------------------------------------------------------------------------------------------
|STATEMENTS OF CASH FLOWS                                                                     
|FOR THE THREE MONTHS ENDED MARCH 31,                                                         
|(UNAUDITED)                                                                                  
|                                                                                             
|                                                                                             
|                                                                                             
|Cash Flows from Operating Activities                                                         
|Net (Loss)                                                                                   
|Adjustments to reconcile net (loss) to net                                                   
|cash provided from operating activities:                                                     
|Depreciation and amortization                                                                
|Bad debt expense                                                                             
|Common stock for services                                                                    
|Amortization of prepaid consulting                                                           
|                                                                                             
|Changes in assets and liabilities                                                            
|Accounts receivable                                                                          
|Prepaid expenses                                                                             
|Accounts payable                                                                             
|Accrued expenses and other liabilities                                                       
|Deferred revenue                                                                             
|                                                                                             
|Net Cash (Used in) Operating  Activities                                                     
|                                                                                             
|Cash Flows from Investing Activities                                                         
|Computer software development costs                                                          
|Purchase of property and equipment                                                           
|Proceeds from sale of investment                                                             
|                                                                                             
|Net Cash (Used In)  Investing Activities                                                     
|                                                                                             
|Cash Flows from Financing Activities                                                         
|Proceeds from line of credit                                                                 
|Payments made on line of credit                                                              
|Borrowings from note payable - shareholder                                                   
|Payments made on insurance financing                                                         
|Proceeds from issuance of stock                                                              
|                                                                                             
|Net Cash Provided by Financing Activities                                                    
|                                                                                             
|Net Change in Cash and Cash Equivalents                                                      
|                                                                                             
|Cash and Cah Equivalents at Beginning of period                                              
|                                                                                             
|Cash and Cash Equivalents at End of Period                                                   
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|The accompanying unaudited notes are an integral part of these condensed financial statements







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INFORMATION SYSTEMS
ASSOCIATES, INC.

NOTES TO UNAUDITED
CONDENSED FINANCIAL STATEMENT

FOR THE THREE MONTHS
ENDED MARCH 31, 2011









NOTE 1 – NATURE OF OPERATIONS,
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



Business Activity



Information Systems Associates, Inc. (Company) was
incorporated under the laws of the State of Florida on May 31, 1994. The Companyprovides
Mobile Data Center ManagementTM systems and turnkey data center management solutions to customers.  Our products
and services include data center asset/inventory management, data center management software and data center data
collection.  Utilizing a proprietary and patented technology, OSPI® (On Site Physical Inventory®), customers are
able to manage data centers on a mobile basis, bringing data center management out of the office and into the data
center.





In



The accompanying unaudited condensed consolidated
financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America
and with the rules and regulations of the U.S Securities and Exchange Commission for interim financial information.  Accordingly,
they do not include all of the information and footnotes required by accounting principles generally accepted in the United States
of America for complete financial statements. The unaudited condensed consolidated financial statements reflect all normal recurring
adjustments, which, in the opinion of management, are considered necessary for a fair presentation of the results for the periods
shown. The results of operations for the periods presented are not necessarily indicative of the results expected for the full
fiscal year or for any future period. The information included in these unaudited condensed consolidated financial statements should
be read in conjunction with Management’s Discussion and Analysis and Plan of Operation contained in this report and the audited
consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year
ended December 31, 2010.



Recent Accounting Pronouncements



In February
the FASB issued an amendment to Accounting Standards Codification 855, “Subsequent Events”. An entity is required
to disclose the date through which subsequent events have been evaluated and the basis for that date. This created
potential conflicts with issuers who also filed with the Securities and Exchange Commission. An entity that is defined as an
“SEC filer” is not required to disclose the date through which subsequent events have been evaluated. This
amendment is effective for interim periods ending after March 31, 2011.



The Company does not believe the amendment to Topic 855 will have a
significant impact on the Company’s financial statements.



C







Use of Estimates



The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts
of assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.



Reclassifications



Certain reclassifications have been made to
the prior period financial statements presented to conform to 2010. Such reclassifications have no effect on reported income.





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INFORMATION SYSTEMS
ASSOCIATES, INC.

NOTES TO UNAUDITED
CONDENSED FINANCIAL STATEMENT

FOR THE THREE MONTHS
ENDED MARCH 31, 2011











NOTE 2 – CASH AND CASH EQUIVALENTS

| | As of
        March 31. 2011 | As of
        December 31, 2010
| | ---------------------------- | -------------------------------



|Wachovia Bank (FDIC insured to $250,000) |  | $ | 29,103 | $ | 70,149
|---------------------------------------- |  | - | ------ | - | ------
|Petty cash                               |  |   | 177    |   | 177   
|Total cash and cash equivalent           |  | $ | 29,280 | $ | 70,326



NOTE 3 – PROPERTY AND EQUIPMENT





|                                               |  | As of     |         | As of    
|---------------------------------------------- |  | --------- | ------- | ---------
|                                               |  | 31-Mar-11 |         | 31-Dec-10
|                                               |  |           |         |          
|Computer software (developed)                  |  | $         | 162,346 |          
|Computer software (purchased)                  |  |           | 590     |          
|Web site development                           |  |           | 10,072  |          
|Furniture, fixtures, and equipment             |  |           | 31,715  |          
|                                               |  |           | 204,723 |          
|Less accumulated depreciation and amortization |  |           | 183,191 |          
|                                               |  | $         | 21,532  |          









Depreciation
and amortization expense for property and equipment was $2,116 and $ 3,728 for the three months ended
March 31, 2011 and 2010, respectively.













NOTE 4 – INVESTMENT



On April 17, 2009, the Company entered into
a strategic alliance agreement with Rubicon Software Group, lpc (a company registered under the laws of England and Wales). The
Company will be Rubicon’s exclusive agent in the United States for reselling Rubicon’s software and services. In return,
Rubicon will be a software development partner and provide consulting services to the Company.



The Company agreed to purchase 2,500,000 ordinary
shares for a subscription price of £.02 (two pence) a share. The total cost of the subscription was $73,958. Within ninety
days of the subscription date, the Company could purchase an additional 2,500,000 shares at the same subscription price in British
pounds. The ninety day period has lapsed with the Company not purchasing any additional shares.



Also, the Company has
the ability, over the next three years, of subscribing to a maximum 5,000,000 warrant shares. Each warranted share will be at a
subscription price of £.05 (five pence) per share and will be issued in offerings of 100,000 shares. The number of subscripted
shares will be based on gross revenue received by Rubicon Software Group, Plc.





On April 30, 2010 the Company entered into an
agreement whereby 2,500,000 shares of stock held in Rubicon Software Group, lpc were sold to Rubicon. In remuneration for this
stock the Company received $10,000 and was relieved from paying $16,611 worth of outstanding invoices. In connection with this
transaction, the Company recorded a loss on sale of security of $47,347.



NOTE 5 – NET (LOSS) PER SHARE



Basic earnings per share (EPS) is computed by
dividing net (loss) by the weighted average number of common shares outstanding. The dilutive EPS adds the dilutive effect of stock
options and other stock equivalents. During the three months ended March 31, 2011, outstanding options to purchase an aggregate
of 15,000,000 shares of stock were excluded from the computation of dilutive earnings per share because the inclusion would have
been anti-dilutive.



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INFORMATION SYSTEMS
ASSOCIATES, INC.

NOTES TO UNAUDITED
CONDENSED FINANCIAL STATEMENT

FOR THE THREE MONTHS
ENDED MARCH 31, 2011







NOTE 6 – INCOME TAXES



The Company files income tax returns in
the U.S. federal jurisdiction and various states. The Company is no longer subject to U.S. federal or state income tax examinations
by tax authorities for years before 2007. None of the tax years subject to examination are currently under examination by a tax
authority and the Company has not received notice of the intent by any tax authority to commence an examination.



The Company adopted the provisions of FIN No.
48 on January 1, 2007. As a result of the implementation of FIN No. 48, the Company did not recognize any liability for unrecognized
tax benefits, since the Company has concluded that all of its tax positions are highly certain of being upheld upon examination
by federal or state tax authorities.





NOTE 7 – SUPPLEMENTAL CASH FLOW INFORMATION



Supplemental disclosures of cash
flow information for the periods ended March 31, 2011 and 2010 is summarized as follows:





|Cash paid during the periods for interest and income
    taxes: |  |   | 2011 |  |  |   | 2010 | 
|--------------------------------------------------------------- |  | - | ---- |  |  | - | ---- | 
|Income taxes                                                    |  | $ | —    |  |  | $ | —    | 
|Interest                                                        |  | $ | 426  |  |  | $ | 669  | 





NOTE 8 – OPERATING LEASE



The Company leases its Palm City, Florida facility.
On March 2, 2009 the lease was renewed for $1,200 per month. The Company held an additional option to renew the lease “at
the market price.” This renewed lease went into effect June 1, 2009. The rent expense as of March 31, 2011 and 2010 was $3,834
and $3,834, respectively.







NOTE 9 – NOTE PAYABLE – LINE OF CREDIT



The Company has a line of credit with Wachovia
Bank N.A. The line of credit provides for borrowings up to $40,000. The balance as of March 31, 2011 and December 31, 2010 was
$24,727 and $36,141, respectively. The interest rate is the Prime Rate plus 3%. The President of the Company is a personal guarantor
on the line of credit.



NOTE 10 – NOTE PAYABLE - INSURANCE





During the three months ended March 31, 2011,
the Company incurred short term financings of $10,242 for the purchase of insurance. The interest rate on the financings were 6.96%
and will be repaid November 2011. The balance as of March 31, 2011 was $ 7,514.





On August 31, 2010, the Company incurred short
term financing for the purchase of insurance. The note was for $5,720. The interest rate on the debt is 4.96% and will be repaid
May 31, 2011. The balance as of March 31, 2011 was $ 1,289.





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INFORMATION SYSTEMS
ASSOCIATES, INC.

NOTES TO UNAUDITED
CONDENSED FINANCIAL STATEMENT

FOR THE THREE MONTHS
ENDED MARCH 31, 2011







NOTE 11 – NOTE PAYABLE – SHAREHOLDER



In February, 2010, the Company obtained financing
from a shareholder for working capital purposes. The amount of $32,500 will be repaid in eighteen months. Interest accrues at a
rate of 6% per annum. There is no penalty for early payment. On August 12, 2010 the shareholder was repaid $7,500. The remainder
was repaid in December 2010.



NOTE 12 – COMMON STOCK



In January 2011, the Company issued 50,000 shares
of common stock in exchange for $5,000 in a private placement with an accredited investor.



In January 2011, the Company issued 3,000,000
shares of common stock in exchange for $150,000 in a private placement with its new director and Chief Operating Officer. In addition,
the Chief Operating Officer was granted 500,000 shares of common stock in lieu of salary for the three months ended March 31, 2011.





NOTE 13 – SHARE BASED PAYMENTS FOR SERVICES



In May 2010, the Company issued 200,000 shares
of restricted common stock to two directors. The stock will vest in May 2011. Shares were valued at the current market price of
$.20 per share.



On May 1, 2010 the Company entered into an agreement
to receive website design and development, internet marketing and search engine optimization for one year. The consultants received
100,000 shares of company common stock. Shares were valued at a current market price of $.20 per share.



On April 29, 2010 the Company entered into an
agreement to receive assistance in the development of new data center management technologies. The consultants will also investigate
a variety of associated topics regarding data center management. This agreement will run for one year. The consultants received
1,000,000 shares of company common stock. Shares were valued at a current market price of $.20 per share.



On April 15, 2010 the Company entered into an
agreement to receive marketing strategies, digital media and social media strategies to expand the Company’s investor base
and improve shareholder communication. The consultants received 400,000 shares of company common stock. Shares were valued at the
then current market price of $.15 per share.



On May 25, 2010 a notice of non renewal, was
sent to the one consulting company that continued to provide services from August 1, 2009 to July 31, 2010 at an agreed to rate
of $262,500. The Company issued 656,200 shares of common stock for the service provided.





The following is a summary of the status of
options outstanding as of March 31, 2011 and 2010 respectively:





|                                            | For the Three Months Ended      March 31,  2011 | For the Three Months Ended             March 31, 2010
|------------------------------------------- | ----------------------------------------------- | -----------------------------------------------------
|                                           
|                                            | Shares                                          | Weighted Average Exercise Price                      
|Outstanding at beginning of period          | 15,000,000                                      | $3.00                                                
|Granted                                     | -                                               | -                                                    
|Exercised                                   | -                                               | -                                                    
|Forfeited                                   | -                                               | -                                                    
|Expired                                     | -                                               | -                                                    
|Outstanding at end of period                | 15,000,000                                      |                                                      
|Exercisable at end of period                | 15,000,000                                      | $3.00                                                
|Outstanding                                 |                                                 |                                                      
|Weighted average remaining contractual term |                                                 | 0.34                                                 
|Aggregated intrinsic value                  |                                                 | $              -                                     
|Weighted average grant date fair value      |                                                 | N/A                                                  
|Exercisable                                 |                                                 |                                                      
|Weighted average remaining contractual term |                                                 | 0.34                                                 
|Aggregated intrinsic value                  |                                                 | $              -                                     
|                                            |                                                 |                                                      









NOTE 14 – CONCENTRATIONS



Two major customers accounted for 68.8% and
17.5% of revenue for the three months ended March 31, 2011.



As of March 31, 2011, the two major customers accounted for 67.7%
and 30.2 % of accounts receivable.











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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS











As used herein the terms “we”, “us”, “our”,
the “Registrant,” “ISA” and the “Company” means, Information Systems Associates, Inc., a Florida
corporation.



GENERAL DESCRIPTION OF BUSINESS



BUSINESS OVERVIEW



Information Systems Associates, Inc. (Company) was incorporated
under the laws of the State of Florida on May 31, 1994. The Company is a leading provider of Mobile Data Center ManagementTM
systems and turnkey data center management solutions.  The suite of products and services include data center asset/inventory
management, data center management software and data center data collection.  Utilizing a proprietary and patented technology,
OSPI® (On Site Physical Inventory®), customers manage data centers on a mobile basis, bringing data center management out
of the office and into the data. Our solutions can reduce sourcing, procurement and tracking costs, improve tracking and monitoring
of asset performance and reduce operational downtime.



In 1995, we became a subcontractor of Avocent Huntsville Corp. (formally
Aperture Technologies Inc At that time, Avocent’s Network Management tools (“System”), was one of the leading
solutions in it field.  For more than five years, Avocent Huntsville Corp. (formerly Aperture Technologies Inc.) has
provided enterprise asset management solutions to customers in the United States, Europe and Asia and Pacific Rim.  During
this same timeframe, we have offered Advocent’s enterprise asset management solutions to customers and prospects in North
America.



The typical Value Added Reseller Agreement allows the vendor’s
partner/subcontractor (in this case ISA) the ability to offer to its client’s and prospects a Commercial Off the Shelf software
solution to address a particular business problem.  ISA’s customers are primarily working data centers, network
management departments and corporate real estate departments. We help these customers to identify and then implement a software
solution which addresses their needs based. Once the client chooses a software solution, ISA assists the client in implementing
the software.



In 2007, ISA developed and began marketing
its own software product, ONSITE PHYSICAL INVENTORYTM (OSPI).



RELATED SERVICES



In connection with our software offerings, we provide the following
services to our customers:



Consulting



A significant number of our customers request our advice regarding
their business and technical processes, often in conjunction with a scoping exercise conducted both before and after the execution
of a contract.  This advice can relate to development or streamline assorted business processes, such as sourcing or
procurement activities, assisting in the development of technical specifications, and recommendations regarding internal workflow
activities.



Customization and Implementation



Based generally upon the up-front scoping activities, we are able
to customize our solutions as required to meet the customer’s particular needs.  This process can vary in length
depending on the degree of customization, the resources applied by the customer and the customer’s business requirements.  We
work closely with our customers to ensure that features and functionality meet their expectations.  We also provide the
professional services work required for the implementation of our customer solutions, including loading of data, identification
of business processes, and integration to other systems applications.



Training



Upon completion of implementation (and often during implementation),
we train customer personnel to utilize our Solutions through our administrative tools.  Training can be conducted in
one-on-one or group situations.  We also conduct “train the trainer” sessions.



Maintenance and Support



We provide regular software upgrades and ongoing support to our
customers.



We have been providing consulting, customization and implementation,
training, maintenance and support services to our customers since 1994.



CURRENT DEVELOPMENTS



In January, 2011, the Company hired a new Chief Operating Officer
who has been charged with identifying, and overseeing improvements and enhancements to our OSPI software. This person will also
direct the development and implementation of the Company’s marketing plan and is responsible for building and managing the
Company’s sales force. During the three months ended March 31, 2011, the Company has prepared a software requirements analysis
for the new and enhanced version of OSPI, and has begun building the Company’s sales network.





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FORWARD LOOKING STATEMENTS



Certain statements in this report, including statements of our expectations,
intentions, plans and beliefs, including those contained in or implied by “Management’s Discussion and Analysis”
and the Notes to Financial Statements, are “forward-looking statements”, within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended (the “”Exchange Act”), that are subject to certain events, risks and uncertainties
that may be outside our control.  The words “believe”, “expect”, “anticipate”, “Optimistic”,
“intend”’ “will”, and similar expressions identify forward-looking statements.  Readers
are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date on which they are
made.  We undertake no obligation to update or revise any forward-looking statements.



These forward-looking statements include statements
include statements of management’s plans and objectives for our future operations and statements of future economic performance,
information regarding our expansion and possible results from expansion, our expected growth, our capital budget and future capital
requirements, the availability of funds and our ability to meet future capital needs, the realization of our deferred tax assets,
and the assumptions described in this report underlying such forward-looking statements.



Actual results and developments could differ materially from those
expressed in or implied by such statements due to a number of factors, including, without limitation, those described in the context
of such forward-looking statements.



CRITICAL ACCOUNTING POLICIES



Revenue recognition



We recognize revenue in accordance with ASC 605-10 “Revenue
Recognition” and ASC 605-25 “Revenue Arrangements with Multiple Deliverables”.



Consulting services and training revenues are accounted for separately
from subscription and support revenues when these services have value to the customer on a standalone basis and there is objective
and reliable evidence of fair value of each deliverable.  When accounted for separately, revenues are achieved and accepted
by the customer for fixed price contracts.  The majority of our consulting service contracts are on a time and material
basis.  Training revenues are recognized after the services are performed.  For revenue arrangements with multiple
deliverables, we allocate the total customer arrangement to the separate units of accounting based on their relative fair values,
as determined by the price of the undelivered items when sold separately.



In determining whether the consulting services can be accounted
for separately from subscription and support revenues, we consider the following factors for each consulting agreement:  availability
of the consulting services from other vendors, whether objective and reliable evidence for fair value exists for the undelivered
elements, the nature of the consulting services, the timing of when the consulting contract was signed in comparison to the subscription
service start date, and the contractual dependence of the subscription service on the customer’s satisfaction with the consulting
work.  If a consulting arrangement does not qualify for separate accounting, we recognize the consulting revenue ratably
over the remaining term of the subscription contract.  Additionally, in these situations we defer the direct costs of
the consulting arrangement and amortize these costs over the same time period as the consulting revenue is recognized.  We
did not have any revenue arrangements with multiple deliverables for the period ending September 30, 2010.



Property, Plant, and Equipment



Property and equipment is stated at cost.  Depreciation
is provided by the straight-line method over the estimated economic life of the property and equipment (three to ten years).  When
assets are sold or retired, their costs and accumulated depreciation are eliminated from the accounts and any gain or loss resulting
from their disposal is included in the statement of operations.



We recognize an impairment loss on property and equipment when evidence,
such as the sum of expected future cash flows (undiscounted and without interest charges), indicates that future operations will
not produce sufficient revenue to cover the related future costs, including depreciation, and when the carrying amount of the asset
cannot be realized through sale.  Measurement of the impairment loss is based on the fair value of the assets.



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Software Development Costs



The Company accounts for costs incurred to develop computer software
for internal use in accordance with FASB Accounting Standards Codification 350-40 “Internal-Use Software”.  As
required by ASC 350-40, we capitalize the costs incurred during the application development state, which include costs to design
the software configuration and interfaces, coding, installation, and testing.  Costs incurred during the preliminary
project along with post-implementation stages of internal use computer software are expensed as incurred.  Capitalized
development costs are amortized over the estimated useful life.  Costs incurred to maintain existing product offerings
are expensed as incurred.  The capitalization and ongoing assessment of recoverability of development costs requires
considerable judgment by management with respect to certain external factors, including, but not limited to, technological and
economic feasibility, and estimated economic life.



After
the development of the internal-use “ON SITE PHYSICAL INVENTORY®”
software (OSPI®)
was complete, we decided to market the software.  Proceeds from the licenses of the computer software, net of direct
incremental costs of marketing, such as commissions, software reproduction cost, warranty and service obligations, and installation
cost, are applied against the carrying cost of that software.  No profit will be recognized until aggregate net proceeds
from licenses and amortization have reduced the carrying amount of the software to zero.  Subsequent proceeds will be
recognized in revenue as earned.



On
December 1, 2009, the Company released Version 2 of the “ON SITE PHYSICAL INVENTORY®”
software (OSPI®)
for sale in the marketplace.  The Company accounts for internally produced software with FASB Accounting Standard Codification
985-20 “Cost of Software To Be Sold, Leased, or Otherwise Marketed”.  Costs were capitalized when the second
version was established as technically feasible and will be written off on a straight line method over the estimated useful life.





RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31,
2011 AND 2010



The following discussion should be read in conjunction with the
financial statements include in this report and is qualified in its entirety by the foregoing.



Revenues



Gross revenues were $127,254 and $256,154 for the three months ended
March 31, 2011 and 2010, respectively. The increase in 2011 revenue is due primarily to a decrease in consulting service revenue
and the related travel expense revenue of $111,000 and a decrease of $29,000 in OSPI software revenue. We recognize professional
services revenue, which includes installation, training, consulting and engineering services, upon delivery of the services.



Operating Expenses



Operating expenses for the three months ended March 31, 2011 were
$386,788 as compared to $466,305 for the three months ended March 31, 2010. The decrease resulted from declines in general and
administrative expenses of $83,000 and professional fees of $70,000 which were primarily related to lower travel expenses and consulting
expenses due to the decline in consulting service revenue. These decreases were partially offset by an increase in salaries and
employee benefits which resulted for the addition of the new COO, software engineer and product salesman.



Loss from Operations



We had a loss from operations of $276,564 for the three months ended
March 31, 2011 as compared to a loss of $207,910 for the three months ended March 31, 2010. The increase in the loss resulted from
the sales decline which was partially offset by a decrease in operating expenses as described above.



Interest Expense



Interest expense was $1,593 for the three months ended March 31,
2011 as compared to interest of $1,741 for the three months ended March 31, 2010.





Net Loss



Net loss for the three months ended March 31, 2011 was $278,157
as compared with a net loss of $209,621 for the three months ended March 31, 2010. Net loss per common share was $0.01 for the
three months ended March 31, 2011 and 2010. Weighted average common shares outstanding as of March 31, 2011 and 2010 were 25,539,973
and 18,266,084, respectively.





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LIQUIDITY AND CAPITAL RESOURCES



Cash flows used in operations were $176,025 and $64,262, respectively,
during the three months ended March 31, 2011 and 2010. Cash flows used in operations during the three months ended March 31, 2011
were primarily attributable to a net loss of $278,157 which was partially offset amortization of prepaid consulting of $83,875,
the issuance of common stock for services of $25,000 and the decrease in accounts receivable of of $18,893 less the reduction of
accounts payable of of $28,756.



Cash flows used by investing activities were $3,964 and $666 for
the three months ended March 31, 2011and 2010, respectively, and resulted from investments for the purchase of equipment and furniture.



Cash flows provided by financing activities
were $138,943 and $49,671, respectively, for the three months ended March 31, 2011 and 2010. Cash flows provided by financing activities
for the three months ended March 31, 2011 were attributable to the proceeds of $155,000 from the sale of common stock in private
placements. These proceeds were used to repay insurance financings of $4,643 and to make payments on the line of credit of $11,414.
Cash flows provided by financing activities for the three months ended March 31, 2010 resulted from additional draws against the
Company’s line of credit of $19,136, plus the proceeds from a shareholder loan of $32,500.





The Company had cash on hand of $29,280 and net working capital
of $66,513 as of March 31, 2011.  If the Company is unable to generate revenues sufficient to support the operations
of the Company, the Company the will require additional debt or equity financing to meet the working capital needs of the Company.



Our current level of operations would require additional capital
to sustain operations through 2011.   Modifications to our business plans may require additional capital for us to operate.  Management
has identified the need for additional financing of up to $1million in order to fund the programming of the software enhancements
and the market rollout of the new software product and is currently exploring various equity and debt financing alternatives. There
can no assurance that these efforts will be successful. No significant amount of our trade payables has been unpaid within the
stated trade term.  We are not subject to any unsatisfied judgments, liens or settlement obligations.



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK



The information to be reported under this item is not required of
smaller reporting companies.



ITEM 4. CONTROLS AND PROCEDURES



|DISCLOSURE CONTROLS AND PROCEDURES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Our management, including our Principal Executive Officer and Principal Financial Officer, has evaluated the design, operation, and effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Securities Exchange Act of 1934 (the “Exchange Act”).  There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures.  Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.  Based upon the evaluation performed by our management, including its Principal Executive Officer and Principal Financial Officer, it was determined that, as of the end of the period covered by this quarterly report, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed in the reports filed or submitted pursuant to the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to our management, including its Principal Executive Officer and Principal Financial Officer, or persons performing similar functions, as appropriate to allow timely decisions regarding disclosures



Changes in Internal Control Over  Financial Reporting



Our Principal Executive Officer and Principal Financial Officer
have determined that, during the period covered by this quarterly report, there were no changes in our internal control over financial
reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.  They
have also concluded that there were no significant changes in our internal controls after the date of the evaluation.





PART II. OTHER INFORMATION



ITEM 1. LEGAL PROCEEDINGS



From time to time we are involved in legal proceedings arising in
the ordinary course of our business. On April 24, 2009, Phuture World, Inc. filed a complaint in the case captioned Phuture World,
Inc. v. Information Systems Associates, Inc. and Joseph Coschera, Case No. 562009 CA 3086, 19th Judicial Circuit in and for St.
Lucie County Florida.  Phuture World originally alleged that the Company and its President breached the terms of a certain
software development contract, and it sought damages in excess of $15,000.  The plaintiff dropped all claims against
the President and eliminated some of its other claims against the Company. The Company terminated the software contract at issue
in the case prior to the filing of the case, and it no longer uses the services of Phuture World.  The Company is contesting
this lawsuit and believes that it has defenses to the claims made by Phuture World.  The Company is vigorously defending
itself and has filed and is pursuing damage claims of its own against Phuture World for Phuture World's failure to provide
the software required under the contract between Phuture World and the Company.  The Company believes that the outcome of
this lawsuit will not have a material adverse effect on our financial condition, cash flows or results of operations.



ITEM 1A. RISK FACTORS



Information regarding risk factors appears in Part I, “Item 2.  Management’s
Discussion and Analysis of Financial Condition and Results of Operations” under the captions “General Description of
Business” and “Cautionary Note Regarding Forward-Looking Statements” contained in this Quarterly Report on Form
10-Q and in “Item 1A. RISK FACTORS” of our 2009 Annual Report on Form 10-K.  There have been no material
changes from the risk factors previously disclosed in our 2009 Annual Report on Form 10-K.





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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS



|Name or Class of Investor   | Date of Sale | No.  of Securities                     | Reason for Issuance         
|--------------------------- | ------------ | -------------------------------------- | ----------------------------
|                            |              |                                        |                             
|                            |              |                                        |                             
|Director & Officer Investor | 1/4/2011     | 3,000,000 shares of common stock       | Investment totaling $150,000
|                            |              |                                        |                             
|Private Placement Investors | 1/4//2011    | 50,000 shares of common stock          | Investment totaling $5,000  
|                            |              |                                        |                             
|Officer                     | 1/4/2011     | 500,000 shares of         common stock | Payment for Services        
|                            |              |                                        |                             



ITEM 3. DEFAULTS UPON SENIOR SECURITIES



None.



ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS



None.



ITEM 5. OTHER INFORMATION



None.





ITEM 6. EXHIBITS



|Exhibit No. |  | Description                                                                                                        
|----------- |  | -------------------------------------------------------------------------------------------------------------------
|31.1        |  | Certification of Chief Executive Officer                                                                           
|31.2        |  | Certification of Chief Financial Officer                                                                           
|32.1        |  | Statement required by 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002.







| | 
| | 



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SIGNATURES



Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the undersigned, there unto duly authorized.

|                   |                                                   
|------------------ | --------------------------------------------------
|                   |                                                   
|Date: May 16, 2011 | By:                                               
|                   | Joseph P. Coschera
        Chief Executive Officer
|                   |                                                   
|Date: May 16, 2011 | By:                                               
|                   | Michael R. Hull
        Chief Financial Officer