<PAGE>

                      SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-Q

(Mark One)

[X]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934

For the quarterly period ended:   March 31, 2002

                                       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 0-23239

                                  UBICS, INC.
             (Exact name of registrant as specified in its charter)

           DELAWARE                                      34-1744587
 (State or other jurisdiction of            (I.R.S. Employer Identification No.)
  incorporation or organization)

333 TECHNOLOGY DRIVE, SUITE 210 SOUTHPOINTE, CANONSBURG, PENNSYLVANIA   15317
                    (Address of principal executive offices)          (Zip code)

                                 (724) 746-6001
              (Registrant's telephone number, including area code)

     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 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 [X]     No [ ]

     As of May 10, 2002, 6,938,709 shares of common stock, par value $0.01 per
share, of the Registrant were outstanding.
<PAGE>

                                  UBICS, INC.

                                   Form 10-Q

                               TABLE OF CONTENTS


PART I -- FINANCIAL INFORMATION
<TABLE>
<S>                                                                                                      <C>
Item 1.  Condensed Consolidated Financial Statements (Unaudited)

         Consolidated Balance Sheets as of March 31, 2002 and December 31, 2001                           3

         Consolidated Statements of Operations for the three months ended March 31, 2002 and 2001         4

         Consolidated Statements of Cash Flows for the three months ended March 31, 2002 and 2001         5

         Notes to Unaudited Consolidated Financial Statements                                             6

Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations           12

Item 3.  Quantitative and Qualitative Disclosures About Market Risk                                      15

PART II -- OTHER INFORMATION

Item 1.  Legal Proceedings                                                                               16

Item 2.  Changes in Securities and Use of Proceeds                                                       16

Item 3.  Defaults Upon Senior Securities                                                                 16

Item 4.  Submission of Matters to a Vote of Security Holders                                             16

Item 5.  Other Information                                                                               16

Item 6.  Exhibits and Reports on Form 8-K                                                                16

SIGNATURES                                                                                               17

EXHIBIT INDEX                                                                                            18
</TABLE>

                                       2
<PAGE>

                                  UBICS, INC.

                          CONSOLIDATED BALANCE SHEETS
                (Dollars in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                                     March 31,           December 31,
                                                                       2002                 2001
                                                                   -----------           -----------
ASSETS                                                             (unaudited)            (audited)
<S>                                                                <C>                   <C>
Current assets:
  Cash and cash equivalents...............................           $ 6,284              $ 7,088
  Accounts receivable, net of allowance for
     doubtful accounts of $500 and $500, respectively.....             1,875                2,464
  Unbilled receivables....................................             1,952                1,665
  Employee advances.......................................                59                   50
  Prepaids and other......................................             1,148                1,051
  Deferred tax asset......................................               761                  761
                                                                     -------              -------
     Total current assets.................................            12,079               13,079
                                                                     -------              -------
Property and equipment:
  Leasehold improvements..................................               135                  135
  Vehicles................................................                86                   92
  Computer equipment and software.........................             1,316                1,318
  Furniture and fixtures..................................               714                  714
                                                                     -------              -------
     Total property and equipment.........................             2,251                2,259
  Accumulated depreciation................................            (1,408)              (1,264)
                                                                     -------              -------
    Net property and equipment............................               843                  995
                                                                     -------              -------
  Goodwill, net of amortization...........................             1,932                4,376
  Notes receivable........................................               983                  983
  Deferred tax asset and other long-term assets...........             1,143                1,175
                                                                     -------              -------
          Total assets....................................           $16,980              $20,608
                                                                     =======              =======


LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable........................................           $   808              $ 1,172
  Payroll liabilities.....................................             2,184                2,323
  Other current liabilities...............................             1,578                1,935
  Deferred revenue........................................                58                   91
  Due to affiliates, net..................................                --                   10
                                                                     -------              -------
    Total current liabilities.............................             4,628                5,531
    Long-term liabilities.................................               100                  100
                                                                     -------              -------
     Total liabilities....................................             4,728                5,631
                                                                     -------              -------

Minority interest in consolidated subsidiary..............                 4                   13
Common stock, subject to redemption, $0.01 par value,
     183,200 shares issued and outstanding................               550                  550

Stockholders' equity:
  Preferred stock, $0.01 par value, 2,000,000
     shares authorized, no shares issued and
     outstanding..........................................                --                   --
  Common stock, $0.01 par value, 20,000,000
         shares authorized, 7,003,324 shares issued.......                70                   70
  Additional paid-in capital..............................            14,171               14,171
  Treasury stock - 247,815 and 220,115 shares,
     respectively, at cost................................              (258)                (239)
  Retained earnings / (deficit)...........................            (2,266)                 423
  Accumulated other comprehensive loss....................               (19)                 (11)
                                                                     -------              -------
     Total stockholders' equity...........................            11,698               14,414
                                                                     -------              -------
          Total liabilities and stockholders' equity......           $16,980              $20,608
                                                                     =======              =======
</TABLE>


  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                       3
<PAGE>

                                  UBICS, INC.

               CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
                (Dollars in thousands, except per share amounts)


<TABLE>
<CAPTION>
                                                      For the Three Months Ended March 31,
                                                         2002                      2001
                                                      ----------                ----------
<S>                                                   <C>                       <C>
Revenues.....................................         $    6,795                $   10,777
Cost of revenues.............................              4,827                     8,616
                                                      ----------                ----------
  Gross profit...............................              1,968                     2,161
Selling, general and
  administrative expenses....................              2,334                     3,409
                                                      ----------                ----------
Income / (Loss) from operations..............               (366)                   (1,248)
Minority interest............................                  9                        --
Interest income, net.........................                 35                       146
                                                      ----------                ----------
Income / (loss) before income taxes and
  cumulative effect of a change in accounting
  principle..................................               (322)                   (1,102)
Cumulative effect of a change in accounting
  principle..................................             (2,444)                       --
Benefit for income taxes.....................                (77)                     (387)
                                                      ----------                ----------

Net income / (loss)..........................         $   (2,689)               $     (715)
                                                      ==========                ==========
Basic and diluted earnings / (loss)
  per share..................................         $    (0.39)               $    (0.10)
                                                      ==========                ==========

Basic - weighted average shares
  outstanding................................          6,950,473                 7,012,151
Diluted - weighted average shares
  outstanding................................          6,950,473                 7,012,151
</TABLE>


  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                       4
<PAGE>

                                  UBICS, INC.

               CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                             (Dollars in thousands)


<TABLE>
<CAPTION>
                                                                                               For the Three Months Ended
                                                                                                       March 31,
                                                                                                   2002            2001
                                                                                              ------------       ---------
<S>                                                                                           <C>                <C>
Cash flows from operating activities:
  Net income / (loss).......................................................................      $(2,689)        $  (715)
  Adjustments to reconcile net income / (loss) to
     net cash used by operating activities--
     Depreciation...........................................................................          144              98
     Amortization of goodwill...............................................................           --              28
     Goodwill impairment....................................................................        2,444              --
     Minority interest......................................................................           (9)             --
     Changes in operating assets and liabilities--
       Accounts receivable..................................................................          589             727
       Unbilled receivables.................................................................         (287)            (66)
       Employee advances....................................................................           (9)             25
       Due to affiliates, net...............................................................          (10)             24
       Prepaids and other...................................................................          (97)           (365)
       Other long-term assets...............................................................           32              --
       Accounts payable.....................................................................         (364)            398
       Payroll liabilities..................................................................         (139)            (58)
       Accrued taxes and other current liabilities..........................................         (390)           (121)
                                                                                                  -------         -------
     Net cash used by operating activities..................................................         (785)            (25)
                                                                                                  -------         -------

Cash flows from investing activities:
  Purchases of property and equipment.......................................................           --            (117)
  Proceeds from sale of equipment...........................................................            8              --
  Cash paid for acquisitions, net of cash acquired..........................................           --             141
                                                                                                  -------         -------
     Net cash provided by investing activities..............................................            8              24
                                                                                                  -------         -------

Cash flows from financing activities:
  Purchase of treasury stock................................................................          (19)             --
                                                                                                  -------         -------
     Net cash used by financing activities..................................................          (19)             --
                                                                                                  -------         -------

Effect of currency translation on cash......................................................           (8)             --

Net increase (decrease) in cash and cash equivalents........................................         (804)             (1)
Cash and cash equivalents, at beginning of period...........................................        7,088          10,477
                                                                                                  -------         -------
Cash and cash equivalents, at end of period.................................................      $ 6,284         $10,476
                                                                                                  =======         =======

Supplemental data:
  Cash payments for income taxes............................................................      $     1         $    19
  Fair value of:
    Assets acquired.........................................................................      $    --         $ 2,447
    Liabilities assumed.....................................................................           --            (605)
    Due to seller...........................................................................           --          (1,983)
                                                                                                  -------         -------
    Cash acquired...........................................................................      $    --         $  (141)
                                                                                                  =======         =======
</TABLE>


  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                       5
<PAGE>

                                  UBICS, INC.

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


1.  BASIS OF PRESENTATION:

  The financial statements of UBICS, Inc. ("UBICS" or "the Company") presented
herein are unaudited.  Certain information and footnote disclosures normally
prepared in accordance with accounting principles generally accepted in the
United States have been either condensed or omitted pursuant to the rules and
regulations of the Securities and Exchange Commission.  Although the Company
believes that all adjustments, consisting of only normal recurring adjustments,
necessary for a fair presentation have been made, interim periods are not
necessarily indicative of the consolidated financial results of operations for a
full year.  As such, these unaudited consolidated financial statements should be
read in conjunction with the financial statements and notes thereto included in
the Company's Annual Report on Form 10-K for its fiscal year ended December 31,
2001.

2.  OPERATIONS:

  UBICS, a Delaware corporation, provides information technology professional
services to large and mid-sized organizations. The Company provides its clients
with a wide range of professional services in such areas as client/server design
and development, enterprise resource planning package implementation and
customization, e-commerce applications design and development, applications
maintenance programming and database and systems administration.

3.  RELATED PARTY TRANSACTIONS:

  Effective April 1, 2001, the Company has renewed an agreement to sublease
office space from United Breweries of America.  The new terms of the agreement
require the Company to pay United Breweries of America $7,700 per month through
March 31, 2003.  The Company paid $23,100 in the three months ended March 31,
2002 related to this agreement.

4.    COMPREHENSIVE LOSS:

Total comprehensive loss for the three months ended March 31, 2002 and 2001 was
as follows (in thousands):

<TABLE>
<CAPTION>
                                                                                                     Three Months
                                                                                                    Ended March 31,
                                                                                              2002                   2001
                                                                                           -----------            -----------
                                                                                           (unaudited)            (unaudited)
<S>                                                                                        <C>                    <C>
Net income (loss)                                                                            $(2,689)                 $(715)
  Foreign currency translation adjustments                                                        (8)                    --
                                                                                             -------                  -----
     Comprehensive loss                                                                      $(2,697)                 $(715)
                                                                                             =======                  =====
</TABLE>

                                       6
<PAGE>

5.    EARNINGS PER SHARE:

  Reconciliation of diluted shares (dollars in thousands, except per share
amounts):

<TABLE>
<CAPTION>
                                                                           Three Months Ended March 31,
                                                                       2002                            2001
                                                                    ----------                     ----------
                                                                    (unaudited)                    (unaudited)
<S>                                                                 <C>                            <C>
Basic earnings per share
 Net income / (loss)                                                $   (2,689)                     $     (715)
                                                                    ----------                      ----------
Divided by:
Weighted average common shares outstanding                           6,950,473                       7,012,151
                                                                    ----------                      ----------

 Basic earnings / (loss) per share                                  $    (0.39)                     $    (0.10)
                                                                    ==========                      ==========

Diluted earnings per share
 Net income / (loss)                                                $   (2,689)                     $     (715)
                                                                    ----------                      ----------
Divided by:
Weighted average common shares outstanding                           6,950,473                       7,012,151
Dilutive effect of common stock equivalents                                 --                              --
                                                                    ----------                      ----------
Dilutive weighted average common shares outstanding                  6,950,473                       7,012,151
                                                                    ----------                      ----------

 Diluted earnings / (loss) per share                                $    (0.39)                     $    (0.10)
                                                                    ==========                      ==========
</TABLE>

  For the three months ended March 31, 2002, options to purchase 968,000 shares
were excluded from the calculation of diluted earnings per share as the effect
would be anti-dilutive due to the exercise price of such options exceeding the
average market price for the period.  The number of anti-dilutive stock options
omitted from the computation of dilutive average common shares for the three
months ended March 31, 2001 were 1,250,000.

6.  ACQUISITION:

  The Company completed the acquisition of all of the outstanding common stock
of Oakwood Technical Services Limited, European Software Services (UK) Limited
and Reflex I.T. Solutions Limited (collectively referred to as "Oakwood") in the
United Kingdom on March 30, 2001 for a consideration of 1.4 million Pounds
Sterling or approximately US$2.0 million.  The 1.4 million Pounds Sterling was
to be paid to the escrow agent as follows: 1.1 Million Pounds Sterling paid on
the purchase date, 151,667 Pounds Sterling paid twelve months after the closing
and the remaining 151,667 Pounds Sterling eighteen months after the closing.  On
December 21, 2001 the parties agreed to reduce the purchase price to 1.1 million
Pounds Sterling or approximately US$1.6 million, thereby eliminating the
Company's obligation to make subsequent payments to the escrow agent.  The
Company felt the acquisition was necessary to expand its European presence.
Oakwood engages in the business of information, consulting and technical
services ranging from high-level strategic human resources planning to project
outsourcing and on-site consulting.  The Oakwood acquisition expanded the
Company's presence in the European market.  The results of Oakwood's operations
have been included in the consolidated financial statements since April 1, 2001.
The consideration of 1.1 million Pounds Sterling was paid to the escrow agent on
the closing and is to be distributed to the seller as follows:

(a)  First installment of 490,000 Pounds Sterling on closing
(b)  Second installment of 303,333 Pounds Sterling six months after the closing
     date
(c)  Third installment of 60,667 Pounds Sterling on January 1, 2002
(d)  Fourth installment of 60,666 Pounds Sterling on April 1, 2002
(e)  Fifth installment of 60,667 Pounds Sterling on July 1, 2002
(f)  Sixth installment of 60,666 Pounds Sterling on October 1, 2002; and
(g)  Seventh and final installment of 60,667 Pounds Sterling on December 31,
     2002.

  The excess of the purchase price over the net assets acquired ($1,822,583) has
been allocated to goodwill.  None of the goodwill is expected to be deductible
for tax purposes.  The Company was willing to pay the purchase price, which
included the aforementioned goodwill, based on a 20% revenue growth rate in 2000
over the prior year and projected future growth rates of approximately 10 - 20%
annually.  The revenue growth was not guaranteed.

                                       7
<PAGE>

  The following table summarizes the estimated fair values of the assets
acquired and liabilities assumed at the date of acquisition (in thousands).

<TABLE>
<S>                                                                        <C>
Current assets                                                             $  499
Net property and equipment                                                     34
Goodwill                                                                    1,823
                                                                           ------
     Total assets acquired                                                  2,356
Current liabilities                                                           655
                                                                           ------
     Total liabilities                                                        655
                                                                           ------
     Net assets acquired                                                   $1,701
                                                                           ======
</TABLE>

  The Company, through its UBIX Computer Services subsidiary, completed the
acquisition of seventy percent (70%) of the equity share capital of DSF Internet
Services Private Limited ("DSF") in India on September 6, 2001 for a
consideration of US$825,000.  DSF engages in the business of offshore
development of software, including video/audio streaming, web designing and
content management.  The Company believed the acquisition was necessary to
obtain cost effective offshore capabilities.  The DSF acquisition provides the
Company an offshore development option for its clients.  The results of DSF's
operations have been included in the consolidated financial statements since
that date.  UBICS also paid $175,000 and issued 219,173 shares of the common
stock of the Company to Fifth Dimension Limited for its mediation services in
connection with the transaction.  The $825,000 purchase price is payable as
follows:

(a)  An amount of $87,500 was paid by wire transfer to the seller as a down
     payment on June 5, 2001
(b)  An amount of $125,000 was paid to the seller on the closing date
(c)  An amount of $612,500 was deposited into an escrow account on September 28,
     2001.  Of such amount, $112,500 may be released to the seller six months
     after the closing date, $200,000 may be released to the seller on the first
     anniversary of the closing date, $200,000 may be released to the seller
     eighteen months after the closing date, and the remaining $100,000 may be
     released to the seller on the later of:

        i.  May 30, 2003
       ii.  Ten days after all taxes payable by DSF in connection with the
            agreement have been determined
      iii.  The business day following the date that UBICS receives payment of
            the working capital adjustment, if any, under the agreement.

  The $175,000 was paid to Fifth Dimension on the closing date.  The 219,173
shares of the common stock of the Company were issued to Fifth Dimension on the
closing date and deposited into escrow.  The shares may be released to Fifth
Dimension as follows:
(a)  65,752 shares of the common stock of the Company may be released to Fifth
     Dimension at any time on or after the closing date
(b)  Second installment of 43,835 shares of the common stock of the Company may
     be released to Fifth Dimension six months after the closing date
(c)  Third installment of 43,835 shares of the common stock of the Company may
     be released to Fifth Dimension on the first anniversary of the closing date
(d)  Fourth installment of 43,835 shares of the common stock of the Company may
     be released to Fifth Dimension eighteen months after the closing date
(e)  Fifth installment of 21,916 shares of the common stock of the Company may
     be released to Fifth Dimension on the later of:
        i.  May 30, 2003
       ii.  Ten days after all taxes payable by DSF in connection with the
            agreement have been determined
      iii.  The business day following the date that UBICS receives payment of
            the working capital adjustment, if any, under the agreement

  The excess of the purchase price over the net assets acquired ($1,166,848) has
been allocated to goodwill.  None of the goodwill is expected to be deducible
for tax purposes.  The Company was willing to pay the purchase price, which
included the aforementioned goodwill, based on a 39% revenue growth rate in 2000
over the prior year and projected future growth rates of approximately 15 - 20%
annually.  The revenue growth was not guaranteed.

                                       8
<PAGE>

  The following table summarizes the estimated fair values of the assets
acquired and liabilities assumed at the date of acquisition (in thousands).

<TABLE>
<S>                                                                        <C>
Current assets                                                             $   81
Net property and equipment                                                     51
Intangible assets                                                               5
Goodwill                                                                    1,167
                                                                           ------
     Total assets acquired                                                  1,304
Current liabilities                                                           147
Long-term liabilities                                                           2
                                                                           ------
     Total liabilities                                                        149
                                                                           ------
     Net assets acquired                                                   $1,155
                                                                           ======
</TABLE>

  The Company has consolidated the results of operations for each of the
acquired entities as of the respective merger date.  The following table reports
pro forma information as if the acquisition of Oakwood and DSF had been
completed at the beginning of the stated periods (unaudited, in thousands,
except per share amounts):

<TABLE>
<CAPTION>
                                                                                        Three Months Ended March 31,
                                                                                              2002         2001
                                                                                           ---------    ---------
                                                                                          (unaudited)  (unaudited)
<S>                                                                          <C>          <C>          <C>
Revenues                                                                     As reported     $ 6,795      $10,777
                                                                              Pro forma        6,795       11,576
Net income / (loss)                                                          As reported     $(2,689)     $  (715)
                                                                              Pro forma       (2,689)        (705)
Basic and diluted earnings / (loss) per share                                As reported     $ (0.39)     $ (0.10)
                                                                              Pro forma        (0.39)       (0.10)
</TABLE>


7.  USE OF ESTIMATES:

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

8.  RESTRUCTURING:

  During the fiscal year ended 2001, the Company recorded a restructuring charge
of $892,000, of which approximately $460,000 was associated with a write-off of
unused office space, approximately $170,000 was related to merging the Company's
UB Interactive division with its SquareRadius subsidiary, approximately $160,000
was associated with a write-off of obsolete assets, and approximately $100,000
was related to the elimination of 32 technical, sales & marketing and management
positions.

  During the fiscal year ended 2000, the Company recorded a restructuring charge
of $902,000, of which $450,000 was related to a payable to the Company's former
Chief Executive Officer as part of his severance agreement, $100,000 was related
to a signing bonus paid to the Company's new Chief Executive Officer pursuant to
his employment agreement and $352,000 represented the value of 100,000 shares of
common stock granted to the Company's new Chief Executive Officer pursuant to
his employment agreement.

                                       9
<PAGE>

  As of March 31, 2002, $465,000 of the restructuring charges was still
remaining as accrued on the consolidated balance sheet.  The table below
identifies the significant components of the accrual balance remaining (in
thousands):

<TABLE>
<CAPTION>
                                             Rent Payments  Write-off of
                                              for Unused     Obsolete                    Stock
                                             Office Space     Assets      Severance      Bonus        Total
                                           ---------------  ------------  ---------      -----        ------
<S>                                        <C>              <C>           <C>            <C>          <C>
Beginning balance January 1, 2000               $  --         $  --         $  --         $  --         $  --
Amounts provided in 2000.................          --            --           450           352           802
Amounts paid in 2000.....................          --            --           150           252           402
Balance at December 31, 2000.............       $  --         $  --          $300          $100          $400
                                                 ====          ====          ====          ====          ====

Beginning balance January 1, 2001........       $  --         $  --          $300          $100          $400
Amounts provided in 2001.................         460           160            --            --           620
Amounts paid in 2001.....................          56           132           100            93           381
                                                 ----          ----          ----          ----          ----
Balance at December 31, 2001.............        $404          $ 28          $200          $  7          $639
                                                 ====          ====          ====          ====          ====

Beginning balance January 1, 2002........        $404          $ 28          $200          $  7          $639
Amounts provided in 2002.................          --            --            --            --            --
Amounts paid in 2002.....................          71             3           100            --           174
                                                 ----          ----          ----          ----          ----
Balance at March 31, 2002................        $333          $ 25          $100          $  7          $465
                                                 ====          ====          ====          ====          ====
</TABLE>


9.  SHARE REPURCHASE PROGRAM:

  On July 3, 2001, the Company announced that its Board of Directors had
approved a stock repurchase plan for up to an additional $500,000 of the total
outstanding shares of the Company.  The repurchases of common stock may occur
from time to time on the open market or through privately negotiated
transactions funded through cash on hand.  As of March 31, 2002, the Company has
purchased 247,815 shares at a cost of $258,134 and has placed these shares in
treasury.  Any gains or losses incurred on the transactions based upon these
shares will be properly offset to additional paid-in capital in accordance with
accounting principles generally accepted in the United States.

10.  NEW ACCOUNTING STANDARDS:

  In August 2001, SFAS No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets", was issued.  This statement addresses financial accounting
and reporting for the impairment or disposal of long-lived assets.  This
statement supersedes FASB Statement No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of", APB Opinion No.
30, "Reporting the Results of Operations - Reporting the Effects of Disposal of
a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring
Events and Transactions" and ARB No. 51, "Consolidated Financial Statements".
This statement is effective for fiscal years beginning after December 15, 2001,
and interim periods within those fiscal years.  The Company is currently
evaluating the impact of this statement, but does not anticipate that the
adoption of SFAS 144 will have a material impact on its consolidated financial
position and results of operations.

11.  INTANGIBLE ASSETS:

     At the beginning of fiscal year 2002, the Company adopted SFAS No. 142,
under which goodwill and other intangible assets with indefinite lives are not
amortized.  In accordance with SFAS No. 142, the Company evaluated the carrying
amount of its existing goodwill and $2.4 million was deemed impaired under these
standards.  The fair value used to evaluate goodwill was determined by based
upon a comparison of carrying value to fair market value as determined by a
valuation technique using comparative sales values.  In addition, each year, the
Company will evaluate the goodwill for impairment with any resulting impairment
reflected as an operating expense.

                                       10
<PAGE>

     The change in the carrying amount of goodwill for the three months ended
March 31, 2002 is as follows (dollars in thousands):

<TABLE>
<S>                                                                                     <C>
     Balance as of January 31, 2002..............................................       $ 4,376
     Impairment losses...........................................................        (2,444)
                                                                                        -------
     Balance as of March 31, 2002................................................       $ 1,932
                                                                                        =======
</TABLE>

  The following table is the Company's disclosure of what reported net income,
basic earnings per share, and diluted earnings per share would have been if the
non-amortization provisions of SFAS 142 had been adopted in all periods
presented (dollars in thousands except per share amounts):

<TABLE>
<CAPTION>
                                                                    Three Months Ended March 31,
                                                                 2002                          2001
                                                             -----------                    -----------
                                                             (unaudited)                    (unaudited)
<S>                                                          <C>                            <C>
Reported net income / (loss)....................              $(2,689)                         $ (715)
    Goodwill amortization.......................                   --                              28
Adjusted net income / (loss)....................              $(2,689)                         $ (687)
                                                              =======                          ======

Basic earnings / (loss) per share...............              $ (0.39)                         $(0.10)
    Goodwill amortization.......................                   --                              --
Adjusted basic earnings / (loss) per share......              $ (0.39)                         $(0.10)
                                                              =======                          ======

Diluted earnings / (loss) per share.............              $ (0.39)                         $(0.10)
    Goodwill amortization.......................                   --                              --
Adjusted diluted earnings / (loss) per share....              $ (0.39)                         $(0.10)
                                                              =======                          ======
</TABLE>

                                       11
<PAGE>

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


     The following discussion and analysis should be read in conjunction with
Part II, Item 7 of the Company's Annual Report on Form 10-K for the year ended
December 31, 2001 (the "2001 Form 10-K").  The following discussion should also
be read in conjunction with the Consolidated Financial Statements and notes
thereto appearing elsewhere in this Quarterly Report on Form 10-Q ("Form 10-Q").
The information contained herein is not a comprehensive management overview and
analysis of the financial condition and results of operations of the Company,
but rather updates disclosures made in the 2001 Form 10-K.

     Some of the statements in this Form 10-Q that are not historical facts are
forward-looking statements.  These forward-looking statements include the
Company's financial, growth, and liquidity projections, as well as statements
concerning the Company's plans, strategies, intentions and beliefs concerning
the Company's business, cash flows, costs, and the markets in which the Company
operates.  These statements are based on information currently available to the
Company, and the Company assumes no obligation to update these statements as
circumstances change.  There are risks and uncertainties that could cause actual
events to differ materially from these forward-looking statements.  These risks
include, but are not limited to, the level of market demand for the Company's
services, the highly-competitive market for the types of services that the
Company offers, market conditions that could cause the Company's customers to
reduce their spending for the Company's services or cause prospective customers
to decide not to engage third-party providers of IT services, the Company's
ability to acquire new businesses and to grow its existing businesses, the
Company's ability to attract and retain qualified personnel, currency
fluctuations and market conditions in India and elsewhere around the world, and
the Company's ability to reduce costs and conserve cash in an uncertain economic
environment.  While the Company cannot predict all of these risks and
uncertainties, investors should also review the risks and uncertainties
described in the 2001 Form 10-K.

OVERVIEW

  UBICS, founded in 1993, provides IT professional services to large and mid-
sized organizations. UBICS provides its clients with a wide range of
professional services in such areas as client/server design and development, ERP
package implementation and customization, e-commerce applications design and
development, applications maintenance programming and database and systems
administration.  UBICS' services are provided primarily on a time-and-materials
basis to client-managed projects, with UBICS IT professionals providing integral
support as project team members. With respect to website design and development
projects, UBICS' services are provided on a fixed price basis.

  The Company's revenues are based on the hourly billing of its IT professional
services and on the fixed prices for its website design and development
services. Revenue is recognized as services are provided.  The Company has
increased the average billing rates of its IT professionals as the demand for
skilled and experienced professionals has expanded, in particular for IT
professionals placed on ERP package implementation and customization projects.
As of March 31, 2002, 29 IT professionals, or nearly one-sixth of the Company's
deployed IT professionals, were placed on such projects.

  UBICS effectively minimizes the number of days IT professionals are not
assigned to projects by proactively marketing these professionals to clients.
Resource managers closely monitor the availability of IT professionals and
utilize subcontractors when UBICS IT professionals are unavailable.  The Company
maintains strong relationships with nearly 80 subcontractors located worldwide.
For the three months ended March 31, 2002, approximately 33% of the Company's
revenues were derived from IT professionals deployed from subcontractors.  As of
March 31, 2002, IT professionals deployed from subcontractors comprised 55 of
the Company's 182 deployed IT professionals.  The Company believes that its
network of subcontractors enables it to maintain closer relationships with
clients by fulfilling more of their needs for IT professional services.
Management believes that as the Company increases its investment in recruiting
and retaining qualified IT professionals, the ratio of UBICS IT professionals to
subcontractor IT professionals will increase.

  Since inception, the Company has developed relationships with 664 clients in a
range of industries and currently has IT professionals deployed at nearly 100 of
these clients.  The Company's five largest clients accounted for approximately
28% of revenues for the three months ended March 31, 2002.  While this revenue
concentration has remained fairly constant, the Company believes that the
continuing growth in its client base and revenues should reduce the percentage
of revenue attributable to its largest clients.  The Company's strategy is to
continue to provide services to clients in a range of industries, in order to
reduce credit risk from conditions or occurrences within any specific industry
or region in which these clients operate.

                                       12
<PAGE>

  On March 30, 2001, the Company completed the acquisition of all of the
outstanding common stock of Oakwood Technical Services Limited, European
Software Services (UK) Limited and Reflex I.T. Solutions Limited in the United
Kingdom for a consideration of 1.4 million Pounds Sterling or approximately
US$2.0 million.  On December 21, 2001, the parties agreed to reduce the total
consideration to be paid by the Company to 1.1 million Pounds Sterling or
approximately US$1.6 million.

  On September 6, 2001, the Company, through its UBIX Computer Services Limited
subsidiary, completed the acquisition of seventy percent (70)% of the equity
share capital of DSF Internet Services Private Limited in India for a purchase
price of $825,000.  UBICS also paid $175,000 and issued 219,173 shares of the
common stock of the Company to Fifth Dimension Limited for its services in
connection with the transaction.


RESULTS OF OPERATIONS

     The following table sets forth, for the periods indicated, selected
statements of operations data as a percentage of revenues:

<TABLE>
<CAPTION>
                                                                             Percentage of Revenues
                                                                    ----------------------------------------
                                                                          Three Months Ended March 31,
                                                                    ----------------------------------------
                                                                           2002                     2001
                                                                         ------                    -----
<S>                                                                      <C>                       <C>
Revenues........................................................          100.0%                   100.0%
Cost of revenues................................................           71.0                     79.9
                                                                         ------                    -----
Gross profit....................................................           29.0                     20.1
Selling, general and administrative expenses....................
                                                                           34.4                     31.6
                                                                         ------                    -----
Income / (Loss) from operations.................................           (5.4)                   (11.6)
Interest income, net............................................            0.7                      1.4
                                                                         ------                    -----
Income / (Loss) before income taxes.............................           (4.7)                   (10.2)
Cumulative effect of a change in accounting principle...........          (36.0)                      --
Benefit for income taxes........................................           (1.1)                    (3.6)
                                                                         ------                    -----
Net income / (loss).............................................         (39.6)%                   (6.6)%
                                                                         ======                    =====
</TABLE>


THREE MONTHS ENDED MARCH 31, 2002 COMPARED TO THREE MONTHS ENDED MARCH 31, 2001.

Revenues

     Revenues for the quarter ended March 31, 2002 were $6.8 million, compared
to $10.8 million for the quarter ended March 31, 2001, a decrease of $4.0
million, or 37%.  The decrease in revenues was due to weaker demand in the IT
staffing industry.  The number of the Company's deployed IT professionals
decreased to 182 at March 31, 2002 from 268 at March 31, 2001.

Gross Profit

     Gross profit consists of revenues less cost of revenues. Cost of revenues
is comprised principally of IT professional salaries and benefits, including
subcontractor professional costs and relocation expenses. Gross profit for the
quarter ended March 31, 2002 was $2.0 million, compared to $2.2 million for the
quarter ended March 31, 2001, a decrease of $0.2 million, or 9%. Gross profit as
a percentage of revenues increased to 29.0% for the quarter ended March 31, 2002
from 20.1% for the quarter ended March 31, 2001. The increase in gross profit as
a percentage of revenues resulted primarily from better management of the
Company's bench, i.e., its undeployed IT professionals.

Selling, General and Administrative Expenses

     Selling, general and administrative ("SG&A") expenses consist of costs
associated with the Company's sales and marketing efforts, executive, finance
and human resource functions, facilities, telecommunications and other general
overhead expenses. SG&A expenses for the quarter ended March 31, 2002 were $2.3
million, compared to $3.4 million for the quarter ended March 31, 2001, a
decrease of $1.1 million or 32.4%.  The decrease in SG&A was primarily due to
reductions in home office staffing.  SG&A expenses as a percentage of revenues
increased to 34.4% for the quarter ended March 31, 2002 from 31.6% for the
comparable quarter in 2001.  The increase was primarily due to a decrease in
revenue for the same period.

                                       13
<PAGE>

Interest Income, Net

     Interest income, net for the three months ended March 31, 2002, was $44,000
compared to interest income of $146,000 for the three months ended March 31,
2001. The decrease resulted primarily from the reduction in the amount of cash
available for short-term investments.

Provision (Benefit) for Income Taxes

     The Company's effective tax benefit was 23.9% for the three months ended
March 31, 2002, compared to an effective tax benefit of 35.1% for the three
months ended March 31, 2001.  The change in rate was primarily the result of the
effect of various international tax rates and the mix of domestic and foreign
net income.

Goodwill Impairment

     At the beginning of fiscal year 2002, the Company adopted SFAS No. 142,
under which goodwill and other intangible assets with indefinite lives are not
amortized.  In accordance with SFAS No. 142, the Company evaluated the carrying
amount of its existing goodwill and $2.4 million was deemed impaired under these
standards.  In addition, each year, the Company will evaluate the goodwill for
impairment with any resulting impairment reflected as an operating expense.

     The change in the carrying amount of goodwill for the three months ended
March 31, 2002 is as follows (dollars in thousands):

<TABLE>
<S>                                                                                     <C>
     Balance as of January 31, 2002..............................................       $ 4,376
     Impairment losses...........................................................        (2,444)
                                                                                        -------
     Balance as of March 31, 2002................................................       $ 1,932
                                                                                        =======
</TABLE>


Net Income (Loss)

     Net loss for the three months March 31, 2002 was $2.7 million, compared to
net loss of $0.7 million for the three months ended March 31, 2001, an increase
of $2.0 million or 285.7%.  The net loss as a percentage of revenues increased
to (39.6)% for the three months ended March 31, 2002, compared to (6.6)% for the
three months ended March 31, 2001.  The increase in net loss was primarily due
to the $2.4 million cumulative effect of a change in accounting principle the
Company incurred in conjunction with the adoption of SFAS No. 142.


LIQUIDITY AND CAPITAL RESOURCES

     Net cash used by operating activities was $0.8 million for the three months
ended March 31, 2002 compared to net cash used by operating activities of
$25,000 for the comparable period in 2001.  Net cash used by operating
activities for the three months ended March 31, 2002 is primarily due to a net
loss of $2.7 million offset by $2.4 million of goodwill impairment.  Net cash
used by operating activities for the three months ended March 31, 2001 is
primarily due to a net loss of $0.7 million offset by a decrease in accounts
receivable of $0.7.

     Net cash provided by investing activities was $8,000 for the three months
ended March 31, 2002, as compared to $24,000 for the same period in 2001.  The
decrease was a result of no capital purchases during the quarter.

     Net cash used by financing activities was $19,000 for the three months
ended March 31, 2002, an increase of $19,000 compared the same period in 2001.
The increase was due to treasury stock purchased under the Company's share
repurchase program.

     For the three months ended March 31, 2002, the Company continued its
program to repurchase, from time to time, up to an additional $500,000 of its
outstanding capital stock for investment or other general corporate purposes.
This board approved repurchase program was announced on July 3, 2001.  During
the three months ended March 31, 2002, the Company purchased 28,000 shares of
its capital stock at a total cost of $19,000, bringing the total number of
shares purchased to 248,000 shares.  The repurchases were financed principally
from cash on hand.  Repurchases may be made from time to time in the open
market, in negotiated or other permissible transactions.

                                       14
<PAGE>

     Capital expenditures for the three months ended March 31, 2002 and 2001
were $0 and $117,000, respectively.  Because of the economic slowdown, the
Company has deferred previously disclosed plans to establish offshore recruiting
offices in various foreign locations.  Except as set forth above, the Company
currently has no material commitments for capital expenditures.

     The Company currently anticipates that $6.3 million in available cash
balances, together with the existing sources of liquidity and cash generated
from operations, will be sufficient to satisfy its cash needs at least through
the next twelve months.

     The Company's functional currency for financial reporting purposes is the
US Dollar.  The Company generally invoices its clients and pays expenses in the
local currency of the country in which the client is located.  Statements of
Operations translation gains and losses arising from differences between the
functional and local currencies are recognized in the Consolidated Statements of
Operations, and have not had a significant impact on the results of operations.
Balance Sheet gains and losses as a result of fluctuations in foreign currency
exchange rates are recognized in the Consolidated Balance Sheet as a component
of comprehensive loss.  The Company continually evaluates the economic
conditions of each country in which it operates, and bases its foreign currency
accounting policies on those assessments.

RECENTLY ISSUED FINANCIAL ACCOUNTING STANDARDS

     In August 2001, SFAS No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets", was issued.  This statement addresses financial accounting
and reporting for the impairment or disposal of long-lived assets.  This
statement supersedes FASB Statement No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of", APB Opinion No.
30, "Reporting the Results of Operations - Reporting the Effects of Disposal of
a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring
Events and Transactions" and ARB No. 51, "Consolidated Financial Statements".
This statement is effective for fiscal years beginning after December 15, 2001,
and interim periods within those fiscal years.  The Company is currently
evaluating the impact of this statement, but does not anticipate that the
adoption of SFAS 144 will have a material impact on its consolidated financial
position and results of operations.


ITEM 3. QUANTATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

     The Company currently does not invest excess funds in derivative financial
instruments or other market risk sensitive instruments for the purpose of
managing its foreign currency exchange rate risk or for any other purpose.

     The fair values and carrying amounts of the Company's financial
instruments, primarily accounts receivable and accounts payable are
approximately equivalent.  All other financial instruments are classified as
current as current and will be utilized within the next operating cycle.

  The financial statements of foreign subsidiaries are translated using the
exchange rate in effect at year-end for balance sheet accounts and the average
exchange rate in effect during the year for revenue and expense accounts.

  The Company's functional currency for financial reporting purposes is the U.S.
Dollar.  The Company generally invoices its clients and pays expenses in the
local currency of the country in which the client is located.  Statements of
Operations translation gains and losses arising from differences between the
functional and local currencies are recognized in the Consolidated Statements of
Operations and have not had a significant impact on the results of operations.
Balance Sheet gains and losses as a result of fluctuations in foreign currency
exchange rates are recognized in the Consolidated Statements of Changes in
Stockholders' Equity as a component of accumulated other comprehensive
income/(loss).  The Company continually evaluates the economic conditions of
each country in which it operates, and bases its foreign currency accounting
policies on those assessments.

                                       15
<PAGE>

                          PART II -- OTHER INFORMATION

Item 1. Legal Proceedings

        Neither the Company nor any of its subsidiaries is a party to any
        material pending legal proceedings.

Item 2. Changes in Securities and Use of Proceeds

        Nothing to report under this item.

Item 3. Defaults Upon Senior Securities

        Nothing to report under this item.

Item 4. Submission of Matters to a Vote of Security Holders

        Nothing to report under this item.

Item 5. Other Information

        Nothing to report under this item.

Item 6. Exhibits and Reports on Form 8-K

(a)    Exhibits:

              2.1  Share Purchase Agreement dated as of March 30, 2001 between
                   UBICS, Inc. and Teksys, Inc. (2)

              2.2  Share Purchase Agreement, dated as of September 4, 2001,
                   among UBIX Computer Services Limited and Anmol Taneja and
                   Vani Taneja (3)

              2.3  Amendment to Share Purchase Agreement dated as of December
                   21, 2001 between UBICS, Inc. and Teksys Inc. (4)

              3.1  Amended and Restated Certificate of Incorporation of UBICS,
                   Inc. (1)

              3.2  Amended and Restated Bylaws of UBICS, Inc. (1)

                   -----------------------------------------------

               (1) Incorporated by reference to the registrant's Registration
                   Statement on Form S-1, No. 333-35171, filed September 8,
                   1997.

               (2) Incorporated by reference to Form 8-K of the registrant dated
                   March 30, 2001

               (3) Incorporated by reference to Form 8-K of the registrant dated
                   September, 2001

               (4) Incorporated by reference to Form 10-K of the registrant for
                   the year ended December 31, 2001

(b)    Reports on Form 8-K:

       None

                                       16
<PAGE>

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has caused this Amendment to Form 10-Q to be signed on its behalf by
the undersigned thereunto duly authorized.

                                         UBICS, Inc.
                                         (Registrant)

Date: May 15, 2002

                                         By: /s/ Robert C. Harbage
                                         -------------------------------
                                         Robert C. Harbage
                                         President and Chief Executive Officer


                                         By: /s/ Neil M. Ebner
                                         -------------------------------
                                         Neil M. Ebner
                                         Vice President, Finance,
                                         Chief Financial Officer and Secretary
                                         (Principal Finance & Accounting
                                         Officer)

                                       17
<PAGE>

EXHIBIT INDEX


    2.1  Share Purchase Agreement dated as of March 30, 2001 between UBICS, Inc.
         and Teksys, Inc. (2)

    2.2  Share Purchase Agreement, dated as of September 4, 2001, among UBIX
         Computer Services Limited and Anmol Taneja and Vani Taneja (3)

    2.3  Amendment to Share Purchase Agreement dated as of December 21, 2001
         between UBICS, Inc. and Teksys Inc. (4)

    3.1  Amended and Restated Certificate of Incorporation of UBICS, Inc. (1)

    3.2  Amended and Restated Bylaws of UBICS, Inc. (1)

         ----------------------------------------------

     (1) Incorporated by reference to the registrant's Registration Statement on
         Form S-1, No. 333-35171, filed September 8, 1997.

     (2) Incorporated by reference to Form 8-K of the registrant dated
         March 30, 2001

     (3) Incorporated by reference to Form 8-K of the registrant dated
         September, 2001

     (4) Incorporated by reference to Form 10-K of the registrant for the year
         ended December 31, 2001

                                       18