U.S. 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: SEPTEMBER 30, 2001
                         Commission file number: 0-20824



                               INFOCROSSING, INC.
                -------------------------------------------------
               (Exact name of issuer as specified in its charter)


                               DELAWARE 13-3252333
                -------------------------------- ----------------
                  (State or other jurisdiction of (IRS Employer
               incorporation or organization) Identification No.)

               2 CHRISTIE HEIGHTS STREET LEONIA, NEW JERSEY 07605
              -----------------------------------------------------
                    (Address of principal executive offices)

                                 (201) 840-4700
                           --------------------------
                           (Issuer's telephone number)




Check whether the registrant (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 [X] No [
]

There were 5,870,282 shares of the registrant's Common Stock, $0.01 par value,
outstanding as of November 12, 2001.

Transitional Small Business Disclosure Form (check one):        Yes [  ]  No [X]









<PAGE>


PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS

                        INFOCROSSING, INC. & SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS


                                        SEPTEMBER 30, 2001  DECEMBER 31, 2000
                                        ------------------  -----------------
                                            (UNAUDITED)

                  ASSETS

CURRENT ASSETS:
  Cash and equivalents                      $26,055,791         $36,763,831
  Marketable debt securities, at cost
    which approximates market value                -              3,413,069
  Trade accounts receivable, net of
    allowances for doubtful accounts
    of $637,219 and $525,957                  4,683,964           3,355,914
  Prepaid and refundable income taxes           135,248           3,648,228
  Prepaid license fees                          357,916             766,135
  Prepaid expenses and other
    current assets                              805,834           1,303,724
                                            -----------         -----------
                                             32,038,753          49,250,901
                                            -----------         -----------

PROPERTY and EQUIPMENT, net                  20,357,557          13,411,113
                                            -----------         -----------
OTHER ASSETS:
  Deferred software, net                      2,445,135           2,665,714
  Goodwill and intangibles, net               8,305,482           8,889,271
  Due from related parties                    2,135,026           1,665,688
  Security deposits and other
    non-current assets                        2,536,300           2,566,728
                                            -----------         -----------
                                             15,421,943          15,787,401
                                            -----------         -----------
  TOTAL ASSETS                             $ 67,818,253        $ 78,449,415
                                            ===========         ===========



        See Notes to Consolidated Interim Financial Statements (Unaudited).












<PAGE>
                        INFOCROSSING, INC. & SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                        SEPTEMBER 30, 2001  DECEMBER 31, 2000
                                        ------------------  -----------------
                                            (UNAUDITED)
    LIABILITIES and STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
   Accounts payable                         $ 1,710,961         $ 1,369,402
   Current portion of long-term debt and
    capitalized lease obligations             1,828,701             846,083
   Current portion of accrued losses on
    office leases                               433,813             510,112
   Accrued expenses                           6,486,009           4,205,520
   Customer deposits and current
    deferred revenue                            762,973             125,488
                                            -----------         -----------
                                             11,222,457           7,056,605
                                            -----------         -----------
LONG-TERM LIABILITIES:
   Long-term debt and capitalized lease
    obligations, net of current portion       4,158,926           2,777,409
   Deferred revenue                             874,995               -
   Accrued losses on office leases            1,219,430           1,537,955
                                            -----------         -----------
                                              6,253,351           4,315,364
                                            -----------         -----------
COMMITMENTS AND CONTINGENCIES                      -                   -

REDEEMABLE 8% SERIES A CUMULATIVE
  CONVERTIBLE PARTICIPATING PREFERRED
  STOCK; $0.01 par value; 300,000 shares
  authorized; 157,377 issued and
  outstanding (liquidation preference
  $67,012,504 at September 30, 2001)         41,760,040          35,436,608
                                            -----------         -----------
STOCKHOLDERS' EQUITY:
   Preferred stock, $0.01 par value;
    2,700,000 shares authorized,
    none issued                                    -                   -
   Common stock, $0.01 par value;
    50,000,000 shares authorized;
    5,913,311 and 5,888,311 shares
    issued, respectively                         59,133              58,882
   Additional paid-in capital                59,053,561          58,936,812
   Unamortized restricted stock award        (7,666,667)         (9,822,917)
   Accumulated deficit                      (42,492,642)        (17,344,526)
                                            -----------         -----------
                                              8,953,385          31,828,251
   Less 43,029 and 12,508 shares,
    respectively, of common stock held
    in treasury, at cost                       (370,980)           (187,413)
                                            -----------         -----------
                                              8,582,405          31,640,838
                                            -----------         -----------
TOTAL LIABILITIES AND STOCKHOLDERS'EQUITY  $ 67,818,253        $ 78,449,415
                                            ===========         ===========
        See Notes to Consolidated Interim Financial Statements (Unaudited).

<PAGE>
                        INFOCROSSING, INC. & SUBSIDIAIRES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

                            THREE MONTHS ENDED            NINE MONTHS ENDED
                               SEPTEMBER 30,                SEPTEMBER 30,
                       --------------------------   --------------------------
                            2001          2000           2001         2000
                       ------------  ------------   ------------  ------------

REVENUES               $  7,354,307  $  5,267,641   $ 19,477,824  $ 17,808,265
                       ------------  ------------   ------------  ------------
COSTS and EXPENSES:
Operating costs           8,164,744     7,141,743     24,746,855    20,283,845
Selling and promotion
   costs                    784,637       785,378      3,061,006     2,300,502
Amortization of
   restricted
   stock award              718,750       718,750      2,156,250       958,333
Loss on office closing         -          514,371           -          514,371
General and
   administrative
   expenses               2,611,261     2,958,708      8,542,654     8,538,860
                       ------------  ------------   ------------  ------------
                         12,279,392    12,118,950     38,506,765    32,595,911
                       ------------  ------------   ------------  ------------
LOSS FROM OPERATIONS     (4,925,085)   (6,851,309)   (19,028,941)  (14,787,646)

Interest income            (269,253)   (1,020,541)    (1,225,030)   (1,989,957)
Interest expense            144,072       117,126        323,773       643,750
                       ------------  ------------   ------------  ------------
                           (125,181)     (903,415)      (901,257)   (1,346,207)
                       ------------  ------------   ------------  ------------
Loss before INCOME
   TAXES                 (4,799,904)   (5,947,894)   (18,127,684)  (13,441,439)
Income tax
   expense/(benefit)           -         (942,253)       697,000    (1,707,063)
                       ------------  ------------   ------------  ------------
Net loss                 (4,799,904)   (5,005,641)   (18,824,684)  (11,734,376)

Accretion and
   dividends on
   redeemable
   preferred stock       (2,153,528)   (1,975,217)    (6,323,432)   (3,167,799)
                       ------------  ------------   ------------  ------------
NET LOSS TO COMMON
   STOCKHOLDERS        $ (6,953,432) $ (6,980,858)  $(25,148,116) $(14,902,175)
                       ============  ============   ============  ============
Basic and diluted
   loss to common
   stockholders per
   common share        $      (1.18) $      (1.19)  $      (4.28) $      (2.81)
                       ============  ============   ============  ============
Weighted average
   number of common
   shares outstanding     5,870,282     5,884,958      5,871,472     5,294,728
                       ============  ============   ============  ============
        See Notes to Consolidated Interim Financial Statements (Unaudited).

<PAGE>
                        INFOCROSSING, INC. & SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOW
                                   (UNAUDITED)

                                              NINE MONTHS ENDED SEPTEMBER 30,
                                              -------------------------------
                                                  2001               2000
                                              ------------       ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                      $(18,824,684)      $(11,734,376)
Adjustments to reconcile net loss
   to net cash used in operating activities:
      Depreciation and amortization              2,882,355          1,791,690
      Amortization of restricted stock award     2,156,250            958,333
      Warrants issued                                 -               120,000
      Accrued loss on office closing                  -               514,371
   Decrease/(increase) in:
      Trade accounts receivable                 (1,328,051)         1,267,498
      Prepaid and refundable taxes               3,512,980         (1,516,422)
      Prepaid license fees, prepaid
         expenses and other current assets         906,109           (828,746)
   Increase/(decrease) in:
      Accounts payable                             341,559            465,228
      Accrued expenses                           2,280,490            535,877
      Payments on accrued losses on
         office leases                            (343,866)          (145,799)
      Customer deposits and
         deferred revenue                        1,512,480            (83,019)
                                              ------------       ------------
Net cash used in
   operating activities                         (6,904,378)        (8,655,365)
                                              ------------       ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchase of property and equipment           (8,692,359)        (4,658,821)
   Disposal of equipment                              -                 2,750
   Investment in/(redemption at maturity
      of) investments in marketable
      fixed income securities                    3,413,069         (6,147,630)
   Decrease/(increase) in other assets              23,111         (2,031,957)
   Purchase of treasury stock                      (66,567)              -
   Increase in deferred software costs            (267,255)          (832,086)
                                              ------------       ------------
Net cash used in
   investing activities                       $ (5,590,001)      $(13,667,744)
                                              ------------       ------------



                             Continued on next page.

       See Notes to Consolidated Interim Financial Statements (Unaudited).








<PAGE>


                        INFOCROSSING, INC. & SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOW
                             (UNAUDITED - CONTINUED)

                                              NINE MONTHS ENDED SEPTEMBER 30,
                                              -------------------------------
                                                  2001               2000
                                              ------------       ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Repayment of debt and capital leases       $   (705,024)      $ (5,013,554)
   Proceeds from debt                            3,011,659          3,000,000
   Proceeds from a private equity placement           -            58,430,596
   Advances to related parties, net               (469,338)           (37,362)
   Proceeds from the sale of common stock             -               999,996
   Proceeds from the exercises of stock
      options and warrants                            -             1,015,155
                                              ------------       ------------
Net cash provided by financing activities        1,837,297         58,394,831
                                              ------------       ------------
CASH FLOWS FROM DISCONTINUED
   OPERATION:
   Payments on portion of accrued loss
      on office sublease relating to
      discontinued operation                       (50,958)           (56,699)
                                              ------------       ------------
Net change in cash and equivalents             (10,708,040)        36,015,023

Cash and equivalents at the
   beginning of the period                      36,763,831          4,391,048
                                              ------------       ------------
Cash and equivalents at the end
   of the period                              $ 26,055,791       $ 40,406,071
                                              ============       ============
SUPPLEMENTAL CASH FLOW INFORMATION:
   Cash paid during the period for:
      Interest expense                        $    292,076       $    112,222
                                              ============       ============
      Income taxes                            $     38,082       $     79,139
                                              ============       ============
SUPPLEMENTAL DISCLOSURE OF NON-CASH
   FINANCING ACTIVITIES:
   Treasury shares received in payment
      of a stock option exercise              $    117,000            111,744
                                              ============       ============
   Equipment acquired subject to a
      capital lease                           $     57,500               -
                                              ============       ============



       See Notes to Consolidated Interim Financial Statements (Unaudited).






<PAGE>
<TABLE>
<CAPTION>
                        INFOCROSSING, INC. & SUBSIDIARIES
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                   (UNAUDITED)
                                                 UNAMORTIZED
                 COMMON     PAR      PAID IN     RESTRICTED    ACCUMULATED  TREASURY
                 SHARES    VALUE     CAPITAL     STOCK AWARD     DEFICIT      STOCK       TOTAL
               ---------  -------  -----------  ------------  ------------  ---------  -----------
<S>            <C>        <C>      <C>          <C>           <C>           <C>        <C>
Balances,
   December
   31, 2000    5,888,311  $58,882  $58,936,812  $ (9,822,917) $(17,344,526) $(187,413) $31,640,838

Exercise
   of stock
   option         25,000      251      116,749          -             -          -         117,000

Surrendered
   20,021 shares
   for exercise
   of stock
   option           -        -            -             -             -      (117,000)    (117,000)

Amortization
   of restricted
   stock award      -        -            -        2,156,250          -          -       2,156,250

Accretion on
   redeemable
   preferred stock  -        -            -             -       (2,458,307)      -      (2,458,307)

Accrued
   dividends on
   redeemable
   preferred stock  -        -            -             -       (3,865,125)      -      (3,865,125)

Purchase of
   treasury
   shares           -        -            -             -             -       (66,567)     (66,567)

Net loss            -        -            -             -      (18,824,684)      -     (18,824,684)
               ---------  -------  -----------  ------------  ------------  ---------  -----------
Balances,
   September
   30, 2001    5,913,311  $59,133  $59,053,561  $ (7,666,667) $(42,492,642) $(370,980) $ 8,582,405
               =========  =======  ===========  ============  ============  =========  ===========
</TABLE>

        See Notes to Consolidated Interim Financial Statements (Unaudited).









<PAGE>


                        INFOCROSSING, INC. & SUBSIDIAIRES
                        NOTES TO THE CONSOLIDATED INTERIM
                        FINANCIAL STATEMENTS (UNAUDITED)


1.  BASIS OF PRESENTATION

The consolidated balance sheet as of September 30, 2001, the consolidated
statements of operations for the three and nine months ended September 30, 2001
and 2000, the consolidated statements of cash flows for the nine months ended
September 30, 2001 and 2000, and the consolidated statement of stockholders'
equity for the nine months ended September 30, 2001 have not been audited. In
the opinion of management, all adjustments (consisting of only normal recurring
adjustments) necessary to present fairly the financial position, results of
operations, and cash flows for the periods indicated have been made. The results
of operations for the periods ended September 30, 2001 and 2000 are not
necessarily indicative of the operating results for the full fiscal years.

Certain reclassifications have been made to the prior periods to conform to the
current presentation. After the filing of Form 10-K for the fiscal year ended
October 31, 2000, the Company changed its year end from October 31 to December
31. The Company effected this change by filing a new Form 10-K for the two-month
period ended December 31, 2000.

Certain disclosures normally included in financial statements prepared in
accordance with accounting principles generally accepted in the United States
have been condensed or omitted. These consolidated interim financial statements
should be read in conjunction with the Company's Annual Report on Form 10-K for
the two-month period ended December 31, 2000.

The consolidated financial statements include the accounts of Infocrossing, Inc.
and its wholly-owned subsidiaries (collectively, the "Company"). All significant
intercompany balances and transactions have been eliminated.


2.  BASIC AND DILUTED EARNINGS PER COMMON SHARE

Statement of Financial Accounting Standards No. 128 "Earnings per Share" ("SFAS
128") requires the presentation of basic and diluted earnings per share ("EPS").
Basic EPS is computed by dividing income available to common stockholders by the
weighted average number of common shares outstanding during each period. Diluted
EPS is computed using the weighted average number of common shares plus the
dilutive effect of common stock equivalents. Stock options and warrants which
are anti-dilutive are excluded from the computation of weighted average shares
outstanding. Certain options which are currently anti-dilutive may be dilutive
in the future. In determining the diluted loss per common share for the three
and nine month periods ended September 30, 2001 and 2000, common stock
equivalents are ignored since the effect of including such equivalents would
have been anti-dilutive. Accordingly, the basic loss and the diluted loss per
common share are equal.







<PAGE>


3.  PRIVATE PLACEMENT OF SECURITIES

A private placement of $60 million of securities closed on May 10, 2000. The
Company issued 157,377 shares of redeemable 8% Series A Cumulative Convertible
Participating Preferred Stock (the "Series A Preferred Stock") and warrants to
purchase 2,531,926 shares of the Company's common stock at an exercise price of
$0.01 per share.

The original carrying value of the warrants ($28,180,132) and Series A Preferred
Stock ($30,250,464) were determined by apportioning an amount equal to the
proceeds from the private placement multiplied by the relative value of each
class of security as of the commitment date. The difference between the carrying
value and the face value of the Series A Preferred Stock is being accreted as a
charge against retained earnings through May 31, 2007 (the Purchasers' earliest
redemption date) using the interest method. Accumulated dividends (dividends not
paid on a dividend date) and dividends accruing subsequent to a dividend payment
date also increase the carrying value of the Series A Preferred Stock through a
charge to retained earnings. The sum of the face value of the Series A Preferred
Stock ($60,000,000) and any accrued and accumulated dividends due on any given
date equals the "Liquidation Preference", which amount is shown on the Balance
Sheet. For the periods presented in the Statements of Operations, the combined
accretion and accrued and accumulated dividends are shown as a component of Net
Loss to Common Stockholders.

4. DUE FROM RELATED PARTIES

In accordance with an employment agreement, the Chief Executive Officer ("CEO")
of the Company received a grant of 800,000 restricted shares of the Company's
common stock on June 15, 2000. Such award vests at various times during the
period ending June 15, 2004. The Company agreed to lend an amount to the CEO
equal to 50% of the related Federal income tax liability on this grant. This
obligation is repayable from proceeds arising from the disposition of any of the
800,000 shares and bears interest at the Applicable Federal Rate as defined in
and published from time to time in accordance with the Internal Revenue Code. As
of September 30, 2001, the CEO had borrowed $1,877,832. Also, the CEO had
purchased 68,446 shares of common stock from the Company for $1,000,000.

In November 2001, the CEO resigned and entered into a settlement agreement with
the Company to terminate the employment contract. The Company accelerated the
vesting of the stock award and purchased 535,594 shares of the 868,446 shares of
common stock held by the CEO for $2,385,000. The CEO used $1,935,000 of the
proceeds to satisfy notes receivable due to the Company. In the fourth quarter,
the Company will recognize a charge of approximately $7,667,000, representing
the unamortized balance of the restricted stock award as of September 30, 2001.













<PAGE>

5. DEBT

In August 2001, the Company borrowed $3 million from a financial institution,
the proceeds of which were used to purchase computer hardware equipment in
connection with the signing of a four-year contract with a significant new
managed services customer. The loan bears interest at 12.55% and is repayable in
36 monthly payments of approximately $100,500. The loan may be prepaid in the
first year with a penalty of 5% of the outstanding principal balance. After the
first twelve months, the prepayment penalty declines by one percentage point for
each subsequent six-month period. The loan is secured by a first lien on certain
computer equipment. If the Company's unrestricted cash declines below $13
million, the Company must either (1) post a letter of credit equal to the
present value of the remaining payments or (2) prepay the loan with the
applicable prepayment penalty.












































<PAGE>


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


RESULTS OF OPERATIONS, THREE-MONTH PERIODS ENDED SEPTEMBER 30, 2001 AND 2000

For the three months ended September 30, 2001 (the "Current Quarter") revenues
increased $2,086,000 (40%), to $7,354,000 from $5,268,000 for the three months
ended September 30, 2000 (the "Prior Year Quarter"), due to greater business
volume. Revenues from a significant new customer contributed to the increase.
The Company recently announced the signing of a significant new managed services
contract with this customer that by its terms is expected to generate $40
million in revenues over the four-year life of its initial term.
The Company's loss from operations improved 28%, dropping to $4,925,000 in the
Current Quarter from $6,851,000 in the Prior Year Quarter. Substantially all of
the incremental expenses associated with the Company's increase in revenues were
offset by cost savings initiated in the second quarter of the year and that were
more fully realized in the Current Quarter. Total costs and expenses increased
in the Current Quarter compared to the Prior Quarter by only $160,000, or 1%, to
$12,279,000.

As previously reported, due to excess supply of server-hosting space, the
Company has taken steps to minimize its costs by temporarily suspending
operations at its Atlanta Internet Data Center ("IDC") and the further
development of the Northern Virginia IDC. The Company is evaluating alternatives
with respect to the two facilities. The ongoing costs of these facilities are
included in operating costs for the Current Quarter.

Operating costs increased $1,023,000 (14%) to $8,165,000 during the Current
Quarter compared with $7,142,000 in the Prior Year Quarter. Operating costs
include $811,000 and $389,000 of depreciation and amortization for the Current
Quarter and Prior Year Quarter, respectively. The remaining increase primarily
consists of IDC operating costs and costs of related managed services.

Selling and promotion costs were $785,000 in both the Current Quarter and the
Prior Year Quarter.

Amortization related to a restricted stock award was $719,000 in both periods.

In the Prior Quarter the Company recorded a loss of $514,000 relating to the
closing of a sales office in Charlotte, NC.

General and administrative expenses decreased $348,000 (12%) to $2,611,000 for
the Current Quarter from $2,959,000 for the Prior Year Quarter, largely
reflecting cost reductions in IDC managed services area. Included in general and
administrative expenses is depreciation of $247,000 and $266,000 in the Current
Quarter and Prior Year Quarter, respectively.

The Company recorded net interest income of $125,000 in the Current Quarter,
compared with net interest income of $903,000 in the Prior Year Quarter. The net
reduction of $778,000 reflects a decrease in interest income of $751,000 from
lower interest rates on investments and a lower average balance of
interest-earning assets during the Current Quarter. The net reduction also
includes an increase of $27,000 in interest expense on a larger average
outstanding debt balance than in the Prior Year Quarter.


<PAGE>
In the Current Quarter, the Company recorded no additional income tax benefit. A
tax benefit of $942,000 was recorded in the Prior Year Quarter based on the
availability of carrying back the pre-tax loss for such period to a prior
taxable year. The cumulative tax benefit recorded by the Company is limited to
the refund of taxes paid in prior years that the Company has received as a
result of carrying back a portion of its pre-tax loss. Cumulative pre-tax losses
that cannot be carried back can be carried forward for a period of 20 taxable
years. The deferred tax asset associated with carrying forward cumulative
pre-tax losses has been fully offset by a valuation allowance due to the
uncertainty of realizing such tax benefits.

The Company had a net loss of $4,800,000 in the Current Quarter versus a net
loss of $5,006,000 in the Prior Year Quarter. Net loss to common stockholders
after accretion and accrued dividends on preferred stock was $6,953,000 for the
Current Quarter versus a loss of $6,981,000 in the Prior Year Quarter. The loss
per common share was $1.18 for the Current Quarter compared with a loss per
common share of $1.19 in the Prior Year Quarter, on both a basic and diluted
basis. Common stock equivalents were ignored in determining the net loss per
share for both periods, since the inclusion of such equivalents would be
anti-dilutive.


RESULTS OF OPERATIONS, NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2001 AND 2000

For the nine months ended September 30, 2001 (the "Current Period"), revenues
increased $1,669,000 (9%) to $19,477,000 from $17,808,000 for the nine months
ended September 30, 2000 (the "Prior Period"). The increase is largely
attributable to increased business volume in managed services, which included
revenues generated from the significant new customer discussed above. The loss
from operations increased $4,241,000 (29%), reflecting an increase of $5,911,000
in total costs and expenses to $38,507,000 in the Current Period. The increased
spending is largely attributable to increased personnel related costs in the
first half of the year which have since been reduced through staff reductions,
primarily in the server-hosting and other IDC related functions.

As previously discussed, the ongoing costs of the Atlanta and the Northern
Virginia facilities are included in operating costs for the Current Period.

Operating costs increased $4,463,000 (22%) to $24,747,000 during the Current
Period compared with $20,284,000 in the Prior Period. Operating costs include
depreciation and amortization of $2,047,000 and $1,034,000 in the Current Period
and Prior Period, respectively. The remaining increases primarily consist of IDC
and related managed services operating and development costs earlier in the
Current Period.

Selling and promotion costs increased $761,000 (33%) to $3,061,000 during the
Current Period compared with $2,301,000 in the Prior Period. The selling and
promotion cost increase is attributable to payroll and other expenses incurred
in earlier quarters to market IDC related services and to improve the brand
identity of the Company.

Amortization related to a restricted stock award was $2,156,000 and $958,000 in
the Current Period and Prior Period, respectively.

General and administrative expenses increased only $4,000 to $8,543,000 for the
Current Period from $8,539,000 for the Prior Period. General and administrative
expenses include $736,000 and $758,000 of depreciation and amortization for the
Current Period and Prior Period, respectively.

<PAGE>

The Company recorded net interest income of $901,000 in the Current Period,
compared with net interest income of $1,346,000 in the Prior Period. The net
reduction of $445,000 reflects a decrease in interest income of $765,000 from a
lower average balance of interest-earning assets during the Current Period,
lower interest rates on interest-earning assets. The net reduction was partially
offset by a decrease of $320,000 in interest expense arising from a larger
average outstanding debt and capital lease obligation balance in the Prior
Period.

In the Current Period, the Company recorded income tax expense of $697,000,
representing the difference between the estimated benefit as previously reported
compared with the amount recognized in its income tax return. A tax benefit of
$1,707,000 was recorded in the Prior Period based on an estimate of the
availability of carrying back the pre-tax loss for such period to a prior
taxable year. The cumulative tax benefit recorded by the Company is limited to
the refund of taxes paid in prior years that the Company has received as a
result of carrying back a portion of its pre-tax loss. Cumulative pre-tax losses
that cannot be carried back can be carried forward for a period of 20 taxable
years. The deferred tax asset associated with carrying forward cumulative
pre-tax losses has been fully offset by a valuation allowance due to the
uncertainty of realizing such tax benefits.

The Company had a net loss of $18,825,000 in the Current Period versus a net
loss of $11,734,000 in the Prior Period. Net loss to common stockholders after
accretion and accrued dividends on preferred stock was $25,148,000 for the
Current Period and $14,902,000 for the Prior Period. The loss per common share
was $4.28 for the Current Period compared with a loss per common share of $2.81
in the Prior Period, on both a basic and diluted basis. Common stock equivalents
were ignored in determining the net loss per share for both periods, since the
inclusion of such equivalents would be anti-dilutive.


LIQUIDITY AND CAPITAL RESOURCES

During the nine months ended September 30, 2001, the Company used net cash in
operating activities of approximately $6,904,000, primarily as a result of a net
loss of $18,825,000, offset by non-cash expenses of $5,039,000 in depreciation
and amortization, an increase in customer deposits and deferred revenue of
$1,512,000, a decrease of $3,513,000 in prepaid and refundable taxes and an
increase of $2,622,000 in accounts payable and accrued expenses.

The Company received $3,413,000 in proceeds from matured marketable fixed income
securities; invested $8,692,000 for the purchase of equipment, software, and
other fixed assets; and spent $267,000 for product development and enhancements.
The Company also purchased 10,500 shares of its common stock in the open market
for approximately $66,600. The Company is currently authorized by its Board of
Directors to purchase up to 500,000 shares of its common stock, of which 18,400
have been purchased through September 30, 2001. No shares were purchased in the
quarter ended September 30, 2001.

Principal financing activities included proceeds from the loan described below
and $705,000 in payments of principal with respect to debt and capital lease
obligations. Included in related party borrowings of $469,000 is an advance of
$389,000 to an officer in accordance with an employment agreement, net of a
repayment by that officer.



<PAGE>


In August 2001, the Company borrowed $3 million from a financial institution,
the proceeds of which were used to purchase computer hardware equipment in
connection with the signing of a four-year contract with a significant new
managed services customer, as previously described. The loan bears interest at
12.55% and is repayable in 36 monthly payments of approximately $100,500. The
loan may be prepaid in the first year with a penalty of 5% of the outstanding
principal balance. After the first twelve months, the prepayment penalty
declines by one percentage point for each subsequent six-month period. The loan
is secured by a first lien on certain computer equipment. If the Company's
unrestricted cash declines below $13 million, the Company must either (1) post a
letter of credit equal to the present value of the remaining payments or (2)
prepay the loan with the applicable prepayment penalty.

In addition to net cash used in operating activities described above, another
measure of a company's ability to generate cash from its operations is earnings
before interest, taxes, depreciation, and amortization ("EBITDA"). For the nine
months ended September 30, 2001 and 2000, the Company's EBITDA loss was
$13,993,000 and $12,038,000, respectively. The Company's EBITDA improved to a
loss of $3,148,000 in the Current Quarter, compared to losses of $4,376,000,
$6,466,000, and $6,930,000 in the second and first quarters for 2001 and the
fourth quarter of 2000, respectively.

As of September 30, 2001, the Company had cash and equivalents of $26,056,000.
The Company believes that the combination of its cash and other liquid assets
will provide adequate resources to fund its ongoing operating requirements until
it returns to positive cash flow from operations.


NEW FINANCIAL ACCOUNTING STANDARDS

In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS 133"), the effective date of which
was deferred for all fiscal quarters of fiscal years beginning after June 15,
2000 by SFAS No. 137 "Accounting for Derivative Instruments and Hedging
Activities - Deferral of Effective Date of SFAS No. 133." SFAS 133 establishes
accounting and reporting standards for derivative instruments, including
derivative instruments embedded in other contracts, and for hedging activities.
This statement did not have a significant impact on the Company's financial
position or results of operations.

In June 2001, the FASB issued Statements of Financial Accounting Standards No.
141, "Business Combinations", effective for all combinations initiated after
June 30, 2001, and No. 142, "Goodwill and Other Intangible Assets" ("SFAS 142"),
effective for fiscal years beginning after December 15, 2001. Under the new
rules, goodwill and intangible assets deemed to have indefinite lives will no
longer be amortized but will be subject to annual impairment tests in accordance
with the Statements. Other intangible assets will continue to be amortized over
their useful lives.

The Company will apply the new rules on accounting for goodwill and other
intangible assets beginning in the first quarter of 2002. Application of the
non-amortization provisions of SFAS 142 is expected to result in a decrease in
amortization expense of approximately $650,000 ($0.11 per share) per year.
During 2002, the Company will perform the first of the required impairment tests
of goodwill and other intangible assets as required by SFAS 142.

<PAGE>


In August 2001, the FASB issued Statement of Financial Accounting Standards No.
144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS
144"). SFAS 144 establishes a single accounting model, based upon the framework
established in SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets
and Long-Lived Assets to be Disposed of", for long-lived assets to be disposed
of by sale and to address significant implementation issues. The Company is
required to adopt SFAS 144 in the first quarter of 2002. The Company is in the
process of assessing the impact of the adoption of this statement on its
financial position, results of operations, and cash flows.


FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements within the meaning of Section
21E of the Securities Exchange Act of 1934, as amended. As such, final results
could differ from estimates or expectations due to risks and uncertainties
including, but not limited to: incomplete or preliminary information; changes in
government regulations and policies; continued acceptance of the Company's
products and services in the marketplace; competitive factors; new products;
technological changes; the Company's dependence on third party suppliers;
intellectual property rights; and other risks. For any of these factors, the
Company claims the protection of the safe harbor for forward-looking statements
contained in the Private Securities Litigation Reform Act of 1995, as amended.


ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

INTEREST RATE RISK

The Company is not exposed to gains or losses related to the impact of interest
rate changes, foreign currency fluctuations, or changes in the market values of
its investments. The Company generally invests in fixed income securities -
typically commercial paper, certificates of deposit and money market accounts
issued only by major corporations and financial institutions of recognized
strength and security - and holds all investments to maturity.

MARKET RISK

The Company's accounts receivable are subject, in the normal course of business,
to collection risks. The Company regularly assesses these risks and has
established policies and business practices to mitigate the adverse effects of
collection risks. As a result, the Company does not anticipate any material
losses in this area in excess of the recorded allowance for doubtful accounts.

FOREIGN CURRENCY RISKS

The Company has no material foreign operations.










<PAGE>


PART II - OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

ATLAS BUSINESS SERVICE CORP. ("ATLAS") VS. INFOCROSSING, INC.
--------------------------------------------------------------

As previously reported, the Company commenced an action against Atlas, a former
customer, in the Supreme Court of New York, New York County (Index No.
00/602461) to collect approximately $45,000 in outstanding data processing
invoices. Atlas filed an answer in which it alleged that the services were
deficient. Discovery is proceeding in this action.

Also as previously reported, the Company was served with a complaint in
connection with a lawsuit commenced by Atlas in Federal District Court for the
Southern District of New York (00 CIV. 6521) alleging a breach of contract by
the Company in providing data processing services resulting in the loss to Atlas
of approximately $700,000. Atlas has demanded damages of not less than $5
million. The Company filed an answer denying all of the material allegations and
asserting several affirmative defenses.

A tentative settlement has been rendered pursuant to which Atlas will receive
$40,000 and a release from Infocrossing in satisfaction of all claims. The
monetary portion of the settlement will be satisfied by insurance.

































<PAGE>


ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

(a)     Exhibits:

        3.1A  Restated Certificate of Incorporation, incorporated by
              reference to Exhibit 3.1 to the Company's Form 10-KSB for
              the period ended October 31, 1999.

        3.1B  Certificate of Amendment to the Company's Certificate of
              Incorporation, filed May 8, 2000, to increase the authorized
              shares and to remove Article 11, incorporated by reference to the
              Company's report on Form 10-Q for the period ended April 30, 2000.

        3.1C  Certificate of Amendment to the Company's Certificate of
              Incorporation, filed as of June 5, 2000, to change the name of the
              Company to Infocrossing, Inc., incorporated by reference to the
              Company's report on Form 10-Q for the period ended April 30, 2000.

        3.2   Amended and Restated By-Laws, incorporated by reference to Exhibit
              3.2 to the Company's Form 10-KSB for the period ended October 31,
              1999.

        4.1   Certificate of Designation of the Powers, Preferences and other
              Special Rights of Series A Cumulative Convertible Participating
              Preferred Stock, incorporated by reference to the Company's Proxy
              Statement for the Annual Meeting held on May 8, 2000.

        4.2   Registration Rights Agreement by and among Computer Outsourcing
              Services, Inc.; DB Capital Investors, LP; the Initial
              Sandler Holders as defined in the agreement; and Zach
              Lonstein, incorporated by reference to the Company's Proxy
              Statement for the Annual Meeting held on May 8, 2000.

        4.3   Warrant Agreement between Computer Outsourcing Services, Inc. and
              the Warrantholders Party thereto, incorporated by reference
              to the Company's Proxy Statement for the Annual Meeting
              held on May 8, 2000.

        4.4   Stockholders Agreement by and among Computer Outsourcing Services,
              Inc.; DB Capital Investors, LP; the Initial Sandler Holders; and
              the Management and Non-Management Stockholders listed therein,
              incorporated by reference to the Company's Proxy Statement for the
              Annual Meeting held on May 8, 2000.

       10.1   Master Loan and Security Agreement No. 85043 by and among
              Infocrossing, Inc. and ETG, Inc. as co-Debtors and Wells Fargo
              Equipment Finance, Inc., dated as of July 19, 2001, with
              accompanying Riders and Schedules.


(b)     Reports on Form 8-K:

                     None.




<PAGE>




SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


                                    INFOCROSSING, INC.





                                           /s/
November 14, 2001                   ------------------------------------
                                    Zach Lonstein
                                    Chairman & Chief Executive Officer



                                           /s/
November 14, 2001                   ------------------------------------
                                    William B. Fischer
                                    Senior Vice President &
                                       Chief Financial Officer