-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, N/D1FtXcbcLG20ThgrUCIjKJOjH7lGKx7agCz6138/OO6grDQtWqwYF4uHHJseUA cNIGNGgJTEVpacU/lMPz4g== 0001047469-04-003476.txt : 20040206 0001047469-04-003476.hdr.sgml : 20040206 20040206144547 ACCESSION NUMBER: 0001047469-04-003476 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20031022 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040206 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INFOCROSSING INC CENTRAL INDEX KEY: 0000893816 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROCESSING & DATA PREPARATION [7374] IRS NUMBER: 133252333 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-20824 FILM NUMBER: 04573679 BUSINESS ADDRESS: STREET 1: 2 CHRISTIE HEIGHTS STREET CITY: LEONIA STATE: NJ ZIP: 07605 BUSINESS PHONE: 2018404700 MAIL ADDRESS: STREET 1: 2 CHRISTIE HEIGHTS STREET CITY: LEONIA STATE: NJ ZIP: 07605 FORMER COMPANY: FORMER CONFORMED NAME: COMPUTER OUTSOURCING SERVICES INC DATE OF NAME CHANGE: 19930328 8-K/A 1 a2128122z8-ka.htm 8-K/A
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549



FORM 8-K/A

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): October 22, 2003

Infocrossing, Inc.
(Exact Name of Registrant as Specified in its Charter)

Delaware
(State or Other Jurisdiction
of Incorporation)
  0-20824
(Commission
File Number)
  13-3252333
(IRS Employer
Identification No.)

2 Christie Heights Street, Leonia, New Jersey 07605
(Address of Principal Executive Offices, including Zip Code)

Registrant's telephone number, including area code: (201) 840-4700

Not Applicable
(Former Name or Former Address, if Changed Since Last Report)

        This amendment is to modify Exhibit 99.1 to update and expand the presentation of pro forma information.





Item 5. Other Events and Required FD Disclosure.

        Infocrossing, Inc. (the "Company") issued two press releases, each dated October 22, 2003, filed herewith under Item 7, one regarding the completion of a previously announced private placement of common stock and warrants to purchase common stock on October 21, 2003, and a second regarding the completion of the previously announced recapitalization of its series A preferred stock and series A warrants on October 21, 2003.

        In connection with the recapitalization, four members of the Company's board of directors, who had been nominated by the holders of the series A preferred stock and elected in accordance with the Company's certificate of incorporation and existing stockholders agreement, resigned on October 21, 2003. The existing stockholders agreement among the Company, the holders of series A preferred stock and other parties was terminated on October 21, 2003.


Item 7. Financial Statements and Exhibits.

    (a)
    Financial statements of business acquired: None

    (b)
    Pro forma financial information: Included as Exhibit 99.1.

    (c)
    Exhibits:

4.1 * Securities Purchase Agreement, dated as of October 16, 2003, by and among the Company and certain purchasers of common stock and warrants.

4.2

*

Registration Rights Agreement, dated as of October 16, 2003, by and among the Company and certain purchasers of common stock and warrants.

4.3

*

Exchange Agreement, dated as of October 16, 2003, by and among the Company and holders of series A preferred stock and series A warrants.

4.4

*

Second Amended and Restated Registration Rights Agreement, dated as of October 21, 2003, by and among the Company and certain stockholders of the Company.

10.1

*

Term Loan Agreement, dated as of October 21, 2003, by and among the Company, the Lenders named therein, and Infocrossing Agent, Inc.

10.2

*

Guarantee and Security Agreement, dated as of October 21, 2003, by and among the Company, the Company's subsidiaries, and Infocrossing Agent, Inc.

99.1

 

Unaudited Pro Forma condensed consolidated combined financial statements for the fiscal year ended December 30, 2002, and the six month period ended June 30, 2003.

99.2

 

Press release, dated October 22, 2003, regarding the completion of a previously announced private placement of common stock and warrants.

99.3

 

Press release, dated October 22, 2003, regarding the completion of the previously announced recapitalization of its series A preferred stock and series A warrants.

      *
      Previously filed as exhibits to the Company's Current Report on Form 8-K filed October 22, 2003.

2



SIGNATURES

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

Date: February 6, 2004 INFOCROSSING, INC.
(Registrant)

 

/s/  
WILLIAM J. MCHALE      
William J. McHale
Senior Vice President of Finance

3




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SIGNATURES
EX-99.1 3 a2128122zex-99_1.htm EX-99.1
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Exhibit 99.1


UNAUDITED PRO FORMA CONDENSED CONSOLIDATED COMBINED
FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED DECEMBER 30, 2002,
AND THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 2003

        On October 21, 2003, the Company closed two related transactions previously announced don October 17, 2003: (1) a private placement of common stock and warrants to purchase common stock (the "Offering") and (2) an exchange of its 8% Series A Cumulative Convertible Participating Preferred Stock and related series A warrants for cash and 9% five-year term loans (the "Recapitalization"). Also on October 21, 2003, the Company repaid its outstanding Senior Subordinated Debt (altogether, the "Transactions").

        The following unaudited consolidated Pro Forma financial information illustrates the effect of the Transactions described below, as if such Transactions occurred on January 1, 2002 in the unaudited Pro Forma Statements of Operations and on the last day of the period for the unaudited Pro Forma Balance Sheet:

    issuance of 9,739,111 shares of common stock and warrants to purchase 3,408,689 shares of common stock in the Offering at an assumed aggregate offering price of $7.86 per unit;

    the exchange of all outstanding 8% Series A Cumulative Convertible Participating Preferred Stock (the "Series A Preferred Stock") and outstanding warrants to purchase 2,806,539 shares of common stock held by holders of such Series A Preferred Stock for the following consideration:

    1.
    $55 million from cash raised in the offering, and

    2.
    $25 million in term loans with, if certain conditions are satisfied, warrants to purchase up to 250,000 shares of common stock;

    the repayment of $12.2 million of Senior Subordinated Debt and accrued interest and the related cancellation of outstanding warrants to purchase 937,500 shares of common stock; and

    payment of an estimated $7.5 million of fees, commissions, and expenses in connection with the Transactions.

        The Pro Forma financial information is based on the Company's historical statements as of and for the nine-month period ended September 30, 2003 and the year ended December 31, 2002, the details of the Transactions, and assumptions the Company believes to be reasonable. Changes in such assumptions could materially impact this presentation. Management has prepared the Pro Forma financial information without audit.

        The Pro Forma financial information does not purport to be indicative of results or financial condition that would have been achieved had the Transactions occurred on the dates indicated, nor does it purport to indicate the results or financial condition that might be obtained in the future. The Pro Forma financial information should be read in conjunction with the Company's Annual Report on Form 10-K/A for the year ended December 31, 2002 and the Quarterly Report on Form 10-Q/A for the nine months ended September 30, 2003.


Pro Forma Statements of Operations
For the Nine Months Ended September 30, 2003
(in thousands, except per share data)
(unaudited)

 
  Historical
  Pro Forma
Adjustments

  Pro Forma
 
Income Statement Data:                    
Revenues   $ 40,825   $   $ 40,825  
Cost and expenses                    
  Costs of revenues, excluding depreciation shown below   $ 25,825   $   $ 25,825  
  Selling and promotional costs   $ 2,551   $   $ 2,551  
  General and administrative expenses   $ 5,292   $   $ 5,292  
  Depreciation and amortization   $ 4,450   $   $ 4,450  
   
 
 
 
Income from operations   $ 2,707   $   $ 2,707  
Interest income   $ (52 ) $   $ (52 )
Interest expense   $ 1,871   $ 1,806   (f) $ 2,228  
        "         $ (1,524 )(f)      
        "         $ 75   (i)      
   
 
 
 
Income (loss) before income taxes   $ 888   $ (357 ) $ 531  
Income tax (benefit) expense   $ 62   $ (143 )(g) $ (81 )
   
 
 
 
Net income (loss)   $ 826   $ (214 ) $ 612  
   
 
 
 
Accretion and dividends on redeemable preferred stock   $ (7,506 ) $ 7,506   (h) $ (6,877 )
        "   $     () $ (6,877 )(e)      
   
 
 
 
Net loss to common stockholders   $ (6,680 ) $ 415   $ (6,265 )
   
 
 
 
Basic and diluted loss per share   $ (1.24 )       $ (0.41 )
   
       
 
Weighted average common shares outstanding     5,383         (a)   15,122  
   
       
 

See notes to unaudited Pro Forma financial information.

2


Pro Forma Statements of Operations
For the Year Ended December 31, 2002
(in thousands, except per share data)
(unaudited)

 
  Historical
  Pro Forma
Adjustments

  Pro Forma
 
Income Statement Data:                    
Revenues   $ 50,774   $   $ 50,774  
Cost and expenses                    
  Costs of revenue, excluding depreciation shown below   $ 31,472   $   $ 31,472  
  Selling and promotional costs   $ 3,140   $   $ 3,140  
  General and administrative expenses   $ 7,619   $   $ 7,619  
  Leased facilities and office closings   $ (290 ) $   $ (290 )
  Amortization of restricted stock award   $   $   $  
  Amortization of goodwill   $   $   $  
  Other depreciation and amortization   $ 5,939   $   $ 5,939  
   
 
 
 
Income from operations   $ 2,894   $   $ 2,894  
Interest income   $ (172 ) $   $ (172 )
Interest expense   $ 2,137   $ 2,431   (f) $ 2,956  
        "         $ (1,712 )(f)      
        "         $ 100   (i)      
   
 
 
 
Income (loss) before income taxes   $ 929   $ (819 ) $ 110  
Income tax benefit   $ (208 ) $ (328 )(g) $ (536 )
   
 
 
 
Net income (loss)   $ 1,137   $ (491 ) $ 646  
Accretion and dividends on redeemable preferred stock   $ (9,293 ) $ (6,812 )(h) $ (16,105 )
   
 
 
 
Net loss to common stockholders   $ (8,156 ) $ (7,303 ) $ (15,459 )
   
 
 
 
Basic and diluted loss per share   $ (1.52 )       $ (1.02 )
   
       
 
Weighted average common shares outstanding     5,353         (a)   15,092  
   
       
 

See notes to unaudited Pro Forma financial information.

3


Pro Forma Balance Sheet Data
As of September 30, 2003
(in thousands) (unaudited)

 
  Historical
  Pro Forma
Adjustments

  Pro Forma
 
Assets                    
Current Assets                    
  Cash and cash equivalents   $ 7,416   $ 69,040   (a) $ 9,229  
        "         $ (12,227 )(c)      
        "         $ (55,000 )(d)      
  Other current assets   $ 6,752   $ (89 )(c) $ 6,663  
Other assets   $ 50,681   $ 500   (i) $ 51,181  
   
 
 
 
    Total assets   $ 64,849   $ 2,224   $ 67,073  
   
 
 
 
Liabilities and Stockholder's Deficit                    
Current liabilities   $ 8,843   $ 147(a ) $ 8,673  
        "         $ (317 )(c)      
Long term liabilities                    
  Debentures due in 2005, net of unaccreted discount   $ 11,106   $ (11,106 )(c) $  
  New debt issued in recapitalization   $   $ 25,000   (d) $ 24,031  
        "         $ (969 )(b)      
  Other long term liabilities   $ 3,038   $   $ 3,038  
   
 
 
 
    Total liabilities   $ 22,987   $ 12,755   $ 35,742  
   
 
 
 
  Redeemable series A preferred stock   $ 60,695   $ (60,695 )(d) $  
   
 
 
 
Stockholder's equity (deficit)                    
  Common stock, par value $0.01   $ 60   $ 97   (a) $ 157  
  Additional paid in capital   $ 61,187   $ 69,297   (a) $ 110,713  
        "         $ 969   (b)      
        "         $ (806 )(c)      
        "         $ (19,934 )(d)      
  Accumulated deficit   $ (77,229 ) $ (89 )(c) $ (76,688 )
        "         $ 630   (e)      
  Treasury stock   $ (2,851 ) $   $ (2,851 )
   
 
 
 
  Total stockholders' equity (deficit)   $ (18,833 ) $ 50,164   $ 31,331  
   
 
 
 
    Total liabilities and stockholder's deficit   $ 64,849   $ 2,224   $ 67,073  
   
 
 
 

See notes to unaudited Pro Forma financial information.

4


    Notes to unaudited Pro Forma financial information:

a)
The Offering raised $69,040,000 after the payment of fees, including $500,000 which are treated as deferred financing costs (see Note i), and there will be 9,739,111 shares of common stock, par value $0.01, issued in the Offering. There are approximately $147,000 in fees that will be paid subsequent to the closing of the Offering.

b)
For the purposes of the pro forma information, we have assumed that 250,000 warrants will be issued in connection with the $25 million term loan, and that the original book value of the term loan will be reduced by the fair value of these warrants, estimated to be $969,000. This estimate is calculated using the Black-Scholes method and assumes a five year life, a $7.86 exercise price, a risk-free interest rate of 3.13%, and volatility of 54.23%. The difference between the face value of the term loan and the original book value is assumed to be amortized over the term of the loan, using the interest method, by means of a charge to interest expense. These warrants will only be issued if certain conditions occur in the first year after the closing of the Transactions, and the actual value if the warrants are issued will vary from that calculated for this pro forma presentation based on the actual number of warrants issued, the agreed-upon strike price, and the Company's volatility at the time. The maximum number of warrants that may be issued is 250,000, and we have used the assumption that all of the warrants would be issued in order to present the most conservative results. However, fewer warrants may be issued, or none may be issued. If the warrants are not issued, the term loan value will be recorded at $25 million, increasing long term and total liabilities, and decreasing paid in capital and stockholders' equity by $969,000. Also, if the warrants are not issued, there will be no amortization charge to future earnings, pro forma interest expense would decrease for the nine months ended September 30, 2003 and the year ended December 31, 2002 by $143,000 and $191,000, respectively, and pro forma net income (after adjusting for taxes) for the nine months ended September 30, 2003 and the year ended December 31, 2002 would increase by $85,800 and $114,600, respectively.

c)
The Transactions include the repayment of Senior Subordinated Debt, amounting to $12,227,000 at September 30, 2003 including $317,000 of accrued interest thereon, and expensing the remaining balance of $89,000 of certain costs we had incurred in connection with the issuance of this debt. We have also cancelled 937,500 warrants originally granted in connection with the issuance of the Senior Subordinated Debt valued at $806,000. The value of the 2,000,000 warrants originally issued in connection with the Senior Subordinated Debt was determined to be $1,720,000, or $0.86 per warrant. This value was determined by utilizing the Black-Scholes model, adjusted for lack of marketability and the probability of when the Senior Subordinated Debt would be repaid. The Black-Scholes model assumed a volatility of 70%, risk-free rate of 4.37% and a dividend yield of zero. The value of $0.86 per warrant was used to determine the charge to paid in capital for the warrants cancelled. The original Senior Subordinated Debt agreements provided that: for each full month between the date the Senior Subordinated Debt is prepaid in full and February 1, 2005, the Company was permitted to cancel 62,500 of the 2,000,000 warrants originally granted, up to a maximum of 1,500,000. For the unaudited Pro Forma Statement of Operations for the year ended December 31, 2002, we have assumed that the Senior Subordinated Debt and the related warrants were never issued.

d)
In the Recapitalization, the Company is exchanging $55 million of cash and the $25 million term loan noted above for all of the currently outstanding Series A Preferred Stock and all of the warrants to purchase 2.81 million common shares @ $0.009006 per share originally issued in connection with the Series A Preferred Stock. These warrants were valued at $19.9 million as described in footnote e).

e)
The Series A Preferred Stock was recorded in May 2000 at a discount to its face value of $60 million, and the difference has been recorded through a charge to accretion expense in

5


    determining Net Loss to Common Stockholders. The original $60 million investment was allocated between the Series A Preferred Stock and the warrants using relative fair values, and the original book value of the Series A Preferred Stock was $30.25 million. Accretion has been calculated using the interest method over the period from the date of the sale of the Series A Preferred Stock to June 2, 2007, the earliest date at which the Series A Preferred Stock would have become redeemable. In addition, 8% quarterly dividends, and 8% interest thereon, have been accrued through September 30, 2003. The fair value of the Series A Preferred Stock and dividends payable thereon at September 30, 2003 has been estimated at approximately $60 million, and the difference between the current accreted book value and the fair value ($630,000 on September 30, 2003) has been recorded as an adjustment to accretion expense in the income statement. Because the Transactions are assumed to occur at the beginning of the period presented in the Pro Forma Operating Statements (January 1, 2002), and the Series A Preferred Stock would have had a lower book value on that date, the adjustment to accretion expense is greater than that recorded at September 30, 2003. The actual accretion adjustment of approximately $630,000 will be recorded in our fourth quarter. We determined the fair values of the Series A Preferred Stock and the warrants in the following manner. We calculated the Company's fair value (our "Enterprise Value") using a discounted future cash flow model (ignoring the effects of the offering and the recapitalization) at approximately $128 million. Using the Black-Scholes method and assuming a seven year life, a risk-free interest rate of 3.13%, and volatility of 54.23%, we calculated the fair value of the warrants to be approximately $21 million. The market value of our common stock outstanding was approximately $42 million. The residual Enterprise Value of $65 million was attributed to the Series A Preferred Stock. The fair values of the warrants and the Series A Preferred Stock were then proportionally allocated to the $80 million consideration described in footnote d), resulting in final fair values for the warrants and the Series A Stock of $19.9 million and $60.1 million, respectively.

f)
The 9% interest and amortization of loan discount connected with the new term loan has been expensed in the unaudited Pro Forma Statements of Operations, and the 12% interest and other expenses connected with the Senior Subordinated Debt have been eliminated.

g)
A rate of 40% has been assumed for the tax effect of the above transactions in the Pro Forma Statements of Operations.

h)
Because the Transactions are assumed to occur on January 1, 2002 in the Pro Forma Operating Statements, the dividends and accretion expense originally recorded in the historical income statements must be reversed.

i)
Professional fees of $500,000 are treated as deferred financing costs and amortized as interest expense over the five-year term of the $25 million term loan.

6




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UNAUDITED PRO FORMA CONDENSED CONSOLIDATED COMBINED FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED DECEMBER 30, 2002, AND THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 2003
EX-99.2 4 a2128122zex-99_2.htm EX-99.2
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Exhibit 99.2


INFOCROSSING COMPLETES PREVIOUSLY ANNOUNCED $76.5 MILLION PRIVATE PLACEMENT OF COMMON STOCK AND WARRANTS

        LEONIA, NJ, OCTOBER 22, 2003—Infocrossing, Inc. (Nasdaq: IFOX), a leading provider of mainframe, AS/400 and open system outsourcing solutions, business process outsourcing and business continuity services, announced today that it completed a previously announced $76.5 million private placement of 9,739,111 shares of its common stock and warrants to purchase 3,408,689 shares of its common stock.

        The net proceeds of the private placement, which was first announced on October 17, 2003, were principally used to fund a recapitalization of the Company in a transaction which was completed yesterday and to pay related fees and expenses. The remainder is being used for working capital purposes. For a description of the recapitalization transactions, please refer to the separate press release, also issued today.

        Of the net proceeds from the private placement, $55.0 million was paid to holders of the Company's series A preferred stock and series A warrants as partial consideration for the cancellation of all of those outstanding securities in connection with the recapitalization. Approximately $12.2 million of the net proceeds was used to repay all $11.9 million in aggregate principal amount outstanding of the Company's 12% senior subordinated debentures due 2005, plus accrued interest through the date of repayment.

        The warrants issued yesterday in the private placement have an exercise price of $7.86 per share of common stock and expire in October 2008.

        The private placement was made only to accredited investors in a transaction exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"). The shares of common stock and warrants being issued, and the shares of common stock issuable upon exercise of the warrants, have not been registered under the Securities Act, or any state securities laws, and unless so registered, may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws.

        This press release does not constitute an offer to sell, or the solicitation of an offer to buy, any securities, nor shall there be any sale of the securities in any jurisdiction in which such offering would be unlawful.

About Infocrossing (www.infocrossing.com)

        Infocrossing, Inc. (Nasdaq: IFOX) is a premier provider of a full range of Information Technology outsourcing services, including mainframe and open system outsourcing, remote systems and network management, business process outsourcing, and Information Technology infrastructure consulting. With more than 18 years of experience managing large, mission-critical Information Technology systems, Infocrossing assures the optimal performance, security, reliability and scalability of customers' mainframes, distributed servers and networks, irrespective of where the systems components are located. Infocrossing maintains strategic alliances with leading technology providers, including IBM, Computer Associates, EMC, Sun Microsystems, Intel, and Cisco Systems.

        This release 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; technological changes; the Company's dependence upon 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.




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INFOCROSSING COMPLETES PREVIOUSLY ANNOUNCED $76.5 MILLION PRIVATE PLACEMENT OF COMMON STOCK AND WARRANTS
EX-99.3 5 a2128122zex-99_3.htm EX-99.3
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Exhibit 99.3


INFOCROSSING COMPLETES PREVIOUSLY ANNOUNCED RECAPITALIZATION OF SERIES A PREFERRED STOCK AND SERIES A WARRANTS

Company Completes Exchange of Series A Preferred Stock and Series A Warrants for Loans and Cash and Repays Senior Subordinated Debentures

        LEONIA, NJ, OCTOBER 22, 2003—Infocrossing, Inc. (Nasdaq: IFOX), a leading provider of mainframe, AS/400 and open system outsourcing solutions, business process outsourcing and business continuity services, announced today that it completed the previously announced recapitalization of all outstanding shares of its redeemable 8% series A cumulative convertible participating preferred stock due 2008 and series A warrants exercisable for shares of the Company's common stock.

        Holders of the series A preferred stock and series A warrants exchanged with the Company for cancellation all of their outstanding securities for $25.0 million in aggregate principal amount of new senior secured term loans and $55.0 million in cash. 157,114.7 shares of series A preferred stock convertible into 2,283,455 shares of common stock (including conversion in respect of accrued dividends) and series A warrants exercisable for 2,806,539 shares of common stock were exchanged for cancellation.

        The new senior secured loans bear interest at 9% per year, payable quarterly, and mature in October 2008. The loans are secured by substantially all of the assets of the Company and its direct and indirect subsidiaries, including the capital stock of the Company's direct and indirect subsidiaries.

        In connection with the recapitalization, which was first announced on October 17, 2003, the Company repaid all $11.9 million in aggregate principal amount outstanding of its 12% senior subordinated debentures due 2005 for a total price of approximately $12.2 million, including accrued interest through the date of repayment. In connection with this repayment, the Company cancelled 937,500 of the 2,000,000 warrants to purchase common stock originally issued to the debentureholders, with the balance of the warrants remaining outstanding.

        The cash used to fund payments in the recapitalization, to repay the senior subordinated debentures and to pay related fees and expenses was obtained from a $76.5 million private placement of the Company's common stock and warrants exercisable for shares of the Company's common stock, which the Company completed yesterday. The Company issued in the private placement 9,739,111 shares of its common stock and five year warrants to purchase 3,408,689 shares of its common stock. The private placement was made only to accredited investors in a transaction exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"). The Company has agreed to file a registration statement under the Securities Act providing for the resale of the common stock, warrants and the shares issuable on exercise of the warrants. For a description of the private placement transaction, please refer to the separate press release, also issued today.

        In connection with the recapitalization, four members of the Company's board of directors, who had been nominated by the holders of the series A preferred stock and elected in accordance with the Company's certificate of incorporation and existing stockholders agreement, resigned yesterday. The existing stockholders agreement among the Company, the holders of series A preferred stock and other parties was terminated yesterday in connection with the recapitalization.

        Zach Lonstein, Chairman and Chief Executive Officer of the Company, said, "This transaction, combined with the private placement greatly improves our balance sheet by converting a shareholders' deficit of $16.7 million to positive shareholders' equity of $30.7 million on a pro forma basis as of June 30, 2003, an increase of $47.4 million. In addition, it simplifies our income statement by eliminating the charges associated with the old preferred stock. As a result, we expect to have positive earnings per share in 2004." Mr. Lonstein concluded: "In summary, the restructuring rationalizes our financial statements and allows clear visibility into our positive operating metrics and financial condition. We believe that we are now positioned for continued growth in revenue. Collectively, our



new and existing shareholders have the opportunity to participate in the future of a financially stronger company."

        This press release does not constitute an offer to sell, or the solicitation of an offer to buy, any securities, nor shall there be any sale of the securities in any jurisdiction in which such offering would be unlawful.

About Infocrossing (www.infocrossing.com)

        Infocrossing, Inc. (Nasdaq: IFOX) is a premier provider of a full range of Information Technology outsourcing services, including mainframe and open system outsourcing, remote systems and network management, business process outsourcing, and Information Technology infrastructure consulting. With more than 18 years of experience managing large, mission-critical Information Technology systems, Infocrossing assures the optimal performance, security, reliability and scalability of customers' mainframes, distributed servers and networks, irrespective of where the systems components are located. Infocrossing maintains strategic alliances with leading technology providers, including IBM, Computer Associates, EMC, Sun Microsystems, Intel, and Cisco Systems.

        This release 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; technological changes; the Company's dependence upon 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.

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INFOCROSSING COMPLETES PREVIOUSLY ANNOUNCED RECAPITALIZATION OF SERIES A PREFERRED STOCK AND SERIES A WARRANTS
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