October 2, 2006
Fax No. 202.772.9211
VIA FACSIMILE AND
EDGAR TRANSMISSION
Securities and Exchange Commission
Division of Corporation Finance
Mail Stop 4561
100 F Street, N.E.
Washington, DC 20549
Attention: Brad Skinner
Accounting Branch Chief
Re: Infocrossing, Inc.
Form 10-K for the Fiscal Year Ended December 31, 2005
Filed March 15, 2006
File No. 000-20824
Ladies and Gentlemen:
Infocrossing, Inc. (the "Company") filed its Form 10-K for the fiscal
year ended December 31, 2005 with the Securities and Exchange Commission (the
"Commission") on March 15, 2006. The undersigned received a letter from the
Commission's Staff (the "Staff") dated July 17, 2006 containing the Staff's
comments on the Form 10-K (the "Comment Letter"). The Company submitted a
response to the Comment Letter on August 14, 2006 (the "Company Response"). The
Company received additional comments from the Staff in a letter dated September
18, 2006 (the "Additional Comments Letter"). A copy of the Additional Comments
Letter is attached hereto as Exhibit A. The Company has the following responses
to the Additional Comments Letter. These responses are numbered to correspond to
the numbered paragraphs in the Additional Comments Letter.
FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2005
NOTES TO CONSOLIDATED FINANCIAL STATEMENT
NOTE 12. QUARTERLY FINANCIAL INFORMATION (UNAUDITED), PAGE F-31
1. WE HAVE READ YOUR RESPONSE TO PRIOR COMMENT NUMBER 3 AND IT REMAINS
UNCLEAR TO US WHY YOU BELIEVE YOU HAVE COMPLIED WITH ITEM 302(A)(1) OF
REGULATION S-K. IN THIS REGARD, YOU MUST PRESENT GROSS MARGIN AS
REQUIRED BY THIS ITEM OR PRESENT COST OF SALES AS ALLOWED BY QUESTION 3
OF SAB TOPIC 6.G. PLEASE REVISE YOUR PRESENTATION IN FUTURE FILINGS.
The Company will present the same expense items in the Quarterly Financial
Information (Unaudited) footnote in future filings as presently appear in the
financial statements included in Form 10-Q, as allowed by Question 3 of SAB
Topic 6.G. This will include costs of revenues, excluding depreciation and
amortization; selling expenses; general and administrative expenses;
depreciation and amortization; and interest expense. The Company presents costs
of revenues in its income statement excluding depreciation in accordance with
SAB Topic 11.B. "Depreciation and Depletion Excluded From Cost of Sales. The
exclusion of depreciation from costs of revenues is also consistent with the
Company's internal financial statements used for management reporting and
analysis. The exclusion of depreciation from costs of revenues is not uncommon
for service providers.
2. AS PREVIOUSLY REQUESTED, IN CONNECTION WITH RESPONDING TO OUR COMMENTS,
PLEASE PROVIDE IN WRITING, A STATEMENT FROM THE COMPANY ACKNOWLEDGING
THAT:
o THE COMPANY IS RESPONSIBLE FOR THE ADEQUACY AND ACCURACY OF THE
DISCLOSURE IN THE FILING;
o STAFF COMMENTS OR CHANGES TO DISCLOSURE IN RESPONSE TO STAFF COMMENTS
DO NOT FORECLOSE THE COMMISSION FROM TAKING ANY ACTION WITH RESPECT TO
THE FILING; AND
o THE COMPANY MAY NOT ASSERT STAFF COMMENTS AS A DEFENSE IN ANY
PROCEEDING INITIATED BY THE COMMISSION OR ANY PERSON UNDER THE FEDERAL
SECURITIES LAWS OF THE UNITED STATES.
The Company acknowledges that it is responsible for the adequacy and accuracy of
any disclosure in a filing with the Commission. The Company further acknowledges
that Staff comments or changes to disclosures in response to Staff comments do
not foreclose the Commission from taking any action with respect to a filing,
and the Company may not assert Staff Comments as a defense in any proceeding
initiated by the Commission or any person under the federal securities laws of
the United States.
Please call the undersigned at (201) 840-4732 or Nicholas J. Letizia, the
Company's general counsel, at (201) 840-4717, if you have any questions with
respect to the foregoing.
Very truly yours,
/s/ WILLIAM J. McHALE
William J. McHale
Chief Financial Officer
cc: Nicholas J. Letizia
EXHIBIT A
Letter from the Securities and Exchange Commission dated September 18, 2006
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SEAL
DIVISION OF
CORPORATION FINANCE
Room 4561
September 18, 2006
Mr. William McHale
Chief Financial Officer
Infocrossing, Inc.
2 Christie Heights Street
Leonia, NJ 07605
Re: Infocrossing, Inc.
Form 10-K for the Fiscal Year Ended December 31, 2005
Filed March 15, 2006
File No. 000-20824
Dear Mr. McHale:
We have reviewed your response letter dated August 14, 2006 and have
the following additional comments. We may ask you to provide us with
supplemental information so we may better understand your disclosure. Please be
as detailed as necessary in your explanation. After reviewing this information,
we may raise additional comments.
Please understand that the purpose of our review process is to assist
you in your compliance with the applicable disclosure requirements and to
enhance the overall disclosure in your filing. We look forward to working with
you in these respects. We welcome any questions you may have about our comments
or any other aspect of our review. Feel free to call us at the telephone numbers
listed at the end of this letter.
Form 10-K for the Fiscal Year Ended December 31, 2005
Notes to Consolidated Financial Statement
Note 12. Quarterly Financial Information (Unaudited), page F-31
1. We have read your response to prior comment number 3 and it remains
unclear to us why you believe you have complied with Item 302(a)(1) of
Regulation S-K. In this regard, you must present gross margin as
required by this item or
Mr. William McHale
Infocrossing, Inc.
September 18, 2006
Page 2
present cost of sales as allowed by Question 3 of SAB Topic 6.G. Please
revise your presentation in future filings.
2. As previously requested, in connection with responding to our
comments, please provide in writing, a statement from the company
acknowledging that:
o the company is responsible for the adequacy and accuracy of the
disclosure in the filing;
o staff comments or changes to disclosure in response to staff comments
do not foreclose the Commission from taking any action with respect to
the filing; and
o the company may not assert staff comments as a defense in any
proceeding initiated by the Commiss ion or any person under the
federal securities laws of the United States.
As appropriate, please amend your filing and respond to these comments
within 10 business days or tell us when you will provide us with a response.
Please submit all correspondence and supplemental materials on EDGAR as required
by Rule 101 of Regulation S-T. You may wish to provide us with marked copies of
any amendment to expedite our review. Please furnish a cover letter with any
amendment that keys your responses to our comments and provides any requested
information. Detailed cover letters greatly facilitate our review. Please
understand that we may have additional comments after reviewing any amendment
and your responses to our comments.
You may contact Christine Davis, Staff Accountant at (202) 551-3408 or
Mark Kronforst, Assistant Chief Account, at (202) 551-3451 or me at (202)
551-3489 if you have questions regarding these comments.
Sincerely,
/s/ Brad Skinner
Brad Skinner
Accounting Branch Chief