<Page>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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

                                    FORM 10-Q
                            ------------------------

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

                  For the quarterly period ended June 30, 2001
                                       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: 000-31411

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


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


              DELAWARE                                   31-1638932
     (State or other jurisdiction                     (I.R.S. Employer
   of incorporation or organization)               Identification Number)

            901 PARKER STREET
           BERKELEY, CALIFORNIA                             94710

       4750 HEMPSTEAD STATION DRIVE
                DAYTON, OHIO                                45429
   (Addresses of principal executive offices)            (Zip Codes)


       Registrant's telephone numbers, including area codes:(510) 665 6680
                                                            (937) 291 8282
                            ------------------------

   Securities registered pursuant to Section 12(b) of the Act: Not applicable

           Securities registered pursuant to Section 12(g) of the Act:
                           Common Stock, no par value

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

     Indicate by check mark whether the Registrant (1) has filed all reports
     required by Section 13 or 15(d) of the Securities Exchange Act of 1934
     during the preceding 12 months, and (2) has been subject to such filing
     requirements for the past 90 days (or for such shorter period that the
     Registrant was required to file such reports): Yes X  No
                                                    ---   ---


  Number of shares of Common Stock outstanding as of August 8, 2001: 14,614,519



<Page>


                                  ZENGINE, INC.

                  FORM 10-Q FOR THE PERIOD ENDED JUNE 30, 2001

                                TABLE OF CONTENTS

<Table>
<Caption>

                                                                                                  Page Numbers
                                                                                                  ------------
PART I - FINANCIAL INFORMATION
<S>                                                                                               <C>
Item 1.  Unaudited Condensed Consolidated Financial Statements:
     Condensed Consolidated Balance Sheets ...............................................            1
     Condensed Consolidated Statements of Operations .....................................            2
     Condensed Consolidated Statements of Cash Flows .....................................            3
     Notes to the Unaudited Condensed Consolidated Financial Statements ..................           4-5

Item 2.  Management's Discussion and Analysis of Financial Condition and Results of
Operations ...............................................................................           6-8

Item 3.  Quantitative and Qualitative Disclosure about Market Risk .......................            9

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings ...............................................................            10

Item 2.  Changes in Securities and Use of Proceeds .......................................            10

Item 3.  Defaults Upon Senior Securities .................................................            10

Item 4.  Submission of Matters to a Vote of Security Holders .............................            10

Item 5.  Other Information ...............................................................            10

Item 6.  Exhibits and Reports on Form 8-K ................................................            10

Signatures ...............................................................................            11
</Table>

     As used in this report on Form 10-Q, unless the context otherwise requires,
the terms "we," "us," or "the Company" and "Zengine" refer to Zengine, Inc., a
Delaware corporation and its subsidiary, Zengine K.K., a Japanese corporation.



<Page>



                                     PART I.

          ITEM 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                  ZENGINE, INC.

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)

<Table>
<Caption>

                                                                        JUNE 30,           SEPTEMBER 30,
                                                                          2001                 2000
                                                                          ----                 ----
<S>                                                                  <C>                   <C>
ASSETS
Current assets:
     Cash and cash equivalents  . . . . . . . . . . . . . . . .      $  29,029,408         $ 50,482,659
     Accounts receivable, net.. . . . . . . . . . . . . . . . .          4,539,216            2,934,797
     Amounts receivable from MCSi, net . . . . . . . . . . . . .         5,726,258            2,447,840
     Other current assets.  . . . . . . . . . . . . . . . . . .            947,274              738,089
                                                                     -------------         ------------
      Total current assets  . . . . . . . . . . . . . . . . . .         40,242,156           56,603,385
                                                                     -------------         ------------
Property and equipment, net. . . . . . . . . . . . . . . . . . .           530,212              146,233
Capitalized software costs, net . . . . . . . . . . . . . . . .          1,698,802              733,002
Other assets. . . . . . . . . . . . . . . . . . . . . . . . . .            402,283               38,736
                                                                     -------------         ------------
      Total assets  .. .  . . . . . . . . . . . . . . . . . . .      $  42,873,453         $ 57,521,356
                                                                     =============         ============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accrued liabilities and cash overdraft. . . . . . . . . . . .     $     729,380         $  1,934,031
   Deferred revenue . . . . . . . . . . . . . . . . . . . . . .             52,506              379,174
                                                                     -------------         ------------
          Total current liabilities . . . . . . . . . . . . . .            781,886            2,313,205
                                                                     -------------         ------------

Stockholders' equity:
   Common stock, no par value; 100,000,000 shares
     authorized, 17,373,094 and 17,285,712 shares issued and
     outstanding at June 30, 2001 and September 30, 2000,
     respectively. . . . . . . . . . . . . . . . . . . . . . .                  --                   --
   Additional paid-in capital. . . . . . . . . . . . . . . . . .        57,582,313           58,884,931
   Unearned compensation  . . . . . . . . . . . . . . . . . . .        (1,407,230)           (2,248,372)
   Accumulated deficit. . . . . . . . . . . . . . . . . . . . .        (1,493,794)           (1,414,786)
   Foreign currency translation adjustment. .. . . . . . . . . .          (24,024)                   --
   Treasury stock, at cost, 2,699,995 and 1,000 shares at June
      30, 2001 and September 30, 2000, respectively .. . . . . .      (12,565,698)              (13,622)
                                                                     -------------         ------------

      Total stockholders' equity . . . .  . . . . . . . . . . .        42,091,567            55,208,151
                                                                     -------------         ------------
      Total liabilities and stockholders' equity  . . . . . . .      $ 42,873,453          $ 57,521,356
                                                                     ============          ============
</Table>

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


                                       1

<Page>


                                  ZENGINE, INC.

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<Table>
<Caption>

                                                                   THREE MONTHS ENDED                    NINE MONTHS ENDED
                                                                       JUNE 30,                              JUNE 30,
                                                                  2001            2000                 2001               2000
                                                                  ----            ----                 ----               ----
<S>                                                           <C>                <C>                <C>                <C>
Revenue
    Third party ........................................      $  3,273,636       $  1,295,077       $ 10,391,702       $  2,649,165
    Related party ......................................           991,434          1,098,293          3,405,573          2,455,121
                                                              ------------       ------------       ------------       ------------
                                                                 4,265,070          2,393,370         13,797,275          5,104,286
                                                              ------------       ------------       ------------       ------------

Cost of revenue
    Third party (excludes non-cash
        stock-based compensation of
        $48,439, $43,703, $146,317 and
        $89,060, respectively) .........................         2,261,309            203,791          4,583,017            435,543
    Related party ......................................           101,686             24,000            231,138             79,253
                                                              ------------       ------------       ------------       ------------
                                                                 2,362,995            227,791          4,814,155            514,796
                                                              ------------       ------------       ------------       ------------

Gross profit ...........................................         1,902,075          2,165,579          8,983,120          4,589,490
                                                              ------------       ------------       ------------       ------------

Selling, general and administrative expenses
    Third party ........................................         3,122,307          1,546,670          8,326,972          3,330,699
    Related party ......................................           506,081            794,251          2,277,238          1,229,251
    Non-cash stock-based
       compensation ....................................           143,761            116,583            436,147            229,756
    Non-cash sales arrangement relating
       to equity issuances .............................              --                 --              222,748               --
                                                              ------------       ------------       ------------       ------------
                                                                 3,772,149          2,457,504         11,263,105          4,789,706
                                                              ------------       ------------       ------------       ------------

Loss from operations ...................................        (1,870,074)          (291,925)        (2,279,985)          (200,216)
Interest income ........................................           645,038             42,291          2,200,977            123,755
                                                              ------------       ------------       ------------       ------------

Loss before income taxes ...............................        (1,225,036)          (249,634)           (79,008)           (76,461)
Provision for income taxes .............................              --                 --                 --                 --
                                                              ------------       ------------       ------------       ------------

Net loss ...............................................      $ (1,225,036)      $   (249,634)      $    (79,008)      $    (76,461)
                                                              ============       ============       ============       =============

 Earnings / (loss) per share of common
    stock -basic .......................................      $      (0.08)      $      (0.02)      $       0.00       $      (0.01)
                                                              ============       ============       ============       =============

 Earnings / (loss) per share of common
    stock - diluted ....................................      $      (0.08)      $      (0.02)      $       0.00       $      (0.01)
                                                              ============       ============       ============       =============

Weighted average number of common
    shares outstanding-basic ...........................        15,120,162         11,282,150         16,258,401         11,177,633
                                                              ============       ============       ============       =============

Weighted average number of common
    shares outstanding-diluted .........................        15,120,162         11,282,150         16,258,401         11,177,633
                                                              ============       ============       ============       =============
</Table>

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


                                      2

<Page>


                                  ZENGINE, INC.

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<Table>
<Caption>

                                                                           NINE MONTHS ENDED
                                                                                 JUNE 30,
                                                                           2001          2000
                                                                           ----          ----
<S>                                                                   <C>             <C>
Cash flows from operating activities:
    Net loss ......................................................   $    (79,008)   $    (76,461)
    Adjustments to reconcile net income to cash flows used in
      operating activities:
      Depreciation and amortization ...............................        488,592         144,220
      Non-cash stock compensation .................................        436,147         229,756
      Non-cash sales arrangement relating to warrant ..............        222,748            --
      Provision for doubtful accounts .............................        225,000            --
      Changes in assets and liabilities:
         Accounts receivable ......................................     (1,829,419)     (2,056,502)
         Other assets .............................................       (572,732)       (975,884)
         Accrued liabilities and cash overdraft ...................     (1,204,651)        549,879
         Deferred revenue .........................................       (326,668)        517,500
                                                                      ------------    ------------

         Cash used in operating activities ........................     (2,639,991)     (1,667,492)
                                                                      ------------    ------------

Cash flows from investing activities:
    Capital expenditures ..........................................       (493,031)       (104,723)
    Capitalization of software ....................................     (1,345,340)       (339,995)
    Issuance of demand note to MCSi ...............................     (8,500,000)     (3,871,049)
    Proceeds from repayment of MCSi demand note ...................      8,500,000            --
    Net settlement under demand note arrangements with MCSi .......     (5,016,759)      2,111,804
                                                                      ------------    ------------

         Cash used in investing activities ........................     (6,855,130)     (2,203,963)
                                                                      ------------    ------------

Cash flows from financing activities:
    Net proceeds from sale of common stock ........................           --         3,871,049
    Payment of stock subscription receivable from MCSi ............      1,738,341            --
    Proceeds from the exercise of stock options ...................         55,172            --
    Stock issuance cost ...........................................       (547,800)           --
    Purchase of equity interest ...................................       (627,743)           --
    Treasury stock purchases ......................................    (12,552,076)           --
                                                                      ------------    ------------

         Cash (used in) / provided by financing activities ........    (11,934,106)      3,871,049
                                                                      ------------    ------------

         Effects of exchange rates ................................        (24,024)           --
                                                                      ------------    ------------

         Net decrease in cash and cash equivalents ................    (21,453,251)           (406)
            Cash and cash equivalents - beginning of period .......   $ 50,482,659    $        406
                                                                      ============    ============
            Cash and cash equivalents - end of period .............   $ 29,029,408    $       --
                                                                      ============    ============
</Table>

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


                                       3

<Page>


                                  ZENGINE, INC.

       NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


1.   Basis of presentation

The accompanying unaudited condensed consolidated financial statements of
Zengine, Inc. include the accounts of Zengine, Inc. and its wholly owned
subsidiary Zengine K.K. ("Zengine" or the "Company"). These statements are
unaudited and, in the opinion of management, include all adjustments (which
include only normal recurring adjustments) necessary to present fairly the
Company's financial position as of June 30, 2001 and the results of its
operations and cash flows for the interim periods presented. The condensed
consolidated balance sheet data for September 30, 2000 is derived from the
Company's audited financial statements, which are included in the Company's
Annual Report on Form 10-K, which should be read in connection with these
financial statements. In accordance with the rules of the Securities and
Exchange Commission ("SEC"), these unaudited condensed consolidated financial
statements do not include all disclosures required by generally accepted
accounting principles but conform to the guidelines for interim financial
information as provided by the instructions to Form 10-Q and Article 10 of
Regulation S-X. The results of the Company's operations for the interim periods
presented are not necessarily indicative of the operating results for the full
fiscal year or any future interim periods.

2.   Income taxes

No provision or benefit for income taxes has been provided in these financial
statements because the Company presently believes that, more likely than not, it
will not have sufficient income before income taxes to utilize its net operating
loss carryforwards and other net deferred tax assets for the year ending
September 30, 2001, or that sufficient income before income taxes will be
realized in periods subsequent to September 30, 2001 to utilize its net
operating loss carryforward and other net deferred tax assets. It is possible
that the Company's valuation allowance could decrease in the near term if
Zengine's operations are able to demonstrate sustained profitability.

3.   Comprehensive income

Prior to the three months ended March 31, 2001, the Company had no components of
comprehensive income other than net income; accordingly, net income and
comprehensive income were the same. For the three and nine months ended June 30,
2001, comprehensive loss was $1,221,272 and $103,032, respectively, after
deducting from net income the currency translation adjustments related to the
Company's Japanese subsidiary.

4.   Earnings per share

Basic earnings per share is calculated by dividing net income by the weighted
average number of shares outstanding during the reporting period. The
calculation of diluted earnings per share is similar to basic, except that
weighted average number of shares outstanding include the additional dilution
from potential common stock such as stock options and restricted stock awards,
to the extent inclusion of the potential common stock is dilutive.

5.   Related party transactions

During the quarter ended December 31, 2000, the Company made an advance to
subsidiaries of MCSi, Inc., the majority stockholder of the Company ("MCSi"),
totaling $8,500,000 as a 90 day secured note (the "Note") to assist in
purchasing the assets of Intellisys Group, Inc. Interest on the Note accrued
monthly based on the "prime rate" as published in the WALL STREET JOURNAL. The
loan was unanimously approved by the Board of Directors of Zengine. During the
three months ended March 31, 2001, MCSi repaid $3.7 million of this loan and the
Company extended the repayment of the remainder of the principal balance and
accrued interest to July 1, 2001 on the same terms and conditions as the
original Note. During the three months ended June 30, 2001, the Note was repaid
in full.

Zengine and MCSi have entered into four other agreements, three of which expire
in October 2001, including an administrative services agreement, a distribution
services agreement and an e-commerce services agreement and a real and personal
property lease. These arrangements are currently being renegotiated.


                                       4

<Page>

                                  ZENGINE, INC.

       NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


With respect to all of its transactions with MCSi, the Company and MCSi have
agreed to a monthly "net" settlement procedure. The following table summarizes
the net receivable due from MCSi related to the aforementioned agreements as of
June 30, 2001:

<Table>

<S>                                                                                           <C>
Net amount receivable from MCSi as of October 1, 2000. . . . . . . . . . . .                  $2,447,840
Amounts received as payment of stock subscription receivable . . . . . . . .                  (1,738,341)
Amounts receivable from MCSi arising from the E-commerce Services Agreement .                  3,405,573
Amounts receivable from MCSi arising from interest. . . . . . . . . . . . . .                    433,651
Amounts receivable from MCSi arising from current account activity. . . . . .                  2,896,916
Amounts payable to MCSi arising from the Distribution Services Agreement. . .                 (1,103,027)
Amounts payable to MCSi arising from the Administrative Services and Sublease and
   Equipment Lease Agreements.. . . . . . . . . . . . . . . . . . . . . . . .                   (616,354)
                                                                                              -----------
Net amount receivable from MCSi and MCSi subsidiaries . . . . . . . . . . . .                 $ 5,726,258
                                                                                              ===========
</Table>

Additional details of related party transactions are found in Note 4 to the
Company's audited financial statements in the Form 10-K for the year ended
September 30, 2000.


                                       5

<Page>


                                  ZENGINE, INC.

           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS


THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH THE COMPANY'S
UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND THE ACCOMPANYING NOTES
THERETO INCLUDED ELSEWHERE HEREIN.

                                   NOTE AS TO
                           FORWARD-LOOKING STATEMENTS

The following information contains "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995 (the "Act") and
is subject to the safe harbor created by that Act. Generally, these statements
relate to business plans or strategies, projected or anticipated benefits from
potential acquisitions, projections involving anticipated revenues, earnings,
profitability or other aspects of operating results or other future developments
in the affairs of the Company or the industry in which it conducts business.
These forward-looking statements, which are based on various assumptions (some
of which are beyond the Company's control), may be identified by reference to a
future period or periods or by the use of forward-looking terminology such as
"anticipate," "believe," "commitment," "consider," "continue," "could,"
"encourage," "estimate," "expect," "intend," "in the event of," "may," "plan,"
"present," "project," "propose," "prospect," "update," "whether," "will,"
"would," future or conditional verb tenses, similar terms, variations on such
terms or negatives of such terms. Although the Company believes that the
anticipated results or other expectations reflected in such forward-looking
statements are based on reasonable assumptions, it can give no assurance that
those results or expectations will be attained. Actual results could differ
materially from those indicated in such statements due to risks, uncertainties
and changes with respect to a variety of factors, including, but not limited to,
the following: the Company's limited operating history, the Company's history of
operating losses, expected fluctuations of quarterly results, its lengthy sales
cycle, potential performance delays, the potential loss of a major client,
dependence upon its client's business and product sales, short term advertising
fees, potential loss of key employees, potential difficulties in managing
growth, the ability of its systems to accommodate significant growth, potential
software defects and system errors, potential product liability litigation, its
ability to adequately protect its trademarks or brand identity, privacy
concerns, potential breach of e-commerce security measures, the numerous risks
and uncertainties of doing business in a foreign country, and the relationship
and affiliated transactions with its major stockholder, MCSi. See Exhibit 99 for
a discussion of these and other factors that could affect our results of
operations and financial condition.

OVERVIEW

Zengine, Inc. is an outsourced e-commerce software and services provider.
Zengine helps companies sell more efficiently. Zengine's e-commerce platform
makes it easy for companies to sell their products online while remaining
focused on what they know best, their core business. This platform ensures that
the right information gets to the right people at the right time so that
individuals are empowered to make smarter business decisions.

Zengine's e-commerce platform provides a standardized, modular framework that
can be customized quickly and easily to scale, add functionality, and provide
seamless software upgrades to meet the specific requirements of individual
clients.

Zengine offers a full range of software and services for business-to-business
and business-to-consumer applications including: Platform Hosting, User
Interface Design, Content and Publishing Management, E-business Management,
E-Commerce Platform, Sales Force Automation, Merchandising, Advertising/PR,
Campaign Planning, Fulfillment, Call Center, and Reporting and Analysis.

In performing services under the Zengine business model, the Company enters into
contractual arrangements with its clients that describe the services Zengine
will perform. The Company generates revenues through service fees, which include
consulting, integration and set-up, monthly subscription and transaction fees,
and product sales directly to consumers through web sites Zengine has developed
and operates; and from advertising and sponsorships on Web pages the Company
services on its client's internet or intranet stores.


                                       6

<Page>


                                  ZENGINE, INC.

           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS
                                   (CONTINUED)


RESULTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED JUNE 30, 2001 AND 2000

REVENUE

 Revenue for the periods presented is summarized as follows:

<Table>
<Caption>

                                        THREE MONTHS ENDED              NINE MONTHS ENDED
                                              JUNE 30,                        JUNE 30,
                                        2001              2000           2001            2000
                                        ----              ----           ----            ----
<S>                                 <C>               <C>            <C>               <C>
Service fees, product
   sales and consulting
    fees  . . . . . . . . . .       $3,621,321       $ 1,405,870     $ 10,559,030      $2,767,536
Advertising and
   sponsorship fees . . . . .          643,749           987,500        3,238,245       2,336,750
                                    ----------       -----------     ------------      ----------
                                    $4,265,070       $ 2,393,370     $ 13,797,275      $5,104,286
                                    ==========       ===========     ============      ==========
</Table>

Service fees are the fees charged by Zengine to install, integrate, design,
create and host e-commerce websites for its clients. Consulting fees are
charged by Zengine to provide advice to its clients regarding
business-to-business and business-to-consumer e-commerce. Product sales are
sales of audio visual and broadcast products on Company owned and operated
websites. Service fees, product sales and consulting fees increased by
$2,215,415 and $7,791,494, respectively, for the three and nine month periods
ended June 30, 2001 over similar periods in 2000. The increase in service fees,
product sales and consulting fees for the three and nine months ended June 30,
2001 reflects the continued increase in the launches of Zengine's clients'
e-commerce Web sites, e-commerce consulting revenues combined with revenues from
the sale of products on Company owned and operated Web sites. Advertising and
sponsorship fees decreased by $343,751 for the three month period ended June 30,
2001 compared to the three month period ended June 30, 2000, resulting from
fewer advertising and sponsorship customers. Advertising and sponsorship fees
increased by $901,495 for the nine month period ended June 30, 2001 compared to
the nine month period ended June 30, 2000 due to an increase in the number of
advertising and placement orders, notwithstanding a decrease in the number of
advertising customers.

Service fee revenue from the MCSi dedicated Web sites was:

<Table>

                  <S>                                         <C>
                  Three months ended June 30, 2001            $    991,434
                                                              ------------
                  Three months ended June 30, 2000            $  1,098,293
                                                              ------------
                  Nine months ended June 30, 2001             $  3,405,573
                                                              ------------
                  Nine months ended June 30, 2000             $  2,408,121
                                                              ------------
</Table>

Zengine's current arrangement to service the MCSi-dedicated Web site expires on
October 1, 2001. However, the Company anticipates that this agreement will be
renewed by MCSi.

The Company's advertising and sponsorship revenue is primarily derived from
original equipment manufacturer ("OEM") advertisers who either place banner
advertisements on Zengine's clients' Web pages, which the Company serves, or who
purchase preferential placement of the OEM products on Zengine's clients'
electronic stores. Zengine provided advertising or sponsorship services to 4
clients in the nine months ended June 30, 2001 as compared to 14 clients in the
nine months ended June 30, 2000. MCSi has supply arrangements with the OEM
companies that purchase advertising from Zengine. Although the Company
negotiates each OEM advertising arrangement, MCSi's relationship with the OEM
companies could have influenced the companies obtaining the advertising and
Zengine may not have obtained the advertising without MCSi's relationship. The
decrease in the number of advertising clients in the nine months ended June 30,
2001 compared to the prior nine month period was due to a general decrease in
internet advertising during the period.


                                       7

<Page>


                                  ZENGINE, INC.

          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS
                                  (CONTINUED)


COST OF REVENUE AND GROSS MARGIN

The Company's cost of revenue includes the amortization of capitalized computer
software costs, the costs of its employees to perform integration and other
services, the fees it pays to MCSi under the Distribution Services Agreement,
and the cost of products sold through Company owned and operated Web sites. The
Company's gross margin percentage fluctuates depending on the timing as to when
it adds additional employees to perform integration and other services and
changes in its sales mix between lower margin product sales and the Company's
consulting and service offerings, which provide higher margins.

Gross margins for the periods presented were:

<Table>
<S>                                                           <C>
                  Three months ended June 30, 2001              44.6%
                                                               -----
                  Three months ended June 30, 2000              90.5%
                                                               -----
                  Nine months ended June 30, 2001               65.1%
                                                               -----
                  Nine months ended June 30, 2000               89.9%
                                                               -----
</Table>

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Selling, general and administrative expenses as a percentage of revenue for the
periods presented were:

<Table>

                  <S>                                         <C>
                  Three months ended June 30, 2001              88.4%
                                                              ------
                  Three months ended June 30, 2000             102.7%
                                                              ------
                  Nine months ended June 30, 2001               81.6%
                                                              ------
                  Nine months ended June 30, 2000               93.8%
                                                              ------
</Table>

Zengine's primary selling, general and administrative expenses relate to sales
function labor costs, its administrative service and leasing arrangements with
MCSi, marketing costs, costs associated with the Company's information systems
and non-cash expenses related to stock-based compensation and other equity
arrangements. As a percentage of revenues, selling, general and administrative
expenses were, and will be, primarily influenced by the timing of when the
Company adds additional personnel to support these functions. Selling, general
and administrative expenses decreased for the three and nine month periods
ended June 30, 2001 compared to prior year periods because the Company was able
to leverage its existing workforce to generate incremental revenue.

INTEREST INCOME

Interest income increased substantially during the three and nine month periods
ended June 30, 2001 compared to the three and nine month periods ended June 30,
2000 as a result of investing the proceeds of the Company's initial public
offering ("IPO") which occurred on September 20, 2000. The average rate of
interest on interest-earning assets was 4.7% and 5.7% for the three and nine
month periods ended June 30, 2001, respectively.

LIQUIDITY AND CAPITAL RESOURCES

During the nine months ended June 30, 2001, cash used in operations was
$2,639,991 primarily as a result of the net loss for the period, increased
accounts receivable and other assets, and reductions in accrued liabilities.
The Company used $6,855,130 for investing activities primarily as a result of
an increase in receivables due from MCSi of $5,016,759 pursuant to the
Distribution and Administrative Services and Sublease and Equipment Lease
Agreements and for the purchase of equipment and development of software. Cash
used in financing activities of $11,934,106 was primarily the result of the
purchase of 2,698,995 shares of the Company's common stock for $12,552,076 for
the nine months ended June 30, 2001. Available cash is held in short-term high
quality investments.

On September 20, 2000 the Company completed its IPO resulting in net proceeds of
approximately $50.5 million. Prior to its IPO, the Company looked to MCSi to
provide financial and capital resources it required to carry on its business
activities. The Company believes that its capital resources will be sufficient
to enable it to conduct its operations for the foreseeable future.


                                       8
<Page>


                                  ZENGINE, INC.

          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS
                                  (CONTINUED)


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company believes that there have been no material changes in the reported
market risks faced by the Company since the fiscal year ended September 30, 2000
except that the Company commenced operations of its wholly owned subsidiary in
Japan during the three month period ending March 31, 2001, which subjects the
Company to foreign exchange risk. To date the Company has not, nor does it
currently intend to, engage in hedging or other financial transactions to
control its foreign currency fluctuations. See Zengine's Annual Report on Form
10-K for the fiscal year ended September 30, 2000 under Item 7A "Quantitative
and Qualitative Disclosures About Market Risk."



                                       9

<Page>


                                  ZENGINE, INC.

                           PART II - OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS

          None.

ITEM 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS

          Not applicable.

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES

          Not applicable.

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

          None.

ITEM 5.   OTHER INFORMATION

          Our Chief Financial Officer, Louis T. Lipinski, resigned on July 31,
2001 to pursue other opportunities. The Board of Directors has appointed
Sharmila Rao as the Company's Chief Financial Officer.

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K.

          (a)  Exhibit 99.0 - Safe Harbor Under the Private Securities
               Litigation Reform Act of 1995.

          (b)  No reports on Form 8-K have been filed by the Company during the
               quarter ended June 30, 2001.


                                       10

<Page>


                                  ZENGINE, INC.


                                   SIGNATURES

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


ZENGINE, INC.

By:   /s/ JOSEPH M. SAVARINO
      -------------------------------------
      Joseph M. Savarino
      President and Chief Executive Officer            Date: August 14, 2001


By:   /s/ SHARMILA RAO
      -------------------------------------
      Sharmila Rao
      Vice President and Chief Financial Officer       Date: August 14, 2001


                                       11