<PAGE>

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

                                    FORM 10-QSB
 (Mark One)
[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

[ ]      TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934
         For the transition period from __________ to __________

                         Commission file number: 0-28560

                                  NETGURU, INC.
              (Exact name of small business issuer in its charter)

                    DELAWARE                                       22-2356861
(State or other jurisdiction of incorporation or               (I.R.S. Employer
                  organization)                              Identification No.)

    22700 SAVI RANCH PARKWAY, YORBA LINDA, CA                        92887
    (Address of principal executive offices)                       (Zip Code)

                    Issuer's telephone number: (714) 974-2500

          Securities registered pursuant to Section 12 (b) of the Act:

  Title of each class                       Name of exchange on which registered
          NONE                                            NONE

          Securities registered pursuant to Section 12 (g) of the Act:

                          COMMON STOCK, $0.01 PAR VALUE
                                (Title of Class)

Indicate by check mark whether the registrant (1) has 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 [ ]

The number of shares outstanding of the registrant's only class of Common Stock,
$.01 par value, was 16,931,815 on August 10, 2001.




<PAGE>

                                     PART I
                              FINANCIAL INFORMATION

Item 1.  Financial Statements

         Condensed Consolidated Statements of Operations for the three month
         periods ended June 30, 2001 and 2000

         Condensed Consolidated Balance Sheets as of June 30, 2001 and March 31,
         2001

         Condensed Consolidated Statements of Cash Flows for the three month
         periods ended June 30, 2001 and 2000

         Notes to Condensed Consolidated Financial Statements

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


                                     PART II
                                OTHER INFORMATION

Item 1.  Legal Proceedings

Item 2.  Changes in Securities

Item 3.  Defaults Upon Senior Securities

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

Item 5.  Other Information

Item 6.  Exhibits and Reports on Form 8-K

                                       2




<PAGE>
<TABLE>

PART I -- FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                                        NETGURU, INC. AND SUBSIDIARIES
                                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                                  (Unaudited)
                              (In thousands, except share and per share amounts)
<CAPTION>

                                                                                 THREE MONTHS ENDED
                                                                                      JUNE 30,
                                                                          ----------------------------------
                                                                               2001               2000
                                                                          ---------------    ---------------
<S>                                                                       <C>                <C>
Net revenues:
    IT services                                                           $        3,348     $        4,917
    Software sales, maintenance and support                                        2,036              2,175
    Internet, e-commerce and ASP services                                          1,390                201
    Digital media products and animation services                                      7                  -
                                                                          ---------------    ---------------

           Total net revenues                                                      6,781              7,293

Cost of revenues:
    IT services                                                                    2,345              3,168
    Software sales, maintenance and support                                          249                295
    Internet, e-commerce and ASP services                                            924                134
    Digital media products and animation services                                     39                  -
                                                                          ---------------    ---------------

           Total cost of sales                                                     3,557              3,597
                                                                          ---------------    ---------------
           Gross profit                                                            3,224              3,696
                                                                          ---------------    ---------------

Operating expenses:
    Selling, general and administrative                                            3,742              3,555
    Research and development                                                         520                675
                                                                          ---------------    ---------------

           Total operating expenses                                                4,262              4,230
                                                                          ---------------    ---------------

           Operating loss                                                         (1,038)              (534)
                                                                          ---------------    ---------------

Other (income) expense:
    Interest, net                                                                     32                (90)
    Other                                                                             (8)               (17)
                                                                          ---------------    ---------------

           Total other (income) expense                                               24               (107)
                                                                          ---------------    ---------------

Loss before income taxes                                                          (1,062)              (427)

Income tax expense (benefit)                                                          89               (110)
                                                                          ---------------    ---------------

           Net loss                                                       $       (1,151)    $         (317)
                                                                          ===============    ===============

Net loss per common share:
         Basic                                                            $        (0.07)    $        (0.04)
                                                                          ===============    ===============
         Diluted                                                          $        (0.07)    $        (0.04)
                                                                          ===============    ===============

Common shares used in computing net loss per common share:
         Basic                                                                16,877,539         13,361,099
                                                                          ===============    ===============
         Diluted                                                              16,877,539         13,361,099
                                                                          ===============    ===============
</TABLE>



See accompanying notes to condensed consolidated financial statements.

                                                      3


<PAGE>
<TABLE>

                                        NETGURU, INC. AND SUBSIDIARIES
                                     CONDENSED CONSOLIDATED BALANCE SHEETS
                              (In thousands, except share and per share amounts)
<CAPTION>

                                                                             JUNE 30, 2001    MARCH 31, 2001
                                                                             -------------    --------------
                                                                              (Unaudited)

                                                   ASSETS
<S>                                                                              <C>            <C>
Current assets:
    Cash and cash equivalents                                                    $  6,964       $  7,958
    Accounts receivable (net of allowance for doubtful accounts of $751 and
      $832, as of June 30 and March 31, respectively)                               3,827          4,937
    Deferred income taxes                                                             405            342
    Notes and related party loans receivable                                           15             14
    Prepaid expenses and other current assets                                       1,663          1,375
                                                                                 ---------      ---------

           Total current assets                                                    12,874         14,626

Property, plant and equipment, net                                                  4,674          4,796
Goodwill and intangible assets (net of accumulated amortization of $3,296
    and $2,962, as of June 30 and March 31, respectively)                          10,584         10,847
Deferred income taxes, non-current                                                    936            936
Other assets                                                                          867          1,076
                                                                                 ---------      ---------
                                                                                 $ 29,935       $ 32,281
                                                                                 =========      =========

                                      LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
    Current portion of long-term bank debt                                       $    596       $    591
    Current portion of capital lease obligations                                      149            151
    Accounts payable                                                                1,120          1,179
    Accrued expenses                                                                1,235          1,558
    Income taxes payable                                                              232            116
    Deferred maintenance revenue                                                    1,466          1,992
    Deferred income taxes                                                              60             60
    Accrued restructuring costs and other liabilities                                 406            309
                                                                                 ---------      ---------

           Total current liabilities                                                5,264          5,956

Long-term bank debt, net of current portion                                           738            840
Capital lease obligations, net of current portion                                     511            532
Deferred income taxes, non-current                                                    112            104
Deferred gain on sale-leaseback                                                       939            957
                                                                                 ---------      ---------

           Total liabilities                                                        7,564          8,389
                                                                                 ---------      ---------

Stockholders' equity:
    Preferred stock, par value $.01 (Authorized 5,000,000 shares; no shares
      issued and outstanding)                                                           -              -
    Common stock, par value $.01; authorized 150,000,000 shares; issued and
      outstanding 16,920,852 and 16,864,604 shares (net of 10,965 treasury
      shares) as of June 30 and March 31, respectively                                169            169
    Additional paid-in capital                                                     32,343         32,621
    Accumulated deficit                                                            (9,013)        (7,861)
    Accumulated other comprehensive loss:
       Cumulative foreign currency translation adjustments                         (1,128)        (1,037)
                                                                                 ---------      ---------

           Total stockholders' equity                                              22,371         23,892
                                                                                 ---------      ---------
                                                                                 $ 29,935       $ 32,281
                                                                                 =========      =========
</TABLE>

See accompanying notes to condensed consolidated financial statements.

                                                      4




<PAGE>
<TABLE>

                                   NETGURU, INC. AND SUBSIDIARIES
                           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                             (Unaudited)
                                           (In thousands)
<CAPTION>

                                                                                THREE MONTHS ENDED
                                                                                     JUNE 30,
                                                                             ------------------------
                                                                                2001           2000
                                                                             ---------      ---------
<S>                                                                          <C>            <C>
Cash flows from operating activities:
    Net loss                                                                 $ (1,151)      $   (317)
    Adjustments to reconcile net loss to net cash provided by (used
      in) operating activities:
        Depreciation and amortization                                             661            557
        Deferred income taxes                                                      (7)          (119)
        Compensation expense recognized on issuance of stock options               34             28
        Changes in operating assets and liabilities (net of
          acquisitions):
          Accounts receivable                                                   1,094           (729)
          Notes and related party loans receivable                                 (1)           122
          Prepaid expenses and other current assets                              (294)           944
          Other assets                                                            153             (6)
          Accounts payable                                                        (57)           291
          Accrued expense                                                        (437)          (619)
          Income taxes payable                                                     68              3
          Deferred maintenance revenue                                           (525)            31
          Deferred gain on sale-leaseback                                         (29)           (18)
          Other                                                                    38              3
                                                                             ---------      ---------

                  Net cash (used in) provided by operating activities            (453)           171
                                                                             ---------      ---------
Cash flows from investing activities:
    Purchase of property, plant and equipment                                    (167)        (1,194)
    Payments to acquire companies, net of cash acquired                           (67)        (2,090)
                                                                             ---------      ---------
                  Net cash used in investing activities                          (234)        (3,284)
                                                                             ---------      ---------
Cash flows from financing activities:
    Proceeds from bank debt                                                        19            161
    Repayment of bank debt                                                       (109)          (754)
    Repayment of capital lease obligations                                        (36)           (31)
    Proceeds from issuance of common stock                                         27          3,494
    Payments to repurchase common stock                                          (140)             -
                                                                             ---------      ---------
                  Net cash (used in) provided by financing activities            (239)         2,870
                                                                             ---------      ---------
    Effect of exchange rate changes on cash and cash equivalents                  (68)           (99)
                                                                             ---------      ---------
                  Decrease in cash and cash equivalents                          (994)          (342)

Cash and cash equivalents, beginning of period                                  7,958         13,265
                                                                             ---------      ---------

Cash and cash equivalents, end of period                                     $  6,964       $ 12,923
                                                                             =========      =========

Supplemental disclosure of cash flow information:
   Cash paid for:
         Interest                                                            $     21       $     43
         Income taxes                                                        $     14       $     15
Supplemental disclosure of non-cash investing and financing activities:
    Issuance of common stock and warrants in connection with
      acquisitions                                                           $      -       $    750
                                                                             =========      =========
</TABLE>

See accompanying notes to condensed consolidated financial statements.

                                                 5




<PAGE>

                         NETGURU, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2001
                                   (UNAUDITED)

BASIS OF PRESENTATION

    The condensed consolidated financial statements include the accounts of
netGuru, Inc. and its wholly-owned subsidiaries (the "Company"). All
significant transactions among the consolidated entities have been
eliminated upon consolidation.

    These condensed consolidated financial statements have been prepared by
the Company and include all adjustments which are, in the opinion of
management, necessary for a fair presentation of the financial position at
June 30, 2001 and the results of operations and the cash flows for the
three months ended June 30, 2001 and 2000, pursuant to the rules and
regulations of the Securities and Exchange Commission. Accordingly, they do
not include all of the information and footnotes required by accounting
principles generally accepted in the United States of America for annual
consolidated financial statements. Results of operations for the three
months ended June 30, 2001 are not necessarily indicative of the results to
be expected for the full year ended March 31, 2002.

USE OF ESTIMATES

    The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the amounts
reported in the consolidated financial statements and accompanying notes.
Actual results could differ from those estimates.

RECLASSIFICATIONS

    Certain prior quarter amounts have been reclassified to conform to the
current quarter presentation.

REVENUE RECOGNITION

    The Company recognizes revenue when it is realized or realizable and earned.
The Company's revenues arise from the following segments: information technology
("IT") services; software sales, maintenance and services; and Internet portals
and digital media products and services.

    Revenue from providing IT services is primarily recognized on a time and
material basis as services are performed. Certain IT services contracts are
fixed cost type contracts for which revenue is recognized upon achieving certain
milestones.

    Revenue from software sales is recognized upon shipment, provided that no
significant post-contract support obligations remain outstanding and collection
of the resulting receivable is deemed probable. The Company's sales do not
provide a specific right of return. At the time of sale, the Company typically
provides 120-day initial maintenance and support to the customer. Costs relating
to this initial 120-day support period, which include primarily telephone
support, are not considered material. After the initial support period,
customers may choose to purchase ongoing maintenance contracts that include
telephone, e-mail and other methods of support, and the right to receive
upgrades. Revenue from these maintenance contracts is deferred and recognized
ratably over the life of the contract, usually twelve months.

                                       6




<PAGE>

    Revenues from products and services sold via Internet portals, including
telecommunications and travel services, are predominantly recognized net of
purchase costs when the products and services are delivered and collectibility
is probable. Certain travel services, based on their nature, are recognized at
the gross sales value with purchase costs stated as a separate cost of revenues
in accordance with Emerging Issues Task Force Issue No. 99-19, RECORDING REVENUE
GROSS AS A PRINCIPAL VERSUS NET AS AN AGENT.

    Revenues from digital media and animation services are recognized upon
achievement of certain pre-determined milestones.

    In December 1999, the staff of the Securities and Exchange Commission issued
Staff Accounting Bulletin No. 101 ("SAB 101"), REVENUE RECOGNITION IN FINANCIAL
STATEMENTS, as amended by Staff Accounting Bulletins No. 101 A and 101 B. These
bulletins summarize certain of the staff's views about applying generally
accepted accounting principles to revenue recognition in financial statements.
The Company adopted SAB 101, as amended, in the fourth quarter of fiscal 2001,
the implementation of which resulted in no material changes in the Company's
previous practice.

PROVISION FOR RESTRUCTURING OPERATIONS

    In March 2001, the Company announced plans to restructure its operations. As
a result of this restructuring plan, the Company recorded a restructuring charge
of $2.4 million in the fourth quarter of fiscal 2001. The restructuring plan
consisted of: 1) refocused strategic direction of internet service provider
("ISP") initiatives; 2) refocused strategic direction of Internet portal
initiatives; 3) consolidation of the Company's technical support activities; and
4) elimination of the Company's in-house legal department. In the Internet
portal business, the Company has redirected its primary focus towards the
telephony and travel services offered through the portal. For the Company's ISP
initiatives in India, the Company has redirected its primary focus towards the
telephony, communication and connectivity services targeted at the corporate
market.

                                       7




<PAGE>

         A roll-forward of the restructuring charge activity is as follows (in
thousands):

<TABLE>
<CAPTION>
                                         ASSET                        CONTRACTUAL
                                       WRITE-OFFS       SEVERANCE      OBLIGATIONS       TOTAL
                                     -------------    -------------   -------------   -------------
<S>                                  <C>              <C>             <C>             <C>
Balance at March 31, 2001:
Refocus of ISP operations            $          -     $          -    $        101    $        101
Refocus of portal operations                    -                -               -               -
Consolidation of technical
    support activities                          -               49             117             166
Elimination of legal department                 -               42               -              42
                                     -------------    -------------   -------------   -------------
                                                -               91             218             309
                                     -------------    -------------   -------------   -------------
Fiscal 2002 Activity:
Refocus of ISP operations                       -                -               -               -
Refocus of portal operations                    -                -               -               -
Consolidation of technical
    support activities                          -                -             (12)            (12)
Elimination of legal department                 -                -               -               -
                                     -------------    -------------   -------------   -------------
                                                -                -             (12)            (12)
                                     -------------    -------------   -------------   -------------
Balance at June 30, 2001:
Refocus of ISP operations                       -                -             101             101
Refocus of portal operations                    -                -               -               -
Consolidation of technical
    support activities                          -               49             105             154
Elimination of legal department                 -               42               -              42
                                     -------------    -------------   -------------   -------------
                                     $          -     $         91    $        206    $        297
                                     =============    =============   =============   =============
</TABLE>

    The provision included $117,000 of lease payments for vacated office space
scheduled for payment through September 2003. The remaining personnel costs are
expected to be paid out and contractual obligations fulfilled by the end of the
second quarter of fiscal 2002. The accrued costs are included in "Accrued
restructuring costs and other liabilities" on the Company's Condensed
Consolidated Balance Sheets.

STOCKHOLDERS' EQUITY

    In April 2000, the Company issued 25,000 shares of common stock as a portion
of the purchase price for the acquisition of Allegria Software, Inc
("Allegria"). The recipients of these shares were given the right to demand the
Company to repurchase these shares at a price of $28.60 per share at the end of
one year. In April 2001, each of the former owners exercised this right. The
total repurchase price is $715,000. Agreements were reached with all parties to
extend cash payment for this repurchase over a twelve-month period.

    The Company paid a total of $140,000 during the first quarter of fiscal 2002
to two of the former owners for the repurchase of 12,000 shares, which were
retired prior to June 30, 2001. The remaining $203,000 payable over the next
twelve months has been accrued under "accrued expenses".

    The owner of the remaining 13,000 shares is holding the stock certificates
until full payment is received for these shares. The total cash to be paid for
this repurchase is $372,000, none of which was paid as of June 30, 2001. As the
Company has yet to receive the certificates, no entry has been made to reflect
this transaction.

                                       8




<PAGE>

COMPREHENSIVE INCOME (LOSS)

    The Company applies the provisions of Statement of Financial Accounting
Standards ("SFAS") No. 130, REPORTING COMPREHENSIVE INCOME, which
establishes rules for the reporting and display of comprehensive income
(loss) and its components. SFAS No. 130 requires foreign currency
translation adjustments, which are reported separately in stockholders'
equity, to be included in other comprehensive income (loss). Total
comprehensive loss was $1,242,000 and $493,000 for the three months ended
June 30, 2001 and 2000, respectively.

NET LOSS PER SHARE

    Basic Earnings (Loss) Per Share ("EPS") is calculated by dividing net income
(loss) by the weighted-average common shares outstanding during the period.
Diluted EPS reflects the potential dilution to basic EPS that could occur upon
conversion or exercise of securities, options, or other such items, to common
shares using the treasury stock method based upon the weighted-average fair
value of the Company's common shares during the period.

    The following table illustrates the computation of basic and diluted net
loss per share (in thousands):

<TABLE>
<CAPTION>
                                                                   THREE MONTHS ENDED
                                                                        JUNE 30,
                                                           ----------------------------------
                                                                2001              2000
                                                           ---------------   ----------------
         <S>                                               <C>               <C>
         Numerator:
         Net loss                                          $       (1,151)   $          (317)
         Cumulative preferred stock dividends              $            -    $          (173)
                                                           ---------------   ----------------
         Numerator for basic and diluted loss per share    $       (1,151)   $          (490)
                                                           ===============   ================

         Denominator:
         Denominator for basic net loss per share -
         average number of common shares outstanding
         during the period                                         16,877             13,361
         Incremental common shares attributable to
         exercise of outstanding options, warrants and
         other common stock equivalents                                 -                  -
                                                           ---------------   ----------------
         Denominator for diluted net loss per share                16,877             13,361
                                                           ===============   ================

         Basic net loss per share                          $        (0.07)   $         (0.04)
                                                           ===============   ================
         Diluted net loss per share                        $        (0.07)   $         (0.04)
                                                           ===============   ================
</TABLE>

    Options, warrants and other common stock equivalents amounting to 608,000
and 1,740,000 potential common shares were excluded from the computation of
diluted EPS for the quarters ended June 30, 2001 and 2000, respectively, because
the Company reported net losses and, therefore, the effect would be
antidilutive.

SEGMENT AND GEOGRAPHIC DATA

    The Company is an integrated Internet and IT technology and services company
operating in four primary business segments; 1) IT services; 2) engineering
software products, maintenance and services; 3) Internet portals focused on
telecommunications and travel services for Asian expatriates and ASP solutions;
and 4) digital media products and animation services.

    The Company has provided computer-aided engineering software solutions to
customers for about 20 years. During the past 16 years, the Company has
supported the engineering software business with India-based software
programming and IT resources. In addition, based upon the Company's knowledge
and understanding of the engineering software market, combined with the
Company's Internet technology resources and experience, the Company launched
Web4engineers.com, an engineering applications service provider ("ASP") portal
hosting the Company's engineering software applications online and providing ASP
services to engineering software

                                       9


<PAGE>

providers and their licensees worldwide. With the acquisitions of R-Cube
Technologies in February 1999 and NetGuru Systems completed in December 1999,
the Company further expanded its IT resources and capabilities and its presence
in the IT services industry, providing expertise in data-mining and embedded
technologies, Internet/Intranet design and development and systems and software
integration and implementation to companies in North America. The Company has
expanded its IT services business into Europe and intends to further expand its
services in India and Southeast Asia.

    With the Company's experience in India and understanding of the global
Indian community, it began offering online Internet portal services in 1999. The
Company's portal offerings are primarily focused on telecommunications and
travel services for Asian expatriates. The Company continues to provide digital
media services, including computer animation, and has used this expertise to
enhance its Internet portal offerings.

    The significant components of worldwide operations by reportable operating
segment (in thousands) are:

<TABLE>
<CAPTION>
                                                                    THREE MONTHS ENDED JUNE 30,
                                                            ---------------------------------------
                                                                  2001                 2000
                                                            -----------------    ------------------
                                                                        (IN THOUSANDS)
                <S>                                         <C>                  <C>
                NET REVENUE
                IT services                                 $          3,348     $           4,917
                Software sales, maintenance and
                  services                                             2,036                 2,175
                Internet, e-commerce and ASP services                  1,390                   201
                Digital media and animation services                       7                     -
                                                            =================    ==================
                         Consolidated                       $          6,781     $           7,293
                                                            =================    ==================

                OPERATING (LOSS)/INCOME
                IT services                                 $            183     $             832
                Software sales, maintenance and
                  services                                              (702)                 (618)
                Internet, e-commerce and ASP services                   (367)                 (598)
                Digital media and animation services                    (152)                 (150)
                                                            -----------------    ------------------
                         Consolidated                       $         (1,038)    $            (534)
                                                            =================    ==================
</TABLE>

    The Company's operations are based worldwide through foreign and domestic
subsidiaries and branch offices in the United States, India, the United Kingdom,
France, Germany and Asia-Pacific. The following are significant components of
worldwide operations by geographic location:

<TABLE>
<CAPTION>
                                                                      THREE MONTHS ENDED
                                                                           JUNE 30,
                                                            ---------------------------------------
                                                                  2001                 2000
                                                            -----------------    ------------------
                                                                       (IN THOUSANDS)
                <S>                                         <C>                  <C>
                NET REVENUE
                United States                               $          5,718     $           6,159
                The Americas (other than U.S.)                           120                   203
                Europe                                                   497                   468
                Asia-Pacific                                             446                   463
                                                            -----------------    ------------------
                         Consolidated                       $          6,781     $           7,293
                                                            =================    ==================
                EXPORT SALES
                United States                               $            124     $             368
                                                            =================    ==================
</TABLE>

                                       10




<PAGE>
<TABLE>
<CAPTION>
                                                                JUNE 30,              MARCH 31,
                                                                  2001                  2001
                                                            -----------------    ------------------
                                                                        (IN THOUSANDS)
                <S>                                         <C>                  <C>
                LONG-LIVED ASSETS
                United States                               $         14,105     $          14,621
                Europe                                                   386                   324
                Asia-Pacific                                           2,570                 2,710
                                                            -----------------    ------------------

                         Consolidated                       $         17,061     $          17,655
                                                            =================    ==================
</TABLE>

CONTINGENCIES

    The Company is party to various litigation arising in the normal course of
business. Management believes the disposition of these matters will not have a
material adverse effect on the Company's result of operations or financial
condition.

                                       11




<PAGE>

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

    This Quarterly Report on Form 10-QSB contains certain forward-looking
statements within the meaning of Section 27A of the Securities Act and Section
21E of the Exchange Act. We intend that such forward-looking statements be
subject to the safe harbors created thereby. These forward-looking statements
generally include the plans and objectives of management for future operations,
including plans and objectives relating to our future economic performance. The
forward-looking statements and associated risks may include, relate to or be
qualified by other important factors, including, without limitation,

    o   our ability to transition into new lines of business as planned;
    o   our ability to become a leading integrated Internet technology and
        services company addressing the global Indian market, the worldwide
        information technology services market and the worldwide Internet
        engineering software market;
    o   our ability to successfully market and sell ASP services through our
        recently launched engineering portal;
    o   market growth;
    o   new competition;
    o   competitive pricing;
    o   new technologies;
    o   our ability to successfully implement our future business plans;
    o   statements about our business strategy and our expansion strategy;
    o   our ability to attract strategic partners, alliances and advertisers;
    o   uncertainties relating to economic conditions in the markets in which we
        currently operate and in which we intend to operate in the future;
    o   our ability to hire and retain qualified personnel;
    o   our ability to obtain capital, if required;
    o   our ability to successfully implement our brand building campaign;
    o   the risks of uncertainty of trademark protection;
    o   our plans for expanding our Internet portal network and the services
        offered through such network;
    o   our plans regarding our telephony infrastructure and service offerings;
    o   our beliefs regarding the growth of Internet usage within the global
        Indian community;
    o   our beliefs regarding the demand for our products and our competitive
        advantages;
    o   the negative impact of economic slowdowns and recessions; and
    o   risks associated with existing and future government regulation to which
        we are subject.

    We do not undertake to update, revise or correct any forward-looking
statements.

    The information contained in this report is not a complete description of
our business or the risks associated with an investment in our common stock.
Before deciding to buy or maintain a position in our common stock, you should
carefully review and consider the various disclosures we made in this report,
and in our other materials filed with the Securities and Exchange Commission,
including our Annual Report on Form 10-KSB for the fiscal year ended March 31,
2001 (and, in particular, in the "Risk Factors" section therein) that discuss
our business in greater detail and that also disclose various risks,
uncertainties and other factors that may affect our business, results of
operations or financial condition.

    Any of the factors described above or in the "Risk Factors" section of our
Annual Report on Form 10-KSB could cause our financial results, including our
net income (loss) or growth in net income (loss) to differ materially from prior
results.

                                       12




<PAGE>

    As a result, we believe that period-to-period comparisons of the results of
our operations of are not necessarily meaningful and should not be relied upon
as any indication of future performance. Fluctuations in our operating results
could cause the price of our common stock to fluctuate substantially.

OVERVIEW

    We were incorporated in 1981 under the name Research Engineers, Inc. and
changed our name to netGuru, Inc. in 2000. We are an integrated Internet
technology and services company providing:

    o   Internet-based information technology, or IT, services;
    o   Internet and personal computer-based engineering software products;
    o   Internet content and commerce through our portal network,
        NETGURUINDIA.COM, which is focused on the "global Indian" community,
        consisting of resident Indians and persons of Indian origin, or PIOs;
        and
    o   Digital media and animation products and services.

    We have been providing computer-aided engineering software solutions to our
customers for about 20 years. For the past 16 years, we have supported our
engineering software business with our India-based software programming and IT
resources. In 1999, we acquired two IT services companies in the U.S., further
expanding our IT resources and capabilities. With our experience in India and
our understanding of the global Indian community, we began offering our Internet
portal services in 1999. In addition, based upon our knowledge and understanding
of the engineering software market, combined with our Internet technology
resources and experience, we launched WEB4ENGINEERS.COM, an engineering portal
hosting our engineering software applications online and providing applications
services provider, or ASP, services to engineering software providers and their
licensees worldwide.

    We provide a full suite of IT consulting services to our customers from our
IT services divisions in the Silicon Valley and the Boston area. We support our
IT services operations with our offshore facility in India. Our IT consulting
customers include companies such as General Electric, Fidelity, Netscape, Sun
Microsystems, Cisco Systems and Hewlett Packard. We have positioned ourselves to
capitalize on our IT services methodology in order to provide Internet-based IT
consulting services to businesses worldwide and to enable us to provide
business-to-business Web solutions in India.

    We develop and market cost-effective, high-quality engineering software
solutions. Our comprehensive line of structural, mechanical, civil and
process/piping engineering software products provide our customers with
fully-integrated, easy-to-use design automation and analysis solutions. We
currently license our software products to more than 20,000 companies accounting
for over 50,000 software installations. Based on our customer surveys, we
estimate that there are approximately 150,000 users at these installations
worldwide. Our customers include: Bechtel Corporation, British Telecom, Jet
Propulsion Laboratories, Exxon Corporation, Fluor Daniel, Inc., General
Dynamics, NASA, Rocketdyne, Siemens AG and Toyo Engineering.

    In April 2000, we acquired Allegria Software, Inc. ("Allegria"), a company
with Internet technology resources and online collaborative software. This
acquisition, combined with our Web-enabling technology, allows us to offer to
our current and prospective customers our engineering software products online
with real-time, online collaboration through our WEB4ENGINEERS.COM portal. Our
WEB4ENGINEERS.COM portal offers ASP services, including applications hosting,
data hosting and portal services for engineering companies worldwide.

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<PAGE>

    Our Internet portal, NETGURUINDIA.COM, currently provides Internet content
and commerce services, including travel, telecommunications and gifts, to PIOs
through destinations that address the specific Indian cultural and ethnic needs
of the targeted communities. Our portal network provides comprehensive
digitally-rich media content and e-commerce services for PIOs, including
direct-to-customer fulfillment and Internet tools such as chat rooms and other
digital communication capabilities.

    We have developed proprietary digital multi-media expertise and resources in
our studios in Calcutta, India and in the U.S. to offer our entertainment,
advertising and corporate customers animation software such as AXA Web, digital
multi-media, and features and other digital products and services worldwide. We
plan to further enrich our offerings by providing full motion video and sound
through internet portals, allowing the user to view content in full-screen
format on the user's computer without distortion or degradation of either video
or sound quality.

RESULTS OF OPERATIONS

    The following table sets forth, for the periods indicated, certain statement
of operations data expressed as a percentage of our net revenues.

                                            THREE MONTHS ENDED JUNE 30,
                                            ---------------------------
                                                2001           2000
                                                ----           ----

     Net revenues                              100.0%          100.0%
     Cost of revenues                           52.5            49.3
                                            -----------     -----------

     Gross profit                               47.5            50.7
                                            -----------     -----------

     Selling, general and
      administrative expenses                   55.2            48.7
     Research and development expenses           7.6             9.3
                                            -----------     -----------

     Operating loss                            (15.3)           (7.3)

     Interest (income) expense, net              0.5            (1.2)
     Other (income) expense, net                (0.1)           (0.3)
                                            -----------     -----------

     Loss before income taxes                  (15.7)           (5.8)
     Income tax (expense) benefit               (1.3)            1.5
                                            -----------     -----------

     Net loss                                  (17.0)%          (4.3)%
                                            ===========     ===========

    NET REVENUES. Net revenues for the three months ended June 30, 2001
decreased by $512,000 (7.0%) to $6,781,000, as compared to $7,293,000 for the
three months ended June 30, 2001. Our revenues were primarily from (1) IT
services, (2) engineering software products, maintenance and services, and (3)
Internet content, e-commerce and ASP services.

    IT services net revenues represented 49.4% of total net revenues for the
quarter ended June 30, 2001 compared to 67.4% for the quarter ended June 30,
2000. In dollar terms, IT services net revenue decreased $1,569,000 or 31.9%
during the quarter ended June 30, 2001 compared to the same period in the prior
year. The decline is primarily reflective of a general decline in the market for
IT services. The decrease in IT services net revenues as a percentage of total
net revenues is also the result of increased revenues for our Internet,
e-commerce and ASP services business segment.

    Our net revenues from software sales, maintenance and services increased as
a percentage of total net revenues to 30.0% in the first quarter of fiscal 2002
from 29.8% in the first quarter of fiscal 2001. In dollar terms, revenues from
software sales, maintenance and services were $2,036,000 in the first quarter of
fiscal 2002 compared to $2,175,000 in the same period of the prior fiscal year,
a decline of 6.4%.

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<PAGE>

    Internet content, e-commerce, and ASP services comprise an emerging business
segment for our company. Revenues in the first three months of fiscal 2002
amounted to $1,390,000 compared to $201,000 from this segment in the comparable
period of the prior fiscal year. These revenues were generated primarily from
travel services and phone cards sold as part of our NETGURUINDIA.COM portal
business, and to a smaller extent from our ASP services.

    GROSS PROFIT. Gross profit as a percentage of net revenues decreased to
47.5% for the three months ended June 30, 2001 as compared to 50.7% for the
three months ended June 30, 2000. In dollar terms, total gross profit decreased
by $472,000 or 12.8% to $3,224,000 for the three months ended June 30, 2001 from
$3,696,000 for the three months ended June 30, 2000. The decrease in gross
profit was largely due to the decline in IT services and to a lesser extent due
to the decrease in software product sales, maintenance and support, partially
offset by an increase in gross profit in the Internet, e-commerce and ASP
services segment.

    The gross profit percentage from the IT services segment is ordinarily lower
than the gross profit percentage from the software sales, maintenance and
services segment. In addition, the general decline in the IT services market
contributed to a further decline in the gross profits in this segment, resulting
in a decrease from 35.6% during the first quarter of fiscal 2001 to 30.0% in the
first quarter of fiscal 2002.

    SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative ("SG&A") expenses increased by $187,000 (5.2%) to $3,742,000 for
the three months ended June 30, 2001 as compared to $3,555,000 for the three
months ended June 30, 2000. Although SG&A expenses increased slightly compared
to the same period in the prior fiscal year, they actually decreased
substantially compared to the three months ended March 31, 2001, reflecting a
reversal of the trend of the past five quarters of increasing SG&A expenses as a
result of our efforts to control costs and expenses.

    RESEARCH AND DEVELOPMENT EXPENSES. Research and development ("R&D") expenses
consist primarily of software developers' wages. R&D expenses declined both as a
percentage of total net revenue and in dollar terms, decreasing by $155,000
(23.0%) to $520,000 for the three months ended June 30, 2001 compared to
$675,000 for the same period in the prior year. As a percentage of the software
product sales, maintenance and support revenues (to which the R&D expenses are
more closely related), R&D expenses decreased from 31.0% in the first quarter of
fiscal 2001 to 25.5% in the first quarter of fiscal 2002. The decrease in R&D
expenses is primarily attributable to our efforts to control costs and expenses.

    OTHER (EXPENSE) INCOME. Net interest expense was $32,000 for the three
months ended June 30, 2001, compared to net interest income of $90,000 for the
three months ended June 30, 2000. This change is primarily due to the reduction
in cash balances deposited in interest earning accounts.

    INCOME TAXES. We recorded an income tax expense of $89,000 in the first
quarter of fiscal 2002 compared to an income tax benefit of $110,000 in the
first quarter of fiscal 2001. The change resulted largely from an increase in
the valuation allowance against deferred tax assets recorded for the quarter
ended June 30, 2001. In assessing the realizability of the net deferred tax
assets, management considers whether it is more likely than not that some or all
of the deferred tax assets will not be realized. The ultimate realization of
deferred tax assets is dependent upon either the generation of future taxable
income during the periods in which those temporary differences become deductible
to recover income taxes previously paid during the carryback period. As of June
30, 2001, we had a valuation allowance of $2,979,000 to reduce the net deferred
tax assets due to the potential expiration of certain tax credit and net
operating loss carryforwards prior to their utilization.

                                       15




<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

    We currently finance our operations (including capital expenditures)
primarily through existing cash and cash equivalent balances. Our principal
sources of liquidity at June 30, 2001 consisted of $6,964,000 of cash and cash
equivalents. Cash and cash equivalents decreased by $994,000 during the three
months ended June 30, 2001. The decrease was largely due to cash used in
operating activities and to a lesser extent by cash used in investing and
financing activities. During the same three-month period in the prior year, the
decrease in cash and cash equivalents was $342,000. The larger decrease in cash
and cash equivalents in the current period is due to a reduction in cash
provided by financing activities.

    Operating activities used $453,000 in the first three months of fiscal 2002.
In contrast, operating activities provided $171,000 in the first three months of
fiscal 2001. The primary contributors were:

    o   A larger net loss in fiscal 2002 ($1,151,000) compared to fiscal 2001
        ($317,000);
    o   An increase in payments to vendors for accounts payable and accrued
        expenses and prepayment of certain expenses resulting in a net cash
        outflow of $788,000 in fiscal 2002 compared to a reduction in cash
        outflow of about $616,000 in fiscal 2001 (as a result of increases in
        accounts payable, prepaid expenses and accrued expenses); and
    o   Decrease in maintenance billings as reflected by a decrease of $525,000
        in deferred maintenance revenue in fiscal 2002 compared to an increase
        of $31,000 in fiscal 2001.

    These contributors were partially offset by:

    o   Reductions in accounts receivable of about $1,094,000 in fiscal 2002
        compared to increase in accounts receivable of $729,000 in fiscal 2001.

    In the first quarter of the current fiscal year (fiscal 2002), we used
$239,000 primarily to repay bank debt and to repurchase common stock. During the
first quarter of the prior fiscal year (fiscal 2001), we received $2,870,000
from financing activities, mainly from an issuance 200,000 shares of our common
stock for approximately $3,084,000 (net of certain commissions and offering
costs) to two investors on June 22, 2000 in a private transaction not involving
a public offering. We received an additional $410,000 through the exercise of
stock options and warrants during the first quarter of fiscal 2001.

    During the three months ended June 30, 2001, we used approximately $234,000
of cash in investing activities primarily to purchase property, plant and
equipment compared to $3,284,000 during the three months ended June 30, 2000,
primarily to acquire companies and purchase property, plant and equipment.

    We believe that our current cash and cash equivalents balances will provide
adequate working capital to fund our operations at currently anticipated levels
through March 31, 2002. Additionally, we currently have $2,000,000 available
under an existing line of credit. We are currently under negotiations to renew
this line of credit which expires August 31, 2001. To the extent that such
amounts are insufficient to finance our working capital requirements, we will be
required to raise additional funds through public or private equity or debt
financing. There can be no assurance that such additional financing will be
available, if needed, or, if available, will be on terms satisfactory to us.

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

    In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133 ("SFAS 133"), ACCOUNTING FOR DERIVATIVE
INSTRUMENTS AND HEDGING ACTIVITIES. The provisions of the statement require the
recognition of all derivatives as either assets or liabilities in the
consolidated balance sheet and the measurement of those instruments at fair
value. The accounting for the changes in fair value of a derivative depends on
the intended use of the derivative and the resulting designation. We have not

                                       16




<PAGE>

historically entered into derivative contracts or related instruments.
Transactions between our domestic entities and foreign entities, including our
foreign subsidiaries, are typically denominated in the US dollar. Transactions
between our foreign subsidiaries and third parties are typically denominated in
the local functional currency in the country in which the subsidiary operates.
We adopted SFAS 133, as amended, effective April 1, 2001, the implementation of
which resulted in no material impact on our consolidated financial statements
and results of operations.

    In July 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 141, "Business Combinations", and SFAS
No. 142, "Goodwill and Other Intangible Assets." The Company is required to
adopt the provisions of SFAS 141 immediately, except with regard to business
combinations initiated prior to July 1, 2001.  SFAS No. 141 requires that all
business combinations be accounted for under a single method - the purchase
method. Use of the pooling-of-interests method is no longer permitted. SFAS No.
141 required that the purchase method be used for business combinations
initiated after June 30, 2001. SFAS No. 142 requires that goodwill no longer be
amortized to earnings, but instead be reviewed for impairment. Under SFAS No.
142, the amortization of goodwill ceases upon adoption of the Statement, is
effective for fiscal years beginning after December 15, 2001 and shall be
initially applied at the beginning of a fiscal year.

    The Company has historically amortized its goodwill and other intangible
assets over their estimated useful lives. Beginning with the adoption of SFAS
No. 142, the Company will cease amortizing its goodwill and certain intangible
assets. The Company anticipates adopting SFAS No. 142 as of the beginning of
fiscal year 2003 (i.e., April 1, 2002). As of the date of adoption, the Company
expects to have unamortized goodwill in the amount of $9,574,000, which will
be subject to the transition provisions of SFAS 141 and 142.  The Company
recorded amortization expense in the amount of $1,360,000 for the fiscal year
ended March 31, 2001, $334,000 for the quarter ended June 30, 2001 and $344,000
for the quarter ended June 30, 2000. To the extent that no impairment charges
are recorded upon adoption or application of SFAS No. 142, similar amounts
amortization will not be recorded in future periods, although the Company
has not fully completed its analysis of the effects of adopting these standards.

                                       17

<PAGE>

PART II -- OTHER INFORMATION

ITEM 1.      LEGAL PROCEEDINGS

             None

ITEM 2.      CHANGES IN SECURITIES

             None

ITEM 3.      DEFAULTS UPON SENIOR SECURITIES

             None

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

             None

ITEM 5.      OTHER INFORMATION

             None

ITEM 6.      EXHIBITS AND REPORTS ON FORM 8-K

             (a) Exhibits

                 None

             (b) Reports on Form 8-K

                 None

                                       18




<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.

Date:  August 14, 2001

                                        NETGURU, INC.

                                        By: /S/ JYOTI CHATTERJEE
                                            --------------------
                                           Jyoti Chatterjee
                                           President and Chief Operating Officer
                                           and Acting Chief Financial Officer
                                           (principal financial and accounting
                                            officer)

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