See Item 2.01 for a description of the agreement and plan of merger, dated August 29, 2006, among BPO Management Services, Inc. ("BPOMS"), netGuru, Inc. ("NGRU" or "our predecessor"), and BPO Acquisition Corp. ("Merger Sub"). Also, see Item 2.01 for a description of the purchase agreement, dated August 29, 2006, among NGRU and Das Family Holdings, a privately-held California corporation ("DFH"), and for a description of other related agreements.

Merger Agreement

On August 29, 2006, BPOMS, NGRU, and a newly created, wholly-owned subsidiary of NGRU, Merger Sub, entered into an agreement and plan of merger (the "Merger Agreement"). The transaction contemplated by the Merger Agreement (the "Merger") closed on December 15, 2006 (the "Merger Closing"). Pursuant to the Merger Agreement, BPOMS merged with and into Merger Sub, thereby making BPOMS a wholly-owned subsidiary of NGRU. Immediately thereafter, the Merger Sub was merged with and into NGRU, and NGRU changed its name to "BPO Management Services, Inc." (referred to as "we" or "our").

BPOMS was a privately-held Delaware corporation that provides business process outsourcing services to support back-office business functions, such as human resources management, IT services, document management solutions, and finance and accounting processes. BPOMS' target is middle-market enterprises located throughout the United States and Canada, with its principal executive offices currently located at 22700 Savi Ranch Parkway, Yorba Linda, California 92887.

Immediately prior to the Merger Closing, NGRU effected a 1-for-15 reverse stock split of its common stock. At the Merger Closing, BPOMS' stockholders exchanged their shares of BPOMS' common and Series A, B, and C preferred stock for shares of our common stock and shares of our three series of preferred stock that contained, among other terms, various conversion, liquidation, redemption, voting, director election, and board observation provisions that were substantially similar to the provisions of BPOMS' three series of preferred stock. Furthermore, we increased the authorized number of our preferred shares from 5,000,000 to 29,795,816, which includes the original 5,000,000 authorized "blank check" preferred shares and an additional number of authorized preferred shares equivalent (on a post-reverse-split basis) to the number of authorized shares of each series of BPOMS preferred stock. We also assumed BPOMS' obligations under its outstanding options and warrants for the purchase of BPOMS' common stock.

Because the former stockholders of BPOMS now hold approximately 90 percent of our outstanding common shares assuming conversion of all outstanding Series A and Series B Preferred Stock, we experienced a change of control. The identities of the directors, officers, and five percent stockholders immediately prior to the Merger Closing and immediately subsequent thereto are as follows:

NGRU Stock Ownership Pre-Merger Closing

                                         AMOUNT AND NATURE OF
              NAME OF                         BENEFICIAL               PERCENT OF CLASS
                                         OWNERSHIP OF COMMON
          BENEFICIAL OWNER                      STOCK                  OF COMMON STOCK

Amrit K. Das                                        2,724,468   (1 )               14.2 %
Santanu K. Das                                      2,554,900                      13.3 %
Sormistha Das                                       1,933,744                      10.1 %
Peter Kellogg                                       3,835,800   (2 )               19.9 %
Diker GP, LLC, Diker
Management LLC, Charles
M. Diker and Mark M. Diker                            967,424   (3 )                5.0 %

Our Stock Ownership Post-Merger Closing

    NAME OF              TITLE OF           NUMBER OF     PERCENT OF
BENEFICIAL OWNER          CLASS              SHARES          CLASS

Patrick Dolan              Common           4,608,144(1 )        51.5 %
                     Series A Preferred       975,909(2 )        63.5 %
                     Series C Preferred       1,400,000          90.9 %

James Cortens              Common           2,949,529(3 )        36.8 %
                     Series A Preferred       560,430(4 )        36.5 %
                     Series C Preferred         140,000           9.1 %

Brian Meyer                Common             863,437(5 )        11.0 %
                     Series B Preferred       439,812(6 )        30.3 %

Don West                   Common           1,921,231(7 )        23.3 %
                     Series B Preferred       907,781(8 )        62.6 %

The Merger resulted in a change of control of NGRU on December 15, 2006. See Item 2.01 "Completion of Acquisition or Disposition of Assets" above.

On December 15, 2006, each of our directors and officers resigned, pursuant to the Merger Agreement. The following persons were appointed as our new directors and officers, as stated:

     NAME               AGE          POSITION

     Patrick Dolan      48          Chairman of the Board, Chief Executive Officer
                                    and Director
     James Cortens       50         President, Secretary and Director
     Bruce K. Nelson    52          Chief financial Officer
     Dale Paisley       65          Director

PATRICK DOLAN founded BPOMS and has served as its chief executive officer and chairman of the Board since its inception in July 2005. Prior to co-founding BPOMS, Mr. Dolan served as president and chief operating officer of Infocrossing Inc., a provider of selective information technology outsourcing solutions, from April 2004 through October 2004. For the two previous years, prior to Infocrossing acquiring ITO Acquisition Corporation, doing business as Systems Management Specialists ("SMS"), a California company, Mr. Dolan served as its chairman and chief executive officer. In December 2002, Mr. Dolan led a successful management team initiative, in conjunction with Los Angeles-based private equity fund Riordan, Lewis & Haden, to re-purchase SMS from Marconi, plc, which had acquired SMS from its prior owners in June 2000. Prior to that time, Mr. Dolan was president and chief operating officer of SMS from November 1994. Mr. Dolan spent the early years of his career with Affiliated Computer Services and, subsequently, SHL Systemhouse. Mr. Dolan earned a B.S. in Economics from New York University.

JAMES CORTENS founded BPOMS and has served as its chief financial officer, president, and a director since its inception in July 2005. Prior to co-founding BPOMS, Mr. Cortens served as executive vice president of Infocrossing Inc., a provider of selective information technology outsourcing solutions, from April 2004 through October 2004. For the two previous years, prior to Infocrossing acquiring SMS, Mr. Cortens served as its president and director. In December 2002, Mr. Cortens was part of a successful management team initiative, in conjunction with Los Angeles-based private equity fund Riordan, Lewis & Haden, to re-purchase SMS from Marconi, plc, which had acquired SMS from its prior owners in June 2000. Prior to that time, Mr. Cortens was executive vice president of business development of SMS from November 1994. Mr. Cortens spent the early years of his career with SHL Systemhouse. Mr. Cortens earned a B.Sc. in Computer Science from the University of Manitoba.

BRUCE K. NELSON has served as our chief financial officer since April 2002 and as our secretary since November 2005. Prior to joining us, Mr. Nelson served as chief financial officer of Millennium Information Technologies, Inc. from 1997 to April 2002. From 1992 to 1997, he was co-founder and president of Comprehensive Weight Management, a healthcare marketing company. From 1985 to 1992, Mr. Nelson served as treasurer of Comprehensive Care Corporation, a NYSE-traded national service company. Mr. Nelson holds a B.S. in Finance from University of Southern California and an M.B.A. from Bryant College in Smithfield, Rhode Island.

DALE PAISLEY has been a financial and accounting consultant to primarily small public companies since 2000. He assists his clients with regulatory reporting with the Commission and state regulators and has served as temporary chief financial officer and chief executive officer of several public and private companies. From October 2002 until December 2003, Mr. Paisley served as president of SoCal Waste Group, Inc., and from February 2003 until December 2003, he served as chief executive officer and chief financial officer of USA Biomass Corporation. Prior to that time, Mr. Paisley was a partner in the international accounting firm of Coopers & Lybrand (now PriceWaterhouseCoopers). Mr. Paisley earned a B.S. in accounting from San Diego State University.

We have employment agreements with two of our executive officers, Mr. Dolan and Mr. Cortens, dated July 29, 2005. Except as otherwise noted, the terms of the employment agreements are identical.

The employment agreements provide that Mr. Dolan will serve as our chief executive officer and Mr. Cortens will serve as our president, respectively, for an initial two and one-half year term. The employment agreements include the following provisions:

o Initial base salary of not less than $225,000 in the case of Mr. Dolan, and $200,000 in the case of Mr. Cortens, subject to annual review and increase in the discretion of our board of directors. The board set 2005-2006 base salaries for Mr. Dolan and Mr. Cortens at $250,000 and $225,000, respectively. For the period through July 29, 2006, the officers accepted their base salaries in shares of our Series A Convertible Preferred Stock at a $1.00-for-1 share ratio, in lieu of cash. Since that time, we have not paid the officers any portion of their salaries;

o Annual bonus in an amount, if any, as determined by the board based on our achievement and individual performance goals as established by the board;

o Participation in BPOMS' employee welfare, pension and benefit plans as maintained for the benefit of BPOMS' employees;

o Six weeks of vacation annually;

o Reimbursement for all business, travel, and entertainment expenses incurred prior to, on, or after July 29, 2005, with respect to our business or prospective business, and including expenses incurred in connection with the formation of the company and the acquisition of ADAPSYS Document Management, Inc. and ADAPSYS Transaction Processing, Inc.; and

o Reimbursement of telephone, cell phones, computer usage, and Internet access at home for business use, as well as a monthly car allowance of $750.00 per month.

Upon execution of the employment agreements, Mr. Dolan and Mr. Cortens were each granted options to purchase 750,000 and 500,000 shares, respectively, of BPOMS' common stock, vesting 25% per year. In the event of a change of control, or if the officer's employment is terminated by us without cause, or by the officer for good reason, as defined in the agreements, then we will:

o Pay a lump sum equal to the sum of all accrued and unpaid base salary and vacation pay through the date of termination, and if no change of control has occurred, the officer's base salary for the remainder of the employment period and two times the highest annual bonus paid for any fiscal year, and if no annual bonus has been paid, then two times the minimum annual bonus;

o Continue to provide the officer and his eligible spouse and dependents the various medical and life insurance provided for in the agreement or economic equivalent as if he had remained employed through the employment agreement term; and

o The officer's unvested stock options will become immediately 100% vested.

If we terminate the officer's employment for cause or the officer terminates his employment without good reason, then we will:

o Pay a lump sum equal to all accrued and unpaid base salary and vacation pay through the date of termination; and

o Have no further obligation to the officer except for the benefits provided under any stock option grants and any other agreements, plans or programs of ours.

For purposes of the employment agreements, termination for "cause" means the employee's willful gross misconduct or conviction of a felony that, in either case, results in material and demonstrable damage to the business or reputation of ours, or the willful and continued failure to perform his duties (subject to a 20-business day cure period), within twenty business days after we deliver to him a written demand for performance that specifically identifies the actions to be performed. Termination for "good reason" means, subject to a ten-business day cure period,

o the assignment to the employee of duties inconsistent with this Agreement or a change in his titles or authority;

o any failure by us to comply with sections of the agreement regarding compensation and benefits in any material way;

o the requirement of the employee to relocate to locations other than Orange County, California;

o the failure of ours to comply with and satisfy its obligations regarding any successor to its business and/or assets;

o any material breach of the agreement by us; or

o a change in control of ours.

A change in control under the agreements is the acquisition of us by another entity by means of any transaction or series of related transactions (including, without limitation, any stock acquisition, reorganization, merger, or consolidation), other than a transaction or series of transactions in which the holders of the our voting securities outstanding immediately prior to the transaction continue to retain (either by such voting securities remaining outstanding or by such voting securities being converted into voting securities of the surviving entity), as a result of our shares held by those holders prior to those transactions, at least fifty percent (50%) of the total voting power represented by our voting securities or the surviving entity outstanding immediately after the transaction or series of transactions, or sale of 80% or more of our assets. The merger was not deemed a change in control for purposes of the employment agreements with Messrs. Dolan and Cortens.

The employment agreements with Messrs. Dolan and Cortens also contain confidentiality provisions.

On March 24, 2006, NGRU entered into an employment agreement with Mr. Bruce Nelson, its Chief Financial Officer and Secretary. The employment agreement superseded and made void a retention agreement that it had entered into with Mr. Nelson in June 2005 on the same terms as the retention agreement described . . .

Immediately prior to the Merger Closing, NGRU filed an amendment to its certificate of incorporation, effective December 14, 2006, to effect a 1-for-15 reverse split of its common stock and to increase the number of authorized shares of its preferred stock from 5,000,000 to 29,795,816. In connection with the Merger, effective December 15, 2006, we filed a certificate of merger to effect the merger of our wholly owned subsidiary, BPO Acquisition Corp., with and into NGRU. Immediately after the Merger Closing, we filed an amendment to our certificate of incorporation to change our name to "BPO Management Services, Inc."

We will account the Merger as a "reverse merger" because there was a change of control at the Merger Closing. Accordingly, for accounting purposes, BPOMS will be treated as the continuing reporting entity and accounting acquiror that acquired NGRU, which accounting treatment will result in the us adopting the December 31 fiscal year-end of BPOMS. Subsequent to the Merger Closing, the historical statements of operations will be those of BPOMS' and the balance sheet will consist of the net assets of BPOMS'. All capital stock shares and amounts and per share data will be retroactively restated. As a result of the accounting treatment of the Merger, subject to our filing of an amendment to this Current Report or the filing of any further Current Reports on Form 8-K, we expect that the next periodic report that we will file pursuant to our obligations under Section 13 or 15(d) of the Securities Exchange Act of 1934 will be an Annual Report on Form 10-KSB for the annual year-ending December 31, 2006.

Item 9.01 Financial Statements and Exhibits.

(a) Financial statements of businesses acquired

The financial statements will be filed by an amendment to this Current Report within 75 days of the Merger Closing and Purchase Closing.

(d) Exhibits

       Exhibit No.   Description of Exhibit

       2.1           Agreement and Plan of Merger by and among BPO Management
                     Services, Inc., netGuru, Inc., and BPO Acquisition Corp, dated
                     August 29, 2006, incorporated by reference to Exhibit 10.1 of
                     NGRU's Form 8-K filed on September 5, 2006
       2.2           Purchase Agreement between Das Family Holdings and netGuru,
                     Inc., dated August 29, 2006, incorporated by reference to
                     Exhibit 10.2 of NGRU's Form 8-K filed on September 5, 2006
       3.1*          Second Restated Certificate of Incorporation of NGRU, as filed
                     with the Secretary of State of the State of Delaware on December
                     14, 2006
       3.2           Bylaws of registrant, incorporated by reference to NGRU's Form
                     SB-2, dated May 21, 1996, or amendment thereto dated June 14,
                     1996
       3.3           Action with respect to Bylaws, as certified by NGRU's secrtary
                     on October 22, 2004, incorporated by reference to NGRU's Form
                     8-K filed on October 29, 2004
       3.4*          Certificate of Merger, as filed with the Secretary of State of
                     the State of Delaware on December 15, 2006
       3.5*          Certificate of Amendment to Articles of Incorporation, as filed
                     with the Secretary of State of the State of Delaware on December
                     15, 2006
       10.1*         Outsourcing Services Agreement, dated December 15, 2006, between
                     DFH and us
       10.2*         Value-Added Reseller Agreement between REL and Web4
       10.3*         Transition Agreement, dated December 15, 2006, between DFH and
                     BPOMS/HRO, Inc.
       10.4*         Promissory Note, dated December 15, 2006, between DFH and us
       99.1*         Press release, dated December 15, 2006
       99.2*         Press release, dated December 18, 2006

* filed herewith