-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, N2f7RQ6co2NoUefG/Ckfy3yFqijDIlQW8mB6G3+GPFgd4PNfImn0oy7dtumOBL9z NOUG3woD6z/DKwYr2/9pfQ== 0001096906-06-000588.txt : 20060609 0001096906-06-000588.hdr.sgml : 20060609 20060609164821 ACCESSION NUMBER: 0001096906-06-000588 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20060331 FILED AS OF DATE: 20060609 DATE AS OF CHANGE: 20060609 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ENSURGE INC CENTRAL INDEX KEY: 0000789879 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 870431533 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 033-03275-D FILM NUMBER: 06897620 BUSINESS ADDRESS: STREET 1: 2089 FORT UNION BLVD STREET 2: --- CITY: SALT LAKE CITY STATE: UT ZIP: 84121 BUSINESS PHONE: 801-673-2953 MAIL ADDRESS: STREET 1: 2089 FORT UNION BLVD STREET 2: --- CITY: SALT LAKE CITY STATE: UT ZIP: 84121 FORMER COMPANY: FORMER CONFORMED NAME: ISHOPPER COM INC DATE OF NAME CHANGE: 20000301 FORMER COMPANY: FORMER CONFORMED NAME: SUNWALKER DEVELOPMENT INC DATE OF NAME CHANGE: 19920703 10QSB 1 ensurge10qsb033106.htm ENSURGE, INC. FORM 10-QSB MARCH 31, 2006 EnSurge, Inc. Form 10-QSB March 31, 2006


 
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 March 31, 2006


[  ]
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


Commission File Number: 033-03275-D


EnSurge, Inc.
(Exact name of small business issuer as specified in its charter)


Nevada
87-0431533
(State or other jurisdiction of incorporation or organization)
(IRS Employer Identification No.)

 
2089 East Fort Union Blvd
Salt Lake City, UT 84121
(Address of principal executive offices)

(801) 673-2953
(Issuer’s telephone number)

(Former name, former address and former fiscal year, if changed since last report)


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

There were 75,142 shares of common stock, $0.001 par value, issued and outstanding as of May 19, 2006.



 
 
 

 
 

EnSurge, Inc.
FORM 10-QSB
 

QUARTER ENDED MARCH 31, 2006

TABLE OF CONTENTS


   
Page
     
PART I-FINANCIAL INFORMATION
     
Item 1.
Financial Statements
 
     
 
Condensed Consolidated Statements of Assets, Liabilities and Stockholders' Deficit - Liquidation Basis (Unaudited) as of March 31, 2006 and December 31, 2005
3
     
 
Condensed Consolidated Statements of Revenue and Expenses - Liquidation Basis (Unaudited) for the Three Months Ended March 31, 2006 and 2005
4
     
 
Condensed Consolidated Statements of Cash Flows - Liquidation Basis (Unaudited) for the Three Months Ended March 31, 2006 and 2005
5
     
 
Notes to Condensed Consolidated Financial Statements (Unaudited)
6
     
Item 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations
10
     
PART II - OTHER INFORMATION
     
Item 1.
Legal Proceedings
11
     
Item 4.
Submission of matters to a vote of Security Holders
13
     
Item 6.
Exhibits and Reports on Form 8-K
13
     
Signatures
14
     









 
 
2

 

PART I -
FINANCIAL INFORMATION

Item 1. Financial Statements
EnSurge, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF ASSETS, LIABILITIES AND
STOCKHOLDERS’ DEFICIT - LIQUIDATION BASIS
(UNAUDITED)

   
March 31,
 
December 31,
 
   
2006
 
2005
 
ASSETS
Current Assets
         
Cash
 
$
56
 
$
400
 
               
Total Current Assets
   
56
   
400
 
               
Total Assets
 
$
56
 
$
400
 
               
               
LIABILITIES AND STOCKHOLDERS' DEFICIT
               
Current Liabilities
             
Trade accounts payable
 
$
1,532,167
 
$
1,532,167
 
Accrued liabilities
   
2,216,289
   
2,569,103
 
Notes payable
   
1,745,184
   
2,492,565
 
               
Total Current Liabilities
   
5,493,640
   
6,593,835
 
               
Stockholders' Deficit
             
Common stock - $0.001 par value; 100,000,000 shares authorized; 75,142 shares issued and outstanding
   
75
   
75
 
Additional paid-in-capital
   
16,280,200
   
16,280,200
 
Accumulated deficit
   
(21,773,859
)
 
(22,873,710
)
               
Total Stockholders' Deficit
   
(5,493,584
)
 
(6,593,435
)
               
Total Liabilities and Stockholders' Deficit
 
$
56
 
$
400
 






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


 
3

 

EnSurge, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF REVENUE AND
EXPENSES - LIQUIDATION BASIS
(UNAUDITED)

   
For the Three Months
 
   
Ended March 31,
 
   
2006
 
2005
 
           
Sales
 
$
-
 
$
-
 
               
Cost of Sales
   
-
   
-
 
               
Gross Profit
   
-
   
-
 
               
Expenses
             
               
General and administrative
   
9,344
   
9,640
 
               
Interest Expense
   
28,572
   
47,256
 
               
Total Expenses
   
37,916
   
56,896
 
               
Operating Loss
   
(37,916
)
 
(56,896
)
               
Gain on Forgiveness of Debt
   
1,137,767
   
-
 
               
Net Gain or (Loss)
 
$
1,099,851
 
$
(56,896
)
               
Basic and Diluted Gain (Loss) per Share
 
$
14.64
 
$
(0.76
)
               
Basic and Diluted Weighted Average Common Shares Outstanding
   
75,142
   
75,142
 



 

 



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

 
4

 
 
 
EnSurge, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
LIQUIDATION BASIS
(UNAUDITED)

   
For the Three Months
 
   
Ended March 31,
 
   
2006
 
2005
 
           
Cash Flows From Operating Activities
         
               
Net gain or (loss)
 
$
1,099,851
 
$
(56,896
)
               
Adjustments to reconcile net loss to net cash used in operating activities:
             
               
Forgiveness of debt
   
(1,137,767
)
 
-
 
               
Changes in operating assets and liabilities:
             
               
Trade accounts payable
   
-
   
(225
)
               
Accrued liabilities
   
37,572
   
56,256
 
               
Net Cash Used in by Operating Activities
   
(344
)
 
(865
)
               
Cash Flows From Financing Activities
             
               
Proceeds from issuance of notes payable
   
59,362
   
250
 
               
Increase in notes payable
   
(59,362
)
 
-
 
               
Net Cash Provided by Financing Activities
   
-
   
250
 
               
Net Decrease in Cash
   
(344
)
 
(615
)
               
Cash at Beginning of Period
   
400
   
672
 
               
Cash at End of Period
 
$
56
 
$
57
 





 



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


 
5

 

 
Ensurge, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)


NOTE 1-ORGANIZATION AND BASIS OF PRESENTATION

Organization and Liquidation - On October 16, 2000, iShopper.com, Inc. changed its name to enSurge, Inc. enSurge, Inc. and its subsidiaries are referred to herein as the Company. On January 1, 2002, the Company began liquidation of its assets; accordingly, the accompanying consolidated financial statements are presented on a liquidation basis of accounting.

Basis of Presentation - The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-QSB. Accordingly, these financial statements do not include all of the information and disclosures required by generally accepted accounting principles for complete financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s annual consolidated financial statements and the notes thereto for the year ended December 31, 2005, included in the Company’s annual report on Form 10-KSB, especially the information included in Note 1 to those financial statements, “Summary of Significant Accounting Policies.” In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to fairly present the Company’s consolidated financial position as of March 31, 2006, and its consolidated results of operations and cash flows for the three months ended March 31, 2006 and 2005. The results of operations for the three months ended March 31, 2006, may not be indicative of the results that may be expected for the year ending December 31, 2006.

Principles of Consolidation - The accompanying consolidated financial statements include the accounts of enSurge, Inc. and the accounts of its wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation.

Business Condition - The Company has suffered losses from operations and has a working capital deficiency of $5,493,584 at March 31, 2006. The Company has no means available nor does management have any plans to obtain financing to satisfy the Company’s current liabilities of $5,493,640 at March 31, 2006, or to satisfy any of the Company’s contingent liabilities. The Company has defaulted on several liabilities and is a defendant in several resulting lawsuits, discussed further in Note 2.

Basic and Diluted Loss Per Share - Basic loss per common share is computed by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted loss per share is calculated to give effect to potentially issuable common shares which include stock options and stock warrants except during loss periods when those potentially issuable common shares would decrease loss per share. As of March 31, 2006, the Company has no potentially issuable shares.

NOTE 2 - COMMITMENTS AND CONTINGENCIES

Company as Guarantor - In October 2000, the Company, a former subsidiary, Theodore Belden and James Corcoran entered into an agreement to settle a royalty payable to Belden and Corcoran by a former subsidiary. The Companies agreed to pay Belden $237,603 and Corcoran $450,720 for past and future Royalty liabilities. The shares were valued at $353,832 or $4.00 per share. The Company is acting as guarantor of the notes payable to Belden and Corcoran totaling $688,323.

E-Commerce Exchange. v. Outbound Enterprises, Inc. or iShopper.com, Inc. - In December 2000, E-Commerce brought suit against Outbound and iShopper Internet Services, former subsidiaries of the Company, seeking recovery of amounts owed for services provided in the amount of $15,939. There was no dispute that the sums claimed were owed and judgment was entered against Outbound and iShopper Internet Services. As of March 31, 2006, the Company has accrued the above liability.
 

 
6

 

 
Ensurge, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)

Media Source, Inc. v. iShopper Internet Services, Inc. - In April 2000, Media Source, Inc brought suit against iShopper Internet Services, a former subsidiary, and the Company seeking recovery of amounts owed for promotional material and products furnished to iShopper Internet Services, Inc., in the amount of $53,399 plus interest and attorneys fees. The Company acknowledged that $43,429 was owed by iShopper Internet Services and an agreement was entered into to pay the undisputed sum, over time. As a result, Media Source dismissed the lawsuit. iShopper Internet Services made the first installment payment of $10,000 but lacked funds to pay the balance. The obligation for the unpaid balance under the settlement agreement is undisputed. As of March 31, 2006, the Company has accrued the above liability.

MediaBang. L.C. v. iShopper Internet Services, Inc. - In April 2000, iShopper Internet Services was informed that MediaBang had filed suit against them in December 1999 seeking recovery of amounts owed for programming services furnished to iShopper Internet Services on an open contract in the amount of $10,136 plus interest and fees. Negotiations resulted in a settlement reduced to writing in November 2000, under which MediaBang agreed to accept installment payments against a $7,000 settlement amount, conditional on the Company’s agreement to guarantee payments. The lawsuit was subsequently dismissed. In November 2000, $2,000 was paid reducing the liability to $5,000. As of March 31, 2006, the Company has accrued the remaining liability.

Positive Response, Inc. v. iShopper Internet Services, Inc. - In July 2000, Positive Response brought suit against iShopper Internet Services seeking recovery of amounts owing for a data base on potential customer or customer contracts in the amount of $41,896. Settlement in the matter was reached in the compromised amount of $37,000, to be satisfied on installment payments. All required installment payments except a final payment of $10,000 due October 14, 2000 were made. As of March 31, 2006, the Company has accrued the above liability.

IOS Capital, Inc. v. iShopper Internet Services, Inc. - In January 2001, IOS Capital brought suit against iShopper Internet Services seeking replevin of leased copy machines and judgment for lease balances totaling $17,553, plus interest and attorneys fees. iShopper Internet Services filed its answer in February 2001 inviting the plaintiff to retrieve both items of equipment. The Company is in default on the leases. As of March 31, 2006, the Company has accrued the above liability.

OneSource.com v. Outbound Enterprises and enSurge, Inc. - In October 2000, OneSource.com brought suit against Outbound seeking recovery for amounts owed for printing services and related products furnished between October 1999 and January 2000 in the amount of $76,157. Settlement was reached in December 2000, on terms that entitled OneSource to judgment against Outbound and Company, as its guarantor, if settlement installments were not made as required. The Company has defaulted in settlement payments and judgment against Outbound and the Company was entered on March 30, 2001, in the amount of $85,096, including interest costs and attorneys fees. As of March 31, 2006, the Company has accrued the above liability.

Pacific Media Duplication, LLC v. iShopper.com, Inc., TotaliNet.net, Inc. and Richard Scavia. - In January 2001, Pacific Media brought suit against the Company, TotaliNet, a former subsidiary, and Richard Scavia seeking recovery of balances owed under a sublease by TotaliNet of office space and equipment in the amount of $30,000 and $38,437, respectively. The plaintiff claims against TotaliNet and the Company as guarantor on the office lease, and against Scavia, as its prior president and as guarantor, on the equipment lease. The Company does not dispute TotaliNet’s obligations (nor its obligations as guarantor) under the office lease. The Company is in default on the leases. As of March 31, 2006, the Company has accrued the above liability.
 

 
 
7

 
 
 
Ensurge, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)


Paychex, Inc. v enSurge, Inc. and Subsidiaries. - In March 2001, Paychex filed for arbitration with the American Arbitration Association in Syracuse, New York, against enSurge and its subsidiaries for employee payroll and payroll taxes paid by Paychex. Paychex has filed arbitration separately for each company as follows: enSurge, Inc. $45,146; iShopper Internet Services, Inc. $13,247; TotaliNet, net, Inc. $17,416; Uniq Studios, Inc. $22,002, and Atlantic Technologies International, Inc. $28,079, all former subsidiaries. As of March 31, 2006, the Company has accrued the above liabilities.

NCX Corporation v Atlantic Technologies International, Inc. - In October 2000, NCX Corporation filed suit in the Superior Court of California, Los Angeles County, against Atlantic Technologies International, Inc. seeking recovery of balances owed for past due accounts payable in the amount of $29,472. As of March 31, 2006, the Company has accrued the above liability.
 
Allison Ewrin Company v Atlantic Technologies International, Inc. - On April 7, 1999, Allison Erwin Company filed suit in the Circuit Court of Orange County, Florida, against Atlantic Technologies International, Inc. seeking recovery of balances owed for past due accounts payable in the amount of $30,666. Settlement was reached for $12,000, with payments to have started on May 25, 2001, but were not made. As of March 31, 2006, the Company has accrued the above liability.

Scanport, Inc. v Atlantic Technologies, Inc. - On March 9, 2001, Scanport, Inc. filed suit in the Circuit Court of Orange County, Florida, against Atlantic Technologies International, Inc. seeking recovery of balances owed for past due accounts payable in the amount of $59,212. As of March 31, 2006, the Company has accrued the above liability.

Avnet Electronics Marketing, Inc. v Atlantic Technologies International, Inc. - On March 27, 2001, Avnet Electronics Marketing, Inc. filed suit in the Circuit Court of Orange County, Florida, against Atlantic Technologies International, Inc. seeking recovery of balances owed for past due accounts payable in the amount of $32,856. As of March 31, 2006, the Company has accrued the above liability.

US Drive Technology Corporation v Atlantic Technologies International, Inc. - On March 24, 1999, US Drive Technology Corporation filed suit in the Circuit Court of Orange County, Florida, against Atlantic Technologies International, Inc. seeking recovery of balances owed for past due accounts payable in the amount of $39,199. Settlement was reached for $39,199 and payments were made paying down the liability to $24,199. As of March 31, 2006, the Company has accrued the above liability.

Trogon Computer Corporation v Atlantic Technologies International, Inc. - On June 15, 1999, Trogan Computer Corporation filed suit in the Circuit Court of Orange County, Florida, against Atlantic Technologies International, Inc. seeking recovery of balances owed for past due accounts payable in the amount of $16,771. Settlement was reached for $6,825, with ten monthly payments at $682 to have started on October 10, 2000, however, the payments were not made. As of March 31, 2006, the Company has accrued the above liability.

Suntrust Bank, N.A. v Atlantic Technologies International, Inc. - In April 2001, Suntrust Bank filed suit in the Circuit Court of Orange County, Florida, against Atlantic Technologies International, Inc. seeking recovery of balances owed for a past due line of credit in the amount of $184,415. As of March 31, 2006, the Company has recorded this liability.

A-Business Funding Group v Ensurge, Inc. In November 2003, A-Business Funding Group filed suit in the Circuit Court of Salt Lake County, Utah, against Ensurge, Inc. seeking recovery of balances owed in the amount of $50,000. This liability is recorded at March 31, 2006.
 

 
 
8

 
 
 
Ensurge, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)


Global Funding v Ensurge, Inc. In November 2003, Global Funding filed suit in the Circuit Court of Salt Lake County, Utah, against Ensurge, Inc. seeking recovery of balances owed in the amount of $100,000. This liability is recorded at March 31, 2006.

REA, LLC v Ensurge, Inc. In November 2003, REA, LLC filed suit in the Circuit Court of Salt Lake County, Utah, against Ensurge, Inc. seeking recovery of balances owed in the amount of $40,000. This liability is recorded at March 31, 2006.

NOTE 3 - NOTES PAYABLE

During the period ended March 31, 2006, the Company entered into five agreements to settle outstanding notes payable and related accrued interest totaling $1,197,129.  Each debt and accrued interest was settled for approximately $0.05 on the dollar, or $59,362. The Company entered into a new note payable agreement to pay for these settlements. This note payable of $59,362 accrues interest at 15% per annum, is due on demand, and is unsecured.

NOTE 4 - SUBSEQUENT EVENTS

Effective May 8, 2006 the company approved a 1 for 3,000 reverse split in its common stock. The Company will not reverse any certificate that is less than 100 shares or any certificate more than 100 shares to an amount below 100 shares. The accompanying financial statements have been presented to reflect this reverse stock split.











 






 
9

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

When used in this discussion, the words “expect(s)”, “feel(s)”, “believe(s)”, “will”, “may”, “anticipate(s)” and similar expressions are intended to identify forward-looking statements. Such statements are subject to certain risks and uncertainties, which could cause actual results to differ materially from those projected. Readers are cautioned not to place undue reliance on these forward-looking statements, and are urged to carefully review and consider the various disclosures elsewhere in this Form 10-QSB.

During the fiscal year 2000 and through today’s date the Company has discontinued operations of three subsidiaries, sold one entity and is in the process of selling another. The Company maintains four subsidiaries and the parent holding Company. The following discussion of the results of operations and numbers presented represent operations from those subsidiaries which have not been discontinued.

Results of Operations

Sales for the three months ended March 31, 2006 and 2005 were respectively, $0 and $0. The Company has no source of revenue. It is looking for opportunities to create revenue, but at this time has no viable options.

General and administrative expenses for the three months ended March 31, 2006 and 2005 were, respectively, $9,344 and $9,640. These costs are made up of bank fees, office expenses and the accrual of officer salary.

The Company has discontinued the following subsidiaries and their operations: NowSeven, Inc., Outbound Enterprises, Inc., Totalinet.net, Inc., Atlantic Technologies International, Inc., Internet Software Solutions, Inc., Uniq Studio’s, Inc., and iShopper Internet Solutions, Inc.

EnSurge and its subsidiaries have several outstanding law suits against them, which approximate $961,937. Settlement arrangements have been in process, however due to lack of cash, any arrangements are uncertain.
 
Liquidity and Capital Resources

The Company has financed its operations to date primarily through private placements of equity securities and current sales. The Company has been unprofitable since inception (1998) and has incurred net losses in each quarter and year. The Company has no further stock for private placements.

The Company is in the process of exploring and investigating business opportunities to merge with or acquire and has not had an active market for its common stock and needs to establish a capital structure that would be more likely to attract business opportunities.

Therefore, effective May 8th, 2006 the company did a reverse split in its common stock on a basis of 1 for 3000. To protect small shareholders it will not reverse any certificate that is currently less than 100 shares or reversing any certificate more than 100 shares to an amount below 100 shares.



 
10

 

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

EnSurge and its’ subsidiaries have several outstanding law suits against them and the company, which approximate, $961,937. Settlement arrangements have been in process, however due to lack of cash, any arrangements are uncertain.

E-Commerce Exchange. v. Outbound Enterprises/iShopper. On December 18, 2000, E-Commerce brought suit against Outbound and iShopper Internet Services in four separate small claims actions filed in Salt Lake County, Sandy Department seeking recovery of amounts owed for services provided in the amount of $15,939. There was no dispute that the sums claimed were owed and judgment was entered against Outbound and iShopper Internet Services. The Company is attempting to settle the judgment from financed receivables available to Outbound. At this date, a settlement arrangement has been finalized to be paid out through receivables, however, until the obligation is paid in full the judgment remains unsatisfied.

Media Source, Inc. v. iShopper Internet Services, Inc. In April 2000, Media Source, Inc brought suit in the Fourth Judicial District Court, Utah County, Utah, against iShopper Internet Services and the Company seeking recovery of amounts owed for promotional material and products furnished to iShopper Internet Services, Inc., in the amount of $53,399 plus interest and attorneys fees. The Company acknowledged that $43,429 was owed by iShopper Internet Services and an agreement was entered into to pay the undisputed sum, over time. As a result, Media Source dismissed the lawsuit. iShopper Internet Services made the first installment payment of $10,000 but has lacked funds to pay the balance. The obligation for the unpaid balance under the settlement agreement is undisputed.

MediaBang. L.C. v. iShopper Internet Services, Inc. In April 2000, iShopper Internet Services was informed that MediaBang had filed suit in the Third Judicial District Court, Salt Lake County, Utah, against them in December 1999 seeking recovery of amounts owed for programming services furnished to iShopper Internet Services on an open contract in the amount of $10,136 plus interest and fees. Negotiations resulted in a settlement reduced to writing in November 2000, under which MediaBang agreed to accept installment payments against a $7,000 settlement amount, conditional on the Company’s agreement to guarantee payments. The lawsuit was subsequently dismissed. An initial settlement installment of $2,000 was paid in November 2000 reducing the liability to $5,000, which amount is still outstanding. The Company remains committed to the settlement commitment but has been unable as of this date to satisfy the balance owed. MediaBang has reserved the right to reassert claims and to reinstitute the lawsuit against iShopper Internet Services in the event that the settlement amounts are not received. As of this date, however, no new lawsuit has been commenced.

Positive Response, Inc. v. iShopper Internet Services, Inc. In July 2000, Positive Response brought suit in the Third Judicial District Court, Salt Lake City, Utah, against iShopper Internet Services seeking recovery of amounts owing for a data base on potential customer or customer contracts in the amount of $41,896. Settlement in the matter was reached in the compromised amount of $37,000, to be satisfied on installment payments. All required installment payments except a final payment of $10,000 due October 14, 2000 have been made. Positive Response has applied to the Court for judgment for the unpaid balance, plus interest from the date of judgment at the legal rate of 8.052%.

IOS Capital, Inc. v. iShopper Internet Services, Inc. In January 2001, IOS Capital brought suit in the Third Judicial District Court, Salt Lake City, Utah, against iShopper Internet Services seeking replevin of leased copy machines and judgment for lease balances totaling $17,553, plus interest and attorneys fees. IShopper Internet Services filed its answer in February 2001 disputing plaintiff’s claims in part and inviting the plaintiff to retrieve both items of equipment. The lawsuit remains at that stage.


 
11

 
 
 
OneSource.com v. Outbound Enterprises and enSurge, Inc. In October 2000, OneSource.com brought suit in the Third Judicial District Court, Salt Lake City, Utah, against Outbound seeking recovery for amounts owed for printing services and related products furnished between October 1999 and January 2000 in the amount of $76,157. Settlement was reached in December 2000, on terms that entitled OneSource to judgment against Outbound and Company, as its guarantor, if settlement installments were not made as required. The Company has defaulted in settlement payments and judgment against Outbound and the Company was entered on March 30, 2001, in the amount of $85,096, including interest costs and attorneys fees. The Company intends to attempt to settle judgment as funds become available.

Pacific Media Duplication, LLC v. iShopper.com, Inc., TotaliNet.net, Inc. and Richard Scavia. In January 2001, Pacific Media brought suit in the Superior Court of California, San Diego County, against the Company, TotaliNet and Richard Scavia seeking recovery of balances owed under a sublease by TotaliNet of office space and equipment in the amount of $30,000 and $38,437, respectively. The plaintiff claims against the TotaliNet and the Company as guarantor on the office lease and against TotaliNet and Scavia, as its prior president and as guarantor, on the equipment lease. The Company does not dispute TotaliNet’s obligations (nor its obligations as guarantor) under the office lease. TotaliNet does not dispute its obligations under the office lease or the equipment lease. While it remains interested in negotiating a resolution with Pacific Media, as it is able to do so, it has reserved all rights it may have to raise any defenses available in the event that Pacific Media seeks to enforce the judgment where the Company conducts business.

Paychex, Inc. v EnSurge, Inc. and Subsidiaries. In March 2001, Paychex filed for arbitration with the American Arbitration Association in Syracuse, New York, against EnSurge and its subsidiaries for employee payroll and payroll taxes paid by Paychex. Paychex has filed arbitration separately for each company as follows: EnSurge, Inc. $45,146, iShopper Internet Services, Inc. $13,247, Totalinet.net, Inc. $17,416, Uniq Studios, Inc. $22,002, and Atlantic Technologies International, Inc. $28,079. All requested amounts are plus interest at 1.5% per month, plus costs and attorney’s fees. All arbitrations are still in process and nothing has been resolved to date. As the Company obtains funds it will seek opportunity to resolve these matters.

NCX Corporation v Atlantic Technologies International, Inc. In October 2000, NCX Corporation filed suit in the Superior Court of California, Los Angeles County, against Atlantic Technologies International, Inc. seeking recovery of balances owed for past due accounts payable in the amount of $29,472. No further action has taken place at this time.

Allison Ewrin Company v Atlantic Technologies International, Inc. On April 7, 1999, Allison Erwin Company filed suit in the Circuit Court of Orange County, Florida, against Atlantic Technologies International, Inc. seeking recovery of balances owed for past due accounts payable in the amount of $30,666. Settlement was reached for $12,000, with payments starting on May 25, 2001. No further action has taken place at this time.

Scanport, Inc. v Atlantic Technologies International, Inc. On March 9, 2001, Scanport, Inc. filed suit in the Circuit Court of Orange County, Florida, against Atlantic Technologies International, Inc. seeking recovery of balances owed for past due accounts payable in the amount of $59,212. No further action has taken place at this time.

Avnet Electronics Marketing, Inc. v Atlantic Technologies International, Inc. On March 27, 2001, Avnet Electronics Marketing, Inc. filed suit in the Circuit Court of Orange County, Florida, against Atlantic Technologies International, Inc. seeking recovery of balances owed for past due accounts payable in the amount of $32,856. No further action has taken place at this time.
 

 
 
12

 


US Drive Technology Corporation v Atlantic Technologies International, Inc. On March 24, 1999, US Drive Technology Corporation filed suit in the Circuit Court of Orange County, Florida, against Atlantic Technologies International, Inc. seeking recovery of balances owed for past due accounts payable in the amount of $39,199. Settlement was reached for $39,199 and payments have been made paying down the amount to $24,199, which is currently outstanding. No further action has taken place at this time.

Trogon Computer Corporation v Atlantic Technologies International, Inc. On June 15, 1999, Trogon Computer Corporation filed suit in the Circuit Court of Orange County, Florida, against Atlantic Technologies International, Inc. seeking recovery of balances owed for past due accounts payable in the amount of $16,771. Settlement was reached for $6,825, with ten monthly payments at $682.50 starting on October 10, 2000. No further action has taken place at this time.

Suntrust Bank, N.A. v Atlantic Technologies International, Inc. In April 2001, Suntrust Bank filed suit in the Circuit Court of Orange County, Florida, against Atlantic Technologies International, Inc. seeking recovery of balances owed for a past due line of credit in the amount of $184,415. All assets of Atlantic Technologies International, Inc. are in the process of either being turned over to the bank or liquidated to pay down this balance.

A-Business Funding Group v Ensurge, Inc. In November 2003, A-Business Funding Group filed suit in the Circuit Court of Salt Lake County, Utah, against Ensurge, Inc. seeking recovery of balances owed in the amount of $50,000.
 
Global Funding v Ensurge, Inc. In November 2003, Global Funding filed suit in the Circuit Court of Salt Lake County, Utah, against Ensurge, Inc. seeking recovery of balances owed in the amount of $100,000.

REA, LLC v Ensurge, Inc. In November 2003, REA, LLC filed suit in the Circuit Court of Salt Lake County, Utah, against Ensurge, Inc. seeking recovery of balances owed in the amount of $40,000.

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

None

 
Item 6.  Exhibits and Reports on Form 8-K.
 
 
(a)
Exhibits.
 
 
31
Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
 
 
32
Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350).
 
 
(b)
Reports on Form 8-K.
 
None.
 

OTHER ITEMS

There were no other items to be reported under Part II of this report.
 

 

 
13

 


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.


 
enSurge, Inc.
   
Date:  June 8, 2006
/s/ Jeff A. Hanks                                               
 
Jeff A. Hanks, Chief Executive Officer
 
Chief Financial Officer, Secretary, Director
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 14

EX-31 2 ensurge10qsb033106ex31.htm EXHIBIT 31 Exhibit 31



EXHIBIT 31
 
enSurge, Inc.
CERTIFICATION PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002
 
I, Jeff A. Hanks, Chief Financial Officer of enSurge, Inc., certify:
 
1.   I have reviewed this quarterly report on Form 10-QSB of enSurge, Inc.;
 
2.   Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
 
3.   Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
 
4.   I am responsible for establishing and maintaining disclosure controls and procedures (as defined in the Exchange Act Rules 13a-14 and 15d-14) for the registrant and I have:
 
 
a.
designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during this period in which the quarterly report is being prepared;
 
 
b.
evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and
 
 
c.
presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
 
5.   I have disclosed, based on my most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):
 
 
a.
all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and
 
 
b.
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and
 
6.   I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
 
     By: /s/ Jeff A. Hanks                       
 
Chief Financial Officer
June 8, 2006
          Jeff A. Hanks
(Principal Financial and Accounting Officer)
 
 
 

EX-32 3 ensurge10qsb033106ex32.htm EXHIBIT 32 Exhibit 32



EXHIBIT 32
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
 
In connection with the Quarterly Report of enSurge, Inc. (the "Company") on Form 10-QSB for the period ending March 31, 2006, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Jeff A. Hanks, Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Accounting and Financial Officer) of the Company, certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)  The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)  The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

   By: /s/ Jeff A. Hanks                   
Chief Executive Officer and
Chief Financial Officer
June 8, 2006
         Jeff A. Hanks
(Principal Executive Officer and Principal
Financial and Accounting Officer )
 


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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