10QSB

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, 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 80,142 shares of common stock, $0.001 par value, issued and outstanding as of August 15, 2006.

EnSurge, Inc.

FORM 10-QSB

QUARTER ENDED JUNE 30, 2006

TABLE OF CONTENTS

		Page
PART I-FINANCIAL INFORMATION
Item 1.	Financial Statements	3
Condensed Consolidated Statements of Assets, Liabilities and Stockholders' Deficit - Liquidation Basis (Unaudited) as of June 30, 2006 and December 31, 2005		3
Condensed Consolidated Statements of Revenue and Expenses - Liquidation Basis (Unaudited) for the Three and Six Months Ended June 30, 2006 and 2005		4
Condensed Consolidated Statements of Cash Flows - Liquidation Basis (Unaudited) for the Three and Six Months Ended June 30, 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	8
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	9
Item 4.	Submission of matters to a vote of Security Holders	9
Item 6.	Exhibits and Reports on Form 8-K	10
Signatures		11

2

PART I - FINANCIAL INFORMATION

Item 1.Financial Statements

Ensurge, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF ASSETS, LIABILITIES AND

STOCKHOLDERS’ DEFICIT - LIQUIDATION BASIS

(UNAUDITED)

	June 30,			December 31,
	2006			2005
ASSETS
Current Assets
Cash	$	3,032		$	400
Total Current Assets		3,032			400
Total Assets	$	3,032		$	400
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Trade accounts payable	$	133,298		$	1,532,167
Accrued liabilities		979,480			2,569,103
Notes payable		1,344,403			2,492,565
Total Current Liabilities		2,457,181			6,593,835
Stockholders' Deficit
Common stock - $0.001 par value; 100,000,000 shares authorized; 80,142 and 75,142 shares issued and outstanding, respectively		80			75
Additional paid-in capital		18,894,575			16,280,200
Accumulated deficit		(21,348,803	)		(22,873,710	)
Total Stockholders' Deficit		(2,454,149	)		(6,593,435	)
Total Liabilities and Stockholders' Deficit	$	3,032		$	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						For the Six Months
	Ended June 30,						Ended June 30,
	2006			2005			2006			2005
Sales	$	-		$	-		$	-		$	-
Cost of Sales		-			-			-			-
Gross Profit		-			-			-			-
Expenses
General and administrative		14,024			19,024			23,368			28,664
Interest expense		28,667			47,277			57,239			94,533
Total Expenses		(42,691	)		(66,301	)		(80,607	)		(123,197	)
Operating Loss	$	(42,691	)	$	(66,301	)	$	(80,607	)	$	(123,197	)
Gain on Forgiveness of Debt	$	467,746		$	-		$	1,605,513		$	-
Net Gain or (Loss)	$	425,055		$	(66,301	)	$	1,524,906		$	(123,197	)
Basic and Diluted Gain (Loss) per Share	$	5.30		$	(0.88	)	$	20.21		$	(1.64	)
Weighted Average Number of Common Shares Used in Per Share Calculation		75,746			75,142			75,446			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 Six Months
	Ended June 30,
	2006			2005
Cash Flows From Operating Activities
Net gain or (loss)	$	1,529,906		$	(123,197	)
Adjustments to reconcile net loss to net cash used in operating activities:
Forgiveness of Debt		(1,605,513	)		-
Changes in operating assets and liabilities:
Trade accounts payable		-			(224	)
Accrued liabilities		75,239			112,532
Net Cash Used in Operating Activities		(5,368	)		(10,889	)
Cash Flows From Financing Activities
Proceeds from notes payable		67,362			16,500
Settlement of notes payable		(59,362	)		-
Net Cash Provided by Financing Activities		8,000			16,500
Net Increase in Cash		2,632			5,611
Cash at Beginning of Period		400			672
Cash at End of Period	$	3,032		$	6,283
Non-Cash Investing and Financing Activities:
Common stock issued for assumption of subsidiary liabilities	$	2,614,380		$	-

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 June 30, 2006, and its consolidated results of operations and cash flows for the three and six months ended June 30, 2006 and 2005. The results of operations for the three and six months ended June 30, 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 its 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 $2,448,149 at June 30, 2006. The Company has no means available nor does management have any plans to obtain financing to satisfy the Company’s current liabilities of $2,457,181 at June 30, 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. The Company does not currently have any potentially issuable common 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.

6

Ensurge, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

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 June 30, 2006, the Company has accrued the above liability.

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 for employee payroll and payroll taxes paid by Paychex. Paychex has filed arbitration for $45,146. All amounts bear interest at 1.5% per month, plus costs and attorney’s fees. As of June 30, 2006, the Company has accrued the above 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 June 30, 2006

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 June 30, 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 June 30, 2006.

NOTE 3 - OTHER SIGNIFICANT ITEMS

Settlement of Liabilities - During the period ended June 30, 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, amounting to a settlement amount of $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. The company entered into two new note payable in the amount of $5,000, and $3,000, which notes accrue interest at 15% per annum, are due on demand, and are unsecured.

Effective June 30^th, 2006 the company wrote off $244,939 of accounts payable and $222,807 of notes payable and related accrued interest, due to the statute of limitations being fulfilled.

On June 19^th, 2006 the company entered into an agreement with Portsmith Partner of Neveda, Inc. to take responsibility for the debt of all of the subsidiaries of Ensurge, totaling $2,614,380. In return for this obligation, Ensurge issued 5,000 shares of common stock to Portsmith Partner of Nevada, Inc.

Common Stock Split - Effective May 8^th, 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.

7

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 seven subsidiaries, sold one entity. 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 both the three and six months ended June 30, 2006 and 2005 were respectively, $0 and $0. The Company has no source of revenue. The Company is looking for opportunities to create revenue, but at this time has no viable options.

General and administrative expenses for the three months ended June 30, 2006 and 2005 were, respectively, $14,024 and $19,024. General and administrative expenses for the six months ended June 30, 2006 and 2005 were, respectively, $23,368 and $28,664. These costs are made up of bank fees, office expenses and the accrual of officer salary.

Effective June 30^th, 2006 the company wrote off $244,939 of accounts payable and $222,807 of notes payable and related accrued interest, due to the statute of limitations being fulfilled.

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.

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 8^th, 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.

Item 3. Controls and Procedures

As of June 30, 2006, an evaluation was carried out by management, of the effectiveness of disclosure controls and procedures. Based on that evaluation, management has concluded that disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in reports that the Company file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. No changes in the Company's internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting, including any corrective actions with regard to significant deficiencies and material weaknesses, occurred during the reporting period or subsequent to the date of the evaluation by its management thereof.

8

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

EnSurge has several outstanding law suits against it, which approximate, $818,565. Settlement arrangements have been in process, however due to lack of cash, any arrangements are uncertain.

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.

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 June 30, 2006, the Company has accrued the above liability.

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 for employee payroll and payroll taxes paid by Paychex. Paychex has filed arbitration for $45,146. All amounts bear interest at 1.5% per month, plus costs and attorney’s fees. As of June 30, 2006, the Company has accrued the above 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 June 30, 2006

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 June 30, 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 June 30, 2006.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On June 19^th, 2006 the company entered into an agreement with Portsmith Partner of Neveda, Inc. to take responsibility for the debt of all of the subsidiaries of Ensurge, totaling $2,614,380. In return for this obligation Ensurge issued 5,000 shares of common stock to Portsmith Partner of Nevada, Inc.

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

None

9

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.

10

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: August 17, 2006	/s/ Jeff A. Hanks
	Jeff A. Hanks, Chief Executive Officer
	Chief Financial Officer, Secretary, Director

 11

EX-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	August 17, 2006
Jeff A. Hanks	(Principal Financial and Accounting Officer)

EX-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 June 30, 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	August 17, 2006
Jeff A. Hanks	(Principal Executive Officer and Principal Financial and Accounting Officer )