ensurge10qsb093007.htm

10QSB 1 ensurge10qsb093007.htm ENSURGE, INC. FORM 10-QSB SEPTEMBER 30, 2007 ensurge10qsb093007.htm

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 September 30, 2007

[ ]

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 111,256 shares of common stock, $0.001 par value, issued and outstanding as of November 15, 2007.

EnSurge, Inc.

FORM 10-QSB

QUARTER ENDED SEPTEMBER 30, 2007

TABLE OF CONTENTS

	Page

PART I-FINANCIAL INFORMATION

Item 1. Financial Statements

Condensed Statements of Assets, Liabilities and Stockholders' Deficit - Liquidation Basis (Unaudited) as of September 30, 2007 and December 31, 2006	3

Condensed Statements of Revenue and Expenses - Liquidation Basis (Unaudited) for the Three and Nine Months Ended September 30, 2007 and 2006	4

Condensed Statements of Cash Flows - Liquidation Basis (Unaudited) for the Nine Months Ended September 30, 2007 and 2006	5

Notes to Condensed Financial Statements (Unaudited)	6

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

Item 3. Controls and Procedures	8

PART II - OTHER INFORMATION

Item 1. Legal Proceedings	9

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

PART I -

FINANCIAL INFORMATION

Item 1. Financial Statements

Ensurge, Inc.

CONDENSED STATEMENTS OF ASSETS, LIABILITIES AND

STOCKHOLDERS’ DEFICIT - LIQUIDATION BASIS

(UNAUDITED)

	September 30,			December 31,
	2007			2006
ASSETS
Current Assets
Cash	$	444		$	2,633

Total Current Assets		444			2,633

Total Assets	$	444		$	2,633


LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities
Trade accounts payable	$	133,298		$	133,298
Accrued liabilities		1,145,669			1,056,042
Notes payable		1,360,403			1,349,403

Total Current Liabilities		2,639,370			2,538,743

Stockholders' Deficit
Common stock - $0.001 par value; 100,000,000 shares authorized; 111,256 and 111,256 shares issued and outstanding		111			111
Additional paid-in-capital		14,259,009			14,160,009
Accumulated deficit		(16,898,046	)		(16,696,230	)

Total Stockholders' Deficit		(2,638,926	)		(2,536,110	)

Total Liabilities and Stockholders' Deficit	$	444		$	2,633

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

EnSurge, Inc.

CONDENSED STATEMENTS OF REVENUE AND

EXPENSES - LIQUIDATION BASIS

(UNAUDITED)

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2007			2006			2007			2006

Sales	$	-		$	-		$	-		$	-

Cost of Sales		-			-			-			-

Gross Profit		-			-			-			-

Expenses
General and administrative		2,579			11,111			13,189			34,479
Interest expense		52,234			29,242			188,626			86,481

Total Expenses		(54,813	)		(40,353	)		(201,815	)		(120,960	)

Operating Loss		(54,813	)		(40,353	)		(201,815	)		(120,960	)

Gain on Forgiveness of Debt		-			-			-			1,605,513

Net Gain or (Loss)	$	(54,813	)	$	(40,353	)	$	(201,815	)	$	1,484,553

Basic and Diluted Gain (Loss) per Share	$	(0.49	)	$	(0.50	)	$	(0.04	)	$	19.27

Weighted Average Number of Common Shares Used in Per Share Calculation		111,256			80,142			4,690,011			77,028

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

Ensurge, Inc.

CONDENSED STATEMENTS OF CASH FLOWS

LIQUIDATION BASIS

(UNAUDITED)

	For the Nine Months Ended September 30,
	2007			2006

Cash Flows From Operating Activities
Net gain or (loss)	$	(201,815	)	$	1,484,553
Adjustments to reconcile net loss to net cash used in operating activities:
Forgiveness of Debt		-			(1,605,513	)
Change in conversion expense from notes payable		99,000
Changes in operating assets and liabilities:
Accrued liabilities		89,626			113,481
Net Cash Used in Operating Activities		(13,189	)		(7,479	)

Cash Flows From Financing Activities
Proceeds from notes payable		11,000			69,862
Settlement of notes payable		-			(59,362	)

Net Cash Provided by Financing Activities		11,000			10,500

Net (Decrease) Increase in Cash		(2,189	)		3,021

Cash at Beginning of Period		2,633			400

Cash at End of Period	$	444		$	3,421


Non-Cash Investing and Financing Activities:

Common stock issued for assumption of subsidiary liabilities	$	-		$	2,614,379

Issuance of common stock for services rendered	$	100,000

Cancellation of common stock for services rendered	$	100,000

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

NOTE 1–ORGANIZATION AND BASIS OF PRESENTATION

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

Basis of Presentation – The accompanying unaudited condensed 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 financial statements should be read in conjunction with the Company’s annual financial statements and the notes thereto for the year ended December 31, 2006, 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 financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to fairly present the Company’s financial position as of September 30, 2007, and its results of operations and cash flows for the three and nine months ended September 30, 2007 and 2006. The results of operations for the three and nine months ended September 30, 2007, may not be indicative of the results that may be expected for the year ending December 31, 2007.

Business Condition– The Company has suffered losses from operations and has a working capital deficiency of $2,638,926 at September 30, 2007. The Company has no means available nor does management have any plans to obtain financing to satisfy the Company’s current liabilities of $2,639,370 at September 30, 2007, 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. At September 30, 2007, the Company had no potentially issuable common shares outstanding.

NOTE 2 – COMMITMENTS AND CONTINGENCIES

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 the 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 September 30, 2007, the Company has accrued the above liability as part of accounts payable.

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 for $45,146. As of September 30, 2007, the Company has accrued the above liability as part of accounts payable.

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 September 30, 2007 as part of notes payable.

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 September 30, 2007 as part of notes payable.

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 September 30, 2007 as part of notes payable.

NOTE 3 – NOTES PAYABLE

During the period ended September 30, 2007, the Company entered into four new notes payable in the amount of $5,500, $2,500, $500 and $2,500, which notes accrue interest at 10% per annum, are due on demand, and are unsecured. These notes are convertible into shares of common stock of $0.001. The fair market value of the Company’s common stock as determined by the Company on the date of issuance was $0.01, which resulted in a beneficial conversion of $99,000 and was booked against interest expense and additional paid-in capital.

NOTE 4 – ISSUANCE OF SECURITIES

On January 6^th, 2007 the Company issued 10,000,000 restricted shares to the Company’s President/CEO for past services rendered. Due to the lack of trading and the stock being restricted it was difficult to know a true market value of the stock. Thus, the stock was valued at $0.01 and decreased the accrued liability owed to the President by $100,000.

On May 11^th, 2007 the President/CEO returned the 10,000,000 shares to the Company for the reinstatement of the $100,000 liability.

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 all subsidiaries.

Results of Operations

Sales for the three months ended September 30, 2007 and 2006 were respectively, $0 and $0. Sales for the nine months ended September 30, 2007 and 2006 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 September 30, 2007 and 2006 were, respectively, $2,579 and $11,111. General and administrative expenses for the nine months ended September 30, 2007 and 2006 were, respectively, $13,189 and $34,479. These costs are made up of bank fees, office expenses, auditor fees and officer salary.

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.

Item 3. Controls and Procedures

As of September 30, 2007, 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.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

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

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

On January 6^th, 2007 the Company issued 10,000,000 restricted shares to the Company’s President/CEO for services rendered.

On May 11^th, 2007 the President/CEO returned the certificate noted above in the amount of 10,000,000 to be cancelled and to return the shares to treasury.

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

None

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

(a)

Exhibits.

Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

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.

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: November 15, 2007	/s/ Jeff A. Hanks
	Jeff A. Hanks, Chief Executive Officer
	Chief Financial Officer, Secretary, Director