10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

FORM 10-Q

(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, 2012

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

Commission File Number: 000-54460

 Ensurge, Inc.

(Exact name of registrant as specified in its charter)

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

1001 Brickell Bay Drive, 27th Floor

Miami, Florida 33131

(Address of principal executive offices)

888-978-9994

(Issuer’s telephone number)

(Former name, address, and 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 [  ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes   [X]                      No [  ]

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.  (Check one):

Large accelerated filer   [  ]      Accelerated filer   [  ]      Non-accelerated filer   [  ]  Smaller reporting company   [X]

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [ X ]

There were 33,138,726 shares of common stock, $0.001 par value, issued and outstanding as of July 27, 2012.

Ensurge, Inc.

FORM 10-Q

QUARTER ENDED JUNE 30, 2012

TABLE OF CONTENTS

			Page
PART I-FINANCIAL INFORMATION
Item 1. Financial Statements
	Balance Sheets
		(Unaudited) as ofJune 30, 2012 and December 31, 2011	3
	Statements of Operations
		(Unaudited) for the three and six months ended June 30, 2012 and 2011 and from inception of exploration stage to June 30, 2012	4
	Statements of Cash Flows
		(Unaudited) for the six months ended June 30, 2012 and 2011 and from inception of exploration stage to June 30, 2012	5
	Notes to Financial Statements (Unaudited)		6
Item 2. Management's Discussion and Analysis of Financial Condition and
	Results of Operations		9
Item 3. Quantitative and Qualitative Disclosures About Market Risk			11
Item 4. Controls and Procedures			11
PART II - OTHER INFORMATION
Item 1. Legal Proceedings			12
Item 1A. Risk Factors			12
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			12
Item 3. Defaults Upon Senior Securities			12
Item 4. Mine Safety Disclosure			12
Item 5. Other Information			12
Item 6. Exhibits			12
Signatures			13

2

PART I -                 FINANCIAL INFORMATION

Item 1.                 Financial Statements

Ensurge, Inc.

(An Exploration Stage Company)

BALANCE SHEET

	June 30, 2012			December 31, 2011
ASSETS	(Unaudited)			(Audited)
Current Assets
Cash	$	64,089		$	214,517
Prepaid Expenses		14,421			-
Total Current Assets		78,510			214,517
Fixed assets (net of depreciation)		54,022			57,936
Total Other Assets		54,022			57,936
Total Assets	$	132,532		$	272,453
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Trade accounts payable	$	87,428		$	36,214
Accrued interest		73,333			18,333
Notes Payable		1,100,000			1,100,000
Proceeds for common stock to be issued		1,360,000			1,360,000
Warrants derivative liability		2,073,024			11,128,157
Total Current Liabilities		4,693,785			13,642,704
Stockholders' Deficit
Common stock-$0.001 par value; 100,000,000 shares authorized; 33,138,726 and 32,348,726 shares outstanding, respectively		33,139			32,348
Additional paid-in-capital		48,086,787			46,494,730
Accumulated deficit		(23,315,973	)		(23,315,973	)
Exploration stage deficit		(29,365,206	)		(36,581,356	)
Total Stockholders' Deficit		(4,561,253	)		(13,370,251	)
Total Liabilities and Stockholders' Deficit	$	132,532		$	272,453

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

3

Ensurge, Inc.

(An Exploration Stage Company)

STATEMENTS OF OPERATIONS

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2012

(UNAUDITED)

	For the Three Months						For the Six Months						From Inception of
	Ended June 30,						Ended June 30,						Exploration Stage
													January 1, 2010
													through
	2012			2011			2012			2011			June 30, 2012
Sales	$	-		$	-		$	-		$	-		$	-
Expenses
General and administrative		1,032,930			12,845,961			1,993,136			14,154,356			22,141,575
Total Expenses		1,032,930			12,845,961			1,993,136			14,154,356			22,141,575
Operating Loss		(1,032,930	)		(12,845,961	)		(1,993,136	)		(14,154,356	)		(22,141,575	)
Other income (expense)
Gain (Loss) on derivative		1,174,085			(9,990,866	)		9,264,088			(17,974,197	)		5,989,655
Derivative day-one loss		-			-			-			-			(11,970,479	)
Interest expense		(27,500	)		-			(55,000	)		-			(1,246,333	)
Interest income		59			413			198			1,269			3,526
Net Income (Loss)	$	113,714		$	(22,836,414	)	$	7,216,150		$	(32,127,284	)	$	(29,365,206	)
Basic and Diluted Net Gain (Loss) Per Common Share	$	0.00		$	(0.77	)	$	0.22		$	(1.08	)
Basic and Diluted Weighted Average Common Shares Outstanding		32,873,067			29,710,341			32,873,067			29,710,341

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

4

Ensurge, Inc.

(An Exploration Stage Company)

STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2012

(UNAUDITED)

							From Inception of
	For the Six Months Ended						Exploration Stage
	June 30,						January 1, 2010
							through
	2012			2011			June 30, 2012
Cash Flows From Operating Activities
Net income (loss)	$	7,216,150		$	(32,127,284	)	$	(29,365,206	)
Adjustments to reconcile net income (loss) in to net cash used in operating activities:
Common stock and options issued for services		1,421,803			1,222,626			19,704,677
Warrant derivative liability		(9,264,088	)		30,231,613			(5,989,655	)
Derivative day-one loss		-			-			11,970,479
Accumulated Depreciation		3,914			318			4,868
Changes in operating assets and liabilities:
(Increase) decrease in prepaid expenses		(14,421	)		-			(14,421	)
Increase (decrease) in trade accounts payable		51,214			(11,620	)		78,742
Increase (decrease) in accrued liabilities		55,000			-			58,595
Net Cash Used in Operating Activities		(530,428	)		(684,347	)		(3,551,921	)
Cash Flows From Investing Activities
Investing in fixed assets		-			(3,817	)		(58,890	)
Investment in mining rights project		-			(379,936	)		-
Net Cash Provided (Used) by Investing Activities		-			(383,753	)		(58,890	)
Cash Flows From Financing Activities
Proceeds from notes payable		-			-			1,600,000
Repayments of notes payable		-			-			(500,000	)
Proceeds from exercise of warrants for
common stock to be issued		-			-			1,360,000
Purchase treasury stock		-			-			(60,000	)
Proceeds from issuance of common stock		380,000			-			1,274,900
Net Cash Provided (Used) by Financing Activities		380,000			-			3,674,900
Net Increase (decrease) in Cash		(150,428	)		(1,068,100	)		64,089
Cash at Beginning of Period		214,517			1,146,936			-
Cash at End of Period	$	64,089		$	78,836		$	64,089
Non-Cash Investing and Financing Activities:
None

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

5

Ensurge, Inc.

(An Exploration Stage Company)

Notes to Unaudited Financial Statements

June 30, 2012

NOTE 1–ORGANIZATION AND BASIS OF PRESENTATION

Organization – On October 16, 2000, iShopper.com, Inc. changed its name to Ensurge, Inc., which is referred to herein as the Company.  On January 1, 2002, the Company began liquidation of its assets.  During 2009, the Company started a new phase of operations.  Accordingly, the accompanying financial statements are presented on a GAAP basis of accounting rather than 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-Q.  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, 2011, included in the Company’s annual report on Form 10-K, 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 June 30, 2012, and its results of operations and cash flows for the six months ended June 30, 2012 and 2011.  The results of operations for the six months ended June 30, 2012, may not be indicative of the results that may be expected for the year ending December 31, 2012.

Business Condition – The Company has suffered losses from operations, and the Company had a working capital deficit in the amount $4,615,275 at June 30, 2012. A large part of the deficit is due to outstanding warrants and warrant derivatives. Without the warrant derivatives the adjusted working capital deficit is $2,542,251.

During 2010, the Company sold an aggregate of 3,100,000 shares of common stock to investors for an aggregate purchase price of $894,900 in a private placement.  The Company received $1,360,000 for exercise of warrants to purchase 5,600,000 shares of the Company’s common stock.  In August 2011 the Company entered into a 90 day note payable in the amount of $500,000.

During the month of October 2011 the Company entered into two twelve month convertible Notes Payable for $605,000 each, for a total funding of $1,210,000, with an initial issue discount of 10% and total proceeds of $1,100,000, which are collateralized by all the assets of the Company.  Half of the proceeds were used to repay the $500,000 August 2011 note. These notes may be converted at a fixed price of $1.50 per share of the Company’s common stock, which may be converted at the option of the lender.  These notes also include 950,000 warrants each for a total of 1,900,000 warrants at an exercise price of $1.00 per share and have a cashless exercise provision.  The warrants have a 5 year term.  In case of default, the Notes may be converted into common stock at $1.50 per share or 80% of the current market bid price, whichever is lower.

Effective March 2, 2012, the Company accepted $380,000 in private placement funds from accredited investors in exchange for units consisting of seven hundred sixty thousand (760,000) shares of the Company’s common stock, plus three hundred eighty thousand (380,000) warrants with an exercise price of $1.00.  The proceeds of the financing are being used by the Company to fund the exploration for gold mines or to acquire relating mining assets, either directly or through one or more partnerships or joint ventures, in Brazil or elsewhere in South America.

6

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 June 30, 2012, the Company had 8,330,000 warrants outstanding which all have a 5 year term.  As of June 30, 2012, the Company had a total of 7,500,000 options of which 5,925,000 have vested and none have been exercised.  The options are all 10 year options with an exercise price ranging from $0.14 to $0.50.

Warrants:

The Company has granted warrants to purchase shares of Common Stock.

Warrants outstanding and exercisable at June 30, 2012 are as follows:

Range of  exercise price		Number Outstanding		Weighted Average Remaining  Contractual Life (in years)	Weighted Average Exercise Price		Aggregate Intrinsic Value
$	0.14 to $1.00		8,330,000	3.87 years	$	0.49	$	4,081,700

Options:

The Company has granted options to purchase shares of Common Stock.

Options outstanding and exercisable at June 30, 2012 are as follows:

Range of exercise price		Number Outstanding		Weighted Average  Remaining Contractual  Life (in years)	Weighted  Average  Exercise  Price		Number  Exercisable
$	0.14 to $0.50		7,500,000	7.13 years	$	0.25		5,925,000

Recently Enacted Accounting Standards

Accounting Standards Update (“ASU”) No. 2009-05 (ASC Topic 820), which amends Fair Value Measurements and Disclosures – Overall, ASU No. 2009-13 (ASC Topic 605), Multiple-Deliverable Revenue Arrangements, ASU No. 2009-14 (ASC Topic 985), Certain Revenue Arrangements that include Software Elements, and various other ASU’s No. 2009-2 through ASU No. 2011-12, which contain technical corrections to existing guidance or affect guidance to specialized industries or entities were recently issued.  These updates have no current applicability to the Company or their effect on the financial statements would not have been significant.

NOTE 2 – COMMITMENTS AND CONTINGENCIES

Ensurge Brasil Participacoes LTDA, (a wholly owned subsidiary of Ensurge, Inc.), hereinafter “Ensurge”, has entered into a Definitive Agreement (“Agreement”) with Metais Juara LTDA, hereinafter “Metais” of Pocone, Mato Grosso, Brazil, on June 13, 2012.  Under provisions of this Agreement, Ensurge will provide technology and the capital equipment necessary to expand gold production and in return will receive an in-kind royalty payment.

7

As part of this Agreement Ensurge is required to make an initial payment of four million Brazilian Reals (R$4,000,000), which is approximately US $1,968,659, to be paid within 90 business days from the date of signing the Agreement.  This Agreement will not become effective until the date the funds are wired to Metais.  In return for said payment Ensurge will be entitled to a top line royalty payment of seventeen percent (17%) of daily gold production, delivered in-kind as a gold dore bar, which is approximately 93% gold.

Ensurge will construct a new gold recovery mill with the purpose of bringing new technology to the current process, which is expected to increase the rate of gold recovery.  The new mill will process approximately 400 tons of ore per day, with the expectation of increasing gold recovery to over 50%.  The construction of the new mill is expected to be completed within 12 months from the initial ordering of equipment.  Once the mill is completed and running as expected, the royalty payment will be increased to forty-one percent (41%). The mill and its equipment will belong to Ensurge.

Ensurge may acquire additional mining equipment (ie. trucks, excavators, etc.) to increase the daily mine production.  Once this additional mining equipment is in place and in operation, the royalty payment will be increased to forty-three percent (43%).

Metais is required to continue to operate and manage the current mining operations for the next three years.  If at any time Metais desires to terminate or sell the mine operation, Ensurge has first right of refusal to purchase and/or continue the mining operations.   The term of the Agreement runs for the life of the mine operations by Metais.

NOTE 3 – ISSUANCE OF STOCK AND OPTIONS

There has been no issuance of stock or options during this quarter.

NOTE 4 – SUBSEQUENT EVENTS

The Company has evaluated subsequent events from the balance sheet date through the date the financial statements were issued, and has determined there are no other events to disclose.

8

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-Q.

Recent Developments and Business Plan

The Company is pursuing opportunities in the gold mining industry, with emphasis on opportunities in South America.  Though several mining opportunities have been reviewed and rejected by the Company, research and investigation of mining opportunities is on-going.

Suriname Mining Project

On May 8, 2012 the Company issued a press release stating that the Company has entered into a Heads of Agreement with Amery Trading, LLC to mine gold in Suriname.  Ensurge will provide capital and technology to the project, while Amery will provide access to 7,500 hectares in Sara Creek, Suriname.  Ensurge will recover all capital costs advanced on the project from 50% of net cash flow, with the remainder of the net cash flow to be split equally between the two parties.  Ensurge will provide test equipment for the project to determine the optimal equipment for the geologic environment at concession.  Based on the results of the test program, Ensurge will determine to move forward with the project or not.

Brazil Mining Project

On June 13, 2012, Ensurge entered into a Definitive Agreement with Metais Juara LTDA, of Pocone, Mato Grosso, Brazil. Under provisions of this Agreement, Ensurge will provide technology and the capital equipment necessary to expand gold production and in return will receive an inkind royalty payment.

As part of this Agreement Ensurge is required to make an initial payment of four million Brazilian Reals (R$4,000,000), which is approximately US $1,968,659 (based on the reported exchange rate as of July 18, 2012), to be paid within 90 business days from the date of signing the Agreement. In return for said payment Ensurge will be entitled to a top line royalty payment of seventeen percent (17%) of daily gold production, delivered in-kind as dore.

Ensurge will construct a new gold recovery mill with the purpose of bringing new technology to the current process, which is expected to increase the rate of gold recovery. The new mill will process approximately 400 tons of ore per day, with the expectation of increasing gold recovery to over 50%. The construction of the new mill is expected to be completed within 12 months from the initial ordering of equipment. Once the mill is completed and running as expected, the royalty payment will be increased to forty-one percent (41%). The mill and its equipment will belong to Ensurge.

Ensurge may acquire additional mining equipment (ie. trucks, excavators, etc.) to increase the daily mine production. Once this additional mining equipment is in place and in operation, the royalty payment will be increased to forty-three percent (43%).

Metais is required to continue to operate and manage the current mining operations for the next three years. If at any time Metais desires to terminate or sell the mine operation, Ensurge has first right of refusal to purchase and/or continue the mining operations. The term of the Agreement runs for the life of the mine operations by Metais.

9

Despite the Company’s efforts in seeking opportunities in the gold mining industry, there can be no assurance that its efforts to enter this industry will ultimately prove successful.

Results of Operations

The Company had no revenues for the three and six months ended June 30, 2012 and 2011.  The Company is currently reviewing several projects and is awaiting completion of engineering results to determine the feasibility of each project, including capital equipment and operating costs.  It continues to search out other opportunities or joint ventures to create operations and revenues.

General and administrative expenses for the three months ended June 30, 2012 and 2011 were, respectively, $1,032,930 and $12,845,961.  General and administrative expenses for the six months ended June 30, 2012 and 2011 were, respectively, $1,993,136 and $14,154,356.  These costs are made up of engineering and drilling costs for projects, audit, legal, option expense and consulting fees, along with travel expenses incurred while performing due diligence on current projects and looking for acquisitions or other business opportunities in Brazil.

The warrant derivative income or expense for the three months ended June 30, 2012 and 2011 were, respectively, a gain of $1,174,085 and a loss of $9,990,866.  The warrant derivative income or expense for the six months ended June 30, 2012 and 2011 was, respectively, a gain of $9,264,088 and a loss of $17,974,197.  This income and expense is due to change in value of the warrants derivative liability, which is determined from the change of closing stock price from March to June 2012 and 2011.

Interest expense was $27,500 and $0 for the three months ended June 30, 2012 and 2011, respectively. Interest expense was $55,000 and $0 for the six months ended June 30, 2012 and 2011, respectively. The interest expense is loan interest from the notes payable the Company has incurred over the past year.

Interest income for the three months ended June 30, 2012 and 2011 was, respectively, $59 and $413.  Interest income for the six months ended June 30, 2012 and 2011 was, respectively, $198 and $1,269.  This income is from interest bearing bank accounts.

Liquidity and Capital Resources

The Company has financed its operations to date primarily through private placements of equity securities and convertible debt instruments.  The Company has been unprofitable since inception (1998) and has incurred net losses in each quarter and year.  From the beginning of 2010 through March 31, 2012 the Company sold an aggregate of 8,941,000 warrants and 3,860,000 shares of common stock for $2,765,000.  As part of this transaction the warrants have been paid for and exercised, but the common stock has not been requested, thus the Company has booked a current liability of $1,360,000 and a warrant derivative liability of $2,073,024, which valuation is determined on a quarterly basis based on the price of the common stock.

During the month of October 2011 the Company entered into two twelve month convertible Notes Payable for $605,000 each, for a total funding of $1,210,000, with an initial issue discount of 10% and total proceeds of $1,100,000, which are collateralized by all the assets of the Company.  These notes may be converted at a fixed price of $1.50 per share of the Company’s common stock, which may be converted at the option of the lender.  These notes also include 950,000 warrants each for a total of 1,900,000 warrants at an exercise price of $1.00 per share and have a cashless exercise provision.  The warrants have a 5 year term.  In case of default, the Note may be converted into common stock at $1.50 per share or 80% of the current market bid price, whichever is lower.

10

We expect these funds will allow the Company to operate for approximately 3 months, due to the majority of the Companies expenses being paid in stock or options.  However, in the event the company’s expenses increase it may only be able to operate for approximately 2 months.  If the Company is unable to obtain additional funds to operate it will decrease its operations until such time that it is able to obtain additional financing for its operations.  Additional funds of at least $2,000,000 will be required to close the transaction with Metais described above under “Recent Developments and Business Plan”.

The Company has made progress in creating relationships with Corporate and Tax Counsel, Banks, and Engineering firms within Brazil.  The Company is continuing to look for appropriate opportunities in Brazil and South America. We will have to raise additional capital to fund current and future projects and would anticipate dilution to current investors as we close on additional equity capital.

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern.  However, the Company has sustained net losses from operations since it adopted its new business plan in January 2010, and it has limited liquidity.  Management anticipates that the Company will be dependent, for the near future, on additional capital to fund its operating expenses and business operations.  While the Company is continuing to look for new financing sources, in the current economic environment, the procurement of outside funding is extremely difficult and there can be no assurance that such financing will be available, or, if available, that such financing will be at a price that will be acceptable to the Company.  Failure to generate significant revenues or to raise additional capital would have an adverse impact on the Company’s ability to achieve its longer-term business objectives, and would adversely affect its ability to continue operating as a going concern.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

Item 4.  Controls and Procedures

Disclosure Controls and Procedures:

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in the Company’s reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in company reports filed or submitted under the Exchange Act is accumulated and communicated to management, including the Company’s Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2012. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective.

Changes in Internal Control:

During the most recently completed fiscal quarter, there has been no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.

11

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

None

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

None

Item 3.  Defaults Upon Senior Securities

None

Item 4.  Mine Safety Disclosures

We have not engaged in any mining activities except for taking core samples, which were taken by a 3rd party consulting firm and consequently we have no mining safety issues.

Item 5.  Other Information

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

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

(a)	Exhibits.
	10.1	Royalty Purchase Agreement with Metais Juara Ltda. Dated June 13, 2012, previously filed with 8-K on July 10, 2012.
	31.1	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31.2	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	32.1	Certification of Chief Executive Officer and Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350)
Set forth below are the additional exhibits for the filing based on the new XBRL rules.
	101.INS	XBRL Instance Document*
	101.XSD	XBRL Schema Document*
	101.CAL	XBRL Calculation Linkbase Document*
	101.DEF	XBRL Definition Linkbase Document*
	101.LAB	XBRL Labels Linkbase Document*
	101.PRE	XBRL Presentation Linkbase Document*

*  The XBRL related information in Exhibit 101 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section and shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.

12

(b)	Reports on Form 8-K.
	1.01	Ensurge enters into Definitive Agreement with Metais Juara LTDA, previously filed with 8-K on July 10, 2012.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Ensurge, Inc.
July 30, 2012	/s/ Jordan M. Estra
	Jordan M. Estra, Chief Executive Officer
	(Principal Executive Officer)
July 30, 2012	/s/ Jeff A. Hanks
	Jeff A. Hanks, Chief Financial Officer
	(Principal Financial Officer and Principal Accounting Officer)

13

EX-31.1

Exhibit 31.1

ENSURGE, INC.

 CERTIFICATION PURSUANT TO SECTION 302

 OF THE SARBANES-OXLEY ACT OF 2002

I, Jordan M. Estra, Chief Executive Officer of Ensurge, Inc., certify that:

1. I have reviewed this report on Form 10-Q of Ensurge, Inc.;

2. Based on my knowledge, this 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 report;

3. Based on my knowledge, the financial statements, and other financial information included in this 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 report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 the period in which this report is being prepared;
b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, 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 and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

By: /s/ Jordan M. Estra	Chief Executive Officer	July 30, 2012
D Jordan M. Estra	( (Principal Executive Officer)

EX-31.2

Exhibit 31.2

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 that:

1. I have reviewed this report on Form 10-Q of Ensurge, Inc.;

2. Based on my knowledge, this 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 report;

3. Based on my knowledge, the financial statements, and other financial information included in this 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 report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 the period in which this report is being prepared;
b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, 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 and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

By: /s/ Jeff A. Hanks	Chief Financial Officer	July 30, 2012
D Jeff A. Hanks	( (Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

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-Q for the period ending June 30, 2012, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Jordan M. Estra, Chief Executive Officer (Principal Executive Officer) and Jeff A. Hanks, Chief Financial Officer (Principal Accounting and Financial Officer) of the Company, certify, 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 results of operations of the Company.

By: /s/ Jordan M. Estra	Chief Executive Officer	July 30, 2012
Jordan M. Estra	(Principal Executive Officer)

By: /s/ Jeff A. Hanks	Chief Financial Officer	July 30, 2012
Jeff A. Hanks	(Principal Financial and Accounting Officer )

* A signed original of this written statement required by Section 906 has been provided to Ensurge, Inc. and will be retained by Ensurge, Inc. and furnished to the Securities Exchange Commission or its staff upon request

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Note 4 - Subsequent Events

3 Months Ended

Jun. 30, 2012

Note 4 - Subsequent Events:

Note 4 - Subsequent Events

NOTE 4 – SUBSEQUENT EVENTS

The Company has evaluated subsequent events from the balance sheet date through the date the financial statements were issued, and has determined there are no other events to disclose.

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Note 3 - Issuance of Stock and Options

3 Months Ended

Jun. 30, 2012

Note 3 - Issuance of Stock and Options:

Note 3 - Issuance of Stock and Options

NOTE 3 – ISSUANCE OF STOCK AND OPTIONS

There has been no issuance of stock or options during this quarter.

XML

BALANCE SHEETS (USD $)	Jun. 30, 2012	Dec. 31, 2011
Cash	$ 64,089	$ 214,517
Prepaid Expenses	14,421
Total Current Assets	78,510	214,517
Fixed assets (net of depreciation)	54,022	57,936
Total Other Assets	54,022	57,936
Total Assets	132,532	272,453
Trade accounts payable	87,428	36,214
Accrued interest	73,333	18,333
Notes payable	1,100,000	1,100,000
Proceeds for common stock to be issued	1,360,000	1,360,000
Warrants derivative liability	2,073,024	11,128,157
Total Current Liabilities	4,693,785	13,642,704
Common stock - $0.001 par value; 100,000,000 shares authorized; 33,138,726 and 32,348,726 shares outstanding, respectively	33,139	32,348
Additional paid-in-capital	48,086,787	46,494,730
Accumulated deficit	(23,315,973)	(23,315,973)
Exploration stage deficit	(29,365,206)	(36,581,356)
Total Stockholders' Deficit	(4,561,253)	(13,370,251)
Total Liabilities and Stockholders' Deficit	$ 132,532	$ 272,453

XML

Note 1-Organization and Basis of Presentation

3 Months Ended

Jun. 30, 2012

Note 1-Organization and Basis of Presentation:

Note 1-Organization and Basis of Presentation

NOTE 1–ORGANIZATION AND BASIS OF PRESENTATION

Organization – On October 16, 2000, iShopper.com, Inc. changed its name to Ensurge, Inc., which is referred to herein as the Company.  On January 1, 2002, the Company began liquidation of its assets.  During 2009, the Company started a new phase of operations.  Accordingly, the accompanying financial statements are presented on a GAAP basis of accounting rather than 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-Q.  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, 2011, included in the Company’s annual report on Form 10-K, 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 June 30, 2012, and its results of operations and cash flows for the six months ended June 30, 2012 and 2011.  The results of operations for the six months ended June 30, 2012, may not be indicative of the results that may be expected for the year ending December 31, 2012.

Business Condition – The Company has suffered losses from operations, and the Company had a working capital deficit in the amount $4,615,275 at June 30, 2012. A large part of the deficit is due to outstanding warrants and warrant derivatives. Without the warrant derivatives the adjusted working capital deficit is $2,542,251. 

During 2010, the Company sold an aggregate of 3,100,000 shares of common stock shares to investors for an aggregate purchase price of $894,900 in a private placement.  The Company received $1,360,000 for exercise of warrants to purchase 5,600,000 shares of the Company’s common stock.  In August 2011 the Company entered into a 90 day note payable in the amount of $500,000.

During the month of October 2011 the Company entered into two twelve month convertible Notes Payable for $605,000 each, for a total funding of $1,210,000, with an initial issue discount of 10% and total proceeds of $1,100,000, which are collateralized by all the assets of the Company.  Half of the proceeds were used to repay the $500,000 August 2011 note. These notes may be converted at a fixed price of $1.50 per share of the Company’s common stock, which may be converted at the option of the lender.  These notes also include 950,000 warrants each for a total of 1,900,000 warrants at an exercise price of $1.00 per share and have a cashless exercise provision.  The warrants have a 5 year term.  In case of default, the Notes may be converted into common stock at $1.50 per share or 80% of the current market bid price, whichever is lower.

Effective March 2, 2012, the Company accepted $380,000 in private placement funds from accredited investors in exchange for units consisting of seven hundred sixty thousand (760,000) shares of the Company’s common stock, plus three hundred eighty thousand (380,000) warrants with an exercise price of $1.00.  The proceeds of the financing are being used by the Company to fund the exploration for gold mines or to acquire relating mining assets, either directly or through one or more partnerships or joint ventures, in Brazil or elsewhere in South America. 

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 June 30, 2012, the Company had 8,330,000 warrants outstanding which all have a 5 year term.  As of June 30, 2012, the Company had a total of 7,500,000 options of which 5,925,000 have vested and none have been exercised.  The options are all 10 year options with an exercise price ranging from $0.14 to $0.50.

Warrants:

The Company has granted warrants to purchase shares of Common Stock. 

Warrants outstanding and exercisable at June 30, 2012 are as follows:

Range of exercise price	Number Outstanding	Weighted Average Remaining Contractual Life (in years)	Weighted Average Exercise Price	Aggregate Intrinsic Value
$0.14 to $1.00	8,330,000	3.87 years	$           0.49	$  4,081,700

Options:

The Company has granted options to purchase shares of Common Stock. 

Options outstanding and exercisable at June 30, 2012 are as follows:

Range of exercise price	Number Outstanding	Weighted Average Remaining Contractual Life (in years)	Weighted Average Exercise Price	Number Exercisable
$0.14 to $0.50	7,500,000	7.13 years	$           0.25	5,925,000

Recently Enacted Accounting Standards

Accounting Standards Update (“ASU”) No. 2009-05 (ASC Topic 820), which amends Fair Value Measurements and Disclosures – Overall, ASU No. 2009-13 (ASC Topic 605), Multiple-Deliverable Revenue Arrangements, ASU No. 2009-14 (ASC Topic 985), Certain Revenue Arrangements that include Software Elements, and various other ASU’s No. 2009-2 through ASU No. 2011-12, which contain technical corrections to existing guidance or affect guidance to specialized industries or entities were recently issued.  These updates have no current applicability to the Company or their effect on the financial statements would not have been significant.

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Note 2 - Commitments and Contingencies

3 Months Ended

Jun. 30, 2012

Note 2 - Commitments and Contingencies:

Note 2 - Commitments and Contingencies

NOTE 2 – COMMITMENTS AND CONTINGENCIES

Ensurge Brasil Participacoes LTDA, (a wholly owned subsidiary of Ensurge, Inc.), hereinafter “Ensurge”, has entered into a Definitive Agreement (“Agreement”) with Metais Juara LTDA, hereinafter “Metais” of Pocone, Mato Grosso, Brazil, on June 13, 2012.  Under provisions of this Agreement, Ensurge will provide technology and the capital equipment necessary to expand gold production and in return will receive an in-kind royalty payment.

As part of this Agreement Ensurge is required to make an initial payment of four million Brazilian Reals (R$4,000,000), which is approximately US $1,968,659, to be paid within 90 business days from the date of signing the Agreement.  This Agreement will not become effective until the date the funds are wired to Metais.  In return for said payment Ensurge will be entitled to a top line royalty payment of seventeen percent (17%) of daily gold production, delivered in-kind as a gold dore bar, which is approximately 93% gold.

Ensurge will construct a new gold recovery mill with the purpose of bringing new technology to the current process, which is expected to increase the rate of gold recovery.  The new mill will process approximately 400 tons of ore per day, with the expectation of increasing gold recovery to over 50%.  The construction of the new mill is expected to be completed within 12 months from the initial ordering of equipment.  Once the mill is completed and running as expected, the royalty payment will be increased to forty-one percent (41%). The mill and its equipment will belong to Ensurge.

Ensurge may acquire additional mining equipment (ie. trucks, excavators, etc.) to increase the daily mine production.  Once this additional mining equipment is in place and in operation, the royalty payment will be increased to forty-three percent (43%).

Metais is required to continue to operate and manage the current mining operations for the next three years.  If at any time Metais desires to terminate or sell the mine operation, Ensurge has first right of refusal to purchase and/or continue the mining operations.   The term of the Agreement runs for the life of the mine operations by Metais.

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BALANCE SHEETS (PARENTHETICAL) (USD $)	Jun. 30, 2012	Dec. 31, 2011
Common Stock par value	$ 0.001	$ 0.001
Common stock shares authorized	100,000,000	100,000,000
Common stock shares outstanding	33,138,726	32,348,726

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Note 1-Organization and Basis of Presentation: BasicAndDilutedLossPerShare: Warrants outstanding and exercisable (Details) (USD $)	Jun. 30, 2012
Range of exercise price for warrants	$0.14 to $1.00
Warrants Outstanding	8,330,000
Weighted Average Remaining Contractual LifeWarrants	3.87 years
Weighted Average Exercise Price For Warrants	$ 0.49
Aggregate Intrinsic Value Of Warrants	$ 4,081,700

XML

Document and Entity Information	3 Months Ended
	Jun. 30, 2012	Jul. 27, 2012
Document and Entity Information
Entity Registrant Name	ENSURGE INC
Document Type	10-Q
Document Period End Date	Jun. 30, 2012
Amendment Flag	false
Entity Central Index Key	0000789879
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		33,138,726
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q2

XML

Note 1-Organization and Basis of Presentation: BasicAndDilutedLossPerShare: Options outstanding and exercisable (Details) (USD $)	Jun. 30, 2012
Range of exercise price options	$0.14 to $0.50
Options Outstanding	7,500,000
Weighted Average Remaining Contractual LifeOptions	7.13 years
Weighted Average Exercise Price For Options	$ 0.25
Options Exercisable	5,925,000

XML

STATEMENTS OF OPERATIONS (USD $)	3 Months Ended		6 Months Ended		30 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012
Sales
General and administrative	1,032,930	12,845,961	1,993,136	14,154,356	22,141,575
Total Expenses	1,032,930	12,845,961	1,993,136	14,154,356	22,141,575
Operating Loss	(1,032,930)	(12,845,961)	(1,993,136)	(14,154,356)	(22,141,575)
Gain (Loss) on derivative	1,174,085	(9,990,866)	9,264,088	(17,974,197)	5,989,655
Derivative day-one loss					(11,970,479)
Interest Expense	(27,500)		(55,000)		(1,246,333)
Interest income	59	413	198	1,269	3,526
Net Income (Loss)	$ 113,715	$ (22,836,414)	$ 7,216,150	$ (32,127,284)	$ (29,365,206)
Basic and Diluted Net Gain (Loss) Per Common Share	$ 0.00	$ (0.77)	$ 0.22	$ (1.08)
Basic and Diluted Weighted Average Common Shares Outstanding	32,873,067	29,710,341	32,873,067	29,710,341

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Note 1-Organization and Basis of Presentation: BasicAndDilutedLossPerShare (Policies)

3 Months Ended

Jun. 30, 2012

BasicAndDilutedLossPerShare:

BasicAndDilutedLossPerShare

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 June 30, 2012, the Company had 8,330,000 warrants outstanding which all have a 5 year term.  As of June 30, 2012, the Company had a total of 7,500,000 options of which 5,925,000 have vested and none have been exercised.  The options are all 10 year options with an exercise price ranging from $0.14 to $0.50.

Warrants:

The Company has granted warrants to purchase shares of Common Stock. 

Warrants outstanding and exercisable at June 30, 2012 are as follows:

Range of exercise price	Number Outstanding	Weighted Average Remaining Contractual Life (in years)	Weighted Average Exercise Price	Aggregate Intrinsic Value
$0.14 to $1.00	8,330,000	3.87 years	$           0.49	$  4,081,700

Options:

The Company has granted options to purchase shares of Common Stock. 

Options outstanding and exercisable at June 30, 2012 are as follows:

Range of exercise price	Number Outstanding	Weighted Average Remaining Contractual Life (in years)	Weighted Average Exercise Price	Number Exercisable
$0.14 to $0.50	7,500,000	7.13 years	$           0.25	5,925,000

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Note 1-Organization and Basis of Presentation: BusinessCondition (Policies)

3 Months Ended

Jun. 30, 2012

BusinessCondition:

BusinessCondition

Business Condition – The Company has suffered losses from operations, and the Company had a working capital deficit in the amount $4,615,275 at June 30, 2012. A large part of the deficit is due to outstanding warrants and warrant derivatives. Without the warrant derivatives the adjusted working capital deficit is $2,542,251. 

During 2010, the Company sold an aggregate of 3,100,000 shares of common stock shares to investors for an aggregate purchase price of $894,900 in a private placement.  The Company received $1,360,000 for exercise of warrants to purchase 5,600,000 shares of the Company’s common stock.  In August 2011 the Company entered into a 90 day note payable in the amount of $500,000.

During the month of October 2011 the Company entered into two twelve month convertible Notes Payable for $605,000 each, for a total funding of $1,210,000, with an initial issue discount of 10% and total proceeds of $1,100,000, which are collateralized by all the assets of the Company.  Half of the proceeds were used to repay the $500,000 August 2011 note. These notes may be converted at a fixed price of $1.50 per share of the Company’s common stock, which may be converted at the option of the lender.  These notes also include 950,000 warrants each for a total of 1,900,000 warrants at an exercise price of $1.00 per share and have a cashless exercise provision.  The warrants have a 5 year term.  In case of default, the Notes may be converted into common stock at $1.50 per share or 80% of the current market bid price, whichever is lower.

Effective March 2, 2012, the Company accepted $380,000 in private placement funds from accredited investors in exchange for units consisting of seven hundred sixty thousand (760,000) shares of the Company’s common stock, plus three hundred eighty thousand (380,000) warrants with an exercise price of $1.00.  The proceeds of the financing are being used by the Company to fund the exploration for gold mines or to acquire relating mining assets, either directly or through one or more partnerships or joint ventures, in Brazil or elsewhere in South America. 

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Note 2 - Commitments and Contingencies (Details) (USD $)	3 Months Ended
	Jun. 30, 2012
PaymentsToAcquireRoyaltyInterestsInMiningProperties	$ 1,968,659	[1]
Top line royalty payment phase 1	17.00%
Top line royalty payment phase 2	41.00%
Top line royalty payment phase 3	43.00%

[1] Approximate value of R$4,000,000 to be paid with in 90 days from June 13, 2012 per agreement

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Note 1-Organization and Basis of Presentation: BasicAndDilutedLossPerShare: Options outstanding and exercisable (Tables)

3 Months Ended

Jun. 30, 2012

Options outstanding and exercisable:

Options outstanding and exercisable

Range of exercise price	Number Outstanding	Weighted Average Remaining Contractual Life (in years)	Weighted Average Exercise Price	Number Exercisable
$0.14 to $0.50	7,500,000	7.13 years	$           0.25	5,925,000

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Note 1-Organization and Basis of Presentation: Recently Enacted Accounting Standards (Policies)

3 Months Ended

Jun. 30, 2012

Recently Enacted Accounting Standards:

Recently Enacted Accounting Standards

Recently Enacted Accounting Standards

Accounting Standards Update (“ASU”) No. 2009-05 (ASC Topic 820), which amends Fair Value Measurements and Disclosures – Overall, ASU No. 2009-13 (ASC Topic 605), Multiple-Deliverable Revenue Arrangements, ASU No. 2009-14 (ASC Topic 985), Certain Revenue Arrangements that include Software Elements, and various other ASU’s No. 2009-2 through ASU No. 2011-12, which contain technical corrections to existing guidance or affect guidance to specialized industries or entities were recently issued.  These updates have no current applicability to the Company or their effect on the financial statements would not have been significant.

XML

Note 1-Organization and Basis of Presentation: BasicAndDilutedLossPerShare: Warrants outstanding and exercisable (Tables)

3 Months Ended

Jun. 30, 2012

Warrants outstanding and exercisable:

Warrants outstanding and exercisable

Range of exercise price	Number Outstanding	Weighted Average Remaining Contractual Life (in years)	Weighted Average Exercise Price	Aggregate Intrinsic Value
$0.14 to $1.00	8,330,000	3.87 years	$           0.49	$  4,081,700

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Note 1-Organization and Basis of Presentation: BusinessCondition (Details) (USD $)	3 Months Ended	6 Months Ended	12 Months Ended	30 Months Ended
	Jun. 30, 2012	Jun. 30, 2012	Dec. 31, 2010	Jun. 30, 2012	Mar. 02, 2012	Oct. 31, 2011		Aug. 31, 2011
Working capital deficit	$ 4,615,275	$ 4,615,275		$ 4,615,275
Adjusted working capital deficit	2,542,251	2,542,251		2,542,251
CommonStockSharesIssued			3,100,000
Proceeds from Issuance of Common Stock		380,000	894,900	1,274,900
Proceeds from exercise of warrants for common stock to be issued	1,360,000			1,360,000
Common stock shares purchased with warrants exercised	5,600,000	5,600,000		5,600,000
August 2011 Short term note						500,000		500,000
Convertible Notes Payable, Noncurrent						1,100,000	[1]
DebtInstrumentConvertibleTermsOfConversionFeature	These notes may be converted at a fixed price of $1.50 per share of the Company’s common stock, which may be converted at the option of the lender. These notes also include 950,000 warrants each for a total of 1,900,000 warrants at an exercise price of $1.00 per share and have a cashless exercise provision. The warrants have a 5 year term. In case of default, the Notes may be converted into common stock at $1.50 per share or 80% of the current market bid price, whichever is lower
ProceedsFromIssuanceOfPrivatePlacement					$ 380,000
Common stock issued in private placement					760,000
Warrants issued in private placement					380,000
Exercise price on warrants					$ 1.00

[1] Consists of 2 $605,000 notes before initial issue discount of 10%,

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STATEMENTS OF CASH FLOWS (USD $)	6 Months Ended		30 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012
Net income (loss)	$ 7,216,150	$ (32,127,284)	$ (29,365,206)
Common stock and options issued for services	1,421,803	1,222,626	19,704,677
Warrant derivative liability	(9,264,088)	30,231,613	(5,989,655)
Derivative day-one loss			11,970,479
Accumulated Depreciation	3,914	318	4,868
Increase (decrease) in trade accounts payable	51,214	(11,620)	78,742
Increase (decrease) in accrued liabilities	55,000		58,595
Net Cash Used in Operating Activities	(530,428)	(684,347)	(3,551,921)
Investing in fixed assets		(3,817)	(58,890)
Investment in mining rights project		(379,936)
Net Cash Provided (Used) by Investing Activities		(383,753)	(58,890)
Proceeds from notes payable			1,600,000
Repayments of notes payable			(500,000)
Proceeds from exercise of warrants for common stock to be issued			1,360,000
Purchase treasury stock			(60,000)
Proceeds from issuance of common stock	380,000		1,274,900
Net Cash Provided (Used) by Financing Activities	380,000		3,674,900
Net Increase (decrease) in Cash	(150,428)	(1,068,100)	64,089
Cash at Beginning of Period	214,517	1,146,936
Cash at End of Period	$ 64,089	$ 78,836	$ 64,089

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Note 1-Organization and Basis of Presentation: BasisOfPresentation (Policies)

3 Months Ended

Jun. 30, 2012

BasisOfPresentation:

BasisOfPresentation

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-Q.  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, 2011, included in the Company’s annual report on Form 10-K, 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 June 30, 2012, and its results of operations and cash flows for the six months ended June 30, 2012 and 2011.  The results of operations for the six months ended June 30, 2012, may not be indicative of the results that may be expected for the year ending December 31, 2012.