UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC  20549

                                   FORM 10-KSB
(Mark One)
[  X  ]          ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2002


[    ]           TRANSITION  REPORT  PURSUANT TO SECTION  13  OR  15(d)  OF  THE
SECURITIES EXCHANGE ACT OF 1934
   For the Transition Period from ____________ to ____________

                       Commission File Number 033-03275-D

                                  ____________

                                  EnSurge, Inc.
                 (Name of small business issuer in its charter)
         Nevada                                    87-0431533
    (State or other                                 (I.R.S.
    jurisdiction of                                 Employer
    incorporation or                             Identification
     organization)                                    No.)

   435 West Universal
         Circle                                      84070
       Sandy, UT                                   (Zip Code)
 (Address of Principal
   Executive Offices)

           Issuer's Telephone Number  (801) 601-2765

Securities Registered Pursuant to Section 12(b) of the Exchange
Act:  None

Securities Registered Pursuant to Section 12(g) of the Exchange
Act: Common Stock, $.001 par value

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. [X] Yes [ ] No

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]

     The registrant's revenues for its most recent fiscal year were $6,742.

     The  aggregate market value of the voting and non-voting common stock  held
by  non-affiliates  of  the  registrant as of  May  9,  2003  was  approximately
$100,000.

     The  registrant had issued and outstanding 100,000,000 shares of its common
stock on May 9, 2003.



                          EnSurge, INC.
                           FORM 10-KSB
              FOR THE YEAR ENDED DECEMBER 31, 2002

PART I
  ITEM 1.BUSINESS                                             1
  ITEM 2.PROPERTIES                                           3
  ITEM 3.LEGAL PROCEEDINGS                                    3
  ITEM 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS  6

PART II
  ITEM 5.MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
          STOCKHOLDER MATTERS                                 7
  ITEM 6.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          CONDITION
          AND RESULTS OF OPERATIONS                           8
  ITEM 7.FINANCIAL STATEMENTS                                13
          REPORT OF INDEPENDENT ACCOUNTANTS                  14
          CONSOLIDATED BALANCE SHEETS                        15
          CONSOLIDATED STATEMENTS OF OPERATIONS              16
          CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT   17
          CONSOLIDATED STATEMENTS OF CASH FLOWS              18
          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS         20
  ITEM 8.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
          ACCOUNTING AND FINANCIAL DISCLOSURE                32

PART III
  ITEM 9.  DIRECTORS AND EXECUTIVE OFFICERS, PROMOTORS AND
             CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a)
             OF THE EXCHANGE ACT                             32
  ITEM 10. EXECUTIVE COMPENSATION                            32
  ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
             AND MANAGEMENT                                  32
  ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS    32
  ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K                  33
  ITEM 14. CONTROLS AND PROCEDURES                           33
           SIGNATURES                                        34
           EXHIBIT INDEX                                     35
           SUBSIDIARIES OF THE REGISTRANT          Exhibit 22.1
           POWER OF ATTORNEY                       Exhibit 24.1
           SARBANES OXLEY CERTIFICATION            Exhibit 99.1
                             PART I

ITEM  1.  BUSINESS

     EnSurge  is  a technology holding company.  Current  EnSurge
holdings include: NowSeven.com, Inc., Stinkyfeet.com, Inc.,  Uniq
Studios, Inc., iShopper Internet Services, Inc. and ZaiBon, Inc.



General Development of Business

     Sunwalker Development, Inc. ("the Company") was incorporated
in the State of Utah on March 28, 1985, and was subsequently
changed to a Nevada Corporation on September 14, 1999.  The
Company was incorporated for the purpose of providing a business
framework within which capital could be raised and business
opportunities, with profit potential, could be sought.  From the
period of inception until December 31, 1989, the Company operated
as a development stage corporation.  Effective February 1, 1990,
the Company began permanent operations in the mining industry
with emphasis on decorative rock used in landscaping.

     In 1990 the Company acquired a mining property located in
Morristown, (near Wickenburg) Arizona.  In 1994 and 1995, the
Company sold all of its assets and ceased active operations.

     Effective October 7, 1999 the Company merged with ECenter,
Inc, a Utah corporation.  Subsequently, the Company changed its
name to iShopper.com, Inc. ("iShopper.com").  As a result of the
merger, the Company had two wholly-owned subsidiaries:  Outbound
Enterprises, Inc. and iShopper Internet Services, Inc.  A total
of 125,000 shares of the Company's common stock were issued
pursuant to the merger.  Effective November 1999, the Company
refocused its efforts into becoming an Internet holding company.
In September 2000, Outbound Enterprises discontinued its
operations.  In December 2000 iShopper Internet Services
discontinued its operations.  On January 31, 2000 it entered into
a sales agreement with Digital Commerce Bank, Inc. to purchase
its assets.  This sales agreement was finalized January of 2002.

     On November 1, 1999, the Company purchased NowSeven.com,
Inc. for a total of 1,000,000 shares of the Company's common
stock.

     On January 31, 2000, the Company purchased Stinkyfeet.com,
Inc. for 7,500 shares of the Company's common stock and cash of
$40,000.  Entity was discontinued December 2002.

     On April 4, 2000, the Company purchased Uniq Studios, Inc.
for 1,500,000 shares of the Company's common stock and options to
purchase 500,000 shares of common stock at $7.60 per share.
Effective November 2001 Uniq Studios, Inc. discontinued its
operations.

     On April 7, 2000, the Company purchased Totalinet.net, Inc.
for 200,000 shares of the Company's common stock.  Effective
December 5, 2000 Totalinet.net, Inc. discontinued its operations.

     On May 31, 2000, the Company purchased Atlantic Technologies
International, Inc. for 238,200 shares of the Company's common
stock.  Effective April 27, 2001 Atlantic Technologies
International, Inc. discontinued its operations.

     On May 31, 2000, the Company purchased Internet Software
Solutions, Inc. for 100,000 shares of the Company's common stock.
Effective April 27, 2001 Internet Software Solutions, Inc.
discontinued its operations.


                                1


     On June 1, 2000, the Company purchased KT Solutions, Inc.
for 500,000 shares of the Company's common stock and options to
purchase 250,000 additional shares of the Company's common stock.
Effective April 1, 2001, the Company sold KT Solutions Inc. to
Knowledge Transfer Systems, Inc. for 8,000,000 shares of common
stock.

     On October 18, 2000, the Company changed its name from
iShopper.com, Inc to EnSurge, Inc.

     On  February  5, 2001, the Company created a new  subsidiary
named ZaiBon, Inc., which was discontinued December 2002.

     On  February  15, 2001, the company did a 5  for  1  forward
split.   Providing  each shareholder five shares  for  every  one
shares  with  they  owned.  Prior to the split  the  company  had
14,386,775  shares issued and outstanding and subsequent  to  the
split the company had 71,933,875 issued and outstanding.



Forward-Looking Statements and Associated Risks

     This Report, including all documents incorporated herein  by
reference,  includes certain "forward-looking statements"  within
the meaning of that term in Section 13 or 15(d) of the Securities
Act  of  1934,  and Section 21E of the Exchange  Act,  including,
among  others,  those  statements preceded  by,  followed  by  or
including  the  words  "believes,"  "expects,"  "anticipates"  or
similar expressions.

     These  forward-looking statements are based largely  on  our
current  expectations and are subject to a number  of  risks  and
uncertainties.   Our actual results could differ materially  from
these forward-looking statements.  In addition to the other risks
described  in  the  "Factors  That  May  Affect  Future  Results"
discussion under Item 6, Management's Discussion and Analysis  of
Financial Condition and Results of Operations in Part II of  this
Report, important factors to consider in evaluating such forward-
looking statements include:

     - changes  in  our  business strategy  or  an  inability  to
       execute our strategy due to unanticipated changes  in  the
       market,

     - our  ability to raise sufficient capital to meet operating
       requirements,

     - various  competitive  factors that  may  prevent  us  from
       competing successfully in the marketplace, and

     - changes in external competitive market factors or  in  our
       internal  budgeting process which might impact  trends  in
       our results of operations.

In  light  of  these risks and uncertainties,  there  can  be  no
assurance  that  the  events contemplated by the  forward-looking
statements contained in this Report will, in fact, occur.


                                2


STRATEGY & MARKET OPPORTUNITY

      While  the  Company strives to create positive  shareholder
value  from  every holding in its portfolio, there will  be  some
holdings that will not reach their full potential.



PRODUCTS & SERVICES - CURRENT

     The   products  and  services  of  EnSurge's  wholly   owned
companies as of May 9, 2003 include NowSeven.com, Inc.


MARKETING SERVICES

       NowSeven.com,  Inc.  specializes  in  business-to-business
database  lists  and  services that support direct  marketing  to
Technology  and  Internet  based  companies.   The  Company  owns
electronic databases and mailing lists.



EMPLOYEES

       As of May 9, 2003, EnSurge and its subsidiaries employed
  a total of 2 persons.  None of our employees are associated
  with unions.


ENVIRONMENTAL STANDARDS

     The Company is not involved in any project that would effect
the environment.


ITEM 2.   PROPERTIES

           Our  corporate office is located at 435 West Universal
Circle,  Sandy, Utah  84070.  This facility is leased on a  month
to  month  basis  for $1,000.  We believe that this  property  is
suitable  for  our  immediate needs.  EnSurge  and  NowSeven  are
located and managed at the corporate facility.



ITEM 3.   LEGAL PROCEEDINGS

EnSurge  and its' subsidiarys have several outstanding law  suits
against  them  and  the  company,  which  approximate,  $771,937.
Settlement arrangements are in the process, however due  to  lack
of cash, any arrangements are uncertain.


                                        3


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

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

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

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

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

OneSource.com v. Outbound Enterprises and enSurge, Inc.    In
October 2000, OneSource.com brought suit in the Third Judicial
District Court, Salt Lake City, Utah, against Outbound seeking
recovery for amounts owed for printing services and related
products furnished between October 1999 and January 2000 in the
amount of $76,157.  Settlement was reached in December 2000, on


                                        4


terms that entitled OneSource to judgment against Outbound and
Company, as its guarantor, if settlement installments were not
made as required.  The Company has defaulted in settlement
payments and judgment against Outbound and the Company was
entered on March 30, 2001, in the amount of $85,096, including
interest costs and attorneys fees.  The Company intends to
attempt to settle judgment as funds become available.

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

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

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

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

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

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

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


                                        5

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

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

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None

                                        6


                             PART II

ITEM 5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS


Price Range of Common Stock
     Our  common stock trades on the OTC Bulletin Board under the
symbol  [ENSG].  The following table sets forth the range of  the
high  and low sales prices per share of our common stock for  the
fiscal quarters indicated, as reported by OTC.  Prior to December
23,  1999, there was no known public trading in our common stock.
Quotations represent inter-dealer prices, without retail  markup,
markdown, or commission and may not necessarily represent  actual
transactions.
                              HIGH            LOW
                            ------         ------
               2001
           -------------
           First Quarter    $0.725         $ 0.060

           SecondQuarter     0.070           0.030

           Third Quarter                     0.013

           Fourth Quarter                    0.003


               2002
           --------------
           First Quarter    $0.0045        $ 0.002

           Second Quarter     0.002         0.0011

           Third Quarter     0.0011         0.0009

           Fourth Quarter    0.0013         0.0001


Approximate Number of Equity Security Holders

     On May 9, 2003, there were 354 shareholders of record of our
common  stock.  Because many of such shares are held  by  brokers
and  other institutions on behalf of shareholders, we are  unable
to estimate the total number of shareholders represented by these
record holders.


                                        7


Dividends

     We  do not presently pay dividends on our common stock.   We
intend  for  the  foreseeable future to continue  the  policy  of
retaining earnings, if any, to finance the development and growth
of our business.


ISSUANCE OF SECURITIES
   None


ITEM  6.    MANAGEMENT'S  DISCUSSION AND  ANALYSIS  OF  FINANCIAL
CONDITION AND RESULTS OF OPERATIONS


Forward-Looking Statements and Associated Risks

     This Report, including all documents incorporated herein  by
reference,  includes certain "forward-looking statements"  within
the meaning of that term in Section 13 or 15(d) of the Securities
Act  of  1934,  and Section 21E of the Exchange  Act,  including,
among  others,  those  statements preceded  by,  followed  by  or
including  the  words  "believes,"  "expects,"  "anticipates"  or
similar expressions.

     These  forward-looking statements are based largely  on  our
current  expectations and are subject to a number  of  risks  and
uncertainties.   Our actual results could differ materially  from
these forward-looking statements.  In addition to the other risks
described  in  the  "Factors  That  May  Affect  Future  Results"
discussion under Item 6, Management's Discussion and Analysis  of
Financial Condition and Results of Operations in Part II of  this
Report, important factors to consider in evaluating such forward-
looking statements include:

     - changes  in  our  business strategy  or  an  inability  to
       execute our strategy due to unanticipated changes  in  the
       market,

     - our  ability to raise sufficient capital to meet operating
       requirements,

     - various  competitive  factors that  may  prevent  us  from
       competing successfully in the marketplace, and

     - changes in external competitive market factors or  in  our
       internal  budgeting process which might impact  trends  in
       our results of operations.

In  light  of  these risks and uncertainties,  there  can  be  no
assurance  that  the  events contemplated by the  forward-looking
statements contained in this Report will, in fact, occur.



Results of Operations

     The following discussions should be read in conjunction with
the  Company's Consolidated Financial Statements contained herein
under Item 7 of this Report.

                                Year            Year
                               Ended           Ended
                              Dec. 31,        Dec. 31,
                                2002            2001
                             --------       -----------
  Revenue:                   $  6,742       $    64,860
                             --------       -----------
  Expenses (including
    selling, general
    and administrative)       609,163         4,682,612
                             --------       -----------
  Net loss                   $617,148       $10,857,930
                             ========       ===========



      During  the fiscal year 2002 and through today's  date  the
Company  has  discontinued operations of eight  subsidiaries  and
sold two entities.  The Company maintains one subsidiary and  the
parent  holding Company.  The following discussion of the results
of  operations  and numbers presented represent  operations  from
those subsidiaries which have not been discontinued.

     Sales for the twelve months ended December 31, 2002 and 2001
were  respectively, $6,742 and $64,860.  The Company's  principal
source of revenue for 2002 was from marketing and database sales.
NowSeven.com, Inc. is the only remaining company with  sales  and
operations.

      Cost of sales for the twelve months ended December 31, 2002
and  2001  were, respectively, $0 and $23,000.  These costs  were
mainly  the labor costs to develop the web designs for  the  year
2001.

      General  &  Administrative expenses for the  twelve  months
ended December 31, 2002 and 2001 were, respectively, $233,575 and
$1,138,455. These costs were mainly to keep operations of the
parent and other companies viable.

     The  Company has discontinued the following subsidiaries and
their  operations:  Outbound Enterprises, Inc., iShopper Internet
Services,   Inc.,   Stinkyfeet,   Inc.,   Uniq   Studios,   Inc.,
Totalinet.net,  Inc., Atlantic Technologies International,  Inc.,
Internet Software Solutions, Inc., and Zaibon, Inc.


      EnSurge  and its' subsidiarys have several outstanding  law
suits  against them and the company, which approximate, $771,937.
Settlement arrangements are in the process, however due  to  lack
of cash, any arrangements are uncertain.

Liquidity and Capital Resources

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


                                        9


FACTORS THAT MAY AFFECT FUTURE RESULTS

We Have No Significant Operating History.

     As  a  company  in  the rapidly changing Technology  and  e-
commerce industries, we are subject to all the substantial  risks
inherent  in  the commencement of a new business enterprise.   We
can  provide  no  assurance that we will be able to  successfully
generate  revenues, operate profitably, or make any distributions
to  the  holders  of our securities.  Additionally,  we  have  no
significant  business history.  Our prospects must be  considered
in  light of the risks, expenses and difficulties encountered  by
companies  in  the  early  stages  of  development.   Such  risks
include,  but  are not limited to, an evolving and  unpredictable
business  model and the management of growth.  We can provide  no
assurance  that we will be successful in addressing  such  risks,
and the failure to do so could have a material adverse effect  on
our business.

We Incurred Operating Losses for the Current Year

     At   December  31,  2002,  our  accumulated  deficit   since
inception  was $22,111,865082,754.  For the twelve  months  ended
December 31, 2002, we incurred a net loss of $617,148588,037.  We
have  incurred a net loss in each year of our existence, and have
financed  our  operations  primarily  through  sales  of   equity
securities.

We Have Significant Funding Needs.

     We  require  capital funds for payment of past due  accounts
payable  and  notes  payable.     However,  we  can  provide   no
assurance  that capital funds will be raised.  If adequate  funds
are  unavailable, we may delay, curtail, reduce the scope  of  or
eliminate  our operations and sales efforts which  could  have  a
material  adverse effect on our financial condition and  business
operations.

 Quarterly Operating Results May Fluctuate.

     Based  on our business and industry, we expect to experience
significant  fluctuations  in  our  future  quarterly   operating
results  due  to a variety of factors, many of which are  outside
our  control.  Factors  that may adversely affect  our  quarterly
operating results include:

     - our  ability to attract new customers at a steady rate and
       maintain customer satisfaction,

     - the  demand  for the products and services  we  intend  to
       market,

     - the  amount and timing of capital expenditures  and  other
       costs relating to the expansion of our operations,

     - the  introduction of new or enhanced services by us or our
       competitors, and

     - economic  conditions specific to the Technology, internet,
       e-commerce or all or a portion of the technology market.

As a Technology Based Company, We are in an Intensely Competitive
Industry.

     The   Internet   and   e-commerce  industries   are   highly
competitive, and have few barriers to entry. Although  there  are
few  competitors  who offer the same or similar services  of  the
type  we  offer,  we  can  provide no assurance  that  additional
competitors will not enter markets that we intend to serve.

                                        10


     We  believe  that  our ability to compete  depends  on  many
factors  both  within  and  beyond  our  control,  including  the
following:

     - the timing and market acceptance of our business model,

     - our competitors' ability to gain market control,

     - the success of our marketing efforts,

     - acquisitions  of  companies with new  internet  models  or
       technology,

     - refocusing companies to internet based models,

     - using current relations to extend all business sales and
        marketing

Our  Operations May be Significantly Impaired by  Changes  in  or
Developments   under  Domestic  or  Foreign  Laws,   Regulations,
Licensing Requirements or Telecommunications Standards.

     We  are  not currently subject to direct regulation  by  any
governmental   agency,  other  than  regulations  applicable   to
businesses  generally.  However, due to the increasing popularity
and use of the Internet, it is possible that a number of laws and
regulations may be adopted with respect to the Internet  covering
issues  such  as  user  privacy,  pricing,  content,  copyrights,
distribution,  and characteristics and quality  of  products  and
services.  The adoption of such laws or regulations may  decrease
the  growth  of the Internet, which could, in turn, decrease  the
demand  for our services and increase our cost of doing business.
Moreover, the applicability to the Internet of existing  laws  in
various   jurisdictions  governing  issues   such   as   property
ownership,  sales and other taxes, libel and personal privacy  is
uncertain  and  may  take  years  to  resolve.   Any   such   new
legislation,  the  application  of  laws  and  regulations   from
jurisdictions whose laws do not currently apply to our  business,
or the application of existing laws to the Internet could have  a
material adverse affect on our business.

The Volatility of Our Securities Prices May Increase.

     The  market price of our common stock has in the past  been,
and  may  in  the future continue to be, volatile. A  variety  of
events  may  cause  the  market price  of  our  common  stock  to
fluctuate significantly, including:

     - quarter to quarter variations in operating results,

     - adverse news announcements,

     - market   conditions  in  the  Internet-based  professional
       services, business, and business-to-business e-commerce.

     In   addition,  the  stock  market  in  recent   years   has
experienced significant price and volume fluctuations  that  have
particularly  affected the market prices of equity securities  of
many companies in our business and that often have been unrelated
to  the  operating  performance of such companies.  These  market
fluctuations may adversely affect the price of our common stock.

We  May be Required to Issue Stock in the Future That Will Dilute
the Value of Our Existing Stock.

     We  currently  have 3,426,800 outstanding options.   If  you
don't  have  any further shares authorized, then you can't  issue
stock for these options - reconcile this.  The exercise of all of


                                11

the   outstanding   options   would  dilute   the   then-existing
shareholders' percentage ownership of our common stock,  and  any
sales  in  the  public market could adversely  affect  prevailing
market  prices  for our common stock.  Moreover, our  ability  to
obtain  additional  equity capital could  be  adversely  affected
since the holders of outstanding options will likely exercise the
options when we probably could obtain any needed capital on terms
more  favorable than those provided by these securities.  We lack
control  over the timing of any exercise or the number of  shares
issued or sold if exercises occur.

Our  Failure to Manage Future Growth Could Adversely  Impact  Our
Business Due to the Strain on Our Management, Financial and Other
Resources.

     Because our business is in an early development stage (avoid
using  `development stage' - development stage companies  require
from inception accounting and slightly different disclosures; you
don't want to suggest to the SEC that you are a development stage
company,  because it will complicate your financial statements;),
oOur ultimate success depends on our ability to manage growth. In
the  future, we may have to increase staff rapidly and  integrate
new personnel into our operations without affecting productivity.
We  will  have  to  ensure  that our administrative  systems  and
procedures  are adequate to handle such growth.   It  is  unclear
whether  our systems, procedures or controls will be adequate  to
support  our operations or that our management will  be  able  to
achieve  the  rapid execution necessary to exploit  our  business
plan.  If our systems, procedures or controls are inadequate, our
operations and financial condition may suffer.

Outlook

      The  Company  strives to create positive shareholder  value
from  every  holding in its portfolio.  Some  holdings  will  not
reach  their full potential.  The Company is not looking to  grow
or add to any of its holdings.

Inflation
      Our  business  and  operations  have  not  been  materially
affected  by  inflation during the periods  for  which  financial
information is presented.


                                12

PART II

ITEM 7.  FINANCIAL STATEMENTS

      The  following  constitutes a list of Financial  Statements
included in Part II of this Report beginning at page 16  of  this
Report:


                          EnSURGE, INC.

                  INDEX TO FINANCIAL STATEMENTS

                                                           Page
                                                           ----
  Report of Independent Certified Public Accountants        14

  Consolidated Statement of Assets, Liabilities and
    Stockholders' Deficit - Liquidation Basis as of
    December 31, 2002 and Consolidated Balance Sheets -
    as of December 31, 20012 and 2001                        15

  Consolidated Statement of Revenue and Expenses -
    Liquidation Basis for the Year Ended December 31, 2002
    and Consolidated Statements of Operations and
    Comprehensive Loss for the Years Ended December 31,
    2002 and 2001                                            16

  Consolidated Statements of Stockholders'' Equity (Deficit)
    for the Years Ended December 31, 2001 and 2002
    Consolidated Statement of Stockholders' Deficit -
    Liquidation Basis for the Year Ended December 31, 2002   17

  Consolidated Statement of Cash Flows - Liquidation Basis
    for the Year Ended December 31, 2002 and Consolidated
    Statements of Cash Flows for the Years Ended December
    31, 2002 and 2001                                        18

  Notes to Consolidated Financial Statements                 20


                                13


HANSEN, BARNETT & MAXWELL                         (801) 532-2200
A Professional Corporation                      Fax (801) 532-7944
CERTIFIED PUBLIC ACCOUNTANTS                5 Triad Center, Suite 750
                                            Salt Lake City, Utah 84180
                                                 www.hbmcpas.com




           REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Directors and the Shareholders
   EnSurge, Inc.

We  have  audited  the  accompanying  consolidated  statement  of
assets, liabilities, and stockholders' deficit-liquidation  basis
consolidated   balance  sheets  of  EnSurge,   Inc.,   a   Nevada
corporation,  and subsidiaries (the Company) as of  December  31,
2002  and  200102,  and  the related consolidated  statements  of
revenues    and    expenses-liquidation   basis,    stockholders'
deficit-liquidation basis, and cash flows-liquidation  basis  for
the   year   then  ended.  In  addition,  we  have  audited   the
accompanying consolidated balance sheet as of December 31,  2001,
and   the  related  consolidated  statements  of  operations  and
comprehensive  loss,  stockholders' equity  (deficit),  and  cash
flows  for  the  years then ended.  These consolidated  financial
statements  are  the responsibility of the Company's  management.
Our  responsibility is to express an opinion on  these  financial
statements based on our audits.

We  conducted  our  audits in accordance with auditing  standards
generally  accepted  in  the  United  States  of  America.  Those
standards  require that we plan and perform the audits to  obtain
reasonable  assurance  about whether the  consolidated  financial
statements are free of material misstatements. An audit  includes
examining,  on a test basis, evidence supporting the amounts  and
disclosures  in the consolidated financial statements.  An  audit
also  includes  assessing  the  accounting  principles  used  and
significant  estimates made by management, as well as  evaluating
the overall financial statement presentation. We believe that our
audits provides a reasonable basis for our opinion.

As  described in Note 1 to the consolidated financial statements,
EnSurge,  Inc. and its subsidiaries began liquidation on  January
1,  2002.  As  a  result, the Company has changed  its  basis  of
accounting for periods subsequent to December 31, 2001  from  the
going-concern basis to a liquidation basis.

In our opinion, the consolidated financial statements referred to
above  present  fairly,  in all material  respects,  the  assets,
liabilities,   and   stockholders'   deficit-liquidation    basis
financial  position  of  EnSurge, Inc.  and  subsidiaries  as  of
December  31,  2002,  2  and  2001 and  the  their  revenues  and
expenses-liquidation basis and their cash flows-liquidation basis
for the year then ended, their consolidated financial position as
of  December  31, 2001, and the results of their  operations  and
their  cash  flows for the years then ended,  in conformity  with
accounting principles generally accepted in the United States  of
America   applied  on  the  bases  described  in  the   preceding
paragraph.

The accompanying financial statements have been prepared assuming
the  Company  will continue as a going concern. As  discussed  in
Note 1 to the consolidated financial statements, the Company  has
suffered recurring losses from operations and negative cash flows
from operating activities, and at December 31, 2002, had negative
working  capital.  In  addition, the  Company  has  defaulted  on
several  liabilities  and  is a defendant  in  several  resulting
lawsuits.  These  conditions raise substantial  doubt  about  the
Company's  ability  to continue as a going concern.  Management's
plans  regarding these matters are also described in Note 1.  The
consolidated financial statements do not include any  adjustments
that might result from the outcome of this uncertainty.


                                   HANSEN, BARNETT & MAXWELL
Salt Lake City, Utah
May 16, 2003

                                14


                          ENSURGE, INC.
 CONSOLIDATED STATEMENT OF ASSETS, LIABILITIES AND STOCKHOLDERS'
     DEFICIT - LIQUIDATION BASIS AS OF DECEMBER 31, 2002 AND
       CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 2001

                                                     2002          2001
----------------------------------------------------------------------------

                                     ASSETS
Current Assets
 Cash                                           $        247    $      7,300
 Investment in securities available for sale               -         487,999
 Other current assets                                      -          28,377
----------------------------------------------------------------------------

  Total Current Assets                                   247         523,676

Property and equipment (net of $0 and $4,181 of
  accumulated depreciation, respectively)                  -          14,297
----------------------------------------------------------------------------


Total Assets                                    $        247    $    537,973
============================================================================


                      LIABILITIES AND STOCKHOLDERS' DEFICIT


Current Liabilities
 Trade accounts payable                         $  1,532,433    $  1,789,827
 Accrued liabilities                               1,883,527       1,555,875
 Notes payable                                     2,415,877       2,419,253
----------------------------------------------------------------------------

  Total Current Liabilities                        5,831,837       5,764,955
----------------------------------------------------------------------------

Stockholders' Deficit
 Common stock - $0.001 par value; 100,000,000
 shares authorized; 100,000,000 and 87,459,814
 shares outstanding, respectively                    100,000          87,460
 Additional paid-in-capital                       16,180,275      16,180,275
 Accumulated deficit                             (22,111,865)    (21,494,717)
----------------------------------------------------------------------------

Total Stockholders' Deficit                       (5,831,590)     (5,226,982)
----------------------------------------------------------------------------

Total Liabilities and Stockholders' Deficit     $        247    $    537,973
============================================================================

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

                                        15


                                  ENSURGE, INC.
 CONSOLIDATED STATEMENT OF REVENUE AND EXPENSES - LIQUIDATION BASIS FOR THE
                       YEARS ENDED DECEMBER 31, 2002 AND
           CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
                      FOR THE YEAR ENDED DECEMBER 31, 2001


                                                      2002             2001
----------------------------------------------------------------------------

Sales                                           $      6,742    $     64,860
Cost of Sales                                              -          23,000
----------------------------------------------------------------------------

Gross Profit                                           6,742          41,860
----------------------------------------------------------------------------

Expenses
 General and administrative                          233,575       1,138,455
   Interest expense                                  180,183         168,443
   Loss from sale of assets                                -           6,056

 Gain on forgiveness of liability                   (199,595)              -
   Impairment of securities available for sale       395,000       3,369,658
----------------------------------------------------------------------------

  Total Expenses                                     609,163       4,682,612
----------------------------------------------------------------------------

Loss From Continuing Operations                     (602,420)     (4,640,752)
----------------------------------------------------------------------------

Loss From Discontinued Operations                    (14,727)     (6,217,178)
----------------------------------------------------------------------------

Net Loss                                        $   (617,148)   $(10,857,930)
============================================================================

Basic and Diluted Loss Per Common Share
 Continuing operations                          $      (0.01)   $      (0.06)
 Discontinued operations                               (0.00)          (0.08)
----------------------------------------------------------------------------
 Net loss                                       $      (0.01)   $      (0.15)


Basic and Diluted Weighted Average Common Shares
 Outstanding                                       96,726,776     73,623,634
 ===========================================================================

Comprehensive Loss
 Net loss                                       $    (617,148)  $(10,857,930)
 Change in unrealized holding gains on investment
  in securities available for sale                          -        (20,640)
----------------------------------------------------------------------------

 Comprehensive Loss                             $    (617,148)  $(10,878,570)
============================================================================

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

                                        16


                                  ENSURGE, INC.
             CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
               FOR THE YEAR ENDED DECEMBER 31, 2001 ANDCONSOLIDATED
     STATEMENT OF STOCKHOLDERS' DEFICIT - LIQUIDATION BASIS FOR THE YEAR ENDED
                                DECEMBER 31, 2002

<TABLE>
<CAPTION>
                                                                               Unrealized                        Total
                                   Common Stock     Additional     Unearned     Gain on                       Stockholders'
                              --------------------    Paid-In       Compen-   Investment In    Accumulated       Equity
                                  Shares    Amount    Capital        sation   Securitites        Deficit        (Deficit)
------------------------------------------------------------------------------------------------------------------------

                          <c>          <c>      <c>             <c>           <c>         <c>               <c>

Balance - December 31, 2000   64,760,400   $64,760  $14,486,537     $(57,075)     $20,640     $(10,636,787)   $ 3,878,075

Issuance of common stock for
  cash                         6,385,000     6,385        5,747            -            -                -         12,132
Issuance of common stock
 for services                 13,226,095    13,227      719,832            -            -                -        733,059
Issuance of common stock upon
 conversion of notes payable
 and accrued interest          2,440,325     2,440      932,387            -            -                -        934,827
Issuance of common stock for
 investment in marketable
 securities                      647,994       648       25,272            -            -                -         25,920
Options issued for services            -         -       10,500            -            -                -         10,500
Amortization of unearned
 compensation                          -         -            -       57,075            -                -         57,075
Unrealized gain on investment
   in securities                       -         -            -            -      (20,640)               -        (20,640)
Net loss                               -         -            -            -            -      (10,857,930)   (10,857,930)
-------------------------------------------------------------------------------------------------------------------------


Balance - December 31, 2001   87,459,814   $87,460  $16,180,275     $      -   $    -         $(21,494,717)   $(5,226,982)
Issuance of common stock for
   payment of note payable    10,375,586    10,375            -            -        -                    -         10,375
Issuance of common stock for
 services                      2,164,600     2,165            -            -        -                    -          2,165
Net loss                               -         -            -            -        -             (617,148)      (617,148)
-------------------------------------------------------------------------------------------------------------------------


Balance - December 31, 2002  100,000,000  $100,000  $16,180,275     $      -   $     -        $(22,111,865)   $(5,831,590)
=========================================================================================================================

</TABLE>

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

                                      17

                                  ENSURGE, INC.
            CONSOLIDATED STATEMENT OF CASH FLOWS - LIQUIDATION BASIS
  FOR THE YEAR ENDED DECEMBER 31, 2002 AND CONSOLIDATED STATEMENT OF CASH FLOWS
                      FOR THE YEARS ENDED DECEMBER 31, 2001

<TABLE>
<CAPTION>

                                                            2002          2001
------------------------------------------------------------------------------------
<S>                                                    <C>             <C>

Cash Flows From Operating Activities
 Net loss                                               $(617,148)      $(10,857,930)
 Adjustments to reconcile net loss to net cash used in
   operating activities:
    Amortization of goodwill                                    -            661,644
    Amortization of software costs                              -            450,000
    Amortization of unearned compensation                       -             57,075
    Depreciation                                            4,293             26,055
    Impairment of goodwill and software costs                   -          5,117,531
    Loss on disposal of equipment                               -             47,573
    Expenses settled with notes payable                         -            (20,300)
    Services and expenses paid with common stock            2,165            733,059
    Options issued for services                                 -             10,500
    Interest paid with common stock                             -             28,192
    Forgiveness of liability                             (199,595)                 -
    Impairment loss on marketable securities              395,000          3,369,658
    Impairment loss on property and equipment              10,004                  -
    Changes in assets and liabilities, net of effects
        Accounts receivable                                     -                500
        Other current assets                               28,377                536
        Merchant financing deposit                              -              3,841
        Trade accounts payable                             42,199            (31,411)
        Accrued liabilities                               327,652            352,781
------------------------------------------------------------------------------------

Net Cash Used in Operating Activities                      (7,053)           (50,696)
------------------------------------------------------------------------------------

Cash Flows From Investing Activities
 Capital expenditures                                           -             (6,777)
------------------------------------------------------------------------------------

Net Cash Used in Investing Activities                           -             (6,777)
------------------------------------------------------------------------------------

Cash Flows From Financing Activities
 Principal payments on notes payable and purchase
   obligations                                                  -             (4,646)
 Proceeds from borrowing under notes payable                    -             57,000
 Proceeds from issuance of common stock                         -             12,132
------------------------------------------------------------------------------------

   Net Cash Provided by Financing Activities                    -             64,486
------------------------------------------------------------------------------------
Increase in Cash                                           (7,053)             7,013

Cash and Cash Equivalents at Beginning of Year              7,300                287
------------------------------------------------------------------------------------

Cash and Cash Equivalents at End of Year                $     247       $      7,300
====================================================================================

</TABLE>

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

                                        18


                                  ENSURGE, INC.
            CONSOLIDATED STATEMENT OF CASH FLOWS - LIQUIDATION BASIS
  FOR THE YEAR ENDED DECEMBER 31, 2002 AND CONSOLIDATED STATEMENT OF CASH FLOWS
                      FOR THE YEARS ENDED DECEMBER 31, 2001

<TABLE>
<CAPTION>

                                                                          2002        2001
------------------------------------------------------------------------------------------
<S>                                                                    <C>       <C>
Supplemental Schedule of Noncash Investing and Financing Activities:

  Notes payable and accrued interest converted into common stock        10,375     934,827
  Accounts payable and accrued liabilities
    converted into notes payable                                         6,999     547,206
  Bank overdraft converted to accounts payable                               -      35,675
  Related party note payable assumed by discontinued entity to
    be disposed of                                                           -      25,000
  Investment securities received for sale of wholly-owned subsidiary         -   3,862,538
   Exchange  of  receivable  for investment  in  marketable  securities      -      60,000
   Assets  acquired by assumption of discontinued entity's  liability        -      44,916
  Exchange of property and equipment for other current assets                -      37,777
  Issuance of common stock for investment securities                         -      25,920
  Marketable securities exchanged for assets                                 -     152,001
    Marketable  securities  exchanged  for  settlement  of  liability   93,000           -


    </TABLE>


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

                                19


                            ENSURGE, INC.
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization - Outbound Enterprises Inc. (Outbound) was incorporated on July  8,
1998  under  the laws of the State of Utah and began operations as  a  marketing
company.   On  July  26, 1999, Outbound entered into an agreement  and  plan  of
merger  with ECenter, Inc., a Utah corporation, (ECenter) whereby ECenter issued
approximately 50% of its common stock to the Outbound stockholders  in  exchange
for  all  of the outstanding common stock of Outbound. In addition, the officers
and directors of Outbound became the officers and directors of ECenter.

On  October  7, 1999, ECenter entered into an agreement and plan of merger  with
Sunwalker  Development,  Inc.,  a  Nevada  corporation,  (Sunwalker)  that   was
completed on November 9, 1999, whereby Sunwalker issued 125,000 shares, or  58%,
of  its  common  stock to the ECenter stockholders in exchange for  all  of  the
outstanding  common  stock of ECenter. The transaction was accounted  for  as  a
recapitalization of ECenter at historical cost.  On October 8, 1999, Sunwalker's
name was changed to iShopper.com, Inc.

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,  2003, the Company began liquidation of its assets and  changed  its
basis of accounting from the going concern basis to a liquidation basis.

Principles of Consolidation - The accompanying consolidated financial statements
include  the  accounts  of enSurge, Inc. and the accounts  of  its  wholly-owned
subsidiaries. All significant intercompany transactions and balances  have  been
eliminated   in   consolidation.  The  results  of  operations   from   Outbound
Enterprises, Inc., iShopper Internet Services, Inc., TotaliNet.net,  Inc.,  Uniq
Studio's, Inc., StinkyFeet.com, Inc., Atlantic Technologies International, Inc.,
Internet  Software  Solutions, Inc., Zaibon, Inc., and KT Solutions,  Inc.  have
been reported as discontinued operations for all periods presented.

Use  of  Estimates - The preparation of financial statements in conformity  with
accounting  principles  generally  accepted in  the  United  States  of  America
requires  management to make estimates and assumptions that affect the  reported
amounts in the financial statements and accompanying notes. Actual results could
differ from those estimates.

Business  Condition  and Liquidation Basis of Presentation  -  The  Company  has
suffered  losses  from  operations, has had negative cash flows  from  operating
activities  for  all  periods since inception and has a  capital  deficiency  of
$5,831,590 and a working capital deficiency of $5,831,590 at December 31,  2002.
The  Company has no means available nor does management have any plans to obtain
financing to satisfy the Company's current liabilities of $5,831,837 at December
31, 2002 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.  On  January 1, 2002, the Company began liquidating its assets.  As  a
result,  the  Company changed its basis of accounting for periods subsequent  to
December 31, 2001 from the going-concern basis to a liquidation basis.

Fair  Value  of  Financial Instruments - The amounts reported as  investment  in
securities  available for sale, trade accounts payable, accrued liabilities  and
notes  payable  are  considered to be reasonable approximations  of  their  fair
values.  The fair value estimates were based on market information available  to
management  at  the  time  of the preparation of the financial  statements.  The
reported  fair  values  do not take into consideration potential  expenses  that
would be incurred in an actual settlement.

Investment  in  Securities - Investments in equity securities are classified  as
available  for sale and are carried at fair value. Unrealized gains  and  losses
are reported as a separate component of shareholders' equity except for declines


                                20


                            ENSURGE, INC.
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



in market value that are other than temporary, which are included in operations.
Realized gains and losses on sales of securities are included in operations with
the cost of securities sold determined on a specific cost basis.

Property  and  Equipment  -  Property and equipment are  recorded  at  cost  and
depreciated over their estimated useful lives ranging from three to seven years,
using  the  straight-line method. Expenditures for repairs and  maintenance  are
charged directly to expense. Renewals and betterments are capitalized.

Valuation of Long-lived Assets - The carrying values of the Company's long-lived
assets  are  reviewed for impairment whenever events or changes in circumstances
indicate  that they may not be recoverable. If such an event were to occur,  the
Company  would project undiscounted cash flows to be generated from the  use  of
the asset and its eventual disposition over the remaining life of the asset.  If
projections  were  to indicate that the carrying value of the  long-lived  asset
will not be recovered, the carrying value of the long-lived asset is reduced  by
the  estimated  excess of the carrying value over the projected discounted  cash
flows.  This  analysis involves significant management judgment to evaluate  the
capacity  of  an asset to perform within projections. The Company recognized  an
impairment  loss of $10,004 from property and equipment during  the  year  ended
December  31,  2002. Impairment losses for 2002 and 2001 were also  included  in
loss on discontinued operations discussed in Note 2.

Sales  Recognition - Sales consist primarily of providing database  services  to
customers.   Revenue from the services and the sale of database  information  is
recognized  upon completion and delivery of the services and acceptance  by  the
customer.

Stock-Based Compensation - The Company accounts for its stock options issued  to
directors, officers and employees under Accounting Principles Board Opinion  No.
25 and related interpretations ("APB 25"). Under APB 25, compensation expense is
recognized  if an option's exercise price on the measurement date is  below  the
fair  value of the Company's common stock. The Company accounts for options  and
warrants issued to non-employees in accordance with SFAS No. 123, Accounting for
Stock-Based  Compensation" (SFAS 123) which requires these options and  warrants
to be accounted for at their fair value.

If the compensation cost for the Company's options granted to employees had been
determined  based  on  the  fair value at the grant dates  consistent  with  the
alternative  method set forth under Statement of Financial Accounting  Standards
No.  123,  net  loss and loss per share would have increased to  the  pro  forma
amounts indicated below:

                                                 For the Years Ended
                                                      December 31,
                                              ---------------------------
                                                  2002           2001
-------------------------------------------------------------------------
     Net loss:
       As reported                            $ (617,148)  $ (10,857,930)
       Add: Stock-based employee
         compensation included in reported
         net loss                                      -          57,075
       Less: Total stock-based compensation
         Expense determined under fair value
         based method                                  -        (126,825)
-------------------------------------------------------------------------
       Pro forma                                (617,148)    (10,927,680)

     Basic and diluted loss per share:
       Pro forma                              $    (0.01)  $       (0.15)


                                22


                            ENSURGE, INC.
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



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.  There  were  a  total  of  3,426,800
potentially  issuable common shares which were excluded from the calculation  of
diluted loss per common share at December 31, 2002 and 2001.

Income Taxes - The Company recognizes an asset or liability for the deferred tax
consequences  of all temporary differences between the tax bases  of  assets  or
liabilities  and  their reported amounts in the financial statements  that  will
result  in  taxable  or  deductible amounts in future years  when  the  reported
amounts  of the asset or liabilities are recovered or settled and for  operating
loss carryforwards. These deferred tax assets and liabilities are measured using
the  enacted tax rates that will be in effect when the differences are  expected
to  reverse  and  the  carryforwards are expected to be realized.  Deferred  tax
assets are reviewed periodically for recoverability and a valuation allowance is
provided as necessary.

Reclassification - The accompanying financial statements have been  reclassified
to  present  the  operations of Stinky Feet as discontinued for the  year  ended
December 31, 2001, due to its ceasing operations in November 2001.  Net loss  of
Stinky Feet for the year ended December 31, 2001 was $51,121 and is included  in
the  loss  from  discontinued  operations  in  the  accompanying  statement   of
operations.  Stinky Feet had no sales for the year ended December 31, 2001.

Adoption of SFAS No. 142 - The Company adopted the provisions of SFAS No. 142 in
its  entirety on January 1, 2002. Under the new standard, goodwill is no  longer
amortized,  but  is subject to annual impairment tests. The Company's  remaining
goodwill  and  intangible assets were fully impaired during  2001.  Accordingly,
there  was no impairment of goodwill or intangible assets upon adoption of  SFAS
No. 142.

Goodwill amortization expense was $0 and $661,644 during the year ended December
31,  2002 and 2001, respectively. The effects on net loss and basic and  diluted
loss per share of excluding such goodwill amortization is as follows:

                                                 For the Years Ended
                                                      December 31,
                                              ---------------------------
                                                  2002           2001
-------------------------------------------------------------------------
Net loss, as reported                         $ (617,148)  $ (10,857,930)
Add back goodwill amortization                         -         661,644
-------------------------------------------------------------------------
   Net loss, excluding goodwill amortization  $ (617,148)  $ (10,196,286)
=========================================================================


Basic and diluted loss per
share:
   Net loss, as reported                      $    (0.01)  $       (0.15)
   Net loss, excluding goodwill amortization  $    (0.01)  $       (0.14)


Recently  Enacted Accounting Standards - In October 2001, the FASB  issued  SFAS
No.  144, Accounting for the Impairment or Disposal of Long-Lived Assets."  This
statement  establishes  financial accounting and  reporting  standards  for  the
impairment  or disposal of long-lived assets. The adoption of this statement  on
January  1,  2002,  did  not have a material effect on the  Company's  financial
position or results of operations.


                                22


                            ENSURGE, INC.
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




New  in April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements
No.  4,  44,  and  64,  Amendment  of  FASB  Statement  No.  13,  and  Technical
Corrections." Among other provisions, this statement modifies the  criteria  for
classification of gains or losses on debt extinguishments such that they are not
required  to  be  classified as extraordinary items if  they  do  not  meet  the
criteria  for  classification as extraordinary items  in  APB  Opinion  No.  30,
"Reporting  the Results of Operations - Reporting the Effects of Disposal  of  a
Segment  of  a  Business, and Extraordinary, Unusual and Infrequently  Occurring
Events  and  Transactions." The Company adopted this standard  during  the  year
ended December 31, 2002, with no effect on its financial statements.

In  July  2002,  the FASB issued SFAS No. 146, "Accounting for Costs  Associated
with Exit or Disposal Activities." The statement requires companies to recognize
costs  associated with exit or disposal activities when they are incurred rather
than  at the date of a commitment to an exit or disposal plan. Examples of costs
covered  by  the  standard include lease termination costs and certain  employee
severance   costs  that  are  associated  with  a  restructuring,   discontinued
operation,  plant closing, or other exit or disposal activity. The Company  will
be  required  to  apply this statement prospectively for any  exit  or  disposal
activities  initiated after December 31, 2002. The adoption of this standard  is
not  expected to have a material effect on the Company's financial  position  or
results of operations.

NOTE 2 - DISCONTINUED OPERATIONS

KT  Solutions, Inc. - On April 25, 2001 the Company consummated a stock exchange
agreement  with GoThink!.com, Inc., a publicly held Nevada corporation,  whereby
all  of  the  1,368,387  outstanding common shares of KT  Solutions,  Inc.  were
transferred   to  GoThink!.com  Inc.  in  exchange  for  8,000,000   shares   of
GoThink!.com,  Inc. common stock. The fair value of the shares  of  GoThink!.com
received  based  on the book value of KT Solutions, Inc., which was  $3,862,538.
No  gain  or loss was recognized from the exchange. Prior to this stock exchange
agreement  the  Company  assumed $243,127 of accounts payable  and  $653,508  of
accrued  liabilities,  which were then converted into common  stock.   Also,  KT
Solutions,  assumed a note payable to a related party from the  Company  in  the
amount of $25,000.

iShopper Internet Services - During December 2000, the Company adopted a  formal
plan  to sell iShopper Internet Services. Operating results of iShopper Internet
Services  for  the year ended December 31, 2000 was a loss of  $271,150  and  is
included in loss from discontinued operations in the accompanying statements  of
operations. Net sales of iShopper Internet Services for the year ended  December
31,  2000 were $35,266. No gain or loss was recognized for the disposal  of  the
discontinued operations.

In  January  2001, the Company entered into an agreement to sell the  assets  of
iShopper Internet Services to Digital Commerce Bank, Inc. ("DCI"), in return for
500,000 shares of DCI.  The 500,000 shares were valued at $13,377, or $0.03  per
share.

Atlantic  Technologies, Inc. (ATI) - On April 27, 2001, the Company  ceased  the
operations of ATI. Operating results of ATI for the seven months ended  December
31,  2000 was a loss of $1,810,774 and is included in the loss from discontinued
operations  in the accompanying statements of operations. Net sales of  ATI  for
the  eight months ended December 31, 2000 were $1,301,459. An estimated loss for
the  disposal  of ATI of $326,830 was recognized during the year ended  December
31, 2000.

StinkyFeet.com, Inc. and Uniq Studios, Inc. - During November 2001, the  Company
ceased the operations of Uniq and StinkyFeet.com. Operating results of Uniq  and
StinkyFeet  for  the  twelve months ended December  31,  2001  were  a  loss  of


                                23


                            ENSURGE, INC.
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



$6,166,057  and  was included in the loss from discontinued  operations  in  the
accompanying  statements of operations. This loss includes the  amortization  of
software  to  be  sold  and marketed of $450,000, amortization  of  goodwill  of
$661,644,  impairment  of  software to be sold  and  market  of  $2,100,000  and
impairment  of  goodwill of $2,865,530. Net sales by Uniq for the twelve  months
ended December 31, 2001 were $79,673.

NOTE 3 - INVESTMENT IN SECURITIES

iBonZai.com, Inc. - During the year ended December 31, 2000, the Company entered
into  and  completed  a  contract to provide services to iBonZai.com,  Inc.   As
payment  for  services  performed,  the  Company  received  100,000  shares   of
iBonZai.com,  Inc. stock.  On the date of settlement, the shares  had  a  market
value  of $531,200 or $5.31 per share.  On December 31, 2000, the shares  had  a
market value of $94,000 or $0.94 per share.  By April 6, 2001, the stock  had  a
market  value of $31,200 or $0.31 per share.  Management considered the loss  to
be  other than temporary.  As a result, the investment in iBonZai.com, Inc.  was
written down to the April 6, 2001 value and a loss of $500,000 was recognized at
December  31, 2000.  As of December 2001, the stock had no market value  and the
remaining $31,200 was written down and was recognized as an other-than-temporary
loss.

On  April 11, 2001 the Company converted a $60,000 note receivable from iBonzai,
Inc.  into  273,093  shares of iBonzai, Inc. common stock valued  at  $0.22  per
share.   As  of  December 2002 the stock had no market value and  the  remaining
$60,000 was written down and was recognized as an other than temporary loss.

On  July 15, 2001, the Company issued 647,994 shares, valued at $0.04 per share,
in return for 107,998 shares of iBonzai, Inc. common stock.  As of December 2002
the  stock had no market value and the remaining value was written down and  was
recognized as a loss.

Travel  Dynamics - During the year ended December 31, 2000, as part of  a  sales
agreement,  the  Company received 60,000 restricted shares of  Travel  Dynamics,
Inc.  common  stock  valued at $0.50 per share as partial payment  for  services
rendered.   On  the date of settlement, free trading shares of Travel  Dynamics,
Inc.  had  a market value of $1.00 per share. The restricted shares received  by
the  Company were valued at $30,000, or $0.50 per share, due to their restricted
nature.  At  December 31, 2000, the shares had an undiscounted market  value  of
$0.84  per  share, resulting in an unrealized gain of $20,640.   As of  December
2001  the  stock had no market value and the remaining $30,000 was written  down
and was recognized as an other-than-temporary loss.

Knowledge Transfer Systems, Inc. - On April 25, 2001, the Company consummated  a
Stock  Exchange Agreement with Knowledge Transfer Systems, Inc., whereby all  of
the  issued  and outstanding common stock of KT Solutions, Inc., was transferred
to  Knowledge  Transfer  Systems,  Inc. in  exchange  for  8,000,000  shares  of
Knowledge  Transfer  Systems,  Inc.  common stock.  The  8,000,000  shares  were
recorded  as an investment in marketable securities in the amount of  $3,862,538
or  $0.48  per  share,  which was their estimated fair value  on  the  date  the
transaction when consummated.

On  September 28, 2001, NowSeven.com, Inc., a wholly-owned subsidiary,  acquired
certain  assets  from Innovative Software Technologies, Inc.,  in  exchange  for
400,000 shares of common stock of Knowledge Transfer Systems, Inc.  These shares
were  valued  at  $32,000, and the acquired assets were charged  as  advertising
costs  in 2001.  The Company recognized a loss of $160,000 from the sale of  its
investment in securities.


                                24


                            ENSURGE, INC.
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



On  December  22,  2001,  the Company exchanged 1,500,000  shares  of  Knowledge
Transfer Systems, Inc. for certain assets from Innovative Software Technologies,
Inc.  These shares were valued at $120,000, and the acquired assets were charged
as  advertising costs in 2001.  The Company recognized a loss of  $604,226  from
the sale of its investment in securities.

During  April  2002, the Company used available-for-sale securities  to  satisfy
liabilities  whereby  the  Company transferred  3,000,000  shares  of  Knowledge
Transfer  System, Inc. to two service providers in full satisfaction of $289,595
of  accounts  payable to the service providers.  On the day of the exchange  the
shares were valued at $90,000 or $0.03 per share.  The Company recognized a gain
on forgiveness of debt totaling $199,595.  In accordance with SFAS 145, the gain
from  debt  forgiveness  did not meet the conditions  for  being  classified  as
extraordinary and therefore was included in continuing operations.  The  Company
also exchanged 100,000 shares of Knowledge Transfer Systems, Inc. for consulting
services valued at $3,000 or $0.03 per share.

As  of  December  31, 2002, the Company recorded losses for other-than-temporary
declines in the market value of its investment in securities available for  sale
totaling  $395,000 and resulting in the carrying value of all  securities  being
written down to zero.

NOTE 4 - PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at December 31, 2002 and 2001:

                                                  2002          2001
-------------------------------------------------------------------------

     Furniture and fixtures                   $      -       $   14,000
     Computer equipment                              -            4,478
-------------------------------------------------------------------------
     Total Property and Equipment                    -           18,478
     Less: Accumulated depreciation                  -           (4,181)
-------------------------------------------------------------------------
     Net Property and Equipment               $      -       $   14,297
=========================================================================


Depreciation  expense for the year ended December 31, 2002 and 2001  was  $4,293
and  $26,055,  respectively. At December 31, 2002,  the  Company  recognized  an
impairment  loss  of  $10,004  to  adjust its  property  and  equipment  to  its
liquidation value of $ -.

NOTE 5 - NOTES PAYABLE

The  Company received additional proceeds on an existing note in the  amount  of
$39,000  during  2001.  The Company also received proceeds of $9,000  on  a  new
note,  and  subsequently repaid $4,646 during 2001.  The Company also  converted
accrued  liabilities into notes payable to officers or directors of the  Company
in the amount of $530,160.  Of this amount, $20,300 was forgiven and $25,000 was
reclassified as net assets of discontinued operations.

The  Company  has  ceased to accrue interest on a note payable  to  a  bank,  in
default, secured by the assets of Atlantic Technologies International,  Inc.  in
the  amount  of  $184,159,  as well as a 12% note payable,  due  on  demand  and
unsecured, due to an officer of Uniq in the amount of $80,622.



                                25


                            ENSURGE, INC.
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



A summary of notes payable is as follows:

<TABLE>
<CAPTION>

                                                                   December 31,
                                                            --------------------------
                                                                2002         2001
--------------------------------------------------------------------------------------
<S>                                                        <C>           <C>
6.06% Notes payable, due November 1997, in default,
   secured  by mining claims held previously by Sunwalker   $   126,000   $   126,000

Note payable to a bank, in default, secured by assets of
  Atlantic Technologies International, Inc.                     184,159       184,159

8% Notes payable, due on demand, unsecured                    1,716,931     1,720,307

12% Note payable, due on demand, unsecured                       80,622        80,622

13% Note payable, due on demand, unsecured                      285,811       285,811

18% Note payable, due on demand, unsecured                       18,000        18,000

Non-interest bearing obligations incurred in connection
 with acquisition of businesses, due on demand, unsecured         4,354         4,354
--------------------------------------------------------------------------------------

  Total Notes Payable                                       $ 2,415,877   $ 2,419,253
======================================================================================

</TABLE>


NOTE 6 - COMMON STOCK ISSUANCES

Stock  Split - On February 15, 2001, the Company effected a 5-for-1 stock  split
of  its  outstanding common stock.  The accompanying financial  statements  have
been restated for the effects of the stock split for all periods presented.

Common  Stock  Issued for Cash - In December 2001, the Company issued  6,385,000
shares of common stock for cash proceeds of $12,132 or approximately $0.002  per
share.

Common  Stock  Issued  for  Services  - In February  2001,  the  Company  issued
2,604,550 shares of common stock for services valued at $1,075,235 or $0.41  per
share.   In  December of 2001, 2,048,455 of these shares were  returned  to  the
Company. This cancellation of these shares resulted in an adjustment of $850,176
to the financial statements in the fourth quarter of 2001.

In  June  2001, the Company issued 120,000 shares of common stock  for  services
valued  at  $6,000  or  $0.05  per  share.  In July  2001,  the  Company  issued
12,550,000 shares of common stock for services valued at $502,000 or  $0.04  per
share.

In  December 2002, the Company issued 2,164,600 shares for services valued at
$2,165 or $0.001 per share.

Common Stock Issued for Marketable Securities - In July 2001, the Company issued
647,994  shares of common stock valued at $25,920 to iBonZai, Inc.  for  107,998
shares of iBonZai, Inc. common stock.

Common Stock Issued for Conversion of Notes Payable - During the year ended
December 31, 2001, the Company converted $934,827 of liabilities into common
stock.  This amount consisted of $896,636 of liabilities assumed from KT
Solutions, Inc. prior to its sale, and $38,191 of other notes payable and
related accrued interest.  The notes were converted into 2,440,325 shares of
common stock.

On February 8, 2002, the Company issued 10,375,586 shares of common stock in
exchange for the forgiveness of $10,375 of a note payable. In December 2002,
the Company issued 2,164,600 shares for services, as mentioned above. The
issuance of these shares resulted in the Company having 100,000,000 shares
outstanding, which is the maximum authorized shares of the Company. As a
result, option holders cannot exercise their options until the shareholders
approve an amendment to the Company's articles of incorporation.


                                26


                            ENSURGE, INC.
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 7 - STOCK OPTIONS

On  April  26,  2001, the Company granted 2,325,000 options to  purchase  common
shares to officers and directors.  These options have an exercise price of $0.03
per option, which was equal to the fair value of the underlying common stock  on
the  date issued.  Accordingly, no compensation expense was recognized from  the
grant of these options.  These options had a fair value of $0.03 per option,  on
the  date  granted, based upon the Black-Scholes option pricing model  with  the
following  assumptions:  risk free interest rate of 6.61 percent, volatility  of
577  percent, expected dividend yield of 0 percent and an expected life of  five
years.  Also, on April 26, 2001, the Company granted 350,000 options to purchase
common shares to a consultant at the same terms as mentioned above, resulting in
compensation expense of $10,500 based on the fair value of the options granted.

Stock-based  compensation charged to operations was $67,575 for the  year  ended
December  31,  2001.  This represented the amortization of unearned compensation
relating  to  options granted to employees and directors that vested immediately
upon  the sale of KT Solutions, and the grant of 350,000 options to a consultant
that were valued at $10,500, as mentioned previously.

In  connection with the purchase of Uniq, the Company issued options to purchase
500,000  shares of common stock at 80% of the bid price on April 4,  2000.   The
options  were  exercisable based upon performance of Uniq Studios,  Inc.  as  to
earnings.  During November, 2001, the Company ceased the operations of Uniq.  As
a  result, the 500,000 options contingent upon Uniq's earnings performance  were
forfeited.

In   connection  with  the  purchase  of  Atlantic  Technologies  International,
Inc.(ATI), the Company issued options to purchase 3,000 shares of common  stock.
Of  the 3,000 options issued, 1,800 vested immediately and 1,200 are exercisable
based  upon  performance of ATI as to earnings.  On April 27, 2001, the  Company
ceased  the  operations of ATI.  As a result, the 1,200 options contingent  upon
ATI earnings performance were forfeited.

Outstanding  Stock Options - A summary of stock option activity  for  the  years
ending December 31, 2002 and 2001 is as follows:
                                                                      Weighted
                                                                      Average
                                                       Exercise       Exercise
                                         Options         Price          Price
--------------------------------------------------------------------------------
      Balance, December 31, 2000        1,253,000    $0.10 - 7.60       $6.08
      Granted                           2,675,000         0.03           0.03
      Forfeited                          (501,200)    0.10 - 7.60        7.58
                                        ---------
      Balance, December 31, 2001        3,426,800     0.03 - 7.60        0.63
                                        =========
      Exercisable, December 31, 2001    3,426,800     0.03 - 7.60        0.63
                                        =========
      Balance, December 31, 2002        3,426,800     0.03 - 7.60        0.63
                                        =========
      Exercisable, December 31, 2002    3,426,800     0.03 - 7.60        0.63
                                        =========

A  summary of stock options outstanding and exercisable as of December 31,  2002
follows:

<TABLE>
<CAPTION>

                                Options Outstanding                 Options Exercisable
                  ---------------------------------------------   -----------------------
                                                                               Weighted-
     Range of       Number     Weighted-Average                     Number      Average
     Exercise     Outstanding     Remaining    Weighted-Average   Exercisable   Exercise
      Prices      At 12/31/02  Contractual Life  Exercise Price   At 12/31/02    Price
-----------------------------------------------------------------------------------------
<S>              <C>            <C>               <C>            <C>            <C>
  $0.03 - $0.10    2,726,800      3.3 years         $  0.03        2,726,800     $ 0.03
       1.75          400,000      1.9 years            1.75          400,000       1.75
       4.00          250,000      2.3 years            4.00          250,000       4.00
       7.60           50,000      2.3 years            7.60           50,000       7.60
                  ----------                                      ----------
   0.03 -  7.60    3,426,800                                       3,426,800
                  ==========                                      ==========

</TABLE>


                                27



                            ENSURGE, INC.
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




NOTE 8 - PROVISION FOR INCOME TAXES

The  Company  has operating loss carry forwards of approximately  $6,593,000  at
December  31,  2002. The operating loss carry forwards expire from 2019  through
2022. Substantially all of the operating loss carry forwards are limited in  the
availability for use by the Company. The net deferred tax asset consisted of the
following at December 31, 2002 and 2001:

                                                        2002           2001
------------------------------------------------------------------------------
  Deferred Tax Assets
     Operating loss carry forwards                  $ 2,459,282   $ 3,063,678
     Unrealized loss on investment in securities
      available for sale                              1,556,028     1,443,382
     Accrued liabilities                                645,232       580,341
------------------------------------------------------------------------------
     Total Deferred Tax Assets                        4,660,542     5,087,401
------------------------------------------------------------------------------
  Valuation Allowance                                (4,660,542)   (5,087,401)
------------------------------------------------------------------------------
  Net Deferred Tax Asset                            $         -   $         -
==============================================================================


The following is a reconciliation of the amount of tax benefit that would result
from  applying  the  federal  statutory rate  to  pretax  loss  from  continuing
operations  with  the  benefit  from  income taxes  attributable  to  continuing
operations:

                                                        2002           2001
------------------------------------------------------------------------------

     Benefit at statutory rate (34%)                   $204,087   $ 1,595,237
     Change in valuation allowance                     (223,895)   (1,750,069)
     State tax benefit, net of federal tax effect        19,808       154,832
------------------------------------------------------------------------------
     Net Benefit (Expense) From Income Taxes         $        -   $         -
==============================================================================


NOTE 9 - COMMITMENTS AND CONTINGENCIES

Company  as  Guarantor  - In October 2000, the Company, KT  Solutions,  Theodore
Belden  and  James  Corcoran entered into an agreement  to  settle  the  Royalty
payable to Belden and Corcoran as recorded on KT Solutions books.  The Companies
agreed  to pay Belden $237,603 and Corcoran $450,720 for past and future Royalty
liabilities.   As  part of the agreement, the Company issued  88,458  shares  of
common  stock  to Belden and Corcoran.  The shares were valued  at  $353,832  or
$4.00  per  share.  The Company is acting as guarantor of the notes  payable  to
Belden and Corcoran totaling $688,323.

E-Commerce Exchange. v. Outbound Enterprises, Inc. or iShopper.com,  Inc.  -  In
December  2000,  E-Commerce brought suit against Outbound and iShopper  Internet
Services seeking recovery of amounts owed for services provided in the amount of
$15,939.  There was no dispute that the sums claimed were owed and judgment  was
entered  against  Outbound  and  iShopper Internet  Services.   The  Company  is
attempting  to  settle  the  judgment  from financed  receivables  available  to
Outbound.  At this date, the settlement arrangements have been finalized  to  be
paid out through receivables however, until the obligation is paid in full,  the
judgment remains unsatisfied.  As of December 31, 2002, the Company has  accrued
the above liability.



                                28


                            ENSURGE, INC.
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




Media  Source, Inc. v. iShopper Internet Services, Inc. - In April  2000,  Media
Source,  Inc  brought suit against iShopper Internet Services  and  the  Company
seeking recovery of amounts owed for promotional material and products furnished
to iShopper Internet Services, Inc., in the amount of  $53,399 plus interest and
attorneys  fees.   The Company acknowledged that $43,429 was  owed  by  iShopper
Internet  Services and an agreement was entered into to pay the undisputed  sum,
over  time.  As a result, Media Source dismissed the lawsuit.  iShopper Internet
Services  made the first installment payment of $10,000 but has lacked funds  to
pay  the  balance.  The obligation for the unpaid balance under  the  settlement
agreement  is undisputed. As of December 31, 2002, the Company has  accrued  the
above liability.

MediaBang.  L.C. v. iShopper Internet Services, Inc. - In April  2000,  iShopper
Internet  Services was informed that MediaBang had filed suit  against  them  in
December  1999  seeking  recovery  of  amounts  owed  for  programming  services
furnished   to iShopper Internet Services on an open contract in the  amount  of
$10,136  plus interest and fees.  Negotiations resulted in a settlement  reduced
to  writing in November 2000, under which MediaBang agreed to accept installment
payments  against  a  $7,000  settlement amount, conditional  on  the  Company's
agreement  to  guarantee payments.  The lawsuit was subsequently dismissed.   In
November 2000, $2,000 was paid reducing the liability to $5,000.  As of December
31, 2002, the Company has accrued the above liability.

Positive  Response, Inc. v. iShopper Internet Services, Inc.  -  In  July  2000,
Positive  Response  brought  suit  against iShopper  Internet  Services  seeking
recovery  of  amounts  owing for a data base on potential customer  or  customer
contracts in the amount of $41,896.  Settlement in the matter was reached in the
compromised  amount  of $37,000, to be satisfied on installment  payments.   All
required installment payments except a final payment of $10,000 due October  14,
2000  was made. Positive Response has applied to the Court for judgment for  the
unpaid  balance, plus interest from the date of judgment at the  legal  rate  of
8.052%.  As of December 31, 2002, the Company has accrued the above liability.

IOS  Capital,  Inc. v. iShopper Internet Services, Inc. - In January  2001,  IOS
Capital  brought  suit against iShopper Internet Services  seeking  replevin  of
leased  copy  machines  and judgment for lease balances totaling  $17,553,  plus
interest  and  attorneys fees.  iShopper Internet Services filed its  answer  in
February 2001 inviting the plaintiff to retrieve both items of equipment.

The  leases  were classified as operating leases and therefore, the Company  did
not  include the asset or the liability on the books.  At December 31, 2002, the
Company was in default on the leases.  As of December 31, 2002, the Company  has
accrued the above liability.

OneSource.com  v.  Outbound Enterprises and enSurge, Inc.  -  In  October  2000,
OneSource.com  brought suit against Outbound seeking recovery for  amounts  owed
for  printing services and related products furnished between October  1999  and
January 2000 in the amount of $76,157.  Settlement was reached in December 2000,
on  terms  that entitled OneSource to judgment against Outbound and Company,  as
its guarantor, if settlement installments were not made as required. The Company
has  defaulted  in  settlement payments and judgment against  Outbound  and  the
Company  was  entered  on March 30, 2001, in the amount  of  $85,096,  including
interest  costs and attorneys fees. The Company intends to attempt to settle  or
otherwise  resolve the judgment as funds become available. As  of  December  31,
2002, the Company has accrued the above liability.

Pacific  Media Duplication, LLC v. iShopper.com, Inc., TotaliNet.net,  Inc.  and
Richard  Scavia.  -  In  January 2001, Pacific Media brought  suit  against  the
Company, TotaliNet and Richard Scavia seeking recovery of balances owed under  a



                                29


                           ENSURGE, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



sublease by TotaliNet of office space and equipment in the amount of $30,000 and
$38,437,  respectively.  The  plaintiff claims against  the  TotaliNet  and  the
Company  as  guarantor on the office lease and against TotaliNet and Scavia,  as
its  prior president and as guarantor, on the equipment lease.  The Company does
not dispute TotaliNet's obligations (nor its obligations as guarantor) under the
office lease.  TotaliNet does not dispute its obligations under the office lease
or the equipment lease.

These leases were classified as operating leases and therefore, the Company  did
not  include  any asset or liability on the books.  At December  31,  2000,  the
Company  was  in default on the leases.    As of December 31, 2002, 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 and its subsidiaries for employee payroll and payroll taxes paid
by  Paychex.  Paychex  has  filed arbitration separately  for  each  company  as
follows:  enSurge,  Inc.  $45,146;  iShopper Internet  Services,  Inc.  $13,247;
TotaliNet,  net,  Inc.  $17,416;  Uniq  Studios,  Inc.  $22,002,  and   Atlantic
Technologies  International,  Inc.  $28,079.  All  requested  amounts  are  plus
interest at 1.5% per month, plus costs and attorney's fees. All arbitrations are
still in process and nothing has been resolved to date. As of December 31, 2002,
the Company has accrued the above liabilities.

NCX  Corporation v Atlantic Technologies International, Inc. - In October  2000,
NCX  Corporation  filed  suit in the Superior Court of California,  Los  Angeles
County,  against Atlantic Technologies International, Inc. seeking  recovery  of
balances  owed  for past due accounts payable in the amount of $29,472.   As  of
December 31, 2002, the Company has accrued the above liability.

Allison Ewrin Company v Atlantic Technologies International, Inc. - On April  7,
1999,  Allison  Erwin Company filed suit in the Circuit Court of Orange  County,
Florida,  against Atlantic Technologies International, Inc. seeking recovery  of
balances owed for past due accounts payable in the amount of $30,666. Settlement
was reached for $12,000, with payments starting on May 25, 2001.  As of December
31, 2002, the Company has accrued the above liability.

Scanport, Inc. v Atlantic Technologies, Inc. - On March 9, 2001, Scanport,  Inc.
filed  suit  in  the Circuit Court of Orange County, Florida,  against  Atlantic
Technologies International, Inc. seeking recovery of balances owed for past  due
accounts payable in the amount of $59,212.  As of December 31, 2002, the Company
has accrued the above liability.

Avnet Electronics Marketing, Inc. v Atlantic Technologies International, Inc.  -
On  March 27, 2001, Avnet Electronics Marketing, Inc. filed suit in the  Circuit
Court  of  Orange County, Florida, against Atlantic Technologies  International,
Inc.  seeking  recovery of balances owed for past due accounts  payable  in  the
amount  of $32,856.  As of December 31, 2002, the Company has accrued the  above
liability.

US Drive Technology Corporation v Atlantic Technologies International, Inc. - On
March  24, 1999, US Drive Technology Corporation filed suit in the Circuit Court
of  Orange  County,  Florida, against Atlantic Technologies International,  Inc.
seeking recovery of balances owed for past due accounts payable in the amount of
$39,199.  Settlement was reached for $39,199 and payments have been made  paying
down the amount to $24,199. As of December 31, 2002, the Company has accrued the
above liability.

Trogon  Computer Corporation v Atlantic Technologies International,  Inc.  -  On
June  15,  1999, Trogan Computer Corporation filed suit in the Circuit Court  of
Orange  County,  Florida,  against  Atlantic  Technologies  International,  Inc.
seeking recovery of balances owed for past due accounts payable in the amount of




                                30


                           ENSURGE, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




$16,771. Settlement was reached for $6,825, with ten monthly payments at $682.50
starting on October 10, 2000.  As of December 31, 2002, the Company has  accrued
the above liability.

Suntrust Bank, N.A. v Atlantic Technologies International, Inc. - In April 2001,
Suntrust Bank filed suit in the Circuit Court of Orange County, Florida, against
Atlantic Technologies International, Inc. seeking recovery of balances owed  for
a  past  due  line of credit in the amount of $184,415. All assets  of  Atlantic
Technologies International, Inc. are in the process of either being turned  over
to  the  bank or liquidated to pay down this balance.  As of December 31,  2002,
the Company has recorded this liability on its balance sheet.



                                31




ITEM  8.    CHANGES  IN  AND DISAGREEMENTS WITH ACCOUNTANTS  ON  ACCOUNTING  AND
FINANCIAL DISCLOSURE.

  None

PART III

ITEM 9.   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.


     The  following  sets  forth  certain information  regarding  our  executive
officers as of May 11, 2001:

        Name               Age                 Position
-------------------------------------------------------------------------

  Scott R. Hosking          42      Chief Executive Officer and President

    Jeff A. Hanks           37      Chief Financial Officer,
                                    Secretary  and Director




      Scott  R.  Hosking,  CEO:  Mr. Hosking is President  and  Chief  Executive
Officer  of  EnSurge.  Prior to working with EnSurge, he worked as a  management
and  marketing  consultant for several businesses in the  US  and  Mexico.   Mr.
Hosking  lived  in  Mexico for a number of years where he  was  able  to  pursue
international opportunities.  He has taken companies from startup and grown them
into  multi-million dollar organizations.  He has served as an adjunct,  on  the
teaching  staff  of three colleges and lectured at numerous other  colleges  and
universities where he presented his personal economic model MoneyMax.

      Jeff  A. Hanks, CFO:  Mr. Hanks is Chief Financial Officer, Secretary  and
Director  for EnSurge.  Prior to working with EnSurge, Mr. Hanks was  controller
for  the  Slaymaker  Group, Inc., a multimillion dollar consolidated  restaurant
group.   He  also  worked with Deloitte & Touche, LLP. for five years  providing
consulting, accounting and auditing services to large and mid-size companies  in
several industries including high-tech, broadcasting and manufacturing.

     All of the current executive officers and directors of the Company were
delinquent in filing their Initial Statements of Beneficial Ownership on Form 3.

IEM 10.   EXECUTIVE COMPENSATION

     Scott  R.  Hosking served as CEO of EnSurge, Inc. during the last completed
fiscal  year and was not compensated during that time period.  No other  officer
of the company was compensated in excess of $100,000.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     None


                                32



ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     None




ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K

     (a) Exhibits.

     21.1 Subsidiaries of EnSurge, Inc.
     24.1 Powers of Attorney for Messrs. Denney, Hosking, and Hanks.
     (b). Reports on Form 8-K:


ITEM 14.  CONTROLS AND PROCEDURES

     (a)  Evaluation of Disclosure Controls and Procedures.  The Company's chief
executive officer and chief financial officer, after evaluating the
effectiveness of the Company's "disclosure controls and procedures" (as defined
in the Securities Exchange Act of 1934, Rules 13a-14(c) and 15-d-14(c)) as of a
date (the "Evaluation Date") within 90 days before the filing date of this
quarterly report, have concluded that, as of the Evaluation Date, the Company's
disclosure controls and procedures were adequate and designed to ensure that
material information relating to the Company and its subsidiaries would be made
known to them by others within those entities.


      (b)   Changes in Internal Controls.  There were no significant changes  in
the  Company's  internal  controls, or, to the  Company's  knowledge,  in  other
factors  that  could  significantly  affect these  controls  subsequent  to  the
Evaluation Date.



                                33



SIGNATURES

     Pursuant  to  the  requirements of Section 13 or 15(d)  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.



May 20, 2003                   By:  /s/ Jeff A. Hanks
                                   --------------------
                                   JEFF A. HANKS, CHIEF FINANCIAL
                                   OFFICER, SECRETARY, DIRECTOR


      Pursuant to the requirements of the Securities and Exchange Act  of  1934,
this  Report  has been signed below by the following persons on  behalf  of  the
registrant and in the capacities and on the dates indicated.



 /s/  Scott R. Hosking
-----------------------         President and Chief Executive
SCOTT R. HOSKING                Officer



 /s/  Jeff A. Hanks
-----------------------         Chief Financial Officer,
JEFF A. HANKS                   Secretary and Director


                                34



                   CHIEF EXECUTIVE OFFICER CERTIFICATION


I, Scott R. Hosking, Chief Executive Officer of EnSurge, Inc., certify that:

 1.   I have reviewed this Annual Report on Form 10-KSB of EnSurge,
   Inc. (the "Registrant");

 2.   Based on my knowledge, this Annual 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 Annual Report;

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

 4.   The Registrant's other certifying officers and I are
   responsible for establishing and maintaining disclosure controls
   and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14)
   for the Registrant and 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 the period in which this Annual
      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 Annual Report (the "Evaluation Date"); and

   c)   presented in this Annual Report our conclusions about the
      effectiveness of the disclosure controls and procedures based on
      our evaluation as of the Evaluation Date;

 5.   The Registrant's other certifying officers and I have
   disclosed, based on our most recent evaluation, to the Registrant's
   auditors and the audit committee of Registrant's board of directors
   (or persons performing the equivalent functions):

   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.   The Registrant's other certifying officers and I have
   indicated in this Annual Report whether 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.


Date: May 20, 2003                  /s/ Scott R. Hosking
                                    -----------------------------
                                    Scott R. Hosking
                                    Chief Executive Officer
                                    (Principal Executive Officer)



                                35




               CHIEF FINANCIAL OFFICER CERTIFICATION

I, Jeff A. Hanks, Chief Financial Officer of EnSurge, Inc., certify that:

 1.   I have reviewed this Annual Report on Form 10-K of EnSurge,
   Inc. (the "Registrant");

  2.   Based on my knowledge, this Annual 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 Annual Report;

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

 4.   The Registrant's other certifying officers and I are
   responsible for establishing and maintaining disclosure controls
   and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14)
   for the Registrant and 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 the period in which this Annual
      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 Annual Report (the "Evaluation Date"); and

   c)   presented in this Annual Report our conclusions about the
      effectiveness of the disclosure controls and procedures based on
      our evaluation as of the Evaluation Date;

 5.   The Registrant's other certifying officers and I have
   disclosed, based on our most recent evaluation, to the Registrant's
   auditors and the audit committee of Registrant's board of directors
   (or persons performing the equivalent functions):

   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.   The Registrant's other certifying officers and I have
   indicated in this Annual Report whether 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.


Date: May 20, 2003                   /s/Jeff A. Hanks
                                     ------------------------
                                     Jeff A. Hanks
                                     Chief Financial Officer
                                     (Principal Financial and
                                     Accounting Officer)


                                36



                           EXHIBIT INDEX

     21.1   Subsidiaries of EnSurge, Inc.
     24.1   Powers of Attorney for Messrs. Hosking and Hanks.
     99.1   CERTIFICATIONS PURSUANT TO 18 U.S.C. SECTION 1350,
            AS ADOPTED PURSUANT TO SECTION 906
            OF THE SARBANES-OXLEY ACT OF 2002




*  Previously filed and incorporated herein by reference.




                                37