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, 2001


[    ]      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.
             (Exact Name of Registrant as Specified in its Charter)



         Nevada                                    87-0431533
    (State or Other Jurisdiction                (I.R.S. Employer
    of Incorporation or Organization           Identification No.)


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


                         (801) 601-2765
      (Registrant's Telephone Number, Including Area Code)


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

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

      Indicate  by check mark whether the registrant (1) has filed  all  reports
required  to be filed by Section 13 or 15(d) of the Securities Exchange  Act  of
1934  during  the  preceding  12 months (or 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.  Yes   X     No ______


     Indicate by check mark if disclosure of delinquent filers pursuant to  Item
405 of Regulation S-K is not contained herein, and will not 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.  [ X ]

     The registrant's revenues for its most recent fiscal year were $64,860.

     The  aggregate market value of the voting and non-voting common stock  held
by  non-affiliates  of  the registrant as of April 12,  2002  was  approximately
$200,000.

     The  registrant had issued and outstanding 100,000,000 shares of its common
stock on April 12, 2002.







                                  EnSurge, INC.
                                   FORM 10-KSB
                      FOR THE YEAR ENDED DECEMBER 31, 2001



PART I
  ITEM 1. BUSINESS                                                1
  ITEM 2. PROPERTIES                                              6
  ITEM 3. LEGAL PROCEEDINGS                                       6
  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                    9
  ITEM 7. FINANCIAL STATEMENTS                                   15
           REPORT OF INDEPENDENT ACCOUNTANTS                     16
           CONSOLIDATED BALANCE SHEETS                           17
           CONSOLIDATED STATEMENTS OF OPERATIONS                 18
           CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY       19
           CONSOLIDATED STATEMENTS OF CASH FLOWS                 20
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS            21
  ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
           ACCOUNTING AND FINANCIAL DISCLOSURE                   31

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                                 33
  ITEM 11.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
           MANAGEMENT                                            33
  ITEM 12.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS         34
  ITEM 13.EXHIBITS AND REPORTS ON FORM 8-K                       34
           SIGNATURES                                            35
           EXHIBIT INDEX                                         36
           SUBSIDIARIES OF THE REGISTRANT              Exhibit 22.1
           POWER OF ATTORNEY                           Exhibit 24.1



                                     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.

     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.


                                3


     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.

     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.

                                4


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 EnSurges wholly owned companies as  of  April
12,  2002  include  the  following: NowSeven.com,  Inc.,  Stinkyfeet.com,  Inc.,
iShopper Internet Servcies, Inc. and ZaiBon, 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 April 12, 2002, 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,
NowSeven,  iShopper Internet Services, Inc., Stinkyfeet and ZaiBon  are  located
and managed at the corporate facility.

     Uniq  Studios, Inc. facility is located at 761 West 1200 North, Suite  100,
Springville,  Utah  84663. We believe that this property is  suitable  for  its'
immediate needs.  This facility is leased on a three-year basis, with the  lease
ending in February 2003, for $2,569 per month for the first year, $2,620 for the
second  year,  and  $2,673 for the third year.  The lease is currently  in  its'
third year.



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.



                                5



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 terms that


                                6


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.


                                7


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

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

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


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

None





                                8





                                     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

          2000

     First Quarter          $12.00         $ 0.125

     Second Quarter          10.65           7.00

     Third Quarter            8.06           4.00

     Fourth Quarter           6.25           1.75


          2001

     First Quarter          $0.725         $ 0.060

     Second Quarter          0.070           0.030

     Third Quarter           0.050           0.013

     Fourth Quarter          0.017           0.003





Approximate Number of Equity Security holders

     On  April  12,  2002, there were 353 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.


                                9


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

     During the fourth quarter and to date the following securities were issued:

 . On February 14, 2002, the Company issued 10,375,586 shares to Vista
   Consulting, Inc. in payment for debt of $10,376.  The shares were issued at
   a value of $0.001 per share.  We issued the shares to accredited investors
   only in reliance upon Section 4(2) of the 1933 Act

 . In  a  private  placement  conducted in December, 2001,  the  Company  issued
   6,385,000  shares of its restricted common stock at $0.0019 for consideration
   of  $12,382.   We issued the shares to accredited investors only in  reliance
   upon Section 4(2) of the 1933 Act.


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.


                                10



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, 2001       Dec. 31, 2000
                                           -------------       -------------

  Revenue:                                 $      64,860       $    976,8250
                                           -------------       -------------
  Expenses (including selling,
   general and administrative)                 8,021,693           3,669,216

                                           -------------       -------------
  Net loss                                 $   7,956,833       $   7,147,511
                                           =============       =============



      During  the  fiscal  year 2001 and through today's date  the  Company  has
discontinued  operations of four subsidiaries, sold two entities.   The  Company
maintains  four  subsidiaries  and the parent holding  Company.   The  following
discussion  of  the  results  of  operations  and  numbers  presented  represent
operations from those subsidiaries which have not been discontinued.

      Sales  for  the  twelve  months ended December  31,  2001  and  2000  were
respectively, $64,860 and $976,825.  The Company's principal source  of  revenue
for   2000  was  from  marketing  and  database  marketing.   Ziabon,  Inc.  and
NowSeven.com, Inc. were the only remaining companies with sales and operations.

      Cost of sales for the twelve months ended December 31, 2001 and 2000 were,
respectively, $23,000 and $453,461.  These costs were mainly the labor costs  to
develop the web designs.

      General & Administrative expenses for the twelve months ended December 31,
2001  and 2000 were, respectively, $1,188,402 and $2,290,164.  These costs  were
mainly to keep operations of the parent and other companies viable.

     The  Company  had  a  Loss from Disposal of Assets of  $44,234,  which  was
primarily  from  writing off software from Stinkyfeet.   The  Company  purchased
several  software platforms to create revenue for 1,900,000 shares of  Knowledge
Transfer  Solutions,  Inc.  common  stock, which  created  a  realized  loss  of
$600,000.  Also, during the fiscal year 2001 the Company recognized a loss  from
discontinued operations of $6,166,057 from Uniq Studio's, Inc.

     At year ending December 31, 2000 the Company had discontinued the following
subsidiaries  and their operations:  Outbound Enterprises, Inc.,  Totalinet.net,
Inc.,  Atlantic  Technologies International, Inc., Internet Software  Solutions,
Inc.  The total loss from discontinued operations or selling of subsidiaries and
disposal of discontinued operations was $3,082,069 and $382,586, respectively.



                                11



      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 to do private placements.  The cash  availability
will come from the sale of its stock investments.



FACTORS THAT MAY AFFECT FUTURE RESULTS

We Have No Significant Operating History.

     As  an  emerging  company  commencing  business  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 and all previous years.

     At   December  31,  2001,  our  accumulated  deficit  since  inception  was
$18,608,176.  For the twelve months ended December 31, 2001, we incurred  a  net
loss  of $7,956,833.  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 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,



                                12



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

     . 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.  We can provide no assurance that additional competitors will
not enter markets that we intend to serve.

     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,

     . 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.



                                13



     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 1,253,000 outstanding options.  The exercise of  all  of
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, our 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.



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.  The  consolidated
financial statements are unaudited. Management of the Company interests to amend
this  annual report to include audited financial statements when an audit by  an
independent certified public accounting firm is completed.



                                14





                                  EnSURGE, INC.

                          INDEX TO FINANCIAL STATEMENTS

                                                       Page



  Consolidated Balance Sheets (Unaudited) - December 31, 2001 and 2000     F-2

  Consolidated Statements of Operations and Comprehensive Loss
  (Unaudited) for the Years Ended December 31, 2001 and 2000               F-3

  Consolidated Statements of Stockholders' Equity (Unaudited) for
  the Years Ended December 31, 2000 and 2001                               F-4

  Consolidated Statements of Cash Flows (Unaudited) for the Years
  Ended  December 31, 2001 and 2000                                        F-5

  Notes to Unaudited Consolidated Financial Statements                     F-6



                                       F-1




                                  enSURGE, INC.
                           CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)


                                                          December 31,
                                                    ------------------------
                                                        2001        2000
                                                    -----------  -----------

                                     ASSETS
Current Assets
 Cash                                                  $  7,300  $       287
 Investment in securities available for sale            526,487       81,840
 Trade accounts receivable (net of allowance
  for doubtful accounts of $0 and $19,625,
  respectively)                                               -          500
 Notes receivable                                             -       60,000
 Other current assets                                    28,377        4,276
                                                    -----------  -----------
  Total Current Assets                                  562,164      146,903
                                                    -----------  -----------
Property and equipment (net of $4,181 and
 $16,981 of accumulated depreciation,
 respectively)                                           14,297       73,609

Deposits                                                      -        3,841

Software to be sold and marketed (net of
 accumulated  amortization of $450,000)                       -    2,550,000

Net assets of discontinued operations                         -    3,874,798

Goodwill (net of accumulated amortization
 of $839,391)                                                 -    3,527,174
                                                    -----------  -----------

Total Assets                                        $   720,460  $10,176,325
                                                    ===========  ===========



                      LIABILITIES AND STOCKHOLDERS' EQUITY


Current Liabilities
 Trade accounts payable                             $ 1,585,510  $ 1,966,728
 Bank overdraft                                               -       35,675
 Accrued liabilities                                  1,627,308    2,386,764
 Notes payable - related party                                -      123,258
 Notes payable                                        2,419,253    1,785,825
                                                    -----------  -----------
  Total Current Liabilities                           5,632,071    6,298,250
                                                    -----------  -----------

Stockholders' Equity
 Common stock - $0.001 par value;
  100,000,000 shares authorized;
  87,459,814 and 64,760,400 shares
  outstanding, respectively                              87,460       64,760
 Additional paid-in-capital                          16,180,275   14,486,537
 Unearned compensation                                        -      (57,075)
 Unrealized gain (loss) on investment in
  securities available for sale                      (2,571,170)      20,640
 Accumulated deficit                                (18,608,176) (10,636,787)
                                                    -----------  -----------

Total Stockholders' Equity                           (4,911,611)   3,878,075
                                                    -----------  -----------


Total Liabilities and Stockholders' Equity          $   720,460  $10,176,325
                                                    ===========  ===========


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

                                       F-2




                                  enSURGE, INC.
          CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
                  FOR THE YEAR ENDED DECEMBER 31, 2001 AND 2000
                                   (UNAUDITED)



                                                2001            2000
                                             -----------    -----------

Sales                                        $    64,860    $   502,740

Cost of Sales                                     23,000        448,895
                                             -----------    -----------
Gross Profit                                      41,860         53,846
                                             -----------    -----------

Expenses
 General and administrative                      972,915      1,813,229
 Amortization of software costs                   19,100              -
 Amortization of goodwill                              -         20,350
 Impairment of goodwill                                -      1,160,308
   Interest expense                              210,943         79,464
   Loss from sale of assets                       44,234              -
   Realized Investment loss                      600,000              -
   Write down of marketable security                   -        500,000
                                             -----------    -----------

  Total Expenses                               1,847,192      3,573,351
                                             -----------    -----------

Loss From Continuing Operations Before
 Income Taxes                                 (1,805,332)    (3,519,505)

Income Tax Benefit (Expense)                           -       (236,060)
                                             -----------    -----------

Loss From Continuing Operations               (1,805,332)    (3,755,566)
                                             -----------    -----------
Discontinued Operations
 Loss from operations of discontinued
  operations (net of income tax benefit
  of $0 and $0, respectively)                 (6,166,057)    (5,423,521)
 Loss on disposal of discontinued
 operations                                            -       (382,586)
                                             -----------    -----------


  Loss from Discontinued Operations           (6,166,057)    (5,806,107)
                                             -----------    -----------

Net Loss                                     $(7,971,389)   $(9,561,673)
                                             ===========    ===========

Basic and Diluted Loss Per Common Share
 Continuing Operations                       $     (0.23)   $     (0.47)
 Discontinued Operations                           (0.48)         (0.41)
                                             -----------    -----------

 Net Loss                                    $     (0.71)   $     (0.89)
                                             ===========    ===========

Basic and Diluted Weighted Average
 Common Shares Outstanding                    82,395,173     62,234,654
                                             ===========    ===========

Comprehensive Loss
 Net loss                                    $(7,971,389)   $(9,561,673)
 Unrealized gain on investment in
  securities available for sale                        -              -
                                             -----------    -----------

 Comprehensive Loss                          $(7,971,389)   $(9,561,673)
                                             ===========    ===========



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


                                       F-3



                                  enSURGE, INC.
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                 FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                                            Unrealized      Total
                                  Common Stock       Additional   Receivable    Unearned    Gain on    Stockholders'
                              ----------------------   Paid-in        From       Compen-   Investment   Accumulated     Equity
                               Shares       Amount     Capital    Stockholders   sation   In Securities   Deficit      (Deficit)
                              ----------  ----------  -----------  -----------  ----------  -----------  ------------  -----------

<S>                          <C>         <C>         <C>          <C>          <C>         <C>          <C>           <C>
Balance - December 31, 1999
 as previously reported       39,071,885  $   39,072  $ 3,313,765  $(2,150,500) $        -  $         -  $ (1,075,114) $    95,965
Adjustments for Restatement
Write off uncollectible
 subscriptions receivable     (4,696,430)     (4,696)  (1,645,812)   1,646,751           -            -             -            -
Shares issued for exercise
 of stock options at $0.01
 per share                       200,000         200          360         (400)          -            -             -            -
                              ----------  ----------  -----------  -----------  ----------  -----------  ------------  -----------

Balance - December 31, 1999
 as Restated                  34,575,455      34,576    1,668,313     (504,149)          -            -    (1,075,114)      95,965
Shares issued for cash           232,820         233       99,373            -           -            -             -       99,419
Issuance of common stock
 for services                    670,510         670      476,280            -           -            -             -      476,280
Conversion of notes payable   17,128,115      17,128       54,810            -           -            -             -       58,236
Acquisition of StinkyFeet.com     37,500          38       33,592            -           -            -             -       33,600
Acquisition of Uniq Studios,
 Inc.                          7,750,000       7,750    6,942,450            -           -            -             -    6,944,000
Acquisition of TotaliNet.
 net.Inc.                        375,000         375      335,925            -           -            -             -      336,000
Acquisition of Atlantic
 Technologies International,
 Inc.                          1,191,000       1,190    1,074,962            -           -            -             -    1,075,200
Acquisition of Internet
 Software Solutions, Inc.        300,000         300      268,740            -           -            -             -      268,800
Acquisition of KT Solutions,
 Inc.                          2,500,000       2,500    3,583,500            -    (116,667)           -             -    3,467,333
Collection of receivable from
 shareholders                          -           -            -      504,149           -            -             -      504,149
Amortization of unearned
  compensation                         -           -            -            -      59,592            -             -       59,592
Unrealized gain on investment
   in securities                       -           -            -            -           -       20,640             -       20,640
Net loss                               -           -            -            -           -            -    (9,561,673)  (9,561,673)
                               ----------  ----------  -----------  ----------  ----------  -----------  ------------  -----------

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                  11,726,095      11,727    1,144,564           -           -            -             -    1,156,290
Issuance of common stock upon
 conversion of notes payable
 and accrued interest           3,940,325       3,940      990,887           -           -            -             -      994,827
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 loss on investment
 in securities                          -           -            -           -           -   (3,158,134)            -   (3,158,134)
Net loss                                -           -            -           -           -            -    (7,971,389)  (7,971,389)
                               ----------  ----------  -----------  ----------  ----------  -----------  ------------  -----------

Balance - December 31, 2001    87,459,814  $   87,460  $16,663,507  $        -  $        -  $(3,137,494) $(18,608,176) $(4,994,704)
                               ==========  ==========  ===========  ==========  ==========  ===========  ============  ===========

</TABLE>

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

                                       F-4



                                  enSURGE, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000
                                   (UNAUDITED)


                                                 2001             2000
                                              -----------     -----------
Cash Flows From Operating Activities
 Net loss                                     $(7,971,389)    $(9,561,673)
 Adjustments to reconcile net loss to net
   cash used in operating activities:
  Amortization of goodwill                        661,644       1,491,495
  Amortization of software costs                  450,000         450,000
  Amortization of unearned compensation            57,075          59,592
  Depreciation                                     25,574          28,854
  Realized loss on marketable securities          772,290               -
  Impairment of goodwill and software to
   be sold                                      4,966,382               -
  Expenses paid with notes payable                (20,300)              -
  Services paid with common stock               1,105,367               -
  Options issued for services                      10,500               -
  Interest paid with common stock                  28,192               -
  Decrease in assets of discontinued
   operations                                     (12,740)              -
  Loss from write down of goodwill                      -       3,170,447
  Loss on disposal of equipment                         -          61,369
  Marketable securities acquired for services           -        (561,200)
  Marketing expense paid with note payable
  and common stock                                      -         153,482
  Write down of marketable securities                   -         500,000
  Royalty expense paid with common stock                -         353,832
  Write down of inventory due to obsolescence           -          37,910
  Changes in assets and liabilities, net of
   effects from acquisitions:
   Accounts receivable                                500         381,417
   Other current assets                            14,513          40,687
   Deferred income taxes                                -         236,060
   Merchant financing deposit                           -         108,981
   Trade accounts payable                        (188,852)      1,117,031
   Accrued liabilities                            (14,043)        284,929
                                              -----------     -----------
Net Cash Used by Operating Activities            (115,287)     (1,646,787)
                                              -----------     -----------

Cash Flows From Investing Activities
 Capital expenditures                              (6,777)        (66,321)
 Cash acquired (deficiency) in business
  purchases                                             -           9,410
 Cash invested in discontinued operations               -         (52,785)
 Cash paid for deposits                             3,841               -
 Payment to purchase businesses                         -         (10,000)
 Purchase of goodwill                                   -               -
 Proceeds from sale of short term investments           -          82,387
                                              -----------     -----------

Net Cash Provided by (Used in) Investing
 Activities                                        (2,936)        (37,309)
                                              -----------     -----------

Cash Flows From Financing Activities
 Collection of receivable from shareholders             -         504,149
 Bank overdraft                                         -          62,153
 Gain on forgiveness of debt                            -         (75,000)
 Principal payments on notes payable and
  purchase obligations                             (5,646)       (226,562)
 Proceeds from borrowing under note payable
  to related part                                       -         123,258
 Proceeds from borrowing under notes payable      118,500       1,579,031
 Proceeds from notes receivable                         -         (60,000)
 Stock issued for cash                             12,382          99,419
 Redemption of common stock                             -        (336,000)
                                              -----------     -----------

   Net Cash Provided by Financing Activities      125,236       1,670,448
                                              -----------     -----------

Net Increase (Decrease) in Cash                     7,013         (13,648)
Cash and Cash Equivalents at Beginning of Year        287          13,935
                                              -----------     -----------

Cash and Cash Equivalents at End of Year      $     7,300     $       287
                                              ===========     ===========


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

                                       F-5



                                  enSURGE, Inc.
                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
                 FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000
                                   (UNAUDITED)


                                                 2001             2000
                                              -----------     -----------

Supplemental Disclosures of Cash
 Flow Information
 Cash paid during the year for interest       $         -     $    47,801


                                                 2001             2000
                                              -----------     -----------


Non-Cash Investing And Financing Activities:

  Issuance of common stock and options to
   acquire a subsidiaries                     $         -     $12,577,600
  Liability incurred to acquire a subsidiary            -          55,000
  Notes payable converted into common stock        70,000          58,236
  Liabilities assumed by Company on behalf
   of KT Solutions subsequently converted to
   common stock                                   896,636               -
  Accrued liabilities converted into notes
   payable to related parties                     293,607
  Bank overdraft converted to accounts payable     35,675               -
  Related party note payable assumed by
   discontinued entity to be disposed of           25,000               -
  Conversion of related party notes payable
   to notes payable                               391,865               -
  Marketable securities received for
   wholly-owned subsidiary                      3,862,538               -
  Exchange  of receivable for investment
   in marketable securities                        60,000               -
  Assets acquired by assumption of ATI liability   44,916               -
  Exchange of property and equipment for prepaid   38,614               -
  Exchange investment securities for an other
   current asset                                   32,000               -
  Issuance of common stock for investment
   securities                                      25,920               -
  Conversion of accounts payable into notes
   payable                                         29,831               -



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

                                       F-6



                                  eSURGE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

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.  The
business  combination was accounted for using the purchase method of accounting.
Due  to  the  percentage  of  common  stock  received  by  the  former  Outbound
shareholders and their control of the top management positions and the board  of
directors  after  the  merger,  Outbound was  determined  to  be  the  acquiring
corporation  for  financial reporting purposes. The net assets of  ECenter  were
recorded  at their fair value of $125,000 in exchange for the shares  of  common
stock  of  ECenter  that  remained outstanding. The operations  of  ECenter  are
included in the accompanying financial statements from July 26, 1999.

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. At the time of the transaction,  Sunwalker
had no operations and $230,271 of net liabilities. The transaction was accounted
for  as  a recapitalization of ECenter at historical cost.  The number of shares
of  common stock of ECenter previously outstanding were restated for all periods
prior  to  the  reorganization to reflect the effects of the 125,000  shares  of
common   stock  issued  to  the  ECenter  stockholders  on  the  date   of   the
reorganization.  The net liabilities of Sunwalker of $230,271 were  recorded  in
exchange  for 89,377 shares of Sunwalker common stock that remained outstanding.
The   operations  of  Sunwalker  are  included  in  the  accompanying  financial
statements  from  October  7,  1999. 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.
Effective  November  1999, the Company refocused its efforts  into  becoming  an
Internet  holding company. Through its subsidiaries, the Company is  engaged  in
the  business of providing cost effective e-commerce development and support for
all  sizes  of businesses. This includes low cost solutions for small businesses
that would normally not have the resources to create an e-commerce solution,  as
well   as,   fully  customized  and  specialized  e-commerce  sites  for   large
organizations.

Principles of Consolidation - The accompanying consolidated financial statements
include  the  accounts  of enSurge, Inc. and the accounts  of  its  wholly-owned
subsidiaries:  NowSeven.com, Inc., StinkyFeet.com, Inc., and ZaiBon,  Inc..  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.,
Atlantic Technologies International, Inc., Internet Software Solutions, Inc. and
KT Solutions, Inc. have been reported as discontinued operations for all periods
presented.

Restatement - The accompanying consolidated financial statements as of  December
31,  1999  and  for  the  year  then  ended  have  been  restated  to  eliminate
uncollectible receivables from stockholders in the amount of $1,646,751  and  to
include  the  issuance of 40,000 shares of common stock during 1999 through  the
exercise  of  stock  options  in  exchange for  a  $400  of  receivable  from  a
stockholder.


                                       F-7


Use  of  Estimates - The preparation of financial statements in conformity  with
accounting   principles  generally  accepted  in  the  United  States   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. Estimates that are particularly subject to change in  the
near  term include the fair value of securities available for sale and the  fair
value of consideration to be received upon sale of discontinued operations.

Business Condition - The accompanying financial statements have been prepared in
conformity  with accounting principles generally accepted in the United  States,
which  contemplate continuation of the Company as a going concern. However,  the
Company  has suffered losses from operations, has had negative cash  flows  from
operating  activities for all periods since inception and has  negative  working
capital  at December 31, 2001. 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.  These consolidated financial statements do not include any adjustments
that might result from the outcome should the Company be unable to continue as a
going  concern. The Company's continued existence is dependent upon its  ability
to  obtain  additional financing and to realize proceeds from  the  sale  of  KT
Solutions,  Inc. Management's plans include obtaining additional  financing  and
selling  Company assets. On April 25, 2000, the Company sold KT Solutions,  Inc.
in  exchange  for  stock of Knowledge Transfer Systems, Inc.,  which  management
intends  to  sale.  There  is  no assurance that any  proceeds  from  additional
financing or from the sale will be realized.

Fair Value of Financial Instruments - The amounts reported as trade receivables,
investment in securities, 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 - Investment 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
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 five to seven  years,
using  the  straight-line method. Expenditures for repairs and  maintenance  are
charged directly to expense. Renewals and betterments are capitalized.

Long-Lived  Assets - The realizability of long-lived assets, including  property
and  equipment,  software to be sold and marketed, net  assets  of  discontinued
operations  and goodwill are evaluated periodically when events or circumstances
indicate  a  possible inability to recover the carrying amounts.  An  impairment
loss is recognized for the excess of the carrying amount over the fair value  of
the  assets. Fair value is determined based on estimated discounted  net  future
cash  flows  or other valuation techniques available in the circumstances.  This
analysis involves significant management judgment to evaluate the capacity of an
asset to perform within projections. Based upon this analysis, impairment losses
of  $0  and $1,160,308 were recognized during the years ended December 31,  2001
and 2000, respectively, relating to goodwill from acquired subsidiaries.

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

Stock-Based  Compensation - Stock-based compensation relating to  stock  options
granted  to  employees is measured by the intrinsic value  method.  This  method
recognizes  compensation based on the difference between the fair value  of  the
underlying common stock and the exercise price of the stock options on the  date
granted.  Compensation relating to options granted to non-employees is  measured
by  the  fair value of the options, computed by the Black-Scholes option pricing
model.


                                       F-8


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 853,000 potentially
issuable common shares which were excluded from the calculation of diluted  loss
per common share at December 31, 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.

Recent  Accounting  Pronouncements - On July 20, 2001, the Financial  Accounting
Standards Board issued Statements of Financial Accounting Standards ("SFAS") No.
141,  "Business  Combinations" and SFAS No. 142 "Goodwill and  Other  Intangible
Assets".   These pronouncements significantly change the accounting for business
combinations, goodwill, and intangible assets.

SFAS  No.  141  eliminates  the pooling-of-interests method  of  accounting  for
business combinations and further clarifies the criteria to recognize intangible
assets  separately from goodwill. The requirements of SFAS No. 141 are effective
for  any  business  combination accounted for by the  purchase  method  that  is
completed after June 30, 2001.

SFAS  No.  142  states goodwill and indefinite lived intangible  assets  are  no
longer amortized but are reviewed for impairment annually (or more frequently if
impairment indicators arise). Separable intangible assets that are not deemed to
have  an indefinite life will continue to be amortized over their useful  lives.
The  amortization  provisions of SFAS No. 142 apply to goodwill  and  intangible
assets  acquired  after June 30, 2001. With respect to goodwill  and  intangible
assets acquired prior to July 1, 2001, the Company will be required to adopt the
pronouncement beginning January 1, 2002.

NOTE 2 - ACQUISITIONS

The  Company  has issued restricted common stock in the following  acquisitions.
The  Company's common stock began trading over the OTC Bulletin Board market  in
December  1999.  Trading  consisted of approximately 400,000  shares  per  month
through  May  2000. Accordingly, management of the Company does not believe  the
prices  at  which the common stock was sold over the thinly traded OTC  Bulletin
Board  represent the fair value of the common stock for the first part of  2000.
From  January through June 2000, the Company was seeking to offer up to  600,000
restricted shares of its common stock in a private placement offering  at  $4.48
per  share  after  offering  costs. The offering price  was  established  by  an
independent brokerage firm and the private placement offering was intended to be
issued  to  several investors.  Although there were no shares issued  under  the
private placement offering, management believed the fair value of the restricted
common  shares was most clearly determined by the price of the private placement
offering.  That  price, $4.48 per common share, was used  to  value  the  common
shares issued in the following acquisitions.

StinkyFeet.com,  Inc.  -  On  January  31,  2000,  the  Company  completed   the
acquisition  of  StinkyFeet.com, Inc. The acquisition was  accomplished  by  the
Company issuing 7,500 shares of common stock and agreeing to pay $40,000 at  the
rate  of  $10,000  per month over four months.  The common  shares  issued  were
valued  at  fair value of $33,600, or $4.48 per share. The assets  acquired  and
liabilities assumed were

                                       F-9

recorded at their fair values with the excess of the purchase price over the net
assets acquired of $66,600 allocated to goodwill, which is being amortized  over
three years by the straight-line method.

TrafficX.com  and  enSurge.com - On March 31, 2000,  the  Company  acquired  the
TrafficX.com  and  enSurge.com  Web  domain names,  proprietary  computer  code,
software  and  related products associated with those names by  the  payment  of
$5,500 and an obligation to pay $25,000 in equal monthly payments of $5,000 each
from  May  1,  through September 1, 2000. The domain names and  software  is  an
Internet  banner  network service, which is provided  either  at  no  charge  to
customers  or bundled with other software sold.  Accordingly, the  cost  of  the
acquired  domain  names and software were accounted for as marketing  costs  and
were  charged to general and administrative expense when incurred.  The  Company
has  not made the required payments for May through August and is default of the
acquisition agreement.

Uniq Studios, Inc. - On April 4, 2000, the Company entered into a stock exchange
agreement with Uniq Studios, Inc. ("Uniq") whereby the Company agreed to acquire
all  of  the  outstanding  capital  shares of Uniq  in  exchange  for  1,500,000
restricted  shares  of  the Company's common stock.  In  addition,  the  Company
issued  50,000 shares of common stock as a finder's fee, which is also  included
in  the purchase price. The Company granted options to the four shareholders  of
Uniq,  who  are  also  key  employees of Uniq, to  purchase  500,000  additional
restricted shares of the Company's common stock at a price equal to 80%  of  the
market  bid  price for the Company's common stock on April 4, 2000. Two  hundred
and  fifty thousand options were exercisable upon Uniq achieving annual  revenue
of $2,500,000 by April 2001 and upon Uniq achieving a breakeven income. At April
4,  2001,  Uniq had not met the requirements for exercising the 250,000  options
and  has  forfeited these options. The remaining 250,000 options are exercisable
upon  Uniq  achieving annual revenue of $7,500,000 by April 2002  and  continued
profitability.  Uniq Studios, Inc. was formed immediately prior to the  exchange
discussed  above  by  the  transfer of all rights, title,  assets  and  business
interests of Uniq Studios, LLC and Uniq Multimedia, LLC (formerly known as  Uniq
Enterprises, LLC) to Uniq Studios, Inc.

The  acquisition of Uniq was recorded using the purchase method  of  accounting.
The  common shares issued were valued at fair value of $6,944,000, or $4.48  per
share.  The remaining 250,000 contingently issuable options will be recorded  at
their fair value when and if the conditions for their issuance are met, and will
increase  goodwill  when  and  if issued. The assets  acquired  and  liabilities
assumed were recorded at their fair values with the excess of the purchase price
over the net assets acquired of $5,460,273 allocated to goodwill, which is being
amortized over five years by the straight-line method.

TotaliNet.net,  Inc.  - On April 7, 2000, the Company issued  50,000  shares  of
common  stock  and agreed to issue an additional 100,000 shares of common  stock
upon  TotaliNet.net, Inc. accomplishing four performance criteria,  in  exchange
for  the common stock of TotaliNet.net, Inc.  The acquisition was accounted  for
as a purchase business combination.  The 50,000 common shares issued were valued
at fair value of $224,000, or $4.48 per share. Twenty-five thousand contingently
issuable  common shares were issuable at June 30, 2000 from the Company  waiving
the  related  performance criteria and were valued at  $112,000,  or  $4.48  per
share.   The  remaining  75,000  contingently issuable  common  shares  will  be
recognized  as an increase to goodwill based upon their fair value when  and  if
they  are issued. The Company advanced TotaliNet.net, Inc. $31,000 in March 2000
as  a  loan. The assets acquired and liabilities assumed were recorded at  their
fair  values with the excess of the purchase price over the net assets  acquired
of  $764,760 allocated to goodwill, which is being amortized over five years  by
the straight-line method.

Atlantic Technologies International, Inc. - On May 31, 2000, the Company entered
into  a  stock exchange agreement with the shareholders of Atlantic Technologies
International,  Inc. (ATI) whereby the Company acquired all of  the  outstanding
capital shares of ATI in exchange for the issuance of 238,200 restricted  shares
of  common  stock and for options to purchase 1,800 restricted shares of  common
stock at $0.10 per share.


                                      F-10


The acquisition of ATI was recorded using the purchase method of accounting. The
238,200 common shares issued and the 1,800 vested options were recorded at their
fair  values  totaling $1,075,200. The assets acquired and  liabilities  assumed
were  recorded  at  their fair values with the excess of the purchase  price  in
excess of the net assets acquired of $1,074,225 allocated to goodwill, which was
amortized  over five years by the straight-line method until December  31,  2000
when ATI's operations were discontinued.

Internet Software Solutions, Inc. - On May 31, 2000, the Company entered into  a
stock  exchange agreement with the shareholders of Internet Software  Solutions,
Inc. ("ISSI") whereby the Company acquired all of the outstanding capital shares
of ISSI in exchange for 60,000 restricted shares of common stock.

The  acquisition of ISSI was recorded using the purchase method  of  accounting.
The  60,000  common shares issued were recorded at fair value  of  $268,800,  or
$4.48  per  share. The assets acquired and liabilities assumed were recorded  at
their  fair  values with the excess of the purchase price over  the  net  assets
acquired of $302,678 allocated to goodwill, which was amortized over five  years
by  the straight-line method until December 31, 2000 when ISSI's operations were
discontinued.

KT  Solutions, Inc. - On June 1, 2000, the Company entered into a stock exchange
agreement with KT Solutions, Inc. ("KT") whereby the Company acquired all of the
outstanding  capital shares of KT in exchange for 500,000 restricted  shares  of
the  Company's  common  stock  and for options to  purchase  250,000  additional
restricted shares of the Company's common stock at $4.00 per share. In addition,
the  Company issued warrants to purchase 50,000 shares of common stock at  $0.10
per share as a finder's fee, which is also included in the purchase.

The  acquisition of KT was recorded using the purchase method of accounting. The
500,000  common shares issued and the 300,000 options and warrants  issued  were
recorded  at  their fair values of $2,240,000 ($4.48 per share) and  $1,344,000,
respectively.   The value of the options was determined using the  Black-Scholes
option pricing model with the following assumptions: risk free interest rate  of
6.0%, expected dividend yield of 0%, volatility of 577% and expected life  of  5
years.  The assets acquired and liabilities assumed were recorded at their  fair
values  with  the excess of the purchase price over the net assets  acquired  of
$4,342,278  allocated to goodwill, which was amortized over five  years  by  the
straight-line  method and will be until April 25, 2001 when KT  Solutions,  Inc.
was sold.

Asset  Purchase Agreement - 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 common  stock  of  Knowledge
Transfer  Systems,  Inc.   The  value of these shares  were  $32,000,  which  is
recorded in other current assets at September 30, 2001. The Company recognized a
loss of $160,000 from the sale of the investment in securities.

NOTE 3 - DISCONTINUED OPERATIONS

KT  Solutions, Inc. - During December 2000, the Company adopted a formal plan to
sell  KT  Solutions,  Inc. The transaction closed on April 25,  2001.  Operating
results of KT Solutions, Inc. for the seven months ended December 31, 2000 was a
loss  of $1,140,640 and is included in the loss from discontinued operations  in
the  accompanying statements of operations. Net sales of KT Solutions, Inc.  for
the  seven months ended December 31, 2000 were $677,520.  Assets and liabilities
of  KT Solutions, Inc. are included in net assets of discontinued operations  in
the  accompanying balance sheet and consisted of the following at  December  31,
2000:

     Cash                                       $   22,144
     Accounts receivable, net of $9,961
      allowance for bad debts                      121,598
     Inventories                                    92,810
     Property and equipment, net of $7,677
      accumulated depreciation                      36,508
     Deposits                                       12,027
     Goodwill, net of $506,599 accumulated
      amortization                               3,835,679
                                                ----------
           Total assets                          4,120,766
     Payables and accruals                        (692,822)
     Notes payable                                (449,414)
                                                ----------
     Net Assets to be Disposed                  $2,978,530
                                                ==========


                                      F-11


Asset  of  KT Solutions, Inc. are shown at their historical cost as the  Company
expects to realize a gain on the sale of KT Solutions, Inc. and the gain has not
been recognized. Notes payable are shown at their carrying amounts.

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  Knowledge  Transfer
Systems, Inc. common stock.

Because  there  is  no  established market for the common shares  of  either  KT
Solutions,  Inc. or  Knowledge Transfer Systems,  Inc., the fair  value  of  the
transaction is assumed to be the cost or historical value of the net  assets  of
KT  Solutions,  which  was $3,862,538. No gain or loss was  recognized  on  this
exchange.

Prior  to this stock exchange agreement the Company assumed $243,127 of accounts
payable,  and  $653,508  of  accrued  liabilities.   The  entire  $896,636   was
subsequently  converted into common stock.  Also, KT Solutions  assumed  a  note
payable to a related party from the Company in the amount of $25,000.

TotaliNet.net, Inc. - During December 2000, the Company ceased the operations of
TotaliNet,  Inc.  The  estimated  loss  on  the  disposal  of  the  discontinued
operations  of  $55,756 represents the estimated loss on  the  disposal  of  the
assets.  Operating results of TotaliNet for the eight months ended December  31,
2000 was a loss of $198,389 and is included in loss from discontinued operations
in  the  accompanying statements of operations. Net sales of TotaliNet  for  the
eight months ended December 31, 2000 were $255,374. Liabilities of TotaliNet are
included  in liabilities of discontinued operations in the accompanying  balance
sheet  and  consisted of $79,244 of accounts payable and accrued liabilities  at
December 31, 2000.

Outbound  -  In  December 2000, the Company ceased operations of  Outbound.  The
Company  has  not adopted a formal plan to sell Outbound. Operating  results  of
Outbound for the years ended December 31, 2000 and December 31, 1999 were losses
of  $123,464 and $647,064 after tax, respectively, and are included in loss from
discontinued operations in the accompanying statements of operations. Net  sales
of  Outbound  for the years ended December 31, 2000 and December 31,  1999  were
$2,877,858 and 3,907,164, respectively. No gain or loss was recognized  for  the
disposal  of  the  discontinued operations. Assets and liabilities  of  Outbound
consisted of the following at December 31, 2000:

     Cash                                             $  37,496
     Accounts receivable, net of $74,068 allowance
      for bad debts                                      68,416
     Property and equipment, net of $18,380
      accumulated depreciation                           58,536
     Payables and accruals                             (374,730)
                                                      ---------
     Net Liabilities to be Disposed                   $(210,282)

Asset  are  shown  at  their expected net realizable  values  and  payables  and
accruals are shown at their face amounts. Net liabilities to be disposed  of  at
their  expected  net realizable values, have been separately classified  in  the
accompanying balance sheet at December 31, 2000 and 1999.

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 and for the  six  months  ended
December  31,  1999 were losses of $271,150 and $15,684, respectively,  and  are
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  and  the  six  months  ended  December  31,  1999  were  $35,266  and
$17,705,respectively. No gain or loss was recognized for  the  disposal  of  the
discontinued  operations. Assets and liabilities of iShopper  Internet  Services
consisted of the following at December 31, 2000


                                      F-12


     Property and equipment, net of $3,692
      accumulated depreciation                        $   2,489
     Payables and accruals                              (35,807)
                                                      ---------
     Net liabilities to be disposed                   $ (33,318)
                                                      =========

Asset  are  shown  at  their expected net realizable  values  and  payables  and
accruals are shown at their face amounts. Net liabilities to be disposed  of  at
their  expected  net realizable values, have been separately classified  in  the
accompanying balance sheet at December 31, 2000.

In  January  2001, the Company entered into an agreement to sell the  assets  of
iShopper  Internet Services to Digital Commerce Bank, Inc.  This  agreement  was
completed in January 2002 for a total of 500,000 shares of common stock.

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 $1,508,097 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 $1,304,459 was recognized during the year ended December
31,  2000. Assets and liabilities of ATI consisted of the following at  December
31, 2000:

      Property and equipment, net of $7,608
       accumulated depreciation                       $   45,944
     Payables and accruals                              (362,351)
     Notes payable                                      (301,923)
                                                      ----------
     Net liabilities to be disposed                   $ (618,330)
                                                      ==========

Assets  are  shown  at  their expected net realizable values  and  payables  and
accruals are shown at their face amounts. Net liabilities to be disposed of have
been  separately  classified in the accompanying balance sheet at  December  31,
2000.

Uniq  Studio's,  Inc.  (Uniq) - During November, 2001, the  Company  ceased  the
operations  of  Uniq.  Operating results of Uniq for  the  twelve  months  ended
December  31,  2001  was a loss of $776,761 and is included  in  the  loss  from
discontinued operations in the accompanying statements of operations. Net  sales
of Uniq for the twelve months ended December 31, 2001 were $79,673. An estimated
gain  for the disposal of Uniq of $762,943 was recognized during the year  ended
December  31, 2001. Liabilities of Uniq consisted of the following  at  December
31, 2001:

     Payables and accruals                            $(1,253,999)
     Notes payable                                        (98,622)
                                                      -----------

     Net liabilities to be disposed                   $(1,352,621)
                                                      ===========


                                      F-13


NOTE 4 - INVESTMENT IN SECURITIES

Marketable equity securities are classified as available for sale and are stated
at  fair value. Unrealized holding gains and losses are recognized as a separate
component  of  stockholders' equity.  At December 31,  2001,  available-for-sale
securities consisted of the following:


                                    Gross       Gross       Estimated
                                 Unrealized   Unrealized       Fair
                       Cost        Gains        Losses        Value
                    ----------   ----------   -----------   ----------
     Common stocks  $3,097,658   $        -   $(2,571,170)  $  526,488
                    ==========   ==========   ===========   ==========


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.

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.

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 considers 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.

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 share  had
an undiscounted market value of $0.84 per share, resulting in an unrealized gain
of  $20,640. Marketable equity securities are classified as available  for  sale
and are stated at fair value. Unrealized holding gains and losses are recognized
as a separate component of stockholders' equity. At December 31, 2000, available
for sale securities consisted of the following:

NOTE 5 - PROPERTY AND EQUIPMENT

Property  and  equipment consisted of the following at  December  31,  2001  and
December 31, 2000:
                                                         2001        2000
                                                      ----------  ----------
     Furniture and fixtures                           $   14,000  $   41,594
     Computer equipment                                    4,478      48,996
                                                      ----------  ----------
     Total Property and Equipment                         18,478      90,591
     Less: Accumulated depreciation                       (4,181)    (16,981)
                                                      ----------  ----------
     Net Property and Equipment                       $   14,297  $   73,609
                                                      ==========  ==========


                                      F-14



Depreciation expense for the year ended December 31, 2001 and 2000  was  $12,650
and $17,357, respectively.

NOTE 6 - NOTES PAYABLE
                                                     December 31, December 31,
                                                         2001        2000
                                                      ----------  ----------
6% Notes payable, due November 1997, in default,
  secured by mining claims previously held by
  Sunwalker                                           $  126,000  $  126,000

8% Notes payable, due on demand, unsecured             1,721,806   1,359,000

12% Notes payable, due on demand, unsecured               97,122      79,122

13% Notes payable, due on demand, unsecured              285,812           -

Note payable to a bank, in default, secured by
  assets of Atlantic Technologies International, Inc.    184,159     201,703

Non-interest bearing obligations incurred in
  connection with acquisition of businesses, due on
  demand, unsecured                                        4,354      20,000
                                                      ----------  ----------

  Total Notes Payable                                 $2,419,253  $1,785,825
                                                      ==========  ==========

Notes Payable - Related Party                         $        -  $  123,258
                                                      ==========  ==========


The  Company  no  longer has business relationships with  two  former  officers.
These  former  officers held related party notes payable  of  $401,397,  bearing
interest  between  8% and 13% and are secured by assets of the  Company.   These
notes have been reclassified into notes payable.

NOTE 7 - COMMON STOCK ISSUANCES

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  Services  - In February  2001,  the  Company  issued
2,604,550 shares of common stock for services valued at $1,077,012 or $0.41  per
share.   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
11,050,000 shares of common stock for services valued at $442,000 or  $0.04  per
share.


Also  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  nine  months
ended  September  30, 2001, the Company converted $994,827 of  liabilities  into
common stock.  This amount consisted of $896,636 of liabilities, assumed from KT
Solutions,  Inc.  prior  to its sale, and $98,191 of  other  notes  payable  and
related  accrued  interest.  The notes were converted into 3,940,325  shares  of
common stock.

Common  Stock  Issued for Cash - In December 2001, the Company issued  6,385,000
shares  of  common stock for cash proceeds of $12,232 at $0.0019 per share.   In
December  2000,  the  Company issued 46,564 shares  of  common  stock  for  cash
proceeds of $99,419 at prices ranging from $1.75 to $2.36 per share.


                                  F-15

Common Stock Issued for Services - In January 2000, the Company entered into  an
agreement  with  a corporation for public relations services.   As  payment  for
these  services, the Company agreed to pay 75% of the fees in cash  and  25%  is
stock.   In September 2000, the Company issued 5,644 shares of common stock  for
services valued at $22,982 or $3.20 to $5.60 per share.

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.

In  November 2000, the Company entered into an agreement with a corporation  for
public  relations services.  As partial payment for these services, the  Company
agreed  to  issue 10,000 shares of common stock upon signing of  the  agreement.
These shares were valued at 40,000 or $4.00 per share.

In  December 2000, the Company entered into an agreement with a corporation  for
promotional  services. As payment for these services, the Company issued  30,000
shares of common stock valued at $60,000 or $2.00 per share.

Common  Stock Issued in Connection with Acquisitions - As discussed  in  Note  2
Acquisitions, the Company issued 7,500 shares of common stock in the acquisition
of  StinkyFeet.com valued at $33,600; 1,550,000 shares of common  stock  in  the
acquisition of Uniq Studios, Inc. valued at $6,944,000; 75,000 shares of  common
stock  in  the  acquisition of TotaliNet.net.Inc. valued  at  $336,000;  238,200
shares   of   common   stock  in  the  acquisition  of   Atlantic   Technologies
International, Inc. valued at $1,075,200; 60,000 shares of common stock  in  the
acquisition of Internet Software Solutions, Inc. valued at $268,800; and 500,000
shares  of  common  stock  in the acquisition of KT Solutions,  Inc.  valued  at
$3,467,333.

NOTE 8 - STOCK OPTIONS

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.

Stock-based compensation charged to operations was $57,075 for the twelve months
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.

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
577.00  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.

Non  Employee Options -  As discussed in Note 2, in connection with the purchase
of  Uniq Studios, Inc., the Company issued options to purchase 500,000 shares of
common  stock  at  80%  of  the bid price on April 4,  2000.   The  options  are
exercisable based upon performance of Uniq Studios, Inc. as to earnings.   These
contingent  options will not be valued until the contingency  has  been  met  at
which  time the value of the options will be added to the purchase price.  Until
then, the options will only be disclosed.


                                      F-16


Also  part of the purchase of Uniq Studios, Inc., the Company issued options  to
purchase  50,000  shares of common stock as a finders  fee.   The  options  were
valued  at  $224,000 or $4.48 per share using the Black-Scholes  option  pricing
model  with the following assumptions: risk free interest rate of 6.0%, expected
dividend  yield  of 0%, volatility of 577% and expected life of  5  years.   The
value  of these options was included in the purchase price.  The options  vested
upon issuance and expire five years from the date of issuance.

As discussed in Note 2, 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.  The 1,800 options
were  valued at $8,064 or $4.48 per share using the Black-Scholes option pricing
model  with the following assumptions: risk free interest rate of 6.0%, expected
dividend  yield of 0%, volatility of 577% and expected life of  5  years.    The
value of these options was included in the purchase price.

The  1,200 contingent options will not be valued until the contingency has  been
met  at which time the value of the options will be added to the purchase price.
Until then, the contingent options will only be disclosed.

As  discussed  in Note 2, in connection with the purchase of KT Solutions,  Inc.
(KT  Solutions), the Company issued options to purchase 250,000 shares of common
stock. The options were valued at $1,120,000 or $4.48 per share using the Black-
Scholes  option pricing model with the following assumptions: risk free interest
rate  of  6.0%, expected dividend yield of 0%, volatility of 577%  and  expected
life  of 5 years.  These options vest over three years and deferred compensation
will be recognized over that period.

Also  part of the purchase of KT Solutions, Inc., the Company issued options  to
purchase  50,000  shares of common stock as a finders  fee.   The  options  were
valued  at  $224,000 or $4.48 per share using the Black-Scholes  option  pricing
model  with the following assumptions: risk free interest rate of 6.0%, expected
dividend  yield  of 0%, volatility of 577% and expected life of  5  years.   The
value  of these options was included in the purchase price.  The options  vested
upon issuance and expire five years from the date of issuance.

NOTE 10 - COMMITMENTS AND CONTINGENCIES

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
judgement remains unsatisfied.  As of December 31, 2000, the Company has accrued
the above liability.

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, 2000, the Company has  accrued  the
above liability.


                                      F-17


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, 2000, 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, 2000, 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, 2000, the
Company was in default on the leases.  As of December 31, 2000, 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,
2000, 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
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.  HBM proposes including the liability  to
Pacific  Media in the amount of $68,437.  As of December 31, 2000,  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;
Totalnet,   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, 2000,
the Company has accrued the above liabilities.


                                      F-18


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.

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.

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.

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.

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.

Trogon  Computer Corporation v Atlantic Technologies International,  Inc.  -  On
June  15,  1999, Trogan Computer Corporation filed suit in the Circuit Court  of
Orange  County,  Florida,  against  Atlantic  Technologies  International,  Inc.
seeking recovery of balances owed for past due accounts payable in the amount of
$16,771. Settlement was reached for $6,825, with ten monthly payments at $682.50
starting on October 10, 2000.

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.

NOTE 11 - SUBSEQUENT EVENTS

Subsequent to December 31, 2001, the Company issued 10,375,586 shares of  common
stock for payment of notes payable of $10,376.


                                      F-19




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 April 12, 2002:

          Name             Age             Position
    -----------------      ---      ------------------------
    Scott R. Hosking        41      Chief Executive Officer,
                                    President and Director

     Jeff A. Hanks          36      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.


ITEM 10.  EXECUTIVE COMPENSATION

     Scott  R.  Hosking served as CEO of EnSurge, Inc. during the last completed
fiscal  year  and  was  compensated $5,000 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


                                35


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.
     27   Financial Data Schedule.

     (b). Reports on Form 8-K:



                                36


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.



April 15, 2000                     By: /s/ Scott R. Hosking
                                   ------------------------
                                   SCOTT R. HOSKING, PRESIDENT AND CHIEF
                                   EXECUTIVE OFFICER


      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 and Director


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







                                37




                                  EXHIBIT INDEX

     21.1 Subsidiaries of EnSurge, Inc.
     24.1 Powers of Attorney for Messrs. Denney, Hackett, Chipman, and Maher.
     27   Financial Data Schedule.



*  Previously filed and incorporated herein by reference.



                                38