UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC  20549

                                   FORM 10-KSB/A
                                  AMENDMENT NO. 1
(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.



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)                10,922,790           3,669,216

                                           -------------       -------------
  Net loss                                 $  10,857,930       $   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, $1,151,398 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
$21,494,717.  For the twelve months ended December 31, 2001, we incurred  a  net
loss of $10,857,930.  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





PART II

ITEM 7.  FINANCIAL STATEMENTS

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




                                  enSURGE, INC.

                          INDEX TO FINANCIAL STATEMENTS

                                                                     Page
                                                                     ----
  Report of Independent Certified Public Accountants                  F-2

  Consolidated Balance Sheets - December 31, 2001 and 2000            F-4

  Consolidated Statements of Operations and Comprehensive Loss
   for the Years Ended December 31, 2001 and 2000                     F-5

  Consolidated Statements of Stockholders' Equity (Deficit)
   for the Years Ended December 31, 2000 and 2001                     F-6

  Consolidated Statements of Cash Flows for the Years Ended
   December 31, 2001 and 2000                                         F-7

  Notes to Consolidated Financial Statements                          F-8


                                        F-1


HANSEN, BARNETT & MAXWELL
  A Professional Corporation
 CERTIFIED PUBLIC ACCOUNTANTS

                                                       (801) 532-2200
Member of AICPA Division of Firms                    Fax (801) 532-7944
      Member of SECPS                            5 Triad Center, Suite 750
  an Independent Member of                    Salt Lake City, Utah 84180-1128
  Baker Tilly International


               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

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

We have audited the accompanying consolidated balance sheets of enSurge, Inc., a
Nevada  corporation, and Subsidiaries (the Company) as of December 31, 2001  and
2000  and  the  related consolidated statements of operations and  comprehensive
loss, stockholders' equity (deficit), and cash flows for the years  then  ended.
These consolidated financial  statements are the responsibility of the Company's
management.  Our  responsibility is to express an  opinion  on  these  financial
statements based on our audits.

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

In  our opinion, the consolidated financial statements referred to above present
fairly,  in all material respects, the financial position of enSurge,  Inc.  and
Subsidiaries  as  of  December  31, 2001 and  2000  and  the  results  of  their
operations  and  their cash flows for the years then ended  in  conformity  with
accounting principles generally accepted in the United States of America.

The  accompanying financial statements have been prepared assuming  the  Company
will  continue  as  a going concern. As discussed in Note 1 to the  consolidated
financial  statements, the Company has suffered recurring losses from operations
and negative cash flows from operating activities, and had  a capital deficiency
and a working capital deficiency 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. Management's plans regarding these matters are
also described in  Note 1.  The consolidated financial statements do not include
any adjustments that might result from the outcome of this uncertainty.


                                   HANSEN, BARNETT & MAXWELL
Salt Lake City, Utah
May 15, 2002

                                        F-2



                                  enSURGE, INC.
                           CONSOLIDATED BALANCE SHEETS

                                                          December 31,
                                                    ------------------------
                                                       2001         2000
                                                    -----------  -----------
                                     ASSETS
Current Assets
 Cash                                               $     7,300  $       287
 Investment in securities available for sale            487,999       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                                523,676      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 $0 and $450,000,
  respectively)                                               -    2,550,000
Net assets of discontinued operations                         -    3,874,798
Goodwill (net of accumulated amortization
 of $0 and $839,391, respectively)                            -    3,527,174
                                                    -----------  -----------

Total Assets                                        $   537,973  $10,176,325
                                                    ===========  ===========

                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current Liabilities
 Trade accounts payable                             $ 1,789,827  $ 1,966,728
 Bank overdraft                                               -       35,675
 Accrued liabilities                                  1,555,875    2,386,764
 Notes payable - related party                                -      123,258
 Notes payable                                        2,419,253    1,785,825
                                                    -----------  -----------

  Total Current Liabilities                           5,764,955    6,298,250
                                                    -----------  -----------

Stockholders' Equity (Deficit)
 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 on investment in
   securities available for sale                              -       20,640
 Accumulated deficit                                (21,494,717) (10,636,787)
                                                    -----------  -----------

Total Stockholders' Equity (Deficit)                 (5,226,982)   3,878,075
                                                    -----------  -----------

Total Liabilities and Stockholders'
  Equity (Deficit)                                  $   537,973  $10,176,325
                                                    ===========  ===========

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

                                       F-3


                                  enSURGE, INC.
          CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
                 FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000



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

Sales                                              $     64,860  $   531,200
Cost of Sales                                            23,000            -
                                                   ------------  -----------

Gross Profit                                             41,860      531,200
                                                   ------------  -----------

Expenses
 General and administrative                           1,151,398    2,101,106
   Interest expense                                     168,443       79,464
   Loss from sale of assets                              44,234            -
   Impairment of securities available-
    for-sale                                          3,369,658      500,000
                                                   ------------  -----------

  Total Expenses                                      4,733,733    2,680,570
                                                   ------------  -----------

Loss From Continuing Operations Before
  Income Taxes                                       (4,691,873)  (2,149,370)
Income Tax Expense                                            -     (236,060)
     							   ------------  -----------
Loss From Continuing Operations                      (4,691,873)  (2,385,430)
                                                   ------------  -----------

Discontinued Operations
 Loss from operations of discontinued
   operations (net of income tax benefit)            (6,166,057)  (6,793,657)
 Loss on disposal of discontinued operations                  -     (382,586)
                                                   ------------  -----------

  Loss from Discontinued Operations                  (6,166,057)  (7,176,243)
                                                   ------------  -----------

Net Loss                                           $(10,857,930) $(9,561,673)
                                                   ============  ===========
Basic and Diluted Loss Per Common Share
 Continuing Operations                             $      (0.06) $     (0.22)
 Discontinued Operations                                  (0.08)       (0.66)
                                                   ------------  -----------

 Net Loss                                          $      (0.15) $     (0.88)
                                                   ============  ===========
Basic and Diluted Weighted Average
  Common Shares Outstanding                          73,623,634   10,914,527
                                                   ============  ===========
Comprehensive Loss
 Net loss                                          $(10,857,930) $(9,561,673)
 Change in unrealized holding gains on investment
  in securities available for sale                      (20,640)      20,640
                                                   ------------  -----------

 Comprehensive Loss                                $(10,878,570) $ (9,541,033)
                                                   ============  ============


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

                                       F-4



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


<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  $ 3,282,507  $(2,150,500) $        -  $         -  $ (1,075,114) $    95,965
Adjustments for Restatement
 Write off uncollectible
  subscriptions receivable    (4,696,430)     (4,696)  (1,642,055)   1,646,751           -            -             -            -
Shares issued for exercise
  of stock options at $0.01
  per share                      200,000         200          200         (400)          -            -             -            -
                              ----------  ----------  -----------  -----------  ----------  -----------  ------------  -----------

Balance - December 31, 1999
 as Restated                  34,575,455      34,576    1,640,652     (504,149)          -            -    (1,075,114)      95,965
Shares issued for cash           232,820         233       99,186            -           -            -             -       99,419
Issuance of common stock
 for services                    670,510         670      476,144            -           -            -             -      476,814
Conversion of notes payable   17,128,115      17,128       41,108            -           -            -             -       58,236
Acquisition of StinkyFeet.com     37,500          38       33,562            -           -            -             -       33,600
Acquisition of Uniq
 Studios, Inc.                 7,750,000       7,750    6,936,250            -           -            -             -    6,944,000
Acquisition of TotaliNet.
 net.Inc.                        375,000         375      335,625            -           -            -             -      336,000
Acquisition of Atlantic
 Technologies International,
 Inc.                          1,191,000       1,190    1,074,010            -           -            -             -    1,075,200
Acquisition of Internet
 Software Solutions, Inc.        300,000         300      268,500            -           -            -             -      268,800
Acquisition of KT Solutions,
 Inc.                          2,500,000       2,500    3,581,500            -    (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                 13,226,095      13,227      719,832            -           -            -             -      733,059
Issuance of common stock upon
 conversion of notes payable
 and accrued interest          2,440,325       2,440      932,387            -           -            -             -      934,827
Issuance of common stock for
 investment in marketable
 securities                      647,994         648       25,272            -           -            -             -       25,920
Options issued for services            -           -       10,500            -           -            -             -       10,500
Amortization of unearned
 compensation                          -           -            -            -      57,075            -             -       57,075
Unrealized gain on investment
 in securities                         -           -            -            -           -      (20,640)            -      (20,640)
Net loss                               -           -            -            -           -            -   (10,857,930) (10,857,930)
                              ----------  ----------  -----------  -----------  ----------  -----------  ------------  -----------

Balance - December 31, 2001   87,459,814  $   87,460  $16,180,275  $         -  $        -  $         -  $(21,494,717) $(5,226,982)
                              ==========  ==========  ===========  ===========  ==========  ===========  ============  ===========
</TABLE>

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

                                       F-5


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



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

Cash Flows From Operating Activities
 Net loss                                          $(10,857,930) $(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                                           26,055       28,854
  Impairment of goodwill and software
    to be sold                                        5,117,531    3,170,447
  Loss on disposal of equipment                          47,573       61,369
  Expenses settled with notes payable                   (20,300)     153,482
  Services and expenses paid with common stock          733,059      353,832
  Options issued for services                            10,500            -
  Interest paid with common stock                        28,192            -
  Marketable securities acquired for services                 -     (561,200)
  Impairment loss on marketable securities            3,369,658      500,000
  Write down of inventory due to obsolescence                 -       37,910
  Gain on forgiveness of debt                                 -      (75,000)
  Changes in assets and liabilities, net
    of effects from acquisitions:
   Accounts receivable                                      500      381,417
   Other current assets                                     536       40,687
   Deferred income taxes                                      -      236,060
   Merchant financing deposit                             3,841      108,981
   Trade accounts payable                               (31,411)   1,117,031
   Accrued liabilities                                  352,781      284,929
                                                   ------------  -----------

Net Cash Used in Operating Activities                   (50,696)  (1,721,787)
                                                   ------------  -----------

Cash Flows From Investing Activities
 Capital expenditures                                    (6,777)     (66,321)
 Cash acquired in business purchases                          -        9,410
 Cash invested in discontinued operations                     -      (52,785)
 Payment to purchase businesses                               -      (10,000)
 Proceeds to   notes receivable                               -      (60,000)
 Proceeds from sale of short-term investments                 -       82,387
                                                   ------------  -----------
Net Cash Used in Investing Activities                    (6,777)     (97,309)
                                                   ------------  -----------

Cash Flows From Financing Activities
 Collection of receivable from shareholders                   -      504,149
 Bank overdraft                                               -       62,153
 Principal payments on notes payable and
   purchase obligations                                  (4,646)    (226,562)
 Proceeds from borrowing under note payable
   to related party                                           -      123,258
 Proceeds from borrowing under notes payable             57,000    1,579,031
 Proceeds from issuance of common stock                  12,132       99,419
 Redemption of common stock                                   -     (336,000)
                                                   ------------  -----------
   Net Cash Provided by Financing Activities             64,486    1,805,448
                                                   ------------  -----------

Net Increase 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 consolidated financial
                                   statements.

                                       F-6


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



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

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


Supplemental Schedule of Noncash Investing
 and Financing Activities:

  Issuance of common stock and options to
    acquire subsidiaries                           $          -  $12,241,600
  Liability incurred to acquire a subsidiary                  -       55,000
  Notes payable and accrued interest converted
    into common stock            				 934,827       58,236
  Accounts payable and accrued liabilities
    converted into notes payable                        547,206
  Bank overdraft converted to accounts
    payable                                              35,675            -
  Related party note payable assumed by
    discontinued entity to be disposed of                25,000            -
  Investment securities received for sale of
    wholly-owned subsidiary                           3,862,538            -
  Exchange of receivable for investment
  in marketable securities                               60,000            -
  Assets acquired by assumption of discontinued
    entity's liability 	                              44,916            -
  Exchange of property and equipment for other
    current assets                                       37,377            -
  Issuance of common stock for investment securities     25,920            -
  Marketable securities exchanged for assets            152,001            -


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

                                       F-7



                                  eSURGE, INC.
                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

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

On October 16, 2000, iShopper.com, Inc. changed its name to enSurge, Inc.
enSurge, Inc. and its subsidiaries are referred to herein as the Company.

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

Use of Estimates - The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts in the financial statements and accompanying notes. Actual results could
differ from those estimates. Estimates that are particularly subject to change
in the near term includes the fair value of securities available for sale.

Business Condition - The accompanying financial statements have been prepared in
conformity with accounting principles generally accepted in the United States of
America, 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 a
capital deficiency and a negative working capital deficiency 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. Management's plans include selling Company assets.
There is no assurance that any additional sale of assets will be realized.
Subsequent to December 31, 2001, the Company distributed securities available
for sale and issued common stock in settlement of certain liabilities.


                                        F-8

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

Investment in Securities - 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 three 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.  Impairment losses for 2001 and 2000 were
included in loss on discontinued operations discussed in Note 3.

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.

Basic and Diluted Loss Per Share - Basic loss per common share is computed by
dividing net loss by the weighted-average number of common shares outstanding
during the period. Diluted loss per share is calculated to give effect to
potentially issuable common shares which include stock options and stock
warrants except during loss periods when those potentially issuable common
shares would decrease loss per share. There were a total of 3,426,800 and
853,000 potentially issuable common shares which were excluded from the
calculation of diluted loss per common share at December 31, 2001 and 2000.

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.


                                        F-9


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 several of 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 recorded at their fair values with the excess of the
purchase price over the net assets acquired of $66,600 allocated to goodwill,
which was impaired and expensed during 2001.

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 in 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. The 500,000
options were exercisable upon Uniq achieving certain annual revenue milestones.
As of December 31, 2001, Uniq's operations have been discontinued and had not
met the requirements for the 500,000 options and consequently these options were
forfeited.


                                        F-10



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 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 and amortized over five years by the straight-
line method and then was impaired and written off as of December 31, 2001.

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. 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 was amortized over five years by the straight-line method and then
subsequently written off when TotaliNet's operations were discontinued in
December 2000. Twenty-five thousand contingently issuable common shares were
issuable at June 30, 2000 as a result of 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 were forfeited as a result
of the operations of TotaliNet.net, Inc. being discontinued in December 2000.

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.

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 their 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.


                                        F-11


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 to be amortized over five years by
the straight-line method until April 25, 2001 when KT Solutions, Inc. was sold.

NOTE 3 - DISCONTINUED OPERATIONS

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

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 resulted in a loss of $198,389 and was 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.

Outbound - In December 2000, the Company ceased operations of Outbound.
Operating results of Outbound for the year ended December 31, 2000 was a loss
$135,966 after tax, and is included in loss from discontinued operations in the
accompanying statements of operations. Net sales of Outbound for the year ended
December 31, 2000 were $2,877,858. No gain or loss was recognized for the
disposal of the discontinued operations.

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


                                        F-12



In January 2001, the Company entered into an agreement to sell the assets of
iShopper Internet Services to Digital Commerce Bank, Inc. ("DCI"), in return for
500,000 shares of DCI.  The 500,000 shares were valued at $13,377, or $0.02 per
share.

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

Uniq Studio's, Inc. (Uniq) - During November 2001, the Company ceased the
operations of Uniq and StinkyFeet.com. Operating results of Uniq and StinkyFeet
for the twelve months ended December 31, 2001 was a loss of $6,166,057 and is
included in the loss from discontinued operations in the accompanying statements
of operations. This loss includes the amortization of software to be sold and
marketed of $450,000, amortization of goodwill of $661,644, impairment of
software to be sold and market of $2,100,000 and impairment of goodwill of
$2,865,530. Net sales by Uniq for the twelve months ended December 31, 2001 were
$79,673.

NOTE 4 - INVESTMENT IN SECURITIES

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.

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.


                                        F-13


On July 15, 2001, the Company issued 647,994 shares, valued at $0.04 per share,
in return for 107,998 shares of iBonzai, Inc. common stock.  On July 20, 2001,
the Company appointed a director and chairman of the board who was also an
officer of iBonzai, Inc. until November 28, 2001.

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

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

As of December 31, 2001, the Company recorded other-than-temporary declines in
the market value of its investment in securities of $3,369,658. At December 31,
2001, available for sale securities consisted of the following:

                                       Gross       Gross     Estimated
                                     Unrealized  Unrealized    Fair
                            Cost       Gains       Losses      Value
                         ----------  ----------  ----------  ----------
    Common stocks        $  487,999  $        -  $        -  $   487,999
                         ==========  ==========  ==========  ===========

NOTE 5 - PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at December 31, 2001 and 2000:

                                               2001         2000
                                             ---------   ----------
        Furniture and fixtures               $  14,000   $   41,594
        Computer equipment                       4,478       48,996
        Total Property and Equipment            18,478       90,590
        Less: Accumulated depreciation          (4,181)     (16,981)
                                             ---------   ----------
        Net Property and Equipment           $  14,297   $   73,609
                                             =========   ==========

Depreciation expense for the year ended December 31, 2001 and 2000 was $26,055
and $28,854, respectively.

NOTE 6 - NOTES PAYABLE

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


                                        F-14



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

A summary of notes payable is as follows:

                                                      December 31,
                                                ------------------------
                                                   2001          2000
                                                ----------    ----------
6.06% Notes payable, due November 1997,
  in default, secured by mining claims
  held previously by Sunwalker                  $  126,000    $  126,000

Note payable to a bank, in default,
  secured by assets of Atlantic
  Technologies International, Inc.                 184,159       201,702

8% Notes payable, due on demand, unsecured       1,720,307     1,359,000

12% Note payable, due on demand, unsecured          80,622        79,123

13% Note payable, due on demand, unsecured         285,811       123,258

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

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    $1,909,083
                                                ==========    ==========

NOTE 7 - COMMON STOCK ISSUANCES

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

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

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

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


                                        F-15



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

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

Common Stock Issued 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.


                                        F-16



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

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

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

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

Outstanding Stock Options - A summary of stock option activity for the years
ending December 31, 2001 and 2000 is as follows:

                                                                  Weighted
                                                                  Average
                                                    Exercise      Exercise
                                      Options        Price          Price
                                    ------------  ------------   -----------
  Balance, December 31, 1999            400,000      $1.75          $1.75
  Granted                               853,000   0.10 - 7.60        6.08
                                    -----------
  Balance, December 31, 2000          1,253,000   0.10 - 7.60        6.08
  Granted                             2,675,000       0.03           0.03
  Forfeited                            (501,200)  0.10 - 7.60        7.58
                                    -----------
  Balance, December 31, 2001          3,426,800   0.03 - 7.60        0.63
                                    ===========
  Exercisable, December 31, 2001      3,426,800   0.03 - 7.60        0.63
                                    ===========

A summary of stock options outstanding and exercisable as of December 31, 2001
follows:

<TABLE>
<CAPTION>

                              Options Outstanding                  Options Exercisable
                ----------------------------------------------   -----------------------
                                                                               Weighted
  Range of         Number    Weighted-Average                      Number      Average
  Exercise      Outstanding     Remaining      Weighted-Average  Exercisable   Exercise
   Prices       At 12/31/01  Contractual Life   Exercise Price   At 12/31/01    Price
-------------   -----------  ----------------   --------------   -----------   --------
<S>            <C>          <C>                <C>              <C>           <C>
$0.03 - $0.10    2,726,800       4.3 years           $0.03         2,726,800      $0.03
     1.75          400,000       2.9 years            1.75           400,000      $1.75
     4.00          250,000       3.3 years            4.00           250,000      $4.00
     7.60           50,000       3.3 years            7.60            50,000       7.60
                -----------                                      -----------
 0.03 - 0.15     3,426,800                                         3,426,800
                ===========                                      ===========
</TABLE>


                                        F-17


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

                                            For the Years Ended
                                                 December 31,
                                         ---------------------------
                                             2001           2000
                                         ------------   ------------
       Net loss:
           As reported                   $(10,857,930)  $ (9,561,673)
           Pro forma                      (10,927,680)    (9,516,081)
       Basic and diluted loss per share:
           As reported                   $      (0.15)  $      (0.88)
           Pro forma                            (0.15)         (0.88)


NOTE 9 - PROVISION FOR INCOME TAXES

The Company has operating loss carry forwards of approximately $6,439,203 at
December 31, 2001. The operating loss carry forwards expire from 2019 through
2021. Substantially all of the operating loss carry forwards are limited in the
availability for use by the Company. The net deferred tax asset consisted of the
following at December 31, 2001 and 2000:


                                                   2001           2000
                                               ------------   ------------
       Deferred Tax Assets
         Operating loss carry forwards         $  3,063,678   $  1,289,140
         Unrealized loss on investment in
          securities available for sale           1,443,382              -
         Allowance for doubtful accounts                  -          7,320
         Accrued liabilities                        580,341        721,758
         Unearned revenue                                 -          5,856
         Depreciation                                     -            387
                                               ------------   ------------
           Total Deferred Tax Assets              5,087,401      2,024,460
                                               ------------   ------------
       Valuation Allowance                       (5,087,401)    (1,065,611)
                                               ------------   ------------
       Deferred Tax Liabilities
         Unrealized gain on securities                    -         (7,699)
         Software to be sold and marketed                 -       (951,150)
                                               ------------   ------------
           Total Deferred Tax Liabilities                 -       (958,849)
                                               ------------   ------------
        Net Deferred Tax Asset                 $          -   $          -
                                               ============   ============

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

                                                   2001           2000
                                               ------------   ------------
         Benefit at statutory rate (34%)       $  1,595,237   $    730,786
         Change in valuation allowance          (1,750,069)     (1,037,775)
         State tax benefit, net of federal
          tax effect                               154,832          70,929
                                               -----------    ------------
         Net Benefit (Expense) From
          Income Taxes                         $         -    $   (236,060)
                                               ===========    ============


                                        F-18


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
judgment remains unsatisfied.  As of December 31, 2001, 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, 2001, the Company has accrued the
above liability.

MediaBang. L.C. v. iShopper Internet Services, Inc. - In April 2000, iShopper
Internet Services was informed that MediaBang had filed suit against them in
December 1999 seeking recovery of amounts owed for programming services
furnished  to iShopper Internet Services on an open contract in the amount of
$10,136 plus interest and fees.  Negotiations resulted in a settlement reduced
to writing in November 2000, under which MediaBang agreed to accept installment
payments against a $7,000 settlement amount, conditional on the Company's
agreement to guarantee payments.  The lawsuit was subsequently dismissed. In
November 2000, $2,000 was paid reducing the liability to $5,000.  As of December
31, 2001, 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, 2001, 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, 2001, the
Company was in default on the leases.  As of December 31, 2001, the Company has
accrued the above liability.


                                        F-19



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,
2001, 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.    As of December 31, 2001, the Company
has accrued the above liability.

Paychex, Inc. v enSurge, Inc. and Subsidiaries. - In March 2001, Paychex filed
for arbitration with the American Arbitration Association in Syracuse, New York,
against enSurge and its subsidiaries for employee payroll and payroll taxes
paid by Paychex. Paychex has filed arbitration separately for each company as
follows: enSurge, Inc. $45,146; iShopper Internet Services, Inc. $13,247;
TotaliNet, net, Inc. $17,416; Uniq Studios, Inc. $22,002, and Atlantic
Technologies International, Inc. $28,079. All requested amounts are plus
interest at 1.5% per month, plus costs and attorney's fees. All arbitrations are
still in process and nothing has been resolved to date. As of December 31, 2001,
the Company has accrued the above liabilities.

NCX Corporation v Atlantic Technologies International, Inc. - In October 2000,
NCX Corporation filed suit in the Superior Court of California, Los Angeles
County, against Atlantic Technologies International, Inc. seeking recovery of
balances owed for past due accounts payable in the amount of $29,472.  As of
December 31, 2001, the Company has accrued the above liability.

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

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


                                        F-20


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

US Drive Technology Corporation v Atlantic Technologies International, Inc. -On
March 24, 1999, US Drive Technology Corporation filed suit in the Circuit Court
of Orange County, Florida, against Atlantic Technologies International, Inc.
seeking recovery of balances owed for past due accounts payable in the amount of
$39,199. Settlement was reached for $39,199 and payments have been made paying
down the amount to $24,199. As of December 31, 2001, the Company has accrued the
above liability.

Trogon Computer Corporation v Atlantic Technologies International, Inc. - On
June 15, 1999, Trogan Computer Corporation filed suit in the Circuit Court of
Orange County, Florida, against Atlantic Technologies International, Inc.
seeking recovery of balances owed for past due accounts payable in the amount of
$16,771. Settlement was reached for $6,825, with ten monthly payments at $682.50
starting on October 10, 2000.  As of December 31, 2001, the Company has accrued
the above liability.

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

NOTE 11 - SUBSEQUENT EVENTS

Subsequent to the year ended December 31, 2001, the Company exchanged 3,000,000
shares of Knowledge Transfer System, Inc. for the forgiveness of $289,595 of
accounts payable, and 100,000 shares of Knowledge Transfer System, Inc. to two
consultants for services provided.  On the day of the exchange the shares were
valued at $0.03 per share.  The Company recognized a realized gain on the
exchange of marketable securities of $150,095.

On February 8, 2002, the Company issued 10,375,586 shares of common stock in
exchange for the forgiveness of $10,376 of a note payable. The issuance of
10,375,586 shares resulted in the Company having 100,000,000 shares outstanding,
which is the maximum authorized shares of the Company. As a result, option
holders cannot exercise their options until the shareholders approve an
amendment to the Company's articles of incorporation.


                                        F-21









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.

     (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.



May 17, 2002                       By: /s/ Jeff A. Hanks
                                   ------------------------------
                                   JEFF A. HANKS, CHIEF FINANCIAL
                                   OFFICER, SECRETARY AND DIRECTOR


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



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



*  Previously filed and incorporated herein by reference.



                                38