UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

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

For the Fiscal Year Ended December 31, 2001

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

                         Commission File Number 0-28417

                                  ------------

                        Knowledge Transfer Systems, Inc.
                          (Formerly, GoThink!com, Inc.
             (Exact Name of Registrant as Specified in its Charter)

                    Nevada                                 76-0599457
        (State or Other Jurisdiction of                 (I.R.S. Employer
        Incorporation or Organization)                 Identification No.)

                 110 Broadway
                  Oakland, CA                                94607
   (Address of Principal Executive Offices)                (Zip Code)

               230 Lookout Place
                 Maitland, FL                                32751
   (Previous Address of Principal Executive               (Zip Code)
                   Offices)

                                 (510) 251-6230
              (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 aggregate  market value of the voting and  non-voting  common stock held by
non-affiliates  of  the  registrant  as of  March  28,  2002  was  approximately
$1,143,879.  The registrant had issued and outstanding  40,390,377 shares of its
common stock on March 28, 2002.



<PAGE>




                        Knowledge Transfer Systems, Inc.
                                   FORM 10-KSB
                      FOR THE YEAR ENDED DECEMBER 31, 2001

PART I
     ITEM 1.      DESCRIPTION OF BUSINESS....................................1
     ITEM 2.      PROPERTIES.................................................7
     ITEM 3.      LEGAL PROCEEDINGS..........................................7
     ITEM 4.      SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS........7

PART II
     ITEM 5.      MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
                  STOCKHOLDER MATTERS........................................8
     ITEM 6.      MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                  CONDITION AND RESULTS OF OPERATIONS........................9
     ITEM 7.      FINANCIAL STATEMENTS......................................10
                  REPORTS OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
                       ROBISON, HILL & CO..................................F-1
                       HANSEN, BARNETT & MAXWELL...........................F-2
                  CONSOLIDATED BALANCE SHEETS..............................F-3
                  CONSOLIDATED STATEMENTS OF OPERATIONS....................F-4
                  CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY..........F-5
                  CONSOLIDATED STATEMENTS OF CASH FLOWS....................F-6
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS...............F-8
     ITEM 8.      CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                  ACCOUNTING AND FINANCIAL DISCLOSURE.......................11

PART III
     ITEM 9.      DIRECTORS AND EXECUTIVE OFFICERS, PROMOTORS AND
                  CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE
                  EXCHANGE ACT..............................................11
     ITEM 10.     EXECUTIVE COMPENSATION....................................14
     ITEM 11.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                  MANAGEMENT................................................14
     ITEM 12.     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS............14
     ITEM 13.     EXHIBITS, FINANCIAL STATEMENT SCHEDULES,
                  AND REPORTS ON FORM 8-K...................................15
                  SIGNATURES................................................15
                  EXHIBIT INDEX.............................................15


<PAGE>


PART I

         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:

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

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

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

         o        our  ability to raise  sufficient  capital  to meet  operating
                  requirements.

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.

ITEM  1. BUSINESS

The Company designs,  produces and markets e-learning courses and solutions. The
Company is an industry leader in developing high quality,  engaging courses that
map to the respective  industry  certifications  in the  information  technology
sector.   The  Company  is  able  to  develop  highly  engaging  courses,   cost
effectively,  due to content sourcing relationships with multiple publishers and
an extremely efficient development process that utilizes proprietary development
tools. These products are then private labeled for those publishers and marketed
through  their  distribution   channels,  in  addition  to  multiple  resellers,
integrators and e-learning  companies.  The Company,  which is  headquartered in
Oakland,  California,  markets  products  through its resellers and distribution
partners in over 50 countries around the world.

GENERAL DEVELOPMENT OF BUSINESS

Organization- On August 1, 1992,  Missaticum,  Inc. was  incorporated  under the
laws of the State of California. On October 4, 1996 the Company changed its name
to KT  Solutions,  Inc. It was formed for the purpose of  developing  technology
based training  solutions.  It creates software  programs that are used to teach
and train  individuals  how to operate  popular  business  and home use software
programs.

On June 1, 2000,  the former  shareholders  of the Company  entered into a stock
exchange agreement with enSurge,  Inc. (enSurge) whereby enSurge acquired all of
the outstanding common shares of KT Solutions, Inc. from its former shareholders
in exchange  for the issuance of 500,000  shares of  enSurge's  common stock and


                                       1
<PAGE>

options to purchase 250,000 shares of enSurge's common stock at $4.00 per share.
In addition,  enSurge issued  warrants to purchase 50,000 shares of common stock
at  $0.10  per  share  as a  finder's  fee.  As a  result,  the  Company  was  a
wholly-owned subsidiary of enSurge, Inc.

The  acquisition  of the KT  Solutions,  Inc. was recorded by enSurge  using the
purchase method of accounting.  The 500,000 common shares issued and the 300,000
options  issued  were  recorded at their fair  values of  $2,240,000  ($4.48 per
share) and $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.

For  financial  reporting  purposes,  KT  Solutions,  Inc. was  considered a new
reporting entity on June 1, 2000. The accompanying  financial statements reflect
the  operations of KT Solutions,  Inc. from June 1, 2000. The purchase price was
allocated to the assets and  liabilities at their fair value.  The excess of the
purchase price over the fair value of the net assets acquired was $4,342,278 and
was allocated to goodwill.  Goodwill is being  amortized  over five years by the
straight-line method.

Reorganization  - On April  25,  2001,  enSurge,  consummated  a stock  exchange
agreement with GoThink!.com,  Inc., a publicly-held Nevada corporation,  whereby
enSurge  exchanged  all  of  the  1,368,387  outstanding  common  shares  of  KT
Solutions,  Inc. for 8,000,060 shares of  GoThink!.com,  Inc. common stock. As a
result  of  the  stock  exchange,  KT  Solutions,  Inc.  became  a  wholly-owned
subsidiary of GoThink!.com, Inc. GoThink!.com, Inc. had 248,247 shares of common
stock  outstanding  prior to the stock exchange,  but after a 1-for-100  reverse
stock split.

The stock exchange has been accounted for as the reorganization of KT Solutions,
Inc.  Accordingly,  the accompanying  financial statements have been restated to
reflect the effects of the 5.84-for-1  equivalent stock split that resulted from
8,000,060  shares of  GoThink!.com,  Inc. being issued in exchange for 1,368,387
previously outstanding shares of KT Solutions,  Inc.  GoThink!.com,  Inc. had no
assets or operations prior to or at the date of the reorganization. Accordingly,
the acquisition of GoThink!.com,  Inc. was not considered a business combination
but was  considered  the  issuance  of  248,247  shares of  common  stock for no
consideration.  The operations of  GoThink!.com,  Inc. have been included in the
accompanying financial statements from April 1, 2001 (which was the beginning of
the accounting period during which GoThink!.com, Inc. was purchased).

On April 23, 2001,  the articles of  incorporation  of  GoThink!.com,  Inc. were
amended to change its name to Knowledge Transfer Systems,  Inc. Through April 1,
2001,  KT  Solutions,  Inc.  is referred to as "the  Company,"  thereafter  that
reference refers to Knowledge Transfer Systems, Inc. and KT Solutions, Inc. on a
consolidated basis.

Business Condition - The Company has incurred a net loss from operations for the
seven months ended December 31, 2000 and for the year ended December 31, 2001 of
$1,177,092  and  $3,385,139,  respectively,  and the  Company  used  $55,940 and
$632,658  of cash in  operating  activities  during  those same  periods.  As of
December  31, 2001,  the Company had a working  capital  deficit of  $1,431,955.
These conditions raise doubt about the Company's  ability to continue as a going
concern.  The Company  needs to obtain  additional  financing to fund payment of
obligations and to provide working capital for operations. Management is seeking
additional  financing.  Upon obtaining additional capital, of which there can be
no  assurance,   management  plans  to  substantially   increase  sales  of  its
technology-based  products. The Company has entered into a contract with a major
publisher in the information technology sector to market the Company's products.
In addition,  the Company has signed distribution  agreements with several other
companies to market the Company's products globally.  Management  believes these
efforts will generate  sufficient  cash flows from future  operations to pay the


                                       2
<PAGE>

Company's  obligations  and  realize  goodwill  and  other  assets.  There is no
assurance any of these transactions will occur. The financial  statements do not
include any adjustments  relating to the  recoverability  and  classification of
asset carrying  amounts or the amount and  classification  of  liabilities  that
might result should the Company be unable to continue as a going concern.

Products and Services

The Company's main products and services revolve around  e-learning  courses and
solutions.  The Company provides high quality,  engaging courses that map to the
respective  industry  certifications in the information  technology (IT) sector.
Courses within the product library include  desktop  applications  and operating
systems areas. The desktop  application courses offered include Microsoft Office
XP, Microsoft  Office 2000, 1998, and 1997.  Operating system courses offered by
the Company include Microsoft Windows 2000,  Microsoft Windows NT 4.0, Microsoft
Windows 98 and 95. In addition, the Company offers IT certification courses such
as Cisco CCNA,  Java,  MCSE  Certification,  Oracle,  etc.  The Company  markets
products through its resellers and distribution partners in over 50 countries.

Competitive Business Conditions

         The  markets  for our  services  are highly  competitive,  continuously
evolving and subject to rapid change,  technological  or otherwise.  Although we
believe our  solutions  currently  compete  favorably  with those offered by our
competitors,  the markets we serve are dynamic and changing rapidly.  We may not
be able to maintain  our  competitive  position  against  current and  potential
competitors,  especially those with significantly greater financial,  marketing,
service,  support,  technical and other resources.  Additional competition could
result in price reductions and loss of market share.

Government Regulation

         The  products  we provide  over the  Internet  are  subject to foreign,
federal,  state  and  local  laws  and  regulations  governing  the  conduct  of
e-commerce and use of the Internet.  E-commerce is new and rapidly changing, and
government regulation relating to the Internet and e-commerce is still evolving.
Currently,  there are few laws and regulations  directly applicable to access of
the  Internet or conduct of  e-commerce  on the  Internet.  However,  due to the
increasing  popularity and use of the Internet and on-line  services,  many laws
relating to the Internet are being debated at the state and federal levels (both
in the U.S.  and abroad) and it is possible  that laws and  regulations  will be
adopted  with  respect  to the  Internet  and  online  services.  These laws and
regulations  could cover  issues such as user  privacy,  freedom of  expression,
pricing,  fraud,  content  and  quality  of  products  and  services,  taxation,
advertising,    intellectual   property   rights   and   information   security.
Additionally,  the rapid growth of  e-commerce  may trigger the  development  of
tougher  consumer  protection  laws.  The adoption of such laws and  regulations
could  reduce  the rate of  growth  of the  Internet,  which  could  potentially
decrease the usage of our products and could  otherwise have a material  adverse
effect on our business.

         In addition,  applicability  to the Internet of existing laws governing
issues such as intellectual  property issues,  taxation and personal property is
uncertain.  The vast  majority of these laws were adopted prior to the advent of
the Internet and related  technologies  and, as a result,  do not contemplate or


                                       3
<PAGE>

address  the  unique  issues  associated  with  operating  an   Internet-related
business.  Those  laws  that do  reference  the  Internet,  such as the  Digital
Millennium Copyright Act, are only beginning to be interpreted by the courts and
their applicability and scope are, therefore, uncertain.

         Several states have proposed  legislation  that would limit the uses of
personal  user  information  gathered  online  or  require  online  services  to
establish  privacy  policies.  The  Federal  Trade  Commission  also has settled
several  proceedings  regarding  the  manner in which  personal  information  is
collected from users and provided to third parties. Specific statues intended to
protect use privacy have been passed in many non-U.S. jurisdictions.  Changes to
existing  laws or the passage of new laws intended to address these issues could
directly  affect  the way we do  business  or could  create  uncertainty  on the
Internet. This could reduce demand for our services,  increase the cost of doing
business as a result of increased litigation costs or increased service delivery
costs, or otherwise harm our business.

Research and Development

The Company has not incurred any significant  costs associated with research and
development.  However, the Company does understand that technological innovation
is often a key to success in the Technology and elearning market.  Further,  the
pace of technological innovation in the elearning market is incredibly rapid. It
can be  daunting  for a single  company  to try to keep pace with  technological
change on all levels.  Upon obtaining  additional capital, of which there can be
no assurance,  management plans to increase expenditures related to research and
development.

Employees

         As of March 28, 2002, the Company  employed a total of 12  individuals.
The Company also engages  subcontractors to perform a significant portion of the
day-to-day  operations  and  product  development.  None  of the  Company's  are
represented  by a labor union.  We have not  experienced  any work  stoppage and
consider relations with our employees to be good.



FACTORS THAT MAY AFFECT FUTURE RESULTS


Risks Related to Our Business


We Incurred  Operating  Losses for the Current Year, but Plan on Profits for the
Coming Year.

         At December 31, 2001,  our  accumulated  deficit  since  inception  was
$4,562,231.  For the twelve  months ended  December 31, 2001,  we incurred a net
loss of  $3,385,139.  We have incurred a net loss in each year of our existence,
and have financed our operations  primarily through sales of equity  securities.
Our current  expense  levels are  approximately  $70,000 per month.  Also,  upon
obtaining  additional  capital,  of which there can be no assurance,  management
plans to increase  its  marketing  efforts and sales  distribution  channels and
anticipate that our revenue will exceed our expenses, thus we are planning for a
profitable year.


                                       4
<PAGE>





Our  Success  Will Be  Dependent  In Part On Our  Ability To  Develop  Strategic
Relationships With Other Businesses.

         One of our primary  goals is to increase  market  awareness  and market
penetration  of our  products.  This will  likely  require us to form  strategic
marketing  and sales  relationships  with  several  additional  companies  whose
resources  can be used to  supplement  and  expand our own,  with such  entities
either acting as  distributors  or resellers of our  products,  or including our
products as complements to or components of their own product offerings.

Our Quarterly Operating Results May Fluctuate.

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

         o        our  ability to attract  new  customers  at a steady  rate and
                  maintain customer satisfaction,  o the demand for the products
                  and services we intend to market,

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

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

         o        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.

         Training and elearning are highly  competitive.  Although there are few
competitors who offer the same or similar  services of the type we offer, we can
provide no assurance that additional  competitors will not enter markets that we
intend to serve.

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

         o        the timing and market acceptance of our business model,

         o        our competitors' ability to gain market control,

         o        the success of our marketing efforts,

         o        acquisitions of companies with new technology,

         o        using  current  relations  to extend  all  business  sales and
                  marketing



                                       5
<PAGE>

We Depend on Certain Key Employees.

         Our future  performance  will  depend  significantly  on the  continued
service and performance of our key executives and officers,  Steve Burke,  Chris
Ryan and Doug Baker.  The loss of the  services  of either of these  individuals
could  seriously  impair our  ability to operate  our  business,  compete in our
industry and improve our tools and services.

We Must Continue to Attract, Train, Motivate and Retain Qualified Personnel.

         We must attract, train, motivate and retain highly qualified personnel,
particularly  in the areas of sales and marketing.  Because the  competition for
qualified  employees is intense,  hiring,  training,  motivating,  retaining and
managing  employees  with the  strategic  and  technical  skills we need is both
time-consuming  and  expensive.  If we fail to  attract,  train and  retain  key
personnel,  we may experience delays in marketing and  commercialization  of our
products and services.


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:

         o        quarter-to-quarter variations in operating results,

         o        adverse news announcements,

         o        the introduction of new products and services, and

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

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

Risks Related to Our Industry

We Are Dependent on Continued Growth in Internet Use and Infrastructure.

         Although  most of the  Company's  revenues to date consist of elearning
and training solutions  conducted offline,  one important aspect of our business
relates to our elearning and training  solutions  through the Internet.  Another
important  aspect of our  business  relates to specific  aspects of our products
related to the  Internet.  Despite  significant  increases in Internet use, many
organizations  have been  reluctant  to  incorporate  the  Internet  into  their
businesses or activities for a number of reasons, including:

         o        inconsistent service quality resulting in part from inadequate
                  infrastructure     of     servers,     routers,      switches,
                  telecommunications links and other components

         o        lack  of  confidence  in the  security  and  privacy  of  data
                  transmitted over the Internet

         o        limited internal resources and technical expertise

         o        reluctance to dedicate  resources to an alternative  method of
                  communicating  that  may  render  substantial   personnel  and
                  infrastructure investments obsolete.



                                       6
<PAGE>

If the  infrastructure  of the  Internet  does not keep pace with the  growth of
Internet usage and if our targeted  customers do not grow comfortable  using the
Internet, our business will suffer.

We Must  Develop,  Produce and  Establish New Products and Services That Keep Up
With Rapid Technological Change.

         The market for Internet services and business-to-business e-commerce is
characterized  by  rapid  technological  changes,   frequent  software  changes,
frequent new products and service introductions and evolving industry standards.
The  introduction of services  embodying new processes and  technologies and the
emergence  of new  industry  standards  can  rapidly  render  existing  services
obsolete  and  unmarketable.  Our success in  adjusting  to rapid  technological
change will depend on our ability to:

         o        develop  and  introduce  new  services  that  keep  pace  with
                  technological  developments and emerging  industry  standards;
                  and

         o        address the  increasingly  sophisticated  and varied  needs of
                  customers.

         Due to inadequate technical expertise,  insufficient  finances or other
reasons,  we may be unable to accomplish these tasks.  Such failure would have a
material adverse effect on our operating results and financial condition.


ITEM 2.  PROPERTIES

         Our  corporate  headquarters  are  located  at 110  Broadway,  Oakland,
California  94607,  where the Company  leases an aggregate of 4,000 square feet.
The lease expires  February  2005. We believe that this property is suitable for
our immediate  needs,  however,  as the Company grows there will be a need for a
larger facility.

ITEM 3.  LEGAL PROCEEDINGS

None



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

None



                                       7
<PAGE>

                                     PART II

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

PRICE RANGE OF COMMON STOCK

         The Company's common stock is traded in the over-the-counter market and
quoted on the Nasdaq National Market under the trading symbol "KTSI". The common
stock  prices  reflect  inter-dealer  prices,  do not  include  retail  markups,
markdowns or commissions and do not necessarily represent actual transactions.

         The following table sets forth,  for the quarters  indicated,  the high
and low sales price per share for the  Company's  common  stock,  as reported by
Nasdaq:

                                                             High          Low

Year Ending December 31, 2000:
                  First Quarter..........................$     N/A         N/A
                  Second Quarter.........................      N/A         N/A
                  Third Quarter..........................      N/A         N/A
                  Fourth Quarter.........................      N/A         N/A
Year Ending December 31, 2001:
                  First Quarter..........................$     N/A         N/A
                  Second Quarter.........................     2.00        0.05
                  Third Quarter..........................     1.00        1.00
                  Fourth Quarter.........................     1.15        0.11

The  closing  price  for the  common  stock on March  28,  2002 was  $0.10.  The
Company's Board of Directors authorized a 5.84-for-1 equivalent stock split that
resulted from 8,000,000  shares of  GoThink!.com,  Inc. being issued in exchange
for  1,368,387  previously  outstanding  shares of KT  Solutions,  Inc. This was
affected on April 25, 2001 to  stockholders  of record on the same date. We have
restated  all  share  and  per  share  amounts  referred  to  in  the  financial
statements, notes, and above table to reflect this stock split.

HOLDERS

         As of March 28,  2002,  the  Company  had 892  holders of record of its
common stock.

DIVIDENDS

         The  Company  does not  anticipate  paying  any cash  dividends  in the
foreseeable  future and intends to retain all working  capital and earnings,  if
any, for use in the Company's  operations  and in the expansion if its business.
Any future determination with respect to the payment of dividends will be at the
discretion of the Board of Directors  and will depend upon,  among other things,
the  Company's   results  of   operations,   financial   condition  and  capital
requirements,  general business conditions,  and such other factors as the Board
of Directors deems relevant.

RECENT SALES OF UNREGISTERED SECURITIES

None.





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<PAGE>



ITEM 6. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISKS

The following  discussion  reviews the Company's  operations  for the year ended
December 31, 2001 and the seven months  ended  December 31, 2000,  and should be
read in conjunction  with the Company's  consolidated  financial  statements and
related notes thereto included elsewhere herein.

The following discussion includes statements that are forward looking in nature.
The accuracy of such statements  depends on a variety of factors that may affect
the  business  and  operations  of the  Company.  Certain of these  factors  are
discussed under "Business - Factors  Influencing  Future Results and Accuracy of
Forward-Looking Statements" included in Part 1 of this report.

Plan of Operation

The Company has incurred a net loss from  operations  for the seven months ended
December  31, 2000 and for the year ended  December 31, 2001 of  $1,177,092  and
$3,385,139,  respectively,  and the Company used $55,940 and $632,658 of cash in
operating  activities  during those same periods.  As of December 31, 2001,  the
Company had a working  capital  deficit of $1,431,955.  These  conditions  raise
substantial  doubt about the Company's  ability to continue as a going  concern.
The Company needs to obtain additional  financing to fund payment of obligations
and to provide working capital or operations.  Management is seeking  additional
financing.  Upon  obtaining  additional  capital,  of  which  there  can  be  no
assurance,   management   plans   to   substantially   increase   sales  of  its
technology-based  products. The Company has entered into a contract with a major
publisher in the information technology sector to market the Company's products.
In addition,  the Company has signed  distribution  agreements  with three other
companies to market the Company's products globally.  Management  believes these
efforts will generate  sufficient  cash flows from future  operations to pay the
Company's  obligations  and  realize  goodwill  and  other  assets.  There is no
assurance any of these transactions will occur. The financial  statements do not
include any adjustments  relating to the  recoverability  and  classification of
asset carrying  amounts or the amount and  classification  of  liabilities  that
might result should the Company be unable to continue as a going concern.

Results of Operations for the Year Ended December 31, 2001 compared to the Seven
Months Ended December 31, 2000

Revenues

Sales  for the year  ended  December  31,  2001 and for the seven  months  ended
December  31, 2000 were  $636,241  and  $677,313,  respectively.  The  company's
principal source of revenue for both periods presented was derived from sales of
technology-based  software training programs.  Sales to one customer, which is a
national franchise and has a license agreement with the Company, accounted for a
significant portion of revenues for the year ended December 31, 2001 and for the
seven months ended December 31, 2000, or 56% and 85%, respectively. This license
agreement expired at the end of 2001. The Company has obtained two new customers
whereby revenue generated from these relationships will offset the expiration of
the above license agreement in the 2nd quarter of 2002.

                                       9
<PAGE>

Cost of Sales

     Cost of sales for the year ended December 31, 2001 and for the seven months
ended December 31, 2000 was $518,767 and $616,363,  respectively.  Cost of sales
for the year  ended  2001 and for the  seven  months  ended  December  31,  2000
represented  costs associated from sales of technology  based software  training
programs As our expected  sales  increase in the coming  periods,  we expect our
cost of sales to increase proportionately.

General and Administrative

         General and  administrative  expenses  for the year ended  December 31,
2001 and the seven months ended December 31, 2000 were  $2,265,797 and $649,083,
respectively.  The Company's  general and  administration  expenses  during 2001
consisted  primarily  of salaries and wages of  $808,691,  professional  fees of
$442,160,  outside  services of $380,716,  rent of $68,274,  travel  expenses of
$65,152,  payroll  taxes of $41,431,  telephone  expenses of $21,789,  and other
general and administrative expenses of $437,584.

Depreciation and Amortization

         Amortization  expense for the year ended  December 31, 2001 and for the
seven months ended  December 31, 2000 was $868,456 and  $506,599,  respectively.
This amortization is carried forward from a previous purchase on June 1, 2000.

Interest

         Interest expense for the year ended December 31, 2001 and for the seven
months ended December 31, 2000 were,  respectively,  $368,360 and $44,450. These
costs are associated with note payable balances.

Liquidity and Capital Resources

               The  Company  looks to finance  its  operations  through  private
placements of equity  securities,  collection of  subscription  receivables  and
current  sales.  The Company  had  negative  working  capital of  $1,431,955  on
December 31, 2001. The capital  infusion will be used for working capital needs,
marketing,  and to make payments on accounts and notes payable.  There can be no
assurance that additional funding will become available.

            The Company expects that its existing cash resources, operating cash
flow,  private  placements and collection of  subscriptions  receivable  will be
sufficient  to meet its operating  requirements  and ordinary  capital  spending
needs.  Subsequent to receiving these funding  sources,  the Company expects its
cash  generated  from  operations  will  be  sufficient  to meet  its  operating
requirements and ordinary capital spending needs going forward.

         In addition,  on February 5, 2002, the Company received $72,440 through
a private placement to individual investors. This capital infusion is to be used
to cover operations and working capital  requirements for the next three months.
Also, the Company is currently working on additional private placements to cover
operations and working capital beyond this point.

ITEM 7.  FINANCIAL STATEMENTS

         The following  constitutes a list of Financial  Statements  included in
Part II of this Report beginning at page F-1 of this Report:


                                       10
<PAGE>

                 KNOWLEDGE TRANSFER SYSTEMS, INC. AND SUBSIDIARY

                          INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
                                                                                       Page

<S>                                                                                    <C>
Report of Robison, Hill & Co., Independent Certified Public Accountants................F - 1

Report of Hansen, Barnett & Maxwell, Independent Certified Public Accountants..........F - 2

Consolidated Balance Sheets  - December 31, 2001 and 2000..............................F - 3

Consolidated Statements of Operations for the Year Ended December 31, 2001 and for the
  Seven Months Ended December 31, 2000.................................................F - 4

Consolidated Statements of Stockholders' Equity for the Seven Months Ended December 31,
  2000 and for the Year Ended December 31, 2001........................................F - 5

Consolidated Statements of Cash Flows for the Year Ended December 31, 2001 and for the
  Seven Months Ended December 31, 2000.................................................F - 6

Notes to the Consolidated Financial Statements.........................................F - 8
</TABLE>

                           --------------------------



<PAGE>








               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS


To the Board of Directors and the Shareholders
  Knowledge Transfer Systems, Inc.

        We have audited the accompanying consolidated balance sheet of Knowledge
Transfer Systems,  Inc. and Subsidiary (the Company) as of December 31, 2001 and
the related  consolidated  statements of operations,  stockholders'  equity, and
cash  flows  for  the  year  then  ended.  These  financial  statements  are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audit.

        We conducted our audit in accordance with auditing  standards  generally
accepted in the United States of America.  Those standards  require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the 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  audit  provides  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 Knowledge
Transfer Systems, Inc. and Subsidiary as of December 31, 2001 and the results of
their operations and their cash flows for the year then ended in conformity with
accounting principles generally accepted in the United States of America.

        The accompanying  financial  statements have been prepared assuming that
the Company  will  continue as a going  concern.  As  discussed in Note 1 to the
consolidated  financial  statements,   the  Company  has  suffered  losses  from
operations of $3,385,139  and has used $632,658 of cash in operating  activities
during the year ended  December 31, 2001.  As of December 31, 2001,  the Company
had a working  capital  deficit of $1,431,955.  These matters 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  financial
statements do not include any  adjustments  relating to the  recoverability  and
classification  of asset carrying  amounts or the amount and  classification  of
liabilities  that might  result  should the  Company be unable to  continue as a
going concern.

                                              Respectfully submitted


                                              /s/ Robison, Hill & Co.
                                              ---------------------------------
                                              Certified Public Accountants

Salt Lake City, Utah
March 18, 2002

                                      F - 1

<PAGE>




  HANSEN, BARNETT & MAXWELL
  A Professional Corporation                              (801) 532-2200
  CERTIFIED PUBLIC ACCOUNTANTS                          Fax (801) 532-7944
                                                    5 Triad Center, Suite 750
Member of AICPA SEC Practice Section                    55 North 300 West
Member of Baker Tilly International              Salt Lake City, Utah 84180-1128



               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Board of Directors and the Stockholders
  Knowledge Transfer Systems, Inc.

We have  audited  the  accompanying  consolidated  balance  sheet  of  Knowledge
Transfer Systems,  Inc. and Subsidiary (the Company) as of December 31, 2000 and
the related  consolidated  statements of operations,  stockholder's  equity, and
cash  flows for the seven  months  ended  December  31,  2000.  These  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

We conducted our audit in accordance with auditing standards  generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the 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  audit  provides  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 Knowledge Transfer
Systems,  Inc. and  Subsidiary  as of December 31, 2000 and the results of their
operations  and their cash flows for the seven months ended December 31, 2000 in
conformity with accounting principles generally accepted in the United States of
America.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 1 to the
consolidated  financial  statements,   the  Company  has  suffered  losses  from
operations  of $1,177,092  and has used $55,940 of cash in operating  activities
during the seven months ended  December 31, 2000.  As of December 31, 2000,  the
Company  had  a  working  capital  deficit  of  $895,286.  These  matters  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
financial   statements   do  not  include  any   adjustments   relating  to  the
recoverability  and  classification  of asset carrying amounts or the amount and
classification  of liabilities that might result should the Company be unable to
continue as a going concern.

                                                 /S/ HANSEN, BARNETT & MAXWELL
Salt Lake City, Utah
April 17, 2001

                                      F - 2

<PAGE>



                 KNOWLEDGE TRANSFER SYSTEMS, INC. AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                        December 31,
                                                               -------------------------------
                                                                    2001             2000
                                                               ---------------  --------------
                              ASSETS
<S>                                                             <C>             <C>
Current Assets
    Cash....................................................... $        3,021  $       22,144
    Trade accounts receivable net of $59,961 and $9,961
       allowance for doubtful accounts, respectively...........         13,288         121,598
    Inventory..................................................         56,115          92,810
                                                               ---------------  --------------
Total Current Assets...........................................         72,424         236,552

Property and Equipment, net of $22,657 and $7,677 accumulated
   depreciation, respectively..................................         21,377          36,508
Deposits.......................................................         12,027          12,027
Prepaid Compensation...........................................              -          57,075
Goodwill, net of $1,375,055 and $506,599 accumulated
   amortization, respectively....  ............................      2,967,223       3,835,679
                                                               ---------------  --------------

Total Assets...................................................$     3,073,051  $    4,177,841
                                                               ===============  ==============

               LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
    Trade accounts payable.....................................$       480,856  $      599,417
    Accrued liabilities........................................        130,365          93,405
    Deferred revenue...........................................        291,779               -
    Capital lease obligation - current portion.................         10,458           8,199
    Notes payable - current portion............................        202,771         289,792
    Notes payable - related parties............................        388,150         141,025
                                                               ---------------  --------------
Total Current Liabilities......................................      1,504,379       1,131,838
                                                               ---------------  --------------
Long-Term Liabilities
    Capital lease obligation - net of current portion..........              -          10,398
                                                               ---------------  --------------
Total Long-Term Liabilities....................................              -          10,398
                                                               ---------------  --------------

Stockholders' Equity
    Preferred stock - $0.001 par value; 10,000,000 shares
       authorized; no shares issued or outstanding.............              -               -
    Common stock - $0.001 par value; 100,000,000 shares
       authorized; 38,887,342 shares and 6,628,575 shares
       outstanding, respectively...............................         38,887           6,628
    Additional paid-in capital.................................      6,880,766       4,206,069
    Notes receivables from stockholders........................       (788,750)              -
    Accumulated deficit........................................     (4,562,231)     (1,177,092)
                                                               ---------------  --------------
Total Stockholders' Equity.....................................      1,568,672       3,035,605
                                                               ---------------  --------------

Total Liabilities and Stockholders' Equity.....................$     3,073,051  $    4,177,841
                                                               ===============  ==============
</TABLE>
   The accompanying notes are an integral part of these financial statements.

                                      F - 3

<PAGE>



                       KNOWLEDGE TRANSFER SYSTEMS, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>

                                                                   For the      For the Seven
                                                                 Year Ended      Months Ended
                                                                December 31,     December 31,
                                                                    2001             2000
                                                               ---------------  --------------

<S>                                                            <C>              <C>
Sales..........................................................$       636,241  $      677,313

Cost of Sales..................................................        518,767         616,363
                                                               ---------------  --------------

Gross Profit...................................................        117,474          60,950
                                                               ---------------  --------------

Operating Expenses
    Write down of inventory to market value....................         56,114          37,910
    General and administrative.................................      2,209,683         649,083
    Amortization of goodwill...................................        868,456         506,599
    Interest expense...........................................        368,360          44,450
                                                               ---------------  --------------

Total Operating Expenses.......................................      3,502,613       1,238,042
                                                               ---------------  --------------

Net Loss.......................................................$    (3,385,139) $   (1,177,092)
                                                               ===============  ==============

Basic and Diluted Loss Per Share...............................$        (0.11)  $       (0.19)
                                                               ===============  ==============
Weighted Average Number of Common
  Shares Used in Per Share Calculation.........................     30,387,778       6,164,124
                                                               ===============  ==============
</TABLE>


















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

                                      F - 4

<PAGE>


                 KNOWLEDGE TRANSFER SYSTEMS, INC. AND SUBSIDIARY
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
                                                                                           Notes
                                                                          Additional    Receivable                        Total
                                                   Common Stock             Paid-In        From        Accumulated    Stockholders'
                                              -----------------------
                                                Shares        Amount        Capital     Stockholders     Deficit         Equity
                                              -----------    ---------    -----------    -----------    -----------    -----------
<S>                                           <C>            <C>          <C>            <C>            <C>            <C>
Stock issued for net assets acquired,
   June 1, 2000 ...........................     5,639,345    $   5,639    $ 3,578,361    $      --      $      --      $ 3,584,000
Expenses paid by shareholder ..............       363,935          364        230,932           --             --          231,296
Cash contribution by shareholder ..........       313,119          313        198,687           --             --          199,000
Notes payable and accrued interest
   assumed by shareholder .................       312,176          312        198,089           --             --          198,401
Net loss for the period ...................          --           --             --             --       (1,177,092)    (1,177,092)
                                              -----------    ---------    -----------    -----------    -----------    -----------

Balance - December 31, 2000 ...............     6,628,575        6,628      4,206,069           --       (1,177,092)     3,035,605
Expenses paid by shareholder ..............       548,543          549        348,073           --             --          348,622
Accounts payable and interest
   paid by shareholder ....................       862,279          862        547,152           --             --          548,014
Assumption of note payable
   from shareholder .......................       (39,337)         (39)       (24,961)          --             --          (25,000)
Shares issued for services ................     4,000,000        4,000        196,000           --             --          200,000
Shares issued for notes receivable
   from stockholders, $0.05 per share .....    23,050,000       23,050      1,129,450     (1,042,500)          --          110,000
Shares issued for notes receivable
   from stockholders, $0.10 per share .....     2,515,000        2,515        248,985       (181,500)          --           70,000
Services received in satisfaction of
  notes receivable from stockholders ......          --           --             --          360,000           --          360,000
Acquisition of GoThink!com ................       248,247          248           (248)          --             --             --
Private placement offering for cash........       840,00           840        209,160           --             --          210,000
Foreign private placement offering
  for cash ................................       236,535          237         21,333           --             --           21,570
Cancellation of common stock and
  related note receivable .................        (2,500)          (3)          (247)           250           --             --
Cash received on notes receivable
   from stockholders ......................          --           --             --           75,000           --           75,000
Net loss for the year .....................          --           --             --             --       (3,385,139)    (3,385,139)
                                              -----------    ---------    -----------    -----------    -----------    -----------

Balance - December 31, 2001 ...............    38,887,342    $  38,887    $ 6,880,766    $  (788,750)   $(4,562,231)   $ 1,568,672
                                              ===========    =========    ===========    ===========    ===========    ===========
</TABLE>










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

                                      F - 5

<PAGE>



                 KNOWLEDGE TRANSFER SYSTEMS, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                   For the      For the Seven
                                                                  Year Ended     Months Ended
                                                                  December 31,   December 31,
                                                                     2001            2000
                                                                --------------  --------------
<S>                                                             <C>             <C>
Cash Flows From Operating Activities
    Net loss....................................................$   (3,385,139) $   (1,177,092)
    Adjustments to reconcile net loss to net cash used
       in operating activities:
    Depreciation................................................        15,131           8,143
    Amortization of goodwill....................................       868,456         506,599
    Bad debt expense............................................        50,000               -
    Amortization of prepaid compensation........................        57,075          59,592
    Shares issued for accounts payable and interest.............       548,014               -
    (Gain) Loss on disposal of equipment........................           (50)          1,784
    Write down of obsolete inventory............................        56,114          37,910
    Expenses paid by shareholder................................       348,622         231,296
    Expenses paid with note payable.............................             -          17,527
    Services received in satisfaction of note receivable........       360,000               -
    Deferred revenue............................................       291,779               -
    Changes in assets and liabilities, net of effects from
      purchase of KT Solutions, Inc.:
       Trade accounts receivable................................        58,310         (28,003)
       Inventory................................................       (19,419)       (130,720)
       Trade accounts payable...................................        81,489         333,619
       Accrued liabilities......................................        36,960          83,405
                                                                --------------  --------------
Net Cash Used In Operating Activities...........................      (632,658)        (55,940)
                                                                --------------  --------------

Cash Flows From Investing Activities
    Capital expenditures for equipment..........................             -         (12,619)
    Decrease in deposits........................................             -           4,972
    Cash acquired in acquisition of KT Solutions, Inc...........             -           1,006
                                                                --------------  --------------
Net Cash Used In Investing Activities...........................             -          (6,641)
                                                                --------------  --------------

Cash Flows From Financing Activities
    Proceeds from borrowing under related party notes payable...       249,124          24,000
    Proceeds from collection of notes receivable from stockholders      75,000               -
    Principal payments on notes payable.........................      (114,020)       (134,031)
    Proceeds from issuance of common stock......................       411,570               -
    Principal payments under capital lease obligation...........        (8,139)         (4,244)
    Capital contribution by shareholder.........................             -         199,000
                                                                --------------  --------------
Net Cash Provided By Financing Activities.......................       613,535          84,725
                                                                --------------  --------------

Net Increase/(Decrease) In Cash.................................       (19,123)         22,144
Cash at Beginning of Period.....................................        22,144               -
                                                                --------------  --------------
Cash at End of Period...........................................$        3,021  $       22,144
                                                                ==============  ==============
</TABLE>



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

                                      F - 6

<PAGE>



                       KNOWLEDGE TRANSFER SYSTEMS, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
<TABLE>
<CAPTION>

                                                                   For the      For the Seven
                                                                 Year Ended      Months Ended
                                                                December 31,     December 31,
                                                                    2001             2000
                                                               ---------------  --------------
<S>                                                            <C>              <C>
Supplemental Disclosure of Cash Flow Information
    Cash paid for interest.....................................$        63,474  $       31,727
                                                               ===============  ==============

Supplemental Schedule of Noncash Investing and Financing Activities
    Common stock issued for services...........................$       200,000  $            -
    Common stock redeemed upon the assumption of a note payable         25,000               -
    Services rendered in satisfaction of notes receivable......        360,000               -
    Common stock issued for subscription receivable............      1,224,000               -
    Equipment acquired under capital lease obligation..........              -          22,841
    Notes payable and accrued interest assumed by shareholder..              -         198,401
    Purchase of KT Solutions, Inc.:
         Fair value of assets acquired and goodwill............$             -  $    4,581,520
         Liabilities assumed...................................              -        (997,520)
                                                               ---------------  --------------
         Common stock issued...................................$             -  $    3,584,000
                                                               ===============  ==============
</TABLE>





























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

                                      F - 7

<PAGE>

                 KNOWLEDGE TRANSFER SYSTEMS, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES

Organization- On August 1, 1992,  Missaticum,  Inc. was  incorporated  under the
laws of the State of  California.  On October 4, 1996,  the Company  changed its
name  to KT  Solutions,  Inc.  It was  formed  for  the  purpose  of  developing
technology based training solutions.  It creates software programs that are used
to teach and train  individuals  how to operate  popular  business  and home use
software programs.

On June 1, 2000,  the former  shareholders  of the Company  entered into a stock
exchange agreement with enSurge,  Inc. (enSurge) whereby enSurge acquired all of
the outstanding common shares of KT Solutions, Inc. from its former shareholders
in exchange  for the issuance of 500,000  shares of  enSurge's  common stock and
options to purchase 250,000 shares of enSurge's common stock at $4.00 per share.
In addition,  enSurge issued  warrants to purchase 50,000 shares of common stock
at  $0.10  per  share  as a  finder's  fee.  As a  result,  the  Company  was  a
wholly-owned subsidiary of enSurge, Inc.

The  acquisition  of the KT  Solutions,  Inc. was recorded by enSurge  using the
purchase method of accounting.  The 500,000 common shares issued and the 300,000
options  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.

For  financial  reporting  purposes,  KT  Solutions,  Inc. was  considered a new
reporting entity on June 1, 2000. The accompanying  financial statements reflect
the  operations of KT Solutions,  Inc. from June 1, 2000. The purchase price was
allocated to the assets and  liabilities at their fair value.  The excess of the
purchase price over the fair value of the net assets acquired was $4,342,278 and
was allocated to goodwill.  Goodwill is being  amortized  over five years by the
straight-line method.

Reorganization  - On April  25,  2001,  enSurge,  consummated  a stock  exchange
agreement with GoThink!.com,  Inc., a publicly-held Nevada corporation,  whereby
enSurge  exchanged  all  of  the  1,368,387  outstanding  common  shares  of  KT
Solutions,  Inc. for 8,000,060 shares of  GoThink!.com,  Inc. common stock. As a
result  of  the  stock  exchange,  KT  Solutions,  Inc.  became  a  wholly-owned
subsidiary of GoThink!.com, Inc. GoThink!.com, Inc. had 248,247 shares of common
stock  outstanding  prior to the stock exchange,  but after a 1-for-100  reverse
stock split.

The stock exchange has been accounted for as the reorganization of KT Solutions,
Inc.  Accordingly,  the accompanying  financial statements have been restated to
reflect the effects of the 5.84-for-1  equivalent stock split that resulted from
8,000,060  shares of  GoThink!.com,  Inc. being issued in exchange for 1,368,387
previously outstanding shares of KT Solutions,  Inc.  GoThink!.com,  Inc. had no
assets or operations prior to or at the date of the reorganization. Accordingly,
the acquisition of GoThink!.com,  Inc. was not considered a business combination
but was  considered  the  issuance  of  248,247  shares of  common  stock for no
consideration.  The operations of  GoThink!.com,  Inc. have been included in the
accompanying financial statements from April 1, 2001 (which was the beginning of
the accounting period during which GoThink!.com, Inc. was purchased).

On April 23, 2001,  the articles of  incorporation  of  GoThink!.com,  Inc. were
amended to change its name to Knowledge Transfer Systems,  Inc. Through April 1,
2001,  KT  Solutions,  Inc.  is referred to as "the  Company,"  thereafter  that
reference refers to Knowledge Transfer Systems, Inc. and KT Solutions, Inc. on a
consolidated basis.  Intercompany accounts and transactions have been eliminated
in consolidation.

The following  unaudited pro forma financial statement data presents the results
of operations of the Company  assuming the acquisition of KT Solutions,  inc. by
enSurge, the purchase of GoThink!.com, Inc. and the

                                      F - 8

<PAGE>

                 KNOWLEDGE TRANSFER SYSTEMS, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
(Continued)

issuance of 10,000,000  shares of common stock for services in  connection  with
the  reorganization of KT Solutions,  Inc. had occurred at the beginning of each
of the years ended  December 31, 2001 and 2000.  The unaudited pro forma results
have been prepared for  illustrative  purposes only and do not represent  actual
results of operations nor is it indicative of actual or future operating results
that may occur.
                                                         2001           2000
                                                    -------------    ----------
                                                              (Unaudited)
        Sales.......................................$     636,241    $1,037,532
        Net loss....................................   (3,385,139)   (2,094,999)
        Basic and diluted loss per share............        (0.08)        (0.05)

Use of Estimates - The  preparation of financial  statements in conformity  with
generally accepted  accounting  principles requires management to make estimates
and assumptions  that affect the reported  amounts of assets and liabilities and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period. Actual results could differ from these estimates.

Business Condition - The Company has incurred a net loss from operations for the
seven months ended December 31, 2000 and for the year ended December 31, 2001 of
$1,177,092  and  $3,385,139,  respectively,  and the  Company  used  $55,940 and
$632,658  of cash in  operating  activities  during  those same  periods.  As of
December  31, 2001,  the Company had a working  capital  deficit of  $1,431,955.
These conditions raise substantial doubt about the Company's ability to continue
as a going  concern.  The Company needs to obtain  additional  financing to fund
payment of obligations and to provide working capital for operations. Management
is seeking additional  financing.  Upon obtaining  additional  capital, of which
there can be no assurance,  management plans to substantially  increase sales of
its  technology-based  products.  The Company has entered into a contract with a
major  publisher in the  information  technology  sector to market the Company's
products. In addition, the Company has signed distribution agreements with three
other companies to market the Company's products globally.  Management  believes
these efforts will generate  sufficient cash flows from future operations to pay
the Company's  obligations  and realize  goodwill and other assets.  There is no
assurance any of these transactions will occur. The financial  statements do not
include any adjustments  relating to the  recoverability  and  classification of
asset carrying  amounts or the amount and  classification  of  liabilities  that
might result should the Company be unable to continue as a going concern.

Financial  Instruments  - The  carrying  amounts  reported  in the  accompanying
financial  statements  for  cash,  trade  accounts  receivable,  trade  accounts
payable,  accrued  liabilities,  capital  lease  obligations  and notes  payable
approximate their fair values because of the immediate or short-term  maturities
of these financial instruments.

Inventory  -  Inventory  is  stated at the lower of cost  (using  the  first-in,
first-out  method) or market  value.  Inventory  consists of  produced  software
products available for sale.

Property and  Equipment - Property and  equipment are stated at cost and consist
of  furniture,  fixtures and  computer  equipment.  Maintenance  and repairs are
charged to operations while major improvements are capitalized. Upon retirement,
sale, or other disposition, the cost and accumulated depreciation are eliminated
from the accounts and a gain or loss is included in operations.  Depreciation is
computed using the straight- line method over the estimated  useful lives of the
property and equipment, which are three to seven years.



                                      F - 9

<PAGE>

                 KNOWLEDGE TRANSFER SYSTEMS, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
(Continued)

Long-Lived  Assets - The  realizability  of long-lived  assets,  which  includes
goodwill,  is evaluated  periodically  when events or  circumstances  indicate a
possible  inability  to recover the  carrying  amounts.  An  impairment  loss is
recognized  for the  excess of the  carrying  amount  over the fair value of the
assets.  Fair value is determined based on estimated  discounted net future cash
flows  or  other  valuation  techniques  available  in the  circumstances.  This
analysis involves significant management judgment to evaluate the capacity of an
asset to perform  within  projections.  Based  upon  management's  analysis,  no
impairment loss was recognized in the accompanying financial statements.

Revenue  Recognition  -  Revenue  from  the  sale of  technology-based  training
products is recognized  upon  delivery,  acceptance and the  determination  that
payment by the customer is likely.  Payments  collected from customers  prior to
recognition of the related sales are recorded as deferred revenue.

Concentration  of Credit  Risk and Major  Customer - Trade  accounts  receivable
subject the Company to  concentration  of credit risk.  This risk arises because
$21,842 of trade accounts were from one customer  which is a national  franchise
and has a license agreement with the Company that can be terminated with 90 days
notice  by  the  customer.  Sales  to the  customer  amounted  to  approximately
$354,000, or 56% of sales, during the year ended December 31, 2001.

Technology-Based  Training  Products - Costs  incurred  to design,  develop  and
create new  training  materials  to be sold,  leased or  otherwise  marketed are
expensed as incurred. Costs incurred to acquire rights to training materials and
convert the materials into the Company's  technology-based training products are
expensed as incurred.

Royalties - The Company incurred a 5% royalty based upon gross sales for the use
of certain  development  technologies  until a total of $850,000  was paid.  The
royalty was recognized as expense as incurred through December 31, 2000.  Common
stock was issued in satisfaction of a portion of this royalty with the remaining
$202,771 due under the royalty  arrangement  reflected  as notes  payable in the
accompanying financial statements.

During 2001,  the Company paid  $325,000 for the right to use some IT Curriculum
produced by a major IT  publisher.  This  payment  provided the Company with the
right to sell and license this  technology-based  training  product  without any
on-going  royalty  obligation.  The cost to acquire  the rights to the  training
materials was expensed when incurred.

The  Company  has entered  into an  agreement  to acquire the rights to training
materials  for many  computer  software  applications.  Under  the  terms of the
related  agreement,  the  Company  is  obligated  to pay a royalty of 15% of net
revenue when resold or licensed.

NOTE 2 - PROPERTY AND EQUIPMENT

                                                       2001            2000
                                                  -------------  --------------
        Furniture and fixtures....................$       2,500  $        2,500
        Computer equipment........................       41,534          41,685
                                                   -------------  --------------

        Total Property and Equipment..............$      44,034  $       44,185
                                                  =============  ==============


Depreciation  expense  for the year ended  December  31,  2001 and for the seven
months ended December 31, 2000 was $15,131 and $1,843, respectively.


                                     F - 10

<PAGE>


                 KNOWLEDGE TRANSFER SYSTEMS, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 - NOTES PAYABLE
<TABLE>
<CAPTION>
                                                                       2001          2000
                                                                   ------------- -------------
<S>                                                                <C>           <C>
Non-interest bearing royalty obligations, due $11,000 per month,
   unsecured, interest accrued at 10% due to being in default..... $     202,771 $     289,792
                                                                   ============= =============

Related Party Notes Payable

    15% Note payable to a relative of an officer, due on demand,
      unsecured................................................... $      20,000 $      20,000
    Note payable to an officer, due on demand, unsecured..........        12,000             -
    12% Note payable to an officer, due on demand, unsecured......         3,000         3,000
    24% Note payable to an officer, due on demand, unsecured......       216,125             -
    Note payable, due on demand, unsecured........................        20,000             -
    20% Note payable, due on demand, unsecured....................        75,000        75,000
    8% Note payable, due on demand, unsecured.....................        42,025        43,025
                                                                   ------------- -------------

    Notes Payable - Related Party................................. $     388,150 $     141,025
                                                                   ============= =============
</TABLE>

NOTE 4 - LEASE OBLIGATIONS

Operating Lease - The Company  conducts its operations in a building leased from
an unrelated  third party,  which lease expires in February  2005.  Rent expense
under this lease was  $48,660 for the year ended  December  31, 2001 and $43,225
for the seven months ended  December  31, 2001.  The  following is a schedule by
years of future minimum rental payments as of December 31, 2001:


        Years Ending December 31:
               2002................................................$      84,540
               2003................................................       84,540
               2004................................................       84,540
               2005................................................       14,090
                                                                   -------------

               Total...............................................$     267,710
                                                                   =============

Capital  Lease  - In  June  2000,  the  Company  entered  into a  capital  lease
obligation  for  computer  equipment.  This  lease  expires  in  December  2002.
Equipment  under  the  capital  lease as of  December  31,  2001 and 2000 was as
follows:
<TABLE>
<CAPTION>
                                                                          December 31,
                                                                   ---------------------------
                                                                       2001          2000
                                                                   ------------- -------------
<S>                                                                <C>           <C>
        Equipment..................................................$      22,841 $      22,841
        Less: Accumulated depreciation.............................       13,704         4,568
                                                                   ------------- -------------

               Net Cost............................................$       9,137 $      18,273
                                                                   ============= =============
</TABLE>



                                     F - 11

<PAGE>

                 KNOWLEDGE TRANSFER SYSTEMS, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4 - LEASE OBLIGATIONS (Continued)

The  following is a schedule by years of future  minimum  lease  payments  under
capital  leases  together  with  the  present  value  of the net  minimum  lease
payments:
<TABLE>
<CAPTION>
                                                                    December 31, December 31,
                                                                       2001          2000
                                                                   ------------- -------------
<S>                                                                <C>                  <C>
      Year Ending December 31:
          2001.....................................................$           - $      10,452
          2002.....................................................       11,292        10,452
                                                                   ------------- -------------
          Total minimum lease payments.............................       11,292        20,904
          Less: Amount representing executory costs................         (864)       (1,728)
                                                                   ------------- -------------
          Net minimum lease payments...............................       10,428        19,176
          Less: Amount representing interest.......................         (834)         (579)
                                                                   ------------- -------------
          Present value of net minimum lease payments..............        9,594        18,597
          Less: Current portion....................................        9,594         8,199
                                                                   ------------- -------------

          Capital Lease Obligation - Long Term.....................$           - $      10,398
                                                                   ============= =============
</TABLE>

NOTE 5 - STOCKHOLDER'S EQUITY

On April 23,  2001,  the  Company's  articles of  incorporation  were amended to
change the par value of its capital  stock from $0.01 to $0.001 per share and to
change  the  authorized  capital  to  100,000,000  shares  of  common  stock and
10,000,000  shares of preferred  stock. The Board of Directors are authorized to
designate  classes and series of the preferred  stock,  including  designations,
preferences,  conversion rights, cumulative, relative, participating,  optional,
voting or other rights,  and  qualifications,  limitations or restrictions.  The
Board of Directors has not designated any preferred stock for issuance.

On April 25, 2001,  enSurge,  Inc. was issued  8,000,060  common shares upon the
reorganization of KT Solutions, Inc. into GoThink!.com,  Inc. KT Solutions, Inc.
was considered the accounting  acquirer in the reorganization and the historical
equity transactions of KT Solutions,  Inc. have been restated for the effects of
the  reorganization  on a retroactive basis similar to a 5.84-for-1 stock split.
Each equity  transaction with enSurge prior to April 25, 2001 has been allocated
a pro rata number of the 8,000,060 common shares issued and each transaction has
been valued based on the fair value of the enSurge  shares  issued,  as follows:
During  February and March 2001,  548,543 shares were issued for services valued
at  $348,622,  or $0.64 per share.  On February 14,  2001,  862,279  shares were
issued to creditors of the Company in satisfaction of $243,128 of trade accounts
payable but recorded at the fair value of the shares issued  $548,014,  or $0.64
per share. The excess fair value of $304,886 was recognized as interest expense.

On March 27,  2001,  39,337  shares  were  redeemed  at $0.64 per share  from an
officer in exchange for the assumption of a $25,000 note payable to the officer.
The shares redeemed were valued at $25,000.  There were no unstated rights given
to the officer in the transaction.

On March 1, 2001, the Company agreed to issue  4,000,000  shares of common stock
to officers,  employees and consultants of KT Solutions,  Inc. for services. The
common stock was issued on April 25, 2001 and was valued


                                     F - 12

<PAGE>


                 KNOWLEDGE TRANSFER SYSTEMS, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5 - STOCKHOLDER'S EQUITY (Continued)

at $200,000, or $0.05 per share, based on an assessment of the fair value of the
common stock of Knowledge Transfer Systems, Inc. on March 1, 2001, as determined
by the Board of Directors.

On March 1, 2001,  the  Company  agreed to issue and on April 25, 2001 it issued
23,050,000  shares of common stock at $0.05 per share to employees,  consultants
and other investors in exchange for cash in the amount of $110,000 and for notes
receivable totaling $1,042,500.  On April 25, 2001, the Company issued 2,515,000
shares of common stock at $0.10 in exchange to employees and other investors for
cash in the amount of $70,000 and for notes receivable  totaling  $181,500.  The
notes   receivable  are  partial   recourse  notes  in  that  each  investor  is
unconditionally  obligated to pay 10% of the amount of their note in addition to
the return of the shares of common stock in the event of default under the terms
of the notes. The notes bear interest at 6% and are due on December 31, 2003 and
December  31,  2005.  As of December  31,  2001,  the Company had  accepted  the
services of four  individuals in satisfaction of $360,000 of the notes that were
received upon the issuance of common stock at $0.05 per share and has recognized
compensation expense during 2001 of $360,000.

In connection with the  reorganization of KT Solutions,  Inc. into GoThink!.com,
Inc., 248,247 shares of GoThink!.com,  Inc. remained outstanding.  For financial
reporting  purposes,  these shares were  accounted  for as having been issued on
April 25, 2001 to acquire the net monetary assets of GoThink!com,  Inc. Since no
monetary  assets were  received nor were any  liabilities  assumed,  the 248,247
common shares were recorded at zero value.

On April 25, 2001, the Company entered into an agreement with a public relations
firm whereby the Company issued  3,000,000  shares of common stock to the public
relations  firm for  investor  relations  services to be rendered to the Company
over a period of two years following the Company's  common stock being listed on
the OTB Electronic  Bulletin  Board.  The agreement was formalized on August 15,
2001. The 3,000,000 common shares issued were originally  value at $300,000,  or
$0.10 per share,  based on the assessed  fair value of the common stock on April
25, 2001,  as determined  by the Board of  Directors.  On December 3, 2001,  the
agreement was terminated  and the 3,000,000  shares were returned to the Company
and cancelled.  As a result, the expense previously  recognized was reversed and
resulted in no expense being recognized during 2001 from the agreement.

On August 27,  2001,  the Company  issued  840,000  shares of common  stock in a
private placement offering for cash totaling $210,000, or $0.25 per share.

On December 4, 2001,  the Company  issued  236,535  shares of common  stock in a
foreign  private  placement  offering for cash  totaling  $21,570,  or $0.09 per
share.

In addition,  the Company received  $75,000 on its outstanding  notes receivable
from stockholders during the year ended December 31, 2001.

NOTE 6 - STOCK OPTIONS

The  Company  accounts  for stock  options  issued to  directors,  officers  and
employees under Accounting  Principles Board Opinion No. 25 (APB 25) and related
interpretations. 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.  For options that provide for cashless  exercise or that have been
modified,  the measurement date is considered the date the options are exercised
or expire. Those options are accounted for as variable options with compensation


                                     F - 13

<PAGE>

                 KNOWLEDGE TRANSFER SYSTEMS, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6 - STOCK OPTIONS  (Continued)

adjusted  each period  based on the  difference  between the market value of the
common stock and the exercise price of the options at the end of the period. The
Company accounts for options and warrants issued to non- employees at their fair
value in accordance  with  Statement of Financial  Accounting  Standard No. 123,
"Accounting for Stock-Based Compensation."

On August 3, 2001,  the Board of  Directors  adopted the 2001 Stock Option Plan,
which  authorized the Company to grant incentive stock options or  non-qualified
options to eligible  employees  for the  purchase of up to  1,500,000  shares of
common stock.  Options  granted under the plan must be exercisable at prices not
less than 100% of the market  value of the  underlying  common stock on the date
granted  (110% if granted to a holder of 10% or more of the  outstanding  common
stock of the Company) and may be exercisable for up to ten years.

Effective  June 1, 2001, the Board of Directors  adopted the 2001  Non-Qualified
Stock Option and Incentive Plan, which authorized the Company to grant employees
and directors of the Company and its  subsidiaries,  as well as consultants  and
other  persons  rendering  services  to the  Company  options to  purchase up to
3,500,000  shares of  common  stock.  If  options  granted  are  intended  to be
incentive options,  they must be exercisable at prices not less than 100% of the
market value of the underlying common stock on the date granted (110% if granted
to a holder  of 10% or more of the  outstanding  common  stock of the  Company).
Options granted may be exercisable for up to ten years.

A summary of the status of the  Company's  two stock option plans as of December
31, 2001 and changes during the year then ended are presented below:
<TABLE>
<CAPTION>
                                                              Number of      Weighted-Average
                                                               Options        Exercise Price
                                                            --------------  ------------------
<S>                                                         <C>             <C>
Balance Outstanding, December 31, 2000.....................              -         $ -
Granted....................................................      3,598,000         0.11
Forfeited..................................................       (125,000)        0.18
                                                            --------------
Balance Outstanding, December 31, 2001.....................      3,473,000         0.11
                                                            ==============
Balance Exercisable, December 31, 2001.....................              -          -
                                                            ==============

Weighted-average fair value of options granted
  during the year.......................................... $      0.38
</TABLE>

The following table summarizes  information  about stock options at December 31,
2001:
<TABLE>
<CAPTION>
                             Options Outstanding                       Options Exercisable
                 --------------------------------------------      ---------------------------
                                    Weighted-      Weighted                        Weighted-
   Range of                          Average        Average                         Average
   Exercise          Number         Remaining      Exercise           Number       Exercise
    Prices        Outstanding    Contractual Life    Price          Exercisable      Price
---------------  --------------  ---------------  -----------      ------------- -------------
<S>              <C>             <C>              <C>              <C>           <C>
    $ 0.10            1,450,000        5.0 years       $ 0.10                  -      $ -
     0.11             2,000,000        5.0 years         0.11                  -        -
     0.18                23,000        5.0 years         0.18                  -        -
                 --------------                                    -------------
 $0.10 - $0.18        3,473,000        5.0 years         0.11                  -        -
                 ==============                                    =============
</TABLE>



                                     F - 14

<PAGE>

                 KNOWLEDGE TRANSFER SYSTEMS, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6 - STOCK OPTIONS  (Continued)

No compensation  expense was recognized  during the year ended December 31, 2001
relating  to stock  options.  Had  compensation  expense for the  Company's  two
stock-based  compensation  plans been determined  based on the fair value at the
grant dates for options granted under those plans  consistent with the method of
FASB  Statement  123, the  Company's net loss and loss per share would have been
increased to the pro forma amounts  indicated below.  The Company  estimated the
fair value of the stock  options  at the grant  date  using the  Black-  Scholes
option-pricing  model. The following  weighted-average  assumptions were used in
the Black-Scholes model for the year ended December 31, 2001: risk-free interest
rate of 4.1%,  dividend  yield of 0%,  volatility of 332%, and expected lives of
5.0 years.
<TABLE>
<CAPTION>
<S>                                                                             <C>
        Net loss, as reported.................................................. $  (3,385,139)
        Net loss, pro forma....................................................    (3,456,642)
        Basic and diluted loss per share, as reported..........................         (0.11)
        Basic and diluted loss per share, pro forma............................         (0.11)
</TABLE>

NOTE 7 - SUBSEQUENT EVENTS

On February 5, 2002,  the Company issued  1,503,095  shares of common stock in a
private  placement  offering  for cash in the  amount of  $72,440,  or $0.05 per
share.


                                     F - 15

<PAGE>



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

None


                                    PART III

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



              Name                    Age



Steven K. Burke................      (48)          President, CEO, and Chairman

Gail C.Burke...................      (41)          Secretary

Chris Ryan.....................      (47)          VP of Sales and Marketing

Jeff Frankel...................      (49)          Chief Technology Officer

William E. Chipman Sr..........      (56)          Chief Financial Officer

John C. Graham.................      (49)          Director

David Manovich.................      (50)          Director

Mark Coulter...................      (47)          Director



All of the  Company's  directors  serve for terms of one year each  until  their
successors are elected and qualified.

Steve K. Burke - Chairman and Chief Executive Officer

Mr. Burke brings more than 25 years  experience  in  Marketing,  operations  and
information  technology  to  Knowledge  Transfer  Systems,  Inc.  In his role as
chairman  and CEO, he has been  focused on guiding the company to be a leader in
the  eLearning  market.  During his  tenure,  Mr.  Burke has  implemented  a new
corporate  identity and company  strategy.  His  leadership  has  positioned the
company for rapid growth in the industry. Prior to joining KTSI, Mr. Burke was a
principal  partner at Emerson  Capital  Corporation,  a business  brokerage  and
investment firm in San Francisco.  In addition, he has held several senior sales
and marketing  management  positions over the years.  Mr. Burke graduated with a
bachelor's degree in Business  Administration  and a masters in Finance from the
University of Wyoming.

Gail C. Burke - Secretary

Ms.  Burke is the  General  Manager  of One  Market  Plaza,  which is owned  and
operated  by Equity  Office  Properties.  One  Market  Plaza is a San  Francisco
landmark  commercial  property,  (1.4 million square feet). She has spent over a
decade  managing  various  commercial  and  residential  properties  in Northern
California. Prior to Equity Office, Ms. Burke held senior management position at
CB Richard Ellis.

Ms. Burke graduated with a bachelor's degree in Business Administration from San
Jose State  University.  In addition,  she has a California  Real Estate Brokers
License as well as an RPA.


                                       11
<PAGE>


Chris Ryan - Vice President, Sales and Marketing

Mr.  Ryan  has  over 25  years  of Sales  and  Marketing  experience  with  high
technology  hardware and software  companies,  including 8 years in the training
industry. Most recently, he set up and ran North American sales for WBT Systems,
an eLearning  infrastructure  company.  Prior to WBT, Mr. Ryan was at SmartForce
(CBT Systems) in various sales and sales  management  roles and  participated in
the growth  from $11  million  to over $125  million in sales and the first ever
eLearning  initial  public  offering.  Mr. Ryan graduated from UCLA with a BA in
Economics.

Jeff Frankel - Chief Technology Officer

Currently, Mr. Frankel spearheads development of Knowledge Transfer System's new
products and technologies for the  cost-effective  production of rich multimedia
content.  Prior to joining  KTSI, he was the Chief  Information  Officer for New
Horizons Computer Learning Centers. While at New Horizons,  Jeff was responsible
for the implementation of a worldwide client relationship  management system and
oversaw several  initiatives that introduced  technology based training into the
New Horizons system.

William E. Chipman - Chief Financial Officer

Mr.  Chipman,  over  the past 34  years,  prior to  joining  Knowledge  Transfer
Systems,  Inc., had been involved with a number of public and private  companies
as a director and has served as the chief financial officer for several of these
organizations.  He is a former CPA and has owned several companies.  Mr. Chipman
has a BS in Business Administration from Merrimack College, N. Andover, MA.

John C. Graham - Member, Knowledge Transfer Systems Board of Directors

Mr. Graham founded International  Catastrophe Insurance Managers,  LLC, ("ICAT")
in July 1998. ICAT  specializes in providing  commercial  catastrophe  insurance
coverages  to small  businesses  located in  catastrophe-exposed  regions of the
United  States.   ICAT's  business  is  produced  exclusively  through  licensed
insurance  agents and brokers who communicate  electronically  with ICAT via its
website (www.icatmanagers.com).

Prior to founding  ICAT,  Mr.  Graham  spent 21 years with E. W. Blanch Co. (now
Benfield Blanch) as a reinsurance  intermediary.  At Blanch, he was an Executive
Vice President,  responsible for the Western Region of the USA. Additionally, he
served as a member of the Board of  Directors of E. W. Blanch  Company,  Paragon
Reinsurance Risk Management  Services,  Inc., and Blanch Capital Risk Solutions,
Inc.  He joined EWB in 1977.  Under his  leadership,  Blanch  became the largest
treaty  reinsurance  intermediary  on the West  Coast,  placing  in excess of $1
billion of reinsurance premium into the marketplace.

Mr.  Graham was E. W.  Blanch  Co.'s  project  leader for the  placement  of the
California Earthquake  Authority's $3.5 billion reinsurance program, the largest
reinsurance  placement in the history of the market.  He  currently  consults to
Blanch as the ongoing project leader for the CEA's reinsurance placement.

Mr. Graham also helped to found the Hawaii Hurricane Relief Fund. Throughout his
career,  he has worked with  insurance  companies  to provide  them with counsel
regarding  their  catastrophe   exposures  and  to  assist  them  in  purchasing
reinsurance coverages. Mr. Graham is currently a member of the Advisory Board to
the National Center for Atmospheric Research.



                                       12
<PAGE>

Mr.  Graham is a graduate  of the  University  of  California-Santa  Barbara and
Colorado State University,  with a Bachelor of Arts degree in US History. He was
drafted by the Miami  Dolphins as a  quarterback  in 1978. He is married and has
three children.

David Manovich - Member, Knowledge Transfer Systems Board of Directors

Mr. Manovich has held several senior management positions in the high technology
industry  during his career.  Most recently as Senior Vice  President and COO of
@Road.   Prior  to  joining  @Road,   Mr.   Manovich  was  with  the  Investment
Banking/Consulting  firm of  Union  Atlantic  where he  assisted  a  variety  of
hardware/software  and internet  related  companies with their  development  and
growth.

Mr.  Manovich spent over 11 years with Apple  Computer,  where he held executive
positions in the USA and Europe.  His most resent  position was  Executive  Vice
President  Worldwide Sales and Service.  During his tenure at Apple, the company
grew from  $1.8B in annual  revenue  to over $11B.  Mr.  Manovich  was also Vice
President of Sales for Fujitsu PC  Corporation  during their  initial entry into
the US marketplace. Fujitsu PC grew from zero to over $150M in its first year of
operation.
During his  career,  Mr.  Manovich  was also a CPA with the  accounting  firm of
Deloitte,  Haskins  and Sells and holds an MBA in Finance  and a BS in  Business
Administration from the University of Montana.

Mark Coulter - Member, Knowledge Transfer Systems Board of Directors

Mark Coulter has over 25 years of experience in the direct mail/direct marketing
Industry,  with  specific  strengths  in the  training,  development  and career
enhancement  market  segments.  Mr.  Coulter  established  himself  as a  direct
marketing and mail specialist while with Kansas City based,  Fred Pryor Seminars
from 1980 to 1988.  Mr. Coulter  successfully  directed the growth of the direct
marketing  division  to  a  national  level.  He  created  and  implemented  the
industry's  first and largest  database  marketing  prospect  list  system.  Mr.
Coulter was integral in the  company's  growth from $2M to $20M in Annual sales.
He was  also  directly  involved  in  overseeing  Fred  Pryor  Seminar's  target
marketing, program development and new product development divisions.

In 1988,  Mr. Coulter  founded List Emporium,  Inc., a direct mail database list
management  and brokerage  firm.  Mr. Coulter grew the List Emporium into one of
the nation's largest firms, specializing in training and development direct mail
marketing.

As  President  of The List  Emporium,  Mr.  Coulter has  established  offices in
Annapolis,  MD, Boulder,  CO,  Asheville,  NC and the  Netherlands.  He has also
assisted  clients in  developing  marketing  programs  in the Pacific  Rim.  Mr.
Coulter still maintains his specialty is "providing  opportunities  for smaller,
upstart  companies  to  grow  quickly,   efficiently  and  effectively."   Other
successful entities Mr. Coulter has created include;

ListMart - a rapidly growing consumer list brokerage firm.

Danielle, McKenzie and Alexander - A consulting firm specializing in direct mail
marketing programs.

E-Mail  Trends - an entity  that is  addressing  the  future  of the  successful
creation of internet direct mail marketing.

Mr. Coulter is active in a variety of charitable organizations.  Most notably as
a founding  member of Social  Venture  Partners,  an  organization  dedicated to
raising venture capital for charitable  fundraising causes. He is also an active
supporter  of  "Challenge   Aspen",  an  organization   dedicated  to  providing
challenging, yet stimulating outdoor activities for the physically disabled. Mr.
Coulter  received a business  degree  from the  University  of Missouri - Kansas
City, in 1980. He is married and has one daughter.


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<PAGE>


ITEM 10.  EXECUTIVE COMPENSATION

Steve K. Burke served as CEO of Knowledge Transfer Systems, Inc. during 2001 and
was compensated $42,000 during that time period. No other officer of the company
was compensated in excess of $100,000 during 2001.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT


                  Name and Address              Amount and Nature      Percent
Title of Class    of Beneficial Owner           of Beneficial Owner    of Class
--------------    ---------------------------   -------------------    --------

Common stock      Steven K. Burke               12,000,000 shares       29.7%
                  62 Crestmont Drive            President, CEO
                  Parkville, MO 64152           and Director

Common stock      Gail Burke                    50,000 shares            0.1%
                  62 Crestmont Drive            Secretary
                  Parkville, MO 64152

Common stock      William E. Chipman Sr.        403,063 shares           1.0%
                  7605 N. Crest Road            Chief Financial Officer
                  Eagle Mtn., Utah 84043

Common stock      Chris Ryan                    500,000 shares           1.2%
                  7605 N. Crest Road            VP Sales and Marketing
                  Eagle Mtn., Utah 84043

Common stock      enSurge, Inc.                 5,700,000 shares        14.1%
                  435 West Universal Circle     Investor
                  Sandy, UT 84043

Common stock      JCL Holding, Inc.             3,700,000 shares         9.2%
                  6500 N.W. Turnberry Ct        Investor
                  Parkville, MO 64152

Common stock      Blue Ridge Financial          3,296,300 shares         8.2%
                  3235 Winding Pine Trial       Investor
                  Longwood, FL 32779

Common stock      John S. Schoene               2,050,180 shares         5.1%
                  5272 Garlander Tr             Investor
                  Oviedo, FL 32765

Common stock      David Manovich                250,000 shares           0.6%
                  1616 Chapin Avenue            Outside Director
                  Burlingame, CA 94010


ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

As of December 31, 2001 and 2000,  notes payable to related parties  amounted to
$388,150 and $141,025, respectively.

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<PAGE>

ITEM 13.  EXHIBITS AND REPORTS ON 8-K

(a) Exhibits.

None.

(b).     Reports on Form 8-K:
         --------------------

None


                                   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.


                                          Knowledge Transfer Systems, Inc.

Date:        March 28, 2002               /s/ Steve K. Burke
                                          --------------------------
                                          Steve K. Burke
                                          President and Chief Executive Officer







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