UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549




FORM
10-K




(Mark
One)




x
            ANNUAL
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934




FOR
THE YEAR ENDED DECEMBER 31, 2008




 ̈
            TRANSITION
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE
      ACT




COMMISSION
FILE NUMBER: 333-132028









ENSURAPET,
INC.


(Small
Business Issuer in its Charter)









NEVADA
            
            13-4303483(State
      or other jurisdiction of
              incorporation
      or organization)
            
            (I.R.S.
      Employer
              Identification
      No.)721
      24TH
      STRET NE
              CANTON,
      OHIO
            
            44714(Address
      of principal executive offices)
            
            (Zip
      Code)




Issuer’s
Telephone Number: (949) 554-7313







Securities
registered pursuant to Section 12(b) of the Act: None


Securities
registered pursuant to Section 12(g) of the Act: None




COMMON
STOCK, PAR VALUE $.001


(Title
of each class)









Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act. o Yes x No




Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act. o Yes   
x No




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




Check if
disclosure of delinquent filers in response to Item 405 of Regulation S-B
is not contained herein, and will not be contained, to the best of issuer’s
knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  x





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




Large
      accelerated filer     ̈
            Accelerated
      filer     ̈Non-accelerated
      filer     ̈
            Smaller
      reporting company    x(Do
      not check if a smaller reporting company)




Indicate
by check mark whether the registrant is a shell company (as defined in rule
12b-2 of the Exchange Act). Yes  ̈    No  x




Number of
shares of the issuer’s common stock, par value $.001, outstanding as of
December 31, 2008, reflecting all post material events through the date of
this filing: 100,000,000 shares of common stock and 3,100,000 preferred
stock.




State the
issuer’s revenues for its most recent fiscal year: Loss of
$(572,756)




The
aggregate market value of the common equity held by non-affiliates of the
Registrant on April 15, 2009 was $54,000 based on a closing price of $0.0006 as
reported on the Over the Counter Bulletin board as of the date herein. Solely
for purposes of the foregoing calculation, all of the registrant’s directors and
officers as of December 31, 2008, are deemed to be affiliates. This
determination of affiliate status for this purpose does not reflect a
determination that any persons are affiliates for any other
purposes.




Documents
incorporated by reference: none




Transitional
Small Business Disclosure Format    YES   ̈    NO  x














ENSURAPET, INC. AND SUBSIDIARIES


FORM
10-K ANNUAL REPORT


FOR
THE FISCAL YEAR ENDED DECEMBER 31, 2008


TABLE
OF CONTENTS


Page
              NumbersForward-Looking
      Statements
            
            
            1Definitions
      of Certain Measures of Usage of the Ensurapet Beneficial Resource
      Centers
            
            
            1




ITEM 1.
            BUSINESS
            
            
            2ITEM 1A.
            RISK
      FACTORS
            
            
            5ITEM 1B.
            UNRESOLVED
      STAFF COMMENTS
            
            
            9ITEM 2.
            PROPERTIES
            
            
            9ITEM 3.
            LEGAL
      PROCEEDINGS
            
            
            9ITEM 4.
            SUBMISSION
      OF MATTERS TO A VOTE OF SECURITY HOLDERS
            
            
            9PART IIITEM 5.
            MARKET
      FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
      PURCHASES OF EQUITY SECURITIES
            
            
            9ITEM 6.
            SELECTED
      FINANCIAL DATA
            
            
            9ITEM 7.
            MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS
            
            
            10ITEM 7A.
            QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
            
            
            14ITEM 8.
            CONSOLIDATED
      FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
            
            
            14ITEM 9.
            CHANGES
      IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE
            
            
            24ITEM 9A.
            CONTROLS
      AND PROCEDURES
            
            
            24ITEM 9B.
            OTHER
      INFORMATION
            
            
            25PART IIIITEM 10.
            DIRECTORS,
      EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE GOVERNANCE
      COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.
            
            
            25ITEM 11.
            EXECUTIVE
      COMPENSATION
            
            
            26ITEM 12.
            SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
      STOCKHOLDER MATTERS
            
            
            28ITEM 13.
            CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
      INDEPENDENCE
            
            
            28ITEM 14.
            PRINCIPAL
      ACCOUNTANT FEES AND SERVICES
            
            
            29PART IVITEM 15.
            EXHIBITS
      AND FINANCIAL STATEMENT SCHEDULES
            
            
            30SIGNATURES
            
            
            31CERTIFICATIONSExhibit
      31 – Management certificationExhibit
      32 – Sarbanes-Oxley Act







FORWARD-LOOKING STATEMENTS




Forward
Looking Statements — Cautionary Language




Certain
statements made in these documents and in other written or oral statements made
by Ensurapet, Inc. or on Ensurapet, Inc’s behalf are "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995 ("PSLRA"). A forward-looking statement is a statement that is not a
historical fact and, without limitation, includes any statement that may
predict, forecast, indicate or imply future results, performance or
achievements, and may contain words like: "believe", "anticipate", "expect",
"estimate", "project", "will", "shall" and other words or phrases with similar
meaning in connection with a discussion of future operating or financial
performance. In particular, these include statements relating to future actions,
trends in our businesses, prospective products, future performance or financial
results. Ensurapet, Inc. claims the protection afforded by the safe harbor for
forward-looking statements provided by the PSLRA.  Forward-looking
statements involve risks and uncertainties that may cause actual results to
differ materially from the results contained in the forward-looking statements.
Risks and uncertainties that may cause actual results to vary materially, some
of which are described in this filing.  The risks included herein are
not exhaustive.




The
following important risks and uncertainties could affect our future results,
causing those results to differ materially from those expressed in our
forward-looking statements:




·
            
            the
      failure to achieve sufficient levels of usage of our public
      portals;




·
            
            the
      inability to successfully deploy new or updated applications or
      services;




·
            
            the
      inability to successfully sell our pet health insurance
      products;




·
            
            the
      anticipated benefits from acquisitions not being fully realized or not
      being realized within the expected time
frames;




·
            
            the
      inability to attract and retain qualified
  personnel;




·
            
            general
      economic, business or regulatory conditions affecting the pet healthcare,
      information technology and Internet industries being less favorable than
      expected; and




·
            
            the
      Risk Factors described in Item 1A of this Annual
    Report.




This
annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on
Form 8-K and other documents filed with the SEC include additional factors which
could impact Ensurapet, Inc.'s business and financial performance. Moreover,
Ensurapet, Inc. operates in a rapidly changing and competitive environment. New
risk factors emerge from time to time and it is not possible for management to
predict all such risk factors. Further, it is not possible to assess the impact
of all risk factors on Ensurapet, Inc's business or the extent to which any
factor, or combination of factors, may cause actual results to differ materially
from those contained in any forward-looking statements. Given these risks and
uncertainties, investors should not place undue reliance on forward-looking
statements as a prediction of actual results. In addition, Ensurapet, Inc.
disclaims any obligation to update any forward-looking statements to reflect
events or circumstances that occur after the date of the report..




DEFINITIONS OF CERTAIN MEASURES




In this
Annual Report, we provide information regarding usage of the Vsurance Beneficial
Resource Centers that we have determined using internal technology that
identifies and monitors usage by individual computers. As used in this Annual
Report:




·
            
            A
      “unique user” or “unique visitor” during any calendar month is an
      individual computer that accesses a Vsurance Beneficial Resource Center
      website during the course of such calendar month, as determined by our
      tracking technology.




·
            
            A
      “page view” is a web page that is sent to the browser of a computer upon a
      request made by such computer and received by a server in Vsurance
      Resource Network. The number of “page views” is not limited by its number
      of unique users or visitors. Accordingly, each unique user or visitor may
      generate multiple page views.




·
            
            With
      respect to any given time period, “aggregate page views” are the total
      number of “page views” during such time period on all of the web sites in
      the network of Beneficial Resource
Centers.




·
            
            Third
      party services that measure usage of Internet sites may provide different
      usage statistics than those reported by our internal tracking technology.
      These discrepancies may occur as a result of differences in methodologies
      applied and differences in measurement periods. For example, third party
      services typically apply their own proprietary methods of calculating
      usage, which may include surveying users and estimating site usage based
      on surveys, rather than based upon our tracking
  technology.




1




PART
I




Item 1.
            Business




Except
for historical information contained herein, the following discussion contains
forward-looking statements that involve risks and uncertainties.  Such
forward-looking statements include, but are not limited to, statements regarding
future events and the Company’s plans and expectations.  Actual
results could differ materially from those discussed herein.  Factors
that could cause or contribute to such differences include, but are not limited
to, those discussed elsewhere in this Form 10-K or incorporated herein by
reference, including those set forth in Management’s Discussion and Analysis
or Plan of Operation.




As used
in this annual report, “we”, “us”, “our”, “Ensurapet,  “Company” or
“our company” refers to Ensurapet and its subsidiaries.





General
Information




Ensurapet,
Inc. is a Nevada corporation that was incorporated on July 26, 2005. We are
a development stage company. We were created to provide beneficial pet and horse
resource centers—VetpetMD,
Spot the Pet, and Purrfect Pet Club—via the worldwide web in order to
sell pet merchandise as an online affiliate of a leading pet retailer, lost and
found registration services (Pet ID tags), global positioning system
technologies to locate lost pets and horses, and lastly liability, life, and
health insurance policies to cover property damage and veterinary expenses from
and on pets and horses in the United States, United Kingdom and in other pet and
horse concentrated countries.




Our
classes of stock include both preferred and common. We are presently authorized
to issue 500,000,000 shares of $.001 par value common stock and 100,000
preferred stock class “D” and 3,000,000 preferred class “G” par value $.001. Our
common stock under the symbol “EPTI” is listed, traded and quoted on the NASDAQ
Over-the-Counter Bulletin Board (OTCBB: symbol EPTI) . All common stock shares
are equal to each other with respect to liquidation and dividend rights. Holders
of voting shares are entitled to one vote for each share they own at any
shareholders’ meeting. Holders of shares of common stock are entitled to receive
such dividends as may be declared by the Board of Directors out of funds legally
available therefore, and upon liquidation are entitled to participate pro-rata
in a distribution of assets available for such a distribution to shareholders.
There are no conversion rights, pre-emptive or other subscription rights or
privileges with respect to common shares.




Our
executive offices which we operate from are located at 177 Riverside Ave, Ste.
F., #1152, Newport Beach, California 92663 and our telephone number is
877-440-7387. Our computer technology division is based in Canton,
Ohio.




We make
available free of charge at www.ensurapet.com (in the “Investor Relations”
section) links to materials we file with, or furnish to, the U.S. Securities and
Exchange Commission, or SEC, including our Annual Reports on Form 10-KSB, Form
10-K, Quarterly Reports on Form 10-QSB, Current Reports on Form 8-K, and
amendments to those reports, as soon as reasonably practicable after we
electronically file such materials with, or furnish them to, the
SEC.




Overview
of Our Businesses




We are a
provider of pet health information services to pet owners, veterinarians, animal
healthcare professionals, and pet service providers, which includes life and
health insurance for pets, horses, and other companion animals through our
public online portals. The online animal healthcare information,
decision-support applications, communications services, and insurance
applications that we provide:




·
            
            enable
      pet owners to obtain detailed information on a particular disease or
      condition, analyze symptoms, locate veterinarians, store their pet’s
      healthcare information, receive periodic e-newsletter featuring
      Dr. Carol, and participate in online communities with pet owners and
      veterinarians;




·
            
            make
      it easier for veterinarians, technicians, and pet service professionals to
      access clinical reference sources, stay abreast of the latest news, learn
      about treatment options, and communicate with peers;
  and




·
            
            enable
      pet owners, veterinarians, insurance agents, employer and employer/group
      organizations to provide their employees and members with access to our
      pet life and health insurance plans for companion animals which provide
      them with benefits so they can make better treatment
    choices.




The
Ensurapet Beneficial Resource Centers consist of the public portals that we own,
such as www.VetpetMD.com. These along with our other pet owner portals help
owners take an active role in managing their pet’s health by providing objective
healthcare and lifestyle information.




Ensurapet
through its companion pet and horse-owner beneficial resource centers provides
services and sells tangible products to build a company owned database of
emails. From this database we shall educate, inform which will lead to the
online sale of pet insurance products (life, liability and health). The
objective is to reduce the cost of acquiring a policyholder. We sell products,
services and/or provide online services to pet owners, to establish an online
relationship with pet owners.




Our
Online Services




Overview




Our
content and services are making our public portals among the leading online
companion animal health destinations for pet owners, veterinarians, technicians,
and other animal service providers. These websites are 100% owned by
Ensurapet.




2




Portal
      Site
            
            Descriptionwww.ensurapet.com
            
            Our
      main directional landing pagewww.vetpetmd.com
            
            Our
      flagship pet owner portal features Dr. Carol and the pet clinic where more
      than 1,000 illnesses are cataloged as a reference source. This site offers
      daily news articles that are written by animal/veterinary journalists and
      reviewed by our professional staff/partners. We look to expand this
      website in 2007 and incorporate an online pet pharmacy.www.purrfectpetclub.com
            
            Our
      living with pets portal provides humorous and fun content including online
      shopping to more than 10,000 products.www.spotthepet.com
            
            Our
      pet locater portal provides ID tag registration for our pet with 24 hour 7
      days a week monitoring.www.purrfectpetinsurance.com
            
            Is
      a life and health insurance site for owners of dogs and cats who want to
      insure against loss and veterinary expenses. Our pet insurance policies
      are the first plan to provide the coverage for life guarantee. Liability
      coverage should be available summer 2008 and form part of our plan
      coverage. By adding liability to every plan will make our policies the
      first and only pet coverage to do so in the United
  States.www.purrfecthorseinsurance.com
            
            A
      health insurance site for owners of non-racing horses, i.e. the family
      horse. This coverage should be available either late
  2009.




Technology
Infrastructure




Our
Internet based services are delivered through websites designed to address the
life and health issues of companion animals for their owners, veterinarians,
technicians, and other animal service providers with easy to use interfaces,
search functions, and navigation capabilities. We use customized content
management and publishing technology to develop, edit, publish, manage,
organize, and optimize the content for our websites. The insurance product
specific site deploys dot-net technology that provides policyholders with
complete access and account management capabilities, such as, coverage changes
or deletions, policy cancellations, and claims processing. Our development and
engineering costs totaled $0 in 2008, $24,225 in 2007, $565,434 in 2006 and $0
in 2005.




Continued
development of our technology infrastructure is critical to our success. Our
development team works closely with marketing and administration to create not
only valuable content but interactive tools, and other applications for use
across all of our portals that improve our content management
capabilities.




Competition




The
Internet portal markets which we participate in are intensely competitive,
continually evolving and in some cases subject to rapid change. Some of our
competitors have greater financial, technical, marketing and other resources
than we do and some are better known than we are. We cannot provide assurance
that we will be able to compete successfully against these organizations. Since
there are no substantial barriers to entry into the markets in which we
participate, we expect that additional competitors will continue to enter these
markets. With that said, the pet insurance market remains minimally competitive
with an estimated 9 insurance providers. The barriers to entry in providing this
product from licensing to capital/surplus should slow entry of competitors.
Further, since we provide both the Internet portal markets and the insurance
product we are uniquely position in the marketplace unlike any of our
competitors.




3




Other
Information




Intellectual
Property




We rely
upon a combination of trade secret, copyright and trademark laws, license
agreements, confidentiality procedures, employee and client nondisclosure
agreements and technical measures to protect the intellectual property used in
our business.




We use
trademarks, trade names and service marks for pet healthcare information
services and technology solutions, including Ensurapet, VetpetMD TM, Spot the Pet
TM , Purrfect Pet Insurance TM , Purrfect Horse Insurance TM , and Purrfect Pet
Club TM . We also use other registered and unregistered trademarks and service
marks for our various products and services. In addition to our trademark
registrations and applications, we have registered the domain names that either
are or may be relevant to conducting our business names, including
“vetpetmd.com,” “ensurapet.com,” and “spotthepet.com,.”




Government
Regulation




Introduction




This
section of the Annual Report contains a description of laws and regulations
applicable to us, either directly or through their effect on our veterinary and
insurance industry customers. Both existing and future laws and regulations
affecting the veterinary care, information technology, insurance, and Internet
industries could create unexpected liabilities for us, cause us to incur
additional costs and restrict our operations. Many of the laws that affect, us
and particularly those applying to insurance and veterinary care, are very
complex and may be subject to varying interpretations by courts and other
governmental authorities. We cannot provide assurance that we will be able to
accurately anticipate the application of these laws and regulations to our
operations.




Insurance
Regulation




The sale
and solicitation of pet health insurance is highly regulated by the individual
State Insurance Departments. Coverage is written on a property casualty insurer
since pets are viewed as property even thought it is a health and replacement
(life) insurance plan. We presently issue policies on a Surplus Lines Insurance
Company authorized in the State of Michigan. The Insurance Agency has two
licensed agents two of these agents are licensed in all states. Policies are
issued through a group/association—The Purrfect Pet Club—with certificates of
coverage issued to pet owners. The advantage is the regulatory unitary treatment
state regulators usually afford these programs which allow members throughout
the United States to insure their pet.




Consumer
Protection Regulation




General. Advertising
and promotional activities presented to visitors on our websites are subject to
federal and state consumer protection laws that regulate unfair and deceptive
practices. We are also subject to various other federal and state consumer
protection laws, including the ones described below. Further, we are subject to
insurance marketing laws by the Department of Insurance within each
state.




CAN-SPAM
Act. On January 1, 2004, the Controlling the Assault of
Non-Solicited Pornography and Marketing Act of 2003, or the CAN-SPAM Act, became
effective. The CAN-SPAM Act regulates commercial emails, provides a right on the
part of the recipient to request the sender to stop sending messages, and
establishes penalties for the sending of email messages that are intended to
deceive the recipient as to source or content. Under the CAN-SPAM Act, senders
of commercial emails (and other persons who initiate those emails) are required
to make sure that those emails do not contain false or misleading transmission
information. Commercial emails are required to include a valid return email
address and other subject heading information so that the sender and the
Internet location from which the message has been sent are accurately
identified. Recipients must be furnished with an electronic method of informing
the sender of the recipient’s decision to not receive further commercial emails.
In addition, the email must include a postal address of the sender and notice
that the email is an advertisement. The CAN-SPAM Act may apply to the
e-newsletters that our public portals distribute to members and to some of our
other commercial email communications. However, there may be additional FTC
regulations indicating that our e-newsletters are outside the scope of the
CAN-SPAM Act. At this time, we are applying the CAN-SPAM requirements to these
email communications, and believe that our email practices comply with the
requirements of the CAN-SPAM Act. Many states have also enacted anti-spam laws.
The CAN-SPAM Act preempts many of these statutes. To the extent that these laws
are not preempted, we believe that our email practices comply with these
laws.




Regulation of
Advertisements Sent by Fax. Section 227 of the Communications
Act, which codifies the provisions of the Telephone Consumer Protection Act of
1991 (or TCPA), prohibits the transmission of an “unsolicited advertisement” via
facsimile to a third party without the consent of that third party. An
“unsolicited advertisement” is defined broadly to include any material
advertising the commercial availability or quality of any property, goods or
services. In 2005, the Junk Fax Prevention Act (or JFPA) was signed into law,
which codified a previous interpretation of the TCPA by the Federal
Communications Commission (or FCC) that a commercial fax is not “unsolicited” if
the transmitting entity has an “established business relationship,” as defined
by the JFPA and applicable FCC regulations, with the recipient.




On
April 5, 2006, the FCC issued its final rules under the JFPA. The rules
became effective on August 1, 2006. In the rules, the FCC confirmed that
transactional faxes are permitted. It defined a transactional fax as one that
facilitates, completes or confirms the commercial transaction that the recipient
has previously agreed to enter into with the sender. The FCC stated that these
faxes are not advertisements that are prohibited by the TCPA. The FCC recognized
that, if a transactional fax has a de minimis amount of advertising information
on it, that alone does not convert a transactional fax into an unsolicited
advertisement.




In
addressing the so-called “EBR exemption” to the TCPA’s prohibition on
unsolicited facsimile advertisements, the FCC adopted the JFPA’s definition of
an “established business relationship” or “EBR,” which includes a voluntary
two-way communication between a person and a business. The FCC rules make clear
that, if the person made an inquiry or application to a sender, it must be about
a product or service offered by the entity for it to qualify as an EBR. The FCC
rules also do not prohibit faxed communications that contain only information,
such as news articles, updates or other similar general
information.




4




States
from time to time have enacted, or have attempted to enact, their own
requirements pertaining to the transmission of commercial faxes. These state
requirements often, but not always, track the terms of the TCPA, the JFPA, and
the FCC’s regulations. To the extent state commercial fax requirements have
conflicted with federal requirements, they have to date been successfully
challenged. We cannot predict the outcome of the FCC’s future rulemaking
proceedings, the extent to which states may successfully enact more restrictive
commercial fax laws in the future, or the outcomes of any judicial challenges to
those laws.




COPPA. The
Children’s Online Privacy Protection Act, or COPPA, applies to operators of
commercial websites and online services directed to U.S. children under the
age of 13 that collect personal information from children, and to operators of
general audience sites with actual knowledge that they are collecting
information from U.S. children under the age of 13. Our sites are not
directed at children and our general audience site,vsurance/vetpetMD, states
that no one under the applicable age is entitled to use the site. In addition,
we employ a kick-out procedure whereby users identifying themselves as being
under the age of 13 during the registration process are not allowed to register
for the site’s member only services, such as message boards and live chat
events. COPPA, however, can be applied broadly and is subject to interpretation
by courts and other governmental authorities. The failure to accurately
anticipate the application or interpretation of this law could create liability
for us, result in adverse publicity and negatively affect our
business.




Regulation of
Contests and Sweepstakes. We may conduct contests and sweepstakes in
some of our marketing channels. The federal Deceptive Mail Prevention and
Enforcement Act and some state prize, gift or sweepstakes statutes may apply to
these promotions. We believe that we will be in compliance with any applicable
law or regulation when and if we run these promotions.




FACTA. In
an effort to reduce the risk of identity theft from the improper disposal of
consumer information, Congress recently passed the Fair and Accurate Credit
Transactions Act (or FACTA) which requires businesses to take reasonable
measures to prevent unauthorized access to such information. FACTA’s disposal
standards are flexible and allow businesses discretion in determining what
measures are reasonable based upon the sensitivity of the information, the costs
and benefits of different disposal methods and relevant changes in technology.
We believe that we are in compliance with FACTA.




Data Protection
Regulation. With the recent increase in publicity regarding data
breaches resulting in improper dissemination of consumer information, many
states have passed laws regulating the actions that a business must take if it
experiences a data breach, such as prompt disclosure to affected customers.
Generally, these laws are limited to electronic data and make some exemptions
for smaller breaches. Congress has also been considering similar federal
legislation relating to data breaches. The FTC has also prosecuted some data
breach cases as unfair and/or deceptive acts or practices under the Federal
Trade Commission Act. We intend to continue to comprehensively protect all
consumer data and to comply with all applicable laws regarding the protection of
this data.




Other Consumer
Protection Regulation. The FTC and many state attorneys general are
applying federal and state consumer protection laws to require that the online
collection, use and dissemination of data, and the presentation of Web site
content, comply with certain standards for notice, choice, security and access.
Courts may also adopt these developing standards. In many cases, the specific
limitations imposed by these standards are subject to interpretation by courts
and other governmental authorities. We believe that we are in compliance with
these consumer protection standards, but a determination by a state or federal
agency or court that any of our practices do not meet these standards could
result in liability and adversely affect our business. New interpretations of
these standards could also require us to incur additional costs and restrict our
business operations.





Employees




As of
December 31, 2008, we had approximately 4 independent
contractors/consultants.





WHERE YOU CAN FIND MORE
INFORMATION





You are
advised to read this Form 10-K in conjunction with other reports and documents
that we file from time to time with the SEC. In particular, please read our
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K that we file from
time to time. You may obtain copies of these reports directly from us or from
the SEC at the SEC’s Public Reference Room at 100 F. Street, N.E. Washington,
D.C. 20549, and you may obtain information about obtaining access to the
Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC
maintains information for electronic filers at its website
http://www.sec.gov.




Item 1A.
            Risk
      Factors




This
section describes circumstances or events that could have a negative effect on
our financial results or operations or that could change, for the worse,
existing trends in some or all of our businesses. The occurrence of one or more
of the circumstances or events described below could have a material adverse
effect on our financial condition, results of operations and cash flows or on
the trading prices of the Common Stock that we have issued or securities we may
issue in the future. We have also included a detailed discussion of risks and
uncertainties arising from governmental regulation of our businesses, one of the
most significant risks we face, in the section “Business — Governmental
Regulation” above. The risks and uncertainties described in this Annual Report
are not the only ones facing us. Additional risks and uncertainties that are not
currently known to us or that we currently believe are immaterial may also
adversely affect our business and operations.




We
have incurred and may continue to incur losses




Our
operating results have been impacted significantly due to the loan with Samir
Financial and may continue to do so in the future as the need for capital
continues. Our net loss for 2008 totaled $(572,756). Many companies with
business plans based on providing pet health insurance have failed to be
profitable and some have ceased operations. Even if demand for users exists, we
cannot assure you that our business will be profitable.




In
addition and while a veterinary health care expenses exceed $18 billion yearly
as reported by the American Veterinary Medical Association (AVMA) with 2% of the
135 million dog and cat owners insuring their pets as reported by the
American Animal Hospital Association (AAHA), our online businesses, specifically
VetpetMD and Purrfect Pet Club have a limited operating history and participate
in a new market even though its management collectively has over 30 years
experience in the pet insurance industry.




5




We
have a significant financial indebtedness




On
December 15, 2005, we executed a Loan and Security Agreement with Samir
Financial, LLC (the “Lender”) for $4,000,000. This loan was due in full at the
end of twelve months (December 14, 2006). We were unable to pay off this loan at
that time. Samir Financial has agreed to extend the loan until June 15,
2007 in exchange for a $500,000 extension fee. At December 31, 2006, we had
not paid the extension fee. A portion of the fee was paid – $200,000 – in
January 2007; however, a balance of $300,000 remains outstanding. The loan
payoff at June 15, 2007, will be $5,000,000. Security for this loan is all
company assets and a controlling stock position if the loan were to be in
default.




On
April 9, 2008, the lender entered into an agreement with the Company and
forgave $4,000,000 in exchange for 3,000,000 restricted common shares. Further,
the Company was to repay then lender $1,000,000 on or before July 9, 2008
and the remaining balance of $1,000,000 would remain on the books as a liability
for a period of 14 months paid as follows: the first payment was due and payable
on July 1, 2009; the second payment was due and payable on October 1,
2009; with subsequent payments due and payable. The lender agreed not to charge
the company any interest (non-interest bearing loan). The Company was to make
quarterly payments to the lender of $250,000 on the dates shown above. The three
million restricted shares of the company’s common stock was issued subject to
SEC Rule 144 restrictions as well as an executed 12 month lock up agreement. As
of this filing the Company failed to make any payments as agreed and is in
default.





If
we are unable to provide content and services that attract and retain users to
The Beneficial Resource Center Network on a consistent basis, our advertising
and sponsorship revenue could be reduce, but more importantly, the database of
pet owners who would be potential policyholders could be greatly
reduced




Users
ofThe Beneficial Resource
Center Network have numerous other online and offline sources of pet
healthcare information services. Our ability to compete for user traffic on our
public portals depends upon our ability to make available a variety of pet
health and veterinary content, decision-support applications and other services
that meet the needs of a variety of types users, including pet owners,
veterinarians, technicians, and other pet service professionals, with a variety
of reasons for seeking information. Our ability to do so depends, in turn,
on:




·
            
            our
      ability to hire and retain qualified authors, journalists and independent
      writers;




·
            
            our
      ability to license quality content from third
      parties; and




·
            
            our
      ability to monitor and respond to increases and decreases in user interest
      in specific topics.




We cannot
assure you that we will be able to continue to develop or acquire needed
content, applications and tools at a reasonable cost. In addition, since
consumer users of our public portals may be attracted toThe Beneficial Resource Center
Network as a result of a specific condition or for a specific purpose, it
is difficult for us to predict the rate at which they will return to the public
portals. Because we generate revenue by, among other things other than through
the sale of pet insurance plans, selling sponsorships of specific pages,
sections or events onVetpetMD, a decline in user traffic levels or a reduction in the number
of pages viewed by users could cause our revenue to decrease and could have a
material adverse effect on our results of operations.




Risks
Related to Use of the Internet and to Our Technological
Infrastructure




Our
Internet-based services are dependent on the development and maintenance of the
Internet infrastructure




Our
ability to deliver our Internet-based services is dependent on the development
and maintenance of the infrastructure of the Internet by third parties. This
includes maintenance of a reliable network backbone with the necessary speed,
data capacity and security, as well as timely development of complementary
products such as high-speed modems, for providing reliable Internet access and
services. The Internet has experienced, and is likely to continue to experience,
significant growth in the number of users and the amount of traffic. If the
Internet continues to experience increased usage, the Internet infrastructure
may be unable to support the demands placed on it. In addition, the reliability
and performance of the Internet may be harmed by increased usage or by
denial-of-service attacks.




The
Internet has experienced a variety of outages and other delays as a result of
damages to portions of its infrastructure, and it could face outages and delays
in the future. These outages and delays could reduce the level of Internet usage
as well as the availability of the Internet to us for delivery of our
Internet-based services. In addition, customers who utilize our Web-based
services depend on Internet service providers, online service providers and
other Web site operators for access to our Web sites. All of these providers
have experienced significant outages in the past and could experience outages,
delays and other difficulties in the future due to system failures unrelated to
our systems. Any significant interruptions in our services or increases in
response time could result in a loss of potential or existing users of and
advertisers and sponsors on our Web sites and, if sustained or repeated, could
reduce the attractiveness of our services.




We
rely on bandwidth providers, data center providers, other third parties and our
own systems for key aspects of the process of providing products and services to
our users, and any failure or interruption in the services provided by these
third parties or our own systems could harm our business




Our
online services are designed to operate 24 hours a day, seven days a week,
without interruption. However, we have experienced and expect that we will in
the future experience interruptions and delays in services and availability from
time to time. We rely on internal systems as well as third-party vendors,
including data center providers and bandwidth providers, to provide our online
services. We do not maintain redundant systems or facilities for some of these
services. In the event of a catastrophic event with respect to one or more of
these systems or facilities, we may experience an extended period of system
unavailability, which could negatively impact our relationship with users. To
operate without interruption, both we and our service providers must guard
against:




·
            
            damage
      from fire, power loss and other natural
  disasters;




·
            
            communications
      failures;




·
            
            software
      and hardware errors, failures and
crashes;




·
            
            security
      breaches, computer viruses and similar disruptive
      problems; and




6




·
            
            other
      potential interruptions.




Any
disruption in the network access or co-location services provided by these
third-party providers or any failure of or by these third-party providers or our
own systems to handle current or higher volume of use could significantly harm
our business. We exercise little control over these third-party vendors, which
increases our vulnerability to problems with services they provide.




Any
errors, failures, interruptions or delays experienced in connection with these
third-party technologies and information services or our own systems could
negatively impact our relationships with users and adversely affect our brand
and our business and could expose us to liabilities to third parties. Although
we maintain insurance for our business, the coverage under our policies may not
be adequate to compensate us for all losses that may occur. In addition, we
cannot provide assurance that we will continue to be able to obtain adequate
insurance coverage at an acceptable cost.




Implementation
of additions to or changes in hardware and software platforms used to deliver
our online services may result in performance problems and may not provide the
additional functionality that was expected




From time
to time, we implement additions to or changes in the hardware and software
platforms we use for providing our online services. During and after the
implementation of additions or changes, a platform may not perform as expected,
which could result in interruptions in operations, an increase in response time
or an inability to track performance metrics. In addition, in connection with
integrating acquired businesses, we may move their operations to our hardware
and software platforms or make other changes, any of which could result in
interruptions in those operations. Any significant interruption in our ability
to operate any of our online services could have an adverse effect on our
relationships with users and clients and, as a result, on our financial results.
We rely on a combination of purchasing, licensing, internal development, and
acquisitions to develop our hardware and software platforms. Our implementation
of additions to or changes in these platforms may cost more than originally
expected, may take longer than originally expected, and may require more testing
than originally anticipated. In addition, we cannot provide assurance that
additions to or changes in these platforms will provide the additional
functionality and other benefits that were originally expected.




If
the systems we use to provide online portals experience security breaches or are
otherwise perceived to be insecure, our business could suffer




We retain
and transmit confidential information, including personal health records, in the
processing centers and other facilities we use to provide online services. It is
critical that these facilities and infrastructure remain secure and be perceived
by the marketplace as secure. A security breach could damage our reputation or
result in liability. We may be required to expend significant capital and other
resources to protect against security breaches and hackers or to alleviate
problems caused by breaches. Despite the implementation of security measures,
this infrastructure or other systems that we interface with, including the
Internet and related systems, may be vulnerable to physical break-ins, hackers,
improper employee or contractor access, computer viruses, programming errors,
denial-of-service attacks or other attacks by third parties or similar
disruptive problems. Any compromise of our security, whether as a result of our
own systems or the systems that they interface with, could reduce demand for our
services and could subject us to legal claims from our clients and users,
including for breach of contract or breach of warranty.




Failure
To Achieve And Maintain Effective Internal Controls In Accordance
With Section 404 Of The Sarbanes-Oxley Act Could Have A Material
Adverse Effect On Our Business And Operating Results.




It may be
time consuming, difficult and costly for us to develop and implement the
additional internal controls, processes and reporting procedures required by the
Sarbanes-Oxley Act. We may need to hire additional financial reporting, internal
auditing and other finance staff in order to develop and implement appropriate
additional internal controls, processes and reporting procedures. If we are
unable to comply with these requirements of the Sarbanes-Oxley Act, we may not
be able to obtain the independent accountant certifications that the
Sarbanes-Oxley Act requires of publicly traded companies.




If we
fail to comply in a timely manner with the requirements of Section 404 of
the Sarbanes-Oxley Act regarding internal control over financial reporting or to
remedy any material weaknesses in our internal controls that we may identify,
such failure could result in material misstatements in our financial statements,
cause investors to lose confidence in our reported financial information and
have a negative effect on the trading price of our common stock.




Pursuant
to Section 404 of the Sarbanes-Oxley Act and current SEC regulations,
beginning with our annual report on Form 10-K for our fiscal period ending
December 31, 2007, we will be required to prepare assessments regarding
internal controls over financial reporting and beginning with our annual report
on Form 10-K for our fiscal period ending December 31, 2008, furnish a
report by our management on our internal control over financial reporting. We
have begun the process of documenting and testing our internal control
procedures in order to satisfy these requirements, which is likely to result in
increased general and administrative expenses and may shift management time and
attention from revenue-generating activities to compliance activities. While our
management is expending significant resources in an effort to complete this
important project, there can be no assurance that we will be able to achieve our
objective on a timely basis. There also can be no assurance that our auditors
will be able to issue an unqualified opinion on management’s assessment of the
effectiveness of our internal control over financial reporting. Failure to
achieve and maintain an effective internal control environment or complete our
Section 404 certifications could have a material adverse effect on our
stock price.




In
addition, in connection with our on-going assessment of the effectiveness of our
internal control over financial reporting, we may discover “material weaknesses”
in our internal controls as defined in standards established by the Public
Company Accounting Oversight Board, or the PCAOB. A material weakness is a
significant deficiency, or combination of significant deficiencies, that results
in more than a remote likelihood that a material misstatement of the annual or
interim financial statements will not be prevented or detected. The PCAOB
defines “significant deficiency” as a deficiency that results in more
than a remote likelihood that a misstatement of the financial statements
that is more than inconsequential will not be prevented or
detected.




7




In the
event that a material weakness is identified, we will employ qualified personnel
and adopt and implement policies and procedures to address any material
weaknesses that we identify. However, the process of designing and implementing
effective internal controls is a continuous effort that requires us to
anticipate and react to changes in our business and the economic and regulatory
environments and to expend significant resources to maintain a system of
internal controls that is adequate to satisfy our reporting obligations as a
public company. We cannot assure you that the measures we will take will
remediate any material weaknesses that we may identify or that we will implement
and maintain adequate controls over our financial process and reporting in the
future.




Any
failure to complete our assessment of our internal control over financial
reporting, to remediate any material weaknesses that we may identify or to
implement new or improved controls, or difficulties encountered in their
implementation, could harm our operating results, cause us to fail to meet our
reporting obligations or result in material misstatements in our financial
statements. Any such failure could also adversely affect the results of the
periodic management evaluations of our internal controls and, in the case of a
failure to remediate any material weaknesses that we may identify, would
adversely affect the annual auditor attestation reports regarding the
effectiveness of our internal control over financial reporting that are required
under Section 404 of the Sarbanes-Oxley Act. Inadequate internal controls
could also cause investors to lose confidence in our reported financial
information, which could have a negative effect on the trading price of our
common stock.




The
Report Of Our Independent Registered Public Accounting Firm Contains Explanatory
Language That Substantial Doubt Exists About Our Ability To Continue As A Going
Concern




The
independent auditor’s report on our financial statements contains explanatory
language that substantial doubt exists about our ability to continue as a going
concern. The report states that we depend on the continued contributions of our
executive officers to work effectively as a team, to execute our business
strategy and to manage our business. The loss of key personnel, or their failure
to work effectively, could have a material adverse effect on our business,
financial condition, and results of operations. If we are unable to obtain
sufficient financing in the near term or achieve profitability, then we would,
in all likelihood, experience severe liquidity problems and may have to curtail
our operations. If we curtail our operations, we may be placed into bankruptcy
or undergo liquidation, the result of which will adversely affect the value of
our common shares.




Operating
History And Lack Of Profits Which Could Lead To Wide Fluctuations In Our Share
Price. The Price At Which You Purchase Our Common Shares May Not Be Indicative
Of The Price That Will Prevail In The Trading Market. You May Be Unable To Sell
Your Common Shares At Or Above Your Purchase Price, Which May Result In
Substantial Losses To You.The Market Price For Our
Common Shares Is Particularly Volatile Given Our Status As A Relatively Unknown
Company With A Small And Thinly Traded Public Float.




The
market for our common shares is characterized by significant price volatility
when compared to seasoned issuers, and we expect that our share price will
continue to be more volatile than a seasoned issuer for the indefinite future.
The volatility in our share price is attributable to a number of factors. First,
as noted above, our common shares are sporadically and thinly traded. As a
consequence of this lack of liquidity, the trading of relatively small
quantities of shares by our shareholders may disproportionately influence the
price of those shares in either direction. The price for our shares could, for
example, decline precipitously in the event that a large number of our common
shares are sold on the market without commensurate demand, as compared to a
seasoned issuer which could better absorb those sales without adverse impact on
its share price. Secondly, we are a speculative or “risky” investment due to our
limited operating history and lack of profits to date, and uncertainty of future
market acceptance for our potential products. As a consequence of this enhanced
risk, more risk-adverse investors may, under the fear of losing all or most of
their investment in the event of negative news or lack of progress, be more
inclined to sell their shares on the market more quickly and at greater
discounts than would be the case with the stock of a seasoned issuer. Many of
these factors are beyond our control and may decrease the market price of our
common shares, regardless of our operating performance. We cannot make any
predictions or projections as to what the prevailing market price for our common
shares will be at any time, including as to whether our common shares will
sustain their current market prices, or as to what effect that the sale of
shares or the availability of common shares for sale at any time will have on
the prevailing market price.




Shareholders
should be aware that, according to SEC Release No. 34-29093, the market for
penny stocks has suffered in recent years from patterns of fraud and abuse. Such
patterns include (1) control of the market for the security by one or a few
broker-dealers that are often related to the promoter or issuer;
(2) manipulation of prices through prearranged matching of purchases and
sales and false and misleading press releases; (3) boiler room practices
involving high-pressure sales tactics and unrealistic price projections by
inexperienced sales persons; (4) excessive and undisclosed bid-ask
differential and markups by selling broker-dealers; and (5) the wholesale
dumping of the same securities by promoters and broker-dealers after prices have
been manipulated to a desired level, along with the resulting inevitable
collapse of those prices and with consequent investor losses. Our management is
aware of the abuses that have occurred historically in the penny stock market.
Although we do not expect to be in a position to dictate the behavior of the
market or of broker-dealers who participate in the market, management will
strive within the confines of practical limitations to prevent the described
patterns from being established with respect to our securities. The occurrence
of these patterns or practices could increase the volatility of our share
price.




Volatility
In Our Common Share Price May Subject Us To Securities Litigation, Thereby
Diverting Our Resources That May Have A Material Effect On Our Profitability And
Results Of Operations.




As
discussed in the preceding risk factors, the market for our common shares is
characterized by significant price volatility when compared to seasoned issuers,
and we expect that our share price will continue to be more volatile than a
seasoned issuer for the indefinite future. In the past, plaintiffs have often
initiated securities class action litigation against a company following periods
of volatility in the market price of its securities. We may in the future be the
target of similar litigation. Securities litigation could result in substantial
costs and liabilities and could divert management’s attention and
resources.




8




Item 1B.
            Unresolved
      Staff Comments




No t
applicable




Item 2.
            Properties




Our
executive offices which we operated from were located at 540 N Golden Circle,
Suite 304, Santa Ana, California 92705; however, the Company had insufficient
operating capital to maintain the lease payments and vacated the premises on or
about December 15, 2008. Presently the Company utilizes the facilities located
at 177 Riverside Ave, Ste. F, #1152, Newport Beach, CA 92663 for its mailing and
delivery with the services of its independent consulting management team. Our
telephone number is 877-440-7387. The lease on the former office which was
vacated was a two year lease at the Theme Building $4,885.80 per month. Our
computer technology division is based in Canton, Ohio. We believe that our
offices and other facilities in Ohio, general, in good operating condition and
adequate for our current technology operations and that additional leased space
can be obtained on acceptable terms if needed.




Item 3.
            Legal
      Proceedings




There is
a case #070C014621B involving Kathy Ranson seller of Animal-ID in the First
Judicial Court in the State of Nevada. The Company plans to contest and seek to
have the judgment set-aside in the amount of $210,000.00 based on fraud and
failure to deliver assets unencumbered as described in the Purchase
Agreement.





There is
a case #08L009199 involving Samir Financial LLC in the Circuit Court of Cook
County, Illinois. The lender is seeking a judgment for breech of timely payments
under the contract in the amount of $2,000,000. The Company is in default and is
attempting to negotiate a settlement or reinstatement.




Item 4.
            Submission
      of Matters to a Vote of Security
Holders




During
the year of 2008, the following matters were submitted to a vote of security
holders of Ensurapet: First: the appointment of Lawrence Scharfman, CPA as the
Company’s independent certified public accountants was ratified; and Second; the
amendment to the Articles of Incorporation to keep the authorized shares of
common stock to 500,000,000, par value $.001 and establish a class “G” preferred
shares with voting rights that converted to common shares 30:1, that is, every
one share of preferred “G” equaled thirty common shares.




PART II




Item 5.
            Market
      for Registrant’s Common equity, Related Stockholder Matters and Issuer
      Purchases of Equity Securities




Our
common stock is traded in the National Association of Securities Dealers
Inter-dealer Quotation System over-the-counter bulletin board market (the
“OTCBB) and can be accessed under the symbol “EPTI.OB” We began trading on the
OTCBB on February 27, 2008. On April 18, 2008 the high and low bid
quotation for our common stock, representing inter-dealer quotations, without
adjustment for retail markup, markdown or commission (and may not represent
actual transactions) was $1.01.




At
December 31, 2008, there were 100,000 preferred shares and 40,000,000
common shares; however, after reflecting all material events through the date of
this filing inclusive of capitalization restructure, there areas of the date of
this filing, 3,100,000 preferred shares and 40,000,000 shares of our common
stock of issued and outstanding and there were an estimated 880 shareholders of
record of the Company’s common stock. The number of record holders was
determined from the records of our transfer agent and an estimate of the number
of beneficial owners of common and preferred stock whose shares are held in the
names of various security brokers, dealers, and registered clearing
agencies.




Dividend
Policy




We may
never pay any dividends to our shareholders. We did not declare any dividends
for the year ended December 31, 2008. Our Board of Directors
does


not
intend to distribute dividends in the near future. The declaration, payment and
amount of any future dividends will be made at the discretion of the Board of
Directors, and will depend upon, among other things, the results of our
operations, cash flows and financial condition, operating and capital
requirements, and other factors as the Board of Directors considers relevant.
There is no assurance that future dividends will be paid, and if dividends are
paid, there is no assurance with respect to the amount of any such
dividend.




Recent
sales of unregistered securities




We
disclosed in our registration statement (SEC File number 333-132028), a schedule
of securities as part of our process in the valuation of privately held
securities issued as compensation. We continued to value stock related matters
on a going forward bases using a similar format. The following represent the
transactions that involved securities.




December
2008 Life Cycle Stage (Forty Second Development Period) – Share value was
established at $0.0005




Authorized
by the Company on December 1, 2008, 3,000,000 preferred class “G” shares
were subscribed pursuant to a Regulation D 506 offering wherein the Company
would receive $50,000. These funds were necessary to pay outstanding
policyholder claims, surplus lines tax, legal, and other expenses necessary to
carry on services to policyholders. The funds were delivered to the Company on
February 27, 2009, following due diligence and deliverables cited in the Reg D
506.




Item 6.
            Selected
      Financial Data




The
following selected consolidated financial data should be read in conjunction
with “Management’s Discussion and Analysis of Financial Condition and Results of
operations” and with the consolidated financial statements and notes thereto,
which are included elsewhere in the Annual Report.




9


ASSETS
              
              December
      31,
                2008
              
              
              December
31,
                2007Fixed
      AssetsProperty
      and equipment - net
              
              
              17,693
              
              
              
              43,957Other
      AssetsSoftware
              
              
              13
              
              
              
              122,214Trademarks
              
              
              25,576
              
              
              
              25,576Vet
      MD data base
              
              
              52,500
              
              
              
              105,000Goodwill
              
              
              0
              
              
              
              0Insurance
      Agency Licenses
              
              
              —
              
              
              
              —78,089
              
              
              
              252,790




The
development and deployment of our public portals—The Beneficial Resource Center
Network—is represented by the investment in assets in 2006. Software
decreased from $460,434 to $122,214 as a result of amortization; furthermore,
the pet medical database remained unchanged since it had not been fully deployed
on the system with all of its features; however, in 2009 as the VetpetMD
database becomes deployed these cost will then be amortized in accordance with
GAAP.


LIABILITIES
            
            December 31,
              2008
            
            
            December 31,
              2007Current
      LiabilitiesAccounts
      payable
            
            $
            194,965
            
            
            $
            132,758Accounts
      payable - in dispute
            
            
            1,201,880
            
            
            
            1,201,880Line
      of Credit
            
            
            39,981
            
            
            
            48,001Note
      payable
            
            
            39,000
            
            
            
            0Accrued
      interest
            
            
            5,300
            
            
            
            0Accrued
      wages
            
            
            93,500
            
            
            
            24,573Shareholder
      advances
            
            
            349,203
            
            
            
            334,737Loan
      extension fee payable
            
            
            0
            
            
            
            0Current
      portion of long-term debt
            
            
            1,263,875
            
            
            
            1,263,875Total
      Current Liabilities
            
            
            3,005,831
            
            
            
            5,266,162




The most
significant liability is our loan to the lender—Samir Financial—who provided
the development capital. On April 9, 2008, the loan amounted to $6,000,000
and Samir accepted 3,000,000 common shares as payment of $4,000,000 and carried
the remaining balance on an interest free note. The Company further re-classed
certain payables which were due key inside shareholders as liabilities in
dispute. This reclassification occurred because it is the Company’s position
that these debts are contingent liabilities by virtue of upcoming stock
settlements not yet recorded but discussed and due to vendors’ failure to
deliver assets and services billed. The current portion of long-term debt above
the monies due Samir Financial of $1,000,000 are $263,875. This amount
represents the lawsuit with Animal-ID that will be disputed by the
Company—remedy being having the judgment ($225,100) set-aside—and two nominal
shareholder loans. Our objective in 2008 was to raise sufficient equity based
capital in order to run a profitable operation so that sufficient earnings would
be available to repay these liabilities. This did not occur. It is unknown now
in 2009 if we will be able to do so and there is no guarantee that management
will be able to raise capital at all.





Item 7.
            Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations




Management’s
Discussion and Analysis of Consolidated Results of Financial Condition and
Results of Operations (“MD&A”) contains forward-looking statements that
involve risk and uncertainties. Please see “Forward-Looking Statements” for a
discussion of the uncertainties, risks, and assumptions associated with these
statements. The results of operations for the periods reflected herein are not
necessarily indicative of results that may be expected for future periods, and
our actual results may differ materially from those discussed in the
forward-looking statements as a result of various factors, including but not
limited to those listed under “Risk Factors” and included elsewhere in this
Annual Report. Further historic disclosures can be found on Form 10-Q for
September 30, 2008, 10-K for December 31, 2007, 2006, and in the 2006
registration statement (SEC File number 333-132028).




Overview




MD&A
is a supplement to our consolidated financial statements and notes thereto
included elsewhere in this Annual Report, and are provided to enhance your
understanding of our results of operations and financial condition. Our MD&A
is organized as follows:




·
            
            Introduction. This
      section provides a general description of our company, background
      information on certain trends, strategies and other matters discussed in
      the MD&A, a description of the basis for presentation of our financial
      statements, a summary discussion of our plan of operations, and a
      discussion on our acquisition.




·
            
            Critical Accounting Policies
      and Estimates. This section discusses those accounting policies
      that are considered important to the evaluation and reporting of our
      financial condition and results of operations, and whose application
      requires us to exercise subjective and often complex judgments in making
      estimated and assumptions.




·
            
            Results of Operation.
      This section provides our analysis and outlook for the significant line
      items on our statement of operations, as well as other information that we
      deem meaningful to understand our results of
  operations.




·
            
            Liquidity and Capital
      Resources. This section provides an analysis of our liquidity and
      cash flows, as well as a discussion of our commitments that existed as of
      December 31, 2008.




10




·
            
            Recent Accounting
      Pronouncements. This section provides a summary of the most recent
      authoritative accounting standards and guidance that have either been
      recently adopted by our company or may be adopted in the
      future.




Introduction




Our
Company




We are a
provider of pet health information services to pet owners, veterinarians, animal
healthcare professionals, and pet service providers, which includes life and
health insurance for pets, horses, and other companion animals through our
public online portals. We are organizing our business into these two operating
segments as follows; however, since we remained a development stage company at
December 31, 2008, we have represented the business as one operating
segment at this time even though the Company has three operating
subsidiaries:




·
            
            Online and Other
      Services. The Ensurapet Beneficial Resource Centers consist of the
      public portals that we own, such as www.VetpetMD.com. These along with our
      other pet/animal owner portals help owners take an active role in managing
      their pet’s health by providing objective healthcare and lifestyle
      information. Our public portals generate revenue primarily through the
      sale of advertising and sponsorship products from Petsmart® as
      an affiliate.




·
            
            Insurance Services. We
      sell several pet health insurance plans for dogs and cats that provide
      reimbursement of veterinary expenses incurred to treat an illness or
      injury and on some policies routine/preventive care treatment such as
      vaccinations: Protect 1, Protect 2, Protect 3, and Protect 4 all of which
      provided an accidental life insurance policy with an endorsement for death
      due to an illness. We are authorized to underwrite a pet replacement
      (life) insurance plan for dogs and cats with death benefit limits ranging
      from $1,000 to $10,000. We have not yet introduced this product to the
      marketplace but look to do so in late 2009.·
            
            Pet Club.We are an
      online pet club portal community that provides humorous and fun content
      including, blogs, podcasts, video, and online shopping to more than 10,000
      pet products. This public portal should generate revenue primarily through
      group membership $24 per year in addition to the sale of advertising and
      sponsorship products from Petsmart® as an
  affiliate.




Background
Information on Certain Trends and Strategies




Several
key trends in the pet healthcare and Internet industries are influencing the use
of pet/animal healthcare information services of the types we provide or are
developing. Those trends, and the strategies we have developed in response, are
described briefly below:




Use of the Internet by pet owners
and veterinarians. The Internet has emerged as a major communications
medium and has already fundamentally changed many sectors of the economy,
including the marketing and sales of financial services, travel, and
entertainment, among others. The Internet is also changing the pet/animal
healthcare industry and has transformed how pet/animal owners and veterinarians
find and utilize healthcare information. Since pet owners presently assume all
of the financial responsibility veterinary costs, which are presently rising,
the Internet serves as a valuable resource by providing them with immediate
access to searchable and dynamic interactive content to check symptoms, assess
risks, understand diseases, find veterinarians and evaluate treatment options.
The Internet has also become a primary source of information for veterinarians
seeking to improve clinical practice and is growing relative to traditional
information sources, such as conferences, meetings and offline
journals.




Increased Online Marketing and
Education Spending for Pet Healthcare Products. Pharmaceutical,
biotechnology and medical device companies spend large amounts each year
marketing their products and educating pet owners and veterinarians about them,
however, only a small portion of this amount is currently spent on online
services. We believe that these companies, which look to be and comprise the
majority of our advertisers and sponsors, are becoming increasingly aware of the
effectiveness of the Internet relative to traditional media in providing health,
clinical and product-related information to pet owners and veterinarians, and
this increasing awareness will result in increasing demand for our
services.




Changes in the Veterinary Profession
with Pet Insurance. Ten years ago, there were two companies selling pet
health insurance; at the present time there are more than nine companies. In
2002 less than 0.5% of pet-owning households carried insurance; today 2% of
households have insured animals, which is more than double the number of pets
from 2002. The American Pet Products Manufactures Association (APPMA) in 2002
reported that the pet insurance industry revenues were $80 million; by 2010
APPMA projects the revenues to reach $500 million which a much larger market for
growth given the fact that there are more than 135 million dog and cat
owners in the United States.




Basis
of Presentation




Ensurapet,
Inc. is a Nevada corporation formerly known as Vsurance, Inc., that was
incorporated on July 26, 2005. We are a development stage company. We were
created to provide beneficial pet and horse resource centers—VetpetMD, Spot the Pet, and
Purrfect Pet Club—via the worldwide web in order to sell pet merchandise
as an online affiliate of a leading pet retailer, lost and found registration
services (Pet ID tags), global positioning system technologies to locate lost
pets and horses, and lastly liability, life, and health insurance policies to
cover property damage and veterinary expenses from and on pets and horses in the
United States, United Kingdom and in other pet and horse concentrated countries.
At December 31, 2008, there were 100,000 preferred shares and 40,000,000
common shares; however, after reflecting all material events through the date of
this filing inclusive of capitalization restructure, there areas of the date of
this filing, 3,100,000 preferred shares and 40,000,000 shares of our common
stock of issued and outstanding and there were an estimated 880 shareholders of
record of the Company’s common stock.  Additionally the Samir
Financial debt was reduced and $4,000,000 was taken as repayment in the form of
3,000,000 restricted common shares with a 12-month lock-up; however, this note
is in default. These material events have all been reflected in this
presentation.




Acquisitions




The
Animal-ID acquisition which occurred during 2006 and reported in that periods
annual report has been and will again be in litigation. The position of the
Company is that the asset being the software was never delivered in its entirety
to Ensurapet. It was determined that the sellers did not possess the all of the
rights and that a key module was not owned by the sellers. The This acquisition
resulted in a case #070C014621B involving one of the sellers, Kathy Ranson
seller of Animal-ID in the First Judicial Court in the State of Nevada. The
Company plans to contest and seek to have the judgment set-aside in the amount
of $210,000.00 based on fraud and failure to deliver assets unencumbered as
described in the Purchase Agreement.




11




Plan
of Operations




We
commenced operations June 2006 on a small scale as our public portals were under
initial development. At that time the VetpetMD portal—www.vetpetmd.com—since the
site was made public has had: 274,812 site hits; 46,241 page views; and
established 6,605 visits of which 3,316 were unique visitors. The pet insurance
site—www.purrfectinsurance.com—since going live has had: 858,418 site hits;
203,134 page views; and established 14,727 visits of which 8,171 were unique
visitors. Our main home page—www.vsurance.com now www.ensurapet.com—delivered
similar results: 559,125 site hits; 296,747 page views; and established 18,637
visits of which 8,964 were unique visitors. From this visitation we had 493
policyholders with annual written premium in excess of $30,000. As we ended the
year our network of associations, employer groups, and insurance brokerage
partnerships continued to grow. We acquired more than 90 relationships and had
the potential to reach more than 30 million members who are potential pet
owners. Company resources to capitalize on these achievements were stifled by
the need to raise capital in order to repay the large indebtedness due Samir
Financial. Further, with the decline of the United States banking industry and
leading insurance giants such as AIG our insurance carrier discontinued offering
our pet insurance product on December 19, 2008, due to inadequate reinsurance.
The Company is presently look for another insurance carrier who will underwrite
our policies but none have been located as of this filing. With that said, all
policies have been canceled and the Company is presently only servicing
claims.




In 2008
our plan was to: increase traffic to our public portals; expand VetpetMD to
include an online pharmacy; grow our pet insurance sales through the
introduction of our kennel coverage program, caring vet program, retail in-store
offer, and expand our group/association network. This was not achieved due to
inadequate capital. In order to build traffic and ramp up policy sales we
required further capital; neither JPC Capital Partners nor Wakabayashi Fund LLC
were able to raise the $5 million required by the Company. Additionally, with
our stock being quoted on the OTCBB we needed to increase investor awareness and
deliver returns for shareholders. Thus the Company engaged DME Capital on March
2008 to act as the Company’s public relations “IR Firm.” This contract has since
been canceled with the collapse of our stock price and economic
markets.




Our
continuation as a going concern now depends upon our ability to raise capital
solely. The Company must get a resolution to the Samir Financial lawsuit. This
is the overall objective of this operating year 2009.




Critical
Accounting Policies and Estimates




Our
MD&A is based upon our consolidated financial statements and notes to
consolidated financial statements, which were prepared in conformity with
U.S. generally accepted accounting principles. The preparation of the
consolidated financial statements requires us to make estimates and assumptions
that affect the amounts reported in the consolidated financial statements and
accompanying notes. We base our estimates on historical experience, current
business factors, and various other assumptions that we believe are necessary to
consider to form a basis for making judgments about the carrying values of
assets and liabilities and disclosure of contingent assets and liabilities. We
are subject to uncertainties such as the impact of future events, economic and
political factors, and changes in our business environment; therefore, actual
results could differ from these estimates. Accordingly, the accounting estimates
used in preparation of our financial statements will change as new events occur,
as more experience is acquired, as additional information is obtained and as our
operating environment changes. Changes in estimates are made when circumstances
warrant. Such changes in estimates and refinements in estimation methodologies
are reflected in reported results of operations; if material, the effects of
changes in estimates are disclosed in the notes to our consolidated financial
statements.




We
evaluate our estimates on an ongoing basis, including those related to revenue
recognition, the allowance for doubtful accounts, the carrying value of prepaid
advertising, policy acquisition costs, the carrying value of long-lived assets
(including goodwill and intangible assets), the amortization period of
long-lived assets (excluding goodwill), the carrying value, capitalization and
amortization of software and website development costs, the provision for income
taxes and related deferred tax accounts, certain accrued expenses and
contingencies.





We
believe the following reflects our critical accounting policies and our more
significant judgments and estimates used in the preparation of our consolidated
financial statements:




·
            
            Revenue
      Recognition. Revenue from advertising is recognized as advertisements are
      delivered. Revenue from sponsorship arrangements, content syndication and
      distribution arrangements, and licenses of pet healthcare management tools
      and public portals are recognized along with the revenue from the sale of
      pet health insurance policies are recognized on an accrual basis
      accounting.




·
            
            Long-Lived
      Assets. Long-lived assets consist of property, software, and equipment,
      goodwill, if any and other intangible assets. Goodwill and other
      intangible assets could arise from acquisitions, specifically Animal-ID
      which was in escrow at December 31, 2006; however, this amount which
      had been recorded as goodwill was written off December 31, 2007, due
      to the litigation. The amount assigned to intangible assets is subjective
      and based on our estimates of the future benefit of the intangible assets
      using accepted valuation techniques, such as discounted cash flow and
      replacement cost models. Our long-lived assets, excluding goodwill, are
      amortized over their estimated useful lives, which we determined based on
      the consideration of several factors including the period of time the
      asset is expected to remain in service. We evaluate the carrying value and
      remaining useful lives of long-lived assets, excluding goodwill, whenever
      indicators of impairment are present. We will evaluate the carrying value
      of goodwill annually, and whenever indicators of impairment are present.
      We will use a discounted cash flow approach to determine the fair value of
      goodwill.




·
            
            Deferred
      Tax Assets. The Company accounts for income taxes under the provisions of
      Statements of Financial Accounting Standards No. 109 “Accounting for
      Income Taxes”, which requires a company to recognize deferred tax assets
      and liabilities for the expected future tax consequences of events that
      have been recognized in a company’s financial statements or tax returns.
      Under this method, deferred tax assets and liabilities are determined
      based on the difference between the financial statement carrying amounts
      and tax bases of assets and liabilities using enacted tax rates. The
      Company has no differences between book and tax
  accounting.




Results
of Operations




For the
year ending 2008 and 2007 we reported a Net Loss of $(572,756) and $(6,791,049)
and Basic Earnings per Share of $(0.01) and $(3,747.82)
respectfully.




12




We are a
development stage company because we have not commenced any significant
operations so far with the exception of a minimal number (1,412) of membership
and certificates of insurance to Purrfect Pet Club members that amounted to more
than $100,000 in annualized written premium. With that said, with the loss of
our insurance carrier and cancellation of all pet health insurance policies the
Company has no incoming revenues until such time as we can secure a new
underwriter. The Company is presently servicing claims, which is a pure cost to
the Company. The Company’s wholly-owned reinsurance company “Vsurance Re, Inc”
was incorporated with the Nevis Office of the Registrar of Companies corporation
number C-304999 but it no longer in good standing due to insufficient operating
capital. The VetpetMD website is operational but its content has not been
updated, thus visitation by online viewers has declined. Spot the Pet lost and
found 24/7 ID program has been placed on hold. The Purrfect Pet Club with online
pet merchandise sales is a viable entity but we need to renew the canceled
membership in the absence of pet insurance. The Purrfect Pet Insurance online
websites are operational for information purposes only—pet owners cannot enroll
their pets in a plan at this time since we do not have an underwriter. The
Company withdrew its Form “A” application with the Idaho Department of Insurance
to purchase of the Universal Life Insurance Company charter as a result of
insufficient capital to fund statutory reserves.




On
January 31, 2008, the Company entered into a revised and new investment
banking agreement with The October Fund on a best efforts basis to raise $4.9
million in capital in exchange for 2,200,000 commons shares. The agreement
combined deliverables on the part of the company—policy sales—with capital
investments as follows: $2 million in exchange for 1,463,414 common shares;
$500,000 on or before November 7, 2008 in exchange for 248,780 common
shares and annualized gross written premiums in-force of $1 million; $1,000,000
on or before January 5, 2009 in exchange for 243,903 common shares with the
addition of 5,000 new pet insurance policies; and $1,400,000 on or before
April 5, 2009 in exchange for 243,903 common shares with the addition of
8,000 new pet insurance policies. With the decline of the United States banking,
investment banking, and insurance industry with the discontinuance in offering
our pet insurance product on December 19, 2008, due to inadequate reinsurance
the Company has not received any capital pursuant to the investment banking
agreement. The focus of management remains on development of the company and in
raising capital. The Company is presently looking for an investment banking firm
that will invest capital and for an insurance carrier who will underwrite our
policies. As of the date of this filing neither has been located.




Revenues—increased from
$47,848 at December 31, 2007 to $61,384 at December 31, 2008, an
increase of 28%, primarily as a result of the continued efforts in pet health
insurance plan sales. These revenues ended at December 31, 2008, with the loss
of the insurance carrier.




Operating Expenses—decreased
from $6,277,217 at December 31, 2007 to $572,756 at December 31, 2008,
a decrease of 90%, primarily as a result of the amortization of prepaid closing
costs and the recent settlement of the note payable to Samir Financial (Footnote
4).




Net Income (Loss)—Net loss
decreased from net income of $(6,791,049) at December 31, 2007 to
$(572,756) at December 31, 2008, an decrease of 90%, primarily as a result
of a slowing of operations, amortization of loan closing costs, and recent
settlement of the loan with Samir Financial.




LIQUIDITY
AND CAPITAL RESOURCES




As of
December 31, 2008 we had total assets of $97,757 of which $1,975 was in
cash. As a result of our current lack of capital and loan obligation to the
Lender, wherein all company assets including cash is pledged as collateral, we
are completely dependent upon further capital to implement our business plan;
furthermore, the need for additional capital beyond any immediate offering is
predicated because in order to write insurance policies we must maintain
adequate surplus with state insurance departments. Regulation requires insurers
to limit policy sales to only three times their surplus deposit, for example,
having a surplus deposit of $2,000,000 we could write $6,000,000 in premium
(policy sales). In the event that we cannot raise capital there is no
foreseeable hope that the Company could locate another underwriting insurance
carrier. While it is common practice to lose program underwriters and locating
other markets for lines of business usually takes only a few months, given the
United States economic condition now upon us in 2009combined with the financial
peril of the Company makes this task even more challenging if not
impossible.





Current
Assets




Cash—decreased from $15,757 at
December 31, 2007 to $1,975 at December 31, 2008, a decrease of
$13,782 primarily as a result of no incoming capital or revenue only the cost of
servicing non-incoming producing policyholder claims.




Commission
receivable—decreased from $751 at December 31, 2007 to $0 at
December 31, 2008, as a result of the termination of the pet health
insurance program by the underwriting insurance carrier due to inadequate
reinsurance coverage.




Prepaid expenses—remained
unchanged from $0 at December 31, 2007 to $0 at December 31, 2008, as
a result of the termination of the pet health insurance program by the
underwriting insurance carrier due to inadequate reinsurance coverage and of the
complete amortization of all prepaid closing cost with the note payable to Samir
Financial (Footnote 4).




Total Current Assets—decreased
from $16,508 at December 31, 2007 to $1,975 at December 31, 2008, a
decrease of $14,533 primarily as a result of the termination of the pet health
insurance program by the underwriting insurance carrier due to inadequate
reinsurance coverage.




Net Fixed Assets—decreased
from $43,957 at December 31, 2007 to $17,693 at December 31, 2008, a
decrease of $26,264, primarily as a result of depreciation and no new fixed
asset purchases.




Other Assets—decreased from
$252,790 at December 31, 2007 to $78,089 at December 31, 2008, a
increase of $174,701, primarily as a result of amortization, write-off of the
Animal-ID acquisition, no new asset purchases, and write down of the VetpetMD
database.




Liabilities




Total Current
Liabilities—increased from $3,005,831 at December 31, 2007 to
$3,187,704 at December 31, 2008, an increase of $181,873 primarily as a
result of debt financing to maintain operations. Further, the Company has
reclassified certain liabilities and views them as contingent ices.




The
Company anticipates that its cash requirements will continue to increase as it
continues to expend substantial resources to build its infrastructure, develop
its business plan and establish its sales and marketing network operations,
customer support and administrative organizations. The Company available
cash resources are scarce; more importantly having no incoming cash flow from
operations combined with the inability so far of the engagements with investment
banking firms to raise capital present a considerable risk that operations can
continue. If the Company is unable to raise money in order to resume not just
operations but profitable operations it will be unable to continue as a going
concern. No assurances can be given that either equity or debt financing will be
available.




13




Recent
Accounting Pronouncements




The
Company has generated only minimal revenues to date and at the close of 2008 no
longer has the ability to sell pet health insurance policies. This factor among
others including the delinquent Note payable that was originally due
December 14, 2006, subsequently settled for a near term payment in July
2008 which was not made and stock that was issued raises substantial doubt about
the Company’s ability to continue as a going concern. Management feels the
Company’s continuation as a going concern depends solely upon its ability to
obtain additional sources of capital and financing. The accompanying
consolidated financial statements do not include any adjustments that may result
from the outcome of this uncertainty.




Item 7A.
            Quantitative
      and Qualitative Disclosures about Market
Risk




Interest
Rate Sensitivity




We have
no investments since we have not capitalized our reinsurance company yet;
however, funds in excess of monthly operating costs are invested in money market
accounts with an FDIC Insured Bank. At which time when we capitalize our
reinsurance company the primary objective of our investment activities will be
to preserve principal and maintain adequate liquidity, while at the same time
maximizing the yield we receive from our investment portfolio in accordance with
investment regulations set forth by the Department of Insurance. This objective
will be accomplished by adherence to our investment policy, which establishes
the list of eligible types of securities and credit requirements for each
investment.




Item 8.
            Financial
      Statements and Supplementary Data




REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM




Ensurapet
Inc. and Subsidiaries


The Board
of Directors and Stockholders




We have
audited the Balance sheet s of Ensurapet, Inc and Subsidiaries as of
December 31, 2008 and 2007 and the related statements of operations,
stockholders equity and cash flows for each of the two years in the period ended
December 31, 2008, and from July 20, 2005 (inception) to December 31,
2008. These statements are responsibility of 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 standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatements. 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.




The
Company has had difficulty in generating sufficient cash flow to meet its
obligations and is dependent on management’s ability to develop profitable
operations. These factors, among others may raise substantial doubt about their
ability to continue as a going concern.




In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Ensurapet, Inc and Subsidiaries as
of December 31, 2008 and 2007, and the related statements of operations,
stockholders equity and cash flows for each of the two years in the period ended
December 31, 2008 and from July 20, 2005 (inception) to December 31, 2008,
in conformity with generally accepted accounting principles.




/s/
      Lawrence Scharfman, CPALawrence
      Scharfman CPA


Boynton
Beach, FL


March ,
2009




14




EnsurApet, Inc. and Subsidiaries (formerly Vsurance, Inc. and
Subsidiary)




(A
Development Stage Company)




Consolidated
Balance Sheet




December 31,
2008 and December 31, 2007


ASSETS
            
            December 31,
              2008
            
            
            December 31,
              2007Current
      AssetsCash
      and cash equivalents
            
            $
            1,975
            
            
            $
            15,757Commissions
      receivable
            
            
            0
            
            
            
            751Prepaid
      expenses
            
            
            0
            
            
            
            0Total
      Current Assets
            
            
            1,975
            
            
            
            16,508Fixed
      AssetsProperty
      and equipment - net
            
            
            17,693
            
            
            
            43,957Other
      AssetsSoftware
            
            
            13
            
            
            
            122,214Trademarks
            
            
            25,576
            
            
            
            25,576Vet
      MD data base
            
            
            52,500
            
            
            
            105,000Goodwill
            
            
            0
            
            
            
            0Insurance
      Agency Licenses
            
            
            0
            
            
            
            078,089
            
            
            
            252,790Total
      Assets
            
            $
            97,757
            
            
            $
            313,255


See
accompanying notes to financial statements




15




EnsurApet,
Inc. and Subsidiaries (formerly Vsurance, Inc. and Subsidiary)




(A
Development Stage Company)




Consolidated
Balance Sheet




December 31,
2008 and December 31, 2007


LIABILITIES
      AND STOCKHOLDERS’ EQUITY
            
            December 31,
              2008
            
            
            December 31,
              2007Current
      LiabilitiesAccounts
      payable
            
            $
            194,965
            
            
            $
            132,765Accounts
      payable - in dispute
            
            
            1,201,880
            
            
            
            1,201,880Line
      of Credit
            
            
            39,981
            
            
            
            48,001Note
      payable
            
            
            39,000
            
            
            
            0Accrued
      interest
            
            
            5,300
            
            
            
            0Accrued
      wages
            
            
            93,500
            
            
            
            24,573Shareholder
      advances
            
            
            349,203
            
            
            
            334,737Loan
      extension fee payable
            
            
            0
            
            
            
            0Current
      portion of long-term debt
            
            
            1,263,875
            
            
            
            1,263,875Total
      Current Liabilities
            
            
            3,187,704
            
            
            
            3,005,831Long-term
      DebtNote
      payable
            
            
            1,000,000
            
            
            
            1,000,000Stockholders’
      EquityStock
      subscriptions receivable
            
            
            (4,740,996)
            
            
            
            0Preferred
      stock
            
            
            100
            
            
            
            12,810Common
      stock
            
            
            40,000
            
            
            
            3,112Additional
      paid in capital
            
            
            13,115,422
            
            
            
            8,223,220Deficit
      accumulated during the development stage
            
            
            (12,504,473
            )
            
            
            (11,931,718
            )Total
      Stockholders’ Equity
            
            
            (4,089,947
            )
            
            
            (3,692,576
            )Total
      Liabilities and Stockholders’ Equity
            
            $
            97,757
            
            
            $
            313,255


See
accompanying notes to financial statements




16




EnsurApet, Inc. and Subsidiaries (formerly Vsurance, Inc. and
Subsidiaries)




(A
Development Stage Company)




Consolidated
Statements of Income




For
the Years ending December 31, 2008 and 2007




and
From July 20, 2005 (Inception) through December 31, 2008


2008
            
            
            2007
            
            
            Since
              InceptionRevenues
            
            $
            61,384
            
            
            $
            47,848
            
            
            $
            113,251Marketing
      expenses
            
            
            5,788
            
            
            
            160,862
            
            
            
            464,286General
      and administrative expenses
            
            
            629,353
            
            
            
            6,116,355
            
            
            
            11,591,759Income
      (loss) before taxes
            
            
            (572,756
            )
            
            
            (6,299,369
            )
            
            
            (11,942,794
            )Other
      Income/ExpenseAbandonment
      loss
            
            
            0
            
            
            
            561,680
            
            
            
            561,680Provision
      for taxes
            
            
            0
            
            
            
            0
            
            
            
            0NET
      INCOME (LOSS)
            
            $
            (572,756
            )
            
            $
            (6,791,049
            )
            
            $
            (12,504,473
            )Earnings
      Per ShareBasic
            
            $
            (0.01
            )
            
            $
            (3,747.82
            )Average
      shares outstandingfor
      2008 and 2007
            
            
            40,000,000
            
            
            
            1,812




See
accompanying notes to financial statements




17




EnsurApet, Inc. and Subsidiaries (formerly Vsurance, Inc. and
Subsidiaries)




(A
Development Stage Company)




Consolidated
Statements of Cash Flow




For
the Years ending December 31, 2008 and 2007




and
From July 20, 2005 (Inception) through December 31, 2008


2007
            
            
            2007
            
            
            Since
              InceptionCash
      Flows From/For Operating ActivitiesNet
      Income (Loss)
            
            $
            (572,756
            )
            
            $
            (6,791,045
            )
            
            $
            (12,504,473
            )Adjustments
      to reconcile net income (loss) to net cash provided by (used for)
      operating activitiesDepreciation
            
            
            26,264
            
            
            
            95,329
            
            
            
            133,417Amortization
            
            
            174,716
            
            
            
            338,220
            
            
            
            735,124Stock
      issued for services
            
            
            6,380
            
            
            
            1,740,500
            
            
            
            2,098,718Interest
      accrual
            
            
            0
            
            
            
            2,506,518
            
            
            
            2,506,518Abandonment
      loss
            
            
            0
            
            
            
            561,680
            
            
            
            561,680Increase
      in Commissions receivable
            
            
            0
            
            
            
            274
            
            
            
            (751
            )Increase
      in Prepaid Expenses
            
            
            0
            
            
            
            496,666
            
            
            
            0(Decrease)
      Increase in Accounts payable
            
            
            62,200
            
            
            
            755,989
            
            
            
            1,396,843Increase
      in Accrued interest
            
            
            5,300
            
            
            
            (58,333)
            
            
            
            28,314Increase
      in Accrued wages
            
            
            93,500
            
            
            
            24,573
            
            
            
            118,073Increase
      in Loan extension fee payable
            
            
            0
            
            
            
            (500,000)
            
            
            
            0Net
      Cash Used in Operation Activities
            
            
            (204,396
            )
            
            
            (829,633
            )
            
            
            (4,926,537
            )Cash
      Flows For Investing ActivitiesPurchase
      of Fixed assets
            
            
            0
            
            
            
            (10,000
            
            
            
            (150,610
            )Software
      costs
            
            
            —
            
            
            
            0
            
            
            
            (660,122
            )Trademarks
            
            
            —
            
            
            
            0
            
            
            
            (22,390
            )Investment
      Animal ID
            
            
            —
            
            
            
            0
            
            
            
            (250,000
            )Vet
      MD data base
            
            
            —
            
            
            
            0
            
            
            
            (105,000
            )Net
      Cash Used in Investing Activities
            
            
            0
            
            
            
            (10,000
            )
            
            
            (1,188,122
            )Cash
      Flows From Financing ActivitiesProceeds
      from Line of credit
            
            
            (2,827
            )
            
            
            (1,172)
            
            
            
            45,174Proceeds
      from Shareholder advances
            
            
            (4,563
            )
            
            
            (334,737)
            
            
            
            (339,300
            )Payments
      on Long term debt
            
            
            0
            
            
            
            (11,225)
            
            
            
            (11,225
            )Proceeds
      from Notes Payable
            
            
            39,000
            
            
            
            50,000
            
            
            
            4,320,986Proceeds
      from Stock subscriptions
            
            
            159,004
            
            
            
            430,477
            
            
            
            589,481Sale
      of Capital Stock
            
            
            0
            
            
            
            615,000
            
            
            
            1,511,518Net
      Cash From Financing Activities
            
            
            190,614
            
            
            
            748,343
            
            
            
            6,116,634Net
      Increase (Decrease) in Cash and Cash Equivalents
            
            
            (13,782
            )
            
            
            (91,290
            )
            
            
            1,975Cash
      and Cash Equivalents - Beginning
            
            
            15,757
            
            
            
            107,047
            
            
            
            —Cash
      and Cash Equivalents - Ending
            
            $
            1,975
            
            
            $
            15,757
            
            
            
            1,975


See
accompanying notes to financial statements




18




EnsurApet,
      Inc. and Subsidiaries (formerly Vsurance, Inc. and
      Subsidiaries)(A
      Development Stage Company)Consolidated
      Statements of Stockholders' EquityFor
      the Period From July 20, 2005 (Inception) through December 31,
      2008




DeficitAccumulatedAdditional
              
              
              Stock
              
              
              During
      the
              
              
              TotalPreferred
              
              
              Stock
              
              
              Common
              
              
              Stock
              
              
              Paid
      in
              
              
              Subscriptions
              
              
              Development
              
              
              Stockholders'Shares
              
              
              Amount
              
              
              Shares
              
              
              Amount
              
              
              Capital
              
              
              Receivable
              
              
              Stage
              
              
              EquityBalance
      July 20, 2005
              
              
              -
              
              
              $
              -
              
              
              
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -Sale
      of shares
              
              
              437,650
              
              
              
              438
              
              
              
              100,000
              
              
              
              100
              
              
              
              122,005
              
              
              
              -
              
              
              
              -
              
              
              
              122,543Stock
      issued for equipment
              
              
              62,500
              
              
              
              62
              
              
              
              -
              
              
              
              
              
              
              
              438
              
              
              
              -
              
              
              
              -
              
              
              
              500Shares
      issued for services
              
              
              3,000,000
              
              
              
              3,000
              
              
              
              -
              
              
              
              -
              
              
              
              83,937
              
              
              
              -
              
              
              
              -
              
              
              
              86,937Shares
      issued for software
              
              
              750,000
              
              
              
              750
              
              
              
              -
              
              
              
              
              
              
              
              21,750
              
              
              
              -
              
              
              
              -
              
              
              
              22,500Shares
      issued for Debt
              
              
              1,200,000
              
              
              
              1,200
              
              
              
              -
              
              
              
              -
              
              
              
              (1,200
              )
              
              
              -
              
              
              
              -
              
              
              
              -Net
      loss
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (1,078,449
              )
              
              
              (1,078,449
              )Balance
      December 31, 2005
              
              
              5,450,150
              
              
              
              5,450
              
              
              
              100,000
              
              
              
              100
              
              
              
              226,930
              
              
              
              -
              
              
              
              (1,078,449
              )
              
              
              (845,969
              )Shares
      converted to common
              
              
              (320,000
              )
              
              
              (320
              )
              
              
              1,500,000
              
              
              
              1,500
              
              
              
              (1,180
              )
              
              
              -
              
              
              
              -
              
              
              
              -Shares
      issued for Debt
              
              
              600,000
              
              
              
              600
              
              
              
              -
              
              
              
              -
              
              
              
              (600
              )
              
              
              -
              
              
              
              -
              
              
              
              -Shares
      issued for services
              
              
              1,005,000
              
              
              
              1,005
              
              
              
              25,000
              
              
              
              25
              
              
              
              263,870
              
              
              
              -
              
              
              
              -
              
              
              
              264,900Shares
      issued for Debt conversion
              
              
              50,000
              
              
              
              50
              
              
              
              1,723,230
              
              
              
              1,723
              
              
              
              722,627
              
              
              
              -
              
              
              
              -
              
              
              
              724,400Shares
      issued for Investment in Animal ID
              
              
              205,500
              
              
              
              206
              
              
              
              249,000
              
              
              
              249
              
              
              
              164,545
              
              
              
              -
              
              
              
              -
              
              
              
              165,000Shares
      sold
              
              
              -
              
              
              
              -
              
              
              
              95,150
              
              
              
              95
              
              
              
              49,480
              
              
              
              -
              
              
              
              -
              
              
              
              49,575Net
      Loss
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (4,062,219
              )
              
              
              (4,062,219
              )Balance
      December 31, 2006
              
              
              6,990,650
              
              
              
              6,991
              
              
              
              3,692,380
              
              
              
              3,692
              
              
              
              1,425,672
              
              
              
              -
              
              
              
              (5,140,668
              )
              
              
              (3,704,313
              )Shares
      for services
              
              
              -
              
              
              
              -
              
              
              
              1,000,000
              
              
              
              1,000
              
              
              
              749,000
              
              
              
              -
              
              
              
              -
              
              
              
              750,000Sale
      of shares
              
              
              -
              
              
              
              -
              
              
              
              15,800,000
              
              
              
              15,800
              
              
              
              15,599,200
              
              
              
              (15,000,000
              )
              
              
              -
              
              
              
              615,000Net
      loss
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (1,357,038
              )
              
              
              (1,357,038
              )Balance
      March 31, 2007
              
              
              6,990,650
              
              
              
              6,991
              
              
              
              20,492,380
              
              
              
              20,492
              
              
              
              17,773,872
              
              
              
              (15,000,000
              )
              
              
              (6,497,706
              )
              
              
              (3,696,351
              )Preferred
      shares converted
              
              
              (1,800,000
              )
              
              
              (1,800
              )
              
              
              9,000,000
              
              
              
              9,000
              
              
              
              (7,200
              )
              
              
              -
              
              
              
              -
              
              
              
              -Funds
      received from stock subscriptions
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              128,300
              
              
              
              -
              
              
              
              128,300Shares
      issued for services
              
              
              7,017,000
              
              
              
              7,017
              
              
              
              900,000
              
              
              
              900
              
              
              
              866,583
              
              
              
              -
              
              
              
              -
              
              
              
              874,500Shares
      issued for debt
              
              
              -
              
              
              
              -
              
              
              
              16,810
              
              
              
              17
              
              
              
              16,793
              
              
              
              -
              
              
              
              -
              
              
              
              16,810Sale
      of shares
              
              
              -
              
              
              
              -
              
              
              
              100,000,000
              
              
              
              100,000
              
              
              
              100,400,000
              
              
              
              (100,500,000
              )
              
              
              -
              
              
              
              -Net
      loss
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (2,886,948
              )
              
              
              (2,886,948
              )Balance
      June 30, 2007
              
              
              12,207,650
              
              
              
              12,208
              
              
              
              130,409,190
              
              
              
              130,409
              
              
              
              119,050,048
              
              
              
              (115,371,700
              )
              
              
              (9,384,654
              )
              
              
              (5,563,689
              )Conversion
      of Preferred shares and reverse stock split
              
              
              (12,107,650
              )
              
              
              (12,108
              )
              
              
              (65,208,932
              )
              
              
              (65,209
              )
              
              
              77,317
              
              
              
              -
              
              
              
              -
              
              
              
              -Funds
      received from stock subscriptions
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              132,177
              
              
              
              -
              
              
              
              132,177Net
      loss
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (888,935
              )
              
              
              (888,935
              )Balance
      September 30, 2007
              
              
              100,000
              
              
              
              100
              
              
              
              65,200,258
              
              
              
              65,200
              
              
              
              119,127,365
              
              
              
              (115,239,523
              )
              
              
              (10,273,589
              )
              
              
              (6,320,447
              )Redemption
      of Common to Preferred E
              
              
              12,450,000
              
              
              
              12,450
              
              
              
              (12,450,000
              )
              
              
              (12,450
              )
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -Funds
      received from stock subscriptions
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              170,000
              
              
              
              -
              
              
              
              170,000Cancellation
      of subscriptions receivable
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (115,069,523
              )
              
              
              115,069,523
              
              
              
              -
              
              
              
              -Stock
      for services
              
              
              260,000
              
              
              
              260
              
              
              
              60,000,000
              
              
              
              60,000
              
              
              
              55,740
              
              
              
              -
              
              
              
              -
              
              
              
              116,000To
      record 1000 to 1 reverse split
              
              
              -
              
              
              
              -
              
              
              
              (112,637,508
              )
              
              
              (112,638
              )
              
              
              112,638
              
              
              
              -
              
              
              
              -
              
              
              
              -Shares
      issued for debt
              
              
              -
              
              
              
              -
              
              
              
              3,000,000
              
              
              
              3,000
              
              
              
              3,997,000
              
              
              
              -
              
              
              
              -
              
              
              
              4,000,000Net
      Loss
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (1,658,129
              )
              
              
              (1,658,129
              )Balance
      December 31, 2007
              
              
              12,810,000
              
              
              
              12,810
              
              
              
              3,112,750
              
              
              
              3,112
              
              
              
              8,223,220
              
              
              
              -
              
              
              
              (11,931,718
              )
              
              
              (3,692,576
              )Conversion
      of Preferred E to Common
              
              
              (12,450,000
              )
              
              
              (12,450
              )
              
              
              12,450,000
              
              
              
              12,450
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -Conversion
      of Preferred F to Common
              
              
              (200,000
              )
              
              
              (200
              )
              
              
              10,000,000
              
              
              
              10,000
              
              
              
              (9,800
              )
              
              
              -
              
              
              
              -
              
              
              
              -Stock
      for services
              
              
              -
              
              
              
              -
              
              
              
              2,000,000
              
              
              
              2,000
              
              
              
              2,000
              
              
              
              -
              
              
              
              -
              
              
              
              4,000Retirement
      of Preferred F
              
              
              (60,000
              )
              
              
              (60
              )
              
              
              -
              
              
              
              -
              
              
              
              60
              
              
              
              -
              
              
              
              -
              
              
              
              -Sale
      of shares
              
              
              -
              
              
              
              -
              
              
              
              2,200,000
              
              
              
              2,200
              
              
              
              4,897,800
              
              
              
              (4,778,962
              )
              
              
              -
              
              
              
              121,038Net
      loss
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (175,728
              )
              
              
              (175,728
              )Balance
      March 31, 2008
              
              
              100,000
              
              
              $
              100
              
              
              
              29,762,750
              
              
              $
              29,762
              
              
              $
              13,113,280
              
              
              $
              (4,778,962
              )
              
              $
              (12,107,446
              )
              
              $
              (3,743,266
              )Stock
      for services
              
              
              
              
              
              
              
              
              
              
              10,237,250
              
              
              
              10,238
              
              
              $
              2,142
              
              
              
              
              
              
              
              
              
              
              $
              12,380Funds
      received from stock subscriptions
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              $
              37,966
              
              
              
              
              
              
              $
              37,966Net
      loss
              
              
              -
              
              
              $
              -
              
              
              
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              (124,393
              )
              
              $
              (124,393
              )Balance
      June 30, 2008
              
              
              100,000
              
              
              $
              100
              
              
              
              40,000,000
              
              
              $
              40,000
              
              
              $
              13,115,422
              
              
              $
              (4,740,996
              )
              
              $
              (12,231,839
              )
              
              $
              (3,817,313
              )Net
      loss
              
              
              -
              
              
              $
              -
              
              
              
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              (38,400
              )
              
              $
              (38,400
              )Balance
      September 30, 2008
              
              
              100,000
              
              
              $
              100
              
              
              
              40,000,000
              
              
              $
              40,000
              
              
              $
              13,115,422
              
              
              $
              (4,740,996
              )
              
              $
              (12,270,239
              )
              
              $
              (3,855,713
              )Net
      loss
              
              
              -
              
              
              $
              -
              
              
              
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              (234,234
              )
              
              $
              (234,234
              )Balance
      December 31, 2008
              
              
              100,000
              
              
              $
              100
              
              
              
              40,000,000
              
              
              $
              40,000
              
              
              $
              13,115,422
              
              
              $
              (4,740,996
              )
              
              $
              (12,504,473
              )
              
              $
              (4,089,947
              )




See
      accompanying notes to financial statements





19




EnsurApet, Inc. and Subsidiaries (formerly Vsurance, Inc. and
Subsidiaries)


(A
Development Stage Company)




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


December 31,
2008




NOTE
1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES




Development Stage
Company




Vsurance,
Inc. and wholly owned Subsidiary, Vsurance Insurance Agency, Inc. (the Company)
are development stage companies as defined under Statements of Financial
Accounting Standards No. 7. Vsurance, Inc. was incorporated on
July 26, 2005, in the State of Nevada. Purfect Pet Insurance Agency, Inc.
was incorporated on July 20, 2005, in the State of Ohio. Purfect Pet
Insurance Agency changed its name to Vsurance Insurance Agency, Inc.,
re-domiciled to New Mexico on December 31, 2005, and later re-domiciled to
Arkansas on June 13, 2006. Vsurance is a development stage Company.
Vsurance intends to provide beneficial pet / horse resource centers—VetpetMD, Spot the Pet, and Purfect
Pet Club—via the worldwide web in order to sell pet merchandise as an
online affiliate of a leading pet retailer, lost and found registration services
(Pet ID tags), global positioning system technologies to locate lost pets and
horses, and lastly liability, life, and health insurance policies to cover
property damage and veterinary expenses from and on pets and horses in the
United States, United Kingdom and in other pet and horse concentrated
countries.




On
January 17, 2006, the Company formed Purrfect Pet Club, a Michigan
corporation. This subsidiary served was placed into service in 2007 and active
members were able to purchase the pet health insurance plans offered by the
parent company Ensurapet. Members paid a monthly membership fee of $2 and had
access to the online portal for humorous pet news, blogging, and online
shopping. All revenues passed through to the parent company via an intercompany
agreement.




The
consolidated financial statements include the accounts of the Vsurance, Inc.,
Vsurance Insurance Agency and Purrfect Pet Club. All significant inter-company
accounts and transactions have been eliminated in consolidation.




The
statements reflect the reverse stock splits of July 27, 2007 of 80 to 1 and
the January 31, 2008 of 1,000 to 1. The statements also reflect the
conversion of the Samir Financial loan on April 9, 2008 into a $2,000,000
loan and 3,000,000 shares of common stock valued at $4,000,000.




Revenue
Recognition




Ensurapet
uses an accrual basis accounting.




Cash and Cash
Equivalents




For
purposes of the statement of cash flows, the Company considers all short-term
debt securities purchased with a maturity of three months or less to be cash
equivalents.




Income
Taxes




The
Company accounts for income taxes under the provisions of Statements of
Financial Accounting Standards No. 109 “Accounting for Income Taxes”, which
requires a company to recognize deferred tax assets and liabilities for the
expected future tax consequences of events that have been recognized in a
company’s financial statements or tax returns. Under this method, deferred tax
assets and liabilities are determined based on the difference between the
financial statement carrying amounts and tax bases of assets and liabilities
using enacted tax rates. The Company has no differences between book and tax
accounting.




Property and
Equipment




Property
and equipment are carried at cost. Maintenance, repairs and renewals are
expensed as incurred. Depreciation of property and equipment is provided for
over their estimated useful life.


Estimated
      useful livesUsed
      Office Equipment
            2
      YearsComputer
      Equipment
            3
      Years




Use of
Estimates




The
preparation of the consolidated financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.




Concentration of Credit
Risks




During
2006 and 2007, the Company had deposits in banks in excess of the FDIC insurance
limit but it did not in 2008.




20




NOTE
2 – OTHER NONCURRENT ASSETS




Software




Software
represents internal use insurance operating software and development utilities
software valued on August 20, 2005, at $22,500. The Company in exchange for
745,000 shares of Preferred Class A stock received for internal use
insurance operating software on August 20, 2005, valued at $22,350. The
Company in exchange for 5,000 shares of Preferred Class A stock received
development utilities software valued at $150. During the six months ended
December 31, 2006, the Company spent an additional $660,122 with a third
party vender in continued development of input software for use with the initial
software. The Company capitalizes costs incurred during the application
development stage and amortizes these costs to expense over the software’s
useful life. Costs incurred during the preliminary project stage and costs
incurred during the post-implementation and operation stage are be expensed as
incurred. The Company has begun amortizing these costs. The utilities software
valued at $150 useful life is 1 year. The internal insurance operating software
has a 2 year life. The straight-lined method is used. Amortization for the year
ended December 31, 2008, 2007 and 2006, and since inception was $122,201,
$338,220, 219,021 and $560,408 respectively.




Trademarks




Trademarks
represent the third party costs in connection with the filing of trademark
applications and related research. The Company evaluates, at least annually, for
potential impairment, this recorded amount, by means of a cash flow analysis in
accordance with SFAS 142.




Vet MD Data
Base




Vet MD
Data Base represents third party costs incurred in the development of an
internet based veterinary medicine reference library. These cost will be
amortized over a, to be determined useful life, when placed into service. The
Company hopes to have this data base complete and in service by the end of 2007.
The Company in 2008 determined the useful life to be 24-months and amortized
$52,500 in the period ending December 31, 2008.




Goodwill




On
June 2, 2006 the Company entered into an agreement to purchase 100% of the
outstanding stock of Animal ID LLC for $415,000. The final agreement for the
acquisition was completed on February 2, 2007. The purchase price consists
of $20,000 cash, $165,000 in the Company’s common stock and a note for $230,
000. The upon closing the acquired company had no assets and minimal
liabilities. The entire purchase price represents Goodwill and will be accounted
for in accordance with SFAS 142. At December 31, 2007, management wrote the
balance off an impaired.




Insurance Agency
Licenses




Insurance
Agency Licenses represents 102 admitted and surplus lines insurance licenses
assigned to it by a shareholder and a consultant. Due to the difficulty in
valuing these licenses the Company has assigned a carrying value of
$0.




Prepaid
Expenses




Prepaid
expenses represent prepaid promotional expenses from a contract entered into in
January 2007. The Company issued 1,000,000 shares of its Common stock for
services valued at $750,000. The services are to be delivered over a three year
period. The prepaid portion of this contract is being amortized over its 36
month life on the straight line basis. The prepaid marketing fees were
determined my management to be of no value in the second quarter of 2007. The
balance of the prepaid fees at that time was written off.




NOTE
3 – PROPERTY AND EQUIPMENT




Property
and equipment are summarized by major classifications as follows:


December 31,
              2008
            
            
            December 31,
              2007Equipment
            
            $
            43,957
            
            
            $
            80,427Leasehold
      Improvements
            
            
            0
            
            
            
            0Less
      Accumulated Depreciation
            
            
            (26,264
            )
            
            
            (36,470
            )$
            17,693
            
            
            $
            43,957




Lease
hold Improvements were not in service during 2007. The Company abandoned its
Little Rock office at June 30, 2007. The balance of the leasehold
improvement was written off to Abandonment loss.




Depreciation
expense for the years ended December 31, 2008, 2007, 2006, and since
inception was $26,264, $95,329, $11,574 and $107,153 respectively.




NOTE
4 – ACCOUNTS PAYABLE IN DISPUTE




The
balance represents trade payable arising since inception that the Company is
disputing and hope to be able to reduce and satisfy the balance with issues of
the Company’s common stock during 2008.




NOTE
5 – NOTES PAYABLE




On
April 17, 2006, the Company borrowed $50,000 under a line of credit
agreement. The loan is due upon demand, unsecured with interest at bank’s prime
plus 2 points. The balance outstanding at September 30, 2007 and
December 31, 2006 was $50,784 and $49,173 respectively.




21




On
December 15, 2005, the Company executed a Loan and Security Agreement with
Samir Financial, LLC for $4,000,000. This loan is due in full at the end of
twelve months. All interest and expenses have been prepaid. The stated interest
rate is 30% per annum. The effective interest rate is 129% per annum.
Security is all company assets including un-disbursed funds. Closing fees
totaling $1,250,000 were paid at closing by the company which netted $1,750,000
in proceeds that will be disbursed in accordance with a draw down schedule
($1,750,000 at closing less closing fees of $1,250,000 at closing: $250,000 on
January 31, 2006; $250,000 on February 28, 2006; $250,000 on
March 31, 2006 and $300,000 on April 30, 2006 resulted in net cash
proceeds to the Company of $1,550,000. The closing fees totaling $1,250,000
together with the prepaid interest of $1,200,000 totaling $2,450,000 were all
prepaid at closing thereby netting the Company, from the $4,000,000 loan, the
sum of $1, 550, 000. Fees at closing were; $800,000 closing fee which were
expensed, $100,000 collateral Management fee, $100,000 audit fees, $200,000 good
faith deposit and $50,000 Legal fees and expenses which were all capitalized at
closing since they were non-refundable and represents items which apply to the
live of the loan. The capitalized amounts totaling $450,000 are being amortized
over the twelve month life of the loan using the effective interest rate method.
These items were fully amortized at December 31, 2006.




In
connection with the above loan the lender has agreed on December 14, 2005
and again on January 31, 2006 to purchase 1,200,000 and 600,000 shares of
Preferred A stock for $500,000 and $300,000 reduction of the loan respectively.
Under the terms of the agreement the shares have been issued to the lender. In
addition the agreement requires the shares to be repurchased by the Company at
the lenders cost and returned to the Company if the loan is not repaid when due
on December 15, 2006. The loan was not repaid timely and the Company has
forfeited its right to compensation for these shares. In December 2006, the
lender agreed verbally to extend the loan for an additional six months for a
$500,000 extension fee. There is still $300,000 of this fee outstanding at
September 30, 2007. This fee is being amortized over the six month
extension period. On September 15, 2007, the principal guarantor of this
loan did hereby forgive, assume, obligate itself, and indemnify the Company for
any and all amounts associated and incurred with this loan above $2,000,000. The
Company has not obtained release from the lender for the amounts assumed by the
principal guarantor; accordingly it will continue to carry the amount on its
books until release is received. On April 9, 2008, the Company entered into
an agreement with the lender to exchange $4,000,000 of the debt was exchanged
for 3,000,000 shares of the Company’s common stock and A new $2,000,000 note due
$1,000,000 due July 9, 2008 and the balance beginning to amortize at the
rate of $250,000 per quarter on July 1, 2009. This transaction was recorded
as of December 31, 2007. This note is in default.




The
balance of the loan at December 31, 2007, as restated, and
December 31, 2006, was $2,000,000 and $5,541,667 respectively.




On
December 5, 2006 the Company borrowed $25,000 from a shareholder. The note
is due March 1, 2007 and is at 30% interest. The loan was not repaid on its
due date. The balance outstanding on the loan at December 31, 2007 and 2006
was $38,775 and $25,000 respectively. This note is in default.





On June
29, 2007 the Company borrowed $55,000 from a shareholder. The note was reduced
in exchange for 6,000 class C preferred stock by $30,000; therefore, the loan
amount is $25,000. The note is due June 29, 2010 with monthly interest payments
as follows: first year $312.50; second year $250 and third year $250. This note
is in default.




In
connection with the Animal ID purchase the Company issued a $230,000 note
payable to one of the former owners of Animal ID. The note calls for quarterly
payments totaling $55,000 the first year, $70,000 the second year and $75,000
the third year. The note bears interest at 1.5% per month if in default.
The lender received a default judgment on this loan in 2007 for $225, 100. The
balance of the loan at December 31, 2007 and 2006, was $225,100 and
$205,000 respectively. This note is in default.





On
September 16, 2008 the Company borrowed $12,500 from Wicklow Properties Limited.
The note is due March 16, 2009 in the amount of $13,750 at an interest rate of
20%. The loan was renewed until May 16, 2009 following the interest payment.
Loan is secured by 5,000,000 common shares.





On
October 8, 2008, the Company borrowed $26,500 from Philip Aitken. The note is
due March 7, 2009 in the amount of $29,150 at an interest rate of 12% following
closing costs of $1,500 legal and $1,060 due diligence. The loan is in default;
however the Company hopes to renewed it until June 7, 2009 in the amount of
$29,500 with the loan being loan secured by 5,000,000 common shares; however,
there is no guarantee that this will occur.




NOTE
6 – INCOME TAXES




The
Company has a net operating loss of approximately $10,000,000 available for
carry-forward of up to twenty (20) years for federal purposes. Pursuant to
Internal Revenue Code Section 382 and the regulations there under, the
amounts of utilizable carryover may be limited as a result of ownership changes
or even eliminated if business continuity requirements are not met. There were
no temporary differences allowing no deferred tax liabilities to
arise.




NOTE
7 – EQUITY




Earnings per
share




The
Company has adopted the provisions of SFAS 128 in the computation of earnings
whereby the convertible Preferred Stock was deemed converted to common stock on
date of issue.




Common
Stock




The
Company has 500,000,000, 500,000,000 and 250,000,000 shares of common stock
authorized with 40,000,000, 3,112,750 and 3,692,380 share outstanding at
December 31, 2008, 2007 and 2006 respectively. The common shares of the
Company were reverse split 1 for 80 shares on July 11, 2007. The shares
were further reversed split on January 31, 2008 1,000 to 1. Share values in
these statements and footnotes indicate if they are per or post split
shares.




Preferred Stock
Class A




The
Company has 8,000,000 shares of $0.001 par value authorized, with 0 and
6,015,150 shares outstanding at December 31, 2007 and December 31,
2006 respectively. The shares have no dividend rights and convert at the
holder’s or the Company’s option to the Company’s Common Stock at the rate of 5
to 1. The shares vote with the common share holders at the same rate as the
conversion rights. The shares have no liquation value, no liquidation rights, no
dividend rights and no redemption rights. It is management’s intent to convert
all shares of Preferred A to common. In connection with the note payable the
lender has agreed on December 14, 2005 and again on January 31, 2006
to purchase 1,200,000 and 600,000 shares of Preferred A stock for a $500,000 and
$300,000 reduction of the loan respectively. Under the terms of the agreement
the shares have been issued to the lender. In addition the agreement requires
the shares to be repurchased by the Company at the lenders cost and returned to
the Company if the loan is not repaid when due on December 15, 2006. The
loan was not repaid timely and the Company has forfeited it right to
compensation for these shares. There were 0 and 6,015,150 shares outstanding at
December 31, 2007 and 2006 respectively.




22




Preferred Stock Class
B




The
Company has 2,000,000 shares of $0.001 par value authorized, with 0 and 975,500
shares outstanding at both December 31, 2007 and December 31, 2006.
The shares have no dividend rights and convert at the holder’s or the Company’s
option to the Company’s Common Stock at the rate of 2 to 1. The shares vote with
the common share holders at the same rate as the conversion rights. The shares
have no liquation value, no liquidation rights, no dividend rights and no
redemption rights. There were 0 and 975,500 shares outstanding at
December 31, 2007 and 2006 respectively.




Preferred Stock Class
C




The
Company has 0 and 0 shares outstanding at December 31, 2007 or
December 31, 2006. The shares have no dividend rights and convert at the
holder’s or the Company’s discretion to the Company’s Common Stock at the rate
of 25 to 1. The shares vote with the common share holders at the same rate as
the conversion rights. The shares have no liquation value, no liquidation
rights, no dividend rights and no redemption rights. There were no shares
outstanding at December 31, 2007 and 2006.




Preferred Stock Class
D




On
July 11, 2007, the shareholders and Board of Directors created a Preferred
Stock Class D. This class of preferred stock has non-dilutive voting rights, a
par value of $0.001 per share, and 100,000 shares authorized. There were 100,000
and 0 shares outstanding at December 31, 2007 and 2006
respectively.




Preferred Stock Class
E




In the
fourth quarter of 2007 the Board of Directors created a Preferred Stock Class E.
The shares have no dividend rights and convert at the holder’s or Company’s
discretion to the Company’s common stock at the rate of 2.2 shares of preferred
to one share of common. The shares were converted in the first quarter of
2008.




NOTE
8 – RELATED PARTY TRANSACTIONS




On
December 5, 2006 the Company borrowed $25,000 from a shareholder. The note
was due March 1, 2007 and is at 30% interest. The loan was not repaid on
its due date. The balance of the loan at December 31, 2007 and 2006 was
$38,775 and $25,000.




The
Company also owed another shareholder and officer $334,737 for funds
advanced.




The
Company has leased over 4,000 square feet of office space from its President.
The lease was abandoned on June 30, 2007.




NOTE
9 – OPERATING SEGMENTS




The
Company organizes its business into three reportable segments: the parent
company (Ensurapet, Inc., f/k/a Vsurance, Inc.), the insurance agency (Vsurance
Insurance Agency, Inc.) and the pet club (Purrfect Pet Club); however, all
assets and expenditures are reported through the parent company (Vsurance)
through an intercompany agreement. Therefore, there are no supplemental
schedules on the subsidiary that would breakdown assets, liabilities and
operations for each of these segments.




NOTE
10 – ABANDONMENT LOSS




The
Company decided on June 30, 2007, to abandon its Little Rock offices. A
loss of $146,680 was recognized as the estimated cost of this decision. Also, in
the second quarter of 2007 management determined that the prepaid marketing fees
capitalized in the first quarter of 2007 were of no value. The $750,000 of fees
were written off in the first half of 2007. The Company on December 31,
2007 wrote off the balance of Goodwill from Animal ID as fully
impaired.




NOTE
11 – GOING CONCERN




The
Company has not generated any revenues or profits to date. This factor among
others including the pass due payables due and the Company’s inability to pay
the secured loan due Samir Financial LLC raises substantial doubt about the
Company’s ability to continue as a going concern. Management feels the Company’s
continuation as a going concern depends upon its ability to obtain additional
sources of capital and financing. Management feels it can raise the necessary
working capital in 2009 to provide the necessary working capital, repay the
delinquent notes payable. The accompanying financial statements do not include
any adjustments that may result from the outcome of this
uncertainty.




NOTE
12 – SUBSEQUENT EVENTS




On
January 10, 2008, the Board of Directors awarded 60,000,000 shares of
common stock to the CEO of the Company for services rendered during the most
recent financial crisis. The shares were valued at the market value of the
Company’s stock on the date of issue. Also, on January 15, 2008, the Board
of Directors awarded 260,000 shares of Preferred stock an entity controlled by
the CEO of the Company. These financial statements reflect this
event.




On
January 31, 2008 the Board of Directors affected a 1000 to 1 reverse split
of common stock. These financial statements reflect this event.




On
April 9, 2008, the Company entered into an agreement with the lender to
exchange $4,000,000 of the debt was exchanged for 3,000,000 shares of the
Company’s common stock and a new $2,000,000 note due $1,000,000 due July 9, 2008
and the balance beginning to amortize at the rate of $250,000 per quarter on
July 1, 2009. These statements reflect this event.




On
January 31, 2008, the Company entered into a subscription receivable
agreement for the sale of $4,900,000 of the Company’s common stock. This event
has been reflected in these statements.




On
February 1, 2008 all shares of all classes of Preferred stock were
converted to 12,710,000 shares of Common stock. This event has been reflected in
these statements.





On
December 15, 2008, the company established a class “G” preferred stock that
converts 30:1 that is, for every 1 share of preferred class “G” equals 30 common
shares. The articles of incorporation where not amended until March 2009. The
Company raised $50,000 through a Reg D 506 offering wherein 5,000,000 preferred
class “G” shares where issued. This event has not been reflected in these
statements.




23




ITEM 9.
            CHANGES
      IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE




None.




ITEM 9A.
            CONTROLS
      AND PROCEDURES






Evaluation
      of Disclosure Controls and
Procedures





(a)
Evaluation of Disclosure Controls and Procedures.Our Chief
Executive Officer and Chief Financial Officer, evaluated the effectiveness of
our disclosure controls and procedures as of the end of the period covered by
this report. Based on that evaluation, Chief Executive Officer and Chief
Financial Officer concluded that our disclosure controls and procedures as of
the end of the period covered by this report were effective such that the
information required to be disclosed by us in reports filed under the Securities
Exchange Act of 1934 is (i) recorded, processed, summarized and reported
within the time periods specified in the SEC’s rules and forms and
(ii) accumulated and communicated to the Chief Executive Officer and Chief
Financial Officer, as appropriate to allow timely decisions regarding
disclosure. A controls system cannot provide absolute assurance, however, that
the objectives of the controls system are met, and no evaluation of controls can
provide absolute assurance that all control issues and instances of fraud, if
any, within a company have been detected.




Our Chief Executive Officer
and Chief Financial Officer is responsible for establishing and maintaining
adequate internal control over financial reporting (as defined in
Rule 13a-15(f) under the Exchange Act). Our internal control over financial
reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with accounting principles generally
accepted in theUnited States.




Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Therefore, even those systems determined to be
effective can provide only reasonable assurance of achieving their control
objectives. Furthermore, smaller reporting companies face additional
limitations.  Smaller reporting companies employ fewer individuals and find
it difficult to properly segregate duties.  Often, one or two individuals
control every aspect of the Company’s operation and are in a position to
override any system of internal control.  Additionally, smaller reporting
companies tend to utilize general accounting software packages that lack a
rigorous set of software controls.




Our Chief Executive Officer and
Chief Financial Officer evaluated the effectiveness of the Company’s
internal control over financial reporting as of December 31, 2008.  In
making this assessment, our Chief Executive Officer and
Chief Financial Officer used the criteria set forth by the Board of
Directors.  Based on this evaluation, our ChiefExecutive Officer and Chief
Financial Officer, concluded that, as ofDecember 31, 2008, our internal
control over financial reporting was effective.




(b)
 Changes in Internal
Control over Financial Reporting.  There were no changes in our
internal control over financial reporting, as defined in Rules 13a-15(f) and
15d-15(f) under the Exchange Act, during our most recently completed fiscal
quarter that have materially affected, or are reasonably likely to materially
affect, our internal control over financial reporting.




Management
is responsible for establishing and maintaining adequate internal control over
financial reporting, as such term is defined in Exchange Act
Rules 13a-15(f). Management is required to base its assessment of the
effectiveness of our internal control over financial reporting on a suitable,
recognized control framework, such as the framework developed by the Committee
of Sponsoring Organizations (COSO). The COSO framework, published in Internal Control-Integrated
Framework, is known as the COSO Report. Our Management has chosen the
COSO framework on which to base its assessment; however, in 2007 this changed
due to insufficient capital.




The
Company’s chief executive officer—W. Russell Smith—assumed the responsibilities
and activities of the chief financial officer (CFO). Mr. Smith has the knowledge
and skills necessary to prepare financial statements since he possess a MBA with
a five year accountancy degree.  Mr. Smith as CEO performed the
financial statement preparation duties of a CFO , this included he
accountability of the insurance operating accounts but the actual insurance
billings and claims adjudication were performed by two independent individuals,
i.e., Claims Director for policyholder claim payments and Underwriting Director
for policyholder insurance premium billings. Despite these changes, new
procedures and evaluation, our management concluded that even with these changes
in the Internal Controls and Procedures that our internal control over financial
reporting was effective as of December 31, 2008.




This
annual report on Form 10-K does not include an attestation report of our
registered public accounting firm regarding internal control over financial
reporting. Management’s report was not subject to attestation by our registered
public accounting firm pursuant to temporary rules of the Securities and
Exchange Commission that permit us to provide only management’s report in this
annual report on Form 10-K.




This
annual report does not include an attestation report of the company’s registered
public accounting firm regarding internal control over financial reporting.
Management’s report was not subject to attestation by the company’s registered
public accounting firm pursuant to temporary rules of the Securities and
Exchange Commission that permit the company to provide only management’s report
in this annual report.




It should
be noted that any system of controls, however well designed and operated, can
provide only reasonable and not absolute assurance that the objectives of the
system are met. In addition, the design of any control system is based in part
upon certain assumptions about the likelihood of certain events. Because of
these and other inherent limitations of control systems, there can be no
assurance that any design will succeed in achieving its stated goals under all
potential future conditions, regardless of how remote.





24




ITEM 9B.
            OTHER
      INFORMATION




Effective
February 8, 2008, the Board of Directors of Ensurapet, Inc. (the “Company”)
accepted the resignation of J. Matt Lile, III from his position as President of
the Company. To the knowledge of the Board of Directors and executive officers
of the Company, Mr. Lile had no disagreement with the Company on any matter
related to the Company’s operations, policies or practices.




The
settlement and shareholder lockup agreements executed on April 9, 2008,
with Samir Financial LLC were filed in an 8-K with the SEC on April 17,
2008.




Accounts
payable in dispute ($1,201,880) are as follows: Animal-ID acquisition note
$225,100; NicoTech Animal-ID software undelivered $12,805.95; Friday Eldridge
Form A legal services provided by former director Mike Pickens $57,464.24; early
stage investor held convertible security $500,000; and early development stage
inside shareholding service providers—Coactive Systems (MIS) $316,509.87 and
Spaner Marketing (Advertising) $90,000,




Advances
to shareholders ($334,737), are as follows: early development stage inside
shareholding service provider Coactive System (MIS) $165,000 and early
development stage inside shareholding service provider Spaner Marketing
(Advertising) $169,736.77.




The
forward looking plan of management, of which there is no guarantee or assurance
of achievement, is to raise $5,000,000 in capital for its pet health insurance
operations and $3 million in capital to meet the surplus requirement by
Insurance Department. Inclusive of these capital raises, stock issued in
exchange for services and retirement of debt there will be 30,000,000 common
shares issued and outstanding on a fully diluted basis. There will be only one
class of preferred stock, series D of which 100,000 shall be issued and
outstanding.





Effective
January 21, 2009, the Board of Directors of Ensurapet, Inc., (the “Company”)
accepted the resignations of Malcolm Pollard, Ann Perniciaro, and Allen Hayes
for their position of directors. To the knowledge of the Board of Directors and
executive offices of the Company neither director had any disagreement with the
Company on any matter related to the Company’s operations, policies, or
practices. Further a spinout has been proposed of the club.




PART III




Item 10.
            Directors,
      Executive Officers, Promoters and Control Persons of the Registrant;
      Compliance with Section 16(A) of the Exchange
  Act




The chart
below sets for the composition of our Board of Directors, Advisors, and its
three committees and IT Advisory Council as of the date of this filing.
Directors are elected for a period of one year and thereafter serve until the
stockholders duly elect their successor. Officers and other employees serve at
the will of the Board of Directors. All of our directors serve until their
successors are elected and qualified by our shareholders, or until their earlier
death, retirement, resignation or removal.


Board
      Member/Occupation
            
            Board
              Member or
              IT Advisor
            
            
            Audit
            
            
            Leadership
              Development
              &
              Compensation
            
            
            Nominating
              &
              Corporate
              Governance
            
            
            IT
              Advisory
              CouncilW.
      Russell Smith, III
              CEO,
      CFO, Chairman & Secretary
              Ensurapet,
      Inc.
            
            
            C
            
            
            
            C
            
            
            
            C
            
            
            
            C
            
            
            
            CBrad
      Green
              Partner
              Coactive
      Systems
            
            
            A
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            MJohn
      Kortis
              Partner
              Coactive
      Systems
            
            
            A
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            M




A = Advisor B = BoardC = Committee chairM = Committee
member




The
following is a brief description of the business experience of our executive
officers, directors and significant employees:




Business
Experience of Officers and the Director




W. Russell Smith, III,CEO, CFO,
Chairman and Secretary since 07/27/05 amended 01/21/09, age 45:




A
licensed property and casualty insurance broker and reinsurance manager with
over 13 years of experience in the pet insurance industry. During this tenure in
the business of insuring household pets (1993 – 2007), Mr. Smith was
instrumental in compiling the actuarial cost necessary in establishing premiums
for the pet insurance policies and claim reporting guidelines to monitor loss
experience. Accomplishments include the establishment of a pet reinsurance
company, development of the computer operating system for pet insurance
companies, cumulative sales growth of annual written premium of pet health
policies on numerous programs to more than $20 million. Further, Mr. Smith
has experience managing public companies. Mr. Smith is an experienced
financial executive with over 13-years in the financial services industry and is
a Summa Cum Laude graduate from Florida Metropolitan University with an MBA in
business/accountancy. He also holds a BA in Business/Finance from Eckerd
College.




25




Malcolm L. Pollard, JD, CPA,Director,
Secretary and Treasurer since 8/31/05 through 01/21/09, age 67:




·
            
            1990
      to present: Self employed attorney and certified public accountant, Erie
      Pennsylvania. Engaged in a varied practice involving tax, contracts,
      domestic relations, bankruptcy, startup ventures, quality and peer
      reviews, and generalized accounting
practices.




·
            
            1989
      to 1990: Served as the Divisional Controller and Administrative Manager
      for Great Lakes Evergreen Division of American Nursery Products, Madison,
      Ohio preparing financial reports and handling administrative matters for
      division of major agribusiness.




Ann Perniciaro,Director since
8/31/05 through 01/21/09, age 44:




·
            
            1993
      to present: Self employed fashion designer, Birmingham Michigan. Provide
      fashion, style, and accessorizing advice to customers including the
      development of privately designed clothing products. Customer clientele
      includes not only celebrities, dignitaries, corporate executives, but
      retail labels such as Gucci, Ralph Lauren, and Max
  Mara.




Allen A. Hayes, MD, PhD,Director since
8/31/05 through 01/21/09, age 63:




·
            
            1995
      to 2000: Under Harold Lasker MD on a part-time basis at South Oaks
      Hospital provided medical services for physically
    challenged.




·
            
            1997
      to 2000: Independent medical practitioner in sports medicine at Rutgers
      University.




Item 11.
            Executive
      Compensation




The
following table sets forth our director and executive officers stock
compensation package at the close of December 31, 2008, annual
compensation, and those participating in the health benefits plan.




Officer and Director Summary
Table (includes all classes of stock held)




Name
            
            Heath
              Insurance
            
            Stock Held and Class
            
            Annual
              CompensationAllen
      A. Hayes, MD PhD, Director (resigned 01/21/09)
            
            No
            
            Common 550,000
            
            $
            0Malcolm
      L. Pollard, JD, CPA, Treasurer & Secretary (resigned
      01/21/09)
            
            No
            
            Common
      600,000
            
            $
            0Ann
      M. Perniciaro, Director (resigned 01/21/09)
            
            No
            
            Common
      550,000
            
            $
            0W.
      Russell Smith, III, CEO & Director
            
            No
            
            Common
      60,000
            
            $
            0




2007
SUMMARY COMPENSATION TABLE


Name
      and Principal Position
            
            Year
            
            Salary ($)
            
            Bonus ($)
            
            Stock
              Awards
              ($)
            
            Option
              Awards
              ($)
            
            Non-Equity
              Incentive
      Plan
              Compensation
              ($)
            
            Change
      in
              Pension
              Value
      and
              Nonqualified
              Deferred
              Compensation
              Earnings
              ($)
            
            All
      Other
              Compensation
              ($)
            
            
            Total
              ($)W.
      Russell Smith, CEO
            
            2008
            
            
            0
            
            
            
            
            —
            
            
            
            
            
            
            
            
            08
            
            
            
            0





Option
      Awards
              
              Stock
      AwardsNumber
      of
              
              Number
      of
              
              
              
              
              
              
              
              
              
              
              
              
              
              EquitySecurities
              
              Securities
              
              
              
              
              
              
              
              
              
              
              
              
              
              IncentiveUnderlying
              
              Underlying
              
              Equity
              
              
              
              
              
              
              
              
              
              Equity
              
              PlanUnexercised
              
              Unexercised
              
              Incentive
              
              
              
              
              
              
              
              
              
              Incentive
              
              Awards:Options
              
              Options
              
              Plan
              
              
              
              
              
              
              
              
              
              Plan
      Awards:
              
              Market
      or(#)
              
              (#)
              
              Awards:
              
              
              
              
              
              
              
              Market
              
              Number
      of
              
              Payout
      ValueNumber
      of
              
              
              
              
              
              Number
      of
              
              Value
      of
              
              Unearned
              
              of
      UnearnedSecurities
              
              
              
              
              
              Shares
      or
              
              Shares
      or
              
              Shares,
      Units
              
              Shares,
      UnitsUnderlying
              
              
              
              
              
              Units
      of
              
              Units
      of
              
              or
      Other
              
              or
      OtherUnexercised
              
              Option
              
              
              
              Stock
      That
              
              Stock
      That
              
              Rights
      That
              
              Rights
      ThatUnearned
              
              Exercise
              
              Option
              
              Have
      Not
              
              Have
      Not
              
              Have
      Not
              
              Have
      NotOptions
              
              Price
              
              Expiration
              
              Vested
              
              Vested
              
              Vested
              
              VestedName
              
              Exercisable
              
              Unexercisable
              
              (#)
              
              ($)
              
              Date
              
              (#)
              
              ($)
              
              (#)
              
              ($)NONE


26


2008
OPTION EXERCISES AND STOCK VESTED TABLE


Option
      Awards
              
              Stock
      AwardsNumber
      of
                Shares
                Acquired
      on
                Exercise
              
              Value
                Realized
      on
                Exercise
              
              Number
      of
                Shares
                Acquired
      on
                Vesting
              
              Value
                Realized
      on
                VestingName
              
              
              (#)
              
              ($)
              
              
              (#)
              
              ($)NONE




2008
PENSION BENEFITS TABLE


Name
            
            Plan Name
            
            Number of Years
              Credited
      Service
              (#)
            
            Present Value
              of Accumulated
              Benefit
              ($)
            
            Payments During Last
              Fiscal
      Year
              ($)NONE




2008
NONQUALIFIED DEFERRED COMPENSATION TABLE


Name
            
            Executive Contributions
              in
      Last Fiscal Year
              ($)
            
            Registrant
              Contributions in Last
              Fiscal
      Year
              ($)
            
            Aggregate Earnings
              in
      Last Fiscal Year
              ($)
            
            Aggregate
              Withdrawals /
              Distributions
              ($)
            
            Aggregate Balance at
              Last
      Fiscal Year-End
              ($)NONE




2008
DIRECTOR COMPENSATION TABLE


Name
            
            Fees Earned or
              Paid in Cash
              ($)
            
            
            Stock Awards
              ($)
            
            Option Awards
              ($)
            
            Non-Equity
              Incentive
      Plan
              Compensation
              ($)
            
            Change
              in
      Pension
              Value
      and
              Nonqualified
              Deferred
              Compensation
              Earnings
              ($)
            
            All
      Other
              Compensation
              ($)
            
            Total
              ($)Malcolm
      Pollard
            
            
            0
            
            
            
            —
            
            
            
            
            
            
            
            
            
            
            0Allen
      Hayes
            
            
            0
            
            
            
            —
            
            
            
            
            
            
            
            
            
            
            0Ann
      Perniciaro
            
            
            0
            
            
            
            —
            
            
            
            
            
            
            
            
            
            
            0W.
      Russell Smith
            
            
            0
            
            
            
            —
            
            
            
            
            
            
            
            
            
            
            0




2008
OTHER COMPENSATION TABLE


Name
            
            Year
            
            Perquisites
              and
      Other
              Personal
              Benefits
              ($)
            
            Tax
              Reimbursements
              ($)
            
            Insurance
              Premiums
              ($)
            
            Company
              Contributions
              to Retirement and
              401(k)
      Plans
              ($)
            
            Severance
              Payments /
              Accruals
              ($)
            
            Change
              in Control
              Payments /
              Accruals
              ($)
            
            Total
              ($)None




2008
PERQUISITES TABLE


Name
            
            Year
            
            Personal Use of
              Company
              Car/Parking
            
            Financial Planning/
              Legal
      Fees
            
            Club Dues
            
            Executive Relocation
            
            Total Perquisites and
              Other Personal BenefitsNONE




27




Item
12. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters




The
following tables are as follows: the first table shows the amount of our common
stock beneficially owned by all of our directors and executive officers as a
group as of December 31, 2008. Unless otherwise indicated, beneficial ownership
is direct and the person indicated has sole voting and investment
power.


Name
      and Address
            
            Title
      of
              Class
            
            Shares
              Beneficially
              Owned(1)
            
            Percent of
              Class(1)Malcolm
      Pollard
              177
      Riverside Ave, Ste. F, #1152
              Newport
      Beach, California 92663
              (Director
      through 01/21/09)
            
            Common
            
            600,000
            
            2
            %Ann
      Perniciaro
              177
      Riverside Ave, Ste. F, #1152
              Newport
      Beach, California 92663
              (Director
      though 01/21/09)
            
            Common
            
            550,000
            
            1.8
            %Allen
      Hayes
              177
      Riverside Ave., Ste. F, #1175
              Newport
      Beach, California 92663
              (Director
      through 01/21/09)
            
            Common
            
            550,000
            
            1.8
            %W.
      Russell Smith, III
              177
      Riverside Ave, Ste., F, #1152
              Newport
      Beach, California 92663
              (Director,
      CFO & CEO from 8/17/07)
            
            Common
            
            10,000,000
            
            2
            5%








*
            Less
      than 1%.




Item 13.
            Certain
      Relationships and Related
Transactions




On
December 5, 2006 the Company borrowed $25,000 from a shareholder. The note
is due March 1, 2007 and is at 30% interest. The loan was not repaid on its
due date. The balance of the loan at December 31, 2006 and 2005 was $25,000
and $0 respectively.




The
Company has leased over 4,000 square feet of office space from its President.
The lease was to began in 2007 and provides a lease rate at market value. This
transaction was entered into for the benefit of those services being
rendered—establishment of the agent network to PEOs, Associations, Unions, and
Employers—and for extending office space to the company at a discounted rate for
a minimum of five years—set forth in the schedule below—to launch operations of
Ensurapet in exchange for 500,000 shares of Class A preferred stock. Rental
space located in downtown little rock in a historic building on the national
register of some 4,000 plus square feet with adjacent accommodations for
management. This was later abandoned (see footnote 10).


Lease
      Year
            
            Lease Rate
            
            
            Market
            
            
            Savings/loss to ownerOne
            
            $
            4.00
            
            
            $
            10
            
            
            $
            24,000Two
            
            $
            5.00
            
            
            $
            10
            
            
            $
            20,000Three
            
            $
            6.00
            
            
            $
            10
            
            
            $
            16,000Four
            
            $
            7.00
            
            
            $
            10
            
            
            $
            12,000Five
      – Ten
            
            $
            8.00
            
            
            $
            10
            
            
            $
            8,000Total
      all years
            
            
            
            
            
            
            
            
            
            $
            80,000




Stock
price of shares based on the registered offering $1.00; however, given the
default status of the Company on the Samir loan and the need to forge ahead with
operations if it is to raise capital the following price per share has been
established for these restricted shares. With only 4,000 shares sold at the
offering price of $1.00 all other common shares issued were promissory notes
that converted that resulted in discounts to as little as $0.31 per share.
Therefore, as a result of further financial deterioration the value of the
shares is $80,000 or $0.16 per share. This property was location was terminated
and the accrued balance of leasehold improvements was written off. To abandon
these Little Rock offices a loss of $146,680 was recognized as the estimated
cost of this decision.





28




Item 14.
            Principal
      Accounting Fees and Services




Lawrence
Scharfman CPA audited the Company’s financial statements for the period for
December 31, 2006. Fees related to services performed by Lawrence Scharfman
CPA were as follows:


2006Audit
      Fees (1)
            
            $
            25,000Audit-Related
      Fees
            
            
            -0-Tax
      Fees (2)
            
            
            -0-All
      Other Fees (3)
            
            
            -0-Total
            
            $
            25,000







(1)
            Audit
      fees represent fees for professional services provided in connection with
      the audit of our financial statements and review of our quarterly
      financial statements.





(2)
            Tax
      fees principally included tax advice, tax planning and tax return
      preparation.





(3)
            Other
      fees related to registration statement reviews and
    comments.




Lawrence
Scharfman CPA audited the Company’s financial statements for the period for
December 31, 2007 since December 31, 2006. Fees related to services
performed by Lawrence Scharfman CPA were as follows:


2007Audit
      Fees (1)
            
            $
            25,000Audit-Related
      Fees
            
            
            -0-Tax
      Fees (2)
            
            
            -0-All
      Other Fees (3)
            
            
            -0-Total
            
            $
            25,000







(1)
            Audit
      fees represent fees for professional services provided in connection with
      the audit of our financial statements and review of our quarterly
      financial statements.





(2)
            Tax
      fees principally included tax advice, tax planning and tax return
      preparation.





(3)
            Other
      fees related to registration statement reviews and
    comments.




Lawrence
Scharfman CPA audited the Company’s financial statements for the period for
December 31, 2008 since December 31, 2006. Fees related to services
performed by Lawrence Scharfman CPA were as follows:





2008Audit
      Fees (1)
            
            $
            25,000Audit-Related
      Fees
            
            
            -0-Tax
      Fees (2)
            
            
            -0-All
      Other Fees (3)
            
            
            -0-Total
            
            $
            25,000







(1)
            Audit
      fees represent fees for professional services provided in connection with
      the audit of our financial statements and review of our quarterly
      financial statements.





(2)
            Tax
      fees principally included tax advice, tax planning and tax return
      preparation.





(3)
            Other
      fees related to registration statement reviews and
    comments.





The Board
of Directors has reviewed and discussed with the Company’s management and
independent registered public accounting firm the audited consolidated financial
statements of the Company contained in the Company’s Annual Report on Form 10-K
for the Company’s 2008 fiscal year. The Board has also discussed with the
auditors the matters required to be discussed pursuant to SAS No. 61
(Codification of Statements on Auditing Standards, AU Section 380), which
includes, among other items, matters related to the conduct of the audit of the
Company’s consolidated financial statements.




29




The Board
has received and reviewed the written disclosures and the letter from the
independent registered public accounting firm required by Independence Standards
Board Standard No. 1 (Independence Discussions with Audit Committees), and
has discussed with its auditors its independence from the Company. The Board has
considered whether the provision of services other than audit services is
compatible with maintaining auditor independence.




Based on
the review and discussions referred to above, the Board approved the inclusion
of the audited consolidated financial statements be included in the Company’s
Annual Report on Form 10-K for its 2008 fiscal year for filing with the
SEC.




The Board
pre-approved all fees described above.




Item 15.
            Exhibits




3.1
            
            —Articles
      of Incorporation (1)3.1 (b)
            
            —Amendment
      to the Articles of Incorporation (1)3.2
            
            —Bylaws (1)3.3
            
            —Certificate
      of Designation of Preferences, Rights and Limitations of Series D
      Convertible Preferred Stock (6)4.1
            
            —Form
      of Common Stock Certificate (1)10.1
            
            —Escrow
      Agreement (1)10.2
            
            —Loan
      and Security Agreement Settlement by and between Samir Financial, L.L.C.,
      and Vsurance, Inc. (2)10.3
            
            —Attachments
      to Loan and Security Agreement (4)10.4
            
            —Guarantee
      of Russell Smith III (4)23.1
            
            Consent
      of Independent Registered Public Accounting Firm (6)31.1
            
            Certification
      of the Chairman, President and Chief Executive Officer pursuant to Rule
      13a-14(a) promulgated under the Securities Exchange Act of 1934, as
      amended. (6)31.2
            
            Certification
      of the Executive Vice President and Chief Financial Officer pursuant to
      Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as
      amended. (6)32.1
            
            Certification
      of Chairman, President and Chief Executive Officer, pursuant to 18 U.S.C.
      Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
      of 2002. (6)32.2
            
            Certification
      of Executive Vice President and Chief Financial Officer, pursuant to 18
      U.S.C. Section 1350, as adopted pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002. (6)99.1
            
            —Subscription
      Agreement (3)99.2
            
            Securities
      Purchase Agreement (5)







(1)
            Previously
      filed as an Exhibit to Vsurance’s registration statement on Form SB-2
      filed with the Securities and Exchange Commission on February 24,
      2006.





(2)
            Previously
      filed as Exhibit 10.2 Vsurance’s registration statement on Form SB-2/A
      filed with the Securities and Exchange Commission on May 30,
      2006.





(3)
            Previously
      filed as an Exhibit 99.1 Vsurance’s registration statement on Form SB-2/A
      filed with the Securities and Exchange Commission on June 23,
      2006.





(4)
            Previously
      filed as an Exhibit to Vsurance’s registration statement on Form SB-2/A
      filed with the Securities and Exchange Commission on September 22,
      2006.





(5)
            Previously
      filed as an Exhibit to Vsurance’s registration statement on Form SB-2/A
      filed with the Securities and Exchange Commission on October 13,
      2006.





(6)
            Filed
      herein.




30




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.


(Date)
            
            ENSURAPET,
      INC.(Registrant)April
      15, 2009
            
            By:
            
            /s/
      W. RUSSELL SMITH, IIIW.
      Russell Smith, IIICEOApril
      15, 2009
            
            
            
            /s/
      W. RUSSELL SMITH, IIIW.
      Russell Smith, IIIExecutive
      Vice President and Chief Financial
Officer




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




/s/
      W. RUSSELL SMITH, III
            
            April
      15, 2009W.
      Russell Smith, III
              CEO,
      Executive Vice President and
              Chief
      Financial Officer





31




ENSURAPET, INC. AND SUBSIDIARIES




INDEX
TO EXHIBITS


Exhibit
            
            Description3.3
            
            Certificate
      of Designation of Preferences, Rights and Limitations of Series G
      Convertible Preferred Stock21
            
            Subsidiaries23.1
            
            Consent
      of Independent Registered Public Accounting Firm.31.1
            
            Certification
      of the Chairman, President and Chief Executive Officer pursuant to
      Rule 13a-14(a) promulgated under the Securities Exchange Act of
      1934, as amended.31.2
            
            Certification
      of the Executive Vice President and Chief Financial Officer pursuant to
      Rule 13a-14(a) promulgated under the Securities Exchange Act of
      1934, as amended.32.1
            
            Certification
      of Chairman, President and Chief Executive Officer, pursuant to 18 U.S.C.
      Section 1350, as adopted pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002.32.2
            
            Certification
      of Executive Vice President and Chief Financial Officer, pursuant to 18
      U.S.C. Section 1350, as adopted pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002.




32