ITEM 1.
BUSINESS
EnSurge is a technology company.
General Development of Business
Sunwalker Development, Inc. (“the Company”) was incorporated in the State of Utah on March 28, 1985, and was subsequently changed to a Nevada Corporation on September 14, 1999. The Company was incorporated for the purpose of providing a business framework within which capital could be raised and business opportunities, with profit potential, could be sought. From the period of inception until December 31, 1989, the Company operated as a development stage corporation. Effective February 1, 1990, the Company began permanent operations in the mining industry with emphasis on decorative rock used in landscaping.
In 1990 the Company acquired a mining property located in Morristown, (near Wickenburg) Arizona. In 1994 and 1995, the Company sold all of its assets and ceased active operations.
Effective October 7, 1999 the Company merged with ECenter, Inc, a Utah corporation. Subsequently, the Company changed its name to iShopper.com, Inc. (“iShopper.com”). As a result of the merger, the Company had two wholly-owned subsidiaries: Outbound Enterprises, Inc. and iShopper Internet Services, Inc. A total of 125,000 shares of the Company’s common stock were issued pursuant to the merger. Effective November 1999, the Company refocused its efforts into becoming an Internet holding company. In September 2000, Outbound Enterprises discontinued its operations. In December 2000 iShopper Internet Services discontinued its operations. On January 31, 2000 it entered into a sales agreement with Digital Commerce Bank, Inc. to purchase its assets. This sales agreement was finalized January of 2002.
On November 1, 1999, the Company purchased NowSeven.com, Inc. for a total of 1,000,000 shares of the Company’s common stock.
On January 31, 2000, the Company purchased Stinkyfeet.com, Inc. for 7,500 shares of the Company’s common stock and cash of $40,000. The entity was discontinued December 2002.
On April 4, 2000, the Company purchased Uniq Studios, Inc. for 1,500,000 shares of the Company’s common stock and options to purchase 500,000 shares of common stock at $7.60 per share. Effective November 2001 Uniq Studios, Inc. discontinued its operations.
On April 7, 2000, the Company purchased Totalinet.net, Inc. for 200,000 shares of the Company’s common stock. Effective December 5, 2000 Totalinet.net, Inc. discontinued its operations.
On May 31, 2000, the Company purchased Atlantic Technologies International, Inc. for 238,200 shares of the Company’s common stock. Effective April 27, 2001 Atlantic Technologies International, Inc. discontinued its operations.
On May 31, 2000, the Company purchased Internet Software Solutions, Inc. for 100,000 shares of the Company’s common stock. Effective April 27, 2001 Internet Software Solutions, Inc. discontinued its operations.
On June 1, 2000, the Company purchased KT Solutions, Inc. for 500,000 shares of the Company’s common stock and options to purchase 250,000 additional shares of the Company’s common stock. Effective April 1, 2001, the Company sold KT Solutions Inc. to Knowledge Transfer Systems, Inc. for 8,000,000 shares of common stock.
On October 18, 2000, the Company changed its name from iShopper.com, Inc to EnSurge, Inc.
On February 5, 2001, the Company created a new subsidiary named ZaiBon, Inc., which was discontinued December 2002.
On February 15, 2001, the Company did a 5 for 1 forward split. This provided each shareholder five shares for every one share owned. Prior to the split the Company had 14,386,775 shares issued and outstanding and subsequent to the split the Company had 71,933,875 issued and outstanding. The accompanying financial statements reflect the split.
Effective May 8th, 2006 the Company approved a 1 for 3,000 reverse split in its common stock. The Company did not reverse any certificate that is less than 100 shares or any certificate more than 100 shares to an amount below 100 shares. The accompanying financial statements have been presented to reflect this reverse stock split.
On September 28, 2006, the Company entered into an agreement with Portsmith Partner of Nevada, Inc., a related party shareholder of Ensurge, to purchase all shares of stock of Outbound, iShopper I.S., ECenter, NowSeven, StinkyFeet, Uniq Studios, TotalInet, ATI, ISSI, and ZaiBon (Ensurge subsidiaries). For the period covering this report, the Company has no subsidiaries.
Forward-Looking Statements and Associated Risks
This Report, including all documents incorporated herein by reference, includes certain “forward-looking statements” within the meaning of that term in Section 13 or 15(d) of the Securities Act of 1934, and Section 21E of the Exchange Act, including, among others, those statements preceded by, followed by or including the words “believes,” “expects,” “anticipates” or similar expressions.
These forward-looking statements are based largely on our current expectations and are subject to a number of risks and uncertainties. Our actual results could differ materially from these forward-looking statements. In addition to the other risks described in the “Factors That May Affect Future Results” discussion under Item 6, Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II of this Report, important factors to consider in evaluating such forward-looking statements include:
·
changes in our business strategy or an inability to execute our strategy due to unanticipated changes in the market,
·
our ability to raise sufficient capital to meet operating requirements,
·
various competitive factors that may prevent us from competing successfully in the marketplace, and
·
changes in external competitive market factors or in our internal budgeting process which might impact trends in our results of operations.
In light of these risks and uncertainties, there can be no assurance that the events contemplated by the forward-looking statements contained in this Report will, in fact, occur.
strategy & market opportunity
While the Company strives to create positive stockholder value from every holding in its portfolio, there will be some holdings that will not reach their full potential.
Employees
As of April 11, 2009, Ensurge employed a total of 1 person. None of our employees are associated with unions.
Environmental Standards
The Company is not involved in any project that would affect the environment.
ITEM 2.
ITEM 2.
PROPERTIES
The Company currently operates from the office of the Company’s legal counsel and pays no rent or expense.
ITEM 3.
ITEM 3.
LEGAL PROCEEDINGS
EnSurge has stipulated to judgements, which approximate $190,000. The debt was recorded on the books of the Company as notes payable and there are no further legal proceedings.
Effective December 31, 2007, the Company wrote-off $130,241 of accounts payable, $484,496 of accrued liabilities and $253,354 of notes payable, due to the statute of limitations being fulfilled. The company has recognized a gain of $868,091 relating to the write-off of these liabilities.
OneSource.com v. Outbound Enterprises and enSurge, Inc. In October 2000, OneSource.com brought suit in the Third Judicial District Court, Salt Lake City, Utah, against Outbound seeking recovery for amounts owed for printing services and related products furnished between October 1999 and January 2000 in the amount of $76,157. Settlement was reached in December 2000, on terms that entitled OneSource to a judgment against Outbound and Company, as its guarantor, if settlement installments were not made as required. The Company has defaulted in settlement payments and judgment against Outbound and the Company was entered on March 30, 2001, in the amount of $85,096, including interest costs and attorneys fees. Effective December 31, 2007, the Company wrote-off this debt of $85,096, due to the statute of limitations being fulfilled. The Company has recognized a gain of $85,096 relating to the write-off of these liabilities.
Paychex, Inc. v EnSurge, Inc. and Subsidiaries. In March 2001, Paychex filed for arbitration with the American Arbitration Association in Syracuse, New York, against EnSurge for employee payroll and payroll taxes paid by Paychex. Paychex has filed arbitration for EnSurge, Inc. for $45,145. All arbitrations are still in process and nothing has been resolved to date. Effective December 31, 2007, the Company wrote-off this debt of $45,145, due to the statute of limitations being fulfilled. The Company has recognized a gain of $45,145 relating to the write-off of these liabilities.
ITEM 4.
ITEM 4.
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
PART II
ITEM 5.
ITEM 5.
MARKET FOR REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Price Range of Common Stock
Our common stock trades on the OTC Bulletin Board under the symbol [ESGI]. The following table sets forth the range of the high and low sales prices per share of our common stock for the fiscal quarters indicated, as reported by OTC. Prior to December 23, 1999, there was no known public trading in our common stock. Quotations represent inter-dealer prices, without retail markup, markdown, or commission and may not necessarily represent actual transactions.
Approximate Number of Equity Security holders
On April 13, 2009, there were 355 stockholders of record of our common stock. Because many of such shares are held by brokers and other institutions on behalf of shareholders, we are unable to estimate the total number of stockholders represented by these record holders.
Dividends
We do not presently pay dividends on our common stock. We intend for the foreseeable future to continue the policy of retaining earnings, if any, to finance the development and growth of our business.
ITEM 6.
ITEM 6.
SELECTED FINANCIAL DATA
Forward-Looking Statements and Associated Risks
This Report, including all documents incorporated herein by reference, includes certain “forward-looking statements” within the meaning of that term in Section 13 or 15(d) of the Securities Act of 1934, and Section 21E of the Exchange Act, including, among others, those statements preceded by, followed by or including the words “believes,” “expects,” “anticipates” or similar expressions.
These forward-looking statements are based largely on our current expectations and are subject to a number of risks and uncertainties. Our actual results could differ materially from these forward-looking statements. In addition to the other risks described in the “Factors That May Affect Future Results” discussion under Item 7A, Quantitative and Qualitive Disclosure About Market Risk in Part II of this Report, important factors to consider in evaluating such forward-looking statements include:
·
changes in our business strategy or an inability to execute our strategy due to unanticipated changes in the market,
·
our ability to raise sufficient capital to meet operating requirements,
·
various competitive factors that may prevent us from competing successfully in the marketplace, and
·
changes in external competitive market factors or in our internal budgeting process which might impact trends in our results of operations.
In light of these risks and uncertainties, there can be no assurance that the events contemplated by the forward-looking statements contained in this Report will, in fact, occur.
Results of Operations
The following discussions should be read in conjunction with the Company's Financial Statements contained herein under Item 8 of this Report.
ITEM 7.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS.
The following discussion of the results of operations and numbers presented represent operations from the parent company. As of September 28, 2006, the Company had sold all subsidiaries.
Sales for the twelve months ended December 31, 2008 and 2007 were respectively, $0 and $0. The Company had no revenue for 2008 and 2007.
General & Administrative expenses for the twelve months ended December 31, 2008 and 2007 were, respectively, $30,460 and $21,858. These costs were mainly to keep operations of the parent company viable.
Interest expense was $100,598 and $218,485 for the years ended December 31, 2008 and 2007, respectively.
During 2007 the company settled several liabilities and as of December 31, 2007 recorded a gain on forgiveness of debt for $868,091.
EnSurge has stipulated to judgements, which approximate $190,000. The debt was recorded on the books of the Company as notes payable and there are no further legal proceedings.
Liquidity and Capital Resources
The Company has financed its operations to date primarily through private placements of equity securities and current sales. We have been unprofitable since inception (1998) and we have incurred net losses in each year. The Company has no further stock authorized to do private placements.
ITEM 7A.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
FACTORS THAT MAY AFFECT FUTURE RESULTS
We Have No Significant Operating History.
As a company in the rapidly changing Technology and e-commerce industries, we are subject to all the substantial risks inherent in the commencement of a new business enterprise. We can provide no assurance that we will be able to successfully generate revenues, operate profitably, or make any distributions to the holders of our securities. Additionally, we have no significant business history. Our prospects must be considered in light of the risks, expenses and difficulties encountered by companies in the early stages of development. Such risks include, but are not limited to, an evolving and unpredictable business model and the management of growth. We can provide no assurance that we will be successful in addressing such risks, and the failure to do so could have a material adverse effect on our business.
We Incurred Operating Losses for the Current Year
At December 31, 2008, our accumulated deficit since inception was $16,199,540. For the twelve months ended December 31, 2008, we incurred a net loss of $131,058. We have financed our operations primarily through sales of equity securities.
We Have Significant Funding Needs.
We require capital funds for payment of past due accounts payable and notes payable. However, we can provide no assurance that capital funds will be raised. If adequate funds are unavailable, we may delay, curtail, reduce the scope of or eliminate our operations and sales efforts which could have a material adverse effect on our financial condition and business operations.
Outlook
The Company does not have current operations or plans for future operations and is not looking to grow or add to any of its holdings.
Inflation
Our business and operations have not been materially affected by inflation during the periods for which financial information is presented.
PART II
ITEM 8.
ITEM 8.
FINANCIAL STATEMENTS
The following constitutes a list of Financial Statements included in Part II of this Report beginning at page 11 of this Report:
ENSURGE, INC.
Douglas W. Child, CPA
Marty D. Van Wagoner, CPA
J. Russ Bradshaw, CPA
William R. Denney, CPA
Roger B. Kennard, CPA
Russell E. Anderson, CPA
Scott L. Farnes
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Officers and Directors
EnSurge, Inc.
We have audited the accompanying statements of assets, liabilities, and stockholders’ deficit - liquidation basis of EnSurge, Inc. a Nevada corporation, (the Company) as of December 31, 2008 and 2007, and the related statements of revenue and expenses - liquidation basis, stockholders’ deficit - liquidation basis, and cash flows - liquidation basis for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States of America). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the assets, liabilities and stockholders’ deficit - liquidation basis of EnSurge, Inc. as of December 31, 2008 and 2007, their revenues and expenses - liquidation basis and their cash flows - liquidation basis for the years then ended, in conformity with accounting principles generally accepted in the United States of America applied on the liquidation basis as described in Note 1.
/s/ Child, Van Wagoner & Bradshaw, PLLC
Child, Van Wagoner & Bradshaw, PLLC
Certified Public Accountants
Salt Lake City, Utah
April 14,
1284 W. Flint Meadow Dr. #D
Kaysville, Utah 84037
Telephone 801.927.1337
Facsimile 801.927.1344
5296 S. Commerce Dr. #300
Salt Lake City, Utah 84107
Telephone 801.281.4700
Facsimile 801.281.4701
Suite A, 5/F
Max Share Centre
King’s Road
North Point, Hong Kong
Telephone 852.21.555.333
Facsimile 852.21.165.222
www.cpaone.net
ENSURGE, INC.
STATEMENTS OF ASSETS, LIABILITIES AND STOCKHOLDERS’
DEFICIT - LIQUIDATION BASIS AS OF DECEMBER 31, 2008 AND 2007
The accompanying notes are an integral part of these financial statements.
ENSURGE, INC.
STATEMENTS OF REVENUE AND EXPENSES - LIQUIDATION BASIS
FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007
The accompanying notes are an integral part of these financial statements.
ENSURGE, INC.
STATEMENTS OF STOCKHOLDERS’ DEFICIT - LIQUIDATION BASIS
FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007
The accompanying notes are an integral part of these financial statements.
ENSURGE, INC.
STATEMENTS OF CASH FLOWS - LIQUIDATION BASIS
FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007
The accompanying notes are an integral part of these financial statements.
NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and Liquidation - On October 16, 2000, iShopper.com, Inc. changed its name to EnSurge, Inc. EnSurge, Inc. is referred to herein as the Company. On January 1, 2002, the Company began liquidation of its assets; accordingly, the accompanying financial statements are presented on a liquidation basis of accounting.
Principles of Consolidation - The accompanying financial statements include the accounts of Enurge, Inc.
On September 28, 2006, the Company entered into an agreement with Portsmith Partner of Nevada, Inc., a related party stockholder of Ensurge, to purchase all shares of stock of Outbound, iShopper I.S., ECenter, NowSeven, StinkyFeet, Uniq Studios, TotalInet, ATI, ISSI, and ZaiBon (Ensurge subsidiaries). As a result, the accompanying financial statements would not be considered consolidated at December 31, 2007, or at December 31, 2008, or the period from September 28, 2006 through December 31, 2008.
Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Actual results could differ from those estimates.
Business Condition - The Company has suffered losses from operations, has had negative cash flows from operating activities for all periods since inception and has a working capital deficiency of $1,940,420 at December 31, 2008. The Company has no means available nor does management have any plans to obtain financing to satisfy the Company’s current liabilities of $1,940,420 at December 31, 2008 or to satisfy any of the Company’s contingent liabilities. The Company has defaulted on several liabilities.
Stock-Based Compensation - Effective January 1, 2006, the Company adopted SFAS No. 123 (revised 2004), “Share-Based Payment” (SFAS No. 123R) requiring that compensation cost relating to share-based payment awards made to employees and directors be recognized in the financial statements. The awards issued under Company's stock-based compensation plans are described in Note 3, “Stock Options". No options were granted during the year ended December 31, 2007. Therefore, there were no effects of stock-based compensation resulting from the application of SFAS No. 123(R) included in Consolidated Statements of Revenue and Expenses. The cost for future awards will be measured at the grant date based on the calculated fair value of the award. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods (generally the vesting period of the equity award) in the Company's Consolidated Statements of Revenue and Expenses.
Prior to January 1, 2006, the Company accounted for its stock options issued to directors, officers and employees under Accounting Principles Board Opinion No. 25 and related interpretations (“APB 25"). Under APB 25, compensation expense is recognized if an option’s exercise price on the measurement date is below the fair value of the Company’s common stock. The Company also accounted for options and warrants issued to non-employees in accordance with SFAS No. 123, Accounting for Stock-Based Compensation” (SFAS 123) which required these options and warrants to be accounted for at their fair value. No options were granted during the year ended December 31, 2008, and all options had vested prior to January 1, 2006, thus pro forma financial information has not been presented.
Basic and Diluted Gain Per Share - Basic gain per common share is computed by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted loss per share is calculated to give effect to potentially issuable common shares which include stock options and stock warrants except during loss periods when those potentially issuable common shares would decrease loss per share. At December 31, 2008, the Company had no potentially issuable common shares.
Income Taxes - The Company recognizes an asset or liability for the deferred tax consequences of all temporary differences between the tax bases of assets or liabilities and their reported amounts in the financial statements that will result in taxable or deductible amounts in future years when the reported amounts of the asset or liabilities are recovered or settled and for operating loss carryforwards. These deferred tax assets and liabilities are measured using the enacted tax rates that will be in effect when the differences are expected to reverse and the carryforwards are expected to be realized. Deferred tax assets are reviewed periodically for recoverability and a valuation allowance is provided as necessary.
Recently Enacted Accounting Standards - In September 2006, the Securities Exchange Commission issued Staff Accounting Bulletin No. 108 (“SAB No. 108”). SAB No. 108 addresses how the effects of prior year uncorrected misstatements should be considered when quantifying misstatements in current year financial statements. SAB No. 108 requires companies to quantify misstatements using a balance sheet and income statement approach and to evaluate whether either approach results in quantifying an error that is material in light of relevant quantitative and qualitative factors. When the effect of initial adoption is material, companies will record the effect as a cumulative effect adjustment to beginning of year retained earnings and disclose the nature and amount of each individual error being corrected in the cumulative adjustment. SAB No. 108 was effective beginning January 1, 2007 and it is anticipated that the initial adoption of SAB No. 108 will not have a material impact on the Company’s financial statements.
In June 2006, the FASB issued FASB Interpretation No. 48 (“FIN-48”), “Accounting for Uncertainty in Income Taxes - an Interpretation of FASB Statement No. 109.” The interpretation clarifies the accounting for uncertainty in income taxes recognized in an entity's financial statements in accordance with SFAS No. 109, “Accounting for Income Taxes.” Specifically, FIN-48 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken. The provisions of FIN-48 are effective for financial statements for fiscal years beginning after December 15, 2006. Accordingly, the Company adopted FIN-48 on January 1, 2007. The adoption of FIN-48 is not expected to have a material effect on the Company’s financial position or results of operations.
NOTE 2 - NOTES PAYABLE
Settlement of Liabilities - During the period ended December 31, 2006, the Company entered into five agreements to settle outstanding notes payable totaling $712,564 and related accrued interest totaling $484,565. Each debt and accrued interest was settled for approximately $0.05 on the dollar, amounting to a settlement amount of $59,362. The Company entered into a new note payable agreement to pay for these settlements. This note payable of $59,362 accrues interest at 15% per annum, is due on demand, and is unsecured. The Company has recognized a gain of $1,137,767 relating to the settlement of these liabilities.
Effective June 30th, 2006 the Company wrote-off $244,939 of accounts payable and $222,807 of notes payable and related accrued interest, due to the statute of limitations being fulfilled. The Company has recognized a gain of $467,746 relating to the write-off of these liabilities.
Effective December 31, 2007, the Company wrote-off $130,241 of accounts payable, $484,496 of accrued liabilities and $253,354 of notes payable, due to the statute of limitations being fulfilled. The Company has recognized a gain of $868,091 relating to the write-off of these liabilities.
Stockholder Activity - During the period ended December 31, 2006, the Company entered into four new notes payable with a related party stockholder totaling $13,000. These notes accrue interest at 15% per annum, are due on demand, and are unsecured.
On June 19th, 2006 the Company entered into an agreement with Portsmith Partner of Neveda, Inc., a stockholder of the Company, whereby Portsmith agreed to assume the debt of the subsidiaries of Ensurge, which totaled $2,614,380. In return for this obligation, Ensurge issued 5,000 shares of common stock to Portsmith. In relation to this transaction, on September 28, 2006, Ensurge sold all shares of stock of all subsidiaries to Portsmith. - See Note 1. This transaction has been treated as a non-monetary transaction with a related party shareholder and the effects are reported through Stockholders’ Deficit.
During the period ended December 31, 2007, the Company entered into two new notes payable with a related party stockholder totaling $8,000. These notes accrue interest at 15% per annum, are due on demand, and are unsecured. The Company also entered into four new notes payable with a related party stockholder totaling $8,000. These notes accrue interest at 10% per annum, are due on demand, and are unsecured.
During the period ended December 31, 2008, the Company entered into one new note payable with a related party stockholder totaling $6,300. This note accrues interest at 15% per annum, is due on demand, and is unsecured. The Company also entered into five new notes payable with a related party stockholder totaling $8,250. These notes accrue interest at 10% per annum, are due on demand, and are unsecured.
A summary of notes payable at December 31, 2008 and 2007 is as follows:
NOTE 3 - STOCK OPTIONS
A summary of stock option activity for the years ending December 31, 2008 and 2007 is as follows:
NOTE 4 - PROVISION FOR INCOME TAXES
The Company has operating loss carry forwards of approximately $6,603,000 at December 31, 2008. The operating loss carry forwards expire from 2019 through 2028. Substantially all of the operating loss carry forwards are limited in the availability for use by the Company. The net deferred tax asset consisted of the following at December 31, 2008 and 2007:
During 2008 and 2007, the valuation allowance increased and decreased by $131,170 and $424,914, respectively, principally due to the utilization of operating losses.
The following is a reconciliation of the amount of tax benefit that would result from applying the federal statutory rate to pretax loss from continuing operations with the benefit from income taxes attributable to continuing operations:
NOTE 5 - COMMITMENTS AND CONTINGENCIES
OneSource.com v. Outbound Enterprises and enSurge, Inc. - In October 2000, OneSource.com brought suit against Outbound seeking recovery for amounts owed for printing services and related products furnished between October 1999 and January 2000 in the amount of $76,157. Settlement was reached in December 2000, on terms that entitled OneSource to judgment against Outbound and Company, as its guarantor, if settlement installments were not made as required. The Company has defaulted in settlement payments and judgment against Outbound and the Company was entered on March 30, 2001, in the amount of $85,096, including interest costs and attorneys fees. Effective December 31, 2007, the company wrote-off this debt of $85,096, due to the statute of limitations being fulfilled. In 2007, the Company recognized a gain of $85,096 relating to the write-off of these liabilities.
Paychex, Inc. v enSurge, Inc. and Subsidiaries. - In March 2001, Paychex filed for arbitration with the American Arbitration Association in Syracuse, New York, against enSurge and its subsidiaries for employee payroll and payroll taxes paid by Paychex. Paychex has filed arbitration separately for the Company in the amount of $45,145. Effective December 31, 2007, the company wrote-off this debt of $45,145, due to the statute of limitations being fulfilled. In 2007, the Company recognized a gain of $45,145 relating to the write-off of these liabilities.
EnSurge has stipulated to judgements, which approximate $190,000. The debt was recorded on the books of the Company as notes payable and there are no further legal proceedings
NOTE 6 - OTHER SIGNIFICANT ITEMS
Common Stock Split - Effective May 8, 2006 the Company approved a 1 for 3,000 reverse split in its common stock. The Company did not reverse any certificate that is less than 100 shares or any certificate more than 100 shares to an amount below 100 shares. The accompanying financial statements have been presented to reflect this reverse stock split.
NOTE 7 - SUBSEQUENT EVENTS
None
ITEM 9.
ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
As of February 29, 2008, the Company changed auditors from Hansen, Barnett & Maxwell to Child, Van Wagoner, & Bradshaw. There have been no disagreements.
ITEM 9A.
ITEM 9A.
CONTROLS AND PROCEDURES
(a) Evaluation of Disclosure Controls and Procedures. The Company’s chief executive officer and chief financial officer, after evaluating the effectiveness of the Company’s “disclosure controls and procedures” (as defined in the Securities Exchange Act of 1934, Rules 13a-14(c) and 15-d-14(c)) as of a date (the “Evaluation Date”) within 90 days before the filing date of this quarterly report, have concluded that, as of the Evaluation Date, the Company’s disclosure controls and procedures were adequate and designed to ensure that material information relating to the Company and its subsidiaries would be made known to them by others within those entities.
(b) Changes in Internal Controls. There were no significant changes in the Company’s internal controls, or, to the Company’s knowledge, in other factors that could significantly affect these controls subsequent to the Evaluation Date.
Management’s Annual Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f). Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles.
Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework established by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) as set forth in Internal Control - Integrated Framework. Based on our evaluation under the framework in Internal Control - Integrated Framework, our management concluded that our internal control over financial reporting was effective as of December 31, 2008.
This annual report does not include an audit or attestation report of our registered public accounting firm regarding our internal control over financial reporting. Our management’s report was not subject to audit or attestation by our registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management’s report in this annual report.
ITEM 9B.
ITEM 9B.
OTHER INFORMATION
None
PART III
ITEM 10.
ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.
The following sets forth certain information regarding our executive officers as of April 13, 2009:
Name
Age
Position
Jeff A. Hanks
President and Chief Financial Officer
Jeff A. Hanks, President and CFO: Mr. Hanks is President and Chief Financial Officer for the Company. Mr. Hanks is not a director of any other public company at this time.
All of the current executive officers and directors of the Company were delinquent in filing their Initial Statements of Beneficial Ownership on Form 3.
Compliance with Section 16(a) Beneficial Ownership Reporting.
Section 16(a) of the Securities Exchange Act of 1934 requires our directors, executive officers and persons who own more than five percent of a registered class of our equity securities to file with the Securities and Exchange Commission initial reports of ownership and reports of changes in ownership of our common stock. Officers, directors and ten-percent or more beneficial owners of our common stock are required by SEC regulations to furnish Ensurge, Inc. with copies of all Section 16(a) reports they file and provide written representation that no Form 5 is required.
ITEM 11.
ITEM 11.
EXECUTIVE COMPENSATION
Jeff A. Hanks served as CEO of the Company during the last completed fiscal year and received no compensation during that time period. No other officer of the company was compensated in excess of $100,000. Mr. Hanks is the only employee of the Company and has reached an agreement on accrued wages of $50,000, and any other accrued wages have been forgiven.
ITEM 12.
ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
None
ITEM 13.
ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None
ITEM 14.
ITEM 14.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
(a) Audit Fees: the aggregate audit and review fees billed for fiscal years ending 2008 and 2007 were respectively, $12,400 and $11,160. These fees were for professional services rendered by Child, Van Wagoner & Bradshaw, PLLC CPA firm for the audit of the Ensurge’s annual financial statements and review of financial statements.
(b) Tax Fees: the aggregate tax fees billed for fiscal years ending 2008 and 2007 were respectively, $700 and $815. These fees were for professional services rendered by Child, Van Wagoner & Bradshaw, PLLC and Hansen, Barnett, & Maxwell CPA firm, which were for the completion of Ensurge’s year end tax return.
ITEM 15.
ITEM 15.
EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
24.1*
Powers of Attorney for Messrs. Hanks.
(b).
Reports on Form 8-K:
None
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
Pursuant to the requirements of the Securities and Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
/s/ JEFF A. HANKS
President, Chief Executive Officer, and
JEFF A. HANKS
Chief Financial Officer, and Director
EXHIBIT INDEX
24.1
Powers of Attorney for Messrs. Hanks.
Certification pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Certification pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
* Previously filed and incorporated herein by reference.