<?xml version="1.0" encoding="us-ascii"?><InstanceReport xmlns:xsd="http://www.w3.org/2001/XMLSchema" xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance"><Version>2.4.0.8</Version><ReportLongName>000120 - Disclosure - Note 1 - Organization and Basis of Presentation: Business Condition (Policies)</ReportLongName><DisplayLabelColumn>true</DisplayLabelColumn><ShowElementNames>false</ShowElementNames><RoundingOption /><HasEmbeddedReports>false</HasEmbeddedReports><Columns><Column FlagID="0"><Id>1</Id><IsAbstractGroupTitle>false</IsAbstractGroupTitle><LabelSeparator>

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</LabelSeparator><Level>1</Level><ElementName>us-gaap_PolicyTextBlockAbstract</ElementName><ElementPrefix>us-gaap_</ElementPrefix><IsBaseElement>true</IsBaseElement><BalanceType>na</BalanceType><PeriodType>duration</PeriodType><IsReportTitle>false</IsReportTitle><IsSegmentTitle>false</IsSegmentTitle><IsCalendarTitle>false</IsCalendarTitle><IsEquityPrevioslyReportedAsRow>false</IsEquityPrevioslyReportedAsRow><IsEquityAdjustmentRow>false</IsEquityAdjustmentRow><IsBeginningBalance>false</IsBeginningBalance><IsEndingBalance>false</IsEndingBalance><IsReverseSign>false</IsReverseSign><FootnoteIndexer /><Cells><Cell FlagID="0" ContextID="" UnitID=""><Id>1</Id><IsNumeric>false</IsNumeric><IsRatio>false</IsRatio><DisplayZeroAsNone>false</DisplayZeroAsNone><NumericAmount>0</NumericAmount><RoundedNumericAmount>0</RoundedNumericAmount><NonNumbericText /><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat></Cell></Cells><ElementDataType>xbrli:stringItemType</ElementDataType><SimpleDataType>string</SimpleDataType><IsTotalLabel>false</IsTotalLabel><UnitID>0</UnitID><Label>Policies</Label></Row><Row FlagID="0"><Id>2</Id><IsAbstractGroupTitle>false</IsAbstractGroupTitle><LabelSeparator>

</LabelSeparator><Level>2</Level><ElementName>us-gaap_LiquidityDisclosureTextBlock</ElementName><ElementPrefix>us-gaap_</ElementPrefix><IsBaseElement>true</IsBaseElement><BalanceType>na</BalanceType><PeriodType>duration</PeriodType><IsReportTitle>false</IsReportTitle><IsSegmentTitle>false</IsSegmentTitle><IsCalendarTitle>false</IsCalendarTitle><IsEquityPrevioslyReportedAsRow>false</IsEquityPrevioslyReportedAsRow><IsEquityAdjustmentRow>false</IsEquityAdjustmentRow><IsBeginningBalance>false</IsBeginningBalance><IsEndingBalance>false</IsEndingBalance><IsReverseSign>false</IsReverseSign><FootnoteIndexer /><Cells><Cell FlagID="0" ContextID="D130101_130630" UnitID=""><Id>1</Id><IsNumeric>false</IsNumeric><IsRatio>false</IsRatio><DisplayZeroAsNone>false</DisplayZeroAsNone><NumericAmount>0</NumericAmount><RoundedNumericAmount>0</RoundedNumericAmount><NonNumbericText>&lt;!--egx--&gt;&lt;p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'&gt;&lt;b&gt;&lt;i&gt;Business Condition&lt;/i&gt;&lt;/b&gt; &amp;#150; The Company has suffered losses from operations, and the Company had a working capital deficit in the amount $4,292,874 at June 30, 2013. Part of the deficit is due to outstanding warrants and warrant derivatives. Without the warrant derivatives the adjusted working capital deficit is $3,551,003.&amp;#160; &lt;/p&gt; &lt;p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'&gt;&amp;nbsp;&lt;/p&gt; &lt;p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'&gt;During the month of October 2011 the Company entered into two twelve month convertible Notes Payable for $605,000 each, for a total funding of $1,210,000, with an initial issue discount of 10% and total proceeds of $1,100,000, which are collateralized by all the assets of the Company. These notes may be converted at a fixed price of $0.50 per share of the Company&amp;#146;s common stock, which may be converted at the option of the lender.&amp;#160; These notes also include 950,000 warrants each for a total of 1,900,000 warrants at an exercise price of $1.00 per share and have a cashless exercise provision.&amp;#160; The warrants have a 5 year term.&amp;#160; In case of default, the Note may be converted into common stock at $0.50 per share.&amp;#160; During November 2012, the Company negotiated an extension of these two notes payable, which are due on March 15, 2013 and are currently in default.&amp;#160; The principal was increased from $550,000 per note to $756,250, or a total of $1,512,500.&amp;#160; As part of this negotiation to extend the note, the Company agreed to pay a total of 900,000 shares of common stock.&amp;#160; On May 6, 2013 the Company negotiated with the debt holders to move this liability off of the books of Ensurge and onto its Brazilian subsidiary.&amp;#160; As part of the this negotiation the Company agreed to pay a total of 2,000,000 shares of common stock.&lt;/p&gt; &lt;p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'&gt;&amp;nbsp;&lt;/p&gt; &lt;p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'&gt;Effective March 2, 2012, the Company accepted $380,000 in private placement funds from accredited investors in exchange for units consisting of seven hundred sixty thousand (760,000) shares of the Company&amp;#146;s common stock, plus three hundred eighty thousand (380,000) warrants with an exercise price of $1.00.&amp;#160; &lt;/p&gt; &lt;p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'&gt;&amp;nbsp;&lt;/p&gt; &lt;p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'&gt;During November 2012, the Company entered into several 12 month notes payable for an aggregate of $150,000.&lt;/p&gt; &lt;p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'&gt;&amp;nbsp;&lt;/p&gt; &lt;p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'&gt;During April 2013, the Company entered into a 60 day 10% convertible note payable for $15,000, which has not been paid off nor converted into stock.&amp;#160; Due to the note being in default the interest rate has now increased to 18%.&lt;/p&gt; &lt;p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'&gt;&amp;nbsp;&lt;/p&gt; &lt;p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'&gt;On May 9, 2013, the Company entered into a 6 month note payable of $23,000 with interest payable at 22% APR.&amp;#160; As part of this note the Company issued 1,000,000 shares of common stock.&lt;/p&gt; &lt;p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'&gt;&amp;nbsp;&lt;/p&gt; &lt;p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'&gt;During May 2013, the Company entered into two 24 month notes receivable for an aggregate of $75,000 in exchange for 15,000,000 shares of common stock. &lt;/p&gt; &lt;p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'&gt;&amp;nbsp;&lt;/p&gt; &lt;p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'&gt;During May 2013, the Company acquired 80% of Transglobal Gold Corporation in exchange for 6,000,000 shares of Ensurge common stock and issued 200,000 shares to employees.&lt;/p&gt; &lt;p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'&gt;&amp;nbsp;&lt;/p&gt; &lt;p style='margin:0in;margin-bottom:.0001pt;text-autospace:none;text-align:justify'&gt;The proceeds of the financing are being used by the Company to fund the exploration for gold mines or to acquire relating mining assets, either directly or through one or more partnerships or joint ventures, in Brazil or elsewhere in South America.&amp;#160; &lt;/p&gt;</NonNumbericText><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat></Cell></Cells><ElementDataType>nonnum:textBlockItemType</ElementDataType><SimpleDataType>na</SimpleDataType><ElementDefenition>Disclosure of accounting policy for reporting when there is a substantial doubt about an entity's ability to continue as a going concern for a reasonable period of time (generally a year from the balance sheet date). Disclose: (a) pertinent conditions and events giving rise to the assessment of substantial doubt about the entity's ability to continue as a going concern for a reasonable period of time, (b) the possible effects of such conditions and events, (c) management's evaluation of the significance of those conditions and events and any mitigating factors, (d) possible discontinuance of operations, (e) management's plans (including relevant prospective financial information), and (f) information about the recoverability or classification of recorded asset amounts or the amounts or classification of liabilities. If management's plans alleviate the substantial doubt about the entity's ability to continue as a going concern, disclosure of the principal conditions and events that initially raised the substantial doubt about the entity's ability to continue as a going concern would be expected to be considered. Disclose whether operations for the current or prior years generated sufficient cash to cover current obligations, whether waivers were obtained from creditors relating to the company's default under the provisions of debt agreements and possible effects of such conditions and events, such as: whether there is a possible need to obtain additional financing (debt or equity) or to liquidate certain holdings to offset future cash flow deficiencies. 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