**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      DC 20549**


**______________________**





**FORM
      10-KSB/A**


**(Amendment
      No. 2)**


(Mark
      One)


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




for
      the
      fiscal year ended December 31, 2006





OR





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





Commission
      File Number: 0-50561




**ENIGMA
      SOFTWARE GROUP, INC.**


(Name
      of
      Small Business Issuer in Its Charter)




**Delaware**
              (State
                or Other Jurisdiction of
              Incorporation
                or Organization)
            
            **20-2675930**
              (I.R.S.
                Employer
              Identification
                No.)2
                Stamford Landing, Suite 100, Stamford, CT
              (Address
                of Principal Executive Offices)
            
            06902
              (Zip
                Code)




(888)
      360-0646


(Issuer's
      Telephone Number, Including Area Code)




Securities
      registered under Section 12(b) of the Exchange Act: None




Securities
      registered under Section 12(g) of the Exchange Act:




Title
                of Each Class
              
              Common
                Stock, $.001 Par Value
            
            Name
                of Each Exchange on Which Registered
              
              Over-the-Counter
                Bulletin Board




Check
      whether the issuer is not required to file reports pursuant to Section 13 or
      15(d) of the Exchange Act.


 ̈





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 þ No  ̈





Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B contained in this form, and no disclosure will be contained,
      to
      the best of the registrant’s knowledge, in definitive proxy or information
      statements incorporated by reference in Part III of this Form 10-KSB or any
      amendment to this Form 10-KSB.


þ





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).


Yes  ̈ No þ




1


State
      issuer’s revenues for its most recent fiscal year.  $1,327,481




State
      the
      aggregate market value of the voting and non-voting common equity held by
      non-affiliates computed by reference to the price at which the common equity
      was
      sold, or the average bid and asked prices of such common equity, as of a
      specified date within the past 60 days. $ 1,550,768 as of March 21, 2007.




**APPLICABLE
      ONLY TO CORPORATE REGISTRANTS**




State
      the
      number of shares outstanding of each of the issuer’s classes of common equity,
      as of the latest practicable date. 4,191,266 shares
      of
      Common Stock, $0.001 par value, outstanding as of May 1, 2007.




Transitional
      Small Business Disclosure Format (Check One):


Yes  ̈ No þ








2





Explanatory
      Note




This
      Form
      10-KSB/A (Amendment No. 2) filing amends Item 8A, Controls and
      Procedures, of the Form 10-KSB/A filed by Enigma Software Group, Inc. (the
      “Company”) on May 1, 2007. These amendments pertain specifically to
      the Company's evaluation of its disclosure controls and procedures.








3







**Item
      8A. Controls and Procedures**




Disclosure
      controls and procedures are designed to ensure that information required to
      be
      disclosed in the reports filed or submitted under the Exchange Act of 1934
      are
      recorded, processed, summarized and reported, within the time periods specified
      in the rules and forms of the Securities and Exchange Commission. Disclosure
      controls and procedures include, without limitation, controls and procedures
      designed to ensure that information required to be disclosed in the reports
      filed under the Securities Exchange Act of 1934 is accumulated and communicated
      to management, including our Chief Executive Officer (“CEO”) and Chief Financial
      Officer (“CFO”), as appropriate, to allow timely decisions regarding required
      disclosure.





As
      noted
      in the Company’s interim filings, a
      material weakness in the Company’s internal controls over financial reporting
      existed as of June 30, 2006, and September 30, 2006 with regard to our
      design and maintenance of adequate controls over the preparation, review,
      presentation and disclosure of amounts included in our Balance Sheet and
      Statements of Operations and Cash Flows, which resulted in misstatements
      therein.  The impact of the issuance of secured convertible debentures and
      the related warrants, and the proceeds therefrom, were not appropriately
      classified as liabilities on the Balance Sheet and the related fair value
      adjustments on the Statement of Operations and financing cash inflows and
      outflows on the Statement of Cash Flows. In addition, the beneficial conversion
      feature of the convertible preferred stock was not appropriately classified
      on
      the Balance Sheet and the related accretion adjustment on the Statement of
      Operations and financing cash inflows and outflows on the Statement of Cash
      Flows. Finally, Temporary and Permanent equity as they relate to the convertible
      preferred stock were misstated. In connection with our material weakness
      regarding our design and maintenance of adequate controls, during the fourth
      quarter, the Company requested and received counsel from its independent public
      accountants concerning the appropriate financial disclosure and treatment of
      derivative securities. In addition, the Company, including the Company’s CFO,
      reviewed literature detailing the proper disclosure and treatment pertaining
      to
      the accounting of these derivative securities. During the fourth quarter, and
      as
      a result of the aforementioned, the Company’s CEO and CFO concluded that the
      preparation of financial statements with respect to such misstatements have
      been
      corrected in the restated financial statements included herein, and that the
      Company has eliminatd the material weakness relating to our design and
      maintenance of adequate controls.





A
      material weakness in the Company’s disclosure controls and procedures existed as
      of December 31, 2006, due to the Company’s limited number of employees. With
      regard to such personnel, there was a weakness as a result of the limited
      segregation of duties amongst our employees. As a result, our CEO and CFO
      determined that the Company’s disclosure controls and procedures were not
      effective as of the period ended December 31, 2006.





**Changes
      in Internal Control Over Financial Reporting**





As
      disclosed above, during the fourth quarter, the Company took steps to correct
      the preparation of our financial statements, and the Company’s CEO and CFO
      concluded that these changes eliminated the material weakness relating to our
      design and maintenance of adequate controls. Thus, there were changes in our
      internal control over financial reporting during the fourth quarter that
      materially affected, or were reasonably likely to materially affect, our
      internal control over financial reporting.


4


**Item
      8B. Other Information.**




None.





5


**SIGNATURES**




In
      accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
      this report to be signed on its behalf by the undersigned, thereunto duly
      authorized.














Date:
                May 29, 2007**Enigma
                Software Group, Inc.**By
            /s/
                Alvin EstevezAlvin
                EstevezPresident
                and Chief Executive Officer








In
      accordance with the Exchange Act, this report has been signed below by the
      following persons on behalf of the registrant and in the capacities and on
      the
      dates indicated.








Signature
            
            Title
            Date/s/
                Alvin Estevez
            
            President
                and Chief Executive Officer
            May
                29, 2007Alvin
                Estevez
            
            (Principal
                Executive Officer)/s/
                Colorado Stark
            
            Executive
                Chairman
            May
                29, 2007Colorado
                Stark/s/
                Richard M. Scarlata
            
            Chief
                Financial Officer and Treasurer
            May
                29, 2007Richard
                M. Scarlata
            
            (Principal
                Financial Officer)/s/
                Edwin J. McGuinn, Jr.
            
            Director
            May
                29, 2007Edwin
                J. McGuinn, Jr.








6