----

----

**UNITED      STATES SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON,      D.C. 20549**

**______________**

**FORM      10-QSB**

**______________**

| x | QUARTERLY                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                ACT OF                1934 |
|---|--------------------------------------------------------------------------------------------------------------------------------------|

**For      the quarterly period ended September 30, 2006**

| o | TRANSITION                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                ACT OF                1934 |
|---|---------------------------------------------------------------------------------------------------------------------------------------|

**For      the transition period from ______________ to      ______________**

**Commission      File No. 000-50494**

**______________**

**EFFECTIVE      PROFITABLE SOFTWARE, INC.**

**(Exact      name of small business issuer as specified in its charter)**

**______________**

| **Delaware**                                                                                 | **98-0412432**                                      |
|----------------------------------------------------------------------------------------------|-----------------------------------------------------|
| (State                or other jurisdiction of incorporation                or organization) | (I.R.S.                Employer Identification No.) |

| **1                Innwood Circle, Suite 209, Little Rock, Arkansas** | **72211**                 |
|-----------------------------------------------------------------------|---------------------------|
| (Address                of principal executive offices)               | (Zip                Code) |

| **(501)                223-3310**                |
|--------------------------------------------------|
| (Issuer’s                telephone number) |

| Yes | x | No                o |
|-----|---|---------------------|

----

**TABLE      OF CONTENTS**

| **PART                I - FINANCIAL INFORMATION**                                                     | 1      |
|-------------------------------------------------------------------------------------------------------|--------|
| Item                1. Financial Information                                                          | 1      |
| Item                2. Management’s Discussion and Analysis or Plan of                Operation | 2      |
| Item                3. Controls and Procedures                                                        | 3      |
|                                                                                                  |   |
| **PART                II -OTHER INFORMATION**                                                         | 4      |
| Item                1. Legal Proceedings.                                                             | 4      |
| Item                2. Unregistered Sales of Equity Securities and Use of                Proceeds.    | 4      |
| Item                3. Defaults Upon Senior Securities.                                               | 4      |
| Item                4. Submission of Matters to a Vote of Security Holders.                           | 4      |
| Item                5. Other Information.                                                             | 4      |
| Item                6. Exhibits and Reports of Form 8-K.                                              | 5      |
|                                                                                                  |   |
| **SIGNATURES**                                                                                        | 6      |

----

**PART      I - FINANCIAL INFORMATION**

**Item        1.    **Financial        Information****

**EFFECTIVE        PROFITABLE SOFTWARE, INC. AND SUBSIDIARY**

**(A        DEVELOPMENT STAGE COMPANY)**

**TABLE        OF CONTENTS**

| PAGE   | 1                                        | CONDENSED                  CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 30, 2006                  (UNAUDITED)                                                                                                                                                                                       |
|--------|------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                     |                                                                                                                                                                                                                                                                                              |
| PAGE   | 2                                        | CONDENSED                  CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE AND NINE MONTHS                  ENDED                  SEPTEMBER 30, 2006 AND 2005 AND FOR THE PERIOD FROM FEBRUARY 23,                  2004                  (INCEPTION) TO SEPTEMBER 30, 2006 (UNAUDITED) |
|   |                                     |                                                                                                                                                                                                                                                                                              |
| PAGE   | 3                                        | CONDENSED                  CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIENCY FOR THE                  PERIOD FROM FEBRUARY 23, 2004 (INCEPTION) TO SEPTEMBER 30, 2006                  (UNAUDITED)                                                                              |
|   |                                     |                                                                                                                                                                                                                                                                                              |
| PAGE   | 4                                        | CONDENSED                  CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED                  SEPTEMBER                  30, 2006 AND 2005 AND FOR THE PERIOD FROM FEBRUARY 23, 2004 (INCEPTION)                  TO                  SEPTEMBER 30, 2006 (UNAUDITED)                |
|   |                                     |                                                                                                                                                                                                                                                                                              |
| PAGES  | 5                  -                  10 | NOTES                  TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF SEPTEMBER                  30, 2006                  (UNAUDITED)                                                                                                                                                      |
|   |                                     |                                                                                                                                                                                                                                                                                              |

----

**EFFECTIVE        PROFITABLE SOFTWARE, INC. AND SUBSIDIARY**

**(A        DEVELOPMENT STAGE COMPANY)**

**CONDENSED**
**CONSOLIDATED        **
**BALANCE        SHEET**

**AS        OF SEPTEMBER 30, 2006**

**(UNAUDITED)**

**ASSETS**

| **CURRENT                  ASSETS**                                                                                                                         |   |    |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------|--------|
| Cash                                                                                                                                                        | $      | 9,927        |   |
| Prepaid                  expenses                                                                                                                           |   | 250          |   |
| Total                  Current Assets                                                                                                                       |   | 10,177       |   |
|                                                                                                                                                        |   |         |   |
| **PROPERTY                  AND EQUIPMENT, NET**                                                                                                            |   | 3,962        |   |
|                                                                                                                                                        |   |         |   |
| **OTHER                  ASSETS**                                                                                                                           |   |         |   |
| Deposits                                                                                                                                                    |   | 750          |   |
| Total                  Other Assets                                                                                                                         |   | 750          |   |
|                                                                                                                                                        |   |         |   |
| **TOTAL                  ASSETS**                                                                                                                           | $      | 14,889       |   |
|                                                                                                                                                        |   |         |   |
| **LIABILITIES                  AND STOCKHOLDERS’ DEFICIENCY**                                                                                         |
|                                                                                                                                                        |   |         |   |
| **CURRENT                  LIABILITIES**                                                                                                                    |   |         |   |
| Accounts                  payable and accrued expenses                                                                                                      | $      | 13,679       |   |
| Stockholder                  loans                                                                                                                          |   | 42,710       |   |
|                                                                                                                                                        |   |         |   |
| **TOTAL                  LIABILITIES**                                                                                                                      |   | 56,389       |   |
|                                                                                                                                                        |   |         |   |
| **STOCKHOLDERS’                  DEFICIENCY**                                                                                                         |   |         |   |
| Common                  stock, $0.0001 par value, 100,000,000 shares authorized, 53,480,000                  shares                  issued and outstanding |   | 5,350        |   |
| Additional                  paid in capital                                                                                                                 |   | 156,813      |   |
| Accumulated                  deficit during development stage                                                                                               |   | (203,663     | )      |
| Total                  Stockholders’ Deficiency                                                                                                       |   | (41,500      | )      |
|                                                                                                                                                        |   |         |   |
| **                    TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIENCY**                                                                      | $      | 14,889       |   |

----

**EFFECTIVE        PROFITABLE SOFTWARE, INC. AND SUBSIDIARY**

**(A        DEVELOPMENT STAGE COMPANY)**

**CONDENSED**
**CONSOLIDATED**
**STATEMENTS        OF OPERATIONS**

**(UNAUDITED)**

|                                                                                                                                 |   | For                the Three Months EndedSeptember                30, 2006 |       | For                the Three Months EndedSeptember                30, 2005 |   | For                the Nine Months EndedSeptember                30, 2006 |   | For                the Nine Months EndedSeptember                30, 2005 |       | For                thePeriod                from February 23, 2004 (Inception) To September 30,                2006 |   |
|--------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------|------------|----------------------------------------------------------------------------|--------|---------------------------------------------------------------------------|--------|---------------------------------------------------------------------------|------------|--------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                 |   |                                                                       |       |                                                                       |   |                                                                      |   |                                                                      |       |                                                                                                                     |   |
| **REVENUE**                                                                                                                          |   | $                                                                          | -          |                                                                       | $      | -                                                                         |   | $                                                                         | -          |                                                                                                                     | $      | - |   | $ | - |   |
|                                                                                                                                 |   |                                                                       |       |                                                                       |   |                                                                      |   |                                                                      |       |                                                                                                                     |   |   |   |   |   |   |
| **OPERATING                EXPENSES**                                                                                                |   |                                                                       |       |                                                                       |   |                                                                      |   |                                                                      |       |                                                                                                                     |   |   |   |   |   |   |
| General                and administrative                                                                                            |   |                                                                       | 14,469     |                                                                       |   | 5,795                                                                     |   |                                                                      | 40,829     |                                                                                                                     |   | 34,199 |   |   | 192,770 |   |
| Total                Operating Expenses                                                                                              |   |                                                                       | 14,469     |                                                                       |   | 5,795                                                                     |   |                                                                      | 40,829     |                                                                                                                     |   | 34,199 |   |   | 192,770 |   |
|                                                                                                                                 |   |                                                                       |       |                                                                       |   |                                                                      |   |                                                                      |       |                                                                                                                     |   |   |   |   |   |   |
| **LOSS                FROM OPERATIONS**                                                                                              |   |                                                                       | (14,469    | )                                                                          |   | (5,795                                                                    | )      |                                                                      | (40,829    | )                                                                                                                        |   | (34,199 | ) |   | (192,770 | ) |
|                                                                                                                                 |   |                                                                       |       |                                                                       |   |                                                                      |   |                                                                      |       |                                                                                                                     |   |   |   |   |   |   |
| **OTHER                INCOME (EXPENSE)**                                                                                            |   |                                                                       |       |                                                                       |   |                                                                      |   |                                                                      |       |                                                                                                                     |   |   |   |   |   |   |
| Other                income                                                                                                          |   |                                                                       | -          |                                                                       |   | -                                                                         |   |                                                                      | -          |                                                                                                                     |   | - |   |   | 31 |   |
| Loss                on disposal of assets                                                                                            |   |                                                                       | -          |                                                                       |   | (3,306                                                                    | )      |                                                                      | -          |                                                                                                                     |   | (3,306 | ) |   | (6,893 | ) |
| Interest                expense                                                                                                      |   |                                                                       | (415       | )                                                                          |   | (851                                                                      | )      |                                                                      | (1,269     | )                                                                                                                        |   | (1,982 | ) |   | (4,031 | ) |
| Total                Other Income (Expense)                                                                                          |   |                                                                       | (415       | )                                                                          |   | (4,157                                                                    | )      |                                                                      | (1,269     | )                                                                                                                        |   | (5,288 | ) |   | (10,813 | ) |
|                                                                                                                                 |   |                                                                       |       |                                                                       |   |                                                                      |   |                                                                      |       |                                                                                                                     |   |   |   |   |   |   |
| **NET                LOSS**                                                                                                          |   | $                                                                          | (14,884    | )                                                                          | $      | (9,952                                                                    | )      | $                                                                         | (42,098    | )                                                                                                                        | $      | (39,487 | ) | $ | (203,663 | ) |
|                                                                                                                                 |   |                                                                       |       |                                                                       |   |                                                                      |   |                                                                      |       |                                                                                                                     |   |   |   |   |   |   |
| NET                LOSS PER SHARE - BASIC AND DILUTED                                                                                |   | $                                                                          | -          |                                                                       | $      | -                                                                         |   | $                                                                         | -          |                                                                                                                     | $      | - |   | $ | - |   |
|                                                                                                                                 |   |                                                                       |       |                                                                       |   |                                                                      |   |                                                                      |       |                                                                                                                     |   |   |   |   |   |   |
|                     WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND                DILUTED |   |                                                                       | 53,480,000 |                                                                       |   | 53,280,000                                                                |   |                                                                      | 51,780,000 |                                                                                                                     |   | 52,069,377 |   |   | 49,889,116 |   |

----

**EFFECTIVE        PROFITABLE SOFTWARE, INC. AND SUBSIDIARY**

**(A        DEVELOPMENT STAGE COMPANY)**

**CONDENSED**
**CONSOLIDATED        **
**STATEMENT        OF CHANGES IN STOCKHOLDERS’ DEFICIENCY**

**FOR        THE PERIOD FROM FEBRUARY 23, 2004 (INCEPTION) TO SEPTEMBER 30,        2006**

**(UNAUDITED)**

|                                                                                                                                |   | Common                Stock |       | Additional                Paid-In |   | Accumulated                Deficit During Development |   |   |    |
|-------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------|------------|-----------------------------------|--------|-------------------------------------------------------|--------|--------|---------|
|                                                                                                                                |   | Shares                      |       | Amount                            |   | Capital                                               |   | Stage  |    | Total |   |
|                                                                                                                                |   |                        |       |                              |   |                                                  |   |   |    |   |   |
|                  Common stock issued to founders for cash ($0.00002 per                share)                                  |   |                        | 45,000,000 |                              | $      | 4,500                                                 |   | $      | (3,600  | ) | $ | - |   | $ | 900 |   |
|                                                                                                                                |   |                        |       |                              |   |                                                  |   |   |    |   |   |   |   |   |   |   |
| Common                stock issued for legal services ($0.02 per share)                                                             |   |                        | 500,000    |                              |   | 50                                                    |   |   | 9,950   |   |   | - |   |   | 10,000 |   |
|                                                                                                                                |   |                        |       |                              |   |                                                  |   |   |    |   |   |   |   |   |   |   |
| Common                stock issued for services ($0.02 per share)                                                                   |   |                        | 2,500,000  |                              |   | 250                                                   |   |   | 49,750  |   |   | - |   |   | 50,000 |   |
|                                                                                                                                |   |                        |       |                              |   |                                                  |   |   |    |   |   |   |   |   |   |   |
| Common                stock issued for cash ($0..02 per share)                                                                      |   |                        | 2,280,000  |                              |   | 230                                                   |   |   | 45,370  |   |   | - |   |   | 45,600 |   |
|                                                                                                                                |   |                        |       |                              |   |                                                  |   |   |    |   |   |   |   |   |   |   |
| In-kind                contribution of interest on stockholder loans                                                                |   |                        | -          |                              |   | -                                                     |   |   | 646     |   |   | - |   |   | 646 |   |
|                                                                                                                                |   |                        |       |                              |   |                                                  |   |   |    |   |   |   |   |   |   |   |
|                  Net loss for the period from February 23, 2004 (inception) to December                31,                2004 |   |                        | -          |                              |   | -                                                     |   |   | -       |   |   | (110,081 | ) |   | (110,081 | ) |
|                                                                                                                                |   |                        |       |                              |   |                                                  |   |   |    |   |   |   |   |   |   |   |
| Balance,                December 31, 2004                                                                                           |   |                        | 50,280,000 |                              |   | 5,030                                                 |   |   | 102,116 |   |   | (110,081 | ) |   | (2,935 | ) |
|                                                                                                                                |   |                        |       |                              |   |                                                  |   |   |    |   |   |   |   |   |   |   |
| Common                stock issued for services ($0.02 per share)                                                                   |   |                        | 500,000    |                              |   | 50                                                    |   |   | 9,950   |   |   | - |   |   | 10,000 |   |
|                                                                                                                                |   |                        |       |                              |   |                                                  |   |   |    |   |   |   |   |   |   |   |
| Common                stock issued for cash ($0.02 per share)                                                                       |   |                        | 500,000    |                              |   | 50                                                    |   |   | 9,950   |   |   | - |   |   | 10,000 |   |
|                                                                                                                                |   |                        |       |                              |   |                                                  |   |   |    |   |   |   |   |   |   |   |
| In-kind                contribution of interest on stockholder loans                                                                |   |                        | -          |                              |   | -                                                     |   |   | 1,787   |   |   | - |   |   | 1,787 |   |
|                                                                                                                                |   |                        |       |                              |   |                                                  |   |   |    |   |   |   |   |   |   |   |
| Common                stock issued in reverse merger                                                                                |   |                        | 500,000    |                              |   | 50                                                    |   |   | (1,650  | ) |   | - |   |   | (1,600 | ) |
|                                                                                                                                |   |                        |       |                              |   |                                                  |   |   |    |   |   |   |   |   |   |   |
| Net                loss, 2005                                                                                                       |   |                        | -          |                              |   | -                                                     |   |   | -       |   |   | (51,484 | ) |   | (51,484 | ) |
|                                                                                                                                |   |                        |       |                              |   |                                                  |   |   |    |   |   |   |   |   |   |   |
| Balance,                December 31, 2005                                                                                           |   |                        | 51,780,000 |                              |   | 5,180                                                 |   |   | 122,153 |   |   | (161,565 | ) |   | (34,232 | ) |
|                                                                                                                                |   |                        |       |                              |   |                                                  |   |   |    |   |   |   |   |   |   |   |
| Stock                issued for cash ($0.02 per share)                                                                              |   |                        | 1,700,000  |                              |   | 170                                                   |   |   | 33,830  |   |   | - |   |   | 34,000 |   |
|                                                                                                                                |   |                        |       |                              |   |                                                  |   |   |    |   |   |   |   |   |   |   |
| In-kind                contribution of interest on stockholder loans                                                                |   |                        | -          |                              |   | -                                                     |   |   | 830     |   |   | - |   |   | 830 |   |
|                                                                                                                                |   |                        |       |                              |   |                                                  |   |   |    |   |   |   |   |   |   |   |
| Net                loss for the nine months ended September 30, 2006                                                                |   |                        | -          |                              |   | -                                                     |   |   | -       |   |   | (42,098 | ) |   | (42,098 | ) |
|                                                                                                                                |   |                        |       |                              |   |                                                  |   |   |    |   |   |   |   |   |   |   |
| **BALANCE,                SEPTEMBER 30, 2006**                                                                                      |   |                        | 53,480,000 |                              | $      | 5,350                                                 |   | $      | 156,813 |   | $ | (203,663 | ) | $ | (41,500 | ) |

----

**EFFECTIVE        PROFITABLE SOFTWARE, INC. AND SUBSIDIARY**

**(A        DEVELOPMENT STAGE COMPANY)**

**CONDENSED**
**CONSOLIDATED**
**STATEMENT        OF CASH FLOWS**

**(UNAUDITED)**

|                                                                                                            |   | For                the Nine Months Ended September 30, 2006 |    | For                the Nine Months Ended September 30, 2005 |   | For                the Period From February 23, 2004(Inception)                to September 30, 2005 |   |
|-----------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------|---------|-------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------|--------|
|                                                                                                            |   |                                                        |    |                                                        |   |                                                                                                      |   |
| **CASH                FLOWS FROM OPERATING ACTIVITIES:**                                                        |   |                                                        |    |                                                        |   |                                                                                                      |   |
| Net                loss                                                                                         |   | $                                                           | (42,098 | )                                                           | $      | (39,487                                                                                                   | )      | $ | (203,663 | ) |
| Adjustments                to reconcile net income to net cash provided by operating                activities: |   |                                                        |    |                                                        |   |                                                                                                      |   |   |   |   |
| Depreciation                                                                                                    |   |                                                        | 694     |                                                        |   | 2,176                                                                                                     |   |   | 4,438 |   |
| Loss                on disposal of property and equipment                                                       |   |                                                        | -       |                                                        |   | 3,306                                                                                                     |   |   | 6,893 |   |
| In-kind                contribution of interest on stockholder loans                                            |   |                                                        | 830     |                                                        |   | 1,795                                                                                                     |   |   | 3,262 |   |
| Stock                issued for payment of services and expenses                                                |   |                                                        | -       |                                                        |   | 10,000                                                                                                    |   |   | 70,000 |   |
| Changes                in operating assets and liabilities:                                                     |   |                                                        |    |                                                        |   |                                                                                                      |   |   |   |   |
| Deposits                                                                                                        |   |                                                        | -       |                                                        |   | -                                                                                                         |   |   | (750 | ) |
| Prepaid                expenses                                                                                 |   |                                                        | 550     |                                                        |   | 25,100                                                                                                    |   |   | (250 | ) |
| Accounts                payable and accrued expenses                                                            |   |                                                        | 5,491   |                                                        |   | 3,814                                                                                                     |   |   | 12,078 |   |
| Net                Cash Provided By (Used In) Operating Activities                                              |   |                                                        | (34,533 | )                                                           |   | 6,704                                                                                                     |   |   | (107,992 | ) |
|                                                                                                            |   |                                                        |    |                                                        |   |                                                                                                      |   |   |   |   |
| **CASH                FLOWS FROM INVESTING ACTIVITIES:**                                                        |   |                                                        |    |                                                        |   |                                                                                                      |   |   |   |   |
| Proceeds                from sale of property and equipment                                                     |   |                                                        | -       |                                                        |   | 1,925                                                                                                     |   |   | 3,425 |   |
| Purchase                of property and equipment                                                               |   |                                                        | -       |                                                        |   | -                                                                                                         |   |   | (18,716 | ) |
| Net                Cash Provided By (Used In) Investing Activities                                              |   |                                                        | -       |                                                        |   | 1,925                                                                                                     |   |   | (15,291 | ) |
|                                                                                                            |   |                                                        |    |                                                        |   |                                                                                                      |   |   |   |   |
| **CASH                FLOWS FROM FINANCING ACTIVITIES:**                                                        |   |                                                        |    |                                                        |   |                                                                                                      |   |   |   |   |
| Proceeds                from issuance of loan payable - related party                                           |   |                                                        | 25,000  |                                                        |   | 15,557                                                                                                    |   |   | 91,420 |   |
| Repayment                of loan payable - related party                                                        |   |                                                        | (16,875 | )                                                           |   | (26,000                                                                                                   | )      |   | (48,710 | ) |
| Proceeds                from issuance of common stock                                                           |   |                                                        | 34,000  |                                                        |   | -                                                                                                         |   |   | 90,500 |   |
| Cash                overdraft                                                                                   |   |                                                        | -       |                                                        |   | 270                                                                                                       |   |   | - |   |
| Net                Cash Provided By (Used In) Financing Activities                                              |   |                                                        | 42,125  |                                                        |   | (10,173                                                                                                   | )      |   | 133,210 |   |
|                                                                                                            |   |                                                        |    |                                                        |   |                                                                                                      |   |   |   |   |
| NET                INCREASE (DECREASE) IN CASH                                                                  |   |                                                        | 7,592   |                                                        |   | (1,544                                                                                                    | )      |   | 9,927 |   |
|                                                                                                            |   |                                                        |    |                                                        |   |                                                                                                      |   |   |   |   |
|                  CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                          |   |                                                        | 2,335   |                                                        |   | 1,544                                                                                                     |   |   | - |   |
|                                                                                                            |   |                                                        |    |                                                        |   |                                                                                                      |   |   |   |   |
|                  CASH AND CASH EQUIVALENTS AT END OF PERIOD                                                |   | $                                                           | 9,927   |                                                        | $      | -                                                                                                         |   | $ | 9,927 |   |
|                                                                                                            |   |                                                        |    |                                                        |   |                                                                                                      |   |   |   |   |
| **SUPPLEMENTAL                DISCLOSURE OF CASH FLOW INFORMATION:**                                            |
|                                                                                                            |   |                                                        |    |                                                        |   |                                                                                                      |   |   |   |   |
|                  Cash paid for interest                                                                    |   | $                                                           | 439     |                                                        | $      | 187                                                                                                       |   | $ | 768 |   |
|                                                                                                            |   |                                                        |    |                                                        |   |                                                                                                      |   |   |   |   |
|                  Cash paid for taxes                                                                       |   | $                                                           | -       |                                                        | $      | -                                                                                                         |   | $ | - |   |

----

**EFFECTIVE        PROFITABLE SOFTWARE, INC. AND SUBSIDIARY**

**(A        DEVELOPMENT STAGE COMPANY)**

**NOTES        TO **
**CONDENSED**
**CONSOLIDATED**
**FINANCIAL        STATEMENTS**

**AS        OF SEPTEMBER 30, 2006**

**(UNAUDITED)**

**NOTE      1**
**SUMMARY      OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION**

***(A)      Basis of Presentation***

***(B)      Organization***

|   | (1) | The                balance sheet consists of the net assets of the acquirer at historical                cost and the net assets of the acquiree at historical                cost. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   |   | (2) | The                statement of operations includes the operations of the acquirer for                the                periods presented and the operations of the acquiree from the date                of the                merger. |
|--------|--------|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**EFFECTIVE        PROFITABLE SOFTWARE, INC. AND SUBSIDIARY**

**(A        DEVELOPMENT STAGE COMPANY)**

**NOTES        TO **
**CONDENSED**
**CONSOLIDATED**
**FINANCIAL        STATEMENTS**

**AS        OF SEPTEMBER 30, 2006**

**(UNAUDITED)**

***(C)      Principles of Consolidation***

***(D)      Revenue Recognition***

***(E)      Cash and Cash Equivalents***

***(F)      Use of Estimates***

----

**EFFECTIVE        PROFITABLE SOFTWARE, INC. AND SUBSIDIARY**

**(A        DEVELOPMENT STAGE COMPANY)**

**NOTES        TO **
**CONDENSED**
**CONSOLIDATED**
**FINANCIAL        STATEMENTS**

**AS        OF SEPTEMBER 30, 2006**

**(UNAUDITED)**

***(G)      Property and Equipment***

|                              Computers and equipment |   | 5                years |
|-----------------------------------------------------------------------------------------------------------------------|--------|------------------------|
|                              Furniture and fixtures  |   | 7                years |

| Office                furniture and fixtures  |   | $      | 4,727  |   |
|-----------------------------------------------|--------|--------|--------|--------|
| Computer                equipment             |   |   | 1,247  |   |
| Total                property and equipment   |   |   | 5,974  |   |
| Less:                accumulated depreciation |   |   | 2,012  |   |
|                                          |   |   |   |   |
| Property                and equipment, net    |   | $      | 3,962  |   |

***(H)      Income Taxes***

----

**EFFECTIVE        PROFITABLE SOFTWARE, INC. AND SUBSIDIARY**

**(A        DEVELOPMENT STAGE COMPANY)**

**NOTES        TO **
**CONDENSED**
**CONSOLIDATED**
**FINANCIAL        STATEMENTS**

**AS        OF SEPTEMBER 30, 2006**

**(UNAUDITED)**

***(I)      Fair Value of Financial Instruments***

***(J)      Earnings Per Share***

***(K)      Concentrations of Credit Risk***

***(L)      Recent Accounting Pronouncements***

**NOTE      2**
**RESTATEMENT      OF FINANCIAL STATEMENTS**

----

**EFFECTIVE        PROFITABLE SOFTWARE, INC. AND SUBSIDIARY**

**(A        DEVELOPMENT STAGE COMPANY)**

**NOTES        TO **
**CONDENSED**
**CONSOLIDATED**
**FINANCIAL        STATEMENTS**

**AS        OF SEPTEMBER 30, 2006**

**(UNAUDITED)**

** NOTE      3**
**RELATED      PARTY TRANSACTIONS**

**NOTE      4**
**STOCKHOLDERS’      EQUITY**

***(A)      Issuance of Common Stock to Founders***

***(B)      Stock Issued for Cash***

***(C)      Stock Issued in Reverse Merger***

***(D)      Stock Issued for Services***

----

**EFFECTIVE        PROFITABLE SOFTWARE, INC. AND SUBSIDIARY**

**(A        DEVELOPMENT STAGE COMPANY)**

**NOTES        TO **
**CONDENSED**
**CONSOLIDATED**
**FINANCIAL        STATEMENTS**

**AS        OF SEPTEMBER 30, 2006**

**(UNAUDITED)**

***(E)      In-Kind Contribution***

**NOTE      4**
**GOING      CONCERN**

----

**Item      2.**
**Management’s      Discussion and Analysis or Plan of Operation**

**Overview**

**Plan      of Operations**

----

**Capital      Resources and Liquidity.**

**Recent      Financial Pronouncements**

**Going      Concern Consideration**

**Critical      Accounting Policies**

----

**Off-Balance      Sheet Arrangements**

**Item      3.**
**Controls      and Procedures**

**Evaluation      of disclosure controls and procedures**

**Changes      in internal controls**

----

**PART      II - OTHER INFORMATION**

**Item      1.**
**Legal      Proceedings.**

**Item      2.**
**Unregistered      Sales of Equity Securities and Use of Proceeds.**

**Item      3.**
**Defaults      Upon Senior Securities.**

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

**Item      5.**
**Other      Information.**

**Item      6.**
**Exhibits      and Reports of Form 8-K.**

|                                                                     | (a)    | Reports                on Form 8-K and Form 8K-A |
|--------------------------------------------------------------------------|--------|--------------------------------------------------|
|                                                                     |   |                                             |
|                                                                     |   | None                                             |
|                                                                     |   |                                             |
|              | (b)    | Exhibits                                         |
|                                                                     |   |                                             |
|                                                                     |   | **Exhibit                Number**                | **Exhibit                Title** |
|                                                                     |   |                                             |   |
|                                                                     |   | 3.1                                              | Certificate                of Incorporation; Certificate of Amendment to Certificate of Incorporation                * |
|                                                                     |   |                                             |   |
|                                                                     |   | 3.3                                              | By-Laws                * |
|                                                                     |   |                                             |   |
|                                                                     |   | 31.1                                             | Certification                of Gary Moore pursuant to 18 U.S.C. Section 1350 as adopted pursuant                to                Section 302 of the Sarbanes-Oxley Act of 2002. |
|                                                                     |   |                                             |   |
|                                                                     |   | 31.2                                             | Certification                of Don Bratcher pursuant to 18 U.S.C. Section 1350 as adopted pursuant                to                Section 302 of the Sarbanes-Oxley Act of 2002. |
|                                                                     |   |                                             |   |
|                                                                     |   | 32.1                                             | Certification                of Gary Moore 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 Don Bratcher pursuant to 18 U.S.C. Section 1350 as adopted pursuant                to                Section 906 of the Sarbanes-Oxley Act of 2002. |
|                                                                     |   |                                             |   |
|                                                                     |   |                                             | *                Incorporated by reference to our quarterly report for the period-ending                September 30, 2005 filed on Form 10-QSB filed with the SEC on June                7, 2006                (File No. 000-50494). |

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**SIGNATURES**

**EFFECTIVE      PROFITABLE SOFTWARE, INC.**

*/s/Gary      Moore*