**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 March 31, 2007**




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)




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




Check
      whether the registrant has filed all documents and reports required to be filed
      by Sections 12, 13, or 15(d) of the Exchange Act subsequent to the distribution
      of securities under a plan confirmed by a court. Yes o No x




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


Yes x No o





State
        the
        number of shares outstanding of each of the issuer's classes of common equity,
        as of May 21, 2007: 53,580,000 shares of common stock.


Transitional
      Small Business Disclosure Format (check one): Yes o No x





























**TABLE
      OF CONTENTS**




**PART
                I - FINANCIAL INFORMATION**
            1Item
                1. Financial Information
            1Item
                2. Management’s Discussion and Analysis or Plan of
                Operation
            10Item
                3. Controls and Procedures**PART
                II -OTHER INFORMATION**
            14Item
                1. Legal Proceedings.
            14Item
                2. Unregistered Sales of Equity Securities and Use of
                Proceeds.
            14Item
                3. Defaults Upon Senior Securities.
            14Item
                4. Submission of Matters to a Vote of Security Holders.
            14Item
                5. Other Information.
            14Item
                6. Exhibits and Reports of Form 8-K.
            14**SIGNATURES**
            15




































**PART
      I - FINANCIAL INFORMATION**





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




**EFFECTIVE
      PROFITABLE SOFTWARE, INC.**


**(A
      DEVELOPMENT STAGE COMPANY)**











**TABLE
      OF CONTENTS**








PAGE
            1
            CONDENSED
                CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 2007
                (UNAUDITED)PAGE
            2
            CONDENSED
                CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED
                MARCH 31,
                2007 AND 2006, AND FOR THE PERIOD FROM FEBRUARY 23, 2004 (INCEPTION)
                TO
                MARCH 31, 2007 (UNAUDITED)PAGE
            3-4
            CONDENSED
                CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIENCY FOR THE
                PERIOD FROM FEBRUARY 23, 2004 (INCEPTION) TO MARCH 31, 2007
                (UNAUDITED)PAGE
            5
            CONDENSED
                CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH
                31,
                2007 AND 2006, AND FOR THE PERIOD FROM FEBRUARY 23, 2004 (INCEPTION)
                TO
                MARCH 31, 2007 (UNAUDITED)PAGES
            6
                -
                9
            NOTES
                TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF MARCH 31, 2007
                (UNAUDITED)














**EFFECTIVE
        PROFITABLE SOFTWARE, INC. AND SUBSIDIARY**
 **(A
        DEVELOPMENT STAGE COMPANY)**
 **CONDENSED**  **CONSOLIDATED** **BALANCE
        SHEET**
 **AS
        OF MARCH 31, 2007**
 **(UNAUDITED)**
   **ASSETS****CURRENT
                  ASSETS****Cash**
              
              $
              **4,165****Total
                  Current Assets**
              
              
              **4,165****PROPERTY
                  AND EQUIPMENT, NET**
              
              
              **3,499****OTHER
                  ASSETS****Deposits**
              
              
              **750****Total
                  Other Assets**
              
              
              **750****TOTAL
                  ASSETS**
              
              $
              **8,414****LIABILITIES
                  AND STOCKHOLDERS’ DEFICIENCY****CURRENT
                  LIABILITIES**Accounts
                  payable and accrued expenses
              
              $
              17,036Stockholder
                  loans
              
              
              56,418**TOTAL
                  LIABILITIES**
              
              
              73,454**STOCKHOLDERS’
                  DEFICIENCY**Common
                  stock, $0.0001 par value, 100,000,000 shares authorized,
                  53,480,000 shares issued and outstanding
              
              
              5,350Additional
                  paid in capital
              
              
              213,717Accumulated
                  deficit during development stage
              
              
              (284,107
              )Total
                  Stockholders’ Deficiency
              
              
              (65,040
              )**TOTAL LIABILITIES AND STOCKHOLDERS’
                  DEFICIENCY**
              
              $
              8,414






See
        accompanying notes to condensed consolidated financial
        statements.


1






**EFFECTIVE
        PROFITABLE SOFTWARE, INC. AND SUBSIDIARY**
 **(A
        DEVELOPMENT STAGE COMPANY)**
 **CONDENSED**  **CONSOLIDATED**  **STATEMENTS
        OF OPERATIONS**
 **(UNAUDITED)**


For
                the Three Months Ended March 31, 2007
            
            For
                the Three Months Ended March 31, 2006
            
            For
                the Period from February 23, 2004 (Inception) to March 31,
                2007**REVENUES**
            
            $
            -
            
            $
            -
            
            $
            -**OPERATING
                EXPENSES**General
                and administrative
            
            
            11,317
            
            
            9,685
            
            
            272,026Total
                Operating Expenses
            
            
            11,317
            
            
            9,685
            
            
            272,026**LOSS
                FROM OPERATIONS**
            
            
            (11,317
            )
            
            (9,685
            )
            
            (272,026
            )**OTHER
                INCOME (EXPENSE)**Other
                income
            
            
            -
            
            
            -
            
            
            30Loss
                on disposal of assets
            
            
            -
            
            
            -
            
            
            (6,893
            )Interest
                expense
            
            
            (622
            )
            
            (828
            )
            
            (5,218
            )Total
                Other Income (Expense)
            
            
            (622
            )
            
            (828
            )
            
            (12,081
            )NET
                LOSS BEFORE PROVISION FOR INCOME TAXES
            
            
            (11,939
            )
            
            (10,513
            )
            
            (284,107
            )Provision
                for Income Taxes
            
            
            -
            
            
            -
            
            
            -**NET
                LOSS**
            
            $
            (11,939
            )
            $
            (10,513
            )
            $
            (284,107
            )Net
                loss per share - basic and diluted
            
            $
            -
            
            $
            -
            
            $
            -Weighted
                average number of shares outstanding during the period - basic and
                diluted
            
            
            53,480,000
            
            
            52,246,667
            
            
            50,466,449




See
        accompanying notes to condensed consolidated financial
        statements.






2






**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 MARCH 31,
        2007**
 **(UNAUDITED)**




Common
                  Stock
              
              Additional
                  Paid-In
              
              Accumulated
                  Deficit During DevelopmentShares
              
              Amount
              
              Capital
              
              Stage
              
              TotalCommon stock issued to founders for cash ($0.00002 per
                  share)
              
              
              45,000,000
              
              $
              4,500
              
              $
              (3,600
              )
              $
              -
              
              $
              900Common
                  stock issued for legal services ($0.02 per share)
              
              
              500,000
              
              
              50
              
              
              9,950
              
              
              -
              
              
              10,000Common
                  stock issued for services ($0.02 per share)
              
              
              2,500,000
              
              
              250
              
              
              49,750
              
              
              -
              
              
              50,000Common
                  stock issued for cash ($0..02 per share)
              
              
              2,280,000
              
              
              230
              
              
              45,370
              
              
              -
              
              
              45,600In-kind
                  contribution of interest on stockholder loans
              
              
              -
              
              
              -
              
              
              646
              
              
              -
              
              
              646Net
                  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
              
              
              -
              
              
              10,000Common
                  stock issued for cash ($0.02 per share)
              
              
              500,000
              
              
              50
              
              
              9,950
              
              
              -
              
              
              10,000In-kind
                  contribution of interest on stockholder loans
              
              
              -
              
              
              -
              
              
              1,787
              
              
              -
              
              
              1,787Common
                  stock issued in reverse merger
              
              
              500,000
              
              
              50
              
              
              (1,650
              )
              
              -
              
              
              (1,600
              )Net
                  loss, 2005
              
              
              -
              
              
              -
              
              
              -
              
              
              (51,484
              )
              
              (51,484
              )Balance,
                  December 31, 2005 (restated)
              
              
              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
              
              
              -
              
              
              34,000In-kind
                  contribution of interest on stockholder loans
              
              
              -
              
              
              -
              
              
              1,248
              
              
              -
              
              
              1,248






3




**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 MARCH 31,
      2007**


**(UNAUDITED)**






In-kind
                  contribution of compensation
              
              
              
              
              
              
              
              
              54,500
              
              
              
              
              
              54,500In
                  -kind contribution of automobile allowance
              
              
              
              
              
              
              
              
              1,500
              
              
              
              
              
              1,500Net
                  loss, 2006
              
              
              -
              
              
              -
              
              
              -
              
              
              (110,603
              )
              
              (110,603
              )BALANCE,
                  December 31, 2006
              
              
              53,480,000
              
              
              5,350
              
              
              213,231
              
              
              (272,168
              )
              
              (53,587
              )In-kind
                  contribution of interest of stockholder loans
              
              
              
              
              
              
              
              
              486
              
              
              
              
              
              486Net
                  loss for the three months ended March 31, 2007
              
              
              -
              
              
              -
              
              
              -
              
              
              (11,939
              )
              
              (11,939
              )BALANCE,
                  March 31, 2007
              
              
              53,480,000
              
              $
              5,350
              
              $
              213,717
              
              $
              (284,107
              )
              $
              (65,040
              )






See
      accompanying notes to condensed consolidated financial statements.








4









For
                the Three Months Ended March 31, 2007
            
            For
                the Three Months Ended March 31, 2006
            
            For
                the Period from February 23, 2004 (Inception) to March 31,
                2007**CASH
                FLOWS FROM OPERATING ACTIVITIES:**Net
                loss
            
            $
            (11,939
            )
            $
            (10,513
            )
            $
            (284,107
            )Adjustments
                to reconcile net loss to net cash provided by (used in) operating
                activities:Depreciation
            
            
            232
            
            
            231
            
            
            4,899Loss
                on disposal of property and equipment
            
            
            -
            
            
            -
            
            
            6,893In-kind
                contribution of interest on stockholder loans
            
            
            486
            
            
            685
            
            
            60,167Stock
                issued for payment of services and expenses
            
            
            -
            
            
            
            
            
            70,000In-kind
                contribution of officers compensationIn-kind
                contribution of automobile allowanceChanges
                in operating assets and liabilities:Deposits
            
            
            -
            
            
            -
            
            
            (750
            )Prepaid
                expenses
            
            
            250
            
            
            750Accounts
                payable and accrued expenses
            
            
            (2,915
            )
            
            2,120
            
            
            15,436Net
                Cash Provided By (Used In) Operating Activities
            
            
            (12,886
            )
            
            (6,727
            )
            
            (127,462)
            )**CASH
                FLOWS FROM INVESTING ACTIVITIES:**Proceeds
                from the sale of property and equipment
            
            
            -
            
            
            -
            
            
            3,425Purchase
                of property and equipment
            
            
            -
            
            
            -
            
            
            (18,716
            )Net
                Cash Provided By (Used In) Investing Activities
            
            
            -
            
            
            -
            
            
            (15,291
            )**CASH
                FLOWS FROM FINANCING ACTIVITIES:**Cash
                overdraft
            
            
            
            
            
            295Proceeds
                from issuance of loan payable - related party
            
            
            20,000
            
            
            
            
            
            111,420Repayment
                of loan payable - related party
            
            
            (4,179
            )
            
            (5,733
            )
            
            (55,002
            )Proceeds
                from issuance of common stock
            
            
            -
            
            
            10,000
            
            
            90,500Net
                Cash Provided By (Used In) Financing Activities
            
            
            15,821
            
            
            4,562
            )
            
            146,918NET
                INCREASE (DECREASE) IN CASH
            
            
            2,935
            
            
            (2,165
            )
            
            4,165CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
            
            
            1,230
            
            
            2,335
            
            
            -**CASH AND CASH EQUIVALENTS AT END OF PERIOD**
            
            $
            4,165
            
            $
            170
            
            $
            4,165**SUPPLEMENTAL
                DISCLOSURE OF CASH FLOW INFORMATION:**Cash paid during the period for interest
            
            $
            136
            
            $
            143
            
            $
            1,052Cash paid during the period for taxes
            
            $
            -
            
            $
            -
            
            $
            -


See
        accompanying notes to condensed consolidated financial
        statements.






5




**EFFECTIVE
        PROFITABLE SOFTWARE, INC. AND SUBSIDIARY**
 **(A
        DEVELOPMENT STAGE COMPANY)**
 **CONDENSED**  **CONSOLIDATED**  **STATEMENT
        OF CASH FLOWS**
 **(UNAUDITED)**





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





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





The
      accompanying unaudited financial statements have been prepared in accordance
      with accounting principles generally accepted in the United States of America
      and the rules and regulations of the Securities and Exchange Commission for
      interim financial information. Accordingly, they do not include all the
      information necessary for a comprehensive presentation of financial position
      and
      results of operations.





It
      is
      management’s opinion however, that all material adjustments (consisting of
      normal recurring adjustments) have been made which are necessary for a fair
      financial statements presentation. The results for the interim period are not
      necessarily indicative of the results to be expected for the year.





***(B)
      Organization***





Effective
      Profitable Software, Inc. F/K/A Modena 2, Inc. (a development stage company)
      was
      incorporated in the state of Delaware on November 18, 2003.





EPS,
      Inc., (a development stage company) was incorporated in the state of Arkansas
      on
      February 23, 2004.





On
      May
      10 th ,
      2005
      pursuant to a stock purchase agreement and share exchange between the Effective
      Profitable Software, Inc. and EPS, Inc. and the shareholders of EPS, Inc.,
      we
      purchased all of the outstanding shares of EPS for the issuance of 10,156,000
      (50,780,000 post-split) shares of our stock to EPS shareholders. Pursuant to
      the
      agreement, EPS became a wholly owned subsidiary of the Company. As a result
      of
      the agreement, the transaction was treated for accounting purposes as a
      reorganization by the accounting acquirer (EPS, Inc.) and as a recapitalization
      by the accounting acquiree (Effective Profitable Software, Inc.).





Accordingly,
      the financial statements include the following:





(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.





Activities
      during the development stage include developing the business plan and raising
      capital.


Effective
      Profitable Software, Inc. and its wholly-owned subsidiary are hereafter referred
      to as the “Company”.





The
      Company intends to develop computer software for use in technical analysis
      of
      financial markets.





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





The
      2007
      and 2006 financial statements include the accounts of Effective Profitable
      Software, Inc. and its wholly-owned subsidiary EPS, Inc.





All
      significant intercompany accounts and transactions have been eliminated in
      consolidation.





***(D)
      Revenue Recognition***





Revenue
      is recognized when persuasive evidence of an arrangement exists, delivery has
      occurred, the fee is fixed or determinable and collectability is
      assured.





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





The
      Company considers cash on hand and amounts on deposit with financial
      institutions which have original maturities of three months or less to be cash
      and cash equivalents.





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





In
      preparing financial statements in conformity with generally accepted accounting
      principles, management is required to make estimates and assumptions that affect
      the reported amounts of assets and liabilities and the disclosure of contingent
      assets and liabilities at the date of the financial statements and revenues
      and
      expenses during the reported period. Actual results could differ from those
      estimates






6







***(G)
      Income Taxes***





The
      Company accounts for income taxes under the Statement of Financial Accounting
      Standards No. 109, “Accounting for Income Taxes” (“Statement 109”). Under
      Statement 109, deferred tax assets and liabilities are recognized for the future
      tax consequences attributable to differences between the financial statement
      carrying amounts of existing assets and liabilities and their respective tax
      bases. Deferred tax assets and liabilities are measured using enacted tax rates
      expected to apply to taxable income in the years in which those temporary
      differences are expected to be recovered or settled. Under Statement 109, the
      effect on deferred tax assets and liabilities of a change in tax rates is
      recognized in income in the period that includes the enactment
      date.





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





The
      Company’s financial instruments include accounts payable and liabilities to
      shareholders. The carrying amounts of other financial instruments approximate
      their fair value because of short-term maturities.





***(I)
      Earnings Per Share***





Basic
      earnings per share is computed by dividing earnings available to stockholders
      by
      the weighted-average number of shares outstanding for the period as guided
      by
      the Financial Accounting Standards Board (FASB) under Statement of Financial
      Accounting Standards (SFAS) No. 128, “Earnings per Shares”. Diluted EPS reflects
      the potential dilution of securities that could share in the earnings. As of
      March 31, 2007 and 2006, the Company does not have any outstanding dilutive
      securities.





***(J)
      Concentrations of Credit Risk***





Financial
      instruments which potentially expose the Company to concentrations of credit
      risk consist principally of operating demand deposit accounts if those accounts
      are in excess of $100,000. As at March 31, 2007 there were no cash deposits
      in
      excess of the FDIC limit.





***(K)
      Recent Accounting Pronouncements***





In
      February 2006, the FASB issued SFAS No. 155, " *Accounting
      for Certain Hybrid Financial Instruments-an amendment of FASB Statements No.
      133
      and 140* ",
      to
      simplify and make more consistent the accounting for certain financial
      instruments. SFAS No. 155 amends SFAS No. 133, " *Accounting
      for Derivative Instruments and Hedging Activities* ",
      to
      permit fair value re-measurement for any hybrid financial instrument with an
      embedded derivative that otherwise would require bifurcation, provided that
      the
      whole instrument is accounted for on a fair value basis. SFAS No. 155 amends
      SFAS No. 140, " *Accounting
      for the Impairment or Disposal of Long-Lived Assets* ",
      to
      allow a qualifying special-purpose entity to hold a derivative financial
      instrument that pertains to a beneficial interest other than another derivative
      financial instrument. SFAS No. 155 applies to all financial instruments acquired
      or issued after the beginning of an entity's first fiscal year that begins
      after
      September 15, 2006, with earlier application allowed. The adoption of this
      statement is not expected to have a material effect on the Company's future
      reported financial position or results of operations.





In
      March
      2006, the FASB issued SFAS No. 156, " *Accounting
      for Servicing of Financial Assets, an amendment of FASB Statement No. 140,
      Accounting for Transfers and Servicing of Financial Assets and Extinguishments
      of Liabilities* ".
      This
      statement requires all separately recognized servicing assets and servicing
      liabilities be initially measured at fair value, if practicable, and permits
      for
      subsequent measurement using either fair value measurement with changes in
      fair
      value reflected in earnings or the amortization and impairment requirements
      of
      Statement No. 140. The subsequent measurement of separately recognized servicing
      assets and servicing liabilities at fair value eliminates the necessity for
      entities that manage the risks inherent in servicing assets and servicing
      liabilities with derivatives to qualify for hedge accounting treatment and
      eliminates the characterization of declines in fair value as impairments or
      direct write-downs. SFAS No. 156 is effective for an entity's first fiscal
      year
      beginning after September 15, 2006. The adoption of this statement is not
      expected to have a material effect on the Company's future reported financial
      position or results of operations.





In
      June
      2006, the FASB issued FASB Interpretation No. 48, *“Accounting
      for Uncertainty in Income Taxes, an interpretation of FASB Statements No.
      109”* .
      FIN 48
      clarifies the accounting for uncertainty in income taxes by prescribing a
      two-step method of first evaluating whether a tax position has met a more likely
      than not recognition threshold and second, measuring that tax position to
      determine the amount of benefit to be recognized in the financial statements.
      FIN 48 provides guidance on the presentation of such positions within a
      classified statement of financial position as well as on derecognition, interest
      and penalties, accounting in interim periods, disclosure, and transition. FIN
      48
      is effective for fiscal years beginning after December 15, 2006. The adoption
      of
      this statement is not expected to have a material effect on the Company's future
      reported financial position or results of operations.






7





In
      September 2006, the FASB issued SFAS No. 157, “ *Fair
      Value Measurements* ”.
      The
      objective of SFAS 157 is to increase consistency and comparability in fair
      value
      measurements and to expand disclosures about fair value measurements. SFAS
      157
      defines fair value, establishes a framework for measuring fair value in
      generally accepted accounting principles, and expands disclosures about fair
      value measurements. SFAS 157 applies under other accounting pronouncements
      that
      require or permit fair value measurements and does not require any new fair
      value measurements. The provisions of SFAS No. 157 are effective for fair value
      measurements made in fiscal years beginning after November 15, 2007. The
      adoption of this statement is not expected to have a material effect on the
      Company's future reported financial position or results of
      operations.





In
      September 2006, the FASB issued SFAS No. 158, “ *Employers’
      Accounting for Defined Benefit Pension and Other Postretirement Plans - an
      amendment of FASB Statements No. 87, 88, 106, and 132(R)* ”.
      This
      statement requires employers to recognize the over-funded or under-funded status
      of a defined benefit postretirement plan (other than a multiemployer plan)
      as an
      asset or liability in its statement of financial position and to recognize
      changes in that funded status in the year in which the changes occur through
      comprehensive income of a business entity or changes in unrestricted net assets
      of a not-for-profit organization. This statement also requires an employer
      to
      measure the funded status of a plan as of the date of its year-end statement
      of
      financial position, with limited exceptions. The provisions of SFAS No. 158
      are
      effective for employers with publicly traded equity securities as of the end
      of
      the fiscal year ending after December 15, 2006. The adoption of this statement
      is not expected to have a material effect on the Company's future reported
      financial position or results of operations.





In
      September 2006, the SEC issued Staff Accounting Bulletin (“SAB”) No. 108,
“ *Considering
      the Effects of Prior Year Misstatements when Quantifying Misstatements in
      Current Year Financial Statements* .”
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. SAB No. 108 is effective for period ending
      after November 15, 2006. The Company is currently evaluating the impact of
      adopting SAB No. 108 but does not expect that it will have a material effect
      on
      its financial statements.





In
      February 2007, the Financial Accounting Standards Board (FASB) issued SFAS
      No.
      159, “ *The
      Fair Value Option for Financial Assets and Financial Liabilities - Including
      an
      Amendment of FASB Statement No. 115* ”.
      This
      statement permits entities to choose to measure many financial instruments
      and
      certain other items at fair value. Most of the provisions of SFAS No. 159 apply
      only to entities that elect the fair value option. However, the amendment to
      SFAS No. 115 “ *Accounting
      for Certain Investments in Debt and Equity Securities* ”
applies
      to all entities with available-for-sale and trading securities. SFAS No. 159
      is
      effective as of the beginning of an entity’s first fiscal year that begins after
      November 15, 2007. Early adoption is permitted as of the beginning of a fiscal
      year that begins on or before November 15, 2007, provided the entity also elects
      to apply the provision of SFAS No. 157, “ *Fair
      Value Measurements”.* The
      adoption of this statement is not expected to have a material effect on the
      Company's financial statements.





**NOTE
      2**  **RELATED
      PARTY TRANSACTIONS**





The
      Company’s officers have loaned the Company working capital in the form of
      unsecured demand notes. At March 31, 2007 the Company owed $56,418. There are
      no
      terms on the note and the Company expects to retire these notes during the
      year
      2007. The Company is accruing interest at a rate of 4% per annum and classifying
      the expense as an in-kind contribution.





**NOTE
      3**  **STOCKHOLDERS’
      EQUITY**





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





On
      February 23, 2004, the company issued 45,000,000 shares of common stock to
      the
      Company’s officers for services regarding the initial start up of the Company.
      The value of these shares was $900, or $.00002 per share.





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





During
      the period ended December 31, 2004, the Company undertook a private placement
      issuance, Regulation D Rule offering whereby 2,280,000 shares of common stock
      were issued for cash of $45,600, or $0.02 per share.





During
      the year ended December 31, 2005, the Company issued 500,000 shares to an
      investor for cash of $10,000, or $0.02 per share. During the three months ended
      March 31, 2006, the Company issued 500,000 shares to an investor for cash of
      $10,000 or $0.02 per share.






8





During
      the year ended December 31, 2005 the company issued 1,700,000 shares to two
      investors for cash of $34,000, or $0.02 per share.





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





On
      May
      10, 2005, Effective Profitable Software, Inc. exchanged 2,500,000 shares of
      common stock for all the outstanding shares of EPS (See Note
      12).





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





On
      April
      1, 2004, the Company issued 500,000 shares of common stock for legal services.
      The value of these shares was $10, 000 or $0.02 per share.





During
      the last quarter of 2004, the Company issued 2,500,000 shares of common stock
      for services. The value of these shares was $50,000, or $0.02 per
      share.





In
      January 2005, the Company issued 500,000 shares of common stock for services.
      The value of these shares was $10,000, or $0.02 per share.





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





During
      the period ended December 31, 2004, $646 of in-kind contributions relating
      to
      imputed interest on related party loans was recorded.





During
      the year ended December 31, 2005, $1,787 of in-kind contributions relating
      to
      imputed interest on related party loans was recorded.





During
      the year ended December 31, 2006, $1,248 of in kind contributions relating
      to
      imputed interest on related party loans was recorded.





During
      the year ended December 31, 2006, $54,500 of in-kind contributions relating
      to
      compensation of officers was recorded.





During
      the year ended December 31, 2006, $1,500 of in-kind contributions relating
      to
      automobile allowance was recorded.





During
      the three months ended March 31, 2007, $486 of in-kind contribution relating
      to
      imputed interest on related party loans was recorded.





***(F)
      Stock Split***


On
      May
      20, 2005, the Board of Directors approved a 5 for 1 forward stock split for
      all
      shareholders of the Company as of May 10, 2005. Per share weighted average
      share
      amounts have been retroactively restated in the accompanying audited financial
      statements and related notes to reflect this split





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





As
      reflected in the accompanying financial statements, the Company is in the
      development stage with no revenue, a working capital deficiency of $69,289,
      a
      stockholder’s deficiency of $65,040 and has a negative cash flow from operations
      of $127,462 from inception. This raises substantial doubt about its ability
      to
      continue as a going concern. The ability of the Company to continue as a going
      concern is dependent on the Company’s ability to raise additional capital and
      implement its business plan. The financial statements do not include any
      adjustments that might be necessary if the Company is unable to continue as
      a
      going concern.





Management
      believes that actions presently being taken to obtain additional funding and
      implement its strategic plans provide the opportunity for the Company to
      continue as a going concern.





**NOTE
      5**  **SUBSEQUENT
      EVENT**





During
        May 2007, the Company sold 100,000 shares of common stock for cash of $10,000
        ($0.10 per share).


9


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





The
      following discussion and analysis provides information which management believes
      is relevant to an assessment and understanding of our financial condition.
      The
      discussion should be read in conjunction with our financial statements and
      notes
      thereto appearing in this prospectus. The following discussion and analysis
      contains forward-looking statements, which involve risks and uncertainties.
      Our
      actual results may differ significantly from the results, expectations and
      plans
      discussed in these forward- looking statements.




Overview




On
      May
      10, 2005, pursuant to a Stock Purchase Agreement and Share Exchange between
      us
      and EPS, Inc., an Arkansas corporation, and the shareholders of EPS, we
      purchased all of the outstanding shares of EPS for the issuance of 10,156,000
      shares of our stock to the EPS shareholders. Pursuant to the Agreement, EPS
      became a wholly owned subsidiary of the Company. Pursuant to the terms of the
      Agreement, we filed Articles of Amendment with the State of Delaware changing
      our name to Effective Profitable Software, Inc.




Based
      on
      the acquisition of EPS we changed our business focus to become an evaluation
      software company which focuses on bringing affordable evaluation tools to the
      general public. We are based in Little Rock, Arkansas and are led by Don
      Bratcher, Gary Moore and Richard Torti. We use in house proprietary software
      for
      evaluation of markets, stocks, commodities, and other financial instruments.
      We
      have developed an innovative financial markets evaluation system we call the
      TimingWave. At the center of the system is a 100% mechanical, unemotional timing
      model that is both powerful and simple to use. The system’s web-based access
      will make it both affordable and accessible and our evaluations are easily
      understood.




On
      May
      20, 2005, our directors and shareholders approved a 5-1 forward split of our
      outstanding common shares increasing the amount of shares owned by these
      shareholders to 51,280,000 shares.


_______________________________________





Plan
      of
      Operations




During
      the next twelve months, we expect to take the following steps in connection
      with
      the operations:





Initially
      we plan to prepare and execute a marketing plan to develop our subscription
      base. The majority of our member base will be obtained from two sources: search
      engine results and links placed in online market timing directories via link
      exchange programs. Link exchange means placing your website address on another
      website for advertising. You can opt to pay on a “per-click” basis or by
      allowing the other website to advertise on your website.




We
        anticipate that within thirty to sixty days, a comprehensive marketing plan
        will
        be developed. We expect to spend approximately $5,000 on marketing in the
        areas
        of Keyword Advertising and Sponsored Links through Google, FindWhat, and
        other
        similar targeted keyword programs. Another area that we will vigorously pursue
        as part of our marketing and branding program is search engine placement.
        By
        continuing to work to optimize the site, and by increasing the number of
        links
        to the site, we feel we can receive better search results and search engine
        saturation, which in turn directs more traffic to the website. In addition
        to
        our internet based effort we intend to advertise in national papers. We
        anticipate additional subscriptions from word of mouth.





Once
      the
      trading system (Timingwave) is built on Trade Station and E-signal, which we
      expect to be completed in 3 to 5 months, a free 30-day trial will be offered
      to
      all existing platform subscribers for both signal and trade station clients,
      which total 540,000 clients. We expect the cost to build the Timingwave on
      Trade
      Station and Signal to be $25,000 to $40,000. Once we achieve our goal of 1,000
      subscribers, we should have the funds to advertise and hire salesmen to solicit
      enough funds to reach our next goal of 10,000 additional subscribers. Our
      ultimate goal is $100,000,000 in managed money for clients using the Timingwave
      signals.




Tutorials
      to use the indicators will be provided on the website. Those satisfied with
      the
      indicators may subscribe online. Links will be provided to trade platforms
      to
      allow the subscribers to access the Timingwave signals. Certified Fund managers
      will solicit clients on the website and by seminars and direct contact with
      Money managers and wealthy individuals, with a performance incentive of 20%
      profit per quarter. Advertising will be done on the internet through Google,
      and
      in print ads that will refer potential customers to our website for detailed
      explanations of fees and historical results. We anticipate acquiring 1000
      subscribers from the free trial period. In the first quarter of 2007, we intend
      to charge a subscription fee of $300 per quarter for our services. We intend
      to
      inform our existing customers when they subscribe that this is an initial offer
      and prices will increase. Income from initial subscribers will provide funds
      for
      advertising for additional subscribers and salesmen to be hired to contact
      wealthy individuals and money managers to solicit funds and subscriptions.
      A
      model Portfolio of $100,000 will be created and results will be posted daily.
      Our current hypothetical portfolio is up 55%.





10


We
        do not
        have enough cash to satisfy our minimum cash requirements for the next twelve
        months. We require additional funds to increase marketing, to expand operations,
        and for further development of our website. Gary Moore, our President, has
        agreed to provide us with the funds that we need until we start producing
        revenue or can acquire funds from other sources. No significant purchases
        of
        equipment are anticipated; however, a substantial surge in traffic and/ or
        membership could necessitate the purchase of additional
        servers.





As
      reflected in the accompanying financial statements, we are in the development
      stage and have not yet commenced operations. This raises substantial doubt
      about
      our ability to continue as a going concern. Our ability to continue as a going
      concern is dependent on our ability to raise additional capital and implement
      our business plan. The financial statements do not include any adjustments
      that
      might be necessary if we are unable to continue as a going concern.




EPS,
        Inc.
        continues to record real time trades in order to give a history of the
        software’s performance. The industry standard is a minimum of one year’s
        results. We have now 9 months of data. Rosenthal & Collins, our only client,
        is independently testing the system. We are working on building its software
        on
        the trade station platform which will enable us to offer it to over 500,000
        subscriber. We do not have a target date for this completion. However once
        this
        is completed we intend to commence a print and internet based marketing
        program.


___________________________________________





**Capital
      Resources and Liquidity**




Our
      audited balance sheet as of March 31, 2007 reflects assets of $8,414, consisting
      of cash of $4,165, property and equipment of $3,499 and deposits of $750. Total
      liabilities as of March 31, 2007 were $73,454, consisting of accounts payable
      of
      $17,036 and stockholder loans of $56,418.





We
      believe that actions presently being taken to obtain additional funding and
      implement our strategic plans provide the opportunity for us to continue as
      a
      going concern.





**Recent
      Financial Pronouncements**




In
      February 2006, the FASB issued SFAS No. 155, "Accounting for Certain Hybrid
      Financial Instruments-an amendment of FASB Statements No. 133 and 140", to
      simplify and make more consistent the accounting for certain financial
      instruments. SFAS No. 155 amends SFAS No. 133, "Accounting for Derivative
      Instruments and Hedging Activities", to permit fair value re-measurement for
      any
      hybrid financial instrument with an embedded derivative that otherwise would
      require bifurcation, provided that the whole instrument is accounted for on
      a
      fair value basis. SFAS No. 155 amends SFAS No. 140, "Accounting for the
      Impairment or Disposal of Long-Lived Assets", to allow a qualifying
      special-purpose entity to hold a derivative financial instrument that pertains
      to a beneficial interest other than another derivative financial instrument.
      SFAS No. 155 applies to all financial instruments acquired or issued after
      the
      beginning of an entity's first fiscal year that begins after September 15,
      2006,
      with earlier application allowed. The adoption of this statement is not expected
      to have a material effect on the Company's future reported financial position
      or
      results of operations.





In
      March
      2006, the FASB issued SFAS No. 156, "Accounting for Servicing of Financial
      Assets, an amendment of FASB Statement No. 140, Accounting for Transfers and
      Servicing of Financial Assets and Extinguishments of Liabilities". This
      statement requires all separately recognized servicing assets and servicing
      liabilities be initially measured at fair value, if practicable, and permits
      for
      subsequent measurement using either fair value measurement with changes in
      fair
      value reflected in earnings or the amortization and impairment requirements
      of
      Statement No. 140. The subsequent measurement of separately recognized servicing
      assets and servicing liabilities at fair value eliminates the necessity for
      entities that manage the risks inherent in servicing assets and servicing
      liabilities with derivatives to qualify for hedge accounting treatment and
      eliminates the characterization of declines in fair value as impairments or
      direct write-downs. SFAS No. 156 is effective for an entity's first fiscal
      year
      beginning after September 15, 2006. The adoption of this statement is not
      expected to have a material effect on the Company's future reported financial
      position or results of operations.





In
      June
      2006, the FASB issued FASB Interpretation No. 48, “Accounting for Uncertainty in
      Income Taxes, an
      interpretation of FASB Statements No. 109”. FIN 48 clarifies the accounting for
      uncertainty in income taxes by prescribing a two-step method of first evaluating
      whether a tax position has met a more likely than not recognition threshold
      and
      second, measuring that tax position to determine the amount of benefit to be
      recognized in the financial statements. FIN 48 provides guidance on the
      presentation of such positions within a classified statement of financial
      position as well as on derecognition, interest and penalties, accounting in
      interim periods, disclosure, and transition. FIN 48 is effective for fiscal
      years beginning after December 15, 2006. The adoption of this statement is
      not
      expected to have a material effect on the Company's future reported financial
      position or results of operations.





11


In
      September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”. The
      objective of SFAS 157 is to increase consistency and comparability in fair
      value
      measurements and to expand disclosures about fair value measurements. SFAS
      157
      defines fair value, establishes a framework for measuring fair value in
      generally accepted accounting principles, and expands disclosures about fair
      value measurements. SFAS 157 applies under other accounting pronouncements
      that
      require or permit fair value measurements and does not require any new fair
      value measurements. The provisions of SFAS No. 157 are effective for fair value
      measurements made in fiscal years beginning after November 15, 2007. The
      adoption of this statement is not expected to have a material effect on the
      Company's future reported financial position or results of
      operations.




In
      September 2006, the FASB issued SFAS No. 158, “Employers’ Accounting for Defined
      Benefit Pension and Other Postretirement Plans - an amendment of FASB Statements
      No. 87, 88, 106, and 132(R)”. This statement requires employers to recognize the
      over-funded or under-funded status of a defined benefit postretirement plan
      (other than a multiemployer plan) as an asset or liability in its statement
      of
      financial position and to recognize changes in that funded status in the year
      in
      which the changes occur through comprehensive income of a business entity or
      changes in unrestricted net assets of a not-for-profit organization. This
      statement also requires an employer to measure the funded status of a plan
      as of
      the date of its year-end statement of financial position, with limited
      exceptions. The provisions of SFAS No. 158 are effective for employers with
      publicly traded equity securities as of the end of the fiscal year ending after
      December 15, 2006. The adoption of this statement is not expected to have a
      material effect on the Company's future reported financial position or results
      of operations.




In
      September 2006, the SEC issued Staff Accounting Bulletin (“SAB”) No. 108,
“Considering the Effects of Prior Year Misstatements when Quantifying
      Misstatements in Current Year Financial Statements.” 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. SAB No. 108 is effective for period ending after November
      15, 2006. The Company is currently evaluating the impact of adopting SAB No.
      108
      but does not expect that it will have a material effect on its financial
      statements.




In
      February 2007, the Financial Accounting Standards Board (FASB) issued SFAS
      No.
      159, “The Fair Value Option for Financial Assets and Financial Liabilities -
      Including an Amendment of FASB Statement No. 115”. This statement permits
      entities to choose to measure many financial instruments and certain other
      items
      at fair value. Most of the provisions of SFAS No. 159 apply only to entities
      that elect the fair value option. However, the amendment to SFAS No. 115
“Accounting for Certain Investments in Debt and Equity Securities” applies to
      all entities with available-for-sale and trading securities. SFAS No. 159 is
      effective as of the beginning of an entity’s first fiscal year that begins after
      November 15, 2007. Early adoption is permitted as of the beginning of a fiscal
      year that begins on or before November 15, 2007, provided the entity also elects
      to apply the provision of SFAS No. 157, “Fair Value Measurements”. The adoption
      of this statement is not expected to have a material effect on the Company's
      financial statements.




**Going
      Concern Consideration**




As
      reflected in the accompanying financial statements, we are in the development
      stage with no revenue, a working capital deficiency of $69,289, a stockholder’s
      deficiency of $65,040 and a negative cash flow from operations of $127,462
      from
      inception. Accordingly, there is substantial doubt about our ability to continue
      as a going concern. Our ability to continue as a going concern is dependent
      on
      our ability to raise additional capital and implement our business plan. The
      financial statements do not include any adjustments that might be necessary
      if
      the Company is unable to continue as a going concern.




We
      believe that actions presently being taken to obtain additional funding and
      implement our strategic plans provide the opportunity for us to continue as
      a
      going concern.




**Critical
      Accounting Policies**




Our
      financial statements and related public financial information are based on
      the
      application of accounting principles generally accepted in the United States
      (“GAAP”). GAAP requires the use of estimates; assumptions, judgments and
      subjective interpretations of accounting principles that have an impact on
      the
      assets, liabilities, revenue and expense amounts reported. These estimates
      can
      also affect supplemental information contained in our external disclosures
      including information regarding contingencies, risk and financial condition.
      We
      believe our use if estimates and underlying accounting assumptions adhere to
      GAAP and are consistently and conservatively applied. We base our estimates
      on
      historical experience and on various other assumptions that we believe to be
      reasonable under the circumstances. Actual results may differ materially from
      these estimates under different assumptions or conditions. We continue to
      monitor significant estimates made during the preparation of our financial
      statements.




12


Our
      significant accounting policies are summarized in Note 1 of our financial
      statements. While all these significant accounting policies impact our financial
      condition and results of operations, we view certain of these policies as
      critical. Policies determined to be critical are those policies that have the
      most significant impact on our financial statements and require management
      to
      use a greater degree of judgment and estimates. Actual results may differ from
      those estimates. Our management believes that given current facts and
      circumstances, it is unlikely that applying any other reasonable judgments
      or
      estimate methodologies would cause effect on our consolidated results of
      operations, financial position or liquidity for the periods presented in this
      report.





**Off-Balance
      Sheet Arrangements**




We
      have
      no off-balance sheet arrangements.




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




**Evaluation
      of disclosure controls and procedures**




Under
      the
      supervision and with the participation of our management, including our
      principal executive officer and Chief Financial Officer , we conducted an
      evaluation of our disclosure controls and procedures, as such term is defined
      under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities
      Exchange Act of 1934, as amended (Exchange Act), as of March 31, 2007. Based
      on
      that evaluation, our principal executive officer and principal financial officer
      concluded that, a material weakness in our internal accounting controls existed
      prior to March 31, 2007 so that our disclosure controls and procedures in place
      were not adequate to ensure that information required to be disclosed by us,
      including our consolidated subsidiaries, in reports that we file or submit
      under
      the Exchange Act, is recorded, processed, summarized and reported on a timely
      basis in accordance with applicable rules and regulations. Although our
      principal executive officer and principal financial officer believe our current
      existing disclosure controls and procedures are adequate to enable us to comply
      with our disclosure obligations, we intend to formalize and document the
      procedures already in place and establish a disclosure committee.




**Changes
      in internal controls**




We
        made
        significant changes to our internal controls prior to the Evaluation Date.
        We
        have applied the necessary corrective action and believe this weakness has
        been
        remediated. Based upon same, there were no further changes (including corrective
        actions with regard to significant deficiencies or material weaknesses) in
        our
        internal controls over financial reporting that occurred during the first
        quarter of fiscal 2007 that has materially affected, or is reasonably likely
        to
        materially affect, our internal control over financial
        reporting.




13







**PART
      II - OTHER INFORMATION**





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




We
      are
      currently not a party to any pending legal proceedings and no such actions
      by,
      or to the best of our knowledge, against us have been threatened.





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




None.





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




None




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




No
      matter
      was submitted during the quarter ending March 31, 2007, covered by this report
      to a vote of our shareholders, through the solicitation of proxies or
      otherwise.





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




None





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




(a)
            Reports
                on Form 8-K and Form 8K-ANone(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).








14






**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, there unto duly
      authorized.




**EFFECTIVE
      PROFITABLE SOFTWARE, INC.**




By: */s/Gary
      Moore*


Gary
      Moore


President,


Chief
      Executive Officer




May
      21,
      2007


15