----

----

**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 June 30, 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) |

----

**TABLE      OF CONTENTS**

| **PART                I - FINANCIAL INFORMATION**                                                     | 1      |
|-------------------------------------------------------------------------------------------------------|--------|
| Item                1. Financial Information                                                          | 10     |
| Item                2. Management’s Discussion and Analysis or Plan of                Operation | 12     |
| Item                3. Controls and Procedures                                                        |   |
|                                                                                                  |   |
| **PART                II -OTHER INFORMATION**                                                         | 13     |
| Item                1. Legal Proceedings.                                                             | 13     |
| Item                2. Unregistered Sales of Equity Securities and Use of                Proceeds.    | 13     |
| Item                3. Defaults Upon Senior Securities.                                               | 13     |
| Item                4. Submission of Matters to a Vote of Security Holders.                           | 13     |
| Item                5. Other Information.                                                             | 13     |
| Item                6. Exhibits and Reports of Form 8-K.                                              | 13     |
|                                                                                                  |   |
| **SIGNATURES**                                                                                        | 14     |

----

**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 JUNE 30, 2007                  (UNAUDITED)                                                                                                                                                                  |
|--------|------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                         |                                                                                                                                                                                                                                                                    |
| PAGE   | 2                            | CONDENSED                  CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE AND SIX MONTHS                  ENDED                  JUNE 30, 2007 AND 2006, AND FOR THE PERIODS FROM FEBRUARY 23, 2004                  (INCEPTION) TO JUNE 30, 2007 (UNAUDITED)      |
|   |                         |                                                                                                                                                                                                                                                                    |
| PAGE   | 3-4                          | CONDENSED                  CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIENCY FOR THE                  PERIOD FROM FEBRUARY 23, 2004 (INCEPTION) TO JUNE 30, 2007                  (UNAUDITED)                                                         |
|   |                         |                                                                                                                                                                                                                                                                    |
| PAGE   | 5                            | CONDENSED                  CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE                  30,                  2007 AND 2006, AND FOR THE PERIOD FROM FEBRUARY 23, 2004 (INCEPTION)                  TO                  JUNE 30, 2007 (UNAUDITED) |
|   |                         |                                                                                                                                                                                                                                                                    |
| PAGES  | 6 -                  11 | NOTES                  TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2007                  (UNAUDITED)                                                                                                                                                  |
|   |                         |                                                                                                                                                                                                                                                                    |

----

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

**(A        DEVELOPMENT STAGE COMPANY)**

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

**AS        OF JUNE 30, 2007**

**(UNAUDITED)**

| **ASSETS**                                                                                                                                      |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| **CURRENT                  ASSETS**                                                                                                             |   |   |   |
| Cash                                                                                                                                            |   | $ | 1,507 |   |
| Total                  Current Assets                                                                                                           |   |   | 1,507 |   |
|                                                                                                                                            |   |   |   |   |
| **PROPERTY                  AND EQUIPMENT, NET**                                                                                                |   |   | 3,268 |   |
|                                                                                                                                            |   |   |   |   |
| **OTHER                  ASSETS**                                                                                                               |   |   |   |   |
| Deposits                                                                                                                                        |   |   | 750 |   |
| Total                  Other Assets                                                                                                             |   |   | 750 |   |
|                                                                                                                                            |   |   |   |   |
| **TOTAL                  ASSETS**                                                                                                               |   | $ | 5,525 |   |
|                                                                                                                                            |   |   |   |   |
| **LIABILITIES                  AND STOCKHOLDERS’ DEFICIENCY**                                                                             |   |
|                                                                                                                                            |   |   |   |   |
| **CURRENT                  LIABILITIES**                                                                                                        |   |   |   |   |
| Accounts                  payable and accrued expenses                                                                                          |   | $ | 21,404 |   |
| Stockholder                  loans                                                                                                              |   |   | 52,634 |   |
|                                                                                                                                            |   |   |   |   |
| **TOTAL                  LIABILITIES**                                                                                                          |   |   | 74,038 |   |
|                                                                                                                                            |   |   |   |   |
| **STOCKHOLDERS’                  DEFICIENCY**                                                                                             |   |   |   |   |
| Common                  stock, $0.0001 par value, 100,000,000 shares authorized,                  53,980,000 shares issued and outstanding |   |   | 5,400 |   |
| Additional                  paid in capital                                                                                                     |   |   | 251,460 |   |
| Accumulated                  deficit during development stage                                                                                   |   |   | (325,373 | ) |
| Total                  Stockholders’ Deficiency                                                                                           |   |   | (68,513 | ) |
|                                                                                                                                            |   |   |   |   |
| **TOTAL                  LIABILITIES AND STOCKHOLDERS’ DEFICIENCY**                                                                       |   | $ | 5,525 |   |
|                                                                                                                                            |   |   |   |   |

----

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

**(A        DEVELOPMENT STAGE COMPANY)**

**CONDENSED**

**CONSOLIDATED**

**STATEMENTS        OF OPERATIONS**

**(UNAUDITED)**

|                                                                                                                  |   | For                  the Three Months Ended June 30, 2007 |       |   | For                  the Three Months EndedJune                  30, 2006 (Restated) |   |       | For                  the Six Months EndedJune                  30, 2007 |   |   | For                  the Six Months EndedJune                  30, 2006 (Restated) |   |   | For                  the Period from February 23, 2004 (Inception) to June 30,                  2007 |       |
|-----------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------|------------|--------|--------------------------------------------------------------------------------------|--------|------------|-------------------------------------------------------------------------|--------|--------|------------------------------------------------------------------------------------|--------|--------|-----------------------------------------------------------------------------------------------------------|------------|
|                                                                                                                  |   |                                                      |       |   |                                                                                 |   |       |                                                                    |   |   |                                                                               |   |   |                                                                                                      |       |
| **REVENUE**                                                                                                           |   | $                                                         | -          |   |                                                                                 | $      | -          |                                                                    |   | $      | -                                                                                  |   |   | $                                                                                                         | -          |   |   | $ | - |   |
|                                                                                                                  |   |                                                      |       |   |                                                                                 |   |       |                                                                    |   |   |                                                                               |   |   |                                                                                                      |       |   |   |   |   |   |
| **OPERATING                  EXPENSES**                                                                               |   |                                                      |       |   |                                                                                 |   |       |                                                                    |   |   |                                                                               |   |   |                                                                                                      |       |   |   |   |   |   |
|   In-Kind                  contribution of Officer’s Salary                                           |   |                                                      | 27,250     |   |                                                                                 |   | -          |                                                                    |   |   | 27,250                                                                             |   |   |                                                                                                      | -          |   |   |   | 81,750 |   |
|   Professional                  Fees                                                                        |   |                                                      | 3,404      |   |                                                                                 |   | -          |                                                                    |   |   | 9,980                                                                              |   |   |                                                                                                      | -          |   |   |   | 61,849 |   |
| General                  and administrative                                                                           |   |                                                      | 9,902      |   |                                                                                 |   | 16,675     |                                                                    |   |   | 14,643                                                                             |   |   |                                                                                                      | 26,360     |   |   |   | 168,983 |   |
| Total                  Operating Expenses                                                                             |   |                                                      | 40,556     |   |                                                                                 |   | 16,675     |                                                                    |   |   | 51,873                                                                             |   |   |                                                                                                      | 26,360     |   |   |   | 312,582 |   |
|                                                                                                                  |   |                                                      |       |   |                                                                                 |   |       |                                                                    |   |   |                                                                               |   |   |                                                                                                      |       |   |   |   |   |   |
| **LOSS                  FROM OPERATIONS**                                                                             |   |                                                      | (40,556    | )      |                                                                                 |   | (16,675    | )                                                                       |   |   | (51,873                                                                            | )      |   |                                                                                                      | (26,360    | ) |   |   | (312,582 | ) |
|                                                                                                                  |   |                                                      |       |   |                                                                                 |   |       |                                                                    |   |   |                                                                               |   |   |                                                                                                      |       |   |   |   |   |   |
| **OTHER                  INCOME (EXPENSE)**                                                                           |   |                                                      |       |   |                                                                                 |   |       |                                                                    |   |   |                                                                               |   |   |                                                                                                      |       |   |   |   |   |   |
| Other                  income                                                                                         |   |                                                      | -          |   |                                                                                 |   | -          |                                                                    |   |   | -                                                                                  |   |   |                                                                                                      | -          |   |   |   | (30 | ) |
| Loss                  on disposal of assets                                                                           |   |                                                      | -          |   |                                                                                 |   | -          |                                                                    |   |   | -                                                                                  |   |   |                                                                                                      | -          |   |   |   | 6,893 |   |
| Interest                  expense                                                                                     |   |                                                      | 710        |   |                                                                                 |   | 26         |                                                                    |   |   | 1,332                                                                              |   |   |                                                                                                      | 854        |   |   |   | 5,928 |   |
| Total                  Other (Income) Expense                                                                         |   |                                                      | 710        |   |                                                                                 |   | 26         |                                                                    |   |   | 1,332                                                                              |   |   |                                                                                                      | 854        |   |   |   | 12,791 |   |
|                                                                                                                  |   |                                                      |       |   |                                                                                 |   |       |                                                                    |   |   |                                                                               |   |   |                                                                                                      |       |   |   |   |   |   |
| **LOSS                  BEFORE PROVISION FOR INCOME TAXES**                                                      |   |                                                      | (41,266    | )      |                                                                                 |   | (16,701    | )                                                                       |   |   | (53,205                                                                            | )      |   |                                                                                                      | (27,214    | ) |   |   | (325,373 | ) |
|                                                                                                                  |   |                                                      |       |   |                                                                                 |   |       |                                                                    |   |   |                                                                               |   |   |                                                                                                      |       |   |   |   |   |   |
| Provision                  for Income Taxes                                                                           |   |                                                      | -          |   |                                                                                 |   | -          |                                                                    |   |   | -                                                                                  |   |   |                                                                                                      | -          |   |   |   | - |   |
|                                                                                                                  |   |                                                      |       |   |                                                                                 |   |       |                                                                    |   |   |                                                                               |   |   |                                                                                                      |       |   |   |   |   |   |
| **NET                  LOSS**                                                                                         |   | $                                                         | (41,266    | )      |                                                                                 | $      | (16,701    | )                                                                       |   |   | (53,205                                                                            | )      |   |                                                                                                      | (27,214    | ) |   |   | (325,373 | ) |
|                                                                                                                  |   |                                                      |       |   |                                                                                 |   |       |                                                                    |   |   |                                                                               |   |   |                                                                                                      |       |   |   |   |   |   |
| Net                  Loss Per Share – Basic and Diluted                                                         |   | $                                                         | -          |   |                                                                                 | $      | -          |                                                                    |   | $      | -                                                                                  |   |   | $                                                                                                         | -          |   |   |   |   |   |
|                                                                                                                  |   |                                                      |       |   |                                                                                 |   |       |                                                                    |   |   |                                                                               |   |   |                                                                                                      |       |   |   |   |   |   |
| Weighted                  Average Number of Common Shares Outstanding – Basic and                  Diluted |   |                                                      | 53,804,176 |   |                                                                                 |   | 53,440,440 |                                                                    |   |   | 53,642,983                                                                         |   |   |                                                                                                      | 52,846,851 |   |   |   |   |   |

----

**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 JUNE 30,        2007**

**(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 (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  |   |   |   | - |   |   |   | 34,000 |   |
|                                                                                                                               |   |                          |       |   |                                |   |   |                                                    |   |   |    |   |   |   |   |   |   |   |   |   |
| In-kind                  contribution of interest on stockholder loans                                                             |   |                          | -          |   |                                |   | -      |                                                    |   |   | 1,248   |   |   |   | - |   |   |   | 1,248 |   |
|                                                                                                                               |   |                          |       |   |                                |   |   |                                                    |   |   |    |   |   |   |   |   |   |   |   |   |
| In-kind                  contribution of compensation                                                                              |   |                          | -          |   |                                |   | -      |                                                    |   |   | 54,500  |   |   |   | - |   |   |   | 54,500 |   |
|                                                                                                                               |   |                          |       |   |                                |   |   |                                                    |   |   |    |   |   |   |   |   |   |   |   |   |
| In                  –kind contribution of automobile allowance                                                               |   |                          | -          |   |                                |   | -      |                                                    |   |   | 1,500   |   |   |   | - |   |   |   | 1,500 |   |
|                                                                                                                               |   |                          |       |   |                                |   |   |                                                    |   |   |    |   |   |   |   |   |   |   |   |   |

----

**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 JUNE 30,        2007**

**(UNAUDITED)**

| Net                  loss, 2006                                             |   |   | -          |   |   |   | -      |   |   |   | -       |   |   |   | (110,603 | )      |   |   | (110,603 | )      |
|-----------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|--------|--------|--------|--------|---------|--------|--------|--------|----------|--------|--------|--------|----------|--------|
|                                                                        |   |   |       |   |   |   |   |   |   |   |    |   |   |   |     |   |   |   |     |   |
| BALANCE,                  December 31, 2006                                 |   |   | 53,480,000 |   |   |   | 5,350  |   |   |   | 213,231 |   |   |   | (272,168 | )      |   |   | (53,587  | )      |
|                                                                        |   |   |       |   |   |   |   |   |   |   |    |   |   |   |     |   |   |   |     |   |
| Stock                  Issued for cash ($0.02 per share)                    |   |   | 500,000    |   |   |   | 50     |   |   |   | 9,950   |   |   |   | -        |   |   |   | 10,000   |   |
|                                                                        |   |   |       |   |   |   |   |   |   |   |    |   |   |   |     |   |   |   |     |   |
| In-kind                  contribution of compensation                       |   |   | -          |   |   |   | -      |   |   |   | 27,250  |   |   |   | -        |   |   |   | 27,250   |   |
|                                                                        |   |   |       |   |   |   |   |   |   |   |    |   |   |   |     |   |   |   |     |   |
| In-kind                  contribution of interest of stockholder loans      |   |   | -          |   |   |   | -      |   |   |   | 1,029   |   |   |   | -        |   |   |   | 1,029    |   |
|                                                                        |   |   |       |   |   |   |   |   |   |   |    |   |   |   |     |   |   |   |     |   |
| Net                  loss for the six  months ended June 30, 2007 |   |   | -          |   |   |   | -      |   |   |   | -       |   |   |   | (53,205  | )      |   |   | (53,205  | )      |
|                                                                        |   |   |       |   |   |   |   |   |   |   |    |   |   |   |     |   |   |   |     |   |
| BALANCE,                  June 30, 2007                                     |   |   | 53,980,000 |   |   | $      | 5,400  |   |   | $      | 251,460 |   |   | $      | (325,373 | )      |   | $      | (68,513  | )      |

----

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

**(A        DEVELOPMENT STAGE COMPANY)**

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

**(UNAUDITED)**

|                                                                                                                             |   | For                  the Six Months Ended June 30, 2007 |    |   | For                  the Six Months June 30, 2006 |   |    | For                  the Period from February 23, 2004 (Inception) to June 30,                  2007 |   |
|----------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------|---------|--------|---------------------------------------------------|--------|---------|-----------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                             |   |                                                    |    |   |                                              |   |    |                                                                                                      |   |
| **CASH                  FLOWS FROM OPERATING ACTIVITIES:**                                                                       |   |                                                    |    |   |                                              |   |    |                                                                                                      |   |
| Net                  loss                                                                                                        |   | $                                                       | (53,205 | )      |                                              | $      | (27,214 | )                                                                                                         |   | $ | (325,373 | ) |
| Adjustments                  to reconcile net loss to net cash provided by (used in) operating                  activities: |   |                                                    |    |   |                                              |   |    |                                                                                                      |   |   |   |   |
|     In-Kind                  Compensation                                                                    |   |                                                    | 27,250  |   |                                              |   | -       |                                                                                                      |   |   | 81,750 |   |
| Depreciation                                                                                                                     |   |                                                    | 463     |   |                                              |   | 462     |                                                                                                      |   |   | 5,130 |   |
| Loss                  on disposal of property and equipment                                                                      |   |                                                    | -       |   |                                              |   | -       |                                                                                                      |   |   | 6,893 |   |
| In-kind                  contribution of expenses                                                                                |   |                                                    | 1,029   |   |                                              |   | 578     |                                                                                                      |   |   | 6,210 |   |
| Stock                  issued for payment of services and expenses                                                               |   |                                                    | -       |   |                                              |   |    |                                                                                                      |   |   | 70,000 |   |
| Changes                  in operating assets and liabilities:                                                                    |   |                                                    |    |   |                                              |   |    |                                                                                                      |   |   |   |   |
| Deposits                                                                                                                         |   |                                                    | -       |   |                                              |   | -       |                                                                                                      |   |   | (750 | ) |
| Prepaid                  expenses                                                                                                |   |                                                    | 250     |   |                                              |   | 550     |                                                                                                      |   |   |   |   |
| Accounts                  payable and accrued expenses                                                                           |   |                                                    | 2,452   |   |                                              |   | 3,400   |                                                                                                      |   |   | 19,803 |   |
| Net                  Cash Provided By (Used In) Operating Activities                                                             |   |                                                    | (21,761 | )      |                                              |   | (22,224 | )                                                                                                         |   |   | (136,337 | ) |
|                                                                                                                             |   |                                                    |    |   |                                              |   |    |                                                                                                      |   |   |   |   |
| **CASH                  FLOWS FROM INVESTING ACTIVITIES:**                                                                       |   |                                                    |    |   |                                              |   |    |                                                                                                      |   |   |   |   |
| Proceeds                  from the sale of property and equipment                                                                |   |                                                    | -       |   |                                              |   | -       |                                                                                                      |   |   | 3,425 |   |
| Purchase                  of property and equipment                                                                              |   |                                                    | -       |   |                                              |   | -       |                                                                                                      |   |   | (18,716 | ) |
| Net                  Cash Provided By (Used In) Investing Activities                                                             |   |                                                    | -       |   |                                              |   | -       |                                                                                                      |   |   | (15,291 | ) |
|                                                                                                                             |   |                                                    |    |   |                                              |   |    |                                                                                                      |   |   |   |   |
| **CASH                  FLOWS FROM FINANCING ACTIVITIES:**                                                                       |   |                                                    |    |   |                                              |   |    |                                                                                                      |   |   |   |   |
| Proceeds                  from issuance of loan payable – related party                                                    |   |                                                    | 20,000  |   |                                              |   | -       |                                                                                                      |   |   | 111,420 |   |
| Repayment                  of loan payable – related party                                                                 |   |                                                    | (7,962  | )      |                                              |   | (12,481 | )                                                                                                         |   |   | (58,785 | ) |
| Proceeds                  from issuance of common stock                                                                          |   |                                                    | 10,000  |   |                                              |   | 34,000  |                                                                                                      |   |   | 100,500 |   |
| Net                  Cash Provided By (Used In) Financing Activities                                                             |   |                                                    | 22,038  |   |                                              |   | 21,519  |                                                                                                      |   |   | 153,135 |   |
|                                                                                                                             |   |                                                    |    |   |                                              |   |    |                                                                                                      |   |   |   |   |
| NET                  INCREASE (DECREASE) IN CASH                                                                                 |   |                                                    | 277     |   |                                              |   | (705    | )                                                                                                         |   |   | 1,507 |   |
|                                                                                                                             |   |                                                    |    |   |                                              |   |    |                                                                                                      |   |   |   |   |
| CASH                  AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                                                |   |                                                    | 1,230   |   |                                              |   | 2,335   |                                                                                                      |   |   | - |   |
|                                                                                                                             |   |                                                    |    |   |                                              |   |    |                                                                                                      |   |   |   |   |
| **CASH                  AND CASH EQUIVALENTS AT END OF PERIOD**                                                                  |   | $                                                       | 1,507   |   |                                              | $      | 1,630   |                                                                                                      |   | $ | 1,507 |   |
|                                                                                                                             |   |                                                    |    |   |                                              |   |    |                                                                                                      |   |   |   |   |
| **SUPPLEMENTAL                  DISCLOSURE OF CASH FLOW INFORMATION:**                                                           |   |
|                                                                                                                             |   |                                                    |    |   |                                              |   |    |                                                                                                      |   |   |   |   |
| Cash                  paid during the period for interest                                                                        |   | $                                                       | 62      |   |                                              | $      | 276     |                                                                                                      |   | $ | 1,114 |   |
|                                                                                                                             |   |                                                    |    |   |                                              |   |    |                                                                                                      |   |   |   |   |
| Cash                  paid during the period for taxes                                                                           |   | $                                                       | -       |   |                                              | $      | -       |                                                                                                      |   | $ | - |   |

----

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

**(A        DEVELOPMENT STAGE COMPANY)**

**NOTES        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**AS        OF JUNE 30, 2007**

**(UNAUDITED)**

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

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

***(B)        Organization***

----

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

**(A            DEVELOPMENT STAGE COMPANY)**

**NOTES            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**AS            OF JUNE 30, 2007**

**(UNAUDITED)**

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

***(D)        Revenue Recognition***

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

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

***(G)        Income Taxes***

----

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

**(A            DEVELOPMENT STAGE COMPANY)**

**NOTES            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**AS            OF JUNE 30, 2007**

**(UNAUDITED)**

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

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

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

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

*Fair Value        Measurements*

*The Fair Value Option for Financial Assets and Financial Liabilities–Including an Amendment of FASB Statement No. 115*

----

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

**(A            DEVELOPMENT STAGE COMPANY)**

**NOTES            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**AS            OF JUNE 30, 2007**

**(UNAUDITED)**

*Accounting for Certain Investments in Debt and Equity        Securities*
*Fair Value Measurements”.*

| **NOTE                  2** | **RELATED                  PARTY TRANSACTIONS** |
|-----------------------------|-------------------------------------------------|

| **NOTE                  3** | **STOCKHOLDERS’                  EQUITY** |
|-----------------------------|-------------------------------------------------|

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

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

----

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

**(A            DEVELOPMENT STAGE COMPANY)**

**NOTES            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**AS            OF JUNE 30, 2007**

**(UNAUDITED)**

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

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

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

----

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

**(A          DEVELOPMENT STAGE COMPANY)**

**NOTES          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**AS          OF JUNE 30, 2007**

**(UNAUDITED)**

| **NOTE                  4** | **GOING                  CONCERN** |
|-----------------------------|------------------------------------|

----

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

----

**Capital          Resources and Liquidity**

**Recent          Financial Pronouncements**

*Fair Value          Measurements*

*The Fair Value Option for Financial Assets and Financial Liabilities–Including an Amendment of FASB Statement No. 115*
*Accounting for Certain Investments in Debt and Equity          Securities*
*Fair Value Measurements”.*

**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). |

----

**SIGNATURES**

**EFFECTIVE      PROFITABLE SOFTWARE, INC.**

*/s/Gary      Moore*