UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 WASHINGTON,
D.C. 20549
 _______________
  FORM
10-Q
 _______________
  x
              QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
  For
the quarterly period ended March 31, 2008
  o
              TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
 
 For the transition period from
______to______.
  EFFECTIVE PROFITABLE SOFTWARE,
INC.
 (Exact
name of registrant as specified in Charter
  Delaware
              
              000-50494
              
              98-0412432(State
      or other jurisdiction of
                incorporation
      or organization)
              
              (Commission
      File No.)
              
              (IRS
      Employee Identification No.)
 
 1
Innwood Circle, Suite 209, Little Rock, Arkansas 72211
 (Address
of Principal Executive Offices)
 _______________
 (501)223-3310
 (Issuer
Telephone number)
 _______________
  (Former
Name or Former Address if Changed Since Last Report)
  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
  Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company filer.
 See definition of “accelerated filer” and “large accelerated filer” in
Rule 12b-2 of the Exchange Act (Check one):
  Large
      Accelerated Filer o
                Accelerated
      Filer o
                Non-Accelerated
      Filer o
                Smaller
      Reporting Company 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 14, 2008: 53,980,000 shares of common stock.
  
 
 
  
   EFFECTIVE
PROFITABLE SOFTWARE, INC.
  FORM
10-Q
  March
31, 2008
  INDEX
  PART
I-- FINANCIAL INFORMATION
   
 Item
      1.
              Financial
      StatementsItem
      2.
              Management’s
      Discussion and Analysis of Financial ConditionItem
      3
              Quantitative
      and Qualitative Disclosures About Market RiskItem
      4T.
              Control
      and Procedures
   PART
II—OTHER INFORMATION
  Item
      1
              Legal
      ProceedingsItem
      1A.
              Risk
      FactorsItem
      2.
              Unregistered
      Sales of Equity Securities and Use of ProceedsItem
      3.
              Defaults
      Upon Senior SecuritiesItem
      4.
              Submission
      of Matters to a Vote of Security HoldersItem
      5.
              Other
      InformationItem
      6.
              Exhibits
      and Reports on Form 8-K
   SIGNATURE
   
   Item 1. Financial
Information




EFFECTIVE
PROFITABLE SOFTWARE, INC.
 (A
DEVELOPMENT STAGE COMPANY)
 
 
 
 TABLE
OF CONTENTS
 
 
 PAGE
              1
              CONDENSED
      CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2008 (UNAUDITED) AND DECEMBER
      31, 2007 (AUDITED)PAGE
              2
              CONDENSED
      CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31,
      2008 AND 2007 AND FOR THE PERIOD FROM FEBRUARY 23, 2004 (INCEPTION) TO
      MARCH 31, 2008 (UNAUDITED)PAGE
              3-4
              CONDENSED
      CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIENCY FOR THE
      PERIOD FROM FEBRUARY 23, 2004 (INCEPTION) TO MARCH 31, 2008
      (UNAUDITED)PAGE
              5
              CONDENSED
      CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31,
      2008 AND 2007 FOR THE PERIOD FROM FEBRUARY 23, 2004 (INCEPTION) TO MARCH
      31, 2008 (UNAUDITED)PAGES
              6 -
      12
              NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF MARCH 31, 2008
      (UNAUDITED)
   
  EFFECTIVE
PROFITABLE SOFTWARE, INC. AND SUBSIDIARY
 (A
DEVELOPMENT STAGE COMPANY)
 CONDENSED CONSOLIDATEDBALANCE
SHEETS
 MARCH 31,
2008
 
 March
      31, 2008 (Unaudited)
              
              
              December
      31, 2007
                (Audited)ASSETSCURRENT
      ASSETSCash
              
              $
              890
              
              
              $
              450Prepaid
      Expense
              
              
              100
              
              
              
              250Total
      Current Assets
              
              
              990
              
              
              
              700PROPERTY
      AND EQUIPMENT, NET
              
              
              2,575
              
              
              
              2,806OTHER
      ASSETSDeposits
              
              
              750
              
              
              
              750Total
      Other Assets
              
              
              750
              
              
              
              750TOTAL
      ASSETS
              
              $
              4,315
              
              
              $
              4,256LIABILITIES AND
      STOCKHOLDERS’ DEFICIENCYCURRENT
      LIABILITIESCash
      overdraft
              
              $
              184
              
              
              $
              -Accounts
      payable and accrued expenses
              
              
              32,436
              
              
              
              30,840Stockholder
      loans
              
              
              62,358
              
              
              
              61,890TOTAL
      LIABILITIES
              
              
              94,978
              
              
              
              92,730STOCKHOLDERS’
      DEFICIENCYCommon
      stock, $0.0001 par value, 100,000,000 shares authorized,
      53,980,000 and 53,980,000 shares issued and outstanding,
      respectively
              
              
              5,400
              
              
              
              5,400Additional
      paid in capital
              
              
              294,068
              
              
              
              279,823Accumulated
      deficit during development stage
              
              
              (390,131
              )
              
              
              (373,697
              )Total
      Stockholders’ Deficiency
              
              
              (90,663
              )
              
              
              188,474TOTAL LIABILITIES AND STOCKHOLDERS’
      DEFICIENCY
              
              $
              4,315
              
              
              $
              4,256
  See
accompanying notes to condensed consolidated financial
statements.
   1
    EFFECTIVE
PROFITABLE SOFTWARE, INC. AND SUBSIDIARY
 (A
DEVELOPMENT STAGE COMPANY)
 STATEMENTS OF
OPERATIONS
 (UNAUDITED)
  For
      the Three Months Ended March 31, 2008
              
              
              For
      the Three Months Ended March 31, 2007
              
              
              For
      the Period from February 23, 2004 (Inception) to March 31,
      2008REVENUES
              
              $
              -
              
              
              $
              -
              
              
              $
              -OPERATING
      EXPENSESProfessional
      fees
              
              
              4,865
              
              
              
              5,576
              
              
              
              80,749Rent
      expense
              
              
              750
              
              
              
              750
              
              
              
              21,000Officers
      compensation
              
              
              13,625
              
              
              
              -
              
              
              
              122,625General
      and administrative
              
              
              6,048
              
              
              
              3,991
              
              
              
              164,953Total
      Operating Expenses
              
              
              (25,288
              )
              
              
              (10,317
              )
              
              
              (389,327
              )LOSS
      FROM OPERATIONSOTHER
      INCOME (EXPENSE)Other
      income
              
              
              9,623
              
              
              
              -
              
              
              
              14,261Loss
      on disposal of assets
              
              
              -
              
              
              
              -
              
              
              
              (6,893
              )Interest
      expense
              
              
              (769
              )
              
              
              (622
              )
              
              
              (8,172
              )Total
      Other Income (Expense)
              
              
              8,854
              
              
              
              (622
              )
              
              
              (804
              )Provision
      for Income Taxes
              
              
              -
              
              
              
              -
              
              
              
              -Net
      Income/ (Loss)
              
              $
              (16,434
              )
              
              $
              (10,939
              )
              
              $
              (390,131
              )Net
      loss per share - basic and diluted
              
              $
              -
              
              
              $
              -Weighted average number of shares outstanding during the period - basic
      and diluted
              
              
              53,980,000
              
              
              
              53,480,000
  See
accompanying notes to condensed consolidated financial
statements.
  2
  EFFECTIVE
PROFITABLE SOFTWARE, INC. AND SUBSIDIARY
 (A
DEVELOPMENT STAGE COMPANY)
 STATEMENT
OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIENCY)
 FOR THE PERIOD FROM FEBRUARY
23, 2004 (INCEPTION) TO MARCH 31, 2008
 (UNAUDITED)
  Common
      Stock
              
              
              Additional
      Paid-In
              
              
              Accumulated
      Deficit During DevelopmentShares
              
              
              Amount
              
              
              Capital
              
              
              Stage
              
              
              TotalCommon stock issued to founders for cash ($0.001 per
share)
              
              
              45,000,000
              
              
              $
              4,500
              
              
              $
              (3,600
              )
              
              $
              -
              
              
              $
              900Common
      stock issued for legal services ($0.10 per share)
              
              
              500,000
              
              
              
              50
              
              
              
              9,950
              
              
              
              -
              
              
              
              10,000Common
      stock issued for services ($0.10 per share)
              
              
              2,500,000
              
              
              
              250
              
              
              
              49,750
              
              
              
              -
              
              
              
              50,000Common
      stock issued for cash ($0.10 per share)
              
              
              2,280,000
              
              
              
              230
              
              
              
              45,370
              
              
              
              -
              
              
              
              45,600In-kind
      contribution
              
              
              -
              
              
              
              -
              
              
              
              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 ($0.10 per share)
              
              
              500,000
              
              
              
              50
              
              
              
              9,950
              
              
              
              -
              
              
              
              10,000Common
      stock issued for cash ($0.10 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
              
              
              51,780,000
              
              
              
              5,180
              
              
              
              122,153
              
              
              
              (161,565
              )
              
              
              (34,232
              )Stock
      issued for cash ($0.10 per share)
              
              
              1,700,000
              
              
              
              170
              
              
              
              33,830
              
              
              
              -
              
              
              
              34,000In-kind
      contribution of interest on stockholder loans
              
              
              -
              
              
              
              -
              
              
              
              1,248
              
              
              
              -
              
              
              
              1,248In-kind
      contribution of compensation
              
              
              
              
              
              
              
              
              
              
              54,500
              
              
              
              
              
              
              
              54,500In
      –kind contribution of automobile allowance
              
              
              
              
              
              
              
              
              
              
              1,500
              
              
              
              
              
              
              
              1,500Net
      loss, 2006
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (110,603
              )
              
              
              (110,603
              )
  See
accompanying notes to condensed consolidated financial
statements.
  3
   EFFECTIVE
PROFITABLE SOFTWARE, INC. AND SUBSIDIARY
 (A
DEVELOPMENT STAGE COMPANY)
 STATEMENT
OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIENCY)
 FOR THE PERIOD FROM FEBRUARY
23, 2004 (INCEPTION) TO MARCH 31, 2008
 (UNAUDITED)
   Balance,
      December 31, 2006
              
              
              53,480,000
              
              
              
              5,350
              
              
              
              213,231
              
              
              
              (272,168
              )
              
              
              (53,587
              )Common
      stock issued for cash ($0.10 per share)
              
              
              500,000
              
              
              
              50
              
              
              
              9,950
              
              
              
              
              
              
              
              10,000In-kind
      contribution of interest of stockholder loans
              
              
              -
              
              
              
              -
              
              
              
              2,142
              
              
              
              -
              
              
              
              2,142In
      -kind contribution of compensation
              
              
              -
              
              
              
              -
              
              
              
              54,500
              
              
              
              -
              
              
              
              54,500Net
      loss, 2007
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (101,529
              )
              
              
              (101,529
              )Balance,
      December 31, 2007
              
              
              53,980,000
              
              
              
              5,400
              
              
              
              279,823
              
              
              
              (373,697
              )
              
              
              (88,474
              )In-kind
      contribution of interest of stockholder loans
              
              
              
              
              
              
              
              
              
              
              620
              
              
              
              
              
              
              
              620In
      -kind contribution of compensation
              
              
              
              
              
              
              
              
              
              
              13,625
              
              
              
              
              
              
              
              13,625Net
      loss, for the three months ended March 31, 2008
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (16,434
              )
              
              
              (16,434
              )Balance,
      March 31, 2008
              
              
              53,980,000
              
              
              $
              5,400
              
              
              $
              294,068
              
              
              $
              (390,131
              )
              
              $
              (90,663
              )
   See
accompanying notes to condensed consolidated financial
statements.
  4
  EFFECTIVE
PROFITABLE SOFTWARE, INC. AND SUBSIDIARY
 (A
DEVELOPMENT STAGE COMPANY)
 CONDENSEDCONSOLIDATEDSTATEMENT
OF CASH FLOWS
 (UNAUDITED)
  For
      the Three Months Ended March 31, 2008
              
              
              For
      the Three Months Ended March 31, 2007
              
              
              For
      the Period from February 23, 2004 (Inception) to March 31,
      2008CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      loss
              
              $
              (16,434
              )
              
              
              (11,939
              )
              
              
              (390,131
              )Adjustments
      to reconcile net loss to net cash provided by (used in) operating
      activities:In-kind
      contribution of officers compensation
              
              
              13,625
              
              
              
              -
              
              
              
              122,625In-kind
      contribution of interest on stockholder loans
              
              
              620
              
              
              
              486
              
              
              
              6,444In-kind
      contribution of automobile allowance
              
              
              -
              
              
              
              1,500
              
              
              
              1,500Stock
      issued for payment of services
              
              
              -
              
              
              
              -
              
              
              
              70,000Loss
      on disposal of property and equipment
              
              
              
              
              
              
              -
              
              
              
              6,893Depreciation
      expense
              
              
              231
              
              
              
              231
              
              
              
              5,823Changes
      in operating assets and liabilities:Deposits
              
              
              -
              
              
              
              
              
              
              
              (750
              )Prepaid
      expenses
              
              
              (640
              )
              
              
              
              
              
              
              (890
              )Accounts
      payable
              
              
              1,596
              
              
              
              
              
              
              
              30,835Net
      Cash (Used In) Operating Activities
              
              
              (1,002
              )
              
              
              -
              
              
              
              (147,651
              )CASH
      FLOWS FROM INVESTING ACTIVITIES:Proceeds
      from the sale of property and equipment
              
              
              -
              
              
              
              -
              
              
              
              3,425Purchase
      of property and equipment
              
              
              -
              
              
              
              -
              
              
              
              (18,716
              )Net
      Cash  (Used In) Investing Activities
              
              
              -
              
              
              
              -
              
              
              
              (15,291
              )CASH
      FLOWS FROM FINANCING ACTIVITIES:Cash
      overdraft
              
              
              184
              
              
              
              
              
              
              
              184Proceeds
      from issuance of loan payable – related party
              
              
              1,500
              
              
              
              20,000
              
              
              
              122,420Repayment
      of loan payable – related party
              
              
              (1,032
              )
              
              
              (4,178
              )
              
              
              (60,062
              )Proceeds
      from issuance of common stock
              
              
              -
              
              
              
              -
              
              
              
              100,500Net
      Cash Provided By (Used In) Financing Activities
              
              
              652
              
              
              
              15,822
              
              
              
              163,042NET
      INCREASE (DECREASE) IN CASH
              
              
              (350
              )
              
              
              2,935
              
              
              
              100CASH
      AT BEGINNING OF PERIOD/YEAR
              
              
              450
              
              
              
              1,230
              
              
              
              -CASH  AT
      END OF PERIOD/YEAR
              
              $
              100
              
              
              
              4,165
              
              
              
              100SUPPLEMENTAL
      DISCLOSURE OF CASH FLOW INFORMATION:Cash paid for interest
              
              $
              149
              
              
              
              136
              
              
              
              1,728Cash
      paid for taxes
              
              $
              -
              
              
              
              -
              
              
              
              -
  See
accompanying notes to condensed consolidated financial
statements.
  5
  EFFECTIVE
PROFITABLE SOFTWARE, INC. AND SUBSIDIARY
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 AS OF MARCH 31,
2008
 (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
10th, 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 reorganization by the
accounting acquirer (EPS, Inc.) and as a recapitalization by the accounting
acquire (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.
   6
  EFFECTIVE
PROFITABLE SOFTWARE, INC. AND SUBSIDIARY
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 AS OF MARCH 31,
2008
 (UNAUDITED)
   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
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
 
 (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.
    7
  EFFECTIVE
PROFITABLE SOFTWARE, INC. AND SUBSIDIARY
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 AS OF MARCH 31,
2008
 (UNAUDITED)
 (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, 2008 and 2007, 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, 2008, there were no cash
deposits in excess of the FDIC limit.
 
 (K) Recent Accounting
Pronouncements
 
 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 did not have a material
effect on the Company's future reported financial position or results of
operations.
 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”.
   8
  EFFECTIVE
PROFITABLE SOFTWARE, INC. AND SUBSIDIARY
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 AS OF MARCH 31,
2008
 (UNAUDITED)
   Continued
-
  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 did not have a material effect on the Company's
financial statements.
 
 In
December 2007, the Financial Accounting Standards Board (FASB) issued SFAS No.
160, “Noncontrolling Interests
in Consolidated Financial Statements – an amendment of ARB No.
51”.  This statement improves the relevance, comparability, and
transparency of the financial information that a reporting entity provides in
its consolidated financial statements by establishing accounting and reporting
standards that require; the ownership interests in subsidiaries held by parties
other than the parent and the amount of consolidated net income attributable to
the parent and to the noncontrolling interest be clearly identified and
presented on the face of the consolidated statement of income, changes in a
parent’s ownership interest while the parent retains its controlling financial
interest in its subsidiary be accounted for consistently, when a subsidiary is
deconsolidated, any retained noncontrolling equity investment in the former
subsidiary be initially measured at fair value, entities provide sufficient
disclosures that clearly identify and distinguish between the interests of the
parent and the interests of the noncontrolling owners.  SFAS No. 160
affects those entities that have an outstanding noncontrolling interest in one
or more subsidiaries or that deconsolidate a subsidiary.  SFAS No. 160
is effective for fiscal years, and interim periods within those fiscal years,
beginning on or after December 15, 2008. Early adoption is prohibited. The
adoption of this statement is not expected to have a material effect on the
Company's financial statements.
 
 In March
2008, the FASB issued SFAS No. 161, “Disclosures about Derivative
Instruments and Hedging Activities, an amendment of FASB Statement No. 133”
(SFAS161). This statement is intended
to improve transparency in financial reporting by requiring enhanced disclosures
of an entity’s derivative instruments and hedging activities and their effects
on the entity’s financial position, financial performance, and cash flows.SFAS161 applies to all derivative
instruments within the scope of SFAS 133, “Accounting for Derivative Instruments
and Hedging Activities” (SFAS 133) as well as related hedged items, bifurcated
derivatives, and nonderivative instruments that are designated and qualify as
hedging instruments. Entities with instruments subject toSFAS161 must provide more robust
qualitative disclosures and expanded quantitative disclosures.SFAS161 is effective prospectively for
financial statements issued for fiscal years and interim periods beginning after
November 15, 2008, with early application permitted. We are currently
evaluating the disclosure implications of this statement.
 
   9
 EFFECTIVE
PROFITABLE SOFTWARE, INC. AND SUBSIDIARY
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 AS OF MARCH 31,
2008
 (UNAUDITED)
 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, 2008, the Company owed
$62,358.  There are no terms on the note and the Company expects to
retire these notes during the year 2008.  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.
 
 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.
 
 (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.
   10
  EFFECTIVE
PROFITABLE SOFTWARE, INC. AND SUBSIDIARY
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 AS OF MARCH 31,
2008
 (UNAUDITED)
 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 year ended December 31, 2007, $2,142 of in-kind contributions relating to
imputed interest on related party loans was recorded.
 
 During
the year ended December 31, 2007, $54,500 of in-kind contributions relating to
compensation of officers was recorded.
 
 During
the three months ended March 31, 2008, $620 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
     11
  EFFECTIVE
PROFITABLE SOFTWARE, INC. AND SUBSIDIARY
 (A
DEVELOPMENT STAGE COMPANY)
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 AS OF MARCH 31,
2008
 (UNAUDITED)
  
 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 $92,403, a
stockholder’s deficiency of $90,663 and has a negative cash flow from operations
of $147,651 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
April 2008, the Company received a loan of $10,000 that bears interest at 8% and
increases 2% annually until repaid.  The note is due on demand and
unsecured.










12






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%.
   13
  
 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
subscribers. 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.
On August 10, 2007, we earned $3,901, or 10% of the profit realized from trades
executed on a $500,000 model portfolio.  The model portfolio is based
on software developed by us.  As of March 31, 2008, we have generated
an additional $9,623 in revenue.
 
 We are
still pursuing this plan but to date we have not been able to raise additional
funds through either debt or equity offerings. Without this additional cash we
have been unable to pursue our plan of operations and commence generating
revenue. We believe that we may not be able to raise the necessary funds to
continue to pursue our business operations. As a result of the foregoing, we
have recently begun to explore our options regarding the development of a new
business plan and direction. We are currently engaged in discussions with a
company regarding the possibility of a reverse triangular merger (the “Merger”)
involving our company. At this stage, no definitive terms have been agreed to,
and neither party is currently bound to proceed with the Merger.
 
 Capital
Resources and Liquidity
  Our
balance sheet as of March 31, 2008 reflects assets of $4,315, consisting of cash
of $890, prepaid expense of $100, property and equipment of $2,575 and deposits
of $750. Total liabilities as of March 31, 2008 were $94,978, consisting of
accounts payable of $32,436, cash overdraft of $184 and stockholder loans of
$62,358.  We currently do not have enough cash to continue operations
for one year.
  Going
Concern Consideration
  As
reflected in the accompanying financial statements, we are in the development
stage with no revenue, a working capital deficiency of $92,403, a stockholder’s
deficiency of $90,663 and a negative cash flow from operations of $147,651 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.
  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.
   14
  
 Recent
Accounting Pronouncements
 
 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 did not have a material effect
on the Company's future reported financial position or results of
operations.
 
 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 did not have a material effect on the Company's
financial statements.
 
 In
December 2007, the Financial Accounting Standards Board (FASB) issued SFAS No.
160, “Noncontrolling Interests
in Consolidated Financial Statements – an amendment of ARB No.
51”.  This statement improves the relevance, comparability, and
transparency of the financial information that a reporting entity provides in
its consolidated financial statements by establishing accounting and reporting
standards that require; the ownership interests in subsidiaries held by parties
other than the parent and the amount of consolidated net income attributable to
the parent and to the noncontrolling interest be clearly identified and
presented on the face of the consolidated statement of income, changes in a
parent’s ownership interest while the parent retains its controlling financial
interest in its subsidiary be accounted for consistently, when a subsidiary is
deconsolidated, any retained noncontrolling equity investment in the former
subsidiary be initially measured at fair value, entities provide sufficient
disclosures that clearly identify and distinguish between the interests of the
parent and the interests of the noncontrolling owners.  SFAS No. 160
affects those entities that have an outstanding noncontrolling interest in one
or more subsidiaries or that deconsolidate a subsidiary.  SFAS No. 160
is effective for fiscal years, and interim periods within those fiscal years,
beginning on or after December 15, 2008. Early adoption is prohibited. The
adoption of this statement is not expected to have a material effect on the
Company's financial statements.
 
 In March
2008, the FASB issued SFAS No. 161, “Disclosures about Derivative
Instruments and Hedging Activities, an amendment of FASB Statement No. 133”
(SFAS 161). This statement is intended to improve transparency in financial
reporting by requiring enhanced disclosures of an entity’s derivative
instruments and hedging activities and their effects on the entity’s financial
position, financial performance, and cash flows. SFAS 161 applies to all
derivative instruments within the scope of SFAS 133, “Accounting for Derivative
Instruments and Hedging Activities” (SFAS 133) as well as related hedged items,
bifurcated derivatives, and nonderivative instruments that are designated and
qualify as hedging instruments. Entities with instruments subject to SFAS 161
must provide more robust qualitative disclosures and expanded quantitative
disclosures. SFAS 161 is effective prospectively for financial statements issued
for fiscal years and interim periods beginning after November 15, 2008,
with early application permitted. We are currently evaluating the disclosure
implications of this statement.
 
 Off Balance Sheet
Transactions
 
 None.
 
   15
  Item
3. Quantitative and Qualitative Disclosures About Market Risk
 
 The
Company is subject to certain market risks including changes in interest rates.
 The Company does not undertake any specific actions to limit those
exposures.
  Item
4T.  Controls and Procedures
 
 Pursuant
to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”),
the Company carried out an evaluation, with the participation of the Company’s
management, including the Company’s Chief Executive Officer (“CEO”) and Chief
Accounting Officer (“CAO”) (the Company’s principal financial and accounting
officer), of the effectiveness of the Company’s disclosure controls and
procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the
end of the period covered by this report. Based upon that evaluation, the
Company’s CEO and CAO concluded that the Company’s disclosure controls and
procedures are effective to ensure that information required to be disclosed by
the Company in the reports that the Company files or submits under the Exchange
Act, is recorded, processed, summarized and reported, within the time periods
specified in the SEC’s rules and forms, and that such information is accumulated
and communicated to the Company’s management, including the Company’s CEO and
CAO, as appropriate, to allow timely decisions regarding required
disclosure.
 Internal
control over financial reporting is a process to provide reasonable assurance
regarding the reliability of consolidated financial reporting and the
preparation of financial statements for external purposes in accordance with
U.S. generally accepted accounting principles.  There has been no change in
the Company’s internal control over financial reporting during the quarter ended
March 31, 2008 that has materially affected, or is reasonably likely to
materially affect, the Company’s internal control over financial
reporting.
  There
have been no significant changes in the Company’s internal controls or in other
factors that could significantly affect internal controls subsequent to the date
the Chief Executive Officer and the Chief Financial Officer carried out this
evaluation.
    
 
 16
  PART
II - OTHER INFORMATION
  Item
1. Legal Proceedings.
  There is
no litigation pending or threatened by or against us.
 
 Item
1A. Risk Factors
 
 None
 
 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.
  None.
  Item
5. Other Information.
  None
  Item
6. Exhibits and Reports of Form 8-K.
  (a)           Exhibits
  31.1   302
Certification of Chief Executive Officer
  31.2   302
Certification of Chief Financial Officer
  32.1   906
Certification of Chief Executive Officer
  32.2   906
Certification of Chief Financial Officer
  (b)           Reports
of Form 8-K
   None
  17
   SIGNATURES
  Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
  
  Signature
              Title
              Date/s/
      Gary Moore
              President,
      Chief Executive Officer, Director
              May
      14, 2008Gary
      Moore/s/
      Don Bratcher
              Chief
      Financial Officer, Director
              May
      14,  2008Don
      Bratcher/s/
      Dick Torti
              Vice
      president
              May
      14, 2008Dick
      Torti