UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-QSB

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

                  For the quarterly period ended September 30, 2005

                         Commission file number 0-26598

                            PAPERCLIP SOFTWARE, INC.
        (Exact name of Small Business Issuer as specified in its Charter)

                                    DELAWARE
                            (State of incorporation)

                                   22-3137907
                            (IRS Employer ID number)

       611 Route 46 West
       HASBROUCK HEIGHTS, NJ                     07604
    (Address of principal executive offices)  (Zip Code)

                        (201)329-6300
               (Issuer's telephone number)


           (Applicable only to Corporate Issuers)
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.

Class                                November 10, 2005
Common Stock, $.01 par value            8,196,521

Transitional Small Business Disclosure Format (check one):
Yes ___   No   X






















        PAPERCLIP SOFTWARE, INC.



                 INDEX


                                                           Page #
Part I. Financial Information

Item 1. Financial Statements

        Condensed Balance Sheet                             1

        Condensed Statements of Operations                  2

        Condensed Statements of Cash Flows                  3

        Notes to Condensed Financial Statements             4

Item 2. Management's Discussion and Analysis
        or Plan of Operation                                6

Item 3. Controls and Procedures                            10

Part II Other Information

Item 6. Exhibits                                           11

Signatures                                                 12








PAPERCLIP SOFTWARE, INC.
BALANCE SHEET
SEPTEMBER 30,2005
(UNAUDITED)
                                                       September 30
                                                               2005
ASSETS                                                 -------------
  CURRENT ASSETS:
    Cash and cash equivalents                         $     278,807
    Accounts receivable (net of
      allowance for doubtful accounts of $75,000)           170,238
    Other current assets                                     49,296
                                                       -------------
      Total Current Assets                                  498,341
                                                       -------------
  EQUIPMENT, FURNITURE AND FIXTURES:
    Computer and office equipment                            94,842
    Furniture and fixtures                                  210,914
    Leasehold improvements                                   12,000
                                                       -------------
                                                            317,756
    Less- Accumulated depreciation                          278,590
                                                       -------------
      Equipment, Furniture, and Fixtures, Net                39,166
                                                       -------------

  OTHER ASSETS                                               22,006
  DEFERRED FINANCING COSTS                                   42,376
                                                       -------------
Total assets                                          $     601,889
                                                       =============
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
  CURRENT LIABILITIES:
    Accounts payable and accrued expenses             $     425,179
    Taxes payable                                            13,500
    Deferred revenue                                        312,400
    Notes payable                                           129,691
    Loans payable                                           250,000
                                                       -------------
      Total Current Liabilities                           1,130,770
                                                       -------------
  
    Accrued compensation- related party                     844,672
                                                       -------------
STOCKHOLDERS' DEFICIENCY:
Convertible Series A, preferred stock, authorized
  10,000,000 shares;  $.01 par value; 3,649,543 shares
  issued and outstanding                                     36,495
Common stock, authorized 30,000,000
  shares; $.01 par value; issued and
  outstanding 8,196,521 shares                               81,965
Additional paid-in capital                               19,450,318
Accumulated deficit                                     (20,942,331)
                                                       -------------
  Total Stockholders' Deficiency                         (1,373,553)
                                                       -------------
Total liabilities and stockholders'deficiency         $     601,889
                                                       =============
See notes to condensed financial statements
                                -1-


PAPERCLIP SOFTWARE, INC.
CONDENSED STATEMENTS OF OPERATIONS
UNAUDITED


                                               THREE MONTHS ENDED        NINE MONTHS ENDED
                                                SEPTEMBER  30,            SEPTEMBER  30,
                                                 2005          2004          2005        2004
                                            ---------- -------------  ------------ -----------
                                                                       
NET SALES                                    $436,400      $389,620    $1,289,118  $1,061,572
                                            ---------- -------------  ------------ -----------

OPERATING EXPENSES:
Research and development expenses             108,800        98,643       369,361     294,798
Selling expenses                              165,449       219,433       617,730     555,160
General and administrative expenses           173,283       114,299       445,791     374,786
                                            ---------- -------------  ------------ -----------
     Total operating expenses                 447,532       432,375     1,432,882   1,224,744
                                            ---------- -------------  ------------ -----------


LOSS FROM OPERATIONS                          (11,132)      (42,755)     (143,764)   (163,172)
                                            ---------- -------------  ------------ -----------

OTHER INCOME (EXPENSE):
Extinguishment of debt (net of expenses)        -            -             -            -
Extinguishment of accounts payable              -            -              4,100       8,566
Interest expense                              (18,462)       (3,900)      (40,724)    (11,700)
Interest income                                   245           176           538         584
                                            ---------- -------------  ------------ -----------
      Total other income(expense),net         (18,217)       (3,724)      (36,086)     (2,550)
                                            ---------- -------------  ------------ -----------

NET LOSS BEFORE
 PROVISION FOR INCOME TAXES                   (29,349)      (46,479)     (179,850)   (165,722)

Provision for income taxes                      -            -             -            -
                                            ---------- -------------  ------------ -----------

NET LOSS                                     ($29,349)     ($46,479)    ($179,850)  ($165,722)
                                            ========== =============  ============ ===========

BASIC AND FULLT DILUTED
  LOSS PER COMMON SHARE                         (0.00)        (0.01)        (0.02)      (0.02)
                                            ========== =============  ============ ===========

WEIGHTED AVERAGE NUMBER
COMMON SHARES OUTSTANDING                   8,196,521     8,196,521     8,196,521   8,196,521
                                            ========== =============  ============ ===========

See notes to condensed financial statements


                                             -2-




PAPERCLIP SOFTWARE, INC.
CONDENSED STATEMENTS OF CASH FLOWS
FOR THE NINE  MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
UNAUDITED


                                                               2005          2004
                                                      ---------------  ------------
                                                                                       
OPERATING ACTIVITIES:
Net loss                                              $    (179,850)   $ (165,722)
Adjustments to reconcile net loss
  to net cash provided by (used for)
  operating activities-
Depreciation and amortization                                                 5,880         3,150
Extinguishment of accounts payable                           (4,100)       -
Increase in accrued compensation to related party            40,961        70,515
Interest on loan payable                                     29,124        -
(Increase) decrease in:
  Accounts receivable                                        (9,607)      108,719
  Other current assets                                      (64,296)       -
  Other assets                                               (8,506)       -
Increase (decrease) in:
  Accounts payable and accrued expenses                     (11,166)      (69,584)
  Accrued interest on convertible debt                       11,800        11,700
  Taxes payable                                              -            (15,400)
  Deferred revenues                                        (106,000)      123,650
                                                       -------------  ------------
Net cash (used for) provided by
  operating activities                                     (295,760)       67,028
                                                       -------------  ------------
INVESTING ACTIVITIES-Purchases of
  equipment, furniture and fixtures                         (17,864)      (17,746)
                                                       -------------  ------------


FINANCING ACTIVITIES:
  Proceeds from loans payable                               250,000        -
  Deferred finance cost                                     (32,500)       -
                                                       -------------  ------------
Net cash provided by financing activities                   217,500        -
                                                       -------------  ------------


(DECREASE) INCREASE  IN CASH                                (96,124)       49,282

CASH AND CASH EQUIVALENTS
Beginning of period                                         374,931       353,008
                                                       -------------  ------------
End of period                                         $     278,807 $     402,290
                                                       -------------  ------------
SUPPLEMENTAL DISCLOSURE
OF CASH FLOW INFORMATION
Interest paid                                                -             -
                                                       -------------  ------------
See notes to condensed financial statements

                                            -3-



PAPERCLIP SOFTWARE, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
September 30, 2005

NOTE A - NATURE OF THE BUSINESS AND BASIS OF PRESENTATION

     PaperClip  Software,  Inc.  (formerly known as PaperClip  Imaging Software,
Inc.) located in Hasbrouck Heights, New Jersey, ("PaperClip" or the "Company"),a
Delaware  corporation,   incorporated  in  October,  1991,  is  engaged  in  the
development and  distribution of computer  software for document  management and
transport  of  electronic  document  packages  across the public  Internet  or a
private Intranet with interoperability,  security and tracking capabilities. The
Company's  systems  allow users of  personal  computer  networks to scan,  file,
retrieve, display, print and route documents and other software objects (such as
word processing files,  spreadsheets and electronic  mail),  while continuing to
use their existing application software. The systems can be integrated with many
personal  computer  applications  with little or no programming and can file and
retrieve  documents  without the time  consuming  step of  manually  labeling or
indexing each document.

     The  accompanying   unaudited  condensed  financial  statements  have  been
prepared in accordance  with  accounting  principles  generally  accepted in the
United States of America for interim financial information,  the instructions to
Form  10-QSB  and  Regulation  S-B.  Accordingly,  they do not  include  all the
information and footnotes required by generally accepted  accounting  principles
for complete financial statements. In the opinion of management, all adjustments
(consisting  of  normal  recurring  accruals)   considered  necessary  for  fair
presentation  have been  included.  The results of  operation  for such  interim
periods are not  necessarily  indicative of results of operation for a full year
or for any other period.  The unaudited  financial  statements should be read in
conjunction  with  the  audited  financial  statements  and  notes  thereto  and
management's  discussion  and analysis of financial  conditions  included in the
Company's  Annual Report on Form 10-KSB for the year ended  December 31, 2004 as
filed with the Securities and Exchange Commission (the "SEC").

NOTE B -  Summary  of  Significant  Accounting  Policies

     The significant  accounting  policies followed by the Company are set forth
in Note 2 to the  Company's  financial  statements in the December 31, 2004 Form
10-KSB.

NOTE C - NET INCOME (LOSS) PER COMMON SHARE

     Income(loss)  per common  share-basic  is computed  based upon the weighted
average  number of common shares and common share  equivalents  outstanding,  if
dilutive, during the period.
 
     Income  (loss) per common  share-fully  diluted is computed  based upon the
weighted average number of common shares,  common share equivalents and Series A
Preferred Stock outstanding, if dilutive, during the period.


                                          -4-



NOTE D - GOING CONCERN
     As  shown in the  accompanying  financial  statements,  the  Company  has a
history of significant  operating  losses and as of September 30, 2005,  current
liabilities  exceeded  current assets by $632,429 and total  liabilities  exceed
total assets by  $1,373,553.  These factors as well as uncertain  conditions the
Company faces regarding  continued negative trends for sales,  operating income,
net income and cash flows,  raise  substantial doubt about the Company's ability
to continue as a going concern.

NOTE E - LOANS PAYABLE
     On March 30,  2005 and April 8, 2005,  the  Company  received  funds from a
group  of  accredited   investors  in  the  amounts  of  $100,000  and  $57,500,
respectively,  in anticipation of the execution of definitive documentation with
such  investors.  Documents  had been  fully  negotiated  in  anticipation  of a
financing  for gross  proceeds of between  $500,000  and  $1,200,000.  While the
Company  executed  certain  documents  prior to its  receipt of the  funds,  the
documents were to be held in escrow pending a final  transaction and the Company
never received countersigned  agreements from the investors.  Under the terms of
the negotiated  transaction,  the invested funds were to be in the form of a two
year loan, secured by a lien on the Company's assets,  with interest at the rate
of 12% per annum prepaid for the entire period,  and financing fees due to Sloan
Securities Corp. (together with its affiliates,  "Sloan") in an aggregate amount
equal to 13% of the gross proceeds  raised.  Warrants to purchase 200,000 shares
and  50,000  shares  were  also  to  be  issued  to  the  investors  and  Sloan,
respectively, for each $100,000 of the financing. One half of such warrants were
to be exercisable  at $0.20 per share,  and the other half of such warrants were
to be  exercisable  at $0.25 per share.  In a letter  agreement  dated March 31,
2005,  Sloan  and the  investors  agreed  that  they  would  not  enforce  their
registration  rights related to shares of common stock issuable upon exercise of
the  warrants  until such time as the  Company  has  received  an  aggregate  of
$500,000  of gross  proceeds  through  the  issuance  of notes.  The Company has
recorded a $250,000  loan payable on its  September 30, 2005 balance sheet based
on its  understanding of the intent of the parties that such $157,500  aggregate
amount  represents  net  proceeds to the  Company,  after  prepaid  interest and
financing  costs,  of a  $250,000  loan to the  Company by such  investors.  The
Company has also  reserved  625,000  shares for  issuance  upon  exercise of the
warrants that were to be issued in connection with the $250,000  financing.  The
Company has been unable to obtain executed documents from the investors or Sloan
or definitive  confirmation  of their intent  regarding the funds.  Accordingly,
there can be no assurance  that the investors will not seek to treat the funding
as an  incomplete  investment  and demand  return of the funds.  The Company has
accounted  for the loan as  short-term  indebtedness,  pending  the  receipt  of
executed definitive documentation.

Note F - Reclassifications

     The Statement of Operations  for the three and nine months ended  September
30, 2004 include  reclassifications of expenses to conform to the classification
for the three and nine months ended September 30,2005.

Note G - Commitments

     The  Company  has  entered  into an  agreement  to  rent  office  space  in
Hackensack,  New Jersey,  starting  January,  2006, with no rent payable for the
first two months, and annual rent starting March 1, 2006 to February, 2011 to be
between approximately $48,000 and $50,000.
                                          -5-



PAPERCLIP SOFTWARE, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

     Certain  information  included  in this  Quarterly  Report may be deemed to
include  forward-looking  statements  within the  meaning of Section  27A of the
Securities Act of 1933, as amended,  and Section 21E of the Securities  Exchange
Act of 1934, as amended, that involve risk and uncertainty,  such as information
relating to the  acceptance  and sale of the Company's  products,  the Company's
ability to  successfully  market and  distribute  its  products,  the  Company's
ability to generate  sufficient  cash flow from the sale of its products to meet
the  Company's  cash  requirements  and to pay its  liabilities  when  due,  the
Company's  ability to raise  capital,  the  Company's  ability  to  protect  its
proprietary  property  and the  Company's  ability  to  attract  and  retain key
employees.  Further,  the results of operation for the third quarter  period are
not necessarily  indicative of results of operation for a full year or any other
period. In addition, certain statements may involve risk and uncertainty if they
are preceded by, followed by, or that include the words "intends,"  "estimates,"
"believes," expects,"  "anticipates," "should," "could," or similar expressions,
and other statements  contained herein regarding matters that are not historical
facts.  Although  we  believe  that our  expectations  are  based on  reasonable
assumptions, we can give no assurance that our expectations will be achieved. We
do not  undertake  any  obligation  to release  publicly  any  revisions to such
forward-looking  statements to reflect  events or  circumstances  after the date
hereof or to reflect the occurrence of unanticipated events.

Results of Operations
Three Months and Nine Months Ended September 30, 2005 Compared with Three Months
and Nine Months Ended September 30, 2004


     Net sales of the Company  increased  by $46,780 or 12% to $436,400  for the
three months ended  September  30, 2005 from $389,620 for the three months ended
September 30, 2004 and  increased by $227,546 or 21% to $1,289,118  for the nine
months  ended  September  30, 2005 from  $1,061,572  for the nine  months  ended
September 30, 2004.  The increases were primarily due to an increase in revenues
from  annual  support  and  upgrade  assurances  and an increase in sales of the
Company's products.




                                        -6-





     Research and development  expenses  increased by $10,157 or 10% to $108,800
for the three months ended  September 30, 2005 from $98,643 for the three months
ended  September  30, 2004 and  increased  by $74,563 or 25% to $369,361 for the
nine months  ended  September  30, 2005 from  $294,798 for the nine months ended
September  30,  2004.  The  increases  were due to an increase  in research  and
development personnel.

     Selling  expenses  decreased  by $53,984 or 25% to  $165,449  for the three
months  ended  September  30,  2005 from  $219,433  for the three  months  ended
September  30, 2004 and  increased  by $62,570 or 11% to  $617,730  for the nine
months  ended  September  30,  2005  from  $555,160  for the nine  months  ended
September 30, 2004.  The decrease for the three months ended  September 30, 2005
was due to a decrease in training  expenses.  The  increase  for the nine months
ended  September  30, 2005,  resulted  from an increase in sales  personnel  and
increases  in  expenses  for trade  shows,  partially  offset by a  decrease  in
training expenses.

     General and administrative expenses increased by $58,984 or 52% to $173,283
for the three months ended September 30, 2005 from $114,299 for the three months
ended  September  30, 2004 and  increased  by $71,005 or 19% to $445,791 for the
nine months  ended  September  30, 2005 from  $374,786 for the nine months ended
September  30,  2004.  The  increases  were  primarily  due  to an  increase  in
professional fees.

     Other  (expense)  income  increased by $14,493 to  ($18,217)  for the three
months  ended  September  30,  2005 from  ($3,724)  for the three  months  ended
September  30, 2004,  and  increased by $33,536 to ($36,086) for the nine months
ended  September 30, 2005 from ($2,550) for the nine months ended  September 30,
2004.  The  increases  were  primarily  due to an increase  in interest  expense
resulting from loans payable to a group of investors.  The increase for the nine
month period in 2005 as compared to the  corresponding  2004 period was also due
to the inclusion in the first quarter of 2004 of a gain from the  extinguishment
of accounts  payable,  due to expiration of the statute of limitations  relating
thereto,  that was $4,466 greater than the gain from the similar  extinguishment
of accounts payable in the first quarter of 2005.

     For the three and nine months  ended  September  30, 2005 and for the three
and nine months  ended  September  30, 2004,  there was no provision  for income
taxes, as the Company had a net operating loss in each such period.

     Net loss  decreased  by $17,130 to  ($29,349)  for the three  months  ended
September 30, 2005 from ($46,479) for the three months ended  September 30, 2004
and increased by $14,128 to ($179,850)  for the nine months ended  September 30,
2005 from ($165,722) for the nine months ended September 30, 2004. The increases
were due to  increases  in research  and  development  and sales  personnel,  an
increase in professional fees, an increase in interest expense, partially offset
by increases in revenues.
                                         -7-



Liquidity and Capital Resources
September 30, 2005 Compared with December 31, 2004

     As of  September  30,  2005,  the  Company  had an  accumulated  deficit of
$20,942,331.  The Company had negative  working capital of $632,429 and $454,674
as of  September  30, 2005 and  December  31,  2004,  respectively.  Included in
current  liabilities  are  deferred  revenues  of  approximately   $312,400  and
$418,400,  as of September  30, 2005 and December 31, 2004,  respectively,  such
amounts representing  liabilities that will not require the use of cash. If such
non-cash  amounts  were  not  included  in  current  liabilities,  then  current
liabilities  would exceed current assets by approximately  $320,029 and $36,274,
as of September 30, 2005, and December 31, 2004, respectively.

     Presently, the Company funds working capital from revenues it receives from
the sale of its  products.  For the remainder of 2005,  the Company  anticipates
that it will need  approximately  $500,000 in order to fund its operations.  The
Company's  management  believes  that  the  Company  will be  able  to meet  its
anticipated cash requirements  through the end of the year through a combination
of cash  from  the  sale  of its  products,  cost  reduction  initiatives  to be
implemented  as  necessary  (which  initiatives  the  Company  expects  would be
primarily related to the Company's sales and marketing activities),  investments
from outside  investors,  and cash on hand.  The  Company's  ability to fund its
operations is subject to broader acceptance of its product lines, its ability to
raise capital,  its ability to continue to realize  revenues from its customers,
product performance, competitive forces, sales efforts of resellers, the absence
of unanticipated  expenses and other factors identified herein.  There can be no
assurance  that the  Company  will  generate  enough  cash  from the sale of its
products  or the raising of  additional  capital,  or that the  Company  will be
successful  in  implementing   any  cost  reduction   initiatives  that  may  be
undertaken, to meet its anticipated cash requirements for the remainder of 2005.
If the Company does not generate  enough cash to meet its  requirements  for the
remainder  of 2005,  the Company  will not have  sufficient  working  capital to
satisfy its  liabilities,  develop new products or implement  its  marketing and
sales initiatives, which may result in a loss of sales and would have a material
adverse effect on the Company.

     As of  September  30,  2005,  the  Company  had  aggregate  liabilities  of
approximately  $1,975,442.  Such amount of  aggregate  liabilities  includes (i)
$312,400 in annual support contracts,  which are recorded as deferred revenue, a
non-cash item, for accounting  purposes and  reclassified on a pro rata basis to
sales as such contracts  expire and income is earned,  (ii) $438,679 in accounts
payable,  accrued  expenses,  and taxes payable (iii)  $129,691 in notes payable
which  were  issued  more than six years  ago,  and (iv)  loans  payable  in the
principal   amount  of  $250,000.   Such   liabilities   also  include   accrued
compensation-related   party,   which  relates  to  deferred   compensation   of
approximately  $844,672  payable to Mr.  Weiss.  Mr.  Weiss has  entered  into a
written agreement with the Company in which he agreed not to demand payment on $
844,672 of his deferred compensation until subsequent to October 1, 2006.

                                     -8-



     On March 30,  2005 and April 8, 2005,  the  Company  received  funds from a
group  of  accredited   investors  in  the  amounts  of  $100,000  and  $57,500,
respectively,  in anticipation of the execution of definitive documentation with
such  investors.  Documents  had been  fully  negotiated  in  anticipation  of a
financing  for gross  proceeds of between  $500,000  and  $1,200,000.  While the
Company  executed  certain  documents  prior to its  receipt of the  funds,  the
documents were to be held in escrow pending a final  transaction and the Company
never received countersigned  agreements from the investors.  Under the terms of
the negotiated  transaction,  the invested funds were to be in the form of a two
year loan, secured by a lien on the Company's assets,  with interest at the rate
of 12% per annum prepaid for the entire period,  and financing fees due to Sloan
Securities Corp. (together with its affiliates,  "Sloan") in an aggregate amount
equal to 13% of the gross proceeds  raised.  Warrants to purchase 200,000 shares
and  50,000  shares  were  also  to  be  issued  to  the  investors  and  Sloan,
respectively, for each $100,000 of the financing. One half of such warrants were
to be exercisable  at $0.20 per share,  and the other half of such warrants were
to be  exercisable  at $0.25 per share.  In a letter  agreement  dated March 31,
2005,  Sloan  and the  investors  agreed  that  they  would  not  enforce  their
registration  rights related to shares of common stock issuable upon exercise of
the  warrants  until such time as the  Company  has  received  an  aggregate  of
$500,000  of gross  proceeds  through  the  issuance  of notes.  The Company has
recorded a $250,000  loan payable on its  September 30, 2005 balance sheet based
on its  understanding of the intent of the parties that such $157,500  aggregate
amount  represents  net  proceeds to the  Company,  after  prepaid  interest and
financing  costs,  of a  $250,000  loan to the  Company by such  investors.  The
Company has also  reserved  625,000  shares for  issuance  upon  exercise of the
warrants that were to be issued in connection with the $250,000  financing.  The
Company has been unable to obtain executed documents from the investors or Sloan
or definitive  confirmation  of their intent  regarding the funds.  Accordingly,
there can be no assurance  that the investors will not seek to treat the funding
as an  incomplete  investment  and demand  return of the funds.  The Company has
accounted  for the loan as  short-term  indebtedness,  pending  the  receipt  of
executed definitive documentation.

 
Outlook

     The Company  has been  marketing a new  document  management  and work flow
product  which  has  been  customized  for the  mortgage  broker  industry.  The
Company's  sales from this  product  were  approximately  $100,000  for the nine
months ended September 30, 2005,  compared to  approximately  $25,000 for fiscal
year 2004.  The Company  believes  that this  product may  represent a promising
opportunity  for its business,  although there are  competitors in this business
and there can be no assurance that the Company can generate  meaningful revenues
from this product.

                                     -9-



Item 3. Controls and Procedures

Disclosure Controls and Procedures

     The Chief Executive Officer/Principal Financial Officer of the Company has
concluded, based on his evaluation as of the end of the fiscal period covered by
this Report, that the Company's disclosure controls and procedures are effective
to ensure  that  information  required  to be  disclosed  by the  Company in the
reports filed or submitted by it under the  Securities  Exchange Act of 1934, as
amended (the "Exchange  Act"), is recorded,  processed,  summarized and reported
within the time  periods  specified  in the SEC's  rules and forms,  and include
controls and  procedures  designed  to ensure that  information  required to be
disclosed by the Company in such reports is accumulated and  communicated to the
Company's management, including the Chief Executive Officer/Principal Financial
Officer, as appropriate to allow timely decisions regarding required disclosure.

Internal Control over Financial Reporting.

     During the quarter ended  September  30, 2005,  there has been no change in
the Company's  internal  control over  financial  reporting  that has materially
affected,  or is reasonably likely to materially  affect, the Company's internal
control over financial reporting.
                                -10-







PART II
OTHER INFORMATION


Item 6.   Exhibits


10.1    Agreement,  dated October 1, 2005, by and between  PaperClip  Software,
        Inc. and William Weiss.
31.1    Certification Pursuant to Rule 13a-14(a) Promulgated under the
        Securities Exchange Act of 1934.
32.1    Certification  pursuant  to 18  U.S.C.  Section  1350,  as  adopted
        pursuant  to  Section  906  of  the Sarbanes-Oxley Act of 2002.







                                 -11-



















                  SIGNATURE

Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly
authorized.


        PAPERCLIP SOFTWARE, INC.


        BY   /s/ William Weiss
        William Weiss, Chief Executive
        Officer and Principal
        Financial Officer



Date:  November 11, 2005







                                -12-













                                   EXHIBIT 10.1

                                   WILLIAM WEISS



October 1, 2005


PaperClip Software, Inc.
611 Route 46 West
Hasbrouck Heights, NJ 07604


     Reference is hereby made to the  $844,672 in "accrued  compensation-related
party" recorded on the balance sheet  appearing in the Quarterly  Report on Form
10-QSB of PaperClip Software, Inc for the quarter ended September 30, 2005. Such
payables relate to deferred  compensation for services  previously  performed by
William  Weiss  ("Weiss")  as an  officer  of the  Company  pursuant  to an oral
employment  arrangement and are payable to Weiss and/or his affiliated  company.
Weiss hereby agrees that neither Weiss nor such affiliated  company shall demand
payment of such payables prior to October 1, 2006.


                                   Sincerely,

                                   BY   /s/ William Weiss
                                        William Weiss



                                -13-





                                    Exhibit 31.1
                                    CERTIFICATION

I, William Weiss, certify that:
     1. I have  reviewed  this  quarterly  report on Form  10-QSB  of  PaperClip
Software, Inc.;

     2. Based on my knowledge, this report does not contain any untrue statement
of a  material  fact or omit to  state a  material  fact  necessary  to make the
statements made, in light of the circumstances  under which such statements were
made, not misleading with respect to the period covered by this report;

     3. Based on my knowledge,  the financial  statements,  and other  financial
information included in this report, fairly present in all material respects the
financial condition,  results of operations and cash flows of the small business
issuer as of, and for, the periods presented in this report;

     4. The small business issuer's other certifying officer(s) and I are
responsible for establishing and maintaining  disclosure controls and procedures
(as  defined  in  Exchange  Act Rules  13a-15(e)  and  15d-15(e))  for the small
business issuer and have:
     (a)  Designed such disclosure controls and procedures, or caused such
disclosure controls and  procedures to be designed  under our  supervision,  to
ensure  that  material  information  relating  to  the  small  business  issuer,
including its  consolidated  subsidiaries,  is made known to us by others within
those entities,  particularly  during the period in which this  report is being
prepared;
     (b) Evaluated the effectiveness of the small business issuer's disclosure
controls and procedures and presented in this report our  conclusions  about the
effectiveness of the disclosure  controls and procedures,  as of the end of the
period covered by this report based on such evaluation; and
     (c)  Disclose in this report any change in the small business  issuer's
internal control  over  financial  reporting  that  occurred  during  the small
business issuer's most recent fiscal quarter (the small business issuer's fourth
fiscal quarter in the case of an annual report) that has materially affected, or
is reasonably likely to materially  affect, the small business issuer's internal
control over financial reporting; and

     5. The small business issuer's  other  certifying  officer(s)  and I have
disclosed,  based  on our  most  recent  evaluation  of  internal  control  over
financial  reporting,  to the small  business  issuer's  auditors  and the audit
committee  of the  small  business  issuer's  board  of  directors  (or  persons
performing the equivalent functions):
     (a) All significant  deficiencies and material  weaknesses in the design or
operation of internal  control over  financial  reporting  which are  reasonably
likely to  adversely  affect  the small  business  issuer's  ability  to record,
process, summarize and report financial information; and
     (b) Any fraud,  whether or not material,  that involves management or other
employees who have a significant  role in the small business  issuer's  internal
control over financial reporting.

Date:  November 11, 2005                            By: /s/ William Weiss
                                                    William Weiss
                                                    Chief Executive Officer
                                                    Principal Financial Officer



EXHIBIT 32.1

                             CERTIFICATION OF
        CHIEF EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER OF
                          PAPERCLIP SOFTWARE, INC.

 (Pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code)

     The  undersigned,  William  Weiss,  Chief  Executive  Officer and Principal
Financial Officer of PaperClip Software, Inc. (the "Company"), certifies that:

     The  Quarterly  Report on Form 10-QSB of the  Company for the three  months
ended  September 30, 2005 fully complies with the  requirements of Section 13(a)
or 15(d) of the Securities Exchange Act of 1934; and

     The  information  contained in the  Quarterly  Report on Form 10-QSB of the
Company for the three months ended September 30, 2005 fairly  presents,  in all
material  respects,  the  financial  condition  and results of operations of the
Company.





November 11, 2005                   BY   /s/ William Weiss
                                    William Weiss
                                    Chief Executive Officer and
                                    Principal Financial Officer