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 - June 30, 2009.

                                       OR

          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                        COMMISSION FILE NUMBER 000-30392

                     ENVIRONMENTAL SOLUTIONS WORLDWIDE, INC.

               (Exact name of Company as specified in its charter)

              Florida                                        13-4172059
    ------------------------------                      ------------------
    State or other jurisdiction of                       (I.R.S. Employer
    incorporation or organization                       Identification No.)

                                 335 Connie Cr.
                        Concord, Ontario, Canada, L4K 5R2
                              (Address of principal
                   executive offices, including postal code.)

                                 (905) 695-4142
              (Registrant's telephone number, including area code)

                         COMMON STOCK, $0.001 PAR VALUE
                                (Title of class)

Indicate by check mark whether the issuer (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the Company was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. YES [X] NO [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer | | Accelerated Filer | | Non-Accelerated Filer | |
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 [ ] NO [X]

There were 73,823,851 shares of the registrant's Common Stock outstanding as of
August 06, 2009
<PAGE>

                                    FORM 10-Q

                     ENVIRONMENTAL SOLUTIONS WORLDWIDE INC.

                                TABLE OF CONTENTS

                                                                          PAGE #

                          PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

        Consolidated Condensed Balance Sheets as of June 30, 2009             F2
        (unaudited) and December 31, 2008

        Consolidated Condensed Statements of Operations and Comprehensive     F3
        Loss for the Six and Three Month Periods Ended June 30, 2009
        and 2008 (unaudited)

        Consolidated Condensed Statements of Changes in Stockholders Equity   F4
        (Deficit)for the Six Months Ended June 30, 2009 (unaudited)

        Consolidated Condensed Statements of Cash Flows for the Six Months    F5
        Ended June 30, 2009 and 2008 (unaudited)

        Notes to Consolidated Condensed Financial Statements (unaudited)      F6

Item 2. Management's Discussion And Analysis Of Financial Condition And        3
        Results Of Operations

Item 3. Quantitative and Qualitative Disclosures About Market Risk.           12

Item 4. Controls And Procedures                                               13

                           PART II. OTHER INFORMATION

Item 1A. Risk Factors                                                         14

Item 5. Other Information.                                                    14

Item 6. Exhibits.                                                             14
<PAGE>

                     ENVIRONMENTAL SOLUTIONS WORLDWIDE, INC.
                      CONSOLIDATED CONDENSED BALANCE SHEET

<TABLE>
<CAPTION>
                                                                    (UNAUDITED)
                                                                     JUNE 30,      DECEMBER 31,
                                                                       2009            2008
                                                                   ------------    ------------
<S>                                                                <C>             <C>
ASSETS

Current assets
      Cash and cash equivalents (Note 4)                           $    350,537    $  2,247,623
      Accounts receivable, net of allowance                              85,844         103,728
          for doubtful accounts of $NIL (2008 - $1,901) (Note 2)
      Inventory (Note 5)                                                865,372         723,812
      Prepaid expenses and sundry assets                                167,428         313,936
                                                                   ------------    ------------
          Total current assets                                        1,469,181       3,389,099

Property, plant and equipment under construction (Note 6)               248,413         171,445

Property, plant and equipment, net of accumulated
      depreciation of $ 3,961,862                                     2,964,180       3,324,364
      (2008 - $3,530,182) (Note 6)

Patents and trademarks, net of accumulated
      amortization of $1,794,517                                        335,672         440,734
      (2008 - $1,688,157) (Note 2)
                                                                   ------------    ------------
                                                                   $  5,017,446    $  7,325,642
                                                                   ============    ============
LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
      Accounts payable                                             $    344,129    $    420,277
      Accrued liabilities                                               716,437         258,155
      Bank loan (Note 7)                                                270,028          77,168
      Redeemable class A special shares (Note 8)                        453,900         453,900
      Current portion of capital lease obligation (Note 14)              10,286          12,001
                                                                   ------------    ------------
          Total current liabilities                                   1,794,780       1,221,501
                                                                   ------------    ------------
Long Term Liabilities
      Convertible Debentures net of deferred costs                    8,953,538       8,943,581
           of $46,462 (2008 - $56,419)  (Note 9)
      Capital lease obligation (Note 14)                                 13,811          19,005
                                                                   ------------    ------------
          Total long term liabilities                                 8,967,349       8,962,586
                                                                   ------------    ------------
          Total liabilities                                          10,762,129      10,184,087
                                                                   ------------    ------------
Commitments and contingencies (Note 14)
Stockholders' Equity (Note 11)(Note 12)
      Common stock, $0.001 par value, 125,000,000
          shares authorized; 73,823,851 shares
          issued and outstanding                                         73,822          72,972
      Additional paid-in capital                                     25,827,635      25,403,485
      Accumulated other comprehensive income                            364,088         251,526
      Accumulated deficit                                           (32,010,228)    (28,586,428)
                                                                   ------------    ------------
          Total stockholders' deficit                                (5,744,683)     (2,858,445)
                                                                   ------------    ------------
                                                                   $  5,017,446    $  7,325,642
                                                                   ============    ============
</TABLE>

    The accompanying notes are an integral part of these financial statements


                                       F2
<PAGE>

                     ENVIRONMENTAL SOLUTIONS WORLDWIDE INC.
     CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
               FOR THE SIX AND THREE MONTH PERIODS ENDED JUNE 30,
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                 SIX MONTHS ENDED JUNE 30      THREE MONTHS ENDED JUNE 30
                                                                  2009            2008            2009            2008
                                                              ------------    ------------    ------------    ------------
<S>                                                           <C>             <C>             <C>             <C>
Revenue
      Net sales                                               $    454,686    $    138,486    $     84,568    $     58,164

Cost of sales                                                      241,959         104,644          35,941          48,616
                                                              ------------    ------------    ------------    ------------
Gross profit                                                       212,727          33,842          48,627           9,548
                                                              ------------    ------------    ------------    ------------
Operating expenses
      Marketing, office and general costs                        1,657,356       2,015,693         845,271         992,310
      Research and development costs                               646,254         843,292         261,547         389,442
      Officers' compensation and directors fees                    332,391         296,312         177,343         145,722
      Consulting and professional fees                              62,132          89,973          61,542          37,787
      Foreign exchange gain                                        (23,465)        (57,446)          4,269         (21,595)
      Depreciation and amortization                                547,641         570,120         286,965         290,148
                                                              ------------    ------------    ------------    ------------
                                                                 3,222,309       3,757,944       1,636,937       1,833,814
                                                              ------------    ------------    ------------    ------------
Loss from operations                                            (3,009,582)     (3,724,102)     (1,588,310)     (1,824,266)

Interest on long term debt                                        (405,000)             --        (202,501)             --
Amortization of deferred costs                                      (9,957)             --          (4,978)             --
Interest on notes payable to related party                              --        (161,990)             --         (87,702)
Interest Income                                                        739          20,033             273           1,843
                                                              ------------    ------------    ------------    ------------
Net loss                                                      $ (3,423,800)   $ (3,866,059)   $ (1,795,516)   $ (1,910,125)
                                                              ============    ============    ============    ============
Other comprehensive gain/(loss):
      Foreign currency translation of Canadian subsidiaries        112,562    $    (81,332)        163,131    $    (18,958)
                                                              ------------    ------------    ------------    ------------
Net and comprehensive loss                                    $ (3,311,238)   $ (3,947,391)   $ (1,632,385)   $ (1,929,083)
                                                              ------------    ------------    ------------    ------------
Net loss per share (Basic and diluted)                        $      (0.05)   $      (0.05)   $      (0.02)   $      (0.03)
                                                              ============    ============    ============    ============
Weighted average number of shares outstanding                   73,006,724      72,973,851      73,039,236      72,973,851
                                                              ============    ============    ============    ============
</TABLE>

    The accompanying notes are an integral part of these financial statements


                                       F3
<PAGE>

                     ENVIRONMENTAL SOLUTIONS WORLDWIDE, INC.
 CONSOLIDATED CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
      AND COMPREHENSIVE INCOME FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2009
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                              ACCUMULATED
                                                              ADDITIONAL         OTHER
                                       COMMON STOCK             PAID-IN      COMPREHENSIVE  ACCUMULATED
                                  SHARES         AMOUNT         CAPITAL         INCOME          DEFICIT          TOTAL
                               ------------   ------------   ------------    ------------    ------------    ------------
<S>                              <C>          <C>            <C>             <C>             <C>             <C>
December 31, 2007                72,973,851   $     72,972   $ 25,665,761    $    450,318    $(21,495,176)   $  4,693,875

Net loss                                 --             --             --              --      (7,091,252)     (7,091,252)

Stock-based compensation                 --             --         13,646              --              --          13,646

Loss on extinguishment of
  debt with related party                --             --       (275,922)             --              --        (275,922)

Foreign currency translation
  of Canadian subsidiaries               --             --             --        (198,792)             --        (198,792)
                               ------------   ------------   ------------    ------------    ------------    ------------
December 31, 2008                72,973,851   $     72,972   $ 25,403,485    $    251,526    $(28,586,428)   $ (2,858,445)
                               ------------   ------------   ------------    ------------    ------------    ------------
Net loss                                 --             --             --              --      (3,423,800)     (3,423,800)

Common stock issued from
  exercise of options               850,000            850        424,150              --              --         425,000

Foreign currency translation
  of Canadian subsidiaries               --             --             --         112,562              --         112,562
                               ------------   ------------   ------------    ------------    ------------    ------------
June 30, 2009                    73,823,851   $     73,822   $ 25,827,635    $    364,088    $(32,010,228)   $ (5,744,683)
                               ------------   ------------   ------------    ------------    ------------    ------------
</TABLE>

The accompanying notes are an integral part of these financial statements


                                       F4
<PAGE>

                     ENVIRONMENTAL SOLUTIONS WORLDWIDE, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                    FOR THE SIX MONTHS PERIOD ENDED JUNE 30,
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                               2009            2008
                                                           ------------    ------------
<S>                                                        <C>             <C>
Net Loss                                                   $ (3,423,800)   $ (3,866,059)
                                                           ------------    ------------
Adjustments to reconcile net loss to net cash
      used in operating activities:
        Depreciation of property, plant and equipment           524,012         503,763
        Amortization of patents and trademarks                  106,390         106,525
        Provision for uncollectible accounts                         --          23,035
        Interest on long term debt                              405,000              --
        Interest on notes to related party                           --         161,990
        Amortization of deferred costs                            9,957              --
        Stock based compensation                                     --          13,646
                                                           ------------    ------------
                                                              1,045,359         808,959
                                                           ------------    ------------
Increase (decrease) in cash flows from operating
      activities resulting from changes in:
        Accounts receivable                                      17,884          (3,370)
        Inventory                                              (141,560)        (15,900)
        Prepaid expenses and sundry assets                      146,508        (105,105)
        Accounts payable and accrued liabilities                (22,866)        356,612
                                                           ------------    ------------
                                                                    (34)        232,237
                                                           ------------    ------------
Net cash used in operating activities                        (2,378,475)     (2,824,863)
                                                           ------------    ------------
Investing activities:
        Acquisition of property, plant and equipment            (60,824)       (138,219)
        Property, plant and equipment under construction        (76,968)       (182,638)
        Increase in patents and trademarks                       (1,328)         (3,879)
                                                           ------------    ------------
Net cash used in investing activities                          (139,120)       (324,736)
                                                           ------------    ------------
Financing activities:
        Bank Loan                                               192,860              --
        Notes payable from related party                             --         500,000
        Issuance of common stock                                425,000              --
        Repayment of capital lease obligation                    (6,909)         (5,740)
                                                           ------------    ------------
Net cash provided by financing activities                       610,951         494,260
                                                           ------------    ------------
Net decrease in cash and equivalents                         (1,906,644)     (2,655,339)

Foreign exchange gain (loss) on foreign operations                9,558         (81,332)

Cash and cash equivalents, beginning of year                  2,247,623       2,891,088
                                                           ------------    ------------
Cash and cash equivalents, end of period                   $    350,537    $    154,417
                                                           ============    ============
Supplemental disclosures:
  Interest received                                        $        739    $     20,033
                                                           ============    ============
</TABLE>

    The accompanying notes are an integral part of these financial statements


                                       F5
<PAGE>

NOTE 1 - NATURE OF BUSINESS AND BASIS OF PRESENTATION

Environmental Solutions Worldwide Inc. (the "Company" or "ESW") through its
wholly owned subsidiaries is engaged in the design, development, manufacturing
and sales of environmental technologies and testing services with its primary
focus on the international on-road and off-road diesel market. ESW currently
manufactures and markets a line of catalytic emission control and enabling
technologies for a number of applications.

The unaudited condensed consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of
America ("US GAAP"), which contemplates continuation of the company as a going
concern. The Company, however, has sustained operating losses and presently
lacks a sufficient source of commercial income, which creates uncertainty about
the Company's ability to continue as a going concern. The Company's ability to
continue operations as a going concern and to realize its assets and to
discharge its liabilities is dependent upon obtaining additional financing
sufficient for continued operations as well as the achievement and maintenance
of a profitable level of operations. Management believes the current business
plan if successfully implemented along with the necessary additional finance may
provide an opportunity for the Company to achieve profitable operations and
allow it to continue as a going concern.

The Company has incurred significant losses to date. As of June 30, 2009, the
Company has an accumulated deficit of $32,010,228 there is no assurance that the
Company will be successful in achieving sufficient cash flow from operations.
The ability of the Company to continue as going concern is dependent upon the
Company obtaining regulatory approvals for its new line of products, during the
current year the company has expensed significant resources and completed the
development of products to meet the new 2009 emission standards enforced by the
regulators. The Company expected the regulatory approvals to come to fruition in
the second quarter of 2009. The company is still awaiting regulatory approval of
its key products. Any significant delay in achieving or absence of the
regulatory approvals will impact the ability of the Company to generate
sufficient cash flow from its operations, the Company will be required to
significantly reduce or limit operations and seek additional financing to fund
its continuing operations and meet its obligations as they come due.

These unaudited condensed consolidated financial statements do not include any
adjustments relating to the recoverability and classification of recorded asset
amounts or the amounts and classification of liabilities that might be necessary
should the Company be unable to continue as a going concern for a reasonable
period of time.

These statements have not been audited and should be read in conjunction with
the financial statements and the notes thereto included in ESW's Annual Report
on Forms 10-K, and amendments thereto, as filed with the United States
Securities and Exchange Commission for the year ended December 31, 2008. The
methods and policies set forth in the year-end audited consolidated financial
statements are followed in these interim consolidated financial statements.

All adjustments considered necessary for fair presentation and of a normal
recurring nature have been included in these interim consolidated financial
statements. Revenues and operating results for the six month period ended June
30, 2009 are not necessarily indicative of the results to be expected for the
full year.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

BASIS OF CONSOLIDATION

The consolidated financial statements include the accounts of the Company and
its wholly owned subsidiaries, ESW America Inc., ESW Technologies Inc., ESW
Canada Inc. and BBL Technologies Inc. All inter-company transactions and
balances have been eliminated on consolidation. Amounts in the consolidated
financial statements are expressed in U.S. dollars.

ESTIMATES

The preparation of consolidated financial statements in conformity with US GAAP
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenue and expense during the reported period. Actual results could differ from
those estimates. Significant estimates include amounts for impairment of
property plant and equipment, intangible assets, share based compensation,
inventory and accounts receivable exposures.

CONCENTRATION OF CREDIT RISK

The Company's cash balances are maintained in various banks in Canada and the
United States. Deposits held in banks in the United States are insured up to
$250,000 for each bank by the Federal Deposit Insurance Corporation, in Canada
deposits are insured up to $100,000 for each bank by Canada Deposit Insurance
Corporation. The balances at times may exceed these limits.

Accounts Receivable and Concentrations of Credit Risk: The Company performs
on-going credit evaluations of its customer's financial condition and generally
does not require collateral from its customers. Three of ESW's customers
accounted for 52%, 27%, and 7%, respectively of the Company's revenue for the
six month period ended June 30, 2009 and 24%, 16%, and 10%, respectively of its
accounts receivable as at June 30, 2009. Three of its customers accounted for
32%, 29%, and 15%, respectively of the Company's revenue in the fiscal year 2008
and 32%, 31%, and 0%, respectively of its accounts receivable as at December 31,
2008.


                                       F6
<PAGE>

ALLOWANCE FOR DOUBTFUL ACCOUNTS

The Company extends unsecured credit to its customers in the ordinary course of
business but mitigates the associated credit risk by performing credit checks
and actively pursuing past due accounts. An allowance for doubtful accounts is
estimated and recorded based on management's assessment of the credit history
with the customer and current relationships with them. On this basis management
has determined that a reserve of $ nil was appropriate as at June 30, 2009 and
that a reserve of $1,901 was appropriate as at December 31, 2008.

INVENTORY

Inventory is stated at the lower of cost (first-in first-out) or market.
Inventory is periodically reviewed for use and obsolescence, and adjusted as
necessary. Inventory consists of raw materials, work in progress and finished
goods.

PROPERTY, PLANT AND EQUIPMENT UNDER CONSTRUCTION

The Company capitalizes at cost, customized equipment built to be used in the
future day to day operations. Once complete and available for use, the cost for
accounting purposes is transferred to property, plant and equipment, where
normal depreciation rates apply.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are recorded at cost. Depreciation is computed on
a straight-line basis over the estimated useful lives of the assets, generally 5
to 7 years. Maintenance and repairs are charged to operations as incurred.
Significant renewals and betterments are capitalized.

PATENTS AND TRADEMARKS

Patents and trademarks consist primarily of the costs incurred to acquire them
from an independent third party. The Statement of Financial Accounting Standards
("SFAS") No. 142 "Goodwill and Other Intangible Assets," requires intangible
assets with a finite life be tested for impairment whenever events or
circumstances indicate that a carrying amount of an asset (or asset group) may
not be recoverable. An impairment loss would be recognized when the carrying
amount of an asset exceeds the estimated discounted cash flow used in
determining the fair value of the asset. ESW conducted a test for impairment in
the fourth quarter of 2008 and found no impairment.

Patents and trademarks are being amortized on a straight-line basis over their
estimated life of ten years. Amortization expense for the six month period ended
June 30, 2009 and 2008 were $106,390 and $106,525 respectively.

REVENUE RECOGNITION

The Company derives revenue primarily from the sale of its catalytic products.
In accordance with SEC Staff Accounting Bulletin No. 104, "Revenue Recognition
in Financial Statements", revenue is recognized when persuasive evidence of an
arrangement exists, delivery has occurred, the amount is fixed and determinable,
risk of ownership has passed to the customer and collection of the resulting
receivable is reasonably assured.

The Company also derives revenue (less than 14.1% of total revenue) from
providing air testing and environmental certification services. Revenues from
these services are recognized upon performance.

RESEARCH AND DEVELOPMENT

The Company is engaged in research and development work. Research and
development costs, are charged as operating expense of the Company as incurred.
Any grant money received for research and development work will be used to
offset these expenditures. For the six month period ended June 30, 2009 and 2008
the Company expensed $646,254 and $843,292 respectively towards research and
development costs. For the six month period ended June 30, 2009 and 2008, grant
money amounted to $27,929 and $177,206 respectively.


                                       F7
<PAGE>

NOTE 3 - RECENTLY ISSUED ACCOUNTING STANDARDS

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"). SFAS 161 changes the disclosure requirements for derivative
instruments and hedging activities. Entities are required to provide enhanced
disclosures about (1) how and why an entity uses derivative instruments, (2) how
derivative instruments and related hedged items are accounted for under SFAS
No.133, Accounting for Derivative Instruments and Hedging Activities ("SFAS
133"), and its related interpretations, and (3) how derivative instruments and
related hedged items affect an entity's financial position, financial
performance, and cash flows. SFAS 161 is effective for fiscal years beginning
after November 15, 2008. The Company is required to adopt SFAS 161 on January 1,
2009. The Company currently does not have any derivative financial instruments
subject to accounting or disclosure under SFAS 133; therefore, the adoption of
statement SFAS 161 does not have a significant effect on the Company's
consolidated statement of financial position, results of operations or cash
flows.

In May 2008, the FASB issued SFAS No. 162, "The Hierarchy of Generally Accepted
Accounting Principles". The new standard is intended to improve financial
reporting by identifying a consistent framework, or hierarchy, for selecting
accounting principles to be used in preparing financial statements that are
presented in conformity with U.S. generally accepted accounting principles
(GAAP) for nongovernmental entities. SFAS 162 became effective November 15,
2008. Adoption of SFAS 162 is does not have a significant impact on ESW's
results of operations or financial position.

In May 2008, the FASB issued Staff Position ("FSP") APB 14-1, "Accounting for
Convertible Debt Instruments That May Be Settled in Cash upon Conversion
(Including Partial Cash Settlements)." This FSP requires a portion of this type
of convertible debt to be recorded as equity and to record interest expense on
the debt portion at a rate that would have been charged on nonconvertible debt
with the same terms. This FSP takes effect in the first quarter of fiscal years
beginning after December 15, 2008 and will be applied retrospectively for all
periods presented. It is effective for the Company starting January 1, 2009. The
Company has evaluated the impact of FSP APB 14-1 on its financial statements,
and the adoption of this statement does not have a significant effect on the
Company's financial statements.

In June 2008, the FASB issued FSP EITF 03-6-1, "Determining Whether Instruments
Granted in Share-Based Payment Transactions Are Participating Securities."
Securities participating in dividends with common stock according to a formula
are participating securities. This FSP determined that unvested shares of
restricted stock and stock units with nonforfeitable rights to dividends are
participating securities. Participating securities require the "two-class"
method to be used to calculate basic earnings per share. This method lowers
basic earnings per common share. This FSP takes effect in the first quarter of
fiscal years beginning after December 15, 2008 and will be applied
retrospectively for all periods presented. It will be effective for the Company
on January 1, 2009. The adoption of FSP EITF 03-6-1 does not have a significant
effect on the Company's consolidated financial statements.

In June 2008, the FASB ratified the consensus reached on EITF Issue No. 07-05,
"Determining Whether an Instrument (or Embedded Feature) Is Indexed to an
Entity's Own Stock" ("EITF No. 07-05"). EITF No. 07-05 clarifies the
determination of whether an instrument (or an embedded feature) is indexed to an
entity's own stock, which would qualify as a scope exception under SFAS No. 133,
Accounting for Derivative Instruments and Hedging Activities. EITF No. 07-05 is
effective for financial statements issued for fiscal years beginning after
December 15, 2008. It will be effective for the Company on January 1, 2009.
Early adoption for an existing instrument is not permitted. The adoption of EITF
No. 07-05 does not have a significant effect on the company's consolidated
financial statements.

In May 2009, the FASB issued SFAS No. 165, SUBSEQUENT EVENTS ("SFAS 165"). This
Statement is intended to establish general standards of accounting for and
disclosure of events that occur after the balance sheet date but before
financial statements are issued or are available to be issued. It requires the
disclosure of the date through which an entity has evaluated subsequent events
and the basis for that date, that is, whether that date represents the date the
financial statements were issued or were available to be issued. This disclosure
should alert all users of financial statements that an entity has not evaluated
subsequent events after that date in the set of financial statements being
presented. SFAS 165 is effective for interim and annual periods ending after
June 15, 2009. The adoption of SFAS 165 had no significant effect on the
Company's financial condition or consolidated results of operations.

In June 2009, the FASB issued SFAS No. 166, Accounting for Transfer of Financial
Assets - an amendment of FASB Statement No. 140 ("SFAS 166"). This Statement
requires that a transferor recognize and initially measure at fair value all
assets obtained (including a transferor's beneficial interest) and liabilities
incurred as a result of a transfer of financial assets accounted for as a sale.
This Statement must be applied as of the beginning of each reporting entity's
first annual reporting period that begins after November 15, 2009. We are
currently assessing the impact, if any, of SFAS 166 on our consolidated
financial statements.

In June 2009, the FASB issued SFAS No. 167, AMENDMENTS TO FASB INTERPRETATION
NO.46(R) ("SFAS 167"). This Statement amends certain guidance in Interpretation
46(R) for determining whether an entity is a variable interest entity. This
Statement amends Interpretation 46(R) to require enhanced disclosures that will
provide users of financial statements with more transparent information about an
enterprise's involvement in a variable interest entity. This Statement shall be
effective as of the beginning of each reporting entity's first annual reporting
period that begins after November 15, 2009. We are currently assessing the
impact, if any, of SFAS 167 on our consolidated financial statements.


                                       F8
<PAGE>

In June 2009, the FASB issued SFAS No. 168, The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting Principles - a
replacement of FASB Statement No.162 ("SFAS 168"). The FASB ACCOUNTING STANDARDS
CODIFICATIONTM (Codification) will become the source of authoritative U.S.
generally accepted accounting principles (GAAP) recognized by the FASB to be
applied by nongovernmental entities. This Statement is effective for financial
statements issued for interim and annual periods ending after September 15,
2009.

NOTE 4 - CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash and highly liquid investments purchased
with an original or remaining maturity of 90 days or less at the date of
purchase.

NOTE 5 - INVENTORY

Inventory is summarized as follows:

                                       JUNE 30,   DECEMBER 31,
                    INVENTORY            2009         2008
                 ---------------------------------------------
                 Raw materials        $ 545,065    $  503,129
                 Work-In-Process        278,375       201,173
                 Finished goods          41,932        19,510
                 ---------------------------------------------
                       TOTAL          $ 865,372    $  723,812
                 =============================================

NOTE 6 - PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consist of the following:

                                             June 30,    DECEMBER 31,
          CLASSIFICATION                       2009           2008
          -----------------------------------------------------------
          Plant, machinery and equipment   $ 5,198,530    $ 5,126,108
          Office equipment                     292,566        294,250
          Furniture and fixtures               430,854        424,426
          Vehicles                              12,014         12,014
          Leasehold improvements               992,078        997,748
                                           --------------------------
                                           $ 6,926,042    $ 6,854,546

          Less: accumulated depreciation    (3,961,862)    (3,530,182)
                                           --------------------------
                                           $ 2,964,180    $ 3,324,364
                                           --------------------------

At June 30, 2009 and December 31, 2008, the Company had $248,413 and $171,445,
respectively, of customized equipment under construction.

The office equipment above includes $17,280 in assets under capital lease with a
corresponding accumulated depreciation of $12,673 for the period ended June 30,
2009. As at year ended December 31, 2008 office equipment included $17,665 in
assets under capital lease with a corresponding depreciation of $11,668.

The plant, machinery and equipment above include $32,799 in assets under capital
lease with a corresponding accumulated depreciation of $13,668 for the period
ended June 30, 2009. As at year ended December 31, 2008, plant, machinery and
equipment included $33,957 in assets under capital lease with a corresponding
accumulated depreciation of $11,539.

NOTE 7 - BANK LOAN

In 2007, ESW's subsidiary, ESW Canada entered into a $2.5 Million revolving
credit facility with Royal Bank of Canada ("RBC"), to finance orders on hand.
Effective September 2, 2008, ESW completed its negotiations with Royal Bank of
Canada and entered into an amendment to the secured commercial loan agreement.
The amended agreement extended the term of the Agreement from June 30, 2008
through June 30, 2009. In addition to extending the term of the Agreement,
certain financial covenants were also amended. The amended arrangement provided
for a revolving facility available by way of a series of term loans of up to
$750,000 to finance future production orders. The Credit Facility is guaranteed
by the Company and its subsidiary ESW Canada through the pledge of their assets
to RBC. The facility has been guaranteed to the bank under Export Development
Canada ("EDC") pre-shipment financing program. Borrowings under the revolving
credit agreement bear interest at 1.5% above the bank's prime rate of interest.


                                       F9
<PAGE>

Repayments of any loans are required no later than one year from the date of the
advancement of that loan. Obligations under the revolving credit agreement are
collateralized by a first-priority lien on the assets of the Company and its
subsidiary ESW Canada, Inc. including, accounts receivable, inventory, equipment
and other tangible and intangible property, including the capital stock of all
direct subsidiaries.

Currently ESW is in negotiations with RBC for the extension and the size of the
facility. The Company cannot be certain as to the outcome of these negotiations
and there is a possibility that the facility may not be renewed, or that it may
be renewed for a lesser amount.

For the period ended June 30, 2009, $270,028 was owed under the aforementioned
facility. As at December 31, 2008, $77,168 was owed under the facility.

NOTE 8 - REDEEMABLE CLASS A SPECIAL SHARES

       700,000 Class A special shares      $ 453,900 (based on the historical
       Authorized, issued, and             exchange rate at the time of
       outstanding.                        issuance.)

The redeemable Class A special shares are issued by the Company's wholly-owned
subsidiary BBL Technologies, Inc. ("BBL") without par value, and are redeemable
on demand by the holder of the shares, which is a private Ontario Corporation,
at $700,000 Canadian Dollars (which translates to $601,892 at June 30, 2009). As
the redeemable Class A special shares were issued by the Company's wholly-owned
subsidiary BBL, the maximum value upon which the Company is liable is the net
book value of BBL. As at June 30, 2009 BBL has an accumulated deficit of
$1,184,184 USD ($1,836,195 Canadian dollars as at June 30, 2009) and therefore,
the holder would be unable to redeem the redeemable Class A special shares at
their ascribed value.

NOTE 9 - CONVERTIBLE DEBENTURES

On November 3, 2008, the Company completed a transaction whereby it issued $6.0
million of 9% convertible debentures (the "Debentures") to six accredited
investors. The Debentures are for a term of three (3) years and are convertible
into shares of the Company's common stock at the option of the holder at any
time six (6) months after the date of issuance of the Debenture by dividing the
principal amount of the Debenture to be converted by $0.25. The Debentures earn
interest at a rate of 9% per annum payable in cash or in shares of the Company's
common stock at the option of the holder. If the Holder elects to receive
interest in shares of common stock, the number of shares of common stock to be
issued for interest shall be determined by dividing accrued interest by $0.25.
Subject to the holder's right to convert, the Company has the right to redeem
the Debentures at a price equal to one hundred and ten percent (110%) multiplied
by the then outstanding principal amount plus unpaid interest to the date of
redemption. Upon maturity, the debenture and interest is payable in cash or
common stock at the option of the Holder. The Debentures contain customary price
adjustment protections.

From the proceeds, the Company repaid $2,200,000, the principal portion only, of
a previously issued Consolidated Note in the amount of $2,308,148 to a company
controlled by a trust to which a director and shareholder of the Company is the
beneficiary. The debt holder agreed to have the remaining amount of $433,923,
due under the Consolidated Note, applied to a subscription of a Debenture under
the November 3, 2008 offering.

Concurrently, the Company repaid a Consolidated Subordinated Note that it had
previously issued to a debt holder who is a director and shareholder of the
Company, in the principal amount of $1,002,589. The debt holder has agreed to
have the full amount of principal and accumulated interest, in the amount of
$1,158,024 due under the Consolidated Subordinated Note, applied to a
subscription of a Debenture under the offering. Additionally the Company's $1.5
million credit facility also provided by the same debt holder, from which the
Company had drawn down the sum of $1,103,000 as of November 3, 2008, was also
satisfied by way of issuance of Debentures under the November 3, 2008 offering.
With the agreement to settle all the notes previously issued by the Debt holder
is subscribing to an aggregate of $2,566,077 of Debentures under the offering.

As at June 30, 2009, the Convertible Debenture amounted to $8,953,538 net of
deferred costs of $46,462, with corresponding accrued interest of $530,753. As
at December 31, 2008, the Convertible Debenture amounted to $8,943,581 net of
deferred costs of $56,419, with corresponding accrued interest of $125,753.

LEGAL FEES RELATED TO CONVERTIBLE DEBENTURES

The Company has recorded a deferred cost asset of $59,738 for legal fees paid in
relation to the issuance of the Convertible Debentures. The deferred costs will
be amortized over the term of the Convertible Debenture. As at June 30, 2009,
the deferred cost asset and related amortization was $46,462 and $9,956
respectively. As at December 31, 2008, the deferred cost asset and related
amortization was $56,419 and $3,319 respectively. Legal fees have been presented
net against the related instrument.


                                       F10
<PAGE>

NOTE 10- INCOME TAXES

As at June 30, 2009, there are tax loss carry forwards for Federal income tax
purposes of approximately $22,520,195 available to offset future taxable income
in the United States. The tax loss carry forwards expire in various years
through 2029. The Company does not expect to incur a Federal income tax
liability in the foreseeable future. Accordingly, a valuation allowance for the
full amount of the related deferred tax asset of approximately $7,882,068 has
been established until realizations of the tax benefit from the loss carry
forwards are more likely than not.

Additionally, as at June 30, 2009, the Company's two wholly owned Canadian
subsidiaries had non-capital tax loss carry forwards of approximately $5,353,702
to be used, in future periods, to offset taxable income. The loss carry forwards
expire in various years through 2029 The deferred tax asset of approximately
$1,793,490 has been fully offset by a valuation allowance until realization of
the tax benefit from the non-capital tax loss carry forwards are more likely
than not.

<TABLE>
<CAPTION>
                                                       For the six month period ended June 30,
                                                                2009             2008
                                                            -----------------------------
<S>                                                         <C>              <C>
Statutory tax rate:
  U.S.                                                              35.0%            35.0%
  Foreign                                                           33.5%            36.1%

Income (loss) before income taxes:
  U.S.                                                      $ (2,113,336)    $ (1,995,140)
  Foreign                                                     (1,310,464)      (1,870,919)
                                                            -----------------------------
                                                            $ (3,423,800)    $ (3,866,059)
                                                            -----------------------------
Expected income tax recovery                                $ (1,178,673)    $ (1,373,701)

Differences in income tax resulting from:
  Depreciation (Foreign operations)                         $     16,608     $     44,005
  Stock Based Compensation                                  $         --     $      4,776
  Accrued interest on loans                                 $    141,750     $         --
                                                            -----------------------------
                                                            $ (1,020,315)    $ (1,324,920)
Benefit of losses not recognized                            $  1,020,315     $  1,324,920
                                                            -----------------------------
Income tax provision (recovery) per financial statements    $         --     $         --
                                                            -----------------------------
</TABLE>

Deferred income tax assets and liabilities consist of the following difference:

<TABLE>
<CAPTION>
                                                                  As at June 30,
                                                               2009             2008
                                                           -----------------------------
<S>                                                        <C>              <C>
Assets
  Capital Assets - Tax Basis (Foreign operations only)     $  1,317,429     $  1,099,539
  Capital Assets - Book Value (Foreign operations only)      (1,074,402)      (1,664,682)
                                                           -----------------------------
  Net Capital Assets/ (Liabilities)                        $    243,027     $   (565,143)
  Tax loss carry forwards                                    27,873,897       21,908,021
                                                           -----------------------------
Net temporary differences (foreign operations only)        $ 28,116,924     $ 21,342,878

Statutory tax rate:
  U.S.                                                             35.0%            35.0%
  Foreign                                                          33.5%            36.1%

Temporary differences (foreign operations only)            $  9,756,973     $  7,704,779
  Valuation allowance                                      $ (9,756,973)    $ (7,704,779)
                                                           -----------------------------
  Carrying Value                                           $         --     $         --
                                                           =============================
</TABLE>

Effective January 1, 2007, the Company adopted the provisions of FASB
Interpretation No. 48, "Accounting for Uncertainty in Income Taxes -- an
interpretation of FASB Statement No. 109" ("FIN 48"). FIN 48 prescribes a
recognition threshold and a measurement attribute for the financial statement
recognition and measurement of tax positions taken or expected to be taken in an
income tax return. For those benefits to be recognized, a tax position must be
more-likely-than-not to be sustained upon examination by taxing authorities.
There was not a material impact on the Company's consolidated financial position
and results of operations as a result of the adoption of the provisions of FIN
48. The Company does not believe there will be any material changes in its
unrecognized tax positions over the next twelve months.

The Company will recognize interest and penalties related to unrecognized tax
benefits within the income tax expense line in the consolidated statement of
operations. Accrued interest and penalties will be included within the related
tax liability line in the consolidated balance sheet.


                                       F11
<PAGE>

In many cases the Company's uncertain tax positions are related to tax years
that remain subject to examination by tax authorities. The following describes
the open tax years, by major tax jurisdiction, as of June 30, 2009:

          United States - Federal                   2005 - present
          United States - State                     2005 - present
          Canada - Federal                          2006 - present
          Canada - Provincial                       2006 - present

Valuation allowances reflect the deferred tax benefits that management is
uncertain of the Company's ability to utilize in the future.

NOTE 11 - ISSUANCE OF COMMON STOCK

On June 24, 2009 the Company received $425,000 from the exercise of options at
$0.50 per share and issued 850,000 shares of restricted common stock. For the
year ended December 31, 2008 there was nil issuance of common shares.

NOTE 12 - STOCK OPTIONS AND WARRANT GRANTS

A total of $ nil and $13,646 for stock based compensation has been recorded for
the six month period ended June 30, 2009 and June 30, 2008, respectively. There
were no stock option grants for the six month period ended June 30, 2009.

On February 7, 2008 the Board of Directors granted an aggregate award of 400,000
stock options to five employees, two executive officers and one director. The
options vested immediately with exercise prices of $0.71 and $1.00 per share
(above fair-market value at the date of grant) with expiry ranging from three
and five years from the date of award.

A summary of option transactions, including those granted pursuant to the terms
of certain employment and other agreements is as follows:

                                             STOCK         WEIGHTED
                                           PURCHASE         AVERAGE
                     DETAILS                OPTIONS     EXERCISE PRICE
         -------------------------------------------------------------
         OUTSTANDING, JANUARY 1, 2008      6,996,667        $ 0.60
         Granted                             100,000        $ 0.71
         Granted                             300,000        $ 1.00
         Expired                          (1,276,667)      ($ 0.72)
                                          ----------       -------
         OUTSTANDING, JANUARY 1, 2009      6,120,000        $ 0.65
         Granted                                  --            --
         Expired                            (550,000)      ($ 0.50)
         Exercised                          (850,000)      ($ 0.50)
                                          ----------       -------
         OUTSTANDING, JUNE 30, 2009        4,720,000        $ 0.70
                                          ==========       =======

At June 30, 2009, the outstanding options have a weighted average remaining life
of 22 months.

The weighted average fair value of options granted during 2008 was $0.93 and was
estimated using the Black-Scholes option-pricing model, and the following
assumptions:

                                                      2008
                                                -----------------
               Expected volatility              49% - 52%
               Risk-free interest Rate          3.00%
               Expected life                    1.5 yrs - 2.5 yrs
               Dividend yield                   0.00%
               Forfeiture rate                  0.00%

The Black-Scholes model used by the Company to calculate options and warrant
values, was developed to estimate the fair value of freely tradable, fully
transferable options without vesting restrictions, which significantly differ
from the Company's stock purchase options and warrants. The model also requires
highly subjective assumptions, including future stock price volatility and
expected time until exercise, which greatly affect the calculated values.
Accordingly, management believes that this model does not necessarily provide a
reliable single measure of the fair value of the Company's stock options and
warrants.


                                       F12
<PAGE>

At June 30, 2009, the Company had outstanding options as follows:

              NUMBER OF          EXERCISE
               OPTIONS             PRICE           EXPIRATION DATE
              ----------------------------------------------------
                900,000            $0.50              August-11-09
                150,000            $0.50            December-01-09
                175,000            $0.71            February-16-10
                795,000            $1.00            December-31-10
                100,000            $0.71            February-06-11
                100,000            $1.00            February-06-11
              2,150,000            $0.71            February-16-12
                100,000            $1.00            February-08-13
                250,000            $0.27              August-06-13
              ----------------------------------------------------
              4,720,000
              ====================================================

Warrants issued in connection with various private placements of equity
securities, are treated as a cost of capital and no income statement recognition
is required. A summary of warrant transactions is as follows:

                                                          WEIGHTED AVERAGE
     DETAILS                            WARRANT SHARES     EXERCISE PRICE
     ---------------------------------------------------------------------
     Outstanding, January 1, 2008          3,272,500          $ 1.28
     Granted                                      --              --
     Exercised                                    --              --
     Expired                               3,272,500          $(1.28)
     ---------------------------------------------------------------------
     Outstanding, January 1, 2009                 --              --
     Granted                                      --              --
     ---------------------------------------------------------------------
     Outstanding, June 30, 2009                   --              --
     =====================================================================

There are no outstanding warrants as of June 30, 2009.

NOTE 13 - RELATED PARTY TRANSACTIONS

During the six month period ended June 30, 2009 and 2008, the Company paid
shareholders and their affiliates $nil and $62,500, respectively for various
services, and fees rendered in addition to salaries and reimbursement of
business expenses. All transactions are recorded at the exchange amounts.

CONSULTING AGREEMENT

In 2008, a director and shareholder of the company provided consulting services
to the company under a consulting agreement. The agreement provides for a
monthly retainer of $12,500 per month. In December 2008 the agreement was
terminated.

CONVERTIBLE DEBENTURE ISSUED TO RELATED PARTY

On November 3, 2008, the Company completed a transaction whereby it issued $6.0
million of 9% convertible debentures to six accredited investors. Based on the
beneficial ownership position in the Company, The Leon Black 1997 Family Trust
is included as a related party, all other entities participating in the November
convertible debenture offering disclaim beneficial ownership (see beneficial
ownership table PART III - ITEM 12 of the Company's 10K report filed with the
Securities Exchange Commission for the year ended December 31, 2008). The Leon
Black 1997 Family Trust participated in the November convertible debenture
offering with a principal investment of $2,000,000.

Further information required by this item is included under the caption "NOTE 9
- CONVERTIBLE DEBENTURES".

As at June 30, 2009, the principal amount of Convertible Debenture due to
related party amounted to $5,000,000 with a corresponding accrued interest of
$293,548. At December 31, 2008, Convertible Debenture due to related party
amounted to $5,000,000 with a corresponding accrued interest of $68,548.

NOTE 14 - COMMITMENTS AND CONTINGENCIES

LEASES

Effective November 24, 2004, the Company's wholly owned subsidiary ESW America,
Inc. entered into a lease agreement for approximately 40,220 square feet of
leasehold space at 2 Bethlehem Pike Industrial Center, Montgomery Township,
Pennsylvania. The leasehold space houses the Company's research and development
facilities. The lease commenced on January 15, 2005 and expires January 31,
2010. Under the terms of the lease agreement the Company has the option to
extend the lease for an additional period of five years.


                                       F13
<PAGE>

Effective December 20, 2004, the Company's wholly owned subsidiary ESW Canada,
Inc. entered into an offer to Lease agreement for approximately 50,000 square
feet of leasehold space in Concord Ontario Canada. The leasehold space houses
the Company's executive offices and a high volume manufacturing plant. The
possession of the leasehold space took place on May 24, 2005 and the term of the
lease will run for a period of five (5) years from the commencement date of July
15, 2005.

The following breakdown is the total, of the minimum annual lease payments, for
both leases.

                            YEAR                 $
                            2009             $225,915
                            2010             $150,503

LEGAL MATTERS

From time to time, the Company may be involved in a variety of claims, suits,
investigations and proceedings arising from the ordinary course of our business,
breach of contract claims, labor and employment claims, tax and other matters.
Although claims, suits, investigations and proceedings are inherently uncertain
and their results cannot be predicted with certainty, ESW believes that the
resolution of current pending matters will not have a material adverse effect on
its business, consolidated financial position, results of operations or cash
flow. Regardless of the outcome, litigation can have an adverse impact on ESW
because of legal costs, diversion of management resources and other factors. In
addition, it is possible that an unfavourable resolution of one or more such
proceedings could in the future materially and adversely affect ESW's financial
position, results of operations or cash flows in a particular period.

CAPITAL LEASE OBLIGATION

The Company is committed to the following lease payments in connection with the
acquisition of capital assets under capital leases:

                                         YEAR             $

                                         2009           10,317
                                         2010           12,180
                                         2011            2,662
                                         2012            1,109
                                                       -------
                                         TOTAL         $26,268

             Less imputed interest                      (2,171)
                                                       -------
             Total obligation under capital lease      $24,097

             Less current portion                      (10,286)
                                                       -------
             TOTAL LONG-TERM PORTION                   $13,811
                                                       =======

The Company has incurred $3,162 of interest expense on capital leases for the
six month period ended June 30, 2009.

NOTE 15 - LOSS PER SHARE

Potential common shares of 4,720,000 related to ESW's outstanding stock options
were excluded from the computation of diluted loss per share for the three month
period ended June 30, 2009. As at June 30, 2008, potential common shares of
7,361,667 related to ESW's outstanding stock options and potential common shares
of 1,572,500 related to ESW's outstanding Warrants were excluded from the
computation of diluted earnings/(loss) per share as the effect of inclusion of
these shares and the related interest expense would have been antidilutive.


                                       F14
<PAGE>

The reconciliation of the number of shares used to calculate the diluted loss
per share is calculated as follows:

<TABLE>
<CAPTION>
                                                  For the six month period      For the three month period
                                                        ended June 30,                 ended June 30,
                                                    2009            2008           2009            2008
                                                ------------    ------------   ------------    ------------
<S>                                             <C>             <C>            <C>             <C>
NUMERATOR
Net (loss) for the period                       $ (3,423,800)   $ (3,866,059)  $ (1,795,516)   $ (1,910,125)
Interest on debentures & amortization           $    414,956    $         --   $    207,478    $         --
Interest on notes to related party              $         --    $    161,990   $         --    $     87,702
                                                ------------    ------------   ------------    ------------
                                                $ (3,008,843)   $ (3,704,069)  $ (1,588,037)   $ (1,822,423)
DENOMINATOR
Weighted average number of shares outstanding     73,006,724      72,973,851     73,039,236      72,973,851
Dilutive effect of :
   Stock options                                          --              --             --              --
   Warrants                                               --              --             --              --
   Convertible Debt conversion                            --              --             --              --
   Notes Payable to related party conversion              --              --             --              --
                                                ------------    ------------   ------------    ------------
DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING               --              --             --              --
                                                ------------    ------------   ------------    ------------
</TABLE>

NOTE 16 - COMPARATIVE FIGURES

Certain 2008 figures have been reclassified to conform to the financial
statements presentation adopted in 2009. The presentation includes Other
Comprehensive Income in the Consolidated Condensed Statement of Operations and
Consolidated Condensed Statement Of Changes In Stockholders Equity (Deficit).

NOTE 17 - SUBSEQUENT EVENTS

The Company has evaluated transactions, events and circumstances for
consideration of recognition or disclosure through August 11, 2009, the date
these interim financial statements were available for issue, and has reflected
or disclosed those items within the condensed consolidated financial statements
as deemed appropriate.

On August 10, 2009, ESW announced that its wholly owned subsidiary ESW Canada
Inc. has received notification from the California Air Resources Board (CARB)
that the Company's ThermaCat(TM) Active Level III Diesel Particulate Filter has
been approved for On-road applications for 1993 through 2006 model year On-Road
vehicle applications powered by 5 to 10 liter diesel engines.

On August 11, 2009 the company entered into an unsecured subordinated demand
short term loan agreement with a Director who is also a Shareholder of the
company. As per the terms of the agreement, the Company received a short term
loan of $300,000 for general business purposes. The loan accrues interest at a
rate of 9% per annum and is payable on demand by the lender. The company has the
option to prepay the loan at anytime without penalty. Prior to prepayment
request by the Company, the Lender has the option to convert the loan principal
and accrued interest into a new debenture or private placement offering made by
the Company in the future.


                                       F15
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

The following discussion should be read in conjunction with ESW's Financial
Statements and Notes thereto included elsewhere in this Report.

This Form 10-Q contains certain forward-looking statements regarding, among
other things, the anticipated financial and operating results of ESW's business.
Investors are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. ESW undertakes no obligation
to publicly release any modifications or revisions to these forward-looking
statements to reflect events or circumstances occurring after the date hereof or
to reflect the occurrence of unanticipated events. In connection with the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995, ESW
caution investors that actual financial and operating results may differ
materially from those projected in forward-looking statements made by, or on
behalf of, ESW. Such forward-looking statements involve known and unknown risks,
uncertainties, and other factors that may cause the actual results, performance,
or achievements to be materially different from any future results, performance,
or achievements expressed or implied by such forward-looking statements. This
report should be read in conjunction with ESW's Annual Report on Forms 10-K, and
amendments thereto for the year ended December 31, 2008 as filed with the
Securities and Exchange Commission.

GENERAL OVERVIEW

Environmental Solutions Worldwide Inc. ("ESW" or the "Company") is a publicly
traded company engaged through its wholly owned subsidiaries ESW Canada Inc.,
ESW America Inc. and ESW Technologies Inc. (the ESW Group of Companies) in the
design, development, manufacturing and sales of environmental technologies. The
ESW Group of Companies currently manufacture and market a diversified line of
catalytic emission control products and support technologies for diesel,
gasoline and alternative fuelled engines. The ESW Group of Companies also
operates a comprehensive Environmental Protection Agency (EPA), California Air
Resources Board (CARB) and the Mine Safety and Health Administration (MSHA)
recognized emissions testing and verification laboratory.

ESW's primary business objective is to capitalize on the growing global
requirement of reducing emissions, by offering catalyst technology solutions to
the market and build upon its military product lines for sales to the U.S. and
NATO countries. ESW has and continues to seek to develop relationships with
Original Equipment Manufacturers (OEM's) of engines for both automotive and
other markets. As part of ESW's efforts to grow its business, as well as to
achieve increased production and distribution efficiencies ESW has made capital
investments in its manufacturing capability to support its products as well as
expensing money on research and development in order for new products to be
developed that meet the new legislative regulations.

Through the year ended 2008 and the first half of 2009, ESW incurred significant
research and development costs. This investment in ESW's products was necessary
for ESW to comply with new regulations which came into force starting January of
2009. The products that ESW has developed and / or presented for verification /
certification cover the following primary technology levels established by CARB:

o Level I + (+ INDICATES 2009 NO2 COMPLIANCE)
      o Diesel Oxidation Catalyst - PM reduction greater than 25%
      o High performance Diesel Oxidation Catalyst - PM reduction greater
        than 30%
o Level II +
      o Diesel Oxidation Catalyst with Crank Case Ventilation - PM reduction
        greater than 50%
o Level III +
      o Off Road Active Diesel Particulate Filter - PM reduction greater
        than 85%
      o On Road Active Diesel Particulate Filter - PM reduction greater
        than 85%

ESW believes that with the certifications/verification of the above range of
products will cover a significant portion of the market and give ESW the
competitive advantage to be the technology of first choice in retrofit and OEM
applications. The regulatory approval process with EPA and CARB is complex and
requires a lengthy process of durability testing which must precede final
certification/verification of ESW's products. Durability testing has been
completed for all ESW's Level III+ products to meet the new 2009 regulations and
verification/certification is in process for all of ESW's Level III products.
ESW does not control the timeliness of the certification/verification process;
however, ESW has taken steps to ensure the efficacy of ESW's contribution to the
certification/verification process

On May 04, 2009, ESW announced that its wholly owned subsidiary ESW Canada Inc.
has received notification from CARB that the Company's ThermaCat(TM) Active
Level III Plus Diesel Particulate Filter has been approved for off-road
applications. ESW's ThermaCat(TM) has been verified as a Level III device for
use in a wide variety of medium/heavy-duty diesel off-road engines powering both
tracked and rubber tired equipment. The ThermaCat(TM), as verified, proved
capable of reducing diesel Particulate Matter (PM), Carbon Monoxide (CO) and
Hydro Carbon (HC) in excess of 85%. The ThermaCat(TM) has also met the
nationwide stringent nitrogen dioxide (NO2) limitations. This new NO2 limit,
which came into effect on January 1, 2009, requires that all verified diesel
retrofits sold and installed in North America must not increase NO2 emissions by
more than 20%.

Through the first half of 2009, ESW has actively pursued the ThermaCat(TM)
Active Level III Plus Diesel Particulate Filter On Road verification, all
submissions to CARB were complete, ESW has undertook and completed additional
testing, which allows a wider demographic of vehicles to be covered by the on
road product, the data for this scope increase has been provided to CARB.


                                        3
<PAGE>

On June 1, 2009 ESW announced that its wholly owned subsidiary ESW Canada Inc.
(ESWC) received notification from the California Highway Patrol (CHP) that the
Company's ThermaCat(TM) Active Level III Plus catalyst system has passed the
first inspection for usage on school buses carrying children on California
roads. In January of 2009 ESW's ThermaCat(TM) successfully meet the applicable
Federal Motor Vehicle Safety Standards 301 (FMVSS301) crash test for school
buses at a recognized third party testing facility in Wisconsin. At the
conclusion of the test, although the bus was deemed a total loss, the
ThermaCat(TM) passed the crash protocol with a zero failure rate. In a separate
test procedure at the same facility, the ThermaCat(TM) Active Level III Plus
catalyst system and school bus installation kit were tested on a 1000 hour
100,000 mile vibration and shock durability simulation machine. Again, the
system passed the test protocol with zero failure to the system or installation
components.

On August 10, 2009, ESW announced that its wholly owned subsidiary ESW Canada
Inc. has received notification from the California Air Resources Board (CARB)
that the Company's ThermaCat(TM) Active Level III Diesel Particulate Filter has
been approved for On-road applications for 1993 through 2006 model year On-Road
vehicle applications powered by 5 to 10 liter diesel engines. The ThermaCat(TM),
as verified, proved capable of reducing diesel Particulate Matter (PM), Carbon
Monoxide (CO) and Hydro Carbon (HC) in excess of 85% while meeting the
nationwide stringent nitrogen dioxide (NO2) limitations. This new NO2 limit,
which came into effect on January 1, 2009, requires that all verified diesel
emission retrofit technologies sold and installed in North America must not
increase NO2 emissions by more than 20%.

ESW to date has shipped 32 ThermaCat(TM) Active Level III Plus Diesel
Particulate Filter Systems to E Global Solutions Inc, of the total 32 systems
sold, 19 systems were sold within the first quarter of 2009 through an exclusive
distributorship arrangement with E Global Solutions Inc, to the New York Market.
The ThermaCat(TM) meets the highest performance and classification level under
the New York City local laws for emission controls, which require the use of
Ultra Low Sulfur Diesel fuel and Best Available Control Technology in on-road
and off-road diesel vehicles used in New York City. Installed applications
include on-highway cement mixers, dump trucks, and off-road excavators and
loaders. This cross section ThermaCat(TM) Systems were sold and installed based
on prior performance demonstrations of the technology.

The ThermaCat(TM) On- and Off-Road products are anticipated to account for a
significant portion of ESW's future revenues, based on feedback received from
our customers and distribution network, the Level I and Level II product
certification / verification program has been delayed considering more states
are adopting California emission standards which are more stringent and in line
with the Level III requirements. ESW intends to complete the Level I and Level
II product certification / verification program submissions in the third quarter
of 2009, the delay in the timeline is due to the delays caused in obtaining the
on road verification for the ThermaCat(TM) Active Level III Plus catalyst
system. ESW believes that this adjustments to its business plan is necessary to
meet market and customers expectations.

On April 07, 2009 ESW announced that the company has been awarded a $731,000
Grant for Environmental Protection Agency (EPA) Verification of its XTRM Cat(TM)
Marine / Locomotive Catalyst. This new grant is intended to support ESW in the
final testing of the XTRM Cat(TM) technology in real-world applications along
with providing a platform for EPA verification. In March of 2009 the EPA
finalized more stringent emissions standards for locomotives and marine
compression-ignition engines opening the door for this newly regulated market.
The grant is made possible by the New Technology Research and Development (NTRD)
Program. The NTRD Program is funded by the State of Texas through the Texas
Commission on Environmental Quality (TCEQ). NTRD grants are designed to expedite
the commercialization of new and innovative emission reduction technologies that
will improve the air quality of Texas. ESW has been awarded the grant in part
due to the significant progress and success that was achieved with the XTRM
Cat(TM) on Electro-Motive Diesel (EMD) 2-stroke diesel engines in during 2007 in
which it was previously awarded a $250,000 TCEQ grant. As per the terms of the
grant the project has a total budget of $731,000, TECQ also has the discretion
to increase the amount of funds available under the budget. Of the total budget
19% is attributed to ESW's cost share and the balance $591,000 will be
reimbursed by TECQ.

On June 10, 2009 ESW announced today that the Company's wholly owned subsidiary
ESW Canada Inc. (ESWC) has received sales orders amounting to $266,000 for five
XtrmCat(TM) Locomotive Diesel Oxidation Catalysts from Advanced Global
Engineering in Atlantic Beach, FL. and West Coast Express (TransLink) in
Vancouver, BC. On October 6, 2008, the XtrmCat(TM) became the first DOC to be
added by the EPA to its Emerging Technology's list for marine Electro Motive
Diesel two-stroke diesel engines. The XtrmCat(TM) is also being sold for
installation on EMD powered locomotives. ESW is working towards the verification
of the XtrmCat(TM) and believes, that once EPA verifies, the XtrmCat(TM), it
will give the Company a great head start in the marine/locomotive emissions
retrofit sector.

The field of emission control is very complex and requires a variety of
different technologies to be employed. ESW has and continues to develop
additional products that meet the needs of its customers and industry standards.
ESW has partnered with several strategic alliances assuring immediate access to
leading edge technologies. ESW has also expensed significant resources in
developing an active dealer and support distribution network for several key
markets. Sales depend on the success of ESW's efforts to develop and market the
products, and there can be no certainty that those efforts will succeed.

Both ESW's facilities are in full compliance with ISO 9001:2000. We currently
hold a full registration certificate effective until March 2010 for ESW America
and January 2010 for ESW Canada.

As ESW has a substantial amount of indebtedness, its ability to generate cash,
both to fund operations and service debt, is also a significant area of focus
for the Company. See "Liquidity and Capital Resources" below for further
discussion of cash flows.


                                        4
<PAGE>

COMPARISON OF THREE MONTH PERIOD ENDED JUNE 30, 2009 TO THREE MONTH PERIOD ENDED
JUNE 30, 2008

RESULTS OF OPERATIONS

The following management's discussion and analysis of financial condition and
results of operations (MD&A) should be read in conjunction with the MD&A
included in ESW's Annual Report on Forms 10-K, and amendments thereto for the
year ended December 31, 2008.

Revenues for the three month period ended June 30, 2009 increased by $26,404 or
45 percent, to $84,568 from $58,164 for the three month period ended June 30,
2008. Sales in the current period remained at lower levels as the company
focused its efforts on obtaining verification for its Level III diesel catalyst
on road product. The marginal increase in revenue over the prior year period is
related to sales of ESW's newly developed products that meet new regulations.
Sales are for mainly unverified product.

Cost of sales as a percentage of revenues for the three month period ended June
30, 2009 was 42.5 percent compared to 83.6 percent for the three month period
ended June 30, 2008. The gross profit for the three month period ended June 30,
2009 was 57.5 percent as compared to a gross margin of 16.4 percent for the
three month period ended June 30, 2008. The improvements in the gross margin are
mainly due to the efforts by ESW to streamline its product installation
capabilities for its new line of products, helped marginally by slightly higher
volume.

Marketing, office and general expenses for the three month period ended June 30,
2009 decreased by $147,039, or 14.8 percent, to $845,271 from $992,310 for the
three month period ended June 30, 2008. The decrease is primarily due to
decreases in Facility costs by $11,143 as a result of the higher sales volumes
higher overhead costs are attributed to sales. Administration salaries and wages
were lower by $128,075, general and administration cost was lower by $16,907
over the previous period and plant related expenses were lower by $12,291 as
support for ESW's research and development programs declined and a consulting
agreement in the prior year was terminated. Investor relations expense was lower
by $15,335. These decreases were offset by an increase in sales and marketing
salaries and wages and selling expenses of $36,712 due to increased focus on
business development and product marketing efforts.

Research and development expenses for the three month period ended June 30, 2009
decreased by $127,895, or 32.9 percent, to $261,547 from $389,442 for the three
month period ended June 30, 2008. ESW continues to aggressively pursue the
verification of its newly developed products, the decrease in the cost of
research and development is marginally due to the product development cycle
being completed, ESW has received verification for its ThermaCat(TM) Active
Level III Plus Diesel Particulate Filter off road product and is now focusing on
obtaining regulatory verifications / certifications for its ThermaCat(TM) Active
Level III Plus Diesel Particulate Filter on road and Level I and II products.

Officer's compensation and director's fees for the three month period ended June
30, 2009 increased by $31,621 or 21.7 percent, to $177,343 from $145,722 for the
three month period ended June 30, 2008.

Consulting and professional fees for the three month period ended June 30, 2009
increased by $23,755 or 62.9 percent, to $61,542 from $37,787 for the three
month period ended June 30, 2008. The increase is mainly attributed to an
increase in audit fees.

Foreign exchange loss for the three month period ended June 30, 2009 was $4,269
as compared to a gain of $21,595 for the three month period ended June 30, 2008.
This is a result of the fluctuation in the exchange rate of the Canadian Dollar
to the United States Dollar.

Depreciation and amortization expense for the three month period ended June 30,
2009 decreased by $3,183, or 1.1 percent to $286,955 from $290,148 for the three
month period ended June 30, 2008.

Interest expense on long-term debt was $202,501 for the three month period ended
June 30, 2009 as compared to $ nil for the three month period ended June 30,
2008. On November 3, 2008, the Company completed a transaction whereby it issued
$6.0 million of 9% convertible debentures (the "Debentures") to six accredited
investors. The Debentures are for a term of three years and are convertible into
shares of the Company's common stock at the option of the holder at any time six
(6) months after the date of issuance of the Debenture by dividing the principal
amount of the Debenture to be converted by $0.25. The Debentures earn interest
at a rate of 9% per annum payable in cash or in shares of the Company's common
stock at the option of the holder. If the Holder elects to receive interest in
shares of common stock, the number of shares of common stock to be issued for
interest shall be determined by dividing accrued interest by $0.25. Subject to
the holder's right to convert, the Company has the right to redeem the
Debentures at a price equal to one hundred and ten percent (110%) multiplied by
the then outstanding principal amount plus unpaid interest to the date of
redemption. Upon maturity, the debenture and interest is payable in cash or
common stock at the option of the Holder. The Debentures contain customary price
adjustment protections. From the proceeds and concurrent with the offering, the
company settled all previously issued promissory notes, the debt holder of the
promissory notes, a shareholder and director of the company agreed to a
subscription of $3,000,000 of Debentures under the offering with the same terms
and conditions as the November 3, 2008 offering.

Interest expense on the notes payable to related party was $nil for the three
month period ended June 30, 2009 as compared to $87,702 for the three month
period ended June 30, 2008. In November 2008, the Company settled all previously
issued promissory notes through a partial repayment of principal and the balance
of principal and interest was converted into a subscription of $3,000,000 of
Debentures under the November 3, 2008 offering.


                                        5
<PAGE>

COMPARISON OF SIX MONTH PERIOD ENDED JUNE 30, 2009 TO SIX MONTH PERIOD ENDED
JUNE 30, 2008

RESULTS OF OPERATIONS

The following management's discussion and analysis of financial condition and
results of operations (MD&A) should be read in conjunction with the MD&A
included in ESW's Annual Report on Forms 10-K, and amendments thereto for the
year ended December 31, 2008.

Revenues for the six month period ended June 30, 2009 increased by $316,200 or
228.3 percent, to $454,686 from $138,486 for the six month period ended June 30,
2008. The increase in revenue is mainly related to sales of ESW's newly
developed products that meet new regulations and increasing customer acceptance.
Sales are for mainly unverified product. In the current period the company
focused its efforts on obtaining verification for its Level III diesel catalyst
products.

Cost of sales as a percentage of revenues for the six month period ended June
30, 2009 was 53.2 percent compared to 75.6 percent for the six month period
ended June 30, 2008. The gross profit for the six month period ended June 30,
2009 was 46.8 percent as compared to a gross margin of 24.4 percent for the six
month period ended June 30, 2008. The improvements in the gross margin are
mainly due to the efforts by ESW to streamline its product installation
capabilities, helped marginally by slightly higher volume orders.

Marketing, office and general expenses for the six month period ended June 30,
2009 decreased by $358,337, or 17.8 percent, to $1,657,356 from $2,015,693 for
the six month period ended June 30, 2008. The decrease is primarily due to a
decrease in Facility of $41,476 as a result of higher sales volumes and higher
overhead costs attributed to sales. Administration salaries and wages were lower
by $259,546 and plant related expenses were lower by $40,365 as support for
ESW's research and development programs declined and a consulting agreement in
the prior year was terminated. Investor relations expense was lower by $32,646.
These decreases were offset by an increase in sales and marketing salaries and
wages and selling expenses by $2,727 and in general and administration cost by
$16,907 mainly due to recruitment expenses for high skill air testing
technicians and increased focus on business development and product marketing
efforts.

Research and development expenses for the six month period ended June 30, 2009
decreased by $197,340, or 23.4 percent, to $646,254 from $843,292 for the six
month period ended June 30, 2008. ESW continues to aggressively pursue the
verification of its newly developed products, the decrease in the cost of
research and development is marginally due to the product development cycle
being completed, ESW has received verification for its ThermaCat(TM) Active
Level III Plus Diesel Particulate Filter off road product and is now focusing on
obtaining regulatory verifications / certifications for its ThermaCat(TM) Active
Level III Plus Diesel Particulate Filter on road and Level I and II products.

Officer's compensation and director's fees for the six month period ended June
30, 2009 increased by $36,079 or 12.2 percent, to $332,391 from $296,312 for the
six month period ended June 30, 2008.

Consulting and professional fees for the six month period ended June 30, 2009
decreased by $27,841 or 30.9 percent, to $62,132 from $89,973 for the six month
period ended June 30, 2008. The decrease is mainly attributed to lower tax and
404 SOX consulting fees offset by an increase in audit fees, in the current
period as compared to the prior year period.

Foreign exchange gain for the six month period ended June 30, 2009 was $23,465
as compared to a gain of $57,446 for the six month period ended June 30, 2008.
This is a result of the fluctuation in the exchange rate of the Canadian Dollar
to the United States Dollar.

Depreciation and amortization expense for the six month period ended June 30,
2009 decreased by $22,497, or 3.9 percent to $547,641 from $570,120 for the six
month period ended June 30, 2008.

Interest expense on long-term debt was $405,000 for the six month period ended
June 30, 2009 as compared to $ nil for the six month period ended June 30, 2008.
On November 3, 2008, the Company completed a transaction whereby it issued $6.0
million of 9% convertible debentures (the "Debentures") to six accredited
investors. The Debentures are for a term of three years and are convertible into
shares of the Company's common stock at the option of the holder at any time six
(6) months after the date of issuance of the Debenture by dividing the principal
amount of the Debenture to be converted by $0.25. The Debentures earn interest
at a rate of 9% per annum payable in cash or in shares of the Company's common
stock at the option of the holder. If the Holder elects to receive interest in
shares of common stock, the number of shares of common stock to be issued for
interest shall be determined by dividing accrued interest by $0.25. Subject to
the holder's right to convert, the Company has the right to redeem the
Debentures at a price equal to one hundred and ten percent (110%) multiplied by
the then outstanding principal amount plus unpaid interest to the date of
redemption. Upon maturity, the debenture and interest is payable in cash or
common stock at the option of the Holder. The Debentures contain customary price
adjustment protections. From the proceeds and concurrent with the offering, the
company settled all previously issued promissory notes, the debt holder of the
promissory notes, a shareholder and director of the company agreed to a
subscription of $3,000,000 of Debentures under the offering with the same terms
and conditions as the November 3, 2008 offering.

Interest expense on the notes payable to related party was $nil for the six
month period ended June 30, 2009 as compared to $161,990 for the six month
period ended June 30, 2008. In November 2008, the Company settled all previously
issued promissory notes through a partial repayment of principal and the balance
of principal and interest was converted into a subscription of $3,000,000 of
Debentures under the November 3, 2008 offering.


                                        6
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

ESW's principal sources of operating capital have been the proceeds from its
various financing transactions; during the six month period ended June 30, 2009,
the Company used $2,378,475 of cash to sustain operating activities as its sales
were low. As of June 30, 2009 and 2008, the Company had cash and cash
equivalents of $350,537 and $154,417 respectively.

Net Cash used in operating activities for the six month period ended June 3,
2009 amounted to $2,378,475. This amount was attributable to the net loss of
$3,423,800, plus non cash expenses such as depreciation, amortization, interest
on long term debt and others of $1,045,359, and a decrease in net operating
assets and liabilities of $34. Net Cash used in operating activities for the six
month period ended June 30, 2008 amounted to $2,824,863. This amount was
attributable to the loss of 3,866,059, plus non cash expenses such as
depreciation, amortization, and others of $808,959, and an increase in net
operating assets and liabilities of $232,237.

Net Cash used in investing activities was $139,120 for the six month period
ended June 30, 2009 as compared to $324,736 for the six month period ended June
30, 2008. The capital expenditures during the first half of 2009 were primarily
dedicated to production tooling required for ESW's new product lines.

Net cash provided by financing activities totalled $610,951 for the six month
period ended June 30, 2009 as compared to $494,260 provided by financing
activities for the six month period ended June 30, 2008. In the current period
$425,000 was provided through the exercise of option, $192,860 was obtained
under ESW`s bank loan and $6,909 repaid under capital lease obligation.

In 2007, ESW's subsidiary, ESW Canada entered into a $2.5 Million revolving
credit facility with Royal Bank of Canada ("RBC"), to finance orders on hand.
This credit line provided ESW with the working capital to complete larger
contracts. Effective September 2, 2008, ESW completed its negotiations with
Royal Bank of Canada and entered into an amendment to the secured commercial
loan agreement. The amended agreement extended the term of the Agreement from
June 30, 2008 through June 30, 2009. In addition to extending the term of the
Agreement, certain financial covenants were also amended. The new agreement
provides for a revolving facility available by way of a series of term loans of
up to $750,000 to finance future production orders. The Credit Facility is
guaranteed by the Company and its subsidiary ESW Canada through the pledge of
their assets to secure RBC. The Credit Facility bears interest at a base rate of
one and a half percentage (1.5%) points above the Canadian prime rate. As this
facility is designed specifically to finance material and labor costs associated
with orders the line is dependent on those open orders. Currently ESW is in
negotiations with RBC for the extension and the size of the facility. The
Company cannot be certain as to the outcome of these negotiations and there is a
possibility that the facility may not be renewed, or that it may be renewed for
a lesser amount. As at June 30, 2009 $270,028 is outstanding and due to RBC
under the Credit Facility. As of December 31, 2008, $77,168 was outstanding and
due to RBC under the Credit Facility.

On November 3, 2008, ESW issued $6.0 million of convertible debentures (the
"Debentures") to six accredited investors under Rule 506 of Regulation D. The
Debentures are for a term of three years and are convertible into shares of the
Company's common stock at the option of the holder at any time six (6) months
after the date of issuance of the Debenture by dividing the principal amount of
the Debentures to be converted by $0.25. ESW used $2.2 Million of the cash to
pay down a previously issued promissory note as well as settling all the other
notes previously issued by the Company. In addition to the $6.0 million, an
additional $3.0 Million of convertible Debt has been issued. Currently ESW has a
principal amount of $9.0 million of Convertible debt at June 30, 2009
($8,953,538 net of deferred costs of $46,462) all at the same terms and
conditions. (See Debt structure for further details.)

Based on ESW's current operating plan, management believes that at June 30, 2009
cash balances, anticipated cash flows from operating activities, and, the
appropriate borrowings from other available financing sources, such as the
issuance of debt or equity securities will be sufficient to meet our working
capital needs on a short-term basis. Overall, capital adequacy is monitored on
an ongoing basis by our management and reviewed quarterly by the Board of
Directors. ESW continues to seek, equity financing and/or debt financing in the
form of private placements at favourable terms, or the exercise of currently
outstanding derivatives that would provide additional capital.

The industry that ESW operates in is capital intensive and there is a timing
issue bringing product to market which is considered normal for this industry.
ESW continues invest in research and development to prove up its technologies
and bring them to the point where its customers have a high confidence level
allowing them to place larger orders. The length of time a customer needs to
build confidence in ESW's technologies cannot be predetermined and as a result,
ESW has sustained operating losses as a result of not generating sufficient
sales to generate a profit from operations. There is no assurance that the
Company will be successful in achieving sufficient cash flow from its current
operations. This indicates a working capital deficiency and a potential concern
about the Company's ability to continue to operate as going concern, ESW's
management believes that the revenues will increase based on ESW`s product
verifications. Certain products, are currently in the verification/certification
stages and ESW believes that these products, will be verified by CARB and EPA
during 2009.


                                        7
<PAGE>

During the first half of 2009 and the fiscal year 2008 ESW did not produce
sufficient cash from operations to support its expenditures; the November 3,
2008 the $6.0 million offering of convertible debentures along with continued
borrowing on ESW's credit facility and the exercise of outstanding derivatives
afforded ESW the opportunity to support its operations and to execute its
business plan. ESW's principal use of liquidity will be to finance any further
capital expenditures needed, to provide working capital availability and to pay
previously issued debt. ESW does not anticipate having any major capital
expenditures in 2009 related to the general operation of its business, however
should the need arise for further tooling or equipment as a result of specific
orders or the introduction of new product lines, ESW would evaluate the need and
make provisions as necessary. ESW does not expect that total capital
expenditures for 2009 will amount to more than $300,000.

Should ESW not be profitable, it will need to finance its operations through
other capital financings. ESW continues to seek, equity financing and/or debt
financing in the form of private placements at favourable terms, or the exercise
of currently outstanding derivatives that would provide additional capital. ESW
also has a good history of receiving capital infusions when needed. However,
such additional financing may not be available to ESW, if and when needed, on
acceptable terms or at all. ESW intends to retain any future earnings to retire
debt, finance the expansion of its business, necessary capital expenditures, and
for general corporate purposes.

ESW's operating profitability requires increased sales coupled with lower
overall cost to manufacture its products and to improve both sales and
administrative productivity through process and system enhancements. This will
be largely dependent on the success of ESW's initiatives to streamline its
infrastructure and drive its operational efficiencies across the Company. ESW's
failure to successfully implement these initiatives, or the failure of such
initiatives to result in improved profit margins, could have a material adverse
effect ESW's liquidity, financial position, and results of operations.

ESW believes the success of its newly developed products will continue to
motivate others to develop similar designs, many of the same functional and
physical characteristics as ESW's product. ESW has patents covering the
technology embodied in its products, and intend to enforce those patents as
appropriate. If ESW is not successful in enforcing its patents, competition from
such products could adversely affect ESW's market share and prices for its
products. Although overall pricing has been stable recently, the average price
of ESW's products may decline in the future. There is no assurance that current
or future products will be able to successfully compete with products developed
by others.

ESW expects an increase in consulting and audit fees related to the impact of
our Sarbanes-Oxley internal control certification efforts, with which we are
required to be in compliance by December 31, 2009.

ESW has 700,000 Class A special shares recorded at $453,900 (based on the
historical exchange rate at the time of issuance.), authorized, issued, and
outstanding. The Class A special shares are issued by ESW's wholly-owned
subsidiary BBL Technologies, Inc. ("BBL") without par value, and are redeemable
on demand by the Holder of the shares which is a private Ontario Corporation at
$700,000 Canadian (which translates to $601,891 at June 30, 2009. As the Class A
special shares are issued by ESW's wholly-owned subsidiary BBL, the maximum
value upon which ESW is liable is the net book value of BBL. At June 30, 2009
BBL had an accumulated deficit and therefore would be unable to redeem the Class
A special shares at their ascribed value.

DEBT STRUCTURE

On November 3, 2008, the Company completed a transaction whereby it issued $6.0
million of 9% convertible debentures to six accredited investors. The Debentures
are for a term of three years and are convertible into shares of the Company's
common stock at the option of the holder at any time six (6) months after the
date of issuance of the Debenture by dividing the principal amount of the
Debenture to be converted by $0.25. The Debentures earn interest at a rate of 9%
per annum payable in cash or in shares of the Company's common stock at the
option of the holder. If the Holder elects to receive interest in shares of
common stock, the number of shares of common stock to be issued for interest
shall be determined by dividing accrued interest by $0.25. Subject to the
holder's right to convert, the Company has the right to redeem the Debentures at
a price equal to one hundred and ten percent (110%) multiplied by the then
outstanding principal amount plus unpaid interest to the date of redemption.
Upon maturity, the debenture and interest is payable in cash or common stock at
the option of the Holder. The Debentures contain customary price adjustment
protections.

From the proceeds, the Company elected to repay $2.2 million, the principal
portion only, of a previously issued Consolidated Note to a company controlled
by a trust to which a director and shareholder of the Company is the
beneficiary. The debt holder has agreed to have the remaining amount of
$433,923, due under the note, to be applied to a subscription to a Debenture
under the November 3, 2008 offering. Concurrently, the Company has agreed to
repay a Consolidated Subordinate Note that it had previously issued to debt
holder who is a director and shareholder of the Company in the principal amount
of $1.02 million. The debt holder has agreed to have the full amount of
principal and accumulated interest, in the amount of $1,158,024 due under the
note, applied to a subscription of a Debenture under the offering. Additionally
the Company's $1.5 million credit facility also provided by the same debt
holder, on which the Company had drawn down the sum of $1,103,000 as of November
3, 2008, was also satisfied by way of issuance of Debentures under the November
3, 2008 offering. With the agreement to settle all the notes previously issued
by the Debt holder is subscribing to an aggregate of $2,566,077 of Debentures
under the offering.


                                        8
<PAGE>

As at June 30, 2009, Convertible Debenture amounted to $8,953,538 net of
deferred costs of $46,462, with corresponding accrued interest of $530,753. As
at December 31, 2008, the new Convertible Debenture amounted to $8,943,851 net
of deferred costs of $56,419, with corresponding accrued interest of $125,753.

In 2007, ESW's subsidiary, ESW Canada entered into a $2.5 Million revolving
credit facility with Royal Bank of Canada ("RBC"), to finance orders on hand.
This credit line provided ESW with the working capital to complete larger
contracts. Effective September 2, 2008, ESW completed its negotiations with
Royal Bank of Canada and entered into an amendment to the secured commercial
loan agreement. The amended agreement extended the term of the Agreement from
June 30, 2008 through June 30, 2009. In addition to extending the term of the
Agreement, certain financial covenants were also amended. The new agreement
provides for a revolving facility available by way of a series of term loans of
up to $750,000 to finance future production orders. The Credit Facility is
guaranteed by the Company and its subsidiary ESW Canada through the pledge of
their assets to secure RBC. The Credit Facility bears interest at a base rate of
one and a half percentage (1.5%) points above the Canadian prime rate. As this
facility is designed specifically to finance material and labor costs associated
with orders the line is dependent on those open orders. Currently ESW is in
negotiations with RBC for the extension and the size of the facility. The
Company cannot be certain as to the outcome of these negotiations and there is a
possibility that the facility may not be renewed, or that it may be renewed for
a lesser amount.

As at June 30, 2009, $270,028 is outstanding and due to RBC under the Credit
Facility. As of December 31, 2008, $ 77,168 was outstanding and due to RBC under
the Credit Facility.

The amount of availability at any time is dependent upon various factors,
including, the amount of open export orders on hand, and the amount of eligible
receivables. The terms relating to the credit agreement specifically note that
at the time of any borrowing under the credit agreement, the Company's
subsidiary ESW Canada Inc. maintain a tangible net worth of at least $1.1
million. The credit agreement contains, among other things, covenants,
representations and warranties and events of default customary for a facility of
this type for both the Company and its subsidiary ESW Canada Inc. Such covenants
include certain restrictions on the incurrence of additional indebtedness,
liens, acquisitions and other investments, mergers, consolidations, liquidations
and dissolutions, sales of assets, dividends and other repurchases in respect of
capital stock, voluntary prepayments of certain other indebtedness, capital
expenditures and transactions with affiliates, subject to certain exceptions.
Under certain conditions amounts outstanding under the credit agreements may be
accelerated. Such events include failure to pay any principal, interest or other
amounts when due, failure to comply with covenants, breach of representations or
warranties in any material respect, non-payment or acceleration of other
material debt, entry of material judgments not covered by insurance, or a change
of control of the Company.

ESW's ability to service our indebtedness in cash will depend on its future
performance, which will be affected by prevailing economic conditions,
financial, business, regulatory and other factors. Certain of these factors are
beyond ESW's control. ESW believes that, based upon its current business plan,
it will be able to meet its debt service obligations when due. Significant
assumptions underlie this belief, including, among other things, that ESW will
be successful in implementing its business strategy, that some of ESW's new
products receive verification from the appropriate regulatory authorities, and
that there will be no material adverse developments in ESW's business, liquidity
or capital requirements. If ESW cannot generate sufficient cash flow from
operations to service its indebtedness and to meet other obligations and
commitments, ESW might be required to refinance its debt or to dispose off
assets to obtain funds for such purpose. There is no assurance that refinancing
or asset dispositions or raising funds from sales of equity or otherwise could
be effected on a timely basis or on satisfactory terms, ESW's ability to pay
principal and interest on its debt would be impaired. In such circumstance, ESW
would have to issue shares of its common stock as repayment of this debt, which
would be of a dilutive nature to ESW's present shareholders.

CONTRACTUAL OBLIGATIONS

LEASES

Effective November 24, 2004, the Company's wholly owned subsidiary ESW America,
Inc. entered into a lease agreement for approximately 40,220 square feet of
leasehold space at 2 Bethlehem Pike Industrial Center, Montgomery Township,
Pennsylvania. The leasehold space houses the Company's research and development
facilities. The lease commenced on January 15, 2005 and expires January 31,
2010. Under the terms of the lease agreement the Company has the option to
extend the lease for an additional period of five years.

Effective December 20, 2004, the Company's wholly owned subsidiary ESW Canada,
Inc. entered into an offer to Lease agreement for approximately 50,000 square
feet of leasehold space in Concord Ontario Canada. The leasehold space houses
the Company's executive offices and a high volume manufacturing plant. The
possession of the leasehold space took place on May 24, 2005 and the term of the
lease will run for a period of five (5) years from the commencement date of July
15, 2005.


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<PAGE>

The following breakdown is the total, of the minimum annual lease payments, for
both leases.

                              YEAR                 $
                              2009             $225,915
                              2010             $150,503

CAPITAL LEASE OBLIGATION

The Company is committed to the following lease payments in connection with the
acquisition of capital assets under capital leases:

                                           YEAR             $
                                           2009           10,317
                                           2010           12,180
                                           2011            2,662
                                           2012            1,109
                                                         -------
                                           TOTAL         $26,268

               Less imputed interest                      (2,171)
                                                         -------
               Total obligation under capital lease      $24,097

               Less current portion                      (10,286)
                                                         -------
               TOTAL LONG-TERM PORTION                   $13,811
                                                         =======

The Company has incurred $3,162 interest expense on capital leases for the six
month period ended June 30, 2009.

NEW ACCOUNTING PRONOUNCEMENTS

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"). SFAS 161 changes the disclosure requirements for derivative
instruments and hedging activities. Entities are required to provide enhanced
disclosures about (1) how and why an entity uses derivative instruments, (2) how
derivative instruments and related hedged items are accounted for under SFAS
No.133, Accounting for Derivative Instruments and Hedging Activities ("SFAS
133"), and its related interpretations, and (3) how derivative instruments and
related hedged items affect an entity's financial position, financial
performance, and cash flows. SFAS 161 is effective for fiscal years beginning
after November 15, 2008. The Company is required to adopt SFAS 161 on January 1,
2009. The Company currently does not have any derivative financial instruments
subject to accounting or disclosure under SFAS 133; therefore, the adoption of
statement SFAS 161 does not have a significant effect on the Company's
consolidated statement of financial position, results of operations or cash
flows.

In May 2008, the FASB issued SFAS No. 162, "The Hierarchy of Generally Accepted
Accounting Principles". The new standard is intended to improve financial
reporting by identifying a consistent framework, or hierarchy, for selecting
accounting principles to be used in preparing financial statements that are
presented in conformity with U.S. generally accepted accounting principles
(GAAP) for nongovernmental entities. SFAS 162 became effective November 15,
2008. Adoption of SFAS 162 is does not have a significant impact on ESW's
results of operations or financial position.

In May 2008, the FASB issued Staff Position ("FSP") APB 14-1, "Accounting for
Convertible Debt Instruments That May Be Settled in Cash upon Conversion
(Including Partial Cash Settlements)." This FSP requires a portion of this type
of convertible debt to be recorded as equity and to record interest expense on
the debt portion at a rate that would have been charged on nonconvertible debt
with the same terms. This FSP takes effect in the first quarter of fiscal years
beginning after December 15, 2008 and will be applied retrospectively for all
periods presented. It is effective for the Company starting January 1, 2009. The
Company has evaluated the impact of FSP APB 14-1 on its financial statements,
and the adoption of this statement does not have a significant effect on the
Company's financial statements.

In June 2008, the FASB issued FSP EITF 03-6-1, "Determining Whether Instruments
Granted in Share-Based Payment Transactions Are Participating Securities."
Securities participating in dividends with common stock according to a formula
are participating securities. This FSP determined that unvested shares of
restricted stock and stock units with nonforfeitable rights to dividends are
participating securities. Participating securities require the "two-class"
method to be used to calculate basic earnings per share. This method lowers
basic earnings per common share. This FSP takes effect in the first quarter of
fiscal years beginning after December 15, 2008 and will be applied
retrospectively for all periods presented. It will be effective for the Company
on January 1, 2009. The adoption of FSP EITF 03-6-1 does not have a significant
effect on the Company's consolidated financial statements.


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<PAGE>

In June 2008, the FASB ratified the consensus reached on EITF Issue No. 07-05,
"Determining Whether an Instrument (or Embedded Feature) Is Indexed to an
Entity's Own Stock" ("EITF No. 07-05"). EITF No. 07-05 clarifies the
determination of whether an instrument (or an embedded feature) is indexed to an
entity's own stock, which would qualify as a scope exception under SFAS No. 133,
Accounting for Derivative Instruments and Hedging Activities. EITF No. 07-05 is
effective for financial statements issued for fiscal years beginning after
December 15, 2008. It will be effective for the Company on January 1, 2009.
Early adoption for an existing instrument is not permitted. The adoption of EITF
No. 07-05 does not have a significant effect on the company's consolidated
financial statements.

In May 2009, the FASB issued SFAS No. 165, SUBSEQUENT EVENTS ("SFAS 165"). This
Statement is intended to establish general standards of accounting for and
disclosure of events that occur after the balance sheet date but before
financial statements are issued or are available to be issued. It requires the
disclosure of the date through which an entity has evaluated subsequent events
and the basis for that date, that is, whether that date represents the date the
financial statements were issued or were available to be issued. This disclosure
should alert all users of financial statements that an entity has not evaluated
subsequent events after that date in the set of financial statements being
presented. SFAS 165 is effective for interim and annual periods ending after
June 15, 2009. The adoption of SFAS 165 had no significant effect on the
Company's financial condition or consolidated results of operations.

In June 2009, the FASB issued SFAS No. 166, Accounting for Transfer of Financial
Assets - an amendment of FASB Statement No. 140 ("SFAS 166"). This Statement
requires that a transferor recognize and initially measure at fair value all
assets obtained (including a transferor's beneficial interest) and liabilities
incurred as a result of a transfer of financial assets accounted for as a sale.
This Statement must be applied as of the beginning of each reporting entity's
first annual reporting period that begins after November 15, 2009. We are
currently assessing the impact, if any, of SFAS 166 on our consolidated
financial statements.

In June 2009, the FASB issued SFAS No. 167, AMENDMENTS TO FASB INTERPRETATION
NO.46(R) ("SFAS 167"). This Statement amends certain guidance in Interpretation
46(R) for determining whether an entity is a variable interest entity. This
Statement amends Interpretation 46(R) to require enhanced disclosures that will
provide users of financial statements with more transparent information about an
enterprise's involvement in a variable interest entity. This Statement shall be
effective as of the beginning of each reporting entity's first annual reporting
period that begins after November 15, 2009. We are currently assessing the
impact, if any, of SFAS 167 on our consolidated financial statements.

In June 2009, the FASB issued SFAS No. 168, The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting Principles - a
replacement of FASB Statement No.162 ("SFAS 168"). The FASB ACCOUNTING STANDARDS
CODIFICATIONTM (Codification) will become the source of authoritative U.S.
generally accepted accounting principles (GAAP) recognized by the FASB to be
applied by nongovernmental entities. This Statement is effective for financial
statements issued for interim and annual periods ending after September 15,
2009.

SIGNIFICANT ACCOUNTING POLICIES AND ESTIMATES

ESW's significant accounting policies are summarized in Note 2 to the
Consolidated Financial Statements included in its 2008 Annual Report to
Shareholders. In preparing the financial statements, we make estimates and
assumptions that affect the expected amounts of assets and liabilities and
disclosure of contingent assets and liabilities. We apply our accounting
policies on a consistent basis. As circumstances change, they are considered in
our estimates and judgments, and future changes in circumstances could result in
changes in amounts at which assets and liabilities are recorded.

FOREIGN CURRENCY TRANSACTIONS

The results of operations and the financial position of ESW's operations in
Canada is principally measured in Canadian currency and translated into U.S.
dollars. The future effects of foreign currency fluctuations between U.S.
dollars and Canadian dollars will be somewhat mitigated by the fact that certain
expenses will be generally incurred in the same currency in which revenues will
be generated. The future reported income of ESW's Canadian subsidiary would be
higher or lower depending on a weakening or strengthening of the U.S. dollar
against the Canadian currency. During the second quarter of 2009, the Company
experienced a net loss on foreign exchange due the weakening of the U.S. Dollar
against the Canadian dollar.

A portion of ESW's assets are based in its foreign operation and are translated
into U.S. dollars at foreign currency exchange rates in effect as of the end of
each period, Accordingly, ESW's consolidated stockholders' investment will
fluctuate depending upon the weakening or strengthening of the Canadian currency
against the U.S. dollar.

Adjustments resulting from ESW's foreign Subsidiaries' financial statements are
included as a component of other comprehensive income within stockholders equity
because the functional currency of subsidiaries is non-USD.


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<PAGE>

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ESW is exposed to financial market risks, including changes in currency exchange
rates and interest rates. The Company also has foreign currency exposures at its
foreign operations related to buying and selling currencies other than the local
currencies. The risk under these interest rate and foreign currency exchange
agreement is not considered to be significant.

FOREIGN EXCHANGE RISK

ESW's foreign subsidiaries conduct their businesses in local currency pre
dominantly the Canadian Dollar. ESW's exposure to foreign currency transaction
gains and losses is the result of certain net receivables due from its foreign
subsidiaries. ESW's exposure to foreign currency translation gains and losses
also arises from the translation of the assets and liabilities of its
subsidiaries to U.S. dollars during consolidation. ESW recognized a translation
gain of $112,562 for the six month period ended June 30, 2009 reported in the
Consolidated Statements of Changes in Stockholders' Equity (Deficit) primarily
as a result of the exchange rates differences between the U.S. dollar against
the Canadian Dollar.

ESW's strategy for management of currency risk relies primarily upon conducting
its operations in the countries' respective currency and ESW may, from time to
time, engage in hedging intended to reduce its exposure to currency
fluctuations. At June 30, 2009, ESW had no outstanding forward exchange
contracts.

INTEREST RATE RISK

ESW invests in highly liquid investments purchased with an original or remaining
maturity of three months or less at the date of purchase. These investments are
fixed rate investments. Investments in fixed rate interest earning products
carry a degree of interest rate risk. Fixed rate securities may have their fair
market value adversely impacted due to a rise in interest rates. However due to
the limited amount of investment in such securities and their terms restricted
to three months or less, ESW does not expect the impact on these investments to
be material. At June 30, 2009, ESW had nil investments.

The interest payable on one of ESW`s subsidiaries bank loan is based on variable
interest rates and therefore affected by changes in market interest rates. The
Canadian prime business interest rates have decreased over the last two years.
Falling interest rates have positively impacted interest expense. Due to the
short term nature of these loans the impact of changing interest rates is not
considered significant.

ESW currently has no variable-rate, long-term debt that exposes ESW to interest
rate risk. As of June 30, 2009, ESW has principal $9 million of convertible
debentures with a fixed interest rate of 9%. Generally, the fair market value of
ESW`s fixed interest rate convertible debentures will increase as interest rates
fall and decrease as interest rates rise. As at June 30, 2009, Convertible
Debenture amounted to $8,953,538 net of deferred costs of $46,462.


                                       12
<PAGE>

ITEM 4. CONTROLS AND PROCEDURES

(a) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURE

EVALUATION OF THE COMPANY'S DISCLOSURE AND INTERNAL CONTROLS

The Company evaluated the effectiveness of the design and operation of its
"disclosure controls and procedures" as of the end of the period covered by this
report. This evaluation was done with the participation of management, under the
supervision of the Chief Executive Officer ("CEO") and Chief Accounting Officer
("CAO").

LIMITATIONS ON THE EFFECTIVENESS OF CONTROLS

A control system, no matter how well conceived and operated, can provide only
reasonable, not absolute, assurance that the objectives of the control system
are met. Further, the design of a control system must reflect the fact that
there are resource constraints, and the benefits of controls must be considered
relative to their costs. Because of the inherent limitations in all control
systems, no evaluation of controls can provide absolute assurance that all
control issues and instances of fraud, if any, within the Company have been
detected. These inherent limitations include the realities that judgments in
decision-making can be faulty, and that breakdowns can occur because of simple
error or mistake. Additionally, controls can be circumvented by the individual
acts of some persons, by collusion of two or more people, or by management
override of the control. The design of any system of controls also is based in
part upon certain assumptions about the likelihood of future events, and there
can be no assurance that any design will succeed in achieving its stated goals
under all potential future conditions; over time, control may become inadequate
because of changes in conditions, or the degree of compliance with the policies
or procedures may deteriorate. Because of the inherent limitations in a cost
effective control system, misstatements due to error or fraud may occur and not
be detected. The Company conducts periodic evaluations of its internal controls
to enhance, where necessary, its procedures and controls.

CONCLUSIONS

Based on our evaluation, the CEO and CAO concluded that the registrant's
disclosures, controls and procedures are effective to ensure that information
required to be disclosed in reports that it files or submits under the Exchange
Act is recorded, processed, summarized and reported within the time periods
specified in the Security Exchange Commission rules and forms.

(b) CHANGES IN INTERNAL CONTROLS

Not applicable.


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<PAGE>

                            PART II OTHER INFORMATION

ITEM 1A. RISK FACTORS.

In evaluating an investment in our common stock, investors should consider
carefully, among other things, the risk factors previously disclosed in Part I,
Item 1 of our Annual Report to the Securities and Exchange Commission for the
year ended December 31, 2008, as well as the information contained in this
Quarterly Report and our other reports and registration statements filed with
the Securities and Exchange Commission. There has been no material changes in
the risk factors as previously disclosed under "Risk Factors" in Part I, Item 1
of our Annual Report to the Securities and Exchange Commission for the year
ended December 31, 2008.

ITEM 5. OTHER INFORMATION

On August 10, 2009, ESW announced that its wholly owned subsidiary ESW Canada
Inc. has received notification from the California Air Resources Board (CARB)
that the Company's ThermaCat(TM) Active Level III Diesel Particulate Filter has
been approved for On-road applications for 1993 through 2006 model year On-Road
vehicle applications powered by 5 to 10 liter diesel engines.

On August 11, 2009 the company entered into an unsecured subordinated demand
short term loan agreement with a Director who is also a Shareholder of the
Company. As per the terms of the agreement, the Company received a short term
loan of $300,000 for general business purposes. The loan accrues interest at a
rate of 9% per annum and is payable on demand by the Lender. The Company has the
option to prepay the loan at anytime without penalty. Prior to prepayment
request by the Company, the Lender has the option to convert the loan principal
and accrued interest into a new debenture or private placement offering made by
the Company in the future.

ITEM 6. EXHIBITS

EXHIBITS:

31.1 Certification of Chief Executive Officer and President pursuant to the
Sarbanes-Oxley Act of 2002.

31.2 Certification of Chief Accounting Officer, pursuant to the Sarbanes-Oxley
Act of 2002.

32.1 Certification pursuant to 18 U.S.C. Section 1350, as amended pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.

32.2 Certification pursuant to 18 U.S.C. Section 1350, as amended pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.


                                       14
<PAGE>

                                    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.

DATED: August 13, 2009
Concord, Ontario Canada

                        ENVIRONMENTAL SOLUTIONS WORLDWIDE, INC.

                        BY: /S/ DAVID J. JOHNSON
                            --------------------
                            DAVID J. JOHNSON
                            CHIEF EXECUTIVE OFFICER AND PRESIDENT


                                       15