ENVIRONMENTAL SOLUTIONS
                                 WORLDWIDE, INC.



                               FILING TYPE:  10QSB
                               DESCRIPTION:  QUARTERLY REPORT
                               FILING DATE:  Aug 14, 2001
                               PERIOD END:   June 30, 2001


                PRIMARY EXCHANGE: OVER THE COUNTER BULLETIN BOARD
                                  TICKER: ESWW











                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

                                   FORM 10-QSB

[x]  Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934 for the quarterly period ended - June 30, 2001.

[    ] Transition report pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934 for the transition period from ______________ to
     _______________.


                        Commission file number 000-30392

                     ENVIRONMENTAL SOLUTIONS WORLDWIDE, INC.
                     ---------------------------------------
               (Exact name of Company as specified in its charter)


                           250 Shields Court, Unit #3
                                Markham, Ontario
                                 Canada L3R 9W7
        ----------------------------------------------------------------
                         (Address of principal executive offices, including
                        postal code.)

             Florida                                          98-0346454
---------------------------------------                 -----------------------
State or other jurisdiction of                             (I.R.S. Employer
incorporation or organization                              Identification No.)


                                 (905) 947-9923
                                 --------------
                (Issuer's telephone number, including area code)



Indicate by check mark whether the issuer (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities 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 [ ]

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:

             TITLE OF EACH CLASS                     OUTSTANDING July 31, 2001
             -------------------                     -----------------------
        Common Stock,  par value $.001                     33,554,874

Transactional Small Business Disclosure Format (check one)  YES [  ]   NO [ x ]



<PAGE>



                     ENVIRONMENTAL SOLUTIONS WORLDWIDE, INC.



                                      INDEX


PART I               FINANCIAL INFORMATION                          PAGE NUMBER

Item 1.    Financial Statements

                Consolidated Balance Sheet as of June 30, 2001          2

                Consolidated Statements of Operations for the
                   Six Months Ended June 30, 2001 and 2000              3

                Consolidated Statement of Changes in
                   Stockholders' Equity For the Six Months ended
                   June 30, 2001                                        4

                Consolidated Statements of Cash Flows for the
                   Six Months Ended June 30, 2001 and 2000              5

                Notes to Financial Satements                            6-8

Item 2.    Management's Discussion and Analysis or Plan of Operations   9


PART II    OTHER INFORMATION

Item 1.    Legal Proceedings                                            14

Item 2.    Changes in Securities                                        14

Item 3.    Defaults Upon Senior Securities                              14

Item 4.    Submission of Matters to a Vote of Security Holders          14

Item 5.    Other Information                                            14

Item 6.    Exhibits and Reports                                         14



<PAGE>



<TABLE>
<CAPTION>

PART I

ENVIRONMENTAL SOLUTIONS WORLDWIDE INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
----------------------------------------------------------------------------------

                                                        JUNE 30,    DECEMBER 31,
                                                          2001         2000
----------------------------------------------------------------------------------


ASSETS

CURRENT ASSETS
<S>                                                    <C>            <C>
   Cash and cash equivalents                           $    54,389    $   673,776
   Accounts receivable                                      91,760           --
   Inventory                                               156,851           --
    Prepaid expenses                                        88,232        221,772
   Other current  assets                                    47,300         25,585
----------------------------------------------------------------------------------

TOTAL CURRENT ASSETS                                       438,532        921,133
----------------------------------------------------------------------------------

PROPERTY AND EQUIPMENT, NET                                593,551         43,465

CONTRACT DEPOSIT                                              --          100,000

PATENTS AND TRADEMARKS, NET                              2,035,040         43,521
----------------------------------------------------------------------------------

TOTAL ASSETS                                           $ 3,067,123    $ 1,108,119

----------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
   Accounts payable and accrued liabilities            $   400,282    $   123,016
   Officer's allowance payable                             195,500        144,500
   Demand note payable, shareholders                        85,000           --
   Demand note payable, officer                             40,000         40,000
   Demand note payable, other                              120,000           --
   Notes payable, shareholders due January 10, 2002        100,000           --

----------------------------------------------------------------------------------

TOTAL CURRENT LIABILITIES                                  940,582        307,516
----------------------------------------------------------------------------------

Class A special shares, no par value, 700,000 shares       453,900        453,900
        Authorized, issued and outstanding
----------------------------------------------------------------------------------

STOCKHOLDERS' EQUITY:

Common stock, $.001 par value,
        50,000,000 shares authorized;
        33,904,874 - 2001, 29,114,401 - 2000
        shares issued and outstanding                       33,905         30,985
Additional paid-in-capital                               8,218,181      5,572,544

ACCUMULATED DEFICIT                                     (6,579,445)    (5,256,826)
----------------------------------------------------------------------------------

TOTAL STOCKHOLDERS' EQUITY                             $ 1,672,641    $   346,703
----------------------------------------------------------------------------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY             $ 3,067,123    $ 1,108,119
----------------------------------------------------------------------------------
</TABLE>





THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.

                                       2


<PAGE>
<TABLE>
<CAPTION>


ENVIRONMENTAL SOLUTIONS WORLDWIDE INC.
CONSOLIDATED  STATEMENTS OF OPERATIONS
(UNAUDITED)

----------------------------------------------------------------------------------------------------

                                             SIX MONTHS    SIX MONTHS   THREE MONTHS   THREE MONTHS
                                               ENDED         ENDED         ENDED          ENDED
                                              JUN. 30,     JUN. 30,      JUN. 30,        JUN. 30,
                                               2001         2000           2001           2000
----------------------------------------------------------------------------------------------------

<S>                                      <C>               <C>             <C>          <C>
SALES                                    $       272,832   $      --       $ 173,819    $     --

COST OF SALES                                    139,208          --          80,574           --
----------------------------------------------------------------------------------------------------

GROSS PROFIT                                     133,624          --          93,245           --
----------------------------------------------------------------------------------------------------
RESEARCH AND DEVELOPMENT                          75,028        584,256       22,096        222,043

PROFESSIONAL FEES                                 83,478        128,027       61,807         18,146

CONSULTING FEES                                  517,028         88,483       71,947         61,772

MARKETING, OFFICE & GENERAL COSTS                902,460        199,283      456,524        166,050

OFFICER'S COMPENSATION AND DIRECTOR'S FEES         9,150         14,587        9,150         14,587
----------------------------------------------------------------------------------------------------

                                               1,587,144      1,014,636      621,524        482,598
----------------------------------------------------------------------------------------------------

NET LOSS FROM OPERATIONS                     $(1,453,520)   $(1,014,636)   $  (528,279)   $  (482,598)

----------------------------------------------------------------------------------------------------
OTHER INCOME                                     130,901           --          130,901           --
----------------------------------------------------------------------------------------------------

NET LOSS                                     $(1,322,619)   $(1,014,636)    $ (397,378)    $ (482,598)
----------------------------------------------------------------------------------------------------


   Basic  and diluted loss per share         $     (0.04)   $     (0.04)   $     (0.01)   $     (0.02)
----------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------
</TABLE>


THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.



                                       3



<PAGE>
<TABLE>
<CAPTION>


ENVIRONMENTAL SOLUTIONS WORLDWIDE INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2001
(UNAUDITED)
-----------------------------------------------------------------------------------------------------------



                                      COMMON        SHARE        PAID-IN
          ACTIVITY                    STOCK         VALUE        CAPITAL       DEFICIT          TOTAL
-----------------------------------------------------------------------------------------------------------


<S>                                <C>          <C>           <C>           <C>            <C>
JANUARY 1, 2001                     30,984,874   $    30,985   $ 5,572,544   $(5,256,826)   $   346,703

Issuance of shares on
   purchase of assets                2,000,000         2,000     2,050,450          --        2,052,450

Options and warrants issued for
   services                            550,000           550       414,557          --          415,107

Issuance of shares upon exercise

Exercise of options                     20,000            20        19,980          --           20,000

Conversion of debt into equity         350,000           350       160,650          --          161,000

Loss from operations for the
   six month period ended
    June 30, 2001                         --            --            --      (1,322,619)    (1,322,619)
-----------------------------------------------------------------------------------------------------------

JUNE 30, 2001                       33,904,874   $    33,905   $ 8,218,181   $(6,579,445)   $ 1,672,641
-----------------------------------------------------------------------------------------------------------

</TABLE>


THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.


                                       4


<PAGE>
<TABLE>
<CAPTION>


ENVIRONMENTAL SOLUTIONS WORLDWIDE INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX -MONTH PERIOD ENDED JUNE 30, 2001
(UNAUDITED)

--------------------------------------------------------------------------------

                                      SIX MONTH       SIX MONTH
                                     PERIOD ENDED    PERIOD ENDED
                                     JUN. 30, 2001   JUN. 30, 2000
--------------------------------------------------------------------------------


<S>                                      <C>            <C>
Cash Flows From Operating Activities:

Net loss                                 $(1,322,619)   $(1,014,636)

Adjustment to reconcile net loss to
   net cash provided by (used in)
    operating activities:
   Depreciation expense                      166,853          2,478
   Non Cash Compensation and Services        372,607        205,121
--------------------------------------------------------------------------------
                                            (783,159)      (807,037)
Changes in assets and liabilities:
   Changes in non-cash working capital       140,280         (9,978)
--------------------------------------------------------------------------------

Net cash provided by (used in)
   operating activities                     (642,879)      (817,015)
--------------------------------------------------------------------------------

Investing activities:
   Acquisition property & equipment         (501,894)       (25,372)
   Contract deposit                          100,000           --
   Patents & trademarks                      (54,114)       (33,474)
--------------------------------------------------------------------------------

Net cash provided by (used in)
   investing activities                     (456,008)       (58,846)
--------------------------------------------------------------------------------

Financing activities:
   Note payable, other                       120,000        (18,567)
   Issuance of common stock                  223,500      1,000,390
   Officer's note, shareholder and
      advances payable                       136,000           --
--------------------------------------------------------------------------------
   Net cash provided by financing
   activities                                479,500        981,823
--------------------------------------------------------------------------------
Net increase (decrease) in cash             (619,387)       105,962

CASH AT BEGINNING OF PERIOD                  673,776         21,277
--------------------------------------------------------------------------------

Cash at end of period                    $    54,389    $   127,239
--------------------------------------------------------------------------------


SUPPLEMENTAL DISCLOSURES:

Non-cash investing and financing activities

   Purchase of Assets and Technology

   - Common stock                         $2,052,450
   - Note payable                           $100,000

</TABLE>


THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.


                                       5


<PAGE>



ENVIRONMENTAL SOLUTIONS WORLDWIDE INC.
NOTES TO  CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)


1.    NATURE OF BUSINESS AND BASIS OF PRESENTATION

      The condensed financial statements included herein have been prepared by
      the Company, without audit, pursuant to the rules and regulations of the
      Securities and Exchange Commission. Certain information and footnote
      disclosures normally included in financial statements prepared in
      accordance with generally accepted accounting principles have been
      condensed or omitted pursuant to such rules and regulations. However, the
      Company believes that the disclosures are adequate to make the information
      presented not misleading. The condensed consolidated financial statements
      should be read in conjunction with the financial statements and notes
      thereto included in the Company's annual report on Form 10KSB for the year
      ended December 31, 2000 filed by the Company on April 16, 2001.

      The condensed consolidated financial statements included herein reflect,
      in the opinion of management, all adjustments (consisting primarily only
      of normal recurring adjustments) necessary to present fairly the results
      for the interim periods. The results of operations for the six months
      ended June 30, 2001 and for the three months ended June 30, 2001 are not
      necessarily indicative of results to be expected for the entire year
      ending December 31, 2001.

      The Company was incorporated in the state of Florida and was inactive
      until January 29, 1999 when it acquired 100% of the issued and outstanding
      common shares of BBL Technologies Inc. ("BBL"), a private Ontario, Canada
      corporation. On February 19, 1999 the Company changed its name to
      Environmental Solutions Worldwide, Inc. ("the Company, or "ESW"). On
      January 11, 2001, the Company purchase certain assets and established a
      manufacturing facility in Telford, Pennsylvania. (See Note 2).

      The accompanying consolidated financial statements have been prepared in
      conformity with generally accepted accounting principles which contemplate
      continuation of the company as a going concern. The company, however, has
      sustained continuing operating losses and lacks a 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 level of
      profitable operations.

      Management believes that the current business plan if successfully
      implemented may provide the opportunity for the Company to continue as a
      going concern.

2.    PURCHASE OF ASSETS

      On January 11, 2001, the Company acquired equipment and technology
      (including a patent and patents pending) from an unrelated third party.
      Through this purchase the Company expects to bring its product to market.
      The Company paid $400,000 in cash, $100,000 in notes, incurred
      approximately $43,035 in closing costs and issued 2,000,000 shares of
      Company common stock valued at $.6875 per share plus contingent options
      valued at $.6775 per share to purchase up to an additional one million
      shares exercisable at $0.01 to the sellers.

      The purchase price was allocated as follows:

                            Equipment                               $    500,000
                            Patents and technology                     2,093,035
                                                                    ------------

                                                                     $ 2,593,035
                                                                    ============


                                       6


<PAGE>



ENVIRONMENTAL SOLUTIONS WORLDWIDE INC.
NOTES TO  CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)


3.    OTHER INCOME

      During the three month period ending June 30, 2001, the Company was able
      to recover $130,901 of certain abandoned research and development costs
      through the sale of such costs.

4.    ISSUANCE OF COMMON STOCK

      On January 11, 2001, the Company issued 2,000,000 shares of Company common
      stock valued at $.6875 per share plus contingent options valued at $.6775
      per share to purchase up to an additional one million shares exercisable
      at $0.01 per share to Mr. Robert Marino and Duane Gulick in connection the
      purchase of certain assets. (Note 2)

      During the six month period ending June 30, 2001 a debt of $161,000 was
      converted into 350,000 shares of the Company. These shares are to be
      issued subsequent to the period ended June 30, 2001.

5.    STOCK OPTIONS AND WARRANT GRANTS

      A former director exercised 20,000 options at $1.00 per share during the
      three-month period ending March 31, 2001.

      On January 2, 2001 the board of directors authorized the granting of
      50,000 options exercisable at $0.75 per share to a consultant and expire
      on January 2, 2002. The options were exercised on January 22, 2001.

      On January 11, 2001, the Company entered into two separate management
      consulting agreements. Both agreements run for three years and provide for
      annual fees of $75,000 and $50,000, respectively. In addition, the
      agreements provide for stock options allowing each consultant to acquire
      500,000 shares of common stock exercisable at $0.01 per share during the
      first year. As of March 26, 2001, each consultant has exercised their
      options for 250,000 shares. The issuance of these shares was recorded as
      compensation expense.

      On April 18, 2001 the Company issued 250,000 options exercisable at $0.50
      per share and expire April 18, 2004 to an employee.

      On May 4, 2001 the Company issued 250,000 options exercisable at $0.50 per
      share and expire May 4, 2004 to an employee.

      On May 30, 2001 the Company issued 100,000 options exercisable at $0.50
      per share and expire May 30, 2004 to an employee.

      On April 18, 2001 and May 30, 2001 the Company issued 250,000 and 100,000
      options, respectively to the chairman of the board. The options expire
      three years from the date of issuance and are exercisable at $0.50 per
      share. The issuance of these options was recorded as a compensation
      expense.

6.    RELATED PARTY TRANSACTIONS

      The chairman of the Company is due the sum of $195,500 (December 31, 2000
      - $144,500) for business travel expenses. The amounts expensed in office,
      travel, and other costs were $51,000 and $ 51,000, respectively, for the
      six months ended June 30, 2001 and 2000. This same individual advanced
      $40,000 by way of a note payable which is due on demand. (December 31,
      2000 - $40,000).

      Shareholders of the Company advanced $85,000 (December 31, 2000 - $0)
      which is due on demand.

      During the six month period ended June 30, 2001 and 2000, the Company paid
      shareholders and their affiliates $ $208,846 and $ 0, respectively for
      various services rendered.



                                       7


<PAGE>

ENVIRONMENTAL SOLUTIONS WORLDWIDE INC.
NOTES TO  CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)


7.    CONTINGENCY

      REGULATORY MATTERS

      The Company has been notified by staff of the Security and Exchange
      Commission's (Commission) Fort Worth District Office that they intend to
      recommend that the Commission institute an enforcement action against the
      Company and its Chairman based on alleged false and misleading statements
      contained in press releases and filings made with the Commission. The
      Commission further alleged that the Company distributed 15,000,000 shares
      of its common stock based upon an inapplicable exemption under the
      Securities Act. The Company and its Chairman have voluntarily provided
      information to the Commission in this matter and the Company's new
      management intends to continue to co-operate with the Commission in the
      event formal changes are made against the Company in an effort to resolve
      any and all claims in the best interest of the Company and its
      shareholders. The Company cannot estimate the effect, if any, on the
      Company's financial statements or the ultimate resolution of these
      matters.









                                       8


<PAGE>



ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

The following discussion should be read in conjunction with the Company's
Financial Statements and Notes thereto included elsewhere in this Form 10-QSB.

This Form 10-QSB contains certain forward-looking statements regarding, among
other things, the anticipated financial and operating results of the Company.
Investors are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. The Company 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, the Company cautions investors that actual
financial and operating results may differ materially from those projected in
forward-looking statements made by, or on behalf of, the Company. Such
forward-looking statements involve known and unknown risks, uncertainties, and
other factors that may cause the actual results, performance, or achievements of
the Company to be materially different from any future results, performance, or
achievements expressed or implied by such forward-looking statements.

GENERAL

At the end of December 2000, the Company was still a development stage
enterprise. We had not generated any revenues from operations during the last
two Fiscal years. Accordingly, there are no meaningful comparisons with
operating results from prior periods.

In the last two quarters, we began to generate revenues by initiating sales of
our catalytic products and testing services. Sales for the three months ended
June 30, 2001, were $173,819. A 74% increase over the previous quarter.

In the fourth quarter of 2000, we engaged the services of Applied Diesel
Technology ("ADT"), a manufacturing and research and development operation
located in Telford Pennsylvania to begin producing additional prototypes for
further testing and refinement. A letter of intent was offered to the principals
of ADT to acquire controlling interest in their company. At that time, we began
to merge our research and development, together with ADT. Towards the latter
part of the fourth quarter of 2000, the business arrangement was changed whereby
we made an offer to acquire the assets of ADT including ADT's intellectual
properties. This offer was accepted on January 3, 2001 and the asset purchase
subsequently closed on January 11, 2001.

We value our purchase of the ADT assets at $2,593,035. In consideration of the
asset purchase, we paid $400,000 in cash, and we issued $100,000 in promissory
notes and issued 2,000,000 shares valued at $0.6875 per share or $1,375,000; and
issued contingent $0.01 options on 1,000,000 shares valued at $0.6775 or
$677,500 to the principals of ADT. In addition, we incurred $40,535 in closing
costs which have been allocated to the cost of the acquisition. The purchase
price of the ADT assets has been allocated as follows: equipment - $500,000;
patents and technology - $2,093,535.


                                       9


<PAGE>


On January 11, 2001, we entered into two consulting agreements with the
principals of ADT. Both agreements run for three years and provide for annual
fees of $75,000 and $50,000, respectively. In addition, as stated above, as
part of our purchase of assets, the agreements provide for stock options
allowing each consultant to acquire up to 500,000 shares of common stock
exercisable at $0.01 per share during the first year. As of March 26, 2001, the
consultants have exercised options for 250,000 shares respectively. The issuance
of these shares was recorded as compensation expense.

We intend to use the newly purchased assets as a platform for further testing,
developing and manufacturing activities. We believe that our research and
development costs will decrease this year as a result of our ability to do a
major portion of testing in house.


In March of 2001,the Company formed three wholly owned subsidiaries, ESW
America, Inc., (a Delaware Corporation) ESW Canada, Inc. (an Ontario
Corporation) and ESW Technologies Inc. (a Delaware Corporation). Effective April
1 2001, the Company transferred certain assets to these subsidiary corporations
in exchange for all of the issued and outstanding shares of stock in each
corporation as well as receiving a secured, interest bearing demand notes as
consideration for the transfer of assets to the wholly owned corporations. These
subsidiaries will serve as operating entities for the Company's day-to-day
business operations.

Environmental Solutions Worldwide, Inc., is a holding company with its primary
operations and assets being its investments in its wholly owned subsidiaries.
Effective April 1, 2001 the parent company transferred its assets acquired from
the ADT acquisition into its subsidiary ESW America, Inc. This entity will
continue to sell and service the Company's products. The patent and patent
pending technology was transferred to ESW Technologies, Inc. These subsidiaries
will act as the Company's operating vehicles to conduct our daily business.


During the second quarter, the Company launched two new product lines, an
industrial duty converter line called Air Sentinel(TM) and a small utility
engine catalyst/muffler called Quiet Cat(TM). The Company believes that over the
next few years the demand for diesel particulate controls will intensify.
Additionally, small utility engines have come under stringent government
regulations for emission controls. We anticipate that these products will
represent a growing and important portion of the Company's future business
plans.




                                       10


<PAGE>


We initiated ISO 9001;2000 procedures late in the fourth quarter last year,
which was subsequently achieved on March 28, 2001. The achievement of this ISO
standard for our manufacturing process will allow our process to be recognized
around the world by leading distribution and engine manufacturing companies.
This potentially exposes our products to broader markets.

We have an agreement with Chase Securities Inc. now known as J.P. Morgan Chase,
whereby Chase will advise and assist us on a broad range of strategic
alternatives. Chase Securities Inc., utilizing its global transportation mergers
and acquisitions department alongside its automotive division based both in New
York and London, may under certain circumstances help facilitate joint ventures,
licensing agreements and other transactions with manufacturers around the world.

We believe that the catalytic converter technologies are reaching the point of
commercial viability as we have begun to receive repeat orders. The Company is
no longer a development stage company as it is generating revenue from the sale
of its products and service. We have generated our cash needs this quarter
partly threw an equity financing and short term loans.




RESULTS OF OPERATIONS

COMPARISON OF THE THREE MONTHS ENDED JUNE 30, 2001 TO THE THREE MONTHS ENDED
JUNE 30, 2000.

Revenue for the three-month period ended June 30, 2001 was $173,819 compared to
$0 for the three-month period ended June 30, 2000. During this period last year
the Company was still in development stage and this quarter marked the
continuation of our marketing and sales effort.

Net loss from operations for the three-month period ended June 30, 2001 was
$528,279 compared to $482,598 for the three-month period ended June 30, 2000, an
increase of $45,681. The net loss for the three-month period ended June 30, 2001
was $397,378 compared to $482,598 for the three-month period ended June 30,
2000, a decrease of $85,220.

The gross margin for the three-month period ended June 30, 2001 was 53.64%.

The increase in the loss from operations was related to an increase in
professional fees of $43,661, increase in marketing, office and general costs of
$ 290,474, which is primarily comprised of expenses relating to investor
relations, depreciation and operational costs of the Company's Telford,
Pennsylvania manufacturing facility and an increase in consulting fees of
$10,175. The increase costs were offset by a gross profit contribution of
$93,245 relating to the sales of the Company's products and services, a decrease
in research and development costs of $ 199,947 as the Company graduated from a
development stage company to operating company and a reduction in officer's
compensation and director's fees.

The decrease in the net loss of $85,220 was related to the increase in the
Company's loss from operations but was offset by other income earned by the
Company.



                                       11


<PAGE>



COMPARISON OF THE SIX MONTHS ENDED JUNE 30, 2001 TO THE SIX MONTHS ENDED JUNE
30, 2000.

Revenue for the six-month period ended June 30, 2001 was $272,832 compared to $0
for the six-month period ended June 30, 2000. During this period last year the
Company was still in development stage and this period marked our first sales.

Net loss from operations for the six-month period ended June 30, 2001 from
operations was $1,453,520 compared to $1,014,636 for the six-month period ended
June 30, 2000, an increase of $438,884. The net loss for the six-month period
ended June 30, 2001 was $1,322,619 compared to $1,014,636 for the six-month
period ended June 30, 2000, a increase of $307,983.

The gross margin for the six-month period ended June 30, 2001 was 48.98%.

The increase in the loss from operations was related to an increase in
consulting fees of $ 428,545 which includes a non-cash compensation expense
relating to the purchase of the ADT assets of $338,750 and additional consulting
fees relating to the operations of the Company, increase in marketing, office
and general costs of $ 703,177 which is primarily comprised of expenses relating
to investor relations, depreciation and operational costs of the Company's
Telford, Pennsylvania manufacturing facility. These increase costs were
offset by a decrease in research and development costs of $ 509,228 as the
company graduated from a development stage company to a operating company, a
reduction in professional fees of $44,549 and a reduction in officer's
compensation and director's fees and contribution of gross profit of $133,624
from the sale of the Company's products and services.

The increase in the net loss of $307,983 was related to the increase in the
Company's loss from operations but was offset by other income earned by the
Company.


 LIQUIDITY AND CAPITAL RESOURCES

The company's cash and cash equivalents were $54,389 on June 30, 2001 as
compared to $673,776 at December 31, 2000.

Accounts receivable amounted to $91,760 on June 30, 2001 compared to $0 on
December 31, 2000.

Inventories were $156,851 on June 30, 2001 compared to $0 on December 31, 2000.



Current liabilities amounted to $940,582 on June 30, 2001 as compared to
$307,516 on December 31, 2000 an increase of $633,066. The increase is primarily
attributed to an increase in accounts payable and accrued liabilities, amounts
due to an officer and a shareholder of the Company and a demand note payable to
a third party.

Investing activities amounted to $456,008 during the six-month period ended June
30, 2001 as compared to $58,846 for the same period last year. The investing
activities primarily related to the net purchase of property and equipment of
$501,894 and patents and trademarks of $54,114 and the receipt of funds related
to a contract.


Net cash provided by financing activities during the six-month period ended June
30, 2001 amounted to $479,500 as compared to $981,823 for the same period last
year. The financing activities during the six-month period ended June 30, 2001
is related to loans from an officer and a shareholder of the company of
$136,000,the issuance of common stock of $223,500 which is comprised of the
exercise of options in the amount of $62,500 and the issuance of common stock in
the amount of $161,000 and issuance of a demand note by the Company in the
amount of $120,000.




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<PAGE>

Net cash used in operating activities amounted to $642,879 during the six-month
period ended June 30, 2001 as compared to $817,015 for the same period last
year. This increase in cash flows from operating activities was due primarily to
the increase in accounts receivable, inventories and other current assets
combined with an increase in non- cash compensation, depreciation and an
increase of accounts payable and a decrease in prepaid expenses.





As of June 30, 2001, we have continued to obtain reorders from customers.
Management believes that we will increase our orders as we move forward with our
business plan. We intend to expand our current capacity and improve our
efficiencies of scale to be able to meet future anticipated increase in orders.
We believe that this increased capacity and efficiency will occur towards the
latter part of fiscal 2001, but there is no assurance that this will not be
delayed. Accordingly, the successful completion of the sale of equity securities
and/or other financing will be essential for us to continue in operation until
such time as we will be able to generate sufficient revenue.

We continue to deplete our current cash resources, and do not presently have the
total funds needed to expand our capacity, fully develop our technology and
sustain our operations until we anticipate our operating cash flow will be
positive. We presently expect to raise additional money through the sale of our
securities.

On May 14,2001, a note holder converted short-term debt of $161,000 into equity,
totaling 350,000 shares of common stock in the Company.

During July 2001, the Company entered into two, (2) equity financing agreements
with accredited investors for $525,000, totaling 1,312,500 shares of common
stock in the Company. The Company has received $67,000 with the balance of
$458,000 payable on or before December 31, 2001. No shares will be issued to an
investor until the Company receives the full payment for same.

During August 2001, the Company completed equity financing transactions with
four (4) accredited investors for $1,500,000. The Company issued 3,700,000
shares of common stock and granted cost free registration rights. The Company
has agreed to file a registration statement for the shares within one hundred
and twenty (120) days from the date of closing.

A total financing amount of $1,728,000 has been received and an additional
$458,000 of equity financing is pending and is expected to be received by
December 31, 2001. The company anticipates raising additional equity in the near
future in order to fully implement our operational and marketing plans; however,
there is no assurance that we will be successful in raising the additional
capital.


If we are unable to secure the required financing, we may be forced to take
steps to reduce expenses, such as reducing our staff or our research and
development efforts and/or selling off any assets. Any such action, however, may
result in an inability to further develop the catalytic converter technology. In
such event, we may be forced to cease operations.

We are currently subject to an order of investigation by the Securities and
Exchange Commission ("Commission"). In the event the Commission commences an
enforcement action against us, the Commission may, among other remedies, impose
a civil monetary penalty or seek an order of permanent injunction if it is
determined that we have violated securities laws. The imposition of a monetary
penalty could have an adverse effect on our liquidity position.

Additionally, although we have not received any notice of claims from
stockholders, we may potentially face claims for rescission and damages stemming
from a prior offering made under a claimed exemption under Regulation D of the
Securities Act. The Commission has alleged that a specific offering conducted by
our prior management was based upon an inapplicable exemption under Rule 504 of
the Security Act.

During the course of the Commission's investigation, we have voluntarily
provided information to the Commission and have cooperated with its inquiry. Our
new management intends to continue to cooperate with the Commission, in the
event formal charges are asserted against the Company, management intends to
make every effort to resolve any claims in the best interest of its
shareholders.




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PART II    OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS

The Company was initially contacted by the Securities and Exchange Commission
("Commission"), and subsequently on November 29, 2000 the Company's securities
counsel, was notified by the staff of the Commission's Fort Worth, Texas
District Office that it intended to recommend that an enforcement action be
instituted against the Company. The recommended enforcement action would be
based on alleged false and misleading statements contained in Company press
releases, filings with the Commission and other information provided to the
public market. The Commission alleges that the false and misleading statements
and omissions included, among other things, the identity, background and stock
ownership of the Company's management. Additionally it is alleged that the
Company made false and misleading statements concerning test results, production
schedules and anticipated revenues to be derived from catalytic converters, the
Company's principal product. The Commission has also alleged that the Company
has made false and misleading statements in connection with its future stock
price. The Commission has further alleged that the Company in January 1999
distributed 15,000,000 shares of its common stock based upon an inapplicable
exemption under Rule 504 of the Securities Act. The Company has been advised
that the Commission may seek an order of permanent injunction and the imposition
of civil monetary penalties against the Company.

Mr. Bengt Odner, the Company's Chairman was subsequently informed on March 7,
2001 by the Fort Worth, Texas District Office that the Commission intended to
recommend an enforcement action against him individually in connection with his
affiliation with the Company. Specifically, the recommended enforcement action
against Mr. Odner is based upon similar allegations of alleged false and
misleading statements contained in Company press releases, postings on the
Company's web site, and in filings with the Commission. The claimed false and
misleading statements concern among other things, the performance of the
Company's catalytic converter and the identity, background and role of the
Company's management. Mr. Odner has been advised that the Commission may seek an
order of permanent injunction and the imposition of civil money penalties.

The Company and Mr. Odner have voluntarily provided information and testimony to
the Commission and have cooperated with its inquiry. The Company's new
management intends to continue to cooperate with the Commission in the event
formal charges are made against the Company in an effort to resolve all claims
in the best interest of the Company and its shareholders. In the event the
Company is required to take action against founders, insiders, former management
or others to obtain damages or reimbursement, it intends to do so to protect the
interests of the Company and its stockholders. The Company's board of directors
intends to establish a specific independent committee to investigate the matter
and make recommendations to the board of directors.




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ITEM 2.    CHANGE IN SECURITIES

                     None

ITEM 3.    DEFAULTS UPON SENIOR SECURITIES

                    None

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

                    None

ITEM 5.    OTHER INFORMATION

                    None



ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K

                    None







                                    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:     Markham, Ontario
           August 14, 2001
                     Environmental Solutions Worldwide, Inc.


                             By:      /s/ DAVID JOHNSON
                                      -----------------------
                                       David Johnson
                                       Chief Operating Officer






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