MAY 23, 2008


DEAR SHAREHOLDER:


During the first quarter of 2008, further progress was achieved in our plans as
we worked to implement the Company's growth strategy previously outlined last
November. We continued to make strategic investments in our business during the
first quarter of 2008. These investments included but were not limited to,
purchasing and building new equipment for our production plant and emissions
Tech Center. These infrastructure upgrades are necessary for the Company to meet
the anticipated demands for our technologies and services. Further investments
were also made in marketing initiatives directed towards the retrofit and
firstfit catalyst sectors of the industry. There were encouraging signs from
these efforts during the quarter, including trial orders and technology
demonstrations to a number of diesel engine, equipment and vehicle Original
Equipment Manufacturers (OEM's) for both on and off road applications.
Additionally, requests for quotes increased sharply during the first three
months of this year. It is our belief that these initiatives will lead to orders
in the second half of 2008 as we pursue opportunities that offer substantial
long-term growth and profitability for the Company.


THESE OPPORTUNITIES INCLUDE:

     o    We are currently involved in two high profile demonstration programs
          in California. The first showcasing our Therma Cat(TM) Level III
          catalyst and the second showcasing our Particulate Reactor(TM) Level
          II device coupled with the Company's fuel savings and emissions
          reducing Fogger(TM) technology. These comprehensive California Air
          Resources Board (CARB) programs have taken significant time and
          resources to bring to fruition, but we are optimistic they will
          generate positive results.

     o    We have made considerable headway in the rail/marine sector in an
          effort to bring a commercialized retrofit catalyst to the North
          American market. The Company's Xtrm Cat(TM), which is engineered and
          manufactured specifically for delivering emission reductions in the
          torturous environment of the General Motors EMD / GE two-Stroke
          rail/marine diesel engines, is scheduled for emissions and durability
          testing within the month at the South West Research Institute in San
          Antonio Texas. We believe the improved Xtrm Cat(TM) system has the
          potential to support EPA and CARB in their efforts to introduce
          applicable retrofit technologies into this industry. The success of
          this program will open up an important new market for ESW.

     o    We have made significant progress with the marking and distribution
          efforts of the NOTOX silicon carbide Diesel Particulate Filter (DPF),
          our newest addition to the ESW product line. This extremely robust DPF
          is considered by off-road OEM's and the regulatory agencies as the
          "Gold Standard" in diesel Particulate Matter (PM) control. The NOTOX
          DPF is a key component in the Company's Therma Cat(TM) Level III
          catalyst system assisting the technology in reducing in excess of 95%
          PM. We have set up NOTOX North America as a separate division in our
          Company and have set in motion a North American sales program
          introducing this state of the art product to the industry.
<PAGE>


     o    We continue to work with the US Military through Tank Automotive and
          Armament Command (TACOM) based in Warren MI, where we have been
          commissioned to engineer a number of technologies. These technologies
          have been introduced into comprehensive valuation programs to
          determine their viability for the applications they were designed for.
          In April we were granted our full security clearance with the
          Controlled Goods (Military Security) which is the Canadian counterpart
          to the United States' International Traffic in Arms Regulations
          (ITAR). These government regulators control the export and import of
          defense-related articles and services as well as the required company
          security clearances. This security clearance is required in order for
          our Company to continue to do business within the military community.
          For further information:
          HTTP://WWW.CGP.GC.CA/CGDWEB/TEXT/REGSEARCH/SEARCH_ALPHA-E.ASP?ALPHA=E

NEW REGULATIONS DRIVING OUR INDUSTRY:

Late last year, the Environmental Protection Agency (EPA) established a nitrogen
dioxide (NO2) limit for diesel retrofit technologies verified under the EPA's
National Clean Diesel Campaign (NCDC) Retrofit Technology Verification Program.
Effective January 1, 2009, the EPA is implementing an NO2 increase limit that is
harmonized with the requirements for retrofit technologies by the California Air
Resources Board (CARB). This requirement limits the increase in NO2 emissions
associated with retrofit technologies to levels no greater than 20% above
baseline engine levels.

This new resolution was made in an EPA "Dear Manufacturer" letter dated December
20, 2007. For existing EPA verified technologies, manufacturers must submit NO2
data to the EPA prior to November 1, 2008 or their technologies will be removed
from the Verified Technology List January 1(,) 2009. Data previously submitted
and approved by CARB may also be submitted to EPA to demonstrate compliance with
these limits. EPA will update the Verified Technology List to indicate which
technologies have demonstrated compliance with the NO2 limit.

As a result of these new regulatory changes, we made the strategic decision to
delay our ongoing verifications on our Therma Cat(TM) Level III and Clean
Cat(TM) High Performance DOC Level I products in order to reconfigure them to
meet the new January 2009 mandate. These products were in the final stages of
process to be submitted for verification in the fourth quarter of 2007. Through
extensive R&D at our Tech Center over the 1st quarter, we are pleased to report
that our new, NO2 compliant on-road/off-road Therma Cat(TM) and Clean Cat(TM)
product verifications are currently underway with both EPA and CARB. We will be
making the results of these verification programs public upon completion. The
new NO2 regulations are having an effect on all companies with a currently
listed non NO2 complient EPA/CARB verified catalyst technology. It's our belief
that these new regulations will have an adverse effect on the number of products
that will be available to service the 2009 North American retrofit market.
<PAGE>


For further information please refer to the following sources:
HTTP://WWW.ARB.CA.GOV/
HTTP://WWW.EPA.GOV/

Although the first quarter's revenues were low due in part to the change in the
above mentioned regulations, they are not indicative of where we believe the
Company is headed with our new fully compliant technologies once EPA/CARB
verified. In order to capitalize on the needs of the market, considerable ground
work has been laid in a number of key program areas. This ground work involves
significant planning, capitalization and patience. We believe our team at ESW is
on the right track to bring these programs to completion in the near future.





FIRST QUARTER 2008 RESULTS
Revenues for the first quarter of 2008 were $80,322 compared to $3,326,845 for
the first quarter of 2007. The Company reported a net loss of $1,955,933 in the
first quarter of 2008 compared with the loss of $384,915 in the first quarter of
2007. The gross profit was 30.2% for the quarter as compared to 59.3% in the
first quarter of 2007. The Company incurred similar expenses during the first
quarter of 2008 to the first quarter 2007 in order to specifically support our
entry as well as expanded presence in key markets. Factors that impacted this
quarter particularly included the addition of sales staff and research and
development costs. We expensed $453,849 in research and development costs,
associated with the rapid development of our new catalyst technologies to meet
the 2009 standards, in the first quarter of 2008 compared to $122,506 in the
first quarter of 2007.


On behalf of the management team at ESW, I would like to thank the shareholders
for their continued support in the Company.





Yours Very Truly,
DAVID J. JOHNSON
PRESIDENT - CEO
ENVIRONMENTAL SOLUTIONS WORLDWIDE INC


SAFE HARBOR
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"intend to," and similar conditional expressions are intended to identify
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safe harbor created by the Act. Such statements are subject to certain risks and
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