**U.S.
      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 September 30, 2006**




**o**
            **TRANSITION
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934**




For
      the
      transition period from




**Commission
      File #333-121764**




**EASTERN
      SERVICES HOLDINGS, INC.**


(Exact
      name of registrant as specified in its charter)




**Delaware**


(State
      or
      other jurisdiction of incorporation or organization)




**30-0284778**


(IRS
      Employer Identification Number)




**1221
                Ocean Avenue #1202, Santa Monica, California
                90401**
            **90401**(Address
                of principal executive offices )
            (Zip
                Code)




**(310)
      587-0029**


(Registrant’s
      telephone no., including area code)




(Former
      name, address and fiscal year, if changed since last report)




Check
      whether the issuer (1) has filed all reports required to be filed by Section
      13
      or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter
      period that the issuer was required to file such reports), and (2)has been
      subject to such filing requirements for the past 90 days. Yes x No o




Indicate
      by check mark whether the registrant is a shell company as defined in Rule
      12b-2
      of the Exchange Act.




Yes
            x
            Noo







State
      the
      number of shares outstanding of each of the issuer’s classes of common equity,
      as of November 1, 2006: 1,400,000 shares of common stock.











































**EASTERN
      SERVICES HOLDINGS, INC.**


**FINANCIAL
      STATEMENTS**




**INDEX**




**PART
      I-- FINANCIAL INFORMATION**




Item
                1. Financial Statements




Item
                2. Management’s Discussion and Analysis of Financial
                Condition




Item
                3. Control and Procedures




**PART
      II-- OTHER INFORMATION**




Item
                1. Legal Proceedings




Item
                2. Changes in Securities




Item
                3. Defaults Upon Senior Securities




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




Item
                5. Other Information




Item
                6. Exhibits and Reports on Form 8-K




**SIGNATURE**




**Item
        1.  **Financial
        Information****




BASIS
      OF
      PRESENTATION




The
      accompanying reviewed financial statements are presented in accordance with
      generally accepted accounting principles for interim financial information
      and
      the instructions to Form 10-QSB and item 310 under subpart A of Regulation
      S-B.
      Accordingly, they do not include all of the information and footnotes required
      by generally accepted accounting principles for complete financial statements.
      In the opinion of management, all adjustments (consisting only of normal
      occurring accruals) considered necessary in order to make the financial
      statements not misleading, have been included. Operating results for the nine
      months ended September 30, 2006 are not necessarily indicative of results that
      may be expected for the year ending December 31, 2006. The financial statements
      are presented on the accrual basis.











EASTERN
        SERVICES HOLDINGS, INC.
 
 
 
 CONSOLIDATED
        FINANCIAL STATEMENTS
 
 
 
 
 
 
 
 AS
        OF
        SEPTEMBER 31, 2006
 
  
 
   
  EASTERN
        SERVICES HOLDINGS, INC.
 
 
 
 Consolidated
        Financial Statements Table of Contents
 
 
 FINANCIAL
                    STATEMENTS
                PageBalance
                    Sheet
                2Statement
                    of Operations
                3Statement
                    of members capital
                4Cash
                    Flow Statement
                5Notes
                    to the Financial Statements
                6-8








F-1




**EASTERN
                  SERVICES HOLDINGS, INC.****BALANCE
                  SHEET****(unaudited)****As
                  of September 30, 2006 and December 31, 2005****ASSETS****CURRENT
                  ASSETS**
              
              **9/30/2006**
              
              **12/31/2005**Cash
              
              $
              48,466
              
              $
              85,868Accounts
                  Receivable
              
              
              149,280
              
              
              149,280Allowance
                  For Doubtful Accounts
              
              
              (149,280
              )
              
              (149,280
              )Advances
              
              
              -
              
              
              9,307Total
                  Current Assets
              
              
              48,466
              
              
              95,175**PROPERTY
                  AND EQUIPMENT**Equipment
              
              
              40,590
              
              
              43,280Less:
                  accumulated depreciation
              
              
              (35,801
              )
              
              (39,562
              )Total
                  Property and Equipment
              
              
              4,789
              
              
              3,718**TOTAL
                  ASSETS**
              
              $
              53,254
              
              $
              98,893**LIABILITIES
                  AND STOCKHOLDERS CAPITAL****CURRENT
                  LIABILITIES**Accounts
                  payable and accrued expenses
              
              $
              110,038
              
              $
              63,520Loan
                  payable - auto
              
              
              2,805
              
              
              5,571Total
                  Current Liabilities
              
              
              112,843
              
              
              69,091**STOCKHOLDERS
                  EQUITY**Common
                  stock, Authorized: 100,000,000 at $0.001par
                  value, Issued: 1,400,000 and 1,400,000, respectively
              
              
              1,400
              
              
              1,400Additional
                  paid in capital
              
              
              39,600
              
              
              39,600Retained
                  Deficit
              
              
              (100,588
              )
              
              (11,198
              )Total
                  Stockholders' Equity
              
              
              (59,588
              )
              
              29,802**TOTAL
                  LIABILITIES AND CAPITAL**
              
              $
              53,254
              
              $
              98,893




The
        accompanying footnotes are an integral part of these financial
        statements.




F-2




**EASTERN
                  SERVICES HOLDINGS, INC.****STATEMENTS
                  OF OPERATIONS****(unaudited)****For
                  the nine months ending September 30, 2006 and
                  2005****9/30/2006**
              
              **9/30/2005****REVENUE**
              
              $
              72,750
              
              $
              53,000**COST
                  OF SERVICES**
              
              
              76,657
              
              
              48,685**GROSS
                  PROFIT OR (LOSS)**
              
              
              (3,907
              )
              
              4,315**GENERAL
                  AND ADMINISTRATIVE EXPENSES**
              
              
              84,040
              
              
              22,244**OPERATING
                  INCOME**
              
              
              (87,947
              )
              
              (17,929
              )**INCOME
                  TAX PROVISION**
              
              
              1,001
              
              
              -**INTEREST
                  EXPENSE**
              
              
              442
              
              
              322**NET
                  INCOME (LOSS)**
              
              $
              (89,390
              )
              $
              (18,251
              )**Earnings
                  (loss) per share, basic & diluted**
              
              $
              (0.06
              )
              $
              (0.01
              )**Weighted
                  average number of common shares**
              
              
              1,400,000
              
              
              1,400,000






The
        accompanying footnotes are an integral part of these financial
        statements.





F-3






**EASTERN
                  SERVICES HOLDINGS, INC.****STATEMENTS
                  OF OPERATIONS****(unaudited)****For
                  the three months ending September 30, 2006 and
                  2005****9/30/2006**
              
              **9/30/2005****REVENUE**
              
              $
              30,250
              
              $
              15,000**COST
                  OF SERVICES**
              
              
              35,780
              
              
              16,875**GROSS
                  PROFIT OR (LOSS)**
              
              
              (5,530
              )
              
              (1,875
              )**GENERAL
                  AND ADMINISTRATIVE EXPENSES**
              
              
              55,185
              
              
              7,899**OPERATING
                  INCOME**
              
              
              (60,715
              )
              
              (9,774
              )**INCOME
                  TAX PROVISION**
              
              
              -
              
              
              -**INTEREST
                  EXPENSE**
              
              
              288
              
              
              112**NET
                  INCOME (LOSS)**
              
              $
              (61,003
              )
              $
              (9,887
              )**Earnings
                  (loss) per share, basic**
              
              $
              (0.04
              )
              $
              (0.01
              )**Weighted
                  average number of common shares**
              
              
              1,400,000
              
              
              1,400,000








The
        accompanying footnotes are an integral part of these financial
        statements.
    F-4
  **EASTERN
                    SERVICES HOLDINGS, INC.****STATEMENT
                    OF STOCKHOLDERS EQUITY****(unaudited)****As
                    of September 30, 2006****SHARES
                    OF**
                
                
                
                **ADDITIONAL****COMMON**
                
                **PAR**
                
                **PAID
                    IN**
                
                **RETAINED**
                
                **TOTAL****STOCK**
                
                **VALUE**
                
                **CAPITAL**
                
                **DEFICIT**
                
                **CAPITAL**Balance,
                    December 31, 2002
                
                
                1,000,000
                
                $
                1,000
                
                
                
                
                $
                (3,994
                )
                $
                (2,994
                )Net
                    income (loss)
                
                
                
                
                
                
                
                
                
                
                
                (23,836
                )
                
                (23,836
                )Balance,
                    December 31, 2003
                
                
                1,000,000
                
                $
                1,000
                
                $
                -
                
                $
                (27,830
                )
                $
                (26,830
                )Common
                    stock subscribed during
                
                
                400,000
                
                
                400
                
                
                39,600
                
                
                
                
                
                40,000December
                    2004 at $0.10 per shareSubcription
                    receivable
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (40,000
                )Net
                    Income (loss)
                
                
                
                
                
                
                
                
                
                
                
                17,912
                
                
                17,912Balance,
                    December 31, 2004
                
                
                1,400,000
                
                $
                1,400
                
                $
                39,600
                
                $
                (9,918
                )
                $
                (8,918
                )Subscription
                    receivable
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                40,000Net
                    Income (Loss)
                
                
                
                
                
                
                
                
                
                
                
                (1,280
                )
                
                (1,280
                )Balance,
                    December 31, 2005
                
                
                1,400,000
                
                
                1,400
                
                
                39,600
                
                
                (11,198
                )
                
                29,802Net
                    Income (loss)
                
                
                
                
                
                
                
                
                
                
                
                (89,390
                )
                
                (89,390
                )Balance,
                    September 30, 2006
                
                
                1,400,000
                
                $
                1,400
                
                $
                39,600
                
                $
                (100,588
                )
                $
                (59,588
                )
   The
          accompanying footnotes are an integral part of these financial
          statements.
   F-5
  **EASTERN
                    SERVICES HOLDINGS, INC.****STATEMENTS
                    OF CASH FLOWS****(unaudited)****For
                    the nine months ending September 30, 2006 and
                    2005****CASH
                    FLOWS FROM OPERATING ACTIVITIES**
                
                **9/30/2006**
                
                **9/30/2005**Net
                    income (loss)
                
                $
                (89,390
                )
                $
                (18,251
                )Adjustments
                    to reconcile net income to net cashprovided
                    by (used in) operating activities:Depreciation
                
                
                1,239
                
                
                1,859(Increase)
                    Decrease in advances
                
                
                9,307
                
                
                (2,543
                )Increase
                    (Decrease) in accounts payable
                
                
                52,935
                
                
                (236
                )Increase
                    (Decrease) in wages payable
                
                
                (6,417
                )
                
                45,000Total
                    adjustments to net income
                
                
                57,064
                
                
                44,079Net
                    cash provided by (used in) operating activities
                
                
                (32,326
                )
                
                25,828**CASH
                    FLOWS FROM INVESTING ACTIVITIES**Cash
                    paid for fixed assets
                
                
                (2,310
                )
                
                -Net
                    cash flows provided by (used in) investing activites
                
                
                (2,310
                )
                
                -**CASH
                    FLOWS FROM FINANCING ACTIVITIES**Cash
                    paid on note payable - auto
                
                
                (2,766
                )
                
                (2,674
                )Cash
                    received from stock issuance
                
                
                -
                
                
                40,000Net
                    cash provided by (used in) financing activities
                
                
                (2,766
                )
                
                37,326**CASH
                    RECONCILIATION**Net
                    increase (decrease) in cash
                
                
                (37,402
                )
                
                63,155Cash
                    - beginning balance
                
                
                85,868
                
                
                353**CASH
                    BALANCE END OF PERIOD**
                
                $
                48,466
                
                $
                63,507
  The
          accompanying footnotes are an integral part of these financial
          statements.
   F-6
  **EASTERN
          SERVICES HOLDINGS, INC.**
   **Notes
          to the financial statements**
   **(unaudited)**
   
 
   1.   Summary
          of Significant Accounting Policies:
  Industry -
          Eastern Services Holdings, Inc. (the Company) was incorporated in the state
          of
          Delaware on November 5, 2004. At the time of incorporation the Company
          exchanged
          shares with Eastern Services Group, Inc. making Eastern Services Group,
          Inc. an
          acquired subsidiary. As the Company was the non-operating acquirer, for
          accounting purposes Eastern Services Group, Inc. is considered the accounting
          acquirer. The share exchange has been accounted for as a retroactive stock
          split. Eastern Services Group, Inc. was incorporated on February 27, 1998
          under
          the laws of the State of Nevada. The Company is headquartered in California.
          The
          Company provides state and local tax consultation and analysis to casinos
          in the
          Las Vegas metropolitan area. The Company does not provide filing services.
          The
          Company’s fiscal year end is December 31, a calendar year end.
  Significant
          Accounting Policies:
  The
          Company’s management has adopted the following accounting policies.
  Basis
          of Accounting - The
          Company’s financial statements are prepared in accordance with generally
          accepted accounting principles. The Company’s management has made all
          adjustments in their opinion that are necessary in order to make the financial
          statements not misleading.
  Estimates
          and adjustment -The
          Company’s management is of the opinion that all estimates and adjustment have
          been made in accordance with Generally Accepted Accounting Principle in
          order
          for the financial statements to not be misleading.
  Revenue
          Recognition -
          Revenues are recognized when the contingency requirements of the Company’s
          service contracts are fulfilled in a manner which leads to tax savings
          to the
          customer. If the Company is not successful in providing tax savings for
          property, sales and use tax then the customer does not have to pay for
          services
          provided. Proof of tax savings occurs when the state issues its assessment
          taxes
          in the month of June therefore revenue is not recognized until such time
          and
          payment of 50% of the tax savings is due from the customer at that time.
          In all
          contracts the Company acts as the principle and recognizes revenues on
          the gross
          method based on these tax savings which is not assured until the tax assessments
          are issued by the county. Cost of sales is recognized as the Company pays
          its
          employees for their work throughout the year regardless as to whether the
          Company is successful in providing tax savings.
  Cash
          and Cash Equivalents - The
          Company considers cash on hand and amounts on deposit with financial
          institutions which have original maturities of three months or less to
          be cash
          and cash equivalents.
   
   F-7
   Property
          and Equipment -
          Property and equipment are recorded at cost. Depreciation is computed using
          the
          straight line method over the estimated useful lives of the various classes
          of
          assets as follows:
  Equipment
                .......................................
                2
                    to 10 yearsFurniture
                .......................................
                5
                    to 10 years
  Maintenance
          and repairs, as incurred, are charged to expenses; betterments and renewals
          are
          capitalized in equipment accounts. Cost and accumulated depreciation applicable
          to  items
          replaced or retired are eliminated from the related accounts; gain or loss
          on
          the disposition thereof is included as income.
  Income
          Taxes - The
          Company utilizes the asset and liability method to measure and record deferred
          income tax assets and liabilities. Deferred tax assets and liabilities
          reflect
          the future income tax effects of temporary differences between the financial
          statement carrying amounts of existing assets and liabilities and their
          respective tax bases and are measured using enacted tax rates that apply
          to
          taxable income in the years in which those temporary differences are expected
          to
          be recovered or settled. Deferred tax assets are reduced by a valuation
          allowance when, in the opinion of management, it is more likely than not
          that
          some portion or all of the deferred tax assets will not be realized.
  Earnings
          Per Share - Basic
          and diluted earnings per share is computed by dividing earnings available
          to
          stockholders by the weighted-average number of shares outstanding for the
          period
          as guided by the Financial Accounting Standards Board (FASB) under Statement
          of
          Financial Accounting Standards (SFAS) No. 128, “Earnings per Shares”. Diluted
          EPS reflects the potential dilution of securities that could share in the
          earnings. The Company used for years ending December 31, 2005 and 2004
          earnings
          as the numerator and weighted average number of shares as disclosed in
          the
          statement of operations to calculate earnings per share. As the Company
          had a
          loss for the year ending December 31 2005, the option agreement that was
          entered
          into that year would not be dilutive.
  Concentrations
          of Credit Risk -
          Financial instruments which potentially expose the Company to concentrations
          of
          credit risk consist principally of operating demand deposit accounts. The
          Company’s policy is to place its operating demand deposit accounts with high
          credit quality financial institutions that are insured by the FDIC.
  Compensation
          in the form of stock - The
          Company used SFAS No.123, “Accounting For Stock Based Compansation,” for the
          years ending December 31, 2005 and 2004. As required by a revision of this
          standard, the Company has adopted SFAS No. 123R to account for stock based
          compensation whereby through this adoption the Company accounts for amounts
          regarding stock based compensation at its expense instead of proforma results.
          For this transition the Company has elected the prospective method to account
          for the change.
  2.   Related
          Party Transactions:
  A
          stockholder may loan the Company working capital from time to time. At
          the
          quarter ending September 30, 2006 and year ending December 31, 2005 the
          Company
          had no amounts owed.
   
   F-8
   3.   Accounts
          Receivable:
  The
          Company carries balances from time to time in accounts receivable for services
          performed. The Company’s management has established an allowance for doubtful
          accounts for those accounts that may not be collectible.
  4.   Use
          of Estimates:
  The
          preparation of financial statements in conformity with generally accepted
          accounting principles requires management to make estimates and assumptions
          that
          effect 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 revenues and expenses during the reporting period.
          Actual results could differ from those estimates.
  5.
          Income Taxes:
  The
          Company has a net operating loss that may be used to offset future income
          for
          tax purposes for a period of 20 years from the date of inception of these
          losses. These losses were derived solely from operating activities. The
          net
          operating losses create a deferred tax asset as a benefit to the Company
          in the
          amount of $7,900. The Company has set up a valuation allowance of $7,900
          to
          reduce the deferred tax asset as in the opinion of management, it is more
          likely
          than not that some portion or all of the deferred tax asset will not be
          realized.
  The
          income tax payable that was accrued for the quarters ending was offset
          by the
          Company’s net operating loss carryforward therefore the provisions for income
          tax in the income statement is an estimate of what may be the tax liability
          for
          the current year end.
  The
          availability of the Company’s net operating loss carryforwards are subject to
          limitation if there is a 50% or more positive change in the ownership of
          the
          Company’s stock. The provision for income taxes consists of the state minimum
          tax imposed on corporations.
 
 Deferred
          income taxes reflect the net tax effects of temporary differences between
          the
          carrying amounts of assets and liabilities for financial statement purposes
          and
          the amounts used for income tax purposes. Significant components of the
          Company's deferred tax liabilities and assets as of December 31, 2005 are
          as
          follows:
 
 Deferred
                    tax assets:Federal
                    net operating loss
                
                $
                13,400State
                    net operating loss
                
                
                4,470Total
                    deferred tax assets
                
                
                17,870Less
                    valuation allowance
                
                
                (17,870
                )$
                --
 
 The
          Company has provided a 100% valuation allowance on the deferred tax assets
          at
          December 31, 2005 and the current quarter to reduce such asset to zero,
          since
          there is no assurance that the Company will generate future taxable income
          to
          utilize such asset. Management will review this valuation allowance requirement
          periodically and make adjustments as warranted.
 
  F-9
  The
          reconciliation of the effective income tax rate to the federal statutory
          rate
          for the years ended December 31, 2005 and 2004 is as follows:
   2005
                2004Federal
                    income tax rate
                (15.0%)
                (15.0%)State
                    tax, net of federal benefit
                (5.0%)
                (5.0%)Increase
                    in valuation allowance
                20.0%
                20.0%Effective
                    income tax rate
                0.0%
                0.0%
   6.   Accounts
          Payable and Accrued Expenses:
  Accounts
          payable and accrued expenses consist of trade payables from normal operations
          of
          the business.
  7.   Operating
          and Capital Lease Agreements:
  The
          Company has entered into a short-term lease for use of storage space. The
          contract is renewable every thirty days. The Company has not entered into
          any
          long-term leases.
  8.
          Note Payable:
  On
          May
          14, 2002 the Company entered into a loan agreement for an auto/truck in
          the
          amount of $20,000 for a 5-year period with a variable interest rate. During
          the
          year 2005, the rate averaged 11% and payments averaged $375 per month.
          The
          Company considers the balance due on this note as short term as its intension
          is
          to retire this debt during the year ending December 31, 2006.
  9.  Stockholder
          Equity:
  The
          Company has authorized 100,000,000 shares of common stock at a par value
          of
          $.001 per share of which 1,400,0000 shares have been issued.
  Upon
          incorporation of the Company (November 5, 2004), 1,000,000 shares of common
          stock were issued in an exchange agreement for the 1,000 shares (100%)
          of the
          subsidiary, Eastern Service Group, Inc. Eastern Service Group is the accounting
          acquirer and therefore the share exchange was accounted as a retroactive
          share
          exchange.
  During
          November and December 2004 the Company undertook a private placement issuance,
          Regulation D Rule 506 offering, of 400,000 shares of common stock for a
          value of
          $40,000, or $.10 per share. The Company believes this offering is exempt
          from
          registration with the US Securities and Exchange Commission. These shares
          have
          been subscribed for and the funds received in January of 2005.
  On
          March
          1, 2005 the company entered into an option agreement with a company officer
          whereby the agreement calls for the purchase of 500,000 shares of common
          stock
          at an exercise price of $1.00 per share. The agreement will expire on March
          1,
          2007. The payment of these shares when exercised is due when the purchaser
          sells
          these common shares. There is no compensation, repurchase or awards with
          regard
          to this option agreement.
   F-10
  10.  Employment
          Contract and Incentive Commitments:
  The
          Company has no employment contracts and incentive commitments. The Company’s
          policy on compensation to Mr. Carrigan, its sole employee, is based upon
          a
          verbally agreed amount of $60,000 per year. The Company plans to outline
          a
          formal agreement with Mr. Carrigan by December 31, 2006.
  11.  Required
          Cash Flow Disclosure for Interest and Taxes Paid:
  The
          Company paid interest during the years ending December 31, 2005 and 2004
          in the
          amounts of $0 and $467, respectively. During the current reporting period
          the
          Company has paid $442 in interest. The Company paid income taxes during
          the
          years ending December 31, 2005 and 2004 in the amount of $169 and $0,
          respectively. The Company has made estimated tax payments for the current
          year
          in the amount of $1,001.
  12.  Contingent
          Liabilities:
  Currently
          the Company has not identified any contingent liabilities that may be due.




F-11




**Item
      2.**  **Management’s
      Discussion and Analysis or Plan of Operation**




The
      following discussion of the financial condition and results of operations should
      be read in conjunction with the consolidated financial statements and related
      notes thereto. The following discussion contains certain forward-looking
      statements that involve risks and uncertainties. Our actual results could differ
      materially from those discussed therein. Factors that could cause or contribute
      to such differences include, but are not limited to, risks and uncertainties
      related to the need for additional funds, the rapid growth of the operations
      and
      our ability to operate profitably a number of new projects.




**Overview**




We
      were
      incorporated under the laws of the State of Delaware on November 5, 2004. On
      November 9, 2004, pursuant to a Stock Purchase Agreement and Share Exchange,
      Eastern Services Group, Inc. became our wholly owned subsidiary. The purpose
      for
      this reorganization with Eastern Services Group, Inc. was to obtain an operating
      company which we believed has a successful business plan. Until this
      reorganization our activities had been limited to actions related to our
      organization, and we conducted virtually no business operations.




Our
      subsidiary, Eastern Services Group, Inc. (“ESG”), was established in the State
      of Nevada in February 1998. Through our subsidiary, we provide state and local
      tax consultation and analysis to casinos in the Las Vegas metropolitan area.
      We
      do not provide filing services nor do we perform CPA services. We provide
      consulting services based on risk assessment via telephone or in a face-to-face
      setting.




The
      core
      services suite provided by Eastern Services Group, Inc. is traditional tax
      analysis, preparation, and business consulting services to clients operating
      casinos in the Las Vegas, Nevada metropolitan area. ESG, Inc. concentrates
      on
      analysis of sales and use taxes, real property taxes, and personal property
      tax.


At
      competitive prices, Eastern Services Group works with clients to minimize tax
      exposure and ensure that each filing adheres to all areas of local and state
      laws. With the highest degree of integrity, ESG, Inc., conducts preliminary
      interviews with clients to ensure a comprehensive analysis and assessment of
      tax
      liability with respect to the specific jurisdiction is provided.




Through
      in-depth evaluation and assessment, ESG, Inc. makes significant recommendations
      to clients to ensure local and state levied taxes are accurate, accounting
      and
      tax filing procedures afford viable tax savings, and records and accounts are
      correctly maintained to prevent unnecessary audits.




ESG,
      Inc.
      has developed an effective pricing model. Approximately 95% of the majority
      of
      contracts is contingent upon the tax savings incurred as a result of services
      rendered by ESG. Typically, ESG receives 50% of the tax savings resulting
      directly from the assessment and analysis provided. The remaining 5% of the
      total contract is a flat or hourly fee to address provisional administrative
      functions associated with the project.




Market
      Trends




With
      real
      estate audits on the decline, property audits are increasing due to the
      renovations of hotel casinos trying to maintain market share in the gaming
      industry. This gives us the opportunity for audits based on the new assets
      purchased. For example, as properties spend on capital improvements such as
      carpets, restaurants, décor, and infrastructure, the overall value of the
      property is increased. Also, when casinos are sold or merge, the value of the
      properties surrounding such casinos increase as well. When property increases
      in
      value, the owner of such property is required to pay additional tax. As a means
      to limit additional tax exposure, casinos seek our services to help them
      identify ways in which they can limit such increases in taxes. Thus, when hotel
      casinos make improvements, they seek our services to help reduce their tax
      liability.




In
      2005,
      the State of Nevada imposed a cap on the amount of taxes that a property would
      have to pay if the property increased in value. In 2005, the cap was set at
      8%.
      The cap was instituted as temporary relief for business and residential markets.
      The cap rate effectively limited the amount of real estate tax liability that
      a
      casino could incur. Because real estate tax liability was capped, casinos were
      less inclined to seek tax burden relief. Therefore, in 2005, the cap limited
      our
      revenue streams because of the decrease in demand.







Although
      the 8% cap limited the revenue stream for all periods during the year ended
      2005, the State of Nevada may adjust the cap during the year ending 2006. At
      this point we cannot determine what cap rate may be applied by the State of
      Nevada or whether there will be a cap rate in the future.




A
      lower
      cap rate means clients will be less inclined to seek our services and therefore
      our revenues would decrease. However, a higher cap rate, or the elimination
      of
      the cap rate altogether, would result in greater demand for our services because
      clients would have more incentive to seek tax burden relief. An increase in
      demand for our services could result in an increase in revenue.




Key
      Metrics




We
      generate revenue when we achieve a reduction in the property tax value of our
      clients. Our revenue derives from the spread between the original assessment
      by
      the State and the adjusted assessment we determine based on our audit.
      Typically, we ask for 50% of such savings. Thus, our revenues are proportionally
      related to the amount of savings we achieve for our clients. We consider audits
      which result in savings for our clients to be “successful audits.”




We
      focus
      on the bottom line profits of the company and cost of achieving them, as well
      as
      cost of obtaining new clients. Operating performance is measured by maintaining
      relationships with our existing clients and ensuring that we save them money.
      Our strength and weakness is dependant upon overall real estate values in the
      gaming industry as well as the rate of mergers and acquisitions that may drive
      up the value of existing entities. Therefore when real estate values and the
      level of mergers and acquisitions activities rise, our business stands to gain
      as well thereby increasing revenue. When those indicators fall, demand for
      our
      services falls as well.




**Critical
      Accounting Policies**




Our
      discussion and analysis of results of operations and financial condition are
      based upon our consolidated financial statements, which have been prepared
      in
      accordance with accounting principles generally accepted in the United States
      of
      America. The preparation of these consolidated financial statements requires
      us
      to make estimates and judgments that affect the reported amounts of assets,
      liabilities, revenues and expenses, and related disclosure of contingent assets
      and liabilities. We base our estimates on historical experience and on various
      other assumptions that are believed to be reasonable under the circumstances,
      the results of which form the basis for making judgments about the carrying
      values of assets and liabilities that are not readily apparent from other
      sources. Actual results may differ from these estimates under different
      assumptions or conditions.




The
      Company considered the quality and variability of information regarding the
      financial condition and operating performance that may have changed in the
      past
      and future that may have a material effect and has quantified them where
      possible. Specifically the Company considers risk of variability with changes
      in
      contract which may affect the recognition of income and also the possibility
      of
      changes in the tax code which may affect the long term rates of
      return.




The
      Company considers the following historical trends and future trends of the
      company as well as risks that are present within the industry. The company
      believes that unless the current 8% Cap is lifted, the downward trend may
      continue. If tax legislation changes to relieve the cap, the company’s services
      may be in more demand.




We
      provide property tax analysis and sales and use tax analysis to the casino
      industry. Revenues are recognized when the contingency requirements of the
      company service contracts are fulfilled in a manner which leads to savings
      to
      the customer.




**Liquidity
      and Capital Resources**




We
      have
      historically satisfied our cash requirements through revenues, short term
      financings, and issuance of common stock for cash. We anticipate that cash
      requirements will continue to increase as we continue to expend resources to
      build infrastructure, develop a business plan and establish a marketing network,
      customer support and administrative organizations. As of September 30, 2006,
      we
      had cash $48,466.













We
      anticipate that we will need $50,000 to cover budgeted operating expenditures
      and offering expenses for the next twelve months from the date of this
      prospectus. The Company is operating at a net loss as of September 30, 2006
      therefore our cash reserves plus contractually committed capital is not
      sufficient to fund our planned business operations for a period of the next
      twelve months.




In
      the
      interim, we will continue to pursue additional capital investment. Current
      assets as of September 30, 2006 were $48,466 which consisted entirely of cash.
      Total current liabilities as of September 30, 2006 were $112,843 which consisted
      of a loan payable on an automobile of $2,805, which is the only loan the company
      has currently and an account payable of $110,038. The loan was entered on May
      14, 2002 for an auto/truck in the amount of $20,000 for a 5 year period with
      a
      variable interest rate. During the year 2005 the rate averaged 5.5% and payments
      are $375 per month. There were no terms on the shareholder loan which was
      retired and we expect to retire the auto loan during the year 2006.




Because
      our current assets are sufficient to cover our current liabilities, we expect
      to
      be able to continue operations for at least the next twelve months only if
      we
      continue to generate significant revenues. However, there is risk if the company
      does not generate significant revenues that it will not be able to cover its
      costs. The company’s major stockholder will fund any shortfalls in capital and
      additional expenses in the form of accounting and legal fees for the company
      to
      become a reporting company. We will also need to seek both private and public
      equity markets to support our ongoing operations




We
      have
      financed our growth and cash requirements through operations, related party
      debt
      and small private placements of equity.




By
      becoming a publicly reporting company, we expect an increase in our audit,
      accounting, and legal fees. As a fully reporting company pursuant to the
      Securities Exchange Act of 1934, we will be required to file quarterly, annual,
      and other periodic reports. As such, we will require the assistance of our
      legal
      counsel to prepare and file such reports and our independent auditors to prepare
      or review financial statements in connection with such reports. In addition,
      we
      will retain an EDGAR service to submit such filings to the Securities and
      Exchange Commission. We anticipate the approximate costs of being a publicly
      reporting company to be the following per quarter (or about $24,000 per year):




Legal:
            $2,500Accounting:
            $2,500Filings:
            $1,000




**Results
      from Operations**




Nine
      Months Ended September 30, 2006 Compared to Nine months ended September 30,
      2005




Revenues




Revenues
      increased from $53,000 for the nine months ended September 30, 2005 to $72,750
      for the nine months ended September 30, 2006, an increase of $19,750 or 37%.
      The
      increase was a result of two new clients.




Total
      Expenses




Cost
      of
      services increased from $48,685  for the nine months ended September
 30, 2005 to $76,657 for the nine months ended September  30, 2006 an
      increase of $27,972 or  57% approximately. The increase in cost of services
      was a result of a payment in the third quarter to a consultant for
      $19,000.




General
      and Administrative expenses which includes general office expenses, travel
      and
      entertainment, and professional fees increased from $22,244 for the nine months
      ended September 30, 2005 to $84,040 for the nine months ended September 30,
      2006
      an increase of $61,796 or 278%. The reason for the increase is due to several
      factors. There was an approximate $ 43,000
      increase in legal fees in the third quarter.   The legal fees were
      related to collections of receivables.  There was an increase of $1700 in
      travel expenses in the third quarter.  There was an increase of $500 in
      Meals and Entertainment in the third quarter and $800 in repairs and
      maintenance.











Net
      Loss




Net
      loss
      increased from $18,251 for the nine months ended September 30, 2005 to a loss
      of
      $89,390 for the nine months ended September 30, 2006. The increase in losses
      was a result of increased General and Administrative expenses, as well as an
      increase in cost of sales as a result of new consultants.




**Off-Balance
      Sheet Arrangements**




We
      do not
      have any off-balance sheet transactions.




**Item
      3.**   **Controls
      and Procedures**




Under
      the
      supervision and with the participation of our management, including our
      principal executive officer and principal financial officer, we conducted an
      evaluation of our disclosure controls and procedures, as such term is defined
      under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities
      Exchange Act of 1934, as amended (Exchange Act), as of September 30, 2006.
      Based
      on this evaluation, our principal executive officer and principal financial
      officer have concluded that our disclosure controls and procedures are effective
      to ensure that information required to be disclosed by us in the reports we
      file
      or submit under the Exchange Act is recorded, processed, summarized, and
      reported within the time periods specified in the Securities and Exchange
      Commission’s rules and forms and that our disclosure and controls are designed
      to ensure that information required to be disclosed by us in the reports that
      we
      file or submit under the Exchange Act is accumulated and communicated to our
      management, including our principal executive officer and principal financial
      officer, or persons performing similar functions, as appropriate to allow timely
      decisions regarding required disclosure.




There
      were no changes (including corrective actions with regard to significant
      deficiencies or material weaknesses) in our internal controls over financial
      reporting that occurred during the first quarter of fiscal 2006 that has
      materially affected, or is reasonably likely to materially affect, our internal
      control over financial reporting.




***Recent
      Accounting Pronouncements***




SFAS
      155,
      Accounting for Certain Hybrid Financial Instruments and SFAS 156, Accounting
      for
      Servicing of Financial Assets were recently issued. SFAS 155 and 156 have no
      current applicability to the Company and have no effect on the financial
      statements.







**PART
      II - OTHER INFORMATION**







Item
      1.  Legal
      Proceedings.





The
      Company is currently not a party to any pending legal proceedings and no such
      action by, or to the best of its knowledge, against the Company has been
      threatened.




Item
      2.  Changes
      in Securities.





None





Item
      3.  Defaults
      Upon Senior Securities.





None





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





No
      matter
      was submitted during the quarter ending September 30, 2006, covered by this
      report to a vote of the Company’s shareholders, through the solicitation of
      proxies or otherwise.




Item
      5.  Other
      Information.





None





Item
      6.  Exhibits
      and Reports of Form 8-K.





**(a)**   **Exhibits**





31.1
      Certification pursuant to Section 302 of Sarbanes Oxley Act of 2002


32.1
      Certification pursuant to Section 906 of Sarbanes Oxley Act of
      2002




**(b)**  **Reports
      of Form 8-K**





None




**SIGNATURES**




In
      accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
      this report to be signed on its behalf by the undersigned, there unto duly
      authorized.




**EASTERN
                SERVICES HOLDINGS, INC.**





By:
              /*s/
                  Akhee Rahman*Akhee
                  Rahman,President,
                  Chief Executive Officer,Chief
                  Financial Officer, Secretary &Director




Date:
      November 1, 2006