U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10-KSB/A
                            AMENDMENT NO. 2 TO ITEM 7

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

                   For the fiscal year ended December 31, 2002

                         Commission File Number: 0-6088

                              Earth Sciences, Inc.
                              --------------------
                 (Name of small business issuer in its charter)

             Colorado                               84-0503749
             --------                               ----------
     (State of incorporation)            (IRS Employer Identification No.)

           8100 SouthPark Way, Unit B, Littleton, Colorado 80120-4525
           ----------------------------------------------------------
          (Address of principal executive offices, including Zip Code)

      (Registrant's telephone number, including area code): (303) 734-1727

         Securities registered under Section 12(g) of the Exchange Act:
                        Common Stock, one cent par value
                        --------------------------------
                                (Title of class)

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 past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
[X] Yes [ ] No

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [ X ]

State issuer's revenues for its most recent fiscal year.  $ 5,744,000

State the aggregate market value of the voting and non-voting common equity held
by nonaffiliates computed by reference to the price at which the common equity
was sold, or the average bid and asked prices of such common equity, as of a
specified date within the past 60 days. As of March 21, 2003 was $7,090,000.


Number of shares outstanding of registrant's Common Stock, one-cent par value as
of March 21, 2003 - 33,363,844.


DOCUMENTS INCORPORATED BY REFERENCE:
None


Transitional Small Business Disclosure Format:  Yes __ No  X

<PAGE>

PART I

Item 7. Financial Statements. (see pages F-1 through F-24)
----------------------------------------------------------
Index to Financial Statements
Independent Auditor's Report
Financial Statements:
     Earth Sciences, Inc. and Subsidiaries
     Consolidated Balance Sheet, December 31, 2002
     Consolidated Statements of Operations, For the Years Ended December 31,
       2002 and 2001
     Consolidated Statement of Stockholders' Equity, For the Period from
       January 1, 2001 to December 31, 2002
     Consolidated Statements of Cash Flows, For the Years Ended December 31,
       2002 and 2001
     Notes to Consolidated Financial Statements


<PAGE>

Item 13. Exhibits and Reports on Form 8-K.
------------------------------------------

(a) Exhibits and Index of Exhibits (all exhibits except as otherwise noted are
incorporated by reference; Exhibit 2.1 and 2.2 were filed as exhibits to
Registrant's April 30, 1997 Form 8K; Exhibit 10.12 was filed as an exhibit to
Registrant's 1997 Form 10KSB, Exhibits 3.1, 10.15 and 21.1 were filed as
exhibits to Registrant's 1998 Form 10KSB, Exhibit 4.6 and 10.16 were filed as
exhibits to Registrant's 2000 Form 10KSB, Exhibit 10.17 and 10.18 were filed as
exhibits to Registrant's 2001 Form 10KSB, Exhibits 10.19 through 10.22 were
filed as exhibits to Registrant's 2002 Form 10KSB, all other such Exhibits were
filed as exhibits to Registrant's 1993 Form 10KSB).

No.         Description
---         -----------
2.1         Stock Option and Exchange Agreement and exhibits among Earth
            Sciences, Inc. and ADA-ES, Inc., ADA Environmental Solutions LLC,
            ADA Technologies, Inc., C. Jean Bustard, John F. Wurster, Kenneth E.
            Baldrey and Cameron E. Martin dated April 30, 1997.
2.2         Amended and Restated Operating Agreement of ADA Environmental
            Solutions LLC, a Colorado Limited Liability Company, April 30, 1997.
3.1         Articles of Incorporation, as amended and restated.
3.2         By-laws.
4.6         Amended and Restated 10% Convertible Debenture Due September 8, 2003
10.2        Lease dated April 3, 1978 between Western Co-operative Fertilizers,
            Limited and ESI Resources, Ltd.
10.12       Assignment of Net Profits Interest dated November 1, 1997 from
            Registrant, ESI Resource Limited, and Earth Sciences Extraction
            Company to Yankee Atomic Electric Company and Vermont Yankee Nuclear
            Power Corporation.
10.15       Amended and Restated Promissory Note dated September 8, 2000
10.16       Market Development Agreement between Norit Americas Inc. and Earth
            Sciences, Inc. dated June 29, 2001
10.17       Joint Venture and Co-Marketing Agreement by and between ADA
            Environmental Solutions, LLC and Arch Coal Sales Company dated
            January 1, 2002
10.19       Earth Science, Inc. 2000 Stock Option Plan dated December 7, 2000
10.20       Stock Option Agreement dated December 7, 2000 between Earth
            Sciences, Inc. and John F. Wurster
10.21       Distribution Agreement between Earth Sciences, Inc. and ADA-ES, Inc.
            dated March 17, 2003
10.22       Joint Product Exploitation and Marketing Agreement dated October 2,
            2002, by and between ALSTOM Power Inc. and ADA Environmental
            Solutions LLC
21.1        Subsidiaries of Registrant.
23.1*       Consent of Hein + Associates LLP
99.1*       Certification Pursuant to 18 U.S.C. Section 1350

(*) - filed herewith.

(b) Reports on Form 8-K.

None.

<PAGE>


SIGNATURES
----------
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.

Earth Sciences, Inc.
--------------------
 (Registrant)

By /s/ Mark H. McKinnies                    /s/ Ramon E. Bisque
------------------------                    -------------------
Mark H. McKinnies, President                Ramon E.  Bisque
and Principal Financial Officer             Chairman of The Board of Directors

Date:   August 19, 2003                     August 19, 2003
        ---------------                     ---------------

In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated.

/s/ Ramon E. Bisque                         /s/ Robert H. Lowdermilk
-------------------                         -------------------------
Ramon E.  Bisque                            Robert H. Lowdermilk
Chairman of The Board of Directors          Director

August 19, 2003                             August 19, 2003
---------------                             ---------------
     Date                                         Date


/s/ Duane N. Bloom                          /s/ Michael D. Durham
------------------                          ---------------------
Duane N.  Bloom, Director                   Michael D. Durham, Director

August 19, 2003                             August 19, 2003
---------------                             ---------------
     Date                                        Date


/s/ Mark H. McKinnies                       /s/ Ronald B. Johnson
---------------------                       ---------------------
Mark H. McKinnies, Director                 Ronald B. Johnson, Director

August 19, 2003                             August 19, 2003
---------------                             ---------------
     Date                                        Date


/s/ Rollie J. Peterson
----------------------
Rollie J. Peterson, Director

August 19, 2003
---------------
     Date

<PAGE>




                      Earth Sciences, Inc. And Subsidiaries

                              Financial Statements
                                December 31, 2002



                          INDEX TO FINANCIAL STATEMENTS


                                                                            PAGE
                                                                            ----

Independent Auditor's Report.................................................F-2

Consolidated Balance Sheet - December 31, 2002...............................F-3

Consolidated Statements of Operations - For the Years Ended
        December 31, 2002 and 2001...........................................F-4

Consolidated Statements of Changes in Stockholders' Equity -
        For the Years Ended December 31, 2002 and 2001.......................F-5

Consolidated Statements of Cash Flows - For the Years Ended
        December 31, 2002 and 2001...........................................F-6

Notes to Consolidated Financial Statements...................................F-7







                                       F-1
<PAGE>





                          INDEPENDENT AUDITOR'S REPORT




To the Board of Directors and Stockholders
Earth Sciences, Inc. and Subsidiaries
Golden, Colorado


We have audited the accompanying consolidated balance sheet of Earth Sciences,
Inc. and subsidiaries as of December 31, 2002, and the related consolidated
statements of operations, changes in stockholders' equity and cash flows for the
years ended December 31, 2002 and 2001. These consolidated financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Earth Sciences, Inc.
and subsidiaries as of December 31, 2002, and the results of their operations
and their cash flows for the years ended December 31, 2002 and 2001, in
conformity with accounting principles generally accepted in the United States of
America.




HEIN + ASSOCIATES LLP

Denver, Colorado
February 28, 2003


                                      F-2
<PAGE>
<TABLE>
<CAPTION>

                        EARTH SCIENCES, INC. AND SUBSIDIARIES

                             CONSOLIDATED BALANCE SHEET
                                  DECEMBER 31, 2002

                                       ASSETS
                                       ------
CURRENT ASSETS:
<S>                                                                     <C>
    Cash and cash equivalents                                           $    323,000
    Trade receivables, with allowance for doubtful accounts of $5,000      1,116,000
    Inventories                                                               87,000
    Prepaid expenses and other                                               119,000
                                                                        ------------
             Total current assets                                          1,645,000

PROPERTY, PLANT AND EQUIPMENT, at cost                                     1,364,000
    Less accumulated depreciation and amortization                          (755,000)
                                                                        ------------
             Net property, plant and equipment                               609,000

GOODWILL, net of $1,556,000 in amortization                                2,024,000

INTANGIBLE ASSETS, net of $17,000 in amortization                             88,000

OTHER ASSETS                                                                 413,000
                                                                        ------------
TOTAL ASSETS                                                            $  4,779,000
                                                                        ============
                        LIABILITIES AND STOCKHOLDERS' EQUITY
                        ------------------------------------
CURRENT LIABILITIES:
    Notes payables:
         Related parties                                                $    100,000
         Others                                                              191,000
    Accounts payable                                                         482,000
    Accrued expenses                                                         208,000
    Current portion-capital lease obligations                                  4,000
    Deferred revenue                                                         383,000
                                                                        ------------
             Total current liabilities                                     1,368,000

LONG-TERM LIABILITIES:
    Capital lease obligations                                                 10,000
    Notes to related parties, net of current portion                       1,050,000
    Notes payable to vendors, net of current portion                         172,000
    Other liabilities                                                        752,000
                                                                        ------------
                                                                           1,984,000
COMMITMENTS AND CONTINGENCIES (Notes 5, and 8)

STOCKHOLDERS' EQUITY:
    Common stock, $.01 par value; 50,000,000 shares authorized;
         33,364,000 shares issued and outstanding                            334,000
    Additional paid-in capital                                            28,746,000
    Accumulated deficit                                                  (25,816,000)
    Foreign currency translation adjustment                               (1,837,000)
                                                                        ------------
             Total stockholders' equity                                    1,427,000
                                                                        ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                              $  4,779,000
                                                                        ============


                See accompanying notes to these financial statements.

                                         F-3
<PAGE>

                      EARTH SCIENCES, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS


                                                       FOR THE YEARS ENDED
                                                           DECEMBER 31,
                                                  -----------------------------
                                                      2002             2001
                                                  ------------     ------------
REVENUE:
    Chemical sales, consulting and other          $  3,095,000     $  2,996,000
    Government contracts                             2,649,000        2,575,000
                                                  ------------     ------------
         Total revenues                              5,744,000        5,571,000

COST AND EXPENSES:
    Cost of government contracts                     1,647,000        1,678,000
    Other operating costs                            1,433,000        1,336,000
    General and administrative                       2,054,000        2,154,000
    Research and development                            93,000          102,000
    Depreciation and amortization                      114,000          928,000
    Impairment of assets                                  --          2,088,000
                                                  ------------     ------------
         Total expenses                              5,341,000        8,286,000
                                                  ------------     ------------

OPERATING INCOME (LOSS)                                403,000       (2,715,000)

OTHER INCOME (EXPENSE):
    Interest expense                                  (164,000)        (226,000)
    Other, net                                           4,000           20,000
                                                  ------------     ------------
             Total other income (expense)             (160,000)        (206,000)
                                                  ------------     ------------

NET INCOME (LOSS)                                 $    243,000     $ (2,921,000)
                                                  ============     ============

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING          32,957,044       32,461,621
                                                  ============     ============

NET INCOME (LOSS) PER SHARE
    (Basic and diluted)                           $        .01     $       (.09)
                                                  ============     ============



              See accompanying notes to these financial statements.

                                       F-4
<PAGE>

                                           EARTH SCIENCES, INC. AND SUBSIDIARIES

                                CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                      FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001



                                            COMMON STOCK           ADDITIONAL                    CUMULATIVE
                                    ---------------------------     PAID-IN      ACCUMULATED     TRANSLATION
                                       SHARES         AMOUNT        CAPITAL        DEFICIT       ADJUSTMENTS         TOTAL
                                    ------------   ------------   ------------   ------------    ------------    ------------

BALANCES, January 1, 2001             32,179,000   $    322,000   $ 28,367,000   $(23,138,000)   $ (1,837,000)   $  3,714,000

    Stock options exercised              115,000          1,000         57,000           --              --            58,000
    Stock issued to employees for
      services                           451,000          5,000        149,000           --              --           154,000
    Net loss                                --             --             --       (2,921,000)           --        (2,921,000)
                                    ------------   ------------   ------------   ------------    ------------    ------------

BALANCES, December 31, 2001           32,745,000        328,000     28,573,000    (26,059,000)     (1,837,000)      1,005,000

    Stock options exercised              141,000          1,000         34,000           --              --            35,000
    Stock issued to employees for
      services                           478,000          5,000        139,000           --              --           144,000
    Net income                              --             --             --          243,000            --           243,000
                                    ------------   ------------   ------------   ------------    ------------    ------------

BALANCES, December 31, 2002           33,364,000   $    334,000   $ 28,746,000   $(25,816,000)   $ (1,837,000)   $  1,427,000
                                    ============   ============   ============   ============    ============    ============



                                   See accompanying notes to these financial statements.

                                                          F-5
<PAGE>

                               EARTH SCIENCES, INC. AND SUBSIDIARIES

                               CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                                             FOR THE YEARS ENDED
                                                                                 DECEMBER 31,
                                                                         --------------------------
                                                                             2002           2001
                                                                         -----------    -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income (loss)                                                    $   243,000    $(2,921,000)
    Adjustments to reconcile net income (loss) to net cash provided by
         operating activities:
             Depreciation and amortization                                   114,000        928,000
             Impairment of Calgary facility                                     --        2,088,000
             Expenses paid with stock                                        144,000        154,000
             Changes in operating assets and liabilities:
                 (Increase) decrease in:
                      Receivables                                           (468,000)      (133,000)
                      Inventories                                            240,000       (284,000)
                      Other assets                                             7,000         24,000
                 Increase (decrease) in:
                      Accounts payable                                       146,000        174,000
                      Accrued expenses                                        26,000         (9,000)
                      Other liabilities                                     (394,000)       571,000
                                                                         -----------    -----------
         Net cash provided by operating activities                            58,000        592,000

CASH FLOWS FROM INVESTING ACTIVITIES:
    Capital expenditures                                                     (81,000)      (131,000)
                                                                         -----------    -----------
         Net cash used in investing activities                               (81,000)      (131,000)

CASH FLOWS FROM FINANCING ACTIVITIES:
    Payments on notes payable and long-term debt                            (190,000)      (151,000)
    Proceeds for exercise of stock options                                      --           33,000
                                                                         -----------    -----------
         Net cash used in financing activities                              (190,000)      (118,000)

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                            (213,000)       343,000

CASH AND CASH EQUIVALENTS, beginning of year                                 536,000        193,000
                                                                         -----------    -----------
CASH AND CASH EQUIVALENTS, end of year                                   $   323,000    $   536,000
                                                                         ===========    ===========
SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION:
    Cash payments for interest                                           $   157,000    $   158,000
                                                                         ===========    ===========
    Stock and options issued for services                                $   144,000    $   154,000
                                                                         ===========    ===========
    Conversion of accounts payable into notes payable                    $      --      $    33,000
                                                                         ===========    ===========
    Exercise of stock options by cancellation of accrued liabilities     $    35,000    $    25,000
                                                                         ===========    ===========


                       See accompanying notes to these financial statements.

                                                F-6
</TABLE>
<PAGE>

                      EARTH SCIENCES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.   SUMMARY OF NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES:
     --------------------------------------------------------------------

     Nature of Operations - The accompanying consolidated financial statements
     include the accounts of Earth Sciences, Inc. (ESI) and its wholly-owned
     subsidiaries, ESI Resources Limited (ESIR), ADA Environment Solutions LLC
     (ADA), and ESI Chemicals, Inc. (ESIC). ADA has been consolidated with ESI
     and its subsidiaries since its acquisition, effective May 1, 1997. ESIC has
     been a dormant subsidiary since 1983. ESIR's only asset is its investment
     in its wholly-owned subsidiary, Earth Sciences Extraction Company (ESEC).
     All significant intercompany transactions have been eliminated.
     Collectively, these entities are referred to as the Company.

     The Company is principally engaged in providing environmental technologies
     and specialty chemicals to the coal-burning utility industry. The Company
     also generates substantial revenue from government contracts. The Company
     sales occur principally throughout the United States. While the Company had
     improved financial results in the year 2002, continued improvements are
     required to improve liquidity. The Company anticipants that the Department
     of Energy contracts (Note 3), improved results at ADA, and reduced
     expenditures at the Calgary facility will further improve financial results
     and liquidity. Unsatisfactory operations of any of the ADA units could
     frustrate the Company's ability to continue profitablity.

     Cash Equivalents - For purposes of the statement of cash flows, the Company
     considers all highly liquid debt instruments with original maturities of
     three months or less to be cash equivalents.

     Inventories - Inventories are stated at the lower of cost or market,
     determined by the first-in, first-out method and consist of supplies.

     Percentage of Completion - ADA follows the percentage of completion method
     of accounting for all significant long-term contracts excluding government
     contracts. The Company recognizes revenue on government contracts based on
     the time and expenses incurred to date. The percentage of completion method
     of reporting income from contracts takes into account the cost and revenue
     to date on contracts not yet completed. Except for the government contracts
     discussed in Note 3 below, the Company had no material long-term contracts
     in progress at December 31, 2002.

     Revenue Recognition - ADA chemical sales are recognized when products are
     shipped to customers. A reserve is established for any returns, based on
     historical trends. Chemical products are shipped FOB shipping point and
     title passes to the customer when the chemicals are shipped. The Company's
     sales agreements do no contain right of inspection or acceptance provision
     and products are generally received by customers within one day of
     shipment. The Company has had no significant history of non-acceptance, nor
     of replacing goods damaged or lost in transit. ADA equipment sales are
     recognized when the equipment is delivered and installed, and all return or
     buy back privileges have expired. Government contracts are recognized as
     services are performed based on various estimates provided by management.


                                      F-7
<PAGE>

                      EARTH SCIENCES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     Property, Plant and Equipment - Property, plant and equipment is stated at
     cost. Depreciation on other assets is provided using the straight-line
     method based on estimated useful lives ranging from 3 to 15 years.
     Maintenance and repairs are charged to operations as incurred. When assets
     are retired, or otherwise disposed of, the property accounts are relieved
     of costs and accumulated depreciation and any resulting gain or loss is
     credited or charged to income. Under the Company's current operating plan,
     it does not intend to ultimately mine its mineral properties, but rather,
     sell an interest in the properties to an industry partner for cash and/or a
     royalty. As a result, gains and losses from the sale of mineral properties
     are reflected in other income.

     Other Assets and Liabilities - Other assets consist primarily of the
     Calgary facility of $396,000. Since the Calgary facility was idled in
     August of 1999, depreciation has been provided on a straight-line basis
     using an estimated useful life of 15 years. Other liabilities include
     $600,000, which is the Company estimate as to the future decommissioning
     costs associated with facilities. The Company is in litigation as to the
     lease and rail access to this facility (see Notes 2 and 5).

     Intangible Assets - Intangible assets principally consist of patents.
     Acquired patents are being amortized over a 7-year period using the
     straight-line method, which is less than the remaining legal life of the
     patents. Patents obtained by the Company directly are being amortized over
     a 17-year life.

     Intangible assets consists of:

                                        Accumulated
                            Cost        Amortization       Net
                         -----------    ------------   -----------

        Patents          $   105,000    $   (17,000)   $    88,000
                         ===========    ===========    ===========

     Goodwill - Goodwill consists of the excess of the aggregate purchase price
     over the fair value of net assets of businesses acquired. Goodwill was
     amortized over a 10-year period through December 31, 2001. Beginning on
     January 1, 2002, Goodwill was no longer amortized but is subject to
     impairment testing as discussed below. The changes in the carrying amount
     of goodwill for the years ended December 31, 2001 and 2002, are as follows:
<TABLE>
<CAPTION>

                                                               Accumulated
                                                  Goodwill     amortization        Net
                                                 -----------   ------------   -----------
          <S>                                    <C>           <C>            <C>
          Balance as of January 1, 2001          $ 3,580,000   $(1,184,000)   $ 2,413,000
          Amortization expense for the year             --     $  (389,000)      (389,000)
                                                 -----------   -----------    -----------
          Balance December 31, 2001              $ 3,580,000   $(1,573,000)   $ 2,024,000
          Amortization expense for the year             --            --             --
                                                 -----------   -----------    -----------
          Balance December 31, 2002              $ 3,580,000   $(1,573,000)   $ 2,024,000
                                                 ===========   ===========    ===========
</TABLE>

     As of January 1, 2002, the Company adopted FAS 142, "Goodwill and Other
     Intangible Assets." Under FAS 142, Goodwill is no longer amortized, but
     subject to an impairment evaluation, which is performed in the fourth
     quarter of each year.

     During fiscal 2002, the Company engaged an investment banking firm to
     perform a valuation of the ADA. As a result of this evaluation as well as
     other factors, the Company concluded that no impairment of its goodwill was
     required.

                                      F-8
<PAGE>

                      EARTH SCIENCES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     Impairment of Long-Lived Assets - In 2001 the Company followed Statement of
     Financial Accounting Standards (SFAS) No. 121, Impairment of Long-Lived
     Assets. In the event that facts and circumstances indicate that the cost of
     assets or intangible assets may be impaired, an evaluation of
     recoverability would be performed. In the fourth quarter of 2001, a further
     evaluation of the Calgary facility was performed in light of the business
     climate after events of September 11, 2001. The estimated future
     undiscounted cash flows associated with the asset were compared to the
     asset's net carrying amount to determine if a write-down to market value or
     discounted cash flow value was required. The results of the test indicated
     that an impairment was required. The Company recorded an impairment of
     $2,088,000 in 2001 to reduce the facility's carrying value to the estimated
     fair value after giving consideration to the remote nature of any future
     payment on the net profits royalty directly related to the facility.

     In 2002 the Company adopted Statement of Financial Accounts Standards
     (SFAS) No. 144, Accounting for the Impairment or Disposal of Long-Lived
     Assets. According to SFAS 144, an impairment exists when the carrying
     amount of a long-lived asset exceeds its fair value. As of December 31,
     2002, the carrying value of this facility approximated the estimated future
     cash flows, as calculated under SFAS 144, therefore the Company did not
     recognize any additional impairment expense for the year ended December 31,
     2002.

     Income Taxes - The Company accounts for income taxes under the liability
     method of SFAS No. 109, whereby current and deferred tax assets and
     liabilities are determined based on tax rates and laws enacted as of the
     balance sheet date.

     Foreign Currency Translation - Through September 30, 1997, the accounts of
     ESEC were maintained in Canadian dollars, its functional currency at that
     time. Assets and liabilities were translated into U.S. dollars at the
     current exchange rate, and earnings or losses were translated at the
     average exchange rate for the year; resulting translation adjustments were
     recorded as a separate component of stockholders' equity.

     During 1997, ESEC ended its construction and start-up phase of the Calgary
     plant and commenced production and sales activities of its primary product.
     While in operation, the Company purchased most of its raw materials and
     sold most of its products from/to U.S. entities in U.S. dollars and as a
     result, ESEC changed its functional currency from Canadian dollars to U.S.
     dollars during 1997. Accordingly, effective October 1, 1997, current assets
     and liabilities denominated in Canadian are translated in U.S. dollars at
     the current exchange rate with any resulting gain or loss recorded in the
     income statement. Property, plant and equipment is recorded at its
     historical costs (U.S. dollars) as of October 1, 1997, after taking into
     effect the foreign currency translation adjustment from Canadian dollars to
     U.S. dollars at that date.

     If the Company should abandon, dispose or otherwise cease operations in
     Canada, the cumulative foreign currency adjustment recorded as a contra
     equity amount of $1,837,000 will be recorded as an operating expense. Such
     adjustment, however, will have no effect on net equity.

     Cost of Government Contracts - Costs of government contracts includes all
     labor, subcontract labor, materials, equipment, supplies and travel cost
     directly related and charged to the contracts being performed.

     Research and Development Costs - Research and development costs are charged
     to operations in the period incurred.


                                      F-9
<PAGE>

                      EARTH SCIENCES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     Income (Loss) Per Share - The income (loss) per common share is presented
     in accordance with the provisions of SFAS No. 128, Earnings Per Share.
     Basic EPS is calculated by dividing the income or loss available to common
     shareholders by the weighted average number of common shares outstanding
     for the period. Diluted EPS reflects the potential dilution that could
     occur if securities or other contracts to issue common stock were exercised
     or converted into common stock. The effect of considering all potential
     dilutive securities (totaling 2,337,000 and 2,608,000 at December 31, 2002
     and 2001, respectively) are either insignificant for 2002 or antidilutive
     as a result of the Company's net loss for the year ended December 31, 2001.
     Accordingly, basic and diluted EPS are the same for each year.

     Stock-Based Compensation - The Company records expense for stock options
     granted to employees by using APB 25, which requires expense to be
     recognized only to the extent the exercise price of the stock-based
     compensation is below the market price on the date of grant. Transactions
     in equity instruments with non-employees for goods or services are
     accounted for on the fair value method. Because the Company has elected not
     to adopt the fair value accounting described in SFAS No. 123 for employees,
     it is subject only to the disclosure requirements described in SFAS No.
     123.

     Use of Estimates - The preparation of the Company's consolidated financial
     statements in conformity with generally accepted accounting principles
     requires the Company's management to make estimates and assumptions that
     affect the amounts reported in these financial statements and accompanying
     notes. Actual results could differ from those estimates. The Company makes
     significant assumptions concerning the impairment of and the remaining
     realizability of its extraction facility, mineral properties and
     intangibles, the deferred tax valuation allowance, as well as future
     decommissioning cost associated with its solvent extraction facility. It is
     at least reasonably possible that the Company's estimates could be
     materially revised within the next year. In addition, the Company enters
     into significant research contracts with the U.S. Government, which are
     subject to future audits. Pursuant to the contracts, the Company makes
     estimates of certain overhead and other rates, which may be adjusted as a
     result of such audits. At this time, the Company does not believe any
     future government audit will result in material adjustment to previously
     recorded revenues.

     Comprehensive Income/Loss - SFAS No. 130 establishes standards for
     reporting and display of comprehensive income/loss, its components and
     accumulated balances. Comprehensive income/loss is defined to include all
     changes in equity except those resulting from investments by owners and
     distributions to owners. Comprehensive income/loss was the same as net
     income(loss) in 2002 and 2001.


                                      F-10
<PAGE>

                      EARTH SCIENCES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     Segment Information - The Company follows SFAS No. 131, Disclosure About
     Segments of an Enterprise and Related Information. SFAS No. 131 establishes
     standards on the way that public companies report financial information
     about operating segments in annual financial statements and requires
     reporting of selected information about operating segments in interim
     financial statements issued to the public. It also establishes standards
     for disclosures regarding products and services, geographic areas, and
     major customers. SFAS No. 131 defines operating segments as components of a
     company about which separate financial information is available that is
     evaluated regularly by the chief operating decision maker in deciding how
     to allocate resources and in assessing performance. The Company has
     identified the following reportable segments: environmental technology and
     specialty chemicals, government contracts and natural resource exploration.
     The Company also has a segment which maintains an idle solvent extraction
     facility which was previously used for the production of purified phosphate
     products.






                                      F-11
<PAGE>

                      EARTH SCIENCES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


2.   PROPERTY, PLANT AND EQUIPMENT:
     ------------------------------

     Property, plant and equipment as of December 31, 2002 is summarized as
     follows:

                                                                Estimated Useful
                                                                      Lives
                                                                ---------------

          Machinery and equipment              $  881,000              10
          Furniture and fixtures                   98,000               5
          Land and mineral properties             385,000
                                               ----------

                                               $1,364,000
                                               ==========

     Depreciation and amortization of property, plant and equipment for the
     years ended December 31, 2002 and 2001 was $88,000 and $535,000,
     respectively.

     The Company's mineral properties include patented mining claims. These land
     and mineral properties are not in production. The recovery of the Company's
     investment in these assets is dependent upon future sales of the Company's
     interests therein or production from such assets. In addition, the Company
     leases or has options to lease various other claims. Such leases are
     cancelable at the option of the Company.

     The above table does not include the net assets of the Calgary facility.
     The Company intends to sell certain equipment and other assets currently
     not in use at the facility, but continues to investigate alternative uses
     for the building and related land under lease. The net assets of the
     Calgary facility included under the balance sheet caption "Other Assets"
     amounted to $396,000 as of December 31, 2002, which represents the fair
     market value of the assets held for sale.

                                      F-12
<PAGE>

                      EARTH SCIENCES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


3.   GOVERNMENT CONTRACTS:
     ---------------------

     ADA is performing activities under three contracts awarded by the
     Department of Energy (the "DOE") that contributed a total of $2,650,000 and
     $2,575,000 to revenues in 2002 and 2001, respectively. ADA typically
     invoices the DOE monthly for estimated labor and expenditures plus overhead
     factors, less cost share amounts. The total approved DOE budgets for these
     contracts amount to $10,400,000, of which the Company's and industry
     partners' cost-share portion is $3,500,000. The remaining unearned amount
     of the contracts expected to be recognized by the Company (including cash
     contributions by other industry partners) is $2,900,000. The Company is in
     the process of working with DOE on a new contract in which the Company will
     be a subcontractor and primary technology provider for 2003 through 2008.
     These contracts are subject to audit and future appropriation of funds by
     Congress. The Company's historical experience has not resulted in
     significant adverse adjustments to the Company, however the government
     audits for years ended 2002 and 2001 have not yet been finalized.

4.   DEBT:
     -----

                                                                    December 31,
                                                                        2002
                                                                    -----------
     Vendors:
     --------
     Notes payable to companies. Interest at 10% and 11%, monthly
     payments of $4,000 beginning November 1, 2000 with a
     remaining amount due on September 1, 2003 and monthly
     payments of $1,000 continuing through January 2004 with a
     remaining amount due February 2004.                            $   363,000

     Related Parties:
     ----------------
     The Company has a note payable and a debenture to a
     stockholder/director. The note has a remaining balance of
     $150,000 and the debenture is for $1,000,000. Both
     instruments are payable in full September 2003, however the
     Company is currently in the process of renegotiating the
     payment date and has received written confirmation from the
     holder that they will not require principle payments in
     excess of $100,000 in 2003. Both bear interest at the
     greater of prime plus 2% or 10% (10% at December 31, 2002).
     The holder can demand up to a $100,000 annual payment on
     both instruments combined with at least 90 days written
     notice. The instruments are convertible into common stock at
     the lesser of market or $.21 per share, however, the maximum
     number of shares that both can be converted into is
     1,000,000 shares. The note is collateralized by all the
     assets of the Company except ADA's accounts receivable and
     certain intangible assets. Any amounts not converted will be
     repaid in cash. The Company has agreed to certain covenants
     on both instruments, including a covenant not to sell
     substantially all the assets of ESI or any subsidiary. The
     Company has negotiated a verbal agreement with the holder to
     allow for the sale of certain ESEC assets.                       1,150,000
                                                                    -----------
                                                                      1,513,000
              Less current portion                                     (291,000)
                                                                    -----------

     Long-term debt, net of current portion                         $ 1,222,000
                                                                    ===========

                                      F-13
<PAGE>

                      EARTH SCIENCES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     The following table shows maturities by year for all the Company's debt and
     assumes the related party noteholder will request full payment of their
     remaining balance in 2004:

                  2003                                  $  291,000
                  2004                                   1,049,000
                  2005                                       5,000
                                                        ----------

                                                        $1,345,000
                                                        ==========


     Line of Credit - In 2002, ADA negotiated $350,000 line of credit with a
     financial institution. Amounts outstanding under the line of credit bear
     interest at 1% above prime, and such interest is payable monthly. Covenants
     of the line require the Company to meet certain working capital
     requirements. No amounts were outstanding under the line as of December 31,
     2002.

5.   CONTINGENT NET PROFITS ROYALTY ON THE CALGARY FACILITY:
     -------------------------------------------------------

     In 1997, ESI finalized agreements with Yankee Atomic Electric Company and
     Vermont Yankee Nuclear Power Corporation (the "Yankee Companies") and
     acquired an option to liquidate the liability to them, which at that time
     totaled $9,382,000. The liability arose from prepayments by the Yankee
     Companies for uranium during the period that the Calgary facility operated
     as a uranium extraction facility. Under the agreement, ESI paid the Yankee
     Companies $1,250,000 and granted them a 10-year, 10% net profit royalty on
     activities at the Calgary facility. Future payments to the Yankee Companies
     under the royalty cannot exceed $4,850,000. ESI has the option to purchase
     the royalty interest at December 31, 2002 for $3,250,000. The Company's
     option and the 10% net profit royalty from operations of the Calgary
     facility expire in 2007. The Calgary facility may not be assigned, sold,
     transferred or conveyed unless expressly subject to the royalty interest.
     The royalty interest requires payment of 10% of net income, if any, as
     defined, generated by the facility and expires in September 2007 without
     any further obligation. In the fourth quarter of 2001, coincidental with a
     downturn in the economy, management determined that the likely prospects
     for the restart of purified phosphate production at the facility were
     exhausted, that the sale of the remaining assets was the most likely course
     of action, and that the likelihood that any future royalty payments was
     remote. Therefore, the Company considered the remote nature of any future
     payment of the net profits royalty in its impairment analysis of the
     Calgary facility. No net profits payments have been made through December
     31, 2002.

                                      F-14
<PAGE>

                      EARTH SCIENCES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


6.   INCOME TAXES:
     -------------

     Deferred tax assets related to U.S. operations are as follows and are
     comprised of the following at December 31, 2002:

                                                               U.S.
                                                            Operations
                                                            -----------
        Deferred tax assets - non-current:
            Tax effect of net operating loss carryforward   $ 2,165,000
            Tax credit carryforwards                             13,000
            Property basis differences                          167,000
            Compensation related deferrals                      154,000
                                                            -----------
        Deferred tax assets                                   2,499,000
        Less valuation allowance                             (2,499,000)
                                                            -----------

        Net deferred tax assets                             $      --
                                                            ===========


     The Company has remaining U.S. a net operating loss carryforwards at
     December 31, 2002 of approximately $5,835,000, which if not utilized to
     reduce taxable income in future periods, will expire in the years 2003
     through 2021. In addition, the Company has $13,000 of alternative minimum
     tax credit which is available to offset future U.S. regular tax liability.

     The Company also has approximately $6,400,000 in Canadian tax assets, for
     which a full valuation allowance has been provided due to the status of the
     Canadian operations as held for sale. The Canadian tax assets include the
     tax effect of a net operating loss carryforward related to the Canadian
     subsidiary and operations which totaled $4,125,000 (U.S.).

     The utilization of these U.S. net operating loss carryforwards may be
     subject to restrictions because of the ownership changes of the Company
     that occurred as a result of issuances of the Company's securities. These
     restrictions will limit the amount of utilizable net operating loss
     carryforwards per year.

     The change in the valuation allowance in 2002 and 2001 was $(158,000) and
     $121,000, respectively. The Company's net income tax expense (benefit)
     differs from the expected income tax rate of approximately 34% primarily
     due to the change in the valuation allowance.

7.   STOCKHOLDERS' EQUITY:
     ---------------------

     Stock Bonus Plan - The Company has reserved 125,000 shares for awards under
     a stock bonus plan established in 1978. As of December 31, 2002, 15,000
     shares remain available for award under the plan.


                                      F-15
<PAGE>

                      EARTH SCIENCES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     Option Exercises -In 2001 the Company issued 115,000 shares to certain
     officers and employees upon the exercise of options for total consideration
     of $58,000.

     In 2002 the Company issued 141,000 shares to an officer and employee upon
     the exercise of options for total consideration of $35,000.

     Shares Issued for Services - The Company issued 478,000 and 451,000 shares
     of common stock in 2002 and 2001, respectively, for the payments of
     approximately $144,000 and $154,000 of employment related expenses, based
     upon the per share value of unrestricted common stock at the time of
     exchange.

     Stock Options - The following is a table of options issued during 2002 and
     2001:

                                                                        Weighted
                                                                        Average
                                              Employees   Non-employee  Exercise
                                               Options      Options      Price
                                              ---------    ---------     ------

     OPTIONS OUTSTANDING, January 1, 2001     1,883,000      270,000      $0.55

             Options exercised                 (115,000)           -       (.53)
             Options expired                   (160,000)    (170,000)     (1.78)
                                              ---------    ---------     ------

     OPTIONS OUTSTANDING, December 31, 2001   1,608,000      100,000       0.31
             Options granted                    149,000                    0.25
             Options exercised                 (141,000)           -       (.54)
             Options expired                   (279,000)    (100,000)     (1.78)
                                              ---------    ---------     ------

     OPTIONS OUTSTANDING, December 31, 2002   1,337,000            -       0.25
                                              =========    =========     ======


     Options for 149,000 shares were granted in 2002. The weighted average
     remaining contractual life for all options as of December 31, 2002 was
     approximately 3.6 years. At December 31, 2002, all outstanding options were
     fully vested and exercisable.


                                      F-16
<PAGE>

                      EARTH SCIENCES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     If not previously exercised, options outstanding at December 31, 2002, will
     expire as follows:


                                                                       Weighted
                                    Range                              Average
                               ----------------       Number of        Exercise
               Year            Low         High        Options          Price
               ----            ---         ----        -------          -----

               2005            .25          .25       1,173,000         $ .25
               2006            .30          .30          15,000         $ .30
               2007            .25          .25         149,000         $ .25
                                                      ---------
                                                      1,337,000
                                                      =========


     Pro Forma Stock-Based Compensation Disclosures - The Company applies APB
     Opinion 25 and related interpretations in accounting for its stock options
     and warrants which are granted to employees. Accordingly, no compensation
     cost has been recognized for grants of options and warrants to employees
     since the exercise prices were not less than the fair value of the
     Company's common stock on the grant dates. Had compensation cost been
     determined based on an estimate of the fair value consistent with the
     method of SFAS No. 123 at the grant dates for awards under those plans, the
     Company's net income and EPS would have been reduced to the pro forma
     amounts indicated below.

                                                      Year Ended December 31,
                                                    --------------------------
                                                       2002            2001
                                                    -----------    -----------
       Net income (loss) per share applicable to
          other stockholders:
              As reported                           $   243,000    $(2,921,000)
              Fair value of stock options               (31,000)          --
                                                    -----------    -----------
              Pro forma                             $   212,000    $(2,921,000)
       Net income (loss) per share applicable to
          other shareholders:
              As reported                           $       .01    $      (.09)
              Pro forma                             $       .01    $      (.09)



                                      F-17
<PAGE>

                      EARTH SCIENCES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     There were no options granted in 2001 and options granted in 2002 had an
     exercise price equal to the market price on the date of the grant. The fair
     value of each employee option granted in 2002 was approximately $.21 and
     was estimated on the date of grant using the Black-Scholes option-pricing
     model with the following weighted average assumptions:

                                               Years Ended December 31,
                                               ------------------------
                                                   2002         2001
                                               -----------   ----------

         Expected volatility                        87%          N/A
         Risk-free interest rate                   3.50%         N/A
         Expected dividends                          -           N/A
         Expected terms (in years)                   5           N/A


8.   COMMITMENTS AND CONTINGENCIES:
     ------------------------------
     Calgary Lease Issues - The Calgary facility is located on a site leased
     from the adjacent landowner who originally supplied feedstock to the
     facility in the 1980's. The lease has an indefinite term, but upon ESEC's
     permanent termination of operations, ESEC has a period of 24 months to
     remove all equipment, improvement and structures erected on the site after
     which time such assets become the sole property of the landlord. ESEC
     believes that the determination of when operations are permanently
     terminated is at its sole discretion. ESEC also has the obligation to
     return the site and any surrendered assets to the landlord in a safe
     condition that complies with the requirements of all statues, regulations
     and ordinances. Although ESEC has no current intent to terminate the lease
     and believes the site is currently in compliance with all regulations, ESEC
     has accrued and recorded as a liability of approximately $600,000 (recorded
     with other long-term liabilities) as an estimate of the ultimate costs it
     would expect to incur to return the facility to the landlord under the
     terms of the lease. The amount recorded is an estimate that includes
     significant assumptions, and it is reasonably possible that these
     assumptions could change in the future and that such a change could be
     material. Without further assessment and sampling an estimate of the
     possible range of costs and related expense cannot be made. The landlord
     commissioned a Phase 1 environmental study of the leased premises. Although
     this Phase 1 study did not include any cost estimates, the landlord has
     estimated the costs substantially higher than ESEC's estimated costs. The
     difference in estimates primarily relates to ESEC basing its estimate on
     revised quantities of the waste on site, assumptions regarding the future
     use of the building (including the future cost to demolish the building),
     and supervision costs. Any significant change to ESEC's estimates could
     result in further expenses being recorded at that time.

     During 2001 the landlord asserted that the cessation of operations at the
     Calgary facility has resulted in the termination of the easement under
     which a rail line services the site and threatened to take steps to
     prohibit the use of and ultimately remove the improvements on the easement
     right-of-way. In January 2002, ESIR filed a motion for injunctive relief to
     restrain the landlord from interfering with use of the rail line. The
     landlord has agreed to an adjournment of the matter to a future date and
     has agreed not to interfere with the use of the rail line until the date of
     the hearing of the Company's application. In September 2002, the landlord
     filed their Statement of Defense and a Counterclaim asserting termination
     of the easement, the site lease and another underlying agreement,

                                      F-18
<PAGE>

                      EARTH SCIENCES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     requesting an order from the Court to that affect and seeking damages in
     the amount of $6 million Canadian to remediate, restore and reclaim the
     leased site and easement. In December 2002 the Company filed a Statement of
     Defence to the Counterclaim vigorously denying breach of any obligation
     under the lease or easement, the landlord's characterization of the
     cessation of operations, the termination of the easement and site lease and
     that any amounts are due for reclamation of the site. To the best of
     management's knowledge and belief, the Company is in compliance with all
     permits and licenses issued for the construction and operation of the
     facility. The Company will continue to defend its rights for this rail line
     access to the site and the validity of the site lease. If the landlord is
     successful in asserting the termination of the rail line easement and site
     lease, it would severely affect the future economic feasibility of any
     operations at the Calgary plant. While there is secure truck access to the
     Calgary plant, the loss of the rail line easement could decrease the
     possibility of some alternative future uses of the Calgary plant.
     Nevertheless, the landlord and the Company have been negotiating a proposal
     for settlement, without prejudice, that has progressed through several
     stages and may result in a withdrawal from the legal action and a plan to
     remediate the site wherein the Company would share in a portion of
     remediation costs by assigning certain assets and by making monthly
     payments to the landlord over an extended period of time. The financial
     implications of an adverse court ruling or a negotiated settlement are
     unknown, and therefore, the financial statements do not include any
     adjustment related to this matter.

     Profit Sharing Retirement Plan - The Company has a defined contribution and
     401(k) plan to cover all eligible employees. The Company paid $159,000 and
     $207,000 as the contributions for 2002 and 2001, respectively, based on a
     percentage of the eligible employees' annual compensation.

     Capital Lease Obligations - The Company leases certain equipment under
     agreements classified as capital leases. Equipment under these leases has a
     cost of $434,000 and accumulated amortization of $420,000 as of December
     31, 2001. The following is a schedule of future minimum lease payments
     under capital leases at December 31, 2001. (The capitalized lease
     obligation is classified with other liabilities on the accompanying balance
     sheet.)

        Year                                                         Amount
        ----                                                        ---------

        2003                                                        $   6,000
        2004                                                            5,000
        2005                                                            4,000
        2006                                                            4,000
                                                                    ---------
                Total Future minimum lease payments                    19,000
        Less amount representing interest                              (5,000)
                                                                    ---------
                Present value of net minimum lease payments            14,000
        Less current portion                                           (4,000)
                                                                    ---------
                                                                    $  10,000
                                                                    =========

                                      F-19
<PAGE>

                      EARTH SCIENCES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     Office Lease - The Company leases office space and equipment under
     noncancellable operating leases. Total rental expense was $73,000 for each
     of the years ending December 31, 2002 and 2001. The total minimum rental
     commitments at December 31, 2002 was $820,000 for lease payments due in
     2003 through 2010.

                  Year                                  Amount
                  ----                                ----------

                  2003                                $   97,000
                  2004                                   113,000
                  2005                                   116,000
                  2006                                   119,000
                  2007                                   122,000
                  Thereafter                             253,000
                                                      ----------

                                                      $  820,000
                                                      ==========


     During 1997, the Board of Directors approved a one-year paid sabbatical
     leave for employees who have been employed for 25 years or greater. In
     1999, this plan was terminated, however, the Company continues to be
     obligated to pay the accrued sabbatical benefits already earned. These
     benefits may be paid in cash or stock at the discretion of the Board of
     Directors. As of December 31, 2002, the Company has accrued a net of
     $132,000 in connection with this benefit.

9.   FAIR VALUE OF FINANCIAL INSTRUMENTS:
     ------------------------------------

     The estimated fair values for financial instruments under SFAS No. 107,
     Disclosures about Fair value of Financial Instruments, are determined at
     discrete points in time based on relevant market information. These
     estimates involve uncertainties and cannot be determined with precision.

     As discussed in Note 5, the Company can terminate the extraction liability
     at December 31, 2002 for $3,250,000. Management estimates the ultimate
     payment of the liability (based on the current status of the Calgary
     facility) is remote at December 31, 2002. The amount the counterparty would
     be willing to settle this obligation for at December 31, 2002 is unknown
     but management's estimate of the fair value of this liability is
     negligible.

     The Company believes the fair value of all remaining financial instruments
     approximates the carrying amount due to their short-term nature or actual
     interest rates that approximate the Company's effective borrowing rate.


                                      F-20
<PAGE>

                      EARTH SCIENCES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


10.  CONCENTRATIONS OF CREDIT RISK, MAJOR CUSTOMERS, AND OTHER RISKS AND
     UNCERTAINTIES:
     -------------------------------------------------------------------

     Credit risk represents the accounting loss that would be recognized at the
     reporting date if counterparties failed completely to perform as
     contracted. Concentrations of credit risk (whether on or off balance sheet)
     that arise from financial instruments exist for groups of customers or
     counterparties when they have similar economic characteristics that would
     cause their ability to meet contractual obligations to be similarly
     effected by changes in economic or other conditions described below. In
     accordance with applicable accounting standards, the credit risk amounts
     shown do not take into account the value of any collateral or security.
     Financial instruments that subject the Company to credit risk consist
     principally of cash and cash equivalents and receivables.

     Sales to unaffiliated customers which represent 10% or more of the
     Company's sales for the year ended December 31, 2002 and 2001 were as
     follows (as a percentage of each entity's sales):

          Customer                                     2002       2001
          --------                                     ----       ----

          US Department of Energy                       41%        44%
          Mid American Energy Company                   12%        11%
          Cleco Corporation                             10%        11%
          Alabama Power Company                         14%        11%

     At December 31, 2002, approximately 79% of the Company's trade receivables
     were from five customers.

     A significant portion of ADA's revenue is derived from contracts with
     Department of Energy and chemical and equipment sales to coal-burning
     electric power plants.

11.  BUSINESS SEGMENT INFORMATION:
     -----------------------------

     The Company has identified its principal business segments as natural
     resource exploration, production of purified phosphate products and
     providing environmental technologies and specialty chemicals. The
     accounting policies of the segments are the same as those described in the
     summary of significant accounting policies. These segments are shown in the
     accompanying table as ESI, ESEC, and ADA, respectively. ESEC is located in
     Canada, and all its net assets, amounting to $453,000 are located in
     Canada. ADA, including government contracts, which generally in the past
     has not been specifically segregated for internal financial reporting.

     ESI's reportable segments are strategic business units that offer different
     products and services. They are managed separately because each business
     requires different technology and marketing strategies. Most of the
     businesses were acquired as a unit, and the management at the time of the
     acquisition was retained.

                                      F-21
<PAGE>

                      EARTH SCIENCES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


12.  SUBSEQUENT EVENTS:
     ------------------

     In March 2003, the Company and ADA-ES, Inc. entered into an agreement (the
     "Distribution Agreement") for the pro rata distribution of all the common
     stock of ADA-ES, Inc. to the shareholders of ESI based on a record date to
     be established by the Board and thereby forming a separate public company.
     The Distribution Agreement requires certain allocations of cash and
     liabilities among ESI and ADA-ES, Inc. prior to the distribution of ADA-ES,
     Inc. common stock.

     Based on the Distribution Agreement, ESI is to issue one share of ADA-ES
     for each ten shares currently owned by the shareholders of ESI. Therefore,
     it is contemplated that approximately 3,400,000 shares of ADA-ES will be
     issued to the shareholders of ESI in the spin-off. The spin-off is subject
     to a number of contingencies and ESI reserves the right to revoke the
     proposed spin-off at any time prior to the distribution date. There can be
     no assurances that the proposed spin-off will actually occur.



                                      F-22
<PAGE>
<TABLE>
<CAPTION>

                                EARTH SCIENCES, INC. AND SUBSIDIARIES

                             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                                                                            Eliminating
                                       ESI          ESEC          ADA         Entries   Consolidated
                                   ----------    ----------    ----------   ----------  ------------
2002

<S>                                <C>           <C>           <C>          <C>          <C>
Revenues from external customers   $     --      $   44,000    $5,700,000   $     --     $5,744,000
                                   ----------    ----------    ----------   ----------   ----------
        Total revenue              $     --      $   44,000    $5,700,000   $     --     $5,744,000
                                   ==========    ==========    ==========   ==========   ==========

Impairment of assets               $     --      $     --      $     --     $     --     $     --
Interest expense                   $  115,000    $   23,000    $   26,000   $     --     $  164,000
Depreciation and amortization      $    1,000    $     --      $  113,000   $     --     $  114,000

Segment operating income (loss)    $  (20,000)   $  (89,000)   $  493,000   $     --     $  403,000
Segment income (loss)              $ (115,000)   $ (111,000)   $  469,000   $     --     $  243,000

Segment assets                     $  353,000    $  453,000    $3,973,000   $     --     $4,779,000
Goodwill, net of amortization      $     --      $     --      $2,024,000   $     --     $2,024,000
Expenses paid with stock           $     --      $     --      $  144,000   $     --     $  144,000
Expenditures for segment assets    $     --      $     --      $   81,000   $     --     $   81,000








                                                F-23
<PAGE>

                                  EARTH SCIENCES, INC. AND SUBSIDIARIES

                               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                                                                               Eliminating
                                       ESI           ESEC           ADA          Entries    Consolidated
                                   -----------    -----------    -----------    ----------  ------------
2001

Revenues from external customers   $      --      $    20,000    $ 5,551,000    $     --     $ 5,571,000
                                   -----------    -----------    -----------    ----------   -----------
        Total revenue              $      --      $    20,000    $ 5,551,000    $     --     $ 5,571,000
                                   ===========    ===========    ===========    ==========   ===========

Impairment of assets               $      --      $ 2,088,000    $      --      $     --     $ 2,088,000
Interest expense                   $   126,000    $    27,000    $    73,000    $     --     $   226,000
Depreciation and amortization      $     3,000    $   427,000    $   498,000    $     --     $   928,000
Segment operating income (loss)    $   (67,000)   $(2,640,000)   $   (51,000)   $     --     $(2,758,000)
Segment income (loss)              $  (134,000)   $(2,666,000)   $  (121,000)   $     --     $(2,921,000)

Segment assets                     $   405,000    $    30,000    $ 4,371,000    $     --     $ 4,806,000
Goodwill, net of amortization      $      --      $      --      $ 2,024,000    $     --     $ 2,024,000
Expenses paid with stock           $      --      $      --      $   154,000    $     --     $   154,000
Expenditures for segment assets    $      --      $      --      $   131,000    $     --     $   131,000







                                                  F-24
</TABLE>
<PAGE>

CERTIFICATION

I, Mark H. McKinnies, certify that:

1. I have reviewed this annual report on Form 10-KSB of Earth Sciences, Inc.;

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

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

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this annual report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the "Evaluation Date"); and

c) presented in this annual report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.


Date: August 19, 2003

                                               /s/ Mark H McKinnies
                                               --------------------
                                               Name:  Mark H. McKinnies
                                               Title:  President and Treasurer