FORM 10-KSB
                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


(Mark One)
[ X ]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
        ACT OF 1934 for the fiscal year ended December 31, 2007.

                                       OR

[   ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934 for the transition period from ______ to ______.

                         COMMISSION FILE NUMBER 1-14244

                    ENVIRONMENTAL SERVICE PROFESSIONALS, INC.
             (Exact name of registrant as specified in its charter)

          NEVADA                                       84-1214736
    ---------------------                   ---------------------------------
  (State of Incorporation)                 (I.R.S. Employer Identification No.)

    1111 EAST TAHQUITZ CANYON WAY, SUITE 110, PALM SPRINGS, CALIFORNIA 92262
    ------------------------------------------------------------------------
               (Address of principal executive offices) (Zip Code)

       Registrant's telephone number, including area code: (760) 327-5284
                                 ---------------

        Securities registered pursuant to Section 12(b) of the Act: None

        Securities registered pursuant to Section 12(g) of the Act: None

Check whether the registrant  (1) has filed all reports  required to be filed by
Section 13 or 15(d) of the Securities  Exchange Act of 1934 during the preceding
12 months (or for such shorter  period that the  registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes [ X ] No [ ]

Check if there is no  disclosure of  delinquent  filers  pursuant 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.

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [ X ].

State issuer's revenues for the most recent fiscal year: $ 581,803

The aggregate market value of common stock of the Company,  par value $0.001 per
share ("Common Stock"), held by non-affiliates of the registrant as of March 31,
2008, was $1,881,417. The Company's Common Stock is currently traded on the Over
the Counter Bulletin Board.

There were 18,655,697  shares of Common Stock issued and outstanding as of March
31, 2008.

Transitional Small Business Disclosure Format (check one): Yes [   ] No [ X ].

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
<S>                                                                                                              <C>
PART I............................................................................................................1
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        ITEM 1.         DESCRIPTION OF BUSINESS...................................................................1
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        ITEM 2.         DESCRIPTION OF PROPERTY..................................................................12
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        ITEM 3.         LEGAL PROCEEDINGS........................................................................12
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        ITEM 4.         SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS......................................13
        --------        ---------------------------------------------------
PART II..........................................................................................................14
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        ITEM 5          MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.................................14
        -------         --------------------------------------------------------
        ITEM 6.         MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION................................15
        --------        ---------------------------------------------------------
        ITEM 7.         FINANCIAL STATEMENTS.....................................................................32
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        ITEM 8.         CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.....53
        -------         ------------------------------------------------------------------------------------
        ITEM 8A.        CONTROLS AND PROCEDURES..................................................................54
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        ITEM 8A(T).     CONTROLS AND PROCEDURES..................................................................55
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        ITEM 8B.        OTHER INFORMATION........................................................................57
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PART III.........................................................................................................58
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        ITEM 9.         DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS; COMPLIANCE WITH
        ------          SECTION 16(A) OF EXCHANGE ACT............................................................58
                        -----------------------------
        ITEM 10.        EXECUTIVE COMPENSATION...................................................................62
        --------        ----------------------
        ITEM 11.        SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
        -------         STOCKHOLDER MATTERS......................................................................64
                        -------------------
        ITEM 12.        CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE................66
        ---------       -------------------------------------------------------------------------
        ITEM 13.        EXHIBITS AND REPORTS ON FORM 8-K.........................................................66
        ---------       --------------------------------
        ITEM 14.        PRINCIPAL ACCOUNTANT FEES AND SERVICES...................................................67
        ---------       --------------------------------------
SIGNATURES.......................................................................................................69
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</TABLE>




<PAGE>
                                     PART I


         This Annual Report on Form 10-KSB contains  forward-looking  statements
including, without limitation,  statements concerning the future of the industry
in which Environmental Service Professionals, Inc. (the "Company") operates, the
Company's product development plans,  business strategy and financial estimates,
the  continued  acceptance  of its products and its  dependence  on  significant
distributors  and  customers.  In some cases,  you can identify  forward-looking
statements by terminology such as "may", "will", "should",  "expects",  "plans",
"anticipates",  "believes", "estimated",  "predicts", "potential", "continue" or
the negative of such terms or other comparable  terminology.  The Company cannot
guarantee  that it actually will achieve the plans,  intentions or  expectations
disclosed  in its  forward-looking  statements  and you should  not place  undue
reliance on the  forward-looking  statements  contained in this  document.  When
considering forward-looking statements, you should keep in mind the risk factors
and other  cautionary  statements  made in this  Annual  Report on Form  10-KSB.
Forward-looking  statements,  particularly  those concerning  anticipated events
relating  to the  development  and  marketing  of  the  Company's  products  and
services, and the timing or magnitude of those events, are inherently uncertain.
The risk factors discussed below and other  considerations noted throughout this
Annual  Report  on  Form  10-KSB  could  cause  its  actual  results  to  differ
significantly from those contained in any forward-looking statements.

         Although the Company  believes that the  expectations  reflected in the
forward-looking  statements are reasonable,  the Company cannot guarantee future
results, levels of activity,  performance, or achievements. The Company is under
no duty to update any of the  forward-looking  statements after the date of this
Annual  Report on Form 10-KSB to conform  forward-looking  statements  to actual
results.

ITEM 1. .DESCRIPTION OF BUSINESS

GENERAL

         Environmental Service Professionals, Inc. ("ESP" or the "Company") is a
Nevada corporation  headquartered in Southern  California.  Management  believes
that ESP is the first company in the moisture  inspection  industry  vertical to
become a publicly-traded company.

         ESP has  embarked  on a strategy  to acquire  businesses  dealing  with
environmental  issues and  resolving  environmentally  sensitive  problems.  The
Company has completed four  acquisitions  and is in various stages of discussion
with  additional  companies that management  believes are a good  philosophical,
operational  and  economic  fit  with  the  Company.  Of the  current  companies
targeted,  management  anticipates that some will be free-standing  subsidiaries
and others will be absorbed into existing operations.

         ESP offers various inspection services for addressing mold and moisture
intrusion  that can have an acute or chronic  negative  impact on the indoor air
quality of commercial and residential buildings.

         Environmental Safeguard Professionals,  Inc., a wholly owned subsidiary
("Safeguard"), has developed a standardized training, certification, inspection,
and results reporting  analysis program which forms the foundation of a suite of
services  that  together  comprise the Certified  Environmental  Home  Inspector

                                      -1-
<PAGE>

("CEHI") program. Management believes that business unit will provide the annual
subscription-based  moisture  maintenance  and energy use awareness  programs to
both residential and commercial clients.

         National  Professional  Services,   Inc.,  a  wholly-owned   subsidiary
("NPS"),  is  currently a  conglomerate  of seven  individual  associations  and
maintains annual paying members. The focus of this business unit is to establish
cross-training   on  CEHI  Programs  and  to  provide   information   concerning
residential  environmental  issues,  establish  training for underwriters,  loan
officers and appraisers to educate these groups about CEHI inspection protocols.
These training programs for insurance companies,  underwriters, loss control and
risk management  personnel educate and emphasize the benefits of using a CEHI on
the initial inspection and then establishing annual inspections.

OVERVIEW AND DESCRIPTION OF WHOLLY OWNED SUBSIDIARIES

ENVIRONMENTAL SAFEGUARD PROFESSIONALS, INC.

         Consistent  with the market  positioning  established  in ESP's initial
business plan and subsequently amended in November 2007; Safeguard has developed
a program that consists of a suite of services when used together  comprise what
management believes to be "The Industry's Best in Class Inspection".

         The branding of this program is called the Certified Environmental Home
Inspector Program ("CEHI Program").

         The CEHI Program  represents  the keystone for  environmental  services
supporting  the  residential   real-estate   mortgage,   banking  and  insurance
industries in their ability to manage losses through moisture related claims.

         Management  believes that the CEHI Program also will play a significant
role in  managing  the health and indoor air quality of the  environments  where
people work and live.

         Safeguard,   while   developing  the  CEHI  Program,   has  engaged  in
partnerships  with five  industry  participants,  the  National  Association  of
Moisture  Management  ("NAMM"),   Porter  Valley  Software,  Inc.,  EMLabs  P&K,
Environmental Data Resources Inc. ("EDR"), and CMC Energy Services, Inc. ("CMC")

         By accepting NAMM's inspection  protocols as the basis for the moisture
inspection,  EMLabs P&K's  MoldScore(TM)  as the prime method of sample analysis
and by  bringing  it all  together,  utilizing  the  core of the  InspectVue(TM)
application from Porter Valley as the software  platform,  ESP has constructed a
system that management  believes  produces a universally  accepted  standardized
report for both  moisture  related  issues and uses the best  science  currently
available to determine if any mold that may be present poses a hazard.

         Safeguard's   CEHI  Program  which  includes  the  Certified   Moisture
Inspection,  MoldScore(TM)  analysis and the Annual Mold & Moisture  Maintenance
services meet the  requirements  of the "mold  prevention and  maintenance  plan
("MPMP") as defined in the, "Mold Steps Toward Clarity A White Paper by the Mold
Working  Group   Updated:   July  2007"   published  by  the   Commercial   Real
Estate/Multifamily  Finance  Board  of  Governors  ("COMBOG")  Underwriting  and
Closing Committee of the Mortgage Bankers Association.

         By  integrating  the services of EDR and CMC,  management  believes the
CEHI Program can provide  abridged Phase I environmental  reports and energy use
inspections.

                                      -2-
<PAGE>

         The CEHI  Program  is all about  risk  management  for the  individual.
Management  believes  it is a  significant  tool to assess  the  health of one's
environment.  Management  believes that for the industry,  it provides an easily
understood,   standardized  way  of  assessing  the  risks  of  their  policies,
regardless of location.

SERVICE DESCRIPTION

         The  services  included  in the  CEHI  Program  are  comprised  of what
management believes to be highly advanced and standardized on-line and automated
procedural  protocols  developed  in  concert  with  each of the  four  industry
participants, ESP, NAMM, EMLab P&K, Porter Valley Software, EDR and CMC.

         It is a  requirement  that all CEHI's  utilize the on-line  system when
delivering any of the CEHI Program services.

         By working with  nationally  recognized  industry  leaders,  management
believes  that  the  Company  has  developed  state of the art  "best in  class"
procedures  providing the residential  real-estate and insurance  industries the
ability to manage losses through claim reduction.

         Management  believes that clients utilizing CEHI's, can be assured that
every single employee or approved vendor who provides  services through the CEHI
Program has obtained the industries' best training, certifications and equipment
required to provide the CEHI's Program's services.

         Management  believes that the CEHI Program also benefits the individual
inspector.  Approved  vendors of Safeguard who deliver CEHI Program services are
anticipated  to have the  ability  to deliver  more  effective  inspections  and
meaningful reports,  as well as the ability to provide additional  environmental
services  (e.g.:  Allergen  Screening,  Energy/Environmental  reports  and Radon
testing).  The CEHI's ability to provide certain  environmental  services may be
subject state or federal law and/or additional training requirements.

NATIONAL PROFESSIONAL SERVICES, INC.

         NPS  is  a  management   company  whose   services   include   complete
organization and association management,  advisory council and board of director
coordination, seminars, conferences, graphic design and printing, accounting and
reporting and consulting.  NPS provides complete  management  services for seven
different  membership   organizations  of  which  four  are  both  National  and
International  Organizations.  NPS  maintains a complete  servicing  facility in
Phoenix, Arizona which includes a fully trained staff, conference room, library,
accounting  services  and  a  computer  room  updated  with  the  latest  server
technology.

         NPS is a full service  association  management company with the ability
to work with trade associations that have between 250 members to 50,000 members.

DESCRIPTION OF ASSOCIATIONS

         NAREA -  Founded  in 1966,  The  NATIONAL  ASSOCIATION  OF REAL  ESTATE
APPRAISERS  ("NAREA") is a professional  organization of real estate appraisers.
NAREA is one of the  largest  professional  associations  in the United  States.

                                      -3-
<PAGE>

Management  believes  that  NAREA has earned the  credibility  and public  trust
needed when affiliating with a professional  organization.  Management  believes
that the Code of Ethics and Uniform Standards of Professional Appraisal Practice
("USPAP"),  to  which  members  must  adhere,  provides  the  industry  with the
assurance it needs when  accepting an appraisal  report from a NAREA  designated
,member.

         Along with the regular nationwide seminars and an annual Appraisal Expo
Conference,  members  receive  bi-monthly  newsletters,   appraisal  guidelines,
updates on regulations, the Annual Membership Directory,  legislative monitoring
of the issues affecting the appraisal industry and much more.

         EAA  -  The  ENVIRONMENTAL   ASSESSMENT   ASSOCIATION   ("EAA")  is  an
international  organization  dedicated to providing members with information and
education in the environmental  industry  relating to environmental  inspections
and testing. EAA represents thousands of environmental professionals who provide
services  to a wide  variety  of  clients  including  lenders,  federal  & state
agencies and private companies.

         The  Environmental  Assessment  Association's  membership  consists  of
environmental  inspectors,  lenders,  remediation firms and government agencies.
The   Environmental   Assessment   Association   offers   several   professional
designations and memberships which management believes makes the association one
of the largest in the world for environmental professionals.

         EAA has worked  closely  with  Environmental  Protection  Agencies  and
management  believes that EAA is at the forefront of the environmental  industry
maintaining a well earned reputation of "being involved".

         ACI  -  Management   believes  that  the  ASSOCIATION  OF  CONSTRUCTION
INSPECTORS ("ACI") is the largest  professional  organization for those involved
in construction inspection and construction project management.

         Management also believes that ACI is the leading association  providing
standards,  guidelines,   regulations,  education,  training,  and  professional
recognition in a field that has quickly become critical for both residential and
commercial construction.

         Management  believes that members of ACI provide a vital service to the
construction  industry,   providing  both  CONSTRUCTION  INSPECTIONS  (verifying
percentage of  completion  for the purpose of draw  requests)  and  CONSTRUCTION
PROJECT  MANAGEMENT  (providing  full  construction  monitoring,  paying  of the
contractor  and  sub-contractors,  verifying  each  stage  of  construction  and
reporting to the client).

         HIF - The HOUSING  INSPECTION  FOUNDATION ("HIF") is an organization of
professionals dedicated to the promotion and development of Home Inspection. The
Housing  Inspection  Foundation was created to provide members with Information,
Education, Standards, Ethics, and Professional Recognition.

         Management  believes that the home  inspection  industry is the fastest
growing   profession   today.   Management   believes   that  this  creates  new
opportunities  for those who are  involved in the real estate,  construction  or
environmental  fields  who are  willing  to learn  how to  perform  these  vital
services-including   home   inspectors,   building   inspectors,   real   estate
professionals, construction inspectors, and remodeling contractors.

                                      -4-
<PAGE>

         IREI  -  The  INTERNATIONAL   REAL  ESTATE  INSTITUTE   ("IREI")  is  a
professional   organization  founded  in  1966,  making  available  real  estate
professionals  to  those  requiring  Professional  Realty  Reports.   Management
believes that IREI is one of the largest professional associations in the world,
with more members in more cities than any other organization.

         Management  believes  that IREI has earned the  credibility  and public
trust one needs when  affiliating with a professional  organization.  Management
believes that the Code of Ethics and Professional Standards of Professional Real
Estate  Practice,  to which  members  must  adhere,  provides  the  industry the
assurance it needs when  accepting an appraisal  report from an IREI  designated
member.

         Professionally   presented  education  programs  enhance  the  member's
knowledge. Along with weekly seminars and an annual Realtor Expo and Conference,
members  receive  bi-monthly  Newsletters,  real estate  guidelines,  updates on
regulations,  the Annual  Membership  Directory,  legislative  monitoring of the
issues affecting the real estate industry and much more.

         ISMP - The  INTERNATIONAL  SOCIETY OF MEETING  PLANNERS  ("ISMP")  is a
professional organization founded in 1966, making available professional meeting
planners.  Management  believes  that  ISMP is one of the  largest  professional
associations  in the United  States  with more  members in more  cities than any
other organization.

         Management  believes  that ISMP has earned the  credibility  and public
trust one needs when  affiliating with a professional  organization.  Management
believes that the Code of Ethics and Uniform  Standards of Professional  Meeting
Planners  Practice,  to which  members  must  adhere,  provides the industry the
assurance  it needs  when  accepting  a meeting  report  from a ISMP  designated
member.

         Professionally   presented  education  programs  enhance  the  member's
knowledge.  In addition to the weekly  seminars and an Annual  Planners Expo and
Conference, members receive bi-monthly Newsletters,  meeting guidelines, updates
on regulations,  the Annual Membership  Directory and legislative  monitoring of
the issues affecting the Industry.

GOVERNMENT REGULATION

         ESP and its affiliates are subject to various federal,  state and local
laws affecting  regulation of the indoor air quality  testing  industry.  ESP is
also  subject to  government  laws and  regulations  governing  health,  safety,
working conditions,  employee relations, wrongful termination,  wages, taxes and
other  matters  applicable  to  businesses  in general.  Labor laws apply to the
employment of workers.  Furthermore,  ESP and its affiliates will be required to
obtain  business  licenses from state and local  governments in order to operate
its facilities. ESP and its affiliates must also obtain certifications for their
Certified  Industrial  Hygienists from the local or state jurisdictions when ESP
and its affiliates decide to operate in other states.

TRADEMARKS AND TRADENAMES

         ESP owns the following registered trademarks/service marks:

                                      -5-
<PAGE>

1        Environmental  Sampling  Professionals,   Inc(R),  registration  number
         2721471; and
2.       ESP and Design(R), registration number 2788620; and
3.       Allstate  Home   Inspection  &  Household   Environmental   Testing(R),
         registration number 2509084; and
4.       Advance Look(R), registration number 3035162.

EMPLOYEES

         As of March 31, 2008,  ESP and its  affiliates  employed 14 people on a
full-time basis. In addition, we utilize the services of several consultants and
part-time  employees on a regular  basis.  ESP projects  that during the next 12
months,  its workforce is likely to increase to approximately  24 employees.  To
support the Company's need for technical  staffing,  the Company has established
relationships  with technical  staffing  organizations  that continuously  offer
qualified  personnel to meet the Company's  needs,  both locally and from out of
the area.

SEASONALITY

         ESP's  operations  are  expected  to be  somewhat  affected by seasonal
fluctuations due to the rainy and wetter  conditions  during the fall and winter
months,  as opposed to the drier  conditions  during  spring and summer  months.
Management does not, however,  expect the disparity in cash flow from summer and
winter to be detrimental to the operation of the Company and its subsidiaries on
an overall basis.

RISK FACTORS

         You  should  carefully  consider  the risks  described  in this  annual
report.  These risks are not the only risks that ESP may face.  Additional risks
and uncertainties  that the Company is unaware of, or that the Company currently
deems  immaterial,  also may become important factors that affect ESP. If any of
the following risks occurs,  ESP's business,  financial  condition or results of
operations  could be  materially  and adversely  affected  which could cause the
Company's actual operating  results to differ materially from those indicated or
suggested  by  forward-looking  statements  made in this  annual  report on Form
10-KSB or presented elsewhere by management from time to time.

RISKS RELATED TO ESP'S BUSINESS

         LIMITED  OPERATING HISTORY - GOING CONCERN  QUALIFICATION.  The Company
was  formed in 2006  with the  acquisition  of  inspection  companies  and has a
limited operating  history.  The Company cannot assure at this time that it will
operate  profitably  or that it will have adequate  working  capital to meet its
obligations  as they become  due.  The Company  believes  that its success  will
depend in large  part on the  various  industry  stakeholders  and the  public's
acceptance of the Company's standardized training, certification, inspection and
results  reporting  analysis  program  which form the  foundation  of a suite of
services that together comprise: "The Industry's Best in Class Inspection".  The
brand  name of this  Program is ESP's  Certified  Environmental  Home  Inspector
("CEHI")  and is operating  under ESP's  Environmental  Safeguard  Professionals
Business   Unit.   This   Business   Unit   will   also   provide   the   annual
subscription-based   moisture  maintenance  programs  to  both  residential  and
commercial  clients.  The  Company  intends to invest  heavily in  establishing,
marketing and advertising its service. As a result, the Company expects to incur
operating  losses  in the near  term.  Furthermore,  the  Company's  independent
auditors have issued a going concern qualification in their audit report because
the Company does not currently have sufficient capital or revenue to sustain its
business.

                                      -6-
<PAGE>

         NO  ASSURANCE  OF SALES OR  PROFITABILITY.  The  Company's  business is
speculative and dependent upon the acceptance of its service as an effective and
reliable  method to perform indoor air quality and energy use  inspections.  The
Company's  business is also  dependent  on the  effectiveness  of its  marketing
program to convince potential clients and potential  independent  contractors to
utilize and its services so that the Company will become  profitable.  There can
be no  assurance  that the  public or  industry  stakeholders  will  accept  the
Company's  inspection  services,  or that the Company will be successful or that
its business  will earn any profit.  There can be no assurance  that the Company
will earn any revenues or that investors will not lose their entire  investment.
There is no assurance that the Company will operate its business successfully or
that its common  stock will have  value.  A failure of the  Company's  marketing
campaign  would  have  a  material  adverse  impact  on its  operating  results,
financial condition and business performance.

         COMPETITION.  The indoor air  quality  testing  industry  is  extremely
competitive.  The Company's principal  competitors will include other indoor air
quality testers,  certified  industrial  hygienists  ("CIHs"),  home inspectors,
termite inspectors,  and remediation and abatement companies.  These competitors
may have longer operating histories, greater name recognition,  larger installed
customer bases, and substantially greater financial and marketing resources than
the  Company.   The  Company  believes  that  the  principal  factors  affecting
competition in this proposed market include name recognition, and the ability to
receive referrals based on client confidence in the Company's service. There are
no  significant  barriers of entry that could keep  potential  competitors  from
opening similar indoor air quality testing facilities.  The Company's ability to
compete  successfully in the industry will depend in large part upon its ability
to market  and sell its  indoor  air  quality  testing  service  and to  respond
effectively to changing insurance industry standards and methodology.  There can
be no  assurance  that the Company will be able to compete  successfully  in the
indoor air quality testing industry,  or that future competition will not have a
material  adverse  effect on the  business,  operating  results,  and  financial
condition of the Company.

         SUBSTANTIAL   INDEBTEDNESS.   The  Company  has  incurred   substantial
indebtedness  through short-term bridge loans and other short term loans made to
the Company during the past 12 months by investors and lenders. These loans have
maturity  dates  occurring in the second quarter of 2008. The Company must raise
substantial  equity capital in order to refinance these short-term loans because
its  businesses  do not have  sufficient  revenue to service the debt.  There is
absolutely  no assurance  that the Company  will be able to raise the  necessary
capital to repay its debt.  If the Company  defaults on the debt, a  significant
portion of which is secured by the Company's assets, then the Company could lose
its  businesses  and related  assets,  and cause  investors to lose their entire
investment in the Company.  Furthermore,  there is no assurance that the Company
will not incur debt in the future,  that it will have sufficient  funds to repay
its indebtedness, or that the Company will not default on its debt, jeopardizing
its  business  viability.  The  Company  may  not be  able to  borrow  or  raise
additional  capital in the future to meet the  Company's  needs or to  otherwise
provide the capital necessary to conduct its business.

         DETERMINATION OF CONSIDERATION TO MANAGEMENT. The common stock and cash
consideration  being  paid  by the  Company  to its  management  have  not  been
determined based on arms length negotiation. The Company may grant stock options
and other equity  incentives to its executive  officers and directors  which may

                                      -7-
<PAGE>

further  dilute the  Shareholders'  ownership of the Company.  While  management
believes that the  consideration is fair for the work being performed,  there is
no assurance that the consideration to management reflects the true market value
of its services.

         GOVERNMENT  REGULATION.  The  Company's  business is subject to various
federal,  state and local laws that  govern  indoor air  quality  assessors  and
hygienists,  business licensing,  and those governing health, safety, the rights
of employees,  employment  discrimination,  wrongful termination,  wages, hours,
taxes,  quality of service,  and other  matters.  Failure of the Company and its
independent  environmental  inspectors  to  comply  with  applicable  government
regulations  or insurance  company  requirements  could have a material  adverse
effect on its financial condition and business operations.

         DEPENDENCE ON KEY  PERSONNEL.  The Company's  success is  substantially
dependent on the performance of its executive officers and key employees.  Given
the Company's early stage of operation,  the Company is dependent on its ability
to retain and motivate high quality personnel.  Although the Company believes it
will be able to engage qualified personnel for such purposes, an inability to do
so could materially adversely affect the Company's ability to market and perform
its  services.  The loss of one or more of its key  employees  or the  Company's
inability to hire and retain  other  qualified  employees  could have a material
adverse effect on the Company's business.

         CONFLICTS  OF  INTEREST.   The   relationship  of  management  and  its
affiliates to the Company could create  conflicts of interest.  While management
has a fiduciary duty to the Company,  it also determines its  compensation  from
the Company.  Management  believes that it will have the resources  necessary to
fulfill its management  obligations to all entities for which it is responsible.
Management's  compensation from the Company has not been determined  pursuant to
arm's-length negotiation.

         INABILITY TO MAKE NEW BUSINESS  ACQUISITIONS.  In the  short-term,  the
success of the Company's  business plan depends  heavily its ability to make key
business  acquisitions,  and in the longer  term,  on its ability to  profitably
integrate and operate those  businesses.  There is no assurance that the company
will  be  able to  find  and  acquire  the  new  businesses  that  it  needs  to
successfully implement its business plan. The Company needs to make new business
acquisitions in order to grow at an attractive pace,  since management  believes
that internal  growth only will  significantly  impair the  Company's  potential
profitability.  While the Company is in active  discussions with two significant
acquisition candidates,  as described to some extent in its public reports filed
with the  Securities and Exchange  Commission,  there is absolutely no assurance
that  the  Company  will be able  to  raise  sufficient  capital  to make  those
acquisitions,  or that even if it does raise adequate  capital,  that it will be
able to  close  the  acquisitions.  A  failure  of the  Company  to make the new
business  acquisitions  that it seeks will likely have an adverse  impact on its
operating results, financial condition and business performance.

         THE  COMPANY  MAY BE  HARMED  BY  ACTIONS  TAKEN  BY ITS  ENVIRONMENTAL
INSPECTORS THAT ARE OUTSIDE THE COMPANY'S CONTROL.  The Company's  environmental
inspectors are independent contractors and are not the Company's employees.  The
Company provides training and support to the environmental  inspectors,  but the
quality of their  operations  may be diminished by any number of factors  beyond
our control.  Consequently,  our  environmental  inspectors may not successfully
operate in a manner consistent with the Company's standards and requirements, or
may not hire and train qualified personnel.  The Company's image and reputation,

                                      -8-
<PAGE>

and the image and  reputation  of other  environmental  inspectors,  may  suffer
materially and system-wide  sales could  significantly  decline if the Company's
environmental inspectors do not operate successfully.

         THE COSTS  INCURRED BY THE COMPANY TO  ESTABLISH  AND GROW ITS BUSINESS
MAY BE HIGHER  THAN  ANTICIPATED  WHICH COULD HURT ITS ABILITY TO EARN A PROFIT.
The  Company  may  incur   substantial  cost  overruns  in  the  growth  of  its
environmental  inspection  business.  Management  is not obligated to contribute
capital  to the  Company.  Unanticipated  costs may force the  Company to obtain
additional capital or financing from other sources,  or may cause the Company to
lose its  entire  investment  in the  business  if it is unable  to  obtain  the
additional  funds  necessary to implement its business plan  successfully.  If a
greater  investment is required in the business  because of cost  overruns,  the
probability of earning a profit or a return of the  shareholders'  investment in
the franchise is diminished.

         FINANCIAL  PROJECTIONS.  Financial projections concerning the estimated
operating  results of the  Company  may be included  with this  report.  If such
projections  are provided,  only those in writing and  authorized by the Company
may be relied upon by prospective purchasers of Shares. Any projections would be
based on certain assumptions, including assumed new business acquisitions, which
could prove to be  inaccurate  and which  would be subject to future  conditions
which may be beyond the  control of the  Company.  The  Company  may  experience
unanticipated  costs,  or  anticipated  revenues  may  not  materialize,  or new
business  acquisitions  may  not be  made,  resulting  in  lower  revenues  than
forecasted.  There is no assurance that the results illustrated in any financial
projections will in fact be realized by the Company.  Any financial  projections
would be  prepared  by  management  of the  Company and would not be examined or
compiled by independent certified public accountants. Counsel to the Company has
had no participation  in the preparation or review of any financial  projections
prepared by the Company.  Accordingly,  neither the independent certified public
accountants  nor  counsel to the  Company  would be able to provide any level of
assurance on them.

         LIMITED  TRADEMARK  PROTECTION.   ESP  owns  the  following  registered
trademarks/service  marks: (1) Environmental  Sampling  Professionals,  Inc.(R),
registration  number  2721471;  and (2) ESP and Design(R),  registration  number
2788620;  and  owns  the  following  registered  trademarks/service  marks:  (1)
Allstate  Home  Inspection & Household  Environmental  Testing(R),  registration
number 2509084; (2) and Advance Look(R), registration number 3035162.

         UNINSURED LOSSES. There is no assurance that the Company will not incur
uninsured liabilities and losses as a result of the conduct of its business. The
Company  plans to maintain  comprehensive  liability  and property  insurance at
customary  levels.  The Company will also evaluate the  availability and cost of
business  interruption  insurance.  However,  should uninsured losses occur, the
Shareholders could lose their invested capital.

         LIABILITIES.  The Company has liabilities to affiliated or unaffiliated
lenders.  These  liabilities would represent fixed costs which would be required
to be paid regardless of the level of business or  profitability  experienced by
the Company.  There is no assurance  that the Company will be able to pay all of
its  liabilities.  Furthermore,  the  Company  is always  subject to the risk of
litigation from customers, suppliers, employees, investors and others because of
the nature of its  business,  including  but not limited to  consumer  lawsuits.
Litigation can cause the Company to incur substantial expenses and, if cases are
lost, judgments, and awards can add to the Company's costs.

         RISK OF COST OVERRUNS.  The Company may incur substantial cost overruns
in the  development,  establishment,  and  marketing  of its indoor air  quality
inspection  services.  The  Company's  management is not obligated to contribute

                                      -9-
<PAGE>

capital  to the  Company.  Unanticipated  costs may force the  Company to obtain
additional capital or financing from other sources,  or may cause the Company to
lose its  entire  investment  in its  business  if it is unable  to  obtain  the
additional funds necessary to implement its business plan. There is no assurance
that the  Company  will be able to obtain  sufficient  capital  to  successfully
implement its business plan. If a greater investment is required in the business
because of cost overruns, the probability of earning a profit or a return of the
Shareholders' investment in the Company is diminished.

         RELIANCE ON MANAGEMENT.  Under applicable state  corporation's  law and
the Bylaws of the Company,  the  officers and  directors of the Company have the
power  and  authority  to  manage  all  aspects  of  the   Company's   business.
Shareholders must be willing to entrust all aspects of the Company's business to
its directors  and executive  officers.  Shareholders  will not have  cumulative
voting rights under Nevada state corporation law.

         OPERATIONS - POSSIBLE  LIENS. If the Company fails to pay for materials
and services for its business on a timely basis,  the Company's  assets could be
subject to materialmen's and workmen's liens. The Company may also be subject to
bank liens in the event that it defaults on loans from banks, if any.

         INADEQUACY OF COMPANY FUNDS. The Company has limited capital  available
to it, and needs the capital from this  offering to remain in  business.  If the
Company's  entire original capital is fully expended and additional costs cannot
be funded from  borrowings  or capital from other  sources,  then the  Company's
financial  condition,  results of operations and business  performance  would be
materially adversely affected.  There is no assurance that the Company will have
adequate capital to conduct its business.

         INDEMNIFICATION  OF MANAGEMENT.  The Company's  Bylaws provide that the
Company will  indemnify  and hold  harmless its officers and  directors  against
claims  arising  from Company  activities,  to the maximum  extent  permitted by
California   law.  If  the  Company  were  called  upon  to  perform  under  its
indemnification  agreement,  then the  portion of its assets  expended  for such
purpose would reduce the amount otherwise available for the Company's business.

         INABILITY  TO ENGAGE  CONTRACTORS.  The  Company  generally  expects to
expand its business through engaging inspectors who are independent  contractors
with  the  Company.  The  Company  will  seek  to  convince  independent  indoor
environmental  service  companies  to  become  independent  contractors  of  the
Company, in consideration for the Company's provision of advertising, marketing,
quality  training and tools to the  inspectors.  There is no assurance  that any
independent  indoor  environmental  sampling  assessor  will  agree to become an
independent  contractor  of the  Company,  or that the  Company  will be able to
secure other suitable locations for its environmental  inspectors.  An inability
of the Company to find suitable  certified  inspector  opportunities will have a
material  adverse  impact on the  operating  results,  financial  condition  and
business performance of the Company.

RISKS RELATED TO OWNERSHIP OF ESP COMMON STOCK

THE TRADING PRICE OF ESP COMMON STOCK HAS BEEN, AND IS LIKELY TO CONTINUE TO BE,
VOLATILE WITH LIMITED LIQUIDITY.

         The trading  prices of ESP common stock and the  securities  of service
companies generally have been highly volatile. Trading volume has been extremely
light and may not increase, resulting in limited liquidity for stockholders. The

                                      -10-
<PAGE>

trading  price of ESP common  stock may decline or fail to  appreciate.  Factors
affecting the trading price of ESP common stock will include:

         >>       variations in ESP operating results;

         >>       announcements  of technological  innovations,  new services or
                  service  enhancements,   strategic  alliances  or  significant
                  agreements by us or by ESP's competitors;

         >>       recruitment or departure of key personnel;

         >>       changes in the estimates of ESP  operating  results or changes
                  in  recommendations  by any securities  analysts that elect to
                  follow ESP common stock;

         >>       developments or disputes concerning ESP intellectual  property
                  or other proprietary rights;

         >>       the gain or loss of significant customers;

         >>       market  conditions in inspection  industry,  the industries of
                  ESP's customers and the economy as a whole; and

         >>       adoption or modification of regulations,  policies, procedures
                  or programs applicable to ESP business.

         In  addition,  if the market for  service  company  stocks or the stock
market in general experiences loss of investor confidence,  the trading price of
ESP common stock could decline for reasons unrelated to ESP business,  operating
results or financial condition. The trading price of ESP common stock might also
decline in reaction to events that affect other  companies in ESP industry  even
if these events do not directly affect us.

SHAREHOLDERS MAY EXPERIENCE DILUTION OF OWNERSHIP IN ESP

         The  Company  has the  right  to  raise  additional  capital  or  incur
borrowings  from third parties to finance its  business.  The Board of Directors
has the authority, without the consent of any of the Shareholders,  to cause the
Company to issue more shares of common and preferred  stock at such price and on
such terms and conditions as are determined by the Board in its sole discretion.
The Company may also issue net profits interests in the Company. The issuance of
additional shares of capital stock or net profits interests by the Company would
dilute the Shareholders' ownership in the Company.

ESP MAY NOT DECLARE OR PAY ANY DIVIDENDS ON ITS COMMON STOCK

         There is no assurance  that the Company will have  sufficient  funds to
declare  or pay  dividends,  whether  or not  required.  Even if  dividends  are
declared and paid, the Company may not be profitable or be earning revenues.  It
is not  anticipated  that the Company will pay  dividends on its common stock in
the  foreseeable  future.  In the short term,  the Company  intends to apply net
earnings,  if any, to increasing its capital base,  developing and acquiring new
business branches, selling franchises,  and marketing its services.  Prospective
investors  seeking or needing  dividend  income or  liquidity  in the short term
should therefore not purchase ESP's common stock.

                                      -11-
<PAGE>

IF SECURITIES OR INDUSTRY  ANALYSTS DO NOT PUBLISH RESEARCH OR REPORTS ABOUT ESP
BUSINESS OR IF THEY ISSUE AN ADVERSE OR MISLEADING  OPINION REGARDING ESP STOCK,
ESP STOCK PRICE AND TRADING VOLUME COULD DECLINE.

         The  trading  market for ESP common  stock  will be  influenced  by the
research and reports that  industry or securities  analysts  publish about us or
ESP  business,  if any. If any of the  analysts who cover us issue an adverse or
misleading opinion regarding ESP stock, ESP stock price would likely decline. If
one or more of these  analysts  cease coverage of ESP company or fail to publish
reports on us regularly,  we could lose  visibility  in the  financial  markets,
which in turn could cause ESP stock price or trading volume to decline.

INSIDERS  HAVE  SUBSTANTIAL  CONTROL  OVER US AND  WILL  BE  ABLE  TO  INFLUENCE
CORPORATE MATTERS.

         As of March 31, 2008,  ESP directors  and executive  officers and their
affiliates beneficially owned or had voting control over approximately 36.52% of
ESP  outstanding  common stock,  including  the fact that ESP's Chief  Executive
Officer,  Edward Torres, has voting control over 4,000,000 outstanding shares of
ESP common  stock.  As a result,  these  stockholders  will be able to  exercise
significant influence over all matters requiring stockholder approval, including
the election of directors and approval of  significant  corporate  transactions,
such as a merger or other sale of the Company or its assets.  This concentration
of ownership  could limit other  stockholders'  ability to  influence  corporate
matters  and may have the effect of delaying  or  preventing  a third party from
acquiring control over us.


ITEM 2.  DESCRIPTION OF PROPERTY

         ESP and its affiliates currently lease office space at 1111 E. Tahquitz
Canyon Way, Suite 110, Palm Springs, California 92262. The Palm Springs location
is ESP's main office with  approximately  4,433 square feet of office space at a
rental  rate of  approximately  $6,000 per month  pursuant to a three year lease
which commenced in August 2006.


ITEM 3.  LEGAL PROCEEDINGS

JOHN COOLEY V. PACIFIC ENVIRONMENTAL SAMPLING, INC. ETC., ET AL.

         On December 6, 2006,  John Cooley  filed a civil  complaint  in Ventura
County alleging  breach of fiduciary duty and fraud regarding the  restructuring
of Pacific Environmental Sampling, Inc. on March 25, 2006. On December 12, 2006,
a hearing before the Court was held on the application for injunctive relief and
for  appointment  of a receiver.  Both of Cooley's  requests  were denied by the
Court.  ESP and its affiliates  subsequently  filed a demurrer  challenging  the
legal sufficiency of the fraud claim and the demurrer was sustained.  Cooley was
permitted by the Court to file a First  Amended  Complaint to attempt to correct
deficiencies.  With an extension, the First Amended Complaint was filed on March
27, 2007.  Subsequently,  this First  Amended  Compliant was rejected as was the
Second  Amended  Complaint.  On  April 4,  2008 a  hearing  for a Third  Amended
Complaint  was held before the court and the  Company was granted all  submitted
demurrers and Motions to Strike.  On April 25, 2008,  Cooley  submitted a Fourth
Amended Complaint. A tentative hearing date has been set for May 30, 2008. As of
the date of this report,  ESP and its  affiliates  cannot predict the outcome of
this case. ESP and its affiliates believe they have meritorious defenses and are
vigorously defending the action.

                                      -12-
<PAGE>

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

         No matters were submitted  during the fourth quarter of the fiscal year
covered by this report to a vote of security holders.



































                                      -13-
<PAGE>
                                     PART II

ITEM 5.       MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

COMMON STOCK

         ESP's common stock began  trading on March 16, 2007 on the OTC Bulletin
Board Market  under the symbol  "EVSP," and before that on the Pink Sheets under
the same symbol.

         The following table sets forth the quarterly high and low closing sales
prices of the common stock for 2006 and 2007 as reported by Yahoo! Finance. Such
prices  represent  prices between  dealers and do not include  retail  mark-ups,
mark-downs or commissions and may not represent actual transactions.
<TABLE>
<CAPTION>

          2006           HIGH        LOW                 2007             HIGH        LOW
--------------------------------------------------------------------------------------------
<S>                  <C>          <C>              <C>                  <C>         <C>
First Quarter        $     N/A    $      N/A       First Quarter        $   1.25    $   0.52
Second Quarter       $     N/A    $      N/A       Second Quarter       $   1.40    $   0.51
Third Quarter        $     N/A    $      N/A       Third Quarter        $   2.20    $   0.40
Fourth Quarter       $    1.50    $     0.10       Fourth Quarter       $   0.76    $   0.15
</TABLE>

         The market price of the common  stock,  has been and may continue to be
volatile.  The closing  price of the common stock on December 31, 2007 was $0.15
and the  closing  price on March 31,  2008 was $0.14.  If the  Company's  future
operating  results  are below the  expectations  of stock  market  analysts  and
investors,  its stock price may decline.  Public  announcements of the Company's
financial results and business developments may have a significant impact on the
market price of the common stock.

         As of December 31, 2007, there were approximately 260 record holders of
ESP's common  stock,  not  including  shares held in "street  name" in brokerage
accounts  which is unknown.  As of December 31, 2007,  there were  approximately
21,745,697 shares of common stock outstanding on record.

         As of March 31, 2008, 3,127,678 shares of outstanding common stock were
cancelled  for   non-performance  of  various  consultants  and  termination  of
negotiations of additional debt or equity.

DIVIDENDS

         The Company has not declared any cash  dividends on its common stock in
its last two  fiscal  years  and does not  expect to pay cash  dividends  in the
foreseeable  future.  The  declaration  and payment of  dividends  is within the
discretion  of the  Company's  Board of Directors  and will depend,  among other
factors,  on results of operations,  capital  requirements  and general business
conditions.

TRANSFER AGENT AND REGISTRAR

         The transfer  agent and  registrar  for the  Company's  common stock is
Corporate  Stock  Transfer,  Inc.,  3200 Cherry  Creek Drive  South,  Suite 430,
Colorado 80209, telephone (303) 282-4800.

                                      -14-
<PAGE>

PURCHASES OF THE COMPANY'S SECURITIES BY ESP OR ITS AFFILIATES

         None of the Company's  shares of common stock were  purchased by ESP or
its affiliates during the fiscal quarter ended December 31, 2007.


EQUITY COMPENSATION PLAN INFORMATION

         During  2007,  no Stock  Option  Plan was  adopted  for any  Directors,
Officers, Employees, Key Consultants, or any other individual.

WARRANTS

         For the fiscal year ended  December  31, 2007,  ESP issued  warrants to
purchase a total of 9,492,292 shares of unregistered common stock,  3,050,000 of
which were issued to founders,  key  executives  and  consultants at an exercise
price of $0.75 per  share,  618,707  of which  were  issued to  investors  at an
exercise  price of $0.75 per  share,  and  737,420  of which  were  issued at an
exercise price of $1.50 per share.  All of these warrants expire on November 30,
2011.

         In  addition,  in  February  2007,  ESP  issued  warrants  to  purchase
1,350,000  shares of  unregistered  common stock to  consultants  at an exercise
price of $0.25 per share expiring in February 2010 and in March 2007, ESP issued
warrants to purchase 93,444 shares of unregistered  common stock to investors at
an exercise price of $0.75 per share expiring in January 2012.


---------------------- ------------------------ -------------------------
   WARRANTS VALUE          WARRANTS ISSUED        TOTAL EXERCISE PRICE

            $    0.01                  275,000             $       2,750

            $    0.10                        -             $           -

            $    0.17                        -             $           -

            $    0.25                1,311,245             $     327,811

            $    0.58                   86,206             $      49,999

            $    0.75                6,707,421             $   5,030,565

            $    1.25                  125,000             $     156,250

            $    1.50                  737,420             $   1,106,130

                TOTAL                9,242,292             $   6,673,506
---------------------- ------------------------ -------------------------

         As of March 31, 2008, none of the warrants had been exercised.

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

CAUTIONARY STATEMENTS

         This Form 10-KSB may contain "forward-looking statements," as that term
is used in federal securities laws, about Environmental  Service  Professionals,
Inc.'s  consolidated  financial  condition,  results of operations and business.
These statements include, among others:

o        statements  concerning  the potential  benefits that ESP may experience
         from its business  activities and certain  transactions it contemplates
         or has completed; and

                                      -15-
<PAGE>

o        statements of ESP's expectations, beliefs, future plans and strategies,
         anticipated  developments  and other  matters  that are not  historical
         facts.  These statements may be made expressly in this Form 10-KSB. You
         can  find  many of  these  statements  by  looking  for  words  such as
         "believes," "expects," "anticipates," "estimates," "opines," or similar
         expressions used in this Form 10-KSB. These forward-looking  statements
         are subject to numerous  assumptions,  risks and uncertainties that may
         cause ESP's actual  results to be materially  different from any future
         results  expressed  or  implied  by ESP in those  statements.  The most
         important  facts that could prevent ESP from achieving its stated goals
         include, but are not limited to, the following:

                  (a)      volatility or decline of ESP's stock price;

                  (b)      potential fluctuation of quarterly results;

                  (c)      failure of ESP to earn revenues or profits;

                  (d)      inadequate   capital  to   continue   or  expand  its
                           business,  and inability to raise additional  capital
                           or financing to implement its business plans;

                  (e)      failure to commercialize  ESP's technology or to make
                           sales;

                  (f)      decline in demand for ESP's products and services;

                  (g)      rapid adverse changes in markets;

                  (h)      litigation  with or legal claims and  allegations  by
                           outside  parties  against  ESP,   including  but  not
                           limited to challenges to ESP's intellectual  property
                           rights; and

                  (i)      insufficient revenues to cover operating costs.

         There is no assurance that ESP will be profitable,  ESP may not be able
to successfully develop, manage or market its products and services, ESP may not
be able to attract or retain qualified executives and technology personnel,  ESP
may not be able to obtain customers for its products or services, ESP's products
and  services  may become  obsolete,  government  regulation  may  hinder  ESP's
business, additional dilution in outstanding stock ownership may be incurred due
to the issuance of more shares,  warrants and stock options,  or the exercise of
outstanding  warrants  and stock  options,  and other  risks  inherent  in ESP's
businesses.

         Because the statements are subject to risks and  uncertainties,  actual
results  may  differ   materially   from  those  expressed  or  implied  by  the
forward-looking  statements. ESP cautions you not to place undue reliance on the
statements,  which speak only as of the date of this Form 10-KSB. The cautionary
statements  contained or referred to in this  section  should be  considered  in
connection with any subsequent written or oral  forward-looking  statements that
ESP or  persons  acting on its  behalf may  issue.  ESP does not  undertake  any
obligation  to review or  confirm  analysts'  expectations  or  estimates  or to
release  publicly any  revisions to any  forward-looking  statements  to reflect
events or  circumstances  after the date of this Form 10-KSB,  or to reflect the
occurrence of unanticipated events.

                                      -16-
<PAGE>

OVERVIEW

         Environmental  Service  Professionals,  Inc. ("ESP" or the "Company") a
California-based,  Nevada  Corporation,  through  its various  acquisitions  has
offered  environmental  services for addressing mold and moisture  intrusion and
the  associated  acute or chronic issues that impact the interior air quality of
commercial and residential buildings.

         ESP has evolved  and has  focused on  developing  and  delivering  what
management believes to be  state-of-the-art,  "Best in Class" procedures,  tools
and education to provide  services for addressing  moisture and mold related and
other  environmental  issues (for  example:  radon and allergy  testing) for the
residential and commercial real estate industries.

         Management believes that ESP's procedures,  tools and education bring a
real  opportunity  to provide a standardized  pro-active  approach to the highly
fragmented and relatively unsophisticated inspection industry.

         Management  believes  that ESP is the first  company  of its kind to be
able to support a pro-active comprehensive annual inspection called the Mold and
Moisture  Management  Program ("MMM PROGRAM").  The MMM Program is available for
all  residential  properties  that have passed ESP's Certified Mold and Moisture
Inspection Process ("CMI").

         Management  believes  that  ESP's  acquisition  of  seven  real  estate
industry  associations  has provided the access to train and provide its members
with information that is consistent with ESP's approach.

         Within  the  next 2  months,  ESP  intends  to  acquire  Porter  Valley
Software, Inc. an inspection software company.  Management anticipates that this
acquisition will be absorbed into the corporate entity to provide support across
the  various  business  units.  and will become a core  component  of the highly
advanced and standardized  on-line and automated  procedural protocols developed
in concert with each of the other three participants in the industry, ESP, NAMM,
and EMLab P&K.

BUSINESS UNIT DESCRIPTIONS

ENVIRONMENTAL   SAFEGUARD   PROFESSIONALS,   INC.   ("SAFEGUARD")  -  WEB  SITE:
HTTP://WWW.ESPUSA.NET

         This business unit has been  re-aligned to provide the home  inspection
industry  with  state-of-the-art  procedures  for  environmental  services.  Its
primary focus is on the standardized  Certified Moisture  Investigation  ("CMI")
focusing on moisture  intrusion  issues that may impact the interior air quality
of commercial and  residential  buildings and the health of its  occupants.  ESP
also offers advanced residential services including:  allergen screening,  radon
testing,  neighborhood  environmental reports and home energy tune-ups. ESP only
utilizes   certified   environmental  home  inspectors  who  possess  nationally
recognized  certifications  and follow the  Company's  "Best in Class"  industry
practices.  These  protocols  were  developed  by the  National  Association  of
Moisture  Management  ("NAMM")  and offer  detailed  interpretive  reports and a
consultation  with  a  certified  industrial  hygienist  consultation  based  on
independent laboratory analysis. Certified documents and expert witness services
are also available.

         ESP provides a pro-active  annual  maintenance  service for homeowners,
property  management  companies and builders.  The MMM Program allows clients to

                                      -17-
<PAGE>

manage their liability and protect their property from serious chronic  moisture
issues. Management believes that ESP is the first company of its kind to be able
to support the MMM Program.  ESP has  centralized  its national  call center and
customer services offices to Palm Springs, California.

NATIONAL     PROFESSIONAL     SERVICES,     INC.    ("NPS")    -    WEB    SITE:
HTTP://WWW.NPSERVICESINC.COM

         NPS is the management company for the following trade associations:

         Services  include  complete  organization  and association  management,
advisory  council and board of  director  coordination,  seminars,  conferences,
graphic  design and  printing,  accounting  and reporting  and  consulting.  NPS
provides   complete   management   services  for  seven   different   membership
organizations of which four are both national and  international  organizations.
NPS maintains a complete servicing facility in Phoenix, Arizona which includes a
fully  trained  staff,  conference  room,  library,  accounting  services  and a
computer room updated with the latest server technology.

         NPS is a full service  association  management company with the ability
to work with trade associations that have between 250 members to 50,000 members.

GROWTH STRATEGY

         Currently the industry,  as a whole lacks a  predominant  brand,  lacks
uniform inspection and reporting protocols, has inconsistent product and service
pricing,  and no consistent  public outreach program.  Management  believes that
cursory  web  searching   tends  to  confirm  the   fragmented   and  relatively
unsophisticated nature of the industry. Management believes that there are a few
participants  who are trying to build a  national  presence  and/or a  certified
network of independent inspectors, but there is no indication that they are very
far along or well-funded in their efforts.

         ESP is focused on "Risk  Management,"  which  management  believes is a
significant tool to assess the health of an individual's  personal  environment.
For the  industry,  it provides an easily  understood  and  standardized  way of
assessing risks regardless of location.

         The goals are three-fold and in order of priority:

1)       To Gain the acceptance of the residential insurance industry to a level
         where they will consider offering a discount to their policyholders, if
         their  customers/insured's  receive an initial CMI and then participate
         in the MMM Program.

2)       To  attract  the  existing  top  tier  home  and  moisture   inspectors
         nationwide  and to  become  approved  vendors  of  ESP  as  independent
         contractors  in order  to  deliver  the CEHI  Program  of  services  by
         offering a 3 point value statement:

         a.       Business on-line  (featuring a complete automated on-line work
                  flow system including: sales, A/R & A/P management);

         b.       Access to operate under ESP's CEHI  liability  insurance at no
                  cost to the Inspector;

         c.       Access to group health, dental, and SEP 125 (as available).

                                      -18-
<PAGE>

3)       To focus on turning every  household in America into ESP's  marketplace
         through  environmental  awareness and education,  by offering  allergen
         screening,  energy use Assessments,  mold sampling, moisture management
         inspections, neighborhood environmental reports, and radon testing.

         a.       ESP has a dedicated sales team to reach out to the 20,000 home
                  inspectors  in  America  who  currently  perform  some type of
                  environmental inspection

         b.       Implement ESP's national marketing campaign

RISK MANAGEMENT PROCESS

         ESP believes that the  residential and commercial  insurance  companies
can benefit  materially  by reducing  their annual claim payouts by requiring an
annually scheduled moisture inspection.

         By  having a CMI  performed  by an ESP CEHI to  identify  any  existing
issues,  then  correcting  those issues,  the building will then be qualified to
subscribe to the MMM Program.

         By  participating  in  the  annual,  preventative  MMM  Program,  it is
possible  that issues  would then be caught  early and not become  chronic.  Any
required repairs can be made quickly and efficiently, usually at a lower cost.

         ESP  mitigates  the client's  liability by  performing  the MMM Program
visit  annually.  ESP shares in the  reoccurring  revenue with the  technicians,
ensuring long-term client relationships.

KEY COMPETITIVE ADVANTAGES

STANDARDIZED, PROPRIETARY & SCALABLE PROCESSES

         ESP has developed a combination of standardized  proprietary  processes
for each  aspect of the client  account  from  initial  call,  to the  dispatch,
through completion of every inspection.

         The Company has standardized each of its processes and has documented a
standardized training program,  which all  employees/contractors  must pass. New
CEHI's are required to learn the Company's  processes,  while developing working
relationships  with  administrative  personal at HQ under simulated,  low-stress
conditions.  Teamwork is built by fostering an  understanding  of all aspects of
the business.


THE COMPANY HAS DEVELOPED AN INDEPENDENT CONTRACTOR MODEL

         The contractor must submit a completed vendor approval form to validate
their  eligibility and  specifically  verify what training,  certifications  and
equipment  the  contractor  currently  has.  Based  on  this  verification,  the
contractor must then obtain the required training and equipment to operate ESP's
proprietary  on-line systems and to deliver the program of services.  There is a
fee  to the  contractor  to  receive  this  equipment  and  instruction.  If the
contractor has obtained certain certifications and/or equipment previously there
may be  discounts  to the amount of fees ESP will  charge.  The  contractor  can
either purchase the sampling kit from ESP or preferably order it direct from the
supplier.

                                      -19-
<PAGE>

         ESP has modeled its  independent  contractor  payment  structure  after
other  leading  service  providers.  The  CEHI  is  then  sub-contracted  as  an
independent contractor and dispatched to leads as they come into the centralized
call center.

         Once the CEHI has performed the work,  the client pays ESP directly and
then ESP pays the CEHI based on the standardized rate schedule.

         ESP has  control  metrics in place to manage the  associated  risks and
will realize higher profit margins with greater quality work in this model.

DIVERSIFIED ACROSS THREE CUSTOMER SEGMENTS

         1. RESIDENTIAL:  The residential  market is the target market,  and the
largest and most  profitable for ESP. It represents  homeowners  contracting for
inspections and demonstrates high same-day close rates.

         2.   MULTI-UNIT:   This   market   represents   condominium   homeowner
associations ("HOAs") contracting for maintenance services.

         3. COMMERCIAL: In this market segment, service calls are used to create
a maintenance budget. These are larger contracts and have longer sales cycles.

ADDITIONAL POTENTIAL REVENUE STEAMS

         ESP has  identified  complimentary  revenue  streams that would further
support the success of our business model. Given the Company's  extensive client
database,  its long-term client relationships and its business relationship with
a client's most valued asset their home, ESP  Management  believes in building a
powerful asset through our inspection reporting database:

         >>       For each house or  building  on an annual MMM  Program,  there
                  will be a history of  inspections,  remediation,  repairs  and
                  maintenance.

         >>       This  information  could be highly  valuable to  mortgage  and
                  insurance underwriters, since it could mitigate their risk.

         Management  believes that the current sub-prime crisis provides another
realistic  avenue for revenue for ESP. City and local  governments are beginning
to enforce  by-laws on the holders of  repossessed  real estate.  This means the
maintenance  of the  property  is now  the  obligation  of the  entity  who  has
repossessed  it.  ESP  could  adapt  and  repackage  its core  services  into an
inspection  program for the  financial  institutions  to assist in ensuring  the
value of these properties.

NEAR TERM EXPANSION STRATEGY

         Beginning in 2008, ESP plans to educate and bring full awareness to the
following industry stakeholders.

         >>       THE INSURANCE INDUSTRY

         Initiative: establish a "Good Consumer Discount" for annual inspections
         by a CEHI.

                                      -20-
<PAGE>

         Goal:  decreased risk, decreased claims, and reduced liability.

         >>       THE MORTGAGE BANKING INDUSTRY

         Initiative:  promote  benefits of a 10 year annual  inspection  program
         with each mortgage. Offer discounts on these mortgages.

         Goal:  mitigation of risk for the mortgage  holder and provide  reduced
         costs for the consumer

         >>       THE BUILDING INDUSTRY

         Initiative:  provide an annual inspection program minimizing  liability
         through the 3rd party inspection process.

         Goal:   reduce uncertainty and liability for claims.

         >>       THE REAL ESTATE INDUSTRY

         Initiative:  teach CMI  inspection  protocols  and  benefits  of annual
         inspection   programs,   including  full  disclosure  of  the  property
         conditions.

         Goal: assurance in an area that has been previously unknown in property
         sales.

         >>       THE CONSUMER

         Initiative:  educate the consumer  regarding  the benefits of an annual
         inspection program.

         Goal: "Peace of Mind" for consumers,  their families,  their health and
         their homes.

CONCLUSION

         ESP has assembled who management believes to be several of the upcoming
industry  leaders and has  brought  them  together  to address  many of industry
concerns.  Management  believes that the indoor air quality industry has emerged
as very  important for the overall  health of all people.  Recognition  has been
given to the myriad of problems  caused by poor indoor air quality as it relates
to microbial infestations-mold,  including allergies, asthma and other pulmonary
ailments.  The  problem  has been  that in an  industry  that  currently  has no
nationally recognized standards.  In response,  management believes that ESP has
taken a leadership role with other industry  members to create a higher level of
quality education and set standards in an effort to self-regulate  what has been
a previously  undisciplined  business segment.  Management believes that ESP has
had the foresight to provide  valuable quality services that lead to a healthier
indoor  environment  as well as the  overall  health of the  household.  ESP has
developed an array of  environmental  service  programs  and packaged  them into
opportunities for sale and success through its multiple lines of business.

         The ESP team has come together from different backgrounds,  educations,
experiences  and  qualifications.  As a team,  ESP has  amassed  many  years  of
experience  in  operations,   sales,  marketing  and  finance  in  service-based
businesses.  ESP believes  that its team has the  knowledge  and  commitment  to
become  one of  the  largest  service  providers  within  this  rapidly  growing
industry. ESP's Chief Executive Officer is a senior member of various boards and
committees  mandated to create a consensus on present  standards for  education,
inspection  and  procedures  and  plans for  their  implementation  for mold and
moisture within the insurance and building industries.

         Management  believes that ESP has delivered proven inspection  programs
within a business model that offers significant profit,  coupled with its intent

                                      -21-
<PAGE>

to lead the  industry.  Management  believes that ESP program  participants  are
provided with all the tools that they need for success.  ESP provides an easy to
follow  operations  manual,  complete  sales  program  and we provide  extensive
training coupled with easily accessible hygienist services.  Management believes
that ESP  continues  to be unique  in  client  service  through  an  established
customer service center and on-line scheduling.

         Management  believes  that  ESP  has  a  focused  concept,  experienced
management  team,  and  a  successful  business  program  in  place.  Additional
investment capital is required in order to leverage the Company's business model
and grow the business to a national level.

GOING CONCERN QUALIFICATION

         ESP has incurred  significant  losses from operations,  and such losses
are  expected  to  continue.  ESP's  auditors  have  included  a "Going  Concern
Qualification"  in their  report  for the  year  ended  December  31,  2007.  In
addition,  ESP has limited working  capital.  The foregoing  raises  substantial
doubt about ESP's  ability to continue as a going  concern.  Management's  plans
include seeking additional capital and/or debt financing.  There is no guarantee
that additional  capital and/or debt financing will be available when and to the
extent  required,  or that if available,  it will be on terms acceptable to ESP.
The financial  statements do not include any adjustments  that might result from
the outcome of this uncertainty.  The "Going Concern  Qualification" may make it
substantially more difficult to raise capital.

OFF-BALANCE SHEET ARRANGEMENTS

         The Company has no off-balance sheet arrangements.

BASIS OF PRESENTATION

REVENUE

         The Company  expects to derive  revenue  primarily  from the  following
services:

         SAFEGUARD DIVISION:

         >>       Certified Environmental Home Inspector (CEHI) Certification
         >>       Certified Moisture Inspection (CMI)
         >>       Annual Mold and Moisture Management Program (MMM)
         >>       New Builder Moisture Management Program (NBMM)
         >>       Allergen Screening
         >>       Abridged Phase I Environmental Reports

         The Company recognizes revenue when services on contracts are provided.

         As of January 1, 2007, the Company  ceased  offering new franchises and
did not renew any franchise  registration  or make any  franchise  sales for the
year 2007. All but 15 existing  franchisees have been incorporated into the CEHI
program and those  franchisees who have been  incorporated into the CEHI program
have executed mutual releases for their previously owned franchises. The Company
continues to transition  all  remaining  franchises to the standard CEHI program
and expects to have all franchisees transitioned by December 31, 2008.

         CEHI  Fees-  The  Company  charges  a  non-refundable  one-time  fee of
$1,995.00 for reviewing an  inspector's  application  to become an approved CEHI

                                      -22-
<PAGE>

vendor. This amount is payable to Environmental  Safeguard  Professionals,  Inc.
("Safeguard")

         This vendor approval is a two-step process for independent  contractors
to be able to provide CEHI program  services:

                  1) The contractor must submit a completed vendor approval form
         to validate their  eligibility and  specifically  verify what training,
         certifications   and  equipment  the  contractor   currently  has.  The
         applicant  must  show  that  they are in good  standing.  Based on this
         verification.  The contractor must obtain the required  instruction and
         equipment to operate ESP's  proprietary  on-line systems and to deliver
         the Program of services.  There is a fee to the  contractor  to receive
         this equipment and  instruction.  If the applicant has obtained certain
         certifications  and  or  equipment  prior  to  applying,  there  may be
         discounts to the fee amount charged. The contractor can either purchase
         the  sampling  kit from ESP or  preferably  order it directly  from the
         supplier.

                  2) Once the  contractor  has obtained the  necessary  approved
         vendor status, they must execute a standardized  independent contractor
         agreement.

         Royalties and  Advertising - As the Company phases out its  franchising
program,  remaining  franchisees  pay a  minimum  of $250 per  month  ($200  for
royalties  and  $50  for  Advertising)  plus  7.5%  for  royalties  and  2%  for
advertising based on their monthly gross income.

         Continuing  franchise  fees are  reported  as  revenue  as the fees are
earned and become  receivable from the franchisee.  Costs relating to continuing
franchise  fees are expensed as incurred.  Although a portion of the  continuing
fee may be designated for a particular purpose,  such as an advertising program,
it is not  recognized as revenue until the fee is earned and becomes  receivable
from the franchisee.

         NPS DIVISION:

         >>       Trade Association Membership dues (annual)

The Company  recognizes  annual  membership  revenue on monthly pro-rated amount
from receipt of dues.


COST OF REVENUE

         Cost of revenue  generated  by Safeguard  consists of costs  related to
cost of goods sold for providing CEHI inspection services.  Costs related to the
CEHI services includes contractor fees,  laboratory fees, related supplies,  and
materials.

         Cost of revenue  generated by NPS consists of costs  related to cost of
providing membership services. Costs related to the membership services includes
postage,   industry  related  information   literature,   related  supplies  and
materials.


GENERAL AND ADMINISTRATIVE EXPENSE

         General and administrative  expense consists primarily of the following
components:

                                      -23-
<PAGE>

         o        payroll and related costs, including stock-based  compensation
                  expense for executive,  finance, business applications,  human
                  resources and other administrative personnel;

         o        fees for professional services and litigation expenses; and

         o        other  expenses  such as  insurance,  allowance  for  doubtful
                  accounts and travel corporate office rent.

         The Company expects general and  administrative  expense to increase in
2008 in absolute  dollars and decrease as a percentage of revenue.  The increase
is due to payroll and related costs attributable to increased hiring,  rents and
utilities as we expand our facilities, as well as increased accounting and legal
and other costs  associated with public  reporting  requirements  and compliance
with the  requirements  of the  Sarbanes-Oxley  Act of 2002.  In 2009 and in the
longer  term,  the Company  expects its  general and  administrative  expense to
decrease as a percentage of revenue as the Company's  costs are expected to grow
slower than its top line revenue.

SALES AND MARKETING EXPENSE

         Sales and marketing  expense consists  primarily of payroll and related
costs,  including  stock-based  compensation  expense and  commissions and other
variable  compensation  for personnel  engaged in  marketing,  sales and service
support functions, as well as advertising and contractor expenses.

         The Company  anticipates its sales and marketing  expense will continue
to increase  in future  periods in  absolute  dollars  and remain  constant as a
percentage  of revenue.  The increase is due to an expected  increase in payroll
and related costs of sales and  marketing  personnel,  increases in  stock-based
compensation  expense, and additional expected increases in marketing costs such
as advertising.

RESEARCH AND DEVELOPMENT EXPENSE

         Research  and  development  expense  consists  primarily of payroll and
related costs and stock-based  compensation  expense associated with development
of the Company's on-line work-flow  systems.  Research and development costs are
expensed as incurred.

         The Company  anticipates  its  research  and  development  expense will
increase in future  periods in absolute  dollars and increase as a percentage of
revenue due to increased  stock-based  compensation expense as well as increased
payroll  and  related  costs   associated  with  continued  hiring  of  research
development personnel and investments in ESP's service offerings.

INTEREST EXPENSE

         Interest  expense   includes   interest  paid  on  the  Company's  debt
obligations as well as amortization of deferred financing costs.

INTEREST INCOME

         Interest  income  includes  interest  earned on invested cash balances,
cash  equivalents and investment  securities.  Interest income also includes the
realized loss on investments.  The Company anticipates interest income to remain
relative constant.

                                      -24-
<PAGE>

OTHER INCOME (EXPENSE)

         ESP's  other  income  consists  primarily  of gains or losses  from the
impairment of goodwill,  Interest on loans payable,  losses on investments,  and
disposal of fixed assets.

INCOME TAX EXPENSE (BENEFIT)

         ESP's  provision  for  income  taxes is  comprised  of a current  and a
deferred  portion.  The  current  income  tax  provision  is  calculated  as the
estimated taxes payable/refundable on tax returns, or the refund associated with
a carryback of net operating loss, for the current year. The deferred income tax
provision is calculated  for the estimated  future tax effects  attributable  to
temporary  differences and  carryforwards  using expected tax rates in effect in
the years during which the differences are expected to reverse.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

         The Company's  discussion  and analysis of its financial  condition and
results of  operations  are based upon our  consolidated  financial  statements,
which have been prepared in accordance with U.S. generally  accepted  accounting
principles.  These  principles  require us to make  estimates and judgments that
affect the reported amounts of assets,  liabilities,  revenue and expenses, cash
flow and related disclosure of contingent assets and liabilities.  The Company's
estimates  include those  related to revenue  recognition,  accounts  receivable
reserves,  income and other taxes,  stock-based  compensation  and equipment and
contingent obligations. The Company bases its estimates on historical experience
and on various other  assumptions  that it believes to be  reasonable  under the
circumstances.  Actual  results may differ from these  estimates.  To the extent
that there are material  differences  between  these  estimates and ESP's actual
results, ESP's future financial statements will be affected.

         The Company  defines its "critical  accounting  policies" as those U.S.
generally  accepted  accounting  principles  that require it to make  subjective
estimates  about  matters that are  uncertain  and are likely to have a material
impact on our  financial  condition  and  results of  operations  as well as the
specific  manner in which the Company  applies those  principles.  The Company's
estimates are based upon assumptions and judgments about matters that are highly
uncertain at the time the accounting estimate is made and applied and require it
to continually assess a range of potential outcomes
         .
REVENUE RECOGNITION

         ESP  recognizes  service  revenues in  accordance  with the SEC's Staff
Accounting Bulletin No. 104, REVENUE  RECOGNITION,  and the Financial Accounting
Standards  Board's (FASB)  Emerging  Issues Task Force Issue No. 00-21,  REVENUE
ARRANGEMENTS WITH MULTIPLE DELIVERABLES. Revenue is recognized when the price is
fixed or determinable, persuasive evidence of an arrangement exists, the service
is performed  and  collectability  of the  resulting  receivable  is  reasonably
assured.

         At the inception of a customer contract for service,  the Company makes
an assessment as to that customer's ability to pay for the services provided. If
the Company  subsequently  determines  that  collection from the customer is not
reasonably  assured,  the Company records an allowance for doubtful accounts and
bad  debt  expense  for  all of  that  customer's  unpaid  invoices  and  ceases
recognizing revenue for continued services provided until cash is received.

         From  time to time,  The  Company  may  enter  into  contracts  to sell
services  to  unrelated  companies  at or about  the same  time it  enters  into
contracts  to  purchase  products or services  from the same  companies.  If ESP

                                      -25-
<PAGE>

concludes that these contracts were negotiated concurrently, the Company expects
to record as revenue only the net cash received from the vendor.

         The Company may from time to time resell  licenses or services of third
parties.  Revenue for these  transactions would be recorded when the Company has
risk of loss related to the amounts  purchased  from the third party and it adds
value to the license or service, such as by providing maintenance or support for
such license or service. If these conditions are present, the Company recognizes
revenue when all other revenue recognition criteria are satisfied.

         SAFEGUARD DIVISION:

         At time of  service  delivery  all  customers  are  required  to sign a
standard service  agreement and either pay by check,  credit card or if approved
prior to dispatch a purchase  order.  The inspector  will contact the centralize
call center and process the check or credit card through the  Company's  on-line
payment  processing  system.  This  ensures  immediate  receipt of  payment  for
services.  Purchase orders are tracked against the applicable work order and are
due within 30 days of delivery of services.

         Customers  who request the annual  inspections  are  required to sign a
standard service  agreement and a  pre-authorizing  form to allow the Company to
debit their account at time of annual inspection.  The Company will pro-rate the
revenue  from those  customers  that sign up and prepay  for  multi-year  annual
inspections

         There is a non-refundable  one-time charge for reviewing an inspector's
application  to become an  approved  CEHI  Vendor.  This  amount is  payable  to
Environmental Safeguard Professionals, Inc. ("Safeguard") and is recognized upon
receipt of the signed approved vendor application.

         NPS DIVISION:

         Customers are required to sign a membership form and either pay for the
annual dues by check or credit card at time of submission.

         The Company  recognizes annual membership  revenue on monthly pro-rated
amount from receipt of dues.

ACCOUNTS RECEIVABLE AND RELATED RESERVES

         Trade accounts  receivable will to be recorded at the invoiced  amounts
and will not bear  interest.  The Company may record  reserves as a reduction of
its accounts  receivable  balance.  Estimates will be used in determining  these
reserves  and may be based  upon  ESP's  review  of  outstanding  balances  on a
customer-specific,   account-by-account   basis.   These  estimates  may  change
significantly if a customers'  financial  condition changes or if the economy in
general  deteriorates.  The allowance for doubtful accounts will be based upon a
review of customer receivables from prior sales with collection issues where ESP
no longer  believe that the  customer has the ability to pay for prior  services
provided.  The Company will perform  on-going  credit  evaluations  of customers
primarily  related to  monitoring  payment  history and the accounts  receivable
aging.  If such an  evaluation  indicates  that payment is no longer  reasonably
assured for current  services  provided,  any future  services  provided to that
customer  will result in the  deferral of revenue  until  payment is made or ESP
determines payment is reasonably assured. In addition,  the Company may record a
reserve for service credits.  Reserves for service credits are measured based on

                                      -26-
<PAGE>

an  analysis  of  credits  to be issued  after the month of  billing  related to
management's  estimate  of the  resolution  of  customer  disputes  and  billing
adjustments.  The Company does not have any  off-balance  sheet credit  exposure
related to its customers.

SHARE-BASED COMPENSATION

         The Company expects to account any share-based compensation pursuant to
SFAS No. 123 (revised 2004) SHARE-BASED PAYMENT, or SFAS No. 123R. SFAS No. 123R
requires  measurement  of all  employee  share-based  payments  awards  using  a
fair-value  method.  When a grant date for fair value is determined  the Company
will  use  the  Black-Scholes-Merton  pricing  model.  The  Black-Scholes-Merton
valuation  calculation  requires  the  Company to make key  assumptions  such as
future stock price  volatility,  expected  terms,  risk-free  rates and dividend
yield.  The  weighted-average  expected  term  for  stock  options  granted  was
calculated  using the  simplified  method in accordance  with the  provisions of
Staff Accounting Bulletin No. 107,  SHARE-BASED  PAYMENT.  The simplified method
defines the expected term as the average of the contractual term and the vesting
period of the stock option.  The Company will estimate the volatility rates used
as inputs to the model based on an analysis of the most similar public companies
for which  ESP has data.  The  Company  will use  judgment  in  selecting  these
companies, as well as in evaluating the available historical volatility data for
these companies.

         SFAS No. 123R requires the Company to develop an estimate of the number
of share-based awards which will be forfeited due to employee  turnover.  Annual
changes  in the  estimated  forfeiture  rate may have a  significant  effect  on
share-based  payments  expense,  as the  effect  of  adjusting  the rate for all
expense  amortization  after  January  1, 2006 is  recognized  in the period the
forfeiture estimate is changed. If the actual forfeiture rate is higher than the
estimated  forfeiture rate, then an adjustment is made to increase the estimated
forfeiture  rate,  which will result in a decrease to the expense  recognized in
the  financial  statements.  If the  actual  forfeiture  rate is lower  than the
estimated  forfeiture rate, then an adjustment is made to decrease the estimated
forfeiture rate,  which will result in an increase to the expense  recognized in
the financial statements. The risk-free rate is based on the U.S. Treasury yield
curve in effect at the time of grant. The Company has never paid cash dividends,
and do not currently  intend to pay cash  dividends,  and thus have assumed a 0%
dividend yield.

         ESP will  continue to use judgment in  evaluating  the  expected  term,
volatility  and  forfeiture  rate  related  to  its  stock-based   awards  on  a
prospective  basis,  and in  incorporating  these factors into the model. If the
Company's actual experience  differs  significantly from the assumptions used to
compute its stock-based  compensation cost, or if different assumptions had been
used,  the  Company may record too much or too little  share-based  compensation
cost. ESP recognizes expense using the straight-line attribution method.

CONTINGENCIES

         The Company records contingent  liabilities resulting from asserted and
unasserted  claims  against it, when it is  probable  that a liability  has been
incurred  and the  amount  of the  loss is  reasonably  estimable.  The  Company
discloses contingent liabilities when there is a reasonable possibility that the
ultimate loss will exceed the recorded  liability.  Estimating  probable  losses
requires analysis of multiple factors,  in some cases including  judgments about
the potential  actions of third-party  claimants and courts.  Therefore,  actual
losses in any future period are inherently  uncertain.  The Company would record

                                      -27-
<PAGE>

additional  accrual amounts to the extent it determines  amounts are probable of
being paid and also  reasonably  estimable.  Such amounts  could be, but are not
limited to post-judgment lost profits, price erosion, royalties and interest.

DEFERRED TAXES AND UNCERTAIN TAX POSITIONS

         The Company  utilizes the  liability  method of  accounting  for income
taxes as set forth in SFAS No. 109, ACCOUNTING FOR INCOME TAXES. ESP records net
deferred tax assets to the extent it believes these assets will more likely than
not be realized.  In making such  determination,  ESP  considers  all  available
positive and negative evidence,  including  scheduled  reversals of deferred tax
liabilities, projected future taxable income, tax planning strategies and recent
financial  performance.  SFAS  109  states  that  forming  a  conclusion  that a
valuation allowance is not required is difficult when there is negative evidence
such as cumulative  losses in recent years. As a result of the Company's  recent
cumulative  losses,  the Company has concluded that a full  valuation  allowance
against its net deferred tax assets is appropriate. In the event the Company was
to determine that it would be able to realize its deferred  income tax assets in
the future in excess of their net  recorded  amount,  the Company  would make an
adjustment  to the  valuation  allowance  which would reduce the  provision  for
income taxes in the period of such realization.

         ESP adopted the  provisions of FIN 48,  ACCOUNTING  FOR  UNCERTAINTY IN
INCOME TAXES, on January 1, 2007, which clarifies the accounting for uncertainty
in income taxes  recognized in the financial  statements in accordance with SFAS
No. 109,  "Accounting  for Income Taxes." FIN No. 48 provides that a tax benefit
from an uncertain tax position may be recognized when it is more likely than not
that the position will be sustained upon examination,  including  resolutions of
any related  appeals or litigation  processes,  based on the  technical  merits.
Income tax positions must meet a  more-likely-than-not  recognition threshold at
the  effective  date  to be  recognized  upon  the  adoption  of  FIN  48 and in
subsequent  periods.  This interpretation also provides guidance on measurement,
derecognition,  classification,  interest and  penalties,  accounting in interim
periods, disclosure and transition. The adoption of FIN 48 did not result in the
recognition  of an  adjustment  for the  cumulative  effect of adoption of a new
accounting  principle.  The Company recognizes interest and penalties related to
unrecognized tax benefits in its tax provision.

         The  Company   follows  the   recognition   threshold  and  measurement
parameters of FIN 48 for financial  statement  recognition  and measurement of a
tax position taken or expected to be taken in a tax return, and related guidance
on de-recognition, classification, interest and penalties, accounting in interim
periods,  disclosure and  transition.  ESP's effective tax rate is influenced by
the recognition and  de-recognition of tax positions pursuant to the more likely
than not standard established by FIN 48 that such positions will be sustained by
the taxing  authority.  In addition,  other factors such as changes in tax laws,
rulings by taxing  authorities and court decisions,  and significant  changes in
its operations  through  acquisitions or divestitures can have a material impact
on the  effective  tax rate.  Differences  between the  Company's  estimated and
actual  effective  income tax rates and related  liabilities are recorded in the
period they become known.

         The  application  of tax laws and  regulations  is subject to legal and
factual  interpretation,  judgment  and  uncertainty.  Tax laws and  regulations
themselves  are  subject  to  change as a result of  changes  in fiscal  policy,
changes  in  legislation,  the  evolution  of  regulations  and  court  rulings.
Therefore,  the actual  liability  for U.S. or foreign  taxes may be  materially
different from the Company's estimates, which could result in the need to record
additional  tax  liabilities  or  potentially  reverse  previously  recorded tax
liabilities.

                                      -28-
<PAGE>

RECENT ACCOUNTING PRONOUNCEMENTS

         In  September   2006,   the  FASB  issued  SFAS  No.  157,  FAIR  VALUE
MEASUREMENT.  SFAS No. 157 defines  fair  value,  establishes  a  framework  for
measuring fair value in generally accepted  accounting  principles,  and expands
disclosures  about fair value  measurements,  but does not  require any new fair
value  measurement.  SFAS No. 157 is effective for fiscal years  beginning after
November 15, 2007 and interim periods within those fiscal years.  The Company is
in the process of determining the effect,  if any, that the adoption of SFAS No.
157 will have on the  consolidated  financial  statements.  Because SFAS No. 157
does not require any new fair value measurements or remeasurements of previously
computed  fair  values,  the  Company  does not  believe  the  adoption  of this
Statement will have a material  effect on our results of operations or financial
condition.

         On February  15,  2007,  the FASB  issued SFAS No. 159,  THE FAIR VALUE
OPTION FOR FINANCIAL ASSETS AND FINANCIAL LIABILITIES. Under this Statement, the
Company may elect to report  financial  instruments  and certain  other items at
fair value on a  contract-by-contract  basis with  changes in value  reported in
earnings. This election is irrevocable.  SFAS No. 159 provides an opportunity to
mitigate  volatility  in reported  earnings  that is caused by measuring  hedged
assets  and  liabilities  that  were  previously  required  to  use a  different
accounting method than the related hedging contracts when the complex provisions
of SFAS No. 133 hedge  accounting  are not met.  SFAS No. 159 is  effective  for
years  beginning  after  November 15, 2007. ESP does not believe the adoption of
SFAS No. 159 will have a material impact on its financial position or results of
operations.

         In December 2007, the Securities and Exchange Commission ("SEC") issued
Staff  Accounting  Bulletin  110, ON  SHARE-BASED  PAYMENTS  ("SAB 110"),  which
permits  entities,   under  certain  circumstances,   to  continue  to  use  the
"simplified"  method of estimating the expected term of plain vanilla options as
discussed in SAB No. 107 and in  accordance  with SFAS No. 123  (Revised  2004),
"Share-Based  Payment."  The guidance in this  release is  effective  January 1,
2008.  The Company  does not believe the adoption of this  standard  will have a
material impact on our consolidated financial statements.

         In December 2007, the FASB issued SFAS No. 141 (revised 2007), BUSINESS
COMBINATIONS  (SFAS No.  141(R)).  SFAS No.  141(R)  replaces  SFAS No. 141 and,
although it retains  certain  requirements  of that  guidance,  it is broader in
scope.  SFAS  No.  141(R)   establishes   principles  and  requirements  in  the
recognition and measurement of the assets acquired,  the liabilities assumed and
any  non-controlling  interests related to a business  combination.  Among other
requirements,  direct  acquisition costs and  acquisition-related  restructuring
costs  must be  accounted  for  separately  from the  business  combination.  In
addition, SFAS No. 141(R) provides guidance in accounting for step acquisitions,
contingent liabilities, goodwill, contingent consideration, and other aspects of
business  combinations.  SFAS  No.  141(R)  applies  prospectively  to  business
combinations  for which the acquisition date is on or after the beginning of the
first  annual  reporting  period  beginning  on  or  after  December  15,  2008.
Accordingly,  the Company will adopt SFAS No. 141(R) on January 1, 2009 and will
apply its provisions prospectively. The Company does not believe the adoption of
this  standard  will  have  a  material  impact  on its  consolidated  financial
statements.

         In  December  2007,  the  FASB  issued  SFAS  No.  160,  NONCONTROLLING
INTERESTS IN CONSOLIDATED FINANCIAL STATEMENTS, AN AMENDMENT OF ARB NO. 51. SFAS
No. 160 requires that ownership  interests in subsidiaries held by parties other
than the  parent be  presented  separately  within  equity  in the  consolidated
balance  sheet.  SFAS No. 160 also  requires  that the  consolidated  net income
attributable to the parent and to the noncontrolling interests be identified and

                                      -29-
<PAGE>

displayed on the face of the consolidated income statement. Changes in ownership
interests,  deconsolidation and additional disclosures regarding  noncontrolling
interests are also addressed in the new guidance.  SFAS No. 160 is effective for
fiscal years,  and interim  periods  within those fiscal years,  beginning on or
after December 15, 2008. Accordingly,  ESP will adopt SFAS No. 160 on January 1,
2009. As of December 31, 2007, ESP had no noncontrolling  interests  recorded in
its balance sheet. ESP does not believe the adoption of SFAS No. 160 will have a
material impact on its financial position or results of operations.

FOREIGN CURRENCY RISK

         Substantially all of ESP's customer  agreements are denominated in U.S.
dollars,  and therefore the Company's revenue is not subject to foreign currency
risk. If in the future ESP has operations in foreign countries,  the Company may
be exposed to  fluctuations  in foreign  exchange  rates with respect to certain
operating  expenses and cash flows.  Additionally,  the Company  potentially may
sell to customers in foreign locations with customer  agreements  denominated in
foreign  currencies,  which may  increase  the  Company's  exposure  to  foreign
exchange fluctuations. At this time, the Company does not have any foreign hedge
contracts because exchange rate fluctuations have had little or no impact on its
operating results and cash flows.

INFLATION RISK

         The Company does not believe that  inflation has had a material  effect
on its business,  financial condition or results of operations. If costs were to
become subject to  significant  inflationary  pressures,  the Company may not be
able to fully offset such higher costs  through price  increases.  The Company's
inability or failure to do so could harm its business,  financial  condition and
results of operations.

RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006

REVENUE

         Total  revenue for the period  ended  December  31, 2007  increased  by
$499,484 to $581,803 from $82,319 in the prior year..

GENERAL AND ADMINISTRATIVE EXPENSES

         General and administrative  expenses  increased by $8,987,613,  up from
$671,254 in 2006,  to  $9,658,867  for the year ended  December 31,  2007.  This
increase  in general and  administrative  expenses  was the result of  increased
commissions  of $1,975,798  from the prior period and increased  finance fees of
$4,407,663 from the prior period.

NET LOSS

         There can be no  assurance  that the  Company  will  generate  positive
revenues  from its operating  activities,  or that it will achieve and sustain a
profit during any future period,  particularly  if operations  remain at current
levels.   Failure  to  achieve  significant   revenues  or  profitability  would
materially and adversely affect the Company's business, financial condition, and
results of operations.  For the fiscal year ended December 31, 2007, the Company
incurred a net pre-tax loss from continuing operations of $21,468,106.  This was
an increase of $20,903,517 or 97% compared to the prior year.

                                      -30-
<PAGE>

         74% of the net pre-tax loss for the fiscal year ended December 31, 2007
was the result of a write down of $11,444,378 in goodwill, $4,407,663 in finance
fees,  and  $359,218  in assets  (training  materials)  attributable  to the AHI
acquisition.

LIQUIDITY AND CAPITAL RESOURCES

         ESP had net cash of $0 at December 31, 2007, as compared to $302,943 at
December 31, 2006.

         During the year ended  December 31, 2007,  ESP used  $5,051,667 of cash
for operating activities, as compared to $579,944 during the year ended December
31, 2006. The increase in the use of cash for operating  activities was a result
of  goodwill,   finance   fees,   accounts   payable,   and  other  general  and
administrative expenses.

         Cash  provided by  financing  activities  relating  to the  issuance of
shares of common stock during the year ended December 31, 2007 was 2,702,308, as
compared to $826,796  during the year ended December 31, 2006.  Since January 1,
2007,  ESP's capital needs have  primarily been met from the proceeds of private
placements, loans and, to a lesser extent, sales.

         The  Company's  zero cash balance at December  31,  2007,  would not be
adequate to fund the  Company's  operations  for more than a short period if the
Company were to continue to use cash in operating activities at the same rate as
in prior months.  The Company will need to rely upon continued  borrowing and/or
sales of additional  equity  instruments  to support its continued  growth.  The
Company's  management  believes  it  will  be able  to  obtain  sufficient  cash
resources and working  capital to meet the Company's  present cash  requirements
through debt and/or  equity-based fund raising.  Following the fiscal year ended
December 31, 2007, the Company has been successful in closing  additional  funds
as described  under the  Convertible  Notes and through the sale of unregistered
common stock (see "ITEM 7,  Financial  Statements,  Events  Subsequent to Fiscal
Year Ended December 31, 2007" below). The Company contemplates  additional sales
of debt  instruments  and  unregistered  common stock  during the current  year,
although  whether it will be successful in doing so, and the additional  amounts
it will receive as a result, cannot be assumed or predicted.







                                      -31-
<PAGE>
ITEM 7.  FINANCIAL STATEMENTS



                    ENVIRONMENTAL SERVICE PROFESSIONALS, INC.

                        CONSOLIDATED FINANCIAL STATEMENTS

                 FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS




                                    CONTENTS

<TABLE>
<CAPTION>

                                                                                                              PAGE
                                                                                                              ----
<S>                                                                                                        <C>
Reports of Independent Registered Public Accounting Firms ..................................................33 - 34

Balance Sheet as of December 31, 2007.......................................................................     35

Statement of Operations for the years ended December 31, 2007 and 2006......................................     36

Statement of Changes in Shareholders Equity for the years ended December 31, 2007 and 2006..................     37

Statement of Cash Flows for the years ended December 31, 2007 and 2006......................................     38

Notes to Financial Statements ..............................................................................     39
</TABLE>











                                      -32-

<PAGE>


                             STAN J.H. LEE, CPA, CMA
                       794 BROADWAY, CHULA VISTA CA 91910
                     DIRECT: 619.623.7799, FAX: 619-564-3408
                            E-MAIL: STAN2U@GMAIL.COM


             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

                   TO THE BOARD OF DIRECTORS AND STOCKHOLDERS
                    ENVIRONMENTAL SERVICE PROFESSIONALS, INC.

We have audited the  accompanying  consolidated  balance sheet of  Environmental
Service  Professionals,  Inc. and  subsidiaries  as of December 31, 2007 and the
related consolidated  statements of operations,  changes in shareholders' equity
and cash flows for the year  ended at  December  31,  2007.  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 audit.

We conducted  our audit in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). 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  audit  provides  a
reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all  material  respects,  the  consolidated  financial  position  of
Environmental  Service  Professionals,  Inc. and subsidiaries as of December 31,
2007,  and the results of its  operations  and its cash flows for the year ended
December  31,  2007  in  conformity  with  U.S.  generally  accepted  accounting
principles.

The  consolidated  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in Note 15 to the
consolidated  financial  statements,  the Company's losses from operations raise
substantial  doubt  about  its  ability  to  continue  as a going  concern.  The
consolidated  financial  statements  do not include any  adjustments  that might
result from the outcome of this uncertainty.



/s/ Stan J.H. Lee, CPA, CMA
---------------------------
Stan J.H. Lee, CPA, CMA

May 8, 2008
Chula Vista, CA. 91910

          Registered with the Public Company Accounting Oversight Board


                                      -33-

<PAGE>



                           CHANG G. PARK, CPA, PH. D.
              * 371 E STREET * CHULA VISTA * CALIFORNIA 91910-2615O
                 * TELEPHONE (858)722-5953 * FAX (858) 408-2695
                         * E-MAIL CHANGGPARK@GMAIL.COM *

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders
Environmental Service Professionals, Inc.
(Formerly Glas-Aire Industries Group Ltd.)


We have audited the  accompanying  consolidated  balance sheets of Environmental
Service  Professionals,  Inc.  (Formerly  Glas-Aire  Industries  Group Ltd., the
"Company")  as of  December  31,  2006  and 2005  and the  related  consolidated
statements of operations, changes in shareholders' equity and cash flows for the
years then ended. 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 the standards of the Public  Company
Accounting Oversight Board (United States). 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  audit  provides  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 Glas-Aire Industries
Group Ltd. as of December 31, 2006 and 2005,  and the results of its  operations
and its cash flows for the years then ended in  conformity  with U.S.  generally
accepted accounting principles.

The  consolidated  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in Note 15 to the
consolidated  financial  statements,  the Company's losses from operations raise
substantial  doubt  about  its  ability  to  continue  as a going  concern.  The
financial  statements do not include any adjustments  that might result from the
outcome of this uncertainty.


/s/Chang G. Park, CPA
---------------------
CHANG G. PARK, CPA

FEBRUARY  23,  2007
(Except for Notes 12 & 17,
as to which the date is June 19, 2007)

CHULA VISTA, CA. 91910


        MEMBER OF THE CALIFORNIA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
          REGISTERED WITH THE PUBLIC COMPANY ACCOUNTING OVERSIGHT BOARD

                                      -34-
<PAGE>
           ENVIRONMENTAL SERVICE PROFESSIONALS, INC. AND SUBSIDIARIES
                           Consolidated Balance Sheets

--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                     ASSETS
                                                                                  AS OF                    AS OF
                                                                              DECEMBER 31,             DECEMBER 31,
                                                                                  2007                     2006
                                                                            ------------------       ------------------
      CURRENT ASSETS
<S>                                                                         <C>                      <C>
       Cash & cash equivalents                                              $                -       $          302,943
       Accounts receivable                                                             138,180                  258,989
       receivable - other                                                                9,867                        -
       Prepaid expense                                                                 926,254                  412,496
                                                                            ------------------       ------------------

      TOTAL CURRENT ASSETS                                                           1,074,301                  974,428

      NET PROPERTY & EQUIPMENT                                                          72,972                   38,820

      OTHER ASSETS
       Deposits                                                                          2,120                   72,026
       Net trademarks                                                                        -                      563
       Goodwill                                                                              -                9,274,770
       Net - association membership list                                               639,852                        -
       Investments in business areas                                                         -                   15,779
                                                                            ------------------       ------------------

      TOTAL OTHER ASSETS                                                               641,972                9,363,138
                                                                            ------------------       ------------------

            TOTAL ASSETS                                                    $        1,789,245       $       10,376,386

                                                                            ==================       ==================

                  LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)

      CURRENT LIABILITIES
       Accounts payable                                                     $        1,308,814       $          361,498
       Bank overdraft                                                                  336,369                        -
       Lines of credit                                                                 220,417                  101,962
       Accrued liabilities                                                             144,502                        -
       Income taxes payable                                                                  -                   35,500
       Loans payable                                                                 1,947,746                  238,000
       Loans payable  - related party                                                   22,900                        -
                                                                            ------------------       ------------------

      TOTAL CURRENT LIABILITIES                                                      3,980,748                  736,960

      LONG-TERM LIABILITIES
       Unsecured 10% Loan payable                                                    1,243,934                  859,831
                                                                            ------------------       ------------------

      TOTAL LONG-TERM LIABILITIES                                                    1,243,934                  859,831
                                                                            ------------------       ------------------

            TOTAL LIABILITIES                                                        5,224,682                1,596,791

      STOCKHOLDERS' EQUITY (DEFICIT)

      Common stock, (par value $.001 per share, 100,000,000 shares
         authorized: 21,783,375 and 13,935,869 shares issued and
         outstanding as of December 31, 2007 and 2006, respectively)                    21,783                   13,935
      Paid-in capital                                                               20,568,299               11,323,073
      Retained earnings                                                            (24,025,519)              (2,557,413)
                                                                            ------------------       ------------------

      TOTAL STOCKHOLDERS' EQUITY (DEFICIT)                                          (3,435,437)               8,779,595

              TOTAL LIABILITIES &
                                                                            ------------------       ------------------
                         STOCKHOLDERS' EQUITY (DEFICIT)                     $        1,789,245       $       10,376,386
                                                                            ==================       ==================
</TABLE>

              See Notes to the Consolidated Financial Statements.

                                      -35-
<PAGE>
           ENVIRONMENTAL SERVICE PROFESSIONALS, INC. AND SUBSIDIARIES
                      Consolidated Statement of Operations

--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                            YEAR ENDED                 YEAR ENDED
                                                           DECEMBER 31,               DECEMBER 31,
                                                               2007                       2006
                                                       ----------------------      --------------------
           REVENUES
<S>                                                    <C>                         <C>
            Income                                     $             581,803       $            82,319
                                                       ----------------------      --------------------

           NET REVENUE                                               581,803                    82,319

           COST OF GOODS SOLD
            Cost of Goods Sold                                        57,104                    15,282
                                                       ----------------------      --------------------

           TOTAL COST OF GOODS SOLD                                   57,104                    15,282

           GROSS PROFIT                                              524,699                    67,037

           OPERATING EXPENSES
            Depreciation                                              13,281                     3,205
            Finance fee                                            4,407,663                         -
            Commission                                             1,975,798                         -
            General and administrative                             3,262,125                   668,049
                                                       ----------------------      --------------------

           TOTAL OPERATING EXPENSES                                9,658,867                   671,254
                                                       ----------------------      --------------------

           LOSS FROM OPERATIONS                                   (9,134,168)                 (604,217)

           OTHER INCOME (EXPENSES)
            Interest income                                              366                         1
            Interest expense                                        (209,099)                  (16,416)
            Impairment of goodwill                               (11,444,378)                        -
            Other income                                             234,019                    57,043
            Other expenses                                          (914,846)                   (1,000)
                                                       ----------------------      --------------------

           TOTAL OTHER INCOME (EXPENSES)                         (12,333,938)                   39,628
                                                       ----------------------      --------------------

           NET INCOME (LOSS)                           $         (21,468,106)      $          (564,589)
                                                       ======================      ====================

            BASIC EARNING (LOSS) PER SHARE             $               (1.18)      $             (0.08)
                                                       ----------------------      --------------------

           WEIGHTED AVERAGE NUMBER OF
             COMMON SHARES - BASIC AND DILUTED                    18,250,793                 6,996,933
                                                       ======================      ====================
</TABLE>

              See Notes to the Consolidated Financial Statements.

                                      -36-
<PAGE>
           ENVIRONMENTAL SERVICE PROFESSIONALS, INC. AND SUBSIDIARIES
             Consolidated Statement of Stockholder Equity (Deficit)
                             As of December 31, 2007
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
                                                                       ADDITIONAL
                                              COMMON        COMMON      PAID-IN      RETAINED      FOREIGN        TOTAL
                                              SHARES        STOCK       CAPITAL      EARNINGS     CURRENCY
                                                                                    (DEFICIT)    TRANSLATION
----------------------------------------------------------------------------------------------------------------------------
<S>                                           <C>            <C>       <C>         <C>              <C>          <C>
BALANCE,  DECEMBER 31, 2005                   2,711,213      $ 27,112  $ 1,549,313 $ (2,645,602)    $ 652,778    $ (416,399)

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

Shares issued on April 24, 2006               3,170,522        31,705      285,475                                  317,180

Shares Adjustment                                  (583)           (6)           6                                        -

Reverse Split 1 to 3.75 on October 11, 2006  (4,312,689)      (57,243)      57,243                                        -

Shares Issued on October 11, 2006            14,625,000        14,625    8,175,375                                8,190,000

Shares Issued On December 1, 2006               425,000           425      297,075                                  297,500

Shares Issued On December 1, 2006               812,629           812      454,260                                  455,072

Shares Issued On December 1, 2006 (10% holders) 477,590           478      434,553                                  435,031

Shares Issued On December 1, 2006               110,187           110       65,690                                   65,800

Stock redemption                             (4,083,000)       (4,083)       4,083                                        -

Adjustments                                      37,677            38          (38)                                       -

Foreign Currency Translation                                                            652,778      (652,778)            -

 Net loss for the year ended
 December 31, 2006                                                                     (564,589)                   (564,589)
----------------------------------------------------------------------------------------------------------------------------
 BALANCE,  DECEMBER 31, 2006                 13,973,546        13,973   11,323,035   (2,557,413)            -     8,779,595
----------------------------------------------------------------------------------------------------------------------------

Shares Issued on January 25, 2007                39,266            39       64,161                                   64,200

Shares Issued On February 16, 2007              200,000           200       19,800                                   20,000

Shares Issued On February 20, 2007            1,000,000         1,000      579,000                                  580,000

Shares Issued on March 16, 2007                 122,917           123      188,980                                  189,103

Shares Issued on April 16, 2007                 153,000           153      519,647                                  519,800

Shares Issued on May 18, 2007                 1,795,000         1,795    1,090,047                                1,091,842

Shares Issued on June 7, 2007                   404,742           405       78,945                                   79,350

Shares Issued On June 26, 2007                  900,000           900    1,491,600                                1,492,500

Shares Issued on July 7, 2007                   381,035           381    2,340,136                                2,340,517

Shares Issued on July 17, 2007                  892,300           892      891,408                                  892,300

Shares Issued On August 1, 2007                  50,000            50       28,950                                   29,000

Shares Issued on September 11, 2007             806,051           806       79,799                                   80,605

Shares Issued on October 2, 2007                515,518           516    1,818,341                                1,818,857

Shares Issued on October 2, 2007                550,000           550       54,450                                   55,000

 Net loss for the year ended
 December 31, 2007                                                                  (21,468,106)                (21,468,106)
----------------------------------------------------------------------------------------------------------------------------
 BALANCE,  DECEMBER 31, 2007                 21,783,375      $ 21,783 $ 20,568,299 $(24,025,519)    $       -  $ (3,435,437)
============================================================================================================================

</TABLE>


              See Notes to the Consolidated Financial Statements.

                                      -37-
<PAGE>
           ENVIRONMENTAL SERVICE PROFESSIONALS, INC. AND SUBSIDIARIES
                      Consolidated Statement of Cash Flows
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                         YEAR ENDED         YEAR ENDED
                                                                        DECEMBER 31,       DECEMBER 31,
                                                                            2007               2006
                                                                      ----------------    --------------

   CASH FLOWS FROM OPERATING ACTIVITIES

<S>                                                                   <C>                 <C>
   Net income (loss)                                                  $  (21,468,106)     $   (564,589)

   Adjustments to reconcile net loss to net cash
   provided by (used in) operating activities:
    Depreciation                                                              13,281             3,205
    Amortization                                                              19,711             3,969
    Common stock                                                           2,284,458           317,180
     (Increase) decrease in goodwill                                       9,340,570                 -
     (Increase) decrease in finance fee                                    4,407,663            23,965
    Changes in operating assets and liabilities:
     (Increase) decrease in accounts receivable                              120,809            70,081
     (Increase) decrease in other receivable                                  (9,868)                -
     (Increase) decrease in prepaid expenses                                (513,758)           (1,430)
     (Increase) decrease in security deposits                                 69,906                 -
     (Increase) decrease in business areas                                    15,779                 -
     (Increase) decrease in accounts payable and accrued expenses          1,026,018          (432,325)
     (Increase) decrease in bank overdraft                                   336,369                 -
     (Increase) decrease in association membership list                     (659,000)                -
     (Increase) decrease in income tax payable                               (35,500)                -
                                                                      ----------------    --------------

 NET CASH USED BY OPERATING ACTIVITIES                                    (5,051,668)         (579,944)

   CASH FLOWS FROM INVESTING ACTIVITIES

   Acquisition of equipment                                                  (47,433)                -
   Increase in loan payable                                                2,093,849            10,000
                                                                      ----------------    --------------

        NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES                2,046,416            10,000

   CASH FLOWS FROM FINANCING ACTIVITIES

   Line of credit                                                            118,455            26,165
   Increase in loan payable - related party                                   22,900                 -
   Proceeds from stock issuances                                           2,560,954            65,800
   Proceeds from long-term liabilities                                             -           734,831
                                                                      ----------------    --------------

        NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES                2,702,309           826,796
                                                                      ----------------    --------------

       NET INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS                   (302,943)          256,852

       CASH AT BEGINNING OF PERIOD                                           302,943             1,832
      CASH AT OCTOBER 11, 2006 OF SUBSIDIARY                                       -            44,259
                                                                      ----------------    --------------

       CASH AT END OF PERIOD                                          $            -      $    302,943
                                                                      ================    ==============

   SUPPLEMENTAL DISCLOSURES OF CASH FLOW
   INFORMATION:

   Interest paid                                                      $      209,098      $     16,416
                                                                      ================    ==============

   Income taxes paid                                                  $            -      $          -
                                                                      ================    ==============

   SUPPLEMENTAL DISCLOSURES OF NON-CASH FLOW
   INFORMATION:

      Common stock issued for acquisition subsidiary                  $    1,475,000      $  8,487,500
      Increase in accounts receivable from acquisition                $      134,000      $    329,070
      Increase in property & equipment from acqusition                $                   $     42,025
      Increase in deposits from acquisition                           $      276,656      $     72,026
      Increase (decrease) in goodwill                                 $    9,340,570      $  8,819,698
      Increase (decrease) in financing fee                            $    4,407,663      $     23,965
      Increase in trademaks from acquisition                          $                   $        587
      Increase in investment in business areas fro acquisition        $                   $     19,725
      Increase in accounts payable and accrued liabilities
        from acquisition                                              $      600,000      $    411,093
      Increase in line of credit from acquisition                     $                   $     75,797
      Increase in loan payable from acquisition                       $                   $    228,000
      Increase in long-term liabilities from acquisition              $                   $    125,000
</TABLE>
              See Notes to the Consolidated Financial Statements.

                                      -38-
<PAGE>
           ENVIRONMENTAL SERVICE PROFESSIONALS, INC. AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                        AS OF DECEMBER 31, 2007 AND 2006


NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS

NATURE OF OPERATIONS:

Environmental Services Professionals, Inc. (formerly Glass-Aire Industries Group
Ltd.),  a Nevada  corporation  ("ESP"  or the  "Company")  was  incorporated  on
September  29,  1992.  Prior to ceasing  business  in March  2004,  the  Company
manufactured and distributed wind deflector products to automobile manufacturers
in the United States, Canada and Japan.

ESP has developed a standardized training, certification, inspection and results
reporting analysis program which form the foundation of a suite of services that
together comprise: "The Industry's Best in Class Inspection".  The brand name of
this Program is ESP's  Certified  Environmental  Home Inspector  ("CEHI") and is
operating under ESP's Environmental  Safeguard Professionals Business Unit. This
Business  Unit  will  also  provide  the  annual   subscription-based   moisture
maintenance programs to both residential and commercial clients.

National  Professional  Services,  a  wholly-owned  business unit is currently a
conglomerate  of 7 individual  associations  and maintains  10,000 annual paying
members. The focus of this Business Unit is to establish  cross-training on CEHI
Programs and to provide information concerning residential environmental issues,
establish  training for  Underwriters,  Loan Officers and  Appraisers to educate
these  groups  about CEHI  inspection  protocols.  These  training  programs for
Insurance  Companies,  Underwriters,  Loss Control and Risk Management personnel
educate and emphasize the benefits of using a CEHI on the initial inspection and
then establishing annual inspections.


NOTE 2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. ACCOUNTING METHOD

The Company's  policy is to use the accrual  method of accounting to prepare and
present financial  statements,  which conforms to generally accepted  accounting
principles ("GAAP"). The Company has elected a December 31, year-end.


                                      -39-
<PAGE>

           ENVIRONMENTAL SERVICE PROFESSIONALS, INC. AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                        AS OF DECEMBER 31, 2007 AND 2006


NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

B. BASIS OF CONSOLIDATION

The  consolidated  financial  statements  include the accounts of  Environmental
Service  Professionals,  Inc.,  the parent  Company,  and National  Professional
Service  Inc.,  a Delaware  Corporation,  Allstate  Home  Inspection & Household
Environmental  Testing, Ltd, a Delaware corporation,  which subsequently changed
its name to Environmental Safeguard Professionals, Inc. on February 1, 2008, and
International Association Managers, Inc., a Minnesota corporation, the Company's
wholly  owned   subsidiaries.   All   significant   intercompany   balances  and
transactions have been eliminated in consolidation.

C. CASH EQUIVALENTS

The Company  considers  all highly  liquid  investments  with  maturity of three
months or less when purchased to be cash equivalents.

D.   ESTIMATES AND ADJUSTMENTS

The preparation of financial  statements in conformity  with generally  accepted
accounting  principles  ("GAAP")  requires  management  to  make  estimates  and
assumptions  that  affect the  reported  amounts of assets and  liabilities  and
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting  period.  Actual  results  could  differ  from  those  estimates.   In
accordance with FASB 16 all adjustments are normal and recurring.

E.   ACCOUNTS RECEIVABLE

Management considers accounts receivable to be fully collectible;  according, no
allowance for doubtful  accounts is required.  If amounts become  uncollectible,
they will be charged to operations when that determination is made.


                                      -40-
<PAGE>

           ENVIRONMENTAL SERVICE PROFESSIONALS, INC. AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                        AS OF DECEMBER 31, 2007 AND 2006


NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

F. CONCENTRATION OF CREDIT RISK

The Company  maintains  their cash in bank  deposit  accounts  that at times may
exceed  federally  insured  limits.  ESP. has not experienced any losses in such
accounts.  Management  believes  that they are not  exposed  to any  significant
credit risk related to cash.

ESP, Inc. maintains credits with Bank of America.  Management  performs periodic
evaluations of the relative credits standing to the financial  institution.  The
Company has not sustained any material  credit losses for the  instruments.  The
carrying  values  reflected in the balance sheet at December 31, 2007 reasonable
approximate the fair values of cash,  accounts payable,  and credit obligations.
In making such  assessment,  the  Company,  has  utilized  discounted  cash flow
analysis,  estimated, and quoted market prices as appropriate in accordance with
paragraph 9 of SFAS 107.


G. REVENUE RECOGNITION AND FRANCHISE FEES

Revenue includes the following services:

>>       Certified Environmental Home Inspector (CEHI) Certification
>>       Certified Moisture Inspection (CMI)
>>       Annual Mold and Moisture Management Program (MMM)
>>       New Builder Moisture Management Program (NBMM)
>>       Allergen Screening
>>       Phase I Environmental Reports

The Company recognizes revenue when services on contracts are provided.

The  Company  ceased  offering  franchises  and did not  renewal  any  franchise
registration  or make any franchise sales for the year 2007. All but 15 existing
franchisees  have been  incorporated  into the CEHI program and franchisees have
executed  mutual  releases for their  previously  owned  franchise.  The Company
continues to transition all remaining franchises to the standard CEHI program.

CEHI - CEHI stands for Certified  Environmental  Home  Inspector  -CEHI approved
CEHI Vendor.  This amount is payable to Environmental  Safeguard  Professionals,
Inc. ("Safeguard").

                                      -41-

<PAGE>
           ENVIRONMENTAL SERVICE PROFESSIONALS, INC. AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                        AS OF DECEMBER 31, 2007 AND 2006


NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

G. REVENUE RECOGNITION AND FRANCHISE FEES

This vendor  approval is a two-step  process for  independent  contractors to be
able to provide CEHI Program Services:

     1)   The  contractor  must  submit  a  completed  vendor  approval  form to
          validate  their  eligibility  and  specifically  verify what training,
          certifications  and  equipment  the  contractor   currently  has.  The
          applicant  must  show that  they are in good  standing.  Based on this
          verification.  The contractor must obtain the required instruction and
          equipment to operate ESP's proprietary  on-line systems and to deliver
          the Program of services.  There is a fee to the  contractor to receive
          this equipment and instruction.  If the applicant has obtained certain
          certifications  and or  equipment  prior  to  applying,  there  may be
          discounts  to the  fee  amount  charged.  The  contractor  can  either
          purchase  the sampling  kit from ESP or  preferably  order it directly
          from the supplier.
     2)   Once the contractor has obtained the necessary approved vendor status,
          they must execute a standardized independent contractor agreement.

Supply  Orders - include  inspections  reports,  mold kits,  lab  supplies,  and
marketing materials

The Company  continues to transition  all  remaining  franchises to the standard
CEHI program.

All initial  services  have been  provided by the  franchisor  to the  remaining
franchisees.
Royalties and  Advertising - are franchise  fees--a minimum of $250 per month --
$200  for  royalties  and $50 for  Advertising  -the  franchisee  pays  7.5% for
royalties and 2% for advertising based on their monthly gross income.

Continuing  franchise  fees are  reported  as revenue as the fees are earned and
become  receivable from the franchisee.  Costs relating to continuing  franchise
fees are expensed as incurred.  Although a portion of the  continuing fee may be
designated for a particular purpose,  such as an advertising  program, it is not
recognized  as revenue until the fee is earned and becomes  receivable  from the
franchisee.



                                      -42-
<PAGE>

           ENVIRONMENTAL SERVICE PROFESSIONALS, INC. AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                        AS OF DECEMBER 31, 2007 AND 2006


NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

H. RECENT ACCOUNTING PRONOUNCEMENTS

In July 2006, the FASB issued Interpretation No. 48, "Accounting for Uncertainty
in Income Taxes - an  interpretation of FASB Statement No. 109" ("FIN 48") which
prescribes  a  recognition  threshold  and  measurement  attribute,  as  well as
criteria for subsequently  recognizing and measuring uncertain tax positions for
financial  statement  purposes.  FIN 48 also requires  expanded  disclosure with
respect to the  uncertainty  in income taxes assets and  liabilities.  FIN 48 is
effective for fiscal years  beginning after December 15, 2006 and is required to
be recognized as a change in accounting  principle  through a  cumulative-effect
adjustment to retained earnings as of the beginning of the year of adoption. The
Company is currently evaluating the impact of adopting this statement.

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements." This
statement defines fair value,  establishes a framework for measuring fair value,
and  expands  disclosures  about  fair  value  measurements.  The  statement  is
effective  for  financial  statements  issued for fiscal years  beginning  after
November 15, 2007,  and interim  periods within that fiscal year. The Company is
currently evaluating the impact of adopting this statement.

In February  2007,  the FASB issued  SFAS No.  159,  "The Fair Value  Option for
Financial Assets and Financial Liabilities - including an amendment of FAS 115".
This statement permits entities to choose to measure many financial  instruments
and certain other items at fair value. This statement is effective for financial
statements issued for fiscal years beginning after November 15, 2007,  including
interim periods within that fiscal year. The Company is currently evaluating the
impact of adopting this statement.


NOTE 3.  CONTRACTS RECEIVABLE - FRANCHISE FEES

All but 15 existing franchisees have been incorporated into the CEHI program and
franchisees  have executed mutual releases for their previously owned franchise.
Of these 15 only 5 have existing financing  agreements for the initial franchise
fee. The Company  ceased  offering  franchises and did not renewal any franchise
registration  or make  any  franchise  sales  for the  year  2007.  The  Company
continues to transition all remaining franchises to the standard CEHI program.


                                      -43-
<PAGE>

           ENVIRONMENTAL SERVICE PROFESSIONALS, INC. AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                        AS OF DECEMBER 31, 2007 AND 2006


NOTE 4. PROPERTY & EQUIPMENT

Property  is  stated  at cost.  Additions,  renovations,  and  improvements  are
capitalized.  Maintenance  and repairs,  which do not extend  asset  lives,  are
expensed as incurred. Depreciation is provided on a straight-line basis over the
estimated useful lives ranging, five years for tenant improvements,  and five to
seven years on furniture and equipment.

Equipment consisted of the following:

                                                          DECEMBER 31,
                                                      2007            2006
                                                 --------------- ---------------
Machinery & equipment                            $    42,149     $     24,442
Software                                                   -           15,000
Furniture and fixtures                                59,721           17,583
Computers                                             67,715           40,854
Automobiles                                               -             8,000
Leasehold improvements                               109,295                -
                                                 --------------- ---------------
Total fixed assets                                   278,880          105,879
     Less: accumulated depreciation                 (205,908)         (67,095)
                                                 --------------- ---------------
Net property & equipment                         $    72,972     $     38,820
                                                 =============== ===============


Depreciation  expense for the year ended  December 31, 2007 and 2006 was $13,281
and $3,205.

The Company  chose to  reevaluate  the $351,218 in training  videos and software
that they had acquired as part of the Allstate Home Inspection acquisition.  The
results of the  evaluation  prompt the Company to write-off  the total amount in
2007.


NOTE 5. LINES OF CREDIT

The  Company  has three  lines of credit,  the line of credit are for  $125,000,
$75,000, and for $30,000.  These lines of credit are in an adjustable rate loan.
The loans are open revolving lines of credit with annual  interest rates.  There
are no restrictions on the use of this line of credit.  There was an outstanding
balance  of  $220,417  and   $101,962,   as  of  December  31,  2007  and  2006,
respectively.


                                      -44-
<PAGE>


           ENVIRONMENTAL SERVICE PROFESSIONALS, INC. AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                        AS OF DECEMBER 31, 2007 AND 2006


NOTE 6.  INTANGIBLE ASSETS

Intangible assets consist of four trademarks and goodwill.

TRADEMARKS

The  trademarks  are  stated  at  cost,  less  amortization.   The  Company  had
amortization  expenses  of $563  and $414 as of  December  31,  2007  and  2006,
respectively.  The trademarks have been fully amortized.  Trademark registration
may be renewed every ten years into perpetuity.

Additional  trademarks  were  assigned to ESP  effective  February 2007 with the
acquisition  of  AHI  (see  Note  12).   Registration  numbers   2,509,084:"Home
Inspection and Household  Environmental  Testing",  apart from the mark as shown
and 3,035,162:  Advance Look, The mark consists of standard  characters  without
claim to any particular font, style, size, or color.

As part of the  Acquisition  of  IMAI  the  Company  received  the  associations
membership list. The Company recorded 659,000 in intangible  asset.  This amount
is to be amortized over 15 years.  Amortization for the year ended December 31mm
2007 was $19,148.


NOTE 7. NOTES PAYABLE & LONG TERM LIABILITIES

Notes payable as of December 31, 2007 consist of the following:

                                                      -------------------------
        Unsecured loan with
        annual interest of 3%.                              $  1,947,746

        Unsecured notes, with annual interest of
        10%.                                                   1,243,934
                                                      -------------------------

                                                            $   3,191,680
                                                      =========================


NOTE 8.  RELATED PARTY TRANSACTION

As of December 31, 2006 the Company has a loan payable due to a  stockholder  of
the  Company (a related  party) in the amount of $22,900.  This is an  unsecured
loan with an interest rate of 3%. Interest is currently being waived.


                                      -45-
<PAGE>

           ENVIRONMENTAL SERVICE PROFESSIONALS, INC. AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                        AS OF DECEMBER 31, 2007 AND 2006
NOTE 9. LONG TERM LEASE AGREEMENT

The Company signed a lease  agreement for its corporate  offices in Palm Springs
commencing  August 1, 2006 with the option of renewal  for an  additional  three
years at a 5% increase each year.

The base rent is currently  $6,206.00 per month.  The following is a schedule of
payments under the above operating lease:


           YEAR ENDING DECEMBER 31, AMOUNT
           ------------------------                     -------------
               2007                                     $  76,022.00
               2008                                        79,822.00
                                                        -------------
                                                        $ 181,798.00


NOTE 10.  ACQUISITIONS

On  or  about  February  20,  2007  (the   "Closing"),   Environmental   Service
Professionals,  Inc.  (the  "Company"),  Allstate  Home  Inspection  & Household
Environmental  Testing,  Ltd., a Delaware  corporation  ("AHI"),  and Francis X.
Finigan,  an individual and sole shareholder of AHI  ("Finigan"),  completed the
closing of a stock purchase  agreement (the "SPA") pursuant to which the Company
acquired 100% of the total issued and  outstanding  stock of AHI from Finigan in
exchange  for  1,000,000  shares  of the  Company's  common  stock  issuable  in
installments over time (the "Stock Payment"), 250,000 warrants issuable 275 days
after the Closing entitling Finigan to purchase 250,000 additional shares of the
Company's common stock at a purchase price of $0.75 per share  exercisable for a
period  of five  years  from the date of the  Closing,  plus  $950,000  in cash,
payable  in  installments  over time (the  "Cash  Payment").  As a result of the
Closing, AHI is a wholly owned subsidiary of the Company.

All shares of the  Company's  common stock and all of the  warrants  issuable to
Finigan by the Company  under the SPA must be held by Finigan for a period of at
least  one year from the date of the  Closing.  Furthermore,  Finigan  will have
piggyback  registration  rights  with  respect  to the  shares  and  the  shares
underlying the warrants,  subject to potential adjustment by the Underwriter for
such registration statement, if any.

                                      -46-
<PAGE>

           ENVIRONMENTAL SERVICE PROFESSIONALS, INC. AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                        AS OF DECEMBER 31, 2007 AND 2006

NOTE 10.  ACQUISITIONS - CONTINUED

On  July  23,  2007,   Environmental  Service  Professionals,   Inc.,  a  Nevada
corporation (the Company"), Robert G. Johnson, an individual (the "Seller"), and
International   Association   Managers,   Inc.,  a  Minnesota  corporation  (the
"Manager")  closed the acquisition of all of the tangible and intangible  assets
(the "Acquired Assets") of International  Association  Managers,  Inc., National
Association of Real Estate  Appraisers,  Environmental  Assessment  Association,
Association  of  Construction   Inspectors,   Housing   Inspection   Foundation,
International  Real  Estate  Institute,  and  International  Society  of Meeting
Planners  (collectively,  the "Entities") by the Company.  Pursuant to the Asset
Purchase  Agreement,  dated  as of  April  3,  2007  (the  "APA")  covering  the
acquisition,  in  consideration  for the  transfer  of the  Acquired  Assets and
unearned revenue payable to the Company of approximately  $134,000,  the Company
paid the Seller a total amount of $659,000 in cash,  $5,000 of which the parties
agreed to  allocate to the  covenant  not to  compete.  Additionally,  Seller is
associated  with the  National  Association  of  Review  Appraisers  &  Mortgage
Underwriters,  a  non-profit  association.  Upon closing of the APA, the Company
will take on the day-to-day management responsibilities of the association.


NOTE 11. STOCK WARRANTS

At December 31, 2007 the Company had the following warrants outstanding:

(i)  warrants to purchase  275,000  shares of the  Company's  common stock at an
exercise price of $.01.

(ii) warrants to purchase  1,311,245  shares of the Company's common stock at an
exercise price of $.25.

(iii)  warrants to purchase  86,206 shares of the  Company's  common stock at an
exercise price of $.58.

(iv) warrants to purchase  7,517,767  shares of the Company's common stock at an
exercise price of $0.75.

(v)  warrants to purchase  125,000  shares of the  Company's  common stock at an
exercise price of $1.25.

(vi) warrants to purchase  737,420  shares of the  Company's  common stock at an
exercise price of $1.50.



                                      -47-
<PAGE>

           ENVIRONMENTAL SERVICE PROFESSIONALS, INC. AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                        AS OF DECEMBER 31, 2007 AND 2006

NOTE 12. BASIC & DILUTED INCOME / (LOSS) PER COMMON SHARE

Basic gain (loss) per common  share has been  calculated  based on the  weighted
average number of shares of common stock outstanding during the period.

                                         DECEMBER 31,           DECEMBER 31,
                                             2007                   2006
                                        -------------        ------------------

NET INCOME (LOSS) FROM OPERATIONS       $ (21,468,106)       $     (564,589)

BASIC INCOME / (LOSS) PER SHARE                 (1.18)                (0.08)
                                        =============        ==================

WEIGHTED AVERAGE NUMBER OF
 SHARES OUTSTANDING                        18,250,793             6,996,933
                                        =============        ==================


NOTE 13. STOCK TRANSACTIONS

On April 24,  2006 the  Company  issued  2,440,000  shares  of  common  stock to
management in lieu of the payment of their services.

On April  24,  2006  the  Company  issued  236,772  shares  of  common  stock in
connection  with  the  payment  of  legal  fees  is  connection  with  the  Bank
Settlement.

On April 24, 2006 the Company  issued  400,000  shares of common stock to settle
the incurred legal fees.

On  April  24,  2006  the  Company  issued  93,750  shares  of  common  stock as
consideration  Glassware  Industries  Group,  Ltd. for legal and other  services
rendered for the Company.

On October 11,  2006,  the  Company  completed  the closing of a stock  purchase
agreement  (the "SPA") to effect a reverse  merger  between the  companies  (the
"Business  Combination") under which the Company issued 14,625,000 shares of its
common stock to PES in  consideration  for  14,625,000  shares of Pest's  common
stock. PES is distributing up to 14,625,000 shares of the Company's common stock
to its existing  shareholders in consideration  for the redemption of 14,625,000
shares of the outstanding  voting stock of PES. As a result of the closing,  PES
is a wholly owned  subsidiary of the Company and the shareholders of PES are the
controlling shareholders of the Company.



                                      -48-
<PAGE>

           ENVIRONMENTAL SERVICE PROFESSIONALS, INC. AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                        AS OF DECEMBER 31, 2007 AND 2006

NOTE 13. STOCK TRANSACTIONS - CONTINUED

According  to the SPA,  prior to the closing of the  Business  Combination,  the
Company  covenanted,  among other things, to effect a one for 3.75 reverse split
of its outstanding  common stock,  which resulted in Glassware having a total of
1,568,463 shares of its common stock outstanding at closing.

On  December  1, 2006,  the Company  completed  the closing of a stock  purchase
agreement  with NPS to effect an  acquisition  under  which the  Company  issued
425,000 shares of its common stock and paid $175,000 to NPS in consideration for
100% interest of Naps' common stock. As a result of the closing, NPS is a wholly
owned subsidiary of the Company.

On January  25,  2007 the  Company  issued  39,266  shares of common  stock in a
private placement.

On February  16,  2007 the Company  issued  200,000  shares of common  stock for
services rendered.

On February 20, 2007 the Company issued  1,000,000 shares of common stock in the
acquisition of Allstate Home Inspection.

On March 16, 2007 the Company issued 122,917 shares of common stock for cash.

On April 16, 2007 the Company issued 153,000 shares of common stock for cash.

On May 18, 2007 the Company issued 1,795,000 shares of common stock for services
rendered.

On June 7, 2007 the Company  issued  404,742 shares of common stock in a private
placement.

On June 26, 2007 the Company issued 900,000 shares of common stock for cash.

On July 7, 2007 the Company  issued  381,035 shares of common stock in a private
placement.

On July 17, 2007 the Company issued 892,300 shares of common stock for cash.

On  August 1,  2007 the  Company  issued  50,000  shares of common  stock in the
acquisition of International Association Managers, Inc.

On  September  11, 2007 the Company  issued  806,851  shares of common stock for
services rendered.

                                      -49-
<PAGE>

           ENVIRONMENTAL SERVICE PROFESSIONALS, INC. AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                        AS OF DECEMBER 31, 2007 AND 2006

NOTE 13. STOCK TRANSACTIONS - CONTINUED

On  October  2, 2007 the  Company  issued  515,518  shares of common  stock in a
private placement.

On  October  2, 2007 the  Company  issued  550,000  shares  of common  stock for
services rendered.

Common stock issued as of December 31, 2007 21,783,375


NOTE 14. STOCKHOLDERS' EQUITY

The  stockholders'  equity section of the Company contains the following classes
of capital stock as of December 31, 2007:

          o    Common stock, $ 0.001 par value;  100,000,000  shares authorized:
               21,783,375 shares


NOTE 14. INCOME TAXES

Income taxes are provided in accordance  with Statement of Financial  Accounting
Standards No. 109 (SFAS 109),  Accounting for Income Taxes. A deferred tax asset
or liability is recorded for all temporary differences between financial and tax
reporting and net operating loss carry forwards.  Deferred tax expense (benefit)
results  from  the net  change  during  the  year of  deferred  tax  assets  and
liabilities.

At December 31, 2007 the Company has  significant  operating and capital  losses
carry forward.  The tax benefits  resulting for the purposes have been estimated
as follows:

                                    DECEMBER 31,      DECEMBER 31,
                                        2007              2006
                                  ---------------   ----------------

  Accumulated deficit as of:      $  (21,468,106)   $     (2,557,413)

  Gross income tax benefit             7,513,837             869,520
  Valuation allowance                 (7,513,837)           (869,520)
                                  ---------------   ----------------
  Net income tax benefit          $            -    $              -
                                  ===============   ================


                                      -50-

<PAGE>

           ENVIRONMENTAL SERVICE PROFESSIONALS, INC. AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                        AS OF DECEMBER 31, 2007 AND 2006

NOTE 14. INCOME TAXES - CONTINUED

The net operating loss expires twenty years from the date the loss was incurred.
The retained earning balance includes  accumulated  comprehensive income (loss).
In  accordance  with SFAS 109  paragraph 18 the Company has reduced its deferred
tax benefit  asset by a valuation  allowance  due to negative  evidence that has
caused the Company to feel it is more  likely than not that some  portion or all
of the  deferred  tax asset will not be  realized.  No portion of the  valuation
allowance will be allocated to reduce  goodwill or other  concurrent  intangible
asset of an acquired entity. There are no temporary  differences or carryforward
tax effects that would significantly affect the Companies deferred tax asset.

Utilization of the net operating losses and credit  carryforwards may be subject
to a substantial  annual limitation due to the "change in ownership"  provisions
of the Internal  Revenue Code of 1986.  The annual  limitation may result in the
expiration of net operating losses and credits before  utilization.  None of the
valuation  allowance  recognized  was  allocated  to  reduce  goodwill  or other
noncurrent  intangible  assets of an acquired  entity or directly to  contribute
capital.


NOTE 15. GOING CONCERN

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will  continue as a going  concern.  The Company  generated net
losses of  $21,468,106  during the period from  September  29, 1992  (inception)
through December 31, 2007. These  conditions raise  substantial  doubt about the
Company's ability to continue as a going concern. The Company's  continuation as
a going concern is dependent on its ability to meet its  obligations,  to obtain
additional financing as may be required and ultimately to attain  profitability.
The consolidated  financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

Management  plans to raise  additional  funds through debt or equity  offerings.
Management  has yet to decide what type of offering  the Company will use or how
much capital the Company will raise. There is no guarantee that the Company will
be able to raise any capital through any type of offerings.


NOTES 16. LEGAL PROCEEDINGS

JOHN COOLEY V. PACIFIC ENVIRONMENTAL SAMPLING, INC. ETC., ET AL.

         On December 6, 2006,  John Cooley  filed a civil  complaint  in Ventura
County alleging  breach of fiduciary duty and fraud regarding the  restructuring
of Pacific Environmental Sampling, Inc. on March 25, 2006. On December 12, 2006,
a hearing before the Court was held on the application for injunctive relief and


                                      -51-
<PAGE>

           ENVIRONMENTAL SERVICE PROFESSIONALS, INC. AND SUBSIDIARIES
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                        AS OF DECEMBER 31, 2007 AND 2006

for  appointment  of a receiver.  Both of Cooley's  requests  were denied by the
Court.  ESP and its affiliates  subsequently  filed a demurrer  challenging  the
legal sufficiency of the fraud claim and the demurrer was sustained.  Cooley was
permitted by the Court to file a First  Amended  Complaint to attempt to correct
deficiencies.  With an extension, the First Amended Complaint was filed on March
27, 2007.  Subsequently,  this First  Amended  Compliant was rejected as was the
Second  Amended  Complaint.  On  April 4,  2008 a  hearing  for a Third  Amended
Complaint  was held before the court and the  Company was granted all  submitted
demurrers and Motions to Strike.  On April 25, 2008,  Cooley  submitted a Fourth
Amended Complaint. A tentative hearing date has been set for May 30, 2008. As of
the date of this report,  ESP and its  affiliates  cannot predict the outcome of
this case. ESP and its affiliates believe they have meritorious defenses and are
vigorously defending the action.


NOTE 17. SUBSEQUENT EVENTS

Subsequent  to December  31,  2007 the three  lines of credits  that the Company
currently has; were  converted to a fixed rate loan with a current  principal as
of March 31, 2008.


NOTE 18 - PRO-FORMA FINANCIAL

The  Company's  financials  reflects  operations  of  International  Association
Managers, Inc. from the date of acquisition.  Below is a pro-forma (in condensed
form) of the statement of operations of Environmental Service Professional, Inc.
and  International  Association  Managers,  Inc. for the year ended December 31,
2007. The pro-forma  reflects what the Company's  statement of operations  would
show if both Company's had been associated the entire year:

<TABLE>
<CAPTION>

                                                        ESP                   IAMI            CONSOLIDATED
---------------------------------------------- ----------------------- ------------------- -------------------

<S>                                            <C>                     <C>                 <C>
Revenues                                       $         581,803       $   1,183,333       $     1,765,136
Cost of goods sold                                       (57,104)            (77,871)             (134,975)
                                               ----------------------- ------------------- -------------------

Gross profit                                             524,699           1,105,462             1,630,161
Total operating expenses                              (9,658,867)           (662,632)          (10,321,499)
                                               ----------------------- ------------------- -------------------

Operations income (loss)                              (9,134,168)            442,830            (8,691,338)
Total other income (expenses)                        (12,333,938)              1,589           (12,332,349)
                                               ----------------------- ------------------- -------------------

                                               ----------------------- ------------------- -------------------
Net Income (Loss)                              $     (21,468,106)      $     444,419       $   (21,023,687)
                                               ======================= =================== ===================
</TABLE>


                                      -52-
<PAGE>
ITEM  8.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
FINANCIAL DISCLOSURE

         On April 28, 2008,  the Company  engaged Stan J.H.  Lee, CPA, CMA ("New
Accountant")  to audit and review the  Company's  financial  statements  for the
fiscal year ending  December 31, 2007.  The New  Accountant has been engaged for
general audit and review services and not because of any particular  transaction
or  accounting  principle,  or because of any  disagreement  with the  Company's
former accountant, Chang G. Park, CPA, Ph. D. (the "Former Accountant").

         Prior to engaging the New Accountant, the Company had not consulted the
New Accountant regarding the application of accounting principles to a specified
transaction,  completed  or  proposed,  the type of audit  opinion that might be
rendered on our financial  statements or a reportable event, nor did the Company
consult  with the New  Accountant  regarding  any  disagreements  with our prior
auditor on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreements, if not resolved
to the satisfaction of the prior auditor, would have caused it to make reference
to the subject matter of the disagreements in connection with its reports.

         The Former Accountant was not re-engaged  effective April 28, 2008. The
Former  Accountant's  reports on the Company's  financial  statements during its
past two  fiscal  years did not  contain an adverse  opinion  or  disclaimer  of
opinion,  nor was it  modified  as to  uncertainty,  audit  scope or  accounting
principles,  except for a going  concern  qualification  contained  in its audit
reports for the fiscal years ending December 31, 2005 and December 31, 2006. The
going  concern  qualification  stated as follows:  "The  consolidated  financial
statements have been prepared assuming that the Company will continue as a going
concern.  As  discussed in Note 2 to the  financial  statements,  the  Company's
losses from operations raise  substantial doubt about its ability to continue as
a going concern.  The financial  statements do not include any adjustments  that
might result from the outcome of this uncertainty."

         The  decision to change  accountants,  which  involved  dismissing  the
Former  Accountant  and  engaging the New  Accountant,  was  recommended  by the
Company's  Audit  Committee  Chairperson  and approved by the Company's Board of
Directors on April 28, 2008. During the fiscal years ended December 31, 2005 and
December  31,  2006  through  the  date  hereof,  the  Company  did not have any
disagreements with the Former Accountant on any matter of accounting  principles
or practices,  financial  statement  disclosure,  or auditing scope or procedure
which,  if not  resolved  to the Former  Accountant's  satisfaction,  would have
caused  it to make  reference  to the  subject  matter  of the  disagreement  in
connection with its report, except as described in the next paragraph.

         In the  course of  preparing  the  financial  statements  for the third
quarter ended  September  30, 2007 for the  Company's  Report on Form 10-QSB for
that quarter,  management of the Company and the Former Accountant discussed the
reporting  of revenue  earned by the  associations  acquired by the Company from
Robert Johnson.  The Company's  acquisition of those associations closed on July
31,  2007  (the  "Closing").   Management  believes  that  the  acquisition  was
structured as an asset acquisition and therefore intended to report revenue from
the  associations  only for the period from the Closing  through  September  30,
2007.  Initially,  the Former Accountant  disagreed with management and asserted
that it believed that the  acquisition was a purchase of stock and insisted that
the Company  record  revenue  for the  associations  for the entire  period from
January 1, 2007 through September 30, 2007.  Eventually management acquiesced to
the  Former  Accountant's   position  and  prepared  the  financial   statements
reflecting association revenue from the beginning of the 2007 fiscal year.

         After the filing  deadline for the Company's  Report on Form 10-QSB for
the third quarter ended September 30, 2007, the Former  Accountant  informed the
Company  that it had  changed  its  position  and now agreed  with  management's
initial position that the Company should report  association  revenue commencing
from  July  31,  2007,  the  Closing  date  for  the  acquisition.   The  Former
Accountant's  change of position was communicated to management after the Former
Accountant had already  approved the Company's policy of recording the full nine
months of revenue from the associations, and too tardy for the Company to change
its Report on Form  10-QSB  for the third  quarter  ended  September  30,  2007.
Furthermore,  at that time  management was still uncertain as to which reporting
policy was correct,  especially in light of the Former Accountant's inconsistent

                                      -53-
<PAGE>

advice. As a result,  the Former Accountant did not issue an approval letter for
the Company's  financial  statements  for the third quarter ended  September 30,
2007.

         In the course of preparing the Company's  financial  statements for the
full year ended  December 31, 2007,  management  determined  that the  Company's
financial  statements  for the third quarter ended  September 30, 2007 should be
restated to report association  revenue only from the date of the Closing of the
acquisition  and not from the  beginning  of the 2007  fiscal  year.  The Former
Accountant agreed with the Company's  management and was prepared to work on the
restatement  for the third quarter ended September 30, 2007 and the audit report
for the fiscal year ended December 31, 2007.  Nevertheless,  the Company's Board
of Directors  decided to  authorize  and direct the Company on April 28, 2008 to
dismiss the Former  Accountant and  simultaneously to engage the New Accountant,
primarily because the Former  Accountant's fee quote for the work was excessive.
Accordingly,  the Company does not currently have a disagreement with the Former
Accountant with respect to the Company's  financial  statements on any matter of
accounting principles or practices,  financial statement disclosure, or auditing
scope  or  procedure.   The  confusion   surrounding  the  Former   Accountant's
inconsistent advice relating to the Company's financial statements for the third
quarter ended September 30, 2007 may,  however,  have resulted in a disagreement
with  the  Former  Accountant  at the  time  in  light  of  management's  recent
determination  that the  associated  revenue  should be  reported  only from the
acquisition  Closing date and not from January 1, 2007. A letter from the Former
Accountant  addressed to The Securities and Exchange Commission was requested by
the Company and was attached to its Report on Form 8-K/A,  dated May 2, 2008, as
Exhibit 9(c)(16).

         Because  of  the   confusion   surrounding   the  Former   Accountant's
inconsistent advice relating to the Company's financial statements for the third
quarter ended September 30, 2007 which may have resulted in a disagreement  with
the  Former  Accountant,  the  Company  does not have a consent  from the Former
Accountant to use the financial  statements for the year ended December 31, 2006
prepared by the Former  Accountant.  Accordingly,  the Company  will rely on the
audit letter provided by the Former Accountant,  dated February 23, 2007 (Except
for Notes 12 & 17, as to which the date is June 19, 2007).

ITEM 8A.          CONTROLS AND PROCEDURES

         ESP and its affiliates'  Chairman,  Chief Executive Officer,  and Chief
Financial  Officer have evaluated the  effectiveness  of ESP and its affiliates'
disclosure  controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
under the  Securities  Exchange  Act of 1934,  as  amended) as of the end of the
period  covered  by this  annual  report  and,  based on this  evaluation,  have
concluded that the disclosure controls and procedures are effective.

                                      -54-
<PAGE>

         There have been no changes in ESP and its affiliates'  internal control
over financial  reporting that occurred  during ESP's fourth fiscal quarter that
has materially  affected,  or is reasonably likely to materially  affect,  ESP's
internal control over financial reporting.

ITEM 8A(T).       CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

           Disclosure  controls and procedures are controls and other procedures
that are  designed to ensure that  information  required to be  disclosed by the
Company is recorded, processed, summarized and reported, within the time periods
specified in the rules and forms of the SEC. Edward Torres,  the Company's Chief
Executive  Officer  and  Principal   Accounting   Officer,  is  responsible  for
establishing and maintaining disclosure controls and procedures for the Company.

         ESP's  management  has evaluated the  effectiveness  of its  disclosure
controls and procedures as of December 31, 2007 (under the  supervision and with
the  participation of the Chief Executive  Officer and the Principal  Accounting
Officer), pursuant to Rule 13a-15(b) promulgated under the Exchange Act. As part
of such evaluation,  management  considered the matters discussed below relating
to internal  control over financial  reporting.  Based on this  evaluation,  the
Company's Chief Executive Officer and Principal Accounting Officer has concluded
that the Company's  disclosure  controls and procedures were not effective as of
December 31, 2007, due to certain  material  weaknesses in internal control over
financial reporting.

         The term "internal  control over  financial  reporting" is defined as a
process  designed by, or under the  supervision of, the  registrant's  principal
executive  and  principal  financial  officers,  or persons  performing  similar
functions,  and effected by the registrant's board of directors,  management and
other personnel,  to provide reasonable  assurance  regarding the reliability of
financial  reporting and the  preparation  of financial  statements for external
purposes  in  accordance  with  generally  accepted  accounting  principles  and
includes those policies and procedures that:

o        pertain  to the  maintenance  of  records  that  in  reasonable  detail
         accurately and fairly reflect the  transactions and dispositions of the
         assets of the registrant;

o        provide   reasonable   assurance  that  transactions  are  recorded  as
         necessary to permit  preparation of financial  statements in accordance
         with generally accepted  accounting  principles,  and that receipts and
         expenditures  of the registrant are being made only in accordance  with
         authorizations of management and directors of the registrant; and

o        provide reasonable  assurance regarding  prevention or timely detection
         of  unauthorized  acquisition,  use or disposition of the  registrant's
         assets that could have a material effect on the financial statements.

         The Company's  auditors believe that ESP's  methodology for identifying
all necessary  disclosures related to non-cash equity transactions could lead to
a material  misstatement of net income (loss).  The Company intends to cooperate
with its auditors in 2008 to address this material weakness.

                                      -55-
<PAGE>

MANAGEMENT'S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

         Management is responsible for  establishing  and  maintaining  adequate
internal  control over financial  reporting (as defined in Rule 13a-15(f)  under
the Exchange Act). ESP's internal control over financial  reporting is a process
designed to provide reasonable  assurance regarding the reliability of financial
reporting and the preparation of financial  statements for external  purposes of
accounting  principles  generally accepted in the United States.  Because of its
inherent limitations,  internal control over financial reporting may not prevent
or  detect  misstatements.  Therefore,  even  those  systems  determined  to  be
effective  can provide only  reasonable  assurance of  achieving  their  control
objectives.

         Management,  with the  participation  of the Chief  Executive  Officer,
evaluated the  effectiveness  of the Company's  internal  control over financial
reporting as of December  31, 2007.  In making this  assessment,  the  Company's
management   used  the  criteria  set  forth  by  the  Committee  of  Sponsoring
Organizations  of the  Treadway  Commission  ("COSO")  in  Internal  Control  --
Integrated  Framework.  Based on this evaluation,  the Company's Chief Executive
Officer and  Principal  Accounting  Officer  has  concluded  that the  Company's
disclosure  controls and procedures  were not effective as of December 31, 2007,
due to certain material weaknesses in internal control over financial reporting.

         This  annual  report  does not  include  an  attestation  report of the
Company's  registered  public  accounting firm regarding  internal  control over
financial  reporting.  Management's report was not subject to attestation by the
Company's  registered  public accounting firm pursuant to temporary rules of the
Securities and Exchange  Commission that permits us to provide only management's
report in this annual report.

CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING

         In connection  with the evaluation of the Company's  internal  controls
during the Company's last fiscal year, the Company's Principal Executive Officer
and Principal Accounting Officer has determined that there are no changes to the
Company's  internal  controls  over  financial  reporting  that have  materially
affected,  or are reasonably likely to materially effect, the Company's internal
controls over financial reporting.

INHERENT LIMITATIONS ON EFFECTIVENESS OF CONTROLS

         The Company's  management does not expect that its disclosure  controls
or its internal  control  over  financial  reporting  will prevent or detect all
error and all fraud. A control system, no matter how well designed and operated,
can provide only reasonable,  not absolute,  assurance that the control system's
objectives  will be met.  The design of a control  system must  reflect the fact
that there are  resource  constraints,  and the  benefits  of  controls  must be
considered relative to their costs. Further, because of the inherent limitations
in all control systems, no evaluation of controls can provide absolute assurance
that  misstatements  due to error or fraud  will not  occur or that all  control
issues and instances of fraud,  if any,  within the Company have been  detected.
These  inherent  limitations  include the realities  that  judgments in decision
making can be faulty and that  breakdowns  can occur  because of simple error or
mistake.  Controls  can  also be  circumvented  by the  individual  acts of some
persons,  by  collusion  of two or more people,  or  management  override of the
controls.  The  design of any  system of  controls  is based in part on  certain
assumptions about the likelihood of future events, and there can be no assurance
that any design will succeed in achieving  its stated goals under all  potential
future  conditions.  Projections of any evaluation of controls  effectiveness to

                                      -56-
<PAGE>

future periods are subject to risks.  Over time,  controls may become inadequate
because of changes in  conditions or  deterioration  in the degree of compliance
with policies or procedures.

ITEM 8B.          OTHER INFORMATION

         None.



































                                      -57-
<PAGE>



                                    PART III

ITEM  9.  DIRECTORS,   EXECUTIVE  OFFICERS,   PROMOTERS,  AND  CONTROL  PERSONS;
COMPLIANCE WITH SECTION 16(A) OF EXCHANGE ACT

         The following  table lists the executive  officers and directors of ESP
and its affiliates as of March 31, 2008:
<TABLE>
<CAPTION>

NAME                                AGE                  POSITIONS AND OFFICES HELD                     SINCE
------------------------------   -----------   ----------------------------------------------   --------------------
<S>                                  <C>       <C>                                               <C>
Edward L. Torres                     50        Chairman, Chief Executive Officer and             October 11, 2006
                                               President, Chief Financial Officer (from May
                                               5, 2007)
Lyle Watkins                         48        Director, Chief Operating Officer, and            October 11, 2006
                                               Corporate Secretary
Leroy Moyer (1)                      65        Director                                          April 1, 2007
S. Robert August                     56        Director                                          May 31, 2007
</TABLE>
----------------------
(1)  Member of Audit Committee.

         EDWARD TORRES, age 50, has been the Chairman,  Chief Executive Officer,
and President of ESP since October 2006 and of Safeguard  since  February  2007.
Mr.  Torres  has  over  25  years  of  business  development  experience  as  an
entrepreneur in several  professional  industries.  Mr. Torres  graduated with a
Bachelor's   Degree  in  Business   Development,   and  established  a  national
manufacturing  service  business with Priority Sales and Service.  After several
years with that  company,  Mr.  Torres  merged the company with  Sandelos USA, a
national   company  known  for  its  kitchen  and  bath  products.   He  oversaw
international  production and  distribution of the products for the U.S. market,
as well as  participated  in the  acquisition  of  Sandelos,  USA during the mid
1990's.  In  1996,  he  participated  in the  acquisition  of  Commercial  Labor
Management,  Inc., a public entity, and arranged its reverse merger with Zeros &
Ones, Inc., a technology  company  currently traded on Pink Sheets.  During 1996
Mr.  Torres also  participated  in the  formation of Joint  Employers  Group,  a
California based professional  employer  organization.  Overseeing the company's
marketing and sales division, he was instrumental in increasing its revenue from
$100,000 in 1995 to $65 million in 2001. In 2003,  Mr. Torres  arranged the sale
of Joint Employers  Group,  Inc. to ITEC, a publicly traded company in the human
resource industry.  In 2003, Mr. Torres,  through Pro-Active  Business Services,
founded  Contempo Homes and was  instrumental in obtaining  130.59 acres for the
development  of 421  homes.  All of the  homes  built by  Contempo  Homes,  Inc.
incorporate  distinct  architectural  design,  modern  conveniences,  and  Green
Technology,  also known as ContempoGREEN and EcoModern. The combination of these
various elements makes Contempo homes unique and desirable.  In 2005, Pro-Active
and Mr. Torres sold their holdings in Contempo Homes and currently  provide land
development and entitlement  procurement  consulting  services to clients in the
City of Palm Springs and in the Coachella Valley communities.  Mr. Torres serves
on several local task forces and on a variety of building industry organizations
which have helped to establish his influence in many Coachella Valley cities. He
sits on the  Building  Industry  Association  Board  of  Directors  as 2nd  Vice
President,  is a Director of the Palm Springs Economic  Development  Corporation
("PSEDC"),  and is a member  of the  Citizen  Task  Force for  establishing  new
development  standards  for the City of Palm  Springs.  Mr.  Torres is currently
working with several  Coachella  Valley cities and school  districts in creating
and developing Green Technology,  Smart Growth and Responsible Growth guidelines
for  developers  and  builders.  Mr.  Torres is involved in  establishing  focus
entitlement  guidelines  for the City of Palm  Springs to be used as a model for
other Coachella Valley cities.

                                      -58-
<PAGE>

         LYLE WATKINS, age 48, has been a Director, Chief Operating Officer, and
Corporate  Secretary of ESP since October 2006. He has been the Chief  Operating
Officer of ESP since  October 2006 and of Safeguard  since  February  2007.  Mr.
Watkins has an Applied Science Degree and received an MBA in 1996. He has served
as Chief  Financial  Officer of Pacific Image  Connect,  Inc. in Thousand  Oaks,
California.   He  served  as   Director  of  Systems   Engineering   of  Rhythms
NetConnections,   Inc.  in  Englewood,  Colorado,  and  a  Manager  of  Business
Development  for GTE  International.  As Manager  of  Business  Development,  he
directed  the  operations  of  engineering  and sales  support  for a  strategic
business unit with a sales support staff including engineers, market development
managers, program and project managers,  trainers,  database analysts,  contract
administrators  and field  operations  desk staff.  During his tenure,  top line
revenue of his strategic  business  unit  increased  275% to $250  million,  the
department  expanded from 22 personnel to 159  personnel,  he managed assets and
administered an $18 million annual expense budget,  expenses were reduced by 15%
and  profitability  increased  by $3 million.  Mr.  Watkins has also managed the
review of cash flow and value statement analysis; developed and launched a fiber
based  metropolitan  ATM  service,  and  negotiated   technology  and  exclusive
marketing  agreements with property developers in Canada, USA, Hong Kong and the
Philippines. Mr. Watkins has developed joint ventures between telecommunications
companies and property developers  including design,  implementation and service
delivery of advanced CATV networks.

         LEROY MOYER,  age 65, has been a Director of ESP since April 2007.  Mr.
Moyer is a Certified Public Accountant and currently is the Director of Business
Development  for  Dimensional  Insight,  a business  intelligence  and corporate
performance  management  company that  delivers  software and services that help
companies drive, monitor and understand corporate  performance.  Mr. Moyer began
his career with Deloitte, Haskins & Sells (subsequently Deloitte and hereinafter
referred to as "Deloitte")  where he was  responsible  for multiple  clients who
ranged from recently  funded  start-up  companies to  multinational  Global 1000
corporations.  In 1980 he was  elected a Partner of  Deloitte.  His career  with
Deloitte included over 22 years serving the unique and complex needs of emerging
technology businesses,  international  experience in Deloitte's Paris office and
Deloitte's New York executive  office where he provided expert  technical advice
on Securities and Exchange Commission ("SEC") matters, mergers and acquisitions.
In Mr. Moyer's SEC department role, he worked extensively with Deloitte clients,
underwriters  and  investment  bankers  on  significant  reporting,  filing  and
disclosure matters. Mr. Moyer has also served as a Vice President of Finance, as
well as Chief Financial  Officer of both private and public companies focused on
high technology, telecommunications,  software, hardware, and manufacturing. Mr.
Moyer has been both an  inside  and  independent  member  of  various  Boards of
Directors,  and has experience in  information  technology  systems,  contracts,
treasury, legal, tax, risk management, pricing and sales and strategic planning.

         S. ROBERT AUGUST, age 56 has been a director of ESP since May 31, 2007.
Mr. August is the  President and founder of S. Robert August & Company,  Inc., a
national  marketing and management  firm  specializing  in servicing real estate
builders,  developers,   Realtors,  economic  development  councils,  suppliers,
manufacturers, and related businesses. The company, located in Denver, Colorado,
was  founded  by Mr.  August  in  1983.  Mr.  August  is  also  the  founder  of
RealtyWorks,  Inc.,  a real  estate  firm  founded in 1995 in Denver,  Colorado,
specializing in land and new home sales, which operated until 2006. From 1983 to
1995,  Mr.  August was the founder and  President  of S.  Robert  August  Realty
Corporation in Denver,  Colorado,  specializing in land and new home sales.  Mr.
August  was the Vice  President  of  Marketing  and Sales for  Stuart R. Scott &
Associates, Inc. from 1982 to 1983, where he trained, supervised and motivated a
real estate sales force for six  residential  communities.  Mr.  August has also
served as a Director of Marketing for The Ranch in Denver,  Colorado,  from 1978
to 1982, a Project  Manager for  Tollin-Grayboyes  from 1976 to 1978,  and other
positions in real estate sales and consulting. Mr. August has a Bachelor of Arts

                                      -59-
<PAGE>

Degree in Labor Management  Relations from  Pennsylvania  State University and a
Masters  of  International  Management  from the  American  Graduate  School  of
International  Management  (1976). Mr. August is also active in fund raising for
Children's  Hospital,  Multiple  Sclerosis,  Hospice of Metro  Denver,  Colorado
Easter Seal Society, Show Home for Hope, Bridge Project,  Colorado AIDS Project,
Colorado  Pediatric  Aids  Foundation,  Home Builders  Foundation,  and National
Association of Home Builders'  (NAHB) Home Builders Care. Mr. August serves as a
Past Chairman of the NAHB's National Sales and Marketing Council.

LIMITATION OF LIABILITY AND INDEMNIFICATION OF OFFICERS AND DIRECTORS

         Under   Nevada   General   Corporation   Law  and  ESP's   Articles  of
Incorporation,  ESP's  directors  will  have  no  personal  liability  to  ESP's
stockholders  for  monetary  damages  incurred  as the  result of the  breach or
alleged  breach by a director  of his "duty of care."  This  provision  does not
apply  to  the  directors'  (i)  acts  or  omissions  that  involve  intentional
misconduct  or a knowing and culpable  violation of law,  (ii) acts or omissions
that a director believes to be contrary to the best interests of the corporation
or its shareholders or that involve the absence of good faith on the part of the
director,  (iii) approval of any  transaction  from which a director  derives an
improper personal benefit, (iv) acts or omissions that show a reckless disregard
for the director's duty to the corporation or its  shareholders in circumstances
in which the  director  was aware,  or should have been aware,  in the  ordinary
course of  performing a director's  duties,  of a risk of serious  injury to the
corporation  or its  shareholders,  (v) acts or omissions  that  constituted  an
unexcused pattern of inattention that amounts to an abdication of the director's
duty to the  corporation  or its  shareholders,  or (vi) approval of an unlawful
dividend,  distribution,  stock  repurchase or redemption.  This provision would
generally  absolve  directors  of  personal  liability  for  negligence  in  the
performance of duties, including gross negligence.

         The effect of this provision in ESP's Articles of  Incorporation  is to
eliminate the rights of ESP's  stockholders  (through  stockholder's  derivative
suits on behalf of ESP) to  recover  monetary  damages  against a  director  for
breach of his fiduciary duty of care as a director (including breaches resulting
from negligent or grossly negligent behavior) except in the situations described
in clauses (i) through (vi) above.  This  provision does not limit nor eliminate
the rights of ESP or any  stockholder  to seek  non-monetary  relief  such as an
injunction or rescission in the event of a breach of a director's  duty of care.
In  addition,  ESP's  Articles of  Incorporation  provide  that if Nevada law is
amended to authorize the future  elimination or limitation of the liability of a
director,  then the liability of the directors  will be eliminated or limited to
the fullest extent permitted by the law, as amended.  Nevada General Corporation
Law  grants  corporations  the right to  indemnify  their  directors,  officers,
employees and agents in accordance with applicable law. ESP's Bylaws provide for
indemnification  of such persons to the full extent  allowable under  applicable
law.  These  provisions  will not alter the  liability  of the  directors  under
federal securities laws.

         Furthermore,  management has entered into agreements to indemnify ESP's
directors and officers, in addition to the indemnification provided for in ESP's
Bylaws.  These  agreements,  among other things,  indemnify  ESP's directors and
officers for certain expenses (including attorneys' fees), judgments, fines, and
settlement  amounts  incurred  by any such  person in any action or  proceeding,
including  any action by or in the right of ESP,  arising  out of such  person's
services as a director  or officer of ESP,  any  subsidiary  of ESP or any other
company or  enterprise to which the person  provides  services at the request of
ESP. We believe that these  provisions  and  agreements are necessary to attract
and retain qualified directors and officers.

                                      -60-
<PAGE>

         Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors,  officers or persons controlling ESP pursuant
to the  foregoing  provisions,  ESP has been informed that in the opinion of the
Securities  and Exchange  Commission,  such  indemnification  is against  public
policy as expressed in the Act and is therefore unenforceable.

BOARD COMMITTEES

         Mr. Leroy Moyer is the sole member of ESP's Audit  Committee who should
be  considered  to be  independent  as  defined  in Rule  4200 of the  Financial
Industry Regulatory  Authority's  listing standards.  The Board of Directors has
adopted a  written  charter  of the Audit  Committee.  The  Audit  Committee  is
authorized by the Board of Directors to review,  with the Company's  independent
accountants, the annual financial statements of ESP prior to publication, and to
review  the  work  of,  and  approve  non-audit   services  preformed  by,  such
independent accountants. The Audit Committee will make annual recommendations to
the Board for the appointment of independent  public accountants for the ensuing
year. The Audit  Committee will also review the  effectiveness  of the financial
and accounting functions and the organization, operations and management of ESP.
The Audit  Committee was formed April,  2007.  The Audit  Committee held monthly
meetings  during fiscal year ended  December 31, 2007. As of March 31, 2008, the
Company has not yet appointed a Compensation Committee.

REPORT OF THE AUDIT COMMITTEE

         ESP's  Audit   Committee  has  reviewed  and  discussed  ESP's  audited
financial  statements  for the fiscal year ended  December  31, 2007 with senior
management. The Audit Committee has reviewed and discussed with management ESP's
audited financial  statements.  The Audit Committee has also discussed with Stan
J.H. Lee, CPA, CMA ("SL"), ESP's independent  auditors,  the matters required to
be  discussed  by the  Statement  on Auditing  Standards  No. 114 (The  Auditors
Communication  With Those  Charged  With  Governance)  and  received the written
disclosures  and the letter  from SL required by  Independence  Standards  Board
Standard  No. 1  (Independence  Discussion  with  Audit  Committees).  The Audit
Committee  has  discussed  with SL the  independence  of SL as  auditors of ESP.
Finally, in considering whether the independent  auditors provision of non-audit
services to ESP is compatible  with the auditors'  independence  for both SL and
SL, ESP's Audit  Committee has  recommended  to the Board of Directors  that the
audited  financial  statements of the Company be included in ESP's Annual Report
on Form 10-KSB for the fiscal year ended  December  31, 2007 for filing with the
United States  Securities  and Exchange  Commission.  The Audit  Committee  also
approved  SL's  engagement  to prepare  ESP's  consolidated  tax returns for its
fiscal year ending  December 31, 2007.  ESP's Audit  Committee  did not submit a
formal report regarding its findings.


                                 AUDIT COMMITTEE

                            LEROY MOYER, CHAIRPERSON

         Notwithstanding  anything  to the  contrary  set  forth in any of ESP's
previous or future  filings under the United States  Securities  Act of 1933, as
amended,  or the  Securities  Exchange  Act of  1934,  as  amended,  that  might
incorporate  this report in future  filings  with the  Securities  and  Exchange
Commission,  in whole or in part, the foregoing report shall not be deemed to be
incorporated by reference into any such filing.

                                      -61-
<PAGE>

CODE OF CONDUCT

         ESP has adopted a Code of Conduct that applies to all of the  Company's
directors,  officers  and  employees.  The text of the Code of Conduct  has been
posted on ESP's Internet website and can be viewed at  HTTP://WWW.EVSP.COM.  Any
waiver of the  provisions  of the Code of Conduct  for  executive  officers  and
directors may be made only by the Audit  Committee  and, in the case of a waiver
for members of the Audit Committee, by the Board of Directors.  Any such waivers
will be promptly disclosed to ESP's shareholders.

COMPLIANCE WITH SECTION 16(A) OF EXCHANGE ACT

         Section  16(a)  of  the  Exchange  Act  requires   ESP's  officers  and
directors,  and certain  persons who own more than 10% of a registered  class of
ESP's equity securities (collectively,  "Reporting Persons"), to file reports of
ownership and changes in ownership  ("Section 16 Reports")  with the  Securities
and Exchange  Commission (the "SEC").  Reporting Persons are required by the SEC
to furnish ESP with copies of all Section 16 Reports they file.

         Based  solely on its  review of the  copies of such  Section 16 Reports
received  by it, or written  representations  received  from  certain  Reporting
Persons,  all Section 16(a) filing  requirements  applicable to ESP's  Reporting
Persons  during and with respect to the fiscal year ended December 31, 2007 have
been complied with on a timely basis.

ITEM 10.          EXECUTIVE COMPENSATION

EXECUTIVE OFFICER COMPENSATION

         The following table summarizes  compensation paid or accrued by ESP and
its subsidiaries  for the year ended December 31, 2007 for services  rendered in
all  capacities,  by the  chief  executive  officer  and the other  most  highly
compensated executive officers during the fiscal year ended December 31, 2007.












                                      -62-

<PAGE>

                           SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>

 NAME AND PRINCIPAL     YEAR        SALARY       BONUS     OPTION        NON-EQUITY       NON-QUALIFIED     ALL OTHER       TOTAL
      POSITION                                             AWARDS      INCENTIVE PLAN        DEFERRED      COMPENSATION
                                                                        COMPENSATION       COMPENSATION
                                                                                             EARNINGS
-----------------------------------------------------------------------------------------------------------------------------------
<S>                     <C>        <C>             <C>        <C>            <C>                <C>             <C>        <C>
Edward L. Torres                                                                                                           $120,000
Chief Executive         2007       $120,000      - 0 -      - 0 -          - 0 -              - 0 -           - 0 -
  Officer

Lyle Watkins                                                                                                               $114,680
Chief Operating         2007       $114,680      - 0 -      - 0 -          - 0 -              - 0 -           - 0 -
  Officer and
  Corporate Secretary

Joseph Leone                                                                                                               $102,000
General Manger -        2007       $102,000      - 0 -      - 0 -          - 0 -              - 0 -           - 0 -
  Environmental
  Safeguard
  Professionals, Inc.

E. Kenneth Twichell     2007       $20,000       - 0 -      - 0 -          - 0 -              - 0 -           - 0 -        $20,000
General Manager
  -National
  Professional
  Services, Inc.

Francis X. Finigan
  National Sales        2007       $113,750      - 0 -      - 0 -          - 0 -              - 0 -           - 0 -        $113,750
  Director

</TABLE>

EMPLOYMENT AGREEMENTS

         ESP  and  its  subsidiaries   have  not  entered  into  any  employment
agreements  with their  executive  officers to date,  and do not intend to enter
into employment  agreements with them at the time. ESP and its  subsidiaries may
enter into employment agreements with them in the future.

OUTSTANDING EQUITY AWARDS

         None of ESP's executive  officers received any equity awards during the
year ended December 31, 2007.

DIRECTOR COMPENSATION

         None of ESP's directors  received any compensation for their respective
services rendered to the Company during the year ended December 31, 2007.

STOCK OPTION PLAN

         Not applicable.

                                      -63-
<PAGE>

ITEM 11.  SECURITY  OWNERSHIP OF CERTAIN  BENEFICIAL  OWNERS AND  MANAGEMENT AND
RELATED STOCKHOLDER MATTERS

         The following table sets forth certain information known to the Company
with respect to the  beneficial  ownership of the  Company's  voting stock as of
March 31, 2008 by (i) all persons who are beneficial owners of five percent (5%)
or more of a class of the Company's  voting stock,  (ii) each current  director,
(iii) the  executive  officers  named in the Summary  Compensation  Table of the
Executive  Compensation  section  of this  Form  10-KSB  and  (iv)  all  current
directors and executive  officers as a group.  As of March 31, 2008,  there were
18,655,697  shares of common stock  outstanding and no shares of preferred stock
outstanding.  Unless  otherwise  indicated,  each of the  stockholders  has sole
voting and  investment  power with  respect  to the shares  beneficially  owned,
subject to community  property  laws,  where  applicable.  Because the Preferred
Stock votes with the common stock,  but each share of Preferred Stock votes on a
1 for 50,000 basis with the common stock,  the  outstanding  common stock of the
Company represents  approximately 0% of the outstanding voting securities of the
Company.
<TABLE>
<CAPTION>

Name and Address of                            Common Stock                   Preferred Stock Beneficially Owned
Beneficial Owner(1)(2)                    Beneficially Owned(11)
----------------------------   ------------------------------------------  -----------------------------------------
                                        Shares           Percentage             Shares              Percentage
                               ------------------------------------------  -----------------------------------------
<S>                            <C>        <C>                     <C>                     <C>                   <C>
Edward Torres                  (3)        4,007,000               21.48%                  --                     --
Lyle Watkins                   (4)        1,000,000                5.36%                  --                     --
Hugh Dallas                    (5)          970,000                 5.2%                  --                     --
Joseph Leone                   (6)          970,000                 5.2%                  --                     --
Francis X. Finigan             (7)        1,000,000                5.36%                  --                     --
E. Kenneth Twichell            (8)           50,000               0.268%                  --                     --
Leroy Moyer                    (9)           10,000               0.054%                  --                     --
S. Robert August               (10)         200,000                1.07%                  --                     --

All current directors and
executive officers as a
group
(4 persons)                               5,217,000               27.96%                   0                     0%
</TABLE>
----------------

(1) Except as pursuant to applicable  community property laws, the persons named
in the table have sole voting and investment power with respect to all shares of
common stock  beneficially  owned.  The total  number of issued and  outstanding
shares and the total  number of shares  owned by each  person  does not  include
unexercised  warrants and stock options, and is calculated as of March 31, 2008.
The  percentages  are  based  on a total of  18,655,697shares  of  common  stock
outstanding.

(2) The  balance  of the  shares of ESP's  common  stock is  primarily  owned by
unaffiliated consultants and outside investors.

(3) Edward  Torres is the Chairman of the Board of  Directors,  Chief  Executive
Officer, and President of ESP, Environmental Safeguard Professionals,  Inc., and
NPS.

(4) Lyle Watkins is the Chief  Operating  Officer,  Corporate  Secretary,  and a
director of ESP.

(5) Hugh Dallas was a Director of ESP until his resignation on May 31, 2007.

(6)  Joseph  T.  Leone  is  the  General  Manager  of  Environmental   Safeguard
Professionals, Inc. and until February 1, 2008 was a director of ESP

(7) Francis  ("Rich")  Finigan was a director  of ESP until his  resignation  on
February 1, 2008.

                                      -64-
<PAGE>

(8) E.  Kenneth  Twitchell  is the  General  Manager  of  National  Professional
Services, Inc.

(9) Leroy Moyer is a director of ESP and Chairperson of the Audit Committee.

(10) S. Robert August is a director of ESP.

(11) Includes shares subject to lock-up and vesting  provisions.  On November 1,
2006,  ESP  entered  into a  Redemption,  Lock-up  and  Vesting  Agreement  (the
"Agreement") with the following  individual  shareholders of ESP: Edward Torres,
Lyle Watkins,  Joseph Leone, Hugh Dallas,  and Peter Torres  (collectively,  the
"Executive").  Peter Torres is the brother of Edward Torres.  The purpose of the
agreement was to provide for  redemption  of a portion of their  shares,  and to
lock-up  the balance of their  shares in order to  facilitate  ESP's  ability to
raise capital.  According to the Agreement,  in consideration for permitting ESP
to redeem and lock-up the shares, ESP conferred piggyback registration rights to
the shares for the Executive as the shares are released from lock-up.  ESP has a
right of first  refusal to purchase the shares  covered by the  Agreement.  This
right  specifies  that before  there can be any valid sale or transfer of any of
the shares by the  Executive,  the Executive must first offer his shares to ESP.
The  Executive  has  agreed  that he will not  directly  or  indirectly  sell or
otherwise  transfer or dispose of any of the shares  during the lock-up  period.
Furthermore,  during the Executive's  employment with ESP, he has agreed that he
will not sell,  transfer,  or assign  more than 8% of the  released  shares  per
month.  Similarly,  the Executive has also agreed that after the  termination of
his  employment  with ESP for any reason,  he will not sell,  transfer or assign
more than 4% of the released  shares per month.  If,  however,  the Executive is
terminated for cause,  all unvested shares on the date of such  termination will
immediately be cancelled. The following table lists the number of shares subject
to lock-up and the scheduled release dates:
<TABLE>
<CAPTION>

                                               NUMBER OF SHARES                     LOCK-UP PERIOD AND
     NAME OF EXECUTIVE                        SUBJECT TO LOCK-UP                     RELEASE SCHEDULE
     -----------------                      ----------------------               -------------------------
<S>                                                <C>                              <C>
     Edward L. Torres                              3,007,000                        11/1/06    :   601,400
                                                                                    11/1/07    :   601,400
                                                                                    11/1/08    :   601,400
                                                                                    11/1/09    :   601,400
                                                                                    11/1/10    :   601,400


     Edward L Torres                               1,000,000                        11/1/06  :     200,000
                                                                                    11/1/07  :     200,000
                                                                                    11/1/08  :     200,000
                                                                                    11/1/09  :     200,000
                                                                                    11/1/10  :     200,000


     Lyle Watkins                                  1,000,000                        11/1/06    :   200,000
                                                                                    11/1/07    :   200,000
                                                                                    11/1/08    :   200,000
                                                                                    11/1/09    :   200,000
                                                                                    11/1/10    :   200,000


     Joe Leone                                       970,000                        11/1/06    :   194,000
                                                                                    11/1/07    :   194,000
                                                                                    11/1/08    :   194,000
                                                                                    11/1/09    :   194,000
                                                                                    11/1/10    :   194,000

     Hugh Dallas                                     970,000                        11/1/06    :   194,000
                                                                                    11/1/07    :   194,000
                                                                                    11/1/08    :   194,000
                                                                                    11/1/09    :   194,000
                                                                                    11/1/10    :   194,000

     Peter Torres                                    420,000                        11/1/06    :   420,000
</TABLE>


                                      -65-
<PAGE>

ITEM  12.  CERTAIN   RELATIONSHIPS  AND  RELATED   TRANSACTIONS,   AND  DIRECTOR
INDEPENDENCE

PROPERTY LEASES

         Until   September   30,   2007  ESP  leased  a  training   center  with
approximately 3,000 square feet located at 39 Elmwood Ave. Barre,  Vermont 05641
for $1,400 per month; and until January 31, 2008 ESP leased an office space with
approximately  2,000 square feet located at 91 Summer St., Barre,  Vermont 05641
for  $900.00  per month.  The  landlord  for both the  Vermont  locations  was a
previous member of the board, Francis X. Finigan.

DIRECTOR INDEPENDENCE

         See "Item 9.  Directors,  Executive  Officers,  Promoters  and  Control
Persons;  Compliance  with Section 16(A) of Exchange Act -- Executive  Officers,
Directors and Committees -- Board of Directors."

ITEM 13.          EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits
<TABLE>
<CAPTION>

         EXHIBIT           DESCRIPTION
<S>     <C>                <C>
         3.1                Articles of Incorporation (1)
         3.2                Amendment to Articles of Incorporation (1)
         3.3                Bylaws (1)
         4.1                Specimen Certificate for Common Stock (1)
         4.2                Specimen Warrant to Purchase Shares of Common Stock (5)
         10.1               Stock Purchase Agreement with Allstate Home Inspection & Household Environmental
                            Testing, Ltd. (3)
         10.2               Redemption, Lock-Up and Vesting Agreement dated November 1, 2006 (3)
         10.3               Plan of Reorganization and Stock Purchase Agreement with Pacific Environmental
                            Sampling, Inc., dated as of July 1, 2006 (2)
         10.4               Stock Purchase Agreement with NPS, Inc. dated December 12, 2006 (11)
         10.5               Consulting Agreement with Craig Grossman (11)
         10.6               Senior Secured Convertible Note with BOCA Funding, LLC (9)
         10.7               Stock Purchase Agreement with ARS, Inc., dated May 31, 2007 (9)
         10.8               Stock Purchase Agreement with Hugh Dallas for sale of PES, dated September 29, 2007 (9)
         10.9               Asset Purchase Agreement with Robert Johnson and IAMI, Inc., dated April 4, 2007 (10)
         14.1               Code of Conduct (11)
         21.1               List of Subsidiaries
         31.1               Section 302 Certification of Chief Executive Officer
         31.2               Section 302 Certification of Chief Financial Officer
         32.1               Section 906 Certification of Chief Executive Officer and Chief Financial Officer

</TABLE>
------------------

                                      -66-
<PAGE>

         (1)      Incorporated  by reference  from prior public reports filed by
                  Glas-Aire  Industries  Group,  Ltd.  with the  Securities  and
                  Exchange Commission.

         (2)      Incorporated  by  reference  from the Report on Form 8-K filed
                  with the  Securities  and Exchange  Commission  on October 11,
                  2006.

         (3)      Incorporated  by  reference  from the Report on Form 8-K filed
                  with the  Securities  and Exchange  Commission on December 31,
                  2006.

         (4)      Incorporated  by  reference  from the Report on Form 8-K filed
                  with the  Securities  and Exchange  Commission on February 20,
                  2007.

         (5)      Incorporated  by  reference  from the Report on Form 8-K filed
                  with the Securities and Exchange Commission on April 4, 2007.

         (6)      Incorporated  by  reference  from the Report on Form 8-K filed
                  with the Securities and Exchange Commission on April 6, 2007.

         (7)      Incorporated  by  reference  from the Report on Form 8-K filed
                  with the Securities and Exchange Commission on May 11, 2007.

         (8)      Incorporated  by  reference  from the Report on Form 8-K filed
                  with the  Securities  and Exchange  Commission on September 4,
                  2007.

         (9)      Incorporated  by  reference  from the Report on Form 8-K filed
                  with the Securities  and Exchange  Commission on September 20,
                  2007.

         (10)     Incorporated  by reference from the Report on Form 8-K/A filed
                  with the Securities and Exchange Commission on July 19, 2007.

         (11)     Incorporated by reference from the Report on Form 10KSB annual
                  report filed with the  Securities  and Exchange  Commission on
                  April 17, 2007.


(b)      The  following  is a list of  Current  Reports on Form 8-K filed by ESP
         during and  subsequent  to the last  quarter  of the fiscal  year ended
         December 31, 2007.

         (1)      Form  8-K,  dated  February  8,  2008,   filed  with  the  SEC
                  reflecting the  resignations  of Francis X. Finigan and Joseph
                  T.  Leone as  members  of the  Company's  Board  of  Directors
                  effective February 1, 2008.

         (2)      Form 8-K, dated May 2, 2008,  filed with the SEC regarding the
                  termination of a material agreement,  the issuance of stock to
                  certain executive  officers of the Company and a change in the
                  Company's certifying accountant.

         (3)      Form 8-K/A, dated May 7, 2008 filed with the SEC regarding the
                  change in the Company's certifying accountant.


ITEM 14.          PRINCIPAL ACCOUNTANT FEES AND SERVICES

         Stan J.H.  Lee, CPA, CMA ("SL") is our  principal  auditing  accountant
firm,  replacing Chang G. Park, CPA, Ph. D. ("CP") on April 28, 2008. SL has not
provided other non-audit  services to the Company.  The Audit Committee approved
the  engagement  of SL before SL rendered  audit and  non-audit  services to the
Company

                                      -67-
<PAGE>

AUDIT FEES

         The following tables set forth fees for services  provided by SL and CP
during fiscal years 2007 and 2006:

SL Fees

                                            2007               2006
--------------------------------------------------------------------------
Audit fees                              $       - 0 -      $  -  0  -
Audit related fees                              - 0 -         -  0  -
Tax fees                                        - 0 -         -  0  -
All other fees                                  - 0 -         -  0  -
                                        ----------------------------------
Total                                   $       - 0 -      $  -  0  -

CP Fees

                                            2007                2006
--------------------------------------------------------------------------
Audit fees                              $      73,078      $   28,200
Audit related fees                              - 0 -           - 0 -
Tax fees                                        - 0 -           - 0 -
All other fees                                  - 0 -           - 0 -
                                        ----------------------------------
Total                                   $      73,078      $   28,200

PRE-APPROVAL  POLICIES  AND  PROCEDURES  OF  AUDIT  AND  NON-AUDIT  SERVICES  OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

         The  Audit  Committee's  policy  is to  pre-approve,  typically  at the
beginning of our fiscal year,  all audit and non-audit  services,  other than de
minimis non-audit services,  to be provided by an independent  registered public
accounting  firm.  These  services may include,  among others,  audit  services,
audit-related  services,  tax services and other  services and such services are
generally  subject to a  specific  budget.  The  independent  registered  public
accounting firm and management are required to  periodically  report to the full
Board regarding the extent of services  provided by the  independent  registered
public  accounting firm in accordance with this  pre-approval,  and the fees for
the services  performed to date. As part of the Board's  review,  the Board will
evaluate other known potential engagements of the independent auditor, including
the scope of work proposed to be performed and the proposed fees, and approve or
reject each service,  taking into account  whether the services are  permissible
under  applicable law and the possible  impact of each non-audit  service on the
independent auditor's independence from management.  At Audit Committee meetings
throughout the year, the auditor and management may present subsequent  services
for  approval.  Typically,  these would be services such as due diligence for an
acquisition, that would not have been known at the beginning of the year.

         The Audit Committee has considered the provision of non-audit  services
provided by our independent  registered  public accounting firm to be compatible
with  maintaining  their  independence.  The Audit  Committee  will  continue to
approve all audit and permissible  non-audit  services provided by the Company's
independent registered public accounting firm.


                                      -68-
<PAGE>



                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended,  the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: May 9, 2008            ENVIRONMENTAL SERVICE PROFESSIONALS, INC.


                              By:  /s/Edward Torres
                                   ---------------------------------------------
                                      Edward Torres,  Chairman of the Board and
                                      Chief Executive Officer (Principal
                                      Executive Officer)

                              By:  /s/Edward Torres
                                   ---------------------------------------------
                                      Edward Torres, Chief Financial Officer
                                      (Principal Accounting Officer)


         Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the dates indicated.


By:  /s/Edward Torres                                         Dated: May 9, 2008
     --------------------------------------------
      Edward Torres, Chairman of the Board

By:  /s/S. Robert August                                      Dated: May 9, 2008
     --------------------------------------------
      S. Robert August, Director

By:  /s/Lyle Watkins                                          Dated: May 9, 2008
     --------------------------------------------
      Lyle Watkins, Director

By:  /s/Leroy Moyer                                           Dated: May 9, 2008
     --------------------------------------------
      Leroy Moyer, Director




                                      -69-