SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549

FORM 10-QSB

[x] Quarterly report pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 for the
quarterly period ended - September 30, 2003.

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

COMMISSION FILE NUMBER 000-30392

ENVIRONMENTAL SOLUTIONS WORLDWIDE, INC.

(Exact name of Company as specified in its charter)

132 Penn Avenue
Telford, PA 18969
(Address of principal
Executive offices, including postal code.)

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

(215) 721-2188
--------------
(Issuer's telephone number, including area code)

Indicate by check mark whether the issuer (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Company was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.YES [x] NO [ ]

The Registrant had 49,349,490 shares of common stock, par value $0.001
outstanding as of October 3, 2003.

ENVIRONMENTAL SOLUTIONS WORLDWIDE INC.
FORM 10-QSB

INDEX

PART I FINANCIAL INFORMATION PAGE NO.

ITEM 1 Financial Statements (unaudited)
Consolidated Balance Sheet as of
September 30, 2003 F2

Consolidated Statements of Operations for the
Three and Nine Months Ended September 30,
2003 and 2002 F3

Consolidated Statement of Changes in Stockholders' F4
Equity for the Nine Months Ended September 30, 2003

Consolidated Statements of Cash Flows for the F5
Nine Months Ended September 30, 2003 and 2002

Notes to Financial Statements F6 - F13

ITEM 2 Management's Discussion and Analysis of Operations 14 - 17

ITEM 3 Controls and Procedures 17

PART II OTHER INFORMATION

ITEM 1 Legal Proceedings 18

ITEM 2 Changes in Securities 18

ITEM 3 Defaults Upon Senior Securities 18

ITEM 4 Submission of Matters to a Vote of Security Holders 18

ITEM 5 Other Information 18

ITEM 6 Exhibits and Reports 18

ENVIRONMENTAL SOLUTIONS WORLDWIDE, INC.
CONSOLIDATED BALANCE SHEET
September 30, 2003
(UNAUDITED)

ASSETS

Current assets

Cash and cash equivalents $ 48,558
Accounts receivable 582,905
Inventory 249,842
Prepaid expenses 26,530
Other current assets 38,082
------------

Total current assets 945,917

Property and equipment, net of accumulated
depreciation of $303,462 494,112

Patents and trademarks, net of accumulated
amortization of $587,111 1,567,410
------------

$ 3,007,439
============

LIABILITIES AND STOCKHOLDERS EQUITY

Current Liabilities
Accounts payable $ 146,437
Accrued liabilities 36,955
------------

Total current liabilities 183,392
------------

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

Stockholders Equity
Common stock, $0.001 par value, 100,000,000
shares authorized; 49,349,490 shares
issued and outstanding 49,348
Additional paid-in capital 11,880,083
Accumulated deficit (9,559,284)
------------

Total stockholders' equity 2,370,147
------------

$ 3,007,439
============

The accompanying notes are an integral part of these financial statements

CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30,
(UNAUDITED)

Nine Months Ended Three Months Ended
September 30, September 30,
2003 2002 2003 2002
------------ ------------ ------------ ------------
Revenue

Net sales $ 1,359,226 $ 1,537,804 $ 303,974 $ 613,260

Cost of sales 650,954 943,750 161,645 293,280
------------ ------------ ------------ ------------

Gross profit 708,272 594,054 142,329 319,980
------------ ------------ ------------ ------------

Operating expenses
Research and development 520 15,189 -- 8,220
Professional fees 118,179 114,665 39,445 54,427
Consulting fees 30,899 123,187 10,715 11,042
Marketing, office & general costs 911,478 1,034,709 292,485 320,597
Officer's compensation and directors fees 136,609 160,679 55,828 37,954
------------ ------------ ------------ ------------

1,197,685 1,448,429 398,473 432,240
------------ ------------ ------------ ------------

Net loss $ (489,413) $ (854,375) $ (256,144) $ (112,260)

Loss per share information
Basic and diluted $ (0.010) $ (0.022) $ (0.005) $ (0.003)

Weighted average number of shares outstanding 48,687,141 39,168,262 49,349,490 39,075,318

The accompanying notes are an integral part of these financial statements

ENVIRONMENTAL SOLUTIONS WORLDWIDE, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003
(UNAUDITED)

Common Stock Additional Accumulated
Shares Amount Paid-In Capital Deficit Total
------ ------ --------------- ------- -----

January 1, 2003 47,352,194 $ 47,351 $ 11,635,080 $ (9,069,871) $ 2,612,560

Net loss (489,413) (489,413)

Exercise of warrants 544,354 544 (544)

Proceeds from third traunch
of private placement 1,452,942 1,453 245,547 247,000
------------ ------------ ------------ ------------ ------------

September 30, 2003 49,349,490 $ 49,348 $ 11,880,083 $ (9,559,284) $ 2,370,147
============ ============ ============ ============ ============

The accompanying notes are an integral part of these financial statements

ENVIRONMENTAL SOLUTIONS WORLDWIDE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30,
(UNAUDITED)

2003 2002
---------- ----------

Net loss $ (489,413) $ (854,375)

Adjustments to reconcile net loss to
net cash used in operating activities:

Depreciation 88,405 83,673
Amortization 160,768 160,090
Non-cash compensation and services -- 79,085
Change in operating assets and liabilities (28,025) (190,834)
---------- ----------

Net cash used in operating activities (268,265) (722,361)
---------- ----------

Investing activities:

Acquisition of property and equipment (27,111) (29,277)
Increase in patents and trademarks (13,850) (421)
---------- ----------

Net cash used in investing activities (40,961) (29,698)
---------- ----------

Financing activities:

Notes payable -- 239,000
Issuance of common stock 247,000 217,340
Officer's note, shareholder and advances 71,474
---------- ----------

Net cash provided by financing activities 247,000 527,814
---------- ----------

Net decrease in cash (62,226) (224,245)

Cash, beginning of period 110,784 243,830
---------- ----------

Cash, end of period $ 48,558 $ 19,585
========== ==========

Non cash financing activities
Exercise of warrants $ 544 $ --
========== ==========

The accompanying notes are an integral part of these financial statements

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

NOTE 1 - NATURE OF BUSINESS AND BASIS OF PRESENTATION

The Company develops, manufactures and sells environmental technology solutions,
and is currently focused on the international automotive, transportation and
utility engine industries. It manufactures and markets a line of catalytic
control products including a boutique line of finished products, proprietary
catalytic converter substrates and catalytic conversion technologies for a
multitude of applications as well as provide testing and certification services.

The accompanying condensed financial statements have been prepared by the
Company, without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations. However, the Company believes the disclosures are adequate to make
the information presented not misleading. The condensed consolidated financial
statements should be read in conjunction with the financial statements and notes
thereto included in the Company's annual report on Form 10-KSB for the year
ended December 31, 2002 filed by the Company with the Securities and Exchange
Commission on March 19, 2003.

The accompanying condensed consolidated financial statements reflect, in the
opinion of management, all adjustments (consisting primarily only of normal
recurring adjustments) necessary to present fairly the results for the interim
periods. The results of operations for the three and nine months ended September
30, 2003 are not necessarily indicative of results to be expected for the entire
year ending December 31, 2003.

The accompanying consolidated financial statements have been prepared in
conformity with generally accepted accounting principles, which contemplate
continuation of the Company as a going concern. The Company, however, has
sustained continuing operating losses and lacks a consistent and sufficient
source of revenue, which creates uncertainty about the Company's ability to
continue as a going concern. The Company's ability to continue operations as a
going concern and to realize its assets and discharge its liabilities is
dependent upon obtaining additional financing sufficient for continued
operations as well as achieving and maintaining profitable operations.
Management believes its current business plan, if successfully implemented, will
allow the Company to continue as a going concern.

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

NOTE 2 - ACCOUNTS RECEIVABLE AND CONCENTRATIONS OF CREDIT RISK

The Company monitors its customer's receivables and while it may, on occasion,
request advance payments, it generally does not require collateral from those
customers. One customer of the Company's ESW America, Inc. subsidiary accounted
for 38% of consolidated product revenues for the nine months ended September 30,
2003 and two customers accounted for 60% and 13% respectively, of accounts
receivable as of September 30, 2003. Management periodically reviews Accounts
Receivable and believes that no reserve or allowance is currently necessary.

NOTE 3 - RECENTLY ISSUED ACCOUNTING STANDARDS

In January 2003, the Financial Accounting Standards Board's ("FASB") issued FASB
Interpretation ("FIN") No. 46, CONSOLIDATION OF VARIABLE INTEREST ENTITIES,
which requires variable interest entities (commonly referred to as SPEs) to be
consolidated by the primary beneficiary of the entity if certain criteria are
met. FIN No. 46 is effective immediately for all new variable interest entities
created or acquired after January 31, 2003. The adoption of this statement does
not impact the Company's historical or present financial statements, as the
Company has not created or acquired any variable interest entities, nor does it
expect to in the future.

In December 2002, The FASB issued SFAS No. 148 ACCOUNTING FOR STOCK-BASED
COMPENSATION, TRANSITION AND DISCLOSURE. SFAS No 148 provides alternative
methods of transition for a voluntary change to the fair value based method of
accounting for stock-based employee compensation. SFAS No. 148 also requires
that disclosures of the pro forma effect of using the fair value method of
accounting for stock-based employee compensation be displayed more prominently
and in a tabular format. Additionally, SFAS No. 148 requires disclosure of the
pro forma effect in interim financial statements. The transition and annual
disclosure requirements of SFAS No. 148 are effective for fiscal years ended
after December 15, 2002. The interim disclosure requirements of SFAS No. 148 are
effective for interim periods beginning after December 15, 2002. The adoption of
the provisions of SFAS No. 148 did not have a material impact on the Company's
consolidated financial statements. The Company modified its disclosures in
its quarterly reports commencing with the quarter ended March 31, 2003, as
provided for in the new standard.

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

In November 2002, the Emerging Issues Task Force ("EITF") reached a consensus on
EITF No. 00-21, REVENUE ARRANGEMENTS WITH MULTIPLE DELIVERABLES. EITF No. 00-21
provides guidance on how to account for arrangements that involve the delivery
or performance of multiple products, services and or rights to use assets. The
provisions of EITF No. 00-21 will apply to revenue arrangements entered into in
fiscal periods beginning after June 15, 2003. The Company believes that its
current accounting is consistent with the provisions of EITF 00-21 and therefore
does not expect that the application of the provisions of EITF 00-21 will have a
material impact on the Company's consolidated financial statements.

In November 2002, the EITF reached a consensus on EITF No. 02-16, ACCOUNTING FOR
CONSIDERATION RECEIVED FROM A VENDOR BY A CUSTOMER. EITF No. 02-16 provides
guidance as to how customers should account for cash consideration received from
a vendor. EITF No. 02-16 presumes that cash received from a vendor represents a
reduction of the prices of the vendor's products or services, unless the cash
received represents a payment for assets or services provided to the vendor or a
reimbursement of costs incurred by the customer to sell the vendor's products.
The provisions of EITF No. 02-16 will apply to all agreements entered into or
modified after December 31, 2002. Management does not expect the provisions of
EITF No. 02-16 to have a material impact on the Company's consolidated financial
statements.

In November 2002, the FASB issued FIN No. 45, GUARANTOR'S ACCOUNTING AND
DISCLOSURE REQUIREMENTS FOR GUARANTEES, INCLUDING INDIRECT GUARANTEES OF
INDEBTEDNESS OF OTHERS. FIN No. 45 requires that a liability be recorded in the
guarantor's balance sheet upon issuance of a guarantee. In addition, FIN No. 45
requires disclosures about the guarantees that an entity has issued, including a
reconciliation of changes in the entity's product warranty liabilities. The
initial recognition and initial measurement provisions of FIN No. 45 are
applicable on a prospective basis to guarantees issued or modified after
December 31, 2002, irrespective of the guarantor's fiscal year-end. The
disclosure requirements of FIN No. 45 are effective for financial statements of
interim or annual periods ending after December 15, 2002. The Company does not
guarantee the indebtedness of others, therefore there will not be any impact on
the Company's consolidated financial statements and there is no need for the
Company to modify its disclosures herein as required.

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

In July 2002, the FASB issued SFAS No. 146, ACCOUNTING FOR COSTS ASSOCIATED WITH
EXIT OR DISPOSAL ACTIVITIES. SFAS NO. 146 nullifies the accounting for
restructuring costs provided in EITF Issue No. 94-3, LIABILITY RECOGNITION FOR
CERTAIN EMPLOYEE TERMINATION BENEFITS AND OTHER COSTS TO EXIT AN ACTIVITY
(INCLUDING CERTAIN COSTS INCURED IN A RESTRUCTURING). SFAS No. 146 requires that
a liability associated with an exit or disposal activity be recognized and
measured at fair value only when incurred. In addition, one-time service
termination benefits should be recognized over the period employees will render
service, if the service period required is beyond a minimum retention period.
SFAS No. 146 is effective for exit or disposal activities initiated after
December 31, 2002. Management does not expect that the application of the
provisions of SFAS No. 146 will have a material impact on the Company's
consolidated financial statements.

In January 2002, the Financial Accounting Standards Board's ("FASB") Emerging
Issues Task Force ("EITF") reached a consensus on EITF No. 01-14, INCOME
STATEMENT CHARACTERIZATION OF REIMBURSEMENTS RECEIVED FOR "OUT-OF-POCKET"
EXPENSE. EITF No. 01-14 requires that reimbursements received for out-of-pocket
expenses be classified as revenue on the income statement. This opinion has no
material impact on the Company's historical and present financial statements.

NOTE 4 - ISSUANCE OF COMMON STOCK

In March of 2003, the Company completed the third traunch of a Unit Placement
and issued 1,452,942 units for $247,000, net of costs. Under the terms of the
Unit Placement, the subscription price was $0.17 per unit and each unit consists
of one share of common stock and one warrant to purchase one-half share of
common stock. Each warrant has an exercise price of $0.15, and can only be
exercised in even lots for full shares.

In May 2003, 750,000 warrants (issued in 2000) were exercised. Utilizing a
"cashless" feature (as defined in the warrants), 544,354 shares of common stock
were issued.

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

NOTE 5 - STOCK OPTIONS AND WARRANT GRANTS

The Company adopted Statement of Financial Accounting Standards No. 123 (SFAS
No. 123), "Accounting for Stock-Based Compensation" since its inception and
adopted Statement of Financial Accounting Standards No. 148, "Accounting for
Stock-Based Compensation - Transition and Disclosure, an amendment of FASB No.
123", in December 2002. In conjunction with the adoption of these standards, the
Company will continue to apply the intrinsic-value-based method of accounting
prescribed by Accounting Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employees" with pro forma disclosure of net income and earnings per
share as if the fair-value based method prescribed by SFAS No. 123 had been
applied. In general, no compensation cost related to the Company's non-qualified
stock option plan is recognized as options are issued for no less than 85% of
fair market value on date of grant.

In August 2003, the board of directors ratified the issuance of 650,000 options
at an exercise price of $0.27 (fair-market-value on date of grant) per share as
compensation for their service on the board. The options expire ten years from
the date of grant and vest over a three year period.

In November 2003, the board of directors ratified the employment contract of the
Chief Executive Officer, which included the issuance of 2,000,000 options at an
exercise price of $0.66 (110% of fair-market value on the date of grant) per
share. They expire in five years from the date of issuance and vest over a two
year period with one-third vesting immediately. (See Note 6 for details of the
employment contract).

Had compensation cost for the company's stock option plan been determined on the
fair value at grant date consistent with the provisions of SFAS No. 123, the
Company's net loss and loss per share would have been as follows:

F-10

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

PRO FORMA INFORMATION
NINE MONTHS ENDED SEPTEMBER 30, THREE MONTHS ENDED SEPTEMBER 30,
2003 2002 2003 2002
--------------------------------------------------------------

Net loss - as reported $ (489,413) $ (854,375) $ (256,144) $ (112,260)
Deduct: Total stock-based
compensation expense
determined under fair
value based method, net (434,867) -- (420,767) --

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

Net earnings - pro forma $ (924,280) $ (854,375) $ (676,911) $ (112,236)
==============================================================

Basic and diluted loss per share -
as reported $ (0.010) $ (0.022) $ (0.005) $ (0.003)
==============================================================

pro forma $ (0.019) $ (0.022) $ (0.014) $ (0.003)
==============================================================

SFAS No. 123 requires that the fair value of options and warrants issued to
non-employees for goods and services be recorded in the financial statements as
an expense.

In May 2002, the board of directors authorized the issuance of 200,000 options
exercisable at $0.01 per share that expired October 1, 2002. The Company
recorded compensation expense of $68,000. The Board of Directors approved an
additional 20,000 options and the Company recorded compensation expense of
$6,800 in the Quarter ended September 30, 2002.

In February 2002, the board of directors authorized the issuance of 50,000
options at an exercise price of $0.52 per share. The options expire three years
from the date of issuance. The Company recorded compensation expense of $4,285.

NOTE 6 - EMPLOYMENT AGREEMENTS

On September 10, 2003 the Company entered into three employment agreements with
its Chief Executive Officer and two other executives that expire on September
30, 2005. All three employees are members of the board of directors.

F-11

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

Under his agreement, Mr. John Donohoe, the Chief Executive Officer, shall
receive an annual base salary of $75,000 plus monthly-reimbursed expenses not to
exceed $2,000. In addition, he shall receive $37,500 on a quarterly basis.
Additionally, Mr. Donohoe was granted options to purchase 2,000,000 shares
of common stock at 110% of fair market value ($0.66 exercise price) and vests as
follows: (i) one-third immediately; (ii) one-third on the first anniversary of
this agreement; and (iii) one-third on the second anniversary of this agreement.
In the event of a "change of control" as defined, all un-vested options vest
immediately. If Mr. Donohoe meets certain goals, as defined in the agreement, he
is entitled to receive options to purchase 500,000 shares of common stock at
110% of fair market value ($0.66 exercise price per share).

Pursuant to their employment contracts, both the Technical Director of R & D and
the Senior Vice President of Sales and Business Development shall each receive
annual salaries of $75,000 and a vehicle allowance of $6,000. In addition, each
shall receive an additional $18,750 on a quarterly basis. If there is a
"change in control" as defined in the agreements prior to the contract's
expiration, they will each be entitled to a bonus of $100,000 and options to
acquire 250,000 shares of common stock at 110% of fair market value (with a
maximum of $0.66 per share)

All stock options per the above agreements have an exercise period of five years
from the date of grant.

NOTE 7 - RELATED PARTY TRANSACTIONS

As of September 30, 2002, a director of the Company was owed $267,974 for
business travel and related expenses. The amounts expensed in office, travel,
and other costs were $102,134. This director also had a non-interest bearing
note payable to him by the Company in the sum of $15,000.

During the Quarter ended September 30, 2002, the current Chairman advanced
$280,000 to the Company pursuant to a short-term note. The Company was also
obligated to a director and shareholder for an $80,000 non-interest bearing note
together with an additional loan of $4,000 at September 30, 2002.

During the nine-month periods ended September 30, 2003 and 2002, the Company
paid shareholders and their affiliates $25,757 and $160,679, respectively for
various services rendered. No one transaction exceeded $60,000.

F-12

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

NOTE 8 - LITIGATION

In January 2002, Royal Extruders in Ontario Canada commenced an action against
the Company for approximately $50,000 U. S. plus costs. The claim by Royal
Extruders alleges breach of contract. The Company is vigorously contesting the
matter and believes that a final determination of the claim will not have an
adverse effect on the financial position of the Company.

F-13

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS

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

This Form 10-QSB contains certain forward-looking statements regarding, among
other things, the anticipated financial and operating results of the Company.
Investors are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. The Company undertakes no
obligation to publicly release any modifications or revisions to these
forward-looking statements to reflect events or circumstances occurring after
the date hereof or to reflect the occurrence of unanticipated events. In
connection with the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995, the Company cautions investors that actual financial and
operating results may differ materially from those projected in forward-looking
statements made by, or on behalf of, the Company. Such forward-looking
statements involve known and unknown risks, uncertainties, and other factors
that may cause the actual results, performance, or achievements of the Company
to be materially different from any future results, performance, or achievements
expressed or implied by such forward-looking statements.

GENERAL

The Company has developed commercially viable catalytic converter technology for
both diesel and gasoline products. The combined technologies of the wire mesh
substrate and the wash coat forms the basis for the woven stainless steel mesh
catalytic converter. This product can be produced in almost any size and shape.
The wire mesh substrate creates a turbulent environment, which increases
catalytic activity and serves as a filter of particulate matter, important in
diesel emission control.

The Company's products have been extensively tested and management believes they
demonstrate superior performance to comparable competing products. ESW's
customers have applied the Company's products to meet their own needs, and have,
in certain instances, received certification by the Environmental Protection
Agency (EPA), the California Air Resources Board (CARB) and other authorities.
Customers have had their engines certified using the Company's Clean Cat (R),
Pro Cat (TM), Quiet Cat (TM) and Air Sentinel (TM) products. The Company's
products are now being marketed both domestically and internationally, including
in such countries as China, India and Mexico.

-14-

ESW is in full compliance with ISO 9001:2000, the ISO standards developed by the
International Organization for Standardization which provide an international
benchmark for quality systems and foundation for continuous improvement and
assurance in design, development and manufacturing. The ISO mandates that the
Company follow strict quality guidelines, administrative protocol and safety
procedures to a recognized international standardized code. ISO auditors confirm
compliance by auditing the Company periodically. The Company passed its most
recent audit in May 2003, and is in full compliance with the ISO requirements.
An ISO certification is considered essential for the Company to do business with
many export customers.

RESULTS OF OPERATIONS

THREE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002:

The Company has continued to expand its product offerings to meet the needs of
its existing customers and to expand its customer base. While it has been
successful in expanding its customer base, there may still be occasions when the
Company experiences reduced revenue, due to the timing and other needs of its
customers. While the Company has adequate resources to carry on its existing
work on hand, it does not deem it advisable at this time to produce large
amounts of completed inventory significantly in advance of known customer
requirements.

Revenue for the Quarter ended September 30, 2003 decreased approximately $309
thousand (50%) from the same period in 2002. Revenue for the current period was
impacted by the return of products previously shipped to one customer. The
Company believes the Customer may have been experiencing financial difficulties,
and when it was unable to remit the customs duty payment associated with this
earlier shipment, the Company agreed to allow that Customer to return the
products for credit. Since the Company no longer produces or markets those
particular products, it decided to scrap the material, and has reduced its basis
in the returned product to its estimated net recoverable value. Another factor
impacting revenue for the quarter was management's decision to shift its focus
to accelerate both the gas and diesel certification projects. The time and
resources spent in validating its technology with a major industry manufacturer
and distributor has since resulted in the consummation of long-term marketing,
distribution and preferred supplier agreements with this producer; which will
undoubtedly enhance the Company's subsequent performance. Direct costs decreased
by $132 thousand (45%); and as a result, gross profit declined to 46.8% from
52.2% in the year-ago period. The reduction in both revenue and direct costs are
considered temporary and are not deemed to be of long-term adverse impact.

Operating expenses continued to decrease in the current quarter by $34 thousand
as compared to the same period a year ago. As a result of the foregoing,
together with the reduction in revenue, the Company recorded a loss of $256
thousand in the current quarter as compared to a loss of $112 thousand in the
year ago period.

-15-

NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002

Revenue for the Nine Months period ended September 30, 2003 decreased by $179
thousand (12%) over the prior year, largely as the result of the current quarter
matters discussed above. Cost of sales decreased by $293 thousand (31%);
primarily as a result of better supplier pricing and improved efficiencies in
operations.

Some of the pricing improvement is believed to have resulted from the Company's
ability to pay its trade suppliers in a timelier manner. As a result, gross
profit improved to 52.1% from 38.6% as compared to the year ago period.

Operating costs reflect reductions previously implemented, and decreased by $251
thousand or 17% from the year-ago period; primarily due to a decrease of $92
thousand in consulting fees and $123 thousand in travel expense from the year
ago period.

The Company's loss of $489 thousand for the current year reflects a reduction of
nearly 43% ($365 thousand) from the year ago period.

LIQUIDITY AND CAPITAL RESOURCES:

Cash declined by $62 thousand from the year-end, and working capital decreased
by $34 thousand. More than half of the loss of $489 thousand consisted of
non-cash expense, including $161 thousand in amortization and $88 thousand in
depreciation. The decrease in working capital primarily results from an increase
of inventory of $94 thousand and prepaid expense of $15 thousand offset by a
decrease of $79 thousand in receivables and the foregoing decrease in cash.

Receivables decreased by 12% and the average age decreased by 8% to 117 days
from 127 days at year-end. At September 30, 2003, two customers accounted for
approximately 60% and 13%, respectively, of the Company's receivables. The
Company monitors its receivables and maintains contact with its customers and
does not presently consider any of its receivables to be a matter of undue
concern.

Cash provided by financing activities amounted to $247 thousand in the current
period as compared to $180 thousand in the same period a year ago; while cash
used in operating activities decreased to $268 thousand from $722 thousand in
the same period a year ago. Investing activities, net of disposals, increased to
$41 thousand from $29 thousand as compared to the same period a year ago.

-16-

As has been the case in previous periods, more than fifty percent (50%) of the
reported loss was in non-cash items, such as depreciation and amortization. The
Company's business plan anticipated profitable operations would be achieved
during the current fiscal year; however, sales and the timing of revenue
continue to be somewhat unpredictable and contribute to the uncertainty of when
profitable operations will be achieved. As the Company continues to mature and
evolve to a more substantial and predictable level of business, we expect to
eliminate our operating losses. We believe this objective will be achieved
within the ensuing fiscal year at the latest.

Management understands that profitable operations are essential for the Company
to become viable. The Company is, at present, unable to quantify the financial
benefits resulting from the recently announced long-term marketing, distribution
and preferred supplier agreements entered into with the Fleetguard Emission
Solutions subsidiary of Cummins, Inc.; however, opportunities presented by these
agreements are substantial. Our current financial resources should allow for a
continuation of our existing operations through at least early to mid 2004.

Should the Company receive a large order (defined as one in which monthly
production and deliveries would exceed $1 million), it would need to either
negotiate extremely favorable payment terms providing for at least some advance
payment or it will need to obtain either debt or equity financing to allow it to
purchase sufficient materials and meet its working capital needs. There can be
no assurance that such financing would be available.

ITEM 3. CONTROLS AND PROCEDURES

The Company is not required to furnish the information required by Item 307 of
Regulation S-B until its year ended December 31, 2005.

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PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

In January 2002, an action was commenced against the Company by Royal Extruders
in Ontario Canada for approximately $50,000 U.S. plus cost. The claim by Royal
Extruders alleges breach of an agreement. The Company is vigorously contesting
the matter and believes that a final determination of the claim will not have an
adverse effect on the financial position of the Company.

ITEM 2. CHANGE IN SECURITIES: NONE

ITEM 3. DEFAULTS UPON SENIOR SECURITIES: NONE

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS: NONE

ITEM 5. OTHER INFORMATION: NONE

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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(A) EXHIBITS:

31.1 Certification of Chairman, Chief Executive Officer and
President pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.

31.2 Certification of Controller pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.

32.1 Certification pursuant to 18 U. S. C. Section 1350, as amended
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(B) REPORTS ON FORM 8-K:

A Form 8-K report regarding Financial Statements and Regulation FD
Disclosure was filed August 7, 2003 reporting the Company's unaudited second
quarter financial results in the current fiscal year.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.

DATED: NOVEMBER 12, 2003
TELFORD, PA

ENVIRONMENTAL SOLUTIONS WORLDWIDE, INC.

BY: /S/ JOHN A. DONOHOE, JR.
-------------------------
JOHN A. DONOHOE, JR.
CHAIRMAN, CHIEF EXECUTIVE
OFFICER AND PRESIDENT

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