EVSP Environmental Service Professionals Inc (CE)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934

For Quarterly Period Ended September 30, 2008

or

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934

For the Transition period from _______________ to ______________

 NEVADA 84-1214736
-------------------------------------- ------------------------------------
 (State or other jurisdiction of (I.R.S. Employer Identification No.)
 incorporation or organization)

Indicate by check mark 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 proceeding 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[___]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer [___] Accelerated filer [___]
Non-accelerated filer [___] Smaller reporting company [_X_]
(Do not check if a smaller
 reporting company)

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

Yes[___] No[_X_]

Indicate the number of shares outstanding of each of the issuer's classes of common stock as of the latest practicable date.

As of November 1, 2008 the number of shares outstanding of the registrant's class of common stock was 52,541,781.

 TABLE OF CONTENTS




PART I - FINANCIAL INFORMATION.....................................................................................................1

 ITEM 1. FINANCIAL STATEMENTS.................................................................................................1

 CONDENSED CONSOLIDATED BALANCE SHEETS AT SEPTEMBER 30, 2008 (UNAUDITED) AND DECEMBER 31, 2007........................2

 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2008 AND SEPTEMBER 30,
 2007 (UNAUDITED).....................................................................................................3

 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2008 AND SEPTEMBER 30,
 2007 (UNAUDITED).....................................................................................................4

 NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.......................................................5

 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS................................8

 ITEM 3. QUANTIATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK...........................................................10

 ITEM 4T. CONTROLS AND PROCEDURES.............................................................................................10

PART II - OTHER INFORMATION.......................................................................................................11

 ITEM 1. LEGAL PROCEEDINGS...................................................................................................11

 ITEM 1A. RISK FACTORS........................................................................................................11

 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.........................................................12

 ITEM 3. DEFAULTS UPON SENIOR SECURITIES.....................................................................................12

 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.................................................................12

 ITEM 5. OTHER INFORMATION...................................................................................................12

 ITEM 6. EXHIBITS............................................................................................................12

SIGNATURES........................................................................................................................13

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

 ENVIRONMENTAL SERVICE PROFESSIONALS, INC. AND SUBSIDIARIES
 CONDENSED CONSOLIDATED BALANCE SHEETS
 AT SEPTEMBER 30, 2008 (UNAUDITED) AND DECEMBER 31, 2007
-----------------------------------------------------------------------------------------------------------------------

 ASSETS

 UNAUDITED REVISED
 AS OF AS OF
 SEPTEMBER 30, DECEMBER 31,
 2008 2007
 ------------------ ------------------
 CURRENT ASSETS
 Cash & cash equivalents $ - $ -
 Accounts receivable 89,380 136,430
 Employee loans 37,227 -
 Receivable - other 26,181 6,398
 Prepaid expense 12,609 926,254
 ------------------ ------------------

 TOTAL CURRENT ASSETS 165,397 1,069,081

 NET PROPERTY & EQUIPMENT 54,638 72,972

 OTHER ASSETS
 Deposits 2,120 2,120
 Net - association membership list 632,750 639,852
 ------------------ ------------------

 TOTAL OTHER ASSETS 634,870 641,972
 ------------------ ------------------

 TOTAL ASSETS $ 854,905 $ 1,784,025
 ================== ==================

 LIABILITIES & STOCKHOLDERS' EQUITY

 CURRENT LIABILITIES
 Accounts payable $ 1,340,534 $ 661,550
 Bank overdraft 43,099 369,475
 Line of credit 581,427 220,417
 Accrued liabilities 147,371 144,502
 Taxes payable 545 -
 Loans payable 2,881,402 1,957,746
 Loans payable - related party 35,357 22,900
 ------------------ ------------------

 TOTAL CURRENT LIABILITIES 5,029,735 3,376,590

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

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

 TOTAL LIABILITIES 6,273,669 4,620,524

 STOCKHOLDERS' EQUITY

 Common stock, (par value $.001 per share, 100,000,000 shares
 authorized: 52,230,168 and 21,783,375 shares issued and outstanding
 as of September 30, 2008 and December 31, 2007, respectively) 52,230 21,745
 Paid-in capital 25,988,805 21,593,382
 Retained earnings (31,459,799) (24,451,626)
 ------------------ ------------------

 TOTAL STOCKHOLDERS' EQUITY (5,418,764) (2,836,499)
 ------------------ ------------------

 TOTAL LIABILITIES &
 STOCKHOLDERS' EQUITY $ 854,905 $ 1,784,025
 ================== ==================

See Notes to the Consolidated Financial Statements

 ENVIRONMENTAL SERVICE PROFESSIONALS, INC. AND SUBSIDIARIES
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE NINE MONTHS ENDED
 SEPTEMBER 30, 2008 AND SEPTEMBER 30, 2007 (UNAUDITED)
------------------------------------------------------------------------------------------------------------------------------

 REVISED REVISED
 THREE MONTHS THREE MONTHS NINE MONTHS NINE MONTHS
 ENDED ENDED ENDED ENDED
 SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
 2008 2007 2008 2007
 ----------------- ---------------- ---------------- --------------
 REVENUES
 Income $ 547,447 $ 143,184 $ 1,087,210 $ 553,603
 ----------------- ---------------- ---------------- --------------

 NET REVENUE 547,447 143,184 1,087,210 553,603

 COST OF GOODS SOLD
 Cost of Goods Sold 210,822 23,727 379,753 80,028
 ----------------- ---------------- ---------------- --------------

 TOTAL COST OF GOODS SOLD 210,822 23,727 379,753 80,028
 ----------------- ---------------- ---------------- --------------

 GROSS PROFIT 336,625 119,457 707,457 473,575

 OPERATING EXPENSES
 Depreciation 9,217 4,960 18,335 17,515
 Finance fee 409 2,664,051 925,367 2,664,051
 Consulting fee 28,000 481,652 3,148,054 628,196
 Professional fees 339,710 1,062,653 1,106,305 1,971,162
 General and administrative 384,751 606,539 1,064,743 1,616,459
 ----------------- ---------------- ---------------- --------------

 TOTAL OPERATING EXPENSES 762,087 4,819,854 6,262,804 6,897,381
 ----------------- ---------------- ---------------- --------------

 LOSS FROM OPERATIONS (425,462) (4,700,397) (5,555,347) (6,423,806)

 OTHER INCOME (EXPENSES)
 Interest income - 358 - 358
 Interest expense (143,867) (49,951) (1,452,880) (99,872)
 Other income - 141,596 - 200,595
 Other expenses - (58,107) - (58,107)
 Impairment of goodwill - 600,000 53 (8,111,186)
 ----------------- ---------------- ---------------- --------------

 TOTAL OTHER INCOME (EXPENSES) (143,867) 633,897 (1,452,827) (8,068,211)
 ----------------- ---------------- ---------------- --------------

 NET INCOME (LOSS) $ (569,329) $ (4,066,500) $ (7,008,174) $ (14,492,018)
 ================= ================ ================ ==============

 BASIC EARNING (LOSS) PER SHARE $ (0.01) $ (0.21) $ (0.19) $ (0.85)
 ----------------- ---------------- ---------------- --------------

 WEIGHTED AVERAGE NUMBER OF
 COMMON SHARES - BASIC AND DILUTED 51,163,016 19,013,176 36,654,958 17,064,228
 ================= ================ ================ ==============

See Notes to the Consolidated Financial Statements

 ENVIRONMENTAL SERVICE PROFESSIONALS, INC. AND SUBSIDIARIES
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED
 SEPTEMBER 30, 2008 AND SEPTEMBER 30, 2007 (UNAUDITED)

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

 UNAUDITED REVISED
 NINE MONTHS NINE MONTHS
 ENDED ENDED
 SEPTEMBER 30, SEPTEMBER 30,
 2008 2007
 ----------------------- -----------------------

CASH FLOWS FROM OPERATING ACTIVITIES

 Net income (loss) $ (7,008,174) $ (14,492,018)

 Adjustments to reconcile net loss to net cash
 provided by (used in) operating activities:
 Depreciation 18,335 17,515
 Common stock issued for services 4,425,908 9,076,821
 Common stock to be issued - 357,500
 Changes in operating assets and liabilities:
 (Increase) decrease in accounts receivable 47,050 (335,769)
 (Increase) decrease in other receivable (19,785) (1,228)
 (Increase) decrease in prepaid expenses 913,645 (3,049,163)
 (Increase) decrease in goodwill - 7,193,185
 (Increase) decrease in trademarks - 414
 (Increase) decrease in employee advances (37,227) -
 (Increase) decrease in security deposits - 69,906
 (Increase) decrease in business areas - (250,001)
 (Increase) decrease in association membership list 7,102 (650,835)
 (Increase) decrease in accounts payable and accrued expenses 681,853 87,541
 (Increase) decrease in bank overdraft (326,376) -
 (Increase) decrease in taxes payable 545 -
 ----------------------- -----------------------

 NET CASH USED BY OPERATING ACTIVITIES (1,297,124) (1,976,131)

CASH FLOWS FROM INVESTING ACTIVITIES

 Acquisition of equipment - (412,806)
 ----------------------- -----------------------

 NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES - (412,806)

CASH FLOWS FROM FINANCING ACTIVITIES

 Line of credit 361,010 (7,761)
 Proceeds from loans payable 923,656 1,739,300
 Proceeds from loans payable - (a realted party) 12,458 -
 Proceeds from long-term liabilities - 384,103
 ----------------------- -----------------------

 NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 1,297,124 2,115,642
 ----------------------- -----------------------

Net increase (decrease) in cash & cash equivalents - (273,295)

Cash at beginning of period - 303,758
 ----------------------- -----------------------

CASH AT END OF PERIOD $ - $ 30,463
 ======================= =======================

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Cash paid for Interest $ 1,452,880 $ 103,900
 ======================= =======================

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

See Notes to the Consolidated Financial Statements

ENVIRONMENTAL SERVICE PROFESSIONALS, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The accompanying September 30, 2008 condensed consolidated financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at September 30, 2008 and for all periods presented have been made.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and notes thereto included in the Company's December 31, 2007 audited consolidated financial statements. The results of operations for the three months period ended September 30, 2008 are not necessarily indicative of the operating results for the full years.

NOTE 2 - GOING CONCERN

The Company's condensed consolidated financial statements are prepared using generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The accompanying condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of liabilities that might result from the outcome of this uncertainty. It is management's intention to seek additional operating funds through operations, and debt or equity offerings. Management has yet to decide what type of offering the Company will use or how much capital will be raised by the Company. There is no guarantee that the Company will be able to raise any capital through any type of offerings.

NOTE 3 - ORGANIZATION AND DESCRIPTION OF BUSINESS

Environmental Service Professionals, Inc. (the "Company" or "ESP") is a Nevada corporation headquartered in Southern California. Through its subsidiary Environmental Safeguard Professionals, Inc. ("Safeguard"), ESP offers various inspection services to address mandated energy certification, construction defects, moisture or other environmental issues in commercial and residential buildings. Through its subsidiary National Professional Services, Inc. ("NPS"), ESP offers annual trade memberships and management services for industry related associations. Through its subsidiary Porter Valley Software, Inc. ("PVS"), an inspection software company, the Company plans to provide the core of its on-line inspection protocols.

Since March 31, 2008 Safeguard has developed an all inclusive multi-disciplined inspection process (the "EcoCheck Inspection(TM)") that is focused on reducing liabilities and mitigating risks to protect homeowners, retail properties, builders, lenders, mortgage brokers/agents relating to state mandated energy certification, construction defects, moisture or other environmental issues. The EcoCheck Inspection(TM) is based on standardized training, certification, inspection, and result reporting analysis protocols and forms the foundation of

NOTE 3 - ORGANIZATION AND DESCRIPTION OF BUSINESS - CONTINUED

services that together are provided by the Certified Environmental Home Inspector(TM) ("CEHI"). The annual Healthy Home Assurance Certification(TM) ("HAC") and the pro-active comprehensive subscription based 10 year annual maintenance process, Healthy Living Maintenance Program(TM) ("HLMP") add value to a property and mitigates risk by reducing claims, instilling confidence in property safety, and promotes a positive green image.

NPS is currently a conglomerate of seven real estate industry trade associations. NPS plans to promote ESP's services by providing information and training about the EcoCheck Inspection(TM) protocols. This training is planned to be focused on underwriters, loan officers, appraisers, insurance companies, loss control and risk management personnel and to emphasize the benefits of using a CEHI and subscribing for the HLMP.

PVS has developed various software programs which have been designed specifically for detailed data searching and data retention under the name "InspectVue(TM)". InspectVue(TM) is the core component of ESP's automated on-line EcoCheck Inspection(TM) protocols that include the new energy inspection requirements that are being developed in concert with other industry participants.

NOTE 4 - NOTES PAYABLE & LONG TERM LIABILITIES

Notes payable as of September 30, 2008 consist of the following:

 September 30, 2008
--------------------------------------------- ---------------------------
Unsecured loans, with annual interest of 8%. $ 2,881,402

Unsecured notes, with annual interest of 10%. 1,243,934
--------------------------------------------- ---------------------------
 $ 4,125,336
============================================= ===========================

NOTE 5 - SIGNIFICANT EVENTS

On June 19, 2008, Environmental Service Professionals, Inc. completed the closing of a stock purchase agreement with Porter Valley Software, Inc., a California corporation. Pursuant to the stock purchase agreement, the Company acquired 100% of the total issued and outstanding stock of Porter Valley Software, Inc in consideration for 650,000 shares of the Company's common stock, issuable in installments over time, plus $400,000 in cash, payable in installments over time.

NOTE 6 BASIC 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.

 September 30, 2008 September 30, 2007
 -------------------- ----------------------

NET INCOME (LOSS) FROM $(7,008,174) $ (14,492,019)
OPERATIONS

Basic income / (loss) per share $ (0.19) $ (0.85)
 ==================== ======================

Weighted average number of shares
outstanding 36,654,958 17,064,228
 ==================== ======================

NOTE 7. STOCK TRANSACTIONS

On September 23, 2008, the Company issued 200,000 shares of its common stock to two employees for services rendered.

On September 19, 2008, the Company issued 525,000 shares of its common stock to a single investor at a purchase price of $0.58 per share pursuant to a private placement.

On August 21, 2008, the Company issued 98,324 shares of its common stock to
seven consultants for services rendered.

On August 19, 2008, the Company issued 200,000 shares of its common stock in

connection with the Company's acquisition of PVS.

On August 15, 2008, the Company issued 326,896 shares of its common stock to a single bridge lender as a late payment penalty.

On August 13, 2008, the Company issued 112,069 shares of its common stock to a single investor at a purchase price of $0.58 per share pursuant to a private placement.

On July 29, 2008, the Company issued 50,000 shares of its common stock to a single bridge lender as a late payment penalty, 20,000 shares of its common stock to a single consultant for services rendered, and 40,000 shares of its common stock to a single investor at a purchase price of $0.58 per share pursuant to a private placement.

As of September 30, 2008, the Company had 52,230,166 shares of common stock outstanding.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

CAUTIONARY STATEMENTS

This Form 10-Q contains financial projections and other "forward-looking statements," as that term is used in federal securities laws, about Environmental Service Professionals, Inc.'s ("our," "ESP," or the "Company") financial condition, results of operations and business. These statements include, among others, statements concerning the potential for revenues and expenses and other matters that are not historical facts. These statements may be made expressly in this Form 10-Q. You can find many of these statements by looking for words such as "believes," "expects," "anticipates," "estimates," or similar expressions used in this Form 10-Q. These forward-looking statements are subject to numerous assumptions, risks and uncertainties that may cause the Company's actual results to be materially different from any future results expressed or implied by the Company in those statements. The most important facts that could prevent the Company from achieving its stated goals include, but are not limited to, the following:

(a) Volatility or decline of the Company's stock price;
(b) Potential fluctuation in quarterly results;
(c) Failure of the Company to earn revenues or profits;
(d) Inadequate capital and inability to raise the additional capital or obtain the financing needed to implement its business plans;
(e) Inadequate capital to continue business;
(f) Absence of demand for the Company's products and services;
(g) Rapid and significant changes in markets;
(h) Litigation with or legal claims and allegations by outside parties against ESP and its subsidiaries;
(i) Insufficient revenues to cover operating costs;
(j) Default by the Company on short-term bridge loans and other indebtedness incurred by the Company due to a lack of capital or cash flow to service and repay the debt; and
(k) Additional dilution incurred as the Company issues more of its capital stock to finance acquisitions and operations.

Because the statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by the forward-looking statements. The Company cautions you not to place undue reliance on the statements, which speak only as of the date of this Form 10-Q. 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 the Company or persons acting on its behalf might issue. The Company 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-Q or to reflect the occurrence of unanticipated events.

The following discussion should be read in conjunction with our condensed consolidated financial statements and notes to those statements. In addition to historical information, the following discussion and other parts of this quarterly report contain forward-looking information that involves risks and uncertainties.

OVERVIEW

Environmental Service Professionals, Inc. ("ESP") is a Nevada corporation headquartered in Southern California. Through our subsidiary Environmental Safeguard Professionals, Inc. ("Safeguard"), we offer various inspection services to address mandated energy certification, construction defects, moisture or other environmental issues in commercial and residential buildings. Through our subsidiary National Professional Services, Inc. ("NPS"), we offer annual trade memberships and management services for industry related associations. Through our subsidiary Porter Valley Software, Inc. ("PVS"), an inspection software company, we plan to provide the core of our on-line inspection protocols.

Since March 31, 2008 Safeguard has developed an all inclusive multi-disciplined inspection process (the "EcoCheck Inspection(TM)") that is focused on reducing liabilities and mitigating risks to protect homeowners, retail properties, builders, lenders, mortgage brokers/agents relating to state mandated energy certification, construction defects, moisture or other environmental issues. The EcoCheck Inspection(TM) is based on standardized training, certification, inspection, and result reporting analysis protocols and forms the foundation of services that together are provided by the Certified

Environmental Home Inspector(TM) ("CEHI"). The annual Healthy Home Assurance Certification(TM) ("HAC") and the pro-active comprehensive subscription based 10 year annual maintenance process, Healthy Living Maintenance Program(TM) ("HLMP") add value to a property and mitigates risk by reducing claims, instilling confidence in property safety, and promotes a positive green image.

NPS is currently a conglomerate of seven real estate industry trade associations. We anticipate that NPS will promote ESP's services by providing information and training about the EcoCheck Inspection(TM) protocols. We expect that this training will be focused on underwriters, loan officers, appraisers, insurance companies, loss control and risk management personnel and will emphasize the benefits of using a CEHI and subscribing for the HLMP.

PVS has developed various software programs which have been designed specifically for detailed data searching and data retention under the name "InspectVue(TM)." InspectVue(TM) is the core component of ESP's automated on-line EcoCheck Inspection(TM) protocols that include the new energy inspection requirements that are being developed in concert with other industry participants.

CRITICAL ACCOUNTING POLICIES

The discussion and analysis of the Company's financial condition and results of operations are based upon the Company's consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, the Company evaluates its estimates, including those related to bad debts, intangible assets, income taxes, and contingencies and litigation, among others. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The Company believes that the following critical accounting policies affect its more significant judgments and estimates used in the preparation of its consolidated financial statements: discontinued operations, use of estimates and impairment of long-lived assets. These accounting policies are discussed in "ITEM 6 --MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION" contained in the Company's Annual Report on Form 10-KSB for the fiscal year ended December 31, 2007, as well as in the notes to the December 31, 2007 consolidated financial statements. There have not been any significant changes to these accounting policies since they were previously reported at December 31, 2007.

RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2008 AS COMPARED TO NINE MONTHS ENDED SEPTEMBER 30, 2007

REVENUE

Total revenue for the nine months ended September 30, 2008 increased by $533,607 from $553,603 during the nine months ended September 30, 2007 to $1,087,210 for the nine months September 30, 2008. This increase in revenue was a result of our launching of the CEHI and EcoCheck Inspection(TM) programs and our receipt of early annual membership renewals from National Professionals Services, Inc. ("NPS"). We anticipate that over the fourth quarter of 2008 our subsidiary Environmental Safeguard Professionals, Inc. ("Safeguard") will continue to increase the number of approved vendors that will be certified to deliver inspection services under the CEHI program, that our subsidiary NPS will continue to invoice and collect the remaining annual 2008 membership dues and continue to increase new memberships in each of its associations, and that our subsidiary Porter Valley Software, Inc. ("PVS") will invoice and collect the annual 2008 software license fees and continue to increase new sales of its software products.

OPERATING EXPENSES

Operating expenses decreased by $634,577, from $6,897,381 during the nine months ended September 30, 2007, to $6,248,804 for the nine months ended September 30, 2008. This majority of the decrease in operating expense was the result of a $551,716 decrease in general and administrative expense from the prior period. Expenses for the period that related to stock issuances were:
finance fee $925,367, consulting fee of $3,148,054 and professional fees of $1,106,305.

NET LOSS

Net loss decreased by $7,483,844 from $14,492,018 during the nine months ended September 30, 2007, to $7,008,174 for the nine months ended September 30, 2008. This decrease in net loss was the result of operating efficiencies, lower general and administrative expenses and the write down of goodwill in the previous period. Stock issuance related expenses for the six months ended September 30, 2008 were $5,263,408. Currently operating costs exceed revenue because sales are not yet sufficient. We cannot assure when or if revenue will exceed operating costs.

LIQUIDITY AND CAPITAL RESOURCES

The Company had net cash of $0 at September 30, 2008, as compared to net cash of $0 at September 30, 2007.

During the nine months ended September 30, 2008, the Company used $1,297,124 of cash for operating activities, as compared to $1,976,131 during the nine months ended September 30, 2007. The decrease in the use of cash for operating activities was a result of continuous optimization of the general and administration support.

Cash provided by financing activities relating to bank line of credit, the issuance of promissory notes and shares of common stock during the nine months ended September 30, 2008 was $1,297,124, as compared to $2,115,642 during the nine months ended September 30, 2007. Since January 1, 2006, our capital needs have primarily been met from the proceeds of private placements, bridge loans and, to a lesser extent, sales.

The Company will have additional capital requirements during 2008 and 2009. If we are unable to satisfy our cash requirements through product and service sales, we will attempt to raise additional capital through the sale of our common stock.

We cannot assure that the Company will have sufficient capital to finance our growth and business operations or that such capital will be available on terms that are favorable to us or at all. We are currently incurring operating deficits that are expected to continue for the foreseeable future.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable.

ITEM 4T. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

As required by Rules 13a-15(e) and 15d-15(e) under the Exchange Act, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer.

We maintain a set of disclosure controls and procedures designed to ensure that information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified by the Securities and Exchange Commission's rules and forms. Disclosure controls are also designed with the objective of ensuring that this information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Based upon their evaluation as of the end of the period covered by this report, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective as of September 30, 2008 to ensure that information required to be included in our periodic filings with the Securities and Exchange Commission are recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission rules and forms.

INTERNAL CONTROL OVER FINANCIAL REPORTING

Our Chief Executive Officer and Principal Financial Officer are responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our 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.

CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING

There were no changes in the Company's internal control over financial reporting identified in connection with the evaluation of it that occurred during the quarter ended September 30, 2008 that materially affected or are reasonably likely to materially affect the Company's internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

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

On July 3, 2008, a hearing regarding plaintiff Cooley's fourth amended complaint was held before the Court and the Company was granted all submitted demurrers and Motions to Strike. On July 29, 2008, plaintiff Cooley advised that he does not intend to file a fifth amended complaint. A Case Management Conference was held September 4, 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. For additional information regarding this legal proceeding, see the Company's Annual Report on Form 10-KSB for the fiscal year ended December 31, 2007.

ITEM 1A.-RISK FACTORS

WE DID NOT TIMELY FILE WITH THE SEC OUR FORM 10-KSB FOR THE FISCAL YEAR ENDED DECEMBER 31, 2007. AS A RESULT OF THIS DELAYED FILING, WE ARE CURRENTLY INELIGIBLE TO USE FORM S-3 TO REGISTER SECURITIES WITH THE SEC IN CAPITAL-RAISING TRANSACTIONS, WHICH MAY ADVERSELY AFFECT OUR COST OF FUTURE CAPITAL.

We did not timely file with the SEC our Form 10-KSB for the fiscal year ended December 31, 2007. Although the filing of this Quarterly Report on Form 10-Q will bring us current in our filings with the SEC, because our Form 10-KSB was not filed within the deadline promulgated by the SEC, the filing was not timely under applicable SEC rules. As a result of the delayed filing of our Form 10-KSB, we are ineligible to use a "short form" registration statement on Form S-3 to register securities for sale by us or for resale by other security holders, in capital raising transactions, until we have timely filed all periodic reports under the Securities Exchange Act of 1934 for at least 12 calendar months. In the meantime, for capital raising transactions, we would need to use Form S-1 to register securities with the SEC, or issue such securities in a private placement, which could increase the time and resources required to raise capital during this period.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 On September 23, 2008, we issued 200,000 shares of our common stock to
two employees for services rendered.

 On September 19, 2008, we issued 525,000 shares of our common stock to

a single investor at a purchase price of $0.58 per share pursuant to a private placement made by us in accordance with Rule 506 of Regulation D of the Securities Act of 1933, as amended (the "Act").

 On August 21, 2008, we issued 98,324 shares of our common stock to
seven consultants for services rendered.

 On August 19, 2008, we issued 200,000 shares of our common stock in

connection with our acquisition of Porter Valley Software, Inc.

On August 15, 2008, we issued 326,896 shares of our common stock to a single bridge lender as a late payment penalty.

On August 13, 2008, we issued 112,069 shares of our common stock to a single investor at a purchase price of $0.58 per share pursuant to a private placement made by us in accordance with Rule 506 of Regulation D of the Act.

On July 29, 2008, we issued 50,000 shares of our common stock to a single bridge lender as a late payment penalty, 20,000 shares of our common stock to a single consultant for services rendered, and 40,000 shares of our common stock to a single investor at a purchase price of $0.58 per share pursuant to a private placement made by us in accordance with Rule 506 of Regulation D of the Act.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not Applicable

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

Not Applicable

ITEM 5. OTHER INFORMATION

Not Applicable

ITEM 6. EXHIBITS

EXHIBIT DESCRIPTION
------- ----------------------------------------------------
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
32.2 Section 906 Certification of Chief Financial Officer

SIGNATURES

Pursuant to the requirements 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.

ENVIRONMENTAL SERVICE PROFESSIONALS, INC.

Dated: November 19, 2008 By: /s/ Edward L. Torres
 ------------------------------------------
 Edward L. Torres, Chairman of the Board,
 President, Chief Executive Officer and
 Acting Chief Financial Officer,(Principal
 Executive Officer and Principal Accounting
 Officer)

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