U

10QSB 1 juneq.htm U

U. S. SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

_____________________________________________

FORM 10-QSB

(Mark One)

[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2005

[ ] 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 0-12914

_________________________________________________

ENVIRONMENTAL ENERGY SERVICES, INC.

(Exact name of small business issuer as specified in its charter)

Delaware

(State or other jurisdiction of incorporation or organization)

43-1953030

(IRS Employer Identification No.)

205 S. Bickford Avenue, El Reno, Oklahoma 73036

(Address of Principal Executive Offices)

(405) 262-0800

(Issuer's telephone number)

Not Applicable

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

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

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: as of December 9, 2005, the Registrant had outstanding 401,683,631 shares of its Common Stock, $0.001 par value, which excludes certain shares issued pursuant to the Nikko Action which have not been recognized as valid by the Registrant. See "Part I, Item 1, Notes to Financial Statements, Note 6."

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

Environmental Energy Services, Inc. and Subsidiaries

FORM 10-QSB REPORT INDEX

		Page No.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
	Consolidated Balance Sheet as of June 30, 2005	3
	Consolidated Statements of Operations for the Three Months Ended June 30, 2005 and 2004	4
	Consolidated Statements of Operations for the Six Months Ended June 30, 2005 and 2004	5
	Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2005 and 2004	6
	Notes to Unaudited Consolidated Financial Statements for the Six Months Ended June 30, 2005	7
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operation		8
Item 3. Controls and Procedures		11
PART II. OTHER INFORMATION		11
Item 1. Legal Proceedings		11
Item 2. Changes in Securities		11
Item 3. Defaults on Senior Securities		11
Item 4. Submission of Matters to a Vote of Security Holders		11
Item 5. Other Information		11
Item 6. Exhibits and Reports on Form 8-K		12
Signatures		12

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Environmental Energy Services, Inc. and Subsidiaries

CONSOLIDATED BALANCE SHEET

As of June 30, 2005 (Unaudited)

ASSETS
Current Assets:
Cash	$ 287,627
Related Party Advances	57,153
Total current assets	344,780

Fixed Assets:
Total Equipment (Net of Depreciation)	14,917

Other Assets:
Marketable securities	624,678
Investment in Private Companies	50,000
Investment in Royalty Agreement, net of amortization	41,455
Investment - Gas and Oil Leases	278,681

Total other assets	994,814

Total assets	$ 1,354,511

LIABILITIES AND STOCKHOLDERS EQUITY

Current liabilities:
Accounts payable, accrued interest, and other liabilities	$ 193,284
Indemnification payable-related party	50,000
Total current liabilities	243,284

Long-term debt and deferred items	0

Stockholders' equity:
Common stock, $0.001 par value; 500,000,000 shares authorized; 384,083,631 shares issued and outstanding	384,084
Additional paid-in capital	90,674,766
Unrealized gain/loss on marketable securities	(519,240)
Accumulated Deficit	(89,428,383)
Total Stockholders' Equity	1,111,227

Total Liabilities and Stockholders' Equity	$ 1,354,511

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

Environmental Energy Services, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three Months Ended June 30, 2005 and 2004

(Unaudited)

	Three Months ended June 30
	2005	2004

Revenues	$ 295,375	$ 223,666

Expenses
Selling, general and administrative	167,635	132,681
Amortization and depreciation	16,340	15,556
Total Expenses:	183,975	148,237

Income from operations	111,400	75,429

Other income (expense)
Interest income	76	0

Total other income (expense)	76	0

Net Income (Loss)	111,476	75,429

Unrealized Gain (Loss)	20,000	(22,598)

Comprehensive Income (loss)	$ 131,476	$ 52,831

Earnings per share:
Basic	0.00	0.00
Diluted	0.00	0.00

Weighted average number of common shares outstanding:
Basic	384,083,631	354,083,631
Diluted	448,556,853	468,564,631

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

Environmental Energy Services, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Six Months Ended June 30, 2005 and 2004

(Unaudited)

	Six Months ended June 30
	2005	2004

Revenues	$ 521,605	$ 438,306

Expenses
Selling, general and administrative	285,395	324,756
Amortization and depreciation	32,680	31,112
Total Expenses:	318,075	355,868

Income from operations	203,530	82,438

Other income (expense)
Interest income	251	0
Legal settlements	(64,000)	-

Total other income (expense)	(63,749)	0

Net Income (Loss)	139,781	83,220

Unrealized Gain (Loss)	(63,559)	(65,931)

Comprehensive Income (loss)	$ 76,222	$ 16,507

Earnings per share:
Basic	0.00	0.00
Diluted	0.00	0.00

Weighted average number of common shares outstanding:
Basic	384,083,631	354,083,631
Diluted	448,560,742	486,317,228

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

Environmental Energy Services, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Three Months Ended June 30, 2005 and 2004

(Unaudited)

INCREASE (DECREASE) IN CASH	2005	2004

Cash flow from operating activities:
Net income (loss)	76,222	16,507
Adjustments to reconcile net earnings (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	32,680	31,112
Unrealized (gain) loss on marketable securities	63,559	65,931
Changes in assets and liabilities:
Accounts payable, accrued interest and other liabilities	134,231	(47,957)
Indemnification payable-related party	50,000	0

Net cash provided by (used in) operating activities	356,692	67,593

Cash flow from investing activities
Related party advance	(50,000)	0
Investment in marketable securities	(60,000)	(120,000)

Net cash provided by (used in) investing activities	(110,000)	(60,000)

Cash flows from financing activities:
Purchase equipment	(4,303)	0

Net cash provided by (used in) financing activities:	______ (4,303)	0

Net increase (decrease) in cash	$ 242,389	($ 52,407)
Cash and cash equivalents at beginning of period	$ 45,238	$ 53,261
Cash and cash equivalents at end of period	$ 287,627	$ 854

Cash paid for interest	0	0

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

Environmental Energy Services, Inc. and Subsidiaries

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2004 (Unaudited)

Basis of Presentation

The accompanying unaudited financial statements have been prepared by Environmental Energy Services, Inc. (the "Company") pursuant to the rules and regulations of the U. S. Securities and Exchange Commission. Certain information and disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments and disclosures necessary for a fair presentation of these financial statements have been included. Such adjustments consist of normal recurring adjustments. This Form 10-QSB Report should be read in conjunction with the Form 10-KSB Report of Environmental Energy Services, Inc. for the fiscal year ended December 31, 2004, as filed with the U. S. Securities and Exchange Commission.

The results of operations for the period ended June 30, 2005 are not indicative of the results that may be expected for the full year.

Summary of Significant Accounting Policies

Nature of Operations. Since June 2001, the Company has not conducted active operations, but has announced its intention to enter the business of acquiring, developing and operating coal, gas and other energy related assets in Alaska and Oklahoma. As of June 30, 2005, the Company has not begun active operations in these industries.

Amortization and Depreciation. Amortization and depreciation were calculated by the straight-line method based on the following useful lives:

Royalty agreement	6 years
Equipment	5 years

Amortization and depreciation expense for the six months ended June 30, 2005 and 2004 was $32,680 and $31,112, respectively.

Concentration of Credit Risk. The only remaining assets of the Company are illiquid investments in Startec, Inc. and Wastech, Inc., investments in illiquid private companies and an interest in a royalty agreement. The Company has not received its certificates representing the investment in Startec, Inc. and may be forced to take legal action for performance.

Use of Estimates. The preparation of financial statements in conformity with generally accepted accounting principles 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 revenue and expenses during the reporting period. Actual results could differ from those estimates.

Liquidity. As of June 30, 2005, the Company's current assets exceeded its current liabilities by $101,495. The Company's assets exceed its liabilities by $1,091,227 at June 30, 2005. The Company is no longer dependent on capital injections from officers and other outside parties. In the quarter ended March 31, 2003, the Company reached an agreement that enables it to receive quarterly royalty payments in an amount that it believes is sufficient to satisfy its routine accounting, managerial, legal and basic general and administrative expenses.

Earnings Per Share. The Company has adopted Statement of Financial Accounting Standards No. 128, "Earnings Per Share," specifying the computation, presentation and disclosure requirements of earnings per share information. Basic earnings per share has been calculated based upon the weighted average number of common shares outstanding. Diluted net income per share is calculated based on the weighted average number of common shares and common stock equivalents outstanding during the year.

Advertising. The Company expenses advertising costs as incurred. There was no advertising expense for the quarters ended June 30, 2005 and 2004.

Marketable Securities. The Company accounts for marketable securities in accordance with Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities." This statement requires securities, which are available for sale to be carried at fair value, with changes in fair value recognized as a separate component of stockholders' equity. As a result of disputes surrounding the Company's investment in Startec, Inc., certain trading restrictions and thin trading activity, the Company has classified the securities as long-term assets. As a result of trading restrictions on the Company's investment in Wastech, Inc., formerly known as Corporate Vision, Inc., and thin trading activity, the Company has classified the securities as long-term assets. Marketable securities consist of the following investments:

Wastech, Inc. (14,605,804 shares)	$ 292,115
Startec, Inc. (665,125 shares)	332,563
Total	$ 624,678

Comprehensive Income. The Company has adopted Statement of Financial Accounting Standards No. 130 ("SFAS 130"), "Reporting Comprehensive Income." SFAS 130 establishes standards for reporting and display of comprehensive income and its components in a full set of general purpose financial statements. The effect of SFAS 130 is reflected in these financial statements.

Accounts Payable, Accrued Interest and Other Liabilities

Accounts payable, accrued interest and other liabilities at June 30, 2005, consist of the following:

Trade payables

$ 166,285

Interest

27,000

$ 193,285

Notes and Loans Payable - Current Liabilities

As of June 30, 2005, the Company is not indebted under any notes classified as short-term liabilities.

Notes and Loans Payable - Long-Term Liabilities

As of June 30, 2005, the Company has no indebtedness classified as a long-term liability.

Commitments and Contingencies

Nikko Action

The Company is a successor to WasteMasters, Inc. as the result of holding company reorganization effected in 2001. Under the terms of the holding company reorganization, the Company is obligated to issue one share of its common stock for each outstanding share of common stock of WasteMasters, Inc. In 1998, WasteMasters, Inc. issued 63,000,000 shares of common stock and warrants to purchase 100,000,000 shares of common stock in settlement of its liability under certain convertible debentures. However, by an Order entered in March 14, 2000, a federal district court ruled that the shares and warrants were issued as a result of collusion and fraud between management of WasteMasters, Inc. and the holders of the convertible debentures. As a result, WasteMasters, Inc. cancelled all shares and warrants issued pursuant to the Settlement Agreement. WasteMasters, Inc. subsequently acquired all of the convertible debentures, and therefore the convertible debentures are not outstanding any longer. However, prior to the court's ruling, certain of the shares were transferred to persons who may qualify as holders in due course, and therefore the Company may be obligated to recognize the validity of such shares. The Company surveyed the current registered holders of the shares, and believes that approximately 14 million shares may be held by potential holders in due course, which shares the Company may be contingently obligated to recognize. The Company does not treat any shares or warrants issued by WasteMasters, Inc. under the settlement of the convertible debentures as issue and outstanding except to the extent the Company enters into a settlement agreement with the holder. Any shares recognized as issued and outstanding pursuant to a settlement agreement are recorded as a litigation expense in the period in which the settlement was finalized.

Dr. Mbanefo Claims

On October 18, 2004, the Company was sued in the United States District Court for the Southern District of Ohio by Dr. Charles O. Mbanefo. Dr. Mbanefo seeks a court order requiring the Company to issue him 25,000,000 shares of common stock under an Agreement dated June 27, 2002, and damages equal to the decline in value of the common stock since the date the shares would have been saleable if they had been issued. Dr. Mbanefo contends that his damages exceed $250,000. The Company has issued the shares, and is contesting Dr. Mbanefo's claim for damages.

Dr. Mbanefo Derivative Action

On May 10, 2005, Dr. Charles O. Mbanefo filed a shareholder derivative suit against the Company and its officers and directors in the Court of Common Pleas, Cuyahoga County, Ohio. Simultaneously, Dr. Mbanefo sought and obtained a temporary restraining order preventing the Company from disbursing any funds from a royalty payment received in mid-May 2005. Dr. Mbanefo alleged that the officers and directors of the Company breached various duties to the Company with respect to five transactions: (1) the entry into a Management and Operations Agreement dated March 14, 2003, and an amendment thereto in 2003, with GD Management Services, Inc., a company owned by three directors and officers of the Company; (2) the repayment in 2003 of $403,000 in loans made by A. Leon Blaser to the Company in 2002; (3) the entry into a Stock Purchase Agreement on September 17, 2002, and subsequent amendments thereto, to purchase shares of common stock of Wastech, Inc., f/k/a Corporate Vision, Inc.; (4) the entry into a Stock Purchase Agreement on December 19, 2002, and an amendment thereto, to purchase shares of common stock of Gulftex Energy Corporation from Wastech, Inc.; and (5) the entry into an Asset Purchase Agreement with Northstar Energy Group, Inc. on June 27, 2002.

Global Convertible Notes

The Company is obligated to issue shares of its common stock on certain notes in the original principle amount of $1,590,000 originally issued by Global Eco-Logical Services, Inc., although the Company is not obligated to pay the debt itself. The conversion price is the market price of the Company's common stock at the time of conversion, subject to a minimum conversion price of $0.10 per share, which is significantly greater than the current market price of the common stock at this time.

The Company has other commitments and contingencies that are discussed in the notes to the audited financial statements included in Item 7 of its Annual Report on Form 10-KSB for the year ended December 31, 2004, which is hereby incorporated by reference.

Termination of Agreement to Purchase Shares of Common Stock of Gulftex, Inc.

During the quarter ended June 30, 2005, the Company terminated its agreement to purchase shares of Gulftex, Inc. common stock from with Wastech, Inc. due to a material adverse change in the financial condition of Gulftex, Inc.

Issuance of Common Stock

At June 30, 2005, the Company's authorized capital stock was 495,000,000 shares of Common Stock, par value $0.001 per share, and 5,000,000 shares of Preferred Stock, par value $0.001 per share. On that date, the Company had outstanding 384,083,631 shares of Common Stock and no shares of Preferred Stock. During the quarter ended June 30, 2005, the Company did not issue any Common Stock, options or warrants.

Related Party Transactions

The Company has engaged in certain transactions with related parties that are discussed in Item 12 of its Annual Report on Form 10-KSB for the year ended December 31, 2004, which is hereby incorporated by reference.

During the period ended June 30, 2005, the Company advanced $50,000 to Ironhorse Exploration, LLC, an Oklahoma LLC owned, in part, by Douglas Holsted and Leon Blaser. The advance was used to finance the acquisition of lease rights and the drilling of a well in Oklahoma. In the event the well is successful, the Company plans to convert the advance into a working interesting the well. In the event the well is unsuccessful, the entity will repay the advance or allow the Company to convert the advance into an interest in another successful well.

In 2004, the Company agreed to reimburse the Company's chief executive officer and chairman for payments totaling $84,000 that are required to make to satisfy a debt that he guaranteed relating to prior operations of the Company. The Company made payments of $14,000 on this obligation prior to the period ended June 30, 2005.

Subsequent Events

In September 2005, the A. Leon Blaser, the Company's chairman and chief executive officer, and a defendant in the lawsuit, purchased all of Dr. Mbanefo's shares of common stock in the Company for $400,000. Simultaneous with the purchase of the shares, the court dismissed the lawsuit by granting a motion to dismiss for lack jurisdiction that had been filed by the defendants. Simultaneously, the Company settled another lawsuit filed by Dr. Mbanefo, in which he sought damages of approximately $250,000 for failing to deliver certain shares, by agreeing to pay Dr. Mbanefo $150,000 in four quarterly installments of $37,500 ending in May 2006.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Disclosure Regarding Forward Looking Statements

This Quarterly Report on Form 10-KSB includes forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended ("Forward Looking Statements"). All statements other than statements of historical fact included in this report are Forward Looking Statements. In the normal course of its business, the Company, in an effort to help keep its shareholders and the public informed about the Company's operations, may from time-to-time issue certain statements, either in writing or orally, that contain or may contain Forward-Looking Statements. Although the Company believes that the expectations reflected in such Forward Looking Statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Generally, these statements relate to business plans or strategies, projected or anticipated benefits or other consequences of such plans or strategies, past and possible future, of acquisitions and projected or anticipated benefits from acquisitions made by or to be made by the Company, or projections involving anticipated revenues, earnings, levels of capital expenditures or other aspects of operating results. All phases of the Company operations are subject to a number of uncertainties, risks and other influences, many of which are outside the control of the Company and any one of which, or a combination of which, could materially affect the results of the Company's proposed operations and whether Forward Looking Statements made by the Company ultimately prove to be accurate. Such important factors ("Important Factors") and other factors could cause actual results to differ materially from the Company's expectations are disclosed in this report. All prior and subsequent written and oral Forward Looking Statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the Important Factors described below that could cause actual results to differ materially from the Company's expectations as set forth in any Forward Looking Statement made by or on behalf of the Company.

Overview

At present, the Company is not engage in business. Since its reorganization as a holding company, the Company has evaluated a number of potential acquisitions, and has identified several in the coal and gas production markets that it believes are viable candidates. However, consummating any such acquisition has been dependent on the settlement or satisfaction of liabilities of the Company and raising capital to fund the acquisitions.

Results of Operations
Three Months Ended June 30, 2005 and 2004

The Company's revenues in the three months ended June 30, 2005 were $295,375, as compared to $223,666 in the three months ended June 30, 2004. The Company's revenues result from payments received under a royalty agreement that expires in the first quarter of 2008.

The Company reported income from operations during the three months ended June 30, 2005 of $111,400, as compared to $75,429 during the three months ended June 30, 2004. The increase in income from operations was primarily attributable to increased royalty revenue and reduced general and administrative expenses and the settlement of most liabilities.

The Company reported comprehensive income of $131,476 during the three months ended June 30, 2005, as compared to comprehensive income of $52,831 during the three months ended June 30, 2004. The Company recorded an unrealized gain of ($20,000) during the three months ended June 30, 2005, as compared to an unrealized loss of ($22,598) during the three months ended June 30, 2004. The unrealized gain and loss in each period results from changes in the market value of the Company's investment in shares of Wastech, Inc.

Six Months Ended June 30, 2005 and 2004

The Company's revenues in the six months ended June 30, 2005 were $521,605, as compared to $438,306 in the six months ended June 30, 2004. The Company's revenues result from payments received under a royalty agreement that expires in the first quarter of 2008.

The Company reported income from operations during the six months ended June 30, 2005 of $203,530, as compared to $82,438 during the six months ended June 30, 2004. The increase in income from operations was primarily attributable to increased royalty revenue and reduced general and administrative expenses and the settlement of most liabilities.

The Company reported comprehensive income of $76,222 during the six months ended June 30, 2005, as compared to comprehensive income of $16,507 during the six months ended June 30, 2004. During the six months ended June 30, 2005, the recorded a $64,000 expense from the settlement of a claim against the Company's chairman and chief executive officer arising out of his personal guarantee of a loan made to a former subsidiary. The Company also recorded an unrealized loss of ($63,559) during the six months ended June 30, 2005, as compared to an unrealized loss of ($65,931) during the six months ended June 30, 2004. The unrealized loss in each period results from the decline in market value of the Company's investment in shares of Wastech, Inc.

Liquidity and Sources of Capital

The Company's consolidated balance sheet as of June 30, 2005 reflects cash and current assets of $344,780 and working capital of $101,496. The Company's liabilities consist primarily of accounts payable that will be paid out of subsequent royalty payments.

The Company's working capital continues to improve as a result of the settlement and satisfaction of most of the Company's current liabilities through the conversion of the liabilities into common stock and/or the settlement of the liabilities at a discount and the investment of proceeds received under a royalty agreement. The Company believes that it has sufficient liquidity to satisfy the remainder of its current liabilities. At this time, the Company's business activities involve the exploration of various business and investment opportunities in the oil and gas drilling exploration and production industry.

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

Item 3. Controls and Procedures.

The Company believes that its disclosure controls and procedures are effective for gathering, analyzing and disclosing the information it is required to disclose in its reports filed under the Securities Exchange Act of 1934. At June 30, 2005, the Company was not engaged in active operations and its controls and procedures were only appropriate for company not engaged in active operations. Since June 30, 2005, the Company has entered into some transactions that involve entering the oil and gas drilling business. The Company is in the process of improving its internal controls and procedures to accommodate an increased level of business activity in the future.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in the Company's reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the Company's reports filed under the Exchange Act is accumulated and communicated to management, including the our company's chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

PART II. OTHER INFORMATION.

Item 1. Legal Proceedings.

The Company is a party to legal proceedings that are discussed in Item 3 of its Annual Report on Form 10-KSB for the year ended December 31, 2004, which is hereby incorporated by reference.

Item 2. Changes 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.

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

(a) Furnish the exhibits required by Item 601 of Regulation S-B.

Exhibit Number	Description and Incorporation by Reference
31.1	Rule 13a-14(a)/15d-14(a) Certification by the Chief Executive Officer
31.2	Rule 13a-14(a)/15d-14(a) Certification by the Chief Financial Officer
32.1	Certification by the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification by the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(b) Reports on Form 8-K.

None.

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	ENVIRONMENTAL ENERGY SERVICES, INC.
Date: December 9, 2005	/s/ Greg Holsted
	By: Greg Holsted, Chief Financial Officer