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

                                   FORM 10-QSB

[X]    QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
       ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2001



[ ]    TRANSITION REPORT UNDER SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE
       ACT OF 1934 FOR THE TRANSITION PERIOD FROM ____________ TO ____________



Commission file number  000-25663

                            ULTRASTRIP SYSTEMS, INC.
        (Exact name of small business issuer as specified in its charter)

           Florida                                              65-0841549
(State or Other Jurisdiction of                              (I.R.S. Employer
Incorporation or Organization)                              Identification No.)

                            3515 S.E. Lionel Terrace
                              Stuart, Florida 34996
                    (Address of principal executive offices)

                                 (561) 287-4846
                (Issuer's telephone number, including area code)

                      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: 42,134,049 shares of common stock
were outstanding as of November 7, 2001.

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



<PAGE>


                            ULTRASTRIP SYSTEMS, INC.
                                   (UNAUDITED)

                                      INDEX

                                                           PAGE NO.
                                                           --------


PART I - FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS (unaudited).........             1

           Condensed Balance Sheets ................             1

           Condensed Statements of Loss ............             3

           Condensed Statement of Cash Flows .......             4

           Notes to the Condensed Financial Statements           5

ITEM 2.    MANAGEMENT'S DISCUSSION AND
           ANALYSIS OR PLAN OF OPERATION............            13


PART II - OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS.......................             17

ITEM 2.    CHANGES IN SECURITIES...................             17

ITEM 3.    DEFAULTS UPON SENIOR SECURITIES.........             17

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE
           OF SECURITY HOLDERS....................              18

ITEM 5.    OTHER INFORMATION.......................             18

ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K........             20

SIGNATURES.........................................             22

<PAGE>

                         PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

                            Ultrastrip Systems, Inc.
                                   (Unaudited)
                            Condensed Balance Sheets

                                     ASSETS


                                          9/30/2001           12/31/2000
                                          ---------           ----------

CURRENT ASSETS
  Cash & Cash Equivalents                 $  306,341          $  300,304
  Accounts Receivable                         77,724                   0
  Receivable - Sale of Equipment             830,900                   0
  Prepaid Expenses                            59,952                   0
                                          ----------          ----------
      TOTAL CURRENT ASSETS                 1,274,917             300,304


  NET PROPERTY AND EQUIPMENT               3,389,061           3,025,961

OTHER ASSETS:
  Deposits                                     8,864               4,066
  Patent, Net of Amortization
    of $10,087 and $5,764                    102,623              89,345
                                          ----------          ----------
    TOTAL OTHER ASSETS                       111,487              93,411
                                          ----------          ----------

TOTAL ASSETS                              $4,775,465          $3,419,676
                                          ==========          ==========




                                       1
<PAGE>
                            Ultrastrip Systems, Inc.
                                   (Unaudited)
                            Condensed Balance Sheets

                                 LIABILITIES AND
                              STOCKHOLDERS' EQUITY

<Table>
<Caption>
                                                                    09/30/2001             12/31/2000
                                                                    ----------             ----------
<S>                                                                <C>                    <C>
LIABILITIES:
  Accounts Payable                                                 $  1,418,207           $    549,851
  Customer Deposits                                                     150,000                      0
  Deferred Revenue                                                       78,365                      0
  Payroll Taxes Payable                                                       0                 73,943
  Accrued Officer Wages                                                 241,643                186,643
  Note Payable - current portion                                          9,438                  9,438
                                                                   ------------           ------------
      TOTAL CURRENT LIABILITIES                                    $  1,897,653           $    819,875

LONG TERM DEBT:
  Loans Payable Shareholders                                          1,120,582                517,893
  Notes Payable                                                         102,248                 78,879
                                                                   ------------           ------------
      TOTAL LONG TERM DEBT                                            1,222,830                596,772
                                                                   ------------           ------------
      TOTAL LIABILITIES                                            $  3,120,483           $  1,416,647

COMMITMENT AND CONTINGENCIES

  Redeemable, convertible, Series A preferred stock
    $0.01 par value; 250 shares authorized, 35
    shares issued and outstanding - liquidation
    value of $1,124,393 and $1,058,750 at
    September 30, 2001 and December 31, 2000
    respectively                                                              1                      1
  Redeemable, convertible, Series B preferred stock
    $0.01 par value; 4,000 shares authorized; 981
    and 1,083 shares issued and outstanding - liquidation
    value of $3,209,178 and $3,375,000 at
    September 30, 2001 and December 31,2000
    respectively                                                             10                     11
  Redeemable warrants, 14,840,000 and 11,993,800
    Authorized, issued and outstanding at
    September 30, 2001 and December 31, 2000
    respectively                                                             --                     --

COMMON STOCKHOLDERS' EQUITY
  Common Stock-$0.01 par value;
    100,000,000 shares authorized;
    42,086,027 and 40,027,033
    shares issued and outstanding
    September 30, 2001 and December 31, 2000                            420,860                400,270
  Paid in Capital Surplus                                            14,112,527              8,035,934
  Accumulated Deficit                                               (12,878,416)            (6,433,187)
                                                                   ------------           ------------
      TOTAL COMMON STOCKHOLDERS'
         EQUITY                                                       1,654,971              2,003,017
                                                                   ------------           ------------
TOTAL LIABILITIES AND
  STOCKHOLDERS' EQUITY                                             $  4,775,465           $  3,419,676
                                                                   ============           ============
</TABLE>




                                       2
<PAGE>

                            Ultrastrip Systems, Inc.
                                   (Unaudited)
                          Condensed Statements of Loss

<TABLE>
<CAPTION>

                                                   Three Months                                    Nine Months
                                       -----------------------------------           -----------------------------------
                                        09/30/2001             09/30/2000             09/30/2001             09/30/2000
                                       ------------           ------------           ------------           ------------
<S>                                    <C>                    <C>                    <C>                    <C>
NET REVENUES                           $     77,724           $          0           $    737,524           $          0

COST OF SALES                               131,603                      0                462,385                      0
                                       ------------           ------------           ------------           ------------
GROSS MARGIN                                (53,879)                     0                275,139                      0

OPERATING EXPENSES                        1,142,799              1,028,338              3,824,879              1,982,008

DEPRECIATION AND AMORTIZATION               181,441                226,441                544,363                344,323

STOCK ISSUED FOR SERVICES                   100,000                      0              2,125,000                800,000
                                       ------------           ------------           ------------           ------------
LOSS FROM OPERATIONS                     (1,478,119)            (1,254,779)            (6,219,103)            (3,126,331)

LOSS FROM DISPOSED ASSETS                  (210,933)                     0               (210,933)                     0

INTEREST EXPENSE                             (5,161)                (5,726)               (15,232)                (9,476)
                                       ------------           ------------           ------------           ------------
LOSS BEFORE TAXES                        (1,694,213)            (1,260,505)            (6,445,268)            (3,135,807)

PROVISION FOR INCOME TAXES
                                       ------------           ------------           ------------           ------------

NET LOSS                               $ (1,694,213)          $ (1,260,505)          $ (6,445,268)          $ (3,135,807)
                                       ============           ============           ============           ============

NET LOSS PER COMMON SHARE
(basic and diluted)                    $       (.04)          $       (.04)          $       (.16)          $       (.08)
                                       ============           ============           ============           ============

WEIGHTED AVERAGE COMMON
  SHARES OUTSTANDING                     41,828,195             39,931,012             41,262,415             39,658,038
                                       ============           ============           ============           ============



</TABLE>





                                       3
<PAGE>
                            Ultrastrip Systems, Inc.
                                   (Unaudited)
                       Condensed Statements of Cash Flows
                     For the Nine Months Ended September 30,

<TABLE>
<CAPTION>

                                                            2001                 2000
                                                        -----------           -----------
<S>                                                     <C>                   <C>
Cash flows from operating activities:
  Net Loss                                              ($6,445,268)          ($3,135,807)
  Adjustments to reconcile net loss to
    net cash utilized by operating activities:
    Depreciation and amortization                           544,363               344,323
    Stock issued in exchange for services                 2,125,000               800,000
    Deferred gain on sale of equipment                      (99,188)                    0
Changes in operating assets and liabilities:
    Accounts payable                                        868,356                 6,173
    Customer deposits                                       150,000                     0
    Payroll taxes payable                                   (73,943)                7,358
    Accrued wages                                            55,000               209,000
    Deferred revenue                                         78,365                     0
    Accounts receivable                                    (908,624)                    0
    Prepaid expenses                                        (59,952)              (95,819)
    Deposits                                                 (4,798)                   (0)
                                                        -----------           -----------
Net cash utilized by operating activities                (3,770,689)           (1,864,772)

Cash flows from investing activities:
    Purchase of property, plant and equipment            (1,653,872)           (1,536,251)
    Sale of property, plant and equipment                   850,000                     0
    Internally developed patents                            (17,641)                    0
                                                        -----------           -----------
Net cash utilized by investing activities                  (821,513)           (1,536,251)

Net cash from financing activities:
    Origination of unrelated long term debt                  34,913                     0
    Repayment of unrelated long term debt                   (11,544)               (7,644)
    Origination of related long term debt                   775,590                     0
    Repayment of related long term debt                    (172,901)              (86,277)
    Issuance of series B preferred stock                          0             2,796,500
    Issuance of common stock                              3,972,181             1,022,600
                                                        -----------           -----------
Net cash provided from financing activities               4,598,239             3,725,179
                                                        -----------           -----------
Net increase (decrease) in cash                               6,037               324,156
Cash & equivalent at beginning of year                      300,304                59,970
                                                        -----------           -----------
Cash & equivalents at September 30,                         306,341               384,126
                                                        ===========           ===========
Non-cash transactions:
    Stock issued as compensation                          2,125,000               800,000
                                                        ===========           ===========
</TABLE>






                                       4
<PAGE>
Ultrastrip Systems, Inc.
Notes to the Condensed Financial Statements
(Unaudited)
September 30, 2001 and 2000

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES

BASIS OF PRESENTATION

The accompanying unaudited condensed financial statements have been prepared in
accordance with accounting principles generally accepted in the United States
for interim financial information and with Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
All adjustments which, in the opinion of management, are considered necessary
for a fair presentation of the results of operations for the periods shown are
of a normal recurring nature and have been reflected in the unaudited condensed
financial statements. The results of operations for the periods presented are
not necessarily indicative of the results expected for the full fiscal year or
for any future period. The information included in these unaudited condensed
financial statements should be read in conjunction with Management's Discussion
and Analysis of Financial Condition and Results of Operations contained in this
report and the financial statements and accompanying notes included in the
Ultrastrip Systems, Inc. (the "COMPANY") Annual Report on Form 10-KSB for the
fiscal year ended December 31, 2000.

COMPANY'S ACTIVITIES AND OPERATING CYCLE

Ultrastrip Systems, Inc. (the "Company") was incorporated under the laws of the
State of Florida on April 2, 1998.

DEVELOPMENT STAGE COMPANY IN PRIOR PERIODS

The Company operated as a development stage enterprise from its inception to
December 31, 2000 by devoting substantially all its efforts to the ongoing
development of the Company. The Company commenced actual operations in March,
2001.

NATURE OF BUSINESS

The Company is engaged in contracting for the performance of paint stripping
services to ship owners, contractors, and dry docks. The Company also
infrequently sells equipment to companies in the industry.

CASH AND CASH EQUIVALENTS

The Company considers cash and all highly liquid investments purchased with an
original maturity of less than three months at the date of purchase to be cash
equivalents.

FAIR VALUE OF FINANCIAL INSTRUMENTS

Carrying amounts of certain of the Company's financial instruments including
cash and cash equivalents, accounts receivable, notes receivable, and accrued
liabilities approximate fair value because of their short maturities.

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 the disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from these estimates.



                                       5
<PAGE>

PROPERTY AND EQUIPMENT

Property and equipment are recorded at cost. Maintenance and repairs are charged
to expense as incurred; major renewals and betterments are capitalized. When
items of property or equipment are sold or retired, the related cost and
accumulated depreciation is removed from the accounts and any gain or loss is
included in the other expenses. Depreciation is calculated using straight-line
and accelerated methods over the estimated useful lives of the respective
assets. The Company is continuously conducting research and development of its
existing technologies. Introduction of new technology or modification of
existing technology may cause existing property and equipment to be rendered
obsolete and retired by the Company.

Description                                       Useful Life
-----------                                       -----------

Furniture & Fixtures                                7 Years
Machinery & Equipment                               5 Years
Office Equipment                                    5 Years
Automobile and Trucks                               5 Years
Spare Parts                                         5 Years
Leasehold Improvements                             40 Years


CONCENTRATIONS

Cash and cash equivalents are, for the most part, maintained with several major
financial institutions in the United States. The balances are insured by the
Federal Deposit Insurance Corporation (FDIC) up to $100,000. At times during the
year cash balances exceeded the amount insured by the FDIC.

Construction of the Company's robotic units and the majority of the Company's
research and development is performed by the Company's research partner,
Carnegie Mellon University (See Note 13, "Research and Development").

INCOME TAXES

The Company accounts for income taxes using the asset and liability method as
required by Statement of Financial Accounting Standards ("SFAS") No. 109.
Deferred income taxes are provided on temporary differences between book and tax
income, arising primarily from the use of differing methods of recognition of
start-up costs. An allowance is provided if it is more likely than not that the
Company will not realize the benefits of a deferred tax asset.

PATENTS

The Patents (see Note 3) are being amortized on a straight-line basis over
sixteen and one-half (16.5) years. Filing fees for internally developed patents
are capitalized as incurred. Amortization charged as an expense for the nine
months ended September 30, 2001 and 2000 was $4,363 and $4,323.

REVENUE RECOGNITION

The Company recognizes revenue where the earning process is complete, evidenced
by an agreement between the customer and the Company, there has been delivery
and acceptance, collectibility is probable, and pricing is fixed and
determinable. If significant obligations remain after delivery, revenue is
deferred until such obligations are fulfilled. Revenue from service agreements
is generally recognized ratably over the service period or as the services are
rendered.

ADVERTISING

The Company conducts nondirect response advertising for the promotion of its
products. These costs are expensed as incurred. Advertising costs for the nine
months ended September 30, 2001 and 2000 were $150,347 and $108,814
respectively.

LOSS PER SHARE

The Company computes loss per share pursuant to SFAS No. 128, "Earnings Per
Share". Weighted average shares outstanding do not include any contingently
issuable shares. The dilutive effect of warrants and, Series A and Series B
convertible preferred stock have not been considered as their effect would be
antidilutive for all periods presented (See Notes 9 and 10).



                                       6
<PAGE>

MARKETS AND ECONOMIC RISKS

The Company's primary source of revenue is generated by providing paint
stripping services and sales of paint stripping equipment to shipyards,
contractors and ship owners. Therefore, there is an inherent risk that changes
in existing technology, worldwide environmental legislation, shipping operations
and changes in painting standards may affect the Company's operations.

COMPENSATED ABSENCES

Employees of the Company are entitled to paid vacations, sick days and other
time off depending on job classification, length of service and other factors.
It is impractical to estimate the amount of compensation for future absences
and, accordingly, it is the Company's policy to recognize the costs of
compensated absences when paid to the employees.

SEGMENT REPORTING

Under SFAS No. 131, "Disclosures About Segments of an Enterprise and Related
Information," the Company is required to use the "management" approach to
reporting segments. The management approach designates the internal organization
that is used by management for making operating decisions and assessing
performance as the source of the Company's reportable segments. SFAS No. 131
also requires disclosures about products and services, geographic areas, and
major customers (See Note 18, "Industry Segment, Geographic, and Customer
Information").

NOTE 2 - PROPERTY AND EQUIPMENT

Property and equipment is stated at cost, maintenance and repairs are charged to
operations. The equipment was successfully tested and demonstrated to the
general public during the 2nd quarter 2000. During the year ended December 31,
2000 a new version of the robotic system was built and the system previously
constructed was scrapped for spare parts and written off as a loss on the
disposal of fixed assets. The net book value of these assets included in the
loss on the disposal of fixed assets in 2000 was $214,134. Upon introduction of
an improved robotic system in August, 2001 the prior system was determined to be
obsolete by the Company and written off as a loss by the Company. During the
nine months ended September 30, 2001 the company also donated used equipment to
its research partner to be used in future research and development. The net book
value of these assets included in the loss on their disposal of fixed assets in
2001 was $210,933. A used paint removal system with a net book value of $750,772
was sold by the Company during the nine months ended September 30, 2001 and is
reflected in the deferred revenue on the condensed balance sheets. A summary of
property and equipment and the related depreciation expenses as of September 30,
2001 and 2000 is as follows:

                                            09/30/2001       09/30/2000
                                            ----------       ----------

Furniture and fixtures                       $354,928          $127,651
Machinery and equipment                     2,563,314         3,130,642
Office equipment                              108,769            54,004
Autos & trucks                                210,474           168,730
Spare parts                                   621,769                 0
Leasehold improvements                        207,161           194,174
                                           ----------        ----------
                                            4,066,415         2,784,908
Accumulated depreciation                     (677,354)         (340,000)
                                           ----------        ----------
                                           $3,389,061        $2,444,908
                                           ==========        ==========
NOTE 3 - PATENT

The Company exercised an option and acquired one patent on December 17, 1999
from a related company. SAB 48 required the value assigned to the patent to be
equivalent to the related company's historical cost as defined by generally
accepted accounting principles. The related Company also assigned an additional
patent (no cost basis) during 2001. The Company has also applied for three
additional patents and has capitalized the fees incurred with the filing and
protection of these patents. The Company is amortizing the patent on a
straight-line basis over its remaining estimated useful life (16.5 years). A
summary of the acquisition cost and accumulated amortization at September 30,
2001 and 2000 is as follows:



                                       7
<PAGE>

                                           09/30/2001           09/30/2000
                                           ----------           ----------

Patent                                       $112,710             $95,109
Accumulated amortization                      (10,087)             (4,323)
                                             --------             -------
                                             $102,623             $90,786
                                             ========             =======

NOTE 4 - LOANS PAYABLE SHAREHOLDERS

Loans payable shareholders consist of several, unsecured, non-interest bearing
loans made by shareholders. The loans are due on demand.

NOTE 5 - CUSTOMER DEPOSITS

Customer deposits consist of advances received from a customer on a contract
scheduled to begin in October, 2001 (See Note 17, " Subsequent events").

NOTE 6 - DEFERRED REVENUE

Deferred revenue resulted from the sale of used equipment in the third quarter.
The equipment was delivered to the buyer in the third quarter, but financing for
the purchase is still being finalized by the buyer. The revenue will be
recognized after the financing arrangements are completed.

NOTE 7 - NOTES PAYABLE

                                            09/30/2001         12/31/2000
                                            ----------         ----------

Installment notes payable to banks,
aggregating $1,842 monthly including
interest at 7.9% to 10.99%, secured by
vehicles, final payment due July, 2009.      $111,686           $92,277

Less Current Portion                           (9,438)           (4,244)
                                             --------           -------
                                             $102,248           $86,029
                                             ========           =======

Additional financing was obtained by the Company from a shareholder on October
19, 2001 (See Note17, " Subsequent Events").

NOTE 8 - OPERATING LEASE

The Company conducts it operations from leased facilities, under an operating
leases expiring July, 2005 and August, 2006, with guaranteed options to renew
for an additional five years at the Company's option for annual increases of
3.25%. Lease rent expense for the periods ended September 30, 2001 and 2000
amounted to $47,518 and $20,780 including Florida rental use tax of 6.5%

At September 30, 2001, future minimum lease payments and rent usage tax were as
follows:

For fiscal years ending December 31,

                            Minimum          Rental Use          Gross
                              Rent              Tax               Rent
                            -------          ----------          -----

              2001            25,920            1,685            27,605
              2002           107,186            6,967           114,153
              2003           110,669            7,193           117,862
              2004           114,265            7,427           121,692
              2005            90,477            5,881            96,358
        Thereafter            35,457            2,305            37,762
                             -------           ------           -------
                             483,974           31,458           515,432
                             =======           ======           =======



                                       8
<PAGE>

NOTE 9 - STOCK TRANSACTIONS

COMPENSATION

During the quarter ended September 30, 2001 the Company issued 20,000 shares of
restricted, unregistered common stock in exchange for services rendered. The
issuances were valued at approximately $100,000 ($5 per share), which equals
management's estimate of the fair market value of the services. The value of the
20,000 shares is reflected as stock issued for services in the 2001 condensed
statements of loss

During the period ended April 3, 2001, the Company incurred obligations to issue
675,000 shares of restricted, unregistered common stock as part of the new
compensation package for key employees, of which 425,000 shares have been
issued. These obligations valued at approximately $2,025,000 ($3 per share),
which equals management's estimate of the fair market value of the services
provided. The value of the 675,000 shares is reflected as stock issued for
services in the 2001 condensed statements of loss. On April 30, 2001 a warrant
holder exercised the appreciation rights of 1,653,800 warrants, but common
shares have not been issued as the exercise may be subject to the resolution of
certain issues.

During 2000, the Company issued 400,000 shares of restricted, unregistered
common stock, granted warrants to purchase 1,400,000 shares at an exercise price
of $2 per share (see Note 11) and paid $75,000 to an unrelated company for
services rendered in the development of a business plan and other consulting
services to be provided on behalf of the Company. The common stock issuances
were valued at approximately $800,000 ($2 per share), which equals management's
estimate of the fair market value of the services.

PRIVATE OFFERING - COMMON STOCK

During the period ended June 30, 2000, the Company conducted a private placement
offering, received subscriptions for and, issued 511,300 shares of restricted,
unregistered common stock. Total proceeds received related to the offering were
approximately $1,022,600.

ISOLATED ISSUANCES - COMMON STOCK

During the period ended April 5, 2001, the Company issued 875,797 shares to a
small group of investors who invested $1,758,596 in the aggregate in exempt,
isolated transactions.

STOCK WARRANTS

During the period ended April 3, 2001 the Company issued warrants for 4,500,000
shares of common stock at an exercise price of $3.00 per share.

Additional warrants to acquire shares were sold to a shareholder on October 19,
2001 (See Note 17, "Subsequent Events")

PRIVATE OFFERING - COMMON STOCK

During the period of April 9 to August 31, 2001, the Company conducted a private
placement offering, received subscriptions for and, issued 544,485 shares of
restricted, unregistered common stock. Total proceeds received related to the
offering were approximately $2,197,085.

NOTE 10 - PREFERRED STOCK

SERIES A

The Company's Series A preferred stock provides annual dividends, at the rate of
$3,750 per share, payable in cash, which are cumulative and have priority over
dividends on the Series B preferred and common stock. Total estimated dividends
in arrears at September 30, 2001 and 2000 were $282,223 and $186,597
respectively.



                                       9
<PAGE>

Each share of Series A preferred is convertible into 24,000 shares of common
stock at the holder's option. The Series A preferred shall automatically be
converted into common stock in the event of an underwritten initial public
offering. During the periods ended September 30, 2001 and 2000, -0- and 10
shares of Series A preferred stock were converted into -0- and 240,000 shares of
common stock. The Series A preferred is redeemable at the option of the Company
at $27,500 per share plus accrued and unpaid dividends. In the event of
dissolution, the holders of Series A preferred shall be entitled to receive
$25,000 per share, plus accrued dividends, prior to any distribution to holders
of Series B preferred stock and the holders of common stock.

SERIES B

During the year ended December 31, 2000, the Company conducted a private
placement offering, received subscriptions for and, issued 1,290 shares of the
Company's Series B preferred stock. Total proceeds received related to the
offering were approximately $3,225,000. The Company's Series B preferred stock
provides annual dividends, at the rate of $250 per share, payable in cash, which
are cumulative and have priority over dividends on the common stock. Total
estimated dividends in arrears at September 30, 2001 and 2000 was $327,981 and
$123,606.

Each share of Series B preferred is convertible into 835 shares of common stock
at the holder's option. The Series B preferred shall automatically be converted
into common stock in the event of an underwritten initial public offering.
During the period ended September 30, 2001, 102 shares of Series B preferred
stock were converted into 85,170 shares of common stock. The Series B preferred
is redeemable at the option of the Company at $3,000 per share plus accrued and
unpaid dividends. In the event of dissolution, the holders of Series B preferred
shall be entitled to receive $3,000 per share, plus accrued dividends, prior to
any distribution to holders of common stock.

NOTE 11 - STOCK WARRANTS

Warrants to acquire an aggregate of 14,840,000 shares of the Company's common
stock were outstanding at September 30, 2001, held by related and unrelated
parties at prices ranging from $0.625 to $3.00 per share. The warrants expire at
various dates through 2004. A summary of the Company's warrants are as follows:

                                                              09/30/2001
                                                             ------------

Warrants outstanding January 1                                 11,993,800
Issued                                                          4,500,000
Exercised                                                      (1,653,800)
                                                             ------------
Warrants outstanding and exercisable at September 30           14,840,000
                                                             ============
Range in exercise prices                                     $0.625-$3.00

Some of the warrants also have stock appreciation rights allowing the warrant
holder to receive an amount of shares which is determined by a multiple of
increase in the value of a share of the issuing corporation's stock on the
exercise date over the value of a share of the stock on the date the warrant is
issued. Currently, the warrant holders are entitled to receive approximately
5,846,970 shares of common stock at no cost to themselves if they choose to
exercise the appreciation rights. A warrant holder exercised the appreciation
rights of 1,653,800 warrants, but the shares have not been issued as the
exercise is currently under review by the Company.

As of September 30, 2001 common shares reserved for issuance are as follows:

Series A preferred                                                  840,000
Series B preferred                                                  819,135
Warrants                                                         14,840,000
Key employee stock compensation                                     250,000
                                                                 ----------
Total                                                            16,749,135
                                                                 ==========

Additional warrants to acquire shares were sold to a shareholder on October 19,
2001 (See Note 17, "Subsequent Events")



                                       10
<PAGE>

NOTE 12 - INCOME TAXES

The Company accounts for income taxes under SFAS No. 109, "Accounting of Income
Taxes". Deferred income tax assets and liabilities are determined based upon
differences between financial reporting and tax basis of assets and liabilities
and are measured using the enacted tax rates and laws that will be in effect
when the differences are expected to reverse.

Significant components of the Company's deferred tax liabilities and assets are
as follows:

                                              2001              2000
                                          -----------         ---------
Deferred tax assets:
Section 195 election                      $    62,078         $  82,770
Net operating loss carryforwards            2,002,388           797,698
                                          -----------           -------
Total deferred tax assets                   2,064,466           880,468
Valuation allowance for deferred
   tax assets                              (2,064,466)         (880,468)
                                          -----------         ---------
                                          $         0         $       0
                                          ===========         =========

SFAS 109 requires a valuation allowance to reduce the deferred tax assets
reported if, based on the weight of the evidence, it is more likely than not
that some portion or all of the deferred tax assets will not be realized.
Management has determined that a valuation allowance of $2,064,466 and $880,468
at September 30, 2001 and 2000 respectively, is necessary to reduce the deferred
tax assets to the amount that will more likely than not be realized. The change
in the valuation allowance for the nine months ended September 30, 2001 and 2000
was $1,027,220 and $581,768 respectively.

The Company has incurred net operating losses since inception. At June 30, 2001
the Company had approximately $6,119,813 that expire in various amounts from
2018 to 2020 for U.S. income tax purposes.

NOTE 13 - RESEARCH AND DEVELOPMENT

Research and development cost related to both future and present products are
charged to operations as incurred. The Company recognized research and
development costs of $264,297 and $139,707 for the nine months ended September
30, 2001 and 2000 respectively. Under a research agreement with its research
partner, any improvements to the Company's existing patents would continue to be
owned by the Company. Any new technology developed by ongoing research and
development would be owned by the Company's research partner and the Company
would have the right to license these patents from its research partner.

NOTE 14 - RELATED PARTY TRANSACTIONS

COMPENSATION ARRANGEMENTS

In February 2001 the Company entered into new compensation agreements with ten
(10) officers and directors of operations. The minimum annual wages payable
under these agreements is $1,310,000 in the aggregate. Under these agreements,
in addition to wages, the afore-mentioned employees are entitled to receive
675,000 shares of common stock in the aggregate of which 425,000 were issued and
the remainder are yet to be issued.

SHAREHOLDER LOANS

The Company received loans from a significant shareholder and officer of the
Company totaling of $705,590 in 2001 in order to finance the acquisition of
equipment and the start of operations. The loans are unsecured, non-interest
bearing and, due upon demand.

NOTE 15 - COMMITMENTS AND CONTINGENCIES

ENVIRONMENTAL REGULATION

The Company currently maintains office facilities in Stuart, Florida and is
subject to applicable federal, state and local regulations with respect to such
facilities. The Company does not currently own or operate any manufacturing,
operating or ship building or repair facilities. Substantially all of the
Company's operations are devoted to the removal



                                       11
<PAGE>

of paint, the disposal of which is regulated by various federal, state and
international laws. Compliance with these provisions has not had, nor does the
Company expect to have, any material affect upon the capital expenditures, net
income, financial condition or competitive position of the Company. The Company
believes that it is in substantial compliance with all environmental laws and
regulations applicable to its business as currently conducted.

RESEARCH AND PRODUCT COSTS

The Company has amended its agreement with its research partner for the
continuing research of the technologies used by and, the construction of the
Company's primary product, the M2000. The Company is obligated under the
agreement to make payments totaling $1,007,564 over the next four months.

NOTE 16 - GOING CONCERN

The Company's financial statements are prepared using the 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 Company did not begin actual operations until March, 2001 and
there is no assurance that the Company will realize a profit in the current
year. Without realization of additional capital, it would be unlikely for the
Company to continue as a going concern. It is management's intention to seek
additional capital through private and public offerings until revenues from
operations are sufficient to support the Company's expenses incurred in the
normal course of business.

NOTE 17 - SUBSEQUENT EVENTS

NOTES PAYABLE - RELATED PARTY

On October 19, 2001 the Company entered into a financing agreement with a
shareholder. Under the terms of the agreement the Company borrowed $862,069.00
at 16%, payable in one lump sum of $1,000,000 with a maturity date of October
19, 2002, collateralized by all equipment of the Company.

SALE OF WARRANTS - RELATED PARTY

On October 19, 2001 the Company sold 100,000 warrants to a shareholder for the
sum of $137,931. The warrants have an exercise price of $.07 per share with an
expiration date of October 19, 2021.

STOCK ACTIVITY

Subsequent to the end of the quarter the Company has issued an additional 48,022
shares in isolated issuances.

NEW CONTRACTS

The Company began operations in Portugal in late October, 2001 under a service
agreement. Under the contract, the equipment is to be used for surface
preparation for 60 days for a base fee of $200,000 and transportation costs of
$50,000 payable in United States Dollars. If the equipment or Company personnel
are utilized more than 56 hours per week the Company is to be reimbursed at
agreed upon rates.

NOTE 18 - INDUSTRY SEGMENT, GEOGRAPHIC, AND CUSTOMER INFORMATION

The Company currently has no internal divisions and no segments considered to be
reportable segments under the criteria of SFAS No. 131.

                                Service
                               Contracts                Totals
                               ---------                ------

Revenues                         737,524               737,524
Direct Costs                     413,157               413,157

Contract services provided to two unrelated companies have accounted for 100% of
the revenues earned during the nine months ended September 30, 2001.

During the nine months ended September 30, 2001 all revenues were generated from
sources within the United States (See Note 17, "Subsequent Events").




                                       12
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

Certain statements in "Management's Discussion and Analysis of Financial
Condition and Results of Operations" are forward-looking statements that involve
risks and uncertainties. Words such as "may," "will," "should," "would,"
"anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates"
and similar expressions identify such forward-looking statements. Readers are
cautioned not to place undue reliance on these forward-looking statements, which
reflect management's analysis only as of the date hereof. The Company assumes no
obligation to update these forward-looking statements to reflect actual results
or changes in factors or assumptions affecting forward-looking statements.

RESULTS OF OPERATIONS

REVENUE

The results of operations for the third quarter of 2001 show meaningful revenues
for the second quarter in the Company's history. Revenues were $77,724 for the
quarter ended September 30, 2001, as compared to $0 for the third quarter of
2000, an increase of $77,724. Revenues for the quarter were generated from
services performed for Northrop Grumman's Ingalls Shipbuilding division.

In August 2001, the Company removed approximately 16,000 square feet of coatings
from the hull and sides of the USS Cole pursuant to the contract with Ingalls
Shipbuilding. The USS Cole, the US Navy destroyer attacked in Yemen in October
2000, was under repair at the Ingalls Shipbuilding facility in Pascagoula,
Mississippi. Ingalls Shipbuilding is a division of Litton Ship Systems, which is
a unit of Northrop Grumman Corporation. The work was completed to the
satisfaction of Ingalls in early September 2001. The Company believes that
Litton Ship Systems may purchase additional equipment or contract services in
the future.

In September 2001, the Company signed an exclusive distributor agreement with
Robotic Environmental Services, LLC ("RES") of Baton Rouge, Louisiana for the
sale of the Company's patented robotic hydroblasting systems in Louisiana and
Texas. RES will concentrate on the above-ground storage tank coatings removal
market, as well as the oil production facility and barge markets for coatings
removal. The exclusive distributor agreement is for a term of five years and
establishes minimum purchasing requirements necessary to maintain RES'
exclusivity in the two states. The minimum number of robotic systems required to
be purchased during the term of the agreement to maintain exclusivity is
expected to generate approximately $20 million dollars in sales. RES also
received an option from the Company to acquire the exclusive distribution rights




                                       13
<PAGE>

in Venezuela. To exercise this option RES must purchase four additional robotic
systems by June 30, 2002.

Pursuant to the terms of the exclusive distributor agreement and after a
successful demonstration of the Company's robotic system on an above-ground
storage tank in Louisiana, RES purchased its first robotic system. This system,
which was delivered in September 2001, contained previously used equipment
thereby allowing the Company to recognize a gain on the sale of used equipment
in connection with this agreement. Since financing for the purchase is still
being finalized by the Purchaser, the Company is deferring the gain on the sale
of the system until the fourth quarter of 2001.

In October 2001, the Company undertook performance of a two-month systems and
manpower rental contract with Tecor - Tecnologia Anti-Corrosao, S.A. ("Tecor")
of Setubal, Portugal, the surface preparation contractor for the Lisnave
shipyards. Lisnave shipyard serves commercial ship owners in Europe and is the
second largest shipyard in the world. The Company has transported to Portugal
two robotic hydroblasting systems with supporting crew to demonstrate the
operation and effectiveness of its technology during the period from October to
December, 2001. Subject to the successful demonstration of the operation of the
robotic systems, the Company believes that Tecor will purchase the demonstration
systems and order additional systems. The Company has invited additional
shipyard managers and owners to the Portugal shipyard to witness first-hand the
operation and capabilities of the Company's robotic systems. The Company
believes that a successful Portugal demonstration will represent a significant
advance in the implementation of the Company's business plan.

To continue to attract industry attention, the Company has also increased the
scope of its marketing efforts. The Company has sponsored booths at the
NorShipping Exhibition in Oslo, Norway in June 2001, and the SNAME IMExpo 2001 -
sponsored by the Society of Naval Architects and Marine Engineers in Orlando,
Florida in October 2001, and intends to sponsor a booth at the London Ship
Repair & Conversion Show in November 2001, a major maritime trade show. The
Company continually improves its website at http://www.ultrastrip.com, to
provide the most current information concerning the Company and its products.
The Company continues to regularly advertise in a number of maritime industry
publications, such as SEATRADE, MARITIME REPORTER AND ENGINEERING NEWS,
SHIPCARE, and INTERNATIONAL SHIPREPAIR NEWS. The Company's M2000 robotic system
has been featured on the covers of numerous trade publications in 2001,
including the third quarter 2001 issue of SHIPREPAIR AND CONVERSION TECHNOLOGY.

These marketing efforts, coupled with the successful completion of its current
contract with Tecor, should enable the Company to negotiate equipment purchase
contracts with interested shipyards worldwide and to perform coatings removal
services on a per-ship, per-square foot basis for shipyard operators, ship
managers and ship owners, including the U.S. government and foreign governments.
The Company also anticipates that RES will satisfy its minimum purchase
requirements established in the exclusive distributor agreement, which will
position the Company to sell additional systems and advance its market
penetration into the above-ground petroleum and water storage tank coatings
removal markets. Under the Company's business plan, future revenues are also
expected from the sale of technical support and maintenance packages, as well as
spare parts and accessories, to those shipyards that have purchased and
installed robotic hydroblasting




                                       14
<PAGE>

systems. However, no such maintenance or supply arrangements or commitments have
been entered into by the Company to date.

OPERATING EXPENSES

Operating expenses increased from $1,028,338 in the third quarter of 2000 to
$1,142,799 in the third quarter of 2001. The major components of operating
expenses include: salaries and wages, including leased labor, which increased
from $231,193 in the third quarter of 2000 to $546,825 in the third quarter of
2001, reflecting the addition of several managerial employees; research and
development, which decreased from $139,707 in the third quarter of 2000 to $0 in
the third quarter of 2001; and insurance expenses, which increased from $20,480
in the third quarter of 2000 to $91,135 in the third quarter of 2001.

LOSS FROM OPERATIONS

The Company continues to recognize losses from its operations. Loss from
operations in the third quarter of 2001 was $1,478,119 as compared to $1,254,779
for the third quarter of 2000. This increase in loss from operations is
primarily due to the increase in operating expenses described above and was
offset by a decrease in depreciation and amortization expenses, from $226,441 in
the third quarter of 2000 to $181,441 in the third quarter of 2001.

INTEREST EXPENSE

Interest expense totaled $5,161 for the third quarter of 2001, compared to
$5,726 for the third quarter in 2000.

NET LOSS

Net loss was $1,694,213 for the third quarter of 2001, compared to $1,260,505
for the third quarter of 2000. Losses per share were $0.04 and $0.04 in the
third quarter of 2001 and 2000, respectively.

LIQUIDITY AND CAPITAL RESOURCES

The Company continues to experience losses from operations and is dependent on
outside sources of funding to continue its operations.

As of September 30, 2001, the Company's cash and cash equivalents on hand were
$306,341, compared to $300,304 as of December 31, 2000. The Company's accounts
receivable were $77,724 as of September 30, 2001, compared to $0 as of December
31, 2000, reflecting the receivable due for the Company's services for Ingalls
Shipbuilding concerning the removal of coatings from the hull and sides of the
USS COLE during the third quarter of 2001, which was collected in October. The
Company also has a receivable from the sale of equipment for $830,900 as of
September 30, 2001, compared to $0 as of December 31, 2000, from Robotic
Environmental Services for the purchase of a robotic hydroblasting system.

The Company received loans of $705,590 from a significant shareholder in the
first nine months of 2001. These loans were generated to finance the acquisition
of additional equipment and to fund the continuation of operations. These loans
and certain other loans payable by the



                                       15
<PAGE>

Company to certain of its shareholders in the aggregate principal amount of
$1,120,582, as of September 30, 2001, are unsecured, non-interest bearing, and
due upon demand.

In October 2001, the Company borrowed $862,069 at an annual percentage rate of
16% from a shareholder by executing a $1,000,000 promissory note due on October
19, 2002. These funds will be used to manufacture new systems, as well as to
fund general operating expenses.

Also during the first nine months of 2001, the Company sold 1,420,282 shares of
its common stock to investors in exempt, isolated transactions and to accredited
investors as part of a private placement of common stock offered under the
exemption from the registration requirements provided by Section 4(2) of the
Securities and Exchange Act of 1933 and Regulation D under the Act for aggregate
proceeds of $3,955,681.

In October 2001, the Company issued a warrant for 100,000 shares of common stock
with a per share exercise price of $0.07 for a purchase price of $137,931. This
warrant expires on October 19, 2021.

Net cash used by operating activities was $3,770,689 for the nine months ended
September 30, 2001, compared to $1,864,772 for the nine months ended September
30, 2000. Net cash used by investing activities decreased from $1,536,251 in the
first nine months of 2000 to $821,531 in the first nine months of 2001,
primarily as a result of new equipment purchases made in connection with the
Company's work for Corrosion Engineering Services and the manufacture of systems
for the Ingalls Shipbuilding and Tecor projects, offset by the sale of equipment
to RES. Management expects that the Company will be able to use this newly
manufactured equipment in connection with future operations.

Subject to its ability to raise outside capital and generate additional
revenues, the Company may also incur additional capital expenses in the future.
The Company currently leases its headquarters facility and is planning to lease
an additional facility adjacent to its current location for manufacturing and
warehouse operations, and may consider purchasing one or both of these
facilities upon the offer of favorable terms. In addition, the Company may
invest in certain machine tools and equipment to enable it to manufacture
critical components of its robotics systems. In total, the Company estimates
that aggregate capital expenditures over the next twelve months may be as much
as $2,000,000.

The Company may also incur additional future expense in connection with its
research and development activities. To date, the Company has expended an
aggregate of $1,277,587 in connection with research and development of the
technology related to its robotic hydroblasting system and other research
projects currently in process, including $0 in research and development
expenditures in the third quarter of 2001. The Company currently has two
research and development projects in process, which management expects will be
completed on or around October 2001. The Company estimates total research and
development expenses over the next twelve months will be approximately $750,000.
The Company intends to advance the design and operation of its systems through
aggressive research and development.



                                       16
<PAGE>

Management estimates the Company's cash needs to fund its operations over the
next twelve months to be approximately $3,600,000, in addition to the $306,341
of cash and cash equivalents on hand as of September 30, 2001.

Since September 30, 2001, the Company has expended approximately $986,091 of the
cash on hand, and as of October 31, 2001, the Company's cash and cash
equivalents on hand were $397,974. Management is actively seeking additional
debt financing through multiple sources of funding.

There can be no assurance that additional financing or other sources of funds
sufficient to meet the operating needs of the Company, including its expected
funding needs over the next twelve months, will be available to the Company.

In the event that the Company is unable to obtain the requisite funds to
continue its operations as planned, it will be necessary for the Company to
curtail its expenditures and refocus its business plan with a view toward
containing costs and obtaining additional revenues. Specific actions to this end
might include a reduction in staff and a decrease in research and development
and marketing expenditures. There can be no assurance, however, that such cost
reductions will be achieved. If the Company is unable to obtain needed sources
of funds or effect sufficient cost reductions, the Company's liquidity would be
materially adversely affected and it is unlikely that the Company would continue
as a going concern. [SEE NOTE 16 TO FINANCIAL STATEMENTS.]

                           PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

        The Company is not a party to any pending litigation.

ITEM 2. CHANGES IN SECURITIES.

         There has been no change in the rights, preferences or privileges of
any security of the Company during the third quarter of 2001. During the third
quarter of 2001, the Company sold 495,173 unregistered, restricted shares of its
common stock to accredited investors for aggregate proceeds of $1,950,525 for
which the Company relied upon the exemption from the registration requirements
provided by Section 4(2) of the Securities and Exchange Act of 1933 and Rule 506
of Regulation D under the Act.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

         There has been no default on any senior security during the third
quarter of 2001.




                                       17
<PAGE>

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

         The Company held its annual meeting of stockholders on August 18, 2001,
and the holders of a majority of the Company's common shares present in person
or by proxy at the annual meeting re-elected the following individuals to the
Company's Board of Directors for an additional one-year term expiring on August
17, 2002: William A. Owens, Robert O. Baratta, John P. Odwazny, John E. Bares,
R. Gerald Buchanan, Jean-Michel Cousteau, Frank R. Esposito, John M. Gumersell,
T. Joseph Lopez, Dennis E. McGuire, and Gordon G. Kuljian. At such annual
meeting, the holders of the Company's common stock voted as follows:

<TABLE>
<CAPTION>

      Nominee                                    Total Votes For                   Total Votes Withheld
      -------                                    ---------------                   --------------------
      <S>                                           <C>                                   <C>
      Robert O. Baratta                             25,710,767                            20,500
      John E. Bares                                 25,710,767                            20,500
      R. Gerald Buchanan                            25,710,767                            20,500
      Jean-Michel Cousteau                          25,710,767                            20,500
      Frank R. Esposito                             25,710,767                            20,500
      John M. Gumersell                             25,710,767                            20,500
      Gordon G. Kuljian                             25,710,767                            20,500
      T. Joseph Lopez                               25,710,767                            20,500
      Dennis E. McGuire                             25,710,767                            20,500
      John P. Odwazny                               25,710,767                            20,500
      William A. Owens                              25,710,767                            20,500
</TABLE>


ITEM 5. OTHER INFORMATION.

In August 2001, the Company removed approximately 16,000 square feet of coatings
from the hull and sides of the USS Cole pursuant to the contract with
Ingalls Shipbuilding. The USS Cole, the US Navy destroyer attacked in Yemen in
October 2000, was under repair at the Ingalls Shipbuilding facility in
Pascagoula, Mississippi. Ingalls Shipbuilding is a division of Litton Ship
Systems, which is a unit of Northrop Grumman Corporation. The work was completed
to the satisfaction of Ingalls in early September 2001.

In September 2001, the Company signed an exclusive distributor agreement with
Robotic Environmental Services, LLC ("RES") of Baton Rouge, Louisiana for the
sale of the Company's patented robotic hydroblasting systems in Louisiana and
Texas. RES will concentrate on the



                                       18
<PAGE>
above-ground storage tank coatings removal market, as well as the oil production
facility and barge markets for coatings removal. The exclusive distributor
agreement is for a term of five years and establishes minimum purchasing
requirements necessary to maintain RES' exclusivity in the two states. The
minimum number of robotic systems required to be purchased during the term of
the agreement to maintain exclusivity is expected to generate approximately $20
million dollars in sales. RES also received an option from the Company to
acquire the exclusive distribution rights in Venezuela. To exercise this option
RES must purchase four additional robotic systems by June 30, 2002. Pursuant to
the terms of the exclusive distributor agreement and after a successful
demonstration of the Company's robotic system on an above-ground storage tank in
Louisiana, RES purchased its first robotic system in September 2001.

In October 2001, the Company undertook performance of a two-month systems and
manpower rental contract with Tecor - Tecnologia Anti-Corrosao, S.A. ("Tecor")
of Setubal, Portugal, the surface preparation contractor for the Lisnave
shipyards. Lisnave shipyard serves commercial ship owners in Europe and is the
second largest shipyard in the world. The Company has transported to Portugal
two robotic hydroblasting systems with supporting crew to demonstrate the
operation and effectiveness of its technology during the period from October to
December, 2001. Subject to the successful demonstration of the operation of the
robotic systems, the Company believes that Tecor will purchase the demonstration
systems and order additional systems. The Company has invited additional
shipyard managers and owners to the Portugal shipyard to witness first-hand the
operation and capabilities of the Company's robotic systems. The Company
believes that a successful Portugal demonstration will represent a significant
advance in the implementation of the Company's business plan.



                                       19
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

         (a)  Exhibits.

<TABLE>
<CAPTION>

Exhibit                                                                                     Prior Filing or
Number                                   Description                                      Sequential Page No.
-------                                  -----------                                      -------------------
<S>                  <C>                                                    <C>
3.1                  Articles of Incorporation, as amended                  Incorporated by reference to Exhibit 2.1 to the
                                                                            Company's Registration Statement on Form 10-SB
                                                                            (the "Form 10-SB").

3.2                  Bylaws                                                 Incorporated by reference to Exhibit 2.2 to the
                                                                            Form 10-SB.

4.1                  Certificate of Designation for the Series A            Incorporated by reference to Exhibit 3.1 to the
                     Preferred Stock                                        Form 10-SB

4.2                  Certificate of Designation for the Series B            Incorporated by reference to Exhibit 3.2 to the
                     Preferred Stock                                        Form 10-SB

10.1                 Employment Agreement - Scott Baratta                   Incorporated by reference to Exhibit 6.1 to the
                                                                            Form 10-SB

10.2                 Employment Agreement - Jacqueline K. McGuire           Incorporated by reference to Exhibit 6.2 to the
                                                                            Form 10-SB

10.3                 Employment Agreement - John P. Odwazny                 Incorporated by reference to Exhibit 6.3 to the
                                                                            Form 10-SB

10.4                 Employment Agreement - Michael R. Donn                 Incorporated by reference to Exhibit 6.4 to the
                                                                            Form 10-SB

10.5                 Employment Agreement - Kevin P. Grady                  Incorporated by reference to Exhibit 6.5 to the
                                                                            Form 10-SB

10.6                 Employment Agreement - Michael Cristoforo              Incorporated by reference to Exhibit 6.6 to the
                                                                            Form 10-SB

10.7                 Employment Agreement - Robert O. Baratta               Incorporated by reference to Exhibit 6.7 to the
                                                                            Form 10-SB

10.8                 Development Agreement with Carnegie Mellon             Incorporated by reference to Exhibit 6.8 to the
                     University Robotics Institute                          Form 10-SB

10.9                 Agreement for Robotic Coatings Removal with Wallem     Incorporated by reference to Exhibit 6.9 to the
                     Shipmanagement Ltd.                                    Form 10-SB

10.10                Consulting Agreement with T.A.S.T. Corporation         Incorporated by reference to Exhibit 6.10 to
                                                                            the Form 10-SB

10.11                Consulting Agreement with D.M. Ransom Associates,      Incorporated by reference to Exhibit 6.11 to
                     Inc.                                                   the Form 10-SB

</TABLE>

                                       20
<PAGE>
<TABLE>
<CAPTION>

<S>                  <C>                                                    <C>
10.12                1999 Outside Directors Stock Option Plan               Incorporated by reference to Exhibit 6.12 to
                                                                            the Form 10-SB

10.13                2000 Long Term Incentive Program                       Incorporated by reference to Exhibit 6.13 to
                                                                            the Form 10-SB

10.14                Full-time Employment Agreement - Robert O. Baratta     Incorporated by reference to Exhibit 10.14 to
                                                                            the Form 10Q-SB for the quarter ended June 30,
                                                                            2001

10.15                Employment Agreement - Dennis McGuire                  Incorporated by reference to Exhibit 10.15 to
                                                                            the Form 10Q-SB for the quarter ended June 30,
                                                                            2001
</TABLE>

         (b) REPORTS ON FORM 8-KSB. A report on Form 8-K was filed on October
12, 2001 announcing the execution of an exclusive distributor agreement between
the Company and Robotic Environmental Services.



                                       21
<PAGE>

                                   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.

                                       ULTRASTRIP SYSTEMS, INC.



November 14, 2001                      /s/ Robert O. Baratta
                                       -----------------------------------------
                                       Robert O. Baratta
                                       President, Co-Chief Executive Officer
                                       and Vice Chairman of the Board



November 14, 2001                      /s/ Scott R. Baratta
                                       -----------------------------------------
                                       Scott R. Baratta
                                       Senior Vice President - Finance
                                       and Chief Financial Officer
                                       (Chief Accounting Officer)






                                       22