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 MARCH 31, 2002



            [ ]       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 34997
                              ---------------------
                    (Address of principal executive offices)

                                 (772) 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: 42,528,349 shares of common stock
were outstanding as of March 31, 2002.

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


Note: The information contained in this Form 10-QSB relates only to the covered
period. The Company has not provided supplemental or revised information after
the period covered by this report, but instead has disclosed such information in
its quarterly reports on Form 10-QSB and annual reports on Form 10-KSB, as
appropriate for periods subsequent to March 31, 2002.



<PAGE>

                            ULTRASTRIP SYSTEMS, INC.

                                   FORM 10-QSB


                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

                                                                                 Page
PART I         FINANCIAL INFORMATION
<S>                                                                             <C>

      Item 1.  Financial Statements (unaudited)
                    Condensed Balance Sheet ..................................     1
                    Condensed Statements of Operations .......................     2
                    Condensed Statements of Cash Flows .......................     3
                    Notes to Condensed Financial Statements ..................     4
      Item 2.  Management's Discussion and Analysis of Financial Condition and
               Results of Operations and Plan of Operation ...................     9

PART II        OTHER INFORMATION

      Item 1.  Legal Proceedings .............................................    14
      Item 2.  Changes in Securities .........................................    14
      Item 3.  Defaults Upon Senior Securities ...............................    15
      Item 4.  Submission of Matters to a Vote of Security Holders ...........    15
      Item 5.  Other Information .............................................    15
      Item 6.  Exhibits and Reports on Form 8-K ..............................    15

               Signatures ....................................................    18

               Certifications ................................................    19
</TABLE>

                                       ii
<PAGE>


                         PART I - FINANCIAL INFORMATION


ITEM 1.    FINANCIAL STATEMENTS.

                            ULTRASTRIP SYSTEMS, INC.
                        UNAUDITED CONDENSED BALANCE SHEET
<TABLE>
<CAPTION>


-----------------------------------------------------------------------------------------------------------------------
March 31,                                                                                                      2002
-----------------------------------------------------------------------------------------------------------------------
<S>                                                                                                       <C>
CURRENT ASSETS
   Cash and cash equivalents                                                                              $      6,966
   Accounts receivable                                                                                          96,895
   Inventories                                                                                                 728,611
   Prepaid expenses and other                                                                                   50,131
----------------------------------------------------------------------------------------------------------------------

TOTAL CURRENT ASSETS                                                                                           882,603

PROPERTY AND EQUIPMENT, NET                                                                                  2,396,509

PATENTS, NET                                                                                                    96,364
----------------------------------------------------------------------------------------------------------------------

                                                                                                          $  3,375,476
======================================================================================================================

LIABILITIES, REDEEMABLE CONVERTIBLE CUMULATIVE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
   Accounts payable and accrued expenses                                                                  $  1,831,506
   Accounts payable - related parties                                                                        1,072,555
   Notes payable to related parties - current portion                                                        1,477,917
   Notes payable - current portion                                                                             200,146
----------------------------------------------------------------------------------------------------------------------

TOTAL CURRENT LIABILITIES                                                                                    4,582,124

LONG-TERM DEBT:
   Notes payable to related parties, less current portion                                                      651,937
   Notes payable, less current portion                                                                          89,390
----------------------------------------------------------------------------------------------------------------------

TOTAL LIABILITIES                                                                                            5,323,451

REDEEMABLE CONVERTIBLE CUMULATIVE PREFERRED STOCK SERIES A
   28 shares outstanding, $25,000 per share redemption amount plus dividends in arrears                      1,125,098

REDEEMABLE CONVERTIBLE CUMULATIVE PREFERRED STOCK SERIES B
   1,054 shares outstanding, $2,500 per share redemption amount plus dividends in arrears                    3,048,150

COMMITMENTS AND CONTINGENCIES (Note 8)

STOCKHOLDERS' DEFICIT

COMMON STOCK, $0.01 par value; 100,000,000 shares authorized; 42,528,349 shares issued and outstanding         425,284
ADDITIONAL PAID-IN CAPITAL                                                                                  18,941,191
ADDITIONAL PAID-IN CAPITAL  - UNISSUED SUBSCRIBED SHARES                                                        75,000
DEFERRED COMPENSATION                                                                                          (59,468)
ACCUMULATED DEFICIT                                                                                        (25,503,230)
----------------------------------------------------------------------------------------------------------------------

TOTAL STOCKHOLDERS' DEFICIT                                                                                 (6,121,223)
----------------------------------------------------------------------------------------------------------------------

                                                                                                          $  3,375,476
======================================================================================================================
</TABLE>


                                       1
<PAGE>



                            ULTRASTRIP SYSTEMS, INC.

                  UNAUDITED CONDENSED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
For the three months ended March 31,                        2002           2001
-----------------------------------------------------------------------------------
<S>                                                    <C>             <C>
REVENUES:
     Equipment sales                                   $     72,585    $         --
     Hydrojetting contracts                                 227,161         659,800
-----------------------------------------------------------------------------------

TOTAL REVENUES                                              299,746         659,800
-----------------------------------------------------------------------------------

OPERATING EXPENSES:
     Cost of equipment sales                                 39,401              --
     Cost of hydrojetting contracts                          96,977         563,525
     Selling, general and administrative,
         excluding non-cash compensation expense          1,127,981       1,171,744
     Non-cash compensation expense                          478,708       1,860,570
-----------------------------------------------------------------------------------

TOTAL OPERATING EXPENSES                                  1,743,067       3,595,839
-----------------------------------------------------------------------------------

LOSS FROM OPERATIONS                                     (1,443,321)     (2,936,039)

OTHER (INCOME) EXPENSE:
     Other income                                            (4,013)             --
     Interest expense                                        51,507           1,996
-----------------------------------------------------------------------------------

NET LOSS                                                 (1,490,815)     (2,938,035)

PREFERRED STOCK DIVIDENDS                                   (94,972)       (104,250)
-----------------------------------------------------------------------------------

NET LOSS APPLICABLE TO COMMON STOCK                    $ (1,585,787)   $ (3,042,285)
===================================================================================

NET LOSS PER COMMON SHARE (BASIC AND DILUTED)          $      (0.04)   $      (0.07)
===================================================================================

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING     42,518,482      41,079,525
===================================================================================
</TABLE>


                                       2
<PAGE>


                            ULTRASTRIP SYSTEMS, INC.
                  UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>

For the three months ended March 31,                                                 2002            2001
--------------------------------------------------------------------------------------------------------------
<S>                                                                               <C>             <C>
OPERATING ACTIVITIES:
   Net loss                                                                       $(1,490,815)    $(2,938,035)


   Adjustments to reconcile net loss to net cash used in operating activities:
       Depreciation and amortization                                                  201,897         181,441
       Accretion of discount on notes payable                                          44,833              --
       Common stock issued for services                                                    --       2,232,000
       Issuance of equity instruments for services                                         --         163,770
       Non-cash compensation expense (benefit)                                        472,600        (535,200)
       Deferred compensation expense                                                    6,108              --
   Change in operating assets and liabilities:
         Accounts receivable                                                          (89,096)       (659,800)
         Inventories                                                                 (271,933)             --
         Prepaid expenses and other                                                    58,409         (51,490)
         Accounts payable and accrued expenses                                        (58,304)        350,169
         Accounts payable-related parties                                             341,328              --
         Deferred revenue                                                            (125,000)             --
-------------------------------------------------------------------------------------------------------------

Net cash used in operating activities                                                (909,973)     (1,257,145)
-------------------------------------------------------------------------------------------------------------

INVESTING ACTIVITIES:
   Purchase of property and equipment                                                 (12,259)       (371,934)
   Repayment of note receivable from officer                                           50,000              --
-------------------------------------------------------------------------------------------------------------

Net cash provided by (used in) investing activities                                    37,741        (371,934)
-------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES:
   Proceeds from issuance of long-term debt and warrants                              200,000          24,857
   Repayment of long-term debt                                                         (2,236)         (3,915)
   Proceeds from issuance of long-term debt to related parties                        387,500         454,360
   Repayment of long-term debt to related parties                                    (250,000)             --
   Proceeds from issuance of preferred stock                                               --         200,000
   Proceeds from issuance of common stock                                                  --       1,670,830
-------------------------------------------------------------------------------------------------------------

Net cash provided by financing activities                                             335,264       2,346,132
-------------------------------------------------------------------------------------------------------------

Net (decrease) increase in cash and cash equivalents                                 (536,968)        717,053

Cash and cash equivalents, beginning of year                                          543,934         300,304
-------------------------------------------------------------------------------------------------------------

Cash and cash equivalents, end of period                                          $     6,966     $ 1,017,357
-------------------------------------------------------------------------------------------------------------
</TABLE>

                              See Note 9 for supplemental cash flow disclosures.

                                       3
<PAGE>

                            ULTRASTRIP SYSTEMS, INC.
               NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

1.      SUMMARY OF SIGNIFICANT
        ACCOUNTING POLICIES

        BASIS OF PRESENTATION     The accompanying unaudited condensed financial
                                  statements have been prepared in accordance
                                  with accounting principles generally accepted
                                  in the United States of America for interim
                                  financial information and with Item 310 of
                                  Regulation S-B. Accordingly, they do not
                                  include all of the information and footnotes
                                  required by accounting principles generally
                                  accepted in the United States of America for
                                  complete financial statements. The financial
                                  statements reflect all normal recurring
                                  adjustments which, in the opinion of
                                  management, are considered necessary for a
                                  fair presentation of the results for the
                                  periods shown. 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 audited 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, 2001.

                                  Certain amounts in prior periods have been
                                  reclassified to conform with the current
                                  period presentation.


2.      GOING CONCERN             The accompanying condensed financial
                                  statements were prepared assuming that the
                                  Company will continue as a going concern. This
                                  basis of accounting contemplates the
                                  realization of assets and the satisfaction of
                                  liabilities in the normal course of
                                  operations. During the three months ended
                                  March 31, 2002, the Company incurred losses of
                                  approximately $1.6 million, had a working
                                  capital deficiency of $3.7 million, had
                                  outstanding redeemable convertible preferred
                                  stock that would become eligible for
                                  redemption at the holder's option for $4.3
                                  million [including accrued dividends] after
                                  June 2002, and had not attained a level of
                                  revenues sufficient to support recurring
                                  expenses. These factors, among others, raise
                                  substantial doubt about the Company's ability
                                  to continue as a going concern.

                                  The Company's continued existence is
                                  dependent upon its ability to resolve its
                                  liquidity problems, principally by obtaining

                                       4
<PAGE>
                            ULTRASTRIP SYSTEMS, INC.
               NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

                                  additional debt financing and equity capital,
                                  and ultimately achieving profitable
                                  operations. While pursuing additional debt
                                  and equity funding, the Company must continue
                                  to operate on limited cash flow generated
                                  internally.

                                  The condensed financial statements do not
                                  include any adjustments to reflect the
                                  possible future effects on the recoverability
                                  and classification of assets or the amounts
                                  and classification of liabilities that may
                                  result from the inability of the Company to
                                  continue as a going concern. There are no
                                  assurances that the Company will be
                                  successful in achieving the above plans, or
                                  that such plans, if consummated, will enable
                                  the Company to obtain profitable operations
                                  or continue as a going concern.


3.      NOTE RECEIVABLE           In March 2002, the Company collected a $50,000
        FROM OFFICER              unsecured demand note from an officer, which
                                  included interest at 6% per annum.


4.      NOTES PAYABLE TO          Notes payable to related parties consist of
        RELATED PARTIES           the following:
<TABLE>
<CAPTION>

                                  March 31,                                                                 2002
                                  ---------------------------------------------------------------------------------
<S>                               <C>                                                           <C>

                                  Unsecured notes payable to
                                  employee/shareholder, interest at prime plus 2%
                                  (6.75% at March 31, 2002), originally due as
                                  follows: $450,000 plus accrued interest
                                  repayable on March 31, 2002, balance due March
                                  1, 2003. As a result of the Company not making
                                  a $450,000 payment due March 31, 2002, the creditor can        $       584,044
                                  now demand immediate repayment.

                                  Unsecured note payable to employee/shareholder, interest
                                  at prime plus 2% (6.75% at March 31, 2002), due April                  517,893
                                  10, 2003

                                  $1,000,000 note payable to shareholder/Advisory Board
                                  member, balloon payment due on October 19, 2002 in the
                                  amount of $1,000,000 including interest at 16%, secured
                                  by all existing equipment and machinery utilized to                    907,917
                                  manufacture the Company's product, net of unamortized
                                  discount

                                  Unsecured note payable to employee/shareholder, interest
                                  at prime plus 2% (6.75% at March 31, 2002), due December                50,000
                                  27, 2002

                                  Unsecured notes payable to Director, interest at prime
                                  plus 2% (6.75% at March 31, 2002), due July 31, 2003                    70,000
                                  ---------------------------------------------------------------------------------
                                                                                                       2,129,854

                                  LESS CURRENT PORTION                                                (1,477,917)
                                  ---------------------------------------------------------------------------------

                                                                                                 $       651,937
                                  =================================================================================
</TABLE>

                                       5
<PAGE>
                            ULTRASTRIP SYSTEMS, INC.
               NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

5.      NOTES PAYABLE             A promissory note was signed on February 21,
                                  2002 to borrow up to $200,000. The loan is due
                                  on August 25, 2002. The loan is guaranteed by
                                  the President of the Company and his spouse.
                                  On February 26, 2002 the Company borrowed
                                  $200,000. In this connection, the Company
                                  granted warrants to acquire 8,001 shares of
                                  common stock and valued such warrants at
                                  $14,000 based on the relative fair value of
                                  the warrants. The warrants are exercisable at
                                  $0.07 per share, were fully vested at the date
                                  of grant and expire in 2022. As such the
                                  Company recorded $186,000 as debt, net of the
                                  allocation of the proceeds to the warrants,
                                  which is included in additional paid-in
                                  capital in the accompanying unaudited
                                  condensed balance sheet of $14,000. The
                                  Company amortizes to interest expense the
                                  value ascribed to the warrants over the term
                                  of the debt.


6.      COMMON STOCK              During the three months ended March 31, 2002,
                                  145,670 shares of Common Stock were issued
                                  upon the conversion of Series A and Series B
                                  Redeemable, Convertible, Cumulative Preferred
                                  Stock.

                                  Shares reserved for issuance
                                  ----------------------------

                                  At March 31, 2002, 19,820,091 shares of
                                  Common Stock were reserved for issuance under
                                  the Company's two fixed stock option plans,
                                  outstanding non-plan options, warrants and
                                  upon conversion of the outstanding Series A
                                  and Series B Redeemable Convertible
                                  Cumulative Preferred Stock.


7.      LOSS PER SHARE            Basic loss per common share is computed on the
                                  basis of the weighted average number of common
                                  shares outstanding during each period
                                  presented. Diluted loss per common share is
                                  computed on the basis of the weighted average
                                  number of common shares and dilutive
                                  securities outstanding. Dilutive securities
                                  having an antidilutive effect on diluted loss
                                  per common share are excluded from the
                                  calculation.

                                  The statement of operations for the three
                                  months ended March 31, 2001 has been restated
                                  to correct a mechanical error in the
                                  computation of the non-cash compensation
                                  amount provided for variable options with
                                  cashless features. Such amount was previously
                                  reported as a benefit of $466,762 and has been
                                  adjusted to a benefit of $535,200. Likewise,
                                  net loss per common share was previously
                                  reported as $(0.08) and has been adjusted to
                                  $(0.07). In addition, a reclassification has
                                  been made between accumulated deficit and
                                  additional paid-in capital at January 1, 2001
                                  of $2.81 million.


                                       6
<PAGE>
                            ULTRASTRIP SYSTEMS, INC.
               NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

                                  The following reconciles the components of
                                  the loss per common share computation:
<TABLE>
<CAPTION>

                                  For the three months ended March 31,                        2002                             2001
                                  --------------------------------------------------------------------------------------------------

                                                                 Income      Weighted      Per-      Income     Weighted       Per-
                                                                 (Loss)       Average     Share      (Loss)      Average      Share
                                                            (Numerator)        Shares    Amount  Numerator)       Shares     Amount
                                                                         (Denominator)                      (Denominator)
                                  --------------------------------------------------------------------------------------------------
<S>                                                          <C>             <C>        <C>      <C>           <C>         <C>
                                  Loss per common share
                                      Net (loss) available
                                          to common
                                          shareholders       $(1,585,787)    42,518,482 $ (0.04) (3,042,285)   41,079,525   $ (0.07)

                                  Effect of Dilutive
                                      Securities:
                                          Stock
                                          options/warrants            --            --      --           --            --       --
                                  -------------------------------------------------------------------------------------------------

                                  Net (loss) available
                                      to common
                                      shareholders
                                      plus assumed
                                      conversions            $(1,585,787)    42,518,482 $ (0.04) (3,042,285)   41,079,525   $ (0.07)
                                  =================================================================================================
</TABLE>

                                  The Company's outstanding options and
                                  warrants to acquire common stock and shares
                                  of common stock issuable upon conversion of
                                  outstanding redeemable convertible cumulative
                                  preferred stock (all aggregating 16,390,091
                                  and 19,966,560 shares of common stock at
                                  March 31, 2002 and 2001, respectively) are
                                  not included in the computation of loss per
                                  common share because the effects of inclusion
                                  would be anti-dilutive.


8.      COMMITMENT AND            In December 2001, the Company filed a
        CONTINGENCIES             complaint in the Circuit Court in and for
                                  Palm Beach County, Florida against Mark H.
                                  Mirkin and Mirkin & Woolf, P.A., the Company's
                                  former corporate and securities counsel and
                                  transfer agent, seeking a declaration from the
                                  court that a warrant to purchase 1,653,800
                                  shares of the Company's common stock for
                                  $0.625 per share was improperly obtained by
                                  Mirkin & Woolf, P.A. in April 1998 and is
                                  void. Mirkin & Woolf attempted to exercise the
                                  warrant in April of 2001. The Company has not
                                  issued the underlying shares of common stock.
                                  In May 2002, the complaint was amended to
                                  remove Mark H. Mirkin as an individual
                                  defendant. The Company and its counsel believe
                                  that they will prevail in this action and that
                                  it will suffer no materially adverse impact as
                                  a result of Mirkin & Woolf's counterclaims
                                  with respect to the warrant.

                                  The Company has commitments with NREC and
                                  Carnegie Mellon University, amounting to
                                  approximately $464,000 for the purchase of
                                  equipment.

                                       7
<PAGE>


9.      SUPPLEMENTAL CASH FLOW    Supplemental disclosure is as follows:
        INFORMATION
<TABLE>
<CAPTION>

                                  For the three months ended March 31,               2002           2001
                                  ---------------------------------------------------------------------------

<S>                                                                             <C>           <C>
                                  Cash paid for interest                        $     3,372   $      1,996

                                  Non-cash investing and financing activities:

                                  Conversion of redeemable, convertible,
                                       cumulative preferred stock to common     $   155,000   $    255,000
                                       stock

                                  Accrued preferred stock dividends             $    94,972   $    104,250
</TABLE>


                                       8
<PAGE>


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

THREE MONTHS ENDED MARCH 31, 2002 COMPARED TO THREE MONTHS ENDED MARCH 31, 2001

REVENUES
--------
Revenues were $299,746 for the three months ended March 31, 2002, as compared to
$659,800 for the three months ended March 31, 2001. Revenues for 2002 were
generated by two primary lines of business. These primary lines of business
include equipment sales and service contracts. In this connection, the Company
had equipment sales of $72,585 and service contract revenue of $227,161 for the
three months ended March 31, 2002, while revenues for the three months ended
March 31, 2001 were generated solely by hydrojetting service contracts.
Service contract revenue for the period ended March 31, 2002 was generated from
the completion of the Company's demonstration contract with Tecor - Tecnologia
Anti-Corrosao, S.A. of Portugal (Tecor), the surface preparation contractor for
the Lisnave shipyard. Upon completion of this contract on March 31, 2002, the
Company's automated hydrojetting equipment had been used for surface
preparation work on seven different vessels in the Lisnave shipyard, ranging
from crude oil carriers to cruise ships. The Company currently has no pending
orders for new service contracts or equipment purchases with this customer.

OPERATING EXPENSES
------------------
Operating expenses decreased from $3,595,839 for the three months ended March
31, 2001 to $1,743,067 for the three months ended March 31, 2002. The primary
components of operating expenses were cost of equipment sales, cost of service
contracts, selling, general and administrative expenses and non-cash
compensation expenses.

Cost of equipment sales increased from $0 for the three months ended March 31,
2001 to $39,401 for the three months ended March 31, 2002 due to the cost of
procuring spare parts and equipment which were sold to a customer. Cost of
equipment sales was 54% of sales. The Company believes that cost of equipment
sales as a percentage of sales will increase in the future as the cost of
equipment sales includes a greater mix of lower-margin, full system sales, in
contrast to the sale of higher-margin spare parts. Cost of service contracts
from hydrojetting decreased from $563,525 for the three months ended March 31,
2001 to $96,977 for the three months ended March 31, 2002 because of a lower
volume of service contracts performed. Cost of hydrojetting service contracts

                                       9
<PAGE>

decreased by 42%, from 85% of sales in 2001 to 43% of sales in 2002. This
decrease was attributable to improved operational planning and execution. The
Company is now more efficient in the operation of its automated systems,
requiring less expenditure for consumable parts and labor to perform its
services. If the Company is able to generate a consistent stream of substantial
service contracts, the Company expects this percentage relationship to stay
relatively stable in the future as the Company will have greater opportunity to
maintain its operational planning and execution improvements.

Selling, general and administrative expenses, excluding non-cash compensation,
decreased from $1,171,744 for the three months ended March 31, 2001 to
$1,127,981 for the three months ended March 31, 2002. The decrease is a result
of the Company's planned reduction in and deferral of some executive salaries,
as well as a reduction in discretionary expenses.

Non-cash compensation expense amounted to $478,708 for the period ended March
31, 2002, a decrease of $1,381,862 from the prior comparable period. Non-cash
stock compensation expense arises due to variable option accounting charges
pursuant to APB 25 in connection with stock options granted to employees and
directors with cashless conversion features. The number of shares of common
stock that may be acquired by the option holder cannot be determined prior to
the exercise of the option, therefore estimates of compensation expense for
these options are recorded based upon the estimated fair value of the stock at
each intervening financial statement date.

LOSS FROM OPERATIONS
--------------------
Loss from operations for the three months ended March 31, 2002 was $1,443,321 as
compared to $2,936,039 for the three months ended March 31, 2001, largely as a
result of the decreases in operating expenses described above.

INTEREST EXPENSE
----------------
Interest expense increased from $1,996 to $51,507 for the three months ended
March 31, 2001 and 2002, respectively. This increase was primarily attributable
to interest accretions related to the Company's $1 million note payable with a
shareholder/Advisory Board member.

PREFERRED STOCK DIVIDENDS
-------------------------
Preferred Stock dividends were $94,972 for the three months ended March 31, 2002
and $104,250 for the three months ended March 31, 2001. These dividends reflect
Company obligations to preferred shareholders but have not been paid.

NET LOSS APPLICABLE TO COMMON STOCK
-----------------------------------
Net loss applicable to Common Stock was $1,585,787 for the three months ended
March 31, 2002, compared to $3,042,285 for the three months ended March 31,
2001. Loss per common share was $0.04 for the three months ended March 31, 2002
and $0.07 for the three months ended March 31, 2001.

                                       10
<PAGE>



LIQUIDITY AND CAPITAL RESOURCES

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

At March 31, 2002, the Company's cash and cash equivalents on hand were $6,966,
compared to $543,934 at December 31, 2001. This decrease in cash and cash
equivalents was primarily due to the Company's net loss, and increases in
deferred revenue and inventories, offset partly by borrowings from related and
non-related parties, described below. In light of this decrease, Management
recognizes that the Company has a continuing need to raise capital to fund its
daily operations and research and development activities.

Since inception, the Company has relied principally upon the proceeds of private
equity financings and loans to fund its working capital requirements and capital
expenditures. Net cash used in operating activities was $909,973 for the three
months ended March 31, 2002, compared to $1,257,145 for the three months ended
March 31, 2001. This decrease resulted from decreases in the Company's net loss,
offset by increases in deferred revenue and inventories.

The Company's net cash provided by (used in) investing activities increased from
$(371,934) for the three months ended March 31, 2001 to $37,741 for the three
months ended March 31, 2002, primarily as a result of a decrease in new
machinery and equipment purchases.

The Company's net cash provided by financing activities decreased by
approximately $2 million to $335,264 for the three months ended March 31, 2002
from $2,346,132 for the three months ended March 31, 2001. The decrease is
primarily attributable to a reduction in $1.9 million proceeds from the issuance
of common stock and preferred stock, as well as repayments of long-term debt to
related parties of $250,000, offset by an increase in new borrowings from
related parties of $387,500 and new borrowings from unrelated parties of
$200,000.

The Company lacks assured available financial resources to meet its March 31,
2002 working capital deficit of $3,699,521 and future operating costs.

Due to insufficient cash generated from operations, the Company presently does
not have cash or other resources available to pay its already incurred debts,
accounts payable and other liabilities. Some of the Company's debts are past
due, and the preferred stock is presently redeemable at the option of the
shareholders. Obligations are being met on a month-to-month basis as cash
becomes available. There can be no assurances that the Company's present flow of
cash will be sufficient to meet current and future obligations. The Company has
incurred losses since its inception, and continues to require additional capital
to fund operations and development. As such, the Company's ability to pay its
already incurred obligations is mostly dependent on the Company raising
additional capital in the form of equity or debt.

The Company's short-term and long-term liquidity requirements are expected to
result from working capital needs to purchase inventory, retire existing trade
liabilities and redeemable preferred stock and to pay other operating expenses.

                                       11
<PAGE>

Although the Company cannot accurately predict the precise timing of its future
capital expenditures, the Company estimates that it will need to expend over $4
million, primarily for research and development and operating expenses, within
the next twelve months.

PLAN OF OPERATIONS

The Company's plan of operation for the next twelve months continues to be to
focus on sales and marketing efforts to place its automated hydrojetting
systems into use in the ship maintenance and repair and above ground storage
tank maintenance markets. The Company believes the most effective marketing
effort for its product will be to conduct live demonstrations at shipyards and
storage tank facilities in the United States and in shipyards throughout the
world which are leaders in environmental protection, thereby introducing the
marine industry to automated hydrojetting and demonstrating its superiority to
existing surface preparation methods and competitive technologies.

The Company offers three primary sales options: outright equipment sales,
long-term rental contracts, and contract services. By offering this variety of
alternatives, customers can select the relationship that best matches their
capital allocation plan. The Company also intends to increase the focus of its
marketing efforts on the U.S. market. The Company believes that environmental
regulations are currently a very strong influence on shipyard operations in the
United States and may provide an external impetus to shipyards to carefully
consider the Company's products. No such agreements or commitments are currently
in place. Under the Company's business plan, future revenues are also expected
from the sale of spare parts and accessories to those customers that have
purchased or rented robotic hydrojetting systems. No such spare parts purchase
agreement or commitment has been made to date.

In the event that the Company executes future sales orders or rental contracts,
the Company has had discussions with lenders willing to provide project finance
funds to cover the costs associated with equipment manufacture. The proceeds
from orders or contracts, the Company's work-in-process and the manufactured
equipment will serve as collateral.

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 automated hydrojetting systems in Louisiana and
Texas and the purchase of one automated hydrojetting system. The distribution
agreement is for a term of five years and establishes minimum purchase
requirements and other terms necessary to maintain RES' exclusivity in the two
states. RES also received an option from the Company to acquire the exclusive
distribution rights in Venezuela. To exercise this option RES was required to
purchase four additional automated hydrojetting systems by June 30, 2002,
which it has failed to do. RES also failed to meet certain contract requirements
under this distribution agreement in March 2002. The Company informed RES that
it no longer holds exclusive distributor status in Louisiana and Texas. While
the foregoing default may materially affect the Company's future sales to RES,

                                       12
<PAGE>

it also provided the Company with an opportunity to recover the distribution
rights to the exclusive territories and afforded greater flexibility in
negotiating with future customers and distributors. The Company has been in
discussion with RES to explore ways to facilitate the sale of its automated
hydrojetting systems.

Should the number of purchase orders or rental contracts be less than currently
forecasted, or should the sales or rental prices be less than currently
forecasted, there can be no assurance that the Company will be able to generate
sufficient cash flow to sustain operations and meet all payable obligations for
the next twelve months.

The Company has continued to reduce costs. In addition to deferring salaries for
some members of senior management since February 2002, the Company has also
reduced annual salaries for three members of senior management by $300,000, a
reduction of 29% in total senior management salaries. The Company will also
reduce its advertising, travel and entertainment, consulting and office
expenses, among other areas, for further cost reductions.

The Company does not currently anticipate any significant changes in its total
number of employees over the next twelve months. However, should the demand for
the Company's products or contract services increase significantly, the Company
anticipates the need to hire additional employees in the areas of equipment
operation for the performance of contract services, equipment maintenance, field
support and component and spare parts manufacturing.

The Company will seek additional equity capital from private offerings. There is
no assurance that the Company will be able to raise such additional capital
during the next twelve months. If the Company is unable to obtain the necessary
additional capital, it may be required to change the proposed business plan and
decrease the planned operations, which could have a material adverse effect upon
the business, financial condition, or results of operations.

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, research and development and marketing
expenditures. There can be no assurance, however, that such cost reductions will
be achieved.

GOING CONCERN

The Company's independent auditors stated in their reports that the financial
statements of the Company for the years ended December 31, 2001 and 2000 were
prepared assuming that the Company will continue as a going concern. For the
years ended December 31, 2001 and 2000, the Company incurred net annual losses
of $4,901,465 and $12,329,568, respectively, had a working capital deficit of
$2,888,483 and $483,670, respectively, and had outstanding redeemable preferred
stock that would become eligible for redemption at the holder's option after
June 2002. These factors raise substantial doubt about the ability of the
Company to continue as a going concern. Management believes that resources will
be available from private sources in 2003 to carry out its business plan
described above. The aforementioned financial statements do not include any
adjustments relating to the recoverability and classification of recorded
assets, or the amounts and classification of liabilities that might be necessary
in the event the Company cannot continue in existence.

                                       13
<PAGE>

Management has established plans intended to increase the sales of the Company's
products. Management intends to seek new capital from new equity securities and
loans to provide funds needed to increase liquidity, fund growth and implement
its business plan; however, no assurance can be given that the Company will be
able to raise any additional capital. 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.



                           PART II - OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS.

On December 21, 2001, the Company filed a complaint in the Circuit Court in and
for Palm Beach County, Florida against Mark H. Mirkin and Mirkin & Woolf, P.A.,
the Company's former corporate and securities counsel and transfer agent,
seeking a declaration from the court that a warrant to purchase 1,653,800 shares
of the Company's common stock for $0.625 per share obtained by Mirkin & Woolf,
P.A. in April 1998 is void. In May 2002, the Company amended the complaint to
remove Mr. Mirkin as an individual defendant in the complaint. Mirkin & Woolf
attempted to exercise the warrant in April 2001, but shares have not been issued
as the exercise is subject to the resolution of the aforementioned action. The
Company is also seeking the return of all corporate books, files and stock
records, including original stock transfer records, which the defendants
continue to hold in their possession. The Company believes, after consultation
with its counsel, that it will prevail in this action and that it will suffer no
materially adverse impact as a result of Mirkin & Woolf's claims with respect to
the warrant.


ITEM 2.    CHANGES IN SECURITIES.

There has been no change in the rights, preferences or privileges of any
security of the Company during the first quarter of 2002. During the first three
months of 2002, three holders of an aggregate of 6 shares of Series A Redeemable
Convertible Cumulative Preferred Stock and one holder of an aggregate of 2
shares of Series B Redeemable Convertible Cumulative Preferred Stock exercised
their conversion rights and were issued 144,000 and 1,670, respectively,
restricted, unregistered shares of Common Stock.

In addition, during the three months ended March 31, 2002, options to purchase
20,000 shares of the Company's Common Stock were issued to employees, options to
purchase 8,001 shares of the Company's Common Stock were issued to service
providers, and options to purchase 250,000 shares of the Company's Common Stock
were forfeited by a member of the Board of Directors. The new options issuances
have exercise prices ranging from $0.07 to $1.76 per share and are exercisable
through 2022.


                                       14
<PAGE>

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

On March 31, 2002, the Company defaulted on a promissory note to an
employee/shareholder by missing a required payment of $450,000 for accrued
interest and principal to be made on March 31, 2002. As a result of the Company
not making the payment due by March 31, 2002, the creditor can demand immediate
repayment of the entire debt. Total payments of $450,000 were made through
October 2002.


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

There were no matters submitted to a vote of security holders during the three
months ended March 31, 2002.


ITEM 5.  OTHER INFORMATION.

None.


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.
</TABLE>


                                       15
<PAGE>
<TABLE>
<CAPTION>
<S>                  <C>                                                   <C>
10.1                 Employment Agreement - Scott Baratta                   Incorporated by reference to Exhibit 10.1 to
                                                                            the Form 10-SB.
10.2                 Employment Agreement - Jacqueline K. McGuire           Incorporated by reference to Exhibit 10.2 to
                                                                            the Form 10-SB.
10.3                 Employment Agreement - John P. Odwazny                 Incorporated by reference to Exhibit 10.3 to
                                                                            the Form 10-SB.
10.4                 Employment Agreement - Michael R. Donn                 Incorporated by reference to Exhibit 10.4 to
                                                                            the Form 10-SB.
10.5                 Employment Agreement - Kevin P. Grady                  Incorporated by reference to Exhibit 10.5 to
                                                                            the Form 10-SB.
10.6                 Employment Agreement - Michael Cristoforo              Incorporated by reference to Exhibit 10.6 to
                                                                            the Form 10-SB.
10.7                 Employment Agreement - Robert O. Baratta               Incorporated by reference to Exhibit 10.7 to
                                                                            the Form 10-SB.
10.8                 Development Agreement with Carnegie Mellon             Incorporated by reference to Exhibit 10.8 to
                     University Robotics Institute                          the Form 10-SB.
10.9                 Agreement for Robotic Coatings Removal with Wallem     Incorporated by reference to Exhibit 10.9 to
                     Shipmanagement Ltd.                                    the Form 10-SB.
10.10                Consulting Agreement with T.A.S.T. Corporation         Incorporated by reference to Exhibit 10.10 to
                                                                            the Form 10-SB.
10.11                Consulting Agreement with D.M. Ransom Associates,      Incorporated by reference to Exhibit 10.11 to
                     Inc.                                                   the Form 10-SB.
10.12                1999 Outside Directors Stock Option Plan               Incorporated by reference to Exhibit 10.12 to
                                                                            the Form 10-SB.
10.13                2000 Long Term Incentive Program                       Incorporated by reference to Exhibit 10.13 to
                                                                            the Form 10-SB.
10.14                License Agreement dated July 17, 2000 by and           Incorporated by reference to Exhibit 10.14 to
                     between UltraStrip Systems, Inc. and Ocean Futures     the Form 10-SB.
                     Society
10.15                Promissory Note executed by UltraStrip Systems,        Incorporated by reference to Exhibit 10.15 to
                     Inc. in favor of Kevin P. Grady dated March 16, 2001   the Form 10-SB.
10.16                Full-time Employment Agreement - Robert O. Baratta     Incorporated by reference to Exhibit 10.14 to
                                                                            the Form 10-QSB for the quarter ended March 31,
                                                                            2001.
10.17                Employment Agreement - Dennis McGuire                  Incorporated by reference to Exhibit 10.15 to
                                                                            the Form 10-QSB for the quarter ended March 31,
                                                                            2001.
</TABLE>

                                       16
<PAGE>
<TABLE>
<CAPTION>
<S>                  <C>                                                   <C>
10.18                Consulting Agreement with George Sterner               Incorporated by reference to Exhibit 10.18 to
                                                                            the Form 10-KSB for the year ended December 31,
                                                                            2001.
10.19                Consulting Agreements (4)                              Incorporated by reference to Exhibit 2.3 to the
                                                                            Form 10-SB.
10.20                Option to Purchase Assets and License Agreement        Incorporated by reference to Exhibit 2.6 to the
                                                                            Form 10-SB
10.21                Subcontract Agreement dated February 9, 2001 by and    Incorporated by reference to Exhibit 10.21 to
                     between Corrosion Engineering Services, Inc. and       the Form 10-QSB/A for the quarter ended March
                     UltraStrip Systems, Inc.                               31, 2001.
10.22                Lease and Option to Purchase Agreement dated August    Incorporated by reference to Exhibit 10.22 to
                     9, 2001 between UltraStrip Systems, Inc. and Tecor     the Form 10-QSB/A for the quarter ended
                     - Tecnologia Anticorrosao S.A.                         September 30, 2001.
10.23                Exclusive Distribution Agreement dated September       Incorporated by reference to Exhibit 10.23 to
                     11, 2001 by and between UltraStrip Systems, Inc.       the Form 10-QSB/A for the quarter ended
                     and Robotic Environmental Services, L.L.C.             September 30, 2001.
10.24                Promissory Note between UltraStrip Systems, Inc.       Filed herewith.
                     and Michael Cristoforo dated December 27, 2001
10.25                Promissory Note between UltraStrip Systems, Inc.       Filed herewith.
                     and Dennis McGuire dated March 1, 2002
10.26                Promissory Note between UltraStrip Systems, Inc.       Filed herewith.
                     and George Sterner dated March 1, 2002
</TABLE>


(B) REPORTS ON FORM 8-K. Two reports were filed on Form 8-K during the three
months ended March 31, 2002. On March 5, 2002 and March 14, 2002, the Company
filed Forms 8-K disclosing that, on February 15, 2002, the relationship with
Barry I. Hechtman, P.A. as principal independent accountants for the Company was
terminated and, on March 8, 2002, BDO Seidman, LLP was appointed.


                                       17
<PAGE>




                                   SIGNATURES

         In accordance with the requirements of the Securities and Exchange Act
of 1934, as amended, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.


                                       ULTRASTRIP SYSTEMS, INC.

         June 4, 2003                  /s/ Robert O. Baratta
                                       ----------------------------------------
                                       Robert O. Baratta
                                       President, Chief Executive Officer
                                       and Vice Chairman of the Board


         June 4, 2003                  /s/ Scott R. Baratta
                                       ----------------------------------------
                                       Scott R. Baratta
                                       Senior Vice President - Finance
                                       (Chief Financial and Accounting Officer)


                                       18
<PAGE>

                                  CERTIFICATION

In connection with the Quarterly Report of UltraStrip Systems, Inc. (the
"Company") on Form 10-QSB for the period ended March 31, 2002, as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), the
undersigned certify pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
to his knowledge that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of
the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.



/s/ Robert O. Baratta
----------------------------------------
President and Chief Executive Officer


/s/ Scott R. Baratta
----------------------------------------
Senior Vice President - Finance (Chief Financial Officer)

                                       19
<PAGE>

                                 CERTIFICATIONS

I, Robert O. Baratta, certify that:

1. I have reviewed this quarterly report on Form 10-QSB of UltraStrip Systems,
Inc;

2. Based on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the small business
issuer as of, and for, the periods presented in this report.


Date:  June 4, 2003                    /s/ Robert O. Baratta
                                       ----------------------------------------
                                       Robert O. Baratta
                                       President, Chief Executive Officer
                                       and Vice Chairman of the Board




                                       20
<PAGE>

                                 CERTIFICATIONS

I, Scott R. Baratta, certify that:

1. I have reviewed this quarterly report on Form 10-QSB of UltraStrip Systems,
Inc;

2. Based on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the small business
issuer as of, and for, the periods presented in this report.


Date:  June 4, 2003                    /s/ Scott R. Baratta
                                       ----------------------------------------
                                       Scott R. Baratta
                                       Senior Vice President - Finance
                                       (Chief Financial Officer)





                                       21