SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

FORM 10-QSB

[  
  ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the Quarterly period ended September 30, 2002

[  
  ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THESECURITIES
  EXCHANGE ACT OF 1934

For the transition period from ___________________________
  to __________________________

Commission file number _____________________________________

SERVICE SYSTEMS INTERNATIONAL, LTD.
  Name of Small Business Issuer in Its Charter

|NEVADA                                 | 88-0263701        
|-------------------------------------- | ------------------
|State of Incorporation                 | I.R.S. Employer   
|                                       | Identification No.
|                                       |                   
|2ndFloor, 5763 203A STREET,            |                   
|LANGLEY, B.C., CANADA                  | V3A 1W7           
|Address of Principal Executive Offices | Zip code          
|                                       |                   
|604-539-9398                           |                   
|Issuer's Telephone Number              |                   

202  11 Burbidge Street, Coquitlam, B.C. Canada
  V3K 7B2
  (Former Address of Registrant)

Securities registered under Section 12(b) of the Act: 
  NONE

Securities registered under Section 12(g) of the Act: 
  COMMON STOCK, PAR VALUE $0.001 PER SHARE

Title of class

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:
  47,324,165 as of November 13, 2002.



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INDEX

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PART  I      Financial Information

Item 1.      Consolidated Financial
  Statements.

|Consolidated Balance Sheets as of September
      30, 2002           |                                                                    
|-------------------------------------------------------------------- | -------------------------------------------------------------------
|and
      2001 (unaudited)                                           | 3                                                                  
|                                                                     |                                                                    
|Consolidated Statements of Operations
      for the three months and |                                                                    
|nine
      months ended September 30, 2002 and 2001 (unaudited)      | 4                                                                  
|                                                                     |                                                                    
|Consolidated Statements of Cash Flows
      for the three months and |                                                                    
|nine
      months ended September 30, 2002 and 2001 (unaudited)      | 5                                                                  
|                                                                     |                                                                    
|Notes to the Financial Statements                                    | 6 to 12                                                            
|                                                                     |                                                                    
|Item 2.                                                              | MANAGEMENT S DISCUSSION AND ANALYSIS
      OF RESULTS OF OPERATIONS
|                                                                     | AND FINANCIAL CONDITIONS                                           
|                                                                     |                                                                    
|Part II                                                              | OTHER INFORMATION                                                  
|                                                                     |                                                                    
|ITEM 1.                                                              | LEGAL PROCEEDINGS                                                  
|                                                                     |                                                                    
|ITEM 2                                                               | CHANGES IN SECURITIES                                              
|                                                                     |                                                                    
|ITEM 3.                                                              | DEFAULT UPON SENIOR SECURITIES                                     
|                                                                     |                                                                    
|ITEM 4.                                                              | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                
|                                                                     |                                                                    
|ITEM 5.                                                              | OTHER INFORMATION                                                  
|                                                                     |                                                                    
|ITEM 6.                                                              | EXHIBITS AND REPORTS ON FORM 8-K                                   
|                                                                     |                                                                    
|Signatures                                                           |                                                                    



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Service Systems International, Ltd.
  Consolidated Balance Sheets

|                                                                    | September30, |   | December 31, |  
|------------------------------------------------------------------- | ------------ | - | ------------ | -
|                                                                    | 2002         |   | 2001         |  
|                                                                    | $            |   | $            |  
|                                                                    | (Unaudited)  |   | (Audited)    |  
|                                                                    |              |   |              |  
|ASSETS                                                              |              |   |              |  
|                                                                    |              |   |              |  
|Current Assets                                                      |              |   |              |  
|Cash                                                                | 24,364       |   | -            |  
|Short-term investment                                               | 79,325       |   | -            |  
|Short-term investment - restricted (Note
      3)                   |              |   | 244,599      |  
|Accounts receivable (Note 6)                                        | 490,199      |   | 1,116,744    |  
|Inventory and contract work in progress                             | 195,241      |   | 254,154      |  
|Prepaid expenses and deposits (Note 3)                              | 285,527      |   | 230,151      |  
|                                                                    |              |   |              |  
|                                                                    |              |   |              |  
|Total Current Assets                                                | 1,074,655    |   | 1,845,648    |  
|Property, Plant and Equipment (Note 4)                              | 19,531       |   | 118,624      |  
|Other Assets                                                        |              |   |              |  
|Patents and trademarks (Note 5)                                     | 102,392      |   | 105,894      |  
|                                                                    |              |   |              |  
|                                                                    |              |   |              |  
|Total Assets                                                        | 1,196,578    |   | 2,070,166    |  
|                                                                    |              |   |              |  
|                                                                    |              |   |              |  
|LIABILITIES AND STOCKHOLDERS DEFICIT                               |              |   |              |  
|                                                                    |              |   |              |  
|Current Liabilities                                                 |              |   |              |  
|Cheques issued in excess of funds on
      deposit                  | -            |   | 4,539        |  
|Accounts payable (Note 6)                                           | 1,068,197    |   | 1,130,572    |  
|Accrued liabilities                                                 | 253,836      |   | 130,674      |  
|Wages and vacation pay payable                                      | 64,054       |   | 70,566       |  
|Customer deposits                                                   | 11,285       |   | 121,396      |  
|Loans payable (Note 7)                                              | 1,106,121    |   | 1,076,419    |  
|Amounts owing to related parties (Note
      8)                     | 629,241      |   | 525,467      |  
|                                                                    |              |   |              |  
|                                                                    |              |   |              |  
|Total Current Liabilities                                           | 3,132,734    |   | 3,059,633    |  
|                                                                    |              |   |              |  
|                                                                    |              |   |              |  
|                                                                    |              |   |              |  
|Stockholders Deficit                                               |              |   |              |  
|                                                                    |              |   |              |  
|Common stock, (Note 9) $.001 par value,                             |              |   |              |  
|50,000,000 shares authorized,                                       |              |   |              |  
|27,254,165 and 26,887,601 issued and
      outstanding respectively | 44,824       |   | 26,888       |  
|Additional paid-in capital                                          | 8,541,202    |   | 8,266,082    |  
|Common shares paid for but unissued                                 | -            |   | 1,209        |  
|Donated capital (Note 8)                                            | 31,928       |   | -            |  
|Stock based compensation                                            | 357,431      |   | 255,875      |  
|Deficit                                                             | (10,911,541  | ) | (9,539,521   | )
|                                                                    |              |   |              |  
|                                                                    |              |   |              |  
|Total Stockholders Deficit                                         | (1,936,156   | ) | (989,467     | )
|                                                                    |              |   |              |  
|                                                                    |              |   |              |  
|Total Liabilities and Stockholders Deficit                         | 1,196,578    |   | 2,070,166    |  
|                                                                    |              |   |              |  
|                                                                    |              |   |              |  
|Contingencies (Notes 1 and 11)                                      |              |   |              |  
|Subsequent Events (Note 12)                                         |              |   |              |  

(See Accompanying Notes to the Financial Statements)

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Service Systems International, Ltd.Consolidated Statements of Operations and Deficit

|                                                                                     | Three months  |   | Three months  |   | Nine months   |   | Nine months  
|------------------------------------------------------------------------------------ | ------------- | - | ------------- | - | ------------- | - | -------------
|                                                                                     | ended         |   | ended         |   | ended         |   | ended        
|                                                                                     | September 30, |   | September 30, |   | September 30, |   | September 30,
|                                                                                     | 2002          |   | 2001          |   | 2002          |   | 2001         
|                                                                                     | $             |   | $             |   | $             |   | $            
|                                                                                     | (Unaudited)   |   | (Unaudited)   |   | (Unaudited)   |   | (Unaudited)  
|                                                                                     |               |   |               |   |               |   |              
|Project Revenue                                                                      | 10,848        |   | 407,706       |   | 45,741        |   | 1,069,596    
|                                                                                     |               |   |               |   |               |   |              
|Project Costs                                                                        | 6,738         |   | 214,246       |   | 38,374        |   | 617,186      
|                                                                                     |               |   |               |   |               |   |              
|                                                                                     |               |   |               |   |               |   |              
|Gross Profit from Projects                                                           | 4,110         |   | 193,460       |   | 7,367         |   | 452,410      
|                                                                                     |               |   |               |   |               |   |              
|                                                                                     |               |   |               |   |               |   |              
|License Revenue                                                                      | -             |   | 242,846       |   | -             |   | 242,846      
|                                                                                     |               |   |               |   |               |   |              
|License Costs                                                                        | -             |   | 66,103        |   | -             |   | 66,103       
|                                                                                     |               |   |               |   |               |   |              
|                                                                                     |               |   |               |   |               |   |              
|Gross Profit from License Revenue                                                    | -             |   | 176,743       |   | -             |   | 176,743      
|                                                                                     |               |   |               |   |               |   |              
|                                                                                     |               |   |               |   |               |   |              
|Gross Profit from Projects and Licensing                                             | 4,110         |   | 370,203       |   | 7,367         |   | 629,153      
|                                                                                     |               |   |               |   |               |   |              
|Additional Project Costs                                                             | 127,560       |   | -             |   | 183,138       |   | -            
|                                                                                     |               |   |               |   |               |   |              
|Manufacturing Costs Not Applied                                                      | 5,730         |   | 24,055        |   | 38,160        |   | 77,368       
|                                                                                     |               |   |               |   |               |   |              
|                                                                                     |               |   |               |   |               |   |              
|Total Gross Profit (Loss)                                                            | (129,180      | ) | 346,148       |   | (213,931      | ) | 551,785      
|                                                                                     |               |   |               |   |               |   |              
|Expenses                                                                             |               |   |               |   |               |   |              
|Amortization of goodwill                                                             | -             |   | 121,270       |   | -             |   | 363,810      
|Bad Debts                                                                            | 415,662       |   | -             |   | 415,662       |   | -            
|Foreign exchange                                                                     | (12,986       | ) | (3,738        | ) | 13,743        |   | 9,014        
|General and administrative                                                           | 167,923       |   | 424,708       |   | 519,017       |   | 840,181      
|Imputed interest (Note 8)                                                            | 2,805         |   | -             |   | 31,928        |   | -            
|Interest                                                                             | 39,984        |   | 25,724        |   | 96,104        |   | 66,583       
|Research and development                                                             | (10,946       | ) | 132,569       |   | 5,837         |   | 295,399      
|Selling                                                                              | 17,663        |   | 139,134       |   | 75,798        |   | 265,752      
|                                                                                     |               |   |               |   |               |   |              
|                                                                                     |               |   |               |   |               |   |              
|Total Expenses                                                                       | 620,105       |   | 839,667       |   | 1,158,089     |   | 1,840,739    
|                                                                                     |               |   |               |   |               |   |              
|                                                                                     |               |   |               |   |               |   |              
|Net Loss for the Period                                                              | 749,285       |   | 493,519       |   | 1,372,020     |   | 1,288,954    
|                                                                                     |               |   |               |   |               |   |              
|                                                                                     |               |   |               |   |               |   |              
|                                                                                     |               |   |               |   |               |   |              
|Net Loss per Share                                                                   | (0.02         | ) | (0.02         | ) | (0.05         | ) | (0.05        
|                                                                                     |               |   |               |   |               |   |              
|                                                                                     |               |   |               |   |               |   |              
|Weighted Average Number of Shares Outstanding                                        | 35,674,000    |   | 24,669,000    |   | 29,939,000    |   | 23,519,000   
|                                                                                     |               |   |               |   |               |   |              
|                                                                                     |               |   |               |   |               |   |              
|(Diluted loss per share has not been presented
      as the result is anti-dilutive) |               |   |               |  

(See Accompanying Notes to the Financial Statements)

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Service Systems International, Ltd.
  Consolidated Statements of Cash Flows

|                                                                      | Nine months   |   | Nine months   |  
|--------------------------------------------------------------------- | ------------- | - | ------------- | -
|                                                                      | ended         |   | ended         |  
|                                                                      | September 30, |   | September 30, |  
|                                                                      | 2002          |   | 2001          |  
|                                                                      | $             |   | $             |  
|                                                                      | (Unaudited)   |   | (Unaudited)   |  
|Cash Flows to Operating Activities                                    |               |   |               |  
|Net Loss                                                              | (1,372,020    | ) | (1,288,954    | )
|                                                                      |               |   |               |  
|Adjustments to reconcile
      net loss to cash                       |               |   |               |  
|Amortization
      of goodwill                                        | -             |   | 242,540       |  
|Depreciation
      and amortization                                   | 41,151        |   | 44,636        |  
|Foreign
      exchange                                                | 13,743        |   | (3,738        | )
|Common
      stock issued for expenses                                | (62,944       | ) | 232,194       |  
|Accrual
      of interest                                             | 97,663        |   | 64,160        |  
|Imputed
      interest                                                | (31,928       | ) | -             |  
|Stock
      based compensation                                        | 101,556       |   | 228,538       |  
|Leasehold
      improvement written off                               | 63,856        |   | -             |  
|                                                                      |               |   |               |  
|Change in non-cash working
      capital items                        |               |   |               |  
|Decrease
      (increase) in accounts receivable                      | 626,545       |   | (837,341      | )
|Decrease
      (increase) in inventory and contract work in progress  | 58,913        |   | (184,250      | )
|Increase
      in prepaid expenses and deposits                       | (55,376       | ) | (58,622       | )
|(Decrease)
      increase in accounts payable, accrued liabilities,   |               |   |               |  
|wages
      and vacation pay payable and customers deposits          | (74,412       | ) | 824,290       |  
|                                                                      |               |   |               |  
|Net Cash Used in Operating Activities                                 | (593,253      | ) | (615,277      | )
|                                                                      |               |   |               |  
|Cash Flows (to) from Investing Activities                             |               |   |               |  
|Acquisition of short-term
      investment                            | (79,325       | ) | -             |  
|Reduction of short-term
      investment - restricted                 | 244,599       |   | 832           |  
|Additions to patents
      and trademarks                             | (2,412        | ) | (15,416       | )
|Acquisition of capital
      assets                                   | 63,857        |   | (76,108       | )
|                                                                      |               |   |               |  
|Net Cash Used in Investing Activities                                 | 226,719       |   | (90,692       | )
|                                                                      |               |   |               |  
|Cash Flows from (to) Financing Activities                             |               |   |               |  
|Common stock issued                                                   | 218,000       |   | 645,583       |  
|Increase in loans payable                                             | 87,926        |   | 342,679       |  
|Increase in amounts owing
      to related parties                    | 90,720        |   | 101,403       |  
|Decrease in shares subscriptions
      received                       | (1,209        | ) | (388,000      | )
|                                                                      |               |   |               |  
|Net Cash Provided by Financing Activities                             | 395,437       |   | 701,665       |  
|                                                                      |               |   |               |  
|Increase in Cash                                                      | 28,903        |   | (4,304        | )
|Cash - Beginning of Period                                            | (4,539        | ) | 30,219        |  
|                                                                      |               |   |               |  
|Cash - End of Period                                                  | 24,364        |   | 25,915        |  
|                                                                      |               |   |               |  
|Non-Cash Financing Activities                                         |               |   |               |  
|16,564 shares were issued
      to settle debts at $0.10 per share    | 1,656         |   | -             |  
|100,000 shares were
      issued to settle debts at $0.40 per share   | -             |   | 40,000        |  
|210,000 shares were
      issued to settle debts at $0.26 per share   |               |   |               |  
|in
      year 2001 and cancelled in 3rdquarter of 2002                | (54,600       | ) | 54,600        |  
|20,000 shares were
      cancelled in 3rdquarter of 2002              | (12,000       | ) | -             |  
|100,000 shares were
      is sued to settle debts @ $0.02 per share   | 2,000         |   | -             |  
|13,800,000 shares were
      issued to settle debts @ $0.01 per share | 138,000       |   | -             |  
|400,000 shares were issued
      for licensing costs                  | -             |   | 60,000        |  
|                                                                      |               |   |               |  
|Supplementary Information                                             |               |   |               |  
|Cash paid for interest                                                | 1,413         |   | 10,985        |  
|Cash paid for income
      taxes                                      | -             |   | -             |  

(See Accompanying Notes to the Financial Statements)

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Service Systems International, Ltd.Notes to the Consolidated Financial Statements



1.  Nature of Operations and Continuance of Business

The Company manufactures and markets its Ultra
  GuardÚ ultra violet based patented water treatment system through its
  wholly-owned Canadian subsidiary, UV Systems Technology Inc. (UVS).
  These products and systems are sold primarily for municipal waste disinfection,
  treatment of process and industrial wastewater, and for potable water, bottled
  products and agriculture and aquaculture water treatment.

Operating activities have not generated profitable
  operations since inception and the Company has a working capital deficit of
  $2,058,079 as at September 30, 2002. These factors raise substantial doubt about
  the Companys ability to continue as a going concern. The ability of the
  Company to continue operations is dependent upon its successful efforts to raise
  additional equity financing in the long term, continue developing the market
  for its products, and/or the attainment of profitable operations.

In order to reduce overhead the Company has tentatively
  reached an agreement with the Clearwater Group (Clearwater). Clearwater
  will assume the manufacturing of any new Ultra Guard Ú water treatment
  systems to be supplied to their strategic alliance partner, US Filter. Clearwater
  will also provide warranty services on any previous Ultra GuardÚ water
  treatment systems. The Company will receive a royalty based on a percentage
  of sales volume. In anticipation of this the Company has moved from its manufacturing
  location and reduced level of staff in production, engineering and support.

2.  Significant Accounting Policies

*Consolidated financial statements*

These financial statements include the accounts
  of the Company, and its wholly-owned Canadian subsidiary, UV Systems Technology
  Inc. (UVS). All significant intercompany transactions and balances
  have been eliminated.

*Cash and cash equivalents*

Cash and cash equivalents include cash on hand,
  in banks and all highly liquid investments with maturity of three months or
  less when purchased. Cash equivalents are stated at cost, which approximates
  market.

*Property, plant, and equipment*

Property, Plant, and Equipment are recorded at
  cost. Depreciation is computed on a straight-line method using an estimated
  useful life of five years.

*Patents and trademarks*

Patents and trademarks are amortized to operations
  over their estimated useful lives of twenty years.

*Revenue recognition*

Product sales are recognized at the time goods
  are shipped. System and project revenue are recognized utilizing the percentage
  of completion method that recognizes project revenue and profit during construction
  based on expected total profit and estimated progress towards completion during
  the reporting period. All related costs are recognized in the period in which
  they occur.

*Estimates and assumptions*

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 in
  the financial statements and accompanying notes. Actual results could differ
  from these estimates.



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Service Systems International, Ltd.Notes to the Consolidated Financial Statements



3.  Significant Accounting Policies (continued)

*Foreign currency*

i)        Translation of foreign
  currency transactions and balances:

> Revenue, expenses and non-monetary balance
>     sheet items in foreign currencies are translated into US dollars at the rate
>     of exchange prevailing on the transaction dates. Monetary balance sheet items
>     are translated at the rate prevailing at the balance sheet date. The resulting
>     exchange gain or loss is included in general and administration expenses.

ii)       Translation
  of foreign subsidiary balances:

Monetary balance sheet items of UVS are
      translated into US dollars at the rate of exchange on the balance sheet
      date. Non-monetary balance sheet items are translated into US dollars at
      the rate of exchange prevailing on the transaction dates. The foreign subsidiarys
      operating results are translated into US dollars using the average exchange
      rate for the year with any translation gain or loss and are included separately
      in operations.


*Basic and Diluted Net Income (Loss) Per Share*

The Company computes net income (loss) per share
  in accordance with SFAS No. 128, "Earnings per Share". This statement requires
  presentation of both basic and diluted earnings per share (EPS) on the face
  of the income statement. Basic EPS is computed by dividing net income (loss)
  available to common shareholders (numerator) by the weighted average number
  of common shares outstanding (denominator) during the period. Diluted EPS gives
  effect to all dilutive potential common shares outstanding during the period
  including stock options, using the treasury stock method, and convertible preferred
  stock, using the if-converted method. In computing Diluted EPS, the average
  stock price for the period is used in determining the number of shares assumed
  to be purchased from the exercise of stock options or warrants. Diluted EPS
  excludes all dilutive potential common shares if their effect is anti dilutive.

*Accounting for Stock -Based Compensation*

The Company accounts for stock based compensation
  in accordance with SFAS No. 123, Accounting for Stock-Based Compensation.
  This statement requires that stock awards granted subsequent to January 1, 1995,
  be recognized as compensation expense based on their fair value at the date
  of grant. Alternatively, a company may account for granted stock awards under
  Accounting Principles Board Opinion (APB) No. 25, Accounting for Stock
  Issued to Employees, and disclose pro forma income amounts which would
  have resulted from recognizing such awards at their fair value. The Company
  has elected to account for stock-based compensation for employees under APB
  No. 25 and make the required pro forma disclosures for compensation expense
  in accordance with SFAS No. 123.

*Interim Financial Statements*

These interim unaudited financial statements
  have been prepared on the same basis as the annual financial statements and
  in the opinion of management, reflect all adjustments, which include only normal
  recurring adjustments, necessary to present fairly the Companys financial
  position, results of operations and cash flows for the periods shown. The results
  of operations for such periods are not necessarily indicative of the results
  expected for a full year or for any future period.

*Recent Accounting Pronouncements*

On June 29, 2001, SFAS No. 141, "Business Combinations,"
  was approved by the Financial Accounting Standards Board ("FASB"). SFAS No.
  141 requires that the purchase method of accounting be used for all business
  combinations initiated after June 30, 2001. Goodwill and certain intangible
  assets will remain on the balance sheet and not be amortized. On an annual basis,
  and when there is reason to suspect that their values have been diminished or
  impaired, these assets must be tested for impairment, and write-downs may be
  necessary. The Company implemented SFAS No. 141 on July 1, 2001 and its impact
  is not expected to be material on its financial position or results of operations.

---

Service Systems International, Ltd.Notes to the Consolidated Financial Statements





|2. | Significant Accounting
        Policies (continued)
        On June 29, 2001, SFAS No. 142, "Goodwill and Other Intangible Assets,"
        was approved by FASB. SFAS No. 142 changes the accounting for goodwill
        from an amortization method to an impairment-only approach. Amortization
        of goodwill, including goodwill recorded in past business combinations,
        will cease upon adoption of this statement. The Company adopted SFAS No.
        142 on April 1, 2002 and its impact is not expected to have a material
        effect on its financia l position or results of operations.
        In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
        Obligation." SFAS No. 143 is effective for fiscal years beginning after
        June 15, 2002, and will require companies to record a liability for asset
        retirement obligations in the period in which they are incurred, which
        typically could be upon completion or shortly thereafter. The FASB decided
        to limit the scope to legal obligations and the liability will be recorded
        at fair value. The effect of adoption of this standard on the Company's
        results of operations and financial positions is being evaluated.
        In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment
        or Disposal of Long-Lived Assets." SFAS No. 144 is effective for fiscal
        years beginning after December 15, 2001. It provides a single accounting
        model for long-lived assets to be disposed of and replaces SFAS No. 121"Accounting
        for the Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed
        Of." The Company adopted SFAS No. 144 on April 1, 2002. The effect of
        adoption of this standard on the Company's results of operations and financial
        position is not expected to be material.
        In June, 2002, FASB issued SFAS No. 146, "Accounting for Costs Associated
        with Exit or Disposal Activities". The provisions of this Statement are
        effective for exit or disposal activities that are initiated after December
        31, 2002, with early application encouraged. This Statement addresses
        financial accounting and reporting for costs associated with exit or disposal
        activities and nullifies Emerging Issues Task Force (EITF) Issue No. 94-3,
        "Liability Recognition for Certain Employee Termination Benefits and Other
        Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)".
        This Statement requires that a liability for a cost associated with an
        exit or disposal activity be recognized when the liability is incurred.
        The Company will adopt SFAS No. 146 on January 1, 2003. The effect of
        adoption of this standard on the Company's results of operations and financial
        position is being evaluated.
        FASB has also issued SFAS No. 145 and 147 but they will not have any relationship
        to the operations of the Company therefore a description of each and their
        respective impact on the Comp any's operations have not been disclosed.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3. | Restricted Cash
        In connection with a letter of guarantee, required under a long-term project
        bonding, the letter and bond had been called. The bonding company is holding
        the funds to provide payment against repairs to be made. A provision has
        been made for C$200,000 (US$126,920).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|4. | Property, Plant, and Equipment
      Property, plant, and equipment are stated at cost less accumulated depreciation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

| |                                               |         |  |              |  | September 30, |  | December 31,
| | --------------------------------------------- | ------- |  | ------------ |  | ------------- |  | ------------
| |                                               |         |  |              |  | 2002          |  | 2001        
| |                                               |         |  | Accumulated  |  | Net Book      |  | Net Book    
| |                                               | Cost    |  | Depreciation |  | Value         |  | Value       
| |                                               | $       |  | $            |  | $             |  | $           
| |                                               |         |  |              |  | (Unaudited)   |  | (Audited)   
| |                                               |         |  |              |  |               |  |             
| | Computer equipment                            | 54,718  |  | 50,442       |  | 4,276         |  | 12,151      
| | Computer software                             | 9,378   |  | 7,676        |  | 1,702         |  | 3,108       
| | Display equipment                             | 33,016  |  | 33,016       |  | -             |  | -           
| | Office furniture and equipment                | 32,475  |  | 32,475       |  | -             |  | 75          
| | Plant jigs, dies, moulds, tools and equipment | 129,080 |  | 115,526      |  | 13,554        |  | 28,533      
| | Leasehold improvements                        | 0       |  | 0            |  | 0             |  | 74,757      
| |                                               |         |  |              |  |               |  |             
| |                                               |         |  |              |  |               |  |             
| |                                               | 258,667 |  | 239,135      |  | 19,532        |  | 118,624     
| |                                               |         |  |              |  |               |  |             



---

Service Systems International, Ltd.Notes to the Consolidated Financial Statements

3.  Property, Plant, and Equipment (continued)

|Depreciation per class of asset:              | Nine months ended |  |              
|--------------------------------------------- | ----------------- |  | -------------
|                                              | September 30,     |  | September 30,
|                                              | 2002              |  | 2001         
|                                              | $                 |  | $            
|                                              | (Unaudited)       |  | (Unaudited)  
|                                              |                   |  |              
|Computer equipment                            | 7,876             |  | 6,500        
|Computer software                             | 1,406             |  | 1,029        
|Display equipment                             | -                 |  | 1,809        
|Office furniture and equipment                | 75                |  | 4,307        
|Plant jigs, dies, moulds, tools and equipment | 14,979            |  | 13,074       
|Leasehold improvements                        | 10,901            |  | 14,950       
|                                              |                   |  |              
|                                              |                   |  |              
|                                              | 35,237            |  | 41,669       
|                                              |                   |  |              

|5. | Patents and Trademarks
        Patents and trademarks represent legal costs associated with designing,
        registering and protecting certain patents and trademarks associated with
        the Ultra GuardÚ System. These costs are amortized over twenty
        years. Amortization for the nine months ended September 30, 2002 was $5,914
        and for the nine months ended September 30, 2001 was $2,967. Components
        of the Ultra GuardÚ System were patented in the United States on
        April 12, 1996. Applications have been approved for patent protection
        under the International Patent Protection Treaty covering 13 European
        countries. Translations and other requirements to formalize these patents
        will continue through the current fiscal year.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|6. | Secured Liabilities
      Pursuant to a funding agreement $736,578 of accounts payable are secured
      by $439,054 of accounts receivable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|7. | Loans Payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

| | a) | At
        December 31, 2001, the Company had loans payable to Elco Bank Clients
        located in Nassau, Bahamas,of $531,416includingprincipal andinterest.Duringthe nine monthsof fiscal 2002,
        an additionalloan of$20,000
        was received and interest of$36,004 was accrued,
        bringing the loans payable balance to $587,420.During
        the third quarter, the company repaid $138,000 of these loans with the
        issuance of 13,800,000 shares@ $0.01
        per share.This leftabalanceowing of $449,420 as atSeptember 30, 2002. Theseloans areunsecured, interest bearing at 10% per annum and due on demand.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | b) | Aloan
        payable of$115,000plusaccruedinterest of $21,494isunsecured, bears interest at 8%per annumand is due on demand.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | c) | Loans
        payable of $200,000 plus accrued interest of $40,145 are unsecured and
        bear interest at 1% per month.The loan was due on
        May 21, 2001. The principal portion of the loan can be converted into
        common sharesat$0.50 per share.                                                                                                                                                                                                                                                                                                                                                                                   
| |   
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | d) | A
        loan payable of $125,000 plus accrued interest of $25,665 is unsecured,
        bears interest at 1%per monthstarting
        from May 19, 2002 and is due on November 19, 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |   
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | e) | Loans
        payable of Cnd $154,700 (US$97,467) plus accrued interest
        of $5,066 secured by a general securityagreement,
        bear interest at 8% per annum and are due six months from the date of
        each advance. The loansare repayable between May
        31, 2002 and June 26, 2002.                                                                                                                                                                                                                                                                                                                                           
| |   
| |   
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | f) | A loan payable
        of Cnd $28,526 (US$17,973) is unsecured, bears interest at prime rate
        plus 3% with monthlyrepayment of Cnd $3,050 (US$1,921).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |   
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | g) | A loan payable of $8,891is unsecured,
        non-interest bearing and is due on demand.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               



---

|Service Systems International, Ltd.
      Notes to the Consolidated Financial Statements
|----------------------------------------------------------------------------------------
|8.                                                                                      
|9.                                                                                      

|                                                  |            |   |        |   | Additional |  
|------------------------------------------------- | ---------- | - | ------ | - | ---------- | -
|                                                  |            |   | Common |   | Paid-in    |  
|                                                  | Shares     |   | Stock  |   | Capital    |  
|                                                  | #          |   | $      |   | $          |  
|                                                  |            |   |        |   |            |  
|Balance, December 31, 2001 (audited)              | 26,887,601 |   | 26,888 |   | 8,266,082  |  
|                                                  |            |   |        |   |            |  
|Issuance of stock for expenses
      pursuant to  |            |   |        |   |            |  
|the
      exercise of employee stock options      | 16,564     |   | 16     |   | 1,640      |  
|                                                  |            |   |        |   |            |  
|Issuance of stock for expenses                    | 100,000    |   | 100    |   | 1,900      |  
|                                                  |            |   |        |   |            |  
|Issuance of stock for cash
      pursuant to      |            |   |        |   |            |  
|private
      placements                          | 4,350,000  |   | 4,350  |   | 230,650    |  
|                                                  |            |   |        |   |            |  
|Issuance of stock for debt
      settlement       | 13,800,000 |   | 13,800 |   | 124,200    |  
|                                                  |            |   |        |   |            |  
|Stock returned to treasury
      for cancellation | (330,000   | ) | (330   | ) | (83,270    | )
|                                                  |            |   |        |   |            |  
|                                                  |            |   |        |   |            |  
|                                                  |            |   |        |   |            |  
|Balance, September 30, 2002 (unaudited)           | 44,824,165 |   | 44,824 |   | 8,541,202  |  
|                                                  |            |   |        |   |            |  

(a)      Warrants outstanding as at
  September 30, 2002:

|      |            |  | Exercise   |  |                                      
|----- | ---------- |  | ---------- |  | -------------------------------------
|Class | #          |  | Price      |  | Expiry
        Date(s)               
|      |            |  |            |  |                                      
|A   | 1,109,989  |  | $.40-$1.00 |  | December 13, 2002  December 20, 2003
|B   | 2,705,174  |  | $.07-$.20  |  | Cancelled on October 1, 2002         
|C   | 12,605,000 |  | $.01-$.24  |  | September 23, 2005  October 3, 2010 
|D   | -          |  |            |  | Expired on September 20, 2002        
|E   | 2,449,790  |  | $.25-$.60  |  | February 16, 2003  December 3, 2003 

> On October 3, 2000, 3,000,000 Class C warrants
>     were issued pursuant to a Strategic Alliance and other agreements with US
>     Filters Wallace and Tiernan Products Group, a wholly owned subsidiary
>     of U.S. Filter (US Filter) to market and sell under license Service
>     Systems UltraGuard® ultraviolet disinfection technology for water
>     and wastewater applications. The value of the 3,000,000 Class C Warrants issued
>     totalled $656,700. This amount is being amortized to operations as a marketing
>     expense at a rate of $65,670 per annum. A total of $49,253 was charged during
>     the nine months of fiscal 2002. These warrants were issued as follows:

| | (i)   | 1,000,000 Class
        C warrants issued, exercisable at the lower of $0.97 per share or the
        fair market valueof the Companys common stock
        at April 25, 2001 expiringOctober 31, 2011 and restricted
        fromexercise for two years from October 3, 2000.
| | ----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      
| |      
| |       |                                                                                                                                                                                                                                                                                
| | (ii)  | 1,000,000 Class C warrants
        were issued at an exercise price of$1.00
        per share, with expiry date ofOctober 31, 2011 and
        restricted from exercise for two years from October 3, 2000.                                                                    
| |      
| |       |                                                                                                                                                                                                                                                                                
| | (iii) | 1,000,000 Class C warrants
        were issued at an exercise price of$2.00
        per share, with expiry date ofOctober 31, 2011 and
        restricted from exercise for two years from October 3, 2000.                                                                    
| |      



---



|Service Systems International,
        Ltd.
        Notes to the Consolidated Financial Statements
|--------------------------------------------------------------------------------------------------
|9.                                                                                                
|                                                                                                  
|                                                                                                  

| |                          | Nine          |   | Twelve       |  
| | ------------------------ | ------------- | - | ------------ | -
| |                          | months ended  |   | months ended |  
| |                          | September 30, |   | December 31, |  
| |                          | 2002          |   | 2001         |  
| |                          | $             |   | $            |  
| |                          | (Unaudited)   |   | (Audited)    |  
| |                          |               |   |              |  
| | Net loss                 |               |   |              |  
| | As reported              | (1,158,089    | ) | (1,831,701   | )
| | Pro forma                | (1,158,089    | ) | (1,951,925   | )
| |                          |               |   |              |  
| | Basic net loss per share |               |   |              |  
| | As reported              | (.05          | ) | (.08         | )
| | Pro forma                | (.05          | ) | (.08         | )

| | (c) | Long-Term Equity
        Incentive Plan
        The Company has allotted 5,000,000 shares pursuant to a Long-Term Equity
        Incentive Plan approved and registered December 17, 1999. The Plan permits
        the grant of Non-qualified Stock Options, Incentive Stock Options, Restricted
        Stock and Performance Shares.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



---

|Service Systems International,
        Ltd.
        Notes to the Consolidated Financial Statements
|--------------------------------------------------------------------------------------------------
|9.                                                                                                
|                                                                                                  
|10.                                                                                               
|                                                                                                  

|                     | Nine months ended      |   | Nine months ended              |  
|-------------------- | ---------------------- | - | ------------------------------ | -
|                     | September 30,2002      |   | September 30, 2001             |  
|                     | (unaudited)            |   | (unaudited)                    |  
|                     |                        |   | United                         |  
|                     | Canada                 |   | States                         |  
|                     | $                      |   | $                              |  
|                     |                        |   |                                |  
|Revenue              | 38,669                 |   | 7,072                          |  
|Expense              | 944,127                |   | 473,634                        |  
|                     |                        |   |                                |  
|                     |                        |   |                                |  
|Loss                 | (905,458               | ) | (466,562                       | )
|                     |                        |   |                                |  
|                     |                        |   |                                |  
|                     | As ofSeptember 30,2002 |   | As ofSeptember
        30,2001 |  
|                     | (unaudited)            |   | (unaudited)                    |  
|                     |                        |   | United                         |  
|                     | Canada                 |   | States                         |  
|                     | $                      |   | $                              |  
|                     |                        |   |                                |  
|Identifiable assets  | 948,762                |   | 145,424                        |  
|Goodwill and patents | 102,392                |   | -                              |  
|                     |                        |   |                                |  
|                     |                        |   |                                |  
|Total assets         | 1,051,154              |   | 145,424                        |  
|                     |                        |   |                                |  

|11. | Legal Proceedings
        On October 20, 1998 a suit was filed in the Supreme Court of British Columbia
        by Thomas OFlynn against the Company, Kenneth Fielding (the Company's
        President and Director), and Charles P. Nield (a former Director and Vice
        President of the Company), OFlynn alleges that in April of 1996,
        he purchased shares of the Common Stock based on a representation that
        they would be free trading in 40 days of "the filing of a prospectus."
        He further alleges that in September of 1996 he purchased additional shares
        of Common Stock based on the representation that the shares would be free
        trading within 40 days of the Common Stock becoming free trading. OFlynn
        alleges that the representation was a warranty and was incorrect. He further
        alleges that he suffered a loss because the share price decreased while
        he was holding the shares. He seeks damages for breach of warranty, negligence,
        misrepresentation and breach of fiduciary duty. The amount claimed is
        not specified. The Company filed an answer denying the claims and continues
        to actively defend the suit. There has been no loss provision set-up pursuant
        to this action against the Company.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|12. | Subsequent Events                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

| | a) |  | On October 15, 2002, the
        company called a special meeting of stockholders to be held on November
        15,2002 to act on the following proposals:
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |  |                                                                                                                                                            
| |    |  | a. Proposal to change the
        Corporations name to UltraGuard Water Systems Corp.                                                                     
| |    |  |                                                                                                                                                            
| |    |  | b. Proposal to effectuate
        a one-for-fifty (1:50) reverse stock split of the Corporations common
        stock.                                    
| |    |  |                                                                                                                                                            
| |    |  | c. Proposal to increase
        the number of authorized common stock to 100,000,000, par value $0.001.                                                    



---

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

The following discussion and analysis should
  be read in conjunction with our Financial Statements and the Notes attached.
  Information discussed in this report may include forward-looking statements
  regarding events or our financial performance and are subject to a number of
  risks and other factors, which could cause the actual results to differ materially
  from those, contained in the forward-looking statements. Among those factors
  are, 1) general business and economic conditions, 2) customer acceptance and
  demand for our products, 3) our overall ability to design, test and introduce
  new products on a timely basis, 4) the nature of the markets addressed by our
  products, and, 5) other risk factors listed from time to time in documents filed
  by our company with the SEC.

BASIS OF PRESENTATION

The financial statements include accounts of
  Service Systems International Ltd. and its 100% owned subsidiary, UV Systems
  Technology Inc. ("UVS"). With the discontinuation of operations at UVS in early
  2002, the financial statements reflect no revenue activities. However, ongoing
  costs incurred at UVS to complete projects in their final stages of acceptance,
  ongoing debt servicing costs and other related costs continue to accrue and
  are included in these financial statement.

MANAGEMENT'S DISCUSSION

Our company was incorporated in the State of
  Nevada in August 1990, and remained inactive until September 1995. The initiation
  of the current business was accompanied by a change of ownership. Through UVS,
  Service Systems manufactures and markets its Ultra Guard ultra violet-based
  patented water treatment system. These products are sold primarily for municipal
  wastewater disinfection; however, the system can also be adapted for treatment
  of process and industrial wastewater, and for potable water, bottled products
  and agriculture and aquaculture water treatment.

In September 1995 Service Systems initiated a
  marketing distribution agreement with UVS, a manufacturer of equipment using
  proprietary ultraviolet light technology for the microbiological disinfection
  of industrial and municipal wastewater. In July 1996 Service Systems entered
  into a funding agreement with UVS, whereby under the funding agreement, Service
  Systems provided 50% of UVS' operating cash needs for a six-month period. On
  December 1, 1996, Service Systems acquired 50.69% of the common stock of UVS
  from two principals and the minority stockholders. On February 14, 2000, Service
  Systems entered into an agreement with the remaining two minority stockholders,
  Growth Works Capital Ltd. (Managers of Working Opportunity Fund (EVCC) Ltd.)
  (WOF) and MDS Ventures Pacific Inc.(MDS), to acquire the remaining 49.31% common
  stock and preferred stock. Under this letter agreement, Service Systems issued
  to WOF 2,809,723 shares of restricted common shares under Regulation S to acquire
  all UVST Class A and B shares held by WOF and debt of UVST totaling C$2,301,098
  and to MDS 1,404,109 shares of restricted common shares under Regulation S to
  acquire all UVST Class A and B shares held by MDS and debt of UVST totaling
  C$1,275,000.

During the period from December 1, 1996 to September
  30, 1997, Service Systems continued with UVS' system development and testing
  programs. These programs included the development of both a mechanical with
  chemical injection and an electronic automatic quartz sheath cleaning system
  to remove the fouling buildup due to suspended solids and chemical prevalent
  in wastewater.

Field testing of the mechanical/chemical quartz
  sleeve wiper cleaning system was concluded during October and November 1997,
  at a production demonstration unit ("PDU") test site near Montreal, Quebec.
  The test results concluded that

---

the cleaning system did perform above anticipated
  levels, and the system has now been incorporated into current products sold.
  The temperature control system for the UVS System was also tested at the Ville
  de Repentigney test site during temperatures ranging down to minus 8 degrees
  Celsius and up to plus 8 degrees Celsius. The test showed that with temperature
  control, infinite variable lamp UV output intensity was stable and controllable.
  This feature is now included on all product sales. The benefits of the temperature
  control are, instant response to changes in power settings, consistent UV output,
  infinite controllability through full range of UV settings, and expected longer
  lamp-in-service life. To our knowledge, no other UV equipment supplier can offer
  this degree of control of a UV lamp. Development of the electronic ultrasonic
  cleaning system has been placed in abeyance pending availability of additional
  development funds.

Negotiations continue on finalizing a project
  delivered to New Zealand in 1995 by UVS and release of hold back funds. Testing
  of the system is ongoing to determine if the equipment is in compliance at times
  of correct effluent flow conditions. During the fiscal year ended August 31,
  2000, the client ordered changes to its UV system amounting to C$31,200 and
  C$45,952, all of which was prepaid. C$31,200 of the work was completed in fiscal
  2000. The work to be completed includes replacement lamp controllers, which
  are in construction for the Single Lamp Reactors but will require addition features
  for remote location mounting to replace the controllers at this location. This
  work was expected to be completed in August 2001, but will be delayed due to
  delayed delivery of materials from suppliers, until the first quarter of fiscal
  2002. In February we were informed that the New Zealand customer embarked on
  a consolidation of a number of wastewater plants. Until the size of the combined
  wastewater plant is known and the systems layout is know, we have stopped work
  of the order and have applied the payment of $45,952 against an accounts receivable
  for this customer. During the third quarter of 2002, no further action or information
  has been received on this project.

A 6-lamp Ultra Guard UV system valued at $127,000,
  capable of disinfecting a wastewater flow of 3.5 million gallons per day, was
  sold to Hamilton, Alabama and was installed in March, 1999. Successful final
  performance testing was conducted in July 1999. This UV project is the first
  full scale operating Ultra Guard UV system installed in North America. This
  system in Hamilton has provided significant equipment exposure to other wastewater
  plants contemplating upgrading their treatment plant discharges, including replacing
  chlorine as the disinfecting means with environmentally friendly ultraviolet
  disinfection.

In January 1999 a PDU was installed at the County
  Sanitation Districts of Los Angeles County (the County). The purpose of the
  test was to determine the Ultra Guard UV system's ability to disinfect wastewater
  to Title 22 Guidelines; a stringent test protocol required as a precursor to
  use of a company's UV product in reuse of wastewater for agriculture and other
  purposes. Testing was completed in July 1999 and was conducted and paid for
  by the County. The County reported that the findings of the five-month testing
  program confirmed the ability of the Ultra Guard UV system to achieve Title
  22 design objectives at fifty percent of the dose required by low pressure,
  low intensity technology previously tested. Using the same safeties as had been
  applied to low pressure, low intensity technology, a substantial saving in energy
  usage, 12.7%, was achieved by using the Ultra Guard system. On February 28,
  2000 the Department of Health Services advised Service Systems that Title 22
  approval had been granted.

In September 1999 the formal order for a project
  in Toronto, Canada was secured for about C$ 685,000 (approximately $466,000).
  The project is now delivered and operating on demand. As this system is used
  only when high rainfall and storm runoff occurs, demand for it's operating is
  infrequent. Since installation, we are informed of two storm events, which required
  the UV system to be activated. This UV system delivered to Toronto is part of
  a C$50 million combined storm

---

overflows (CSO) project (the world largest submersible
  CSO pumping station) and is used for disinfection of CSO before discharge into
  Lake Ontario. During this quarter, at the request of the customer Clearwater
  Industries (our product manufacturing licensee )replaced the computer operating
  system with a Programmable Logic Controller (PLC). This decision was taken to
  permit service of the UV System to be performed by a number of service companies
  versed in PLC control system. This action provides the customer more flexibility
  and available service options and reflects the direction being taken by Clearwater
  on new system sales. Clearwater Industries reports that the UV System remedial
  work is complete. Final testing will not be conducted until spring 2003 as this
  site operates only during summer storm events. Tests conducted during 2002 were
  not successful, as effluent delivered to the UV system did not meet the design
  standards. Refuse, solids and city street runoff waste included in the effluent
  was not removed prior to entering the UV System.

After successful PDU testing in September &
  October 1998 at the City of Peterborough wastewater treatment plant, we received
  an order in March 1999 valued at over C$1,100,000 (approximately $748,000.).
  The UV system will disinfect effluent flow in excess of 36 million gallons per
  day. The UV system delivery was completed in January 2002 and installed during
  February and March for operation starting May 15, 2002. Problems were encountered
  with the field wiring which affected the operating software. As well, problems
  were encountered with the installation of some of the structural components.
  In the second quarter, four of the five channels (48 of the 60 lamps) had been
  operated for about 30 days using the non-flow paced computer system. Clearwater
  reported that during this period, performance requirements were being met. Negotiation
  of the work and guarantees required by the customer to complete the balance
  of the system was being conducted between the City of Peterborough, Clearwater,
  our product-manufacturing licensee and with USFilter and our strategic alliance
  marketer. These negotiations have been unsuccessful. In November we received
  notification that the City of Peterborough was canceling our UV system contract.
  We have advised the City that we do not accept this cancellation and will strenuously
  defend our rights under the contract purchased order. We have made the appropriate
  loss provisions in our financial statements to reflect this cancellation.

In October 1999 Service Systems signed an agreement
  with a leading Australian UV equipment manufacturer to market its product in
  North America. In November 2001, the Managing Director advised us that Australian
  UV had been sold to our competitor; Wedeco AG Water Technologies, a leading
  manufacturer of ultraviolet equipment. The marketing agreement was cancelled.

Purchase orders for two additional UV systems
  valued at approximately C$150,000 (approximately $96,000) were produced during
  the 2000-2001 period and delivered into the Province of Ontario. One project
  was delivered in May 2000. Additional orders for shipment to Louisiana and Virginia
  were received, with an aggregate value of about $258,000. These two systems
  are to be delivered in the fourth quarter of fiscal 2001.

In July 2001 an order was received from USFilter/W&T,
  the first order received as a result of the Strategic Alliance signed in January
  2001(detailed below). An order for delivery of a system to Chile, valued at
  about $32,500 was delivered and installed with startup in May and June 2002.

During the fiscal year ended August 31, 2000,
  Service Systems began development to reconfigure its UV system. In the quarter
  ended March 31, 2001, Service Systems produced the prototype of a new UV product
  line, the Ultra-Flow Single amp Reactor (SLR. The SLR, with a designed disinfection
  capacity of up to 1.0 million gallons per day per lamp, incorporates Service
  Systems' patented flow reactor chamber, the proprietary low pressure, high intensity
  UV lamp, and the patented flow balanced weir. It encompasses layout flexibility,
  infinite automatic flow control and monitoring, and future expansion can be
  easily accomplished. The client can monitor system and component performance
  locally

---

or remotely. Additional features include full
  password-protected, Internet-based, web-monitored, microprocessor control, which
  will permit monitoring of the Ultra-Flow SLR UV system from Service Systems'
  plant or from any location equipped with an Internet connection. As part of
  this SLR development, Service Systems proceeded on the development of a High
  Voltage Power Controller with increased power and lamp striking voltage. The
  work on this component of the SLR was slower than anticipated, the result of
  which is the rescheduling of jobs in progress. Production units have now been
  manufactured at Service System factory and have been tested and accepted
  for installation into the SLR products. These Power Controller have been installed
  into all SLR ultraviolet system currently delivered and into those systems delivered
  in late 2001 and first quarter 2002. As well, all future UV system delivered
  will incorporate this SLR technology

On January 25, 2001, Service Systems and its
  wholly owned subsidiary, UV Systems Technology, Inc., a British Columbia company
  ("UV Systems"), entered into a Strategic Alliance Agreement and related agreements
  with US Filter/Wallace & Tiernan, Inc., a Delaware corporation ("U.S. Filter
  "). In general, the Strategic Alliance Agreement provides that U.S. Filter will
  market, offer and sell Service Systems' UltraGuard ultraviolet disinfection
  systems (the "Systems"), including aftermarket components and spare parts, on
  an exclusive basis for ten years throughout a territory consisting of North
  America, Central America (including the Caribbean Zone) and South America (the
  "Territory"). Certain of the basic terms of the Strategic Alliance Agreement
  and the related agreements are summarized below. The summaries are subject to
  and qualified by the agreements themselves. Reference should be made to the
  agreements themselves to insure adequate understanding.

Strategic Alliance Agreement.

The parties to the Strategic Alliance Agreement
  are Service Systems and UV Systems, and U.S. Filter/Wallace & Tiernan, Inc.
  The term of the Strategic Alliance Agreement is ten years, subject to earlier
  termination, including a termination for convenience by either party after three
  years. If not terminated, the Agreement is subject to automatic one-year renewals.
  During the term, U.S. Filter will act as the exclusive agent within the Territory
  for the marketing, sales and distribution of the Systems, including aftermarket
  components and spare parts, for all municipal (excluding aquatics) and industrial
  water and wastewater treatment applications. Service Systems will refrain from
  any direct or indirect attempt to market, sell or distribute Systems or components
  within the Territory. U.S. Filter will use its existing sales network and distribution
  system to market, offer and distribute the Systems, and also will provide start
  up assistance, ongoing service, and components, parts and spares installation
  support. U.S. Filter will cause certain companies related to it to refrain from
  any direct or indirect attempt to market, sell or distribute competitive products
  within the Territory. Service Systems will sell ultraviolet disinfection systems
  and components to U.S. Filter, and will provide related support services. The
  purchase price to be paid by U.S. Filter for each System or component manufactured
  or supplied by Service Systems will be based upon Service Systems' list price
  and applicable tax, less a negotiated deduction, and will be subject to further
  adjustment depending upon the price at which U.S. Filter sells the System or
  component to the end user. U.S. Filter will make progress payments as the design
  and manufacture of the System progresses through to delivery and final acceptance
  of the System by the end user. If Service Systems is unable or unwilling to
  meet specified manufacture and supply requirements, then U.S. Filter may manufacture
  and supply Systems and components. U.S. Filter will pay a royalty payment for
  each System or component, whether manufactured or supplied by Service System
  or U.S. Filter. The Strategic Alliance Agreement also gives U.S. Filter a right
  of first refusal with respect to any distribution or marketing agreements, which
  Service Systems or UV Systems may wish to make outside the Territory.

---

License Agreement.

Service Systems, UV Systems and U.S. Filter also
  entered into a License Agreement by which Service System and UV Systems granted
  to U.S. Filter certain exclusive rights in and to patents, trademarks, trade
  secrets, copyrights, software and know-how related to the sale, distribution,
  promotion, marketing or manufacture of Systems for installation within the Territory.
  U.S. Filter will pay a royalty equal to 5% of the net sales price with respect
  to any System manufactured or supplied by Service Systems/UV Systems and a royalty
  between 5% and 10% with respect to any System manufactured or supplied by U.S.
  Filter. In connection with the License Agreement, the parties have entered a
  Trust Agreement with Fort Knox Escrow Services, Inc., a Georgia corporation,
  which provides that software and manufacturing instructions be placed into escrow.

In June 2001 we entered into an agreement with
  US Filter's Wallace and Tiernan Products Group to provide funding ("Funding
  Agreement") to support the production of the various projects noted above. As
  part of this Funding Agreement, USFilter purchased and paid for a new generation
  Production Demonstration Unit ("PDU"). This PDU, valued at $85,000, includes
  the new Single Lamp Reactor design and is self contained, and trailer mounted
  for easy delivery and setup for testing of the wastewater from selected wastewater
  plants interested in applying UV disinfection. The PDU will be delivered in
  September 2001. Complete details of the Funding Agreement were filed with the
  Securities and Exchange Commission on Form 8-K on June 18, 2001.

Stock Purchase Warrants.

Concurrently with the execution of the original
  Strategic Alliance Agreement, Service Systems granted three Stock Purchase Warrants
  to U.S. Filter for an aggregate of 3,000,000 shares of Service Systems common
  stock.

|* | 1,000,000 shares at an exercise
        price equal to the lower of $0.97 pershare or the
        "Fair Market Value" of the common stock as of April 25, 2001;
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | 1,000,000 shares at an exercise price of $1.00
      per share; and                                                                                            
|  | 1,000,000 shares at an exercise price of $2.00
      per share.                                                                                                

As a term of the Funding Agreement, the exercise
  prices on the 3,000,000 warrants was reduced to $0.24 per share. In addition,
  up to 5,000,000 Class C warrants (the "Additional Warrants") may be issued if
  the full funding amount of $785,000 ("Target Level") is used by Service Systems.
  Should the funding provided be less or more than the Target Level, the number
  of Additional Warrants will be increased or decreased proportionately. Up to
  the date of this report a total of 105,000 Additional warrants had been issued.
  The exercise price for the Additional Warrants is also $0.24 per share. All
  warrants issued to US Filter may be exercised any time after October 31, 2001.
  The Warrants may be exercised until October 10, 2010.

If the Strategic Alliance Agreement is terminated
  for convenience, the warrants will expire on the second anniversary of the effective
  date of the termination for convenience. In addition, on January 25 of each
  year during the term of the Strategic Alliance Agreement, Service Systems will
  grant to U.S. Filter additional warrants to purchase Service Systems common
  stock, based upon the orders for Systems booked or significantly influenced
  by U.S. Filter during the preceding 12 months. Provided at least US$1,000,000
  of orders for Systems have been booked or influenced, each warrant will permit
  U.S. Filter to purchase 50,000 shares and also 500 shares for each US$10,000
  of orders for Systems booked or significantly influenced by U.S. Filter in excess
  of US$1,000,000 during the preceding 12 months.

---

Registration Rights Agreement.

Service Systems and U.S. Filter also entered
  into a Registration Rights Agreement. The Registration Rights Agreement entitles
  U.S. Filter to demand registrations (two long form registrations and, if available,
  short form registrations at specified intervals) and piggyback registrations
  for the shares of Service Systems common stock issued upon exercise of the warrants.

Security Agreement.

Service Systems and UV Systems have granted to
  U.S. Filter a security interest in certain rights in and to their patents, trademarks,
  trade secrets, copyrights, soft ware and know how, and contracts related to
  the use or exploitation of these rights in connection with the sale, distribution,
  promotion, marketing or manufacture of Systems for installation within the Territory.
  The security interest secures an obligation to make a $100,000 payment under
  the Strategic Alliance Agreement upon a termination by convenience, or a termination,
  rejection, disclaiming or repudiation of the License Agreement in connection
  with insolvency proceedings.

Service Systems believes the Strategic Alliance
  with US Filter will benefit Service Systems through a reduction of operating
  and working capital, as US Filter will be responsible for sales and marketing
  expenses and after sales costs associated with start up, installation support
  and ongoing service, among other things. Due to the operational cost reduction,
  margin expectations remain consistent with those contemplated before the signing
  of the Agreement.

With the signing of our Strategic Alliance Agreements
  and related agreements with US Filter's Wallace and Tiernan Products Group on
  January 25, 2001, the responsibility for marketing the Ultra Guard systems within
  the Exclusive Territory was transferred to US Filter. The exclusive territory
  consists of North, South and Central America and the Caribbean. US Filter's
  representative companies have the responsibility for all our sales within the
  Exclusive Territory.

During the first and second quarter of 2002 USFilter
  issued orders to the Clearwater Group for three UV systems valued at about $237,000.
  These systems are to be delivered into Chile and the USA. The orders are being
  manufactured at the Clearwater Group plant in Langley, British Columbia, Canada.

In September 2001 we licensed the Korean company,
  VITROSYS, the exclusive rights to manufacture and sell our SLR Ultraviolet disinfection
  systems within the Republic of Korea and a non-exclusive right to manufacture
  and sell in other territories not currently represented by Service Systems agents.
  VITROSYS will pay a royalty on each UV system manufactured. The royalty fee
  is variable, dependant on the selling price of the UV system. Under the License
  Agreement, Service Systems will provide full manufacturing drawings, software
  technology and expertise, and a specified number of hours of training at Service
  Systems facilities. These drawings were provided in the last quarter of
  fiscal 2001 and first quarter 2002. The training was conducted in June 2002
  in Langley, BC where our staff personnel and consultants trained three Vitzrosys
  personnel in the manufacturing and operational requirements of the SLR UV system.
  As a requirement of the License Agreement, VITROSYS will be required to purchase
  from Service Systems, a key component for each SLR system. This key component
  is defined as the royalty verification component. Its purchase will trigger
  a sale and resultant royalty payment liability. The Korean market for UV is
  expected to increase as a result of legislation that will require all municipal
  and Industrial wastewater to be disinfected. During the third quarter Vitzrosys
  has purchased special manufacturing test equipment and a representative Single
  Lamp Reactor. In addition we continue to quote various other parts and UV system
  components.

---

During the first quarter of 2002 we made a major
  move to reduce our overheads. Having completed the delivery of the UV systems
  that were produced during 2000 to January 2002, we searched out a partner to
  work with on production of future UV systems orders. We found The Clearwater
  Group for this purpose. Clearwater is engaged in the water industry, targeting
  the treatment of potable water for smaller towns to which they provide complete
  packaged treatment plants. Clearwater will assume the manufacturing of new UV
  project supplying these to our Strategic Alliance partner, USFilter. Clearwater
  will also provide warranty services on the previously delivered UV products.
  Service Systems will be paid a royalty on sales, the percentage scaled upward
  as the total sale volume increases. This association with Clearwater as our
  manufacturing partner permitted the company to move from its factory and
  reduce staff level in production, engineering and support. A number of key production
  staff moved to the Clearwater facility to assist in setting up for this manufacturing
  responsibility. The remaining staff at Service Systems works in a liaison and
  support role between USFilter and Clearwater.

This change of manufacturing strategy has significantly
  reduced our monthly operational costs. UV Systems Technology Inc, our wholly
  owed subsidiary is now inactive and has no operations. Activities are limited
  to accounting functions, recording of accounts receivable collections and project
  completion activities. Our revenue will come from royalties received from the
  Clearwater Group due to sales from USFilter and from sales of the UltraGuard
  SLR UV systems. will now be received through royalty receipts.

We anticipate recent US and world events will
  accelerate the use of ultraviolet products for use in drinking water applications,
  and as well, in air treatment, both for surface and ventilation. As a result
  of this, our company has started research and development of products to be
  used in these applications. UV units for the drinking water market will target
  application such as point of entry (POE) and point of use (POU). POE UV systems
  will treat water at the entry point into single-family homes or apartment complex.
  POU systems will treat water at selected points within the home using a system
  installed under the sink. Both POE and POU will use of various combinations
  of filters and an ultraviolet sterilizer. Additional types of systems that are
  being looked at for exploitation are; 1) Air systems for ventilation will use
  ultraviolet lamps and filtration, installed within ventilation ducts, and; 2)
  Surface disinfections systems which will use ultraviolet systems mounted above
  and/or under conveyors to disinfect articles such as food and drink packaging
  container while moving on the conveyor. Other applications could include external
  disinfection of mail or packages mounted on a conveyor. Ultraviolet will not
  penetrate the envelope or the wrappings to disinfect the contents of the package
  but is applicable to external surface disinfection. During this quarter work
  on the product was started. Components of the new system were selected for a
  prototype test product. Production and testing, including laboratory tests,
  CSA and UL approval and beta test site selection and testing will be conducted
  over the following months.

To cover costs of these drinking water UV products,
  during this quarter we were successful in raising funds through private placement
  of the Companies common stock. These private placements to various investors,
  including a number of our existing shareholders, were made in reliance upon
  the exemptions from registration afforded by Rule 506 of Regulation D. We will
  continue to solicit funds through this venue during the third and fourth quarter
  as we move this product through production and active marketing.

On October 8, 2002 we filed with the US Securities
  and Exchange Commission Form Type PREM14A-PROXY STATEMENT pursuant to the Securities
  Act of 1934 and filed Form Type DEF 14A-PROXY STATEMENT on October 19, 2002.
  The purpose for these filing being the Notice of Special Meeting of Stockholders
  to be convened at 10:00 a.m. November 15, 2002 at the Executive Hotel, 4201
  Lougheed Highway, Burnaby British Columbia V5C 3Y6 in Boardroom A. The record
  date for the meeting is October 15, 2002.

---

The matters to be considered at the meeting included:

(1) Amending the Corporations Articles
  of Incorporation to change the name of the Corporation from Service Systems
  International, Ltd. to UltraGuard Water Systems Corp., and approving the required
  amendment to the Articles of Incorporation and other actions necessary to complete
  the change of name.

(2) Authorizing the Corporations board
  of directors to affect a one-for-fifty (1:50) reverse split of the Corporations
  issued and outstanding common stock.

(3) Amending the Corporations Articles
  of Incorporation to increase the Corporations authorized common stock
  from 50,000,000 par value $0.001 to 100,000,000 par value $0.001, and approving
  the required amendment to the Articles of Incorporation and other actions necessary
  to complete the increase in authorized common stock.

The full content of the filing is available on
  the Internet atwww.sec.govunder Edgar reports

RESULTS OF OPERATIONS FOR THE NINE MONTHS
  ENDED SEPTEMBER 30, 2002.

Nine months ended September 30, 2002 compared
  to the nine months ended September 30, 2001.

Revenues. During
  the nine months ended September 30, 2002, we reported revenues of $45,741 compared
  to revenues of $1,069,596 reported in the comparable period of fiscal 2001,
  a decrease of $1,023,855 or 96%. The decrease was as a result of the close down
  of manufacturing activity and their transfer to The Clearwater Group.

Direct Project
  Costs. Project costs recorded during the nine months ended September 30, 2002
  amounted to $38,374 compared to $617,186 during the comparable period of fiscal
  2001, a decrease of $578,812 or 94%. The decrease was as a result of the close
  down of manufacturing activity and their transfer to The Clearwater Group.

Gross Profit from Projects. Gross profits from
  projects dropped to $7,367 during the nine months ended September 30, 2002,
  compared to $452,410 recorded during the comparable period of fiscal 2001, a
  decrease of $445,043, or 98%. The decrease was as a result of the close down
  of manufacturing activity and their transfer to The Clearwater Group.

Gross Profit
  from License Revenue. We reported no income from licensing during the nine months
  ended September 30, 2002 compared to a gain of $242,846, less cost of $66,103,
  resulting in a net amount of $176,743, in the comparable period of fiscal 2001.

Additional Project Costs. During the nine months
  ended September 30, 2002, additional costs and repairs accruals relating to
  systems shipped in 2000 and 2001 amounted to $183,138 as compared to nil, an
  increase of 100% over the comparable period of the prior fiscal period.

Manufacturing
  Costs Not Applied. Manufacturing costs not applied are annual plant overhead
  costs that are not being charged against contracts. The balance not charged
  is identified as manufacturing cost not applied. For the nine months ended September
  30, 2002, we reported $38,160 of these costs, a decrease of $39,208 or 51%,
  from $77,368 in the comparable period of the prior year. The decrease was as
  a result of the close down of manufacturing activity and their transfer to The
  Clearwater Group.

---

Amortization
  of Goodwill. For the nine months ended September 30, 2002, there was no amortization
  of goodwill as it had been fully amortized in the fourth quarter of 2001 compared
  to the $363,810 for the comparable period of the prior fiscal period. The goodwill
  resulted from our acquisition of a majority interest in our subsidiary, UVS.

Bad Debts. For
  the nine months ended September 30, 2002, we provided an allowance for doubtful
  account in the amount of $415,662 as compared to nil, or 100% increase over
  the comparable prior fiscal period.

Foreign Exchange
  Translation Loss. For the nine months ended September 30, 2002, we reported
  a foreign exchange translation loss of $13,743, an increase of $4,729, or 52%,
  over $9,014 in the comparable prior fiscal period.

General and Administrative
  Expense. For the nine months ended September 30, 2002, we reported general and
  administrative expense of $519,017, a decrease of $321,164, or 38% from $840,181
  reported in the comparable period of the prior year. This decrease resulted
  primarily in the decreased legal fees, decreased finders fees paid to fund raisers
  and a recovery of bad debts from an account that was written off in the prior
  years. As well the discontinuation of manufacturing activities reduced general
  and administrative wages.

Imputed Interest. For the nine months ended
  September 30, 2002, we reported imputed interest of $31,928 as compared to nil
  or 100% increase over the comparable prior fiscal period. The increase is primarily
  due to the imputed interest calculated on amounts owing to related parties.

Interest, Net
  of Interest Income. For the nine months ended September 30, 2002, we reported
  interest, net of interest income, of $96,104, an increase of $29,521, or 44%,
  from $66,583 reported in the comparable prior fiscal period. The increase was
  due to interest costs on additional loans required to fund manufacturing to
  complete shipments in the latter part of 2001 and in the first quarter of 2002.

Research and
  Development Expense. For the nine months ended September 30, 2002, we reported
  research and development expense of $5,837 made up of expenses of $17,337, reduced
  by a recovery of expenses from prior years amounting to $11,500, a decrease
  of $289,562 or 98%, from $295,399 in the comparable period of the prior fiscal
  period. The decrease in R & D activities was as a result of the close down
  of manufacturing activity and R & D activities having been mainly completed
  prior to this close down.

Selling Expenses.
  For the nine months ended September 30, 2002, we reported selling expenses of
  $75,798, a decrease of $189,954, or 71%, from $265,752 reported in the comparable
  period of the prior year. The decrease of $189,954 was due mainly to the shut
  down of all Sales and marketing activities resulting in an expenses decrease
  of $239,207. This decrease was partially offset by stock based compensation
  expense of $49,253, resulting from the stock warrant issued as part of the Strategic
  Alliance signed with USFilter/WT.

Net Loss for the Period. For the nine months
  ended September 30, 2002, we reported a net loss for the period of $1,372,020,
  an increase of $83,066 or 66% over $1,288,954 in the comparable period of prior
  year. The increase in net loss was due primarily to the accrual of additional
  project costs, provision for bad debts and the recording of imputed interest
  and stock based compensation expense. These costs and expenses were reduced
  partly by the reduced activity which resulted in decreased general and administrative
  expenses, decreased engineering and prototyping expenses, and decreased selling
  expenses during the nine-month period of fiscal 2002 in spite of the fact that
  there was an amortization of goodwill during the comparable period of the prior
  fiscal year.

---

Net Loss per
  Share. For the nine months ended September 30, 2002, we reported a net loss
  per share for the period of $0.05, equal to the loss per share of $0.05 in the
  comparable period of the prior fiscal year. Although the net loss increased,
  the increased net loss was allocated over an increased number of shares outstanding
  and share equivalents in fiscal 2002.

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER
  30, 2002.

Three months ended September 30, 2002 compared
  to the three months ended September 30, 2001.

Revenues. During
  the three months ended September 30, 2002, we reported $10,848 revenue compared
  to revenues of $407,706 during the comparable period of the prior year, a decrease
  of $396,858, or 97%. The decrease was as a result of the close down of manufacturing
  activity and their transfer to The Clearwater Group.

Direct Project
  Costs. During the three months ended September 30, 2002, we reported project
  costs of $6,738 compared to $214,246 during the comparable period of the prior
  year, a decrease of $207,508, or 97%. The decrease was as a result of the close
  down of manufacturing activity and their transfer to The Clearwater Group.

Gross Profit from Projects. We reported $4,110
  gross profit for the three months ended September 30, 2002, compared to $193,460
  during the comparable period of the prior year, a decrease of $189,350 or 98%.
  The decrease was as a result of the close down of manufacturing activity and
  their transfer to The Clearwater Group.

Additional Project
  Costs. During the three months ended September 30, 2002, additional costs and
  repairs were accrued relating to the systems shipped in 2000 and 2001 amounting
  to $127,560 as compared to nil, or 100% increase over the comparable period
  of the prior fiscal period.

Manufacturing
  Costs Not Applied. Manufacturing costs not applied are annual plant overhead
  costs that are not being charged against contracts. The balance not charged
  is identified as manufacturing cost not applied. For the three months ended
  September 30, 2002, we reported $5,730 of these costs, a decrease of $18,325
  or 76%, from $24,055 in the comparable period of the prior year. The reduced
  loss was due mainly to the close down of manufacturing activity and their transfer
  to The Clearwater Group.

Amortization
  of Goodwill. For the three months ended September 30, 2002, there was no amortization
  of goodwill as it had been fully amortized in the fourth quarter of 2001 compared
  to the $121,270 for the comparable period of the prior fiscal period. The goodwill
  resulted from our acquisition of a majority interest in our subsidiary, UVS.

Bad Debts. For
  the three months ended September 30, 2002, we provided $415,662 allowance for
  doubtful account of a project compared to nil or 100% increase over the comparable
  period of the prior year. This was due wholly to provisional costs set up to
  provide for the cancellation of one project.

Foreign Exchange
  Translation Gain. For the three months ended September 30, 2002, we reported
  a foreign exchange translation gain of $12,986, an increase of $9,248, or 247%,
  over $3,738 in the comparable prior fiscal period.

General and Administrative
  Expense. For the three months ended September 30, 2002, we reported general
  and administrative expense of $167,923, a decrease of $256,785, or 60% from
  $424,708 reported in the comparable period of the prior year. This decrease
  resulted primarily in the decreased legal fees; decreased finders fees paid
  to fund raisers, decreased investor relations expenses and, as well the discontinuation
  of manufacturing activities.

---



Imputed Interest.
  For the three months ended September 30, 2002, we reported imputed interest
  of $2,805, compared to nil or 100% increase over the comparable prior fiscal
  period. The increase is primarily due to the imputed interest calculated on
  amounts owing to related parties.

Interest, Net
  of Interest Income. For the three months ended September 30, 2002, we reported
  interest, net of interest income, of $39,984, an increase of $14,260, or 55%,
  from $25,724 reported in the comparable prior fiscal period. The increase was
  due to interest costs on additional loans acquired since the prior fiscal period.

Research and
  Development Expense. For the three months ended September 30, 2002, we reported
  research and development expense credit of $10,946, a decrease of $143,515,
  or 108%, from $132,569 in the comparable period of the prior fiscal year. The
  decrease of $143,515 is made up of a decrease of expenses in the amount of 155,015
  due mainly to reduced R & D activities in the fiscal 2002 and a recovery
  of R & D expenses of prior years in the amount of $11,500.

Selling Expenses.
  For the three months ended September 30, 2002, we reported selling expenses
  of $17,663, a decrease of $121,471, or 87%, from $139,134 reported in the comparable
  period of the prior fiscal year. The decrease 4121,471 was due mainly to the
  shut down of all sales and marketing activities resulted in expense reduction
  of $239,207. This decrease was partially offset recording in the third quarter
  stock based compensation expenses of $49,253 resulting from the stock warrants
  issued as part of the Strategic Alliance signed with USFilter/WT.

Net Loss for the Period. For the three months
  ended September 30, 2002, we reported a net loss for the period of $749,285,
  an increase of $255,766, or 52% over $493,519 in the comparable period of fiscal
  2001. The increase in net loss was due primarily to the accrual of additional
  project costs, provision for bad debts, and the recording of stock based compensation
  expense. These costs and expenses were reduced partly during the three-month
  period of fiscal 2002 by reduced activity resulting from the shut down of manufacturing
  operations. They shut down acted to decrease general and administrative expenses,
  engineering and prototyping expenses, and selling expenses, this decreases partly
  offset by an amortization of goodwill charge during the comparable three month
  period of the 2001 fiscal year.

Net Loss per
  Share. For the three months ended September 30, 2002, we reported a net loss
  per share for the period of $0.02. The net loss per share decreased mainly as
  a result of the decrease in net loss and partly due to the net loss being allocated
  over an increased number of shares outstanding and share equivalents in fiscal
  2002.

LIQUIDITY

The nature of our business may be expected to
  include a normal lag time between the incurring of operating expenses and the
  collection of royalty receivables if and when sales are made. In addition, we
  are dependent on sales to a licensee, which is obligated to purchase agreed
  upon system components, and on awards of water treatment system contracts for
  non-recurring projects. For these and other reasons, we may experience periods
  of limited working capital and may be expected to require financing for working
  capital during those periods.

In addition, we will require financing over and
  above our current resources to sustain our operations and expand our marketing
  efforts. We cannot assure that the additional financing can be obtained on a
  timely basis, on terms that are acceptable or if at all.

---



We financed our operations during this fiscal
  period through loans from related parties, minority shareholders of Service
  Systems, and through private placement of the Companies common stock. These
  private placements to various investors, including a number of our existing
  shareholders, were made in reliance upon the exemptions from registration afforded
  by Rule 506 of Regulation D.

We expect that during the final quarter of fiscal
  2002 and fiscal 2003, royalty revenues will be received as a result of the signed
  Strategic Alliance with US Filter, the relationship established with The Clearwater
  Group and our Korean Licensee, however these revenues will not be significant.
  Also, we will continue to depend on receipt of additional funds through public
  or private equity or debt sales or other lender financing to fund the expansion
  of our market in territories not already covered and in potable water industry
  activities. Except as previously indicated and although arrangements have not
  been completed to raise funds we continue to actively seek funding sources.
  Failure to receive these funds may be expected to have a material adverse effect
  on our company.

Part II Other Information

Item 1. Legal Proceedings

On October 20, 1998 a suit was filed in the Supreme
  Court of British Columbia by Thomas O' Flynn against the Company, Kenneth Fielding
  (the Company's President and Director), and Charles P. Nield (a former Director
  and Vice President of the Company). O' Flynn alleges that in April of 1996,
  he purchased shares of the Common Stock based on a representation that they
  would be free trading in 40 days of "the filing of a prospectus". He further
  alleges that in September of 1996 he purchased additional shares of Common Stock
  based on the representation that the shares would be free trading within 40
  days of the Common Stock becoming free trading. O' Flynn alleges that the representation
  was a warranty and was incorrect. He further alleges that he suffered a loss
  because the share price decreased while he was holding the shares. He seeks
  damages for breach of warranty, negligence, misrepresentation and breach of
  fiduciary duty. The amount claimed is not specified. The Company filed an answer
  denying the claims and continues to actively defend the suit. Examination for
  discovery of Charles P. Nield was conducted in June 1999; since then there has
  been no further activity.

Item 2. Changes in Securities

Service Systems issued the following shares of
  common stock to four United States through private placements. These private
  placements were made in reliance upon the exemptions from registration afforded
  by Rule 506 of Regulation D.

|Date         | Shares    | Residency   | Consideration | Exemption      
|------------ | --------- | ----------- | ------------- | ---------------
|             |           | Citizenship | Valued at     |                
|            
|             |           |             |               |                
|17 July 2002 | 4,000,000 | Can         | $200,000      | Rule 506, Reg D



---

Item 3. Defaults upon Senior Securities

None

Item 4. Submissions of Matters to a Vote of Security Holders

None

Item 5. Other Information

None

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

|(a)   Exhibits (exhibit reference numbers refer
      to Item 601 ofRegulation SB
|---------------------------------------------------------------------------------
|                                                                                 

|Exhibit Number | Description Method of Filing           | 
|-------------- | -------------------------------------- | 
|               |                                        | 
|(3)(I)         | Articles of Incorporation (1)          | 
|               |                                        | 
|(3)(ii)        | Bylaws, as amended (2)                 | 
|               |                                        | 
|               |                                        | 
|(10)(iii)      | Agreement between Douglas              | 
|               | Sommerville and Company dated          | 
|               | 12/6/96 (3)                            | 
|               |                                        | 
|(10)(iv)       | Agreement between John Gaetz           | 
|               | and the Company dated 12/6/96 (3)      | 
|               |                                        | 
|(10)(v)        | Sample Agreement among minority        | 
|               | Shareholders of UV Systems             | 
|               | Technology, Inc. and the Company       | 
|               | each dated 2/28/97 (3)                 | 
|               |                                        | 
|(10)(vi)       | Marketing Distribution Agreement       | 
|               | Between UV Systems Technology, Inc.    | 
|               | and the Company (2)                    | 
|               |                                        | 
|(10)(vii)      | Sales Representation Agreement         | 
|               | between UV Systems Technology,         | 
|               | Inc. and "The Representative" (2)      | 
|               |                                        | 
|(10)(viii)     | Exclusive Distributorship Agreement    | 
|               | Between UV Waterguard Systems, Inc.    | 
|               | and Chiyoda Kohan Co., Ltd., and NIMAC | 
|               | Corporation. (2)                       | 
|               |                                        | 
|(10)(ix)       | 1997 Stock Option Plan (4)             | 
|               |                                        | 
|(10)(x)        | Interim Funding Agreement              | 
|               | between UVS, MDS and WOF (5)           | 
|               |                                        | 
|(10)(xi)       | Letter Agreement between Service       | 
|               | Systems and Elco Bank and Trust        | 
|               | Company Limited (6)                    | 
|               |                                        | 
|(10)(xii)      | Loan Agreement between the Company     | 
|               | and TD Bank (6)                        | 
|               |                                        | 
|(10)(xiii)     | Service Systems 1999 Long-Term         | 
|               | Equity Incentive Plan (7)              | 

---





|(10)(xiv)   | Letter Agreement between Service          |               
|----------- | ----------------------------------------- | --------------
|            | Systems, UVS, WOF and MDS dated           |               
|            | February 13, 2000(7)                      |               
|            |                                           |               
|(10)(xv)    | Lease dated October, 2000 between         |               
|            | Service Systems, UV Technology Inc.       |               
|            | and Slough Estates Canada Limited(8)      |               
|            |                                           |               
|(10)(xvi)   | Amended Long Term Equity Incentive        |               
|            | Plan (10)                                 |               
|            |                                           |               
|(10)(xvii)  | Strategic Alliance Agreement Between      |               
|            | Service Systems, UV Technology, Inc.      |               
|            | And US Filter dated January 25, 2001(9)   |               
|            |                                           |               
|(10)(xviii) | Letter Agreement between Service Systems, |               
|            | UV Technology, Inc. and US Filter dated   |               
|            | June 1, 2001 (11)                         |               
|            |                                           |               
|(11)        | Statement Regarding Computation           | Filed Herewith
|            | of Per Share Earnings                     | Electronically
|            |                                           |               
|(21)        | Subsidiaries of the Corporation:          |               
|            | UV Systems Technology, Inc.,              |               
|            | incorporated in British Columbia,         |               
|            | Canada (4)                                |               

|(1  | ) | Incorporates by reference to the Corporation's
      Form 10SB effective       
|--- | - | -------------------------------------------------------------------------------
|    |   | on January 22, 1997.                                                           
|(2  | ) | Incorporated by reference to the Corporation's
      Form S-8 filed with the   
|    |   | Commission on October 6, 1997.                                                 
|(3  | ) | Incorporated by reference to the Corporation's
      Form 10Q for the fiscal   
|    |   | quarter ended February 28, 1997.                                               
|(4  | ) | Incorporation by reference to the Corporation's
      Form 10KSB for the fiscal
|    |   | Year ended August 31, 1997.                                                    
|(5  | ) | Incorporation by reference to the Corporation's
      Form 10KSB for the fiscal
|    |   | Year ended August 31, 1998                                                     
|(6  | ) | Incorporated by reference to the Corporation's
      Form 10KSB for the fiscal 
|    |   | year ended August 31, 1999                                                     
|(7  | ) | Incorporated by reference to the Corporation's
      Form 10QSB for the fiscal 
|    |   | quarter ended February 29, 2000.                                               
|(8  | ) | Incorporated by reference to the Corporation's
      Form 10KSB for the fiscal 
|    |   | year ended August 31, 2000                                                     
|(9  | ) | Incorporated by reference to the Corporation's
      Form 8-K filed February   
|    |   | 27, 2001                                                                       
|(10 | ) | Incorporated by reference to the Corporation's
      Form 10Q for the fiscal   
|    |   | period ended March 31, 2001                                                    
|(11 | ) | Incorporated by reference to the Corporation's
      Form 8-K filed June 18,   
|    |   | 2001                                                                           

|(b) Reports on Form 8-K
|-----------------------
|None
      filed       



---

SIGNATURES

In accordance with Section 13 or 15(d) of the
  Securities Exchange Act of 1934, the registrant caused this registration statement
  to be signed on its behalf by the undersigned, thereunto duly authorized.

| | SERVICE SYSTEMS INTERNATIONAL, LTD.
| | -----------------------------------
| |                                    
| |                                    
| | /s/ Kenneth R. Fielding            
| |                                    
| | Kenneth R. Fielding, President     
| |                                    

|Date: November 14, 2002 | /s/ Ken Fielding                         
|----------------------- | -----------------------------------------
|                        |                                          
|                        | Ken Fielding, President                  
|                        |                                          
|                        |                                          
|                        |                                          
|Date: November 14, 2002 | /s/ John R. Gaetz                        
|                        |                                          
|                        | John R Gaetz, Principal Financial Officer





---

**CERTIFICATION PURSUANT TO 18 U.S.C. SECTION
  1350 AS ADOPTED
  PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the quarterly report of Service
  Systems International Ltd. on Form 10-QSB for the period ended September 30,
  2002 as filed with the Securities and Exchange Commission, Ken Fielding, President
  and Chief Executive Officer, and John R. Gaetz, Vice President and Chief Financial
  Officer of Service Systems International Ltd., hereby certify, pursuant to 18
  U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
  Act of 2002, to our knowledge, that:

| | (1) | the quarterly report of Service
      Systems International Ltd. for the period ended September 30,2002,
      fully complies with the requirements of section 13(a) or 15 (d) of the Securities
      ExchangeAct of 1934; and                                                                   
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    
| |     |                                                                                                                                                                                                                                                                                                   
| | (2) | the information
        contained in such quarterly report of Service Systems International Ltd.
        for theperiod ended September 30, 2002, fairly
        presents, in all material respects, the financialcondition
        and results of operations of Service Systems International Ltd.
| |    
| |    
| |     |                                                                                                                                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                   

| | /s/ KEN FIELDING                          
| | ------------------------------------------
| |                                           
| | Ken Fielding                              
| | President and Chief Executive Officer     
| |                                           
| |                                           
| |                                           
| | /s/ JOHN R. GAETZ                         
| |                                           
| | John R. Gaetz                             
| | Vice President and Chief Financial Officer





---

EXHIBIT 11

Service Systems International, Ltd.Computation of Per-Share Incom
  Treasury Stock Method
  As Modified for 20% Test

|                                              | Period Ended              
|--------------------------------------------- | --------------------------
|                                              | September 30,
        2002
|                                              |                           
|                                              |                           
|                                              |                           
|                                              |                           
|                                              |                           
|Weighted average number of shares outstanding |                           
|                                              |                           
|                                              |                           
|                                              |                           
|Total common and common equivalent shares     |                           
|                                              |                           
|                                              |                           
|                                              |                           
|Net income (loss) for the period              |                           
|                                              |                           
|                                              |                           
|Loss per common and common equivalent shares  | $                         
|                                              |                           

Earnings per share:

The earnings per share are computed by dividing
  the net income (loss) for the period by the weighted average number of common
  shares outstanding for the period. Common stock equivalents are excluded from
  the computation if their effect would be anti-dilutive.

---