SECURITIES AND EXCHANGE COMMISSION
                          WASHINGTON, 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 June 30, 2002

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

  For the transition period from                      to
                                 ---------------------  -----------------------

  Commission file number
                         ------------------------------------

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

         NEVADA                                            88-0263701
State of Incorporation                                   I.R.S. Employer
                                                        Identification No.

2nd Floor, 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: 31,024,165 as of July 25, 2002.


<PAGE>



                                        INDEX
--------------------------------------------------------------------------------


PART I     Financial Information

Item 1.    Consolidated Financial Statements.
---------------------------------------------

Consolidated Balance Sheets as of June 30, 2002
     and 2001 (unaudited)                                                      3

Consolidated Statements of Operations for the three months and
     six months ended June 30, 2002 and 2001 (unaudited)                       4

Consolidated Statements of Cash Flows for the three months and
     six months ended June 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                          13 to 21

Part II    OTHER INFORMATION                                                  21

ITEM 1.    LEGAL PROCEEDINGS                                                  21

ITEM 2     CHANGES IN SECURITIES                                              21

ITEM 3.    DEFAULT UPON SENIOR SECURITIES                                     21

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                22

ITEM 5.    OTHER INFORMATION                                                  22

ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K                                22-24

Signatures                                                                    25

<PAGE>

Service Systems International, Ltd.
Consolidated Balance Sheets

                                                         June 30,   December 31,
                                                           2002           2001
                                                            $              $
                                                       (Unaudited)     (Audited)

ASSETS

Current Assets
   Cash                                                    1,105           -
   Short-term investment - restricted (Note 3)           257,806        244,599
   Accounts receivable (Note 6)                          983,154      1,116,744
   Inventory and contract work in progress               197,630        254,154
   Prepaid expenses and deposits                          95,490        230,151
                                                     -----------    -----------

Total Current Assets                                   1,535,185      1,845,648
Property, Plant and Equipment (Note 4)                    92,999        118,624
Other Assets
   Patents and trademarks (Note 5)                       108,183        105,894
                                                     -----------    -----------

Total Assets                                           1,736,367      2,070,166
                                                     ===========    ===========

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities
   Cheques issued in excess of funds on deposit             -             4,539
   Accounts payable (Note 6)                           1,199,688      1,130,572
   Accrued liabilities                                    94,515        130,674
   Wages and vacation pay payable                         69,160         70,566
   Customer deposits                                       6,595        121,396
   Loans payable (Note 7)                              1,201,386      1,076,419
   Amounts owing to related parties (Note 8)             639,467        525,467
                                                     -----------    -----------

Total Current Liabilities                              3,210,811      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                                        27,254         26,888
   Additional paid-in capital                          8,302,372      8,266,082
   Common shares paid for but unissued                      -             1,209
   Donated capital (Note 8)                               29,123           -
   Stock based compensation                              329,063        255,875
Deficit                                              (10,162,256)    (9,539,521)
                                                     -----------    -----------

Total Stockholders' Deficit                           (1,474,444)      (989,467)
                                                     -----------    -----------

Total Liabilities and Stockholders' Deficit            1,736,367      2,070,166
                                                     ===========    ===========

Contingencies (Notes 1 and 11)
Subsequent Events (Note 12)

                  (See Accompanying Notes to the Financial Statements)

<PAGE>

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

<TABLE>
<CAPTION>
                                                   Three months    Three months      Six months     Six months
                                                       ended           ended           ended           ended
                                                      June 30,        June 30,        June 30,        June 30,
                                                        2002            2001            2002            2001
                                                         $               $               $               $
                                                    (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)
<S>                                                 <C>             <C>             <C>             <C>
Project Revenue                                           -            254,171          34,893         661,890

Project Costs                                             -            162,225          31,636         402,940
                                                    ----------      ----------      ----------      ----------

Gross Profit before adjustment                            -             91,946           3,257         258,950

Additional Project Costs                                  -               -             55,578            -

Manufacturing Costs Not Applied                         10,498          42,302          32,430          53,313
                                                    ----------      ----------      ----------      ----------

Total Gross Profit (Loss)                              (10,498)         49,644         (84,751)        205,637
                                                    ----------      ----------      ----------      ----------
Expenses
   Amortization of goodwill                               -            121,270            -            242,540
   Foreign exchange                                     20,782             973          26,729          12,752
   General and administrative                          187,608         209,443         351,094         415,473
   Imputed interest (Note 8)                            29,123            -             29,123            -
   Interest                                             28,364          24,811          56,120          40,859
   Research and development                                687          80,378          16,783         162,830
   Selling                                              20,694          60,011          58,135         126,618
                                                    ----------      ----------      ----------      ----------

Total Expenses                                         287,258         496,886         537,984       1,001,072
                                                    ----------      ----------      ----------      ----------

Net Loss for the Period                                297,756         447,242         622,735         795,435
                                                    ==========      ==========      ==========      ==========


Net Loss per Share                                       (0.01)          (0.02)          (0.02)          (0.03)
                                                    ==========      ==========      ==========      ==========

Weighted Average Number of Shares Outstanding       27,237,000      23,461,000      27,071,000      22,944,000
                                                    ==========      ==========      ==========      ==========

(Diluted loss per share has not been presented as the result is anti-dilutive)
</TABLE>

                  (See Accompanying Notes to the Financial Statements)


<PAGE>

Service Systems International, Ltd.
Consolidated Statements of Cash Flows

                                                       Six months     Six months
                                                          ended         ended
                                                         June 30,      June 30,
                                                           2002          2001
                                                            $             $
                                                       (Unaudited)   (Unaudited)

Cash Flows to Operating Activities
   Net Loss                                             (622,735)      (795,435)

   Adjustments to reconcile net loss to cash
     Amortization of goodwill                               -           242,540
     Depreciation and amortization                        29,219         31,722
     Foreign exchange                                     26,729         12,752
     Common stock issued for expenses                      1,656         94,600
     Accrual of interest                                  57,740         40,501
     Imputed interest                                     29,123           -
     Stock based compensation                             73,188           -

   Change in non-cash working capital items
     Decrease (increase) in accounts receivable          164,262       (603,441)
     Decrease (increase) in inventory and contract
      work in progress                                    56,524        (24,123)
     Decrease (increase) in prepaid expenses and
      deposits                                           134,661        (52,692)
     (Decrease) increase in accounts payable,
       accrued liabilities, wages and vacation
       pay payable and customers' deposits              (147,044)       514,244
                                                     -----------    -----------

Net Cash Used in Operating Activities                  (196,677)       (539,332)
                                                     -----------    -----------

Cash Flows (to) from Investing Activities
   (Acquisition) reduction of short-term
     investment - restricted                               (854)          1,029
   Additions to patents and trademarks                     -            (15,089)
   Acquisition of capital assets                           -            (75,472)
                                                     -----------    -----------

Net Cash Used in Investing Activities                      (854)        (89,532)
                                                     -----------    -----------

Cash Flows from (to) Financing Activities
   Common stock issued                                    35,000        524,962
   Increase in loans payable                              70,558        414,076
   Increase in amounts owing to related parties           98,826         57,194
   Decrease in shares subscriptions received              (1,209)      (378,600)
                                                     -----------    -----------

Net Cash Provided by Financing Activities                203,175        617,634
                                                     -----------    -----------

Increase in Cash                                           5,644        (11,231)

Cash - Beginning of Period                                (4,539)        30,219
                                                     -----------    -----------

Cash - End of Period                                       1,105         18,988
                                                     ===========    ===========
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                                        -            54,600

Supplementary Information
   Cash paid for interest                                    619          6,492
   Cash paid for income taxes                               -              -

                  (See Accompanying Notes to the Financial Statements)


<PAGE>

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 Guard 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 $1,675,626 as at
     June 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 water treatment systems to be
     supplied to their strategic alliance partner, US Filter. Clearwater will
     also provide warranty services on any previous Ultra Guard 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.


<PAGE>

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


2.   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.

3.   Restricted Cash

     In connection with a letter of guarantee, required under a long-term
     project bonding, the Company purchased a C$391,000 face value Bankers'
     Acceptance maturing July 5, 2002, yielding a 2% return, to be held as a
     bond for the letter of guarantee of C$390,809. Upon satisfaction of certain
     minor follow-up engineering this letter of guarantee will be extinguished
     and the cash will become unrestricted.


<PAGE>

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


4.   Property, Plant, and Equipment

     Property, plant, and equipment are stated at cost less accumulated
     depreciation.

<TABLE>
<CAPTION>
                                                                                    June 30,     December 31,
                                                                                      2002          2001
                                                                     Accumulated    Net Book       Net Book
                                                         Cost       Depreciation      Value          Value
                                                          $              $              $              $
                                                                                   (Unaudited)    (Audited)
     <S>                                               <C>            <C>            <C>            <C>
     Computer equipment                                 54,718         47,849         6,869          12,151
     Computer software                                   9,378          7,208         2,170           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        110,533        18,547          28,533
     Leasehold improvements                             93,439         28,026        65,413          74,757
                                                       -------        -------        ------         -------
                                                       352,106        259,107        92,999         118,624
                                                       =======        =======        ======         =======
</TABLE>

     Depreciation per class of asset:

                                                            Six months ended
                                                         June 30,     June 30,
                                                           2002         2001
                                                            $            $
                                                       (Unaudited)   (Unaudited)

     Computer equipment                                    5,281        4,374
     Computer software                                       938          652
     Display equipment                                      -           1,179
     Office furniture and equipment                           75        3,109
     Plant jigs, dies, moulds, tools and equipment         9,986       10,399
     Leasehold improvements                                9,344       10,101
                                                          ------       ------

                                                          25,624       29,814
                                                          ======       ======

5.   Patents and Trademarks

     Patents and trademarks represent legal costs associated with designing,
     registering and protecting certain patents and trademarks associated with
     the Ultra Guard System. These costs are amortized over twenty years.
     Amortization for the six months ended June 30, 2002 was $3,595 and for the
     six months ended June 30, 2001 was $1,908. Components of the Ultra Guard
     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 $795,061 of accounts payable are secured by
     $795,061 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 $531,416 including principal
          and interest. During the first six months of fiscal 2002, an
          additional loan of $20,000 was received and interest of $23,657 was
          accrued, bringing the loans payable balance to $575,073 at June 30,
          2002. These loans are unsecured, interest bearing at 10% per annum and
          due on demand.

     b)   A loan payable of $115,000 plus accrued interest of $18,989 is
          unsecured, bears interest at 8% per annum and is due on demand.

<PAGE>

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


7.  Loans Payable (continued)

     c)   Loans payable of $200,000 plus accrued interest of $33,370 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 shares at $0.50 per share.

     d)   A loan payable of $125,000 plus accrued interest of $21,925 is
          unsecured, bears interest at 1% per month starting from May 19, 2002
          and is due on November 19, 2002.

     e)   Loans payable of Cnd $154,700 (US$102,031) plus accrued interest of
          $3,917 secured by a general security agreement, bear interest at 8%
          per annum and are due six months from the date of each advance. The
          loans are repayable between May 31, 2002 and June 26, 2002.

     f)   A loan payable of $6,081 is unsecured, non-interest bearing and is due
          on demand.

8.   Amounts Owing to Related Parties

     These amounts, totalling $639,467, represent unpaid wages, loans and
     consulting for two directors. These amounts are due on demand, unsecured
     and non-interest bearing. For the six months ended June 30, 2002, imputed
     interest in the amount of $29,123 has been recorded as donated capital and
     is calculated at 10% per annum.

9.   Common Stock

<TABLE>
<CAPTION>
                                                                                              Additional
                                                                             Common            Paid-in
                                                             Shares           Stock            Capital
                                                               #                $                 $
     <S>                                                   <C>             <C>            <C>
     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 cash pursuant to
        private placements                                    350,000         350            34,650
     -----------------------------------------------------------------------------------------------------
     Balance, June 30, 2002 (unaudited)                    27,254,165      27,254         8,302,372
     =====================================================================================================
</TABLE>

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

<TABLE>
<CAPTION>
                                     Exercise
           Class          #            Price              Expiry Date(s)
           <S>        <C>            <C>           <C>
            "A"       2,520,939      $.30-$1.00    July 13, 2002 - December 20, 2003
            "B"       2,705,174      $.07-$.20     January 9, 2003 - December 3, 2003
            "C"       8,105,000      $0.24         October 3, 2010
            "D"       1,455,049      $0.40         September 20, 2002
            "E"       5,780,553      $.20-$.90     August 31, 2002 - December 3, 2003
</TABLE>

     518,439 Class A warrants were issued at various exercise prices of $.40 to
     $.90 per share with various expiry dates from July 13, 2002 to December 20,
     2003 pursuant to various private placements and stock options exercised.

     1,217,456 Class B warrants and 2,399,790 Class E warrants were issued in
     connection with a shares for debt agreement. Refer to Note 7(a) for
     details.

     1,684,482 Class E warrants issued in prior years were reduced to an
     exercise price of $.20 per share and the expiration period was extended to
     September 20, 2002.

<PAGE>

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


9.   Common Stock (continued)

     100,000 Class E warrants issued in prior years with an exercise price of
     $.90 in connection with 100,000 performance shares issued. The expiration
     period was extended to September 20, 2002.

     1,446,281 Class E warrants were issued at an exercise price of $.40
     pursuant to stock options exercised. These warrants expire September 20,
     2002.

     50,000 Class E warrants were issued at an exercise price of $.40 - $.90 per
     share pursuant to various private placements. These warrants expire from
     December 31, 2000 - February 20, 2003.

     100,000 Class A warrants were issued at an exercise price of $0.50 per
     share expiring December 15, 2003 for investor relations services. The value
     of the warrants on the date of issue was $34,690 which was charged to
     compensation expense. These warrants were cancelled subsequent to June 30,
     2002.

     800,000 Class A warrants were issued during fiscal 2001 with an expiry date
     of December 8, 2002, 400,000 of these warrants have an exercise price of
     $0.60 per share and the balance of 400,000 have an exercise price of $1.00
     per share. These warrants were issued pursuant to an Agreement for private
     placement financing and investor relations. The value of the warrants at
     the date of issue was $91,320 which was charged to compensation expense.
     The Agreement calls for a 7% finders fee to be paid pursuant to a private
     placement of units at $0.50 per unit. The Agreement also calls for an
     option to purchase 400,000 shares from an existing shareholder at an
     exercise price of approximately $1.10 per share for a period of one year.
     These warrants were cancelled subsequent to June 30, 2002.

     712,500 Class A warrants were issued in fiscal 2001 at an exercise price of
     $1.00 per share pursuant to various private placements. 645,000 of these
     warrants have an expiry date of February 7, 2003 and the remaining 67,500
     have an expiry date of January 25, 2003. No value was placed on these
     warrants.

     390,000 Class A warrants were issued to a consultant at an exercise price
     of $0.30 per share expiring May, 2003 for website development, media
     services and other related services. The value of these warrants was
     $43,875 which is amortized to investor relations expense over one year. A
     total of $16,453 was charged during the first six months of fiscal 2002.
     These warrants were cancelled subsequent to June 30, 2002.

     100,000 Class E warrants were issued at $0.70 per share expiring August 31,
     2002 for website development and other related services. The value of these
     warrants were $20,540 at the date of issue which was charged to
     compensation expense.

     1,487,718 Class B warrants were issued and exercisable at $0.0695 per share
     expiring January 9, 2003. These warrants were issued in replacement of
     1,487,718 stock options available to the Vice-President.

     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 $32,835 was charged during first six 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 value of the Company's common
             stock at April 25, 2001 expiring October 31, 2011 and restricted
             from exercise 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 of October 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 of October 31, 2011 and
             restricted from exercise for two years from October 3, 2000.

<PAGE>

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


9.   Common Stock (continued)

     In June 2001, the Company entered into a funding agreement with US Filter/
     Wallace and Tiernan Products Group. As a term of the funding agreement, the
     warrant exercise price on the above 3,000,000 warrants was reduced to $0.24
     per share and the restriction from exercise period was changed from October
     3, 2003 to October 31, 2001. The expiry date of these warrants was changed
     to October 3, 2010. In addition, 5,105,000 Class C warrants were issued
     with an exercise price of $0.24 per share and an expiry date of October 3,
     2010. These additional warrants were issued because of certain funding
     criteria being met. The value of the 5,105,000 Class C warrants issued
     totalled $478,000. This amount is being amortized to operations as a
     financing expense at a rate of $47,800 per annum. A total of $23,900 was
     charged during the first six months of fiscal 2002.


     (b)  Employee Stock Option Plan

          The common stock underlying the Employee Stock Option Plan,
          registering 1,588,000 shares for future issuance, was registered
          with the Securities Exchange Commission on October 6, 1997 on Form
          S-8.

          On December 5, 2000, three employees were granted stock options to
          acquire 115,075 shares at $0.35 per share, expiring December 5, 2002.
          During fiscal 2001, these options were exercised for proceeds of
          $40,276.

          On December 6, 2000, a consultant was granted stock options to acquire
          100,000 shares at $0.40 per share, expiring December 6, 2002. These
          options were exercised during fiscal 2001 for proceeds of $40,000.

          On December 27, 2000, an employee was granted stock options to acquire
          5,000 shares at $0.25 per share. These options were exercised in
          fiscal 2001 for proceeds of $1,250.

          On June 11, 2001, two consultants were granted stock options to
          acquire 310,751 shares at $0.22 per share. These options were
          exercised in fiscal 2001 for proceeds of $68,365.

          On June 21, 2001, two consultants were granted stock options to
          acquire 488,890 shares at $0.135 per share. These options were
          exercised in fiscal 2001 for proceeds of $66,000.

          On July 5, 2001, two consultants were granted stock options to
          acquire 35,000 shares at $0.181 per share. These options were
          exercised in fiscal 2001 for proceeds of $6,335.

          On October 10, 2001, ten employees were granted stock options to
          acquire 124,067 shares at $0.10 per share. These options were
          exercised in fiscal 2001 for proceeds of $12,407.

          On October 10, 2001, 2 employees were granted stock options to
          acquire 16,564 shares at $0.10 per share. These options were exercised
          in fiscal 2002 for proceeds of $1,640.

     These options were granted for services provided, or to be provided, to the
     Company. Statement of Financial Accounting Standards No. 123 ("SFAS 123")
     requires that an enterprise recognize, or at its option, disclose the
     impact of the fair value of stock options and other forms of stock based
     compensation in the determination of income. The Company has elected under
     SFAS 123 to continue to measure compensation cost on the intrinsic value
     basis set out in APB Opinion No. 25. As options are granted at exercise
     prices based on the market price of the Company's shares at the date of
     grant, no compensation cost is recognized. However, under SFAS 123, the
     impact on net income and income per share of the fair value of stock
     options must be measured and disclosed on a fair value based method on a
     pro forma basis.

     The fair value of the employee's purchase rights under SFAS 123, was
     estimated using the Black-Scholes model.


<PAGE>

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


9.  Common Stock (continued)

     If compensation expense had been determined pursuant to SFAS 123, the
     Company's net loss and net loss per share would have been as follows:

                                               Six months     Twelve months
                                                 ended           ended
                                                June 30,       December 31,
                                                  2002            2001
                                                   $               $
                                              (Unaudited)       (Audited)

          Net loss
                  As reported                  (622,735)     (1,831,701)
                  Pro forma                    (622,735)     (1,951,925)

          Basic net loss per share
                  As reported                      (.02)           (.08)
                  Pro forma                        (.02)           (.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.

     (d)  Legal Services Plan

          Pursuant to an S-8 Registration Statement filed and accepted on
          November 19, 2001 the Company issued 3,925,000 common shares at $0.19
          per share pursuant to three separate contracts. Of these, a total of
          2,500,000 shares have been cancelled as the related contract was never
          consummated.

10.  Segmented Information

     The business of the Company is carried on in one industry segment (See Note
     1). The Company operates in two geographic segments. The United States
     operations only consist of costs associated with debt and equity financing
     and being a public company.

<TABLE>
<CAPTION>
                                      Six months ended                           Six months ended
                                        June 30, 2002                              June 30, 2001
                                        -------------                              -------------

                                           United                                     United
                             Canada        States       Total           Canada        States       Total
                               $             $            $               $             $            $
     <S>                   <C>           <C>           <C>           <C>           <C>           <C>
     Revenue                 62,588         -            62,588        661,890         -           661,890
     Expense                369,002      316,321        685,323      1,149,805      307,520      1,457,325
     -----------------------------------------------------------------------------------------------------
     Loss                  (306,414)    (316,321)      (622,735)      (487,915)    (307,520)      (795,435)
     =====================================================================================================
</TABLE>

<TABLE>
<CAPTION>
                                    As of June 30, 2002                        As of June 30, 2001
                                    -------------------                        -------------------

                                           United                                     United
                             Canada        States       Total           Canada        States       Total
                               $             $            $               $             $            $
     <S>                   <C>           <C>           <C>           <C>           <C>           <C>
     Identifiable assets   1,519,163     109,021       1,628,184     1,596,122      58,084       1,654,206
     Goodwill and patents    108,183        -            108,183        63,708     202,121         265,829
     -----------------------------------------------------------------------------------------------------
     Total assets          1,627,346     109,021       1,736,367     1,659,830     260,205       1,920,035
     =====================================================================================================
</TABLE>

<PAGE>

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


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)   Subsequent to June 30, 2002, the company received $200,000 and issued
          4,000,000 common shares at $0.05 per common share pursuant to private
          placements.

     b)   On July 12, 2002, the company cancelled 230,000 common shares and
          1,290,000 class A warrants due to performance conditions not achieved.




<PAGE>


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")

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
build-up 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

<PAGE>

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.

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 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.

After successful PDU testing in September & October 1998 at the City of
Peterborough wastewater treatment plant, we received an order valued at over
C$1,100,000 (approximately $748,000.) in March 1999. 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. At this time, four
of the five channels (48 of the 60 lamps) have been operated. The work to
complete the balance of the system is being completed with the assistance of
Clearwater Industries, our product manufacturing licensee and with our strategic
alliance marketer, USFilter.

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.

<PAGE>

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.

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 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.

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.

<PAGE>

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.

<PAGE>

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 per share
   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.

<PAGE>


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 additional sales of three UV systems
valued at about $237,000 were received from USFilter for delivery into Chile and
the USA. Manufacturing is in process 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 this quarter 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 were fortunate to find 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. Revenue sources 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

<PAGE>

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. We have engaged the firm Catalyst Partner of Vancouver, to conduct
marketing and sales strategy studies.

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.


RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2002.
-------------------------------------------------------------

Six months ended June 30, 2002 compared to the six months ended June 30, 2001

    Revenues. During the six months ended June 30, 2002, we reported revenues
of $34,893 compared to revenues of $661,890 being reported in the comparable
period of fiscal 2001, a decrease of $626,997 or 95%. The decrease was as a
result of the reduced activity in the sales and manufacturing as most of the
projects have been completed and shipped in the prior fiscal year.

    Direct Project Costs. Project costs recorded during the six months ended
June 30, 2002 amounted to $31,636 compared to $402,940 during the comparable
period of fiscal 2001, a decrease of $371,304 or 92%. The decrease of costs
incurred resulted from reduced production activity due to decrease in sales.

    Gross Profit before adjustment. Gross profits dropped to $3,257 during
the six months ended June 30, 2002, compared to $258,950 recorded during the
comparable period of fiscal 2001, a decrease of $255,693, or 99%. The decrease
was due mainly to the decrease in sales.

   Additional Project Costs. During the six months ended June 30, 2002,
additional costs incurred relating to systems shipped in 2001 amounted to
$55,578 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 six
months ended June 30, 2002, we reported $32,430 of these costs, a decrease of
$20,883 or 39%, from $53,313 in the comparable period of the prior year. This
decrease occurred due to lack of sales in the period, which resulted in the
overhead costs not applied directly against project costs.

   Amortization of Goodwill. For the six months ended June 30, 2002, there
was no amortization of goodwill as it had been fully amortized in the fourth
quarter of 2001 compared to the $242,540 for the comparable period of the prior
fiscal period. The goodwill resulted from our acquisition of a majority interest
in our subsidiary, UVS.

<PAGE>

   Foreign Exchange Translation Loss. For the six months ended June 30, 2002,
we reported a foreign exchange translation loss of $26,729, an increase of
$13,977, or 110%, over $12,752 in the comparable prior fiscal period.

    General and Administrative Expense. For the six months ended June 30,
2002, we reported general and administrative expense of $351,094, a decrease of
$64,379, or 15% from $415,473 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.

   Imputed Interest. For the six months ended June 30, 2002, we reported
imputed interest of $29,123, an increase of $29,123 or 100% 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 six months ended June 30, 2002,
we reported interest, net of interest income, of $56,120, an increase of
$15,261, or 37%, from $40,859 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 six months ended June 30, 2002,
we reported research and development expense of $16,783, a decrease of $146,047,
or 90%, from $162,830 in the comparable period of the prior fiscal period. The
decrease in R & D activities was due to the reduction of costs related to the
development of the Single Lamp Reactor UV system. Cost include items such as
design, engineering and prototyping expenses for mechanical and structural
components as well as printed circuit boards and computer based software for the
web based operating system of the single lamp reactor product. These costs and
all other R & D activities were fully expensed during the fiscal 2001 and 2002.

   Selling Expenses. For the six months ended June 30, 2002, we reported
selling expenses of $58,135, a decrease of $68,483, or 54%, from $126,618
reported in the comparable period of the prior year. The decrease of $68,483 was
due mainly to the lack of activity in Marketing that resulted in reduction of
expenses of $101,318 which was reduced by the recording of $32,835 stock based
compensation expense resulting from the Strategic Alliance signed with
USFilter/WT.

   Net Loss for the Period. For the six months ended June 30, 2002, we
reported a net loss for the period of $622,735, a decrease of $172,700, or 22%
over $795,435 in the comparable period of fiscal 2001. The decrease in net loss
was due primarily to goodwill having been fully amortized in the prior fiscal
year, recovery of bad debts, and reduced activity which resulted in decreased
general and administrative expenses, decreased engineering and prototyping
expenses, and decreased selling expenses, in spite of the fact that imputed
interest was expensed during the six-month period of fiscal 2002, compared to
the amortization of goodwill during the comparable period of the prior fiscal
year.

    Net Loss per Share. For the six months ended June 30, 2002, we reported a
net loss per share for the period of $0.02, a decrease of $0.01, or 33%, from
$0.02 in the comparable period of prior year. The net loss per share decreased
mainly as a result of the net loss being allocated over an increased number of
shares outstanding and share equivalents in fiscal 2002 as well as the decrease
in the net loss.


<PAGE>


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

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

    Revenues. During the three months ended June 30, 2002, we reported nil
revenue compared to revenues of $254,171 during the comparable period for the
prior year, a decrease of $254,171, or 100%. The decrease was due mainly to no
sale being reported for the second quarter of the current fiscal year.

    Direct Project Costs. During the three months ended June 30, 2002, we
reported no project cost compared to $162,225 during the comparable period for
the prior year, a decrease of $162,225, or 100%. The decrease was due mainly to
no sale being reported for the second quarter of the current fiscal year.

    Gross Profit before adjustment. We reported nil gross profit for the
three months ended June 30, 2002, compared to $91,946 during the comparable
period for the prior year, a decrease of $91,946 or 100%.

   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 June 30, 2002, we reported $10,498 of these costs, a decrease of
$31,804 or 75%, from $42,302 in the comparable period of the prior year. This
decrease occurred as there was no sale in the second quarter of fiscal 2002.

    Amortization of Goodwill. For the three months ended June 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.

   Foreign Exchange Translation Loss. For the three months ended June 30,
2002, we reported a foreign exchange translation loss of $20,782, an increase of
$19,809, or 2036%, over $973 in the comparable prior fiscal period.

    General and Administrative Expense. For the three months ended June 30,
2002, we reported general and administrative expense of $187,608, a decrease of
$21,835, or 10% from $209,443 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 decreased investor relations expense.

   Imputed Interest. For the six months ended June 30, 2002, we reported
imputed interest of $29,123, an increase of $29,123 or 100% 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 June 30,
2002, we reported interest, net of interest income, of $28,364, an increase of
$3,553, or 14%, from $24,811 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 June 30,
2002, we reported research and development expense of $687, a decrease of
$79,691, or 99%, from $80,378 in the comparable period of the prior fiscal
period. The decrease in R & D activities was due to the reduction of costs
related to the development of the Single Lamp Reactor UV system. Cost include
items such as design, engineering and prototyping expenses for mechanical and
structural components as well as printed circuit boards and computer based
software for the web based operating system of the single lamp reactor product.
These costs and all other R & D activities were fully expensed during the fiscal
2001 and 2002.


<PAGE>

   Selling Expenses. For the three months ended June 30, 2002, we reported
selling expenses of $20,694, a decrease of $39,317, or 66%, from $60,011
reported in the comparable period of the prior fiscal year. The decrease was due
mainly to the lack of activity in Marketing that resulted in expense reduction
of $55,735 which was reduced by the recording in the second quarter of the stock
based compensation of $16,418 resulting from the Strategic Alliance signed with
USFilter/WT.

   Net Loss for the Period. For the three months ended June 30, 2002, we
reported a net loss for the period of $297,756, a decrease of $149,486, or 33%
over $447,242 in the comparable period of fiscal 2001. The decrease in net loss
was due primarily to goodwill having been fully amortized in the prior fiscal
year and reduced activity which resulted in decreased general and administrative
expenses, decreased engineering and prototyping expenses, and decreased selling
expenses in spite of the fact that imputed interest was expensed during the
second quarter of 2002, compared to the amortization of goodwill during the
comparable period of the prior fiscal year.

    Net Loss per Share. For the three months ended June 30, 2002, we reported
a net loss per share for the period of $0.01, a decrease of $0.01, or 50%, from
$0.02 in the comparable period of prior year. 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. Many of our
contracts may be expected to include provision for hold back, entitling the
other party to the contract to withhold a specified portion of the payment for a
given period of time until after completion of a project. 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.

Our sales of Ultra Guard systems to governmental entities outside of the
Strategic Alliance distribution area may be expected to occur on an intermittent
rather than consistent basis as requests for proposal ("RFP") are issued and
awards made. Sales on both an annual and quarterly basis are subject to
fluctuations that are often beyond our control.

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 from short-term loans,
loans from related parties and 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 fiscal 2002, sales should increase, as a result of the
signed Strategic Alliance with US Filter, the relationship established with The
Clearwater Group and our Korean Licensee. We expect these activities will
generate royalty revenues in the later part of 2002. Also, we will continue to

<PAGE>

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 Apr 2002     300,000          USA             $30,000        Rule 506, Reg D
15 May 2002      50,000          USA             $ 5,000        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

<PAGE>




ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits (exhibit reference numbers refer to Item 601 of Regulation 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)

<PAGE>

       (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


<PAGE>



                                    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: July 25,2002              /s/ Ken Fielding
---------------------
                                Ken Fielding, President



Date: July 25, 2002             /s/ John R. Gaetz
----------------------
                                John R Gaetz, Principal Financial Officer

<PAGE>
EXHIBIT 11


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



                                                      Period Ended June 30, 2002
                                                      --------------------------




Weighted average number of shares outstanding                        27,070,832
                                                                     ==========


Total common and common equivalent shares                            27,254,165
                                                                     ==========


Net income (loss) for the period                                     $ (622,735)
                                                                     ==========

Loss per common and common equivalent shares                         $    (0.02)
                                                                     ==========


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.



<PAGE>