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 September 30, 2001

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

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

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

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

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

11 - 202 BURBRIDGE STREET,
COQUITLAM, B.C., CANADA                                     V3K 7B2
Address of Principal Executive Offices                      Zip code

604-468-6200
Issuer's Telephone Number

2800 Ingleton Avenue, Burnaby, B.C. Canada V5C 6G7
     (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: 25,282,077 as of November14, 2001

<PAGE>
Page 2

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


PART I   Financial Information

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

Consolidated Balance Sheets as of September 30, 2001
   and 2000 (unaudited).                                                       3

Consolidated Statements of Operations for the nine months ended
   September 30, 2001 and 2000 (unaudited)                                     4

Consolidated Statements of Cash Flows for the nine months ended
   September 30, 2001 and 2000 (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>
Page 3

Service Systems International, Ltd.
Consolidated Balance Sheets

                                                    September 30,   December 31,
                                                         2001           2000
                                                     (unaudited)      (audited)
ASSETS                                                    $               $

Current Assets
   Cash and short-term investments                       25,915          30,219
   Short-term investments - restricted (Note 3)         246,524         260,345
   Accounts receivable                                  964,075         126,734
   Inventory and contract work in progress              477,134         292,884
   Prepaid expenses and deposits                         80,136          21,514
                                                     ----------      ----------

Total Current Assets                                  1,793,784         731,696
Property, Plant and Equipment (Note 4)                  120,647          86,208
Other Assets
   Goodwill (net of amortization of $2,344,557)          80,851         444,661
   Patents and trademarks (Note 5)                       62,976          50,527
                                                     ----------      ----------

Total Assets                                          2,058,258       1,313,092
                                                     ==========      ==========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
   Accounts payable (Note 11)                           967,488         178,949
   Accrued liabilities                                   62,569          79,801
   Wages and vacation pay payable                        32,723          25,292
   Customer deposits                                    175,989         147,163
   Loans payable (Note 6)                               974,292         567,453
   Amounts owing to related parties (Note 7 (i))        151,417          50,014
                                                     ----------      ----------

Total Current Liabilities                             2,364,478       1,048,672

Long-Term Debt
   Amounts owing to related parties (Note 7 (ii))       342,244         342,244
                                                     ----------      ----------

Total Liabilities                                     2,706,722       1,390,916
                                                     ----------      ----------

Stockholders' Deficiency

Common stock, (Note 8) $.001 par value,
   50,000,000 shares authorized,
   24,736,958 and 22,214,023 issued and
     outstanding respectively                            24,737          22,214
   Additional paid-in capital                         7,883,109       7,067,856
   Common shares paid for but unissued                    2,600         390,600
   Common shares allotted for license but unissued       60,000            -
   Stock based compensation                             377,864         149,326
                                                     ----------      ----------

                                                      8,348,310       7,629,996

Deficit                                              (8,996,774)     (7,707,820)
                                                     ----------      ----------

Total Stockholders' Deficiency                         (648,464)        (77,824)
                                                     ----------      ----------

Total Liabilities and Stockholders' Equity            2,058,258       1,313,092
                                                     ==========      ==========
Contingency (Note 1)

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Page 4

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

<TABLE>
<CAPTION>
                                                 Three months ended                      Nine months ended
                                          Sept. 30, 2001    Sept. 30, 2000        Sept. 30, 2001    Sept. 30, 2000
                                          --------------------------------        --------------------------------
                                             (unaudited)      (unaudited)           (unaudited)       (unaudited)
                                                   $                $                     $                 $
<S>                                       <C>               <C>                   <C>               <C>
Project Revenue                              407,706            (1,591)            1,069,596            63,792
Project Costs                                214,246              (356)              617,186            58,165
                                          ----------        ----------            ----------        ----------

Gross Profit (Loss) from Projects            193,460            (1,235)              452,410             5,627
                                          ----------        ----------            ----------        ----------

License Revenue                              242,846              -                  242,846              -
License Costs                                 66,103              -                   66,103              -
                                          ----------        ----------            ----------        ----------

Gross Profit from License Revenue            176,743              -                  176,743              -
                                          ----------        ----------            ----------        ----------

                                             370,203            (1,235)              629,153             5,627

Manufacturing Costs Not Applied               24,055            81,962                77,368           136,273
                                          ----------        ----------            ----------        ----------

Total Gross Profit (Loss)                    346,148           (83,197)              551,785          (130,646)
                                          ----------        ----------            ----------        ----------

Expenses
   Selling                                   139,134            68,508               265,752           158,334
   General and administrative                424,708           328,410               840,181           502,450
   Research and development                  132,569           546,954               295,399           576,931
   Amortization of goodwill                  121,270           121,270               363,810           363,810
   Interest, net of interest income and
     interest recovered                       25,724             7,599                66,583          (126,956)
   Foreign exchange (gain) loss               (3,738)           12,574                 9,014           (21,159)
                                          ----------        ----------            ----------        ----------

   Total Expenses                            839,667         1,085,315             1,840,739         1,453,410
                                          ----------        ----------            ----------        ----------

Net Loss for the Period                      493,519         1,168,512             1,288,954         1,584,056
                                          ==========        ==========            ==========        ==========

Net Loss Per Share                             (0.01)            (0.05)                (0.05)            (0.08)
                                          ==========        ==========            ==========        ==========

                                               #                 #                     #                 #

Weighted average shares outstanding       24,669,000        22,345,000            23,519,000        20,492,000
                                          ==========        ==========            ==========        ==========
</TABLE>

<PAGE>
Page 5

Service Systems International, Ltd.
Consolidated Statements of Cash Flows
(Unaudited)
                                            Nine Months          Nine Months
                                               ended                ended
                                         September 30, 2001   September 30, 2000
                                            (unaudited)          (unaudited)
                                                 $                    $
Cash Flows to Operating Activities
   Net Loss                                    (1,288,954)           (1,584,056)
Adjustments to reconcile net loss to cash
   Amortization of goodwill                       363,810               363,810
   Depreciation                                    44,636                41,377
   Foreign exchange (gain) loss                    (3,738)               21,159
   Common stock issued for expenses               232,194               228,589
   Recovery of interest on long-term debt            -                 (119,670)
   Accrual of interest                             64,160                23,775
   Stock based compensation                       228,538                  -
Change in non-cash working capital items
   (Increase) Decrease in accounts receivable    (837,341)               52,707
   (Increase) Decrease in inventory and
      contract work in progress                  (184,250)               46,527
   (Increase) in prepaid expenses and deposits    (58,622)              (12,685)
   Increase (Decrease) in accounts payable,
     accrued liabilities, wages and vacation
     pay payable and customers' deposits          824,290                22,884
                                               ----------            ----------
Net Cash Used in Operating Activities            (615,277)             (915,583)
                                               ----------            ----------
Cash Flows (to) from Investing Activities
   Reduction to short-term investment -
      restricted                                      832                 2,586
   (Addition) Reduction to patents and
      trademarks                                  (15,416)              209,797
   Acquisition of capital assets                  (76,108)              (17,981)
                                               ----------            ----------
Net Cash Used in Investing Activities             (90,692)              194,402
                                               ----------            ----------
Cash Flows from (to) Financing Activities
   (Decrease) in bank demand loan                    -                  (23,129)
   Common stock issued                            645,583               945,329
   Increase (decrease) in loans payable           342,679              (215,684)
   Increase in amounts owing to related parties   101,403                57,279
   (Decrease) in borrowings from minority
      shareholders                                   -                  (72,469)
   (Decrease) in shares subscriptions received   (388,000)                 -
                                               ----------            ----------
Net Cash Provided by Financing Activities         701,665               691,326
                                               ----------            ----------
Increase in Cash                                   (4,304)              (29,855)

Cash - Beginning of Period                         30,219                47,527
                                               ----------            ----------

Cash - End of Period                               25,915                17,672
                                               ==========            ==========

Non-Cash Financing Activities
   400,000 common shares were issued for
      licensing costs                              60,000                  -
   4,223,832 common shares were issued
      to settle debts at $0.58 per share             -                2,449,383
                                               ----------            ----------
                                                   60,000             2,449,383
                                               ==========            ==========

Cash paid for interest                             10,985                 7,594
Cash paid for income taxes                           -                     -

<PAGE>
Page 6

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 yet produced significant revenue and the
     Company has experienced significant losses to date. 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.


2.   Significant Accounting Policies

     Consolidated financial statements

     These financial statements include the accounts of the Company, and its
     Canadian subsidiary, UVS, of which the Company owned 50.7% until February
     14, 2000, when it acquired 100% of UVS' capital stock.

     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.

     Goodwill

     Goodwill represents the excess of purchase consideration over fair market
     value of net identifiable assets acquired, and is amortized on a straight-
     line basis over five years. Goodwill is evaluated in each reporting period
     to determine if there were events or circumstances that would indicate
     inability to recover the carrying amount. Such evaluation is based on
     various analyses including discounted cash flows and profitability
     projections that necessarily involve management judgment.

     Patents and trademarks

     Patents and trademarks will be 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.

     Royalty revenue from licensing agreements will be recognized when the UV
     System is sold by the licensee. The initial licensing fee will be
     recognized when there is persuasive evidence that an arrangement exists and
     collection of the licensing fee is virtually certain. All related licensing
     costs will be expensed in the period they occur.

<PAGE>
Page 7

2.   Significant Accounting Policies (continued)

     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.

     Earnings per share

     The earnings per share is 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.

     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 rates 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.

     Adjustments

     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 credit, required under a long-term project
     bonding, the Company purchased a C$391,000 face value Bankers' Acceptance
     to be held as a bond for the letter of credit of C$390,809.


4.   Property, Plant, and Equipment

     Property, plant, and equipment are stated at cost less accumulated
     depreciation.
<TABLE>
<CAPTION>
                                                                                      Sept. 30,       Dec. 31,
                                                                                        2001            2000
                                                                      Accumulated      Net Book        Net Book
                                                        Cost          Depreciation       Value           Value
                                                                                       (unaudited)     (audited)
                                                          $                $                $              $
     <S>                                               <C>              <C>              <C>              <C>
     Computer equipment                                 54,313           39,891           14,422          13,907
     Computer software                                   9,060            5,834            3,226           3,380
     Display equipment                                  33,016           33,016                0           1,809
     Office furniture and equipment                     32,475           32,286              189           4,498
     Plant jigs, dies, moulds, tools and equipment     115,161           96,128           19,033          30,803
     Leasehold improvements                             98,726           14,949           83,777          31,811
                                                       -------          -------          -------          ------

                                                       342,751          222,104          120,647          86,208
                                                       =======          =======          =======          ======
</TABLE>

<PAGE>
Page 8

4.   Property, Plant, and Equipment (continued)

     Depreciation per class of asset:
                                                        Nine months ended
                                                   September 30,   September 30,
                                                       2001            2000
                                                    (unaudited)     (unaudited)
                                                         $               $

     Computer equipment                                 6,500           7,848
     Computer software                                  1,029           1,171
     Display equipment                                  1,809           5,635
     Office furniture and equipment                     4,307           5,563
     Plant jigs, dies, moulds, tools and equipment     13,074          18,874
     Leasehold improvements                            14,950           4,752
                                                      -------         -------

                                                       41,669          43,843
                                                      =======         =======


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.
     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.   Loans Payable

     a)   At December 31, 2000, the Company had loans payable to "Elco Bank
          Clients" located in Nassau, Bahamas, of $497,038. During the period,
          loans decreased by $35,600 and interest of $33,928 was accrued,
          bringing the loans payable balance to $498,710. The loans payable to
          "Elco Bank Clients" are unsecured, interest bearing at 10% per annum
          and due on demand.

     b)   Loans payable to a shareholder of $126,743 are unsecured and interest
          bearing at 8% per annum.

     c)   Loans payable of $214,269 are unsecured and interest bearing at 12%
          per annum and due on May 21, 2001.

     d)   Loans payable of $134,082 are unsecured, interest bearing at 12% per
          annum and due on June 21, 2001.

     e)   Loans payable of $488 are unsecured, interest bearing at 17.75% per
          annum and matures on November 7, 2001.


7.   Amounts Owing to Related Parties

     (i)   These amounts, totaling $151,417, are owing to two directors, due on
           demand, unsecured and non-interest bearing.
     (ii)  During this quarter, two directors agreed to defer payment of their
           loans amounting to $342,244 until October 31, 2002.



<PAGE>
Page 9

8.   Common Stock

                                                                     Additional
                                                         Common       Paid-in
                                              Shares      Stock       Capital
                                                 #          $            $

     Balance, December 31, 2000 (audited)    22,214,023     22,214    7,067,856

      Issuance of stock for expenses
       pursuant to the exercise of
       stock options                            100,000        100       39,900
      Issuance of stock for cash pursuant
       to stock options, exercised at
       $0.35 per share                          100,000        112       39,088
      Share issue costs                                                    (134)
     ---------------------------------------------------------------------------

     Balance, March 31, 2001 (unaudited)     22,426,023     22,426    7,146,710
     ---------------------------------------------------------------------------

      Issuance of stock for expenses
       at $0.26                                 210,000        210       54,390
      Issuance of stock for cash
       pursuant to private placements           950,000        950      474,050
      Issuance of stock for expenses
       pursuant to exercise of
       employee stock options                    35,575         36        8,340
      Share issue costs                                                  (2,520)
     ---------------------------------------------------------------------------

     Balance, June 30, 2001 (unaudited)      23,621,598     23,622    7,686,010
     ---------------------------------------------------------------------------

      Issuance of stock for expenses at
       prices between $0.16 to $0.17
       per share                                139,375        139       23,454
      Issuance of stock for cash
       pursuant to the exercise of
       stock options                            342,095        342       77,744
      Issuance of stock for expenses
       pursuant to exercise of
       employee stock options                   400,000        400       53,600
      Issuance of stock for cash
       pursuant to stock options,
       exercised at prices from
       $0.135 to $0.22 per share                233,890        234       42,301
     ---------------------------------------------------------------------------

     Balance, September 30, 2001
      (unaudited)                            24,736,958     24,737    7,883,109
     ---------------------------------------------------------------------------

     (a)   Warrants outstanding as at September 30, 2001:

                        Exercise
     Class     #          Price               Expiry Date(s)

     "A"   2,908,784   $.24-$1.00        August 3, 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             June 2, 2002
     "E"   6,130,553   $.20-$.90         December 31, 2001 - December 3, 2003

          28,325 Class A warrants issued in prior years that was reduced with an
          exercise price of $.24 per share, was extended to August 3, 2002.

          17,520 Class A warrants were issued at an exercise price of $.35
          expiring April 8, 2002 in connection with a shares for debt agreement
          where 17,520 shares were issued at $.35 to settle $6,132 of debt.

<PAGE>
Page 10

8.   Common Stock (continued)

          952,699 Class A warrants were issued at various exercise prices of
          $.40 to $.90 per share with various expiry dates of June 30, 2001 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 6(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 June 30, 2002.

          100,000 Class A and 100,000 Class E warrants with an exercise price of
          $.60 and $.90 respectively were issued with an expiry period of May
          29, 2002 in connection with 200,000 performance shares issued.

          150,000 Class E warrants at an exercise price of $.40 were extended
          from December 31, 2000 to December 31, 2001.

          1,446,281 Class E warrants were issued at an exercise price of $.40
          pursuant to stock options exercised. These warrants expire September
          13, 2002.

          450,000 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.

          400,000 Class A warrants were issued during the first quarter 2001
          with an expiry date of December 8, 2002, 200,000 of these warrants
          have an exercise price of $0.60 per share and the balance of 200,000
          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 from an existing shareholder at an exercise price of
          approximately $1.10 per share for a period of one year.

          712,500 Class A warrants were issued during the second quarter 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.

          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
          were $60,000 at the date of issue which will be amortized to
          compensation expense over the two-year life of the warrants.

          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.

          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. These warrants were issued as follows:

          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.

          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.

<PAGE>
Page 11

8.   Common Stock (continued)

          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.

          In June 2001, we 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 exercise price
          of $0.24 per share and an expiry date of October 3, 2010.

     (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 August 21, 1997 employees were granted stock options to acquire
          1,217,000 shares at $1.00 per share expiring August 21, 2000. These
          options are currently unexercised.

          On April 15, 1998 two directors and an employee were granted stock
          options to acquire 341,000 shares at $0.15 per share expiring April
          15, 2001. During fiscal 1999, 321,000 options were exercised for
          proceeds of $48,150. The remaining 20,000 were exercised subsequently.

          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 the first quarter of 2001, 112,000 options were exercised and
          the remaining 3,075 stock options were exercised in the second
          quarter.

          On December 6, 2000, one consultant was granted stock options to
          acquire 100,000 shares at $0.40 per share, expiring December 6, 2002.
          These options were exercised during the first quarter of 2001.

          On December 27, 2000, an employee was granted stock options to acquire
          5,000 shares at $0.25 per share that were exercised in the second
          quarter.

          On June 11, 2001, one consultant was granted stock options to acquire
          27,500 shares at $0.22 per share that were exercised in the second
          quarter.

          The options are granted for services 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 with the following assumptions
          used for grants on August 21, 1997: risk free interest rate was 5.57%,
          expected volatility of 120%, an expected option life of three years
          and no expected dividends; and for grants on April 15, 1998: risk free
          interest rate was 5.56%, expected volatility of 120%, an expected
          option life of three years and no expected dividends. For subsequent
          grants: risk free interest rate was 5.0%, expected volatility of 100%,
          no option life as all exercised and no expected dividends.

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

                                        September 30, 2001   September 30, 2000
                                           (unaudited)            (unaudited)
                Net loss
                        As reported        (1,288,954)            (1,584,056)
                        Pro forma          (1,288,954)              (415,544)

                Basic net loss per share
                        As reported              (.05)                  (.08)
                        Pro forma                (.05)                  (.02)

<PAGE>
Page 12

8.   Common Stock (continued)

     (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. During the prior
          year 330,922 performance shares were granted at a fair market value of
          $193,589.

9.   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>
                                            Nine months ended                      Nine months ended
                                           September 30, 2001                     September 30, 2000
                                           ------------------                     ------------------
                                              (unaudited)                             (unaudited)
                                                United                                  United
                                  Canada        States       Total        Canada        States       Total
                                     $             $           $             $             $           $
     <S>                        <C>          <C>          <C>          <C>          <C>          <C>
     Revenue                    1,312,442        -        1,312,442      63,792         -            63,792
     Expense                    1,741,836     859,560     2,601,396     941,665      706,183      1,647,848
     Income (loss)               (429,394)   (859,560)   (1,288,954)   (877,873)    (706,183)    (1,584,056)
     -------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
                                          As of September 30, 2001        As of September 30, 2000
                                          ------------------------        ------------------------
                                                  (unaudited)                     (unaudited)
                                     $             $           $             $             $           $
     <S>                        <C>          <C>          <C>          <C>          <C>          <C>
     Identifiable assets        1,873,187     41,244      1,914,431     670,066      20,651        690,717
     Goodwill and patents          62,976     80,851        143,827      50,383     565,932        616,315
     -------------------------------------------------------------------------------------------------------
     Total assets               1,936,163    122,095      2,058,258     720,449     586,583      1,307,032
     =======================================================================================================
</TABLE>

10.  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.


11.  Secured Liability

     Pursuant to a funding agreement mentioned in Note 8, $614,348 of accounts
     payable are secured by $614,348 of accounts receivable.


12.  Subsequent Events

     Subsequent to September 30, 2001, 54,664 shares were issued pursuant to
     stock options exercised at $0.10 per share, 90,455 shares for cash pursuant
     to stock options exercised at $0.22 per share and 400,000 shares for
     licensing costs at $0.15 per share.

<PAGE>
Page 13


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 and 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 wiper cleaning system was concluded during
October and November 1997, at a production demonstration unit ("PDU") test site
near Montreal, Quebec. The test results concluded that the cleaning system did
perform above anticipated levels, and the system has now been incorporated into
current products sold. The temperature control system for the UVS System was
also tested at the Ville de Repentigney test site during temperatures ranging
down to minus 8 degrees Celsius and up to plus 8 degrees Celsius. The test
showed that with temperature control, infinite variable lamp UV output intensity
was stable and controllable. This feature is now included on all product sales.

<PAGE>
Page 14

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.

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 currently in
design and manufacture and has again been rescheduled for delivery due to delays
in delivery of components. The equipment is currently nearing final completion
and delivery will me made in November 2001. The UV system to be delivered to
Toronto is part of a C$50 million combined storm overflows (CSO) project (the
world largest submersible CSO pumping station) and will be 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 schedule
delivery has been revised again, due to delayed delivery of materials from
suppliers. Equipment delivered to the wastewater plant is to be put into
operation during November and December 2001.

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

In July 2001 an order was received from USFilter/W&T, the first order received
as a result of the Strategic Alliance signed in January 2001(detailed below). An
order for delivery of a system to Chile, valued at about $32,500 is rescheduled
to be delivered in November 2001.

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

<PAGE>
Page 15

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 Wedeco AG
Water Technologies, a leading manufacturer of ultraviolet equipment.

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 are being installed into all SLR ultraviolet system currently
on order for delivery by the end of fiscal 2001.

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

Strategic Alliance Agreement.

The parties to the Strategic Alliance Agreement are Service Systems and UV
Systems, and U.S. Filter/Wallace & Tiernan, Inc. The term of the Strategic
Alliance Agreement is ten years, subject to earlier termination, including a
termination for convenience by either party after three years. If not
terminated, the Agreement is subject to automatic one-year renewals. During the
term, U.S. Filter will act as the exclusive agent within the Territory for the
marketing, sales and distribution of the Systems, including aftermarket
components and spare parts, for all municipal (excluding aquatics) and
industrial water and wastewater treatment applications. Service Systems will
refrain from any direct or indirect attempt to market, sell or distribute
Systems or components within the Territory. U.S. Filter will use its existing
sales network and distribution system to market, offer and distribute the
Systems, and also will provide start up assistance, ongoing service, and
components, parts and spares installation support. U.S. Filter will cause

<PAGE>
Page 16

certain companies related to it to refrain from any direct or indirect attempt
to market, sell or distribute competitive products within the Territory. Service
Systems will sell ultraviolet disinfection systems and components to U.S.
Filter, and will provide related support services. The purchase price to be paid
by U.S. Filter for each System or component manufactured or supplied by Service
Systems will be based upon Service Systems' list price and applicable tax, less
a negotiated deduction, and will be subject to further adjustment depending upon
the price at which U.S. Filter sells the System or component to the end user.
U.S. Filter will make progress payments as the design and manufacture of the
System progresses through to delivery and final acceptance of the System by the
end user. If Service Systems is unable or unwilling to meet specified
manufacture and supply requirements, then U.S. Filter may manufacture and supply
Systems and components. U.S. Filter will pay a royalty payment for each System
or component, whether manufactured or supplied by Service System or U.S. Filter.
The Strategic Alliance Agreement also gives U.S. Filter a right of first refusal
with respect to any distribution or marketing agreements, which Service Systems
or UV Systems may wish to make outside the Territory.

License Agreement.

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

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

Stock Purchase Warrants.

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

*  1,000,000 shares at an exercise price equal to the lower of $0.97 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.

<PAGE>
Page 17

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

Registration Rights Agreement.

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

Security Agreement.

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

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

With the signing of our Strategic Alliance Agreements and related agreements
with US Filter's Wallace and Tiernan Products Group on January 25, 2001, the
responsibility for marketing the Ultra Guard systems within the Exclusive
Territory was transferred to US Filter. The exclusive territory consists of
North, South and Central America and the Caribbean. At this time, a joint
determination is being made as to which of our agents will be retained by US
Filter, those not taken over will be terminated. US Filter's representative
companies will then have the responsibility for all our sales within the
Exclusive Territory.

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 sold within the. 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. 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.

<PAGE>
Page 18

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 entry (POU). POE UV systems will treat water for the home
though the use of various combinations of filters and ultraviolet installed at
the entry point into single-family homes or apartment complexes. Point of use
systems will treat water within the home, sing a like type system installed
under the sink. Air systems for ventilation will use ultraviolet lamps and
filtration, installed within ventilation ducts. Surface disinfections systems
will use ultraviolet systems mounted above and/or under conveyors to disinfect
articles on the conveyor, such as food and drink packaging container. 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.

RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED September 30, 2001.

Nine months ended September 30, 2001 compared to nine months ended September 30,
2000.

The following comparisons for the fiscal 2000 periods are approximate as a
result of Service Systems change in its fiscal year end from August 31 to
December 31. The resultant comparisons for the prior fiscal year have been
developed from the reported quarters.

    Revenues. During the third quarter of fiscal 2001, we reported revenues
of $1,069,596 compared to revenues of $63,792 being reported in the third
quarter of fiscal 2000, an increase of $1,1005,804 or 1577%. The increase was as
a result of project components shipped and invoiced and projected percentage
completion of projects in progress in the factory.

    Direct Project Costs. Project costs recorded during the third quarter of
fiscal 2001 amounted to $617,186 compared to $58,165 during the third quarter of
fiscal 2000, an increase of 961%. The increase of costs incurred resulted from
the increase in sales shipments and projected cost of sales on projects in
process.

    Gross Profit. Gross profits rose to $452,410 during the third quarter of
fiscal 2001, compared to $5,627 recorded during the third quarter of fiscal
2000. The increase was due to the increase in sales recorded, with higher
margins being achieved on these sales.

    Gross Profit from License Revenue. During the third quarter we received
other income from the licensing of our technology to a Korean company resulting
in a one-time gain of $242,846, less cost of $66,103, resulting in a net amount
of $176,743, compared to $0 in the comparable 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. As our
level of activity increases, we expect that these costs will be fully recovered.
For the third quarter of fiscal 2001, we reported $77,368 of these costs, a
decrease of $58,904 or (43%), from $136,273 in the comparable period of the
prior year. This decrease occurred as a result of increased activities, which
allowed more of the overhead costs to be applied directly to production cost.
The reported amounts represent manufacturing costs such as facilities, plant
personnel, power, etc. which continue irrespective of manufacturing activity.

    Selling Expenses. For the third quarter of fiscal 2001, we reported
selling expenses of $265,752, an increase of $107,418, or 68%, from $158,334
reported in the comparable period of the prior year. This increase primarily was
a result of accrual of stock based compensation resulting from the Strategic

<PAGE>
Page 19

Alliance signed with USFilter/WT in January 2001, commission, Production
Demonstration Unit testing costs, increased travel and training cost due to the
Strategic Alliance signed with the USFilter/Wallace & Tiernan, Inc.

    General and Administrative Expense. For the third quarter of fiscal 2001,
we reported general and administrative expense of $840,181, a increase of
$337,731, or 67% from $502,450 reported in the comparable period of the prior
year. This increase resulted primarily due to increased salaries and salary
related costs, consulting fees, audit fees, legal fees associated with the
USFilter Strategic Alliance, stock based compensation resulting from the Funding
Agreement signed with USFilter/WT in June 2001 , finders fees paid to fund
raisers, investor relations costs, higher amortization costs related to new
plant and facilities and transition costs of two locations during transfer to
our new facilities.

    Research and Development Expense. For the third quarter of fiscal 2001,
we reported research and development expense of $295,399, a decrease of
$281,532, or (49%), from $576,931 in the comparable period of the prior fiscal
period. The decrease in R & D activities was as a result of reduced activities
on design of components for the Single lamp reactor UV system as it nears
completion. 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.

    Amortization of Goodwill. For the third quarter of fiscal 2001, we
reported amortization of goodwill of $363,810, the same figure for the
comparable period of the prior fiscal period. The goodwill resulted from our
acquisition of a majority interest in our subsidiary, UVS. The balance of
goodwill will be fully amortized in the fourth quarter of fiscal 2001.

    Interest, Net of Interest Income. For the third quarter of fiscal 2001,
we reported interest, net of interest income, of $66,583, compared to $(126,956)
in the prior year period. The increase was due to interest costs on additional
short term loans required to fund manufacturing, compared to favorable results
achieved through forgiveness of interest on long term debt negotiated with
minority shareholders, recorded in a comparable period of the prior fiscal
period.

    Foreign Exchange Translation Loss. For the third quarter of fiscal 2001,
we reported a foreign exchange translation loss of $9,014 an increase of
$30,173, or 143 %, over ($21,159) in the comparable period of prior year. The
increase in loss in the fiscal 2001 resulted from an increase in the value of
the Canadian dollar as compared to comparable prior fiscal periods.

    Net Loss for the Period. For the third quarter of fiscal 2001, we
reported a net loss for the period of $1,288,954, a decrease of $295,102, or
(19%) over $1,584,056 in the comparable period of prior year. The decrease in
net loss was due primarily to decreased general and administrative expenses, and
decreased engineering and prototyping expenses incurred, a reduction of
manufacturing costs not applied and income received and record as Other Income
during the third quarter of the fiscal 2001, compared to increased general and
administrative expenses, increased engineering and prototyping expenses
incurred, and loss in foreign exchange accounts during the comparable period of
the prior fiscal period.

    Net Loss per Share. For the third quarter of fiscal 2001, we reported a
net loss per share for the period of $0.05, a decrease of $0.03, or 40%, from
$0.08 in the comparable period of prior year. The net loss per share decreased
as a result of the decreased net loss. The net loss decrease was due partly to

<PAGE>
Page 20

the loss being allocated over an increased number of shares outstanding and
share equivalents in fiscal 2001 and etc.


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 contract receivables,
which may be expected to be due largely from governments, 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. Pursuant to the Strategic
Alliance Agreement, 35% of project financing is paid to Service Systems before
shipping of the project.

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 progress payments
received from work in progress, and in part, from proceeds of sales of
restricted common stock, short term loans, loans from related parties and
minority shareholders of Service Systems, sale of a license to manufacture and
sell UV products in Korea and from the proceeds of a Funding Agreement entered
into on June 1, 2001 with USFilter/Wallace & Tiernan Inc. During this fiscal
period USFilter/Wallace & Tiernan Inc. has provided about C$73,000 ($47,500)in
project funding. The funds advanced by USFilter/Wallace & Tiernan Inc. will be
repaid from customer payments received on delivery and completion of the
installation.

We expect that during fiscal 2002, project sales should increase, as a result of
the signed Strategic Alliance with US Filter. We expect to fund these projects
primarily through the progress payments to be provided in the US Filter
agreements. Also, we will continue to depend on receipt of additional funds
through public or private equity or debt sales or other lender financing to fund
the expansion of our market in territories not covered within the Strategic
Alliance, in potable water industry activities, and the manufacturing of
products sold and general operational and sales expenses. Except as previously
indicated, no arrangements are currently in place to raise funds, although we
actively continue to seek 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

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Page 21

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 Canadian
employees, three Canadian technical consultants and one US technical consultant
under the Employee Stock Option Plan - S-8 filed on October 6, 1997.

<TABLE>
<CAPTION>
Date              Shares                Residency/                 Consideration         Exemption
                                        Citizenship                Valued at
-----------------------------------------------------------------------------------------------------------------
<S>             <C>                   <C>                   <C>                           <C>
6 July 2001      55,000               Canadian              Exercised Options             S-8*
                                                            for cash $12,100

16 July 2001     88,800               Canada                Exercised Options             S-8*
                                                            for Cash $12,000

23 July 2001     35,000               Canada                Exercised Options             S-8*
                                                            for Cash $6,335

23 July 2001    400,000               US                    Exercised Options             S-8*
                                                            for services $54,000

6 July 2001      55,000               Canada                Exercised Options             S-8*
                                                            for cash $12,100

------------------------------------------------------------------------------------------------------------------

Service Systems also issued the following shares of common stock to four Canadian and two US Investor as follows.

Date              Shares                Residency/                 Consideration         Exemption
                                        Citizenship                Valued at
-----------------------------------------------------------------------------------------------------------------
18 July 2001     61,675               Canada                Exercised Warrants
                                                            for cash $14,802              Regulation S

16 August 2001  187,875               Canada                Cash $21,992                  Regulation S

16 August 2001   20,000               US                    Exercised Warrants            Section 4 (2)
                                                            for cash $4,800

16 July 2001     10,000               US                    For Services
                                                            valued at $1,600              Section 4 (2)
</TABLE>

*Registered on Form S-8 on October 6, 1997

Item 3. Defaults upon Senior Securities

     None

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Page 22

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

     None

Item 5. Other Information

     None

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

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

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Page 23

 (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)(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 (10)

 (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

<PAGE>
Page 24

(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 8-K filed June 18,
     2001
(b) Reports on Form 8-K

           None filed

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Page 25

                                     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: August 14 ,2001     /s/ Ken Fielding
---------------------
                          Ken Fielding, President



Date: August 14, 2001     /s/ John R. Gaetz
----------------------
                          John R Gaetz, Principal Financial Officer


EXHIBIT 11


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



                                                 Period Ended September 30, 2001
                                                 -------------------------------

Weighted average number of shares outstanding                        23,518,690
                                                                     ==========

Total common and common equivalent shares                            24,736,958
                                                                     ==========

Net income (loss) for the period                                    $(1,000,416)
                                                                     ==========

Loss per common and common equivalent shares                        $     (0.04)
                                                                     ==========


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>