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, 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: 24,532,583 as of August 10, 2001



<PAGE>
Page 2

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


PART I     Financial Information

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

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

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

Consolidated Statements of Cash Flows for the three months ended
     June 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

Part 1.          Financial Information

Item 1.     Financial Statements (unaudited)
            --------------------------------

Service Systems International, Ltd.
Consolidated Balance Sheets


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

Current Assets
   Cash and short-term investments                       18,988          30,219
   Short-term investments - restricted (Note 3)         256,822         260,345
   Accounts receivable                                  730,175         126,734
   Inventory and contract work in progress              306,463         292,884
   Prepaid expenses and deposits                         74,206          21,514
                                                     ----------      ----------

Total Current Assets                                  1,386,654         731,696
Property, Plant and Equipment (Note 4)                  131,866          86,208
Other Assets
   Goodwill (net of amortization of $2,223,287)         202,121         444,661
   Patents and trademarks (Note 5)                       63,708          50,527
                                                     ----------      ----------

Total Assets                                          1,784,349       1,313,092
                                                     ==========      ==========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
   Accounts payable                                     560,426         178,949
   Accrued liabilities                                    9,947          79,801
   Wages and vacation pay payable                        36,129          25,292
   Customer deposits                                    338,662         147,163
   Loans payable (Note 6)                             1,022,030         567,453
   Amounts owing to related parties (Note 7 (i))        107,208          50,014
                                                     ----------      ----------

Total Current Liabilities                             2,074,402       1,048,672

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

Total Liabilities                                     2,416,646       1,390,916
                                                     ----------      ----------

Stockholders' Equity (Deficiency)

Common stock, (Note 8) $.001 par value,
   50,000,000 shares authorized,
   23,621,598 and 22,214,023 issued and
    outstanding respectively                             23,622          22,214
   Additional paid-in capital                         7,686,010       7,067,856
   Common shares paid for but unissued                   12,000         390,600
   Stock based compensation                             149,326         149,326
Deficit                                              (8,503,255)     (7,707,820)
                                                     ----------      ----------

Total Stockholders' Equity (Deficiency)                (632,297)        (77,824)
                                                     ----------      ----------

Total Liabilities and Stockholders' Equity            1,784,349       1,313,092
                                                     ==========      ==========

               See Accompanying Notes to the Financial Statements

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Page 4

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

<TABLE>
<CAPTION>
                                                              Three months ended                        Six months ended
                                                     June 30, 2001          June 30, 2000     June 30, 2001          June 30, 2000
                                                     ------------------------------------     ------------------------------------
                                                      (unaudited)            (unaudited)       (unaudited)            (unaudited)
                                                           $                      $                 $                      $
<S>                                                  <C>                    <C>               <C>                    <C>
Project Revenue                                         254,171                 10,617           661,890                 65,383
Project Costs                                           162,225                  9,216           402,940                 58,521
                                                     ----------             ----------        ----------             ----------

Gross Profit                                             91,946                  1,401           258,950                  6,862

Manufacturing Costs Not Applied                          42,302                 40,329            53,313                 54,311
                                                     ----------             ----------        ----------             ----------

                                                         49,644                (38,928)          205,637                (47,449)
                                                     ----------             ----------        ----------             ----------

Expenses
   Selling                                               60,011                 44,375           126,618                 89,826
   General and administrative                           209,443                 65,087           415,473                174,040
   Research and development                              80,378                  9,934           162,830                 29,977
   Amortization of goodwill                             121,270                121,270           242,540                242,540
   Interest, net of interest income and
     interest recovered                                  24,811                  3,497            40,859               (134,555)
   Foreign exchange (gain) loss                             973                (14,928)           12,752                (33,733)
                                                     ----------             ----------        ----------             ----------

Total Expenses                                          496,886                229,235         1,001,072                368,095
                                                     ----------             ----------        ----------             ----------

Net Loss for the Period                                 447,242                268,163           795,435                415,544
                                                     ----------             ----------        ----------             ----------

                                                           $                      $                 $                      $

Net Loss Per Share                                   $    (0.02)            $    (0.01)       $    (0.03)            $    (0.02)
                                                     ==========             ==========        ==========             ==========

                                                           #                      #                 #                      #

Weighted average shares outstanding                  23,461,000             22,010,000        22,944,000             19,566,000
                                                     ==========             ==========        ==========             ==========
</TABLE>

               See Accompanying Notes to the Financial Statements

<PAGE>
Page 5

Service Systems International, Ltd.
Consolidated Statements of Cash Flows
(Unaudited)
                                                      Six Months     Six Months
                                                        ended         ended
                                                    June 30, 2001  June 30, 2000
                                                     (unaudited)    (unaudited)
                                                          $              $

Cash Flows to Operating Activities
   Net Loss                                            (795,435)       (415,544)

Adjustments to reconcile net loss to cash
   Amortization of goodwill                             242,540         242,540
   Depreciation                                          31,722          27,179
   Foreign exchange (gain) loss                          12,752         (33,733)
   Common stock issued for expenses                      94,600         212,126
   Recovery of interest on long-term debt                     0        (119,670)
   Accrual of interest                                   40,501          16,308

Change in non-cash working capital items
   (Increase) in accounts receivable                   (603,441)        (22,830)
   (Increase) in inventory and contract
      work in progress                                  (24,123)        (40,971)
   (Increase) in prepaid expenses and deposits          (52,692)        (20,205)
   Decrease (increase) in accounts payable,
      accrued liabilities, wages and vacation
      pay payable and customers' deposits               514,244         (43,782)
                                                     ----------      ----------

Net Cash Used in Operating Activities                  (539,332)       (198,582)
                                                     ----------      ----------

Cash Flows (to) from Investing Activities
   (Reduction) of short-term investment - restricted      1,029           1,589
   Additions to patents and trademarks                  (15,089)       (148,661)
   Acquisition of capital assets                        (75,472)         (7,323)
                                                     ----------      ----------

Net Cash Used in Investing Activities                   (89,533)       (154,395)
                                                     ----------      ----------

Cash Flows from (to) Financing Activities
   (Decrease) in bank demand loan                             0         (23,129)
   Common stock issued                                  524,962         628,231
   Increase (decrease) in loans payable                 414,076        (224,415)
   Increase (decrease) in amounts owing to
     related parties                                     57,194         (29,217)
   (Decrease) in borrowings from minority
     shareholders                                             0         (31,477)
   (Decrease) in shares subscriptions received         (378,600)           -
                                                     ----------      ----------

Net Cash Provided by Financing Activities               617,634         319,993
                                                     ----------      ----------
Increase in Cash                                        (11,231)        (32,984)
Cash - Beginning of Period                               30,219          47,527
                                                     ----------      ----------
Cash - End of Period                                     18,988          14,543
                                                     ==========      ==========

Non-Cash Financing Activities
   4,223,832 common shares were issued
   to settle debts at $0.58 per share                         0       2,449,383
                                                     ==========      ==========

Cash paid for interest                                    6,492           3,680
Cash paid for income taxes                                    0            -

               See Accompanying Notes to the Financial Statements

<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.

     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>
Page 7

2.   Significant Accounting Policies (continued)

     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>
                                                                                     June 30,        Dec. 31,
                                                                                       2001            2000
                                                                    Accumulated      Net Book        Net Book
                                                      Cost         Depreciation        Value           Value
                                                                                    (unaudited)      (audited)
                                                       $                 $               $               $
     <S>                                            <C>              <C>             <C>             <C>
     Computer equipment                              53,938           37,872          16,066         13,907
     Computer software                                9,060            5,457           3,603          3,380
     Display equipment                               33,016           32,386             630          1,809
     Office furniture and equipment                  32,475           30,980           1,495          4,498
     Plant jigs, dies, moulds, tools and equipment  115,161           93,453          21,708         30,803
     Leasehold improvements                          98,465           10,101          88,364         31,811
                                                    -------          -------         -------         ------

                                                    342,115          210,249         131,866         86,208
                                                    =======          =======         =======         ======
</TABLE>

<PAGE>
Page 8

4.   Property, Plant, and Equipment

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

     Computer equipment                                     4,374         3,977
     Computer software                                        652           809
     Display equipment                                      1,179         3,128
     Office furniture and equipment                         3,109         2,901
     Plant jigs, dies, moulds, tools and equipment         10,399         8,929
     Leasehold improvements                                10,101         2,525
                                                           ------        ------

                                                           29,814        22,269
                                                           ======        ======

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,
          additional loans of $28,150 were received and interest of $11,724 was
          accrued, bringing the loans payable balance to $536,912. 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 $124,074 are unsecured and interest
          bearing at 8% per annum.

     c)   Loans payable of $208,219 are unsecured and interest bearing at 12%
          per annum and due on May 21, 2001.

     d)   Loans payable of $130,301 are unsecured, interest bearing at 10% per
          annum and due on June 21, 2001.

     e)   Loans payable of $22,524 are unsecured, interest bearing at 12% per
          annum and due on demand.

7.   Amounts Owing to Related Parties
     (i)    These amounts, totaling $107,208, are owing to two directors, due on
            demand, unsecured and non-interest bearing.
     (ii)   During the quarter ended December 31, 2000, two directors agreed to
            defer payment of their loans amounting to $342,244 until January,
            2002.



<PAGE>
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8.   Common Stock
<TABLE>
<CAPTION>
                                                                                          Additional
                                                                            Common         Paid-in
                                                            Shares           Stock         Capital
                                                               #               $              $
     <S>                                                  <C>                <C>         <C>
     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
     ----------------------------------------------------------------------------------------------
</TABLE>

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

                              Exercise
      Class         #          Price                Expiry Date(s)

       "A"       3,281,299    $.24-$1.00    August 3, 2001 - December 20, 2003
       "B"       2,705,174    $.07-$.20     January 9, 2003 - December 3, 2003
       "C"       8,000,000      $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


          450,420 Class A warrants issued in prior years were reduced to an
          exercise price of $.24 per share and the expiration period was
          extended to August 3, 2001.

          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.

          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.

<PAGE>
Page 10

          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 3, 2010 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 3, 2010 and restricted from
          exercise for two years from October 3, 2000.

          1,000,000 Class C warrants were issued at an exercise price of $2.00
          per share, with expiry date of October 3, 2010 and restricted from
          exercise for two years from October 3, 2000.

          During the second quarter, the warrant exercise price on the above
          3,000,000 warrants issued to US Filter/ Wallace and Tiernan Products
          Group was reduced to $0.24 per share and the restriction from exercise
          period was changed from October 3, 2003 to October 31, 2001.

          In June 2001, we entered into an agreement with US Filter's Wallace
          and Tiernan Products Group whereby USFilter will provide funding to
          support the production of the various projects.  Complete details of
          the funding agreement were filed with the Securities and Exchange
          Commission on Form 8-K on June 1, 2001.

          As a term of the funding agreement, we will issue up to more or less
          5,000,000 Class "A" warrants if the full funding amount of $785,000 is
          used by Service Systems.  Should the amount of funding provided be
          more or less than $785,000, the number of warrants will be increased
          or decreased on a proportional basis. The exercise price for these
          warrants is $0.24 per share.  All 8,000,000 warrants issued to US
          Filter may be exercised at any time after October 31, 2001 up to the
          expiry date of October 3, 2010.

     (c)  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.

<PAGE>
Page 11

          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.

                                               June 30, 2001     June 30, 2000
                                                (unaudited)       (unaudited)

          Net loss
               As reported                        (795,435)         (415,544)
               Pro forma                          (846,535)         (415,544)

          Basic net loss per share
               As reported                            (.03)             (.02)
               Pro forma                              (.04)             (.02)

     (d)  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).

<PAGE>
Page 12

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, 2001                                June 30, 2000
                                                 -------------                                -------------
                                                  (unaudited)                                   (unaudited)
                                                     United                                        United
                                   Canada            States           Total      Canada             States           Total
                                      $                 $               $           $                 $                $
<S>                               <C>              <C>             <C>          <C>              <C>              <C>
Revenue                             661,890            -             661,890       65,383             -              65,383
Expense                           1,149,805         307,520        1,457,325      344,950          135,977          480,927
Income (loss)                      (487,915)       (307,520)        (795,435)    (279,567)        (135,977)        (415,544)
-----------------------------------------------------------------------------------------------------------------------------

                                              As of June 30, 2001                         As of June 30, 2000
                                              -------------------                         -------------------
                                                  (unaudited)                                  (unaudited)
                                      $                 $               $           $                 $                $
Identifiable assets               1,596,122          58,084        1,654,206      856,009           18,084          874,093
Goodwill and patents                 63,708         202,121          265,829      401,465          687,202        1,088,667
-----------------------------------------------------------------------------------------------------------------------------
Total assets                      1,659,830         260,205        1,920,035    1,257,474          705,286        1,962,760
=============================================================================================================================
</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.  Subsequent Events

     Subsequent to June 30, 2001, 410,000 common shares were issued for
     services, at prices between $0.135 and $0.16, 178,900 for cash at prices
     between $0.135 and $0.22 and 321,675 for Class "A" shares exercised at a
     price of $0.24.


<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

<PAGE>

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.
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 form suppliers, until the fourth quarter of fiscal 2001.

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

<PAGE>
Page 14

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. Delivery is now scheduled to be complete in
September 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 due to delayed delivery of materials from suppliers,
the wastewater plant is to be operational by the end of October 2001.

Purchase orders for two additional UV systems valued at approximately C$150,000
(approximately $258,000.) were produced during the 2000-2001 period and will be
delivered into the Province of Ontario. One project was delivered in May, 2000
and the second partially shipped in January, 2001, with the balance to be
delivered in the third 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 2001.

In July 2001 an order was received from USFilter/WT, 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 to be
delivered in October 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
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. The products
provided through this agreement will permit Service Systems to sell into market
areas not currently serviced. These products will service small to intermediate
scale projects for municipal and industrial clients in the area of potable
water, food processing and recreational services. In addition, the products are
used by clients requiring treatment solutions beyond disinfection, such as
oxidation of chemical and organic by-products occurring in nature as well as

<PAGE>
Page 15

those occurring as a result of production processes. The implementation of these
products into Service Systems' product line has been delayed, pending setup of a
division to lead this business segment and the funding necessary for its
implementation. As a result of the rapidly expanding need for the use of UV in
the disinfection of potable water, this implementation has been placed high on
Service Systems' priority list as a business segment to develop and exploit in
the final quarter of fiscal 2001, subject to sufficient funding being available.

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 SLR.
This product, with a designed disinfection capacity of up to 1.0 million gallons
per day per lamp, will incorporate 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 Power Controller with increased power
and lamp striking voltage. The work on this component of the SLR has been
slower than anticipated, the result of which is the rescheduling of jobs in
progress. Prototype testing has been completed, and products have been ordered
and will be available starting July 2001 to complete all projects 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

<PAGE>
Page 16

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>
Page 17

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 A
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. 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.

<PAGE>
Page 18

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.

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

Six months ended June 30, 2001 compared to six months ended June 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 second quarter of fiscal 2001, we reported revenues
of $661,890 compared to revenues of $65,383 being reported in the first quarter
of fiscal 2000, an increase of $596,507 or 912%. 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 second quarter of
fiscal 2001 amounted to $402,940 compared to $58,521 during the second quarter
of fiscal 2000, an increase of 589%. 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 $258,950 during the second quarter
of fiscal 2001, compared to $6,862 recorded during the second quarter of fiscal
2000. The increase was due to the increase in sales recorded, with higher
margins being achieved on these sales.

       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 second quarter of fiscal 2001, we reported $$53,313 of these costs, a
decrease of $998 or 2%, from $54,311 in the comparable period of the prior

<PAGE>
Page 19

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 second quarter of fiscal 2001, we reported
selling expenses of $126,618, an increase of $36,792, or 41%, from $89,826
reported in the comparable period of the prior year. This increase primarily
was a result of, 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 second quarter of fiscal
2001, we reported general and administrative expense of $415,473, a increase of
$241,433, or 139% from $174,040 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, 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 second quarter of fiscal 2001,
we reported research and development expense of $162,830 , an increase of
$132,853 , or 443% , from $29,977 in the comparable period of the prior year.
The increase in R & D activities included design , engineering and prototyping
expenses on the single lamp reactor product. These costs and all other R & D
activities were fully expensed during this second quarter of fiscal 2001.

       Amortization of Goodwill. For the second quarter of fiscal 2001, we
reported amortization of goodwill of $242,540 , the same figure for the
comparable period of the prior year. The goodwill resulted from our acquisition
of a majority interest in our subsidiary, UVS. The goodwill will be completely
amortized in fiscal 2001.

       Interest, Net of Interest Income. For the second quarter of fiscal 2001,
we reported interest, net of interest income, of $40,859, compared to
$(134,555) in the prior year period. This increase was due to interest costs on
increased short term loans required to fund manufacturing, compared to the
favorable results due to forgiveness of interest on long term debt negotiated
with minority shareholders, recorded in a prior fiscal period.

       Foreign Exchange Translation Loss. For the second quarter of fiscal 2001,
we reported a foreign exchange translation loss of $12,752 an increase of
$46,485, or (365%) over $(33,733) 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 previous fiscal periods.

       Net Loss for the Period. For the second quarter of fiscal 2001, we
reported a net loss for the period of $795,435, an increase of $379,891, or 91%
over $415,544 in the comparable period of the prior year. The increase in net
loss was due primarily to the increased selling, general and administrative

<PAGE>
Page 20

expenses, and write-off of engineering and prototyping expenses, compared to
gains in foreign exchange accounts and interest expense forgiveness negotiated
with minority shareholders during the fiscal 2000 period.

       Net Loss per Share. For the second quarter of fiscal 2001, we reported a
net loss per share for the period of $0.03, an increase of $0.01, or 33%, from
$0.02 in the comparable period of prior year. The net loss per share increased
as a result of the increased net loss. The net loss increase was partly offset
by the loss being allocated over an increased number of shares outstanding and
share equivalents in fiscal 2000.


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 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 and prepayment of a Production
Demonstration Unit valued at $85,000.

<PAGE>
Page 21

We expect that during fiscal 2001, 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
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

     Sales of securities during the quarter ended June 30, 2001 were

Date          Shares     Residency/    Consideration      Exemption
                         Citizenship   Valued at
--------------------------------------------------------------------------------
6 June 2001   210,000    Canadian      Services valued
                                       at $54,390       Regulation S 6 June 2001
              950,000    Canadian      Cash $474,050    Regulation S
6 June 2001    35,575    Canadian      Exercise Price
                                       of Option for
                                       services Valued
                                       at $8,340        N/A*

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)

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Page 23

   (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)(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

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Page 24

   (21)         Subsidiaries of the Corporation:
                UV Systems Technology, Inc.,
                incorporated in British Columbia,
                Canada


(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

        The Company filed one report on Form 8-K, filed on June 18, 2001 during
the period ended June 30, 2001 which reported the Letter Agreement between the
Company, UV Systems Technology, Inc. and US Filter.



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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

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Page 26


EXHIBIT 11


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



                                                      Period Ended June 30, 2001
                                                      --------------------------




Weighted average number of shares outstanding                        22,943,619
                                                                     ==========


Total common and common equivalent shares                            22,943,619
                                                                     ==========


Net income (loss) for the period                                    $  (795,435)
                                                                     ===========


Loss per common and common equivalent shares                        $     (0.03)
                                                                     ===========






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.

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