Services Systems International, Ltd. Newsletter
Volume 2, Issue 1
June 2000
Services Systems International, Ltd. (OTCBB:SVSY) is a high technology company engaged in the development and commercialization of energy efficient water treatment systems. Through its wholly owned subsidiary, UV Systems Technology, Inc., they engineer, manufacture, and market the Ultra Guard(tm) ultraviolet (UV) disinfection system.
Ultra Guard(tm)'s Technology represents a significant advancement in UV disinfection resulting in substantially reduced O & M (operations and maintenance) costs when compared to competing alternatives. The Technology is applicable in treatment of municipal water & wastewater or industrial effluent. The System uses low-pressure, high-intensity, high efficiency ultraviolet lamps, related high-tech controls, and patented components/design elements in custom configurations to suit the specific needs of a given client.
California Title 22 Awarded
Ultra Guard(tm) Meets Highest Disinfection Standard - Opens Vast Markets
On March 9/2000, Service Systems announced they received acceptance from the California Department of Health Services (DHS) of its Ultra Guard(tm) Technology for disinfection of filtered wastewater to produce reclaimed water equivalent to that specified in Title 22 of the California Code of Regulations (CCR).
The DHS acceptance of Ultra Guard(tm) was based on the strength of the report submitted by the Los Angeles County Sanitation District (LACSD). The report's data was generated during a five-month, full-scale test at LACSD's Pomona wastewater treatment plant, supported by sample analysis at Orange County Sanitation District (OCSD) and University of California at Davis Laboratories.
According to Mr. Peter Colak, V.P. Sales & Marketing - UV Systems Technology Inc., "Title 22 is recognized as one of the most stringent disinfection standards in the world. DHS accreditation of Ultra Guard(tm)'s Technology represents an important milestone. It elevates credibility in the design elements and advanced components that underlay our key competitive advantages. It not only says that we disinfect to the highest standard but that we do so at a processing rate per lamp that is significantly higher than competing systems from Trojan Technologies Inc. (TSE: TUV), Calgon Carbon Corporation (NYSE: CCC), Infilco Degremont Inc., PCI-Wedeco Ultraviolet Systems and Aquionics Inc. (tested under the same conditions)."
Mr. Colak further stated "Title 22 accreditation at the defined flow rate per lamp enables the Company to bid with compelling economics for projects in a state that is a recognized environmental leader in the USA, not only for its environmental policies but also for its procurement expenditures in advanced treatment technologies. The State of California and UV Systems Technology Inc. share a common value in that we each consider water as 'liquid gold' in consideration of potential revenues from this sector and the precious nature of this resource. The July/August 1999 issue of WaterWorld outlined that the State of California is expected to spend in excess of $6.5 billion over the next five years on water & wastewater treatment facilities. Ultra Guard(tm) can now pursue these opportunities as well as in other states which accept California Title 22 or equivalents (Florida, Nevada, Arizona, etc.)".
Service Systems acquires 100% ownership of UV Systems Technology Inc.
Service Systems announced February 16, 2000 that under an agreement, they had acquired from GrowthWorks Capital Ltd., the managers of Working Opportunity Fund, and MDS Ventures Pacific Inc., their 49.3% share holdings of UV Systems Technology Inc. The agreement gives Service Systems shareholders 100% ownership of UV Systems Technology Inc.
In the transaction, debt amounting to $2,575,573 was exchanged for 4,213,832 restricted common shares of Service Systems, accrued interest amounting to $147,865 was forgiven and other related parties agreed to defer repayment of their debt of $206,230 until June 30, 2001.
David Levi, President and CEO of GrowthWorks Capital Ltd., Manager of the Working Opportunity Fund, said, "now that Service Systems and its shareholders have 100% ownership of the Ultra Guard(tm) UV system, the Company can truly make its mark in the rapidly expanding UV industry. We are confident that Service Systems will take this opportunity to advance in this growing industry."
David Scott of MDS Ventures Pacific Inc. commented, "This is a real win - win situation for all parties concerned. Due to recently demonstrated accomplishments and announced orders, we believe that Service Systems has matured to the extent that real value has been developed and real growth can be accomplished. With the exchange of Service Systems equity for our debt in UV Systems Technology, we will share in this growth."
Ken Fielding, President of Service Systems stated "this is a significant event in the ongoing development of the Company. The restructuring will allow the Company to move forward in obtaining financing, additional bonding facilities and joint venture opportunities."
Service Systems unveils new 1 MGD Single Lamp Reactor
On April 3/2000, Service Systems through its wholly owned subsidiary, UV Systems Technology Inc, announced the unveiling of its innovative new product line, the Uni-Flow Single Lamp UV Reactor at Water Environment Federation's (WEF) Disinfection 2000 in New Orleans.
Service Systems' Uni-Flow Single Lamp Reactor will disinfect up to 1,000,000 gallons per day. The Uni-Flow system's control is microprocessor based and Internet enabled. The use of Internet based technology allowed the design team to configure each UV plant location as a secure Web site, accessible from any local or remote location. Owner operators such as Enron Corp., and others, can centralize the monitoring and control of many plants from one location via the Internet, in line with the current trend toward privatization, automation and unmanning of Wastewater plants. Flow pacing, a term used in the UV industry to describe the function of balancing treatment needs while reacting to changes in flow and water clarity, is performed automatically within the software. The control system utilizes the unique, infinite modulation feature of the Ultra Guard(tm) UV lamp to yield even greater power savings of up to 88% over UV equipment supplied by Service System's major competitor. Also, Service Systems, from its' facilities, can monitor any site and upload any software changes to ensure optimum performance at all times. Service Systems International Ltd. teamed with TRI-M Engineering, a Burnaby based, internationally recognized custom engineering and turnkey manufacturing company. With expertise in development of the "plug & use" modular functionality of solid-state components and communications software, TRI-M counts NASA, and defense industry companies, Raytheon, Boeing and Lockheed Martin, as some of its customers.
Industry News
May 25/00: An E. coli bacteria contamination of the town drinking water supply in Walkerton, Ontario has resulted in several deaths and illness in over 1000 people. Failure of the chlorination system is cited as one reason.
May 4/00: A feared water crisis in metro Atlanta caused by unprecedented growth and economic prosperity has prompted the formation of a Clean Water Initiative Task Force. "As a region we are at the threshold of a water quality crisis," says Bill Dahlberg, co-chairman of the Clean Water Initiative and chairman and CEO of Southern Company. "Without additional wastewater treatment capacity, sewer hook-ups will not be available and economic development and growth will stop."
Apr. 18/00: Trojan Technologies, Inc. and Calgon Carbon Corporation announced they reached a settlement of ongoing litigation with respect to products for UV disinfection of municipal wastewater. Calgon has agreed to cease the manufacture and sale of their Aurora UV disinfection system.
Apr. 11/00: In "Clean and Safe Water for the 21st Century", a report released by the Water Infrastructure Network, the 54,000 drinking water systems and 16,000 wastewater systems in the U.S. face staggering infrastructure funding needs of $1 trillion over the next 20 years and shortfall of a half of a trillion dollars.
WWW: Water/Wastewater Websites
And Online Investor Resources
Investors and shareholder have continued conducting research and due diligence into the water/wastewater industry. As such, we would like to provide a few further websites as a launch point for them.
Free Edgar (public company filings) - www.freeedgar.com
Raging Bull Discussion Forum - www.ragingbull.com
Service Systems Website - www.servicesystems.com
Ultra Guard Website - www.ultraguard.com
Water Environment Federation - www.wef.org
Water Investments - www.waterinvestments.com
Water Online - www.wateronline.com
Yahoo.com Quote Service - quote.yahoo.com
Questions and Answers
Q: Aside from the obvious competitive advantages of the new Single Lamp UV Reactor, are there any other benefits to SVSY?
A: There are several:
Lower cost of manufacturing
Flexible system design
Lower ongoing servicing costs
Lower inventory costs
Higher gross margins
Pricing flexibility on project bids.
Q: Could the E. coli contamination of the town water supply in Walkerton, ON have been neutralized by UV treatment?
A: Yes, ultraviolet irradiation is very effective in neutralizing E.coli bacteria. The failure of the chlorination system could have been countered by a secondary/tertiary UV treatment system to kill E.coli bacteria present in the water supply.
Q: With the acquisition of UV Systems Technology Inc. completed, what benefits accrued to the shareholders?
A: SVSY now owns 100% of UV Systems Technology Inc. This was an opportune time for shareholders to realize full value of the technology during this early phase of commercialization. The acquisition was done at an attractive price and terms, and should deliver improvements to the balance sheet. Additionally, interest on the debt has been forgiven and remaining loan repayments have been deferred.
Going Forward...Challenges and Opportunities
A message from Ken Fielding, President
As the Company moves forward through its continued development and marketing of the Ultra Guard(tm) product line, we are very encouraged by the level of interest received from the water treatment industry. Service Systems has been inundated with Requests For Proposals (RFPs) from many Engineering firms, wastewater and water treatment facilities throughout North America and worldwide.
Due to its flexibility in application. our new, Ultra Guard(tm) Ultra Flow Single Lamp UV Reactor unit has opened up many additional opportunities and applications for our product from both small projects (single unit applications) to "mega-projects" of several million gallon per day plus.
Applications in the potable (drinking) water field have recently opened up for Service Systems with the introduction of our licensed product line from Australian Ultra-Violet Products Mnfg. Pty. Interest levels and inquiries in potable water disinfection systems have exploded since the E. coli bacteria contamination of the Walkerton, Ontario municipal water supply. The usage of ultraviolet light as a secondary or tertiary treatment mechanism can compliment the use of chlorination in rendering drinking water supplies safe.
I would like to thank the shareholders of Service Systems for their continued support through this period of development.
Service Systems International Ltd.
This Newsletter
...will be published to keep our shareholders informed of corporate issues and developments.
We invite you to email your questions to us, and we welcome your suggestions for articles that may be of interest to our shareholders.
You may contact the Company at:
Service Systems International Ltd. (SVSY)
PH5-1060 Alberni Street
Vancouver, BC, CANADA V6E 4K2
Telephone: (604) 257-4256
Toll free: 1-888-516-7766 or 1-800-542-8091
Fax: (604) 608-2949
Online at: www.servicesystems.com or
www.ultraguard.com
E-mail: rrc@rrcomm.com |
