<PAGE>


                     U.S. SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 10-K/A

            [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                     For the fiscal year ended June 30, 2000
                                       or

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

       For the transition period from _______________ to _________________

                         Commission file number 0-26972

                          SWISSRAY INTERNATIONAL, INC.
             (Exact Name of Registrant as Specified in Its Charter)

                         New York                       16-0950197
                (State or Other Jurisdiction of        (I.R.S. Employer
               Incorporation or Organization)          Identification No.)

             80 Grasslands Road, Elmsford, New York, New York 10523
               (Address of Principal Executive Office) (Zip Code)

         United States - 914-345-3700 Switzerland - 011 41 41 914 12 00
              (Registrant's Telephone Number, Including Area Code)

        Securities registered pursuant to Section 12(b) of the Act: None

               Securities registered pursuant Section 12(g) of the Act:

                     COMMON STOCK, PAR VALUE $.01 PER SHARE
                                (TITLE OF CLASS)

Indicate  by check  mark  whether  the  Registrant;  (1) has filed  all  reports
required to be filed by Section 13 or 15(d) of the  Exchange  Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for past 90 days.

                                    Yes xx No

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

The number of shares  outstanding of each of the Registrant's  classes of Common
Stock,  as of September 12, 2000 is  23,667,129  shares (1), all of one class of
common stock, $.01 par value. Of this number a total of 14,216,791 shares having
an aggregate  market  value of  $27,580,574,  based on the closing  price of the
Registrant's  common  stock of $1.94 on  September  12,  2000 as  quoted  on the
Electronic Over-the-Counter Bulletin Board ("OTC"), were held by non-affiliates*
of the Registrant.

                                       -1-

<PAGE>



* Affiliates  for the purpose of this item refers to the  Registrant's  officers
and  directors  and/or any persons or firms  (excluding  those  brokerage  firms
and/or  clearing  houses  and/or  depository   companies  holding   Registrant's
securities as record holders only for their  respective  clienteles'  beneficial
interest) owning 5% or more of the Registrant's Common Stock, both of record and
beneficially.

(1) Unless  otherwise  indicated  throughout  this Form 10-K,  all references to
number of  shares,  price per share  and data of a similar  and  related  nature
retroactively  reflect  and take into  consideration  a 1 for 10  reverse  stock
split, as effective October 1, 1998.

                               APPLICABLE ONLY TO
                 REGISTRANTS INVOLVED IN BANKRUPTCY PROCEEDINGS
                         DURING THE PRECEDING FIVE YEARS

Indicate  by check mark  whether  the  Registrant  has filed all  documents  and
reports  required  to be  filed by  Section  12,  13 or 15(d) of the  Securities
Exchange Act of 1934 subsequent to the  distribution of securities  under a plan
confirmed by a court.
                                             Yes ___           No ___

Not Applicable

                   (APPLICABLE ONLY TO CORPORATE REGISTRANTS)

Indicate the number of shares outstanding of each of the Registant's  classes of
common  stock,  as of the  latest  practicable  date:  23,667,129  shares  as of
September 12, 2000.

                       DOCUMENTS INCORPORATED BY REFERENCE

List hereunder the following documents if incorporated by reference and the part
of the Form 10-K  (e.g.,  Part I, Part II,  etc.)  into  which the  document  is
incorporated:  (1) any  annual  report  to  security  holders;  (2) any proxy or
information  statement;  and (3) any prospectus filed pursuant to Rule 424(b) or
(c) under the Securities Act of 1933.

None  excepting for the  incorporation  by reference of the  Company's  Form S-1
Registration Statement (under File Number 333-59829 as declared effective August
14, 2000) and in particular  those  sections  therein  entitled  "Risk  Factors"
(which is herewith  incorporated  by  reference  to Part I, Item 1, of this Form
10-K) and  "Market  Prices and  Dividend  Policy"  subsection  entitled  "Nasdaq
Delisting" (which is herewith incorporated by reference into Part II, Item 5, of
this Form 10-K).


                                       -2-

<PAGE>

ITEM 8.           FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The  following  financial  statements  have been prepared in accordance
with the requirements of Regulation S-X and supplementary  financial information
included  herein,  if any,  has been  prepared  in  accordance  with Item 301 of
Regulation S-K.
                          INDEX TO FINANCIAL STATEMENTS

                                                                        Page

Audited Financial Statements for Fiscal Years Ended
         June 30, 2000, 1999 and 1998:

Independent Auditors' Report                                            F-1

Consolidated Balance Sheets at June 30, 2000 and 1999                   F-2-3

Consolidated Statements of Operations for the years ended
         June 30, 2000, 1999 and 1998                                   F-4

Consolidated Statements of Cash flows for the years ended
         June 30, 2000, 1999 and 1998                                   F-5-6

Consolidated Statements of Stockholders Equity for the years
         ended June 30, 2000, 1999 and 1998                             F-7-8

Notes to Consolidated Financial Statements                              F-9-23

                                      -35-

<PAGE>

                          INDEPENDENT AUDITORS' REPORT


To the Stockholders and Board of Directors
Swissray International, Inc.
New York, New York

We have  audited  the  accompanying  consolidated  balance  sheets  of  Swissray
International,  Inc.  and  subsidiaries  as of June  30,  2000  and 1999 and the
related consolidated  statements of operations,  changes in stockholders' equity
and  cash  flows  for  each of the  three  years  then  ended.  These  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards  require that we plan and perform the audit to obtain reasonable
assurance   about  whether  the  financial   statements  are  free  of  material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall consolidated  financial statement
presentation.  We believe  that our audit  provides a  reasonable  basis for our
opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of Swissray  International,  Inc.
and subsidiaries as of June 30, 2000 and 1999, and the results of its operations
changes in stockholders'  equity and cash flows for each of the three years then
ended in conformity with generally accepted accounting principles.




                                      /s/ Feldman Sherb & Co., P.C.
                                      Feldman Sherb & Co., P.C.
                                      Certified Public Accountants

New York, New York
August 4, 2000
                                       F-1
<PAGE>


                          SWISSRAY INTERNATIONAL INC.
                           CONSOLIDATED BALANCE SHEET

                                     ASSETS

<TABLE>
<CAPTION>
                                                                         ------------------------------
                                                                              2000              1999
                                                                                             (Restated)
                                                                         ------------------------------

<S>                                                                       <C>                 <C>
CURRENT ASSETS
Cash and cash equivalents                                                 $ 3,011,183       $ 1,281,297
Restricted cash                                                             1,385,600              -
Notes receivable - short-term                                                 300,000              -
Accounts receivable, net of allowance for doubtful
accounts of $170,883 and $219,993                                           3,185,399         2,448,879
Inventories                                                                 4,637,152         7,332,401
Prepaid expenses and sundry receivables                                     1,312,167           866,804
                                                                         ------------------------------
TOTAL CURRENT ASSETS                                                       13,831,501        11,929,381
                                                                         ------------------------------

PROPERTY AND EQUIPMENT                                                      6,300,616         6,283,040
                                                                         ------------------------------

OTHER ASSETS
Loan receivable                                                                  -               15,948
Loan receivable affiliates                                                    768,647              -
Licensing agreement                                                         2,607,451         3,104,109
Patents and trademarks                                                        171,866           199,906
Software development costs                                                    256,380           347,763
Security deposits                                                              36,873            28,035
Goodwill                                                                    1,409,680         1,603,007
                                                                         ------------------------------
TOTAL OTHER ASSETS                                                          5,250,897         5,298,768
                                                                         ------------------------------
TOTAL ASSETS                                                              $25,383,014       $23,511,189
                                                                         ==============================
</TABLE>

                                       F-2
    The accompanying notes are an integral part of these financial statements
<PAGE>
                            SWISSRAY INTERNATIONAL
                    CONSOLIDATED BALANCE SHEET (Continued)


                      LIABILITIES AND STOCKHOLDERS' DEFICIT

<TABLE>
                                                                         ------------------------------
                                                                              2000              1999
                                                                                             (Restated)
                                                                         ------------------------------


<S>                                                                       <C>                 <C>
CURRENT LIABILITIES
Current maturities of long-term debt                                      $   229,700       $   247,028
Notes payable - banks                                                       3,578,339         3,667,159
Notes payable - short-term                                                  1,352,502         1,700,000
Loan payable                                                                  119,885           126,006
Accounts payable                                                            4,340,033         5,422,321
Accrued expenses                                                           10,727,576         3,003,844
Restructuring                                                                 100,000           500,000
Customer deposits                                                             785,614           278,507
                                                                         ------------------------------
TOTAL CURRENT LIABILITIES                                                  21,233,649        14,944,865
                                                                         ------------------------------

CONVERTIBLE DEBENTURES, net of conversion benefit                          14,067,294        15,305,852
                                                                         ------------------------------

LONG-TERM DEBT, less current maturities                                        83,102           195,095

COMMON STOCK SUBJECT TO PUT                                                   319,985         1,819,985

STOCKHOLDERS' DEFICIT
Common stock                                                                  233,999           140,062
Additional paid-in capital                                                 88,207,532        69,028,013
Treasury stock                                                             (2,040,000)         (540,000)
Deferred compensation                                                        (998,399)       (1,282,500)
Accumulated deficit                                                       (94,130,543)      (72,492,463)
Accumulated other comprehensive loss                                       (1,273,620)       (1,787,735)
Common stock subject to put                                                  (319,985)       (1,819,985)
                                                                         ------------------------------
TOTAL STOCKHOLDERS' DEFICIT                                               (10,321,016)       (8,754,608)
                                                                         ------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                     $ 25,383,014      $ 23,511,189
                                                                         ==============================
</TABLE>

                                       F-3
    The accompanying notes are an integral part of these financial statements
<PAGE>
                           SWISSRAY INTERNATIONAL INC.
                      CONSOLIDATED STATEMENT OF OPERATIONS


<TABLE>
<CAPTION>                                                 YEAR ENDED JUNE 30,
                                          ----------------------------------------------------
                                              2000                1999                1998
                                                               (Restated)          (Restated)
                                          ----------------------------------------------------
<S>                                       <C>                 <C>                 <C>
NET SALES                                 $ 22,030,124        $ 17,295,882        $ 22,892,978
COST OF SALES                               16,499,996          13,529,301          18,081,786
                                          ----------------------------------------------------
GROSS PROFIT                                 5,530,128           3,766,581           4,811,192
                                          ----------------------------------------------------

OPERATING EXPENSES
Officers and directors compensation          2,831,662           5,014,293             569,816
Salaries                                     3,762,009           3,784,305           4,168,540
Selling                                      4,352,016           3,207,646           3,740,391
Research and development                     1,914,065           1,808,107           3,542,149
General and administrative                   1,816,828           2,484,756           2,612,262
Restructuring cost                                 ---                 ---             500,000
Other operating expenses                       883,835           1,066,039           1,735,877
Bad debts                                       93,570             706,877             133,196
Depreciation and amortization                1,357,112           1,273,916           1,745,498
                                          ----------------------------------------------------
TOTAL OPERATING EXPENSES                    17,011,097          19,345,939          18,747,729
                                          ----------------------------------------------------

LOSS BEFORE OTHER INCOME (EXPENSES)        (11,480,969)        (15,579,358)        (13,936,537)

Other income (expenses)                        190,316              40,385            (281,227)
Interest expense                           (10,347,427)         (5,638,928)         (8,590,268)
                                          ----------------------------------------------------
OTHER EXPENSES                             (10,157,111)         (5,598,543)         (8,871,495)
                                          ----------------------------------------------------
LOSS FROM CONTINUING OPERATIONS
  BEFORE EXTRAORDINARY ITEMS               (21,638,080)        (21,177,901)        (22,808,032)

Extraordinary income (expenses)                    ---            (832,849)            304,923
                                          ----------------------------------------------------
NET LOSS                                  $(21,638,080)       $(22,010,750)       $(22,503,109)
                                          ====================================================

LOSS PER COMMON SHARE BASIC
Loss from continuing operations                  (1.14)              (3.24)              (8.48)
Extraordinary items                              (0.00)              (0.13)               0.11
                                          ----------------------------------------------------
NET LOSS                                         (1.14)              (3.37)              (8.37)
                                          ====================================================
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING                          18,927,303           6,525,423           2,690,695
                                          ============           =========           =========
</TABLE>


                                       F-4
    The accompanying notes are an integral part of these financial statements
<PAGE>

                           SWISSRAY INTERNATIONAL INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>                                                                           YEAR ENDED JUNE 30,
                                                                     ----------------------------------------------------
                                                                        2000                1999                1998
                                                                                          (Restated)          (Restated)
                                                                     ----------------------------------------------------
<S>                                                                 <C>                 <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITES
Net loss                                                            $(21,638,080)       $(22,010,750)       $(22,503,109)
Adjustment to reconcile net loss to net
        cash used by operating activities
        Depreciation and amortization                                  1,438,719           1,327,395           1,874,206
        Provision for bad debts                                          (49,110)            931,146             (38,803)
        Common stock and stock options issued for services             2,809,936           4,755,925                 ---
        Issuance of common stock in lieu of interest payments            279,600             128,107             449,376
        Interest expense on debt issuance cost and
          conversion benefit                                           1,131,061           3,070,784           7,905,225
        Interest expense on option value per Black Scholes             1,066,536              91,763                 ---
        Settlement expense paid through issuance of common stock         675,000                 ---                 ---
        Amortization of deferred compensation                          1,615,302                 ---                 ---
        Early extinguishment of debt (gain)                                  ---             832,849            (304,923)

        (Increase) decrease in operating assets:
        Accounts receivable                                             (687,410)            (51,866)          2,887,427
        Accounts receivable - long-term                                      ---                 ---             163,680
        Inventories                                                    2,695,249             368,744          (3,790,038)
        Prepaid expenses and sundry receivables                         (445,363)            635,106             434 229
        Increase (decrease) in operating liabilities:
        Accounts payable                                              (1,082,288)            391,873            (306,300)
        Accrued expenses                                               7,723,732            (361,606)          1,463,512
        Restructuring                                                   (400,000)                ---                 ---
        Customers deposits                                               507,107             101,924               6,147
                                                                    ----------------------------------------------------
NET CASH USED BY OPERATING ACTIVITIES                                 (4,360,009)         (9,788,606)        (11,759,371)
                                                                    ----------------------------------------------------

CASH FLOW FROM INVESTING ACTIVITIES
        Acquisition of property and equipment                           (633,419)           (692,954)         (2,849,205)
        Capitalized computer software                                        ---             (1,518)           (225,174)
        Patents and trademarks                                               ---                 ---             (52,386)
        Goodwill                                                             ---                 ---            (802,107)
        Other intangibles                                                (13,469)                ---                 ---
        Asset purchase net of cash received                                  ---                 ---            (591,108)
        Increase in notes receivable                                         ---            (199,132)                ---
        Security deposits                                                 (8,838)             10,245               5,448
        Increase(repayment)of loan receivable                             15,948               4,056              (2,608)
                                                                    ----------------------------------------------------
NET CASH USED BY INVESTING ACTIVITIES                                   (639,778)           (879,303)         (4,517,140)

CASH FLOWS FROM FINANCING ACTIVITIES
        Proceeds from (payments for) short-term borrowings-bank          (88,820)         20,191,413          10,342,060
        Proceeds related to debentures not funded                            ---            (227,273)                ---
        Principal payment of short-term borrowings                      (370,947)        (11,268,343)         (3,852,075)
        Principal payment of long-term borrowings                       (111,993)           (245,580)            (21,748)
        Principal payment of long-term borrowings with stock                 ---                 ---             (62,267)
        Increase in restricted cash                                   (1,385,600)                ---                 ---
        Note receivable - short-term                                    (300,000)                ---                 ---
        Loan receivable - affiliates                                    (768,647)                ---                 ---
        Issuance of common stock for cash                              8,605,416           3,160,396           8,461,262
        Exercise of stock options for cash                             2,136,149                 ---                 ---
        Purchase of treasury stock                                    (1,500,000)           (540,000)                ---
        Payment to stockholders and officers                                 ---              (2,207)            (68,032)
                                                                    ----------------------------------------------------
CASH PROVIDED BY FINANCING ACTIVITIES                                  6,215,558          11,068,406          14,779,200
                                                                    ----------------------------------------------------
EFFECT OF EXCHANGE RATE ON CASH                                          514,115            (400,752)           (332,444)
                                                                    ----------------------------------------------------
NET INCREASE (DECREASE) IN CASH                                        1,729,886                (255)         (1,809,755)
CASH AND CASH EQUIVALENT - beginning of year                           1,281,297           1,281,552           3,091,307
                                                                    ----------------------------------------------------
CASH AND CASH EQUIVALENTS - end of year                             $  3,011,183        $  1,281,297        $  1,281,552
                                                                    ====================================================
</TABLE>

                                      F-5
    The accompanying notes are an integral part of these financial statements
<PAGE>
<TABLE>
<CAPTION>

                       SUPPLEMENTAL CASH FLOW INFORMATION
                                                                                      YEAR ENDED JUNE 30,
                                                                     ----------------------------------------------------
                                                                        2000                1999                1998
                                                                                          (Restated)          (Restated)
                                                                     ----------------------------------------------------
<S>                                                                 <C>                 <C>                 <C>
Cash paid for interest                                              $    154,157        $    462,997        $   161,093

DISCLOSURE OF NONCASH FINANCING AND INVESTING ACTIVITIES

Shares issued in lieu of interest paymnets                               279,600             128,107            449,376
Stock issued for acquisition                                                 ---                 ---          1,499,997
Beneficial conversion feature recorded as additional paid-in
   capital                                                             1,131,061           1,633,164          5,738,149
Convertible debentures converted to common stock                       1,238,558                 ---                ---
</TABLE>






















                                       F-6
   The accompanying notes are an integral part of these financial statements
<PAGE>


SWISSRAY INTERNATIONAL, INC.
CONSOLITATED STATEMENT OF STOCKHOLDERS' EQUITY
YEARS ENDED JUNE 30, 2000, 1999 and 1998

<TABLE>
<CAPTION>
                                                                                                             Common
                                                                                        Additional            Stock
                                                                                          Paid-in             to be
                                                                  Common Stock            Capital             issued     Treasury
                                                              Shares         Amount      (Restated)         (Restated) )   Stock
                                                             --------------------------------------------------------------------
<S>                                                          <C>             <C>         <C>            <C>             <C>
BALANCE - JULY 1, 1997                                       1,969,443    $     19,694   $ 35,957,659   $  1,122,973    $      --

COMPREHENSIVE LOSS:
     Net loss of the year                                           --              --             --             --           --
     Foreign currency translation losses net of taxes $ -0-         --              --             --             --           --

     TOTAL COMPREHENSIVE LOSS                                       --              --             --             --           --

Issuance of common stock for cash                            2,013,688          20,137     13,581,739             --           --
Stock options exercised for cash                                16,900             169        123,201             --           --
Shares issued to officers for services                          48,259             483      1,122,490     (1,122,973)          --
Issuance of common stock in lieu of interest payment            60,999             610        448,766             --           --
Beneficial conversion feature of convertible debentures             --              --      5,738,149             --           --
Early extinguishment of debt                                        --              --       (396,875)            --           --
Issuance of common stock for asset purchase                     33,333             333      1,499,664             --           --
Common Stock subject to put                                         --              --             --             --           --
                                                             --------------------------------------------------------------------
BALANCE - JUNE 30, 1998                                      4,142,622          41,426     58,074,793            --            --


COMPREHENSIVE LOSS:
     Net loss of the year                                           --              --             --             --           --
     Foreign currency translation losses net of taxes $ -0-         --              --             --             --           --

     TOTAL COMPREHENSIVE LOSS                                       --              --             --             --           --

Issuance of common stock for cash                            3,861,287          38,613      3,121,784             --           --
Stock options exercised for services                             1,000              10          7,290             --           --
Shares issued for services                                   3,801,500          38,015      1,673,110             --           --
Issuance of common stock in lieu of interest payment           199,830           1,998        126,109             --           --
Beneficial conversion feature of convertible debentures             --              --      1,633,164             --           --
Shares issued to officers for services                       2,000,000          20,000      4,300,000             --           --
Treasury stock - at cost                                            --              --             --             --     (540,000)
Interest expense on option value per Black Scholes                  --              --         91,763             --           --
                                                            ----------------------------------------------------------------------
BALANCE - JUNE 30, 1999                                     14,006,239         140,062     69,028,013             --     (540,000)

COMPREHENSIVE LOSS:
     Net loss of the year                                           --              --             --             --           --
     Foreign currency translation losses net of taxes $ -0-         --              --             --             --           --

     TOTAL COMPREHENSIVE LOSS                                       --              --             --             --           --

Issuance of common stock for cash                            6,269,621          62,696      9,781,278             --           --
Stock options exercised for cash                             1,125,500          11,255      2,124,894             --           --
Issuance of common stock in lieu of interest payment           165,450           1,655        277,945             --           --
Issuance of common stock "Settlement"                          150,000           1,500        673,500             --
Amortization of shares issued for services                          --              --             --             --
Shares issued to officers/employees for services             1,157,065          11,571      2,798,365             --           --
Shares issued for services                                     526,000           5,260      1,325,941             --           --
Purchase of 33,333 shares subject to put                            --              --             --             --   (1,500,000)
Beneficial conversion feature of convertible debentures             --              --      1,131,061             --           --
Interest expense on option value per Black Scholes                  --              --      1,066,536             --           --
                                                            ----------------------------------------------------------------------
BALANCE - JUNE 30, 2000                                     23,399,875    $    233,999   $ 88,207,532   $         --   (2,040,000)
                                                            ======================================================================
                                      F-7
</TABLE>
<PAGE>


<TABLE>
<CAPTION>
                                                             Accumulated                  Other
                                                               Deficit    Deferred    Comprehensive  Common Stock      Total
                                                              (Restated) Compensation      Loss      Subject to Put  (Restated)
                                                            --------------------------------------------------------------------
<S>                                                          <C>           <C>           <C>            <C>          <C>

BALANCE - JULY 1, 1997                                       $(27,978,604) $      --     $(1,428,534)   $ (320,000)  $  7,373,188

COMPREHENSIVE LOSS:
     Net loss of the year                                     (22,503,109)        --             --            --     (22,503,109)
     Foreign currency transaction losses net of taxes $ -0-            --         --         (47,245)          --         (47,245)
                                                                                                                    --------------
     TOTAL COMPREHENSIVE LOSS                                          --         --             --            --     (22,550,354)

Issuance of common stock for cash                                      --         --             --            --      13,601,876
Stock options exercised for cash                                       --         --             --            --         123,370
Shares issued to officers for services                                 --         --             --            --              --
Issuance of common stock in lieu of interest payment                   --         --             --            --         449,376
Beneficial conversion feature of convertible debentures                --         --             --            --       5,738,149
Early extinguishment of debt                                           --         --             --            --        (396,875)
Issuance of common stock for asset purchase                            --         --             --            --       1,499,997
Common Stock subject to put                                            --         --             --    (1,499,985)     (1,819,985)
                                                            ----------------------------------------------------------------------

BALANCE - JUNE 30, 1998                                       (50,481,713)        --      (1,475,779)   (1,819,985)      4,338,742

COMPREHENSIVE LOSS:
     Net loss of the year                                     (22,010,750)        --             --            --     (22,010,750)
     Foreign currency translation losses net of taxes $ -0-         --            --        (311,956)           --        (311,956)
                                                                                                                    --------------
     TOTAL COMPREHENSIVE LOSS                                       --            --             --            --     (22,322,706)

Issuance of common stock for cash                                   --            --             --            --       3,160,397
Stock options exercised for services                                --            --             --            --           7,300
Shares issued for services                                          --       (1,282,500)         --            --        428,625
Issuance of common stock in lieu of interest payment                --            --             --            --         128,107
Beneficial conversion feature of convertible debentures             --            --             --            --       1,633,164
Shares issued to officers for services                              --            --             --            --       4,320,000
Treasury stock - at cost                                            --            --             --            --        (540,000)
Interest expense on option value per Black Scholes                  --            --             --            --          91,763
                                                            ---------------------------------------------------------------------
BALANCE - JUNE 30, 1999                                       (72,492,463)   (1,282,500)  (1,787,735)   (1,819,985)    (8,754,608)

COMPREHENSIVE LOSS:
     Net loss of the year                                     (21,638,080)          --            --           --     (21,638,080)
     Foreign currency translation losses net of taxes $ -0-         --              --       514,115           --         514,115
                                                                                                                       ----------
     TOTAL COMPREHENSIVE LOSS                                       --              --            --           --     (21,123,965)

Issuance of common stock for cash                                   --              --            --           --       9,843,974
Stock options exercised for cash                                    --              --            --           --       2,136,149
Issuance of common stock in lieu of interest payment                --              --            --           --         279,600
Issuance of common stock "Settlement"                               --              --            --           --         675,000
Amortization of shares issued for services                          --        1,282,500           --           --       1,282,500
Shares issued to officers/employees for services                    --              --            --           --       2,809,936
Shares issued for services                                          --         (998,399)          --           --         332,802
Purchase of 33,333 shares subject to put                            --              --            --     1,500,000             --
Beneficial conversion feature of convertible debentures             --              --            --           --       1,131,061
Interest expense on option value per Black Scholes                  --              --            --           --       1,066,536
                                                            ----------------------------------------------------------------------
BALANCE - JUNE 30, 2000                                      $(94,130,543) $   (998,399) $(1,273,620)   $ (319,985)  $(10,321,016)
                                                            ======================================================================
</TABLE>

                                       F-8

   The accompanying notes are an integral part of these financial statements
<PAGE>

SWISSRAY INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED JUNE 30, 2000, 1999 AND 1998


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION

The Company was incorporated  under the laws of the State of New York on January
2, 1968  under the name CGS Units  Incorporated.  On June 6, 1994,  the  Company
merged  with  Direct  Marketing  Services,  Inc.  and  changed  its  name to DMS
Industries,  Inc. In May of 1995 the Company  discontinued the operations of DMS
Industries,  Inc. and acquired all of the outstanding  stock of SR Medical AG, a
Swiss  corporation  engaged in the business of  manufacturing  and selling X-ray
equipment,  components and accessories.  On June 5, 1995 the Company changed its
name to Swissray  International,  Inc. The  Company's  operations  are conducted
principally through its wholly owned subsidiaries.

PRINCIPLES OF CONSOLIDATION

The consolidated  financial  statements  include the accounts of the Company and
its  wholly-owned  subsidiaries.   All  significant  intercompany  balances  and
transactions have been eliminated.

REVENUE RECOGNITION

Revenues  from  direct  sales of  products  to end users are  recorded  when the
products are shipped,  installed,  collection of the purchase  price is probable
and the Company has no significant further obligations to the customer. Revenues
from direct sales of products to distributors are recorded when the products are
shipped,  collection  of the  purchase  price is probable and the Company has no
significant further obligations to the customer. Cost of remaining insignificant
Company  obligations,  if any,  are  accrued  as costs of revenue at the time of
revenue recognition.

USE OF ESTIMATES

The preparation of financial  statements in conformity  with generally  accepted
accounting  principles require management to make estimates and assumptions that
affect the  reported  amounts  of assets  and  liabilities  and  disclosures  of
contingent  assets and  liabilities at the date of the financial  statements and
the reported amounts of revenue and expenses during this period.  Actual results
could differ from those estimates.

                                      F-9
<PAGE>

WARRANTY

The  company  accrues a warranty  allowance  at the time of sale.  The  warranty
allowance is based upon the companies  experience  and varies between 0.5 and 2%
of the net sales amount.

FAIR VALUE OF FINANCIAL INSTRUMENTS

Statement of Financial Accounting Standard No. 107 "Disclosures about Fair Value
of  Financial  Instruments"  (SFAS 107)  requires the  disclosure  of fair value
information about financial instruments whether or not recognized on the balance
sheet,  for which it is practicable  to estimate the value.  Where quoted market
prices are not readily available,  fair values are based on quoted market prices
of comparable instruments. The carrying amount of cash and equivalents, accounts
receivable  and accounts  payable  approximates  fair value because of the short
maturity of those instruments.

CASH EQUIVALENTS

The Company considers all highly liquid  investments  purchased with an original
maturity of three months or less to be cash equivalents.

INVENTORIES

Inventories  are  stated  at the  lower  of  cost or  market,  with  cost  being
determined on the first-in,  first-out  (FIFO) method.  Inventory  costs include
material, labor, and overhead.

PROPERTY AND EQUIPMENT

Property  and  equipment  are  stated  at cost  and are  depreciated  using  the
straight-line  method over the estimated useful lives of the respective  assets.
Leasehold  improvements  are amortized over the shorter of the estimated  useful
lives of the improvements, or the term of the facility lease.

IMPAIRMENT OF LONG-LIVED ASSETS

The  Company  reviews  long-lived  assets to assess  recoverability  from future
operations  using   undiscounted  cash  flows.   When  necessary,   charges  for
impairments  of  long-lived  assets  are  recorded  for the  amount by which the
present value of future cash flows exceeds the carrying value of these assets.

INTANGIBLE ASSETS

Intangible  assets are stated at cost and are being amortized using the straight
line method over the estimated useful lives of the respective assets.

                                      F-10
<PAGE>


SOFTWARE DEVELOPMENT COSTS

Capitalization  of software  development  costs begins upon the establishment of
technological  feasibility of new or enhanced software  products.  Technological
feasibility of a computer  software  product is established when the Company has
completed  all  planning,  designing,  coding and testing  that is  necessary to
establish   that  the   software   product   can  be  produced  to  meet  design
specifications   including   functions,   features  and  technical   performance
requirements. All costs incurred prior to establishing technological feasibility
of a software product are charged to research and development as incurred.

ADVERTISING AND PROMOTION

Advertising  and  promotion  costs are  expensed  as  incurred  and  included in
"Selling"  expenses.  Advertising and promotion expense for the years ended June
30,  2000,  1999  and  1998  were $  2,601,410,  $  1,452,309  and $  1,737,935,
respectively.

RESEARCH AND DEVELOPMENT

Costs  associated  with  research,  new product  development,  and product  cost
improvements are treated as expenses when incurred.

CONVERTIBLE DEBT

Convertible  debt is recorded as a liability  until converted into common stock,
at which time it is recorded as equity.

INCOME TAXES

Deferred  tax assets and  liabilities  are  determined  based on the  difference
between the financial  statement and tax basis of assets and  liabilities  using
enacted tax rates in effect for the year in which the  differences  are expected
to affect taxable income. Valuation allowances are established when necessary to
reduce deferred tax assets to the amounts expected to be realized.

EXPENSES RELATED TO SALES AND ISSUANCE OF SECURITIES

All costs  incurred in connection  with the sale of the  Company's  common stock
have been capitalized and charged to additional paid-in capital.

NET LOSS PER COMMON SHARE

Basic earnings per share is computed by dividing the net income (loss) available
to common  shareholders  by the weighted  average number of  outstanding  common
shares.  The  calculation  of  diluted  earnings  per share is  similar to basic
earnings  per share  except  the  denominator  includes  dilutive  common  stock
equivalents  such as stock  options and  convertible  debentures.  Common  stock
options and the common shares  underlying  the  convertible  debentures  are not
included as their effect would be anti-dilutive.

                                      F-11

<PAGE>

ACCOUNTING FOR STOCK OPTIONS

The Company  accounts for  stock-based  compensation  using the intrinsic  value
method as prescribed  under  Accounting  Principles  Board Opinion (APB) No. 25,
"Accounting for Stock Issued to Employees" and related Interpretations.

FOREIGN CURRENCY TRANSLATION

Assets and  liabilities  of  subsidiaries  operating  in foreign  countries  are
translated  into U.S.  dollars  using  both the  exchange  rate in effect at the
balance sheet date or historical rate, as applicable.  Results of operations are
translated using the average exchange rates prevailing  throughout the year. The
effects of exchange rate fluctuations on translating foreign currency assets and
liabilities into U.S. dollars are included in stockholders  equity  (Accumulated
other  comprehensive  loss),  while  gains and  losses  resulting  from  foreign
currency transactions are included in operations.

NEW ACCOUNTING PRONOUNCEMENTS

The Company has adopted  Statement  of  Financial  Accounting  Standard  No. 133
("SFAS No. 133"), "Accounting for Derivative Instruments and Hedging Activities"
for the year  ended June 30,  2000.  SFAS No.  133  establishes  a new model for
accounting for  derivatives  and hedging  activities and supersedes and amends a
number of existing  standards.  The application of the new pronouncement did not
have a material impact on the Company's financial statements.

STOCK SPLIT

On October 1, 1998 the  Company  declared a 1 for 10 reverse  stock  split.  The
financial statements for all periods presented have been retroactively  adjusted
for the stock split.

NOTE 2 - RESTRICTED CASH

In association with the contract signed with the Romanian  Ministry of Health in
October  1999,  the Company had to post a  performance  bond of 10% of the total
contract of $13,856,000 or $1,385,600.  The  performance  bond will be partially
reimbursed  at 50% of its  total  value  within 30 days of the  presentation  of
acceptance  certificates for the first 16 units.  The remaining  balance will be
reimbursed 30 days after presentation of the acceptance certificate for the 32nd
and final unit. The amount for the performance  bond is denoted in the financial
statements as restricted cash.

                                      F-12
<PAGE>

NOTE 3 - INVENTORIES

Inventories are summarized by major classification as follows:

                                                        June 30,
                                              2000                   1999
                                          ---------------       ----------------
      Raw materials, parts and supplies $       2,682,558     $        5,558,330
      Work in process                           1,295,575              1,048,197
      Finished goods                              659,019                725,874
                                        -----------------       ----------------
                                        $       4,637,152     $        7,332,401
                                        =================       ================


NOTE 4  - PREPAID EXPENSES AND SUNDRY RECEIVABLES

Prepaid expenses and sundry receivables consist of the following:


                                                         June 30,
                                               2000                  1999
                                        -------------------    -----------------
      Prepaid expenses, deposits and
        advance payments                    $       892,077  $           229,236
      Insurance claim for fire damage                     -              389,220
      Prepaid and refundable taxes                  414,090              240,368
      Employee loans                                  6,000                7,980
                                        -------------------    -----------------
                                     $            1,312,167  $           866,804
                                        ===================    =================

NOTE 5 - PROPERTY AND EQUIPMENT

Property and equipment consist of the following:


                                     Estimated               June 30,
                                    Useful Lives
                                      (years)         2000               1999
                                    ------------   -----------       -----------
      Land                                -      $    596,982      $   5,501,853
      Building                           30         4,976,657              -
      Equipment                           5         1,866,720          1,448,961
      Office furniture and equipment    3-5           253,946            333,596
                                                  -------------    -------------
                                                    7,694,305          7,284,410
Less: Accumulated depreciation                      1,393,689          1,001,370
                                                  -------------    -------------
                                                 $  6,300,616      $   6,283,040
                                                  =============    =============


Depreciation and amortization expense, for property and equipment, for the years
ended June 30,  2000,  1999 and 1998 were $ 615,873,  $ 547,693  and $ 1,077,074
respectively.

                                      F-13
<PAGE>



NOTE 6 - INTANGIBLE ASSETS

Intangible Assets at June 30, 2000 and 1999 consisted of the following


                                        Estimated              June 30,
                                       Useful Lives
                                         (Years)         2000            1999
                                       ----------      ---------    ------------
      Excess of cost over fair value
        of net assets acquired             10      $   1,933,275    $  1,933,275
      Licensing (a)                        10          4,966,575       4,966,575
      Software development cost           5-8            592,198         578,729
      Patents and Trademarks               10            313,330         313,330
                                                    ------------    ------------
                                                       7,805,378       7,791,909
      Less: Accumulated amortization                   3,360,001       2,537,125
                                                    ------------    ------------
                                                   $   4,445,377    $  5,254,784
                                                    ============    ============


Amortization  expense, for Intangible Assets, for the years ended June 30, 2000,
1999 and 1998 were $ 822,876, $ 830,194 and $ 1,227,719, respectively.

(a) The  Company  entered  into a  licensing  agreement  in June of 1995 with an
unaffiliated individual.  The agreement is for an exclusive field-of-use license
within  the  United  States  and  Canada  to use  the  proprietary  information,
including the patent rights, for certain technology regarding the integration of
computer  technology  with  diagnostic  x-ray and  radiology  medical  equipment
through digital imaging  systems.  The total cost of the license was $4,966,575.
This  agreement  is for an  indefinite  term  or  until  all of the  proprietary
information becomes public knowledge and the patent rights expire.

NOTE 7 - NOTES PAYABLE - BANKS

The Company has negotiated a revolving line-of-credit agreement with Migros Bank
of Switzerland,  dated March 23, 1998, for up to $ 440,263. The Company has also
negotiated an agreement for up to $ 1,206,200 for the issuance of guarantees and
letters of credit,  both with a  commission  of 15% per $  1,000,000,  quarterly
while outstanding.  There were $ 596,896 in outstanding  guarantees and $ -0- in
letter of credits as of June 30, 2000. The Company also  negotiated a fixed line
of credit for up to $  2,352,090  with an agreed  repayment  of $ 60,310 per 180
days first time applicable as of June 30, 2000. All lines of credit are based on
the Exchange rate in effect on June 30, 2000.


                                      F-14

<PAGE>



Notes payable are summarized as follows:


                                                           June 30,
                                                   2000                1999
                                              -------------       --------------

Migros Bank revolving line of credit,
due on demand,with  interest at 4.75% per
annum,  collateralized  by certain  accounts
Receivable,  and a cash deposit at Migros
Bank as of June 30, 2000 and 1999 were
 $ -0-  and $ 485,367, respectively.          $           -       $      798,730

Migros  Bank,  on demand with six week
notice,  with  interest as of June 30,
2000 and 1999 at 3.7/8% and 4% per annum,
collateralized by land and building               2,231,470            2,529,930

Union  Bank of  Switzerland,  due on
demand,  with  interest  at 8% per  annum,
collateralized  by the cash on deposit at
Union Bank of Switzerland and accounts
receivable.  Cash balances on deposit at
Union Bank of  Switzerland  at June 30,
2000 and 1999 were $ 2,429,258 and $ 627,625,
respectively                                       1,346,869             338,499

                                                ---------------      -----------
                                              $    3,578,339      $    3,667,159
                                                ===============      ===========

NOTE 8 - LOAN PAYABLE

The Company has negotiated a 4% demand loan from a private  foundation fund. The
loan  balance  payable  at June 30,  2000 and 1999 was $  119,885  and $ 126,006
respectively.

NOTE 9 - SHARES ISSUED FOR COMPENSATION

In June 1999, the Company incurred  additional  compensation to the President of
the Company of 2,000,000 fully vested,  nonforfeitable shares with a fair market
value of $2.16  per  share or  $4,320,000  (based  on the bid price of $2.40 per
share on the date of issuance less a 10% discount for restrictions on the resale
of such  shares).  The  compensation  was in  consideration  of the  President's
agreement to extinguish his rights  contained in his employment  agreement which
entitled him to a 25% bonus of the Company's earnings (as defined).

In 1999 the Company  issued  3,800,000  fully vested,  nonforfeitable  shares of
common stock with a fair market value of $.45 per share or $1,710,000  (based on
the bid price of $.50 per share on the date of issuance  less a 10% discount for
restrictions  on the resale of such  shares) to  consultants  for services to be
rendered  over a term of one  year to  eighteen  months.  Such  amount  has been
deferred and is being amortized over the term of the consulting agreements.

In October 1999 the Company issued 1,050,000 fully vested, nonforfeitable shares
of common  stock  with a fair  market  value of $2.475  per share or  $2,165,625
(based on the bid price of $2.75  per share on the date of  issuance  less a 10%
discount  for  restrictions  on the resale of such  shares) to  officers  and/or
directors  as  additional  compensation.  Such amount has been  expensed  and is
included in results of operations.

                                      F-15

<PAGE>

On April 4, 2000 the Company issued 490,000 fully vested,  nonforfeitable shares
of common  stock with a fair  market  value of $2.5308  per share or  $1,240,092
(based  on the bid price of $.50 per  share on the date of  issuance  less a 10%
discount for  restrictions  on the resale of such  shares) to a  consultant  for
services to be rendered over twelve months commencing April 1, 2000. Such amount
has been  deferred  and is  being  amortized  over  the  term of the  consulting
agreement.  In  addition  the  agreement  provides  for the  issuance  of 36,000
restrictive  shares of Company  Common  stock  (based on 3,000 shares per month)
throughout the period of the Consultant's performance.

NOTE 10 - CONVERTIBLE DEBENTURES

Convertible debentures consist of the following:



                                                               June 30,
                                                        2000              1999
                                                     ----------       ----------

Convertible debenture dated June 15, 1998.
The debenture was converted into 851,970
shares in Fiscal 2000.                                    -           2,000,000

Convertible debenture of $6,143,849 dated
August 31, 1988 and due August 31, 2000 with
interest of 5% per annum.The debentures are
convertible into common shares at a price
equal to the lesser of eighty-two (82%) of
the average closing bid price for the ten
trading days preceding the date of the
conversion.All debentures are convertible at
the earlier of a registration effective date
or March 1, 1998.Any debenture not so converted
is subject to mandatory conversion on August 31,
2000.The Company at its sole discretion can redeem
the debenture at 125% after the sixth month
following  the  closing  date. $1,698,827 and
$514,428 of the balance was converted into
1,383,604 and  1,051,529 shares in
Fiscal 2000 and 1999 respectively.
Debt issuance cost was $311,000, beneficial
conversion feature was $-0-.                           3,930,594      5,629,421

Convertible debenture including $540,000
repurchase of stock dated October 6, 1988 and
due October 6, 2000 with  interest of 5% per
annum.The debentures are convertible into common
shares at a price equal to the lesser of
eighty-two (82%) of the average closing bid
price for the ten trading days  preceding  the
date of the conversion.All debentures are
convertible at the earlier of a registration
effective date or October 6, 1998. Any debenture
not so converted is subject to mandatory
conversion on October 6, 2000.The Company at
its sole discretion can redeem the debenture at
125% after the sixth month following the closing
date. Debt issuance cost was $300,000, beneficial
conversion feature was $53,112.                        2,940,000      2,940,000

Convertible debenture dated January 29, 1999 and
due January 29, 2001 with interest of 3% per each
30 days for the first ninety days, 3.5% per each
30 days for the  ninety-first to the one hundred-
twentieth day and 4% per each 30 days from the
hundred-twenty-first day until the earlier of
conversion or redemption. The debentures are
convertible into common shares at a price equal to
the lesser of eighty-two (82%) of the average
closing bid price for the ten trading days
preceding the date of the conversion or $1.00. All
debentures are convertible at the earlier of a
registration effective date or January 29, 1999.
Any debenture not so converted is subject to
mandatory conversion on January 29, 2001. The
Company at its sole discretion can redeem the
debentures at any time. Debt issuance cost was
$150,000, beneficial conversion feature was $-0-.      1,170,000      1,170,000

                                      F-16
<PAGE>

Convertible debenture dated May 13, 1999 and due
May 13, 2001 with interest of 5% per annum. The
debentures are convertible into common shares at
a price equal to the lesser of eighty (80%) of
the average closing bid price for the ten trading
days preceding the date of the conversion or $1.00.
All debentures are convertible at the earlier of a
registration effective date or May 13, 1999. Any
debenture not so converted is subject to mandatory
conversion on May 13, 2001.The company at its sole
discretion can redeem the debenture at 125%
after the sixth month following the closing date.
Debt issuance cost was $80,000, interest rollover
was $39,600, beneficial conversion feature was
$735,025.                                              1,119,600      1,119,600

Convertible debenture dated May 5, May 24 and
June 10, 1999 and due May 5, May 24 and June 10,
2001, respectively with interest of 5% per annum.
The debentures are convertible into common shares
at a price equal to eighty (80%) of the average
closing bid price for the ten trading  days
preceding the date of the conversion.The investor
shall not be allowed to convert any portion of the
Debentures for 120 days from the Closing date,
unless the bid price is greater than $5.50.Every
30-day period after the Closing date, the investor
shall be allowed to convert and sell based upon if
the bid price is over $1.50 then 15% of the
original face amount can be converted, if the bid
price is over $7.50 then 20% of the original face
amount can be converted. No conversion can be made
for 300 days if the bid price is below $1.50 All
debentures are convertible at the earlier of a
registration effective date or May 5, May 24 and
June 10, 1999, respectively.Any debenture not so
converted is subject to mandatory conversion on May
5, May 24 and June 10, 2001, respectively.The
Company at its sole discretion can redeem the
debenture at 120% of the face amount including
interest. $310,500 of the balance was converted
into 142,332 shares in Fiscal 2000.  Debt issuance
cost was $100,000, beneficial conversion feature
was $423,973.                                          539,500          850,000

Convertible debenture dated May 31, 1999 and due
May 31, 2001 with interest of 5% per annum. The
debentures are convertible into common shares at
a price equal to the lesser of eighty (80%) of the
average  closing  bid price for the ten trading
days preceding the date of the conversion or $1.00.
All debentures are convertible at the earlier of a
registration effective date or May 31, 1999. Any
debenture not so converted is subject to mandatory
conversion on May 31, 2001.The company at its sole
discretion can redeem the debenture at 125% after
the sixth month following the closing date. Debt
issuance cost was $110,000, interest rollover was
$22,200, beneficial conversion feature
was $140,049.                                          1,132,200      1,132,000

Convertible debenture dated June 26, 1999 and due
June 26, 2001 with interest of 5% per annum. The
debentures are convertible into common shares at
a price equal to the lesser of eighty (80%) of the
average closing bid price for the ten trading days
preceding the date of the conversion or $1.00.
All debentures are convertible at the earlier of a
registration effective date or June 26, 1999. Any
debenture not so converted is subject to mandatory
conversion on June 26, 2001.The company at its sole
discretion can redeem the debenture at 125% after
the sixth month following the closing date.Debt
issuance cost was $50,000, interest rollover was
$11,000, beneficial conversion feature was $281,005.   561,000          561,000

                                      F-17
<PAGE>

Convertible debenture dated August 23, 1999
and due August 23, 2001 with interest of 5% per
annum. The debentures are convertible into
common shares at a price equal to the lesser
of eighty  (80%) of the average  closing bid
price for the ten trading days  preceding the
date of the  conversion.  All debentures are
convertible immediately.  Any debenture not so
converted is subject to mandatory conversion
on August 23, 2001.  The company at its sole
discretion can redeem the debenture  at 125%
after the sixth month following the closing date.
Debt issuance cost was $100,000, beneficial
conversion feature was $717,243.                       1,148,400            -

Convertible debenture dated November 11, 1999
and due November 11, 2001 with interest of 5%
per annum. The debentures are convertible into
common shares at a price equal to the lesser of
eighty (80%) of the average closing bid price for
the ten trading days preceding the date of the
conversion.  All debentures are convertible
immediately.  Any debenture not so converted is
subject to mandatory conversion  on November
11, 2001.  The company at its sole  discretion can
redeem the debenture at 125% after the sixth month
following the closing date.  Debt issuance cost
was $140,000, beneficial conversion feature
was $510,187.                                          1,526,000            -
                                                      -----------   ------------
                                                       14,067,294    15,402,221
Less:  Discount due to beneficial conversion
features, net of accumulated amortization
of $ -0- and $327,604                                         -         (96,369)
                                                      ------------  ------------

                                                     $ 14,067,294   $15,305,852
                                                      ============  ============
The Company is currently in  violation of certain  covenants in their  debenture
agreements. Such covenants have been waived by the holders through July 1, 2002.

NOTE 11 - NOTES PAYABLE - SHORT-TERM

                                                               June 30,
                                                         2000            1999
                                                     -----------    ------------
Promissory note, dated June 11, 1999, $654,000,
due September 9, 1999,  collateralized by
inventory.                                         $   350,000      $   600,000

Promissory note, dated August 31, 1999, $500,000,
with interest at 8%, payable monthly through
August 15, 2001.(a)                                    302,502             -

Promissory note, dated May 2000, with interest
payable at 3% per month due December 31, 2000.         500,000             -

Promissory note, dated June 2000, with interest
payable at 3% per month due December 31, 2000.         200,000             -

Promissory note, dated April 1999, the note was
converted into debentures in Fiscal 2000.            1,050,000        1,100,000
                                                    -----------     ------------
                                                   $ 1,352,502      $ 1,700,000
                                                    ===========     ============

(a) This  promissory  note is a  settlement  agreement  with  former  owners  of
Swissray America, Inc.



                                      F-18

<PAGE>

NOTE 12 - LONG-TERM DEBT

Long-term debt consists of the following:

                                                            June 30,
                                                    2000               1999
                                             --------------      ---------------
Note payable - Other                          $    87,450          $   122,175

Note payable - Union Bank of Switzerland,
in monthly installments of $12,589 with
imputed interest at 6.0% per annum,
maturing on September 30, 2000                    163,824               188,907

Capitalized leases                                 61,528               131,040
                                             --------------         ------------
                                                  312,802               442,123
Less: Current portion                            (229,700)             (247,028)
                                             --------------         ------------
                                              $    83,102          $    195,095
                                             ==============         ============

The aggregate long-term debt principal payment are as follows:

                Year Ending June 30,
                        2001                    $          229,700
                        2002                                72,591
                        2003                                10,511

NOTE 13 - SHAREHOLDERS' EQUITY

Authorized Shares

On March 12, 1997,  the Company  amended its  certificate  of  incorporation  to
change the number of authorized  common shares from  15,000,000 to 30,000,000 of
$.01 par value common  shares.  On December 26,  1997,  the Company  amended its
certificate of  incorporation  to change the number of authorized  common shares
from 30,000,000 to 50,000,000 of $.01 par value common shares. On July 20, 2000,
the Company  amended its  certificate of  incorporation  to change the number of
authorized common shares from 50,000,000 to 100,000,000 of $.01 par value common
shares.

Preferred Stock

In July 1999, the Company amended its Certificate of Incorporation to authorized
the issuance of 1,000,000 shares of preferred stock, $.01 par value per share.

Stock Option

The Stock Option Plans provide for the grant of options to officers,  directors,
employees  and  consultants.  Options may be either  incentive  stock options or
non-qualified stock options, except that only employees may be granted incentive
stock  options.  The maximum  number of shares of Common  Stock with  respect to
which  options may be granted  under the Stock Option  Plans is 500,000  shares.
Options vest at the discretion of the Board of Directors. All options granted in
1999 and 1997 vested  immediately.  The maximum  term of an option is ten years.
The 1996 Stock  Option Plan will  terminate  in January,  2006,  though  options
granted prior to  termination  may expire after that date. The 1997 Stock Option
Plan will terminate at the discretion of the Board of Directors. In Fiscal 2000,
had  compensation  cost for the Stock Option Plans been determined  based on the
fair value at the grant dates for awards  under the Stock Option  Plans,  except
for grants to consultants  for which  compensation  expense has been  recognized
consistent  with  the  method  of SFAS  No.  123,  as  discussed  in Note 1, the
Company's net loss and net loss per share would have  increased to the pro forma
amounts indicated below:

                                                  Fiscal 2000
                                             As                 Pro
                                          Reported             Forma
Net loss (in thousands)                   ($21,638)          ($22,616)
Basic and diluted net loss per share        ($1.22)            ($1.27)

The fair value of each option  grant is estimated on the date of grant using the
Black  Scholes   option-pricing  method  with  the  following  weighted  average
assumptions used for grants in 2000; dividend yield 0%, expected volatility 50%,
risk-free interest rate 5.7%, expected lives in years-1 year.

The weighted  average fair value of stock options  granted during the year ended
June 30, 2000 was $ 2.36.

                                      F-19
<PAGE>

A summary of the status of the Stock  Option  Plans at June 30,  2000,  1999 and
1998 and the changes during the years then ended is presented below:
<TABLE>
<CAPTION>
                                       2000                           1999                            1998
                           ----------------------------- ------------------------------- --------------------------------
                                             Weighted                        Weighted                         Weighted
                              Shares          Average        Shares           Average       Shares            Average
                            Underlying       Exercise      Underlying        Exercise     Underlying          Exercise
                             Options           Price        Options            Price       Options             Price
                           -------------    ------------ ---------------    ------------ -------------      -------------
<S>                             <C>            <C>           <C>               <C>         <C>                  <C>
      Outstanding
      At beginning
      Of year                   194,500  $     23.40         180,000     $     23.40       196,900       $      23.40

      Granted                 2,987,000  $      2.36          15,500     $       .44         -           $       0.00

      Exercised              (1,130,500) $      1.93          (1,000)    $      7.30       (16,900)      $       7.30
                           -------------    ------------ ---------------    ------------ -------------      -------------
      Outstanding
      At end of year          2,051,000  $      4.60         194,500     $     23.40       180,000       $      23.40
                           =============    ============ ===============    ============ =============      =============
      Exercisable at
      End of year             2,051,000  $      4.60         194,500     $     23.40       180,000       $      23.40
                           =============    ============ ===============    ============ =============      =============

</TABLE>

The following table summarizes  information  about stock options under the Stock
Option Plans at June 30, 2000

                       Options Outstanding and Exercisable
      ---------------------------------------------------------------------
                                             Weighted Average        Weighted
                             Number       Remaining Contractual      Average
  Range of Exercise Pr     Outstanding            Life            Exercise Price
  ---------------------- ---------------   --------------------  ---------------
         $.01 - $.44           15,500                8.5              $0.44
       $2.625 - $2.625      1,856,500                9.2             $2.625
       $7.30 - $10.00          18,000                7.4              $8.00
       $20.00 - $40.00        127,500                6.8             $22.10
       $47.50 - $65.00         33,500                6.5             $58.70
                          --------------
                            2,051,000
                          ==============

Stock Warrants

In Fiscal 1999,  the Company  issued 462,500  warrants.  The Company  recognized
compensation cost for the warrants issued of $92,000.  Such value was determined
using the Black-Scholes  method with the following weighted average assumptions;
dividend yield 0%, expected volatility 70%, risk-free interest rate 7%, expected
lives in years  1.  The  following  table  summarized  information  about  stock
warrants at June 30, 2000:

                       Warrants
                      Outstanding
                         and
                      Exercisable
    Range of             Number        Remaining Contractual    Average Exercise
 Exercise Price       Outstanding            Life                      Price

 $.375 - $9.38          462,500              4.5                       $.96

NOTE 14 - DEFINED CONTRIBUTION PLANS

The Swiss and German  Subsidiaries,  mandated  by  government  regulations,  are
required to  contribute  approximately  five (5%)  percent of all  eligible,  as
defined,  employees'  salaries into a government  pension plan. The subsidiaries
also contribute  approximately  five (5%) percent of eligible  employee salaries
into a private pension plan. Total  contributions  charged to operations for the
years ended June 30, 2000, 1999 and 1998, were $ 475,176, $509,959 and $347,854,
respectively.

                                      F-20

<PAGE>

NOTE 15 - INCOME TAXES

Deferred income tax assets as of June 30, 2000 of $22,700,000 as a result of net
operating losses, have been fully offset by valuation allowances.  The valuation
allowances have been  established  equal to the full amounts of the deferred tax
assets, as the Company is not assured that it is more likely than not that these
benefits will be realized.

A  reconciliation  between the statutory United States corporate income tax rate
(34%) and the effective  income tax rates based on  continuing  operations is as
follows:


<TABLE>
<CAPTION>


                                                                                Year Ended June 30,
                                                         -------------------------------------------------------------------
                                                                2000                  1999                      1998
                                                         -------------------    ------------------        ------------------
   <S>                                                          <C>                   <C>                       <C>
   Statutory federal income tax (benefit)         $          (7,400,000)     $     (5,600,000)      $        (7,754,000)
   Foreign income tax (benefit) in excess of
   domestic rate                                                (77,000)              377,000                   543,000
   Benefit not recognized on operating loss                   5,127,000             3,693,000                 5,111,000
   Permanent and other differences                            2,350,000             1,530,000                 2,100,000
                                                         -------------------    ------------------        ------------------
                                                  $              -           $          -              $          -
                                                         ===================    ==================        ==================
</TABLE>

Net operating loss carryforwards at June 30, 2000 were approximately as follows:



United States (expiring through June 30, 2015)          $ 40,000,000

Switzerland (expiring through June 30, 2010)              33,000,000
                                                          ----------
                                                        $ 77,000,000
                                                          ==========

NOTE 16 - EXTRAORDINARY ITEMS

On July 31, 1997 the Company refinanced Convertible debentures issued in May and
June 1997.  A gain on  extinguishment  of debt of  $154,212  resulted  from that
transaction net of income taxes of $-0-.

In December,  1997 the Company  refinanced  part of the  Convertible  debentures
issued in August 1997.  A gain on  extinguishment  of debt of $150,711  resulted
from that transaction net of income taxes of $-0-.

In Fiscal 1999 the Company  recognized a loss from early  extinguishment of debt
of $832,849, net of income taxes of $-0-.

NOTE 17 -  SIGNIFICANT CUSTOMER AND CONCENTRATION OF CREDIT RISK

The Company sells its products to various customers  primarily in Europe and the
USA. The company  performs  ongoing  credit  evaluations  on its  customers  and
generally  does not require  collateral.  Export  sales are  usually  made under
letter of credit  agreements.  The company  establishes  reserves  for  expected
credit losses and such losses, in the aggregate,  have not exceeded management's
expectations.

The Company  maintains  its cash  balances  with major Swiss,  United States and
German financial  institutions.  Funds on deposit with financial institutions in
the United  States are insured by the  Federal  Deposits  Insurance  Corporation
("FDIC) up to $ 100,000.

During  the  years  ended  June 30,  2000,  1999 and 1998  there  were  sales to
customers that exceeded 10% of net consolidated  sales. Sales to these customers
were:  2000 customer A, $ 8,180,866  (23 %) and customer C $ 10,825,000  (49 %),
1999 customer A, $9,253,480 (54%), 1998 customer A, $ 7,647,354 (33%) customer B
$2,389,613 (18%). The company operates in a single industry  segment,  providing
x-ray medical equipment.

                                      F-21
<PAGE>

The Company  derives all of its revenues  from its  subsidiaries  located in the
United States,  Switzerland and Germany. Sales by geographic areas for the years
ended June 30, 2000, 1999 and 1998 were as follows:
<TABLE>
<CAPTION>

                                                   2000                           1999                      1998
                                           ---------------------           --------------------       ------------------
       <S>                                           <C>                             <C>                      <C>
       United States                    $             6,561,669         $            4,026,931     $          9,127,569
       Switzerland                                   15,164,707                     12,625,381               12,851,115
       Germany                                          303,748                        643,570                  914,294
                                           ---------------------           --------------------       ------------------
                                        $            22,030,124         $           17,295,882     $         22,892,978
                                           =====================           ====================       ==================
</TABLE>

The following summarizes identifiable assets by geographic area:


                                   2000                    1999
                              -----------------    ------------------
   United States         $        8,344,431        $     7,270,543
   Switzerland                   16,782,132             16,009,209
   Germany                          184,157                231,437
   Romania                           72,293                   -
                              -----------------    ------------------
                         $       25,383,014        $    23,511,189
                              =================    ==================

The following summarizes operating losses before provision for income tax:

<TABLE>
<CAPTION>


                                          2000                         1999                          1998
                                   -------------------          --------------------          -------------------
       <S>                            <C>                              <C>                          <C>
       United States            $     (16,801,696)           $      (14,542,148)        $        (13,962,842)
       Switzerland                     (4,277,240)                   (5,392,436)                  (8,803,006)
       Germany                           (409,272)                     (243,317)                     (42,184)
                                         (149,872)                         -                            -
                                   ------------------           --------------------          -------------------
                                $     (21,638,080)        $         (20,177,901)        $        (22,808,032)
                                   ===================          ====================          ===================


</TABLE>

NOTE 18 - COMMITMENTS

The Company leases various facilities under operating lease agreements  expiring
through  September  2003. The  facilities  lease  agreements  provide for a base
monthly payment of $22,285 per month.  Rent expense for the years ended June 30,
2000, 1999 and 1998 was $ 361,757, $ 325,000 and $ 324,726 respectively.  Future
minimum annual lease payments,  based on the exchange rate in effect on June 30,
2000, under the facilities lease agreements are as follows: 2000 $173,549,  2001
$162,526, 2002 $166,995, 2003 $137,994, Thereafter $0.

The Company has  employment  agreements  with three of its  executives.  Minimum
compensation under these agreements are as follows:


                       Year Ended
                      June 30, 2001                      $            299,326
                      June 30, 2002                                   202,498
                      June 30, 2003                                   109,037
                                                            ------------------
                                                         $            610,861
                                                            ==================


                                      F-22
<PAGE>

NOTE 19 - RESTRUCTURING

During the year ended June 30, 1998 the Company recorded  restructuring  charges
of $500,000, as a result of its decision to relocate two facilities. The charges
consisted  primarily of the present value of the remaining lease  obligations of
those facilities. The balance at June 30, 2000 is $100,000.

NOTE 20 - UNAUDITED PROFORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

The following unaudited proforma condensed combined statements of operations for
the years ended June 30, 1998 give retroactive  effect of the SSG on October 17,
1997,  which were accounted for as purchase.  The unaudited  proforma  condensed
combined  statements  of  operations  give  retroactive  effect to the foregoing
transaction as if it had occurred at the beginning of each year  presented.  The
proforma  statements do not purport to represent  what the Company's  results of
operations  would actually have been if the foregoing  transactions had actually
been  consummated  on such dates or project the Company's  results of operations
for any future period or date.

The  proforma  statements  should  be read in  conjunction  with the  historical
financial statements and notes thereto.

                           SWISSRAY INTERNATIONAL, INC
          UNAUDITED PROFORMA CONDENSED COMBINED CONSOLIDATED STATEMENT
                                  OF OPERATIONS
                        FOR THE YEARS ENDED JUNE 30, 1998

                                                            Year Ended
                                                             June 30,
                                                               1998
                                                    ------------------------
Revenues                                         $          23,837,000
Loss before extraordinary items                            (21,963,000)
Net Loss                                                   (22,403,000)
Loss per share                                                   (8.33)
Weighted average number of shares outstanding    $           2,690,695


NOTE 21-VALUATION AND QUALIFYING ACCOUNTS
<TABLE>
<CAPTION>
                                           Balance at         Additions        Deductions       Balance at End
                                           Beginning         Charged to                             of Year
                                            of Year           Expenses
                                          ---------------------------------------------------------------------
<S>                                            <C>                 <C>             <C>                  <C>
Allowance for doubtful accounts:
   Year ended December 30, 2000        $       219,993  $          93,570  $       142,680  $           170,883
   Year ended December 30, 1999        $        32,356  $         706,877  $       519,240  $           219,993
   Year ended December 30, 1998        $       148,390  $         133,169  $       249,230  $            32,356
</TABLE>

NOTE 22 - RESTATEMENT

The accompanying  financial statements have been restated to properly record the
accounting for the value of common stock issued to an officer and consultants as
compensation  during  the  year  ended  June  30,  1999  and the  accrual  of an
additional  $1,000,000 for interest  expense for the accrual of penalty interest
on periodic payments required by terms of financing agreements.

The effect of such restatements on the Company's 1999 financial  statement is as
follows:
                                   As                                  As
                                Reported       Adjustments          Restated
Balance Sheet Adjustments

   Assets
                             $  23,761,189    $  (250,000)      $   23,511,189
   Liabilities
                                29,695,812        750,000           30,445,812
Statement of Operations

   Adjustments

     Operating expenses
                             $  15,581,217    $ 3,764,722       $   19,345,939
      Loss from continuing
         Operations            (16,413,179)     4,764,722          (21,177,901)

      Net Loss                 (17,246,028)     4,764,722          (22,010,750)

      Net loss per common
         Share basic         $       (2.65)   $     (0.72)      $        (3.37)


                                      F-23


<PAGE>



                                   SIGNATURES



         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                               SWISSRAY INTERNATIONAL, INC.


Dated: October 31, 2000                        By:/s/Ruedi G. Laupper
                                               Name: Ruedi G. Laupper
                                               Title:Chairman of the Board of
                                                     Directors, President &
                                                     Principal Executive Officer



         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
this  report has been  signed  below by the  following  persons on behalf of the
Registrant and in the capacities and on the dates indicated.


Signature                   Title                         Date



/s/Ruedi G. Laupper         Chairman of the Board of      Dated: October 31,2000
   Ruedi G. Laupper         Directors, President &
                            Principal Executive Officer

/s/Josef Laupper            Secretary, Treasurer and a    Dated: October 31,2000
   Josef Laupper            Director


/s/Michael Laupper          Principal Financial Officer   Dated: October 31,2000
   Michael Laupper          & Controller


/s/Ueli Laupper             Vice President and a Director Dated: October 31,2000
Ueli Laupper


/s/Dr. Erwin Zimmerli       Director                      Dated: October 31,2000
   Dr. Erwin Zimmerli


Dr. Sc. Dov Maor            Director                      Dated: October  , 2000





                                      -48-