<PAGE>

                                  UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549

                                  FORM 10-Q

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

               For the quarterly period ended: September 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 Number)

80 Grasslands Road, Elmsford, New York                      10523
(Address of principal executive offices)                  (Zip Code)

   New York (914) 345-3700                 Switzerland  011 41 41 914 12 00
              (Registrant's telephone number, including area code)

                                       N/A

              (Former name, former address and former fiscal year,
                          if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities 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 the past 90 days. [X] Yes [ ] No

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

The number of shares  outstanding of each of the issuer's class of common stock,
as of the latest practicable date.

The number of shares  outstanding of each of the registrant's  classes of common
stock, as of October 18, 2000 is 23,767,129 shares, all of one class of $.01 par
value common stock.
<PAGE>



                                TABLE OF CONTENTS

                                     PART I

Item 1.   Financial Statements                                           F1-F6

Item 2.   Management's Discussion and Analysis of Financial Condition
          and Results of Operations                                       3-5

Item 3.   Quantitative and Qualitative Disclosures About Market Risk       6

                                     PART II

Item 1.   Legal Proceedings                                               6-7

Item 2.   Changes in Securities and Use of Proceeds                        8

Item 3.   Defaults Upon Senior Securities                                  8

Item 4.   Submission of Matters to a Vote of Security Holders              8

Item 5.   Other Information                                                9

Item 6.   Exhibits and Reports on Form 8-K                                 9

Signatures                                                                10

                                        2
<PAGE>


                           SWISSRAY INTERNATIONAL INC.
                           CONSOLIDATED BALANCE SHEET

                                     ASSETS
                                                       September 30,  June 30,
                                                          2000         2000
                                                       (Unaudited)
                                                      -----------   -----------
CURRENT ASSETS
Cash and cash equivalents .......................     $ 1,859,298   $ 3,011,183
Restricted cash .................................       1,385,600     1,385,600
Notes receivable - short-term ...................         300,000       300,000
Accounts receivable, net of allowance for doubtful
accounts of $ 167,139 and $ 170,883 .............       1,620,090     3,185,399
Inventories .....................................       4,751,270     4,637,152
Prepaid expenses and sundry receivables .........         724,004     1,312,167
                                                      -----------   -----------
Total Current Assets ............................      10,640,262    13,831,501
                                                      -----------   -----------
PROPERTY AND EQUIPMENT ..........................       6,454,175     6,300,616
                                                      -----------   -----------
OTHER ASSETS
Loan receivable affiliates.......................         919,255       768,647
Licensing agreement .............................       2,483,287     2,607,451
Patents and trademarks ..........................         165,314       171,866
Software develompent costs ......................         231,231       256,380
Security deposits ...............................          36,640        36,873
Goodwill ........................................       1,361,347     1,409,680
                                                       -----------   -----------
TOTAL OTHER ASSETS ..............................       5,197,074     5,250,897
                                                       -----------   -----------
Total Assets ....................................     $22,291,511   $25,383,014
                                                      ===========   ===========
                                        F 1

<PAGE>

                           SWISSRAY INTERNATIONAL INC.
                           CONSOLIDATED BALANCE SHEET

                      LIABILITIES AND STOCKHOLDERS' DEFICIT

                                                       September 30,  June 30,
                                                          2000         2000
                                                       -------------------------
                                                       (Unaudited)

CURRENT LIABILITIES
Current maturities of long-term debt ............  $    226,031    $    229,700
Notes payable - banks ...........................     3,574,792       3,578,339
Notes payable - short-term ......................     1,290,367       1,352,502
Loan payable ....................................       114,611         119,885
Accounts payable ................................     3,363,833       4,340,033
Accrued expenses ................................     4,534,238      10,727,576
Restructuring ...................................        29,830         100,000
Customer deposits ...............................       338,145         785,614
                                                      -----------   -----------
TOTAL CURRENT LIABILITIES .......................    13,471,847      21,233,649
                                                      -----------   -----------
Convertible Debentures, net of conversion benefit     9,838,400      14,067,294
                                                      -----------   -----------
LONG-TERM DEBT, less current maturities .........        50,996          83,102
                                                      -----------   -----------
COMMON STOCK SUBJECT TO PUT .....................       319,985         319,985
                                                      -----------   -----------
STOCKHOLDERS' DEFICIT
Convertible preferred shares - Series A .........     7,000,000              --
Common stock ....................................       279,774         233,999
Additional paid-in capital ......................    92,679,634      88,207,532
Treasury Stock ..................................    (2,040,000)     (2,040,000)
Deferred Compensation ...........................      (665,599)       (998,399)
Accumulated deficit .............................   (97,298,692)    (94,130,543)
Accumulated other comprehensive loss ............    (1,024,849)     (1,273,620)
Common stock subject to put .....................      (319,985)       (319,985)
                                                      ----------    -----------
TOTAL STOCKHOLDERS' DEFICIT .....................    (1,389,717)    (10,321,016)
                                                      ----------    -----------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT .....  $ 22,291,511    $ 25,383,014
                                                    ============    ===========
                                       F 2
<PAGE>


                           SWISSRAY INTERNATIONAL INC.
                      CONSOLIDATED STATEMENT OF OPERATIONS

                                            Three Months Ended
                                               September 30,
                                           2000            1999
                                       (Unaudited)      (Unaudited)
                                                         Restated
                                      ------------    ------------
NET SALES .........................   $ 4,928,825     $  3,879,167
COST OF SALES .....................     3,738,514        2,978,034
                                      ------------    ------------
GROSS PROFIT ......................     1,190,311          901,133
                                      ------------    ------------
OPERATING EXPENSES
Officers and directors compensation       144,992          137,813
Salaries ..........................       991,353        1,022,441
Selling ...........................       840,963          753,532
Research and development ..........       611,647          465,232
General and administrative ........       185,617          262,748
Other operating expenses ..........        78,864           85,548
Depreciation and amortization .....       329,267          321,881
                                      ------------    ------------
TOTAL OPERATING EXPENSES ..........     3,182,703        3,049,195
                                      ------------    ------------
LOSS BEFORE OTHER INCOME (EXPENSES)    (1,992,392)      (2,148,062)

Other income.......................        77,282           26,258
Interest expense ..................    (1,145,589)      (2,421,613)
                                      ------------    ------------
OTHER EXPENSES.....................    (1,068,307)      (2,395,355)
                                      ------------    ------------
NET LOSS ..........................    (3,060,699)      (4,543,417)

Imputed preferred stock dividends..      (107,450)              --
                                      ------------    -------------
Loss available to common share ....  $ (3,168,149)   $  (4,543,417)
                                      ============    =============


NET LOSS PER COMMON SHARE            $      (0.12)   $       (0.31)
                                      ============    =============
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING ................    26,042,877       14,786,198
                                      ------------    ------------


                                       F 3
<PAGE>


                          SWISSRAY INTERNATIONAL INC.
                 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

                                                      Three Months Ended
                                                         September 30,
                                                       2000              1999
                                                   ----------        ----------
                                                  (Unaudited)       (Unaudited)
                                                                     Restated

Net Loss ...................................     $ (3,060,699)     $ (4,543,417)
Other Comprehensive income, net of tax                248,771            40,444
                                                   ----------       -----------
Comprehensive loss                               $ (2,811,928)     $ (4,502,973)
                                                   ==========       ===========

                                      F 4
<PAGE>



                      SWISSRAY INTERNATIONAL INC.
                 CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                          Three Months Ended
                                                             September 30,
                                                        2000           1999
                                                    (Unaudited)     (Unaudited)
                                                                     Restated
                                                   ------------    ------------
CASH FLOWS FROM OPERATING ACTIVITES

Net loss .......................................   $ (3,060,699)   $ (4,543,417)
Adjustment to reconcile net loss to net
  cash used by operating activities
  Depreciation and amortization ................        346,498         332,865
  Provision for bad debts ......................         (3,744)         (7,827)
  Operating expenses through issuance of stock
     options and common stock to be issued......         60,000              --
  Issuance of common stock in lieu of
     interest payments .........................        954,688          34,244
  Interest expense on Debt issuance cost and
    conversion benefit .........................             --       2,111,476
  Amortization of deferred compensation ........        332,800         427,500

  (Increase) decrease in operating assets:
  Accounts receivable ..........................      1,569,053        (136,921)
  Inventories ..................................       (114,118)         91,666
  Prepaid expenses and sundry receivables ......        588,163         117,007
  Increase (decrease) in  operating liabilities:
  Accounts payable .............................       (976,200)       (103,378)
  Accrued expenses .............................        306,662         638,593
  Restructuring ................................        (70,170)             --
  Customers deposits ...........................       (447,469)       (145,520)
                                                   ------------    ------------
NET CASH USED BY OPERATING ACTIVITIES ..........       (514,536)     (1,183,712)
CASH FLOW FROM INVESTING ACTIVITIES
  Acquisition of property and equipment ........       (295,859)        (43,585)
  Capitalized computer software ................             --          (7,007)
  Security deposits ............................            233           1,410
  Repayment of loan receivable .................             --          (1,039)
                                                   ------------    ------------
NET CASH USED BY INVESTING ACTIVITIES ..........       (295,626)        (50,221)
                                                   ------------    ------------
CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from short-term borrowings ..........         (3,547)     22,305,507
  Costs related to debentures conversions....          (333,155)             --
  Principal payment of short-term borrowings ...        (71,078)    (21,415,142)
  Principal payment of long-term borrowings ....        (32,106)          1,216
  Loan receivable affiliates ...................       (150,608)             --
  Issuance of common stock for cash ............             --       2,748,827
  Issuance of stock options for cash ...........             --           6,774
  Purchase of treasury stock ...................             --      (1,500,000)
                                                   ------------    ------------
CASH PROVIDED (USED)BY FINANCING ACTIVITIES ....       (590,494)      2,147,182
                                                   ------------    ------------
EFFECT OF EXCHANGE RATE ON CASH ................        248,771         (22,597)
                                                   ------------    ------------
NET INCREASE (DECREASE)IN CASH .................     (1,151,885)        890,652
CASH AND CASH EQUIVALENTS - beginning of period       3,011,183       1,281,297
                                                   ------------    ------------
CASH AND CASH EQUIVALENTS - end of period ......   $  1,859,298    $  2,171,949
                                                   ============    ============

                                      F 5
<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2000

         (1)The  accompanying   financial  statements  are  unaudited.   Certain
information and footnote  disclosures  normally included in financial statements
prepared in accordance with generally accepted  accounting  principles have been
condensed or omitted,  although the Registrant believes that the disclosures are
adequate to make the information presented not misleading.  It is suggested that
these condensed  consolidated  financial  statements be read in conjunction with
the financial  statements and notes thereto included in the Registrant's  annual
report on Form 10-K for the fiscal year ended June 30, 2000.

         (2)In  the   opinion  of   management,   the   accompanying   unaudited
consolidated financial statements contain all adjustments,  consisting of only a
normal and recurring nature,  necessary to present fairly the financial position
of the  Registrant as of September  30, 2000 and the results of  operations  and
cash flows for the interim  period  presented.  Operating  results for the three
months ended September 30, 2000 are not necessarily indicative of the results to
be expected for the full year ending June 30, 2001.

         (3)INVENTORIES

                  Inventories are summarized by major classification as follows:

                                                     September 30,      June 30,

                                                     ---------------------------
                                                        2000             2000
                                                     ----------       ----------

Raw materials, parts and supplies                    $3,707,279       $2,682,558
Work in process                                         386,335        1,295,575
Finished goods                                          657,656          659,019
                                                     ----------       ----------
                                                     $4,751,270       $4,637,152
                                                     ==========       ==========

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

         (4) Preferred Stock - During the  quarter ended September 30, 2000, the
Company  issued 7,000 shares of Series A Preferred  Stock  ("Series  A").  These
shares were issued in accordance with terms and provisions of liquidated  damage
provisions contained in underlying financing documents.

         (5) Mandatory Conversion - In  August  2000,  in  compliance  with  the
mandatory  conversion  requirements  contained in the August 31, 1998 debtenture
agreement,  the Company  converted  $3,930,594  principal  amount of convertible
debentures  plus  accrued  interest of  $393,059  into  4,323,653  shares of the
Company's common stock.

                                       F 6
<PAGE>


Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS

            All  references  herein  to  the  "Registrant"  refer  to   Swissray
International  Inc. All  references  herein to the  "Company"  refer to Swissray
International, Inc. and its subsidiaries.

CAUTIONARY  STATEMENT FOR PURPOSES OF THE SAFE HARBOR  PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995

            Statements in this discussion  which are not historical facts may be
considered  forward looking  statements within the meaning of Section 21E of the
Securities Exchange Act of 1934, as amended, including estimated cost savings to
be realized from restructuring activities and estimated proceeds from and timing
of facility sales. The words "believe," "expect," "anticipate," "estimate",  and
similar  expressions  identify forward looking  statements.  Any forward looking
statements  involve  risks and  uncertainties  that could cause actual events or
results to differ,  perhaps materially,  from the events or results described in
the  forward  looking  statements.  Readers  are  cautioned  not to place  undue
reliance  on these  forward  looking  statements,  which  speak only as of their
dates.  The Company  undertakes no  obligation to publicly  update or revise any
forward  looking  statements,  whether  as a result of new  information,  future
events  or  otherwise.  Risks  associated  with the  Company's  forward  looking
statements include,  but are not limited to, risks associated with the Company's
history of losses and uncertain profitability, need for market acceptance of the
ddR-Systems,  reliance on a single product,  reliance on large customers,  risks
associated with the Company's international  operations,  currency fluctuations,
the risk of new and different  legal and regulatory  requirements,  governmental
approvals,  tariffs and trade barriers,  risks  associated with  competition and
technological  innovation by competitors,  dependence on patents and proprietary
technology,  general  economic  conditions  and  conditions  in  the  healthcare
industry, reliance on key management, limited manufacturing history with respect
to the ddR-Systems,  dependence on sole source  suppliers,  future capital needs
and  uncertainty  of  additional   financing,   potential  recalls  and  product
liability,  dilution,  effects of outstanding  convertible  debentures,  limited
public market,  liquidity,  possible volatility of stock price, recently adopted
new listing standards for NASDAQ securities and environmental matters.

         The following  discussion  and analysis  should be read in  conjunction
with the Consolidated Financial Statements,  related notes and other information
included in this quarterly report on Form 10-Q.

THREE-MONTH PERIOD ENDED SEPTEMBER 30, 2000 COMPARED TO THREE-MONTH PERIOD ENDED
SEPTEMBER 30, 1999

RESULTS OF OPERATIONS

         Net sales  amounted to  $4,928,825  for the  three-month  period  ended
September 30, 2000,  compared to  $3,879,167  for the  three-month  period ended
September 30, 1999. The 27.06%  increase in net sales was mainly due to the sale
of ddR-Systems increasing by 150.8% or 1,936,533.  This significant increase was
slightly  offset by a decrase  in  conventional  x-ray of 83.5%  ($420,104)  and
conventional  OEM-Business  of 58.2%  ($887,337).  The decrease in  conventional
x-ray and conventional  OEM-Business is due to the Company's conscious effort of
promoting sales of ddR-Systems with a corresponding decline of interest in sales
of conventional x-ray and conventional OEM-Business.

                                       3

<PAGE>

         Gross  profit  amounted  to  $1,190,311  or 24.2% of net  sales for the
three-month  period ended  September 30, 2000,  compared to $901,130 or 23.2% of
net sales for the  three-month  period ended September 30, 1999. The increase in
gross profit as a percentage  of net revenues is  attributable  to the fact that
the percentage of sales of ddR-Systems to total sales increased to 65.3% for the
three-month  period  ended  September  30,  2000 from 33.1% for the  three-month
period ended September 30, 1999.

         Operating expenses were $3,182,703,  or 64.6% of net revenues,  for the
three-month period ended September 30, 2000, compared to $3,049,194, or 78.6% of
net revenues for the three-month  period ended September 30, 1999. The principal
items were salaries (net of officers and directors  compensation) of $991,353 or
20.1% of net sales for the three-month  period ended September 30, 2000 compared
to $1,022,441 or 26.4% of net sales for the  three-month  period ended September
30,  1999 and  selling  expenses  of  $840,963  or 17.1%  of net  sales  for the
three-month period ended September 30, 2000 compared to $753,532 or 19.4% of net
sales  for the  three-month  period  ended  September  30,  1999.  Research  and
development  expenses  were  $611,647 or 12.4% of net sales for the  three-month
period ended  September  30, 2000 compared to $465,232 or 12.0% of net sales for
the three-month period ended September 30, 1999.

         Interest  expense  decreased to  $1,145,589  for the three months ended
September 30, 2000 compared to $2,421,613  for the three months ended  September
30, 1999. This decrease is primarily due to the decrease of interest expense for
accrual of penalty interest on periodic  payments required by terms of financing
agreements  and an decrease  in  amortization  of  Debenture  issuance  cost and
Conversion Benefit.

FINANCIAL CONDITION

September 30, 2000 compared to June 30, 2000

         Total  assets  of the  Company  on  September  30,  2000  decreased  by
$3,091,503 to $22,291,511  from  $25,383,014 on June 30, 2000,  primarily due to
the  decrease  of  Current  Assets.   Current  Assets  decreased  $3,191,239  to
$10,640,262  on  September  30,  2000 from  $13,831,501  on June 30,  2000.  The
decrease  in current  assets is  attributable  to the  decrease of Cash and cash
equivalents of $1,151,885, the decrease of Accounts receivable of $1,565,309 and
the decrease in Prepaid  expenses  and sundry  receivables of $588,163  slightly
offset by the increase in inventory of $114,118.  Other Assets decreased $53,823
to  $5,197,074  on September 30, 2000 from  $5,250,897  on  June  30, 2000.  The
decrease  is  primarily  attributable  to  the  amortization  of  the  licensing
agreement, patents & trademark, software development cost and the goodwill.

                                       4
<PAGE>

         On September 30, 2000, the Company had total liabilities of $23,681,228
compared to  $35,704,030  on June 30,  2000.  On  September  30,  2000,  current
liabilities were $13,471,847  compared to $21,233,649 on June 30, 2000.  Working
capital at September 30, 2000 was $(2,831,585)  compared to $(7,402,148) at June
30, 2000.

CASH FLOW AND CAPITAL  EXPENDITURES  THREE MONTH PERIOD ENDED SEPTEMBER 30, 2000
COMPARED TO THREE MONTH PERIOD ENDED SEPTEMBER 30, 1999.

         Cash used for operating activities for the three months ended September
30,  2000 was  $514,536  compared  to  $1,183,712  for the  three  months  ended
September  30, 1999.  Cash used for  investing  activities  was $295,626 for the
three months ended  September  30, 2000 compared to $50,221 for the three months
ended  September 30, 1999.  Cash used from  financing  activities  for the three
months ended September 30, 2000 was $590,494 compared to Cash flow of $2,147,182
for three months ended September 30, 1999.

LIQUIDITY

         The Company  anticipates  that its use of cash will be substantial  for
the  foreseeable  future.  In  particular,  management  of the  Company  expects
substantial  expenditures  in  connection  with the  production  of the  planned
increase of sales,  the continuation of the  strengthening  and expansion of the
Company's marketing  organization and, to a lesser degree,  ongoing research and
development  projects.  The Company expects that funding for these  expenditures
will be  available  out of the  Company's,  future cash flow and/or  issuance of
equity and/or debt securities.

         However,  the availability of a sufficient future cash flow will depend
to a  significant  extent on the  marketability  of the  Company's  ddR-Systems.
Accordingly,  the  Company  may be  required  to  issue  additional  convertible
debentures or equity securities to finance such capital expenditures and working
capital  requirements.  There can be no assurance  whether or not such financing
will be available on terms satisfactory to management.

         Reference is  herewith  made to the Company's Form 10-K for fiscal year
ended  June 30, 2000  and  in  particular  to  the  Mangagement's Discussion and
Analysis section thereof which summarizes most recent financing activities.

         The  Company  has  not  engaged  in any additional financing activities
during the quarter ended September 30, 2000.

EFFECT OF CURRENCY ON RESULTS OF OPERATIONS

         The result of operations  and the  financial  position of the Company's
subsidiaries  outside of the United  States is reported in the relevant  foreign
currency  (primarily in Swiss Francs) and then translated into US dollars at the
applicable  foreign  exchange rate for  inclusion in the Company's  consolidated
financial   statements.   Accordingly,   the  results  of   operations  of  such
subsidiaries  as reported in US dollars  can vary  significantly  as a result of
changes in currency  exchange rates (in particular the exchange rate between the
Swiss Franc and the US dollar).

                                       5
<PAGE>

Item 3. Quantitative and Qualitative Disclosures About Market Risk

         Not Applicable

                                     PART II

                                OTHER INFORMATION

Item 1.  Legal Proceedings

A.   DISPUTE WITH GARY J. DURDAY ("DURDAY"), KENNETH R. MONTLER  ("MONTLER") AND
MICHAEL  E.  HARLE  ("HARLE").  On July 17,  1998,  two legal  proceedings  were
commenced by Swissray,  and two of its subsidiaries against Durday,  Montler and
Harle. Harle and Montler are former Chief Executive Officers of Swissray Medical
Systems Inc.  and  Swissray  Healthcare  Inc.,  respectively,  and Durday is the
former  Chief  Financial  Officer of both of those  companies.  Each of them was
employed  pursuant  to an  Employment  Agreement  dated  October  17,  1997.  In
addition,  these  three  individuals  were  owners of a  company  by the name of
Service  Support  Group LLC  ("SSG"),  the assets of which were sold to Swissray
Medical Systems Inc. pursuant to an Asset Purchase Agreement dated as of October
17,  1997.  whereby  Messrs.  Durday,  Montler and Harle  received,  among other
consideration,  33,333  shares of Swissray's  common stock,  together with a put
option entitling these individuals to require Swissray to purchase any or all of
such shares at a purchase  price equal to $45.00 per share (on or after June 30,
1998 and until April 16, 1999).

     On July 17,  1998,  Swissray and its subsidiaries, Swissray Medical Systems
Inc. and Swissray Healthcare Inc. commenced an arbitration proceeding before the
American  Arbitration  Association in Seattle,  Washington (Case No. 75 489 0019
6 98) alleging that Messrs.  Durday,  Montler  and  Harle  fraudulently  induced
Swissray and its subsidiaries to enter into the above referenced  Asset Purchase
Agreement and  otherwise  breached  that  Agreement.  The  relief  sought in the
arbitration  proceeding was the recovery of damages suffered as a result of this
alleged wrongful conduct and a rescission of the put option  provided for in the
Asset Purchase Agreement. Messrs. Durday, Montler and  Harle  responded  to  the
allegations  made  in the  arbitration  proceeding  and  asserted  counterclaims
against  Swissray  and its  subsidiaries  claiming  a  breach  by them of  their
obligations under the Asset Purchase Agreement and other relief. The arbitration
took place in Seattle on January 8-10, 1999; the proceeding concluded on January
27, 1999 after the submission of post-hearing  briefs. On February 23, 1999, the
Arbitrator  issued  his  ruling,  awarding  Messrs.  Durday,  Montler  and Harle
$1,500,000  and  ordering  them to  surrender  all  rights to  33,333  shares of
Swissray  common  stock.  On February  26, 1999,  Swissray and Swissray  Medical
Systems  Inc.  filed a petition in Supreme  Court,  New York  County  (Index No.
99/104017) to vacate the above referenced arbitration award. By order dated July
8, 1999 such motion was denied and the court confirmed the aforesaid arbitration
award.

                                       6
<PAGE>

         In addition to the above referenced  arbitration  proceeding,  Swissray
and its  subsidiaries  commenced an action against Messrs.  Durday,  Montler and
Harle  in the  Supreme  Court of the  State of New  York,  County  of New  York,
alleging that these individuals  breached the obligations  undertaken by them in
their respective Employment  Agreements.  Further,  Messrs.  Durday, Montler and
Harle  commenced  an  action in  Superior  Court in  Pierce  County,  Washington
(September  1998  under  Cause  No.  98-2-10701-0),  and  asked  that  Court  to
adjudicate  the  issues  raised in the above  referenced  New York  State  Court
action.  Swissray  filed  applications  in both  the  Washington  and  New  York
litigations urging that, because the action was first filed in New York, the New
York court, rather than the Washington court, should decide where the litigation
should  proceed.  Messrs.  Durday,  Montler  and Harle  initially  opposed  that
position and urged the  Washington  State court to  adjudicate  all issues,  but
subsequently  withdrew their opposition to Swissray's  application and consented
to a stay of all further  proceedings in the Washington State court action until
after  the New York  court  had  reached  a  decision  as to  whether  it or the
Washington court is the proper forum for litigation of the parties' dispute.  By
order  dated June 1, 1999 filed in the  Supreme  Court of the State of New York,
County of New York (Index No.  603512/98)  Messrs.  Durday,  Montler and Harle's
motion for an order dismissing  Swissray's complaint (on the ground of forum non
conveniens)  was granted.  The  aforesaid  action  commenced by Messrs.  Durday,
Montler and Harle in Pierce County, Washington, remained pending.

         Parties to each of the aforesaid  proceedings  thereafter  entered into
settlement  negotiations resulting in Swissray agreeing to pay $1,500,000 as and
for full settlement of all outstanding claims; such settlement  agreement having
been executed on August 31, 1999. In accordance with such  settlement  agreement
the Company was required and has since paid the sum of $1,000,000 and is further
obligated to pay (in accordance  with the terms of an August 31, 1999 promissory
note and over a period of 24  consecutive  months) an aggregate of $500,000 with
interest at the rate of 9% per annum.  Payments with respect to such  promissory
note have been and remain current.

B.   DISPUTE WITH J. DOUGLAS MAXWELL. On or about July 1, 1999 an action was
commenced in the Supreme Court, State of New York, County of New York (Index No.
113099/99)   entitled  J.   Douglas   Maxwell   ("Maxwell")   against   Swissray
International, Inc. ("Swissray"), whereby Maxwell is seeking judgment in the sum
of  $380,000  based  upon his  interpretation  of various  terms and  conditions
contained in an Exchange Agreement between the parties dated July 22, 1996 and a
subsequent  Mutual  Release and Settlement  Agreement  between the parties dated
June 1,  1998.  Swissray  has  denied  the  material  allegations  of  Maxwell's
complaint  and  has  asserted  three  affirmative   defenses  and  two  separate
counterclaims  seeking  (amongst other  matters)  dismissal of the complaint and
recision  of the  settlement  agreement.  An order  was  made on July  24,  2000
granting  to  Maxwell  partial  summary  judgement  on  portion of his claim for
approximately  $320,000  plus  interest.  The  court  is  presently  considering
Maxwell's  application  for judgement on the balance of his claim and Swissray's
application for dismissal of that portion of plaintiff's claim.

                                       7
<PAGE>

Item 2. CHANGES IN SECURITIES

         At the Company's 1998 Annual Meeting of Stockholders  held  on July 23,
1999, stockholders approved a proposal and adopted an amendment to the Company's
Certificate  of  Incorporation  so as to  authorize  the  creation of a class of
Preferred  Stock.  The amendment to the Company's  Certificate of  Incorporation
reflecting such stockholder adoption was filed with the New York State Secretary
of State on July 28, 1999.  Approval of such proposal  provided for the issuance
of up to 1,000,000 shares of Preferred Stock, par value $.01 per share in one or
more series with the designations,  preferences,  conversion rights, cumulative,
relative,    participating,    or   other   rights,including    voting   rights,
qualifications, limitations or restrictions thereof of the Preferred Stock to be
determined by the Company's Board of Directors in their sole discretion, with no
further  authorization  by security  holders being required for the creation and
issuance thereof.

         Subsequent  thereto  and  in  accordance  with the above, the Company's
Board created a class of Series A Preferred Stock authorizing the issuance of up
to 7,000  shares of A  Preferred  Stock.  The  Series A  Preferred  Shares  were
authorized   and  created  for   purposes  of  issuance  to  certain   financing
participants  and/or their  assignees in accordance with terms and provisions of
liquidated damage provisions contained in underlying  financing documents;  such
financing documents being heretofore filed with the SEC as exhibits (principally
debenture  agreements)  may be  obtained  from the  Commission's  web site.  The
address of such site is http:\\www.sec.gov.

         With  respect  to  the  designations,  preferences  and other rights or
limitations thereon as are contained in the Series A Preferred Stock,  reference
is herewith made to the Company's Certificate of Amendment to its Certificate of
Incorporation as filed with the New York State Secretary of State on October 24,
2000, a copy of which is attached  hereto and marked as an exhibit in accordance
with Item 6(a) hereof entitled "Exhibits"..

Item 3. DEFAULTS UPON SENIOR SECURITIES

         None  excepting  for such  penalties  as have  accrued  with respect to
certain  conditions  and  requirements  contained  in  outstanding   convertible
debentures  pursuant to which the  Company  was  required,  in  accordance  with
related  registration  rights agreement,  to file a Registration  Statement by a
specific date and to have same declared  effective (so as to register  shares of
common stock underlying debentures) by a specified and agreed to date - which if
not timely accomplished results in commencement of penalty provisions.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         The Company  held its Annual  Meeting of  Stockholders  for fiscal year
ended June 30, 1999 on July 12, 2000.  With proxies being received for in excess
of 95% of all  shares  entitled  to  vote,  stockholders  elected  each of the 5
nominees  to the  Company's  Board  of  Directors  by an  overwhelming  majority
approximating in excess of 98% of all votes cast.

         Stockholders also  overwhelmingly  approved the  appointment of Feldman
Sherb  & Co., P.C.  as  independent auditors for fiscal year ended June 30, 2000
with such firm similarly receiving in excess of 98% of all votes cast.

         With respect to the shareholder  ratification as related to Proposals 3
and 4 - in excess  of 96% of all votes  cast,  excluding  abstentions,  voted in
favor of ratifying  the  issuance of shares  issued to the  Company's  President
while in excess of 95% of all votes cast, excluding abstentions,  voted in favor
of issuance of certain  other  shares of Company  common stock to certain of its
employees.  In each instance  those  persons who had received  shares of Company
common  stock for which  shareholder  ratification  was  sought  abstained  from
voting.

         Stockholders also overwhelmingly approved (a) the proposal to adopt the
Company's  2000 Stock  Option Plan and (b) the  proposal to increase  authorized
common shares from  50,000,000 to  100,000,000.  In each instance votes for such
approvals were in excess of 96% of all votes cast (excluding abstentions).

         The  Company   currently   intends  to  hold  its  Annual   Meeting  of
Stockholders  for fiscal year ended June 30,  2000 on  November  30, 2000 at the
Hyatt Regency McCormick Place Hotel in Chicago, Illinois.

                                       8
<PAGE>

Item 5. OTHER INFORMATION

         Not applicable

Item 6. EXHIBITS AND REPORTS ON FORM 8-K

         (a)    The following exhibits are filed as part of this report:

                EXHIBIT  DESCRIPTION

                  3.4    Amendment to Registrant's Certificate of Incorporation,
                         dated October 26, 2000

         (b)    Reports on Form 8-K                         None

                                        9


<PAGE>


                                   SIGNATURES

         In  accordance  with  Section  13 or 15(d)  of the  Exchange  Act,  the
Registrant  caused  this  report to be signed on its behalf by the  undersigned,
thereunto duly authorized.

                                      SWISSRAY INTERNATIONAL, INC.

                                By:\S\Ruedi G. Laupper
                                   Ruedi G. Laupper, Chairman of the
                                   Board of Directors, President and
                                   Chief Executive Officer

Date:  November 6, 2000

                                       10
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