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: March 31, 2001

                                       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 May 3,  2001 is  84,604,775  shares,  all of one class of $.01 par
value common stock.

<PAGE>



TABLE OF CONTENTS                                                           Page



No.                                  PART I

Item 1.       Financial Statements                                         F1-F8

Item 2.       Management's Discussion and Analysis of Financial Condition
              and Results of Operations                                      3-7

Item 3.       Quantitative and Qualitative Disclosures About Market Risk       7

                                     PART II

Item 1.       Legal Proceedings                                              7-8

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              9

Item 5.       Other Information                                                9

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

Signatures                                                                    10



                                        2
<PAGE>

                           SWISSRAY INTERNATIONAL INC.
                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS


                                                     March 31,         June 30,
                                                       2001              2000
                                                    (Unaudited)
                                                 -------------------------------

CURRENT ASSETS
Cash and cash equivalents                         $   2,116,373    $  3,011,183
Restricted cash                                           -           1,385,600
Notes receivable - short-term                           300,000         300,000
Accounts receivable, net of allowance for doubtful
accounts of $76,881 and $170,883                      2,418,618       3,185,399
Inventories                                           5,643,947       4,637,152
Prepaid expenses and sundry receivables               1,434,021       1,312,167
                                                 -------------------------------
Total Current Assets                                 11,912,959      13,831,501
                                                 -------------------------------

PROPERTY AND EQUIPMENT, at cost                       6,285,809       6,300,616
                                                 -------------------------------


OTHER ASSETS
Loan receivable affiliiates                           1,021,177         768,647
Licensing agreement                                   2,234,958       2,607,451
Patents and trademarks                                  152,136         171,866
Software develompent costs                              185,368         256,380
Security deposits                                        32,529          36,873
Goodwill                                              1,264,681       1,409,680
                                                 -------------------------------
TOTAL OTHER ASSETS                                    4,890,849       5,250,897
                                                 -------------------------------
Total Assets                                      $  23,089,617    $ 25,383,014
                                                 ===============================



                                       F 1
<PAGE>

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Current maturities of long-term debt              $     166,395    $    229,700
Notes payable - banks                                 2,419,472       3,578,339
Notes payable - short-term                            3,111,736       1,352,502
Loan payable                                            113,336         119,885
Accounts payable                                      5,640,976       4,340,033
Accrued expenses                                      3,007,530      10,727,576
Restructuring                                              -            100,000
Customer deposits                                     1,155,750         785,614
                                                 -------------------------------
TOTAL CURRENT LIABILITIES                            15,579,195      21,233,649
                                                 -------------------------------

CONVERTIBLE DEBENTURES, net of conversion benefit          -         14,067,294
                                                 -------------------------------

LONG-TERM DEBT, less current maturities                  50,996          83,102
                                                 -------------------------------

COMMON STOCK SUBJECT TO PUT                             319,985         319,985
                                                 -------------------------------

STOCKHOLDERS' EQUITY (DEFICIT)

Common stock                                            844,914         233,999
Additional paid-in capital                          112,145,249      88,207,532
Treasury stock                                       (2,040,000)     (2,040,000)
Deferred compensation                                      -           (998,399)
Accumulated deficit                                (101,928,237)    (94,130,543)
Accumulated other comprehensive loss                 (1,562,500)     (1,273,620)
Common stock subject to put                            (319,985)       (319,985)
                                                 -------------------------------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT)                  7,139,441     (10,321,016)
                                                 -------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY        $  23,089,617   $  25,383,014
                                                 ===============================



                                       F 2

<PAGE>
                           SWISSRAY INTERNATIONAL INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS


                                                        Nine Months Ended
                                                            March 31,
                                               ---------------------------------
                                                     2001              2000
                                                   Unaudited         Unaudited
                                               ---------------------------------

NET SALES                                       $ 14,378,418      $  12,393,655
COST OF SALES                                     10,435,413          9,372,120
                                               ---------------------------------
GROSS PROFIT                                       3,943,005          3,021,535
                                               ---------------------------------

OPERATING EXPENSES
Officers and directors compensation                  481,879          2,650,288
Salaries                                           3,025,177          3,153,332
Selling                                            2,880,856          3,364,935
Research and developent                            1,923,877          1,364,415
General and administrative                           490,928          1,320,325
Other operating expenses                             328,423            794,971
Bad debts                                              5,578             50,276
Depreciation and amortization                        995,837          1,025,967
                                               ---------------------------------
TOTAL OPERATING EXPENSES                          10,132,555         13,724,509
                                               ---------------------------------

LOSS BEFORE OTHER INCOME (EXPENSES)               (6,189,550)       (10,702,974)
                                               ---------------------------------

Other income (expenses)                              314,434            409,269
Interest expense                                  (1,815,128)        (7,276,519)
                                               ---------------------------------
OTHER INCOME (EXPENSES)                           (1,500,694)        (6,867,250)
                                               ---------------------------------

NET LOSS                                          (7,690,244)       (17,570,224)

Inputed Preffered Stock Dividend                    (107,450)              -
                                               ---------------------------------
Loss available to common shareholder's          $ (7,797,694)     $ (17,570,224)
                                               =================================

LOSS PER COMMON SHARE AVAILABLE TO SHAREHOLDERS $      (0.16)     $       (0.99)
                                               =================================

WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING                                47,656,704         17,807,655


                                       F 3


<PAGE>


                           SWISSRAY INTERNATIONAL INC.
                 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

                                                      Nine Months Ended
                                                            March 31,
                                                       2001              2000
                                                   ----------        ----------
                                                    Unaudited        Unaudited

NET LOSS ...................................     $ (7,690,244)     $(17,570,224)
Other comprehensive loss, net of tax
         Foreign translation adjustment              (288,880)         (122,512)
                                                   ----------       -----------
Comprehensive loss                               $ (7,979,124)     $(17,692,736)
                                                   ==========       ===========
                                      F 4


<PAGE>

                           SWISSRAY INTERNATIONAL INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS


                                                       Three Months Ended
                                                             March 31,
                                               ---------------------------------
                                                      2001             2000
                                                   Unaudited        Unaudited
                                               ---------------------------------

NET SALES                                       $  4,737,664      $   5,436,627
COST OF SALES                                      3,159,808          4,039,558
                                               ---------------------------------
GROSS PROFIT                                       1,577,856          1,397,069
                                               ---------------------------------

OPERATING EXPENSES
Officers and directors compensation                  152,971            224,898
Salaries                                             919,445            730,201
Selling                                              774,732            992,447
Research and development                             585,388            469,343
General and administrative                           139,048            398,444
Other operating expenses                              92,206            223,251
Bad debts                                              5,578             34,275
Depreciation and amortization                        335,690            347,571
                                               ---------------------------------
TOTAL OPERATING EXPENSES                           3,005,058          3,420,430
                                               ---------------------------------

LOSS BEFORE OTHER INCOME (EXPENSES)               (1,427,202)        (2,023,361)

Other income (expenses)                              (11,647)           388,780)
Interest expense                                    (241,359)        (1,908,209)
                                               ---------------------------------
OTHER INCOME (EXPENSES)                             (253,006)        (1,519,429)
                                               ---------------------------------

NET LOSS                                        $ (1,680,208)     $  (3,542,790)
                                               =================================

LOSS PER COMMON SHARE                           $      (0.02)     $       (0.17)
                                               =================================

WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING                                84,026,908         20,636,133




                                       F 5

<PAGE>

                          SWISSRAY INTERNATIONAL INC.
                 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

                                                      Three Months Ended
                                                            March 31,
                                                       2001              2000
                                                   ----------        ----------
                                                    Unaudited        Unaudited

NET LOSS ...................................     $ (1,680,208)     $ (3,542,790)
Other comprehensive income (loss), net of tax
        Foreign translation adjustment                  4,341          (204,056)
                                                   ----------       -----------
Comprehensive loss                               $ (1,675,867)     $ (3,746,846)
                                                   ==========       ===========
                                      F 6


<PAGE>


                          SWISSRAY INTERNATIONAL INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                       Nine Months Ended
                                                           March 31,
                                               -------------------------------
                                                      2001            2000
                                               -------------------------------
CASH FLOWS FROM OPERATING ACTIVITES
Net loss                                          $(7,690,244)   $(17,570,224)
Adjustment to reconcile net loss to net
 cash used by operating activities
 Depreciation and amortization                      1,054,833       1,080,732
 Provision for bad debts                              (94,002)        (44,997)
 Operating expenses through issuance of stock
  options and common stock to be issued                60,000       2,809,936
 Issuance of common stock in lieu of
  interest payments                                 3,508,562         270,250
 Interest expense on debt issuance cost and
  conversion benefit                                     -          2,931,061
 Interest expense on option value per black
  scholes                                                -          1,385,473
 Settelment expense paid through issuance of
  common stock                                                        675,000
 Amortization of deferred compensation                998,399       1,282,500

(Increase) decrease in operating assets:
 Accounts receivable                                  860,783      (2,011,842)
 Inventories                                       (1,006,795)      1,516,204
 Prepaid expenses and sundry receivables             (121,854)         26,741
Increase (decrease) in  operating liabilities:
 Accounts payable                                   1,264,943        (895,967)
 Accrued expenses                                  (1,220,046)      1,288,989
 Restructuring                                       (100,000)           -
 Customers deposits                                   370,136       1,783,396
                                                -------------------------------
NET CASH USED BY OPERATING ACTIVITIES              (2,115,285)     (5,472,748)
                                                -------------------------------
CASH FLOW FROM INVESTING ACTIVITIES
 Acquisition of proberty and equipment               (426,216)       (548,114)
 Other intangibles                                     (5,575)        (13,698)
 Security deposits                                      4,344          (8,498)
 Repayment of loan receivable                            -            (59,322)
                                                -------------------------------
NET CASH USED BY INVESTING ACTIVITIES                 (427,447)       (629,632)
                                                -------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
 Proceeds from short-term borrowings                (1,158,867)         21,985
 Expenses related to debentures                           -         (1,063,059)
 Principal payment of short-term borrowings          1,689,380      (1,089,095)
 Principal payment of long-term borrowings             (32,106)        (15,248)
 Decrease in restricted cash                         1,385,600            -
 Loan receivable affiliates                           (252,530)           -
 Issuance of common stock for cash                     155,325       9,698,473
 Issuance of stock options for cash                    150,000       2,136,149
 Purchase of treasury stock                               -         (1,500,000)
                                                -------------------------------
CASH PROVIDED BY FINANCING ACTIVITIES                1,936,802       8,189,205

EFFECT OF EXCHANGE RATE ON CASH                       (288,880)       (122,512)
                                                -------------------------------
NET INCREASE (DECREASE) IN CASH                       (894,810)      1,964,313
CASH AND CASH EQUIVALENT - beginning of period       3,011,183       1,281,297
                                                -------------------------------
CASH AND CASH EQUIVALENTS - end of period          $ 2,116,373    $  3,245,610
                                                ===============================



                                       F 7

<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 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 March 31, 2001 and the results of  operations  and cash
flows for the interim period  presented.  Operating  results for the nine months
ended  March  31,  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:
                                          March 31,       June 30,
                                         ---------------------------
                                            2000             2000
                                         ----------       ----------

Raw materials, parts and supplies        $3,535,213       $2,682,558
Work in process                           1,401,574        1,295,575
Finished goods                              707,160          659,019
                                         ----------       ----------
                                         $5,643,947       $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)Common Stock - On  January 4, 2001, the  Company converted $9,700 of
convertible debentures into 26,514 shares of the Company's common stock.

                           During  the   quarter  options  were  converted  into
150,000  shares of the  Company's  common stock at a  conversion  rate of $1 per
share.

                           During  the  quarter  481,035  shares of common stock
were issued for penalties and accrued interest on debentures.

                                       F 8
<PAGE>

Item 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF  OPEATIONS

     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.

                                       3
<PAGE>

   (a)THREE-MONTH  PERIOD ENDED MARCH 31, 2001 COMPARED TO THREE-MONTH PERIOD
      ENDED MARCH 31, 2000

     Net sales  amounted  to  $4,737,664 for the three-month  period ended March
31, 2001,  compared to  $5,436,627  for the  three-month  period ended March 31,
2000, a decrease of $668,963, or 12.86% compared to the three-month period ended
March 31, 2000. The 12.86%  decrease in net sales was mainly due to the decrease
in conventional x-ray sales of 70.81% ($388,045),  conventional  OEM-Business of
88.34%  ($424,178),  services of 41.64% ($194,657) and Information  Solutions of
70.58%  ($145,607).  Sales of ddR-Systems  increased by 12.14% or $453,524.  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.

     Gross  profit  amounted  to  $1,577,856  or  33.3%  of net  sales  for the
three-month period ended March 31, 2001,  compared to $1,397,069 or 25.7% of net
sales for the  three-month  period ended March 31,  2000.  The increase in gross
profit as a  percentage  of net  revenues is  attributable  to the fact that the
percentage  of sales of  ddRMulti-Systems  to total sales  increased to 88.4% of
total sales for the three-month  period ended March 31, 2001 from 68.69% for the
three-month period ended March 31, 2000.

     Operating  expenses were  $3,005,058,  or 63.43% of net  revenues,  for the
three-month period ended March 31, 2001, compared to $3,420,430,or 62.91% of net
revenues for the  three-month  period ended March 31, 2000. The principal  items
were salaries (net of officers and directors compensation) of $919,445 or 19.41%
of net  sales for the  three-month  period  ended  March 31,  2001  compared  to
$730,201 or 13.43% of net sales for the three-month  period ended March 31, 2000
and selling  expenses  of  $774,732  or 16.35% of net sales for the  three-month
period ended March 31, 2001  compared to $992,447 or 18.25% of net sales for the
three-month period ended March 31, 2000. Research and development  expenses were
$585,388 or 11.36% of net sales for the three-month  period ended March 31, 2001
compared  to  $469,343 or 8.63% of net sales for the  three-month  period  ended
March 31, 2000. Officers and directors compensation was $152,971 or 3.23% of net
sales for the  three-month  period ended March 31, 2001  compared to $224,898 or
4.14% of net sales for the three-month  period ended March 31, 2000, general and
administrative  expenses were $139,048 or 2.93% of net sales for the three-month
period  ended March 31, 2001  compared to $398,444 or 7.33% of net sales for the
three-month  period  ended  March 31,  2000 and other  operating  expenses  were
$92,206 or 1.95% of net sales for the three-month  ended March 31, 2001 compared
to $223,251 or 4.11% of net sales for the three-month ended March 31, 2000.

     Interest expense decreased to $241,356 for the three-months ended March 31,
2001  compared to $1,908,209  for the  three-months  ended March 31, 2000.  This
decrease is  primarily  due the lack of interest  expense  for  amortization  of
Debenture  issuance cost and Conversion  Benefit in the three-month period ended
March 31, 2001.

                                       4
<PAGE>

   (b)NINE-MONTH  PERIOD  ENDED  MARCH 31, 2001 COMPARED TO NINE-MONTH PERIOD
      ENDED  MARCH 31, 2000

  RESULTS OF  OPERATIONS

     Net sales amounted to $14,378,418 for the nine-month period ended March 31,
2001,  compared to $12,393,655 for the nine-month period ended March 31,2000, an
increase of  $1,984,763,  or 16.01% from the  nine-month  period ended March 31,
2000.  The  16.01%  increase  in net  sales  was  mainly  due to  the  sales  of
ddR-Systems  increasing  by  75.59%  or  $4,489,843  and  Information  Solutions
increasing  397.61% or  $1,341,743.  This  significant  increase was offset by a
decrese  in  conventional  x-ray of  80.92%  ($1,139,986),  services  of  28.95%
($395,177) and conventional OEM-Business of 68.68% ($2,311,660). 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.

     Gross  profit  amounted  to  $3,943,005  or  27.42%  of net  sales  for the
nine-month period ended March 31, 2001,  compared to $3,021,535 or 24.38% of net
sales for the  nine-month  period  ended March 31,  2000.  The increase in gross
profit as a  percentage  of net  revenues is  attributable  to the fact that the
percentage of sales of  ddRMulti-Systems  to total sales  increased to 72.38% of
total sales for the  nine-month  period ended March 31, 2001 from 47.74% for the
nine-month period ended March 31, 2000.

     Operating expenses were  $10,132,555,  or 70.47% of net  revenues,  for the
nine-month period ended March 31, 2001,  compared to $13,724,509,  or 110.74% of
net revenues for the nine-month period ended March 31, 2000. The principal items
were  salaries  (net of officers and  directors  compensation)  of $3,025,177 or
21.04% of net sales for the  nine-month  period ended March 31, 2001 compared to
$3,153,332 or 25.44% of net sales for the nine-month period ended March 31, 2000
and selling  expenses of  $2,880,856  or 20.04% of net sales for the  nine-month
period ended March 31, 2001  compared to  $3,364,935  or 27.15% of net sales for
the snine-month period ended March 31, 2000.  Research and development  expenses
were $1,923,877 or 13.38% of net sales for the nine-month period ended March 31,
2001  compared to $1,364,415  or 11.01% of net sales for the  nine-month  period
ended March 31, 2000. Officers and directors  compensation was $481,879 or 3.35%
of net  sales  for the  nine-month  period  ended  March 31,  2001  compared  to
$2,650,288  or 21.38% of net sales for the  snine-month  period  ended March 31,
2000,  general and  administrative  expenses were $490,928 or 3.41% of net sales
for the nine-month  period ended March 31, 2001 compared to $1,320,325 or 10.65%
of net sales for the nine-month  period ended March 31, 2000 and other operating
expenses  were  $328,423 or 2.28% of net sales for the  nine-month  period ended
March 31, 2001  compared  to  $794,971 or 6.41% of net sales for the  nine-month
period ended March 31, 2000. The decrease in officers and directors compensation
and general and administrative  expenses is mainly due to the issuance of shares
in the nine-month period ended March 31, 2000.

     Interest expenses decreased to $1,815,128 for the nine-month period ended
March 31, 2001 compared to $7,276,519 for the nine-month  period ended March 31,
2000.  This  decrease  is  primarily  due  the  lack  of  interest  expense  for
amortization of Debenture issuance cost and Conversion Benefit in the nine-month
period ended March 31, 2001.

                                       5
<PAGE>

FINANCIAL CONDITION

March 31, 2001 compared to June 30, 2000

     Total assets of the Company on March 31, 2001 decreased by $2,293,397 to
$23,089,617 from $25,383,014 on June 30, 2000,  primarily due to the decrease of
current assets.  Current assets decreased $1,918,542 to $11,912,959 on March 31,
2001 from  $13,831,501  on June 30,  2000.  The  decrease  in current  assets is
attributable  to  the  decrease  of  cash  and  cash  equivalents  of  $894,810,
restricted  cash of  $1,385,600,  and the  decrease  of accounts  receivable  of
$766,781.  Inventory and prepaid  expenses and sundry  receivables  increased by
$1,006,795  and  $121,854  respectively.  Other  assets  decreased  $360,048  to
$4,890,849 on March 31, 2001 from  $5,250,897 on June 30, 2000.  The decrease is
attributable  to  the  amortization  of  the  licensing  agreement,   patents  &
trademark,software development cost and the goodwill being offset by an increase
in loan receivable affiliates.

     On March 31, 2001,  the Company had total  liabilities  of  $15,950,176
compared to $35,704,030 on June 30, 2000. On March 31, 2001, current liabilities
were  $15,579,195  compared to $21,233,649 on June 30, 2000.  Working capital at
March 31, 2001 was $(3,666,236) compared to $(7,402,148) at June30, 2000.

CASH FLOW AND CAPITAL EXPENDITURES NINE MONTH PERIOD ENDED MARCH 31, 2001
COMPARED TO NINE MONTH PERIOD ENDED MARCH 31, 2000.

     Cash used for operating activities for the nine-month  period ended March
31, 2001 was $2,115,285  compared to $5,472,748 for the nine-month  period ended
March  31,  2000.  Cash  used for  investing  activities  was  $427,447  for the
nine-month  period ended March 31, 2001 compared to $629,632 for the  nine-month
period  ended  March  31,  2000.  Cash flow from  financing  activities  for the
nine-month  period ended March 31, 2001 was $1,936,802  compared to cash flow of
$8,189,205 for nine-month period ended March 31, 2000.

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.

     The  availability  of    sufficient  future  cash  flow  will  depend  to a
significant extent on the marketability  of the  Company's  ddR-Systems.  Absent
sufficient  cash flow to satisfy Company requirements,  it may be  necessary for
the  Company  to  attempt  to secure some form of financing  and there can be no
assurance  as  to whether such financing will be available on terms satisfactory
to management.

     The Company has not engaged in any additional financing  activities  during
the  quarter  ended  March 31,  2001  except  for a  $3,000,000  purchase  order
financing concluded in December 2000 and January 2001. Additionally,  during the
quarter ended March 31, 2001 the Company engaged in an Exchange Agreement (which
did not result in the  Company  receiving  any  funds)  between  certain  former
Selling  Shareholders  and  a  new  Selling  Shareholder  as  more  specifically
described in Form 8-K and  exhibits  thereto with date of report of December 29,
2000 as filed January 12, 2001.

     During  the  quarter  ened   March  31,  2001  the  Company  entered   into
negotiations with an unaffiliated  third party pursuant to which an agreement in
principal  was  reached  as  relates  to  an  Equity  Line  of  Credit  of up to
$15,000,000  over a period of 30 months  subject to various terms and conditions
including the Company's receipt of stockholder  approval authorizing an increase
in the number of authorized shares of Company common stock,  which authority and
increase is necessary in order to have sufficient shares of Company common stock
available under the terms of the Private Equity Credit Agreement  ("Agreement").
Once all terms are  agreed  to and the  Agreement  finalized  and  executed  the
Company intends to file a Form 8-K with the SEC with respect thereto.

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
theSwiss  Franc  and  the  US  dollar).

Item  3.   Quantitative  and  Qualitative Disclosures About Market Risk

           Not Applicable

                                       6
<PAGE>

                                     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
00196  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.

      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
Courtaction.  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  nonconveniens)  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.

                                       7
<PAGE>

     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.  Maxwell's  application for judgement on the balance of his claim
has been dismissed.

Item 2. CHANGES IN SECURITIES

        None.

Item 3. DEFAULTS UPON SENIOR SECURITIES

        None.

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

     The Company  currently intends to hold its Annual  Meeting of  Stockholders
for fiscal year ended June 30, 2001 during the fourth  quarter  of  the  current
calendar  year.

Item  5. OTHER  INFORMATION

         None

Item 6. EXHIBITS AND REPORTS ON FORM 8-K

        (a) Exhibits - None

        (b)  Reports  on  Form  8-K - None



                                       8
<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:  May , 2001

                                       9