UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D. C. 20549

                                  FORM 10-Q/A-3

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

For the quarterly period ended: December 31, 1999

                                       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)

320 WEST 77TH Street, Suite 1A, New York, New York          10024
(Address of principal executive offices)                  (Zip Code)

   New York (914) 441 7841                 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 FEBRUARY 11, 1999 IS 20,989,669, all of one class of $.01 par value
common stock.

                                        1



<PAGE>

<TABLE>

<CAPTION>

TABLE OF CONTENTS                                                           Page

<S>                                                                        <C>

No.                                  PART I

Item 1.       Financial Statements                                         F1-F8

Item 2.       Management's Discussion and Analysis of Financial Condition
              and Results of Operations                                      3-6

Item 3.       Quantitative and Qualitative Disclosures About Market Risk       6

                                     PART II

Item 1.       Legal Proceedings                                                7

Item 2.       Changes in Securities and Use of Proceeds                        7

Item 3.       Defaults Upon Senior Securities                                  7

Item 4.       Submission of Matters to a Vote of Security Holders              7

Item 5.       Other Information                                                7

Item 6.       Exhibits and Reports on Form 8-K                                 7

Signatures                                                                     8

</TABLE>

                                        2
<PAGE>

                           SWISSRAY INTERNATIONAL INC.
                           CONSOLIDATED BALANCE SHEET


                                     ASSETS

                                                     December 31,    June 30,
                                                         1999          1999
                                                     (Unaudited)    (Restated)
                                                    ------------    ----------
CURRENT ASSETS

Cash and cash equivalents ........................   $ 3,714,913   $ 1,281,297
Accounts receivable, net of allowance for doubtful
accounts of $ 202,942 and $ 219,993 ..............     2,586,887     2,448,879
Inventories ......................................     6,546,931     7,332,401
Prepaid expenses and sundry receivables ..........       706,589       866,804
                                                     -----------   -----------
TOTAL CURRENT ASSETS .............................    13,555,320    11,929,381


PROPERTY AND EQUIPMENT ...........................     6,483,486     6,283,040

OTHER ASSETS
Loan receivable ..................................        15,267        15,948
Licensing agreement ..............................     2,855,780     3,104,109
Patents and trademarks ...........................       185,298       199,906
Software develompent costs .......................       307,799       347,763
Security deposits ................................        37,449        28,035
Goodwill .........................................     1,506,341     1,603,007
                                                     -----------   -----------
TOTAL OTHER ASSETS ...............................     4,907,934     5,298,768
                                                     -----------   -----------
TOTAL ASSETS .....................................   $24,946,740   $23,511,189
                                                     ===========   ===========






                                       F 1

<PAGE>
                                                    December 31,     June 30,
                                                         1999          1999
                                                     (Unaudited)    (Restated)
                                                    ------------    ----------

                     LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES

Current maturities of long-term debt ............   $    191,655    $   247,028
Notes payable - banks ...........................      5,231,860      3,667,159
Notes payable - short-term ......................        772,767      1,700,000
Loan payable ....................................        117,332        126,006
Accounts payable ................................      4,459,599      5,422,321
Accrued expenses ................................      4,693,918      3,003,844
Restructuring ...................................        500,000        500,000
Customer deposits ...............................        227,490        278,507
                                                      ------------   -----------
TOTAL CURRENT LIABILITIES .......................     16,194,621     14,944,865

Convertible Debentures, net of conversion benefit     15,292,793     15,305,852

LONG-TERM DEBT, less current maturities .........        181,141        195,095

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

STOCKHOLDERS' EQUITY

Common stock ....................................        206,120        140,062
Additional paid-in capital ......................     83,765,653     69,028,013
Treasury Stock ..................................     (2,040,000)      (540,000)
Deferred Compensation ...........................       (336,500)    (1,282,500)
Accumulated deficit .............................    (86,610,897)   (72,492,463)
Accumulated other comprehensive loss ............     (1,706,191)    (1,787,735)
Common stock subject to put .....................       (319,985)    (1,819,985)
                                                    ------------    ------------
TOTAL STOCKHOLDERS' EQUITY ......................     (7,041,800)    (8,754,608)
                                                    ------------    ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ......   $ 24,946,740   $ 23,511,189
                                                    ============    ============
                                         F 2
<PAGE>

                           SWISSRAY INTERNATIONAL INC.
                      CONSOLIDATED STATEMENT OF OPERATIONS

                                                       Six Months Ended
                                                         December 31,
                                                       1999              1998
                                                   ----------        ----------
                                                    Unaudited        Unaudited

NET SALES ..................................     $  6,957,028      $ 10,101,147
COST OF SALES ..............................        5,332,562         7,969,342
                                                   ----------        ----------
GROSS PROFIT ...............................        1,624,466         2,131,805

OPERATING EXPENSES
Officers and directors compensation ........        2,425,390           396,894
Salaries ...................................        2,423,131         2,064,577
Selling ....................................        2,372,488         1,438,281
Research and development ...................          895,072           843,589
General and administrative .................          921,881           710,818
Other operating expenses ...................          571,720           561,007
Bad debts ..................................           16,001             7,383
Depreciation and amortization ..............          678,396           590,762
                                                   ----------        ----------
TOTAL OPERATING EXPENSES ...................       10,304,079         6,613,311
                                                   ----------        ----------
LOSS BEFORE OTHER INCOME (EXPENSES) ........       (8,679,613)       (4,481,506)

Other income (expense) .....................           20,489          (358,995)
Interest expense ...........................       (5,368,310)       (1,412,696)
                                                   ----------        ----------
OTHER EXPENSES .............................       (5,347,821)       (1,771,691)
                                                   ----------        ----------
LOSS FROM CONTINUING OPERATIONS
  BEFORE EXTRAORDINARY ITEMS ...............      (14,027,434)       (6,253,197)

Extraordinary expenses .....................             --            (832,849)
                                                   ----------        ----------
NET LOSS ...................................     $(14,027,434)     $ (7,086,046)
                                                   ==========        ==========

LOSS PER COMMON SHARE
Loss from continuing operations ............     $      (0.87)     $      (1.35)
Extraordinary items ........................             0.00             (0.18)
                                                   ----------        ----------
NET LOSS ...................................     $      (0.87)     $      (1.54)
                                                   ==========        ==========
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING .........................       16,141,977         4,625,626


                                       F 3

<PAGE>

                           SWISSRAY INTERNATIONAL INC.
                 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

                                                       Six Months Ended
                                                         December 31,
                                                       1999              1998
                                                   ----------        ----------
                                                    Unaudited        Unaudited

NET LOSS ...................................     $(14,027,434)     $ (7,086,046)
Other Comprehensive income, net of tax                 81,544            20,037
                                                   ----------       -----------
Comprehensive loss                               $(13,945,890)     $ (7,066,009)
                                                   ==========       ===========
                                      F 4
<PAGE>

                           SWISSRAY INTERNATIONAL INC.
                      CONSOLIDATED STATEMENT OF OPERATIONS

                                                       Three Months Ended
                                                          December 31,
                                                      1999              1998
                                                    ---------         ---------
                                                    Unaudited         Unaudited

NET SALES ..................................     $  3,077,861      $  6,444,706
COST OF SALES ..............................     $  2,354,527         5,132,428
                                                    ---------         ---------
GROSS PROFIT ...............................          723,334         1,312,278

OPERATING EXPENSES
Officers and directors compensation ........        2,287,577           241,707
Salaries ...................................        1,400,690           979,391
Selling ....................................        1,618,956           925,483
Research and development ...................          429,839           437,552
General and administrative .................          659,136           260,177
Other operating expenses ...................          486,171           296,518
Bad debts ..................................           16,001             7,383
Depreciation and amortization ..............          356,515           297,013
                                                    ---------         ---------
TOTAL OPERATING EXPENSES ...................        7,254,885         3,445,224
                                                    ---------         ---------
LOSS BEFORE OTHER EXPENSES .................       (6,531,551)       (2,132,946)

Other expenses .............................           (5,768)         (175,628)
Interest expense ...........................       (2,946,697)         (758,800)
                                                    ---------         ---------
OTHER EXPENSES .............................       (2,952,465)         (934,428)
                                                    ---------         ---------
LOSS FROM CONTINUING OPERATIONS
  BEFORE EXTRAORDINARY ITEMS ...............       (9,484,016)       (3,067,374)

Extraordinary expenses .....................             --            (803,182)
                                                    ---------         ---------
NET LOSS ...................................     $ (9,484,016)     $ (3,870,556)
                                                    =========         =========

LOSS PER COMMON SHARE
Loss from continuing operations ............     $      (0.55)     $      (0.66)
Extraordinary items ........................             0.00             (0.17)
                                                    ---------         ---------
NET LOSS ...................................     $      (0.55)     $      (0.85)
                                                    =========         =========
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING .........................       17,144,238         4,625,626


                                       F 5

<PAGE>
                          SWISSRAY INTERNATIONAL INC.
                 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

                                                      Three Months Ended
                                                         December 31,
                                                       1999              1998
                                                   ----------        ----------
                                                    Unaudited        Unaudited

NET LOSS ...................................     $ (9,484,016)     $ (3,870,556)
Other Comprehensive income (loss), net of tax          41,100           (86,967)
                                                   ----------       -----------
Comprehensive loss                               $ (9,442,916)     $ (3,957,523)
                                                   ==========       ===========
                                      F 6
<PAGE>

                           SWISSRAY INTERNATIONAL INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

                                                            Six Months Ended
                                                              December 31,
                                                           1999            1998
                                                        Unaudited        Unaudited
                                                         ---------       ---------
CASH FLOWS FROM OPERATING ACTIVITES
<S>                                                   <C>             <C>

Net loss ..........................................   $(14,027,434)   $ (7,086,046)
Adjustment to reconcile net loss to net
 cash used by operating activities
 Depreciation and amortization ....................        714,399         617,486
 Provision for bad debts ..........................        (17,050)          2,477
 Operating expenses through issuance of
 stock options and common stock ...................        355,561            --
 Issuance of common stock in lieu of
 interest payments ................................        195,729            --
 Interest expense on debt issuance cost and
 conversion benefit ...............................      2,331,061       1,297,158
 Interest expense on option value per black scholes      1,385,473            --
 Amortization of deferred compensation ............      3,309,375            --
 Early extinguishment of  debt (gain) .............           --           832,849
 (Increase) decrease in operating assets:
 Accounts receivable ..............................       (120,957)     (1,985,436)
 Inventories ......................................        785,470        (620,696)
 Prepaid expenses and sundry receivables ..........        160,216         163,842
 Increase (decrease) in  operating liabilities:
 Accounts payable .................................       (962,723)      1,815,812
 Accrued expenses .................................        490,075        (864,444)
 Customers deposits ...............................        (51,017)       (145,739)
                                                         ---------       ---------
NET CASH USED BY OPERATING ACTIVITIES .............     (5,451,822)     (5,972,737)
                                                         ---------       ---------
CASH FLOW FROM INVESTING ACTIVITIES
 Acquisition of property and equipment ............       (500,902)       (207,223)
 Other intangibles ................................        (14,377)           --
 Security deposits ................................         (9,414)          7,134
 Increase in loan receivable ......................            681           1,974
                                                         ---------       ---------
NET CASH USED BY INVESTING ACTIVITIES .............       (524,012)       (198,115)
                                                         ---------       ---------
CASH FLOWS FROM FINANCING ACTIVITIES
 Proceeds from short-term borrowings ..............      1,564,701      16,669,384
 Expenses related to debentures ...................        (13,059)            --
 Principal payment of short-term borrowings .......       (991,280)    (11,188,135)
 Principal payment of long-term borrowings ........        (13,954)        (72,950)
 Issuance of common stock for cash ................      7,683,474       1,500,000
 Issuance of stock options for cash ...............      1,598,024             --
 Purchase of Treasury Stock .......................     (1,500,000)       (540,000)
 Payment to stockholders and officers .............           --            (2,207)
                                                         ---------       ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES .........      8,327,906       6,366,092
                                                         ---------       ---------
EFFECT OF EXCHANGE RATE ON CASH ...................         81,544        (251,964)
                                                         ---------       ---------
NET INCREASE (DECREASE) IN CASH ...................      2,433,616         (56,724)
CASH AND CASH EQUIVALENT - beginning of period ....      1,281,297       1,281,552
                                                         ---------       ---------
CASH AND CASH EQUIVALENTS - end of period .........   $  3,714,913    $  1,224,828
                                                         =========       =========
</TABLE>
                                       F 7


<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 1999

         (1)The financial  statements  included herein have been prepared by the
Registrant,  without  audit,  pursuant  to  the  rules  and  regulations  of the
Securities and Exchange Commission. Certain information and footnote disclosures
normally included in financial  statements prepared in accordance with generally
accepted  accounting  principles have been condensed or omitted pursuant to such
rules and regulations, 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, 1999.

         (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 December 31, 1999 and the results of operations and cash
flows for the interim  period  presented.  Operating  results for the six months
ended  December  31, 1999 are not  necessarily  indicative  of the results to be
expected for the full year ending June 30, 2000.

         (3)INVENTORIES

                  Inventories are summarized by major classification as follows:


                                                     December 31,      June 30,

                                                     ---------------------------
                                                        1999             1999
                                                     ----------       ----------
Raw materials, parts and supplies                    $3,888,797       $5,558,330
Work in process                                       1,205,428        1,048,197
Finished goods                                        1,452,706          725,874
                                                     ----------       ----------
                                                     $6,546,931       $7,332,401
                                                     ==========       ==========

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

         (4) Common Stock

In October 1999 the Company issued 875,000 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 8

<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
ddRMulti  System,  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 ddRMulti-System, 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>

RESULTS OF OPERATIONS

     (a)THREE-MONTH  PERIOD  ENDED  DECEMBER  31, 1999  COMPARED TO  THREE-MONTH
     PERIOD ENDED DECEMBER 31, 1998

         Net sales  amounted to  $3,077,861  for the  three-month  period  ended
December 31,  1999,  compared to  $6,444,706  for the  three-month  period ended
December 31, 1998,  an decrease of  $3,366,845,  or 52.24% form the  three-month
period ended December 31, 1998.  The 52.24%  decrease in net sales was manly due
to the decrease in conventional x-ray of 71.68% and conventional OEM-Business of
63% whereas sales of ddRMulti-Systems increase of 10.37%.

         Gross  profit  amounted  to  $723,334  or  23.5% of net  sales  for the
three-month period ended December 31, 1999,  compared to $1,312,278 or 20.36% of
net sales for the  three-month  period ended  December 31, 1998. The increase in
gross profit as a percentage  of net revenues is  attributable  to the fact that
the percentage of sales of  ddRMulti-Systems  increased to 29.18% of total sales
for  the  three-month  period  ended  December  31,  1999  from  12.63%  for the
three-month period ended December 31, 1998.

         Operating expenses were $7,254,885,  or 235.7% of net revenues, for the
three-month period ended December 31, 1999, compared to $3,445,224, or 53.46% of
net revenues for the  three-month  period ended December 31, 1998. The principal
items were  officers and  directors  compensation  of $2,287,390 or 74.3% of net
sales for the three-month period ended December 31, 1999 compared to $241,707 or
3.8% of net sales for the three-month  period ended December 31, 1998,  salaries
(net of officers and directors compensation) of $1,400,690 or 45.5% of net sales
for the three-month period ended December 31, 1999 compared to $979,391 or 15.2%
of net sales for the  three-month  period  ended  December  31, 1998 and selling
expenses of  $1,618,956 or 52.6% of net sales for the  three-month  period ended
December 31, 1999 compared to $925,483 or 14.4% of net sales for the three-month
period ended December 31, 1998. Research and development  expenses were $429,839
or 13.97% of net  sales for the  three-month  period  ended  December  31,  1999
compared  to  $437,552 or 6.79% of net sales for the  three-month  period  ended
December 31, 1998 and general and administrative expenses were $659,136 or 21.4%
of net sales for the  three-month  period ended  December  31, 1999  compared to
$260,177 or 4.0%% of net sales for the  three-month  period  ended  December 31,
1998. The increase in officers and directors compensation and salaries is due to
the issuance of common stock to certain employees and directors. The increase in
selling  and  general  administrative  expenses  is due to the  amortization  of
deferred  compensation  for those  shares  issued to  consultants  for  services
currently being rendered.


         Interest  expenses  increased to $2,946,697 for the three-months  ended
December 31, 1999 compared to $758,800 for the  three-months  ended December 31,
1998.  This  increase is  primarily  due the  increase  of interest  expense for
accrual of penalty interest on periodic  payments required by terms of financing
agreements  and an increase  in  amortization  of  Debenture  issuance  cost and
Conversion Benefit.


         Loss  on  extinguishment  of  Debt was $-0- for the three-months  ended
December  31, 1999  compared to a loss of $803,182  for the  three-months  ended
December  31,  1998.  The  extingushment   loss  resulted  from  refinancing  of
Convertible debentures.

     (b)SIX-MONTH  PERIOD ENDED DECEMBER 31, 1999 COMPARED TO SIX-MONTH  PERIODS
     ENDED DECEMBER 31, 1998

RESULTS OF OPERATIONS

         Net  sales  amounted  to  $6,957,028  for  the  six-month  period ended
December  31,  1999,  compared to  $10,101,147  for the  six-month  period ended
December  31,  1998,  an decrease of  $3,144,119,  or 31.13% form the  six-month
period ended December 31, 1998.  The 31.13%  decrease in net sales was manly due
to the decrease in conventional x-ray of 51.55% and conventional OEM-Business of
48.39% whereas sales of ddRMulti-Systems increased 53.6%.

         Gross  profit  amounted  to  $1,624,466  or 23.35% of net sales for the
six-month period ended December 31, 1999, compared to $2,131,805 or 21.1% of net
sales for the six-month  period ended  December 31, 1998.  The increase in gross
profit as a  percentage  of net  revenues is  attributable  to the fact that the
percentage of sales of  ddRMulti-Systems  increased to 31.36% of total sales for
the  six-month  period ended  December  31, 1999 from 14.06% for the  sixe-month
period ended December 31, 1998.

         Operating expenses were $10,304,079 or 148.1% of net revenues,  for the
six-month period ended December 31, 1999, compared to $6,613,311 or 65.5% of net
revenues for the six-month  period ended December 31, 1998.

                                       4
<PAGE>

The principal  items were officers and directors  compensation  of $2,425,390 or
34.9% of net sales for the six-month  period ended December 31, 1999 compared to
$396,894 or 3.9% of net sales for the six-month  period ended December 31, 1998,
salaries (net of officers and directors  compensation) of $2,423,131 or 34.8% of
net  sales  for the  six-month  period  ended  December  31,  1999  compared  to
$2,064,577  or 20.4% of net sales for the  six-month  period ended  December 31,
1998 and selling  expenses of $2,372,488 or 34.1% of net sales for the six-month
period ended  December 31, 1999 compared to $1,438,281 or 14.2% of net sales for
the six-month period ended December 31, 1998. Research and development  expenses
were $895,072 or 12.9% of net sales for the six-month  period ended December 31,
1999 compared to $843,589 or 8.4%% of net sales for the  six-month  period ended
December 31, 1998 and general and administrative expenses were $921,881 or 13.3%
of net sales for the  six-month  period  ended  December  31,  1999  compared to
$710,818 or 7.0%% of net sales for the six-month period ended December 31, 1998.
The increase in officers and directors  compensation  and salaries is due to the
issuance of common stock to certain  employees  and  directors.  The increase in
selling  and  general  administrative  expenses  is due to the  amortization  of
deferred  compensation  for those  shares  issued to  consultants  for  services
currently being rendered.


         Interest  expenses  increased  to  $5,368,310  for the six-months ended
December 31, 1999 compared to $1,412,696 for the  six-months  ended December 31,
1998.  This  increase is  primarily  due the  increase  of interest  expense for
accrual of penalty interest on periodic  payments required by terms of financing
agreements  and  an  increase   amortization  of  Debenture  issuance  cost  and
Conversion Benefit.

         Loss  on  extinguishment  of  Debt  was  $-0- for the six-months  ended
December  31,  1999  compared  to a loss of $832,849  for the  six-months  ended
December  31,  1998.  The  extingushment   loss  resulted  from  refinancing  of
Convertible debentures.

FINANCIAL CONDITION

December 31, 1999 compared to June 30, 1999

         Total  assets  of  the  Company  on  December  31,  1999  increased  by
$1,435,551 to $24,946,740  from  $23,511,189 on June 30, 1999,  primarily due to
the  increase  in  current  assets.   Current  assets  increased  $1,625,939  to
$13,555,320 on December 31, 1999 from $11,929,381 on June 30, 1999. The increase
in  current  assets is  primarily attributable  to the increase in cash and cash
equivalents  of 2,433,616  and the increase in accounts  receivable  of $138,008
which was  partially  offset by the  decrease in  inventory  of $785,470 and the
decrease in prepaid  expenses and sundry  receivables of $160,215.  Other assets
decreased  $390,834 to $4,907,934  on December 31, 1999 from  $5,298,768 on June
30, 1999.  The decrease is primarily  attributable  to the  amortization  of the
licensing  agreement,  patents & trademark,  software  development  cost and the
goodwill.

         On December 31, 1999, the Company had total liabilities of  $31,668,555
compared  to  $30,445,812  on June 30,  1999.  On  December  31,  1999,  current
liabilities were $16,194,621  compared to $14,944,865 on June 30, 1999.  Working
capital at December 31, 1999 was  $(2,639,301)  compared to $(3,015,484) at June
30, 1999.

CASH FLOW AND CAPITAL EXPENDITURES SIX MONTHS PERIOD ENDED DECEMBER 31, 1999
COMPARED TO SIX MONTHS PERIOD ENDED DECEMBER 31, 1998

         Cash used for operating  activities for the  six-months  ended December
31, 1999 was $5,451,822 compared to $5,972,737 for the six-months ended December
31, 1998.  Cash used for investing  activities  was $524,012 for the  six-months
ended December 31, 1999 compared to $198,115 for the  six-months  ended December
31, 1998. Cash flow from financing  activities for the six-months ended December
31, 1999 was $8,327,906 compared to $6,366,092 for six-months ended December 31,
1998.


                                       5

<PAGE>

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-Multi-System.
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.

         On July 9, 1999 the Company entered into a promissory note  (contingent
convertible  debenture  financing)  with  Southshore  Capital,  Ltd.  for  gross
proceeds of  $1,100,000  and with a due date of August 23, 1999 with no right to
extend. The debenture  contains a 20% discount from market conversion  provision
based upon the 10 day  average  closing bid price for the 10  consecutive  dates
preceding  conversion  date.  There  was no  placement  agent  involved  in this
financing. The promissory note was not paid on its due date and the terms of the
Contingent Subscription Agreement, Convertible Debenture and Registration Rights
Agreement automatically went into effect with debentures in the principal sum of
$1,148,400  (inclusive  of interest  on  aforesaid  promissory  note) going into
effect. None of these Convertible  Debentures have been converted as of November
11, 1999. Any Convertible  Debentures remaining  unconverted at maturity (i.e. 2
years from date of issuance) are subject to mandatory conversion by the Company.

         On  August  11,  1999  the  Company  entered  into  a  promissory  note
(contingent   convertible   debenture   financing)  with  terms  and  conditions
substantially  identical to those set forth in the July 9, 1999  promissory note
financing  referred to directly above excepting (a) the lender is different,  to
wit: Aberdeen Avenue, LLC, (b) gross proceeds amounted to $1,400,000 and (c) the
due date of such note is November 11, 1999 with no right to extend. In all other
respects the material  terms and  conditions of each of the  documents  executed
with respect to this  transaction  are identical to those described in the above
referenced  July 9, 1999  transaction.  There was no placement agent involved in
this  financing.  The promissory note was not paid on its due date and the terms
of the Contingent Subscription Agreement, Convertible Debenture and Registration
Rights Agreement automatically went into effect with debentures in the principal
sum of  $1,484,000  (inclusive of interest on aforesaid  promissory  note) going
into effect.  None of these  Convertible  Debentures  have been  converted as of
November 11, 1999. Any Convertible  Debentures remaining unconverted at maturity
(i.e. 2 years from date of issuance) are subject to mandatory  conversion by the
Company.

         In  September  1999 and  October/November  1999 and  December  1999 the
Company  entered  into two  separate  transactions  whereby  it sold  1,000,000,
1,000,000 and 666,667  restrictive  shares of its common stock  respectively  at
$1.00 per share in September 1999 and $1.50 per share in  October/November  1999
and December 1999.

EFFECT OF CURRENCY ON RESULTS OF OPERATIONS

         The  result  of   operations   and  the   financial   position  of  the
Company'ssubsidiaries  outside of the United  States is reported in the relevant
foreigncurrency  (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).

Item 3. Quantitative and Qualitative Disclosures About Market Risk

         Not Applicable


                                       6

<PAGE>

                                     PART II

                                OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         None  excepting that certain legal  proceedings  commenced in July 1998
against SRMI and two of it  subsidiaries  by Gary J. Durday,  Kenneth R. Montler
and Michael E. Harle (hereinafter  "Plaintiffs") heretofore summarized in SRMI's
Form 10-K for  fiscal  year  ended June 30,  1999 were  subsequently  settled in
accordance  with the terms and  conditions of Settlement  Agreement  executed on
August 31, 1999  pursuant  to which SRMI was  required to pay and has since paid
the sum of $1,000,000 to Plaintiffs and is further  obligated  pursuant to terms
of August  31,  1999  promissory  note to pay  (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.

         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. Maxwell has submitted a motion for Summary
Judgment  which  Swissray  has  opposed  and as of  January  31,  2000 no  Court
determination has been made with respect thereto. It is Swissray's  management's
intention to contest this matter vigorously.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

         Not applicable

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. SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS

         The Company  held its Annual  Meeting of  Stockholders  for fiscal year
ended June 30, 1998 on July 23,  1999,  at which time  stockholders  (i) elected
each of  those  five  persons  nominated  to  serve  on the  Company's  Board of
Directors,  (ii) approved the  appointment of Feldman Sherb Horowitz & Co., P.C.
as the Company's  independent  accountants  for fiscal year ended June 30, 1999,
(iii)  voted  in  favor  of  adopting  an  amendment  to  its   Certificate   of
Incorporation so as to authorize the creation of a class of Preferred Stock; and
(iv) approved the proposal to adopt the Company's 1999 Stock Option Plan.

         The proposal to re-incorporate the Company in Delaware was not approved
notwithstanding the fact that approximately 74% of all votes cast voted in favor
of  such  proposal.  Such  votes  only  represented  approximately  62%  of  all
outstanding  shares while approval of the proposal  required an affirmative vote
of at least two-thirds of all outstanding shares.

         The  number  of  shares of Common  Stock  voted at the  Annual  Meeting
approximated 84% of all issued and outstanding securities as of the record date.


Item 5. OTHER INFORMATION

         Not applicable

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K


         (a) Exhibits                        - NONE-
         (b) Reports on Form 8-K             - NONE-




                                       7

<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:  July 25, 2000

                                        8