<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: December 31, 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 February 2, 2001 is 84,502,805 shares, all of one class of $.01 par
value common stock.

<PAGE>



TABLE OF CONTENTS                                                           Page



No.                                  PART I

Item 1.       Financial Statements                                         F1-F6

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                                              7-8

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              8

Item 5.       Other Information                                                8

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

Signatures                                                                     9



                                        2
<PAGE>

                           SWISSRAY INTERNATIONAL INC.
                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS


                                                   December 31,         June 30,
                                                       2000               2000
                                                   (Unaudited)
                                                 -------------------------------

CURRENT ASSETS
Cash and cash equivalents                         $   1,621,032    $  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 $ 163,678 and $ 170,883                   2,010,043       3,185,399
Inventories                                           4,463,819       4,637,152
Prepaid expenses and sundry receivables                 914,329       1,312,167
                                                 -------------------------------
Total Current Assets                                  9,309,223      13,831,501
                                                 -------------------------------

PROPERTY AND EQUIPMENT, at cost                       6,398,801       6,300,616
                                                 -------------------------------


OTHER ASSETS
Loan receivable affiliiates                           1,164,099         768,647
Licensing agreement                                   2,359,123       2,607,451
Patents and trademarks                                  158,781         171,866
Software develompent costs                              206,266         256,380
Security deposits                                        37,045          36,873
Goodwill                                              1,313,014       1,409,680
                                                 -------------------------------
TOTAL OTHER ASSETS                                    5,238,328       5,250,897
                                                 -------------------------------
Total Assets                                      $  20,946,352    $ 25,383,014
                                                 ===============================



                                       F 1
<PAGE>

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Current maturities of long-term debt              $     206,582    $    229,700
Notes payable - banks                                 2,924,930       3,578,339
Notes payable - short-term                            2,176,773       1,352,502
Loan payable                                            121,976         119,885
Accounts payable                                      4,570,056       4,340,033
Accrued expenses                                      1,850,517      10,727,576
Restructuring                                              -            100,000
Customer deposits                                       243,748         785,614
                                                 -------------------------------

TOTAL CURRENT LIABILITIES                            12,094,582      21,233,649
                                                 -------------------------------

CONVERTIBLE DEBENTURES, net of conversion benefit         9,700      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                                            839,838         233,999
Additional paid-in capital                          112,138,906      88,207,532
Treasury stock                                       (2,040,000)     (2,040,000)
Deferred compensation                                  (332,800)       (998,399)
Accumulated deficit                                (100,248,029)    (94,130,543)
Accumulated other comprehensive loss                 (1,566,841)     (1,273,620)
Common stock subject to put                            (319,985)       (319,985)
                                                 -------------------------------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT)                  8,471,089     (10,321,016)
                                                 -------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY        $  20,946,352   $  25,383,014
                                                 ===============================



                                       F 2

<PAGE>
                           SWISSRAY INTERNATIONAL INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS


                                                         Six Months Ended
                                                           December 31,
                                               ---------------------------------
                                                     2000               1999
                                                   Unaudited         Unaudited
                                               ---------------------------------

NET SALES                                       $  9,640,754      $   6,957,028
COST OF SALES                                      7,275,605          5,332,562
                                               ---------------------------------
GROSS PROFIT                                       2,365,149          1,624,466
                                               ---------------------------------

OPERATING EXPENSES
Officers and directors compensation                  328,908          2,425,390
Salaries                                           2,105,732          2,423,131
Selling                                            2,106,124          2,372,488
Research and developent                            1,338,489            895,072
General and administrative                           351,880            921,881
Other operating expenses                             236,217            571,720
Bad debts                                                -               16,001
Depreciation and amortization                        660,147            678,396
                                               ---------------------------------
TOTAL OPERATING EXPENSES                           7,127,497         10,304,079
                                               ---------------------------------

LOSS BEFORE OTHER INCOME (EXPENSES)               (4,762,348)        (8,679,613)
                                               ---------------------------------


Other income (expenses)                              326,081             20,489
Interest expense                                  (1,573,769)        (5,368,310)
                                               ---------------------------------
OTHER INCOME (EXPENSES)                           (1,247,688)        (5,347,821)
                                               ---------------------------------

NET LOSS                                          (6,010,036)       (14,027,434)

Inputed Preffered Stock Dividend                 (107,450.00)               -
                                               ---------------------------------

Loss available to common shareholder's          $ (6,117,486)     $ (14,027,434)
                                               =================================

LOSS PER COMMON SHARE                                $ (0.21)           $ (0.87)
                                               =================================

WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING                                29,468,269         16,141,977


                                       F 3


<PAGE>

                           SWISSRAY INTERNATIONAL INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS


                                                       Three Months Ended
                                                           December 31,
                                               ---------------------------------
                                                      2000             1999
                                                   Unaudited        Unaudited
                                               ---------------------------------

NET SALES                                       $  4,711,929      $   3,077,861
COST OF SALES                                      3,537,091          2,354,827
                                               ---------------------------------
GROSS PROFIT                                       1,174,838            723,034
                                               ---------------------------------

OPERATING EXPENSES
Officers and directors compensation                  183,916          2,287,577
Salaries                                           1,114,379          1,400,690
Selling                                            1,265,161          1,618,956
Research and development                             726,842            429,839
General and administrative                           166,263            659,136
Other operating expenses                             157,353            486,171
Bad debts                                                -               16,001
Depreciation and amortization                        330,880            356,515
                                               ---------------------------------
TOTAL OPERATING EXPENSES                           3,944,794          7,254,885
                                               ---------------------------------

LOSS BEFORE OTHER INCOME (EXPENSES)               (2,769,956)        (6,531,851)


Other income (expenses)                              248,799             (5,768)
Interest expense                                    (428,180)        (2,946,697)
                                               ---------------------------------
OTHER INCOME (EXPENSES)                             (179,381)        (2,952,465)
                                               ---------------------------------

NET LOSS                                        $ (2,949,337)     $  (9,484,316)
                                               =================================

LOSS PER COMMON SHARE                           $      (0.09)     $       (0.55)
                                               =================================

WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING                                32,253,481         17,144,238




                                       F 4

<PAGE>
                           SWISSRAY INTERNATIONAL INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                      Six Months Ended
                                                                        December 31,
                                                                ------------------------------
                                                                     2000            1999
                                                                -------------------------------
                                                                                   Restated
CASH FLOWS FROM OPERATING ACTIVITES
<S>                                                              <C>            <C>
Net loss                                                         $(6,010,036)   $(14,027,434)
Adjustment to reconcile net loss to net
      cash used by operating activities
      Depreciation and amortization                                  697,900         714,399
      Provision for bad debts                                         (3,744)        (17,050)
      Operating expenses through issuance of stock options
        and common stock to be issued                                 60,000         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
      Interest expense on Option value per black scholes-          1,385,473             -
      Settelment expense paid through issuance of common-stock           -               -
      Amortization of Deferred Compensation                          665,599       3,309,375
      Early extinguishment of  Debt (gain)                               -               -

      (Increase) decrease in operating assets:
      Accounts receivable                                          1,179,100        (120,957)
      Inventories                                                    173,333         785,470
      Prepaid expenses and sundry receivables                        397,838         160,216
      Increase (decrease) in  operating liabilities:
      Accounts payable                                               230,023        (962,723)
      Accrued expenses                                               943,264         490,075
      Restructuring                                                 (100,000)            -
      Customers deposits                                            (541,866)        (51,017)
                                                                -------------------------------
NET CASH USED BY OPERATING ACTIVITIES                             (2,308,589)     (5,451,822)
                                                                -------------------------------
CASH FLOW FROM INVESTING ACTIVITIES
      Acquisition of proberty and equipment                         (387,500)       (500,902)
      Other intangibles                                                 (392)        (14,377)
      Security deposits                                                 (172)         (9,414)
      Increase (Repayment of) loan receivable                            -               681
                                                                -------------------------------
NET CASH USED BY INVESTING ACTIVITIES                               (388,064)       (524,012)
                                                                -------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
      Proceeds from short-term borrowings                           (653,408)      1,564,701
      Expenses related to debentures                                     -           (13,059)
      Principal payment of short-term borrowings                     803,244        (991,280)
      Principal payment of long-term borrowings                      (32,106)        (13,954)
      Decrease in Restricted Cash                                  1,385,600             -
      Loan receivable Affiliates                                    (395,452)            -
      Issuance of common stock for cash                              341,845       7,683,474
      Issuance of stock options for cash                             150,000       1,598,024
      Purchase of Treasury Stock                                         -        (1,500,000)
                                                                -------------------------------

CASH PROVIDED BY FINANCING ACTIVITIES                              1,599,723       8,327,906

EFFECT OF EXCHANGE RATE ON CASH                                     (293,221)         81,544
                                                                -------------------------------
NET INCREASE (DECREASE) IN CASH                                   (1,390,151)      2,433,616
CASH AND CASH EQUIVALENT - beginning of period                     3,011,183       1,281,297
                                                                -------------------------------
CASH AND CASH EQUIVALENTS - end of period                        $ 1,621,032    $  3,714,913
                                                                ===============================
</TABLE>


                                       F 5

<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 December 31, 2000 and the results of operations and cash
flows for the interim  period  presented.  Operating  results for the six months
ended  December  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:
                                         December 31,      June 30,
                                         ---------------------------
                                            2000             2000
                                         ----------       ----------

Raw materials, parts and supplies        $3,291,154       $2,682,558
Work in process                             698,925        1,295,575
Finished goods                              473,740          659,019
                                         ----------       ----------
                                         $4,463,819       $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 6,932 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) Common Stock - On December 27, 2000, the Company issued  52,442,347
shares of common stock in exchange for cancellation of:
                a. issued and outstanding convertible debentures
                b. Series A Preferred stock and
                c. Promissory notes

         (6) Mandatory  Conversion - In October  2000,  in  compliance  with the
mandatory  conversion  requirements  contained in the October 5, 1998  debenture
agreement,  the Company  converted  $2,940,000  principal  amount of convertible
debentures  plus  accrued  interest of  $294,000  into  3,234,000  shares of the
Company's common stock.

                                       F 6
<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 DECEMBER 31, 2000 COMPARED TO THREE-MONTH PERIOD
      ENDED DECEMBER 31, 1999

     Net sales amounted to $4,711,929 for the three-month  period ended December
31, 2000,  compared to $3,077,861 for the three-month  period ended December 31,
1999, an increase of  $1,634,068,  or 53.09% form the  three-month  period ended
December 31, 1999.The 53.09% increase in net sales was maInly due to the sale of
ddR-Systems  increasing  by  233.79% or  $2,099,787  and  Information  Solutions
increasing 1,124.07% or $863,283.  This significant increase was slightly offset
by a  decrease in  conventional  x-ray of  92.83%  ($331,837)  and  conventional
OEM-Business  of 73.56%  ($1,000,146).  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  $1,174,838  or  24.93%  of net  sales  for the
three-month  period ended  December 31, 2000,  compared to $723,034 or 23.49% of
net sales for the  three-month  period ended  December 31, 1999. 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 63.62%
of total sales for the  three-month  period ended  December 31, 2000 from 29.18%
for the three-month period ended December 31, 1999.

     Operating  expenses were  $3,944,794,  or 83.72% of net  revenues,  for the
three-month period ended December 31, 2000, compared to $7,254,885,or 235.71% of
net revenues for the  three-month  period ended December 31, 1999. The principle
items were salaries (net of officers and directors  compensation)  of $1,114,379
or 23.65% of net  sales for the  three-month  period  ended  December  31,  2000
compared to $1,400,690 or 45.51% of net sales for the  three-month  period ended
December 31, 1999 and selling  expenses of $1,265,161 or 26.85% of net sales for
the  three-month  period ended December 31, 2000 compared to $1,618,956 or 52.6%
of net sales for the  three-month  period ended December 31, 1999.  Research and
development  expenses were  $726,842 or 15.43% of net sales for the  three-month
period ended  December 31, 2000  compared to $429,839 or 13.97% of net sales for
the  three-month  period  ended  December  31,  1999.   Officers  and  directors
compensation  was  $ 183,916  or 3.9% of net sales  for the  three-month  period
ended  December  31, 2000 compare to  $2,287,577  or 74.32% of net sales for the
three-month period ended December 31, 1999, general and administrative  expenses
were $166,263 or 3.53% of net sales for the  three-month  period ended  December
31, 2000 compared to $659,136 or 21.42% of net sales for the three-month  period
ended  December 31, 1999 and other  operating expenses were $157,353 or 3.34% of
net sales for the  three-month  ended  December 31, 2000 compared to $486,171 or
15.8% of net sales for the three-month  ended December 31, 1999. The decrease in
officers and directors  compensation and general and administrative  expenses is
manly due to the issuance of shares in the three-month period ended December 31,
1999.

     Interest expense  decreased to $428,180 for the three-months ended December
31, 2000 compared to $2,949,697  for the  three-months  ended December 31, 1999.
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
December 31, 2000.

                                       4
<PAGE>

   (b)SIX-MONTH  PERIOD  ENDED  DECEMBER  31, 2000 COMPARED TO SIX-MONTH PERIODS
      ENDED  DECEMBER 31, 1999

  RESULTS OF  OPERATIONS

     Net sales  amounted to $9,640,754  for the six-month  period ended December
31, 2000,  compared to $6,957,028  for the six-month  period ended  December 31,
1999,  an increase of  $2,683,726,  or 38.58% form the  six-month  period  ended
December 31, 1999. The 38.58% increase in net sales was manly due to the sale of
ddR-Systems  increasing  by  184.98% or  $4,036,321  and  Information  Solutions
increasing   1,134,08%   or   $1,487,350.    This   significant   increase   was
offset by a decrese in conventional  x-ray of 87.35% ($751,942) and conventional
OEM-Business  of 65.41%  ($1,887,782).  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  $2,365,149  or  24.53%  of net  sales  for the
six-month  period ended  December 31, 2000,  compared to $1,624,466 or 23.35% of
net sales for the  six-month  period ended  December  31, 1999.  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 64.5% of
total sales for the six-month period ended December 31, 2000 from 31.36% for the
six-month period ended December 31, 1999.

     Operating  expenses were  $7,127,497,  or 73.93% of net  revenues,  for the
six-month period ended December 31, 2000, compared to $10,304,079,  or 148.1% of
net revenues for the  six-month  period ended  December 31, 1999.  The principle
items were salaries (net of officers and directors  compensation)  of $2,105,732
or 21.84% of net sales for the six-month period ended December 31, 2000 compared
to $2,423,131 or 34.83% of net sales for the six-month period ended December 31,
1999 and selling expenses of $2,106,124 or 21.85% of net sales for the six-month
period ended  December 31, 2000 compared to $2,372,488 or 34.1% of net sales for
the six-month period ended December 31, 1999. Research and development  expenses
were  $1,338,489 or 13.88% of net sales for the six-month  period ended December
31, 2000  compared to $895,072 or 12.87% of net sales for the  six-month  period
ended December 31, 1999.  Officers and directors  compensation was  $ 328,908 or
3.41% of net sales for the six-month  period ended  December 31, 2000 compare to
$2,425,390  or 34.86% of net sales for the six-month  period ended  December 31,
1999,  general and  administrative  expenses were $351,880 or 3.65% of net sales
for the six-month  period ended December 31, 2000 compared to $921,881 or 13.25%
of net  sales  for the  six-month  period  ended  December  31,  1999 and  other
operating  expenses were $236,217 or 2.45% of net sales for the six-month  ended
December 31, 2000  compared to $571,720 or 8.22% of net sales for the  six-month
ended December 31, 1999. The decrease in officers and directors compensation and
general  and  administrative  expenses  is manly due to the  issuance  of shares
in the six-month period ended December 31, 1999.

     Interest expenses decreased to $1,573,769 for the six-months ended December
31, 2000 compared to $5,368,310 for the six-months ended December 31, 1999. This
decrease is  primarily  due the lack of interest  expense  for  amortization  of
Debenture  issuance cost and  Conversion  Benefit in the six-month  period ended
December 31, 2000.

                                       5
<PAGE>

FINANCIAL CONDITION

December 31, 2000 compared to June 30, 2000

     Total assets of the Company on December 31, 2000 decreased by $4,436,662 to
$20,946,352 from $25,383,014 on June 30, 2000,  primarily due to the decrease of
current assets. Current assets decreased $4,522,278 to$9,309,223 on December 31,
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  $1,390,151,
restricted   cash   of   $1,385,600,   accounts   receivable   of     $1,175,356
and the  decrease in prepaid  expenses  and sundry  receivables  of $397,838 and
inventory  of  $173,333.  Other  assets  decreased  $12,569 to  $5,238,328    on
December 31, 2000 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 December  31, 2000,  the Company had total  liabilities  of  $12,475,263
compared  to  $35,704,030  on June 30,  2000.  On  December  31,  2000,  current
liabilities were $12,094,582  compared to $21,233,649 on June 30, 2000.  Working
capital at  December  31, 2000 was  $(2,785,359)  compared  to  $(7,402,148)  at
June30, 2000.

CASH  FLOW  AND  CAPITAL  EXPENDITURES  SIX MONTH PERIOD ENDED DECEMBER 31, 2000
COMPARED TO SIX MONTH PERIOD ENDED DECEMBER 31, 1999.

     Cash used for operating activities for the six  months  ended  December 31,
2000 was $2,308,589 compared to $5,451,822 for the six months ended December 31,
1999.  Cash used for  investing activities was $388,064 for the six months ended
December 31,2000 compared to $524,012 for the six months ended December 31,1999.
Cash flow from financing  activities for the six months  ended December 31, 2000
was $1,599,723 compared to cash flow of $8,327,906 for six months ended December
31,  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.

     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.

     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  December  31, 2000 except for a  $3,000,000  purchase  order
financing concluded in December 2000 and January 2001. Additionally,  during the
quarter  ended  December 31, 2000 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.

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.    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.

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 held its Annual Meeting of  Stockholders  for fiscal year ended
June 30,  2000 on  November  30, 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 of
all votes cast.

     Stockholders also approved the  appointment of Feldman Sherb & Co., P.C. as
independent  auditors  for  fiscal  year ended June 30,  2001 and  approved  the
proposal  to adopt the Company's  2001 Stock Option  Plan.

     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

         In December 2000 the Company  issued, to its employees, an aggregate of
2,548,500 options to purchase up to  2,548,500  shares of Company  common stock.
Of  such  2,548,500  options   91,000  were  issued  from  the  Company's   1999
Non-Statutory Stock Option Plan  (which  91,000  options represented the balance
of then  unissued options)  and  2,457,500  were issued from the  Company's 2000
Plan  (leaving a balance of 1,542,500 unissued options).  In each  instance  the
options are exercisable at $0.35 per share;  the bid price on the date of grant.
With  the  exception  of 1,200,000  options granted which 1,200,000  options are
immediately exercisable  and expire  June 30,  2003,  the balance of  1,348,500
options are exercisable  only during such period of time as the option holder is
employed by the Company and then further subject to the following limitations:

         No more than fifty percent (50%)  commencing June 30, 2001 and assuming
employment on such  commencement  date with the balance of  unexercised  options
being exercisable  commencing  January 1, 2002 through June 30, 2003, subject to
option holder being in the Company's employ at the time of exercise.

Item 6. EXHIBITS AND REPORTS ON FORM 8-K

        (a) None

        (b)  Reports  on  Form  8-K

             8-K with date of report of December 29, 2000 together with exhibits
             as filed January 12, 2001.

                                       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:  February 12, 2001

                                       9