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, 2001

                                       OR

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

For the transition period from ____________________to_________________________

                         Commission file number 0-26972

                          Swissray International, Inc.
             (Exact name of registrant as specified in its charter)

                New York                                 16-0950197
    (State or other jurisdiction of                    (I.R.S. Employer

     incorporation or organization)                 Identification Number)

100 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)


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


The number of shares  outstanding of each of the registrant's  classes of common
stock, as of February 11, 2002 is 90,788,663 shares, all of one class of $.01
par value common stock.





<PAGE>









                                TABLE OF CONTENTS

                                     PART I

Item 1.   Financial Statements                                           F1-F7

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

Item 3.   Quantitative and Qualitative Disclosures About Market Risk       7

                                     PART II

Item 1.   Legal Proceedings                                                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                                 9

Signatures                                                                 10







                                       2

<PAGE>

                           SWISSRAY INTERNATIONAL INC.
                           CONSOLIDATED BALANCE SHEETS


                                     ASSETS
                                                 December 31,       June 30,
                                                    2001             2001
                                                -------------    ---------------
                                                 (Unaudited)

CURRENT ASSETS
 Cash and cash equivalents                     $  1,185,616      $  1,588,490
 Accounts receivable, net of allowance
  for doubtful accounts of $ 142,806
  and $ 134,700                                   1,342,769         2,104,385
 Inventories                                      4,603,754         4,278,360
 Prepaid expenses and sundry receivables            809,523           786,425
                                                -------------    ---------------
Total Current Assets                              7,941,662         8,757,660
                                                -------------    ---------------

PROPERTY AND EQUIPMENT, at cost                   6,297,576         6,417,753
                                                -------------    ---------------

OTHER ASSETS
 Loan receivable affiliiates                        965,015           963,249
 Licensing agreement                              1,862,465         2,110,794
 Patents and trademarks                             132,251           145,782
 Software develompent costs                         207,867           161,099
 Security deposits                                   50,673            33,546
 Goodwill                                         1,119,686         1,216,352
                                                -------------    ---------------
TOTAL OTHER ASSETS                                4,337,957         4,630,822
                                                -------------    ---------------
Total Assets                                   $ 18,577,195      $ 19,806,235
                                                =============    ===============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
 Current maturities of long-term debt          $     24,187      $     40,495
 Notes payable - banks                            4,622,548         2,262,481
 Notes payable - short-term                            -            3,045,226
 Loan payable                                       118,875           110,634
 Accounts payable                                 6,670,100         4,995,528
 Accrued expenses                                 1,450,953         1,885,586
 Customer deposits                                1,909,876         1,505,333
                                                -------------    ---------------
TOTAL CURRENT LIABILITIES                        14,796,539        13,845,283
                                                -------------    ---------------

LONG-TERM DEBT, less current maturities              40,904            10,511
                                                -------------    ---------------

COMMON STOCK SUBJECT TO PUT                         319,985            319,985
                                                -------------    ---------------
STOCKHOLDERS' EQUITY
 Convertible preferred shares - Series B          3,791,100               -
 Common stock                                       907,887            843,809
 Additional paid-in capital                     114,670,413        112,088,028
 Treasury stock                                  (2,040,000)        (2,040,000)
 Deferred compensation                               (4,789)           (16,291)
 Accumulated deficit                           (111,847,219)      (103,590,902)
 Accumulated other comprehensive loss            (1,737,640)        (1,334,203)
 Common stock subject to put                       (319,985)          (319,985)
                                                -------------    ---------------
TOTAL STOCKHOLDERS' EQUITY                        3,419,767          5,630,456
                                                -------------    ---------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY     $ 18,577,195      $  19,806,235
                                                =============    ===============

                                       F 1

<PAGE>

                           SWISSRAY INTERNATIONAL INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)


                                                      Six Months Ended
                                                --------------------------------
                                                December 31,     December 31,
                                                    2001             2000
                                                -------------    ---------------
NET SALES                                       $ 8,201,848       $ 9,640,754

COST OF SALES                                     6,122,061         7,275,605
                                                -------------    ---------------
GROSS PROFIT                                      2,079,787         2,365,149
                                                -------------    ---------------

OPERATING EXPENSES
 Officers and directors compensation                342,379           328,908
 Salaries                                         1,824,645         2,105,732
 Selling                                          2,122,002         2,106,124
 Research and development                         1,882,455         1,338,489
 General and administrative                         412,347           351,880
 Other operating expenses                           231,864           236,217
 Bad debts                                               54              -
 Depreciation and amortization                      732,358           660,147
                                                -------------    ---------------
TOTAL OPERATING EXPENSES                          7,548,104         7,127,497
                                                -------------    ---------------
LOSS BEFORE OTHER INCOME (EXPENSES)              (5,468,317)       (4,762,348)

Other income (expenses)                             219,903           326,081
Interest expense                                   (424,003)       (1,573,769)
                                                -------------    ---------------
OTHER INCOME (EXPENSES)                            (204,100)       (1,247,688)
                                                -------------    ---------------
NET LOSS                                         (5,672,417)       (6,010,036)

Imputed Preferred Stock Dividend                 (2,583,900)         (107,450)
                                                -------------    ---------------
Loss available to common shareholders           $(8,256,317)      $(6,117,486)
                                                =============    ===============

Loss per share available to common shareholders $     (0.10)      $     (0.21)
                                                =============    ===============

WEIGHTED AVERAGE NUMBER OF
 SHARES OUTSTANDING                              84,488,808        29,468,269
                                                =============    ===============


                                       F 2

<PAGE>


                           SWISSRAY INTERNATIONAL INC.
                 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
                                   (Unaudited)




                                                      Six Months Ended
                                                --------------------------------
                                                December 31,     December 31,
                                                    2001             2000
                                                -------------    ---------------
NET LOSS                                       $ (5,672,417)      $(6,010,036)

Other comprehensive income (loss),
   net of tax
     Foreign translation adjustment                (403,437)         (293,221)

                                                -------------    ---------------
Comprehensive loss                             $ (6,075,854)      $(6,303,257)
                                                =============    ===============





                                       F 3

<PAGE>


                           SWISSRAY INTERNATIONAL INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)





                                                     Three Months Ended
                                                --------------------------------
                                                December 31,     December 31,
                                                    2001             2000
                                                -------------    ---------------
NET SALES                                     $  4,033,523       $ 4,711,929

COST OF SALES                                    3,144,746         3,537,091
                                                -------------    ---------------
GROSS PROFIT                                       888,777         1,174,838
                                                -------------    ---------------

OPERATING EXPENSES
 Officers and directors compensation               194,028           183,916
 Salaries                                          906,917         1,114,379
 Selling                                         1,434,016         1,265,161
 Research and development                        1,333,264           726,842
 General and administrative                        191,403           166,263
 Other operating expenses                          141,123           157,353
 Depreciation and amortization                     415,073           330,880
                                                -------------    ---------------
TOTAL OPERATING EXPENSES                         4,615,824         3,944,794
                                                -------------    ---------------

LOSS BEFORE OTHER INCOME (EXPENSES)             (3,727,047)       (2,769,956)

Other income (expenses)                            (64,231)          248,799
Interest expense                                  (218,875)         (428,180)
                                                -------------    ---------------
OTHER INCOME (EXPENSES)                           (283,106)         (179,381)
                                                -------------    ---------------
NET LOSS                                      $ (4,010,153)      $(2,949,337)

Imputed Preferred Stock Dividend                (2,583,900)             -
                                                -------------    ---------------
Loss available to common shareholders         $ (6,594,053)      $(2,949,337)
                                                =============    ===============

Loss per share available to
 common shareholders                          $      (0.08)      $     (0.09)
                                                =============    ===============

WEIGHTED AVERAGE NUMBER OF
 SHARES OUTSTANDING                             84,544,726        32,253,481
                                                =============    ===============









                                       F 4

<PAGE>



                           SWISSRAY INTERNATIONAL INC.
                 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
                                   (Unaudited)






                                                     Three Months Ended
                                                --------------------------------
                                                December 31,     December 31,
                                                    2001             2000
                                                -------------    ---------------

NET LOSS                                       $ (4,010,153)     $ (2,949,337)

Other comprehensive income (loss),
   net of tax

    Foreign translation adjustment                  452,139          (541,992)
                                                -------------    ---------------
Comprehensive loss                             $ (3,558,014)     $ (3,491,329)
                                                =============    ===============













                                       F 5

<PAGE>

                           SWISSRAY INTERNATIONAL INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                   (Unaudited)

                                                      Six Months Ended
                                                --------------------------------
                                                December 31,     December 31,
                                                    2001             2000
                                                -------------    ---------------

CASH FLOWS FROM OPERATING ACTIVITES
 Net loss                                        $(5,672,417)    $(6,010,036)
 Adjustment to reconcile net loss to net
  cash used by operating activities
   Depreciation and amortization                     769,115         697,900
   Provision for bad debts                             8,106          (3,744)
   Operating expenses through issuance
    of stock options and common stock to
    be issued                                           -             60,000
   Issuance of common stock in lieu of
    interest payments                                372,600       3,320,324
   Amortization of deferred compensation              11,502         665,599

(Increase) decrease in operating assets:
  Accounts receivable                                753,510       1,179,100
  Inventories                                       (325,394)        173,333
  Prepaid expenses and sundry receivables            (23,099)        397,838

Increase (decrease) in operating liabilities:
  Accounts payable                                 1,674,572         230,023
  Accrued expenses                                   (16,133)     (2,377,060)
  Restructuring                                         -           (100,000)
  Customers deposits                                 404,543        (541,866)
                                                -------------    ---------------
NET CASH USED BY OPERATING ACTIVITIES             (2,043,095)     (2,308,589)
                                                -------------    ---------------

CASH FLOW FROM INVESTING ACTIVITIES
 Acquisition of property and equipment              (224,412)       (387,500)
 Other intangibles                                  (112,767)           (392)
 Security deposits                                   (17,127)           (172)
                                                -------------    ---------------
NET CASH USED BY INVESTING ACTIVITIES               (354,306)       (388,064)
                                                -------------    ---------------

CASH FLOWS FROM FINANCING ACTIVITIES
 Proceeds from shortterm borrowings                2,360,067        (653,408)
 Proceeds related to debentures                         -        (14,057,594)
 Principal payment of shortterm borrowings           (53,293)        803,244
 Principal payment of longterm borrowings             30,393         (32,106)
 Decrease / (increase)  in restricted cash              -          1,385,600
 Loan receivable affiliates                           (1,766)       (395,452)
 Issuance of common stock for cash                      -         14,399,439
 Issuance of stock options for cash                   62,563         150,000
                                                -------------    ---------------
CASH PROVIDED BY FINANCING ACTIVITIES              2,397,964       1,599,723
                                                -------------    ---------------

EFFECT OF EXCHANGE RATE ON CASH                     (403,437)       (293,221)
                                                -------------    ---------------

NET DECREASE IN CASH                                (402,874)     (1,390,151)

CASH AND CASH EQUIVALENT  beginning of period      1,588,490       3,011,183
                                                -------------    ---------------
CASH AND CASH EQUIVALENTS  end of period         $ 1,185,616     $ 1,621,032
                                                =============    ===============















                                       F 6

<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2001

         (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, 2001.

         (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, 2001 and the results of operations and cash
flows for the interim period presented. Operating results for the six months
ended December 31, 2001 are not necessarily indicative of the results to be
expected for the full year ending June 30, 2002.

         (3)INVENTORIES
               Inventories are summarized by major classification as follows:
                                          December 31,      June 30,
                                          ---------------------------
                                             2001             2001
                                          ----------       ----------
Raw materials, parts and supplies         $3,434,757       $2,750,510
Work in process                              481,612          749,938
Finished goods                               687,385          777,912
                                           ----------       ----------
                                           4,603,754       $4,278,360
                                           ==========      ==========
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) CONVERTIBLE PREFERRED SHARES - SERIES B

On December 29, 2000 the Company borrowed $3,000,000 from Kew Court LLC ("Kew
Court") in accordance with a promissory note bearing interest at the rate of
2.025% per month and due and payable on or before December 29, 2001. The
promissory note and related security agreement were collateralized by the
Company's inventory and accounts receivable and further provided (amongst other
matters) that in the event of default the principal sum due on the note shall
bear interest (commencing December 29, 2001) at the rate of 5% per 30 calendar
day period as liquidated damages. Shortly prior to the December 29, 2001 due
date on the promissory note (and with no portion of the principal or interest
thereon having been paid) the Company entered into negotiations with Kew Court
in an effort to resolve this matter through means other than cash repayment.
Such negotiations concluded with Kew Court agreeing to cancel the aforesaid
indebtedness evidenced by the promissory note inclusive of all interest due
thereunder and further agreed to release the security interests which served as
collateral thereunder in exchange for the Company issuing to Kew Court
convertible preferred shares having a face value approximating $3,800,000 with
the right to convert same into 18,750,000 restrictive shares of Company common
stock. The convertible preferred shares do not bear any interest nor does the
Company have any obligation to file a Registration Statement to register either
the convertible preferred shares or the underlying shares of Company common
stock heretofore referred to. The Company has the right to repurchase the
aforesaid underlying shares of common stock through September 30, 2002 at an
agreed upon price of $0.80 per share.

                                       F 7
<PAGE>

Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS

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

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

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

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

         Net sales amounted to $4,033,523 for the three-month period ended
December 31, 2001, compared to $4,711,929 for the three-month period ended
December 31, 2000, an decrease of $678,405, or 14.4% form the three-month period
ended December 31, 2000.

Sales of ddR-Systems increased by 7.6% or $227,661, service revenue increased by
28.4% or $110,214 and conventional x-ray increased by 181.3% or $46,430. The
14.4% decrease in net sales was mainly due to a decrease in sale of Information
Solution by 95.7% or $899,856 and conventional OEM-Business decreasing by 45.3%
or $162,853.

The Company's overall sales and marketing strategy includes the use of a direct
sales force, distribution agreements with other medical imaging companies, local
distributors and OEM agreements. The decrease of Information Solution is due to
the Companies focus in the USA, the single largest market for the Company, to
sell its ddR-products mainly through distribution agreements which are providing
similar services to the End User, whereas the decease in conventional
OEM-Business is due to the Company's conscious effort of promoting sales of

                                       3

<PAGE>

ddR-Systems with a corresponding decline of interest in sales of conventional
x-ray and conventional OEM-Business.

         Gross profit amounted to $888,777 or 22.03% of net sales for the
three-month period ended December 31, 2001, compared to $1,174,838 or 24.93% of
net sales for the three-month period ended December 31, 2000.

The decrease in gross profit as a percentage of net revenues is attributable to
a fraction of higher unit sales, a lower average selling price due to the
concentration on strong ddR-distribution agreements versus direct sales and the
increase of ddR Sales as a percentage of total sales.

      Operating expenses were $4,615,824, or 114.44% of net revenues, for the
three-month period ended December 31, 2001, compared to $3,944,794, or 83.72% of
net revenues for the three-month period ended December 31, 2000.

 The principle items were salaries (net of officers and directors compensation)
of $906,917 or 22.48% of net sales for the three-month period ended December 31,
2001 compared to $1,114,379 or 23,65% of net sales for the three-month period
ended December 31, 2000 and selling expenses of $1,434,016 or 35.55% of net
sales for the three-month period ended December 31, 2001 compared to $1,265,161
or 26.85% of net sales for the three-month period ended December 31, 2000.
Research and development expenses were $1,333,264 or 33.05% of net sales for the
three-month period ended December 31, 2001 compared to $726,842 or 15.43% of net
sales for the three-month period ended December 31, 2000.

Officers and directors compensation was $ 194,028 or 4.81% of net sales for the
three-month period ended December 31, 2001 compared to $183,916 or 3.9% of net
sales for the three-month period ended December 31, 2000. General and
administrative expenses were $191,403 or 4.75% of net sales for the three-month
period ended December 31, 2001 compared to $166,263 or 3.53% of net sales for
the three-month period ended December 31, 2000 and other operating expenses were
$141,123 or 3.5% of net sales for the three-month ended December 31, 2001
compared to $157,353 or 3.34% of net sales for the three-month ended December
31, 2000.

The increase of Research and Development is due to the development of the
expert(TM)4000. The expert(TM)4000 is a comprehensive system management and
communication system for all ddR systems, linking SwissVision(R) with the
Company's expert(TM)-center. This state of the art control console offers the
ultimate in workflow improvement as well as easier and faster access to all
expert(TM)-center services.

         Interest expenses decreased to $218,875 for the three-months ended
December 31, 2001 compared to $428,180 for the three-months ended December 31,
2000. This decrease is primarily due to the lack of interest expense for
amortization of Debenture issuance cost and Conversion Benefit in the
three-month period ended December 31, 2001.

         (b)SIX-MONTH PERIOD ENDED DECEMBER 31, 2001 COMPARED TO SIX-MONTH
         PERIOD ENDED DECEMBER 31, 2000

         Net sales amounted to $8,201,848 for the six-month period ended
December 31, 2001, compared to $9,640,754 for the six-month period ended
December 31, 2000, a decrease of $1,438,906, or 14.9% form the six-month period
ended December 31, 2000.

Sales of ddR-Systems increased by 10.1% or $627,882, service revenue increased
by 23.9% or $166,330 and conventional x-ray increased by 27.5% or $29,898. The
14.9% decrease in net sales was mainly due to a decrease in sale of Information
Solution by 95.1% or $1,538,842 and conventional OEM-Business decreasing by
72.5% or $724,174.

                                       4
<PAGE>

The Company's overall sales and marketing strategy includes the use of a direct
sales force, distribution agreements with other medical imaging companies, local
distributors and OEM agreements. The decrease of Information Solution is due to
the Companies focus in the USA, the single largest market for the Company, to
sell its ddR-products mainly through distribution agreements which are providing
similar services to the End User, whereas the decease in 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 $2,079,787 or 25.36% of net sales for the
six-month period ended December 31, 2001, compared to $2,365,149 or 24.53% of
net sales for the six-month period ended December 31, 2000.

The increase in gross profit as a percentage of net revenues is attributable to
a fraction of higher unit sales, a lower average selling price due to the
concentration on strong ddR-distribution agreements versus direct sales and the
increase of ddR Sales as a percentage of total sales.

      Operating expenses were $7,548,104, or 92.03% of net revenues, for the
six-month period ended December 31, 2001, compared to $7,127,497, or 73.93% of
net revenues for the six-month period ended December 31, 2000.

 The principle items were salaries (net of officers and directors compensation)
of $1,824,645 or 22.25% of net sales for the six-month period ended December 31,
2001 compared to $2,105,732 or 21.84% of net sales for the six-month period
ended December 31, 2000 and selling expenses of $2,122,002 or 25.87% of net
sales for the six-month period ended December 31, 2001 compared to $2,106,124 or
21.85% of net sales for the six-month period ended December 31, 2000. Research
and development expenses were $1,882,455 or 22.95% of net sales for the
six-month period ended December 31, 2001 compared to $1,338,489 or 13.88% of net
sales for the six-month period ended December 31, 2000.

Officers and directors compensation was $342,379 or 4.17% of net sales for the
six-month period ended December 31, 2001 compared to $328,908 or 3.41% of net
sales for the six-month period ended December 31, 2000. General and
administrative expenses were $412,347 or 5.03% of net sales for the six-month
period ended December 31, 2001 compared to $351,880 or 3.65% of net sales for
the six-month period ended December 31, 2000 and other operating expenses were
$231,864 or 2.83% of net sales for the six-months ended December 31, 2001
compared to $236,217 or 2.45% of net sales for the six-month ended December 31,
2000.

The increase of Research and Development is due to the development of the
expert(TM)4000. The expert(TM)4000 is a comprehensive system management and
communication system for all ddR systems, linking SwissVision(R) with the
Company's expert(TM)-center. This state of the art control console offers the
ultimate in workflow improvement as well as easier and faster access to all
expert(TM)-center services.

         Interest expense decreased to $424,003 for the six-months ended
December 31, 2001 compared to $1,573,769 for the six-months ended December 31,
2000. This decrease is primarily due to the lack of interest expense for
amortization of Debenture issuance cost and Conversion Benefit in the six-month
period ended December 31, 2001.


                                       5
<PAGE>


FINANCIAL CONDITION

December 31, 2001 compared to June 30, 2001

         Total assets of the Company on December 31, 2001 decreased by
$1,229,040 to $18,577,195 from $19,806,235 on June 30, 2001, primarily due to
the decrease in current assets. Current assets decreased by $815,998 to
$7,941,662 on December 31, 2001 from $8,757,660 on June 30, 2001. The decrease
in current assets is attributable to the decrease in cash and cash
equivalents of $402,874, the decrease of accounts receivable of $761,616
slightly offset by the increase in inventories of $325,394 and the increase in
prepaid expenses and sundry receivables of $23,098.

Other assets decreased $292,865 to $4,337,957 on December 31, 2001 from
$4,630,822 on June 30, 2001. The decrease is primarily attributable to the
amortization of the licensing agreement, patents & trademark and the goodwill
offset by an increase in software development cost.

         On December 31, 2001, the Company had total liabilities of $14,837,443
compared to $13,855,794 on June 30, 2001. On December 31, 2001, current
liabilities were $14,796,539 compared to $13,845,283 on June 30, 2001. Working
capital at December 31, 2001 was $(6,854,877) compared to $(5,087,623) at June
30, 2001.

CASH FLOW AND CAPITAL EXPENDITURES SIX MONTH PERIOD ENDED DECEMBER 31, 2001
COMPARED TO SIX MONTH PERIOD ENDED DECEMBER 31, 2000.

         Cash used for operating activities for the six months ended December
31, 2001 was $2,043,095 compared to $2,308,589 for the six months ended December
31, 2000. Cash used for investing activities was $354,306 for the six months
ended December 31, 2001 compared to $388,064 for the six months ended December
31, 2000. Cash flow from financing activities for the six months ended December
31, 2001 was $2,397,964 compared to cash flow of $1,599,723 for six months ended
December 31, 2000.


LIQUIDITY

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

         The availability of a 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.

         On December 29, 2000 the Company borrowed $3,000,000 from Kew Court LLC
("Kew Court") in accordance with a promissory note bearing interest at the rate
of 2.025% per month and due and payable on or before December 29, 2001. The
promissory note and related security agreement were collateralized by the
Company's inventory and accounts receivable and further provided (amongst other
matters) that in the event of default the principal sum due on the note shall
bear interest (commencing December 29, 2001) at the rate of 5% per 30 calendar
day period as liquidated damages. Shortly prior to the December 29, 2001 due
date on the promissory note (and with no portion of the principal or interest

                                       6

<PAGE>

thereon having been paid) the Company entered into negotiations with Kew Court
in an effort to resolve this matter through means other than cash repayment.
Such negotiations concluded with Kew Court agreeing to cancel the aforesaid
indebtedness evidenced by the promissory note inclusive of all interest due
thereunder and further agreed to release the security interests which served as
collateral thereunder in exchange for the Company issuing to Kew Court
convertible preferred shares having a face value approximating $3,800,000 with
the right to convert same into 18,750,000 restrictive shares of Company common
stock. The convertible preferred shares do not bear any interest nor does the
Company have any obligation to file a Registration Statement to register either
the convertible preferred shares or the underlying shares of Company common
stock heretofore referred to. The Company has the right to repurchase the
aforesaid underlying shares of common stock through September 30, 2002 at an
agreed upon price of $0.80 per share.

         As a result of the above, the Company became obligated to issue to
Hillcrest Avenue LLC ("Hillcrest") additional restrictive shares of its common
stock (without any obligation to register same on behalf of Hillcrest) as
consideration for Hillcrest agreeing to waive any and all anti-dilution
provisions contained in a separate agreement between the Company and Hillcrest
entered into on December 29, 2000 and filed with the SEC on Form 8-K on January
12, 2001. Those additional shares issued to Hillcrest provide for the Company's
President having the exact same voting power over these newly issued shares as
is held by the Company's President with respect to approximately 52,500,000
shares heretofore issued to Hillcrest in accordance with the aforesaid December
29, 2000 Company agreement with Hillcrest.

EFFECT OF CURRENCY ON RESULTS OF OPERATIONS

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

Item 3. Quantitative and Qualitative Disclosures About Market Risk

         Not Applicable

                                       7
<PAGE>



                                     PART II

                                OTHER INFORMATION

Item 1.  Legal Proceedings

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

B. Dispute with Elscint Ltd. In August 1998 the Company entered into a global
distributorship agreement for its ddRMulti with Elscint Ltd. of Haifa to sell
and service such product in 14 countries in Europe, Canada, South America and
Africa. Soon thereafter almost all of the assets of Elscint Ltd. were sold to
Picker International and GE Medical Systems respectively. Neither Picker
International nor GE Medical Systems have executed or honored the
distributorship agreement as of the date hereof and therefore the Company was
unable to sell the anticipated 75 ddRMulti (partially anticipated to be sold
through Elscint Ltd.) within the fiscal year 98/99 as originally planned. The
Company is currently contemplating instituting legal proceedings against Elscint
Ltd. absent receipt of acceptable settlement offer.


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, 2001 on January 25, 2002. With proxies being received for
approximately 94% of all shares entitled to vote, stockholders elected each of
the 5 nominees to the Company's Board of Directors by an overwhelming majority,
approximating 99%, of all votes cast.

         Stockholders also approved (a) the appointment of Feldman Sherb & Co.,
P.C. as independent auditors for fiscal year ended June 30, 2002 (b)the proposal
to increase the authorized shares of common stock of the Company to 150,000,000
and (c)the proposal to reincorporate in the state of Delaware.

         The Company currently intends to hold its Annual Meeting of
Stockholders for fiscal year ended June 30, 2002 during the fourth quarter of
the current calendar year.

Item 5. OTHER INFORMATION

                  None

                                       8

<PAGE>

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, 2001 filed
          January 14, 2002.




                                       9
<PAGE>






                                   SIGNATURES

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

                                   SWISSRAY INTERNATIONAL, INC.

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

Date:  February 12, 2002



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