<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
Amendment No 1 to
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: September 30, 1997
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)
200 East 32nd Street, Suite 34-B, New York, New York 10016
(Address of principal executive offices) (Zip Code)
New York (212) 545 0095 Switzerland 011 41 41 919 90 50
(Registrant's telephone number, including area code)
(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 March 6, 1998 is 28,333,749 shares, all of one class of $.01 par
value common stock.
<PAGE> 2
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 3-5
Item 3. Quantitative and Qualitative Disclosures About Market Risk 6
PART II
Item 1. Legal Proceedings 6
Item 2. Changes in Securities and Use of Proceeds 6
Item 3. Defaults Upon Senior Securities 6
Item 4. Submission of Matters to a Vote of Security Holders 6
Item 5. Other Information 6
Item 6. Exhibits and Reports on Form 8-K 7
Signatures 8
2
<PAGE> 3
SWISSRAY INTERNATIONAL INC.
CONSOLIDATED BALANCE SHEET
ASSETS
<TABLE>
<CAPTION>
September 30, June 30,
1997 1997
---- ----
(Restated) (Restated)
(Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 5,181,359 $3,091,307
Accounts receivable, net of allowance for doubtful
accounts of $ 107,553 (September 1997) and $ 148,390 (June 1997) 5,029,070 5,154,794
Inventories 4,678,372 3,911,107
Prepaid expenses and sundry receivables 2,051,392 1,936,138
--------- ---------
TOTAL CURRENT ASSETS 16,940,193 14,093,346
---------- ----------
PROPERTY AND EQUIPMENT, at cost, net of accumulated depreciation
of $ 396,881. (September 1997) and $ 320,110 (June 1997) 4,388,463 4,336,617
--------- ---------
OTHER ASSETS
Due from stockholders 351 69,587
Loan receivable 20,917 17,396
Accounts receivable - long-term, net of allowance of $ 818,105
(September 1997) and $ 814,178 (June 1997) for doubtful account 159,574 240,912
Licensing agreement, net of accumulated amortization of
$ 993.315 (September 1997) and $ 869,151 (June 1997) 3,973,260 4,097,424
Patents and trademarks, net of accumulated amortization of
$ 61,468 (September 1997) and $ 54,941 (June 1997) 220,899 206,003
Capitalized computer software, net of accumulated amortization of
$ 51,348 (September 1997) and $ 34,512 (June 1997) 351,958 317,524
Organization cost, net of accumulated amortization of
$ 2,801 (September 1997) and $ 2,464 (June 1997) 5,584 5,921
Debt Issuance cost, net of accumulated amortization of $746,036
(September 1997) and $ 200,566 (June 1997) 389,588 435,319
Security deposits 39,656 43,728
Note receivable - long-term 513,643 513,643
Goodwill, net of accumulated amortization of $ 19,519 (September
1997) and $ 9,023 (June 1997) 400,318 410,814
TOTAL OTHER ASSETS 6,075,748 6,358,271
--------- ---------
TOTAL ASSETS $ 27,404,405 $ 24,788,234
============ ============
</TABLE>
F1
<PAGE> 4
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
<S> <C> <C>
CURRENT LIABILITIES
Current maturities of long-term debt 158,441 $ 243,135
Notes payable - banks 2,960,478 3,834,706
Notes payable - short-term 36,291 -
Loan payable 133,099 133,008
Accounts payable 5,221,685 5,336,749
Accrued expenses 800,590 1,401,938
Customer deposits 181,431 170,436
Due to stockholders and officers - 139,826
Due to Employees 39,590 -
------
TOTAL CURRENT LIABILITIES 9,531,606 11,259,798
--------- ----------
Convertible Debentures 10,135,500 6,000,000
Conversion benefit (656,961) (689,441)
-------- --------
Net Convertible Debentures 9,478,539 5,310,559
--------- ---------
LONG-TERM DEBT, less current maturities 993,995 524,689
------- -------
STOCKHOLDERS' EQUITY
Common stock 206,212 196,944
Additional paid-in capital 38,229,806 35,780,409
Accumulated deficit (29,541,702) (26,855,631)
Accumulated other comprehensive loss (1,494,052) (1,428,534)
---------- ----------
TOTAL STOCKHOLDERS' EQUITY 7,400,265 7,693,188
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 27,404,405 $ 24,788,234
============ ============
</TABLE>
F2
<PAGE> 5
SWISSRAY INTERNATIONAL INC.
CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended
September 30,
-------------------------------------
1997 1996
(Restated) (Restated)
(Unaudited) (Unaudited)
NET SALES $ 5,258,903 $ 2,467,175
COST OF SALES 3,313,091 1,189,257
-------------------------------------
GROSS PROFIT 1,945,812 1,277,918
-------------------------------------
<S> <C> <C>
OPERATING EXPENSES
Officers and directors compensation 95,735 127,211
Salaries 621,677 502,164
Selling 488,031 194,379
Research and development 473,839 499,522
General and administrative 212,180 868,302
Other operating expenses 135,877 331,902
Depreciation and amortization 198,723 172,958
-------------------------------------
TOTAL OPERATING EXPENSES 2,226,061 2,696,438
-------------------------------------
LOSS BEFORE OTHER INCOME (EXPENSES)
AND INCOME TAXES (280,249) (1,418,520)
Other Income 138,499 19,898
Interest Expenses (2,694,153) (29,982)
-------------------------------------
OTHER INCOME (EXPENSES) (2,555,654) (10,084)
-------------------------------------
LOSS FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES AND
EXTRAORDINARY ITEMS (2,835,903) (1,428,604)
Income Tax provision (Benefit) 876 -
-------------------------------------
LOSS FROM CONTINUING OPERATIONS
BEFORE EXTRAORDINARY ITEMS (2,836,780) (1,428,604)
Extraordinary items 150,708 -
-------------------------------------
NET LOSS $(2,686,072) $(1,428,604)
=====================================
LOSS PER COMMON SHARE
Loss from continuing operations (0.14) (0.10)
Extraordinary items 0.01 -
NET LOSS (0.13) (0.10)
=====================================
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 20,076,311 14,185,064
=====================================
</TABLE>
F3
<PAGE> 6
<TABLE>
<CAPTION>
Three Months Ended
September 30,
--------------------------------
1997 1996
--------------------------------
(Restated) (Restated)
(Unaudited) (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net loss $(2,686,072) $(1,428,604)
Adjustment to reconcile net loess to net
cash from operating activities
Depreciation and amortization 235,131 172,958
Provision for bad debts (36,910) (9,968)
Financing costs incurred 91,425 -
Operating expenses through issuance of stock options
Issuance of common stock in lieu of - 588,846
interest payments 10,947
Interest expense on Debt issuance cost and 2,508,382
conversion benefit
Debt extinguishment gain (150,708)
(Increase) decrease in operating assets:
Accounts receivable 166,561 1,303,848
Accounts receivable - others 77,411 -
Inventories (767,265) (843,472)
Prepaid expenses and sundry receivables (115,254) (457,291)
Increase (decrease) in operating liabilities:
Accounts payable (115,064) (1,499,529)
Accounts payable - affiliates 0 (1,541)
Accrued expenses (601,348) 338,796
Customers deposits 10,995 (25,281)
--------------------------------
NET CASH USED BY OPERATING ACTIVITIES (1,371,769) (1,861,238)
--------------------------------
CASH FLOW FROM INVESTING ACTIVITIES
Acquisition of property and equipment (179,888) (82,334)
Patents and trademarks (21,423) (1,626)
Security deposits 4,072 (31)
Loans receivable (3,521) -
Repayments from (advances to) affiliates - (149,222)
--------------------------------
NET CASH USED BY INVESTING ACTIVITIES (200,760) (233,213)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term borrowings 36,382 3,151,023
Proceeds from long-term borrowings 469,306 -
Principal payment of short-term borrowings (958,923) (2,069,828)
Principal payment of long-term borrowings - (511,101)
Issuance of common stock for cash 3,873,000 -
Repayment from (advances to) stockholders and officers 170,173 -
--------------------------------
CASH PROVIDED BY FINANCING ACTIVITIES 3,589,938 570,094
--------------------------------
EFFECT OF EXCHANGE RATE ON CASH 72,643 845
--------------------------------
NET INCREASE (DECREASE) IN CASH 2,090,052 (1,523,512)
CASH AND CASH EQUIVALENT - beginning of period 3,091,307 3,252,658
--------------------------------
$ 5,181,359 $ 1,729,173
================================
</TABLE>
F4
<PAGE> 7
<TABLE>
<CAPTION>
Cumulative
Common Stock Additional Foreign
------------------------------ Paid-in Accumulated Currency
Shares Amount Capital Deficit Adjustment Total
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE JULY 1, 1997 (Restated) 19,694,433 $ 196,944 $35,780,409 $(26,855,631) $(1,428,534) $ 7,693,188
Issuance of common stock for cash 818,814 8,188 1,050,905 1,059,093
Issuance of common stock in lieu of
interest payments 7,974 80 10,867 10,947
Stock options exercised for cash 100,000 1,000 72,000 73,000
Beneficial conversion feature of
convertible debentures 1,250,000 1,250,000
Early extinguishment of Debt 65,625 65,625
Foreign currency translation adjustment (65,518) (65,518)
Net loss (2,686,072) (2,686,072)
20,621,221 $ 206,212 $38,229,806 $(29,541,702) $(1,494,052) $ 7,400,265
===========================================================================================
</TABLE>
F5
<PAGE> 8
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
(1)The financial statements included herein have been prepared by the
Registrant, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to such
rules and regulations, although the Registrant believes that the disclosures are
adequate to make the information presented not misleading. It is suggested that
these condensed consolidated financial statements be read in conjunction with
the financial statements and notes thereto included in the Registrant's annual
report on Form 10-K-A for the fiscal year ended June 30, 1997.
(2)In the opinion of management, the accompanying unaudited consolidated
financial statements contain all adjustments, consisting of only a normal and
recurring nature, necessary to present fairly the financial position of the
Registrant as of September 30, 1997 and the results of operations and cash flows
for the interim period presented. Operating results for the three months ended
September 30, 1997 are not necessarily indicative of the results to be expected
for the full year ending June 30, 1998.
(3)INVENTORIES
<TABLE>
<CAPTION>
Inventories are summarized by major classification as follows:
September 30, June 30,
-----------------------------------
1997 1997
------------ -----------
<S> <C> <C>
Raw materials, parts and supplies $3,862,229 $2,632,256
Work in process 277,652 468,204
Finished goods 538,491 810,647
---------- ----------
$4,678,372 $3,911,107
========== ==========
</TABLE>
Inventories are stated at lower of cost or market, with cost being determined on
the first-in, first-out (FIFO) method. Inventory cost include material,
labor, and overhead.
F6
<PAGE> 9
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
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
AddOn Multi System, reliance on a single product, reliance on large customers,
risks associated with the Company's international operations, currency
fluctuations, the risk of new and different legal and regulatory requirements,
governmental approvals, tariffs and trade barriers, risks associated with
competition and technological innovation by competitors, dependence on patents
and proprietary technology, general economic conditions and conditions in the
Healthcare industry, reliance on key management, limited manufacturing history
with respect to the AddOn-Multi-System, dependence on sole source suppliers,
future capital needs and uncertainty of additional financing, potential recalls
and product liability, dilution, effects of outstanding convertible debentures,
limited public market, liquidity, possible volatility of stock price, recently
adopted new listing standards for NASDAQ securities and environmental matters.
The following discussion and analysis should be read in conjunction with
the Consolidated Financial Statements, related notes and other information
included in this first amendment to the quarterly report on Form 10-Q.
GENERAL
On October 17, 1997, the Company acquired substantially all of the assets
of Service Support Group LLC, located in Gig Harbor, Washington ("SSG"). Since
its formation on October 16, 1996, SSG has been in the Business of selling
diagnostic imaging equipment and providing services related thereto in the
markets on the West Coast of the United States. On October 17, 1997, SSG's three
co-owners, Kenneth Montler, Michael Harle and Gary Durday signed three year
employment agreements with the Company. Kenneth Montler has been appointed Chief
Executive Officer of Swissray Medical Systems, Inc. Gary Durday has been
appointed Chief Financial Officer of Swissray Medical Systems, Inc. and Michael
Harle has been appointed Chief Executive Officer of Swissray Healthcare, Inc.,
which is intended to be engaged in providing maintenance management, capital
planning and other services to hospital imaging departments and imaging centers.
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1997 VERSUS
THREE MONTHS ENDED SEPTEMBER 30, 1996
3
<PAGE> 10
Net Revenues
Net sales amounted to $5.258.903 for the three months ended September 30, 1997,
an increase of $2.791.728, or 113.15%, from the prior year three months ended
September 30, 1996.
The increase in net sales was partially due to the acquisition of Empower on
April 1, 1997. The Company could also increase sales in Swiss Francs made under
the Philips OEM agreement by about 252%. There were no sales of Elscint
Equipment during the three months ended September 30, 1997 compared to $ 411.400
during the three months ended September 30, 1996.
Gross Profit:
Gross profit increased by $667.894, or 52.3%, to $1.945.812 in the three months
ended September 30, 1997 from $1.277.918 in the prior year period. Gross profit
as a percentage of net revenues decreased to 37.0% in the three months ended
September 30, 1997 from 51.8% in the same prior year period. The decrease in
gross profits as a percentage of net revenues is attributable to the fact that a
major part of the sales was made with products which have a relatively lower
margin during the three month ended September 30, 1997 compared to the
comparative period ended September 30, 1996 where Sales of high margin products
and revenue from servicing of x-ray equipment with high margin dominated.
Operating Expenses
Operating expenses decreased by $470,377, or 17.4%, to $2,226,061 or 42.3% of
net revenues, in the three months ended September 30, 1997, from $2,696,438, or
109.3% of net revenues for the three month period ended September 30, 1996. The
single largest items of operating expenses continued to be represented by the
aggregate of officers and directors compensation and salaries of $717,412 or
13.6% of net sales for the three months ended September 30, 1997 compared to
$629,375 or 25.5% of net sales for the three months period ended September 1996.
Selling expenses were $488,031 or 9.3% for the three months ended September 30,
1997 compared to $194,379 or 7.8% for the three months ended September 30, 1996.
The increase in selling expenses was partially due to the selling expenses of
Empower, Inc. And Swissray Medical Systems, Inc. which both were not
subsidiaries of the Company during the three months ended September 30, 1996.
Research and development expenses decreased $ 25,683to $ 473,839 or 9.0% of net
sales for the three months ended September 30, 1997 compared to $ 499,522 or
20.2% of net sales for the three months ended September 30, 1996. Expenses were
partially for the development of a new Floating Table to be sold together with
the AddOn Multi System. Interest expenses increased to $2,694,153 for the three
month ended September 30, 1997 compared to $29,982 for the three month ended
September 30, 1996. This increase is primarily due to the interest expense for
amortization of Debenture issuance cost and Conversion Benefit. Gain on early
extinguishment of Debt was $150,708 for the three month ended September 30, 1997
compared to $-0- for the three month ended September 30, 1996. The
extinguishment gain resulted from refinancing of Convertible debentures.
FINANCIAL CONDITION
Total assets of the Company on September 30, 1997 increased by $2,616,171
to $27,404,405 from $24,788,234 on June 30, 1997, primarily due to the increase
of Current Assets. Current Assets increased $2,846,847 to $16,940,193 on
September 30, 1997 from $14,093,346 on June 30, 1997. The increase in current
assets is primarily attributable to the increase in cash. Other Assets
4
<PAGE> 11
decreased $282,523 to $6,075,748 on September 30, 1997 from $6,358,271 on June
30, 1997.
On September 30, 1997, the Company had total liabilities of $20,004,140
compared to $17,095,046 on June 30, 1997. On September 30, 1997, current
liabilities were $9,531,606 compared to $11,259,798 on June 30, 1997. The
decrease in current liabilities is primarily due to the decrease of notes
payable to banks and accrued expenses. Working capital at September 30, 1997 was
$7,408,588 compared to $2,833,548 at June 30, 1997.
CASH FLOW AND CAPITAL EXPENDITURES
Cash used by operating activities for the quarter ended September 30, 1997
decreased to $1,371,769 from $1,861,238 for the quarter ended September 30, 1996
and cash used by investing activities decreased to $200,760 for the quarter
ended September 30, 1997 from $233,213 for the quarter ended September 30, 1996.
Cash flow from financing activities for the quarter ended September 30, 1997 was
$3,589,938 compared to $570,094 for the quarter ended September 30, 1996.
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 improvement of the new Hochdorf facility,
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 the necessary funds to finance these expenditures depends on
the Company's ability to obtain (i) equity or debt financing to the extent
necessary and (ii) a sufficient future cash flow which in turn depends on the
marketability of the Company's AddOn-Multi-System. There can be no assurance
whether or not such financing or sufficient future cash flow will be available.
On August 19, 1997, the Company issued $5,000,000 aggregate principal
amount of 6% convertible debentures (the "Convertible Debentures"), convertible
into Common Stock of the Company. Placement Agent for such convertible debenture
was Rolcan Finance Ltd. The aggregate offering price of the Convertible
Debentures was $5,000,000. After deducting underwriting discounts, commissions
and escrow fees in the aggregate amount of $681,250 the Company received a net
amount of $4,318,750. All Convertible Debentures were issued to accredited
investors as defined in Rule 501(a) of Regulation D promulgated under the Act
("Regulation D") and the Company has received written representations from each
investor to that effect. Fifty percent of the face amount of the Convertible
Debentures are convertible into shares of Common Stock of the Company at any
time after November 3, 1997 and the remaining 50% of the face value of the
Convertible Debentures are convertible into shares of Common Stock of the
Company after December 3, 1997, in each case at a conversion price equal to 80%
of the average Closing bid price for the five trading days preceding the date of
conversion. Any Convertible Debentures not so converted are subject to mandatory
conversion by the Company on the 36th monthly anniversary of the date of
issuance of the Convertible Debentures.
EFFECT OF CURRENCY ON RESULTS OF OPERATIONS
The result of operations and the financial position of the Company's
subsidiaries outside of the United States is reported in the relevant foreign
currency (primarily in Swiss Francs) and then translated into US dollars at the
applicable foreign exchange rate for inclusion in the Company's consolidated
financial statements. Accordingly, the results of operations of such
subsidiaries as reported in US dollars can vary significantly as a result of
changes in currency exchange rates (in particular the exchange rate between the
Swiss Franc and the US dollar).
5
<PAGE> 12
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not Applicable
PART II OTHER INFORMATION
Item 1. Legal Proceedings
On or about July 7, 1995, the Company commenced litigation against a
former officer and director of a corporate predecessor alleging certain
improprieties on the part of such officer and seeking monetary compensation as a
result thereof. Such defendant responded (in September 1995) by filing certain
affirmative defenses and counterclaims against the Company and others and
subsequently brought (together with certain of his family members) an action
against the Company in the same court which action raised issues and claims
substantially similar to those raised in the aforesaid counterclaims. The two
actions were assigned to the same judge and the Company moved successfully to
dismiss both the counterclaims and the second action. Leave to replead both
claims was granted and amended counterclaims and an amended complaint were
served and filed and the Company again successfully moved to dismiss both
pleadings. Following the most recent dismissal, counsel for the Company and the
aforesaid former officer entered into settlement discussions. Both the Company
and defendant have agreed to dismiss all claims and counterclaims against each
other, and formal written releases have been exchanged.
On or about October 15, 1997, the Registrant and Swissray Healthcare, Inc.
were served with a complaint by a company engaged in the Business of providing
services related to imaging equipment alleging benefit from breach of fiduciary
and contractual duties and misappropriation of trade secrets by certain former
employees of such competitor. Such company also obtained a preliminary
injunction and a temporary restraining order against the Registrant and Swissray
Healthcare, Inc. On November 10, 1997, the preliminary injunction and the
temporary restraining order were vacated. The Company denies the allegations,
intends to vigorously defend the litigation, and believes the ultimate outcome
thereof will not have a material adverse effect upon the Company's results of
operations or financial position. The Company believes that the complaint is
without merit.
Item 2. CHANGES IN SECURITIES
Not applicable
Item 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable
Item 4. SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable
Item 5. OTHER INFORMATION
The financial statements for the fiscal year ended June 30, 1997 and the three
months ended September 30, 1997 and 1996 (unaudited) have been restated to
properly record the accounting treatment of certain beneficial conversion
features and debt issuance cost of convertible debentures issued and the
6
<PAGE> 13
accounting for the value of stock options granted during the year ended June 30,
1997 and three months ended September 30, 1997 and 1996 (unaudited). The net
effect of such restatements on the June 30, 1997 financial statements resulted
in an increase in total assets of $435,619, a decrease in total liabilities of
$689,141, an increase in stockholders equity of $1,124,760 and an increase in
the net loss of $588,846 for the three months ended September 30, 1996
(unaudited). The net effect of such restatements on the September 30, 1997
financial statements (unaudited) resulted in an increase in total assets of
$389,588, a decrease in total liabilities of $299,183, an increase in
stockholders equity of $688,771 and an increase in the net loss of $2,492,883.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
2.1 Asset Purchase Agreement, dated as of October 17, 1997 by and
among Swissray Medical Systems, Inc., Swissray International,
Inc., Service Support Group, LLC, Gary Durday, Michael Harle and
Kenneth Montler (incorporated by reference to Exhibit 2.1 of the
Registrant's Current Report on Form 8-K, filed November 4, 1997).
2.2 Registration Rights Agreement, dated as of October 17, 1997, by
and among Swissray International, Inc., Service Support Group,
LLC, Gary Durday, Michael Harle and Kenneth Montler (incorporated
by reference to Exhibit 2.2 of the Registrant's Current Report on
Form 8-K, filed November 4, 1997).
(b) Reports on Form 8-K
Form 8-K, dated July 31, 1997 (August 20, 1997) with respect to the
issuance by the Registrant of $4,262,500 of convertible debentures in reliance
upon Regulation S under the Securities Act of 1933.
Form 8-K, dated November 4, 1995 with respect to the acquisition of
Service Support Group LLC.
7
<PAGE> 14
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 LAUPPER
--------------------------------
Ruedi G. Laupper, Chairman of the
Board of Directors, President and
Chief Executive Officer
Date: March 13, 1998
8
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 5,181,359
<SECURITIES> 0
<RECEIVABLES> 5,136,623
<ALLOWANCES> 107,553
<INVENTORY> 4,676,372
<CURRENT-ASSETS> 16,940,193
<PP&E> 4,784,344
<DEPRECIATION> 396,881
<TOTAL-ASSETS> 27,404,105
<CURRENT-LIABILITIES> 9,531,606
<BONDS> 10,427,543
0
0
<COMMON> 206,212
<OTHER-SE> 7,194,053
<TOTAL-LIABILITY-AND-EQUITY> 27,404,405
<SALES> 5,258,903
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</TABLE>
