<PAGE> 1
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, 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:
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The number of shares outstanding of each of the issuer's class of common stock,
as of the latest practicable date.
The number of shares outstanding of each of the registrant's classes of common
stock, as of February 11, 1997 is 28,322,286 shares, all of one class of $.01
par value common stock.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page No.
PART I
<S> <C> <C>
Item 1. Financial Statements*
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Item 3. Market Prices and Dividend Policy 7
PART II
Item 1. Legal Proceedings 8
Item 2. Changes in Securities 9
Item 3. Defaults Upon Senior Securities 9
Item 4. Submission of Matters to a Vote of Security Holders 9
Item 5. Other Information 9
Item 6. Exhibits and Reports on Form 8-K 9
Signatures 10
</TABLE>
* See explanations in Part I, Item 2 and Part II, Item 5
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Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
The Registrant has recently discovered that the audited financial
statements for the fiscal year ended June 30, 1997 and the unaudited financial
statements for the quarter ended September 30, 1997 as filed with the Securities
and Exchange Commission may need to be restated. The reason therefor is the
treatment of certain convertible debentures, which were not accounted for
following the accounting standards set forth in the March 13, 1997 SEC Staff
announcement made at the March 13, 1997 EITF meeting with respect to convertible
debentures with beneficial conversion features. The Registrant has also recently
discovered that certain expense items classified as "extraordinary expenses" in
the Registrant's audited income statements for the fiscal year ended June 30,
1996 may need to be reclassified as "ordinary expenses". As of the date hereof,
the Registrant could not definitively determine whether additional adjustments
to such financial statements may be necessary. The Registrant is diligently
resolving these issues with the assistance of the Registrant's current and
previous independent accountants and will file restated financial statements for
the foregoing periods and the quarter ended December 31, 1997 and any necessary
amendments to the Registrant's filings with the Securities and Exchange
Commission as soon as practicable. Due to the recent discovery of these issues
and the announced replacement of the Registrant's chief financial officer, the
Company has not been able to restate the financial statements for the periods
indicated above and to prepare the financial statements for the quarter ended
December 31, 1997 on a timely basis.
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
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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 the availability of necessary additional
financing, potential recalls and product liability, dilution, effects of
outstanding convertible debentures, limited public market, liquidity, possible
volatility of stock price, proposed new listing standards for NASDAQ securities
and environmental matters.
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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. Both the Company and the 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.
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Item 2. CHANGES IN SECURITIES
Between November 26, 1997 and December 11, 1997, the Registrant issued
$5,158,285 aggregate principal amount of 8% convertible debentures (the
"Convertible Debentures") convertible into Common Stock of the Company. The
registrant did not receive any cash proceeds from the offering of the
Convertible Debentures. $2,158,285 principal amount of Convertible Debentures
was issued to holders of the Company's convertible debentures issued on August
6, 1997 holding $1,850,000 of such convertible debentures as repayment in full
of the Company's obligations under such convertible debentures. During the
same period the Company issued an additional $3,690,000 aggregate principal
amount of Convertible Debentures, convertible into Common Stock of the Company.
Placement Agent for the Convertible Debenture was Net Financial International
Ltd. After deducting underwriting discounts, commissions and escrow fees in
the aggregate amount of $690,000 the Company received a net amount of
$3,000,000. 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. Twenty-five percent of the face amount of the Convertible
Debentures are convertible into shares of Common Stock of the Company at the
earlier of the effective date of a registration statement covering the
underlying shares of Common Stock or March 21, 1998. A additional twenty-five
percent of the face amount of the Convertible Debentures may be converted each
30 days thereafter, in each case at a conversion price equal to 75% of the
average closing bid price for the five trading days preceding the date of the.
Any Convertible Debentures not so converted are subject to mandatory
conversion by the Company on the 24h monthly anniversary of the date of issuance
of the Convertible Debentures.
Item 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable
Item 4. SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS
On December 23, 1997, at the Company's Annual Meeting of Shareholders,
the following matters were submitted to a vote of the holders of the Company's
common stock, $.01 par value per share:
1. For the following persons to serve as directors of the Company until
the next annual meeting of shareholders and until their respective successors
are duly elected and qualified:
<TABLE>
<CAPTION>
For Election Withheld Note Voted Total
<S> <C> <C> <C>
Ruedi G. Laupper 15,466,044 9,837 1 15,455,882
Josef Laupper 15,445,488 10,391 1 15,455,882
Ueli Laupper 15,444,488 11,394 1 15,455,882
Akbar Seddigh 15,446,044 9,837 1 15,455,882
Daniel A. Wuersch 15,445,488 10,391 1 15,455,882
Erwin Zimmerli 15,444,488 11,392 1 15,455,882
</TABLE>
2. To ratify the appointment by the Board of Directors of the Company of
STG Coopers & Lybrand as the independent auditors of the Company for the fiscal
year ending June 30, 1998:
<TABLE>
<CAPTION>
For the Against the
Total Votes Resolution Resolution Abstaining Not Voted
<S> <C> <C> <C>
15,455,882 15,449,039 6,830 12 1
</TABLE>
3. To approve a proposal to increase the number of shares of Common Stock
the Company is authorized to issue from 30,000,000 to 50,000,000 (Proposal
3(a)) and a proposal to create a class of preferred stock (Proposal 3(b)):
<TABLE>
<CAPTION>
For the Against the
Total Votes Resolution Resolution Abstaining Not Voted
<S> <C> <C> <C> <C> <C>
Proposal 3(a) 15,455,882 15,339,530 62,831 53,520 1
Proposal 3(b) 15,455,882 5,587,572 173,255 64,142 9,630,913
</TABLE>
Because the affirmative vote of holders of a majority of the outstanding shares
of Common Stock of the Company would have been required to approve proposal
3(b), such proposal was not approved by the shareholders of the Company.
4. To approve the adoption of the Company's 1997 Stock Option Plan:
<TABLE>
<CAPTION>
For the Against the
Total Votes Resolution Resolution Abstaining Not Voted
<S> <C> <C> <C> <C>
15,455,882 5,609,685 153,756 61,528 9,630,913
</TABLE>
Item 5. OTHER INFORMATION
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. ("Swissray Medical Systems")
Gary Durday has been appointed Chief Financial Officer of Swissray Medical
Systems, Inc., Swissray Healthcare, Inc. and Swissray Information Solutions,
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.
On December 18, 1997, the Federal Food and Drug Administration approved
the AddOn-Multi-System for marketing in the United States.
On December 18, 1997, Ruedi G. Laupper entered into a five-year employment
agreement with Swissray Management AG, a wholly owned subsidiary of the
Registrant, which agreement will be automatically renewed for another five years
unless terminated by either party no later than December 31, 2001. Such
agreement provides for (i) an annual salary of 276,000 Swiss francs or $192,683
(based on an exchange rate of 1.4324), (ii) a fixed annual bonus of 23,000 Swiss
francs (or $16,057), and (iii) a performance based bonus, based on the audited
consolidated financial statements of the Company as of the end of the fiscal
year. Such bonus shall be equal to 25% of EBIT (earnings before interest and
taxes) and is payable in stock of Swissray International, Inc. valued at the
average of the closing prices during the five business days following the filing
of the Company's annual report on Form 10-K. In addition, the agreement entitles
Mr. Laupper to a car allowance, five weeks of vacation, $698 per month for
expenses and a "Bel Etage" insurance which provides certain pension benefits not
mandated by Swiss law. If such employment agreement is terminated for reasons
beyond the employee's control, Ruedi Laupper will receive 2 million Swiss francs
(or $1,396,258) including any bonus. The Company Registrant guarantees the
obligation of Swissray Management AG in the event of a default by it under such
agreement.
Ueli Laupper and Josef Laupper have entered into three-year employment
agreements with Swissray Management AG on December 18, 1997, which agreements
will be automatically renewed for another three years unless notice is given six
months prior to the expiration date. Such agreements provide for salaries of
$84,924 and 119,700 Swiss francs (or $83,566) respectively with annual bonuses
of $7,077 and 9,975 Swiss francs (or $6,964) respectively, $1,500 and 1,000
Swiss francs (or $698) per month for expenses respectively and 20 days and 25
days of vacation respectively. The employment agreements of each of Ueli Laupper
and Josef Laupper also provide for a car allowance. If either of such employees
is terminated for reasons beyond the employee's control, he will receive 500,000
Swiss francs (or $349,065).
Herbert Laubscher has entered into an employment agreement with
Swissray Management AG for an indefinite term, which agreement may be terminated
upon one month notice during the first year of employment, two months notice
after two years of employment and three months notice after ten years of
employment. Such agreement provides for (i) an annual salary of 102,000 Swiss
francs (or $71,209), (ii) an annual bonus of 8,500 Swiss francs (or $5,934),
(iii) 500 Swiss francs (or $349) per month for expenses and (v) 20 days
vacation.
On December 18, 1997, the Company entered into an OEM Agreement (the
"EMED Agreement") with Raytheon E-Systems Inc., ("EMED") which provides for the
manufacture by EMED of PACS systems to be marketed world-wide by the Company.
The term of the EMED Agreement ends on June 30, 2000 unless renewed prior
thereto.
On December 29, 1997, the Company filed a Registration Statement with
the Securities and Exchange Commission with respect to the sale of up to
6,221,580 shares of Common Stock by the holders of $5,848,285 principal amount
of 8% Convertible Debentures issued by the Company between November 26 and
December 5, 1997.
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Effective February 4, 1998 the Company restructured its Swiss
operations. A newly formed company, Teleray Research and Development AG, was
founded as a spin of off the Development Department of Teleray AG. SR Medical
AG,a wholly owned subsidiary of the Registrant, which was renamed SR Medical
Holding AG sold all of the assets and liabilities of the sales and service
department to Teleray AG, a wholly owned subsidiary of the Registrant, which was
renamed SR Medical AG.
At a meeting of the board of directors of the Company held on February
5, 1998, the board of directors decided to immediately enter into negotiations
with a group of investors concerning a financing of the Company's short-term and
medium-term capital needs. As of the date hereof, no such financing could be
secured, and no assurance can be given that the Company will be successful in
timely obtaining the necessary funds to continue its operations as a going
concern.
On February 11, 1998 the Company signed a letter of intent to sell
substantially the entire business of Swissray Empower Inc. ("Empower") To E.M.
Parker Company Inc.
On February 13, 1998, the Company announced that the Company's Board of
Directors has decided to restructure the senior management of the Company. The
Board of Directors of the Company decided to retain an executive search firm to
search for a new Chief Executive Officer and a new Chief Financial Officer to
lead the Company. In the interim, primary management responsibility will be
with a newly formed Executive Committee of the Board of Directors consisting of
Akbar Seddigh, Daniel A. Wuersch and Dr. Erwin Zimmerli, Ruedi G. Laupper
remains Chairman of the Board and is primarily responsible for the day-to-day
operations of the Company.
The Registrant has recently discovered that the audited financial
statements for the fiscal year ended June 30, 1997 and the unaudited financial
statements for the quarter ended September 30, 1997 as filed with the Securities
and Exchange Commission may need to be restated. The reason therefor is the
treatment of certain convertible debentures, which debentures were not accounted
for following the accounting standards set forth in the March 13, 1997 SEC Staff
announcement made at the March 13, 1997 EITF meeting with respect to convertible
debentures with beneficial conversion features. The Registrant has also recently
discovered that certain expense items classified as "extraordinary expenses" in
the Registrant's audited income statements for the fiscal year ended June 30,
1996 may need to be reclassified as "ordinary expenses". As of the date hereof
the Registrant could not definitively determine whether additional adjustments
to such financial statements may be necessary. The Registrant is diligently
resolving these issues with the assistance of the Registrant's current and
previous independent accountants and will file restated financial statements for
the foregoing periods and the quarter ended December 31, 1997 and any necessary
amendments to the Registrant's filings with the Securities and Exchange
Commission as soon as practicable. Due to the recent discovery of these issues
and the announced replacement of the Registrant's chief financial officer, the
Registrant has not been able to restate the financial statements for the periods
indicated above and to prepare the financial statements for the quarter ended
December 31, 1997 on a timely basis.
The Registrant has previously reported an order backlog for its digital
X-ray equipment as of June 30, 1997 of $30,000,000. $[29,000,000] thereof
related to a contract with a purchaser located in South Korea. As a result of
the recent economic problems in that country, management considers it doubtful
that this order will be filled in the current calendar year or at all.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
2.1 Acquisition Agreement, dated May 1995, by and between Registrant, a
New York corporation (now Swissray International, Inc.); Berkshire
International Finance, Inc., SR-Medical AG (a Swiss corporation),
Teleray AG (a Swiss corporation) and others (Incorporated by reference
to Exhibit 6 (a) of the Registrant's Registration Statement on Form
10SB, Registration No. 0-26972, effective February 14, 1996).
2.2 Exchange Agreement, dated as of November 22, 1996 by and between the
Registrant and Maxwell; Registration Rights Agreement, dated as of
March 13, 1997, between the Registrant and Maxwell, Assignment and
Assumption Agreement, dated March 13, 1997, between the Registrant and
Maxwell; Option Agreement, dated January 24, 1997, granting options
for 125,000 shares of the Registrant to Maxwell (Incorporation by
reference to Exhibit 2.2 of the Registrant's Annual Report for the
fiscal year ended June 30, 1997 on Form 10-KSB filed on September 30,
1997).
3.1 Registrant's Certificate of Incorporation, dated December 20, 1967
(Incorporated by reference to Exhibit 2(a) of the Registrant's
Registration Statement on Form 10SB, Registration No. 0-26972,
effective February 14, 1996).
3.2 Amendment to Registrant's Certificate of Incorporation, dated
September 19, 1968 (Incorporated by reference to Exhibit 2(b) of the
Registrant's Registration Statement on Form 10SB, Registration No.
0-26972, effective February 14, 1996).
3.3 Amendment to Registrant's Certificate of Incorporation, dated
September 8, 1972 (Incorporated by reference to Exhibit 2(c) of the
Registrant's Registration Statement on Form 10SB, Registration No.
0-26972, effective February 14, 1996).
3.4 Amendment to Registrant's Certificate of Incorporation, dated October
30, 1981 (Incorporated by reference to Exhibit 2(d) of the Registrants
Registration Statement on Form 10SB, Registration No. 0-26972,
effective February 14, 1996).
3.5 Certificate of Merger of Direct Marketing Services, Inc. and CGS
Units Incorporated into CGS Units Incorporated, dated June 16, 1994
(Incorporated by reference to Exhibit 2(e) of the Registrant's
Registration Statement on Form 10SB, Registration No. 0-26972,
effective February 14, 1996).
3.6 Amendment to Registrant's Certificate of Incorporation, dated August
10, 1994 (Incorporated by reference to Exhibit 3.6 of Registrant's
Annual Report for the fiscal year ended June 30, 1997 on Form 10-KSB,
filed September 30, 1997).
3.7 Certificate of Correction of Certificate of Merger of Direct Marketing
Services, Inc. and CGS Units Incorporated into CGS Units Incorporated,
filed August 5, 1994 (Incorporated by reference to Exhibit 2(f) of the
Registrant's Registration Statement on Form 10SB, Registration No.
0-26972, effective February 14, 1996).
3.8 Amendment to Registrant's Certificate of Incorporation, dated May 24,
1995 (Incorporated by reference to Exhibit 2(g) of the Registrant's
Registration Statement on Form 10SB, Registration No. 0-26972,
effective February 14, 1996).
3.9 Amendment to Registrant's Certificate of Incorporation, dated August
29, 1996 (Incorporated by reference to Exhibit 3.9 of Registrant's
Annual Report for the fiscal year ended June 30, 1997 on Form 10-KSB,
filed September 30, 1997).
3.10 Amendment to Registrant's Certificate of Incorporation, dated December
13, 1996 (Incorporated by reference to Exhibit 3.10 of Registrant's
Annual Report for the fiscal year ended June 30, 1997 on Form 10-KSB,
filed September 30, 1997).
3.11 Amendment to Registrant's Certificate of Incorporation, dated March
12, 1997 (Incorporated by reference to Exhibit 3.11 of Registrant's
Annual Report for the fiscal year ended June 30, 1997 on Form 10-KSB,
filed September 30, 1997).
3.12 Registrant's By-Laws (Incorporated by reference to Exhibit 2 (h) of
the Registrant's Registration Statement on Form 10SB, Registration No.
0-26972, effective February 14, 1996).
3.13 Amendment to Registrant's Certificate of Incorporation, dated December
26, 1997.
10.1 License Agreement, dated June 24, 1995, by and between the Registrant
and Hane-Jurgen Behrendt (Incorporated by reference to Exhibit 6(b) of
Registrant's Registration Statement on Form 10SB, Registration No.
0-26972, effective February 14, 1996)
10.2 1996 Swissray International Corporation, Inc. Non-Statutory Stock
Option Plan. (Incorporated by reference to Exhibit 10.2 of
Registrant's Amendment No. 1 to Form S-1 Registration Statement,
Registration No. 333-38229, filed December 17, 1997).
10.3 Agreement, dated June 11, 1996 between the Registrant and Philips
Medical Systems (Incorporated by reference to Exhibit 10.3 of
Registrant's Annual Report for the fiscal year ended June 30, 1997 on
Form 10-KSB, filed September 30, 1997).
10.4 License Agreement, dated as of July 18, 1997, by and between the
Registrant and Agfa-Gevaert N.V., certain portions of which are filed
under a request for confidential treatment pursuant to Rule 24b-2
promulgated pursuant to the Securities Exchange Act of 1934, as
amended, and Rule 80(b)(4) of Organization; Conduct and Ethics; and
Information and Requests adopted under the Freedom of Information
Act, under Rule 406 of the Securities Act of 1933, as amended, and the
Freedom of Information Act (Incorporated by reference to Exhibit 10.4
of Registrant's Annual Report for the fiscal year ended June 30, 1997
on Form 10-KSB/A2, filed December 3, 1997).
10.5 Agreement, dated July 14, 1995, by and between Teleray AG and Optische
Werke G. Roderstock, certain portions of which are filed under a
request for confidential treatment pursuant to Rule 24b-2 promulgated
pursuant to the Securities Exchange Act of 1934, as amended, and Rule
80(b)(4) of Organization; Conduct and Ethics; and Information and
Requests adopted under the Freedom of Information Act, under Rule 406
of the Securities Act of 1933, as amended, and the Freedom of
Information Act (Incorporated by reference to Exhibit 10.5 of
Registrant's Annual Report for the fiscal year ended June 30, 1997 on
Form 10-KSB/A2, filed December 3, 1997).
10.6 Agreement, dated as of June 30, 1997, between the Registrant and Ruedi
G. Laupper (Incorporated by reference to Exhibit 10.6 of Registrant's
Amendment No. 1 to Form S-1 Registration Statement. Registration No.
333-38229, filed December 17, 1997).
10.7 Form of Registration Rights Agreement, dated as of August ___, 1997,
by and between Swissray International Inc. and the person named on the
signature page hereto (Incorporated by reference to Exhibit 10.7 of
Registrant's Amendment No. 1 to Form S-1 Registration Statement,
Registration No. 333-38229, filed December 17, 1997).
10.8 Form of Debenture of Swissray International, Inc. (Incorporated by
reference to Exhibit 10.8 of Registrant's Amendment No. 1 to Form S-1
Registration Statement, Registration No. 333-38229, filed December 17,
1997).
10.9 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 October 17, 1997).
10.10 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
October 17, 1997).
10.11 Employment Agreement between the Registrant and Ruedi G. Laupper,
dated as of December 18, 1997 (incorporated by reference to Exhibit
10.11 of the Registrant's Registration Statement on Form S-1,
Registration No. 333-43401, filed December 29, 1997).
10.12 Employment Agreement between the Registrant and Josef Laupper, dated
as of December 18, 1997 (incorporated by reference to Exhibit 10.12 of
the Registrant's Registration Statement on Form S-1, Registration No.
333-43401, filed December 29, 1997).
10.13 Employment Agreement between the Registrant and Herbert Laubscher,
dated as of December 18, 1997 (incorporated by reference to Exhibit
10.13 of the Registrant's Registration Statement on Form S-1,
Registration No. 333-43401, filed December 29, 1997).
10.14 Employment Agreement between the Registrant and Ueli Laupper, dated as
of December 18, 1997 (incorporated by reference to Exhibit 10.14 of
the Registrant's Registration Statement on Form S-1, Registration No.
333-43401, filed December 29, 1997).
10.15 Form of Registration Rights Agreement, dated as of November , 1997
(incorporated by reference to Exhibit 10.15 of the Registrant's
Registration Statement on Form S-1, Registration No. 333-43401, filed
December 29, 1997).
10.16 Form of Debenture of Swissray International, Inc., dated November ,
1997 (incorporated by reference to Exhibit 10.16 of the Registrant's
Registration Statement on Form S-1, Registration No. 333-43401, filed
December 29, 1997).
10.17 Form of Subscription Agreement, dated November , 1997 (incorporated
by reference to Exhibit 10.17 of the Registrant's Registration
Statement on Form S-1, Registration No. 333-43401, filed December 29,
1997).
10.18 Form of Registration Rights Agreement (rollover), dated as of
November , 1997 (incorporated by reference to Exhibit 10.18 of the
Registrant's Registration Statement on Form S-1, Registration
No. 333-43401, filed December 29, 1997).
10.19 Form of Debenture of Swissray International, Inc. (rollover), dated
November , 1997 (incorporated by reference to Exhibit 10.19 of the
Registrant's Registration Statement on Form S-1, Registration No.
333-43401, filed December 29, 1997).
10.20 Form of Subscription Agreement (rollover), dated November , 1997
(incorporated by reference to Exhibit 10.20 of the Registrant's
Registration Statement on Form S-1, Registration No. 333-43401, filed
December 29, 1997).
10.21 Agreement Regarding August, 1997 Regulation D offering (incorporated
by reference to Exhibit 10.21 of the Registrant's Registration
Statement on Form S-1, Registration No. 333-43401, filed December 29,
1997).
10.22 Original Equipment Manufacturer Agreement between the Registrant and
Raytheon E-Systems Inc.
21.1 List of Subsidiaries (Incorporated by reference to Exhibit 21 of
Registrant's Annual Report for the fiscal year ended June 30, 1997 on
Form 10-KSB, filed September 30, 1997).
(b) Reports on Form 8-K
Form 8-K, dated 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, 1997 with respect to the acquisition of
Service Support Group LLC.
Form 8-K, dated November 14, 1997, with respect to the change in the
Company's certified public accountants.
Amendment No. 1 to Form 8-K, dated November 14, 1997, with respect to
the change in the Company's certified public accountants, filed on November 20,
1997.
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
Date: February 23, 1998
Page 13
<PAGE> 8
SWISSRAY INTERNATIONAL INC.
CONSOLIDATED BALANCE SHEET*
ASSETS
* See explanation in Part I, Item 2 and Part 2, Item 5
<PAGE> 9
SWISSRAY INTERNATIONAL INC.
CONSOLIDATED STATEMENT OF OPERATIONS*
* See explanation in Part I, Item 2 and Part 2, Item 5.
<PAGE> 10
SWISSRAY INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
* See explanation in Part I, Item 2 and Part II, Item 5.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 3,225,272
<SECURITIES> 0
<RECEIVABLES> 6,554,843
<ALLOWANCES> 93,663
<INVENTORY> 5,938,590
<CURRENT-ASSETS> 17,917,404
<PP&E> 4,908,846
<DEPRECIATION> 446,280
<TOTAL-ASSETS> 32,099,973
<CURRENT-LIABILITIES> 11,814,622
<BONDS> 9,713,599
0
0
<COMMON> 268,098
<OTHER-SE> 10,303,654
<TOTAL-LIABILITY-AND-EQUITY> 32,099,973
<SALES> 11,302,578
<TOTAL-REVENUES> 11,302,578
<CGS> 8,590,947
<TOTAL-COSTS> 8,590,947
<OTHER-EXPENSES> 6,833,591
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,169,321
<INCOME-PRETAX> (8,136,848)
<INCOME-TAX> 0
<INCOME-CONTINUING> (8,136,848)
<DISCONTINUED> 0
<EXTRAORDINARY> 338,109
<CHANGES> 0
<NET-INCOME> 7,798,739
<EPS-PRIMARY> (.31)
<EPS-DILUTED> (.22)
</TABLE>
