0001019056-11-001087.txt : 20111114 0001019056-11-001087.hdr.sgml : 20111111 20111114143803 ACCESSION NUMBER: 0001019056-11-001087 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 11 CONFORMED PERIOD OF REPORT: 20110930 FILED AS OF DATE: 20111114 DATE AS OF CHANGE: 20111114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DAXOR CORP CENTRAL INDEX KEY: 0000027367 STANDARD INDUSTRIAL CLASSIFICATION: SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841] IRS NUMBER: 132682108 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-09999 FILM NUMBER: 111201149 BUSINESS ADDRESS: STREET 1: 350 FIFTH AVENUE STREET 2: SUITE 7120 CITY: NEW YORK STATE: NY ZIP: 10118 BUSINESS PHONE: 2122440555 MAIL ADDRESS: STREET 1: 350 5TH AVENUE STREET 2: SUITE 7120 CITY: NEW YORK STATE: NY ZIP: 10118 FORMER COMPANY: FORMER CONFORMED NAME: IDANT CORP DATE OF NAME CHANGE: 19730823 10-Q 1 daxor_3q11.htm FORM 10-Q Unassociated Document

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 10-Q
 
Quarterly Report Under Section 13 or 15(d)
of the
Securities Act of 1934
 
FOR QUARTER ENDED September 30, 2011
Commission File Number 001-09999
 
DAXOR CORPORATION
(Exact Name as Specified in its Charter)

New York
 
13-2682108
(State or Other Jurisdiction of
 
(I.R.S. Employer
Incorporation or Organization)
 
Identification No.)
 
350 Fifth Ave
Suite 7120
New York, New York 10118
(Address of Principal Executive Offices & Zip Code)
 
Registrant’s Telephone Number:
 
(212) 244-0555
(Including Area Code)
   
 
Indicate by check mark whether the registrant (1) has filed all reports required 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.
Yes  o    No o
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to post and submit such files)
Yes o    No o
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
 
Large Accelerated filer
o
Accelerated Filer o
       
 
Non-accelerated filer
o (Do not check if a smaller reporting company) 
Smaller reporting company x
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes o    No x
 
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
 
CLASS: COMMON STOCK
4,212,612 OUTSTANDING AT November 9, 2011
PAR VALUE: $.01 per share
 
 
 
 

 
 
DAXOR CORPORATION AND SUBSIDIARY
 
TABLE OF CONTENTS
 
PART I. FINANCIAL INFORMATION
     
           
 
Item 1.
FINANCIAL STATEMENTS
     
           
   
Index to Financial Statements
     
           
     
1
 
           
     
2-3
 
           
     
4
 
           
     
5-24
 
           
   
25-34
 
           
   
35-37
 
           
   
37
 
           
     
       
   
38
 
           
   
38
 
           
   
39
 
           
   
39
 
           
   
39
 
           
   
39
 
           
   
40
 
 
 
 

 
 
DAXOR CORPORATION AND SUBSIDIARY
 
   
UNAUDITED
September 30,
2011
   
December 31,
2010
 
ASSETS
           
             
CURRENT ASSETS
           
Cash and cash equivalents
 
$
29,711
   
$
57,741
 
Receivable from broker
   
30,961,894
     
32,382,439
 
Available-for-sale securities, at fair value
   
52,316,506
     
53,876,071
 
Accounts receivable, net of allowance for doubtful accounts of $125,402 in 2011 and $125,402 in 2010
   
189,612
     
178,820
 
Inventory
   
313,494
     
363,634
 
Prepaid expenses and other current assets
   
338,333
     
130,560
 
Total Current Assets
   
84,149,550
     
86,989,265
 
                 
Property and equipment, net
   
4,065,934
     
4,168,992
 
Other assets
   
37,158
     
37,158
 
                 
Total Assets
 
$
88,252,642
   
$
91,195,415
 
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
                 
CURRENT LIABILITIES
               
Accounts payable and accrued liabilities
 
$
971,146
   
$
436,542
 
Margin loans payable
   
7,841,832
     
4,638,197
 
Income taxes payable
   
742,579
     
2,986,800
 
Mortgage payable, current portion
   
57,230
     
46,798
 
Put and call options, at fair value
   
11,777,529
     
4,330,069
 
Securities borrowed, at fair value
   
26,171,717
     
22,406,036
 
Deferred revenue
   
52,529
     
51,920
 
Deferred income taxes
   
2,757,226
     
9,003,946
 
Total Current Liabilities
   
50,371,788
     
43,900,308
 
                 
LONG TERM LIABILITIES
               
                 
Mortgage payable, less current portion
   
258,802
     
300,063
 
                 
Total Liabilities
   
50,630,590
     
44,200,371
 
                 
STOCKHOLDERS’ EQUITY
               
Common stock, $.01 par value, Authorized - 10,000,000 shares Issued – 5,316,530 shares Outstanding – 4,216,643 and 4,226,137 shares at September 30, 2011 and December 31, 2010, respectively
   
53,165
     
53,165
 
Additional paid in capital
   
10,680,860
     
10,675,228
 
Accumulated other comprehensive income
   
11,931,796
     
14,890,272
 
Retained earnings
   
26,651,971
     
32,980,341
 
Treasury stock, at cost, 1,099,887 and 1,090,413 shares at September  30, 2011 and December 31, 2010, respectively
   
(11,695,740
)
   
(11,603,962
)
Total Stockholders’ Equity
   
37,622,052
     
46,995,044
 
Total Liabilities and Stockholders’ Equity
 
$
88,252,642
   
$
91,195,415
 
 
See accompanying notes to unaudited condensed consolidated financial statements.

 
1

 
 
DAXOR CORPORATION AND SUBSIDIARY
FOR THE THREE MONTHS ENDED
 
   
September 30,
2011
   
September 30,
2010
 
REVENUES:
           
             
Operating Revenues – equipment sales and related services
 
$
260,231
   
$
368,201
 
Operating Revenues – cryobanking and related services
   
80,676
     
85,080
 
                 
Total Revenues
   
340,907
     
453,281
 
                 
Cost of Sales:
               
                 
Cost of equipment sales and related services
   
136,166
     
174,014
 
Cost of cryobanking and related services
   
13,210
     
11,728
 
                 
Total Cost of Sales
   
149,376
     
185,742
 
                 
Gross Profit
   
191,531
     
267,539
 
                 
OPERATING EXPENSES:
               
                 
Research and development expenses:
               
                 
Research and development-equipment sales and related services
   
591,043
     
642,143
 
                 
Research and development-cryobanking and related services
   
46,008
     
52,587
 
                 
Total Research and Development Expenses
   
637,051
     
694,730
 
                 
Selling, General & Administrative Expenses:
               
                 
Selling, general, and administrative- equipment sales and related services
   
639,894
     
651,639
 
Selling, general, and administrative- cryobanking and related services
   
175,658
     
206,035
 
                 
Total Selling, General & Administrative Expenses
   
815,552
     
857,674
 
                 
Total Operating Expenses
   
1,452,603
     
1,552,404
 
                 
Loss from Operations
   
(1,261,072
)
   
(1,284,865
)
                 
Other Income (Expenses):
               
                 
Dividend income-investment portfolio
   
645,792
     
635,678
 
Realized gains on sale of securities and options, net
   
253,505
     
2,370,510
 
Mark to market adjustments on short sales of options
   
(6,608,910
   
2,735,102
 
Other revenues
   
3,093
     
3,041
 
Interest expense
   
(29,769
)
   
(20,323
)
Administrative expense relating to portfolio investments
   
(31,444
)
   
(35,227
)
                 
Total Other (Loss) Income
   
(5,767,733
   
5,688,781
 
                 
(Loss) Income before Income Taxes
   
(7,028,805
   
4,403,916
 
                 
Income Tax (Benefit) Expense
   
(2,845,136
   
1,799,112
 
Net (Loss) Income
 
$
(4,183,669
 
$
2,604,804
 
                 
Comprehensive Loss:
               
                 
Net Income (Loss)
 
$
(4,183,669
 
$
2,604,804
 
Unrealized (Loss )Gain on Securities Held for Sale, Net of Deferred Income Taxes
   
(3,710,012
   
3,829,575
 
Comprehensive (Loss) Income
 
$
(7,893,681
 
$
6,434,379
 
                 
Weighted average number of shares outstanding – basic and diluted
   
4,219,026
     
4,232,691
 
                 
Net (Loss) Income per common equivalent share – basic and diluted
 
$
(0.99
 
$
0.62
 
                 
Dividends paid per common share
 
$
   
$
0.25
 
 
See accompanying notes to unaudited condensed consolidated financial statements.
 
 
2

 
 
DAXOR CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS [UNAUDITED]
FOR THE NINE MONTHS ENDED
 
   
September 30,
2011
   
September 30,
2010
 
REVENUES:
           
             
Operating Revenues – equipment sales and related services
 
$
841,158
   
$
958,929
 
Operating Revenues – cryobanking and related services
   
235,357
     
258,956
 
                 
Total Revenues
   
1,076,515
     
1,217,885
 
                 
Cost of Sales:
               
                 
Cost of equipment sales and related services
   
445,453
     
516,304
 
Cost of cryobanking and related services
   
30,104
     
26,626
 
                 
Total Cost of Sales
   
475,557
     
542,930
 
                 
Gross Profit
   
600,958
     
674,955
 
                 
OPERATING EXPENSES:
               
                 
Research and development expenses:
               
                 
Research and development-equipment sales and related services
   
1,853,350
     
2,166,121
 
                 
Research and development-cryobanking and related services
   
143,074
     
155,143
 
                 
Total Research and Development Expenses
   
1,996,424
     
2,321,264
 
                 
Selling, General & Administrative Expenses:
               
                 
Selling, general, and administrative- equipment sales and related services
   
2,903,796
     
1,950,852
 
Selling, general, and administrative- cryobanking and related services
   
481,544
     
534,930
 
                 
Total Selling, General & Administrative Expenses
   
3,385,340
     
2,485,782
 
                 
Total Operating Expenses
   
5,381,764
     
4,807,046
 
                 
Loss from Operations
   
(4,780,806
)
   
(4,132,091
)
                 
Other Income (Expenses):
               
                 
Dividend income-investment portfolio
   
1,719,345
     
1,722,944
 
Realized gains on sale of securities and options, net
   
6,277,552
     
9,936,557
 
Mark to market adjustments on short sales of options
   
(12,764,473
)
   
(2,355,785
)
Other revenues
   
9,281
     
9,124
 
Interest expense
   
(141,677
)
   
(35,506
)
Administrative expense relating to portfolio investments
   
(101,153
)
   
(101,244
)
                 
Total Other (Loss) Income
   
(5,001,125
   
9,176,090
 
                 
(Loss) Income before Income Taxes
   
(9,781,931
   
5,043,999
 
                 
Income Tax (Benefit) Expense
   
(4,087,480
)
   
2,343,258
 
Net (Loss) Income
 
$
(5,694,451
 
$
2,700,741
 
                 
Comprehensive Loss(Income):
               
                 
Net (Loss) Income
 
$
(5,694,451
 
$
2,700,741
 
Unrealized Loss on Securities Held for Sale, Net of Deferred Income Taxes
   
(2,958,476
   
(292,161
Comprehensive (Loss) Income
 
$
(8,652,927
 
$
2,408,580
 
                 
Weighted average number of shares outstanding – basic and diluted
   
4,223,504
     
4,240,753
 
                 
Net (Loss) Income per common equivalent share – basic and diluted
 
$
(1.35
 
$
0.64
 
                 
Dividends paid per common share
 
$
0.15
   
$
0.35
 
 
See accompanying notes to unaudited condensed consolidated financial statements.
 
 
3

 
 
DAXOR CORPORATION AND SUBSIDIARY
FOR THE NINE MONTHS ENDED
 
   
September 30,
2011
   
September 30,
2010
 
CASH FLOWS FROM OPERATING ACTIVITIES:
               
Net (Loss) Income
 
$
(5,694,451
 
$
2,700,741
 
Adjustment to reconcile net (loss) income to net cash used in operating activities:
               
Depreciation
   
219,508
     
222,737
 
Non-cash compensation expense associated with employee stock compensation plans
   
5,839
     
 
Deferred income taxes
   
(4,652,095
)
   
(1,282,320
)
Bad debt allowance
   
     
20,366
 
Gain on sale of fixed assets
   
     
(52,533
Loss on disposal of fixed assets
   
     
285
 
Realized gains on sale of securities and options, net
   
(6,277,552
)
   
(9,936,557
)
Non-cash dividend income
   
(7,028
   
 
Mark to market adjustments on short sales of options
   
12,764,473
     
2,355,785
 
                 
Change in operating assets and liabilities:
               
Increase in accounts receivable
   
(10,792
)
   
(67,535
Increase in prepaid expenses & other current assets
   
(207,773
)
   
(69,364
)
Decrease in inventory
   
50,140
     
72,453
 
Increase in accounts payable and accrued liabilities
   
534,604
     
29,700
 
(Decrease) Increase in income taxes payable
   
(2,244,221
)
   
2,131,173
 
Increase in deferred revenue
   
609
     
20,260
 
                 
Net cash used in operating activities
   
(5,518,739
)
   
(3,854,809
)
                 
CASH FLOWS FROM INVESTING ACTIVITIES:
               
Purchase of property and equipment
   
(118,450
)
   
(289,703
)
Proceeds from sale of fixed assets
   
     
65,000
 
Proceeds from sale of property and equipment
   
2,000
     
 
Increase in receivable due from broker
   
(4,957,939
)
   
(5,176,245
)
Increase in securities borrowed, at fair market value
   
3,765,681
     
4,861,094
 
Purchases of put and call options
   
(2,149,747
)
   
(419,080
)
Proceeds from sales of put and call options
   
8,794,637
     
14,344,491
 
Acquisition of available for sale securities
   
(14,276,361
)
   
(21,818,503
)
Proceeds from sale of available for sale securities
   
5,605,503
     
11,383,466
 
                 
Net cash (used in) provided by investing activities
   
(3,334,676
   
2,950,520
 
                 
CASH FLOWS FROM FINANCING ACTIVITIES:
               
Proceeds from margin loan payable
   
25,213,762
     
29,622,601
 
Repayment of margin loan payable
   
(15,631,644
)
   
(27,137,287
)
Purchase of treasury stock
   
(91,778
   
(236,744
)
Dividends paid
   
(633,919
   
(1,482,076
Repurchase and retirement of Common Stock
   
(207
   
 
Repayment of mortgage payable
   
(30,829
   
(32,250
)
Net cash provided by financing activities
   
8,825,385
     
734,244
 
                 
Net decrease in cash and cash equivalents
   
(28,030)
     
(170,045
)
                 
Cash and cash equivalents at beginning of period
   
57,741
     
277,088
 
                 
Cash and cash equivalents at end of period
 
$
29,711
   
$
107,043
 
                 
Supplemental Disclosures of Cash Flow Information:
               
Cash paid during the period for:
               
                 
Interest
 
$
142,961
   
$
37,340
 
Income taxes
 
$
2,997,342
   
$
1,556,483
 
 
See accompanying notes to unaudited condensed consolidated financial statements.
 
 
4

 
 
DAXOR CORPORATION AND SUBSIDIARY
September 30, 2011
(Unaudited)
 
(1) BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
 
BUSINESS
 
Daxor Corporation (the “Company”) is a medical device manufacturing company that offers additional biotech services, such as cryobanking, through its wholly owned subsidiary, Scientific Medical Systems Corp. The Company provides long-term frozen blood and semen storage services to enable individuals to store their own blood and semen. The main focus of Daxor Corporation has been the development of an instrument that rapidly and accurately measures human blood volume. This instrument is used in conjunction with a single use diagnostic injection and collection kit.
 
SEC ADMINISTRATIVE PROCEEDING
 
In 2005 and 2007, the Company and Dr. Joseph Feldschuh, its President and Chief Executive Officer, respectively, received Wells Notices from the Securities and Exchange Commission (“SEC”) requesting their comments on the SEC Staff’s view that the Company was in violation of Section 7(a) of the Investment Company Act in that it was operating as an unregistered investment company. The Company and Dr. Feldschuh responded to those requests when made.
 
            In November 2009, the staff of the Northeast Regional Office of the SEC contacted the Company and invited both the Company and Dr. Feldschuh to make a new Wells submission based upon more recent operations and results. The Company and Dr. Feldschuh responded to the staff’s invitation on December 20, 2009.

The Company disclosed in its Form 10-Q for September 30, 2010, Form 10-K for December 31, 2010 and Form 10-Q’s for March 31, 2011 and June 30, 2011 that the SEC instituted administrative proceedings pursuant to the Investment Company Act of 1940 on September 17, 2010. The New York City staff of the Enforcement Division of the SEC claimed that Daxor is primarily an investment company and not primarily an operating company.
 
The Company has disclosed in previous public filings that it is dependent upon earnings from its investment portfolio to fund operations and that a single individual, Dr. Joseph Feldschuh, makes all investment decisions.
 
The administrative proceeding took place from March 7, 2011 through March 9, 2011 in New York City. The Company feels strongly that the extensive documentation of its history of operations presented at the administrative proceeding demonstrated that it is primarily an operating medical instrumentation and biotechnology company and not primarily an investment company.
 
On August 31, 2011, an Administrative Law Judge of the SEC issued his decision finding Daxor to be an Investment Company as defined by the Investment Company Act of 1940. A major factor in the decision was his opinion that we are in the business of investing and more than 40% of our assets are comprised of investment securities.

The management of the Company believes the additional disclosures that would be necessary if Daxor were to become an Investment Company would not materially affect investment policies and practices currently in place.

As disclosed in our press release of September 1, 2011, the Board of Directors and the Management of Daxor are considering different options. We may register as an Investment Company, appeal the decision or take the Company private. The management of the Company believes that if we register or take  the Company private, our operations and ongoing research efforts will not be materially affected.

SIGNIFICANT ACCOUNTING POLICIES
 
Basis of Presentation
 
The accompanying unaudited condensed consolidated financial statements reflect all adjustments of a normal recurring nature, which are, in the opinion of management, necessary for a fair statement of the financial position and results of operations for the interim periods presented. The condensed consolidated financial statements are unaudited and are subject to such year-end adjustments as may be considered appropriate and should be read in conjunction with the historical consolidated financial statements of Daxor Corporation for the years ended December 31, 2010 and 2009, included in Daxor Corporation’s Annual Report and Form 10-K for the fiscal year ended December 31, 2010 which was filed on March 29, 2011. The December 31, 2010 condensed consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. Operating results for the three and nine month periods ended September 30, 2011 are not necessarily indicative of the results that may be expected for the year ending December 31, 2011.
 
These condensed consolidated financial statements have been prepared in accordance with Generally Accepted Accounting Principles in the United States of America (“US GAAP”) and under the same accounting principles as the consolidated financial statements included in the Annual Report on Form 10-K. Certain information and footnote disclosures related thereto normally included in the financial statements prepared in accordance with US GAAP have been omitted in accordance with Rule 8-03 of Regulation S-X.
 
Management has evaluated subsequent events through the date of this filing.
 
Fair Value of Financial Instruments
 
The carrying amounts of financial instruments, including cash and cash equivalents, accounts receivable and payable, accrued liabilities, deferred option premiums and loans payable approximate fair value because of their short maturities. The carrying amount of the mortgage payable is estimated to approximate fair value as the mortgage carries a market rate of interest.
 
Fair Value Measurements

The Company accounts for its investments under the provision of FASB ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”). ASC 820 defines fair value, establishes a framework for measuring fair value under GAAP and enhances disclosures about fair value measurements. Fair value is defined under ASC 820 as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair values which are discussed below.
 
Level 1 - Quoted prices in active markets for identical assets or liabilities.

Level 2 - Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 assets include corporate-owned key person life insurance policies.
 
 
5

 
 
DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2011 (Continued)
(Unaudited)

Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. This category includes auction rate securities where independent pricing information was not able to be obtained.

The Company’s marketable securities are valued using Level 1 observable inputs utilizing quoted market prices in active markets. These marketable securities are summarized in Note 2, Available-for -Sale Securities.

On January 1, 2010, the Company adopted the provisions of FASB ASU No. 2010-06, “Improving Disclosures about Fair Value Measurements” (“ASU 2010-06”). This update provides amendments to Subtopic 820-10 that requires new disclosure as follows: 1) Transfers in and out of Levels 1 and 2. A reporting entity should disclose separately the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements and describe the reasons for the transfers. 2) Activity in Level 3 fair value measurements. In the reconciliation for fair value measurements using significant unobservable inputs (Level 3), a reporting entity should present separately information about purchases, sales, issuances, and settlements (that is, on a gross basis rather than as one net number). This update provides amendments to Subtopic 820-10 that clarify existing disclosures as follows: 1) Level of disaggregation. A reporting entity should provide fair value measurement disclosures for each class of assets and liabilities. A class is often a subset of assets or liabilities within a line item in the statement of financial position. A reporting entity needs to use judgment in determining the appropriate classes of assets and liabilities. 2) Disclosures about inputs and valuation techniques. A reporting entity should provide disclosures about the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements. Those disclosures are required for fair value measurements that fall in either Level 2 or Level 3.The new disclosures and clarifications of existing disclosures are effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. The adoption of the ASU 2010-06 did not have an impact on the Company’s financial statements.
 
Available-for-Sale Securities

Available-for-sale securities represent investments in debt and equity securities (primarily common and preferred stock of electric utility companies) that management has determined meet the definition of available-for-sale under FASB ASC 320 - Accounting for Certain Investments in Debt and Equity Securities (“ASC 320”). Accordingly, these investments are stated at fair market value and all unrealized holding gains or losses are recorded in the Stockholders’ Equity section as Accumulated Other Comprehensive Income (Loss). Conversely, all realized gains, losses and earnings are recorded in the Statement of Operations under Other Income (Expense).

At certain times, the Company will engage in short selling of stock. When this occurs, the short position is marked to the market and recorded as a realized sale. Any gain or (loss) is recorded for the period presented.

Historical cost is used by the Company to determine all gains and losses, and fair market value is obtained by readily available market quotes on all securities (Level 1 inputs).
 
Put and Call Options at fair value

As part of the company’s investment strategy, put and call options are sold on various stocks the company is willing to buy or sell. The premiums received are deferred until such time as they are exercised or expire. In accordance with FASB ASC 815 - Accounting for Derivative Instruments and Hedging Activities, these options are marked to market for each reporting period using readily available market quotes (Level 1 inputs), and this fair value adjustment is recorded as a gain or loss in the Statement of Operations.

Upon exercise, the value of the premium will adjust the basis of the underlying security bought or sold. Options that expire are recorded as income in the period they expire.

All proceeds of the put and call options which are equity contracts are shown net of the mark to market adjustment in the current liability section of the balance sheet as put and call options, at fair value.
 
 
6

 
 
DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2011 (Continued)
(Unaudited)
 
Receivable from Broker

The Receivable from Brokers includes cash proceeds from the sales of securities and dividends. These proceeds are invested in dividend bearing money market accounts. The securities loaned are shares loaned to UBS to cover short positions held by other customers of the broker. UBS pays the Company interest for the loan of these securities. The restricted cash is held by the brokers to satisfy margin requirements.

The following table summarizes Receivable from Broker at September 30, 2011 and December 31, 2010:
 
Description
 
(Unaudited)
September 30, 2011
   
December 31, 2010
 
Money Market Accounts
 
$
3,737,314
   
$
10,115,798
 
Securities Loaned
   
187,386
     
 
Restricted Cash
   
27,037,194
     
22,266,641
 
Total Receivable from Broker
 
$
30,961,894
   
$
32,382,439
 
 
 
7

 
 
DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2011 (Continued)
(Unaudited)
 
Securities borrowed at fair value
 
When a call option that has been sold short is exercised, this creates a short position in the related common stock. The recorded cost of these short positions is the amount received on the sale of the stock plus the proceeds received from the underlying call option. These positions are shown on the Balance Sheet as “Securities borrowed at fair value” and the carrying value is reduced or increased at the end of each quarter by the mark to market adjustment which is recorded in accordance with ASC 320.
 
Investment Goals, Strategies and Policies
 
The Company’s investment goals, strategies and policies are as follows:
 
 
1.
The Company’s investment goals are capital preservation, maintaining returns on capital with a high degree of safety and generating income from dividends and option sales to help offset operating losses.
       
 
2.
In order to achieve these goals, the Company maintains a diversified securities portfolio comprised primarily of electric utility common and preferred stocks. The Company also sells covered calls on portions of its portfolio and also sells puts on stocks it is willing to own. It also sells uncovered calls and may have net short positions in common stock up to 15% of the value of the portfolio. The Company’s net short position may temporarily rise to 20% of the Company’s portfolio without any specific action because of changes in valuation, but should not exceed this amount. The Company’s investment policy is to maintain a minimum of 80% of its portfolio in electric utilities. The Board of Directors has authorized this minimum to be temporarily lowered to 70% when Company management deems it to be necessary. Investments in utilities are primarily in electric companies. Investments in non-utility stocks will generally not exceed 20% of the value of the portfolio.
       
 
3.
Investment in speculative issues, including short sales, maximum of 15%.
       
 
4.
Limited use of options to increase yearly investment income.
       
   
a.
The use of “Call” Options Covered options can be sold up to a maximum of 20% of the value of the portfolio. This provides extra income in addition to dividends received from the Company’s investments. The risk of this strategy is that investments may be called away, which the Company may have preferred to retain. Therefore, a limitation of 20% is placed on the amount of stock on which options can be written. The amount of the portfolio on which options are actually written usually does not exceed 10% of the value of the portfolio. The historical turnover of the portfolio is such that the average holding period is in excess of five years for available for sale securities.
       
   
b.
The use of “Put” options Put options are written on stocks which the Company is willing to purchase. While the Company does not have a high rate of turnover in its portfolio, there is some turnover; for example, due to preferred stocks being called back by the issuing Company, or stocks being called away because call options have been written. If the stock does not go below the put exercise price, the Company records the proceeds from the sale as income. If the put is exercised, the cost basis is reduced by the proceeds received from the sale of the put option. There may be occasions where the cost basis of the stock is lower than the market price at the time the option is exercised.
       
   
c.
Speculative Short Sales/Short Options The Company normally limits its speculative transactions to no more than 15% of the value of the portfolio. The Company may sell uncovered calls on certain stocks. If the stock price does not rise to the price of the call, the option is not exercised and the Company records the proceeds from the sale of the call as income. If the call is exercised, the Company will have a short position in the related stock. The Company then has the choice of covering the short position, or selling a put against it. If the put is exercised, then the short position is covered. The Company’s current accounting policy is to mark to the market at the end of each quarter any short positions, and include it in the income statement. While the Company may have short positions equal to 15% of its accounts, in actual practice the net short stock positions usually account for less than 10% of the assets of the Company.
       
 
5.
In the event of a merger, the Company will elect to receive shares in the new company if this is an option. If the proposed merger is a cash only offer, the Company will receive cash and be forced to sell the stock.

 
8

 
 
DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2011 (Continued)
(Unaudited)
 
It is possible that the market value of a stock may go below our cost after we purchase it even though we considered the stock to be undervalued relative to the market at the time we purchased it. When that occurs, we follow the provisions of SEC Staff Accounting Bulletin: Codification of Staff Accounting Bulletins, Topic 5-M (“SAB 5-M”): Miscellaneous Accounting, Other Than Temporary Investments in Debt and Equity Securities in determining whether an investment is other than temporarily impaired.
 
Inventory
 
Inventory is stated at the lower of cost or market, using the first-in, first-out method (FIFO), and consists primarily of finished goods.
 
Earnings per Share
 
The Company computes earnings per share in accordance with ASC 260 - Earnings per Share . Basic earnings per common share is computed by dividing income or loss available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per common share are based on the average number of common shares outstanding during each period, adjusted for the effects of outstanding stock options.
 
The following table summarizes the loss per share calculations for the three months ended September 30, 2011 and September 30, 2010:

   
Three months ended
September 30, 2011
   
Three months ended
September 30, 2010
 
Basic and diluted shares
   
4,219,026
     
4,232,691
 
Net (Loss) Income
 
$
(4,183,669
 
$
2,604,804
 
Basic and diluted (loss) income per share
 
$
(0.99
 
$
0.62
 
 
Certain stock options were not included in the computation of the earnings per share due to their anti-dilutive effect. The number of anti-dilutive options totaled 52,800 and 54,800 for the three months ended September 30, 2011 and 2010, respectively.
    
The following table summarizes the loss per share calculations for the nine months ended September 30, 2011 and September 30, 2010:

   
Nine months ended
September 30, 2011
   
Nine months ended
September 30, 2010
 
Basic and diluted shares
   
4,223,504
     
4,240,753
 
Net (Loss) Income  
 
$
(5,694,451
 
$
2,700,741
 
Basic and diluted (loss) income per share
 
$
(1.35
 
$
0.64
 
 
Certain stock options were not included in the computation of the earnings per share due to their anti-dilutive effect. The number of anti-dilutive options totaled 52,800 and 54,800 for the nine months ended September 30, 2011 and 2010, respectively.
 
 
9

 
 
DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2011 (Continued)
(Unaudited)
 
Dividends
 
In 2008, Management instituted a policy of paying dividends when funds are available.

The Company paid a dividend of $0.15 per share on June 16, 2011. The Company paid a total dividend of $0.25 and $0.35 per share during the three and nine months ended September 30, 2010.

On November 8, 2011 the Company announced plans to pay a dividend of $0.10 per share on November 30, 2011 to shareholders of record on November 18, 2011.

Stock Based Compensation

The Company records compensation expense associated with stock options and other forms of equity compensation in accordance with FASB ASC 718, “Compensation – Stock Compensation.” Under the fair value recognition provision of FASB ASC Topic 718, stock-based compensation cost is estimated at the grant date based on the fair value of the award. The Company estimates the fair value of stock options granted using the Black-Scholes-Merton option pricing model.
 
Reclassifications

 Reclassifications occurred to certain prior period amounts in order to conform to current year presentation.  The reclassifications have no effect on the reported net income.
 
(2) AVAILABLE-FOR-SALE SECURITIES
 
The Company uses the historical cost method in the determination of its realized and unrealized gains and losses. The following tables summarize the Company’s investments as of:
 
Summary of Available for Sale Securities as of September 30, 2011 (Unaudited)
 
Type of Security
 
Market Value
   
Cost of Securities
   
Net Unrealized Gain
   
Unrealized Gains
   
Unrealized Losses
 
Common Stock
  $ 50,440,956     $ 32,389,878     $ 18,051,078     $ 25,019,410     $ (6,968,332 )
Preferred Stock
    1,875,550       1,571,618       303,932       363,630       (59,698 )
Total Equity Securities
  $ 52,316,506     $ 33,961,496     $ 18,355,010     $ 25,383,040     $ (7,028,030 )
 
Summary of Unrealized Losses of Available for Sale Securities as of September 30, 2011 (Unaudited)
 
   
Less Than Twelve Months
   
Twelve Months or Greater
   
Total
 
   
Fair Value
   
Unrealized Loss
   
Fair Value
   
Unrealized Loss
   
Fair Value
   
Unrealized Loss
 
Marketable Equity Securities
 
$
6,956,028
   
$
5,203,441
   
$
1,901,917
   
$
1,824,589
   
$
8,857,945
   
$
7,028,030
 
 
Summary of Unrealized Gains on Available for Sale Securities as of September 30, 2011 (Unaudited)
 
   
Less Than Twelve Months
   
Twelve Months or Greater
   
Total
 
   
Fair Value
   
Unrealized Gains
   
Fair Value
   
Unrealized Gains
   
Fair Value
   
Unrealized Gains
 
Marketable Equity Securities
 
$
67,700
   
$
4,990
   
$
43,390,861
   
$
25,378,050
   
$
43,458,561
   
$
25,383,040
 
 
 
10

 
 
DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2011 (Continued)
(Unaudited)
 
Summary of Available for Sale Securities as of December 31, 2010
 
Type of Security
 
Market Value
   
Cost of Securities
   
Net Unrealized Gain
   
Unrealized Gains
   
Unrealized Losses
 
Common Stock
 
$
51,808,717
   
$
29,341,744
   
$
22,466,973
   
$
23,044,040
   
$
(577,067
)
Preferred Stock
   
2,067,354
     
1,626,215
     
441,139
     
454,032
     
(12,893
)
Total Equity Securities
 
$
53,876,071
   
$
30,967,959
   
$
22,908,112
   
$
23,498,072
   
$
(589,960
)
 
Daxor Corporation
Summary of Unrealized Losses on Available for Sale Securities
As at December 31, 2010
 
   
Less Than Twelve Months
   
Twelve Months or Greater
   
Total
 
   
Fair Value
   
Unrealized Loss
   
Fair Value
   
Unrealized Loss
   
Fair Value
   
Unrealized Loss
 
Marketable Equity Securities
 
$
8,263,313
   
$
74,480
   
$
2,216,443
   
$
515,480
   
$
10,479,756
   
$
589,960
 
 
Daxor Corporation
Summary of Unrealized Gains on Available for Sale Securities
As at December 31, 2010
 
   
Less Than Twelve Months
   
Twelve Months or Greater
   
Total
 
   
Fair Value
   
Unrealized Gains
   
Fair Value
   
Unrealized Gains
   
Fair Value
   
Unrealized Gains
 
Marketable Equity Securities
 
$
2,423,702
   
$
384,011
   
$
40,972,613
   
$
23,114,061
   
$
43,396,315
   
$
23,498,072
 
 
Our investment policy calls for a minimum of 80% of the value of our portfolio of Available for Sale Securities to be maintained in utility stocks. This percentage may be temporarily decreased to 70% if deemed necessary by management. Operating under this policy, Management’s investment strategy is to purchase utility stocks which it considers to be undervalued relative to the market in anticipation of an increase in the market price.
 
At September 30, 2011 and December 31, 2010, available for sale securities consisted mostly of preferred and common stocks of utility companies. At September 30, 2011 and December 31, 2010, 96.37% and 96.16% of the market value of the Company’s available for sale securities was made up of common stock, respectively.
 
The Company’s portfolio value is exposed to fluctuations in the general value of electric utilities. An increase of interest rates could put downward pressure on the valuation of utility stocks.
 
Electric utilities operate in an environment of federal, state and local regulations, and they may disproportionately affect an individual utility. The Company believes that it’s exposure to regulatory risk is mitigated due to the diversity of holdings consisting of 86 separate common and preferred stocks. As of September 30, 2011 there were five holdings of common stock which comprised 47.54% of the total market value of the available for sale investments. These five holdings are Entergy, Exelon, First Energy, Bank of America, and National Grid.
 
 
11

 
 
DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2011 (Continued)
(Unaudited)
 
It is possible that the market value of a stock may go below our cost after we purchase it even though we considered the stock to be undervalued relative to the market at the time we purchased it. When that occurs, we follow the provisions of SEC Staff Accounting Bulletin: Codification of Staff Accounting Bulletins, Topic 5-M (“SAB 5-M”): Miscellaneous Accounting, Other Than Temporary Investments in Debt and Equity Securities in determining whether an investment is other than temporarily impaired. The factors we review and/or consider include the following:
 
 
The extent to which the market value has been less than cost.
     
 
An evaluation of the financial condition of an issuer including a review of their profit and loss statements for the most recent completed fiscal year and the preceding two years.
     
 
The examination of the general market outlook of the issuer. This could include but is not limited to the issuer having a unique product or technology which would appear likely to have a positive impact on future earnings.
     
 
A review of the general market conditions.
     
 
Our intent and ability to retain the investment for a period of time sufficient to allow for the anticipated recovery in market value.
     
 
Specific adverse conditions related to the financial health of, and business outlook for, the issuer.
     
 
Changes in technology in the industry and its affect on the issuer.
     
 
Changes in the issuer’s credit rating.
 
Unrealized Losses on Available for Sale Securities
 
At September 30, 2011, 82.82% or $5,820,878 of the total unrealized losses of $7,028,030 was comprised of the following three securities: $3,631,118 for Bank of America, $823,789 for Citigroup Inc. and $1,365,971 for USEC.

Bank of America

At September 30, 2011, Daxor owned 560,295 shares of Bank of America with a cost basis of $12.60 per share and a market value of $6.12 per share. On October 31, 2011, the market value was $6.83 per share which is $5.77 or 46% lower than our cost basis of $12.60 per share. As of September 30, 2011, the book value of the Company was $20.80 per share which is substantially more than the current market price and the cost basis of the shares owned by Daxor.

Revenue, net of interest expense for the quarter ended September 30, 2011 increased to $28.4 billion from $26.7 billion during the quarter ended September 30, 2010.

The Company took advantage of its strong liquidity position during the quarter ended September 30, 2011 and reduced short term debt by $17 billion and long term debt by $28 billion.

On October 18, 2011, Bank of America reported net income of $6.2 billion for the quarter ended September 30, 2011 versus a net loss of $7.3 billion for the same period in 2010.

In order to be “well capitalized” under federal bank regulatory agency definitions, a bank holding company must have a Tier 1 Capital Ratio of at least 6%, a Total Capital Ratio of at least 10%, and a Leverage ratio of at least 3% not to be subject to a Federal Reserve Board directive to maintain higher capital levels. At September 30, 2011, the Tier 1 Capital Ratio was 11.48%, the Total Capital Ratio was 15.86% and the leverage ratio was 7.11%. Bank of America is considered “well capitalized” under the federal regulatory agency definitions at September 30, 2011.
 
 
12

 
 
DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2011 (Continued)
(Unaudited)
 
            After considering the available positive and negative evidence in addition to the ability of Daxor to hold the stock until the market price exceeds our cost as it did at March 31, 2011, management has determined that an impairment charge is not necessary at September 30, 2011 on Bank of America.

Citigroup

At September 30, 2011, Daxor owned 38,440 shares of Citigroup with a cost basis of $47.05 per share and a market value of $25.62. On October 31, 2011, the market value was $31.59 per share which is $15.46 or 33% lower than our cost basis of $47.05 per share. During the first quarter of 2009, the stock was at $10.00 per share and as of October 31, 2011, was trading at $31.59 per share. The stock price has decreased by 5% from January 1, 2010 through October 31, 2011 going from $33.10 per share to $31.59 per share. As of September 30, 2011, the book value of the Company was $60.56 which is substantially more than the current market price and the shares owned by Daxor.

Citigroup reported net income of $3.8 billion for the quarter ended September 30, 2011 versus net income of $2.1 billion for the quarter ended September 30, 2010. Revenue was $20.8 billion during the current quarter versus $20.7 billion for the same period in 2010.

Citigroup has increased headcount to 267,000 at September 30, 2011 from 260,000 at March 31, 2011. This is still less than the peak level of 375,000 from 2007. Total Operating Expenses were 8% higher during the nine months ended September 30, 2011 as compared to the same period in 2010.

During 2009, Citigroup repaid $20 billion of TARP (Troubled Asset Relief Program) trust preferred securities and exited a loss sharing agreement. As a result of these transactions, effective in 2010, Citigroup is no longer deemed to be a beneficiary of “exceptional financial assistance” under TARP.
 
In order to be “well capitalized” under federal bank regulatory agency definitions, a bank holding company must have a Tier 1 Capital Ratio of at least 6%, a Total Capital Ratio of at least 10% , and a Leverage ratio of at least 3%, and not be subject to a Federal Reserve Board directive to maintain higher capital levels. At September 30, 2011, the Tier 1 Capital Ratio was 13.5%, Total Capital Ratio was 16.9% and the Leverage Ratio was 7.0%. Citigroup is considered “well capitalized” under the federal regulatory agency definitions at June 30, 2011 and all of these percentages have improved since December 31, 2010.
 
The operating environment for Citigroup continues to be difficult but the stock price has mostly been trending upward since the first quarter of 2010. Citigroup has now recorded a profit for seven consecutive quarters versus a loss for the year ended December 31, 2009. Citigroup is no longer deemed to be a beneficiary of “exceptional financial assistance” under TARP and is considered to be “well capitalized” under the federal regulatory agency definitions at September 30, 2011.
 
           After considering the available positive and negative evidence in addition to the ability of Daxor to hold the stock until the market price exceeds our cost, management has determined that an impairment charge is not necessary at September 30, 2011 on Citigroup.
 
USEC

At September 30, 2011, Daxor owned 422,400 shares of USEC with a cost basis of $4.84 per share and a market value of $1.61 per share. On October 31, 2011 the market value of USEC was $2.10 per share which is $2.74 or 57% less than our cost basis of $4.84 per share.

 The stock price has decreased by 65% from January 1, 2011 through October 31, 2011, going from $5.99 per share to $2.10 per share. As of September 30, 2011, the Book Value of the Company was approximately $10.93 per share. This is substantially more than the current market price and the cost basis of the shares owned by Daxor.
 
USEC Inc., together with its subsidiaries, supplies low enriched uranium (LEU) to commercial nuclear power plants in the United States and internationally. It also performs contract work for the U.S. Department of Energy (DOE) and DOE contractors at the Paducah and Portsmouth gaseous diffusion plants. USEC Inc’s contract work includes support services and the maintenance of Portsmouth gaseous diffusion plant in a state of cold shutdown. In addition, the company provides nuclear energy solutions and services, including the design, fabrication, and implementation of spent nuclear fuel technologies; nuclear materials transportation and storage systems; and nuclear fuel cycle and energy consulting services.
 
 
13

 
 
USEC reported a net loss of $44.7 million for the nine months ended September 30, 2011, versus a net loss of $1.5 million for the same period in 2010. Revenue for the current nine month period was $1.209 billion which is a 12% increase from 2010. The Gross Profit Margin was 6.1% during the nine months ended September 30, 2011 versus 8.0% for the nine months ended September 30, 2010.
 
Electricity makes up approximately 70% of USEC’s production cost. The Company is focused on negotiations with their major power supplier and other utilities in order to obtain lower cost power with less volatility in pricing after their current contract expires in 2012.
 
             In their news release of November 4, 2011, the Company reaffirmed  expected revenue of approximately $1.7 billion for 2011 and a gross profit of approximately $100 million.
 
After considering the available positive and negative evidence in addition to the ability of Daxor to hold the stock until the market price exceeds our cost, management has determined that an impairment charge is not necessary at September 30, 2011 on USEC.
 
Daxor Corporation
Summary of Unrealized Losses on Bank of America, Citigroup and USEC
As of September 30, 2011

          
Less Than Twelve Months
   
Twelve Months or Greater
   
Total
 
Security
 
Total Cost
   
Fair Value
   
Unrealized
 Loss
   
Fair Value
   
Unrealized
Loss
   
Fair Value
   
Unrealized
 Loss
 
Bank of America
 
$
7,060,123
   
$
3,077,105
   
$
3,198,236
   
$
351,900
   
$
432,882
   
$
3,429,005
   
$
3,631,118
 
Citigroup
   
1,808,429
     
550,723
     
244,864
     
433,918
     
578,925
     
984,641
     
823,789
 
USEC
   
2,046,036
     
377,223
     
690,565
     
302,841
     
675,406
     
680,064
     
1,365,971
 
Total
 
$
10,914,588
   
$
4,005,051
   
$
4,133,665
   
$
1,088,659
   
$
1,687,213
   
$
5,093,710
   
$
5,820,878
 
 
 
14

 
 
DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2011 (Continued)
(Unaudited)
 
(3) SEGMENT ANALYSIS
 
The Company has two operating segments: Equipment Sales and Related Services, and Cryobanking and Related Services.
 
The Equipment Sales and Related Services segment comprises the Blood Volume Analyzer equipment and related activity. This includes equipment sales, equipment rentals, equipment delivery fees, BVA-100 kit sales and service contract revenues.
 
The Cryobanking and Related Services segment is comprised of activity relating to the storage of blood and semen, and related laboratory services and handling fees.
 
Although not deemed an operating segment: the Company reports a third business segment; Investment activity. This segment reports the activity of the Company’s investment portfolio. This includes all earnings, gains and losses, and expenses relating to these investments.
 
The following table summarizes the results of each segment described above for the three months ended September 30, 2011 (unaudited).
 
   
September 30, 2011
 
   
Equipment
Sales &
Related
Services
   
Cryobanking
& Related
Services
   
Investment
Activity
   
Total
 
                         
Revenues
 
$
260,231
   
$
80,676
   
$
   
$
340,907
 
                                 
Expenses
                               
Cost of sales
   
136,166
     
13,210
     
     
149,376
 
Research and development expenses
   
591,043
     
46,008
     
     
637,051
 
Selling, general and administrative expenses
   
639,894
     
175,658
     
     
815,552
 
                                 
Total Expenses
   
1,367,103
     
234,876
     
     
1,601,979
 
                                 
Operating loss
   
(1,106,872
)
   
(154,200
)
   
     
(1,261,072
)
                                 
Investment loss, net
   
     
     
(5,741,057
   
(5,741,057
                                 
Other income (expense)
                               
                                 
Interest expense, net
   
(5,412
)
   
     
(24,357
)
   
(29,769
)
                                 
Other income
   
3,093
     
     
     
3,093
 
                                 
Total Other Expense
   
(2,319
)
   
     
(24,357
)
   
(26,676
)
                                 
Loss before income taxes
   
(1,109,191
)
   
(154,200
)
   
(5,765,414
   
(7,028,805
                                 
Income tax expense (benefit)
   
(10,806
   
470
     
(2,834,800
   
(2,845,136
                                 
Net Income (loss)
 
$
(1,098,385
)
 
$
(154,670
)
 
$
(2,930,614
 
$
(4,183,669
                                 
Total assets
 
$
4,842,613
   
$
131,629
   
$
83,278,400
   
$
88,252,642
 
 
 
15

 
 
DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2011 (Continued)
(Unaudited)

The following table summarizes the results of each segment described above for the three months ended September 30, 2010 (unaudited).

   
September 30, 2010
 
   
Equipment Sales &
Related Services
   
Cryobanking & Related Services
   
Investment Activity
   
Total
 
                         
Revenues
 
$
368,201
   
$
 85,080
   
$
 —
   
$
 453,281
 
                                 
Expenses
                               
Cost of sales
   
 174,014
     
 11,728
     
 —
     
 185,742
 
Research and development expenses
   
 642,143
     
 52,587
     
     
 694,730
 
Selling, general and administrative expenses
   
 651,639
     
 206,035
     
 —
     
 857,674
 
                                 
Total Expenses
   
1,467,796
     
270,350
     
     
1,738,146
 
                                 
Operating loss
   
(1,099,595
)
   
 (185,270
)
   
     
(1,284,865
)
                                 
Investment income, net
   
 —
     
 —
     
5,706,063
     
5,706,063
 
                                 
Other income (expense)
                               
                                 
Interest expense, net
   
 (6,896
)
   
 —
     
 (13,427
)
   
 (20,323
)
                                 
Other income
   
 3,041
     
 —
     
     
 3,041
 
Total Other Income (expense)
   
(3,855
)
   
 —
     
(13,427
)
   
(17,282
)
                                 
Income (loss) before income taxes
   
(1,103,450
)
   
(185,270
)
   
 5,692,636
     
 4,403,916
 
Income tax expense
   
75,403
     
     
1,723,709
     
1,799,112
 
                                 
Net Income (loss)
 
$
 (1,178,853
)
 
$
 (185,270
)
 
$
 3,968,927
   
$
2,604,804
 
                                 
Total assets
 
$
5,052,684
   
$
162,402
   
$
 81,032,990
   
$
86,248,076
 

 
16

 
 
DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2011 (Continued)
(Unaudited)
 
The following table summarizes the results of each segment described above for the nine months ended September 30, 2011 (unaudited).
 
   
September 30, 2011
 
   
Equipment
Sales &
Related
Services
   
Cryobanking
& Related
Services
   
Investment
Activity
   
Total
 
                         
Revenues
 
$
841,158
   
$
235,357
   
$
   
$
1,076,515
 
                                 
Expenses
                               
Cost of sales
   
445,453
     
30,104
     
     
475,557
 
Research and development expenses
   
1,853,350
     
143,074
     
     
1,996,424
 
Selling, general and administrative expenses
   
2,903,796
     
481,544
     
     
3,385,340
 
                                 
Total Expenses
   
5,202,599
     
654,722
     
     
5,857,321
 
                                 
Operating loss
   
(4,361,441
)
   
(419,365
)
   
     
(4,780,806
)
                                 
Investment loss, net
   
     
     
(4,868,729
   
(4,868,729
                                 
Other income (expense)
                               
                                 
Interest expense, net
   
(28,004
)
   
     
(113,673
)
   
(141,677
)
                                 
Other income
   
9,281
     
     
     
9,281
 
                                 
Total Other Expense
   
(18,723
)
   
     
(113,673
)
   
(132,396
)
                                 
Loss before income taxes
   
(4,380,164
)
   
(419,365
)
   
(4,982,402
   
(9,781,931
                                 
Income tax expense (benefit)
   
112,176
     
470
     
(4,200,126
   
(4,087,480
                                 
Net Income (loss)
 
$
(4,492,340
)
 
$
(419,835
)
 
$
(782,276
 
$
(5,694,451
)
                                 
Total assets
 
$
4,842,613
   
$
131,629
   
$
83,278,400
   
$
88,252,642
 

 
17

 
 
DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2011 (Continued)
(Unaudited)

The following table summarizes the results of each segment described above for the nine months ended September 30, 2010 (unaudited).

   
September 30, 2010
 
   
Equipment Sales &
Related Services
   
Cryobanking & Related Services
   
Investment Activity
   
Total
 
                         
Revenues
 
$
 958,929
   
$
 258,956
   
$
 —
   
$
1,217,885
 
                                 
Expenses
                               
Cost of sales
   
 516,304
     
 26,626
     
 —
     
 542,930
 
Research and development expenses
   
2,166,121
     
 155,143
     
     
 2,321,264
 
Selling, general and administrative expenses
   
1,950,852
     
 534,930
     
 —
     
 2,485,782
 
                                 
Total Expenses
   
4,633,277
     
716,699
     
     
5,349,976
 
                                 
Operating loss
   
(3,674,348
)
   
 (457,743
)
   
     
(4,132,091
)
                                 
Investment income, net
   
 —
     
 —
     
9,202,472
     
 9,202,472
 
                                 
Other income (expense)
                               
                                 
Interest expense, net
   
 (21,142
)
   
 296
     
 (14,660
)
   
 (35,506
)
                                 
Other income
   
9,124
     
 —
     
     
 9,124
 
Total Other Income (Expense)
   
(12,018
)
   
296
     
(14,660
)
   
(26,382
)
                                 
Income (loss) before income taxes
   
(3,686,366
)
   
(457,447
)
   
 9,187,812
     
 5,043,999
 
                                 
Income tax expense
   
111,403
     
     
2,231,855
     
2,343,258
 
                                 
Net Income (loss)
 
$
 (3,797,769
)
 
$
 (457,447
)
 
$
 6,955,957
   
$
2,700,741
 
                                 
Total