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 JUNE 30, 1996
Commission File Number 0-12248
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 ( X ) No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
CLASS OUTSTANDING AT JUNE 30, 1996
COMMON STOCK 4,742,709
PAR VALUE: $.O1 per share
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS PAGE
Consolidated Balance Sheets as at
June 30, 1996 and December 31,1995 2
Consolidated Statements of Operations for the
Three and Six Months ended June 30, 1996
and 1995 3
Consolidated Statements of Cash Flows for the
Six Months ended June 30, 1996 and 1995 4
Notes to Financial Statements 5
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<HEADER>
DAXOR CORPORATION
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
<S> <C> <C>
June 30, December 31,
1996 1995
ASSETS
___________________________________________________________________________
Current Assets:
Cash $ 159,799 $ 1,987
Marketable Securities at Fair Value
June 30,1996 and December 31,
1995.(Notes 1 and 2) 33,754,459 35,735,073
Accounts Receivable 567,936 409,196
Accounts Receivable - Related Parties 144,345 172,951
Other Current Assets 169,402 764,695
Tax Refunds Receivable 206,233 206,233
---------- ----------
TOTAL CURRENT ASSETS: $ 35,002,174 $ 37,290,135
========== ==========
___________________________________________________________________________
Equipment and Improvements
Storage Tanks 125,815 125,815
Leasehold Improvements, Furniture
and Equipment 636,120 628,617
Laboratory Equipment 274,418 274,418
--------- ---------
1,036,353 1,028,850
Less Accumulated Depreciation and
Amortization (635,810) (606,180)
--------- ---------
Net Equipment and Improvements 400,543 422,670
Other Assets 31,985 31,816
TOTAL ASSETS: $ 35,434,702 $ 37,744,621
=========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts Payable and Accrued Liabilities $ 139,309 $ 323,815
Loans Payable (Notes 1 and 2) 717,297 1,536,609
Other Liabilities (Note 1) 30,749 93,056
Deffered Taxes (Note 3) 3,655,630 3,738,310
--------- ---------
TOTAL LIABILITIES: 4,542,715 5,691,790
Shareholders' Equity:
Common Stock, par value $.01 per Share:
Authorized 10,000,000 Shares: Issued and
Outstanding 4,722,709 shares at June 30,
1996 and 4,742,709 at December 31, 1995 53,097 53,097
Additional Paid in Capital 8,579,803 8,579,803
Net Unrealized Holding gains on available-
for-sale securities(Note 1) 6,219,113 7,119,401
Retained Earnings 19,211,153 19,338,209
Treasury Stock (3,171,179) (3,037,679)
---------- ----------
TOTAL SHAREHOLDERS' EQUITY 30,891,987 32,052,831
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 35,434,702 $ 37,744,621
========== ==========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
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DAXOR CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<S> <C> <C> <C> <C>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
------------------ -----------------
1996 1995 1996 1995
---- ---- ---- ----
REVENUES
Operating Revenues $ 253,889 $ 430,113 $ 431,565 $ 933,593
Dividend Income 529,191 556,023 1,042,892 1,105,375
Gains (Losses) on Sale
of Securities 40,729 89,734 182,774 287,772
Gains (Losses) On Sale of
Options and Commodities (949) 11,458 (198,375) 7,090
------- --------- --------- ---------
TOTAL REVENUES 822,860 1,087,328 1,458,856 2,333,830
------- --------- --------- ---------
COSTS AND EXPENSES
Operations of Laboratories 294,719 279,168 424,846 558,531
Selling, General, and
Administrative 536,314 431,262 1,121,386 829,996
Interest Expense, Net of
Interest Income 6,011 50,417 25,292 (877)
------- ------- --------- ---------
TOTAL COSTS AND EXPENSES 837,044 760,847 1,571,524 1,387,650
------- ------- --------- ---------
Net Income (Loss) Before
Income Taxes (14,184) 326,481 (112,688) 946,180
Provision for Income Taxes 1,081 28,358 14,392 78,075
------- ------- --------- -------
NET INCOME (LOSS) $ (15,265) $ 298,123 $ (127,060) $ 868,105
======= ======= ======= =======
Weighted Average Number
of Shares Outstanding 4,722,709 4,891,709 4,789,375 4,979,502
========= ========= ========= =========
Net Income (Loss) Per Common
Equivalent Share ($.01) $.06 ($.03) $ .17
===== ==== ====== ======
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
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<HEADER>
DAXOR CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE SIX MONTHS ENDED
<S> <C> <C>
JUNE 30, JUNE 30,
1996 1995
___________________________________________
CASH FLOWS FROM OPERATING ACTIVITIES
- -------------------------------------------
Net Income or (Loss)........................... $ (127,060) $ 868,105
--------- -------
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation equipment and improvements........ 29,630 20,250
Amortization - goodwill........................ -- 2,804
(Gain) Loss on sale of investments............. 15,601 (294,862)
Change in assets and liabilities:
(increase) decrease in accounts receivable... (130,134) 18,614
(increase) decrease in other current assets.. 595,293 223,833
(increase) decrease in other assets.......... (169) -0-
increase (decrease) in accounts payable,
accrued and other liabilities net of "short
sales"....................................... (183,476) 46,630
------- -------
Total adjustments............................ 326,745 17,269
------- -------
Net cash provided by or (used in) operating
activities................................... 199,685 885,374
------- -------
___________________________________________
CASH FLOWS FROM INVESTING ACTIVITIES:
- -------------------------------------------
Payment for purchase of equipment and
improvements................................. (7,503) (17,165)
Net cash provided or (used) in purchase and
sale of investments.......................... 898,270 1,687,155
Net proceeds (repayments) of loans from brokers
used to purchase investments................. 80,688 (452,807)
Proceeds from "short sales" not closed......... 20,172 117,696
------- --------
Net cash provided by or (used in) investing
activities................................... 991,627 1,334,879
------- ---------
___________________________________________
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of Bank Loan....................... (900,000) (1,000,000)
Payment for purchase of treasury stock....... (133,500) (1,220,800)
-------- ---------
Net cash provided by or (used in) financing
activities............................... (1,033,500) (2,220,800)
--------- ---------
Net increase (decrease) in cash and cash
equivalents.................................. 157,812 (547)
Cash and cash equivalents at beginning of year 1,987 59,962
--------- --------
Cash and cash equivalents at end of period... $ 159,799 $ 59,415
========= ========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
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DAXOR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
SIX MONTHS ENDED JUNE 30, 1996 AND 1995
In the opinion of the Company, the accompanying unaudited consolidated financial
statements contain all adjustments (consisting of only normal recurring
accruals) necessary to present fairly the financial position as of June 30,
1996 and December 31, 1995, the results of operations for the three and six
months ended June 30, 1996 and 1995 and cash flows for the six months ended
June 30, 1996 and 1995. The consolidated financial statements include the
accounts of the Company and its subsidiary. All significant intercompany
transactions and balances have been eliminated in consolidation.
1. MARKETABLE SECURITIES
Upon adoption of FASB No. 115, management has determined that the company's
portfolio is best characterized as "Available-For-Sale". This has resulted
in the balance sheet carrying value of the company's marketable securities
investments, as of June 30,1996, and December 31, 1995, being increased
approximately 41.35% and 43.64% respectively over its historical cost. A
corresponding increase in shareholders' equity has been effectuated. In
accordance with the provisions of FASB No.115, the adjustment in shareholders'
equity to reflect the company's unrealized gains has been made net of the tax
effect had these gains been realized. The prior period has not been restated.
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The following table summarizes the company's investments as of June 30, 1996.
<S> <C> <C> <C> <C>
TYPE OF COST FAIR VALUE UNREALIZED UNREALIZED
SECURITY HOLDING GAINS HOLDING LOSSES
Equity $23,854,716 $33,727,959 $12,864,142 $2,990,899
Debt 25,000 26,500 1,500 -0-
----------- ----------- ----------- ----------
Total $23,879,716 $33,754,459 $12,865,642 $2,990,899
=========== =========== =========== ==========
December 31, 1995
TYPE OF COST FAIR VALUE UNREALIZED UNREALIZED
SECURITY HOLDING GAINS HOLDING LOSSES
Equity $24,851,151 $35,673,901 $13,470,588 $2,647,838
Debt 26,212 61,172 34,960 -0-
----------- ----------- ----------- -----------
Total $24,877,363 $35,735,073 $13,505,548 $2,647,838
=========== =========== =========== ===========
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At June 30, 1996, the securities held by the Company had a market value of
$33,754,459 and a cost basis of $23,879,716 resulting in a net unrealized gain
of $9,874,743 or 41.35% of cost. At December 31, 1995, the securities held by
the Company had a market value of $35,735,073 and a cost basis of $24,877,363
resulting in a net unrealized gain of $10,857,710 or 43.64% of cost. At
June 30, 1996 and December 31, 1995, marketable securities, primarily
consisting of preferred and common stocks of utility companies, are valued at
fair value.
2. LOANS PAYABLE
As at June 30, 1996 and December 31, 1995, the Company had loans outstanding
aggregating $200,000 and $1,100,000 respectively, borrowed on a short-term
basis from a bank, which are secured by certain marketable securities owned
by the Company. These loans bear interest at approximately 7.8%.
Short term margin debt due to brokers, secured by the Company's marketable
securities, totaled $ 516,897 at June 30, 1996 and $ 436,609 at December 31,
1995.
PART II. OTHER INFORMATION
ITEM 2 Legal Proceedings
As previously reported, Daxor Corporation, (through its separately licensed
divisions), has been involved in several proceedings with the New York State
Department of Health relating to its licenses to operate clinical laboratories,
its blood bank and semen bank. The following is a summary of recent activity
in these matters:
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1. Idant Laboratories, et al v. State of New York Department of Health, et al.
(Supreme Court, New York County; Index No.105052/94). Idant commenced suit
challenging the State Health Department's denial of Idant's clinical laboratory
and blood bank licensure operations for the periods including 1991-1993. By
decision and order dated April 13, 1995, Justice Freeman denied Idant's
petitions. The Appeal has been filed. The matter will be heard in the
October term.
2. Daxor Corp., et al. v. State of New York Department of Health, et al.
(Supreme Court, New York County; Index No. 131181/94). This matter was
instituted by Daxor challenging the constitutionality of the State Health
Department's semen bank regulations. By decision and order dated April 26,
1995, Justice Harold Tompkins denied the motion of the State Health Department
to dismiss the complaint and declined Daxor's request to convert the State
Health Department's motion to one for summary judgment. The proceeding remains
ongoing.
3.Daxor Corp., et al. v. State of New York Department of Health, et al.
(Supreme Court, New York County; Index No. 107564/95). This proceeding was
instituted by Daxor to challenge the determination of the State Department of
Health to revoke all licenses issued to, and to deny all licensure applications
for, Daxor's New York health care facilities. The court (Tompkins, J.) heard
argument on the petition on June 23, 1995, and by decision and order dated July
17, 1995, denied Daxor's application. An appeal from that decision was filed on
on November 6, 1995, with the Supreme Court, Appellate Division, First
Department. The appeal was argued before the February Term of the court. The
matter is pending a decision. The Appellate Division reversed the decision.
The State was denied leave to appeal the decision to the Court of Appeals by
the Appellate Division.
4. Daxor Corp., et al. v. Linden, et al. (United States District Court,
Southern District, Case No. 95 Civ. 7847 (KTD). Daxor instituted an anti
trust, Racketeering Influenced Corrupt Organizations Act and an action
pursuant to 42 US Cryobanks 1983 for violations of its civil rights. The
defendants filed motions to dismiss the complaint. The matter is pending a
decision by the court.
5. Daxor, et al. v. Amy Clyde. et al. (Supreme Court, New York County;
Index No. 122486/95). Daxor instituted an action for defamation against Amy
Clyde, the author of the article, and K-111 Corp., the owner of New York
Magazine, which published the defamatory article. This proceeding remains
ongoing.
6. Daxor, et al. v. State of New York, (Court of Claims; Claim No. 92013).
Daxor instituted a claim for defamation against the State of New York resulting
from the dissemination of false information regarding Daxor to the media. This
claim remains ongoing.
7. Daxor and Yaker, et al. v. DeBuono, (Supreme Court, New York Count;
Index No. 122485/95). Justice Cohen. This is a class action instituted by
tissue depositors of Daxor against the Department of Health to enjoin the
Department of Health from mandating the removal of the class' property from
the Daxor tissue banks premises. The matter is still ongoing.
8. Idant v. DeBuono, (Supreme Court, Albany County; Index No. 471/96).
Justice Canefield. This a petition instituted pursuant to CLPR Article 78,
appealing the decision of the New York State Department of Health for revoking
- -6-
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Idant's Semen Bank license. The basis of this action is that the Department
of Health revoked the license in violation of Public Health Law section 4366.
The matter was argued and submitted to Justice Canefield and a decision is
pending.
9. Idant v. The Department of Health of the City of New York, (Supreme Court,
Appellate Division, First Department; Index No. 123218/94). This action is an
appeal of the City Department of Health's decision to prohibit Daxor from
performing Semen Analysis. This matter was argued before the February Term of
the Appellate Division. The Appellate Division reversed the City's decision.
The City was denied leave to appeal the decision to the Court of Appeals by
the Appellate Division.
10. Gregory Pollinger v. Joseph Feldschuh, Idant Laboratories and Daxor
Corporation, (Supreme Court, New York County; Index No. 122560/95). Former
Daxor semen bank depositor brought suit, alleging that his semen stored at
Daxor is no longer viable. The plaintiff complaint does not allege a dollar
amount in the ad damnum clause. The standard Semen Depositor contract, that
the Plaintiff signed, specifically states that Daxor cannot guarantee the
viability of the semen and that there are no warranties, expressed or implied.
Based on the clear language of the contract, the Company believes that
Plaintiff's action is without merit. The matter is still ongoing.
ITEM 6(b) Reports on Form 8-K
The Company did not file any reports on Form 8-K during the quarter ended
June 30, 1996.
ITEM 2.
Management's discussion and analysis of financial conditions and results
of operations.
RESULTS OF OPERATIONS
- ---------------------
Six months ended June 30, 1996 as compared with six months ended June 30, 1995.
- -------------------------------------------------------------------------------
For the six months ended June 30, 1996, total revenues were $1,458,856 down
slightly from $2,333,830, in 1995. Operating revenues were $431,965 in 1996
and $933,593 in 1995. Dividend income was $1,042,892 with a net interest
expense of ($25,292) as compared to dividend income of $1,105,375 with a net
interest income of $877 in 1995. In 1996, the Company had a net loss of
$112,668 before income taxes versus a net income of $946,180 before taxes in
1995.
Three months ended June 30,1996 as compared with three months ended June 30,1995
- --------------------------------------------------------------------------------
For the three months ended June 30, 1996 total revenues declined to $822,860
from $1,087,328 in the 1995 quarter. In 1996, dividend income was $529,191
with an interest expense of $6,011 compared to dividend income of $556,023
with an interest expense of $50,417 in 1995. The Company had a net loss of
$14,184 before income taxes in 1996 versus a net income of $326,481 before
taxes in the 1995 quarter.
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LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
At June 30, 1996 the Company had total assets of $35,434,702 and total
liabilities of $4,542,715 with shareholders' equity of $30,891,987. The
Company has $ 6,219,113 of net after tax unrealized capital gains on available-
for-sale securities in its portfolio. This amount is included in the calculation
of Total Shareholders' Equity.
The Company has adequate resources for the development and marketing of its
instrument (the Blood Volume Analyzer BVA-100) and the liquid capital to
sustain its blood bank. If the Company were to expand its blood banking
operation on a full scale, nation-wide basis, it would require additional
capital.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DAXOR CORPORATION
(Registrant)
DATE: August 15, 1996 /S/ Joseph Feldschuh, M.D.
--------------------------
JOSEPH FELDSCHUH, M.D.
President
DATE: August 15, 1996 /S/ Robert Rosenthal, M.D.
---------------------------
ROBERT ROSENTHAL, M.D.
Vice President
DATE: August 15, 1996 /S/ Octavia Atanasiu
---------------------------
OCTAVIA ATANASIU
Treasurer
DATE: August 15, 1996 /S/ Virginia Fitzpatrick
----------------------------
VIRGINIA FITZPATRICK
Secretary
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<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 159,799
<SECURITIES> 33,754,459
<RECEIVABLES> 712,281
<ALLOWANCES> 0
<INVENTORY> 158,000
<CURRENT-ASSETS> 35,002,174
<PP&E> 1,036,353
<DEPRECIATION> (635,810)
<TOTAL-ASSETS> 35,434,702
<CURRENT-LIABILITIES> 4,542,715
<BONDS> 0
0
0
<COMMON> 53,097
<OTHER-SE> 30,891,987
<TOTAL-LIABILITY-AND-EQUITY> 35,434,702
<SALES> 431,565
<TOTAL-REVENUES> 1,458,856
<CGS> 424,846
<TOTAL-COSTS> 1,571,524
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 25,292
<INCOME-PRETAX> (112,668)
<INCOME-TAX> 14,392
<INCOME-CONTINUING> (127,060)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (127,060)
<EPS-PRIMARY> (0.03)
<EPS-DILUTED> (0.03)
</TABLE>
