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, 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 SEPTEMBER 30, 1996
COMMON STOCK 4,722,709
PAR VALUE: $.O1 per share
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS PAGE
Consolidated Balance Sheets as at
September 30, 1996 and December 31,1995 2
Consolidated Statements of Operations for the
Three and Nine Months ended September 30, 1996
and 1995 3
Consolidated Statements of Cash Flows for the
Nine Months ended September 30, 1996 and 1995 4
Notes to Financial Statements 5
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<PAGE>
[CAPTION]
DAXOR CORPORATION
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
<TABLE>
<S> <C> <C>
September 30, December 31,
1996 1995
ASSETS
___________________________________________________________________________
Current Assets:
Cash $ 89,805 $ 1,987
Marketable Securities at Fair Value
June 30,1996 and December 31,
1995.(Notes 1 and 2) 33,230,471 35,735,073
Accounts Receivable 625,442 409,196
Accounts Receivable - Related Parties 140,038 172,951
Other Current Assets 255,180 764,695
Tax Refunds Receivable 206,233 206,233
----------- ----------
TOTAL CURRENT ASSETS: $ 34,547,169 $37,290,135
___________________________________________________________________________
Equipment and Improvements
Storage Tanks 125,815 125,815
Leasehold Improvements, Furniture
and Equipment 701,943 628,617
Laboratory Equipment 274,418 274,418
---------- ----------
1,102,176 1,028,850
Less Accumulated Depreciation and
Amortization (650,625) (606,180)
---------- -----------
Net Equipment and Improvements 451,551 422,670
Other Assets 31,985 31,816
TOTAL ASSETS: $35,030,705 $ 37,744,621
=========== ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts Payable and Accrued Liabilities $ 140,960 $ 323,815
Loans Payable (Notes 1 and 2) 1,436,414 1,536,609
Other Liabilities (Note 1) 12,451 93,056
Deffered Taxes (Note 3) 3,277,819 3,738,310
---------- ----------
TOTAL LIABILITIES: 4,867,644 5,691,790
Shareholders' Equity:
Common Stock, par value $.01 per Share:
Authorized 10,000,000 Shares: Issued and
Outstanding 4,712,709 shares September 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) 5,576,365 7,119,401
Retained Earnings 19,225,478 19,338,209
Treasury Stock (3,271,682) (3,037,679)
------------ -----------
TOTAL SHAREHOLDERS' EQUITY 30,163,061 32,052,831
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 35,030,705 $ 37,744,621
============ ============
</TABLE>
[FN]
SEE ACCOMPANYING FINANCIAL NOTES
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<PAGE>
[CAPTION]
DAXOR CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<S> <C> <C> <C> <C>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPT 30 SEPT 30
1996 1995 1996 1995
____ ____ ____ ____
REVENUES
Operating Revenues $ 200,851 $ 254,928 $ 632,416 $1,188,521
Dividend Income 538,866 528,262 1,581,758 1,633,637
Gains (Losses) on Sale
of Securities 23,311 195,311 206,085 483,083
Gains (Losses) On Sale of
Options and Commodities 1,652 12,783 (196,723) 19,873
---------- --------- ---------- --------
TOTAL REVENUES 764,680 991,284 2,223,536 3,325,114
COSTS AND EXPENSES
- - ------------------
Operations of Laboratories 248,836 217,345 673,682 775,876
Selling, General, and
Administrative 485,230 583,780 1,606,616 1,413,776
Interest Expense, Net of
Interest Income 16,849 (61,742) 42,141 (62,619)
----------- --------- ---------- ---------
TOTAL COSTS AND EXPENSES 750,915 739,383 2,322,439 2,127,033
----------- --------- ---------- ---------
Net Income (Loss) Before
Income Taxes 13,765 251,901 (98,903) 1,198,081
Provision for Income Taxes (564) 29,549 13,828 107,624
---------- -------- -------- ---------
NET INCOME (LOSS) $ 14,239 $ 222,352 $ (112,731)$ 1,090,457
============ ========== ========== ===========
Weighted Average Number
of Shares Outstanding 4,722,709 4,782,142 4,729,375 4,913,716
========= ========= ========= =========
Net Income (Loss) Per Common
Equivalent Share $.01 $.05 $(.02) $ .22
</TABLE>
[FN]
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
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<PAGE>
[CAPTION]
DAXOR CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE NINE MONTHS ENDED
<TABLE>
<S> <C> <C>
SEPT 30, SEPT 30,
1996 1995
---- ----
___________________________________________
CASH FLOWS FROM OPERATING ACTIVITIES
___________________________________________
Net Income or (Loss)........................... $ (112,731) $ 1,090,457
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation equipment and improvements........ 44,445 30,375
Amortization - goodwill........................ -0- 2,804
(Gain) Loss on sale of investments............. (9,362) (502,956)
Change in assets and liabilities:
(increase) decrease in accounts receivable... (183,333) 94,137
(increase) decrease in other current assets.. 509,515 235,069
(increase) decrease in other assets.......... (169) -0-
increase (decrease) in accounts payable,
accrued and other liabilities net of "short
sales"....................................... (182,825) 11,645
__________ _________
Total adjustments............................ 178,271 (128,926)
__________ _________
Net cash provided by or (used in) operating
activities................................... 65,540 961,531
_________ _________
___________________________________________
CASH FLOWS FROM INVESTING ACTIVITIES:
___________________________________________
Payment for purchase of equipment and
improvements................................. (73,326) (22,458)
Net cash provided or (used) in purchase and
sale of investments.......................... 426,659 1,806,503
Net proceeds (repayments) of loans from brokers
used to purchase investments................. 799,805 586,154
Proceeds from "short sales" not closed......... 3,144 86,302
__________ _________
Net cash provided by or (used in) investing
activities.................................... 1,156,282 2,458,501
__________ _________
___________________________________________
CASH FLOWS FROM FINANCING ACTIVITIES:
- - -------------------------------------------
Repayment of Bank Loan....................... (900,000) (1,500,000)
Payment for purchase of treasury stock....... (234,004) (1,908,302)
Net cash provided by or (used in) financing
activities............................... (1,134,004) (3,408,302)
Net increase (decrease) in cash and cash
equivalents.................................. 87,818 9,730
Cash and cash equivalents at beginning of year 1,987 59,962
Cash and cash equivalents at end of period... $ 89,805 $ 69,692
</TABLE>
[FN]
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
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<PAGE>
DAXOR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 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 September 30,
1996 and December 31, 1995, the results of operations for the three and nine
months ended September 30, 1996 and 1995 and cash flows for the nine months
ended September 30, 1996 and 1995. The consolidated financial statements
include the accounts of the Company and its subsidary. 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 September 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 adjustmement 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.
[CAPTION]
The following table summarizes the company's investments as of September 30,
1996.
<TABLE>
<S> <C> <C> <C> <C>
TYPE OF COST FAIR VALUE UNREALIZED UNREALIZED
_______ ____ __________ __________ __________
SECURITY HOLDING GAINS HOLDING LOSSES
________ _____________ ______________
Equity $24,351,287 $33,214,596 $11,682,821 $2,819,512
Debt 25,000 25,875 875 0
----------- ----------- ----------- ----------
Total $24,376,287 $33,240,471 $11,683,696 $2,819,512
=========== =========== =========== ==========
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
=========== =========== =========== ==========
</TABLE>
At September 30, 1996, the securities held by the Company had a market value of
$33,230,471 and a cost basis of $24,376,287 resulting in a net unrealized gain
of $8,854,184 or 36.32% 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 September 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 September 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, totalled $ 1,227,216 at September 30, 1996 and $ 436,609 at December
31, 1995.
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<PAGE>
PART II. OTHER INFORMATION
ITEM 2 Legal Proceedings
Since the filing of last quarter's 10Q, which contains a complete list of the
pending legal actions, the following significant legal actions have occurred:
In the matter of Idant Laboratories, et al, v. State of New York Department of
Health, et al. (Supreme Court, New York County: Index No. 105052/94). The
decision of Justice Friedman has been appealed and filed. The appeal was argued
and submitted for the November Term. Daxor is awaiting the court's decision.
In the matter of Daxor Corp. et al. v. State of New York Department of Health,
et al. (Supreme Court, New York County; Index No. 131181/94) discovery is
proceeding. Daxor is currently deposing the Department of Health employees who
drafted the regulation. They have admitted to an ignorance of semen banking.
These drafters have also disagreed with each other about definition of terms
used by the regulation and various implications of the regulation. The matter
is proceeding.
In the matter of Daxor Corp., et al. v. State of New York Department of Health,
et al. (Supreme Court, New York County, Index No. 107564/95) The State has
requested leave of the Court of Appeals to appeal the Appellate Division's
decision in favor of Daxor. The Court of Appeals has not rendered a decion as
to whether it will entertain the State's appeal.
In the matter of 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. The Court of Claims judge dismissed the action, claiming that despite
the State's admission that it supplied various documents to the New York Daily
News, that there was no evidence that the State supplied documents to the New
York Daily News. A notice of appeal has been filed.
In the Matter of Idant v. DeBuono, (Albany County; Index No. 471/96). Justice
Canefield has transferred this case to the Appellate Division, Third Department.
The Court cited numerous important allegations of bias by the State which
necessitates transfer of the matter to the Appellate Division. Justice
Canefield also allowed the appellate record to be expanded to include documents
previously suppressed by the State. Daxor has moved before the Appellate
Division to be allowed to include in the appellate record the deposition
testimony received in Daxor Corp., et al. v. State of New York Department of
Health, et al. (Supreme Court, New york County; Index No., 31181/94). This
testimony reveals that the drafters of the regulation failed to follow the State
Administrative Procedure Act when they promulgated the regulation. Furthermore,
this testimony reveals that the drafters disagree with each other as to the
meaning and application of the regulation. This motion is still pending.
In the matter of Idant v. The Department of Health of the City of New York,
(Supreme Court, Appellate Division, First Department; Index No. 123218/94). The
City has requested leave of the Court of Appeals to appeal the Appellate
Division's decision in favor of Daxor. The Court of Appeals has not rendered a
decision as to whether it will entertain the City's appeal.
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<PAGE>
Item 6(b) Reports on Form 8-K
The Company did not file any reports on Form 8-K during the quarter ended
September 30, 1996.
ITEM 2.
Management's discussion and analysis of financial conditions and results of
operations.
RESULTS OF OPERATIONS
- - ---------------------
Nine months ended Sept. 30, 1996 as compared with nine months ended Sept 30,
1995.
For the nine months ended September 30, 1996, total revenues were $2,223,536
down from $3,325,114, in 1995. Operating revenues were $632,416 in 1996, down
from $1,188,521 in 1995. Dividend income was $1,581,758 with an interest
expense of $42,141 in 1996, as compared to dividend income of $1,633,637 with an
interest expense of ($62,618) in 1995. In 1996, the Company had a net income
(loss) of ($112,731) before income taxes versus a net income of $1,090,457
before taxes in 1995.
Three months ended September 30, 1996 as compared with three months ended
September 30, 1995.
For the three months ended September 30, 1996 total revenues declined to
$764,680 from $991,284 in the 1995 quarter. In 1996, dividend income was
$538,866 with an interest expense of $16,849 compared to dividend income of
$528,262 with an interest expense of ($61,742) in 1995. The Company had a net
income of $13,765 before income taxes in 1996 versus a net income of $251,901
before taxes in the 1995 quarter. Operations were negatively impacted by the
partial closure of the Company's New York State facilities from August 21, 1995
through May 16, 1996. Operations within these facilities have not returned to
their previous level operations. The Scientific Medical Systems division which
provided specialized pathology services has not yet fully reopened. This
division provided approximately 20% of operating revenues. The Company believes
that its operating revenue from laboratory sources will return to previous
levels. The Company anticipates that once the BVA-100 and its associated kit is
approved that this will become a major source of revenue.
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 1996 the Company had total assets of $35,030,705 and total
liabilities of $4,867,644 with shareholders' equity of $30,163,061. The Company
has $ 5,576,375 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 initial development and marketing of
its instrument the Blood Volume Analyzer (BVA-100). The Company will attempt to
sell its Blood Volume Analyzer directly to hospitals. The Company also plans to
offer its BVA-100 on a loaner basis to hospitals with a guaranteed number of kit
purchases. The Company would require additional capital to sustain this
marketing plan to all potential hospital users. If the Company were to expand
its blood banking operation on a full scale, nation-wide basis, it would sustain
its New York State blood banking facility.
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<PAGE>
The Company is currently evaluating a preliminary proposal to purchase another
private blood banking corporation, as well as another clinical laboratory. The
Company is also considering expanding its ownership stake in US Cryobanks of
Florida. The Company formed Daxor Health Services to provide rehabilitation
services in Florida. To date this operation has sponsored a pilot program in
conjunction with Therapuetic Rehabilitation Services which Daxor Corporation
partially owns.
The Company has had an important series of important court victories which
reopened its facilities. The Company intends to expand its marketing efforts in
the blood banking field. In July 1996, the Company entered into a contract with
Oxford Instruments, Inc., Nuclear Measuremnts Group (NMG) to produce the
BVA-100. The Company established a southern division headed by Vice President
of Engineering Ron Baldry to work with Oxford Instruments in Oakridge, Tenn.
The Agreement with Oxford Instruments, NMG permits the Company to use its capial
resources for the development of a kit manufacturing facility. The Company may
initially subcontract its kit manufacturing but, intends to build its own
facility. The need for additional capital will be a function of the rate of
acceptance of the Blood Volume Analyzer as well as frozen blood banking. If
there is rapid acceptance of these services, then additional capital might be
required for optimal penetration of these markets.
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<PAGE>
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: November 15, 1996 /S/JOSEPH FELDSCHUH
JOSEPH FELDSCHUH, M.D.
President
DATE: November 15, 1996 /S/ROBERT ROSENTHAL
ROBERT ROSENTHAL, M.D.
Vice President
DATE: November 15, 1996 /S/ OCTAVIA ATANASIU
OCTAVIA ATANASIU
Treasurer
DATE: November 15, 1996 /S/ VIRGINIA FITZPATRICK
VIRGINIA FITZPATRICK
Corporate Secretary
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