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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the
Securities Act of 1934
FOR QUARTER ENDED MARCH 31, 1997
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 Avenue
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
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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 MARCH 31, 1997
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COMMON STOCK 4,703,709
PAR VALUE: $.O1 per share
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS PAGE
Consolidated Balance Sheets as at
March 31, 1997 and December 31, 1996 2
Consolidated Statements of Operations for the
Three Months Ended March 31, 1997 and 1996 3
Consolidated Statements of Cash Flows for the
Three Months ended March 31, 1997 and 1996 4
Notes to Financial Statements 5
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DAXOR CORPORATION
BALANCE SHEETS (UNAUDITED)
Consolidated
MARCH 31, DECEMBER 31,
1997 1996
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ASSETS
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Current Assets
Cash $ 111,186 $ 123,115
Marketable Securities at Fair Value
March 31, 1996 and
December 31,1996
(Notes 1 and 2) 33,585,732 35,574,526
Accounts Receivable 622,706 611,555
Accounts receivable-Related Parties 94,710 115,008
Other Current Assets 302,982 235,858
Tax Refunds Receivable 5,881 153,901
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TOTAL CURRENT ASSETS 34,723,197 36,813,963
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Equipment and Improvements
Storage Tanks 125,815 125,815
Leasehold Improvements, Furniture
and Equipment 714,574 714,142
Laboratory Equipment 274,418 274,418
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1,114,807 1,114,375
Less: Accumulated Depreciation and
Amortization (687,769) (671,519)
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Net Equipment and Improvements 427,038 442,856
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Other Assets 31,985 31,985
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TOTAL ASSETS $35,182,220 $37,288,804
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LIABILITIES AND SHAREHOLDERS' EQUITY
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Current Liabilities
Accounts Payable and Accrued
Liabilities $ 86,598 $ 136,551
Loans Payable (Notes 1 and 2) 1,199,772 1,636,067
Other Liabilities 15,629 14,834
Deferred Taxes 3,089,556 3,719,932
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TOTAL CURRENT LIABILITIES 4,391,555 5,507,384
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Shareholders' Equity
Common Stock, par value $.01 per Share:
Authorized 10,000,000 Shares: Issued
and Outstanding 4,703,709 shares at
March 31, 1997 and 4,712,709 at
December 31, 1996 53,097 53,097
Additional Paid in Capital 8,579,803 8,579,803
Net Unrealized holding gains on
available-for-sale securities(Note 2) 5,997,373 7,194,158
Retained Earnings 19,518,024 19,226,044
Treasury Stock (3,357,632) (3,271,682)
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TOTAL SHAREHOLDERS' EQUITY 30,790,665 31,781,420
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TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $35,182,220 $37,288,804
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SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
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DAXOR CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31
1997 1996
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REVENUES
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Operating Revenues $ 150,282 $ 177,676
Dividend Income 544,923 513,701
Gains/(Losses) on Sale of Securities 163,785 142,045
Gains/(Losses) On Sale of
Options and Commodities 5,620 (197,426)
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TOTAL REVENUES 864,610 635,996
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COSTS AND EXPENSES
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Operations of Laboratories 139,757 130,127
Selling, General, and Administrative 387,155 585,072
Interest Expense, Net of Interest
Income 18,482 19,281
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TOTAL COSTS AND EXPENSES 545,394 734,480
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Net Income (Loss) Before Income Taxes 319,216 (98,484)
Provision for Income Taxes 27,240 13,311
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NET INCOME (LOSS) $ 291,976 $ (111,795)
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Weighted Average Number of Shares
Outstanding 4,709,709 4,736,042
Net Income Per Common Equivalent Share $ 0.06 $ (0.02)
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SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
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CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31
1997 1996
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CASH FLOWS FROM OPERATING EXPENSES
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Net Income or (Loss) $ 291,976 $ (111,795)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation equipment and improvements......... 16,250 14,815
Amortization - goodwill.........................
(Gain) Loss on sale of investments.............. (169,405) 55,381
Change in assets and liabilities:
(increase) decrease in accounts receivable.... (11,151) (136,539)
(increase) decrease in other current assets... (67,124) 661,413
(increase) decrease in tax refunds receivab 148,020
increase (decrease) in accounts payable, accrued
and other liabilities net of "short sales". (48,953) (192,533)
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Total adjustments............................ (112,065) 402,537
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Net cash used in/provided by operating
activities................................... 179,911 290,742
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Cash Flows from investing activities:
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Payment for purchase of equipment and
improvements................................. (432) -0-
Net cash provided or (used in) purchase and
sale of investments.......................... 325,512 1,235,324
Net proceeds (repayments) of loans from brokers
used to purchase investments................. (1,236,292) (317,612)
Proceeds from "short sales" not closed......... 5,322 23,713
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Net cash provided by or (used in) investing
activities................................... (905,890) 941,425
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Cash flows from financing activities:
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Payment for purchase of treasury stock....... (85,950) (133,500)
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Repayment of bank loan....................... 800,000 (900,000)
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Net cash provided by (used in) financing
activities................................. 714,050 (1,033,500)
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Net increase (decrease) in cash
and cash equivalents...................... (11,929) 198.667
Cash and cash equivalents at beginning of year 123,115 1,987
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Cash and cash equivalents at end of year..... $ 111,186 $ 200,654
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SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
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DAXOR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
THREE MONTHS ENDED MARCH 31, 1997 AND 1996
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
March 31, 1997 and December 31, 1996, the results of operations for the three
months ended March 31, 1997 and 1996 and cash flows for the three months ended
March 31, 1996 and March 31, 1997. 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 March 31,1997, and December 31,1996 being
increased approximately 37.09% and 44.26% 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.
The following table summarizes the company's investments as of March 31, 1997.
TYPE OF COST FAIR VALUE UNREALIZED UNREALIZED
SECURITY HOLDING GAINS HOLDING LOSSES
Equity $24,473,802 $33,559,607 $12,138,032 $3,052,227
Debt 25,000 26,125 1,125 -0-
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Total $24,498,802 $33,585,732 $12,139,157 $3,052,227
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The following table summarizes the company's investments as of December 31,
1996.
TYPE OF COST FAIR VALUE UNREALIZED UNREALIZED
SECURITY HOLDING GAINS HOLDING LOSSES
Equity $24,635,436 $35,548,401 $13,375,737 $2,462,772
Debt 25,000 26,125 1,125 -0-
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Total $24,660,436 $35,574,526 $13,376,862 $2,462,772
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At March 31, 1997, the securities held by the Company had a market
value of $xx,xxx,xxx and a cost basis of $xxx,xxx,xxx resulting in a net
unrealized gain of $xx,xxx,xxx or xx.xx% of cost.
At December 31, 1996, the securities held by the Company had a market
value of $xx,xxx,xxx and a cost basis of $xx,xxx,xxx resulting in a net
unrealized gain of $xx,xxx,xxx or xx.xx% of cost. At March 31, 1997 and December
31, 1996, marketable securities, primarily consisting of preferred and common
stocks of utility companies, are valued at fair value.
LOANS PAYABLE
As at March 31, 1997 and December 31, 1996, the Company had loans
outstanding aggregating $2,000,000 and $1,100,000 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 Companies
marketable securities, totaled $118,997 at March 31, 1996 and $436,609 at
December 31, 1996.
PART II. OTHER INFORMATION
ITEM 6(b) Reports on Form 8-K
The Company did file a report on Form 8-K during the quarter ended
March 31, 1997.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
For the three month period ending March 31, 1997, total revenues were
$864,610 as compared to $635,996 in 1996. Operating revenues were $150,282 in
1997, and $177,676 in 1996. In 1997, dividend income was $544,923 versus
dividend income of $513,701 in 1996. In the 1997 quarter, the Company had a
profit of $319,216 before income taxes as compared to a net loss of $98,484
before taxes in the 1996 period. Laboratory operating revenues have fallen
sharply since the licenses of Daxor's Idant Laboratories division were revoked
on August 21, 1995. The laboratories functioned on a restricted basis, until May
30, 1996. The Company, on May 30, 1996, won a unanimous 5 - 0 Appellate Court
decision against the New York State Health Department ordering the restoration
of Daxor's license. The Company lost a portion of its client base as a result of
the Health Department's actions as well as false media stories. The Company, on
April 26, 1997 received accreditation from the American Association of Tissue
Banks (AATB). The Company became the only sperm bank organization in New York
State to receive this accreditation, and the sixth within the United States. The
Company is preparing a marketing program to restore its client base. The company
has potential recovery of its damages from a one hundred million dollar
RICO/Antitrust suit as well another separate libel suit. Operations a Daxor Oak
Ridge where the Blood Analyzer is being manufactured, have not contributed to
earnings. The Company is awaiting FDA approval for the Blood Volume Analyzer
from the FDA.
Liquidity and Capital Resources
The Company has a 5 year agreement with Oxford N.M.G., of Oak Ridge
Tennessee to produce the Blood Volume Analyzer. The Company signed a preliminary
agreement with Wellport INC. of Rochester N.Y. to fabricate the blood volume
analyzer kit. The Company has the option of building its own kit dispensing
facility to dispense the radioisotope kits or to utilize the services of a
subcontractor.
The Company has adequate resources for the 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 operations on a full
scale, nation-wide basis, it would require additional capital. The Company's
financial reserves have played an essential role in sustaining the company
during its legal battles to provide frozen blood banking services to the public.
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SIGNATURES
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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
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(Registrant)
DATE: May 13, 1997 /s/Joseph Feldschuh
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JOSEPH FELDSCHUH, M.D.
President
DATE: May 13, 1997 /s/Robert Rosenthal
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ROBERT ROSENTHAL, M.D.
Vice President
DATE: May 13, 1997 /s/Octavia Atanasiu
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OCTAVIA ATANASIU
Treasurer
DATE: May 13, 1997 /s/ Virginia Fitzpatrick
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VIRGINIA FITZPATRICK
Secretary
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