<PAGE>
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 JUNE 30, 1999
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, 1999
- ------------------------------------------------------------------------
COMMON STOCK
PAR VALUE: $.O1 per share 4,725,309
<PAGE>
PART I. FINANCIAL INFORMATION
---------------------
ITEM 1. FINANCIAL STATEMENTS PAGE
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Balance Sheets as at June 30, 1999 and
December 31, 1998 F-1
Statement of Income and Consolidated Statement of Income
For the Three and Six Months ended June 30,1999
And 1998 F-2
Statement of Cash Flows and Consolidated Statement
Of Cash Flows for the Six Months ended
June 30, 1999 and 1998 F-3
Notes to Financial Statements F-4
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DAXOR CORPORATION
BALANCE SHEETS [UNAUDITED]
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
---- ----
<S> <C> <C>
ASSETS
=======================================================================================================
CURRENT ASSETS
Cash $ 34,092 $ 79,511
Marketable Securities at Fair Value
June 30,1999 and December 31,
1998. (Notes 1 and 2) 40,321,565 43,016,243
Accounts receivable 141,931 151,234
Accounts receivable-Related parties 75,979 75,979
Other current assets 249,571 261,597
Tax refunds receivable 5,881 5,881
---------- -----------
Total Current Assets 40,829,019 43,590,445
EQUIPMENT AND IMPROVEMENTS
Storage tanks 125,815 125,815
Leasehold improvements, furniture
and equipment 838,854 823,859
Laboratory equipment 275,817 274,418
---------- -----------
1,240,486 1,224,092
Less: Accumulated depreciation and amortization 832,311 796,159
---------- -----------
Net equipment and improvements 408,175 427,933
Other Assets 43,990 37,971
Total Assets $ 41,281,184 $ 44,056,349
============ ============
=======================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
=======================================================================================================
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 61,481 $ 88,594
Loans payable (Notes 1 and 2) 1,969,474 2,050,549
Other Liabilities 17,006 10,384
Deferred Taxes (Note 1) 5,789,898 6,602,988
---------- -----------
Total Liabilities 7,837,859 8,752,515
SHAREHOLDERS' EQUITY
Common stock, par value $.01 per share:
Authorized 10,000,000 shares: issued and
outstanding shares 4,725,309 June 30,
1999 and 4,752,709 December 31, 1998 53,097 53,097
Additional Paid in capital 9,798,232 9,798,232
Net unrealized holding gains
on available-for-sale securities (Note 1) 11,239,213 12,817,565
Retained earnings 16,397,863 16,292,976
Treasury stock (4,045,080) (3,658,036)
---------- -----------
Total Shareholders' Equity 33,443,325 35,303,834
Total Liabilities and Shareholders' Equity $ 41,281,184 $ 44,056,349
============ ============
</TABLE>
See accompanying notes to financial statements
F-1
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DAXOR CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
THREE AND SIX MONTHS ENDED
<TABLE>
<CAPTION>
JUNE 30, JUNE 30,
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUES:
- ------------------------------------------------------------------------------------------------------------------------------
Operating revenues $ 104,800 $ 90,613 $ 224,127 $ 185,142
Dividend income 560,430 529,045 922,995 1,024,325
Gains (losses) on sale
of securities (6,443) 114,148 397,194 349,864
Gains (losses) on sale
of options and commodities
---------------------------------------------------------------------
Total Revenues 658,787 733,806 1,544,316 1,559,331
- ------------------------------------------------------------------------------------------------------------------------------
COSTS AND EXPENSES
- ------------------------------------------------------------------------------------------------------------------------------
Operations of Laboratories 352,183 262,747 719,137 413,476
Selling, General, and
Administrative 380,371 173,970 659,462 891,711
Interest expense, net of
interest income 28,920 241,245 58,318 420,755
---------------------------------------------------------------------
Total Costs and Expenses 761,474 677,962 1,436,917 1,725,942
---------------------------------------------------------------------
Net Income (Loss) Before Income
Taxes (102,687) 55,844 107,399 (166,611)
Provision for income taxes 812 2,512 14,000
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Net Income (Loss) $ (103,499) $55,844 $104,887 $(180,611)
=====================================================================
Weighted Average Number of Shares
Outstanding 4,727,476 4,696,376 4,737,859 4,757,376
Net Income of (Loss) per Common
Equivalent
Share $ (0.02) $0.01 $0.02 $ (0.04)
=====================================================================
See accompanying notes to financial statements
- ---------------------------------------------------------
</TABLE>
F-2
<PAGE>
DAXOR CORPORATION
STATEMENTS OF CASH FLOWS [UNAUDITED]
FOR THE SIX MONTHS ENDED
<TABLE>
<CAPTION>
JUNE 30, JUNE 30,
1999 1998
---- ----
<S> <C> <C>
Cash flows from operating activities:
- -------------------------------------
Net income or (loss) $ 104,887 ($180,611)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation equipment and
improvements 36,152 31,000
(Gain) loss on sale of investments (397,194) (349,864)
Change in assets and liabilities:
(Increase) decrease in accounts receivable 9,303 12,615
(Increase) decrease in accounts receivable- Related Parties - 28,371
(Increase) decrease in other current assets 12,026 (43,772)
(Increase) decrease in other assets (6,019)
Increase (decrease) in accounts payable, accrued
and other liabilities net of "short sales" (26,613) (87,469)
--------- ----------
Total adjustments (372,345) (409,119)
--------- ----------
Net cash (used in) operating activities (267,458) (589,730)
--------- ----------
Cah flows from investing activities:
- ------------------------------------
Payment for purchase of equipment and
improvements (16,394) (89)
Net cash provided or (used) in purchase
and sale of investments 694,203 433,089
Net proceeds (repayments) of loans from
brokers used to purchase investments (81,075) (1,288,313)
Proceeds from "short sales" not closed 12,349 1,953
--------- ----------
Net cash provided by / (used in)
investing activities 609,083 (853,360)
--------- ----------
Cash flows from financing activities
- ------------------------------------
Payment for purchase of treasury stock (387,044)
Receipt from reissuance of treasury stock 1,494,950
--------- ----------
Net cash provided by / (used in) financing activities (387,044) 1,494,950
--------- ----------
Net increase (decrease) in cash and
cash equivalents (45,419) 51,860
Cash and cash equivalents at beginning of year 79,511 60,768
--------- ----------
Cash and cash equivalents at end of period $34,092 $112,628
========= ==========
See accompanying notes to financial statements
</TABLE>
F-3
<PAGE>
DAXOR CORPORATION
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
SIX MONTHS ENDED JUNE 30, 1999 AND 1998
In the opinion of the Company, the accompanying unaudited financial
statements contain all adjustments (consisting of only normal recurring
accruals) necessary to present fairly the financial position as of June 30,1999,
and December 31, 1998, the results of operations for the three and six months
ended June 30,1999 and 1998 and cash flows for the three months ended March
31,1999 and 1998. 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, 1999 and December 31, 1998 being increased
approximately 73.11 % and 82.30 % 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 following tables summarize the company's investments as of:
<TABLE>
<CAPTION>
June 30, 1999
-------------
Type of Unrealized Unrealized
security Cost Fair Value Holding gains holding losses
- -------- ---- ---------- ------------- --------------
<S> <C> <C> <C> <C>
Equity $23,277,595 $40,311,565 $18,117,644 $1,083,671
- ------
Debt 14,859 10,000 -0- 4,859
- ----
--------------------------------------------------------------------------------------------
Total $23,292,454 $40,321,565 $18,117,644 $1,088,530
- ----- =========== =========== =========== ==========
</TABLE>
<TABLE>
<CAPTION>
December 31, 1998
-----------------
Type of Unrealized Unrealized
security Cost Fair Value Holding gains holding losses
- -------- ---- ---------- ------------- --------------
<S> <C> <C> <C> <C>
Equity $23,595,690 $43,016,243 $20,441,847 $1,021,294
- ------
Debt 0 0 0 0
- ---- --------------------------------------------------------------------------------------------
Total $23,595,690 $43,016,243 $20,441,847 $1,021,294
- ----- =========== =========== =========== ==========
</TABLE>
At June 30, 1999 the securities held by the Company had a market value of
$40,321,565 and a cost basis of $23,292,454 resulting in a net unrealized gain
of $ 17,029,111 or 73.11% of cost.
At December 31, 1998, the securities held by the Company had a market value
of $43,016,243 and a cost basis of $23,595,690 resulting in a net unrealized
gain of $19,420,553 or 82.30% of cost.
At June 30, 1999 and December 31, 1998 marketable securities, primarily
consisting of preferred and common stocks of utility companies, are valued at
fair value.
(2) LOANS PAYABLE
As at June 30, 1999 and December 31, 1998, the Company had loans
outstanding aggregating $1,000,000 borrowed on a short term basis from a bank,
which are secured by certain marketable securities of the Company. The loans
bear interest at approximately 7.5%.
Short term margin debt due to brokers secured by the Companies marketable
securities, totaled $969,474 at June 30, 1999 and $1,050,549 at December 31,
1998.
F-4
<PAGE>
Part II OTHER INFORMATION
- -------------------------
Item 1.
- -------
Legal Proceedings
- -----------------
None
MANAGEMENT'S DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
ITEM 2.
- -------
RESULTS OF OPERATIONS
- ---------------------
Six months ended June 30, 1999 as compared with six months ended June 30, 1998.
- -------------------------------------------------------------------------------
For the six months ended March 31, 1999, total revenues were $1,544,316
down from $1,559,331 in 1998. Operating revenues were $224,127 up from $185,142
in 1998. Dividend income was $922,995 with a net interest expense of $58,318, as
compared to dividend income of $1,024,325 with a net interest expense of
$420,755 in 1998. In 1999, the Company had a net profit of $107,399 before
income taxes versus a loss of $166,611 before income taxes in 1998. Operating
revenues have been sharply decreased because of limited operations in the
Company's semen, blood banking laboratory sections. These operations functioned
on a limited basis during the first six weeks of 1999. These facilities received
new licenses in February 1999. The Company has not yet received any income from
the Blood Volume Analyzer, which is in the process of being tested in hospitals.
The Company anticipates that sales related to the Blood Volume Analyzer will
become a major source of income for the Company.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
At June 30, 1999 the Company had total assets of $41,281,184 and total
liabilities of $7,837,859 with shareholders' equity of $33,443,325. The Company
has a net pre-taxed unrealized gain of $19,420,553 and $11,239,213 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's stock portfolio had a market value of $40,321,565 with short-term
loans of $1,969,474 with 4,725,309 shares outstanding.
In October 1998 the Company acquired the assets of the Wellport Corporation
which manufactures the Company's special quantitative injection syringe which is
used in conjunction with the BVA-100. The Company leases approximately 11,000
square feet of space in Rochester, New York for these operations.
The Company has adequate resources for the marketing of its Blood Volume
Analyzer 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 plans to focus its financial
reserves primarily on developing and marketing the Blood Volume Analyzer.
The Company did not file any reports on form 8-K during the first six
months of 1999.
<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: August 12,1999 /s/ Joseph Feldschuh, M.D.
- -------------------- -------------------------------
JOSEPH FELDSCHUH, M.D.
President
DATE: August 12,1999 /s/ Dan Wellington
- -------------------- ------------------------------
DAN WELLINGTON
Vice President
DATE: August 12,1999 /s/ Octavia Atanasiu
- -------------------- ------------------------------
OCTAVIA ATANASIU
Treasurer
DATE: August 12,1999 /s/ Virginia Fitzpatrick
- -------------------- ------------------------------
VIRGINIA FITZPATRICK
Secretary
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-1-1999
<PERIOD-END> JUN-30-1999
<CASH> 34092
<SECURITIES> 40321565
<RECEIVABLES> 217910
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 255452
<PP&E> 1240486
<DEPRECIATION> 832311
<TOTAL-ASSETS> 41281184
<CURRENT-LIABILITIES> 7837859
<BONDS> 0
<COMMON> 53097
0
0
<OTHER-SE> 33390228
<TOTAL-LIABILITY-AND-EQUITY> 41281184
<SALES> 224127
<TOTAL-REVENUES> 1544316
<CGS> 0
<TOTAL-COSTS> 719137
<OTHER-EXPENSES> 659462
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 58318
<INCOME-PRETAX> 107399
<INCOME-TAX> 2512
<INCOME-CONTINUING> 104887
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 104887
<EPS-BASIC> 0.02
<EPS-DILUTED> 0.02
</TABLE>
