<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 SEPTEMBER 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 SEPTEMBER 30, 1999
- --------------------------------------------------------------------------------
COMMON STOCK
PAR VALUE: $.01 per share 4,713,109
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS PAGE
- --------------------------------------------------------------------------------
Balance Sheets as at September 30, 1999 and
December 31, 1998 F-1
Consolidated Statements of Income For the Three
and Nine Months ended September 30,1999 and 1998 F-2
Consolidated Statement of Cash Flows for the Nine Months
ended September 30, 1999 and 1998 F-3
Notes to Financial Statements F-4
<PAGE>
DAXOR CORPORATION
BALANCE SHEETS [UNAUDITED]
<TABLE>
<CAPTION>
(Consolidated)
September 30, December 31,
1999 1998
---- ----
ASSETS
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<S> <C> <C>
CURRENT ASSETS
Cash $ 24,676 $ 79,511
Marketable Securities at Fair Value
September 30,1999 and December 31,
1998. (Notes 1 and 2) 37,985,527 43,016,243
Accounts receivable 142,324 151,234
Accounts receivable-Related parties 75,979 75,979
Other current assets 329,202 261,597
Tax refunds receivable 5,881 5,881
----------- -----------
Total Current Assets 38,563,589 43,590,445
EQUIPMENT AND IMPROVEMENTS
Storage tanks 125,815 125,815
Leasehold improvements, furniture
and equipment 796,871 823,859
Laboratory equipment 275,817 274,418
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1,198,503 1,224,092
Less: Accumulated depreciation and amortization 846,688 796,159
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Net equipment and improvements 351,815 427,933
Other Assets 43,990 37,971
Total Assets $38,959,394 $44,056,349
=========== ===========
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LIABILITIES AND SHAREHOLDERS' EQUITY
- ----------------------------------------------------------------------------------------------
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 30,222 $ 88,594
Loans payable (Notes 1 and 2) 2,099,199 2,050,549
Other Liabilities 21,464 10,384
Deferred Taxes (Note 1) 5,000,710 6,602,988
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Total Liabilities 7,151,595 8,752,515
SHAREHOLDERS' EQUITY
Common stock, par value $.01 per share:
Authorized 10,000,000 shares: issued and
outstanding shares 4,713,109 September 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) 9,707,260 12,817,565
Retained earnings 16,447,528 16,292,976
Treasury stock (4,198,318) (3,658,036)
----------- -----------
Total Shareholders' Equity 31,807,799 35,303,834
Total Liabilities and Shareholders' Equity $38,959,394 $44,056,349
=========== ===========
</TABLE>
See accompanying notes to financial statements
F-1
<PAGE>
DAXOR CORPORATION
CONSOLIDATED STATEMENTS
OF INCOME (UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONENDEDNDED
SEPTEMBER 30, SEPTEMBER 30,
1999 1998 1999 1998
---- ---- ---- ----
REVENUES:
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<S> <C> <C> <C> <C>
Operating revenues $ 209,430 $ 74,161 $ 433,557 $ 259,303
Other revenues $ 39,208 $ 39,208
Dividend income 464,547 451,323 1,387,542 1,475,648
Gains (losses) on sale
of securities (9,077) 3,505 388,117 353,369
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Total Revenues 704,108 528,989 2,248,424 2,088,320
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COSTS AND EXPENSES
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Operations of Laboratories 254,481 203,347 973,618 616,823
Selling, General, and
Administrative 358,443 299,340 1,017,905 1,191,051
Interest expense, net of
interest income 41,519 26,709 99,837 447,464
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Total Costs and Expenses 654,443 529,396 2,091,360 2,255,338
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Net Income (Loss) Before Income
Taxes 49,665 (407) 157,064 (167,018)
Provision for income taxes - - 2,512 14,000
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Net Income (Loss) $ 49,665 $ (407) $ 154,552 $ (181,018)
=================================================================
Weighted Average Number of Shares
Outstanding 4,716,876 4,780,709 4,731,198 4,765,153
Net Income of (Loss) per Common Equivalent
Share $ 0.01 $ - $ 0.03 $ (0.04)
=================================================================
</TABLE>
See accompanying notes to financial statements
F-2
<PAGE>
DAXOR CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS [UNAUDITED]
FOR THE NINE MONTHS ENDED
<TABLE>
<CAPTION>
September 30, September 30,
1999 1998
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
- -------------------------------------
Net income or (loss) $ 154,552 $ (181,018)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation equipment and
improvements 54,228 46,500
(Gain) loss on sale of investments (388,117) (353,369)
(Gain) loss on sale of machinery & equipment (1,918)
Change in assets and liabilities:
(Increase) decrease in accounts receivable 8,910 14,388
(Increase) decrease in accounts receivable - Related Parties - 28,371
(Increase) decrease in other current assets (67,605) (28,197)
(Increase) decrease in tax refunds receivable - -
(Increase) decrease in other assets (6,019)
Increase (decrease) in accounts payable, accrued
and other liabilities net of "short sales" (57,872) (150,627)
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Total adjustments (458,393) (442,934)
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Net cash provided by or (used in) operating activities (303,841) (623,952)
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CASH FLOWS FROM INVESTING ACTIVITIES:
- -------------------------------------
Payment for purchase of equipment and
improvements (26,192) (52,417)
Proceeds from sale of equipment 50,000
Net cash provided or (used) in purchase
and sale of investments 700,023 399,813
Net proceeds (repayments) of loans from
brokers used to purchase investments 48,650 (835,158)
Proceeds from "short sales" not closed 16,807 7,179
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Net cash provided by or (used in)
investing activities 789,288 (480,583)
Cash flows from financing activities
Payment for purchase of treasury stock (540,282) (361,500)
Receipt from reissuance of treasury stock 1,494,950
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Net cash provided by or (used in) financing activities (540,282) 1,133,450
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Net increase (decrease) in cash and
cash equivalents (54,835) 28,915
Cash and cash equivalents at beginning of year 79,511 60,768
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Cash and cash equivalents at end of period $ 24,676 $ 89,683
========= ==========
</TABLE>
See accompanying notes to financial statements
F-3
<PAGE>
DAXOR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
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 30,1999, and December 31, 1998, the results of operations for the
three and nine months ended September 30,1999 and 1998 and cash flows for the
nine months ended September 30,1999 and 1998. 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 September 30, 1999 and December 31, 1998 being
increased approximately 63.19 % 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>
September 30, 1999
------------------
Type of Unrealized Unrealized
security Cost Fair Value Holding gains holding losses
- -------- ---- ---------- ------------- --------------
<S> <C> <C> <C> <C>
Equity $23,262,698 $ 37,984,627 $16,100,536 $1,378,607
Debt 14,859 900 -0- 13,959
----------------------------------------------------------------------------------------------------
Total $23,277,557 $37,985,527 $16,100,536 $1,392,566
=========== =========== =========== ==========
<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>
F-4
<PAGE>
At September 30, 1999 the securities held by the Company had a market
value of $37,985,527 and a cost basis of $23,277,557 resulting in a net
unrealized gain of $ 14,707,970 or 63.19% 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 September 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 September 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 $1,099,199 at September 30, 1999 and $1,050,549
at December 31, 1998.
F-5
<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
Nine months ended September 30, 1999 as compared with nine months ended
September 30, 1998.
For the nine months ended September 30, 1999, total revenues were
$2,248,424 up from $2,088,320 in 1998. Operating revenues were $433,557 up from
$259,303 in 1998. Dividend income was $1,387,542 with a net interest expense of
$99,837, as compared to dividend income of $1,475,648 with a net interest
expense of $447,464 in 1998. In 1999, the Company had a net profit of $157,064
before income taxes versus a loss of $167,018 before income taxes in 1998.
Operating revenues have begun to increase. The Company's semen bank and blood
bank operations received new licenses in February 1999. These operations had
functioned on a limited basis in 1998 and during the first six weeks of 1999.
The Company has had its Blood Volume Analyzer undergoing beta-testing in
hospitals and has begun marketing its Blood Volume Analyzer under the reagent
loaner plan. Under the reagent loaner plan, a hospital pays a higher fee for the
reagent kits but receives the Blood Volume Analyzer as a loan. Income to the
Company under such a plan is slower than under a direct equipment purchase plan.
The overall potential profit to the Company is greater under the reagent loaner
plan than the direct sale plan. However, initial income is lower than under
direct sales. The Company has received some income under this plan. 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 September 30, 1999 the Company had total assets of
$38,959,394 and total liabilities of $7,151,595 with shareholders' equity of $
31,807,799. The Company has a net pre-taxed unrealized gain of $14,707,970 and
$9,707,260 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
$37,985,527 with short-term loans of $2,099,199 with 4,713,109 shares
outstanding.
The Company has adequate resources for the initial marketing
of its Blood Volume Analyzer. There are an estimated 6400 hospitals in the
United States and 2000 imaging centers that are potential candidates for using
the Blood Volume Analyzer. If the reagent loaner plan became the dominant mode
of marketing the Company's equipment, then the company might require additional
capital. The Company has adequate capital to sustain its blood banking and semen
banking operations. 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 nine 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: November 12, 1999 /s/
--------------------------
JOSEPH FELDSCHUH, M.D.
President
DATE: November 12, 1999
/s/
--------------------------
DAN WELLINGTON
Vice President
DATE: November 12, 1999
/s/
--------------------------
OCTAVIA ATANASIU
Treasurer
DATE: November 12, 1999
/s/
--------------------------
VIRGINIA FITZPATRICK
Secretary
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-30-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 24,676
<SECURITIES> 37,985,527
<RECEIVABLES> 218,303
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 38,563,589
<PP&E> 1,198,503
<DEPRECIATION> 846,688
<TOTAL-ASSETS> 38,959,394
<CURRENT-LIABILITIES> 7,151,595
<BONDS> 0
0
0
<COMMON> 53,097
<OTHER-SE> 31,754,702
<TOTAL-LIABILITY-AND-EQUITY> 38,959,394
<SALES> 433,557
<TOTAL-REVENUES> 2,248,424
<CGS> 0
<TOTAL-COSTS> 973,618
<OTHER-EXPENSES> 1,017,905
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 99,837
<INCOME-PRETAX> 157,064
<INCOME-TAX> 2,512
<INCOME-CONTINUING> 157,064
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 157,064
<EPS-BASIC> 0.03
<EPS-DILUTED> 0.03
</TABLE>
