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 MARCH 31, 2006
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. EmployerIncorporation or Organization)

Identification No.) 350 Fifth AveSuite 7120New 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. Yesx
Noo Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of accelerated
filer and large accelerated filer in Rule 12-b-2 of the Exchange Act: Large Accelerated
  Filer o
Accelerated
  Filer o
Non-accelerated
  Filer x Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes o
No x 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 April
  30, 2006COMMON STOCKPAR VALUE:
  $.01 per share
4,630,426     DAXOR CORPORATION AND SUBSIDIARY

TABLE OF CONTENTS

PART
  I. FINANCIAL INFORMATIONItem 1.
FINANCIAL
  STATEMENTS (Unaudited)Index to
  Financial Statements

2Condensed Consolidated Balance Sheets at
  March 31, 2006 and December 31, 2005

F-1Condensed Consolidated Statements of
  Operations for the three months ended March 31, 2006 and 2005 (Unaudited)

F-2Condensed Consolidated Statements of Cash
  Flows for the three months ended March 31, 2006 and 2005  (Unaudited)

F-3Notes to Condensed Consolidated Financial
  Statements  (Unaudited)

F-4-12Item 2.

Managements Discussion and Analysis of
  Financial Condition and Results of Operations

3-8Item 3.

Quantitative and Qualitative Disclosures
  about Market Risk

8-10Item 4.

Controls and Procedures

11PART II. OTHER INFORMATIONItem 1.

Legal Proceedings

12Item 1A.

Risk Factors

12Item 2.

Unregistered Sales of Equity Securities and
  Use of Proceeds

12Item 3.

Defaults Upon Senior Securities

12Item 4.

Submission of Matters to a Vote of Security
  Holders

12Item 5.

Other Information

12Item 6.

Exhibits

12-1-

DAXOR CORPORATION AND SUBSIDIARY

PART I FINANCIAL INFORMATIONItem 1.
Financial
  Statements (Unaudited)Index to
  Financial StatementsCondensed
  Consolidated Balance Sheets at March 31, 2006 and December 31, 2005

F-1Condensed
  Consolidated Statements of Operations for the three months ended March 31,
  2006 and 2005  (Unaudited)

F-2Condensed
  Consolidated Statements of Cash Flows for the three months ended March 31, 2006
  and 2005  (Unaudited)

F-3Notes to
  Condensed Consolidated Financial Statements  (Unaudited)

F-4-12-2-

DAXOR CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

DAXOR CORPORATIONCONDENSED CONSOLIDATED BALANCE SHEETS

UNAUDITED
  March 31,
  2006

AUDITED
  December 31,
  2005ASSETSCURRENT ASSETSCash and cash equivalents

$
37,818

$
93,003Available-for-sale
securities


57,611,803


57,246,006Other receivable


163,934


1,018,936Accounts receivable, net of
$35,325 in 2006 and $41,300 in 2005


138,944


131,592Inventory


177,861


191,861Prepaid expenses and other
current assets


122,877


230,632Total Current Assets


58,253,237


58,912,030PROPERTY AND EQUIPMENT, NET


651,313


620,865OTHER ASSETS


32,158


32,158Total Assets

$
58,936,708

$
59,565,053LIABILITIES AND
STOCKHOLDERS EQUITYCURRENT LIABILITIESAccounts payable and accrued
liabilities

$
404,878

$
512,024Loans payable


5,849,828


7,083,372Put and call options, at fair
market value


1,264,566


772,803Other liabilities


665,416


1,302,797Deferred revenue


38,458


90,468Deferred taxes


11,383,053


11,058,788Total Current Liabilities


19,606,199


20,820,252COMMITMENTS AND
CONTINGENCIES





STOCKHOLDERS
EQUITYCommon stock, $.01 par
valueAuthorized - 10,000,000 sharesIssued  5,309,750 sharesOutstanding  4,630,426
and 4,630,426 shares at March 31, 2006 and
  December 31, 2005, respectively


53,097


53,097Additional paid in capital


10,326,454


10,303,969Accumulated other comprehensive
income


21,139,955


20,537,750Retained earnings


13,586,705


13,625,687Treasury stock, at cost,
686,124 and 686,124 shares, respectively


(5,775,702
)

(5,775,702
)Total Stockholders
Equity


39,330,509


38,744,801Total Liabilities and
Stockholders Equity

$
58,936,708

$
59,565,053See accompanying notes to
condensed consolidated financial statements.

F-1

DAXOR CORPORATION AND
SUBSIDIARYCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS [UNAUDITED]
FOR THE THREE MONTHS ENDED

March 31, 
  2006

RESTATED
  March 31,2005Revenues

$
342,146

$
300,356Cost
  of sales


325,280


396,381Gross
  Profit (loss)


16,866


(96,025
)Selling,
  general and administrative expenses


1,288,985


1,142,032Operating
  loss


(1,272,119
)

(1,238,057
)Investment
  income, net


1,327,450


806,041Interest
  expense, net


(96,981
)

(41,968
)Other
  income


2,668


3,857Loss
  before income taxes


(38,982
)

(470,127
)Income
  tax expense


0


0Net
  loss

$
(38,982
)
$
(470,127
)Weighted
  average number of shares outstanding - basic and diluted


4,630,426


4,634,459Net
  loss per common equivalent share - basic and diluted

$
(0.01
)
$
(0.10
)See accompanying notes to
condensed consolidated financial statements.

F-2

DAXOR CORPORATION AND
SUBSIDIARYCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS [UNAUDITED]
FOR THE THREE MONTHS ENDED

March 31,
  2006

RESTATED
  March 31,
  2005CASH FLOWS FROM OPERATING
  ACTIVITIES:Net loss

$
(38,982
)
$
(470,127
)Adjustments to reconcile
net loss to net cash used in operating activities:Depreciation
& amortization


34,651


20,926Non-cash
compensation expense associated
  with employee stock compensation plans


22,485


0Gains on sale
of investments


(710,201
)

(389,036
)Mark to market
adjustments on
  options & short sales


(74,587
)

120,670Change in assets and
liabilities:Increase in
accounts receivable


(7,352
)

(266,014
)Decrease in
prepaid expenses &
  other current assets


107,755


276,818Decrease in
inventory


14,000


0Decrease in
accounts payable and
  accrued liabilities


(107,146
)

(8,640
)Decrease in
other liabilities


(637,381
)

(9,898
)Increase
(decrease) in deferred
  income


(52,010
)

239,873Net cash used in operating
  activities


(1,448,768
)

(485,428
)CASH FLOWS FROM INVESTING
  ACTIVITIES:Purchase of property and
equipment


(65,099
)

(12,879
)Unsettled trades
receivable


855,002


0Purchase of
investments


(5,177,087
)

(1,338,102
)Sale of investments


6,446,971


1,032,214Proceeds
          from put and call options not closed


567,340


(4,385
)Net cash provided by (used in)
  investing activities


2,627,127


(323,152
)CASH FLOWS FROM FINANCING
  ACTIVITIES:Proceeds from margin
loans


4,801,872


2,628,735Repayment of margin
loans


(6,035,416
)

(2,345,456
)Proceeds from sale of treasury
  stock


0


533,952Net cash provided by (used in)
  financing activities


(1,233,544
)

817,231Net increase in cash and cash
  equivalents


(55,185
)

8,651Cash and cash equivalents at
  beginning of period


93,003


5,079Cash and cash equivalents at
end of
  period

$
37,818

$
13,730Supplementary
DisclosuresInterest paid in the
period

$
98,403

$
41,835Income taxes paid in the
period

$
0

$
0See accompanying notes to
condensed consolidated financial statements.

F-3

DAXOR CORPORATION AND SUBSIDIARYNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2006 AND 2005

(1) BUSINESS
AND SIGNIFICANT ACCOUNTING POLICIES

BUSINESS

Daxor
Corporation is a medical device manufacturing company that offers additional
biotech services, such as cryobanking, through its wholly owned subsidiary,
Scientific Medical Systems Corp. The Company provides long-term frozen blood
storage services to enable individuals to store their own blood. The main focus
of Daxor Corporation has been the development of an instrument that rapidly and
accurately measures human blood volume. This instrument is used in conjunction
with a single use diagnostic injection and collection kit.

SIGNIFICANT
ACCOUNTING POLICIES

Basis of
Presentation

The
accompanying unaudited condensed consolidated financial statements reflect all
adjustments of a normal recurring nature, which are, in the opinion of
management, necessary for a fair statement of the financial position and
results of operations for the interim periods presented. The condensed
consolidated financial statements are unaudited and are subject to such
year-end adjustments as may be considered appropriate and should be read in
conjunction with the historical consolidated financial statements of Daxor
Corporation for the years ended December 31, 2005, 2004 and 2003, included in
Daxor Corporations Annual Report on Form 10-K for the fiscal year ended
December 31, 2005. Operating results for the three month period ended March 31,
2006 are not necessarily indicative of the results that may be expected for the
year ending December 31, 2006.

These
condensed consolidated financial statements have been prepared in accordance
with US GAAP and under the same accounting principles as the consolidated
financial statements included in the Annual Report on Form 10-K. Certain
information and footnote disclosures related thereto normally included in the
financial statements prepared in accordance with US GAAP have been omitted in
accordance with Rule 10-01 of Regulation S-X.

Principles of
Consolidation

The
condensed consolidated financial statements include the accounts of Daxor
Corporation and Scientific Medical Systems Corp, a wholly-owned subsidiary. All
significant inter-company transactions and balances have been eliminated in
consolidation.

Segment
Reporting

The
Company has two operating segments: Equipment Sales and Related Services, and
Cryobanking and Related Services.

The
Equipment Sales and Related Services segment encompasses the activity of the
Blood Volume Analyzer equipment. This includes equipment sales, equipment
rentals, equipment delivery fees, kit sales and service contract revenues.

The
Cryobanking and Related Services segment is comprised of activity relating to
the storage of blood and semen, and related laboratory services and handling
fees.

Although
not deemed an operating segment, the Company reports a third business segment;
Investment Activity. This segment reports the activity of the Companys
Investment Portfolio. This includes all earnings, gains and losses, and
expenses relating to these investments.

Use of Estimates

The preparation of financial
statements in conformity with US GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities as of the dates of the
financial statements and the results of operations during the reporting
periods. Actual results may differ from these estimates.

Cash and Cash Equivalents

Cash and cash equivalents include time deposits and short term
investments with original maturities of three months or less. Normally, these
short term investments consist of U.S. Treasury Bills. At March 31, 2006 and
2005, there were no short term investments included as cash equivalents.

Available-for-Sale
Securities

Available-for-sale
securities represent investments in debt and equity securities (primarily
common and preferred stock of utility companies)that management has determined
meet the definition of available-for-sale under SFAS No. 115 - Accounting
for Certain Investments in Debt and Equity Securities. Accordingly,
these investments are stated at fair market value and all unrealized holding
gains or losses are recorded in the Stockholders Equity section as Accumulated
Other Comprehensive Income (Loss). Conversely, all realized gains, losses and
earnings are recorded in the Statement of Operations under Other Income
(Expense).

At
certain times, the Company will engage in short selling of stock. When this
occurs, the short position is marked to the market and recorded as a realized
sale. Any gain or (loss) is recorded for the period presented.

F-4

DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2006 and 2005 (Continued)

Historical
cost is used by the Company to determine all gains and losses, and fair market
value is obtained by readily available market quotes on all securities.

Put and Call
Options

As
part of the companys investment strategy put and call options are sold on
various stocks the company is willing to buy or sell. The premiums received are
deferred until such time as they are exercised or expire. In accordance with
SFAS No. 133 - Accounting for Derivative Instruments and Hedging Activities,these
options are marked to market for each reporting period using readily available
market quotes, and this fair value adjustment is recorded as a gain or loss in
the Statement of Operations.

Upon
exercise, the value of the premium will adjust the basis of the underlying
security bought or sold. Options that expire are recorded as income in the
period they expire.

Investment
Goals, Strategies and Policies

The
Companys investment goals are capital preservation and maintaining returns on
this capital with a high degree of safety. These goals are accomplished through
the following strategies and policies:

1.
The Company maintains a diversified securities portfolio comprised primarily of
electric utility preferred and common stocks. The Company also sells covered
calls on portions of its portfolio and also sells puts on stocks it is willing
to own. It also sells uncovered calls and will engage in short position up to
5% of the value of its portfolio. The Companys investment policy is to
maintain a minimum of 80% of its portfolio in electric utilities. Investments
in utilities are primarily in electric companies. Investments in non-utility
stocks will not exceed 15% of the portfolio.

2
 Investment in speculative issues, including short sales, maximum of 5%.

3.
Limited use of options to increase yearly investment income.

a.
The use of
  Call Options. Covered options can be sold up to a
  maximum of 20% of the value of the portfolio. This provides extra income in
  addition to dividends received from the companys investments. The risk of
  this strategy is that investments may be called away, which the company may
  have preferred to retain. Therefore, a limitation of 20% is placed on the
  amount of stock on which options which can be written. The amount of the
  portfolio on which options are actually written is usually between 3-10% of
  the portfolio. In actual practice, more than 90% of the options that are
  written expire unexercised. The actual turnover of the portfolio is such
  that the average holding period is in excess of 5 years.b.
The use of
  Put options. Put options are written on stocks
  which the company is willing to purchase. While the company does not have a
  high rate of turnover in its portfolio, there is some turnover; for example,
  due to preferred stocks being called back by the issuing company, or stocks
  being called away because call options have been written. The use of put
  options is a conservative strategy which enables the company to buy stocks at
  a lower price than the prevailing market. If the stock does not go to
  the put exercise price, then the company receives the unexercised option
  price. If the put is exercised, the company obtains its stock at a lower
  price and has the additional benefit of a lower basis cost because the option
  price is incorporated into the cost basis. For example, if a stock is selling
  at $23 per share and the company sells a put for $0.80 at $20.00, if the
  stock drops to $19.75, the exercise price is $20.00, the effective cost to
  the company, however, is only $19.20 per share. The company may or may not
  sell Calls against a stock it has acquired this way, or it may retain the
  stock. In either case, the company benefits by acquiring the stock at a lower
  price than prevailed at the time it indicated an interest in this particular
  stock.c.
Speculative
  Short Sales/Short Options. The company limits its
  speculative transaction to 5% of the portfolio value of the assets. The
  company may sell uncovered calls on certain stocks. If the stock price does
  not rise to the price of the calls, the option is not exercised, and the
  company receives the income from the call. If the call is exercised, the
  company is then short the stock. The company then has the choice of covering
  the short stock, or selling a put against its short stock. If the put is
  exercised, then the short sale is covered. The companys current accounting
  policy is to mark to the market each quarter any short positions, and include
  it in the income statement. While the company may have so-called speculative
  positions equal to 5% of its accounts, in actual practice there are most
  quarters where short stock positions account for less than 1% of the assets
  of the company.The
income derived from these investments has been essential to offset the
research, operating and marketing expenses of developing the Blood Volume
Analyzer. The Company has followed a conservative policy of assuring adequate
liquidity so that it can expand its marketing and research development without
the sudden necessity of raising additional capital. The securities in the
Companys portfolio are selected to provide stability of both income and
capital. The Company has been able to achieve financial stability because of
these returns, which covered a significant portion of the Companys continuing
losses from operations. The Companys investment policy is reviewed at least
once yearly by the Board of Directors and the Audit Committee. Individual
investment decisions are made solely by Dr. Joseph Feldschuh, CEO, who devotes
approximately 10 to 15% of his time 7 to 7.5 hours per week to this activity.
He is assisted by a single half-time employee. No other member of the Company
is involved in individual investment decisions.

Revenue
Recognition

The
Company recognizes operational revenues from several sources. The first source
is the sale of equipment, the Blood Volume Analyzer, to customers. The second
source is the sale and associated shipping revenues of single-use radioactive
doses (Volumex) that are injected into the patient and measured by the Blood Volume
Analyzer. The third source of revenue is service contracts on the Blood Volume
Analyzer, after it has been sold to a customer. The fourth source of revenue is
the storage fees associated with cryobanked blood and semen specimens. The
fifth is lab revenues from laboratory services, and the sixth is revenue from
semen sales.

The
Company currently offers three different methods of purchasing the Blood Volume
Analyzer equipment. A customer may purchase the equipment directly, lease the
equipment, or rent the equipment on a month-to-month basis. The revenues
generated by a direct sale or a monthly rental are recognized as revenue in the
period in which the sale or rental occurs. If a customer is to select the
lease option, the Company refers its customer to a third party finance
company with which it has established a relationship, and if the lease is
approved, the Company receives 100% of the sales proceeds from the finance
company and recognizes 100% of the revenue. The finance company then deals
directly with the customer with regard to lease payments and related collections.

The
sales of the single-use radioactive doses (Volumex) that are used in
conjunction with the Blood Volume Analyzer are recognized as revenue in the
period in which the sale occurs.

  When
    Blood Volume Analyzer equipment has been sold to a customer, the Company offers
    a one year warranty on the product, which covers all mechanical failures.
    This one year warranty is effective on the date of sale of the equipment.
    After the one year period expires, customers may purchase a service contract
    through the Company, which is usually offered in one-year increments. These
    service contracts are recorded by the Company as deferred revenue and are
    amortized into income in the period in which they apply. As at March 31, 2006
    and December 31, 2005, deferred revenue pertaining to these service contracts
    was $3,375 and $6,583 respectively.

  The
    storage fees associated with the cryobanked blood and semen samples are recognized
    as income in the period for which the fee applies. Although the Company historically
    offered annual storage fee contracts effective October 1, 2005, the Company
    only offers storage term contracts of three months or less.

Income Taxes

The
Company accounts for income taxes under the provisions of SFAS No. 109 - Accounting
for Income Taxes. This pronouncement requires recognition of
deferred tax assets and liabilities for the estimated future tax consequences
of events attributable to differences between the financial statement carrying
amounts of existing assets and liabilities and their respective tax bases and
operating loss and tax credit carry forwards. Deferred tax assets and
liabilities are measured using enacted tax rates in effect for the year in
which the differences are expected to be recovered or settled. The effect on
deferred tax assets and liabilities of changes in tax rates is recognized in
the statement of operations in the period in which the enactment rate changes.
Deferred tax assets and liabilities are reduced through the establishment of a
valuation allowance at such time as, based on available evidence, it is more
likely than not that the deferred tax assets will not be realized.

Comprehensive
Income (Loss)

The
Company reports components of comprehensive income under the requirements of
SFAS No. 130 - Reporting Comprehensive Income. This statement establishes
rules for the reporting of comprehensive income and requires certain transactions
to be presented as separate components of stockholders equity. The Company
currently reports the unrealized holding gains and losses on available-for-sale
securities, net of deferred taxes, as accumulated other comprehensive income
(loss).

F-5

DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2006 and 2005 (Continued)

Product
Warrantees and Related Liabilities

The
Company offers a one year warranty on the Blood Volume Analyzer equipment. This
warranty is effective on the date of sale and covers all mechanical failures of
the equipment. All major components of the equipment are purchased and
warranteed by the original 3rd party manufacturers.

Once
the initial one year warranty period has expired, customers may purchase annual
service contracts for the equipment. These service contracts warranty the
mechanical failures of the equipment that are not associated with normal
wear-and-tear of the components.

To
date, the Company has not experienced any major mechanical failures on any
equipment sold. In addition, the majority of the potential liability would
revert to the original manufacturer. Due to this history, a liability has not
been recorded with respect to product / warranty liability.

Stock Based
Compensation

In
December 2004, the FASB issued SFAS No. 123R - Share-Based Payment: An Amendment of
FASB Statements No. 123, (SFAS 123R) which requires
companies to recognize in the income statement the grant-date fair value of
stock options and other equity-based compensation issued to employees.
SFAS 123R is effective for financial statements issued for annual
reporting periods that begin after June 15, 2005. In adopting SFAS No.
123R, the Company used the modified prospective transition method, as of
January 1, 2006, the first day of the Companys fiscal year 2006.

Under
the modified prospective transition method, awards that are granted, modified
or settled after the date of adoption will be measured and accounted for in
accordance with SFAS 123R. Compensation cost for awards granted prior to,
but not vested, as of the date SFAS 123R is adopted would be based on the
grant date attributes originally used to value those awards for pro forma purposes
under SFAS 123. The Companys condensed consolidated financial statements
as of, and for the three months ended March 31, 2006, reflect the impact of
SFAS No. 123R. In accordance with the modified prospective transition method,
the Companys consolidated financial statements for periods prior to January 1,
2006 have not been restated to reflect, and do not include, the impact of SFAS
123R.

SFAS
123R also requires the tax benefits associated with these share-based payments
to be classified as financing activities in the Condensed Consolidated
Statements of Cash Flows, rather than as operating cash flows as required under
previous regulations.

At
March 31, 2006, the Company has one stock-based compensation plan, the 2004
Stock Option Plan. This Plan allows for the issuance of a maximum of 200,000
shares of common stock, or 5% of the outstanding balance of shares of the
Company on the date of grant, whichever is greater.

  At
    March 31, 2006, there is a total unvested stock-based compensation expense
    of $61,821 and a total weighted average remaining term of .6 years. Total
    share-based compensation expense recognized in the Statement of Operations
    aggregated $22,485 for the three months ended March 31, 2006. Due to the Companys
    history of losses, a tax benefit relating to this expense would not likely
    be realized by the Company. Accordingly, the Company has fully reserved against
    this tax benefit and no tax effect appears in these financial statements.

Prior
to the adoption of SFAS 123R, the Company accounted for stock options issued
under its plans under APB Opinion No. 25, Accounting for Stock Issued to
Employees, and related interpretations. Because the exercise price of the
Companys stock options granted to employees and directors equaled the fair
market value of the underlying stock at the grant date, under the intrinsic
value method, no share-based compensation expense was recognized in the
Companys condensed consolidated statement of operations for the first quarter
of 2005. If compensation cost had been determined based on fair values at the
date of grant under SFAS 123, Accounting for Stock-Based Compensation,
pro-forma net loss and loss per share would have been as follows:

RestatedQuarter ended
  March 31, 2005Net loss as reported

$
(470,127
)Deduct: Total stock-based
employee compensation expense determined
  under the fair value based method for all awards, net of the related tax
  effects


(37,524
)Pro forma net loss

$
(507,651
)Net loss per common
share:Basic and diluted - as
reported

$
(.10
)Basic and diluted -
proforma

$
(.11
)SFAS
123R requires companies to estimate the fair value of share-based awards on the
date of grant using an option-pricing model. The value of the portion of the
award that is ultimately expected to vest is recognized as expense in the
Companys condensed consolidated statement of operations over the requisite
service periods. Share-based compensation expense for share-based awards
granted prior to, but not yet vested as of December 31, 2005, is based on the
grant date fair value estimated in accordance with the provisions of SFAS 123.
For options granted subsequent to December 31, 2005, compensation expense is
based on the grant date fair value estimated in accordance with SFAS 123R.
Because share-based compensation expense is based on awards that are ultimately
expected to vest, share-based compensation expense will be reduced to account
for estimated forfeitures. SFAS 123R requires forfeitures to be estimated at
the time of grant and revised, if necessary, in subsequent periods if actual
forfeitures differ from those estimates. Under SFAS 123, in the proforma
information required for periods prior to January 1, 2006, the Company
accounted for forfeitures as they occurred.

To
calculate the option-based compensation under SFAS 123R, the Company used the
Black-Scholes option-pricing model, which it had previously used for the
valuation of option-based awards for its proforma information required under
SFAS 123 for periods prior to fiscal 2006. The Companys determination of fair
value of option-based awards on the date of grant using the Black-Scholes model
is affected by the Companys stock price as well as assumptions regarding a
number of subjective variables. These variables include, but are not limited
to, the Companys expected stock price volatility over the term of the awards,
risk-free interest rate, and the expected life of the options. The risk-free
interest rate is based on a treasury instrument whose term is consistent with
the expected life of the stock options. The expected volatility, holding
period, and forfeitures of options are based on historical experience.

The
following table represents stock option activity for the three months ended
March 31, 2006:

Number of
  Shares

Weighted-
  Average
  Exercise
  Price

Weighted-
  Average
  Remaining
  Contract LifeOutstanding options at
  beginning of period


78,100

$
19.44Granted


23,400


21.44Exercised





Canceled





Outstanding options at end
  of period


101,500

$
19.90


1.76 Yrs.Outstanding exercisable at
  end of period


66,100

$
19.55


.65 Yrs.F-6

DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2006 and 2005 (Continued)

Reclassifications

Certain
reclassifications have been made to the Companys March 31, 2005 condensed
consolidated financial statements to conform with the presentation of the March
31, 2006 condensed consolidated financial statements.

Restatements

The
Company has corrected reporting errors in its March 31, 2005 financial
information as originally released. These errors arose from the misapplication
of generally accepted accounting principles and are described as follows:

1.
The first
  change in accounting principle is the appropriate valuation and
  classification of options and short sale activities. In compliance with SFAS
  No. 133  Accounting
  for Derivate Instruments and Hedging Activites, the cost of these
  transactions have been marked-to-market and the adjustment has been reflected
  in the Statement of Operations. Under previous reporting, these options and
  short sale positions were not marked up/down to the fair market value at the
  time of financial reporting, but rather were carried at cost until the
  positions were closed. The impact of this restatement is indicated by (1)
  below.2.
The second
  change in accounting principle is the appropriate capitalization and
  valuation of equipment that has been placed in-service with customers as
  either a loan or rental. The Company has properly capitalized these
  equipment costs and correspondingly, depreciated them over the estimated
  useful lives of the equipment. Under previous reporting, the Company expensed
  the cost of the equipment at the time the equipment was manufactured. The
  impact of this restatement is indicated by (2) below.3.
The third
  and final accounting principle change relates to Revenue Recognition.
  Previously, the Company reported its cryobanking revenue under the cash
  method. As restated, these revenues are now appropriately reported under the
  accrual method, giving rise to a deferred income account, and proper matching
  of income and expense. The impact of this restatement is indicated by (3)
  below.The impact
  of these restatements to the three months ended March 31, 2005 is summarized
  as follows and is indexed as referenced above:Impact of Restatement
  Increase (Decrease)

Total Balances
  As RestatedRevenues(1)


$
0(2)



0(3)



3,773Total


$
3,773



$
300,356Operating
  income (loss)(1)


$
0(2)



(10,696
)(3)



3,773Total


$
(6,923
)


$
(1,238,057
)Investment
  income(1)


$
(123,165
)(2)



0(3)



0Total


$
(123,165
)


$
806,041Net income
  (loss)(1)


$
(123,165
)(2)



(10,696
)(3)



3,773Total


$
(130,088
)


$
(470,127
)EPS - basic
  and diluted(1)


$
(0.03
)(2)



0(3)



0Total


$
(0.03
)


$
(0.10
)(2)
AVAILABLE-FOR-SALE SECURITIES

Upon
adoption of SFAS No. 115 - Accounting for Certain Investments in Debt and EquitySecurities, management has determined that the companys portfolio
is best characterized as Available-For-Sale. SFAS No. 115 requires these
securities to be recorded at their fair market values, with the offsetting
unrealized holding gains or losses being recorded as Comprehensive Income
(Loss) in the Equity section of the Balance Sheet. The adoption of this pronouncement
has resulted in an increase in the carrying value of the companys
available-for-sale securities, as at March 31, 2006 and December 31, 2005, of
approximately 129.6% and 123.2%, respectively, over its historical cost.

In
accordance with the provisions of SFAS No. 115, the adjustment in stockholders
equity has been made net of the tax effect had these gains been realized.

F-7

The Company
uses the historical cost method in the determination of its realized and
unrealized gains and losses. The following tables summarize the Companys
investments as of:

March 31, 2006Type of
  security

Cost

Fair Value

Unrealized
  Holding gains

Unrealized
  holding lossesEquity

$
24,936,913


57,475,778


32,978,775


(439,910
)Debt


151,882


136,025


14,320


(30,177
)Total

$
25,088,795


57,611,803


32,993,095


(470,087
)December 31, 2005Type of
  security

Cost

Fair Value

Unrealized
  holding gains

Unrealized
  holding lossesEquity

$
25,497,586


57,148,830


32,435,561


(784,317
)Debt


151,882


97,176


4,570


(59,276
)Total

$
25,649,468


57,246,006


32,440,131


(843,593
)At
    March 31, 2006 the securities held by the Company had a market value of $57,611,803
    and a cost basis of $25,088,795 resulting in a net unrealized gain of $32,523,008
    or 129.6% of cost.

  At
    December 31, 2005, the securities held by the Company had a market value of
    $57,246,006 and a cost basis of $25,649,468 resulting in a net unrealized
    gain of $31,596,538 or 123.2% of cost.

At
March 31, 2006 and December 31, 2005, marketable securities primarily consist
of preferred and common stocks of utility companies, and are valued at fair
value. Debt securities consist of Corporate Bonds & Notes. As at March 31,
2006, these items, which have a cost of $151,882, are scheduled to mature at
various dates through May 2008.

F-8

DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2006 AND 2005 (Continued)

(3) SEGMENT
ANALYSIS

The Company
has two operating segments: the sale of blood volume analysis equipment and
related services, and cryobanking services which encompasses blood and semen
storage and related services. In addition, the Company reports an additional
segment, Investment Activity, although it is not deemed to be an operating
segment.

The following
table summarizes the results of each segment described above for the three
months ended March 31, 2006.

March 31,
  2006Equipment Sales
  &Related Services

Cryobanking &Related
  Services

InvestmentActivity

TotalRevenues


$
212,578




129,568








$
342,146Cost of
  sales



(227,273
)



(98,007
)








(325,280
)Selling,
  general and administrative expenses



(1,266,137
)



(22,848
)








(1,288,985
)Operating
  income (loss)



(1,280,832
)



8,713









(1,272,119
)Investment
  income, netDividends













550,822




550,822Gain on sales of securities,
net













710,201




710,201Mark to market of short
positions













74,587




74,587Administrative expenses relating to
portfolio investments













(8,160
)



(8,160
)Total Investment income,
net













1,327,450




1,327,450Interest
  expense, net








(60
)



(96,921
)



(96,981
)Other income



2,668














2,668Income (loss)
  before income taxes



(1,278,164
)



8,653




1,230,529




(38,982
)Income tax
  expense


















Net income
  (loss)


$
(1,278,164
)



8,653




1,230,529



$
(38,982
)Total assets


$
1,209,896




115,009




57,611,803



$
58,936,708F-9

The following
table summarizes the results of each segment described above for the three
months ended March 31, 2005

March 31,
  2005Restated
          Equipment Sales
          &
          Related Services

      Restated
          Cryobanking &
          Related
          Services

      Restated
          Investment
          Activity

      Restated
          TotalRevenues


$
172,713




127,643








$
300,356Cost of
  sales



296,747




99,634









396,381Selling,
  general and administrative expenses



1,132,476




9,556









1,142,032Operating
  income (loss)



(1,256,510
)



18,453









(1,238,057
)Investment
  incomeDividends













538,120




538,120Gain on sales of securities,
net













389,036




389,036Mark to market of short
positions













(120,670
)



(120,670
)Administrative expenses relating to
portfolio investments













(445
)



(445
)Total Investment income,
net













806,041




806,041Interest
  expense, net








161




(42,129
)



(41,968
)Other income



3,857














3,857Income
  (loss) before income taxes



(1,252,653
)



18,614




763,912




(470,127
)Income tax
  expense


















Net income
  (loss)


$
(1,252,653
)



18,614




763,912



$
(470,127
)Total assets


$
937,343




287,379




55,726,452



$
56,951,174(4) PROPERTY
AND EQUIPMENT

Property
and equipment as at March 31, 2006 and March 31, 2005, respectively, consist
of:

Restated2006

2005Machinery and equipment

$
1,356,889

$
1,023,825Furniture
  and fixtures


333,500


329,341Leasehold
  improvements


295,530


295,530Total Cost

$
1,985,919

$
1,648,696Accumulated
  depreciation


(1,334,606
)
$
1,208,067Property and
  equipment, net

$
651,313

$
440,629Depreciation
and amortization expense for the three months ended March 31, 2006 and 2005 was
$34,651 and $20,926, respectively.

F-10

DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2006 and 2005 (Continued)

(5) LOANS
PAYABLE

At
March 31, 2006 and December 31, 2005, the Company has a note payable of
$1,500,000 with a bank with an annual option to renew, and is classified as
short term. The note balance is an aggregate of borrowings (loans) that renews
as one note each year, but is subject to different interest rates depending on
the individual amount of each borrowing.

  The
    loan bears interest at approximately 5.95% and is secured by certain marketable
    securities of the Company.

Short-term
debt to brokers (margin debt), is secured by the Companys marketable
securities, and totaled $4,349,828 at March 31, 2006 and $ 5,583,372 at
December 31, 2005.

(6) PUT AND
CALL OPTIONS

As
part of the companys investment strategy, put and call options are sold on
various stocks the company is willing to buy or sell. The premiums received are
deferred until such time as they are exercised or expire. In accordance with
SFAS No. 133 - Accounting for Derivative Instruments and Hedging Activities,these
options are marked to market for each reporting period using readily available
market quotes, and this fair value adjustment is recorded as a gain or loss in
the Statement of Operations.

Upon
exercise, the value of the premium will adjust the basis of the underlying
security bought or sold. Options that expire are recorded as income in the
period they expire.

The following
summarizes the Companys Put and Call Options as of March 31, 2006 and December
31, 2005.

Put and
  Call Options

Selling price

Fair Market value

Unrealized 
  Gain/(Loss)March 31,
  2006


1,551,252


1,264,566


286,686December
  31, 2005


983,912


772,803


211,109(7) CURRENT
INCOME TAXES

The
Company, due to current losses and loss carry forwards from previous years, has
not accrued or paid taxes based on income. It has, however, paid State and City
taxes which were assessed on its Capital Base. In accordance with SFAS No. 109
- Accounting
for Income Taxes, these Capital Base assessments were not classified
as income taxes.

(8) DEFERRED
INCOME TAXES

Deferred
income taxes result from differences in the recognition of gains and losses on
marketable securities, as well as operating loss carry forwards, for tax and
financial statement purposes. The deferred income tax results in a liability
for the marketable securities, while the operating loss carry forwards result
in a deferred tax asset.

The
deferred tax liability that results from the marketable securities does not
flow through the Statement of Operations due to the classification of the
marketable securities as available-for-sale. Instead, the deferred tax
liability is recorded against the Accumulated Other Comprehensive Income, in
the StockholdersEquity section of the Balance Sheet.

  At
    March 31, 2006, the Company has approximately $16.7 million in net operating
    loss carryforwards. These losses will expire between the years ending December
    31, 2015 and 2025 and give rise to deferred tax assets. However, a valuation
    allowance has been recorded for the entire deferred tax asset as a result
    of uncertainties regarding the realization of the asset due to the history
    of losses and the variability of operating results.

F-11

The
deferred tax computations at March 31, 2006 and December 31, 2005, computed at
federal statutory rates of 35%, are as follows:

2006

2005Deferred tax
  assets:Net
  operating loss carry forwards

$
5,870,992

$
5,858,218Valuation
  allowance


(5,870,992
)

(5,858,218
)Total
  deferred tax assets

$
0

$
0Deferred tax
  liabilities:Fair market
  value adjustment for available-for-sale securities

$
11,383,053

$
11,058,788While
the Company has a deferred tax liability on unrealized portfolio gains, at present
it is not managements intention to liquidate its holdings in order to utilize
these loss carryovers.

(9) Research
and Development Costs

All
research and development costs, as defined in SFAS No. 2  Accounting for Research and Development
Costs, are expensed in the period they are incurred. Research and
development costs for the three months ended March 31, 2006 and 2005 were
$557,508 and $515,334, respectively. These costs appear as components of both
the cost of sales and selling, general & administrative expenses in the
Statement of Operations.

F-12

ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RECENT DEVELOPMENTS

During the year 2005 Medicare
made an erroneous analysis of the cost for the radiopharmaceutical kit,
Volumex, used in conjunction with the BVA-100 Blood Volume Analyzer. The error
was detected in late 2005 and brought to the attention of appropriate
officials. The error, however, was not corrected in the year 2005 but was corrected
at the beginning of 2006. This had a negative impact on the Companys ability
to initiate BVA-100 trial agreements as well as convert trial agreements into
sales. Medical facilities are extremely sensitive to inadequate reimbursement
for any procedures they perform. Many insurance companies base their own
reimbursement on Medicare fee schedules. The correction of this error is
expected to improve acceptance of blood volume measurement by various
institutions.

RESULTS OF OPERATIONS

Three months ended March 31,
2006 as compared with three months ended March 31, 2005:

Operating
Revenues

For
the three months ended March 31, 2006, operating revenues increased to $342,146
vs. $300,356 in 2005, an increase of 13.9%. The increase was due primarily to
increased blood volume kit sales, which increased by 26%. None of the blood
volume analyzer instruments installed on a trial basis were sold during the
quarter. As previously described, the 2005 Medicare error in reimbursement to
hospitals for kits resulted in reduced reimbursement. This error has been
corrected for 2006. The Company has extended the trial period for a number of
hospitals so they are better able to evaluate their total reimbursement.

The
Company is in the process of negotiating with three hospitals who have
indicated an interest for a Blood Optimization Program (BOP). Such a contract
would involve installation of the BVA-100 Blood Volume Analyzer as well as use
of frozen blood storage for patients undergoing elective surgery. This type of
program would enable the patient to store their own blood well in advance of
surgery and avoid being anemic at the time of surgery. The program would be the
first of its type in the United States. Administrative review procedures for
such contracts can take a year, or longer.

  Total
    cost and expenses for research and development, equipment sales and related
    services for Daxor and the BVA segment were $1,493,410 in 2006 vs. $1,429,223
    in 2005, for an increase of 4.49%. Daxor is committed to making Blood Volume
    Analysis a standard of care in at least three different disease states. To
    this end, we are continuing to spend time and money in research and development
    to get the best product to the market. We are still working on the three projects
    of 1) GFR: Glomeril Filtration Rate, 2) Total Body Albumin Analysis, and 3)Wipes
    tests for radiation contamination/detection. We are also progressing on the
    next version of the delivery device for the radioactive dose Volumex. The
    current version is the Max-100 which has a patent. The next version,
    the Max-200 will be without a needle and should afford the company
    extended protection with a second patent when it is completed.

The
sales from Volumex were up 27.8% on dollar sales of $206,827 in 2006 from
161,853 in 2005. However, the quantity of kits sold was up 26%. This is
attributed to the newer accounts paying slightly higher prices than our older
clients. Costs of goods sold for Volumex increased to $102,537 from $70,623 in
2005. This is a 45.2% increase year over year. It is directly attributed to the
13.5% fuel surcharge that FedEx is charging for shipping along with a modest
increase from our vendor who fills and drop ships Volumex for us. We anticipate
an improvement of our profit margins as soon as we pass along these price increases
to our clients. The gross profit for Volumex for the quarter was $104,290 up
from $91,230. However, the profit margin was down to 50.4% from the prior year
of 56.37%. For the three months ended March 31, 2006 total operating revenues
and other total income for equipment sales and related services increased by
23.08% to $212,578 from $172,713 in 2005. In the three months ended March 31,
2006 there has been no sales of the BVA-100 Blood Volume Analyzer, although six
contracts were signed for instruments on a trial basis. In the fourth quarter
of 2005, Daxor had seven signed trial agreements. In the first three quarters
of 2005, Daxor had only seven signed trial agreements. The renewed interest in
the instrument is directly attributable to the reinstatement of the Medicare
reimbursement for Volumex. Trial agreements on a clinical basis require the
Hospitals to pay for kits that they use while they have the equipment on a
trial basis. The only exception are those facilities who are conducting
research utilizing the BVA-100 and therefore, the Company has agreed to supply
those Volumex doses free of charge (this includes the shipping costs and all
disposables associated with the study).

Operating revenues
for the cryobanking division, which includes both blood banking and sperm
banking, were relatively flat with a small increase to $129,568 in 2006 from
$127,643 in 2005, an increase of 1.5%. Total cost and expenses for cryobanking
and related services were $120,855 in 2006 vs. $109,190 in 2005, for an increase
of 10.68%.

-3-


Dividend
Income

Dividend income earned on the
Companys security portfolio for the quarter was $550,822 in 2006 vs. $538,120
in 2005, an increase of 2.4%.

Investment
Gains

Gains on the sale of
investments were $710,201 for the period ending March 31, 2006 vs. $389,036 in
2005. For the current quarter the Company had a positive mark to the market
of short positions of $74,587 vs. negative mark to the market of $120,670 in 2005.
Other revenues were $2,668 in 2006 vs. $3,857 in 2005. Interest expense net of
interest income increased to $96,981 in 2006 vs. $41,968 in 2005.
Administrative expenses relating to portfolio investments were $8,160 vs. $445
in 2005. Total non-operating income, net of non-operating expense for the
quarter was $1,233,137 in 2006 vs. $767,930 in 2005, an increase of 60.6%. Total
non-operating income, net played an essential role in decreasing operating
losses. A detailed description of investment policies and historical records
over the past 13 years was included in the recent 10K filing for year end
December 31, 2005.

Operating
Expenses

  Daxors total expenses
    from operations for first quarter 2006 were $1,614,265 vs. $1,538,413 in 2005.
    A significant portion of the increase in operating costs were due to increased
    hiring of personnel related to expanded research and development expenses
    as well as expanded marketing related to the blood volume analyzer. The Company
    had a major change in the blood volume analyzer which we previously detailed
    in our most recent filing. The Company intends to continue increasing the
    number of individuals assigned to direct sales of the BVA-100 as well as those
    tasked with increased education of the benefits of blood volume analysis and
    the related sales of Volumex. (See research and development 10-K filing for
    2005).

The Company has reported on the
details of the longest case of frozen semen resulting in a successful pregnancy
and birth, which was published in the October, 2005 issue of Fertility
and Sterility magazine. On Monday, October 17, 2005, the company
announced the publication of a case report of 2 successful pregnancies from
cryopreserved semen for 21 and 28 years. The father stored his sperm in 1972 at
the age of 28. This is the world record for the longest cryopreservation of
semen resulting in live births. The successful pregnancies were additionally
notable in that they were achieved using intrauterine artificial insemination
rather than the more complex surgical procedure of in vitro fertilization. The
Company has initiated marketing for its blood banking services. The Company is
attempting to develop a BOP program with a specific hospital. This would
involve blood volume measurement and autologous frozen blood storage prior to
elective orthopedic surgery. The program is called a Blood Optimization
Program, and the Company has filed for trademark status.

In an effort to revitalize
sales in the semen bank segment, the Company may also initiate a separate
marketing program for its semen bank services, which would include a sales and
marketing team.

LIQUIDITY AND CAPITAL
RESOURCES

The
Companys management has pursued a policy of maintaining sufficient liquidity
and capital resources in order to assure continued availability of necessary
funds for the viability and projected growth of all ongoing projects.

At March
31, 2006 the Company had total assets of $58,936,708 with stockholders equity
of $39,330,509 as compared to total assets of $59,565,053 with stockholders
equity of $38,744,801 at December 31, 2005. At March 31, 2006, the Company has
a net pre-taxed unrealized gain of $32,523,008 and deferred taxes of
$11,383,053 for a net after tax unrealized capital gains on available-for-sale
securities in its portfolio of $21,139,955. At December 31, 2005, the company
had a net pre-taxed unrealized gain of $31,596,538 and deferred taxes of
$11,058,788 for a net after tax unrealized capital gains on available-for-sale
securities in its portfolio of $20,537,750. These amounts are included in the
calculation of Total Stockholders Equity. The Companys stock portfolio had a
fair market value of $57,611,803 with short-term loans of $5,849,828 with
4,630,426 shares outstanding. The Company has current liabilities of
$19,606,199. Included in these liabilities are deferred taxes of $11,383,053.
These deferred taxes would occur if the Company chose to sell its entire
portfolio. Current liabilities less these deferred taxes is $8,223,146. The
Companys investment portfolio has been a critical source of supplemental
income to partially offset the continuing losses from operations. Without this
income, the Company would have been in a precarious financial situation because
of its operating losses over

-4-

the past 10 years. The
Companys portfolio has maintained a net value above historical cost for each
of the past 85 consecutive quarters.

The
Companys goal is to establish blood volume measurement as a standard of care
in multiple areas of medicine and surgery. It is hoped that the publication of
research studies from leading medical facilities will result in an increase in
sales in both the Blood Volume Analyzer and its associated kits.

The
Company has adequate resources for the current marketing level of its BVA-100
Blood Volume Analyzer as well as capital to sustain its localized semen and
blood banking services. The Company many not, at the present time, have
adequate resources to expand its marketing force to all areas of the country.
The Company is simultaneously expanding its research and development efforts to
develop additional instrumentation for renal function testing, specifically
glomerular filtration testing. In 2006 the Company considered purchasing the
operations (assets only) of the radiopharmaceutical manufacturer who provides
the isotope for Daxors Blood Volume Analyzer. The Company is also attempting
to implement its Blood Optimization Program. If all of these activities were
expanded at the same rate simultaneously, the Company could experience a
serious cash flow crisis. The Company will explore the potential for raising
additional capital. The current primary focus will be on the BVA-100 Blood
Volume Analyzer with respect to expenditure of resources. The Company
anticipates hiring additional regional managers to the existing sales/marketing
team. It is the goal of the marketing team to develop an individual sales team
for each regional manager. The Company is also expanding its support services
personnel. The decision to develop the marketing team was partially based on
the anticipation of new publications in peer reviewed medical journals by current
users of the Blood Volume Analyzer.

All
sales to leasing companies are non-recourse leases, which are not guaranteed by
the Company The Company sells, as well as offers to lease or rent the BVA-100
as part of the overall marketing plan. The Company also loans the instrument
for a limited time period, however facilities evaluating the instrument must
pay for the kits. A financing arrangement for customers was established through
a relationship with De Lage Landen (DLL) and other third party institutions.
The significance of this relationship is as sales through leases increases,
Daxor will not have to diminish its capital outlay for equipment as DLL and
others will fund the net present value of the lease upon installation of the
equipment. In an effort to obtain the best rates for our clients, the Company
will also work with other independent leasing firms. The Company will use its
current financial reserves primarily for developing and marketing the Blood
Volume Analyzer. The Company is evaluating various options to expand blood
banking services in conjunction with the use of the Blood Volume Analyzer.
Additional information on the Company is available on our website www.daxor.com.

CRITICAL ACCOUNTING POLICIES

The consolidated financial
statements and accompanying footnotes included in this report have been
prepared in accordance with accounting principles generally accepted in the
United States with certain amounts based on managements best estimates and
judgments. To determine appropriate carrying values of assets and liabilities
that are not readily available from other sources, management uses assumptions
based on historical results and other factors that they believe are reasonable.
Actual results could differ from those estimates.

  The Company adopted SFAS
    No. 123R - Share-Based Payments, effective January 1, 2006,
    utilizing the modified prospective method. Under the modified
    prospective method, compensation cost is recognized for all share-based
    payments granted after the effective date and for all unvested awards granted
    prior to the effective date. Prior to adoption, the Company accounted for
    share-based payments under the recognition and measurement principles of Accounting
    Principles Board Opinion No. 25 - Accounting for Stock Issued to Employees,
    and related interpretations. The Company recognized $22,485 million in
    total stock-based compensation expense during the first quarter of 2006. Total
    unvested stock-based compensation expense was $61,821 at March 31, 2006
    and had a total weighted average remaining term of .6 years. See
    Footnote #1 for more information on stock-based compensation.

The following is a summary of
the accounting policies that the Company has deemed critical for reporting
purposes in form 10-Q at March 31, 2006. However, a comprehensive discussion of
the Companys critical accounting policies and management estimates is included
in Managements Discussion and Analysis of Financial Condition and Results of
Operations in the Companys Annual Report on Form 10-K for the year ended
December 31, 2005. There have been no significant changes in critical
accounting policies or management estimates since the year ended
December 31, 2005 other than the adoption of SFAS No. 123R as
described above.

-5-

Available-for-Sale
Securities

Available-for-sale
securities represent investments in debt and equity securities (primarily
common and preferred stock of utility companies)that management has determined
meet the definition of available-for-sale under SFAS No. 115 - Accounting
for Certain Investments in Debt and Equity Securities. Accordingly,
these investments are stated at fair market value and all unrealized holding
gains or losses are recorded in the Stockholders Equity section as Accumulated
Other Comprehensive Income (Loss). Conversely, all realized gains, losses and
earnings are recorded in the Statement of Operations under Other Income
(Expense).

At
certain times the company will engage in short selling of stock. When this
occurs the short position is marked to the market and recorded as a realized
sale. Any gain or (loss) is recorded for the period presented.

Historical
cost is used by the Company to determine all gains and losses, and fair market
value is obtained by readily available market quotes on all securities.

Put and Call Options

As
part of the companys investment strategy put and call options are sold on
various stocks the company is willing to buy or sell. The premiums received are
deferred until such time as they are exercised or expire. In accordance with
SFAS No. 133 - Accounting for Derivative Instruments and Hedging Activities,these
options are marked to market for each reporting period using readily available
market quotes, and this fair value adjustment is recorded as a gain or loss in
the Statement of Operations.

Upon
exercise, the value of the premium will adjust the basis of the underlying
security bought or sold. Options that expire are recorded as income in the
period they expire.

Investment Goals, Strategies
and Policies

The
Companys investment goals are capital preservation and maintaining returns on
this capital with a high degree of safety. These goals are accomplished through
the following strategies and policies:

1.
The Company maintains a diversified securities portfolio comprised primarily of
electric utility preferred and common stocks. The Company also sells covered
calls on portions of its portfolio and also sells puts on stocks it is willing
to own. It also sells uncovered calls and will engage in short position up to
5% of the value of its portfolio. The Companys investment policy is to
maintain a minimum of 80% of its portfolio in electric utilities. Investments
in utilities are primarily in electric companies. Investments in non-utility
stocks will not exceed 15% of the portfolio.

2.
Investment in speculative issues, including short sales, maximum of 5%.

3.
Limited use of options to increase yearly investment income.

a.
The use of Call Options. Covered options can be sold up to a
  maximum of 20% of the value of the portfolio. This provides extra income in
  addition to dividends received from the companys investments. The risk of
  this strategy is that investments may be called away, which the company may
  have preferred to retain. Therefore, a limitation of 20% is placed on the
  amount of stock on which options which can be written. The amount of the
  portfolio on which options are actually written is usually between 3-10% of
  the portfolio. In actual practice, more than 90% of the options that are
  written expire unexercised. The actual turnover of the portfolio is such
  that the average holding period is in excess of 5 years.b.
The use of Put options. Put options are written on stocks
which
  the company is willing to purchase. While the company does not have a high
  rate of turnover in its portfolio, there is some turnover; for example, due
  to preferred stocks being called back by the issuing company, or stocks being
  called away because call options have been written. The use of put options is
  a conservative strategy which enables the company to buy stocks at a lower
  price than the prevailing market. If the stock does not go to the put
  exercise price, then the company receives the unexercised option price. If
  the put is exercised, the company obtains its stock at a lower price and has
  the additional benefit of a lower basis cost because the option price is
  incorporated into the cost basis. For example, if a stock is selling at $23
  per share and the company sells a put for $0.80 at $20.00, if the stock drops
  to $19.75, the exercise price is $20.00, the effective cost to the company,
  however, is only $19.20 per share. The company may or may not sell Calls
  against a stock it has acquired this way, or it may retain the stock. In
  either case, the company benefits by acquiring the stock at a lower price
  than prevailed at the time it indicated an interest in this particular stock.-6-

c.
Speculative Short
  Sales/Short Options.
  The company limits its speculative transaction to 5% of the portfolio value
  of the assets. The company may sell uncovered calls on certain stocks. If the
  stock price does not rise to the price of the calls, the option is not
  exercised, and the company receives the income from the call. If the call is
  exercised, the company is then short the stock. The company then has the
  choice of covering the short stock, or selling a put against its short stock.
  If the put is exercised, then the short sale is covered. The companys
  current accounting policy is to mark to the market each quarter any short
  positions, and include it in the income statement. While the company may have
  so-called speculative positions equal to 5% of its accounts, in actual
  practice there are most quarters where short stock positions account for less
  than 1% of the assets of the company.The
income derived from these investments has been essential to offset the
research, operating and marketing expenses of developing the Blood Volume
Analyzer. The Company has followed a conservative policy of assuring adequate
liquidity so that it can expand its marketing and research development without
the sudden necessity of raising additional capital. The securities in the
Companys portfolio are selected to provide stability of both income and
capital. The Company has been able to achieve financial stability because of
these returns, which covered a significant portion of the Companys continuing
losses from operations. The Companys investment policy is reviewed at least
once yearly by the Board of Directors and the Audit Committee. Individual
investment decisions are made solely by Dr. Joseph Feldschuh, CEO, who devotes
approximately 10 to 15% of his time 7 to 7.5 hours per week to this activity.
He is assisted by a single half-time employee. No other member of the Company
is involved in individual investment decisions.

Revenue
Recognition

The
Company recognizes operational revenues from several sources. The first source
is the outright sale of equipment, the Blood Volume Analyzer, to customers. The
second source is the sale and associated shipping revenues of single-use
radioactive doses (Volumex) that are injected into the patient and measured by
the Blood Volume Analyzer. The third source of revenue is service contracts on
the Blood Volume Analyzer, after it has been sold to a customer. The fourth
source of revenue is the storage fees associated with cryobanked blood and
semen specimens. The fifth is lab revenues from laboratory services, and the sixth
is revenue from semen sales.

The
Company currently offers three different methods of purchasing the Blood Volume
Analyzer equipment. A customer may purchase the equipment directly, lease the
equipment, or rent the equipment on a month-to-month basis. The revenues
generated by a direct sale or a monthly rental are recognized as revenue in the
period in which the sale or rental occurred. If a customer is to select the
lease option, the Company refers its customer to a third party finance company
with which it has established a relationship, and if the lease is approved, the
Company receives 100% of the sales proceeds from the finance company and
recognizes 100% of the revenue. The finance company then deals directly with
the customer with regard to lease payments and related collections.

The
sales of the single-use radioactive doses (Volumex) that are used in
conjunction with the Blood Volume Analyzer are recognized as revenue in the
period in which the sale occurred.

When
Blood Volume Analyzer equipment has been sold to a customer, the Company offers
a one year warranty on the product, which covers all mechanical failures. This
one year warranty is effective on the date of sale of the equipment. After the
one year period expires, customers may purchase a service contract through the
Company, which is usually offered in one-year, three year or five year
increments. These service contracts are billed quarterly and therefore become
income in the period in which they apply.

  The
    storage fees associated with the cryobanked blood and semen samples are recognized
    as income in the period for which the fee applies. The Company invoices customers
    for storage fees on the first day of the quarter for a 3 month period. Therefore,
    the income invoiced in that quarter is earned by the end of the quarter. This
    policy has made it easier for our clients to spread their storage payments
    over the four quarters of the year, as compared to prior years where clients
    had to choose between 1, 2 or 4 year contracts.

-7-

Comprehensive
Income (Loss)

The
Company reports components of comprehensive income under the requirements of
SFAS No. 130 - Reporting Comprehensive Income. This statement establishes
rules for the reporting of comprehensive income and requires certain
transactions to be presented as separate components of stockholders equity.
The Company currently reports the unrealized holding gains and losses on
available-for-sale securities, net of deferred taxes, as accumulated other comprehensive
income (loss).

Product
Warrantees and Related Liabilities

The
Company offers a one year warranty on the Blood Volume Analyzer equipment. This
warranty is effective on the date of sale and covers all mechanical failures of
the equipment. All major components of the equipment are purchased and
warranted by the original third party manufacturers.

Once
the initial one year warranty period has expired, customers may purchase annual
service contracts for the equipment. These service contracts warranty the
mechanical failures of the equipment that are not associated with normal
wear-and-tear of the components.

To
date, the Company has not experienced any major mechanical failures on any
equipment sold. In addition, the majority of the potential liability would
revert to the original manufacturer. Due to this history, a liability has not
been recorded with respect to product warranty liability.

Income
Taxes

The
Company accounts for income taxes under the provisions of SFAS No. 109 -
Accounting for Income Taxes. This pronouncement requires recognition of
deferred tax assets and liabilities for the estimated future tax consequences
of events attributable to differences between the financial statement carrying
amounts of existing assets and liabilities and their respective tax bases and
operating loss and tax credit carry forwards. Deferred tax assets and
liabilities are measured using enacted tax rates in effect for the year in
which the differences are expected to be recovered or settled. The effect on
deferred tax assets and liabilities of changes in tax rates is recognized in
the statement of operations in the period in which the enactment rate changes.
Deferred tax assets and liabilities are reduced through the establishment of a
valuation allowance at such time as, based on available evidence, it is more
likely than not that the deferred tax assets will not be realized.

Item
3. Quantitative and Qualitative Disclosures About Market Risk

The Securities and Exchange
Commissions rule related to market risk disclosure requires that we describe
and quantify our potential losses from market risk sensitive instruments
attributable to reasonably possible market changes. Market risk sensitive
instruments include all financial or commodity instruments and other financial
instruments that are sensitive to future changes in interest rates, currency
exchange rates, commodity prices or other market factors.

We are not exposed to market
risks from changes in foreign currency rates. The company maintains an
investment portfolio primarily consisting of electric utility companies which
are publicly traded common and preferred stock. These are categorized as
available-for-sale securities.

In addition to receiving
income from dividends, the company also has an investment policy of selling
puts on stocks that it is willing to own. Such options usually have a maturity
of less than 1 year. The company will also sell covered calls on securities
within its investment portfolio. Covered calls involve stocks, which usually do
not exceed 10% of the value of the companys portfolio and have never exceeded
15% of the companys portfolio value.

The company will, at times,
sell naked or uncovered calls, as well as, engage in short sales as part of a
strategy to mitigate risk. Such short sales are usually less than 10% of the
companys portfolio value, and have never exceeded 15% of the companys
portfolio value.

Puts, calls and short sales,
collectively referred to as short positions, are all marked to market for each
reporting period and any gain or loss is recognized through the Statement of
Operations and labeled as Mark to market of short positions.

The companys investment
strategy is reviewed at least once a year, and more frequently as needed, at
board meetings. The companys investing policy permits investment in
non-electric utilities for up to 10% of the corporate portfolio value. The
companys unrealized gains vs. unrealized losses are usually more than 10 to 1.

At the most
recent first quarter computation, unrealized gains were $32,993,095 and net
unrealized losses were $(470,087) for a ratio of 70 to 1. The results from
option strategies are

-8-

variable and
within the past 5 years have represented from 2.1% to 33.2% of total investment
income. Annual income from dividends has been relatively stable and for the
first quarter 2006 was $550,822 up from $538,120 in the first quarter ended
March 31, 2005.

Certain
utility preferred stocks have call provisions which may enable them to be
called away from the company. The call price, in all instances, is higher than
the companys cost for the stock. The yields on such preferred stocks may be
significantly higher than current available yields. Such stocks, therefore,
could not be replaced with similar yields. Currently, approximately 2.3% of the
companys portfolio falls into this category.

The companys
portfolio value is exposed to fluctuations in the general value of electric
utilities. An increase of interest rates could affect the company in two ways;
one would be to put downward pressure on the valuation of utility stocks as
well as increase the companys cost of borrowing.

Because of the
size of the unrealized gains in the companys portfolio, the company does not
anticipate any changes which could reduce the value of the companys utility
portfolio below historical cost. Electric utilities operate in an environment
of federal, state and local regulations, and they may disproportionately affect
an individual utility. The company exposure to regulator risk is mitigated due
to its diversity of holdings consisting of 70 separate stocks.

DAXOR
        CORPORATION 
        SUMMARY OF INVESTMENTS
        AS AT MARCH 31, 2006ACCOUNT
    
    
    COST
    
    
    FAIR
        MARKET 
        VALUE
    
    
    TOTALUNREALIZED GAIN (LOSS)TOTAL
        COMMON STOCK
    
    $
    24,040,396
    
    $
    56,287,069
    
    $
    32,246,673TOTAL
        PREFERRED STOCK
    
    $
    896,517
    
    $
    1,188,709
    
    $
    292,192TOTAL
        EQUITIES
    
    $
    24,936,913
    
    $
    57,475,778
    
    $
    32,538,865TOTAL
        BONDS
    
    $
    151,882
    
    $
    136,025
    
    $
    (15,857
    )TOTAL
        PORTFOLIO
    
    $
    25,088,795
    
    $
    57,611,803
    
    $
    32,523,008DAXOR
        CORPORATION 
        SUMMARY OF INVESTMENTS
        AS AT MARCH 31, 2005ACCOUNT
    
    
    COST
    
    
    FAIR
        MARKET
        VALUE
    
    
    TOTAL
        UNREALIZED GAIN (LOSS)TOTAL
        COMMON STOCK
    
    $
    22,970,824
    
    $
    54,798,209
    
    $
    31,827,385TOTAL
        PREFERRED STOCK
    
    $
    554,125
    
    $
    899,843
    
    $
    345,718TOTAL
        EQUITIES
    
    $
    23,524,949
    
    $
    55,698,052
    
    $
    32,173,103TOTAL
        BONDS
    
    $
    77,564
    
    $
    28,400
    
    $
    (49,164
    )TOTAL
        PORTFOLIO
    
    $
    23,602,513
    
    $
    55,726,452
    
    $
    32,123,939-9-

Daxor Corporation
Summary of Proceeds Received and Market Valuation at 03/31/06
Put and Call Options

Total Proceeds
  
  Received on
  open positions
  at 12/31/05


Sale of 
  Options from 
  01/01/06-03/31/06


Expirations
  and 
  Assignments of 
  Options from
  01 /01/06-03/31/06


Proceeds
  Received on 
  open positions at 03/31/06


Market
  Value at
  3/31/2006


Unrealized Appreciation 
  (Depreciation)
  at 03/31/06$
983,912

$
1,526,594

$
959,254

$
1,551,252

$
1,264,566

$
286,686

Daxor Corporation
Summary of Proceeds Received and Market Valuation at 03/31/05
Put and Call Options

.Total
  Proceeds 
  Received on
  open positions
  at 12/31/04


Sale of 
  Options from 
  01/01/05-03/31/05


Expirations
  and 
  Assignments of 
  Options from
  01 /01/05-03/31/05


Proceeds
  Received on 
  open positions at 03/31/05


Market
  Value at
  3/31/2005


Unrealized Appreciation 
  (Depreciation)
  at 03/31/05$
969,231

$
483,073

$
488,798

$
963,506

$
701,428

$
262,078-10-

Item 4. Controls and Procedures

As of March 31, 2006, the Company carried out
an evaluation, under the supervision and with the participation of the
Companys management, including the Companys Chief Executive Officer, Chief
Financial Officer and Treasurer, of the effectiveness of the design and
operation of the Companys disclosure controls and procedures pursuant to Rule
13a-14 under the Securities and Exchange Act of 1934, as amended.

During the calendar year ended December 31,
2005, as well as during the first quarter ended March 31, 2006, the Company had
an insufficient amount of internal personnel possessing the appropriate
knowledge, experience and training in applying US GAAP and reporting financial
information in accordance with the requirements of the Commission. The
evaluation found insufficient controls over dissemination of information
regarding non-routine and complex transactions, which resulted in incorrect
treatment and lack of proper analysis of such transactions by accounting staff.
This weakness resulted in material adjustments proposed by our independent
registered accountants with respect to our financial statements for our
calendar years ended December 31, 2005, 2004 and 2003. As a result, the figures
for the years ended December 31, 2004 and 2003 and the three months ended March
31, 2005, which are presented in this document, required restatement from their
previous filing. Management believes this issue to be material and therefore,
deemed the design and operation of internal control in place at December 31,
2005 and March 31, 2006 to be ineffective.

In late 2005, the Company hired a Controller, who is a Certified Public
Accountant to
oversee the accounting department and coordinate the efforts of analysis and
dissemination. These efforts include design changes and related monitoring of
the internal control system. In addition, the firm has temporarily hired two
Certified Public Accountants to assist them in the work required to get the Companys prior financial
statements in accordance with all filing requirements. It is managements
intention to address accounting issues on a timely basis, and prevent
misstatement based on errors and/or lack of understanding.

The Companys management and board of
directors are fully committed to the review and evaluation of the procedures
and policies designed to assure effective internal control over financial
reporting. It is managements opinion that these new additions to the internal
accounting staff will assist in the establishment of an effective design and
operation of the internal control system and therefore, improve the quality of
future period financial reporting.

-11-

PART II.
  OTHER INFORMATIONItem 1. Legal
  ProceedingsNone.Item 1A. Risk FactorsNone.Item 2. Unregistered
  Sales of Equity Securities and Use of ProceedsNone.Item 3. Defaults
  Upon Senior SecuritiesNone.Item 4. Submission
  of Matters to a Vote of Security HoldersNone.Item 5. Other
  InformationNone.Item 6. Exhibits and
  Reports on Form 8-K(a) Exhibits31.1
Certification of Chief Executive
Officer
  pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2
Certification of Principal Financial
  Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1
Certification of Chief Executive
Officer
  pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the
  Sarbanes-Oxley Act of 200232.2
Certification of Principal Financial
  Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
  906 of the Sarbanes-Oxley Act of 2002(b) There
  were no reports on Form 8-k filed.-12-

SIGNATURES

Pursuant to
the requirements of the Securities and Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.

DATE: May
  19, 2006
By:
/s/ JOSEPH
  FELDSCHUH, M.D.JOSEPH
  FELDSCHUH, M.D.,President
  and Chief ExecutiveOfficerDATE: May
  19, 2006
By:
/s/ STEPHEN
  FELDSCHUHSTEPHEN FELDSCHUHVice President
  of OperationsAnd Chief
  Financial Officer-13-