---

|                                          
|------------------------------------------
|SECURITIES AND EXCHANGE COMMISSION        
|                                          
|WASHINGTON, D.C. 20549                    
|                                          
|                                          
|                                          
|FORM 10-Q                                 
|                                          
|Quarterly Report Under Section 13 or 15(d)
|of the                                    
|Securities Act of 1934                    
|                                          
|FOR QUARTER ENDED SEPTEMBER 30, 2007      
|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.

Yesx     
No  o

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  oNox

Indicate
the number of shares outstanding of each of the issuers classes of common
stock, as of the latest practicable date.

|                           |  |                                           
|-------------------------- |  | ------------------------------------------
|CLASS                      |  | 4,516,818 OUTSTANDING AT
 November 9, 2007
|                           |  |                                           
|COMMON
 STOCK              |  |                                           
|PAR
 VALUE: $.01 per share |  |                                           

---



DAXOR CORPORATION AND SUBSIDIARY

TABLE OF CONTENTS

|         |                       |                                                                                                                                |       
|-------- | --------------------- | ------------------------------------------------------------------------------------------------------------------------------ | ------
|PART I.  | FINANCIAL INFORMATION |                                                                                                                               
|        
|         | Item 1.               | FINANCIAL
 STATEMENTS (Unaudited)                                                                                              |       
|        
|         |                       | Index to
 Financial Statements                                                                                                 | 2     
|        
|         |                       | Condensed
 Consolidated Balance Sheets at September 30, 2007 (Unaudited)
 and December 31, 2006 - (Audited)                    | F-1   
|        
|         |                       | Condensed
 Consolidated Statements of Operations for the three and nine months ended September
 30,2007 and 2006  (Unaudited) | F-2-3 
|        
|         |                       | Condensed
 Consolidated Statements of Cash Flows for the nine months ended September 30,
 2007 and 2006  (Unaudited)          | F-4-5 
|        
|         |                       | Notes to
 Condensed Consolidated Financial Statements  (Unaudited)                                                            | F-6-18
|        
|         | Item 2.               | Managements
 Discussion and Analysis of Financial Condition and Results of Operations                                         | 3-10  
|        
|         | Item 3.               | Quantitative
 and Qualitative Disclosures about Market Risk                                                                    | 11-13 
|        
|         | Item 4.               | Controls
 and Procedures                                                                                                       | 13    
|        
|         | Item 5.               | Additional
 Information                                                                                                        |       
|        
|PART II. | OTHER INFORMATION     |                                                                                                                               
|        
|         | Item 1.               | Legal
 Proceedings                                                                                                             | 13    
|        
|         | Item 1A.              | Risk
 Factors                                                                                                                  | 13    
|        
|         | Item 2.               | Unregistered
 Sales of Equity Securities and Use of Proceeds                                                                   | 13    
|        
|         | Item 3.               | Defaults
 Upon Senior Securities                                                                                               | 13    
|        
|         | Item 4.               | Submission
 of Matters to a Vote of Security Holders                                                                           | 13    
|        
|         | Item 5.               | Other
 Information                                                                                                             | 13    
|        
|         | Item 6.               | Exhibits                                                                                                                       | 14    

-1-

---



DAXOR CORPORATION AND SUBSIDIARY

|                                 |                                                                                                                               |  |       
|-------------------------------- | ----------------------------------------------------------------------------------------------------------------------------- |  | ------
|PART I    FINANCIAL
 INFORMATION |                                                                                                                               | 
|                                
|Item 1.                          | Financial Statements
 (Unaudited)                                                                                             |  |       
|                                
|                                 | Index to Financial
 Statements                                                                                                |  |       
|                                
|                                 | Condensed Consolidated Balance Sheets at September 30, 2007 (Unaudited)
 and December 31, 2006 (Audited)                      |  | F-1   
|                                
|                                 | Condensed Consolidated
Statements of Operations for the three and nine
 months endedSeptember 30, 2007 and 2006  (Unaudited) |  | F-2-3 
|                                
|                                 | Condensed Consolidated Statements of Cash Flows for the nine months
 ended September 30, 2007 and 2006  (Unaudited)          |  | F-4-5 
|                                
|                                 | Notes to Condensed Consolidated Financial Statements  (Unaudited)                                                            |  | F-6-18

-2-

---



DAXOR CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

DAXOR CORPORATION 
CONDENSED CONSOLIDATED BALANCE SHEETS

|                                                                                                                                                                                                |  |                                |            |                             |   |            |  
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------ | ---------- | --------------------------- | - | ---------- | -
|                                                                                                                                                                                                |  | UNAUDITED
 September 30,
 2007 |            | AUDITED
 December 31,
 2006 |  
|                                                                                                                                                                                                |  |                                |            |                             |  
|ASSETS                                                                                                                                                                                          |  |                                |            |                             |   |            |  
|                                                                                                                                                                                                |  |                                |            |                             |   |            |  
|CURRENT ASSETS                                                                                                                                                                                  |  |                                |            |                             |   |            |  
|Cash and cash equivalents                                                                                                                                                                       |  | $                              | 14,696     |                             | $ | 2,838,927  |  
|Receivable from broker (Money Market
 Accounts)                                                                                                                                                 |  |                                | 7,378,204  |                             |   |           |  
|Available-for-sale securities, at fair
 market value                                                                                                                                            |  |                                | 67,351,942 |                             |   | 66,968,446 |  
|Securities sold, not received at fair
 market value                                                                                                                                             |  |                                | 5,259,745  |                             |   | 7,102,763  |  
|Accounts receivable, net of allowance for
 doubtful accounts of $49,163 in 2007 and $34,163 in 2006                                                                                             |  |                                | 185,332    |                             |   | 174,109    |  
|Inventory                                                                                                                                                                                       |  |                                | 203,283    |                             |   | 170,996    |  
|Prepaid expenses and other current assets                                                                                                                                                       |  |                                | 354,087    |                             |   | 115,111    |  
|                                                                                                                                                                                                |  |                                |            |                             |   |            |  
|Total Current Assets                                                                                                                                                                            |  |                                | 80,747,289 |                             |   | 77,370,352 |  
|                                                                                                                                                                                                |  |                                |            |                             |   |            |  
|PROPERTY AND EQUIPMENT, NET                                                                                                                                                                     |  |                                | 1,731,607  |                             |   | 763,802    |  
|OTHER ASSETS                                                                                                                                                                                    |  |                                | 295,795    |                             |   | 32,158     |  
|                                                                                                                                                                                                |  |                                |            |                             |   |            |  
|                                                                                                                                                                                               
|Total Assets                                                                                                                                                                                    |  | $                              | 82,774,691 |                             | $ | 78,166,312 |  
|                                                                                                                                                                                                |  |                                |            |                             |   |            |  
|                                                                                                                                                                                                |  |                                |            |                             |   |            |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                                                            |  |                                |            |                             |   |            |  
|                                                                                                                                                                                                |  |                                |            |                             |   |            |  
|CURRENT LIABILITIES                                                                                                                                                                             |  |                                |            |                             |   |            |  
|Accounts payable and accrued liabilities                                                                                                                                                        |  | $                              | 592,831    |                             | $ | 412,967    |  
|Loans payable                                                                                                                                                                                   |  |                                | 127,050    |                             |   | 3,483,161  |  
|Mortgage payable, current portion                                                                                                                                                               |  |                                | 36,625     |                             |   |           |  
|Put and call options, at fair market value                                                                                                                                                      |  |                                | 8,035,557  |                             |   | 2,682,545  |  
|Securities borrowed, at fair market value                                                                                                                                                       |  |                                | 6,775,375  |                             |   | 10,665,722 |  
|Deferred revenue                                                                                                                                                                                |  |                                | 9,916      |                             |   | 2,755      |  
|Deferred income taxes                                                                                                                                                                           |  |                                | 14,885,884 |                             |   | 15,281,370 |  
|                                                                                                                                                                                                |  |                                |            |                             |   |            |  
|Total Current Liabilities                                                                                                                                                                       |  |                                | 30,463,238 |                             |   | 32,528,520 |  
|                                                                                                                                                                                                |  |                                |            |                             |   |            |  
|                                                                                                                                                                                                |  |                                |            |                             |   |            |  
|LONG TERM LIABILITIES                                                                                                                                                                           |  |                                |            |                             |   |            |  
|                                                                                                                                                                                                |  |                                |            |                             |   |            |  
|Mortgage Payable, less current portion                                                                                                                                                          |  |                                | 440,235    |                             |   |           |  
|                                                                                                                                                                                                |  |                                |            |                             |   |            |  
|COMMITMENTS AND CONTINGENCIES                                                                                                                                                                   |  |                                |            |                             |   |            |  
|                                                                                                                                                                                                |  |                                |            |                             |   |            |  
|STOCKHOLDERS EQUITY                                                                                                                                                                            |  |                                |            |                             |   |            |  
|Common stock, $.01 par value, Authorized -
 10,000,000 shares Issued  5,316,550 shares Outstanding  4,584,918 and
 4,615,326 shares at September 30, 2007 and December 31, 2006, respectively |  |                                | 53,165     |                             |   | 53,165     |  
|Additional paid in capital                                                                                                                                                                      |  |                                | 10,573,289 |                             |   | 10,381,882 |  
|Accumulated other comprehensive income                                                                                                                                                          |  |                                | 27,645,213 |                             |   | 28,379,687 |  
|Retained earnings                                                                                                                                                                               |  |                                | 20,195,667 |                             |   | 12,840,155 |  
|Treasury stock, at cost, 731,632 and
 701,224 shares of Treasury stock at September 30, 2007 and December 31, 2006,
 respectively                                                               |  |                                | (6,596,116 | )                           |   | (6,017,097 | )
|                                                                                                                                                                                                |  |                                |            |                             |   |            |  
|Total Stockholders Equity                                                                                                                                                                      |  |                                | 51,871,218 |                             |   | 45,637,792 |  
|                                                                                                                                                                                                |  |                                |            |                             |   |            |  
|Total Liabilities and Stockholders Equity                                                                                                                                                      |  | $                              | 82,774,691 |                             | $ | 78,166,312 |  
|                                                                                                                                                                                                |  |                                |            |                             |   |            |  

See
accompanying notes to unaudited condensed consolidated financial statements.

F-1

---



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

|                                                                   |  |                     |            |                     |   |            |  
|------------------------------------------------------------------ |  | ------------------- | ---------- | ------------------- | - | ---------- | -
|                                                                   |  | September 30,
 2007 |            | September 30,
 2006 |  
|                                                                   |  |                     |            |                     |  
|                                                                  
|Revenues                                                           |  | $                   | 349,547    |                     | $ | 420,140    |  
|Cost of sales                                                      |  |                     | 220,250    |                     |   | 140,525    |  
|                                                                   |  |                     |            |                     |   |            |  
|Gross profit                                                       |  |                     | 129,297    |                     |   | 279,615    |  
|                                                                   |  |                     |            |                     |   |            |  
|OPERATING EXPENSES:                                                |  |                     |            |                     |   |            |  
|                                                                   |  |                     |            |                     |   |            |  
|Research and development expenses                                  |  |                     | 636,698    |                     |   | 573,817    |  
|Selling, general and administrative
 expenses                      |  |                     | 1,061,438  |                     |   | 949,182    |  
|                                                                   |  |                     |            |                     |   |            |  
|                                                                   |  |                     |            |                     |   |            |  
|Total Operating Expenses                                           |  |                     | 1,698,136  |                     |   | 1,522,999  |  
|                                                                   |  |                     |            |                     |   |            |  
|                                                                   |  |                     |            |                     |   |            |  
|Operating loss                                                     |  |                     | (1,568,839 | )                   |   | (1,243,384 | )
|                                                                   |  |                     |            |                     |   |            |  
|                                                                   |  |                     |            |                     |   |            |  
|Other income (expense):                                            |  |                     |            |                     |   |            |  
|Investment income, net                                             |  |                     | 3,556,693  |                     |   | 402,888    |  
|Interest expense, net                                              |  |                     | (34,976    | )                   |   | (92,957    | )
|Other income                                                       |  |                     | 2,725      |                     |   | 5,661      |  
|                                                                   |  |                     |            |                     |   |            |  
|                                                                   |  |                     |            |                     |   |            |  
|Total other income                                                 |  |                     | 3,524,442  |                     |   | 315,592    |  
|                                                                   |  |                     |            |                     |   |            |  
|                                                                   |  |                     |            |                     |   |            |  
|Income (Loss) before income taxes                                  |  |                     | 1,955,603  |                     |   | (927,792   | )
|Income tax expense                                                 |  |                     |           |                     |   |           |  
|                                                                   |  |                     |            |                     |   |            |  
|                                                                   |  |                     |            |                     |   |            |  
|Net income (loss)                                                  |  | $                   | 1,955,603  |                     | $ | (927,792   | )
|                                                                   |  |                     |            |                     |   |            |  
|                                                                   |  |                     |            |                     |   |            |  
|Weighted average number of shares outstanding
 - basic and diluted |  |                     | 4,578,485  |                     |   | 4,623,493  |  
|                                                                   |  |                     |            |                     |   |            |  
|                                                                   |  |                     |            |                     |   |            |  
|Net income (loss) per common equivalent
 share - basic and diluted |  | $                   | 0.43       |                     | $ | (0.20      | )
|                                                                   |  |                     |            |                     |   |            |  

See
accompanying notes to unaudited condensed consolidated financial statements.

F-2

---



DAXOR CORPORATION AND SUBSIDIARY 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS [UNAUDITED]
FOR THE NINE MONTHS ENDED

|                                                                   |  |                     |            |                     |   |            |  
|------------------------------------------------------------------ |  | ------------------- | ---------- | ------------------- | - | ---------- | -
|                                                                   |  | September 30,
 2007 |            | September 30,
 2006 |  
|                                                                   |  |                     |            |                     |  
|                                                                  
|Revenues                                                           |  | $                   | 1,400,747  |                     | $ | 1,151,608  |  
|Cost of sales                                                      |  |                     | 516,810    |                     |   | 468,399    |  
|                                                                   |  |                     |            |                     |   |            |  
|Gross profit                                                       |  |                     | 883,937    |                     |   | 683,209    |  
|                                                                   |  |                     |            |                     |   |            |  
|OPERATING EXPENSES:                                                |  |                     |            |                     |   |            |  
|                                                                   |  |                     |            |                     |   |            |  
|Research and development expenses                                  |  |                     | 1,899,468  |                     |   | 1,759,468  |  
|Selling, general and administrative
 expenses                      |  |                     | 2,993,436  |                     |   | 2,964,850  |  
|                                                                   |  |                     |            |                     |   |            |  
|                                                                   |  |                     |            |                     |   |            |  
|Total Operating Expenses                                           |  |                     | 4,892,904  |                     |   | 4,724,318  |  
|                                                                   |  |                     |            |                     |   |            |  
|                                                                   |  |                     |            |                     |   |            |  
|Operating loss                                                     |  |                     | (4,008,967 | )                   |   | (4,041,109 | )
|                                                                   |  |                     |            |                     |   |            |  
|                                                                   |  |                     |            |                     |   |            |  
|Other income (expense):                                            |  |                     |            |                     |   |            |  
|Investment income, net                                             |  |                     | 11,535,156 |                     |   | 3,476,411  |  
|Interest expense, net                                              |  |                     | (179,033   | )                   |   | (278,747   | )
|Other income                                                       |  |                     | 8,356      |                     |   | 10,991     |  
|                                                                   |  |                     |            |                     |   |            |  
|                                                                   |  |                     |            |                     |   |            |  
|Total other income                                                 |  |                     | 11,364,479 |                     |   | 3,208,655  |  
|                                                                   |  |                     |            |                     |   |            |  
|                                                                   |  |                     |            |                     |   |            |  
|Income (Loss) before income taxes                                  |  |                     | 7,355,512  |                     |   | (832,454   | )
|Income tax expense                                                 |  |                     |           |                     |   |           |  
|                                                                   |  |                     |            |                     |   |            |  
|                                                                   |  |                     |            |                     |   |            |  
|Net income (loss)                                                  |  | $                   | 7,355,512  |                     | $ | (832,454   | )
|                                                                   |  |                     |            |                     |   |            |  
|                                                                   |  |                     |            |                     |   |            |  
|Weighted average number of shares
 outstanding - basic and diluted |  |                     | 4,591,563  |                     |   | 4,627,848  |  
|                                                                   |  |                     |            |                     |   |            |  
|                                                                   |  |                     |            |                     |   |            |  
|Net income (loss) per common equivalent
 share - basic and diluted |  | $                   | 1.60       |                     | $ | (0.18      | )
|                                                                   |  |                     |            |                     |   |            |  

See accompanying notes to unaudited condensed
consolidated financial statements

F-3

---



DAXOR CORPORATION AND
SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS [UNAUDITED]
FOR THE NINE MONTHS ENDED

|                                                                                      |  |                      |             |                      |   |             |  
|------------------------------------------------------------------------------------- |  | -------------------- | ----------- | -------------------- | - | ----------- | -
|                                                                                      |  | September 30,
  2007 |             | September 30,
  2006 |  
|                                                                                      |  |                      |             |                      |  
|CASH FLOWS FROM OPERATING
  ACTIVITIES:                                               |  |                      |             |                      |   |             |  
|Net income (loss)                                                                     |  | $                    | 7,355,512   |                      | $ | (832,454    | )
|                                                                                     
|Adjustment to reconcile
  net income (loss) to net cash used in operating activities: |  |                      |             |                      |   |             |  
|Depreciation                                                                          |  |                      | 161,640     |                      |   | 119,741     |  
|Provision for doubtful accounts                                                       |  |                      | 15,000      |                      |   | (7,137      | )
|Non-cash compensation expense associated with
employee stock compensation
  plans     |  |                      | 23,065      |                      |   | 67,132      |  
|Gain on sale of fixed assets                                                          |  |                      | (151,016    | )                    |   |            |  
|Gains on sale of investments                                                          |  |                      | (9,551,357  | )                    |   | (2,041,145  | )
|Mark to market adjustments on options & short
sales                                   |  |                      | (79,021     | )                    |   | 150,331     |  
|                                                                                      |  |                      |             |                      |   |             |  
|Changes in operating assets and liabilities                                           |  |                      |             |                      |   |             |  
|Increase in accounts receivable                                                       |  |                      | (26,223     | )                    |   | (54,000     | )
|Decrease in prepaid expenses & other current
assets                                   |  |                      | 8,784       |                      |   | 130,459     |  
|Increase in inventory                                                                 |  |                      | (32,287     | )                    |   | (49,301     | )
|Increase in other assets                                                              |  |                      | (263,637    | )                    |   |            |  
|Increase (Decrease) in accounts payable and accrued
liabilities                       |  |                      | 179,864     |                      |   | (20,486     | )
|Increase (Decrease) in deferred revenue                                               |  |                      | 7,161       |                      |   | (84,795     | )
|                                                                                      |  |                      |             |                      |   |             |  
|                                                                                      |  |                      |             |                      |   |             |  
|Net cash used in operating
  activities                                               |  |                      | (2,352,515  | )                    |   | (2,621,655  | )
|                                                                                      |  |                      |             |                      |   |             |  
|                                                                                      |  |                      |             |                      |   |             |  
|CASH FLOWS FROM INVESTING
  ACTIVITIES:                                               |  |                      |             |                      |   |             |  
|Purchase of property and
  equipment                                                  |  |                      | (1,173,929  | )                    |   | (242,553    | )
|Proceeds from sale of
  fixed assets                                                  |  |                      | 195,500     |                      |   |            |  
|Decrease (Increase) in
  securities sold, not received at fair market value           |  |                      | 1,843,018   |                      |   | (2,405,712  | )
|Decrease (Increase) in
  securities borrowed, at fair market value                    |  |                      | (3,890,347  | )                    |   | 3,370,497   |  
|Purchases of put and call
  options                                                   |  |                      | (708,650    | )                    |   | (58,100     | )
|Sales of put and call
  options                                                       |  |                      | 13,305,465  |                      |   | 4,699,052   |  
|Acquisition of available
  for sale securities                                        |  |                      | (16,084,725 | )                    |   | (11,561,803 | )
|Proceeds from sale of
  available for sale securities                                 |  |                      | 16,957,844  |                      |   | 11,829,733  |  
|                                                                                      |  |                      |             |                      |   |             |  
|Net cash provided by
  investing activities                                           |  |                      | 10,444,176  |                      |   | 5,631,114   |  
|                                                                                      |  |                      |             |                      |   |             |  
|                                                                                      |  |                      |             |                      |   |             |  
|CASH FLOWS FROM FINANCING
  ACTIVITIES:                                               |  |                      |             |                      |   |             |  
|Proceeds from margin payable                                                          |  |                      | 26,052,876  |                      |   | 16,485,258  |  
|Repayment of margin payable                                                           |  |                      | (35,387,191 | )                    |   | (19,337,102 | )
|Repayment of bank loan                                                                |  |                      | (1,400,000  | )                    |   |            |  
|Purchase of treasury stock                                                            |  |                      | (670,597    | )                    |   | (148,545    | )
|Proceeds from sale of
  treasury stock                                                |  |                      | 12,160      |                      |   |             |  
|Proceeds from mortgage payable                                                        |  |                      | 500,000     |                      |   |            |  
|Repayment of mortgage payable                                                         |  |                      | (23,140     | )                    |   |            |  
|                                                                                      |  |                      |             |                      |   |             |  
|                                                                                      |  |                      |             |                      |   |             |  
|Net cash used in financing
  activities                                               |  |                      | (10,915,892 | )                    |   | (3,000,389  | )
|                                                                                      |  |                      |             |                      |   |             |  
|                                                                                      |  |                      |             |                      |   |             |  
|Net increase(decrease) in
  cash and cash equivalents                                 |  |                      | (2,824,231  | )                    |   | 9,070       |  
|Cash and cash equivalents
  at beginning of period                                    |  |                      | 2,838,927   |                      |   | 93,003      |  
|                                                                                      |  |                      |             |                      |   |             |  
|                                                                                      |  |                      |             |                      |   |             |  
|Cash and cash equivalents
  at end of period                                          |  | $                    | 14,696      |                      | $ | 102,073     |  
|                                                                                      |  |                      |             |                      |   |             |  
|                                                                                      |  |                      |             |                      |   |             |  
|Supplemental Disclosures
  of Cash Flow Information:                                  |  |                      |             |                      |   |             |  
|Cash paid during the
  quarter for:                                                   |  |                      |             |                      |   |             |  
|Interest                                                                              |  | $                    | 190,948     |                      | $ | 281,230     |  
|Income taxes                                                                          |  | $                    |            |                      | $ |            |  

F-4

---



During the nine months ended
September 30, 2007, the company sold 17,100 shares of treasury stock at $15.20
per share due to the exercise of options held by an employee. The total amount
due from the sale of these shares was $259,920 of which $12,160 was collected
prior to September 30, 2007 and the remaining $247,760 was collected in October
of 2007.

The decrease in prepaid
expenses and other current assets was adjusted by $247,760 to reflect the
receivable from sale of treasury stock at September 30, 2007.

For the nine months ended
September 30, 2007, the change in securities borrowed at fair market value is
shown as part of Cash Flows from Investing Activities. The change in this
amount for the nine months ended September 30, 2006 has been reclassified to the
same category as the nine months ended September 30, 2007 in order to
accurately reflect the type of activity that this account represents.

See accompanying notes to
unaudited condensed consolidated financial statements.

F-5

---



DAXOR CORPORATION AND
SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2007 and 2006 (Continued)
(Unaudited)

(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
and semen storage services to enable individuals to store their own blood and
semen. 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, 2006, 2005 and 2004, included in
Daxor Corporations Annual Report on Form 10-K for the fiscal year ended
December 31, 2006. The December 31, 2006 condensed consolidated balance sheet
data was derived from audited financial statements but does not include all
disclosures required by accounting principles generally accepted in the United
States of America. Operating results for the three and nine month periods ended
September 30, 2007 are not necessarily indicative of the results that may be
expected for the year ending December 31, 2007.

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
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 comprises the Blood Volume
Analyzer equipment and related activity. This includes equipment sales,
equipment rentals, equipment delivery fees, BVA-100 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

In
order to prepare financial statements that conform to the requirements of US
GAAP, management makes 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 September 30, 2007 and September
30, 2006 there were no short term investments included as cash equivalents.

F-6

---



DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2007 and 2006 (Continued)
(Unaudited)

Available-for-Sale Securities

Available-for-sale
securities represent investments in debt and equity securities (primarily
common and preferred stock of electric 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.

Receivable from Broker

The
Receivable from Broker represents cash proceeds from sales of securities and
dividends. These proceeds are kept in dividend bearing money market accounts.

Securities borrowed at fair value

When a call option that has
been sold short is exercised, this creates a short position in the related
common stock. The recorded cost of these short positions is the amount received
on the sale of the stock plus the proceeds received from the underlying call
option. These positions are shown on the Balance Sheet as Securities borrowed
at fair value and the carrying value is reduced or increased at the end of
each quarter by the mark to market adjustment which is recorded in accordance
with SFAS No. 115  Accounting for Certain Investments in Debt and Equity
Securities.

Securities sold, not yet received at fair value

Some of the financial
institutions who hold our securities do not increase our account with the cash
proceeds on the sale of a short stock. In lieu of cash, our account receives a
credit for the proceeds of the short sale. Cash is added to or subtracted from
our account weekly based on the market value of our short positions. These
securities are recorded by the Company as received but not delivered and are
valued at their quoted market price.

Investment Goals, Strategies and Policies

The
Companys investment goals are capital preservation and maintaining returns on
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
dividend bearing electric utility common and preferred 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 periodically have
short positions of up to 10% of the value of its portfolio. The Companys short
position may temporarily rise to 15% of the Companys portfolio without any
specific action because of changes in valuation, but should not exceed this
amount. The Companys investment policy is to maintain a minimum of 85% 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.

F-7

---



DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2007 and 2006 (Continued)
(Unaudited)

2. Investment
in speculative issues, including short sales, maximum of 10%.

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 which the company may have preferred to
  retain can be called away. Therefore, a limitation of 20% is placed on the
  amount of stock on which options can be written. The amount of the portfolio
  on which options are actually written is usually between 3-10% of the
  portfolio. The historical turnover of the portfolio is such that the average
  holding period is in excess of five years for available for sale securities.                                                                                                                                                                                                                                                                                                           
| |  |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |  | 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. If the stock does
  not go below the put exercise price, the company records the proceeds from
  the sale as income. If the put is exercised, the cost basis is reduced by the
  proceeds received from the sale of the put option. There may be occasions
  where the cost basis of the stock is lower than the market price at the time
  the option is exercised.                                                                                                                                                                                                                                                                           
| |  |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |  | c. | Speculative Short
  Sales/Short Options.
  The company normally limits its speculative transactions to no more than 15%
  of the value of the portfolio. 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 records the proceeds from the
  sale of the call as income. If the call is exercised, the company will have a
  short position in the related stock. The company then has the choice of
  covering the short position or selling a put against it. If the put is
  exercised, the short position is covered. The companys current accounting
  policy is to mark to the market at the end of each quarter any short
  positions, and include it in the income statement. While the company may have
  so-called speculative positions equal to 15% of its accounts, in actual
  practice the short stock positions usually account for less than 5% of the
  assets of the company.

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 donor 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 selects the lease option, the
Company refers the customer to a third party leasing company with whom it has
established a relationship. If the lease is approved by the independent leasing
company, the Company receives 100% of the sales proceeds from the leasing
company and recognizes 100% of the revenue. The leasing company then deals
directly with the customer with regard to lease payments and any 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.

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.

F-8

---



DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2007 and 2006 (Continued)
(Unaudited)

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 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 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).

Product Warrantees and Related Liabilities

When
a Blood Volume Analyzer 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 unit. All major
components of the equipment are purchased and warranted by the original third
party manufacturers. After the one year period expires, customers may purchase
a service contract through the Company, which is usually offered in one-year
increments. 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 or warranty liability.

Historically,
service contracts were recorded by the Company as deferred revenue and were
amortized into income in the period in which they were earned. Effective
January 1, 2006, the company offers service contracts priced on annual basis
which are billed quarterly and revenue is earned in the same calendar quarter
that it is billed. There were three hospitals that the Company billed during
the quarter ended September 30, 2007 for the entire amount of their annual
service contract. As at September 30, 2007 and December 31, 2006, deferred
revenue pertaining to the historical service contracts was $9,458 and $0
respectively.

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 nine months ended September 30, 2007, 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
September 30, 2007, 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. Under the provisions of the
Option Plan, the exercise price of any stock options issued is a minimum of
110% of the closing market price of the Companys stock on the grant date of
the option.

F-9

---



DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2007 and 2006 (Continued)
(Unaudited)

At
September 30, 2007, there is a total unvested stock-based compensation expense
of $ 15,720 and a total weighted average remaining term of .48 years. Total
share-based compensation expense recognized in the Statement of Operations
aggregated $23,065 for the nine months ended September 30, 2007 and $67,132 for
nine months ended September 30, 2006.

The
Company recognized $9,362 and $20,651 in total stock-based compensation expense
in the Statement of Operations during the three months ended September
30, 2007 and September 30, 2006.

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 pro-forma 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 nine months ended
September 30, 2007:

|                                           |  |                 |         |                  |   |                           |  |  |         | 
|------------------------------------------ |  | --------------- | ------- | ---------------- | - | ------------------------- |  |  | ------- | 
|                                           |  | Number ofShares |         | Exercise
  Price |   | Remaining
  Contract Life | 
|                                           |  |                 |         |                  |   |                           | 
|Outstanding options at beginning of period |  |                 | 96,500  |                  | $ | 19.36                     |  |  | 2.19Yrs | 
|Granted                                    |  |                 | 9,200   |                  | $ | 15.72                     |  |  |         | 
|Exercised                                  |  |                 | (17,100 | )                |   | 15.20                     |  |  |         | 
|Expired                                    |  |                 | (8,000  | )                | $ | 23.17                     |  |  |         | 
|Canceled                                   |  |                 | (10,500 | )                | $ | 19.47                     |  |  |         | 
|                                           |  |                 |         |                  |   |                           |  |  |         | 
|Outstanding options at end of period       |  |                 | 70,100  |                  | $ | 19.44                     |  |  | 2.18Yrs | 
|                                           |  |                 |         |                  |   |                           |  |  |         | 
|Outstanding exercisable at end of period   |  |                 | 48,400  |                  | $ | 21.10                     |  |  | 2.09Yrs | 
|                                           |  |                 |         |                  |   |                           |  |  |         | 

On October 1, 2002 the
Company granted options to an Officer of the Corporation giving him the right
to purchase 20,000 shares of Daxor Common Stock at a price of $15.20. During
the quarter ended September 30, 2007, the employee exercised 17,100 options and
the remaining 2,900 expired without being exercised.

As part of this exercise of
options, the Company sold 17,100 shares of Treasury stock for $15.20 during the
quarter ended September 30, 2007 resulting in total proceeds due of $259,920.
Of this amount, $ 12,160 was received prior to September 30, 2007 and the
remainder was received in October of 2007.

(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 of September 30, 2007 and December 31, 2006, of approximately 171.35% and
187.33%, 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.

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:

F-10

---



DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2007 and 2006 (Continued)
(Unaudited)

|                   |  |                    |            |              |   |                              |  |                               |            |  |   |            |  
|------------------ |  | ------------------ | ---------- | ------------ | - | ---------------------------- |  | ----------------------------- | ---------- |  | - | ---------- | -
|                   |  | September 30, 2007 |           
|                   |  |                    |           
|Type of
  security |  | Cost               |            | Fair
  Value |   | Unrealized
  Holding
  gains |  | Unrealized
  holding
  losses |           
|                   |  |                    |            |              |   |                              |  |                               |           
|Equity             |  | $                  | 24,636,199 |              | $ | 67,000,972                   |  | $                             | 43,423,509 |  | $ | (1,058,736 | )
|Debt               |  |                    | 184,646    |              |   | 350,970                      |  |                               | 166,324    |  |   | (0         | )
|                   |  |                    |            |              |   |                              |  |                               |            |  |   |            |  
|Total              |  | $                  | 24,820,845 |              | $ | 67,351,942                   |  | $                             | 43,589,833 |  | $ | (1,058,736 | )
|                   |  |                    |            |              |   |                              |  |                               |            |  |   |            |  

|                   |  |                   |            |              |   |                            |  |                               |            |  |   |          |  
|------------------ |  | ----------------- | ---------- | ------------ | - | -------------------------- |  | ----------------------------- | ---------- |  | - | -------- | -
|                   |  | December 31, 2006 |           
|                   |  |                   |           
|Type of
  security |  | Cost              |            | Fair
  Value |   | Unrealized
  holding gains |  | Unrealized
  holding
  losses |           
|                   |  |                   |            |              |   |                            |  |                               |           
|Equity             |  | $                 | 23,122,744 |              | $ | 66,692,556                 |  | $                             | 43,836,526 |  | $ | (266,714 | )
|Debt               |  |                   | 184,646    |              |   | 275,890                    |  |                               | 91,244     |  |   | (0       | )
|                   |  |                   |            |              |   |                            |  |                               |            |  |   |          |  
|Total              |  | $                 | 23,307,390 |              | $ | 66,968,446                 |  | $                             | 43,927,770 |  | $ | (266,714 | )
|                   |  |                   |            |              |   |                            |  |                               |            |  |   |          |  

At
September 30, 2007 the securities held by the Company had a market value of
$67,351,942 and a cost basis of $24,820,845 resulting in a net unrealized gain
of $42,531,097 or 171.35% of cost.

At
December 31, 2006, the securities held by the Company had a market value of
$66,968,446 and a cost basis of $23,307,390 resulting in a net unrealized gain
of $43,661,056 or 187.33% of cost.

At
September 30, 2007 and December 31, 2006, marketable securities primarily
consist of preferred and common stocks of utility companies, and are valued at
fair value. Debt securities consist of corporate bonds and notes at September
30, 2007 and these items have a cost of $184,646 and are scheduled to mature at
various dates through May 2048.

(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 September 30, 2007.

|                                                          |  |                                          |            |                                    |   |                       |   |       |            |   |   |            |  
|--------------------------------------------------------- |  | ---------------------------------------- | ---------- | ---------------------------------- | - | --------------------- | - | ----- | ---------- | - | - | ---------- | -
|                                                          |  | September 30, 2007                       |           
|                                                          |  |                                          |           
|                                                          |  | Equipment
  Sales &
  Related
  Services |            | Cryobanking
  & Related
  Services |   | Investment
  Activity |   | Total |           
|                                                          |  |                                          |            |                                    |   |                       |   |       |           
|                                                          |  |                                          |            |                                    |   |                       |   |       |           
|Revenues                                                  |  | $                                        | 246,263    |                                    | $ | 103,284               |   | $     |           |   | $ | 349,547    |  
|Cost of sales                                             |  |                                          | 210,215    |                                    |   | 10,035                |   |       |           |   |   | 220,250    |  
|Research and development expenses                         |  |                                          | 600,201    |                                    |   | 36,497                |   |       |           |   |   | 636,698    |  
|Selling, general and administrative expenses              |  |                                          | 888,897    |                                    |   | 172,541               |   |       |           |   |   | 1,061,438  |  
|                                                          |  |                                          |            |                                    |   |                       |   |       |            |   |   |            |  
|Operating loss                                            |  |                                          | (1,453,050 | )                                  |   | (115,789              | ) |       |           |   |   | (1,568,839 | )
|                                                          |  |                                          |            |                                    |   |                       |   |       |            |   |   |            |  
|                                                          |  |                                          |            |                                    |   |                       |   |       |            |   |   |            |  
|Investment income, net                                    |  |                                          |            |                                    |   |                       |   |       |            |   |   |            |  
|Dividends                                                 |  |                                          |           |                                    |   |                      |   |       | 711,578    |   |   | 711,578    |  
|Gain on sales of securities, net                          |  |                                          |           |                                    |   |                      |   |       | 6,110,405  |   |   | 6,110,405  |  
|Mark to market of short positions                         |  |                                          |           |                                    |   |                      |   |       | (3,251,811 | ) |   | (3,251,811 | )
|Administrative expenses relating to portfolio
investments |  |                                          |           |                                    |   |                      |   |       | (13,479    | ) |   | (13,479    | )
|                                                          |  |                                          |            |                                    |   |                       |   |       |            |   |   |            |  
|Total Investment income, net                              |  |                                          |           |                                    |   |                      |   |       | 3,556,693  |   |   | 3,556,693  |  
|                                                          |  |                                          |            |                                    |   |                       |   |       |            |   |   |            |  
|                                                          |  |                                          |            |                                    |   |                       |   |       |            |   |   |            |  
|Interest expense, net                                     |  |                                          | (9,111     | )                                  |   |                      |   |       | (25,865    | ) |   | (34,976    | )
|Other income                                              |  |                                          | 2,755      |                                    |   | (30                   | ) |       |           |   |   | 2,725      |  
|                                                          |  |                                          |            |                                    |   |                       |   |       |            |   |   |            |  
|                                                          |  |                                          |            |                                    |   |                       |   |       |            |   |   |            |  
|Income (loss) before income taxes                         |  |                                          | (1,459,406 | )                                  |   | (115,819              | ) |       | 3,530,828  |   |   | 1,955,603  |  
|Income tax expense                                        |  |                                          |           |                                    |   |                      |   |       |           |   |   |           |  
|                                                          |  |                                          |            |                                    |   |                       |   |       |            |   |   |            |  
|                                                          |  |                                          |            |                                    |   |                       |   |       |            |   |   |            |  
|Net income (loss)                                         |  | $                                        | (1,459,406 | )                                  | $ | (115,819              | ) | $     | 3,530,828  |   | $ | 1,955,603  |  
|                                                          |  |                                          |            |                                    |   |                       |   |       |            |   |   |            |  
|                                                          |  |                                          |            |                                    |   |                       |   |       |            |   |   |            |  
|Total assets                                              |  | $                                        | 2,649,253  |                                    | $ | 135,548               |   | $     | 79,989,890 |   | $ | 82,774,691 |  
|                                                          |  |                                          |            |                                    |   |                       |   |       |            |   |   |            |  

F-11

---



DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2007 and 2006 (Continued)
(Unaudited)

The following
table summarizes the results of each segment described above for the three
months ended September 30, 2006

|                                                           |  |                                       |            |                                  |   |                      |   |       |            |   |   |            |  
|---------------------------------------------------------- |  | ------------------------------------- | ---------- | -------------------------------- | - | -------------------- | - | ----- | ---------- | - | - | ---------- | -
|                                                           |  | September 30, 2006                    |           
|                                                           |  |                                       |           
|                                                           |  | Equipment
 Sales &
 Related
 Services |            | Cryobanking
 & Related
 Services |   | Investment
 Activity |   | Total |           
|                                                           |  |                                       |            |                                  |   |                      |   |       |           
|                                                           |  |                                       |            |                                  |   |                      |   |       |           
|Revenues                                                   |  | $                                     | 326,310    |                                  | $ | 93,830               |   | $     |           |   | $ | 420,140    |  
|Cost of sales                                              |  |                                       | 127,147    |                                  |   | 13,378               |   |       |           |   |   | 140,525    |  
|Research and development expenses                          |  |                                       | 543,057    |                                  |   | 30,760               |   |       |           |   |   | 573,817    |  
|Selling, general and administrative
 expenses              |  |                                       | 873,053    |                                  |   | 76,129               |   |       |           |   |   | 949,182    |  
|                                                           |  |                                       |            |                                  |   |                      |   |       |            |   |   |            |  
|Operating loss                                             |  |                                       | (1,216,947 | )                                |   | (26,437              | ) |       |           |   |   | (1,243,384 | )
|                                                           |  |                                       |            |                                  |   |                      |   |       |            |   |   |            |  
|                                                           |  |                                       |            |                                  |   |                      |   |       |            |   |   |            |  
|Investment income                                          |  |                                       |            |                                  |   |                      |   |       |            |   |   |            |  
|Dividends                                                  |  |                                       |           |                                  |   |                     |   |       | 580,578    |   |   | 580,578    |  
|Gain on sales of securities, net                           |  |                                       |           |                                  |   |                     |   |       | 566,606    |   |   | 566,606    |  
|Mark to market of short positions                          |  |                                       |           |                                  |   |                     |   |       | (734,010   | ) |   | (734,010   | )
|Administrative expenses relating to
 portfolio investments |  |                                       |           |                                  |   |                     |   |       | (10,286    | ) |   | (10,286    | )
|                                                           |  |                                       |            |                                  |   |                      |   |       |            |   |   |            |  
|Total Investment income, net                               |  |                                       |           |                                  |   |                     |   |       | 402,888    |   |   | 402,888    |  
|                                                           |  |                                       |            |                                  |   |                      |   |       |            |   |   |            |  
|                                                           |  |                                       |            |                                  |   |                      |   |       |            |   |   |            |  
|Interest expense, net                                      |  |                                       |           |                                  |   | 337                  |   |       | (93,294    | ) |   | (92,957    | )
|Other income                                               |  |                                       | 5,661      |                                  |   |                     |   |       |           |   |   | 5,661      |  
|                                                           |  |                                       |            |                                  |   |                      |   |       |            |   |   |            |  
|                                                           |  |                                       |            |                                  |   |                      |   |       |            |   |   |            |  
|Income (loss) before income taxes                          |  |                                       | (1,211,286 | )                                |   | (26,100              | ) |       | 309,594    |   |   | (927,792   | )
|Income tax expense                                         |  |                                       |           |                                  |   |                     |   |       |           |   |   |           |  
|                                                           |  |                                       |            |                                  |   |                      |   |       |            |   |   |            |  
|                                                           |  |                                       |            |                                  |   |                      |   |       |            |   |   |            |  
|Net income (loss)                                          |  | $                                     | (1,211,286 | )                                | $ | (26,100              | ) | $     | 309,594    |   | $ | (927,792   | )
|                                                           |  |                                       |            |                                  |   |                      |   |       |            |   |   |            |  
|                                                           |  |                                       |            |                                  |   |                      |   |       |            |   |   |            |  
|Total assets                                               |  | $                                     | 1,289,096  |                                  | $ | 122,876              |   | $     | 65,699,760 |   | $ | 67,111,732 |  
|                                                           |  |                                       |            |                                  |   |                      |   |       |            |   |   |            |  

F-12

---



DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2007 and 2006 (Continued)
(Unaudited)

The following
table summarizes the results of each segment described above for the nine
months ended September 30, 2007

|                                                           |  |                                       |            |                                  |   |                      |   |       |            |   |   |            |  
|---------------------------------------------------------- |  | ------------------------------------- | ---------- | -------------------------------- | - | -------------------- | - | ----- | ---------- | - | - | ---------- | -
|                                                           |  | September 30, 2007                    |           
|                                                           |  |                                       |           
|                                                           |  | Equipment
 Sales &
 Related
 Services |            | Cryobanking
 & Related
 Services |   | Investment
 Activity |   | Total |           
|                                                           |  |                                       |            |                                  |   |                      |   |       |           
|                                                           |  |                                       |            |                                  |   |                      |   |       |            |   |   |            |  
|Revenues                                                   |  | $                                     | 1,078,947  |                                  | $ | 321,800              |   | $     |           |   | $ | 1,400,747  |  
|Cost of sales                                              |  |                                       | 482,975    |                                  |   | 33,835               |   |       |           |   |   | 516,810    |  
|Research and development expenses                          |  |                                       | 1,759,945  |                                  |   | 139,523              |   |       |           |   |   | 1,899,468  |  
|Selling, general and administrative
 expenses              |  |                                       | 2,477,261  |                                  |   | 516,175              |   |       |           |   |   | 2,993,436  |  
|                                                           |  |                                       |            |                                  |   |                      |   |       |            |   |   |            |  
|Operating loss                                             |  |                                       | (3,641,234 | )                                |   | (367,733             | ) |       |           |   |   | (4,008,967 | )
|                                                           |  |                                       |            |                                  |   |                      |   |       |            |   |   |            |  
|                                                           |  |                                       |            |                                  |   |                      |   |       |            |   |   |            |  
|Investment income                                          |  |                                       |            |                                  |   |                      |   |       |            |   |   |            |  
|Dividends                                                  |  |                                       |           |                                  |   |                     |   |       | 1,942,178  |   |   | 1,942,178  |  
|Gain on sales of securities, net                           |  |                                       |           |                                  |   |                     |   |       | 9,551,357  |   |   | 9,551,357  |  
|Mark to market of short positions                          |  |                                       |           |                                  |   |                     |   |       | 79,021     |   |   | 79,021     |  
|Administrative expenses relating to
 portfolio investments |  |                                       |           |                                  |   |                     |   |       | (37,400    | ) |   | (37,400    | )
|                                                           |  |                                       |            |                                  |   |                      |   |       |            |   |   |            |  
|Total Investment income, net                               |  |                                       |           |                                  |   |                     |   |       | 11,535,156 |   |   | 11,535,156 |  
|                                                           |  |                                       |            |                                  |   |                      |   |       |            |   |   |            |  
|                                                           |  |                                       |            |                                  |   |                      |   |       |            |   |   |            |  
|Interest expense, net                                      |  |                                       | (24,320    | )                                |   |                     |   |       | (154,713   | ) |   | (179,033   | )
|Other income                                               |  |                                       | 8,266      |                                  |   | 90                   |   |       |           |   |   | 8,356      |  
|                                                           |  |                                       |            |                                  |   |                      |   |       |            |   |   |            |  
|                                                           |  |                                       |            |                                  |   |                      |   |       |            |   |   |            |  
|Income (loss) before income taxes                          |  |                                       | (3,657,288 | )                                |   | (367,643             | ) |       | 11,380,443 |   |   | 7,355,512  |  
|Income tax expense                                         |  |                                       |           |                                  |   |                     |   |       |           |   |   |           |  
|                                                           |  |                                       |            |                                  |   |                      |   |       |            |   |   |            |  
|                                                           |  |                                       |            |                                  |   |                      |   |       |            |   |   |            |  
|Net income (loss)                                          |  | $                                     | (3,657,288 | )                                | $ | (367,643             | ) | $     | 11,380,443 |   | $ | 7,355,512  |  
|                                                           |  |                                       |            |                                  |   |                      |   |       |            |   |   |            |  
|                                                           |  |                                       |            |                                  |   |                      |   |       |            |   |   |            |  
|Total assets                                               |  | $                                     | 2,649,253  |                                  | $ | 135,548              |   | $     | 79,989,890 |   | $ | 82,774,691 |  
|                                                           |  |                                       |            |                                  |   |                      |   |       |            |   |   |            |  

F-13

---



DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2007 and 2006 (Continued)
(Unaudited)

The following
table summarizes the results of each segment described above for the nine
months ended September 30, 2006

|                                                           |  |                                       |            |                                  |   |                      |   |       |            |   |   |            |  
|---------------------------------------------------------- |  | ------------------------------------- | ---------- | -------------------------------- | - | -------------------- | - | ----- | ---------- | - | - | ---------- | -
|                                                           |  | September 30, 2006                    |           
|                                                           |  |                                       |           
|                                                           |  | Equipment
 Sales &
 Related
 Services |            | Cryobanking
 & Related
 Services |   | Investment
 Activity |   | Total |           
|                                                           |  |                                       |            |                                  |   |                      |   |       |           
|                                                           |  |                                       |            |                                  |   |                      |   |       |            |   |   |            |  
|Revenues                                                   |  | $                                     | 826,782    |                                  | $ | 324,826              |   | $     |           |   | $ | 1,151,608  |  
|Cost of sales                                              |  |                                       | 436,142    |                                  |   | 32,257               |   |       |           |   |   | 468,399    |  
|Research and development expenses                          |  |                                       | 1,659,625  |                                  |   | 99,843               |   |       |           |   |   | 1,759,468  |  
|Selling, general and administrative
 expenses              |  |                                       | 2,739,917  |                                  |   | 224,933              |   |       |           |   |   | 2,964,850  |  
|                                                           |  |                                       |            |                                  |   |                      |   |       |            |   |   |            |  
|Operating loss                                             |  |                                       | (4,008,902 | )                                |   | (32,207              | ) |       |           |   |   | (4,041,109 | )
|                                                           |  |                                       |            |                                  |   |                      |   |       |            |   |   |            |  
|                                                           |  |                                       |            |                                  |   |                      |   |       |            |   |   |            |  
|Investment income                                          |  |                                       |            |                                  |   |                      |   |       |            |   |   |            |  
|Dividends                                                  |  |                                       |           |                                  |   |                     |   |       | 1,617,129  |   |   | 1,617,129  |  
|Gain on sales of securities, net                           |  |                                       |           |                                  |   |                     |   |       | 2,041,145  |   |   | 2,041,145  |  
|Mark to market of short positions                          |  |                                       |           |                                  |   |                     |   |       | (150,331   | ) |   | (150,331   | )
|Administrative expenses relating to
 portfolio investments |  |                                       |           |                                  |   |                     |   |       | (31,532    | ) |   | (31,532    | )
|                                                           |  |                                       |            |                                  |   |                      |   |       |            |   |   |            |  
|Total Investment income, net                               |  |                                       |           |                                  |   |                     |   |       | 3,476,411  |   |   | 3,476,411  |  
|                                                           |  |                                       |            |                                  |   |                      |   |       |            |   |   |            |  
|                                                           |  |                                       |            |                                  |   |                      |   |       |            |   |   |            |  
|Interest expense, net                                      |  |                                       |           |                                  |   | 80                   |   |       | (278,827   | ) |   | (278,747   | )
|Other income                                               |  |                                       | 10,991     |                                  |   |                     |   |       |           |   |   | 10,991     |  
|                                                           |  |                                       |            |                                  |   |                      |   |       |            |   |   |            |  
|                                                           |  |                                       |            |                                  |   |                      |   |       |            |   |   |            |  
|Income (loss) before income taxes                          |  |                                       | (3,997,911 | )                                |   | (32,127              | ) |       | 3,197,584  |   |   | (832,454   | )
|Income tax expense                                         |  |                                       |           |                                  |   |                     |   |       |           |   |   |           |  
|                                                           |  |                                       |            |                                  |   |                      |   |       |            |   |   |            |  
|                                                           |  |                                       |            |                                  |   |                      |   |       |            |   |   |            |  
|Net income (loss)                                          |  | $                                     | (3,997,911 | )                                | $ | (32,127              | ) | $     | 3,197,584  |   | $ | (832,454   | )
|                                                           |  |                                       |            |                                  |   |                      |   |       |            |   |   |            |  
|                                                           |  |                                       |            |                                  |   |                      |   |       |            |   |   |            |  
|Total assets                                               |  | $                                     | 1,289,096  |                                  | $ | 122,876              |   | $     | 65,699,760 |   | $ | 67,111,732 |  
|                                                           |  |                                       |            |                                  |   |                      |   |       |            |   |   |            |  

4) PROPERTY
AND EQUIPMENT

Property
and equipment as at September 30, 2007 and December 31, 2006, consists of:

|                                          |  |                     |            |                    |   |            |  
|----------------------------------------- |  | ------------------- | ---------- | ------------------ | - | ---------- | -
|                                          |  | September 30,
 2007 |            | December 31,
 2006 |  
|                                          |  |                     |            |                    |  
|                                          |  |                     |            |                    |   |            |  
|Machinery and equipment                   |  | $                   | 1,087,761  |                    | $ | 975,656    |  
|BVA Equipment on trial                    |  |                     | 799,000    |                    |   | 578,000    |  
|Land                                      |  |                     | 185,641    |                    |   |           |  
|Buildings                                 |  |                     | 598,423    |                    |   |           |  
|Furniture and fixtures                    |  |                     | 350,578    |                    |   | 338,473    |  
|Leasehold improvements                    |  |                     | 298,765    |                    |   | 295,530    |  
|                                          |  |                     |            |                    |   |            |  
|Total Cost                                |  | $                   | 3,320,168  |                    | $ | 2,187,659  |  
|Accumulated depreciation and amortization |  |                     | (1,588,561 | )                  |   | (1,423,857 | )
|                                          |  |                     |            |                    |   |            |  
|Property and equipment, net               |  | $                   | 1,731,607  |                    | $ | 763,802    |  
|                                          |  |                     |            |                    |   |            |  

Depreciation
expense for the three months ended September 30, 2007 and September 30, 2006
was respectively $ 51,466 and $45,430.

Depreciation expense for the
nine months ended September 30, 2007 and September 30, 2006 was respectively
$161,640 and $119,741.

F-14

---



DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2007 and 2006 (Continued)
(Unaudited)

On January 3,
2007, Daxor closed on the purchase of 3.5 acres of land at 107 and 109 Meco
Lane, Oak Ridge, Tennessee that contains two separate 10,000 square foot
buildings. The buildings were constructed in 2004 and each structure is a
single story steel frame with metal shell and roof constructed on a concrete
slab. The total purchase price for the land and buildings including closing
costs was $784,064.

The build out
of the buildings in Oak Ridge commenced in the beginning of July of 2007 after
the Company received the necessary state and local permits and licenses and the
company moved in to the new buildings during the first week of October 2007.

(5) LOANS AND
MORTGAGE PAYABLE

LOANS
PAYABLE

At
September 30, 2007 and December 31, 2006, the Company has a bank note payable
of $100,000 and $1,500,000 respectively which is classified as a current liability.
The note is renewable on May 28, 2008 for a period of one year. The note bears
interest at approximately 6.25% and is secured by certain marketable securities
of the Company.

The
interest expense on this note for the three months ended September 30, 2007 and
2006 was $18,249 and $22,808, respectively. The interest expense on this note
for the nine months ended September 30, 2007 and 2006 was $68,278 and $65,569
respectively.

Short-term
debt to brokers (margin debt), is secured by the Companys marketable
securities, and totaled $27,050 at September 30, 2007 and $1,983,161 at
December 31, 2006.

MORTGAGE
PAYABLE

Daxor
financed the purchase of the land and buildings in Oak Ridge, Tennessee with a
$500,000 10-year mortgage, with the first five years fixed at 7.49%. On January
2, 2012 there is a single payment of $301,972 for the remaining principal and
interest on the mortgage. The Company has the option of making this payment or
refinancing the mortgage for an additional five year term at a fixed rate of
interest that would be set on January 2, 2012.

The
future payments of principal on the mortgage by twelve month period end are as follows:

|         |        |          |  |          |  |          |        |            |  |        |  |   |         | 
|-------- | ------ | -------- |  | -------- |  | -------- | ------ | ---------- |  | ------ |  | - | ------- | 
|09/30/08 |        | 09/30/09 |  | 09/30/10 |  | 09/30/11 |        | Thereafter | 
|         |        |          |  |          |  |          |        |            | 
|         |        |          |  |          |  |          |        |            | 
|$        | 36,625 |          |  | 39,563   |  |          | 42,630 |            |  | 45,935 |  | $ | 312,107 | 

At
September 30, 2007, the remaining principal due on the mortgage for the land
and buildings in Oak Ridge, Tennessee is $ 476,860. Of this amount, $36,625 is
due before September 30, 2008 and the remaining $440,235 is due after that
date.

(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 September 30,
2007 and December 31, 2006.

|                     |  |               |           |                    |  |                  |  |  |         | 
|-------------------- |  | ------------- | --------- | ------------------ |  | ---------------- |  |  | ------- | 
|Put and Call Options |  | Selling price |           | Fair Market
 value |  | Unrealized
 Gain | 
|                     |  |               |           |                    |  |                  | 
|September
 30, 2007  |  |               | 8,263,127 |                    |  | 8,035,557        |  |  | 227,570 | 
|December 31,
 2006   |  |               | 2,848,667 |                    |  | 2,682,545        |  |  | 166,122 | 

F-15

---



DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2007 and 2006 (Continued)  (Unaudited)

(7) SECURITIES
BORROWED AT FAIR MARKET VALUE

At
September 30, 2007 and December 31, 2006, the Company maintained short
positions in certain marketable securities. The liability for short sales of
securities is included in Securities borrowed at fair market value in the
accompanying balance sheets. The cost basis of these positions or proceeds for
these short sales were $6,293,306 and $10,166,081 at September 30, 2007 and December
31, 2006 respectively and had respective market values of $6,775,375 and
$10,665,722, resulting in mark to market adjustments of ($482,069) and
($499,641) at September 30, 2007 and December 31, 2006.

(8) 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 and are included as part of selling, general and administrative expenses.

(9) 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, any increase or decrease
in the deferred tax liability is recorded as an adjustment to Accumulated Other
Comprehensive Income which is in the Stockholders Equity section of the
Balance Sheet.

At September 30, 2007, the Company has approximately $8.8
million in net operating loss available as a carry forward. These losses will
expire between the years ending December 31, 2015 and 2026 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.

While 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. Some holdings may be
periodically liquidated on an involuntary basis when the Company receives a
cash only offer as the result of a merger. If there is an option to receive
stock instead of cash, the Company will usually elect to receive stock.

The
deferred tax computations at September 30, 2007 and December 31, 2006, computed
at federal statutory rates of 35%, are as follows:

|                                   |  |      |            |      |   |            |  
|---------------------------------- |  | ---- | ---------- | ---- | - | ---------- | -
|                                   |  | 2007 |            | 2006 |  
|                                   |  |      |            |      |  
|                                   |  |      |            |      |  
|Deferred tax
 assets:              |  |      |            |      |   |            |  
|Net
 operating loss carry forwards |  | $    | 3,089,781  |      | $ | 5,724,139  |  
|Valuation
 allowance               |  |      | (3,089,781 | )    |   | (5,724,139 | )
|                                   |  |      |            |      |   |            |  
|Total
 deferred tax assets         |  | $    | 0          |      | $ | 0          |  
|                                   |  |      |            |      |   |            |  
|                                   |  |      |            |      |   |            |  
|Deferred tax
 liabilities          |  | $    | 14,885,884 |      | $ | 15,281,370 |  
|                                   |  |      |            |      |   |            |  

(10) CERTAIN
CONCENTRATIONS AND CONTINGENCIES

Financial
instruments which potentially subject the Company to concentrations of credit
risk consist primarily of the common stock of marketable electric utilities. At
September 30, 2007, stocks representing 98.11% of the market value of common
stocks held by the Company were listed on either the New York Stock Exchange
(NYSE) or the American Stock Exchange (AMEX). The Company maintains its
investments in six different brokerage accounts, four at UBS, one at Merrill
Lynch and one at JP Morgan Chase. The limits of this insurance which is offered
by the Securities Investor Protection Corporation (SIPC) is up to $100,000 for
the total amount of cash on deposit and up to $500,000 for the total amount of
securities held at Merrill Lynch and JP Morgan Chase. UBS provides supplemental
insurance up to the face value of the securities in excess of the SIPC limit of
$500,000.

F-16

---



DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2007 and 2006 (Continued) (Unaudited)

Each of these
brokerage houses is well known in the industry and management does not believe
that these securities bear any risk of loss over and above the basic risk that
a security bears through the normal activity of the securities markets.
However, as at September 30, 2007, the fair market value of securities in
excess of the SIPC insured limit is $36,376,747 and the cash on deposit in
excess of the insured limit is $6,978,204.

For the nine
months ended September 30, 2007 there were seven customers (hospitals) that
accounted for 47.42% of the Companys total consolidated sales. Management
believes that the loss of any one customer would have an adverse effect on the
Companys consolidated business for a short period of time. All seven of these
hospitals have purchased their BVA-100 equipment. The Company has not had any
situations in which a hospital, after having purchased a blood volume analyzer,
discontinued purchasing Volumex kits. This suggests that, when more hospitals
purchase equipment, they will continue with ongoing purchase of Volumex kits.
The Company continues to seek new customers, so that any one hospital will
represent a smaller percentage of overall sales.

The Companys
Volumex syringes are filled by an FDA approved radio pharmaceutical
manufacturer. This manufacturer is the only one approved by the FDA in the
United States to manufacture Volumex for interstate commerce. If this
manufacturer were to cease filling the Volumex syringes for Daxor before the
Company had a chance to make alternative arrangements, the effect on Daxors
business could be material.

As discussed
in our Form 10-K for the year ended December 31, 2006, by a letter dated
February 8, 2007, the staff of the Northeast Regional Office of the United
States Securities and Exchange Commission advised Dr. Joseph Feldschuh, the
President and Chief Executive Officer of Daxor that it is recommending that the
Commission bring action against Dr. Feldschuh and Daxor Corporation for
violation of Section 7(a) of the Investment Company Act. The company responded
to the Securities and Exchange Commission on March 9, 2007.

The company
received a notice from the SEC in November of 2005 about whether or not it
should be designated as an investment company. The company responded to this
notice on January 13, 2006. The Company has provided extensive documentation
directly to the SEC and in the 10-K filing for the year ended December 31, 2006
as to why it is primarily an operating company and not primarily an investment
company.

In June of
2007, the Company received a verbal request from the Northeast Regional Office
of the United States Securities and Exchange Commission (SEC) for information
pertaining to discussions that had taken place at previous meetings with
representatives of the SEC in 1984 and 1992. The Company has complied with this
request.

As discussed
in our Form 10-Q for the quarters ended March 31, 2007 and June 30, 2007, the
company cannot determine whether the Commission will decide to bring an
enforcement action against either the Company or its Chief Executive Officer,
nor can the Company determine the nature or amount of any legal or other
regulatory penalties or sanctions that may be imposed.

A resolution
was passed at the Board of Directors meeting of March 23, 2007 whereby the
Company agreed to indemnify the Chief Executive Officer for any expenses he may
incur if the Securities and Exchange Commission brings an enforcement action
against him as specified in their letter of February 8, 2007.

(11) 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 September 30, 2007 and 2006
were $636,698 and $573,817, respectively.

Research
and development costs for the nine months ended September 30, 2007 and 2006
were $1,899,468 and $1,759,468, respectively.

F-17

---



DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2007 and 2006 (Continued) (Unaudited)

(12) Recently
Issued Accounting Pronouncements

The Financial
Accounting Standards Board (FASB) periodically issues new accounting
standards in a continuing effort to improve standards of financial accounting
and reporting. Daxor has reviewed the recently issued pronouncements and
concluded that the following new accounting standards are applicable to the
Company.

In February
2006, the FASB issued Statement of Financial Accounting Standards (SFAS) No.
155 Accounting for Certain Hybrid Financial Instruments amending SFAS No. 133
and SFAS No. 140. SFAS No. 155 eliminates the exemption from applying SFAS No.
133 to securitized financial assets. The provisions of SFAS No. 155 are to be
applied to financial instruments issued or acquired during fiscal periods
beginning after September 15, 2006. The adoption of SFAS No. 155 is not
expected to have a material impact on the Companys financial position or
results of operations.

FASB
Interpretation No. 48 Accounting for Uncertainty in Income Taxes (FIN 48) was
issued in June 2006. It clarifies recognition and derecognition criteria for
tax positions taken in a return that may be subject to challenge upon audit. If
it is more likely than not, that the tax position will be sustained upon
examination, the benefit is to be recognized in the financial statements.
Conversely, if the position is less likely than not to be sustained, the
benefit should not be recognized. The recognition/derecognition decision should
be reflected in the first interim period when the status changes and not
deferred to a future settlement upon audit. General tax reserves to cover
aggressive positions taken in filed returns are no longer allowable. Each issue
must be judged on its own merits and a recognition/derecognition decision
recorded in the financial statements. FIN 48 is effective f or fiscal years
beginning after December 15, 2006. Because the Company knowingly takes no
aggressive positions in its tax returns and accordingly, carries no income tax
reserves on its books, this Interpretation is not expected to have a material
effect on the Companys financial position or results of operations in future
periods.

In September
2006, the FASB issued SFAS No. 157 Fair Value Measurements which amends and
puts in one place guidance on the use of fair value measurements which had been
spread through four APB Opinions and 37 FASB Standards. No extensions of the
use of fair value measurements are contained in this new pronouncement, and
with some special industry exceptions (e.g., broker-dealers), no significant
changes in practice should ensue. The standard is to be applied to financial
statements beginning after November 15, 2007. The adoption of SFAS No. 157 is
not expected to have a material impact on the Companys financial position or
results of operations.

Also in
September 2006, the FASB issued SFAS No. 158 Employers Accounting for Defined
Benefit Pension Plans and Other Postretirement Plans  an amendment of FASB
Statements No. 87, 88, 106 and 132(R). This standard requires recognition in
the balance sheet of the funded status of pension plans, rather than footnote
disclosure which has been current practice. Publicly traded companies are to
reflect the new standard in financial statements ending after December 15,
2006, and non-public companies are to apply it in statements ending after June
15, 2007. Because the Company does not maintain a defined benefit pension plan
and has no plans to do so, this standard should not have any impact on the Companys
financial position or results of operations.

In February
2007, the FASB issued SFAS No. 159 Fair Value Option for Financial Assets and
Financial Liabilities  including an amendment of FASB Statement No. 115. This
standard permits the use of fair value measurement of financial assets and
liabilities in the balance sheet with the net change in fair value recognized
in periodic net income. The Standard is effective for fiscal years beginning
after November 15, 2007. The adoption of this standard is not expected to have
a material effect on the Companys financial position or results of operations
because the majority of its debts and investment assets are variable rate and
thus fair value approximates recorded value.

F-18

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

RECENT
DEVELOPMENTS

The
Centers for Medicare and Medicaid Services (CMS) recently announced
implementation of a significant policy change affecting the reimbursement for
all diagnostic radiopharmaceutical products and contrast agents which will be
effective as of January 1, 2008. Diagnostic radiopharmaceuticals such as
Daxors Volumex will not be separately reimbursable by Medicare for outpatient
services. At this time, it is unclear if this policy change will also be
implemented by private third party health insurance companies or non-hospital
providers.

The
current reimbursement for hospital outpatients includes payment for both the
cost of the procedure to perform a blood volume analysis (BVA) and the
radiopharmaceutical (Daxors Volumex radiopharmaceutical). CMSs new policy
which is currently set to become effective as of January 1, 2008 will only
include the reimbursement for the procedure and would require the hospital to
absorb the cost of the radiopharmaceutical. There will be an upward adjustment
for the procedure code to include some of the costs of the radiopharmaceutical.
However, this upward adjustment may not entirely cover the costs associated
with the procedure and the radiopharmaceutical.

Many
medical societies and major manufacturers of radiopharmaceuticals and contrast
agents are currently engaged in an aggressive attempt to reverse this ruling.
The Company has had similar issues in the past that have negatively impaired
revenue from operations. This particular issue may have a similar impact.
However, at the present time, the Company is unable to quantify what the effect
of this ruling will be on revenue from operations for the year ending December
31, 2008.

The
Company made an agreement effective September 1, 2007 with an officer and Vice
President of Sales and Marketing of the Corporation.

Under
the terms of this agreement, Daxor will provide employment to this individual
for no less than five years. This five year term began on September 1, 2007.
The minimum annual salary for the term of this agreement is $145,000 per year.
The payment of the salary and any additional yearly increases shall occur as is
the current practice, policy and procedure for Daxor salaried employees. The
employee is guaranteed a minimum annual bonus of $25,000.

The
employee was granted 20,000 options to purchase Daxor Corporation Stock at an
exercise price of $17.32 per share. In accordance with the 2004 Stock Option
plan, these options were granted at 110% of the closing price on the date of
the grant which was October 1, 2007. The options vest on October 1, 2008.

Daxor
is paying a monthly rental subsidy of $4,000 from September 1, 2007 through
August 31, 2008. This monthly subusidy decreases to $3,500 from September 1,
2008 through August 31, 2009.

The
Company will provide a mortgage loan of $300,000 to enable the employee to
purchase a home within reasonable commuting distance of Daxor Company
Headquarters in New York City. The mortgage will be at a yearly rate of two
percent and will be payable over 30 years.

Daxor
will pay the employee one year of annual compensation including salary,
incentive compensation, medical benefits, relocation rental expense, loan
benefit and stock options in the event of termination due to any adverse change
in employment excluding termination due to cause and termination by employee.

-3-

---



RESULTS OF
OPERATIONS

Three months
ended September 30, 2007 as compared with three months ended September 30,
2006:

Operating Revenues and Expenses

For
the three months ended September 30, 2007, operating revenues decreased to
$349,547 vs. $420,140 in 2006, a decrease of $70,593 or 16.80%. This decrease
was mainly the result of no Blood Volume Analyzers being sold during the third
quarter of 2007 versus the sale of one Blood Volume Analyzer during the same
period in 2006 for a total of $65,000.

For
the three months ended September 30, 2007, revenue from Blood volume kit sales
decreased by 1.00% vs. the same period in 2006 even though the amount of kits
sold was down by 17.35% from 775 to 644. For the three months ended September
30, 2007, the Company provided 100 Volumex doses free of charge to facilities
utilizing the BVA-100 for research versus 44 during the same period in 2006.
Effective February 1, 2007, the Company raised prices by approximately 5% on
Blood Volume Kits. This was the first price increase in two years and helped to
reduce the impact of fewer kits being sold on gross revenue from kit sales.

The
following table provides gross margin information on Equipment Sales &
Related Services for the three months ended September 30, 2007 and 2006:

|                                         |  |                                                             |         |                                                                               |   |                                                       |    |                                                       |         |   |   |         |  
|---------------------------------------- |  | ----------------------------------------------------------- | ------- | ----------------------------------------------------------------------------- | - | ----------------------------------------------------- | -- | ----------------------------------------------------- | ------- | - | - | ------- | -
|Equipment
  Sales
  And Related Serivces |  | Kit Sales
  Three
  Months
  Ended
  September
  30,
  2007 |         | Equipment
  Sales and
  Other Three
  Months
  Ended
  September
  30,
  2007 |   | Total Three
  Months
  Ended
  September
  30,
  2007 |    | Total Three
  Months
  Ended
  September
  30,
  2006 |        
|                                         |  |                                                             |         |                                                                               |   |                                                       |    |                                                       |        
|Revenue                                  |  | $                                                           | 223,274 |                                                                               | $ | 22,989                                                |    | $                                                     | 246,263 |   | $ | 326,310 |  
|Cost of Goods Sold                       |  |                                                             | 156,230 |                                                                               |   | 53,985                                                |    |                                                       | 210,215 |   |   | 127,147 |  
|Gross Profit (Loss)                      |  | $                                                           | 67,044  |                                                                               | $ | (30,996                                               | )  | $                                                     | 36,048  |   | $ | 199,163 |  
|Gross Profit (Loss) Percentage           |  |                                                             | 30.00   | %                                                                             |   | (134.83                                               | %) |                                                       | 14.63   | % |   | 61.03   | %

There
were no Blood Volume Analyzers sold during the three months ended September 30,
2007. Even though there were no sales of instruments during the quarter, costs
associated with production were still incurred. The revenue of $22,989 for
Equipment Sales and Other consists almost entirely of shipping charges and
service contract revenue.

During
the current quarter, there were also three trial agreements signed for the
BVA-100 Blood Volume Analyzer versus three for the same period in 2006. 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).

Total
S G & A (selling, general and administrative) and R&D (Research and
Development) costs for Equipment Sales and Related Services were $1,489,098 for
the three months ended September 30, 2007 versus $ 1,416,110 for the same
period in 2006, for an increase of $72,988 or 5.15%. The main reason for this
increase was an additional $49,741 in payroll and related expenses for the
three months ended September 30, 2007.

Research
& Development expenses for Equipment Sales and Related Services were
$600,201 for the three months ended September 30, 2007 vs. $543,057 for the
same period in 2006 which is an increase of $57,144 or 10.52%. Daxor is
committed to making Blood Volume Analysis a standard of care in at least three
different disease states. In order to achieve this goal, 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 following three projects: 1) GFR:
Glomerular 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

-4-

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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.

Operating
revenues for the cryobanking segment, which includes both blood banking and
semen banking, increased from $93,830 in 2006 to $103,284 in 2007, for an
increase of $9,454 or 10.07%. The main reasons for this was increases in semen
processing revenues of $4,260 and lab testing revenues of $2,432.

Total
S G & A (selling, general and administrative) and R&D (Research and
Development) costs for the Cryobanking and related services segment were
$209,038 for the three months ended September 30, 2007 vs. $106,889 for the
same period in 2006, for an increase of $102,149 or 95.56%. The main reason for this
increase is the allocation of $81,008 of salaries and rent paid by the
Equipment Sales and Related Services segment applicable to Cryobanking.

Operating Expenses and Cost of Goods Sold

Daxors
total expenses from operations and cost of goods sold for the third quarter of
2007 were $1,918,386 versus $1,663,524 in 2006 for an increase of $254,862 or
15.32%. This increase in operating expenses and cost of goods sold is mostly
due to increases in payroll and related expenses of $80,196 and cost of goods
sold of $79,413.

INVESTMENT
PORTFOLIO

Dividend Income

Dividend
income earned on the Companys security portfolio for the three months ended
September 30, 2007 was $711,578 versus $580,578 for the same period in 2006 for
an increase of $131,000 or 22.56%.

Investment Gains

Gains on the
sale of investments were $6,110,405 for the three months ended September 30,
2007 versus $566,606 for the same period in 2006 for an increase of $5,543,799
or 978.42%. For the current quarter, the Company had a loss from the marking to
the market on short positions of stocks and put and call options of $3,251,811
versus a loss of $734,010 for the same period in 2006 for an increase of
$2,517,801 or 343.01%. Interest expense net of interest income was $25,865 for
the three months ended September 30, 2007 versus $93,294 for the three months
ended September 30, 2006 for a decrease of $67,429 or 72.27%. Administrative
expenses relating to portfolio investments were $13,479 in 2007 versus $ 10,286
for the same period in 2006 for an increase of $3,193 or 31.04%. A detailed
description of investment policies and historical records over the past 14
years was included in the recent 10-K filing for year end December 31, 2006.

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
September 30, 2007 the Company had total assets of $82,774,691 with
stockholders equity of $51,871,218 as compared to total assets of $78,166,312
with stockholders equity of $45,637,792 at December 31, 2006. At September 30,
2007, the Company had a net unrealized gain on available for sale securities of
$42,531,097 and a deferred tax liability of $14,885,884 for net unrealized
capital gains on available-for-sale securities of $27,645,213. At December 31,
2006, the company had a net unrealized gain of $43,661,056 and a deferred tax
liability of $15,281,370 for net unrealized capital gains on available-for-sale
securities of $28,379,686. These amounts are included in the calculation of
Total Stockholders Equity. At September 30, 2007, the Companys available for
sale securities had a fair market value of $67,351,942 with short-term loans
payable of $127,050 and a receivable due from brokers of $7,378,204. The
Company has current liabilities of $30,463,238 which includes the deferred tax
liability of $14,885,884 and the short term loans payable of $127,050. The

-5-

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deferred tax
liability would be due if the Company chose to sell its entire portfolio. 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 the past ten years. The Companys portfolio has
maintained a net value above historical cost for each of the past 91
consecutive quarters.

The
Company currently has adequate resources for the current level of marketing and
research and development expenses for the BVA-100 Blood Volume Analyzer as well
as capital to sustain its localized semen and blood banking services. The
Company may 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. The Company recently explored the potential for raising additional
capital but the terms would have been disadvantageous to existing shareholders.
The current primary focus is 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.

RESULTS OF
OPERATIONS

Nine months
ended September 30, 2007 as compared with nine months ended September 30, 2006:

Operating Revenues and Expenses

For
the nine months ended September 30, 2007, operating revenues increased to
$1,400,747 vs. $1,151,608 for the same period in 2006, an increase of $249,139
or 21.63%. This increase was mainly the result of the sale of five Blood Volume
Analyzers during the first nine months of 2007 for a total of $325,500 versus
the sale of two Blood Volume Analyzer during the same period in 2006 for a
total of $130,000. The increase in sales revenue from Blood Volume Analyzers
can be attributed to the increased focus on securing purchase agreements from
customers who have clinical trial agreements. The company engages in clinical
trial agreements to allow customers to begin utilization of the instrument and
to become familiar with the clinical benefit of a measured blood volume prior
to the purchase of the instrument.

For
the nine months ended September 30, 2007, revenue from Blood volume kit sales
increased by 8.96% vs. the same period in 2006 and the amount of kits sold
decreased by 2.55% from 2,154 to 2,099. For the nine months ended September 30,
2007, the Company provided 298 Volumex doses free of charge to facilities
utilizing the BVA-100 for research versus 166 during the same period in 2006.
There were 55 Blood Volume Analyzers placed at September 30, 2007 versus 44
instruments placed at September 30, 2006. Effective February 1, 2007, the
Company raised prices by approximately 5% on Blood Volume Kits. This was the
first price increase in two years and also helped to increase gross revenue
from kit sales.

The
following table provides gross margin information on Equipment Sales &
Related Services for the nine months ended September 30, 2007 and 2006:

|                                       |  |                                                            |         |                                                                              |   |                                                      |   |                                                      |           |   |   |         |  
|-------------------------------------- |  | ---------------------------------------------------------- | ------- | ---------------------------------------------------------------------------- | - | ---------------------------------------------------- | - | ---------------------------------------------------- | --------- | - | - | ------- | -
|Equipment Sales
  And Related Serivces |  | Kit Sales
  Nine
  Months
  Ended
  September
  30,
  2007 |         | Equipment
  Sales and
  Other Nine
  Months
  Ended
  September
  30,
  2007 |   | Total Nine
  Months
  Ended
  September
  30,
  2007 |   | Total Nine
  Months
  Ended
  September
  30,
  2006 |          
|                                       |  |                                                            |         |                                                                              |   |                                                      |   |                                                      |          
|Revenue                                |  | $                                                          | 680,693 |                                                                              | $ | 398,254                                              |   | $                                                    | 1,078,947 |   | $ | 826,782 |  
|Cost of
  Goods Sold                   |  |                                                            | 331,306 |                                                                              |   | 151,669                                              |   |                                                      | 482,975   |   |   | 436,142 |  
|Gross Profit                           |  | $                                                          | 349,387 |                                                                              | $ | 246,585                                              |   | $                                                    | 595,972   |   | $ | 390,640 |  
|Gross Profit
  Percentage              |  |                                                            | 51.32   | %                                                                            |   | 61.91                                                | % |                                                      | 55.24     | % |   | 47.25   | %

During
the nine months ended September 30, 2007 there were also eleven trial
agreements signed for the BVA-100 Blood Volume Analyzer versus eleven for the
same period in 2006. 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

-6-

---



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).

Total
S G & A (selling, general and administrative) and R&D (Research and
Development) costs for Equipment Sales and Related Services were $4,237,206 for
the nine months ended September 30, 2007 versus $ 4,399,542 for the same period
in 2006, for a decrease of $162,336 or 3.69%. The major reason for this
decrease is that $274,344 of salaries and rent paid by Daxor during the current
period were allocated to the Cryobanking segment. This allocation was not done
in 2006. The allocation is shown as part of selling general and administrative
expenses and has no effect on consolidated expenses.

Research
& Development expenses for Equipment Sales and Related Services were
$1,759,945 for the nine months ended September 30, 2007 vs. $1,659,625 for the
same period in 2006 which represents an increase of $100,320 or 6.04%. Daxor is
committed to making Blood Volume Analysis a standard of care in at least three
different disease states. In order to achieve this goal, 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 following three projects: 1) GFR:
Glomerular 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 ex tended protection
with a second patent when it is completed.

Operating
revenues for the cryobanking segment, which includes both blood banking and
semen banking, decreased from $324,826 during the nine months ended September
30, 2006 to $321,800 for the same period in 2007, for a decrease of $3,026 or
0.93%. This was due mainly to a decrease of $15,594 in semen storage fees.

Total
S G & A (selling, general and administrative) and R&D (Research and
Development) costs for the Cryobanking and related services segment were
$655,698 for the nine months ended September 30, 2007 vs. $324,776 for the same
period in 2006, for an increase of $330,922 or 101.89%. The major reason for
this increase is the allocation of $274,344 of salaries and rent paid by the
Equipment Sales and Related Services segment applicable to Cryobanking.

Operating Expenses

Daxors
total expenses from operations not including cost of goods sold for the nine
months ended September 30, 2007 were $4,892,904 versus $4,724,318 in 2006 for
an increase of $168,586 or 3.56%. The major reason for this increase was an
additional $104,769 of payroll and related expenses for the nine months ended
September 30, 2007 versus the same period in 2006.

INVESTMENT
PORTFOLIO

Dividend Income

Dividend
income earned on the Companys security portfolio for the nine months ended
September 30, 2007 was $1,942,178 versus $1,617,129 for the same period in 2006
for an increase of $325,049 or 20.10%. This increase is due mostly to a
one-time special dividend of $156,200 on one stock in the Companys portfolio
and an increase of $52,742 in money market dividends.

Investment Gains

Gains on the
sale of investments were $9,551,357 for the nine months ended September 30,
2007 versus $2,041,145 for the same period in 2006 for an increase of
$7,510,212 or 367.94%. For the current period, the Company had a gain from the
marking to the market on short positions of stocks and put and call options of
$79,021 versus a loss of $150,331 for the same period in 2006 for an increase
of $229,352 or 152.65%. Interest expense net of interest income was $154,713
for the nine months ended September 30, 2007 versus $278,827 in 2006 for the
same period in 2006 for a decrease of $124,114 or 44.51%. Administrative
expenses relating to portfolio investments were $37,400 for the nine months
ended September 30, 2007 versus $ 31,532 for the same period in 2006 for an
increase of $5,868 or 18.61%. A detailed description of investment policies and
historical records over the past 14 years was included in the recent 10-K
filing for the year ended December 31, 2006.

-7-

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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 $ 23,065 and $67,132 in
total stock-based compensation expense during the nine months ended September
30, 2007 and September 30, 2006.

The Company
recognized $9,362 and $20,651 in total stock-based compensation expense during
the three months ended September 30, 2007 and September 30, 2006.

Total unvested
stock-based compensation expense was $15,720 at September 30, 2007 and had a
total weighted average remaining term of .48 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 September 30, 2007. 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, 2006. There have been no significant
changes in critical accounting policies or management estimates since the year
ended December 31, 2006.

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 securities 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).

The
company will also periodically engage in short selling of common stock. When
this occurs, the short position is marked to the market and this adjustment is
recorded in the Statement of Operations. Any gain or loss is recorded in 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.

The Companys
investment goals, strategies and policies are as follows:

1. The
Companys investment goals are capital preservation and maintaining returns on
capital with a high degree of safety.

2. The
Company maintains a diversified securities portfolio comprised primarily of electric
utility common and preferred 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 may have short positions in common stock up
to 10% of the value of the portfolio. The Companys short position may
temporarily rise to 15% of the Companys portfolio without any specific action
because of

-8-

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changes in
valuation, but should not exceed this amount. The Companys investment policy
is to maintain a minimum of 85% 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.

3. Investment
in speculative issues, including short sales, maximum of 10%.

4. 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 can be written. The amount of the portfolio
  on which options are actually written is usually between 3-10% of the
  portfolio. The historical turnover of the portfolio is such that the average
  holding period is in excess of 5 years for available for sale securities.                                                                                                                                                                                                                                                                                                             
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | 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. If the stock does
  not go below the put exercise price, the company records the proceeds from
  the sale as income. If the put is exercised, the cost basis is reduced by the
  proceeds received from the sale of the put option. There may be occasions
  where the cost basis of the stock is lower than the market price at the time
  the option is exercised.                                                                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | c. | Speculative
  Short Sales/Short Options. The company normally limits
  its speculative transactions to no more than 15% of the value of the
  portfolio. The company may sell uncovered calls on certain stocks. If the
  stock price does not rise to the price of the call, the option is not
  exercised and the company records the proceeds from the sale of the call as
  income. If the call is exercised, the company will have a short position in
  the related stock. The company then has the choice of covering the short
  position, or selling a put against it. If the put is exercised, then the
  short position is covered. The companys current accounting policy is to mark
  to the market at the end of each quarter any short positions, and include it
  in the income statement. While the company may have so-called speculative
  positions equal to 15% of its accounts, in actual practice the short stock
  positions usually account for less than 5% of the assets of the company.

The
income derived from these investments has been essential to help 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 and 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 have 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 5 to 7.5 hours per week to this activity. He is
assisted by a single part-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

-9-

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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 the
revenue is earned in the quarter invoiced.

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.

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 favorable 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.

-10-

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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 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 15% of the corporate portfolio value.

At September
30, 2007 unrealized gains were $43,589,833 and unrealized losses were ($1,058,736)
on available for sale securities for a ratio of 41 to 1.

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. At September 30, 2007, 1.75% of the
market value of the companys available for sale securities is made up of
preferred stock.

At September
30, 2007, 97.73% of the market value of the companys available for sale
securities is made up of common stock. There is a risk that any of these stocks
could be sold as the result of an involuntary tender offer and that the
security could not be replaced with an investment offering a similar yield.

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s exposure to regulatory risk is mitigated
due to the diversity of holdings consisting of 60 separate stocks. As of
September 30, 2007, there are four holdings of common stock which comprise
42.25% of the total market value of the available for sale investments.

-11-

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DAXOR CORPORATION
SUMMARY OF INVESTMENTS
AS AT SEPTEMBER 30, 2007

|                       |  |      |            |                     |   |                                    |  |   |            | 
|---------------------- |  | ---- | ---------- | ------------------- | - | ---------------------------------- |  | - | ---------- | 
|                       |  | COST |            | FAIR
 MARKET
 VALUE |   | TOTAL NET
 UNREALIZED
 GAIN (LOSS) | 
|                       |  |      |            |                     |   |                                    | 
|TOTAL COMMON
 STOCK    |  | $    | 23,820,181 |                     | $ | 65,822,207                         |  | $ | 42,002,026 | 
|TOTAL
 PREFERRED STOCK |  |      | 816,018    |                     |   | 1,178,765                          |  |   | 362,747    | 
|                       |  |      |            |                     |   |                                    |  |   |            | 
|TOTAL
 EQUITIES        |  |      | 24,636,199 |                     |   | 67,000,972                         |  |   | 42,364,773 | 
|                       |  |      |            |                     |   |                                    |  |   |            | 
|TOTAL BONDS            |  |      | 184,646    |                     |   | 350,970                            |  |   | 166,324    | 
|                       |  |      |            |                     |   |                                    |  |   |            | 
|TOTAL
 PORTFOLIO       |  | $    | 24,820,845 |                     | $ | 67,351,942                         |  | $ | 42,531,097 | 
|                       |  |      |            |                     |   |                                    |  |   |            | 

DAXOR CORPORATION
SUMMARY OF INVESTMENTS
AS AT SEPTEMBER 30, 2006

|                       |  |      |            |                     |   |                                    |  |   |            | 
|---------------------- |  | ---- | ---------- | ------------------- | - | ---------------------------------- |  | - | ---------- | 
|                       |  | COST |            | FAIR
 MARKET
 VALUE |   | TOTAL NET
 UNREALIZED
 GAIN (LOSS) | 
|                       |  |      |            |                     |   |                                    | 
|TOTAL COMMON
 STOCK    |  | $    | 23,184,551 |                     | $ | 60,880,715                         |  | $ | 37,696,164 | 
|TOTAL
 PREFERRED STOCK |  |      | 890,168    |                     |   | 1,193,647                          |  |   | 303,479    | 
|                       |  |      |            |                     |   |                                    |  |   |            | 
|TOTAL
 EQUITIES        |  |      | 24,074,719 |                     |   | 62,074,362                         |  |   | 37,999,643 | 
|                       |  |      |            |                     |   |                                    |  |   |            | 
|TOTAL BONDS            |  |      | 184,646    |                     |   | 200,750                            |  |   | 16,104     | 
|                       |  |      |            |                     |   |                                    |  |   |            | 
|TOTAL
 PORTFOLIO,      |  | $    | 24,259,365 |                     | $ | 62,275,112                         |  | $ | 38,015,747 | 
|                       |  |      |            |                     |   |                                    |  |   |            | 

Summary of
Proceeds Received and Market Valuation at 09/30/07
Put and Call Options

|                                                         |           |                                          |   |                                                                  |  |                                                    |           |                           |   |                                                       |  |   |           |  |   |        
|-------------------------------------------------------- | --------- | ---------------------------------------- | - | ---------------------------------------------------------------- |  | -------------------------------------------------- | --------- | ------------------------- | - | ----------------------------------------------------- |  | - | --------- |  | - | -------
|Total Proceeds
 Received on
 open positions
 at 01/01/07 |           | Sale of
 Options from
 01/01/07-09/30/07 |   | Expirations and
 Assignments of
 Options from
 01/01/07-09/30/07 |  | Proceeds
 Received on
 open positions
 at 09/30/07 |           | Market
 Value at
 9/30/07 |   | Unrealized
 Appreciation
 (Depreciation)
 at 09/30/07
|                                                         |           |                                          |   |                                                                  |  |                                                    |           |                           |   |                                                      
|$                                                        | 2,848,667 |                                          | $ | 13,305,465                                                       |  | $                                                  | 7,891,005 |                           | $ | 8,263,127                                             |  | $ | 8,053,557 |  | $ | 227,570

-12-

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Daxor
Corporation
Summary of Proceeds Received and Market Valuation at 09/30/06
Put and Call Options

|                                                         |         |                                          |   |                                                                  |  |                                                    |           |                           |   |                                                       |  |   |           |  |   |        
|-------------------------------------------------------- | ------- | ---------------------------------------- | - | ---------------------------------------------------------------- |  | -------------------------------------------------- | --------- | ------------------------- | - | ----------------------------------------------------- |  | - | --------- |  | - | -------
|Total Proceeds
 Received on
 open positions
 at 01/01/06 |         | Sale of
 Options from
 01/01/06-09/30/06 |   | Expirations and
 Assignments of
 Options from
 01/01/06-09/31/06 |  | Proceeds
 Received on
 open positions
 at 09/30/06 |           | Market
 Value at
 9/30/06 |   | Unrealized
 Appreciation
 (Depreciation)
 at 09/30/06
|                                                         |         |                                          |   |                                                                  |  |                                                    |           |                           |   |                                                      
|$                                                        | 983,912 |                                          | $ | 4,699,052                                                        |  | $                                                  | 3,116,291 |                           | $ | 2,566,673                                             |  | $ | 2,400,768 |  | $ | 165,905

Item 4. Controls and Procedures

As of
September 30, 2007, 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 of 1934, as amended.

In late 2005,
the Company hired a CPA 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
temporarily hired two CPAs 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.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

There
have been no material changes from the risk factors disclosed in the Companys
Annual Report on Form 10-K for the fiscal year ended December 31, 2006 as filed
with the Securities and Exchange Commission on April 2, 2007. A change in
Medicare and Medicaid reimbursement rates was recently announced. This change
will be effective as of January 1, 2008 and at this time the Company is unable
to quantify the effect this change will have on operating revenue. This change
is discussed in greater detail in the Recent Developments section of this 10-Q.

Item 2. Unregistered Sales of Equity Securities and Use of
Proceeds

None.

Item 3. Defaults upon Senior Securities

None.

Item 4. Submission of Matters to a Vote of Security Holders

None.

Item 5. Other Information

None.

-13-

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Item 6. Exhibits and Reports on Form 8-K

(a)
Exhibits

| |  |      |                                                                                                                                                        
| |  | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 31.1 | Certification
 of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act
 of 2002                                                   
| |  |      |                                                                                                                                                        
| |  | 31.2 | Certification
 of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
 Act of 2002                                               
| |  |      |                                                                                                                                                        
| |  | 32.1 | 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 2002     
| |  |      |                                                                                                                                                        
| |  | 32.2 | 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

(c)
There were no reports on Form 8-k filed.

-14-

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SIGNATURES

|                                                                                                                                                                                                                      | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|Pursuant to
 the requirements of Section 13 or 15(d)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:
 November 13, 2007 | By: | /s/ JOSEPH
 FELDSCHUH, M.D.           
|                         |     |                                       
|                         |     | JOSEPH
 FELDSCHUH, M.D.,              
|                         |     | President
 and Chief Executive Officer
|                         |     |                                       
|DATE:
 November 13, 2007 | By: | /s/ DAVID
 FRANKEL                    
|                         |     |                                       
|                         |     | DAVID
 FRANKEL                        
|                         |     | Chief
 Financial Officer              

-15-

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