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UNITED
STATES
SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549



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FORM 10-Q

Quarterly Report Under Section 13 or 15(d)
of the
Securities Act of 1934

FOR QUARTER ENDED JUNE 30, 2008
Commission File Number 0-12248

DAXOR CORPORATION
(Exact Name as Specified in
its Charter)

|                                                                   |  |                                         
|------------------------------------------------------------------ |  | ----------------------------------------
|New York                                                           |  | 13-2682108                              
|(State
  or Other Jurisdiction of
  Incorporation or Organization) |  | (I.R.S.
  Employer
  Identification No.)

350 Fifth Ave
Suite 7120
New York, New York 10118
(Address of Principal Executive Offices & Zip Code)

|                                                         |  |                 
|-------------------------------------------------------- |  | ----------------
|Registrants
  Telephone Number:
  (Including Area Code) |  | (212)
  244-0555

Indicate
by check mark whether the registrant (1) has filed all reports required by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the
past 90 days.

Yes   x       No   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    ̈ | Accelerated
  Filer    ̈ | Non-accelerated
  Filer   x

Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).

Yes   o       No   x

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

|                            |  |                                         
|--------------------------- |  | ----------------------------------------
|CLASS                       |  | 4,328,018 OUTSTANDING AT
  July 28, 2008
|                            |  |                                         
|COMMON
  STOCK              |  |                                         
|PAR
  VALUE: $.01 per share |  |                                         

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DAXOR CORPORATION AND SUBSIDIARY

TABLE OF CONTENTS

|                              |          |                                                                                                                           |  |       
|----------------------------- | -------- | ------------------------------------------------------------------------------------------------------------------------- |  | ------
|PART I. FINANCIAL INFORMATION |          |                                                                                                                          
|                              |          |                                                                                                                          
|                              | Item 1.  | FINANCIAL STATEMENTS (Unaudited)                                                                                          |  |       
|                              |          |                                                                                                                           |  |       
|                              |          | Index to Financial Statements                                                                                             |  |       
|                              |          |                                                                                                                           |  |       
|                              |          | Condensed Consolidated Balance Sheets at June 30,
  2008 (Unaudited) and December 31, 2007 - (Audited)                    |  | F-1   
|                              |          |                                                                                                                           |  |       
|                              |          | Condensed Consolidated Statements of Operations for
  the three and six months ended June 30, 2008 and 2007  (Unaudited) |  | F-2-3 
|                              |          |                                                                                                                           |  |       
|                              |          | Condensed Consolidated Statements of Cash Flows for
  the six months ended June 30, 2008 and 2007  (Unaudited)           |  | F-4   
|                              |          |                                                                                                                           |  |       
|                              |          | Notes to Condensed Consolidated Financial Statements
   (Unaudited)                                                      |  | F-5-22
|                              |          |                                                                                                                           |  |       
|                              | 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    
|                              |          |                                                                                                                           |  |       
|                             
|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-

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DAXOR CORPORATION AND SUBSIDIARY

|        |                                                                                                                           |  |       
|------- | ------------------------------------------------------------------------------------------------------------------------- |  | ------
|PART I  | FINANCIAL INFORMATION                                                                                                     |  |       
|        |                                                                                                                           |  |       
|Item 1. | Financial Statements
  (Unaudited)                                                                                        |  |       
|        |                                                                                                                           |  |       
|        | Index to Financial
  Statements                                                                                           |  |       
|        |                                                                                                                           |  |       
|        | Condensed Consolidated Balance Sheets at June 30, 2008 (Unaudited)
  and December 31, 2007 (Audited)                      |  | F-1   
|        |                                                                                                                           |  |       
|        | Condensed Consolidated Statements of Operations for the three and six
  months ended June 30, 2008 and 2007  (Unaudited) |  | F-2-3 
|        |                                                                                                                           |  |       
|        | Notes to Condensed Consolidated Financial Statements  (Unaudited)                                                        |  | F-5-22

-2-

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DAXOR CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

DAXOR CORPORATIONCONDENSED CONSOLIDATED BALANCE SHEETS

|                                                                                                                                                                                             |  |                           |             |                             |   |             |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------- | ----------- | --------------------------- | - | ----------- | -
|                                                                                                                                                                                             |  | UNAUDITED
  June 30, 2008 |             | AUDITED
  December 31, 2007 |  
|                                                                                                                                                                                             |  |                           |             |                             |  
|                                                                                                                                                                                             |  |                           |             |                             |  
|ASSETS                                                                                                                                                                                       |  |                           |             |                             |   |             |  
|                                                                                                                                                                                             |  |                           |             |                             |   |             |  
|CURRENT ASSETS                                                                                                                                                                               |  |                           |             |                             |   |             |  
|Cash and cash equivalents                                                                                                                                                                    |  | $                         | 21,246      |                             | $ | 2,029,834   |  
|Receivable from broker (held in money market accounts)                                                                                                                                       |  |                           | 6,894,986   |                             |   | 10,495,417  |  
|Available-for-sale securities, at fair value                                                                                                                                                 |  |                           | 77,773,675  |                             |   | 74,919,193  |  
|Securities sold, not received, at fair value                                                                                                                                                 |  |                           | 16,612,770  |                             |   | 12,404,409  |  
|Accounts receivable, net of allowance for doubtful accounts of
  $57,655 in 2008 and $57,655 in 2007                                                                                         |  |                           | 290,954     |                             |   | 214,334     |  
|Inventory                                                                                                                                                                                    |  |                           | 430,312     |                             |   | 255,834     |  
|Prepaid expenses and other current assets                                                                                                                                                    |  |                           | 172,683     |                             |   | 145,827     |  
|                                                                                                                                                                                             |  |                           |             |                             |   |             |  
|Total Current Assets                                                                                                                                                                         |  |                           | 102,196,626 |                             |   | 100,464,848 |  
|                                                                                                                                                                                             |  |                           |             |                             |  
|Property and equipment, net                                                                                                                                                                  |  |                           | 2,040,934   |                             |   | 2,058,494   |  
|Other assets                                                                                                                                                                                 |  |                           | 37,158      |                             |   | 37,158      |  
|                                                                                                                                                                                             |  |                           |             |                             |   |             |  
|                                                                                                                                                                                             |  |                           |             |                             |   |             |  
|Total Assets                                                                                                                                                                                 |  | $                         | 104,274,718 |                             | $ | 102,560,500 |  
|                                                                                                                                                                                             |  |                           |             |                             |   |             |  
|                                                                                                                                                                                             |  |                           |             |                             |   |             |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                                                         |  |                           |             |                             |   |             |  
|                                                                                                                                                                                             |  |                           |             |                             |   |             |  
|CURRENT LIABILITIES                                                                                                                                                                          |  |                           |             |                             |   |             |  
|Accounts payable and accrued liabilities                                                                                                                                                     |  | $                         | 434,738     |                             | $ | 498,212     |  
|Loans payable                                                                                                                                                                                |  |                           | 792,758     |                             |   | 3,314,303   |  
|Income taxes payable                                                                                                                                                                         |  |                           | 400,000     |                             |   | 1,295,668   |  
|Mortgage payable, current portion                                                                                                                                                            |  |                           | 38,825      |                             |   | 37,313      |  
|Put and call options, at fair value                                                                                                                                                          |  |                           | 6,295,900   |                             |   | 5,972,632   |  
|Securities borrowed, at fair value                                                                                                                                                           |  |                           | 22,979,181  |                             |   | 20,362,259  |  
|Deferred revenue                                                                                                                                                                             |  |                           | 2,048       |                             |   | 7,417       |  
|Deferred income taxes                                                                                                                                                                        |  |                           | 13,904,206  |                             |   | 15,726,213  |  
|                                                                                                                                                                                             |  |                           |             |                             |   |             |  
|Total Current Liabilities                                                                                                                                                                    |  |                           | 44,847,656  |                             |   | 47,214,017  |  
|                                                                                                                                                                                             |  |                           |             |                             |   |             |  
|LONG TERM LIABILITIES                                                                                                                                                                        |  |                           |             |                             |   |             |  
|                                                                                                                                                                                             |  |                           |             |                             |   |             |  
|Mortgage payable, less current portion                                                                                                                                                       |  |                           | 410,779     |                             |   | 430,598     |  
|                                                                                                                                                                                             |  |                           |             |                             |   |             |  
|                                                                                                                                                                                             |  |                           |             |                             |   |             |  
|Total Liabilities                                                                                                                                                                            |  |                           | 45,258,435  |                             |   | 47,644,615  |  
|                                                                                                                                                                                             |  |                           |             |                             |   |             |  
|                                                                                                                                                                                             |  |                           |             |                             |   |             |  
|COMMITMENTS AND CONTINGENICES                                                                                                                                                                |  |                           |             |                             |   |             |  
|                                                                                                                                                                                             |  |                           |             |                             |   |             |  
|STOCKHOLDERS EQUITY                                                                                                                                                                         |  |                           |             |                             |   |             |  
|Common stock, $.01 par value, Authorized - 10,000,000 shares Issued 
  5,316,550 shares Outstanding  4,357,918 and 4,468,618 shares at June 30,
  2008 and December 31, 2007, respectively |  |                           | 53,165      |                             |   | 53,165      |  
|Additional paid in capital                                                                                                                                                                   |  |                           | 10,632,524  |                             |   | 10,594,161  |  
|Accumulated other comprehensive income                                                                                                                                                       |  |                           | 25,822,096  |                             |   | 29,205,823  |  
|Retained earnings                                                                                                                                                                            |  |                           | 32,313,221  |                             |   | 23,487,371  |  
|Treasury stock, at cost, 958,632 and 847,932 shares of Treasury stock
  at June 30, 2008 and December 31, 2007, respectively                                                                 |  |                           | (9,804,723  | )                           |   | (8,424,635  | )
|                                                                                                                                                                                             |  |                           |             |                             |   |             |  
|Total Stockholders Equity                                                                                                                                                                   |  |                           | 59,016,283  |                             |   | 54,915,885  |  
|                                                                                                                                                                                             |  |                           |             |                             |   |             |  
|Total Liabilities and Stockholders Equity                                                                                                                                                   |  | $                         | 104,274,718 |                             | $ | 102,560,500 |  
|                                                                                                                                                                                             |  |                           |             |                             |   |             |  

See accompanying notes to unaudited condensed consolidated financial
statements.

F-1

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

|                                                                             |  |               |            |               |   |            |  
|---------------------------------------------------------------------------- |  | ------------- | ---------- | ------------- | - | ---------- | -
|                                                                             |  | June 30, 2008 |            | June 30, 2007 |  
|                                                                             |  |               |            |               |  
|                                                                             |  |               |            |               |  
|REVENUES:                                                                    |  |               |            |               |   |            |  
|                                                                             |  |               |            |               |   |            |  
|Operating Revenues  equipment sales and related services                    |  | $             | 467,998    |               | $ | 438,458    |  
|Operating Revenues  cryobanking and related services                        |  |               | 88,589     |               |   | 106,860    |  
|                                                                             |  |               |            |               |   |            |  
|                                                                             |  |               |            |               |   |            |  
|Total Revenues                                                               |  |               | 556,587    |               |   | 545,318    |  
|                                                                             |  |               |            |               |   |            |  
|                                                                             |  |               |            |               |   |            |  
|Cost of Sales:                                                               |  |               |            |               |   |            |  
|                                                                             |  |               |            |               |   |            |  
|Cost of equipment sales and related services                                 |  |               | 164,176    |               |   | 133,700    |  
|Cost of cryobanking and related services                                     |  |               | 10,326     |               |   | 11,325     |  
|                                                                             |  |               |            |               |   |            |  
|                                                                             |  |               |            |               |   |            |  
|Total Cost of Sales                                                          |  |               | 174,502    |               |   | 145,025    |  
|                                                                             |  |               |            |               |   |            |  
|                                                                             |  |               |            |               |   |            |  
|Gross Profit                                                                 |  |               | 382,085    |               |   | 400,293    |  
|                                                                             |  |               |            |               |   |            |  
|                                                                             |  |               |            |               |   |            |  
|OPERATING EXPENSES:                                                          |  |               |            |               |   |            |  
|                                                                             |  |               |            |               |   |            |  
|Research and development expenses:                                           |  |               |            |               |   |            |  
|                                                                             |  |               |            |               |   |            |  
|Research and development-equipment sales and related services                |  |               | 614,979    |               |   | 611,554    |  
|Research and development-cryobanking and related services                    |  |               | 47,154     |               |   | 46,985     |  
|                                                                             |  |               |            |               |   |            |  
|                                                                             |  |               |            |               |   |            |  
|Total Research and Development Expenses                                      |  |               | 662,133    |               |   | 658,539    |  
|                                                                             |  |               |            |               |   |            |  
|                                                                             |  |               |            |               |   |            |  
|Selling, General & Administrative Expenses:                                  |  |               |            |               |   |            |  
|                                                                             |  |               |            |               |   |            |  
|Selling, general, and administrative- equipment sales and related
  services |  |               | 803,941    |               |   | 833,584    |  
|Selling, general, and administrative- cryobanking and related
  services     |  |               | 140,262    |               |   | 142,431    |  
|                                                                             |  |               |            |               |   |            |  
|                                                                             |  |               |            |               |   |            |  
|Total Selling, General & Administrative Expenses                             |  |               | 944,203    |               |   | 976,015    |  
|                                                                             |  |               |            |               |   |            |  
|                                                                             |  |               |            |               |   |            |  
|Total Operating Expenses                                                     |  |               | 1,606,336  |               |   | 1,634,554  |  
|                                                                             |  |               |            |               |   |            |  
|                                                                             |  |               |            |               |   |            |  
|Loss from Operations                                                         |  |               | (1,224,251 | )             |   | (1,234,261 | )
|                                                                             |  |               |            |               |   |            |  
|                                                                             |  |               |            |               |   |            |  
|Other income (expenses):                                                     |  |               |            |               |   |            |  
|                                                                             |  |               |            |               |   |            |  
|Dividend income-investment portfolio                                         |  |               | 551,719    |               |   | 519,171    |  
|Realized gains on sale of securities, net                                    |  |               | 2,644,472  |               |   | 1,814,522  |  
|Mark to market of short positions                                            |  |               | (33,259    | )             |   | 1,316,034  |  
|Other revenues                                                               |  |               | 2,869      |               |   | 2,876      |  
|Interest expense, net of interest income of $19,976 and $922                 |  |               | (15,552    | )             |   | (66,644    | )
|Administrative expense relating to portfolio investments                     |  |               | (21,156    | )             |   | (11,783    | )
|                                                                             |  |               |            |               |   |            |  
|                                                                             |  |               |            |               |   |            |  
|Total Other Income, net                                                      |  |               | 3,129,093  |               |   | 3,574,176  |  
|                                                                             |  |               |            |               |   |            |  
|                                                                             |  |               |            |               |   |            |  
|Income before income taxes                                                   |  | $             | 1,904,842  |               | $ | 2,339,915  |  
|                                                                             |  |               |            |               |   |            |  
|Income tax expense                                                           |  |               | 400,000    |               |   |           |  
|                                                                             |  |               |            |               |   |            |  
|                                                                             |  |               |            |               |   |            |  
|Net income                                                                   |  | $             | 1,504,842  |               | $ | 2,339,915  |  
|                                                                             |  |               |            |               |   |            |  
|                                                                             |  |               |            |               |   |            |  
|Weighted average number of shares outstanding - basic                        |  |               | 4,361,918  |               |   | 4,589,418  |  
|                                                                             |  |               |            |               |   |            |  
|                                                                             |  |               |            |               |   |            |  
|Net income per common equivalent share - basic                               |  | $             | 0.35       |               | $ | 0.51       |  
|                                                                             |  |               |            |               |   |            |  
|                                                                             |  |               |            |               |   |            |  
|Weighted average number of shares outstanding - diluted                      |  |               | 4,383,918  |               |   | 4,589,418  |  
|                                                                             |  |               |            |               |   |            |  
|                                                                             |  |               |            |               |   |            |  
|Net income per common equivalent share - diluted                             |  | $             | 0.34       |               | $ | 0.51       |  
|                                                                             |  |               |            |               |   |            |  

See accompanying notes to unaudited condensed consolidated financial
statements.

F-2

---



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

|                                                                             |  |               |            |               |   |            |  
|---------------------------------------------------------------------------- |  | ------------- | ---------- | ------------- | - | ---------- | -
|                                                                             |  | June 30, 2008 |            | June 30, 2007 |  
|                                                                             |  |               |            |               |  
|                                                                             |  |               |            |               |  
|REVENUES:                                                                    |  |               |            |               |   |            |  
|                                                                             |  |               |            |               |   |            |  
|Operating Revenues 
  equipment sales and related services                  |  | $             | 791,778    |               | $ | 832,684    |  
|Operating Revenues 
  cryobanking and related services                      |  |               | 185,722    |               |   | 218,516    |  
|                                                                             |  |               |            |               |   |            |  
|                                                                             |  |               |            |               |   |            |  
|Total Revenues                                                               |  |               | 977,500    |               |   | 1,051,200  |  
|                                                                             |  |               |            |               |   |            |  
|                                                                             |  |               |            |               |   |            |  
|Cost of Sales:                                                               |  |               |            |               |   |            |  
|                                                                             |  |               |            |               |   |            |  
|Cost of equipment sales
  and related services                               |  |               | 302,790    |               |   | 272,760    |  
|Cost of cryobanking and
  related services                                   |  |               | 23,726     |               |   | 23,800     |  
|                                                                             |  |               |            |               |   |            |  
|                                                                             |  |               |            |               |   |            |  
|Total Cost of Sales                                                          |  |               | 326,516    |               |   | 296,560    |  
|                                                                             |  |               |            |               |   |            |  
|                                                                             |  |               |            |               |   |            |  
|Gross Profit                                                                 |  |               | 650,984    |               |   | 754,640    |  
|                                                                             |  |               |            |               |   |            |  
|                                                                             |  |               |            |               |   |            |  
|OPERATING EXPENSES:                                                          |  |               |            |               |   |            |  
|                                                                             |  |               |            |               |   |            |  
|Research and development
  expenses:                                         |  |               |            |               |   |            |  
|                                                                             |  |               |            |               |   |            |  
|Research and
  development-equipment sales and related services              |  |               | 1,174,288  |               |   | 1,159,744  |  
|Research and
  development-cryobanking and related services                  |  |               | 95,396     |               |   | 103,026    |  
|                                                                             |  |               |            |               |   |            |  
|                                                                             |  |               |            |               |   |            |  
|Total Research and
  Development Expenses                                    |  |               | 1,269,684  |               |   | 1,262,770  |  
|                                                                             |  |               |            |               |   |            |  
|                                                                             |  |               |            |               |   |            |  
|Selling, General &
  Administrative Expenses:                                |  |               |            |               |   |            |  
|                                                                             |  |               |            |               |   |            |  
|Selling, general, and
  administrative- equipment sales and related services |  |               | 1,574,536  |               |   | 1,588,364  |  
|Selling, general, and
  administrative- cryobanking and related services     |  |               | 299,816    |               |   | 343,634    |  
|                                                                             |  |               |            |               |   |            |  
|                                                                             |  |               |            |               |   |            |  
|Total Selling, General
  & Administrative Expenses                           |  |               | 1,874,352  |               |   | 1,931,998  |  
|                                                                             |  |               |            |               |   |            |  
|                                                                             |  |               |            |               |   |            |  
|Total Operating Expenses                                                     |  |               | 3,144,036  |               |   | 3,194,768  |  
|                                                                             |  |               |            |               |   |            |  
|                                                                             |  |               |            |               |   |            |  
|Loss from Operations                                                         |  |               | (2,493,052 | )             |   | (2,440,128 | )
|                                                                             |  |               |            |               |   |            |  
|                                                                             |  |               |            |               |   |            |  
|Other income (expenses):                                                     |  |               |            |               |   |            |  
|                                                                             |  |               |            |               |   |            |  
|Dividend income-investment
  portfolio                                       |  |               | 1,182,501  |               |   | 1,230,600  |  
|Realized gains on sale of
  securities, net                                  |  |               | 8,475,471  |               |   | 3,440,952  |  
|Mark to market of short
  positions                                          |  |               | 2,142,782  |               |   | 3,330,832  |  
|Other revenues                                                               |  |               | 5,785      |               |   | 5,631      |  
|Interest expense, net of
  interest income of $31,161 and $10,994            |  |               | (45,067    | )             |   | (144,057   | )
|Administrative expense
  relating to portfolio investments                   |  |               | (42,570    | )             |   | (23,921    | )
|                                                                             |  |               |            |               |   |            |  
|                                                                             |  |               |            |               |   |            |  
|Total Other Income, net                                                      |  |               | 11,718,902 |               |   | 7,840,037  |  
|                                                                             |  |               |            |               |   |            |  
|                                                                             |  |               |            |               |   |            |  
|Income before income taxes                                                   |  | $             | 9,225,850  |               | $ | 5,399,909  |  
|                                                                             |  |               |            |               |   |            |  
|Income tax expense                                                           |  |               | 400,000    |               |   |           |  
|                                                                             |  |               |            |               |   |            |  
|                                                                             |  |               |            |               |   |            |  
|Net income                                                                   |  | $             | 8,825,850  |               | $ | 5,399,909  |  
|                                                                             |  |               |            |               |   |            |  
|                                                                             |  |               |            |               |   |            |  
|Weighted average number of
  shares outstanding - basic                      |  |               | 4,391,718  |               |   | 4,598,103  |  
|                                                                             |  |               |            |               |   |            |  
|                                                                             |  |               |            |               |   |            |  
|Net income per common
  equivalent share - basic                             |  | $             | 2.01       |               | $ | 1.17       |  
|                                                                             |  |               |            |               |   |            |  
|                                                                             |  |               |            |               |   |            |  
|Weighted average number of
  shares outstanding - diluted                    |  |               | 4,416,718  |               |   | 4,598,103  |  
|                                                                             |  |               |            |               |   |            |  
|                                                                             |  |               |            |               |   |            |  
|Net income per common
  equivalent share - basic  diluted                   |  | $             | 2.00       |               | $ | 1.17       |  
|                                                                             |  |               |            |               |   |            |  

See accompanying notes to
unaudited condensed consolidated financial statements.

F-3

---



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

|                                                                                  |  |               |             |               |   |             |  
|--------------------------------------------------------------------------------- |  | ------------- | ----------- | ------------- | - | ----------- | -
|                                                                                  |  | June 30, 2008 |             | June 30, 2007 |  
|                                                                                  |  |               |             |               |  
|                                                                                  |  |               |             |               |  
|CASH FLOWS FROM OPERATING ACTIVITIES:                                             |  |               |             |               |   |             |  
|Net income                                                                        |  | $             | 8,825,850   |               | $ | 5,399,909   |  
|                                                                                  |  |               |             |               |   |             |  
|Adjustment to reconcile net income to net cash used in operating
  activities:    |  |               |             |               |   |             |  
|Depreciation                                                                      |  |               | 156,053     |               |   | 110,174     |  
|Non-cash compensation expense associated with employee stock
  compensation plans |  |               | 38,363      |               |   | 13,703      |  
|Gain on sale of fixed assets                                                      |  |               | (162,131    | )             |   | (151,016    | )
|Gains on sale of investments                                                      |  |               | (8,475,471  | )             |   | (3,440,952  | )
|Mark to market adjustments on options & short sales                               |  |               | (2,142,782  | )             |   | (3,330,832  | )
|                                                                                  |  |               |             |               |   |             |  
|Change in operating assets and liabilities:                                       |  |               |             |               |   |             |  
|Increase in accounts receivable                                                   |  |               | (76,620     | )             |   | (251,935    | )
|Decrease in prepaid expenses & other current assets                               |  |               | (26,856     | )             |   | (12,268     | )
|Increase in inventory                                                             |  |               | (174,478    | )             |   | (43,027     | )
|Increase in other assets                                                          |  |               |            |               |   | (2,050      | )
|(Decrease) Increase in accounts payable and accrued liabilities                   |  |               | (63,474     | )             |   | 62,892      |  
|Decrease in income taxes payable                                                  |  |               | (895,668    | )             |   |            |  
|Decrease in deferred revenue                                                      |  |               | (5,369      | )             |   | (2,108      | )
|                                                                                  |  |               |             |               |   |             |  
|                                                                                  |  |               |             |               |   |             |  
|Net cash used in operating activities                                             |  |               | (3,002,583  | )             |   | (1,647,510  | )
|                                                                                  |  |               |             |               |   |             |  
|                                                                                  |  |               |             |               |   |             |  
|CASH FLOWS FROM INVESTING ACTIVITIES:                                             |  |               |             |               |   |             |  
|Purchase of property and equipment                                                |  |               | (171,362    | )             |   | (1,033,918  | )
|Proceeds from sale of fixed assets                                                |  |               | 195,000     |               |   | 195,500     |  
|(Increase) Decrease in securities sold, not received at fair market
  value       |  |               | (4,208,361  | )             |   | 2,655,860   |  
|Increase (Decrease) in securities borrowed, at fair market value                  |  |               | 2,616,922   |               |   | (4,745,842  | )
|Purchases of put and call options                                                 |  |               | (259,076    | )             |   | (653,737    | )
|Sales of put and call options                                                     |  |               | 13,119,694  |               |   | 6,874,390   |  
|Acquisition of available for sale securities                                      |  |               | (28,843,402 | )             |   | (11,268,919 | )
|Proceeds from sale of available for sale securities                               |  |               | 18,864,089  |               |   | 10,438,089  |  
|                                                                                  |  |               |             |               |   |             |  
|Net cash provided by investing activities                                         |  |               | 1,313,504   |               |   | 2,461,423   |  
|                                                                                  |  |               |             |               |   |             |  
|                                                                                  |  |               |             |               |   |             |  
|CASH FLOWS FROM FINANCING ACTIVITIES:                                             |  |               |             |               |   |             |  
|Proceeds from margin loan payable                                                 |  |               | 29,538,163  |               |   | 18,141,847  |  
|Repayment of margin loan payable                                                  |  |               | (27,169,277 | )             |   | (21,808,149 | )
|Repayment of bank loan                                                            |  |               | (1,490,000  | )             |   |            |  
|Proceeds from bank loan                                                           |  |               | 200,000     |               |   |            |  
|Purchase of treasury stock                                                        |  |               | (1,380,088  | )             |   | (434,387    | )
|Proceeds from mortgage payable                                                    |  |               |            |               |   | 500,000     |  
|Repayment of mortgage payable                                                     |  |               | (18,307     | )             |   | (14,454     | )
|                                                                                  |  |               |             |               |   |             |  
|                                                                                  |  |               |             |               |   |             |  
|Net cash used in financing activities                                             |  |               | (319,509    | )             |   | (3,615,143  | )
|                                                                                  |  |               |             |               |   |             |  
|                                                                                  |  |               |             |               |   |             |  
|Net decrease in cash and cash equivalents                                         |  |               | (2,008,588  | )             |   | (2,801,230  | )
|Cash and cash equivalents at beginning of period                                  |  |               | 2,029,834   |               |   | 2,838,927   |  
|                                                                                  |  |               |             |               |   |             |  
|                                                                                  |  |               |             |               |   |             |  
|Cash and cash equivalents at end of period                                        |  | $             | 21,246      |               | $ | 37,697      |  
|                                                                                  |  |               |             |               |   |             |  
|                                                                                  |  |               |             |               |   |             |  
|Supplemental Disclosures of Cash Flow Information:                                |  |               |             |               |   |             |  
|Cash paid during the period for:                                                  |  |               |             |               |   |             |  
|Interest                                                                          |  | $             | 76,227      |               | $ | 155,052     |  
|Income taxes                                                                      |  | $             | 1,302,210   |               | $ |            |  

See accompanying notes to
unaudited condensed consolidated financial statements.

F-4

---



DAXOR CORPORATION AND SUBSIDIARYNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2008 and 2007 (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, 2007, 2006 and 2005, included in
Daxor Corporations Annual Report on Form 10-K for the fiscal year ended
December 31, 2007. The December 31, 2007 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 six month periods ended
June 30, 2008 are not necessarily indicative of the results that may be
expected for the year December 31, 2008.

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.

F-5

---



DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2008 and 2007 (Continued)
(Unaudited)

Reclassifications

Reclassifications
occurred to certain prior year amounts in order to conform to the current year
classifications. The reclassifications have no effect on the reported net
income.

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 both June 30, 2008 and June 30, 2007, there were no short
term investments included as cash equivalents.

Fair Value of Financial
Instruments

The carrying amounts of
financial instruments, including cash and cash equivalents, accounts receivable
and payable, accrued liabilities deferred option premiums and short term debt
(loans payable and short positions on securities) approximate fair value
because of their short maturities. The carrying amount of the mortgage payable
is estimated to approximate fair value as the mortgage was closed in 2007 at a
current interest rate.

F-6

---



DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2008 and 2007 (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 at fair value

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 net
  short positions of up to 15% of the value of its portfolio. The Companys net
  short position may temporarily rise to 20% 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
June 30, 2008 and 2007 (Continued)
(Unaudited)

| |    |                                                                           
| | -- | --------------------------------------------------------------------------
| | 2. | Investment in speculative
  issues, including short sales, maximum of 15%.
| |    |                                                                           
| | 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 net short stock positions usually account for less than 10% of the
  assets of the company.

| |    |                                                                                                                                                                                              
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 4. | In the event
  of a merger, the Company will elect to receive shares in the new company. In
  the event of a cash only offer, the Company will receive cash and be forced
  to sell it stock.

Accounts Receivable

Accounts receivable are
reviewed by the Company at the end of each reporting period to determine the
collectability based upon the aging of the balances and the history of the
customer. As of June 30, 2008, the Company determined that a reserve of $57,655
should be placed against the outstanding receivable balance of $348,609. As of
December 31, 2007, the Company determined that a reserve of $57,655 should be
placed against the outstanding receivable balance of $271,989.

Inventory

Inventory is stated at the
lower of cost or market, using the first-in, first-out method (FIFO), and
consists primarily of finished goods.

Prepaid Expenses and Other
Current Assets

Prepaid expenses and other
current assets generally consist of prepayments for future services and
corporate capital base/personal holding taxes. Prepayments are expensed when
the services are received or as the prepaid capital base/personal holding taxes
are offset by the related tax liability. All prepaid expenses and taxes are
expensed within one year of the Balance Sheet date and are thus classified as
Current Assets.

Property and Equipment

Property and Equipment is
stated at cost and consists of BVA equipment loaned on a trial basis,
laboratory and office equipment, furniture and fixtures, and leasehold improvements.
These assets are depreciated under the straight-line method, over their
estimated useful lives, which range from 5 to 39 years.

F-8

---



DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2008 and 2007 (Continued)
(Unaudited)

Amounts spent to repair or
maintain these assets arising out of the normal course of business are expensed
in the period incurred. The cost of betterments and additions are capitalized
and depreciated over the life of the asset. The cost of assets disposed of or
determined to be non-revenue producing, together with the related accumulated
depreciation applicable thereto, are eliminated from the accounts, and any gain
or loss is recognized.

In accordance with SFAS No.
144, Accounting for the Impairment or Disposal of Long-Lived Assets, management
reviews long-lived assets for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. Currently, management does not believe there is any impairment of
any long-lived assets.

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.

Service
contracts are recorded by the Company as deferred revenue and are amortized
into income in the period in which they are earned. Effective January 1, 2006,
the company began to offer service contracts priced on annual basis which are
billed quarterly and revenue is earned in the same calendar quarter that it is
billed. As at June 30, 2008 and December 31, 2007, deferred revenue pertaining
to the historical service contracts was $1,875 and $7,417 respectively.

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

Income
Taxes

The
Company accounts for income taxes under the provisions of SFAS No. 109 - Accounting for Income Taxes. This
pronouncement requires recognition of deferred tax assets and liabilities for
the estimated future tax consequences of events attributable to differences
between the 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).

F-9

---



DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2008 and 2007 (Continued)
(Unaudited)

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.

Advertising Costs

Advertising expenditures
relating to the advertising and marketing of the Companys products and
services are expensed in the period incurred. Advertising Expense for the three
months ended June 30, 2008 and 2007 amounted to $3,742 and $3,404. Advertising
expense for the six months ended June 30, 2008 and 2007 amounted to $7,258 and
$6,900.

Earnings Per Share

The Company computes
earnings per share in accordance with SFAS No. 128, Earnings per Share. Basic
earnings per common share is computed by dividing income or loss available to
common stockholders by the weighted average number of common shares outstanding
for the period. Diluted earnings per common share are based on the average
number of common shares outstanding during each period, adjusted for the
effects of outstanding stock options.

For the six months ended
June 30, 2008 and 2007, stock options were included in the computation of
diluted earnings per common share due to their anti-dilutive effect. The number
of anti-dilutive stock options excluded from the computation of diluted loss
per common share was 85,500 and 100,100, respectively.

Leased Employees

The Company has entered into
an agreement with ADP Total Source, whereby the Company leases its employees
from ADP. The agreement requires the Company to reimburse ADP for all employee
wages, related taxes, employee benefit costs and human resource fees.

The Company records these
payments using the same classifications for which the reimbursement is made
(i.e. wage reimbursements are recorded as wage expense).

Stock Based Compensation

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

Under
the modified prospective transition method, awards that are granted, modified
or settled after the date of adoption will be measured and accounted for in
accordance with SFAS 123R. Compensation cost for awards granted prior to,
but not vested, as of the date SFAS 123R is adopted would be based on the
grant date attributes originally used to value those awards for pro forma
purposes under SFAS 123. The Companys condensed consolidated financial
statements as of and for the three and six months ended June 30, 2008, 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 June 30, 2008, 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-10

---



DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2008 and 2007 (Continued)
(Unaudited)

At
June 30, 2008, there is a total unvested stock-based compensation expense of $
31,627 and a total weighted average remaining term of 0.53 years. Total
share-based compensation expense recognized in the Statement of Operations
aggregated $20,508 for the three months ended June 30, 2008 and $9,185 for the
three months ended June 30, 2007. The share-based compensation for the six
months ended June 30, 2008 and 2007 was $38,363 and $13,703 respectively.

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 six months ended June
30, 2008:

|                                           |  |                    |         |                  |   |                           |  |  |             | 
|------------------------------------------ |  | ------------------ | ------- | ---------------- | - | ------------------------- |  |  | ----------- | 
|                                           |  | Number of
  Shares |         | Exercise
  Price |   | Remaining
  Contract Life | 
|                                           |  |                    |         |                  |   |                           | 
|Outstanding options at beginning of period |  |                    | 90,000  |                  | $ | 18.93                     |  |  | 2.60
  Yrs. | 
|Granted                                    |  |                    | 22,000  |                  | $ | 11.39                     |  |  |             | 
|Canceled                                   |  |                    | (1,500  | )                | $ | 18.18                     |  |  |             | 
|                                           |  |                    |         |                  |   |                           |  |  |             | 
|Outstanding options at end of period       |  |                    | 110,500 |                  | $ | 17.44                     |  |  | 2.63
  Yrs. | 
|                                           |  |                    |         |                  |   |                           |  |  |             | 
|Outstanding exercisable at end of period   |  |                    | 67,500  |                  | $ | 19.45                     |  |  | 1.45
  Yrs. | 
|                                           |  |                    |         |                  |   |                           |  |  |             | 

(2) AVAILABLE-FOR-SALE
SECURITIES

Upon
adoption of SFAS No. 115 - Accounting for
Certain Investments in Debt and Equity Securities, 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 June 30, 2008 and December 31, 2007, of approximately 104.41% and
149.84%, 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:

|                 |  |               |            |              |   |                            |  |                             |            |  |   |            |  
|---------------- |  | ------------- | ---------- | ------------ | - | -------------------------- |  | --------------------------- | ---------- |  | - | ---------- | -
|                 |  | June 30, 2008 |           
|                 |  |               |           
|Type of security |  | Cost          |            | Fair
  Value |   | Unrealized Holding
  gains |  | Unrealized holding
  losses |           
|                 |  |               |            |              |   |                            |  |                             |           
|Equity           |  | $             | 37,981,603 |              | $ | 77,748,755                 |  | $                           | 45,426,056 |  | $ | (5,658,904 | )
|Debt             |  |               | 65,770     |              |   | 24,920                     |  |                             |           |  |   | (40,850    | )
|                 |  |               |            |              |   |                            |  |                             |            |  |   |            |  
|Total            |  | $             | 38,047,373 |              | $ | 77,773,675                 |  | $                           | 45,426,056 |  | $ | (5,699,754 | )
|                 |  |               |            |              |   |                            |  |                             |            |  |   |            |  

F-11

---



DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2008 and 2007 (Continued)
(Unaudited)

|                 |  |                   |            |              |   |                            |  |                             |            |  |   |            |  
|---------------- |  | ----------------- | ---------- | ------------ | - | -------------------------- |  | --------------------------- | ---------- |  | - | ---------- | -
|                 |  | December 31, 2007 |           
|                 |  |                   |           
|Type of security |  | Cost              |            | Fair
  Value |   | Unrealized
  holding gains |  | Unrealized holding
  losses |           
|                 |  |                   |            |              |   |                            |  |                             |           
|Equity           |  | $                 | 29,802,511 |              | $ | 74,572,643                 |  | $                           | 47,224,495 |  | $ | (2,454,363 | )
|Debt             |  |                   | 184,646    |              |   | 346,550                    |  |                             | 161,904    |  |   |           |  
|                 |  |                   |            |              |   |                            |  |                             |            |  |   |            |  
|Total            |  | $                 | 29,987,157 |              | $ | 74,919,193                 |  | $                           | 47,386,399 |  | $ | (2,454,363 | )
|                 |  |                   |            |              |   |                            |  |                             |            |  |   |            |  

At
June 30, 2008 the securities held by the Company had a market value of
$77,773,675 and a cost basis of $38,047,373 resulting in a net unrealized gain
of $39,726,302 or 104.41% of cost.

At
December 31, 2007, the securities held by the Company had a market value of
$74,919,193 and a cost basis of $29,987,157 resulting in a net unrealized gain
of $44,932,036 or 149.84% of cost.

At
June 30, 2008 and December 31, 2007, 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 June 30, 2008 and these
items have a cost of $65,770 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 June 30, 2008.

|                                                          |  |                                    |            |                                |   |                     |   |       |             |   |   |             |  
|--------------------------------------------------------- |  | ---------------------------------- | ---------- | ------------------------------ | - | ------------------- | - | ----- | ----------- | - | - | ----------- | -
|                                                          |  | June 30, 2008                      |           
|                                                          |  |                                    |           
|                                                          |  | Equipment Sales & Related Services |            | Cryobanking & Related Services |   | Investment Activity |   | Total |            
|                                                          |  |                                    |            |                                |   |                     |   |       |            
|                                                         
|Revenues                                                  |  | $                                  | 467,998    |                                | $ | 88,589              |   | $     |            |   | $ | 556,587     |  
|                                                          |  |                                    |            |                                |   |                     |   |       |             |   |   |             |  
|Expenses                                                  |  |                                    |            |                                |   |                     |   |       |             |   |   |             |  
|Cost of sales                                             |  |                                    | 164,176    |                                |   | 10,326              |   |       |            |   |   | 174,502     |  
|Research and development expenses                         |  |                                    | 614,979    |                                |   | 47,154              |   |       |            |   |   | 662,133     |  
|Selling, general and administrative
expenses              |  |                                    | 803,941    |                                |   | 140,262             |   |       |            |   |   | 944,203     |  
|                                                          |  |                                    |            |                                |   |                     |   |       |             |   |   |             |  
|Total Expenses                                            |  |                                    | 1,583,096  |                                |   | 197,742             |   |       |             |   |   | 1,780,838   |  
|                                                          |  |                                    |            |                                |   |                     |   |       |             |   |   |             |  
|Operating loss                                            |  |                                    | (1,115,098 | )                              |   | (109,153            | ) |       |            |   |   | (1,224,251  | )
|                                                          |  |                                    |            |                                |   |                     |   |       |             |   |   |             |  
|                                                          |  |                                    |            |                                |   |                     |   |       |             |   |   |             |  
|Investment income, net                                    |  |                                    |            |                                |   |                     |   |       |             |   |   |             |  
|Dividends                                                 |  |                                    |           |                                |   |                    |   |       | 551,719     |   |   | 551,719     |  
|Gain on sales of securities, net                          |  |                                    |           |                                |   |                    |   |       | 2,644,472   |   |   | 2,644,472   |  
|Mark to market of short positions                         |  |                                    |           |                                |   |                    |   |       | (33,259     | ) |   | (33,259     | )
|Administrative expenses relating to portfolio
investments |  |                                    |           |                                |   |                    |   |       | (21,156     | ) |   | (21,156     | )
|                                                          |  |                                    |            |                                |   |                     |   |       |             |   |   |             |  
|Total Investment income, net                              |  |                                    |           |                                |   |                    |   |       | 3,141,776   |   |   | 3,141,776   |  
|                                                          |  |                                    |            |                                |   |                     |   |       |             |   |   |             |  
|                                                          |  |                                    |            |                                |   |                     |   |       |             |   |   |             |  
|Interest expense, net                                     |  |                                    | (8,604     | )                              |   |                    |   |       | (6,948      | ) |   | (15,552     | )
|Other income                                              |  |                                    | 2,869      |                                |   |                    |   |       |            |   |   | 2,869       |  
|                                                          |  |                                    |            |                                |   |                     |   |       |             |   |   |             |  
|                                                          |  |                                    |            |                                |   |                     |   |       |             |   |   |             |  
|Income (loss) before income taxes                         |  |                                    | (1,120,833 | )                              |   | (109,153            | ) |       | 3,134,828   |   |   | 1,904,842   |  
|Income tax expense                                        |  |                                    |           |                                |   |                    |   |       | 400,000     |   |   | 400,000     |  
|                                                          |  |                                    |            |                                |   |                     |   |       |             |   |   |             |  
|                                                          |  |                                    |            |                                |   |                     |   |       |             |   |   |             |  
|Net income (loss)                                         |  | $                                  | (1,120,833 | )                              | $ | (109,153            | ) | $     | 2,734,828   |   | $ | 1,504,842   |  
|                                                          |  |                                    |            |                                |   |                     |   |       |             |   |   |             |  
|                                                          |  |                                    |            |                                |   |                     |   |       |             |   |   |             |  
|Total assets                                              |  | $                                  | 2,771,270  |                                | $ | 222,017             |   | $     | 101,281,431 |   | $ | 104,274,718 |  
|                                                          |  |                                    |            |                                |   |                     |   |       |             |   |   |             |  

F-12

---



DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2008 and 2007 (Continued)
(Unaudited)

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

|                                                          |  |                                    |            |                                |   |                     |   |       |            |   |   |            |  
|--------------------------------------------------------- |  | ---------------------------------- | ---------- | ------------------------------ | - | ------------------- | - | ----- | ---------- | - | - | ---------- | -
|                                                          |  | June 30, 2007                      |           
|                                                          |  |                                    |           
|                                                          |  | Equipment Sales & Related Services |            | Cryobanking & Related Services |   | Investment Activity |   | Total |           
|                                                          |  |                                    |            |                                |   |                     |   |       |           
|                                                         
|Revenues                                                  |  | $                                  | 438,458    |                                | $ | 106,860             |   | $     |           |   | $ | 545,318    |  
|                                                          |  |                                    |            |                                |   |                     |   |       |            |   |   |            |  
|Expenses                                                  |  |                                    |            |                                |   |                     |   |       |            |   |   |            |  
|Cost of sales                                             |  |                                    | 133,700    |                                |   | 11,325              |   |       |           |   |   | 145,025    |  
|Research and development expenses                         |  |                                    | 611,554    |                                |   | 46,985              |   |       |           |   |   | 658,539    |  
|Selling, general and administrative
expenses              |  |                                    | 833,584    |                                |   | 142,431             |   |       |           |   |   | 976,015    |  
|                                                          |  |                                    |            |                                |   |                     |   |       |            |   |   |            |  
|Total Expenses                                            |  |                                    | 1,578,838  |                                |   | 200,741             |   |       |            |   |   | 1,779,579  |  
|                                                          |  |                                    |            |                                |   |                     |   |       |            |   |   |            |  
|Operating loss                                            |  |                                    | (1,140,380 | )                              |   | (93,881             | ) |       |           |   |   | (1,234,261 | )
|                                                          |  |                                    |            |                                |   |                     |   |       |            |   |   |            |  
|                                                          |  |                                    |            |                                |   |                     |   |       |            |   |   |            |  
|Investment income                                         |  |                                    |            |                                |   |                     |   |       |            |   |   |            |  
|Dividends                                                 |  |                                    |           |                                |   |                    |   |       | 519,171    |   |   | 519,171    |  
|Gain on sales of securities, net                          |  |                                    |           |                                |   |                    |   |       | 1,814,522  |   |   | 1,814,522  |  
|Mark to market of short positions                         |  |                                    |           |                                |   |                    |   |       | 1,316,034  |   |   | 1,316,034  |  
|Administrative expenses relating to portfolio
investments |  |                                    |           |                                |   |                    |   |       | (11,783    | ) |   | (11,783    | )
|                                                          |  |                                    |            |                                |   |                     |   |       |            |   |   |            |  
|Total Investment income, net                              |  |                                    |           |                                |   |                    |   |       | 3,637,944  |   |   | 3,637,944  |  
|                                                          |  |                                    |            |                                |   |                     |   |       |            |   |   |            |  
|                                                          |  |                                    |            |                                |   |                     |   |       |            |   |   |            |  
|Interest expense, net                                     |  |                                    | (9,274     | )                              |   |                    |   |       | (57,370    | ) |   | (66,644    | )
|Other income                                              |  |                                    | 2,756      |                                |   | 120                 |   |       |           |   |   | 2,876      |  
|                                                          |  |                                    |            |                                |   |                     |   |       |            |   |   |            |  
|                                                          |  |                                    |            |                                |   |                     |   |       |            |   |   |            |  
|Income (loss) before income taxes                         |  |                                    | (1,146,898 | )                              |   | (93,761             | ) |       | 3,580,574  |   |   | 2,339,915  |  
|Income tax expense                                        |  |                                    |           |                                |   |                    |   |       |           |   |   |           |  
|                                                          |  |                                    |            |                                |   |                     |   |       |            |   |   |            |  
|                                                          |  |                                    |            |                                |   |                     |   |       |            |   |   |            |  
|Net income (loss)                                         |  | $                                  | (1,146,898 | )                              | $ | (93,761             | ) | $     | 3,580,574  |   | $ | 2,339,915  |  
|                                                          |  |                                    |            |                                |   |                     |   |       |            |   |   |            |  
|                                                          |  |                                    |            |                                |   |                     |   |       |            |   |   |            |  
|Total assets                                              |  | $                                  | 2,332,483  |                                | $ | 149,930             |   | $     | 77,904,576 |   | $ | 80,386,989 |  
|                                                          |  |                                    |            |                                |   |                     |   |       |            |   |   |            |  

F-13

---



DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2008 and 2007 (Continued)
(Unaudited)

The following table
summarizes the results of each segment described above for the six months ended
June 30, 2008

|                                                          |  |                                    |            |                                |   |                     |   |       |             |   |   |             |  
|--------------------------------------------------------- |  | ---------------------------------- | ---------- | ------------------------------ | - | ------------------- | - | ----- | ----------- | - | - | ----------- | -
|                                                          |  | June 30, 2008                      |           
|                                                          |  |                                    |           
|                                                          |  | Equipment Sales & Related Services |            | Cryobanking & Related Services |   | Investment Activity |   | Total |            
|                                                          |  |                                    |            |                                |   |                     |   |       |            
|                                                         
|Revenues                                                  |  | $                                  | 791,778    |                                | $ | 185,722             |   | $     |            |   | $ | 977,500     |  
|                                                          |  |                                    |            |                                |   |                     |   |       |             |   |   |             |  
|Expenses                                                  |  |                                    |            |                                |   |                     |   |       |             |   |   |             |  
|Cost of sales                                             |  |                                    | 302,790    |                                |   | 23,726              |   |       |            |   |   | 326,516     |  
|Research and development expenses                         |  |                                    | 1,174,288  |                                |   | 95,396              |   |       |            |   |   | 1,269,684   |  
|Selling, general and administrative
expenses              |  |                                    | 1,574,536  |                                |   | 299,816             |   |       |            |   |   | 1,874,352   |  
|                                                          |  |                                    |            |                                |   |                     |   |       |             |   |   |             |  
|Total Expenses                                            |  |                                    | 3,051,614  |                                |   | 418,938             |   |       |             |   |   | 3,470,552   |  
|                                                          |  |                                    |            |                                |   |                     |   |       |             |   |   |             |  
|Operating loss                                            |  |                                    | (2,259,836 | )                              |   | (233,216            | ) |       |            |   |   | (2,493,052  | )
|                                                          |  |                                    |            |                                |   |                     |   |       |             |   |   |             |  
|                                                          |  |                                    |            |                                |   |                     |   |       |             |   |   |             |  
|Investment income                                         |  |                                    |            |                                |   |                     |   |       |             |   |   |             |  
|Dividends                                                 |  |                                    |           |                                |   |                    |   |       | 1,182,501   |   |   | 1,182,501   |  
|Gain on sales of securities, net                          |  |                                    |           |                                |   |                    |   |       | 8,475,471   |   |   | 8,475,471   |  
|Mark to market of short positions                         |  |                                    |           |                                |   |                    |   |       | 2,142,782   |   |   | 2,142,782   |  
|Administrative expenses relating to portfolio
investments |  |                                    |           |                                |   |                    |   |       | (42,570     | ) |   | (42,570     | )
|                                                          |  |                                    |            |                                |   |                     |   |       |             |   |   |             |  
|Total Investment income, net                              |  |                                    |           |                                |   |                    |   |       | 11,758,184  |   |   | 11,758,184  |  
|                                                          |  |                                    |            |                                |   |                     |   |       |             |   |   |             |  
|                                                          |  |                                    |            |                                |   |                     |   |       |             |   |   |             |  
|Interest expense, net                                     |  |                                    | (17,288    | )                              |   |                    |   |       | (27,779     | ) |   | (45,067     | )
|Other income                                              |  |                                    | 5,739      |                                |   | 46                  |   |       |            |   |   | 5,785       |  
|                                                          |  |                                    |            |                                |   |                     |   |       |             |   |   |             |  
|                                                          |  |                                    |            |                                |   |                     |   |       |             |   |   |             |  
|Income (loss) before income taxes                         |  |                                    | (2,271,385 | )                              |   | (233,170            | ) |       | 11,730,405  |   |   | 9,225,850   |  
|Income tax expense                                        |  |                                    |           |                                |   |                    |   |       | 400,000     |   |   | 400,000     |  
|                                                          |  |                                    |            |                                |   |                     |   |       |             |   |   |             |  
|                                                          |  |                                    |            |                                |   |                     |   |       |             |   |   |             |  
|Net income (loss)                                         |  | $                                  | (2,271,385 | )                              | $ | (233,170            | ) | $     | 11,330,405  |   | $ | 8,825,850   |  
|                                                          |  |                                    |            |                                |   |                     |   |       |             |   |   |             |  
|                                                          |  |                                    |            |                                |   |                     |   |       |             |   |   |             |  
|Total assets                                              |  | $                                  | 2,771,270  |                                | $ | 222,017             |   | $     | 101,281,431 |   | $ | 104,274,718 |  
|                                                          |  |                                    |            |                                |   |                     |   |       |             |   |   |             |  

F-14

---



DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2008 and 2007 (Continued)
(Unaudited)

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

|                                                          |  |                                    |            |                                |   |                     |   |       |            |   |   |            |  
|--------------------------------------------------------- |  | ---------------------------------- | ---------- | ------------------------------ | - | ------------------- | - | ----- | ---------- | - | - | ---------- | -
|                                                          |  | June 30, 2007                      |           
|                                                          |  |                                    |           
|                                                          |  | Equipment Sales & Related Services |            | Cryobanking & Related Services |   | Investment Activity |   | Total |           
|                                                          |  |                                    |            |                                |   |                     |   |       |           
|                                                         
|Revenues                                                  |  | $                                  | 832,684    |                                | $ | 218,516             |   | $     |           |   | $ | 1,051,200  |  
|                                                          |  |                                    |            |                                |   |                     |   |       |            |   |   |            |  
|Expenses                                                  |  |                                    |            |                                |   |                     |   |       |            |   |   |            |  
|Cost of sales                                             |  |                                    | 272,760    |                                |   | 23,800              |   |       |           |   |   | 296,560    |  
|Research and development expenses                         |  |                                    | 1,159,744  |                                |   | 103,026             |   |       |           |   |   | 1,262,770  |  
|Selling, general and administrative
expenses              |  |                                    | 1,588,364  |                                |   | 343,634             |   |       |           |   |   | 1,931,998  |  
|                                                          |  |                                    |            |                                |   |                     |   |       |            |   |   |            |  
|Total Expenses                                            |  |                                    | 3,020,868  |                                |   | 470,460             |   |       |            |   |   | 3,491,328  |  
|                                                          |  |                                    |            |                                |   |                     |   |       |            |   |   |            |  
|Operating loss                                            |  |                                    | (2,188,184 | )                              |   | (251,944            | ) |       |           |   |   | (2,440,128 | )
|                                                          |  |                                    |            |                                |   |                     |   |       |            |   |   |            |  
|                                                          |  |                                    |            |                                |   |                     |   |       |            |   |   |            |  
|Investment income                                         |  |                                    |            |                                |   |                     |   |       |            |   |   |            |  
|Dividends                                                 |  |                                    |           |                                |   |                    |   |       | 1,230,600  |   |   | 1,230,600  |  
|Gain on sales of securities, net                          |  |                                    |           |                                |   |                    |   |       | 3,440,952  |   |   | 3,440,952  |  
|Mark to market of short positions                         |  |                                    |           |                                |   |                    |   |       | 3,330,832  |   |   | 3,330,832  |  
|Administrative expenses relating to portfolio
investments |  |                                    |           |                                |   |                    |   |       | (23,921    | ) |   | (23,921    | )
|                                                          |  |                                    |            |                                |   |                     |   |       |            |   |   |            |  
|Total Investment income, net                              |  |                                    |           |                                |   |                    |   |       | 7,978,463  |   |   | 7,978,463  |  
|                                                          |  |                                    |            |                                |   |                     |   |       |            |   |   |            |  
|                                                          |  |                                    |            |                                |   |                     |   |       |            |   |   |            |  
|Interest expense, net                                     |  |                                    | (15,209    | )                              |   |                    |   |       | (128,848   | ) |   | (144,057   | )
|Other income                                              |  |                                    | 5,511      |                                |   | 120                 |   |       |           |   |   | 5,631      |  
|                                                          |  |                                    |            |                                |   |                     |   |       |            |   |   |            |  
|                                                          |  |                                    |            |                                |   |                     |   |       |            |   |   |            |  
|Income (loss) before income taxes                         |  |                                    | (2,197,882 | )                              |   | (251,824            | ) |       | 7,849,615  |   |   | 5,399,909  |  
|Income tax expense                                        |  |                                    |           |                                |   |                    |   |       |           |   |   |           |  
|                                                          |  |                                    |            |                                |   |                     |   |       |            |   |   |            |  
|                                                          |  |                                    |            |                                |   |                     |   |       |            |   |   |            |  
|Net income (loss)                                         |  | $                                  | (2,197,882 | )                              | $ | (251,824            | ) | $     | 7,849,615  |   | $ | 5,399,909  |  
|                                                          |  |                                    |            |                                |   |                     |   |       |            |   |   |            |  
|                                                          |  |                                    |            |                                |   |                     |   |       |            |   |   |            |  
|Total assets                                              |  | $                                  | 2,332,483  |                                | $ | 149,930             |   | $     | 77,904,576 |   | $ | 80,386,989 |  
|                                                          |  |                                    |            |                                |   |                     |   |       |            |   |   |            |  

F-15

---



DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2008 and 2007 (Continued)
(Unaudited)

(4) PROPERTY AND EQUIPMENT

Property
and equipment as at June 30, 2008 and December 31, 2007 consists of:

|                                          |  |               |            |                   |   |            |  
|----------------------------------------- |  | ------------- | ---------- | ----------------- | - | ---------- | -
|                                          |  | June 30, 2008 |            | December 31, 2007 |  
|                                          |  |               |            |                   |  
|Machinery and equipment                   |  | $             | 1,304,760  |                   | $ | 1,161,413  |  
|BVA Equipment on trial                    |  |               | 748,000    |                   |   | 782,000    |  
|Land and Land Improvements                |  |               | 196,991    |                   |   | 196,991    |  
|Buildings                                 |  |               | 598,422    |                   |   | 598,422    |  
|Furniture and fixtures                    |  |               | 361,318    |                   |   | 352,972    |  
|Leasehold improvements                    |  |               | 594,535    |                   |   | 591,866    |  
|                                          |  |               |            |                   |   |            |  
|Total Cost                                |  | $             | 3,804,026  |                   | $ | 3,683,664  |  
|Accumulated depreciation and amortization |  |               | (1,763,092 | )                 |   | (1,625,170 | )
|                                          |  |               |            |                   |   |            |  
|Property and equipment, net               |  | $             | 2,040,934  |                   | $ | 2,058,494  |  
|                                          |  |               |            |                   |   |            |  

Depreciation expense for the
three months ended June 30, 2008 and June 30, 2007 was respectively $ 87,394
and $57,643.

Depreciation expense for the
six months ended June 30, 2008 and June 30, 2007 was respectively $ 156,053 and
$110,174.

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
June 30, 2008 and December 31, 2007, the Company has a bank note payable of
$210,000 and $1,500,000 respectively which is classified as a current
liability. The note is renewable on May 27, 2009 for a period of one year. The
note bears interest at the Prime Rate less 1.50%. At June 30, 2008, this was
3.50%. The note is secured by certain marketable securities of the Company.

The
interest expense on this note for the three months ended June 30, 2008 and June
30, 2007 was $10,044 and $25,031, respectively. The interest expense on this
note for the six months ended June 30, 2008 and June 30, 2007 was $28,071 and
$50,029, respectively.

Short-term
debt to brokers (margin debt), is secured by the Companys marketable
securities, and totaled $582,758 at June 30, 2008 and $ 1,814,303 at December
31, 2007.

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.

F-16

---



DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2008 and 2007 (Continued)
(Unaudited)

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

|         |        |          |   |          |  |            |        |  |   |         | 
|-------- | ------ | -------- | - | -------- |  | ---------- | ------ |  | - | ------- | 
|06/30/09 |        | 06/30/10 |   | 06/30/11 |  | Thereafter |       
|         |        |          |   |          |  |            |       
|         |        |          |   |          |  |            |        |  |   |         | 
|$        | 38,825 |          | $ | 41,835   |  | $          | 45,078 |  | $ | 323,866 | 

At June 30, 2008, the
remaining principal due on the mortgage for the land and buildings in Oak
Ridge, Tennessee is $ 449,604.  Of this
amount, $38,825 is due before June 30, 2009 and the remaining $410,779 is due
after that date.

(6) PUT AND CALL OPTIONS AT
FAIR VALUE

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 June 30, 2008 and December 31, 2007:

|                       |  |               |  |  |                   |  |  |                 | 
|---------------------- |  | ------------- |  |  | ----------------- |  |  | --------------- | 
|Put and
  Call Options |  | Selling price |  |  | Fair Market value |  |  | Unrealized Gain | 
|                       |  |               |  |  |                   |  |  |                 | 
|June 30, 2008          |  | 8,648,828     |  |  | 6,295,900         |  |  | 2,352,928       | 
|December 31, 2007      |  | 7,645,833     |  |  | 5,972,632         |  |  | 1,673,201       | 

(7) SECURITIES BORROWED AT
FAIR VALUE

At
June 30, 2008 and December 31, 2007, 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 $22,907,167 and $18,712,876 at June 30, 2008 and December 31, 2007
respectively and had respective market values of $22,979,181 and $20,362,259,
resulting in mark to market adjustments of ($72,014) and ($1,649,383) at June
30, 2008 and December 31, 2007.

(8) STOCK OPTIONS

In June 2004, the Company
created the 2004 Stock Option Plan in an effort to provide incentive to
employees, officers, agents, consultants, and independent contractors through
proprietary interest. The Board of Directors shall act as the Plan
Administrator, and may issue these options at its discretion. The maximum
number of shares that may be issued under this Plan is 200,000 or 5% of the
Companys outstanding shares, whichever is greater. Prior to June 2004, the
Company issued options to various employees under the previous Stock Option
Plan that was also administered by the Board of Directors. All issuances have
varying vesting and expiration timelines. As at June 30, 2008 and 2007, 67,500
and 77,400 of the outstanding options were exercisable, respectively.

(9) CURRENT INCOME TAXES

Under Internal revenue code
section 542, a company is defined as a personal holding company (PHC) if it
meets both an ownership and income test. The ownership test is met if a company
has five or fewer shareholders who own more than 50% of the company.  Daxor meets the ownership test.  The income test is met if PHC income items
such as dividends, interest and rents exceed 60% of adjusted ordinary gross
income. Adjusted ordinary gross income is defined as all items of income
except capital gains.  For the six
months ended June 30, 2008, more than 60% of Daxors adjusted gross income came
from items defined as PHC income.
Accordingly the Company is a PHC, as it meets both the ownership and
income tests.

F-17

---



DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2008 and 2007 (Continued)
(Unaudited)

As a result,
the Company is subject to a PHC income tax on its undistributed PHC income. For
the six months ending June 30, 2008, Daxors undistributed PHC income is approximately
$8,200,000. Management plans to eliminate or significantly reduce the
Companys undistributed PHC income before the end of the year.  This will be accomplished by either paying
this income out as a dividend before the end of the year, or by realizing
losses on the sale of certain securities or by a combination of both of these
activities.

Under FASB No. 109, the Company accrues
income taxes in interim periods based upon its estimated annual effective tax
rate.  Assuming there is no change in
PHC income for the remainder of 2008, the effective rate would be equal to the
statutory rate for the six months ended June 30, 2008. The calculated PHC tax
provision at June 30, 2008 after taking credits into account, as discussed
above, is approximately $400,000.

Determining the PHC tax liability
requires computing the Companys undistributed PHC income for the year and
taxing such PHC income at the statutory rate of 15% (or during interim periods
using the estimated annual effective PHC income tax rate). Undistributed PHC
income is the Companys current year taxable income, exclusive of the net
operating loss carry forward deduction which is permitted for regular tax
purposes and adjusted for certain allowable deductions.

The most significant of
these deductions is long-term capital gains, which the Company did not have
during the six months ended June 30, 2008.
During the six months ending June 30, 2008, the Company had short-term
capital gains totaling approximately $10,692,000. Short term capital gains are
not a deduction for PHC tax purposes, which has given rise to the Companys
estimated undistributed PHC income.

(10) 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
June 30, 2008 the Company has approximately $9.7 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 June 30, 2008 and December 31, 2007, computed at
federal statutory rates of 35%, are as follows:

|                                    |  |      |            |      |   |            |  
|----------------------------------- |  | ---- | ---------- | ---- | - | ---------- | -
|                                    |  | 2008 |            | 2007 |  
|                                    |  |      |            |      |  
|                                    |  |      |            |      |   |            |  
|Deferred tax assets:                |  |      |            |      |   |            |  
|Net operating loss carry
  forwards |  | $    | 3,399,311  |      | $ | 3,410,396  |  
|Valuation allowance                 |  |      | (3,399,311 | )    |   | (3,410,396 | )
|                                    |  |      |            |      |   |            |  
|Total deferred tax assets           |  | $    | 0          |      | $ | 0          |  
|                                    |  |      |            |      |   |            |  
|                                    |  |      |            |      |   |            |  
|Deferred tax liabilities            |  | $    | 13,904,206 |      | $ | 15,726,213 |  
|                                    |  |      |            |      |   |            |  

F-18

---



DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2008 and 2007 (Continued)
(Unaudited)

As a result of the
implementation of FIN 48, we recognized no material
adjustment to unrecognized tax benefits. At June 30, 2008 and December 31,
2007, we had $3,399,311 and $3,410,396 respectively of unrecognized tax
benefits, all of which would affect our effective tax rate if recognized.

A valuation allowance has
been established equal to the full amount of the deferred tax assets as the Company
is not assured at June 30, 2008 and December 31,2007 that it is more likely
than not that these tax benefits will be realized. The valuation allowance is
evaluated considering positive and negative evidence about whether the deferred
tax assets will be realized. At that time of evaluation, the allowance is
either increased or reduced; reduction could result in the complete elimination
of the allowance if positive evidence indicates that the value of the deferred
tax assets is no longer impaired and the allowance is no longer required. The
decrease in the valuation allowance of $11,085 was due to the decrease in the
net operating loss of Daxor Corporation and subsidiary.

(11) 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 June 30,
2008, stocks representing 99.10% 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 the
insurance which 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.

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
June 30, 2008 the fair market value of securities in excess of the SIPC insured
limit is $27,835,462 and the cash on deposit in excess of the insured limit is
$5,794,986.

For the six months ended
June 30, 2008, the sales of Blood Volume Kits accounted for 55.37% of the
Companys total consolidated sales. There were three customers (hospitals) that
accounted for 49.15% of the Companys sales of Blood Volume Kits.   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 three 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.

As disclosed previously, the
Centers for Medicare and Medicaid Services (CMS) implemented a significant
policy change affecting the reimbursement for all diagnostic
radiopharmaceutical products and contrast agents which was 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.

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.

Since December 31, 2007,
Daxor has not received any verbal or written communication from the staff of
the Northeast Regional Office of the United States Securities and Exchange
Commission regarding any unresolved issues.
These unresolved issues were discussed in detail in the Forms 10-K for
the years ended December 31, 2007 and 2006 as well as the 10-Qs for 2007.

(12) Related Party
Transactions

The
Company subleases a portion of its New York City office space to the President
of the Company for five hours per week. This sublease agreement has no formal
terms and is executed on a month to month basis.

F-19

---



DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2008 and 2007 (Continued)
(Unaudited)

The
amount of rental income received from the President of the Company in the
quarters ended June 30, 2008 and June 30, 2007 was $2,869 and $2,756.

The
amount of rental income received from the President of the Company for the six
months ended June 30, 2008 and June 30, 2007 was $5,739 and $5,511.

Jonathan
Feldschuh is the co-inventor of the BVA-100 Blood Volume Analyzer and is the
son of Dr. Joseph Feldschuh.  He is
expected to provide a limited amount of consultative help in the filing of the
additional patents in 2008.

(13) 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.

The
total Research and development costs for the three months ended June 30, 2008
and June 30, 2007 were $662,133 and $658,539, respectively.

The
total Research and development costs for the six months ended June 30, 2008 and
June 30, 2007 were $1,269,684 and $1,262,770, respectively.

(14) Subsequent Events

The
Board of Directors has voted to declare a dividend of $0.25 per quarter. The
dividend will be paid to shareholders of record on July 28, 2008. The payment
date is August 27, 2008. The Company intends to maintain a policy of paying
dividends on a quarterly basis if net income is available to maintain the
dividend.

The
Company expects that the distribution will be treated for Federal Income Tax
purposes as a dividend. However, this determination cannot be made until
shortly after December 31, 2008. It is possible, though not expected, that all
or a portion of the distribution will be treated as a return of capital. This
will be determined once results from operations are available for the year
ending December 31, 2008.

If
any portion of the distribution is classified as a dividend for Federal Income
Tax Purposes, it will reduce the Companys undistributed personal holding
company income which will in turn reduce the liability for personal holding
company taxes.

(15) Recently Issued
Accounting Pronouncements

In June 2006, The FASB
issued Interpretation No. 48 Accounting for Uncertainty in Income Taxesan
interpretation of FASB Statement No. 109 (FIN 48). This Interpretation
clarifies the accounting for uncertainty in income taxes recognized in an
enterprises financial statements in accordance with FASB Statement No. 109,
Accounting for Income Taxes.  FIN 48
prescribes a recognition threshold and measurement attribute for the financial
statement recognition and measurement of a tax position taken or expected to be
taken in a tax return. This Interpretation also provides guidance on
derecognition, classification, interest and penalties, accounting in interim
periods, disclosure, and transition. This Interpretation is effective for
fiscal years beginning after December 15, 2006. Earlier application of the
provisions of this Interpretation is encouraged if the enterprise has not yet
issued financial statements, including interim financial statements, in the
period this Interpretation is adopted. Management does not expect that the
application of this standard will have any effect on the Companys results of
operations or its financial condition.

In September 2006, the FASB
issued SFAS No. 157, Fair Value Measurements (SFAS 157), to define fair
value, establish a framework for measuring fair value in accordance with
generally accepted accounting principles (GAAP) and expand disclosures about
fair value measurements. SFAS 157 requires quantitative disclosures using a
tabular format in all periods (interim and annual) and qualitative disclosures
about the valuation techniques used to measure fair value in all annual
periods. SFAS 157 will be effective for the Company beginning January 1, 2008.
The Company is currently evaluating the impact of adopting SFAS 157.

F-20

---



DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2008 and 2007 (Continued)
(Unaudited)

In September 2006, the SEC
staff issued Staff Accounting Bulletin (SAB) Topic 1M (SAB 108), Financial
Statements - Considering the Effects of Prior Year Misstatements when
Quantifying Misstatements in Current Year Financial Statements, which is
effective for the 2007 year. SAB 108 provides guidance on how prior year
misstatements should be taken into consideration when quantifying misstatements
in current year financial statements for the purpose of determining whether the
financial statements are materially misstated. Under this guidance, companies
should take into account both the effect of a misstatement on the current year
balance sheet as well as the impact upon the current year income statement in
assessing the materiality of a current year misstatement. Once a current year
misstatement has been quantified, the guidance in SAB Topic 1M, Financial
Statements - Materiality, (SAB 99) should be applied to determine whether the
misstatement is material. The implementation of SAB 108 did not have any impact
on the Companys financial statements.

In February 2007, the FASB
issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial
Liabilities (SFAS 159). SFAS 159 expands opportunities to use fair value
measurements in financial reporting and permits entities to choose to measure
many financial instruments and certain other items at fair value. SFAS 159 will
be effective for the Company on January 1, 2008. The Company is currently
evaluating the impact of adopting SFAS 159 on its financial statements.

In June 2007, the Emerging
Issues Task Force (EITF) issued EITF 07-3, Accounting for Nonrefundable
Advance Payments for Goods or Services to Be Used in Future Research and
Development Activities, which provides guidance on the accounting for certain
nonrefundable advance payments for goods or services that will be used or
rendered for future research and development activities. This issue is
effective prospectively for fiscal years beginning after December 15, 2007, or
fiscal 2009 for the Company. We are still assessing the potential impact of adoption.

In December 2007, the FASB
issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial
Statements  an amendment of ARB No. 51 (SFAS 160). SFAS 160 requires that
ownership interests in subsidiaries held by parties other than the parent, and
the amount of consolidated net income, be clearly identified, labeled, and
presented in the consolidated financial statements within equity, but separate
from the parents equity. It also requires once a subsidiary is deconsolidated,
any retained noncontrolling equity investment in the former subsidiary be
initially measured at fair value. Sufficient disclosures are required to
clearly identify and distinguish between the interests of the parent and the
interests of the noncontrolling owners. SFAS 160 will be effective for the
Company beginning January 1, 2009. The Company is currently evaluating the
impact of the provisions of SFAS 160 on its financial position, results of
operations and cash flows and does not believe the impact of the adoption will
be material.

In December 2007, the
Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin No.
110 (SAB 110). SAB 110 amends and replaces Question 6 of Section D.2 of Topic
14, Share-Based Payment of the Staff Accounting Bulletin series. Question 6 of
Section D.2 of Topic 14 expresses the views of the staff regarding the use of
the simplified method in developing an estimate of expected term of plain
vanilla share options and allows usage of the simplified method for share option
grants prior to December 31, 2007. SAB 110 allows public companies which do not
have historically sufficient experience to provide a reasonable estimate to
continue use of the simplified method for estimating the expected term of
plain vanilla share option grants after December 31, 2007. We currently use
the simplified method to estimate the expected term for share option grants
as we do not have enough historical experience to provide a reasonable
estimate. We will continue to use the simplified method until we have enough
historical experience to provide a reasonable estimate of expected term in
accordance with SAB 110. SAB 110 is effective for the Company on January 1,
2008.

In December 2007, the FASB
issued SFAS No. 141(R), Business Combinations (revised 2007).  SFAS No. 141(R) applies the acquisition
method of accounting for business combinations established in SFAS No. 141 to
all acquisitions where the acquirer gains a controlling interest, regardless of
whether consideration was exchanged.
Consistent with SFAS No. 141, SFAS No. 141(R) requires the acquirer to
fair value the assets and liabilities of the acquiree and record goodwill on
bargain purchases, with main difference the application to all acquisitions
where control is achieved. SFAS No. 141(R) is effective for financial
statements issued for fiscal years beginning after December 15, 2008 and will
be adopted by the Company in the first quarter of fiscal year 2009.  The Company does not expect that the
adoption of SFAS No. 141(R) will have a material impact on our financial
condition or results of operation.

F-21

---



DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2008 and 2007 (Continued)
(Unaudited)

In
March 2008, the FASB issued SFAS
No. 161, Disclosures about
Derivative Instruments and Hedging Activitiesan amendment of FASB Statement
No. 133. The use and complexity of derivative instruments and hedging
activities have increased significantly over the past several years.
Constituents have expressed concerns that the existing disclosure requirements
in FASB Statement No. 133, Accounting for
Derivative Instruments and Hedging Activities, do not provide
adequate information about how derivative and hedging activities affect an
entitys financial position, financial performance, and cash flows.
Accordingly, this Statement requires enhanced disclosures about an entitys
derivative and hedging activities and thereby improves the transparency of
financial reporting. This Statement is effective for financial statements
issued for fiscal years and interim periods beginning after November 15, 2008,
with early application encouraged. This Statement encourages, but does not
require, comparative disclosures for earlier periods at initial adoption. The
Company is currently evaluating the impact of the provisions of SFAS No. 161 on
its financial position, results of operations and cash flows and does not
believe the impact of the adoption will be material.

F-22

---



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

RECENT DEVELOPMENTS

The
Centers for Medicare and Medicaid Services (CMS) implemented a significant
policy change affecting the reimbursement for all diagnostic
radiopharmaceutical products and contrast agents which became 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
previous 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 became effective as of
January 1, 2008 and 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 had its Annual Meeting of Shareholders on June 25, 2008. As part of the
normal business conducted at the meeting, the Company had an Election of the
Board of Directors. Robert Moussa and Stephen Valentine who were Directors of
the Corporation did not stand for re-election.

At
the annual meeting, the shareholders of the Corporation re-elected Dr. Joseph
Feldschuh, Chief Executive Officer and President of Daxor and Robert Willens,
Martin Wolpoff, James Lombard as directors of Daxor. The shareholders elected
Bernhard Saxe, Dr. Stanley Epstein and Mario Biaggi, Jr. as new directors of
Daxor. None of the three new directors are employees of Daxor.

RESULTS OF OPERATIONS

Three months ended June 30,
2008 as compared with three months ended June 30, 2007:

Operating
Revenues and Expenses

For
the three months ended June 30, 2008, consolidated operating revenues increased
to $556,587 from $545,318 for the same period in 2007, an increase of $11,269
or 2.07%. This was mainly the result of increased kit sales of $25,962 for the
three months ended June 30, 2008 versus the same period in 2007.

For
the three months ended June 30, 2008, revenue from Blood volume kit sales
increased by $25,962 or 11.76% to $246,820 from $220,858 for the same period in
2007. This can mainly be attributed to an increase in the number of kits sold
from 705 in 2007 to 772 during the current period for an increase of
9.50%.  A major reason for the increase
in the number of kits sold is that there were 56 Blood Volume Analyzers placed
at June 30, 2008 versus 50 at June 30, 2007. For the three months ended June
30, 2008, the Company provided 156 Volumex doses free of charge to facilities
utilizing the BVA-100 for research versus 111 during the same period in 2007.
Effective February 1, 2007, the Company raised prices by approximately 5% on
Blood Volume Kits.

-3-

---



The
following table provides gross margin information on Equipment Sales &
Related Services for the three months ended June 30, 2008 and 2007:

|                                         |  |                                              |         |                                                               |   |                                          |   |                                                |         |   |   |         |  
|---------------------------------------- |  | -------------------------------------------- | ------- | ------------------------------------------------------------- | - | ---------------------------------------- | - | ---------------------------------------------- | ------- | - | - | ------- | -
|Equipment
  Sales
  And Related Serivces |  | Kit Sales Three Months Ended
  June 30, 2008 |         | Equipment Sales and OtherThree Months Ended
  June 30,
  2008 |   | Total Three Months Ended
  June 30, 2008 |   | Total Three
  Months
  Ended
  June 30,
  2007 |        
|                                         |  |                                              |         |                                                               |   |                                          |   |                                                |        
|Revenue                                  |  | $                                            | 246,820 |                                                               | $ | 221,178                                  |   | $                                              | 467,998 |   | $ | 438,458 |  
|Cost of Goods Sold                       |  |                                              | 120,100 |                                                               |   | 44,076                                   |   |                                                | 164,176 |   |   | 133,700 |  
|Gross Profit                             |  | $                                            | 126,720 |                                                               | $ | 177,102                                  |   | $                                              | 303,822 |   | $ | 304,758 |  
|Gross Profit Percentage                  |  |                                              | 51.34   | %                                                             |   | 80.07                                    | % |                                                | 64.92   | % |   | 69.51   | %

There
were three Blood Volume Analyzers sold during the quarter ended June 30, 2008
for a total of $195,000 versus three during the quarter ended June 30, 2007 for
a total of $195,000. The additional revenue of $26,178 for Equipment Sales and
Other during the current quarter consists almost entirely of shipping charges
and service contract revenue.

Total
S G & A (selling, general and administrative) and R&D (Research and
Development) costs for Equipment Sales and Related Services were $1,418,920 for
the three months ended June 30, 2008 versus $ 1,445,138 for the same period in
2007, for a decrease of $26,218 or 1.81%. The main reason for this was
decreased payroll and related costs of $48,047 for the three months ended June
30, 2008 as compared to the same period in 2007.

Research
& Development expenses for Equipment Sales and Related Services were
$614,979 for the three months ended June 30, 2008 vs. $611,554 for the same
period in 2007 which is an increase of $3,425 or 0.56%. 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 extended protection with a second patent when it is
completed.

Operating
revenues for the cryobanking segment, which includes both blood banking and
semen banking, decreased to $88,589 in 2008 from $106,860 in 2007, for a
decrease of $18,271 or 17.10%. The main reason for this was a decrease in Semen
Bank Storage fees and related items of $12,746 for the three months ended June
30, 2008 as compared to 2007.

Total
S G & A (selling, general and administrative) and R&D (Research and
Development) costs for the Cryobanking and related services segment were
$187,416 for the three months ended June 30, 2008 vs. $189,416 for the same
period in 2007, for a decrease of $2,000 or 1.05%.

Consolidated
Operating Expenses

The
total consolidated operating expenses including cost of sales for the second
quarter of 2008 were $1,780,838 versus $1,779,579 in 2007 for an increase of
$1,259.

-4-

---



INVESTMENT PORTFOLIO

Dividend
Income

Dividend
income earned on the Companys security portfolio for the three months ended
June 30, 2008 was $551,719 versus $519,171 for the same period in 2007 for an
increase of $32,548 or 6.27%.

Investment
Gains

Gains on the sale of
investments were $2,644,472 for the three months ended June 30, 2008 versus
$1,814,522 for the same period in 2007 for an increase of $829,950 or
45.74%.  For the current quarter, the
Company had a loss from the marking to the market of short positions of stocks
and put and call options of $ 33,259 versus a gain of $1,316,034 for the same
period in 2007. Interest expense net of interest income was $6,948 for the
three months ended June 30, 2008 versus $57,370 for the three months ended June
30, 2007 for a decrease of $50,422 or 87.89%.
Administrative expenses relating to portfolio investments were $21,156
in 2008 versus $ 11,783 for the same period in 2007 for an increase of $9,373
or 79.55%. A detailed description of investment policies and historical records
over the past 15 years was included in the recent 10-K filing for the year
ended December 31, 2007.

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
June 30, 2008 the Company had total assets of $104,274,718 with stockholders
equity of $59,016,283 as compared to total assets of $102,560,500 with
stockholders equity of $54,915,885 at December 31, 2007. At June 30, 2008, the
Company had a net unrealized gain on available for sale securities of
$39,726,302 and a deferred tax liability of $13,904,206 for net unrealized
capital gains on available-for-sale securities of $25,822,096. At December 31,
2007, the company had a net unrealized gain of $44,932,036 and a deferred tax
liability of $15,726,213 for net unrealized capital gains on available-for-sale
securities of $29,205,823.  These
amounts are included in the calculation of Total Stockholders Equity. At June
30 2008, the Companys available for sale securities had a fair market value of
$77,773,675 with short-term loans payable of $792,758 and a receivable due from
brokers of $6,894,986. The Company has current liabilities of $44,847,656 which
includes the deferred tax liability of $13,904,206 and the short term loans
payable of $792,758. The 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 15 years.  The Companys portfolio has maintained a net value above
historical cost for each of the past 94 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.

-5-

---



On July 14, 2008, The Board
of Directors voted to declare a dividend of $0.25 per quarter. The dividend
will be paid to shareholders of record on July 28, 2008.  The dividend will be paid Wednesday, August
27, 2008.  The Company last paid a
dividend in 1996.  It is the intention
of the company to maintain a quarterly dividend policy if net profits are
available to maintain the dividend.

The Company expects that the
distribution will be treated, for Federal income tax purposes, as a dividend.
However, this determination cannot be made until shortly after the close of the
taxable year at which time the Companys earnings and profits for 2008 will
be tabulated. It is possible, though not expected, depending on the results of
operations for 2008, that all or a portion of the distribution will be
classified as a return of capital. Any portion of the distribution that is
properly classified as a dividend for such Federal income tax purposes will
reduce the corporations undistributed personal holding company income and,
hence, will diminish its potential liability for personal holding company taxes

RESULTS OF OPERATIONS

Six months ended June 30,
2008 as compared with six months ended June 30, 2007:

Operating
Revenues and Expenses

For
the six months ended June 30, 2008, consolidated operating revenues decreased
to $977,500 from $1,051,200 for the same period in 2007, a decrease of $73,700
or 7.01%. This decrease was mainly the result of three Blood Volume Analyzers
being sold during the first six months of 2008 for a total of $195,000 versus
the sale of five Blood Volume Analyzers during the same period in 2007 for a
total of $325,500.

For
the six months ended June 30, 2008, revenue from Blood volume kit sales
increased by $83,778 or 18.32% to $541,197 from $457,419 for the same period in
2007. This can mainly be attributed to an increase in the number of kits sold
from 1,455 in 2007 to 1,634 during the current period for an increase of
12.30%.  A major reason for the increase
in the number of kits sold is that there were 56 Blood Volume Analyzers placed
at June 30, 2008 versus 50 at June 30, 2007. For the six months ended June 30,
2008, the Company provided 267 Volumex doses free of charge to facilities
utilizing the BVA-100 for research versus 198 during the same period in 2007.
Effective February 1, 2007, the Company raised prices by approximately 5% on
Blood Volume Kits.

The
following table provides gross margin information on Equipment Sales &
Related Services for the six months ended June 30, 2008 and 2007:

|                                         |  |                                              |         |                                                           |   |                                              |   |                                              |         |   |   |         |  
|---------------------------------------- |  | -------------------------------------------- | ------- | --------------------------------------------------------- | - | -------------------------------------------- | - | -------------------------------------------- | ------- | - | - | ------- | -
|Equipment
  Sales
  And Related Serivces |  | Kit Sales Six Months Ended
  June 30,
  2008 |         | Equipment Sales and OtherSix Months Ended
  June 30, 2008 |   | Total Six
  Months
  Ended
  June 30,
  2008 |   | Total Six
  Months
  Ended
  June 30,
  2007 |        
|                                         |  |                                              |         |                                                           |   |                                              |   |                                              |        
|Revenue                                  |  | $                                            | 541,197 |                                                           | $ | 250,581                                      |   | $                                            | 791,778 |   | $ | 832,684 |  
|Cost of Goods Sold                       |  |                                              | 240,268 |                                                           |   | 62,522                                       |   |                                              | 302,790 |   |   | 272,760 |  
|Gross Profit                             |  | $                                            | 300,929 |                                                           | $ | 188,059                                      |   | $                                            | 488,988 |   | $ | 559,924 |  
|Gross Profit  Percentage                 |  |                                              | 55.60   | %                                                         |   | 75.05                                        | % |                                              | 61.76   | % |   | 67.24   | %

There
were three Blood Volume Analyzers sold during the six months ended June 30,
2008 for a total of $195,000 versus five during the six months ended June 30,
2007 for a total of $325,500. The additional revenue of $55,581 for Equipment
Sales and Other consists almost entirely of shipping charges and service
contract revenue.

-6-

---



Total
S G & A (selling, general and administrative) and R&D (Research and
Development) costs for Equipment Sales and Related Services were $2,748,824 for
the six months ended June 30, 2008 versus $ 2,748,108 for the same period in
2007.

Research
& Development expenses for Equipment Sales and Related Services were
$1,174,288 for the six months ended June 30, 2008 vs. $1,159,744 for the same
period in 2007 which is an increase of $14,544 or 1.25%. 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 extended protection with a second patent when it is
completed.

Operating
revenues for the cryobanking segment, which includes both blood banking and
semen banking, decreased to $185,722 in 2008 from $218,516 in 2007, for a
decrease of $32,794 or 15.00%. The main reason for this was a decrease in Semen
Bank Storage fees and related items of $19,908 for the six months ended June
30, 2008 as compared to 2007.

Total
S G & A (selling, general and administrative) and R&D (Research and
Development) costs for the Cryobanking and related services segment were
$395,212 for the six months ended June 30, 2008 vs. $446,660 for the same
period in 2007, for a decrease of $51,448 or 13.02%.  The main reason for this decrease was a $31,928 reduction in payroll
and related expenses for the six months ended June 30, 2008 as compared to the
same period in 2007.

Consolidated
Operating Expenses

The
total consolidated operating expenses including cost of sales for the six
months ended June 30, 2008 were $3,470,552 versus $3,491,328 for the same
period in 2007 for a decrease of $20,776 or 0.59%.  This decrease in operating expenses is mostly due to a decrease
in payroll and related expenses of $62,597 for the six months ended June 30,
2008 as compared to the same period in 2007.

INVESTMENT PORTFOLIO

Dividend
Income

Dividend
income earned on the Companys security portfolio for the six months ended June
30, 2008 was $1,182,501 versus $1,230,600 for the same period in 2007 for a
decrease of $48,099 or 3.91%. The main reason for this decrease was the receipt
of a onetime special dividend of $156,200 during the six months ended June 30,
2007 on a stock that is no longer included in the Companys available for sale
securities.

Investment
Gains

Gains on the sale of
investments were $8,475,471 for the six months ended June 30, 2008 versus
$3,440,952 for the same period in 2007 for an increase of $5,034,519 or
146.31%.  For the current period, the
Company had a gain from the marking to the market of short positions of stocks
and put and call options of $2,142,782 versus a gain of $3,330,832 for the same
period in 2007. Interest expense net of interest income was $27,779 for the six
months ended June 30, 2008 versus $128,848 for the six months ended June 30,
2007 for a decrease of $101,069 or 78.44%.
Administrative expenses relating to portfolio investments were $42,570
in 2008 versus $ 23,921 for the same period in 2007 for an increase of $18,649
or 77.96%. A detailed description of investment policies and historical records
over the past 15 years was included in the recent 10-K filing for the year
ended December 31, 2007.

-7-

---



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
$20,508 and $9,185, respectively in total stock-based compensation expense
during the three months ended June 30, 2008 and June 30, 2007.

The Company recognized
$38,363 and $13,703, respectively in total stock-based compensation expense
during the six months ended June 30, 2008 and June 30, 2007.

Total unvested stock-based
compensation expense was $31,627 at June 30, 2008 and had a total weighted
average remaining term of 0.53 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 June 30, 2008. 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, 2007. There have been no significant changes in critical
accounting policies or management estimates since the year ended December 31,
2007.

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 net short positions in common stock up to
  15% of the value of the portfolio. The Companys net 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.

-8-

---



| |    |                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 3. | Investment in speculative
  issues, including short sales, maximum of 15%.                                                                                                                   
| |    |                                                                                                                                                                                              
| | 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 net
  short stock positions usually account for less than 10% of the assets of the
  company.
| |    |                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | 5. | In the event
  of a merger, the Company will elect to receive shares in the new company. In
  the event of a cash only offer, the Company will receive cash and be forced
  to sell it stock.

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 8 to 10 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.

-9-

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

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

When
Blood Volume Analyzer equipment has been sold to a customer, the Company offers
a one year warranty on the product, which covers all mechanical failures. This
one year warranty is effective on the date of sale of the equipment. After the
one year period expires, customers may purchase a service contract through the
Company, which is usually offered in one-year, three year or five year
increments.  These service contracts are
billed quarterly and therefore 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 15% 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 June 30, 2008, unrealized
gains were $45,426,056 and unrealized losses were ($5,699,754) on available for
sale securities for a ratio of 8 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 June 30, 2008, 3.18% of the
market value of the companys available for sale securities is made up of
preferred stock.

At June 30, 2008, 96.78% 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 77 separate common and preferred stocks. As
of June 30, 2008 there were three holdings of common stock which comprised
47.54% of the total market value of the available for sale investments.

-11-

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DAXOR CORPORATION
SUMMARY OF INVESTMENTS
AS AT JUNE 30, 2008

|                      |  |      |            |                   |   |                                  |  |   |            |  
|--------------------- |  | ---- | ---------- | ----------------- | - | -------------------------------- |  | - | ---------- | -
|                      |  | COST |            | FAIR MARKET VALUE |   | TOTAL NET UNREALIZED GAIN (LOSS) | 
|                      |  |      |            |                   |   |                                  | 
|TOTAL COMMON STOCK    |  | $    | 35,485,703 |                   | $ | 75,273,027                       |  | $ | 39,787,324 |  
|TOTAL PREFERRED STOCK |  |      | 2,495,900  |                   |   | 2,475,728                        |  |   | (20,172    | )
|                      |  |      |            |                   |   |                                  |  |   |            |  
|TOTAL EQUITIES        |  |      | 37,981,603 |                   |   | 77,748,755                       |  |   | 39,767,152 |  
|                      |  |      |            |                   |   |                                  |  |   |            |  
|TOTAL BONDS           |  |      | 65,770     |                   |   | 24,920                           |  |   | (40,850    | )
|                      |  |      |            |                   |   |                                  |  |   |            |  
|TOTAL PORTFOLIO       |  | $    | 38,047,373 |                   | $ | 77,773,675                       |  | $ | 39,726,302 |  
|                      |  |      |            |                   |   |                                  |  |   |            |  

DAXOR CORPORATION
SUMMARY OF INVESTMENTS
AS AT JUNE 30, 2007

|                      |  |      |            |                   |   |                                  |  |   |            | 
|--------------------- |  | ---- | ---------- | ----------------- | - | -------------------------------- |  | - | ---------- | 
|                      |  | COST |            | FAIR MARKET VALUE |   | TOTAL NET UNREALIZED GAIN (LOSS) | 
|                      |  |      |            |                   |   |                                  | 
|TOTAL COMMON STOCK    |  | $    | 22,743,226 |                   | $ | 68,468,911                       |  | $ | 45,725,685 | 
|TOTAL PREFERRED STOCK |  |      | 832,418    |                   |   | 1,158,250                        |  |   | 325,832    | 
|                      |  |      |            |                   |   |                                  |  |   |            | 
|TOTAL EQUITIES        |  |      | 23,575,644 |                   |   | 69,627,161                       |  |   | 46,051,517 | 
|                      |  |      |            |                   |   |                                  |  |   |            | 
|TOTAL BONDS           |  |      | 184,646    |                   |   | 385,920                          |  |   | 201,274    | 
|                      |  |      |            |                   |   |                                  |  |   |            | 
|TOTAL PORTFOLIO       |  | $    | 23,760,290 |                   | $ | 70,013,081                       |  | $ | 46,252,791 | 
|                      |  |      |            |                   |   |                                  |  |   |            | 

Summary of Proceeds Received
and Market Valuation at 06/30/08
Put and Call Options

|                                                            |           |                                            |   |                                                                     |  |                                                       |            |                              |   |                                                          |  |   |           |  |   |          
|----------------------------------------------------------- | --------- | ------------------------------------------ | - | ------------------------------------------------------------------- |  | ----------------------------------------------------- | ---------- | ---------------------------- | - | -------------------------------------------------------- |  | - | --------- |  | - | ---------
|Total Proceeds
  Received on
  open positions
  at 01/01/08 |           | Sale of
  Options from
  01/01/08-06/30/08 |   | Expirations and
  Assignments of
  Options from
  01/01/08-06/30/08 |  | Proceeds
  Received on
  open positions
  at 06/30/08 |            | Market
  Value at
  06/30/08 |   | Unrealized
  Appreciation
  (Depreciation)
  at 06/30/08
|                                                            |           |                                            |   |                                                                     |  |                                                       |            |                              |   |                                                         
|$                                                           | 7,645,833 |                                            | $ | 13,119,694                                                          |  | $                                                     | 12,116,699 |                              | $ | 8,648,828                                                |  | $ | 6,295,900 |  | $ | 2,352,928

-12-

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Summary of Proceeds Received
and Market Valuation at 06/30/07
Put and Call Options

|                                                            |           |                                            |   |                                                                     |  |                                                       |           |                              |   |                                                          |  |   |           |  |   |          
|----------------------------------------------------------- | --------- | ------------------------------------------ | - | ------------------------------------------------------------------- |  | ----------------------------------------------------- | --------- | ---------------------------- | - | -------------------------------------------------------- |  | - | --------- |  | - | ---------
|Total Proceeds
  Received on
  open positions
  at 01/01/07 |           | Sale of
  Options from
  01/01/07-06/30/07 |   | Expirations and
  Assignments of
  Options from
  01/01/07-06/30/07 |  | Proceeds
  Received on
  open positions
  at 06/30/07 |           | Market
  Value at
  06/30/07 |   | Unrealized
  Appreciation
  (Depreciation)
  at 06/30/07
|                                                            |           |                                            |   |                                                                     |  |                                                       |           |                              |   |                                                         
|$                                                           | 2,846,667 |                                            | $ | 6,874,390                                                           |  | $                                                     | 4,669,592 |                              | $ | 5,053,465                                                |  | $ | 1,753,485 |  | $ | 3,299,980

Item 4. Controls and
Procedures

As of June 30, 2008, 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.

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.

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, 2007 as filed
with the Securities and Exchange Commission on March 31, 2008. A change in
Medicare and Medicaid reimbursement rates was 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: July 31, 2008 |  | By: |  | /s/ JOSEPH FELDSCHUH, M.D.             
|                    |  |     |  |                                        
|                    |  |     |  | JOSEPH FELDSCHUH, M.D.,                
|                    |  |     |  | President and Chief
  Executive Officer
|                    |  |     |  |                                        
|DATE: July 31, 2008 |  | By: |  | /s/ DAVID FRANKEL                      
|                    |  |     |  |                                        
|                    |  |     |  | DAVID FRANKEL                          
|                    |  |     |  | Chief Financial Officer                

-15-

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