SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549   FORM 10-Q Quarterly Report Under Section 13 or 15(d)
of the
Securities Act of 1934 FOR QUARTER ENDED JUNE 30, 2006
Commission File Number 0-12248 DAXOR CORPORATION
(Exact Name as Specified in its Charter) New York
  (State or Other Jurisdiction of
  Incorporation or Organization)

13-2682108
  (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  o
Accelerated Filer  o
Non-accelerated Filer
  x Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes
  o
               
No  x Indicate the number of shares outstanding of each of the issuers classes of
common stock, as of the latest practicable date. CLASS

4,627,226 OUTSTANDING
  AT July 31, 2006COMMON STOCK
  PAR VALUE: $.O1 per share     DAXOR CORPORATION AND SUBSIDIARY

TABLE OF CONTENTS

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

2Condensed Consolidated Balance
Sheets at
  June 30, 2006 and December 31, 2005

F-1Condensed Consolidated Statements of Operations for
the three and six
  months ended June 30, 2006 and 2005  - (Unaudited)

F-2Condensed Consolidated Statements of Cash Flows for
the six months
  ended June 30, 2006 and 2005 - (Unaudited)

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

F-4-12Item 2.
Managements Discussion
and Analysis of
  Financial Condition and Results of Operations

3-10Item 3.
Quantitative and Qualitative
Disclosures
  about Market Risk

11-12Item 4.
Controls and
Procedures

13PART
  II.    OTHER INFORMATIONItem 1.
Legal Proceedings

14Item 1A.
Risk Factors

14Item 2.
Unregistered Sales of Equity
Securities and
  Use of Proceeds

14Item 3.
Defaults Upon Senior
Securities

14Item 4.
Submission of Matters to a Vote
of Security
  Holders

14Item 5.
Other Information

14Item 6.
Exhibits

14-1-

DAXOR CORPORATION AND SUBSIDIARY

PART
  I     FINANCIAL INFORMATIONItem 1.
Financial
  Statements (Unaudited)Index to
  Financial StatementsCondensed
  Consolidated Balance Sheets at June 30, 2006 and December 31, 2005

F-1Condensed
  Consolidated Statements of Operations for the three and six months ended June
  30, 2006 and 2005 - (Unaudited)

F-2Condensed
  Consolidated Statements of Cash Flows for the six months ended June 30, 2006
  and 2005 - (Unaudited)

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

F-4-12-2-

DAXOR
CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

DAXOR CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS

UNAUDITED
  June 30,
  2006

AUDITED
  December 31,
  2005ASSETSCURRENT ASSETSCash and cash
equivalents

$
28,646

$
93,003Available-for-sale
securities


59,260,152


57,246,006Other receivable


759,564


1,018,936Accounts receivable, net of
$34,163 in 2006 and $41,300 in 2005


219,701


131,592Inventory


135,830


191,861Prepaid expenses and other
current assets


146,775


230,632Total Current Assets


60,550,668


58,912,030PROPERTY AND EQUIPMENT,
NET


725,147


620,865OTHER ASSETS


32,158


32,158Total Assets

$
61,307,973

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

$
677,345

$
512,024Loans payable


5,619,317


7,083,372Other Liabilities


759,564


1,302,797Put and call options, at fair
market value


1,479,372


772,803Deferred revenue


11,324


90,468Deferred taxes


12,058,720


11,058,788Total Current
Liabilities


20,605,642


20,820,252COMMITMENTS AND
CONTINGENCIES





STOCKHOLDERS
EQUITYCommon stock, $.01 par value
Authorized - 10,000,000 shares Issued - 5,316,550 sharesOutstanding - 4,628,026 and 4,630,426
shares at June 30, 2006
  and December 31, 2005,respectively


53,165


53,165Additional paid in
capital


10,350,382


10,303,901Accumulated other comprehensive
income


22,394,766


20,537,750Retained earnings


13,721,025


13,625,687Treasury stock, at
cost


(5,817,007
)

(5,775,702
)Total Stockholders
Equity


40,702,331


38,744,801Total Liabilities and
Stockholders Equity

$
61,307,973

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

F-1

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

June 30,
  2006

RESTATED
  June 30,
  2005Revenues

$
389,322

$
287,690Cost of sales


209,001


131,324Gross profit


180,321


156,366Selling, general and
  administrative expenses


1,705,927


1,353,427Operating loss


(1,525,606
)

(1,197,061
)Other income (expense):Investment income (loss),
  net


1,746,073


(8,727
)Interest expense, net


(88,809
)

(61,744
)Other income


2,662


2,465Total other income
  (expense)


1,659,926


(68,006
)Net income (loss) before
  income taxes


134,320


(1,265,067
)Income tax expense


0


0Net income (loss)

$
134,320

$
(1,265,067
)Weighted average number of
  shares outstanding - basic and diluted


4,629,626


4,644,126Net income (loss) per
  common equivalent share - basic and diluted

$
0.03

$
(0.27
)F-2

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

RESTATEDJune 30,
  2006

June 30,
  2005Revenues

$
731,468

$
588,046Cost of sales


327,874


314,670Gross profit


403,594


273,376Selling, general and
administrative
  expenses


3,201,319


2,708,494Operating loss


(2,797,725
)

(2,435,118
)Other income
(expense):Investment income,
net


3,073,523


797,314Interest expense, net


(185,790
)

(103,712
)Other income


5,330


6,322Total other income
(expense)


2,893,063


699,924Net income (loss) before
income taxes


95,338


(1,735,194
)Income tax expense


0


0Net income (loss)

$
95,338

$
(1,735,194
)Weighted average number of
shares
  outstanding - basic and diluted


4,630,026


4,639,293Net income (loss) per common
equivalent
  share - basic and diluted

$
0.02

$
(0.37
)See
accompanying notes to condensed consolidated financial statements.

F-2

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

RESTATEDJune 30,
  2006

June 30,
  2005CASH FLOWS FROM OPERATING
ACTIVITIES:Net income (loss)

$
95,338

$
(1,735,194
)Adjustments to reconcile net
loss to net
  cash used in operating activities:Depreciation
& amortization


74,311


46,299Provision for
doubtful accounts


(7,137
)

Non-cash
compensation expense associated
  with employee stock compensation plans


46,481


0Gains on sale
of investments, net


(1,490,210
)

(771,956
)Mark to market
adjustments on options &
  short sales


(583,679
)

1,003,389Change in assets and
liabilities:Increase in
accounts receivable


(80,972
)

(101,693
)Decrease
(Increase) in prepaid expenses
  & other current assets


83,857


(12,347
)Decrease in
inventory


56,031


Decrease in
accounts payable and accrued
  liabilities


165,321


39,129Increase
(decrease) in other liabilities


(543,233
)

6,435,603Increase
(decrease) in deferred revenue


(79,144
)

143,535Net cash (used in) provided by
operating
  activities


(2,263,036
)

5,046,765CASH FLOWS FROM INVESTING
ACTIVITIES:Purchase of property and
equipment


(178,593
)

(150,911
)Unsettled short sales
receivable


259,372


(5,916,250
)Purchase of
investments


(6,018,036
)

(4,609,706
)Purchases of put and call
options


(14,250
)

(23,442
)Sale of investments


6,468,366


1,647,535Sales of put and call
options


3,187,180


1,208,677Net cash provided by (used in)
investing
  activities


3,704,039


(7,844,097
)CASH FLOWS FROM FINANCING
ACTIVITIES:Proceeds from margin
loans


8,945,020


6,676,111Repayment of margin
loans


(10,409,075
)

(4,435,708
)Purchase of treasury
stock


(41,305
)

0Proceeds from sale of treasury
stock


0


551,850Net cash (used in) provided by
financing
  activities


(1,505,360
)

2,792,253Net increase in cash and cash
equivalents


(64,357
)

(5,079
)Cash and cash equivalents at
beginning of
  period


93,003


5,079Cash and cash equivalents at
end of period

$
28,646

$
0Supplementary
DisclosuresInterest paid in the
period

$
187,014

$
75,930Income taxes paid in the
period

$
0

$
0See accompanying notes to
condensed consolidated financial statements.

F-3

DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2006 AND 2005

(1) BUSINESS AND SIGNIFICANT
ACCOUNTING POLICIES

BUSINESS

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

SIGNIFICANT ACCOUNTING
POLICIES

Basis of Presentation

The
accompanying unaudited condensed consolidated financial statements reflect all
adjustments of a normal recurring nature, which are, in the opinion of
management, necessary for a fair statement of the financial position and results
of operations for the interim periods presented. The condensed consolidated
financial statements are unaudited and are subject to such year-end adjustments
as may be considered appropriate and should be read in conjunction with the
historical consolidated financial statements of Daxor Corporation for the years
ended December 31, 2005, 2004 and 2003, included in Daxor Corporations Annual
Report on Form 10-K for the fiscal year ended December 31, 2005. Operating
results for the three and six month periods ended June 30, 2006 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 2006.

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

Principles of Consolidation

The
condensed consolidated financial statements include the accounts of Daxor
Corporation and Scientific Medical Systems Corp, a wholly-owned subsidiary. All
inter-company transactions and balances have been eliminated in consolidation.
F-4

DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2006 AND 2005 (Continued)

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

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

Cash and Cash Equivalents

Cash
and cash equivalents include time deposits and short term investments with
original maturities of three months or less. Normally, these short term
investments consist of U.S. Treasury Bills. At June 30, 2006 and 2005, there
were no short term investments included as cash equivalents.

Available-for-Sale Securities

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

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

DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2006 and 2005 (Continued)

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

Put and Call Options

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

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

Investment Goals, Strategies and Policies

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

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

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

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

a.
The use of Call Options. Covered options can be sold up to a maximum of 20% of the
value of the portfolio. This provides extra income in addition to dividends
received from the companys investments. The risk of this strategy is that
investments 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 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. The use of put options is a conservative strategy
  which enables the company to buy stocks at a lower price than the prevailing
  market. If the stock does not go to the put exercise price, then the company
  records the proceeds from the sale as income. If the put is exercised, the
  company obtains its stock at a lower price and has the additional benefit of
  a lower basis cost because the option price is incorporated into the cost
  basis.c.
Speculative
Short Sales/Short Options. The company limits its speculative transaction to
5% of the portfolio value of the assets. The company may sell uncovered calls
on certain stocks. If the stock price does not rise to the price of the
calls, the option is not exercised, and the company records the proceeds from
the sale of the call as income. If the call is exercised, the company is then
short the stock. The company then has the choice of covering the short stock,
or selling a put against its short stock. If the put is exercised, then the
short sale is covered. The companys current accounting policy is to mark to
the market each quarter any short positions, and include it in the income
statement. While the company may have so-called speculative positions equal
to 5% of its accounts, in actual practice the short stock positions usually
account for less than 5% of the assets of the company.DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2006 and 2005 (Continued)

The
income derived from these investments has been essential to offset the research
and development, operating and marketing expenses of developing the Blood
Volume Analyzer. The Company has followed a conservative policy of assuring
adequate liquidity without the sudden necessity of raising additional capital.
The securities in the Companys portfolio are selected to provide stability of
both dividend income and capital. The Company has been able to achieve
financial stability because of these returns, which covered a significant portion
of the Companys continuing losses from operations. The Companys investment
policy is reviewed at least once yearly by the Board of Directors and the Audit
Committee. Individual investment decisions are made solely by Dr. Joseph
Feldschuh, CEO, who devotes approximately 5 to 7.5 hours per week to this
activity. He is assisted by a single part-time employee. No other member of the
Company is involved in individual investment decisions.

Revenue Recognition

The
Company recognizes operational revenues from several sources. The first source
is the sale of equipment, the Blood Volume Analyzer, to customers. The second
source is the sale and associated shipping revenues of single-use radio isotope
tracer 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 radio isotope tracer doses (Volumex) that are used in
conjunction with the Blood Volume Analyzer are recognized as revenue in the
period in which the sale occurs.

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

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 enacted tax rates in effect for the year in
which the differences are expected to be recovered or settled. The effect on
deferred tax assets and liabilities of changes in tax rates is recognized in
the statement of operations in the period in which the enactment rate changes.
Deferred tax assets and liabilities are reduced through the establishment of a
valuation allowance at such time as, based on available evidence, it is more
likely than not that the deferred tax assets will not be realized.

Comprehensive Income (Loss)

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

F-5

DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2006 and 2005 (Continued)

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 warranteed by the original third
party manufacturers. After the one year period expires, customers may purchase
a service contract through the Company, which is usually offered in one-year
increments. To date, the Company has not experienced any major mechanical
failures on any equipment sold. In addition, the majority of the potential
liability would revert to the original manufacturer. Due to this history, a
liability has not been recorded with respect to product or warranty liability.

Historically,
service contracts were recorded by the Company as deferred revenue and were
amortized into income in the period in which they were earned. Effective
January 1, 2006, the company offers service contracts priced on an annual basis
which are billed quarterly and revenue is earned in the same calendar quarter
that it is billed. As at June 30, 2006 and December 31, 2005, deferred revenue
pertaining to the historical service contracts was $2,250 and $6,583
respectively.

Stock Based Compensation

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

Under
the modified prospective transition method, awards that are granted, modified
or settled after the date of adoption will be measured and accounted for in
accordance with SFAS 123R. Compensation cost for awards granted prior to, but
not vested, as of the date SFAS 123R is adopted would be based on the grant
date attributes originally used to value those awards for pro forma purposes
under SFAS 123. The Companys condensed consolidated financial statements as
of, and for the six months ended June 30, 2006, reflect the impact of SFAS No.
123R. In accordance with the modified prospective transition method, the
Companys consolidated financial statements for periods prior to January 1,
2006 have not been restated to reflect, and do not include, the impact of SFAS
123R.

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

At
June 30, 2006, the Company has one stock-based compensation plan, the 2004
Stock Option Plan. This Plan allows for the issuance of a maximum of 200,000
shares of common stock or 5% of the outstanding balance of shares of the
Company on the date of grant, whichever is greater.

At
June 30, 2006, there is a total unvested stock-based compensation expense of $37,184 and a total weighted average remaining term of .49 years. Total
share-based compensation expense recognized in the Statement of Operations
aggregated $46,481 for the six months ended June 30, 2006. Due to the Companys
history of losses, a tax benefit relating to this expense would not likely be
realized by the Company. Accordingly, the Company has fully reserved against
this tax benefit and no tax effect appears in these financial statements.

DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2006 and 2005 (Continued)

Prior
to the adoption of SFAS 123R, the Company accounted for stock options issued
under its plans under APB Opinion No. 25, Accounting for Stock Issued to Employees,
and related interpretations. If compensation cost had been determined based on
fair values at the date of grant under SFAS 123, Accounting for Stock-Based
Compensation, pro-forma net loss and loss per share would have been as
follows:

Restated Three
  Months ended
  June 30, 2005

Restated Six
  Months ended
  June 30, 2005Net loss as reported

$
(1,265,067
)
$
(1,735,194
)Deduct: Total stock-based
employee compensation expense determined
  under the fair value based method for all awards, net of the related tax
  effects


(27,255
)

(58,566
)Pro forma net loss

$
(1,292,322
)
$
(1,793,760
)Net loss per common
share:Basic and
diluted - as reported

$
(0.27
)
$
(0.37
)Basic and
diluted  proforma

$
(0.28
)
$
(0.39
)SFAS
123R requires companies to estimate the fair value of share-based awards on the
date of grant using an option-pricing model. The value of the portion of the
award that is ultimately expected to vest is recognized as expense in the
Companys condensed consolidated statement of operations over the requisite
service periods. Share-based compensation expense for share-based awards
granted prior to, but not yet vested as of December 31, 2005, is based on the
grant date fair value estimated in accordance with the provisions of SFAS 123.
For options granted subsequent to December 31, 2005, compensation expense is
based on the grant date fair value estimated in accordance with SFAS 123R.
Because share-based compensation expense is based on awards that are ultimately
expected to vest, share-based compensation expense will be reduced to account
for estimated forfeitures. SFAS 123R requires forfeitures to be estimated at
the time of grant and revised, if necessary, in subsequent periods if actual
forfeitures differ from those estimates. Under SFAS 123, in the proforma
information required for periods prior to January 1, 2006, the Company
accounted for forfeitures as they occurred. Based on the Companys option history,
no forfeiture reserve has been established to date.

DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2006 and 2005 (Continued)

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

The
following table represents stock option activity for the six months ended June
30, 2006:

Number
  of
  Shares

Exercise
  Price

Remaining
  Contract LifeOutstanding options at
  beginning of period


78,100

$
19.44Granted


23,400


21.44Exercised





Canceled


(300
)

21.45Outstanding options at end
  of period


101,200

$
19.90


1.76
  Yrs.Outstanding
  exercisable at end of period


72,100

$
19.75


1.92
  Yrs.DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2006 and 2005 (Continued)

Reclassifications and Restatements

Certain reclassifications have been made to the Companys June 30, 2005
condensed consolidated financial statements to conform with the presentation of
the June 30, 2006 condensed consolidated financial statements.

The
Company has corrected reporting errors in (restated) its June 30, 2005
financial information as originally released. These errors arose from the
misapplication of generally accepted accounting principles and are described as
follows:

1.
The first
  change in accounting principle is the appropriate valuation and
  classification of options and short sale activities. In compliance with SFAS
  No. 133 - Accounting for Derivate
  Instruments and Hedging Activities, the cost of these transactions
  has been marked-to-market and the adjustment has been reflected in the
  Statement of Operations. Under previous reporting, these options and short
  sale positions were not marked up/down to the fair market value at the time
  of financial reporting, but rather were carried at cost until the positions
  were closed. The impact of this restatement is indicated by (1) below.2.
The second change
  in accounting principle is the appropriate capitalization and valuation of
  equipment that has been placed in-service with customers as either a loan
  or rental. The Company has properly capitalized these equipment costs and
  correspondingly, depreciated them over the estimated useful lives of the
  equipment. Under previous reporting, the Company expensed the cost of the
  equipment at the time the equipment was manufactured. The impact of this
  restatement is indicated by (2) below.3.
The third change
  in accounting principle relates to Revenue Recognition. Previously, the
  Company reported its cryobanking revenue under the cash method. As restated,
  these revenues are now appropriately reported under the accrual method,
  giving rise to a deferred income account, and proper matching of income and
  expense. The impact of this restatement is indicated by (3) below.4.
The fourth
  and final change is the reclassification (regrouping) of certain account
  balances in order to present comparable financial statement information for
  all years presented. The largest reclassification pertained to labor costs that
  were categorized in Cost of Sales and Selling, General and
  Administrative.The impact
  of these restatements to the three months ended June 30, 2005 is summarized
  as follows and is indexed as referenced above:Impact of
  Restatement
  Inccome (Expense)

Total Balances
  As RestatedRevenues(1)


$
0(2)



0(3)



25,602(4)



(8,571
)Total


$
17,031



$
287,690Cost of
  sales(1)


$
0(2)



22,668(3)



0(4)



133,228Total


$
155,896



$
131,324Selling,
  general and administrative(1)


$
0(2)



0(3)



0(4)



(148,242
)Total


$
(148,242
)


$
1,353,427Operating
  income (loss)(1)


$
0(2)



22,668(3)



25,602(4)



(23,585
)Total


$
24,685



$
(1,197,061
)Other income
  (expense)(1)


$
(182,673
)(2)



0(3)



0(4)



(15,013
)Total


$
(197,686
)


$
(68,006
)Net income (loss)(1)


$
(182,673
)(2)



22,668(3)



25,602(4)



(38,598
)Total


$
(173,001
)


$
(1,265,067
)EPS - basic
  and diluted(1)


$
(0.04
)(2)



0.01(3)



0.01(4)



(0.01
)Total


$
(0.03
)


$
(0.27
)F-7

DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2006 and 2005 (Continued)

The impact
  of these restatements to the six months ended June 30, 2005 is summarized as
  follows and is indexed as referenced above:Impact of
  Restatement
  Income (Expense)

Total Balances
  As RestatedRevenues(1)


$
0(2)



0(3)



29,375(4)



2,099Total


$
31,474



$
588,046Cost of
  sales(1)


$
0(2)



11,972(3)



0(4)



502,927Total


$
514,899



$
314,670Selling,
  general and administrative(1)


$
0(2)



0(3)



0(4)



(534,234
)Total


$
(534,234
)


$
2,708,494Operating
  income (loss)(1)


$
0(2)



11,972(3)



29,375(4)



(29,208
)Total


$
12,139



$
(2,435,118
)Other income
  (expense)(1)


$
(305,838
)(2)



0(3)



0(4)



1,280Total


$
(304,558
)


$
699,924Net income
  (loss)(1)


$
(305,838
)(2)



11,972(3)



29,375(4)



(27,928
)Total


$
(292,419
)


$
(1,735,194
)EPS - basic
  and diluted(1)


$
(0.07
)(2)



0.01(3)



0.01(4)



(0.01
)Total


$
(0.06
)


$
(0.37
)DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2006 and 2005 (Continued)

(2)
AVAILABLE-FOR-SALE SECURITIES

Upon adoption of SFAS No. 115 - Accounting
for Certain Investments in Debt and EquitySecurities, management
has determined that the companys portfolio is best characterized as
Available-For-Sale. SFAS No. 115 requires these securities to be recorded at
their fair market values, with the offsetting unrealized holding gains or
losses being recorded as Comprehensive Income (Loss) in the Equity section of
the Balance Sheet. The adoption of this pronouncement has resulted in an
increase in the carrying value of the companys available-for-sale securities,
as at June 30, 2006 and December 31, 2005, of approximately 138.9% and 123.2%,
respectively, over its historical cost.

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

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, 2006Type of
  security

Cost

Fair Value

Unrealized
  Holding gains

Unrealized
  holding lossesEquity

$
24,622,020


59,071,562


34,809,762


(360,220
)Debt


184,646


188,590


19,569


(15,625
)Total

$
24,806,666


59,260,152


34,829,331


(375,845
)December 31, 2005Type of
  security

Cost

Fair Value

Unrealized 
  holding gains

Unrealized holding lossesEquity

$
25,497,586


57,148,830


32,435,561


(784,317
)Debt


151,882


97,176


4,570


(59,276
)Total

$
25,649,468


57,246,006


32,440,131


(843,593
)At June 30, 2006 the securities held by the Company had a market value of
$59,260,152 and a cost basis of $24,806,666 resulting in a net unrealized gain
of $34,453,486 or 138.9% of cost.

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

At June 30, 2006 and December 31, 2005, marketable securities primarily consist
of preferred and common stocks of utility companies, and are valued at fair
value. Debt securities consist of Corporate Bonds & Notes. As at June 30,
2006, these items have a cost of $184,646 and are scheduled to mature at
various dates through May 2048.

F-8

DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2006 AND 2005 (Continued)

(3) SEGMENT
ANALYSIS

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

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

June 30, 2006Equipment Sales
  &
  Related Services

Cryobanking &
  Related
  Services

Investment
  Activity

TotalRevenues

$
287,894

$
101,428

$


$
389,322Cost of sales


(199,211
)

(9,790
)




(209,001
)Selling, general and
administrative
  expenses


(1,599,806
)

(106,121
)




(1,705,927
)Operating loss


(1,511,123
)

(14,483
)




(1,525,606
)Investment income,
netDividends








485,729


485,729Gain on sales
of securities, net








764,338


764,338Mark to market
of short positions








509,092


509,092Administrative
expenses relating to
  portfolio investments








(13,086
)

(13,086
)Total
Investment income, net








1,746,073


1,746,073Interest expense, net





(197
)

(88,612
)

(88,809
)Other income


2,662








2,662Income (loss) before income
taxes


(1,508,461
)

(14,680
)

1,657,461


134,320Income tax expense











Net income (loss)

$
(1,508,461
)
$
(14,680
)
$
1,657,461

$
134,320Total assets

$
1,168,074

$
120,183

$
60,019,716

$
61,307,973F-9

DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2006 AND 2005 (Continued)

The following
table summarizes the results of each segment described above for the three
months ended June 30, 2005.

June 30, 2005Restated
  Equipment Sales
  &
  Related Services

Restated
  Cryobanking &
  Related
  Services

Restated
  Investment
  Activity

Restated
  TotalRevenues

$
166,277

$
121,413

$


$
287,690Cost of
  sales


(130,475
)

(849
)




(131,324
)Selling,
  general and administrative expenses


(1,217,297
)

(136,130
)




(1,353,427
)Operating loss


(1,181,495
)

(15,566
)




(1,197,061
)Investment
  incomeDividends








491,232


491,232Gain on sales
of securities, net








382,315


382,315Mark to market
of short positions








(882,719
)

(882,719
)Administrative
expenses relating to
  portfolio investments








445


445Total
  Investment income, net








(8,727
)

(8,727
)Interest income (expense), net





33


(61,777
)

(61,744
)Other income


2,465








2,465Income
  (loss) before income taxes


(1,179,030
)

(15,533
)

(70,504
)

(1,265,067
)Income tax
  expense











Net income
  (loss)

$
(1,179,030
)
$
(15,533
)
$
(70,504
)
$
(1,265,067
)Total assets

$
866,147

$
285,632

$
67,512,992

$
68,664,771DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2006 AND 2005 (Continued)

The following
table summarizes the results of each segment described above for the six months
ended June 30, 2006.

June 30, 2006Equipment Sales
  &
  Related Services

Cryobanking &
  Related
  Services

Investment
  Activity

TotalRevenues

$
500,472

$
230,996

$


$
731,468Cost of
  sales


(308,995
)

(18,879
)




(327,874
)Selling,
  general and administrative expenses


(2,983,432
)

(217,887
)




(3,201,319
)Operating loss


(2,791,955
)

(5,770
)




(2,797,725
)Investment
  income, netDividends








1,036,551


1,036,551Gain on sales
of securities, net








1,474,539


1,474,539Mark to market
of short positions








583,679


583,679Administrative
expenses relating to
  portfolio investments








(21,246
)

(21,246
)Total
Investment income, net








3,073,523


3,073,523Interest
  expense, net





(257
)

(185,533
)

(185,790
)Other income


5,330








5,330Income
  (loss) before income taxes


(2,786,625
)

(6,027
)

2,887,990


95,338Income tax
  expense











Net income
  (loss)

$
(2,786,625
)
$
(6,027
)

2,887,990

$
95,338Total assets

$
1,168,074

$
120,183

$
60,019,716

$
61,307,973F-9

DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2006 AND 2005 (Continued)

The following
table summarizes the results of each segment described above for the six months
ended June 30, 2005.

June 30, 2005Restated
  Equipment Sales
  &
  Related Services

Restated
  Cryobanking &
  Related
  Services

Restated
  Investment
  Activity

Restated
  TotalRevenues

$
338,990

$
249,056

$


$
588,046Cost of
  sales


(294,458
)

(20,212
)




(314,670
)Selling,
  general and administrative expenses


(2,482,537
)

(225,957
)




(2,708,494
)Operating income (loss)


(2,438,005
)

2,887





(2,435,118
)Investment
  incomeDividends








1,029,352


1,029,352Gain on sales
of securities, net








771,351


771,351Mark to market
of short positions








(1,003,389
)

(1,003,389
)Administrative
expenses relating to
  portfolio investments





Total
Investment income, net








797,314


797,314Interest income (expense), net





194


(103,906
)

(103,712
)Other income


6,322








6,322Income
  (loss) before income taxes


(2,431,683
)

3,081


693,408


(1,735,194
)Income tax
  expense











Net income
  (loss)

$
(2,431,683
)
$
3,081

$
693,408

$
(1,735,194
)Total assets

$
866,147

$
285,632

$
67,512,992

$
68,664,771DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2006 AND 2005 (Continued)

4) PROPERTY
AND EQUIPMENT

Property
and equipment as at June 30, 2006 and December 31, 2005, consists of:

June 30, 2006

December
  31, 2005Machinery
  and equipment

$
1,468,234

$
1,297,120Furniture
  and fixtures


335,649


330,593Leasehold
  improvements


295,530


295,530Total Cost

$
2,099,413

$
1,923,243Accumulated
  depreciation


(1,374,266
)

(1,302,378
)Property and
  equipment, net

$
725,147

$
620,865Depreciation
expense for the three months ended June 30, 2006 and 2005 was $ 39,660 and
$25,373, respectively. Depreciation expense for the six months ended June 30,
2006 and 2005 was $74,311 and $46,299, respectively.

(5) LOANS
PAYABLE

At
June 30, 2006 and December 31, 2005, the Company has a bank note payable of
$1,500,000 with an annual option to renew. This note is classified as a current
liability. The note bears interest at approximately 5.95% and is secured by
certain marketable securities of the Company. The interest expense on this note
for the three months ended June 30, 2006 and 2005 was $22,560 and $16,330,
respectively. The interest expense on this note for the six months ended June
30, 2006 and 2005 was $42,760 and $27,976, respectively.

Short-term
debt to brokers (margin debt), is secured by the Companys marketable
securities, and totaled $4,119,317 at June 30, 2006 and $ 5,583,372 at December
31, 2005.

(6) PUT AND
CALL OPTIONS

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

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

The following
summarizes the Companys Put and Call Options as of June 30, 2006 and December
31, 2005.

Put and
  Call Options

Selling price

Fair Market value

Unrealized 
  Gain/(Loss)June 30,
  2006

2,274,161

1,479,372

794,789December
  31, 2005

983,912

772,803

211,109DAXOR CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2006 AND 2005 (Continued)

(7) CURRENT
INCOME TAXES

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

(8) DEFERRED
INCOME TAXES

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

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

At
June 30, 2006, the Company has approximately $16.7 million in net operating
loss carryforwards. These losses will expire between the years ending December
31, 2015 and 2025 and give rise to deferred tax assets. However, a valuation
allowance has been recorded for the entire deferred tax asset as a result of
uncertainties regarding the realization of the asset due to the history of
losses and the variability of operating results.

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.

The
deferred tax computations at June 30, 2006 and December 31, 2005, computed at
federal statutory rates of 35%, are as follows:

2006

2005Deferred tax assets:Net operating loss carry
forwards

$
5,878,673

$
5,858,218Valuation allowance


(5,878,673
)

(5,858,218
)Total deferred tax
assets

$
0

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

$
12,058,720

$
11,058,788(9) RESEARCH
AND DEVELOPMENT COSTS

All
research and development costs, as defined in SFAS No. 2 - Accounting for Research and Development Costs,
are expensed in the period they are incurred. Research and development costs
for the three months ended June 30, 2006 and 2005 were $628,143 and $491,933,
respectively. Research and development costs for the six months ended June 30,
2006 and 2005 were $1,185,651 and $1,007,267 respectively. Research and
development costs are included with selling, general and administrative
expenses on the income statement.

(10) RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

FASB Statement of Financial Accounting Standards No. 123 (revised 2004),
Share-Based Payment. In December 2004, the FASB issued SFAS 123R, which
requires that the cost of all share-based payments to employees, including stock
option grants, be recognized in the financial statements based on their fair
values. The standard applies to newly granted awards and previously granted
awards that are not fully vested on the date of adoption. The Company adopted
the standard on January 1, 2006 using the modified prospective method (See Note
1 to in these Consolidated Consolidated Financial Statements).

FASB Statement of Financial Accounting Standards No. 154, Accounting Changes
and Error Corrections - a replacement of APB Opinion No. 20 and FASB Statement
No. 3. In May 2005, the FASB issued Statement of Financial Accounting Standards
No. 154, Accounting Changes and Error Corrections - a replacement of APB
Opinion No. 20 and FASB Statement No. 3, referred to as SFAS 154, which
replaces APB Opinion No. 20, Accounting Changes, and SFAS No. 3, Reporting
Accounting Changes in Interim Financial Statements, and changes the
requirements for the accounting for and reporting of a change in accounting
principle. SFAS 154 applies to all voluntary changes in accounting principles.
It also applies to changes required by an accounting pronouncement in the
unusual instance that the pronouncement does not include specific transition
provisions. SFAS 154 is effective for accounting changes and corrections of
errors made in fiscal years beginning after December 15, 2005. It does not
change the transition provisions of any existing accounting pronouncements,
including those that are in a transition phase as of the effective date of SFAS
154. The Company adopted SFAS 154 on January 1, 2006, and it had no impact on
the Condensed Consolidated Financial Statements.

In June 2006, the Financial Accounting Standards Board (FASB) issued FASB
Interpretation No. 48, Accounting for Uncertainty in Income Taxes (FIN 48) an
interpretation of FASB Statement No. 109, Accounting for Income Taxes, which
clarifies the accounting for uncertainty in 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. The Interpretation requires that the Company recognize in the
financial statements, the impact of a tax position, if that position is more
likely than not of being sustained on audit, based on the technical merits of
the position. FIN 48 also provides guidance on de-recognition of a previously
recognized tax position, classification, interest and penalties, accounting in
interim periods and disclosures. The provisions of FIN 48 are effective
beginning January 1, 2007 with the cumulative effect of the change in accounting
principle recorded as an adjustment to the opening balance of retained earnings.
The Company is assessing the potential impact the adoption of this
Interpretation may have on its financial position or results of operations.

F-12

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

RECENT DEVELOPMENTS

During
the year 2005 Medicare made an incorrect analysis of the cost for the
radiopharmaceutical kit, Volumex which is used in conjunction with the BVA-100
Blood Volume Analyzer. The error was discovered in late 2005 and brought to the
attention of the appropriate officials. However, the error was not corrected
until the beginning of 2006. This had a negative impact on the Companys
ability to obtain BVA-100 trial agreements and to convert trial agreements into
sales. Medical facilities are extremely cautious about receiving adequate
reimbursement for any procedures they perform. Many insurance companies base
their own reimbursement on Medicare fee schedules. The correction of this error
is expected to lead to increased acceptance of blood volume measurement by
various institutions.

RESULTS OF OPERATIONS

Three months
ended June 30, 2006 as compared with three months ended June 30, 2005:

Operating Revenues

For
the three months ended June 30, 2006, operating revenues increased to $389,322
vs. $287,690 in 2005, an increase of 35.3%. The increase was due primarily to
an increase in blood volume kit sales which increased by 40.2% along with the
sale of one Blood Volume Analyzer during the quarter. A major reason for the
increase in kit sales is that there were 42 Blood Volume Analyzers installed at
June 30, 2006 versus 30 instruments installed at June 30, 2005. As a result of
the Medicare issue, the Company has extended the trial period for a number of hospitals
so that they are better able to evaluate their total opportunity.

Operating
revenues for the cryobanking division, which includes both blood banking and
semen banking, decreased from $121,413 in 2005 to $101,428 in 2006, for a
reduction of 16.4%. Of the $20k reduction, there was an $11k decrease in semen
storage, $5k decrease in semen analysis, and the remaining decrease was
associated with other lab services.

During
the three months ended June 30, 2006, the Company obtained a signed agreement
from a New York area hospital establishing the nations first Blood
Optimization Program through the Idant Laboratories subsidiary. As part of the
program, the hospital will acquire a Blood Volume Analyzer to perform blood
volume studies. The Company is in the process of negotiating with two other
hospitals who have indicated an interest for a Blood Optimization Program
(BOP). These contracts would also involve installation of the BVA-100 Blood
Volume Analyzer as well as use of frozen blood storage for patients undergoing
elective surgery. This type of program would enable the patient to store their
own blood well in advance of surgery and avoid being anemic at the time of
surgery. Administrative review procedures for such contracts can take a year, or
longer.

Total
S G & A (selling, general and administrative) costs for Daxor and the BVA segment were
$1,599,806 for the three months ended June 30, 2006 vs. $1,217,297 for the same
period in 2005, for an increase of 31.4%. Total Research & Development for
the Company was $628,143 as of June 30, 2006 vs. $491,933 in 2005. 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: Glomeril
Filtration Rate, 2) Total Body Albumin Analysis, and 3) Wipes tests for
radiation contamination/detection. We are also progressing on the next version
of the delivery device for the radioactive dose Volumex. The current version is
the  Max-100 which has a patent. The next version, the  Max-200 will be
without a needle and should afford the company extended protection with a
second patent when it is completed.

3

For
the three months ended June 30, 2006, the sales from Volumex were up 37.1% on
dollar sales of $203,599 in 2006 from 148,454 in 2005. However, the quantity of
kits sold was up 40.2%. Costs of goods sold for Volumex increased to $86,125
from $69,586 in 2005. This is a 23.7% increase year over year. It is directly
attributed a modest increase from our vendor who fills and drop ships Volumex
for us. We anticipate an improvement of our profit margins as soon as we pass
along these price increases to our clients. The gross profit for Volumex for
the quarter was $117,474 up from $78,868. The profit margin was up to 57.6%
from the prior year of 53.1%. This is attributed to the newer accounts paying
slightly higher prices than our older clients.

For
the three months ended June 30, 2006, total operating revenues and other total
income for equipment sales and related services increased by 73.1% to $287,894
from $166,277 in 2005. In the three months ended June 30, 2006 there has been
one sale for $65,000 of the BVA-100 Blood Volume Analyzer, along with five
signed contracts for instruments on a trial basis. For the same period in 2005,
there were no sales of BVA-100s. This brings the six months ended June 30,
2006 total of signed trial agreements to eleven. In the first three quarters of
2005, Daxor had only seven signed trial agreements. In the fourth quarter of
2005, Daxor added seven additional trial agreements, for a total of 14 for 2005. The
renewed interest in the instrument is directly attributable to the
reinstatement of the Medicare reimbursement for Volumex. Trial agreements on a
clinical basis require the Hospitals to pay for kits that they use while they
have the equipment on a trial basis. The only exception are those facilities
who are conducting research utilizing the BVA-100 and therefore, the Company
has agreed to supply those Volumex doses free of charge (this includes the shipping
costs and all disposables associated with the study).

Total
cost and expenses for cryobanking and related services were $115,911 for the
three months ended June 30, 2006 vs. $137,379 for the same period in 2005, for
a decrease of 15.6%. Operating revenues from cryobanking and other related
services decreased by 16.4% to $101,428 in 2006 from $121,413 for the same
period in 2005.

Dividend Income

Dividend
income earned on the Companys security portfolio for the three months ended
June 30, 2006 was $485,729 versus $491,232 for the same period in 2005 for a
decrease of 1.1%.

Investment Gains

Gains on the
sale of investments were $764,338 for the three months ended June 30, 2006
versus $382,315 for the same period in 2005. For the current quarter, the
Company had income from the marking to the market of short positions of
$509,092 versus a loss of $882,719 for the same period in 2005. Interest
expense net of interest income increased to $88,809 in 2006 versus $61,744 in
2005. Administrative expenses relating to portfolio investments were $13,086 in
2006 versus a credit of $445 for the same period. A detailed description of
investment policies and historical records over the past 13 years was included
in the recent 10K filing for year end December 31, 2005.

Operating Expenses

Daxors total
expenses from operations for the second quarter of 2006 were $1,914,928 versus
$1,484,751 in 2005 for an increase of 28.9%. A significant portion of the
increase in operating costs were due to increased hiring of personnel for the
expanded research and development as well as expanded marketing related to the
blood volume analyzer. The Company had a major change in the blood volume
analyzer which we previously detailed in our most recent filing. The Company
intends to continue increasing the number of individuals assigned to direct
sales of the BVA-100 as well as those tasked with increased education of the
benefits of blood volume analysis and the related sales of Volumex. (See
research and development costs in the Companys 10-K filing for 2005).

4

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

RESULTS OF OPERATIONS

Six months
ended June 30, 2006 as compared with six months ended June 30, 2005:

Operating Revenues

For
the six months ended June 30, 2006, operating revenues increased to $731,468
vs. $588,046 for the same period in 2005, an increase of 24.3%. The increase
was due primarily to an increase in blood volume kit sales which increased by
31.8% and the sale of one blood volume analyzer instrument during the quarter.
A major reason for the increase in kit sales is that there are 42 blood volume
analyzers placed at June 30, 2006 versus 30 instruments at June 30, 2005. As a
result of the Medicare issue, the Company has extended the trial period for a
number of hospitals so they are better able to evaluate their total
opportunity.

Operating
revenues for the cryobanking division, which includes
both blood banking and sperm banking, decreased from $249,056 in 2005 to
$230,996 in 2006, for a reduction of 7.2%.

Total
cost and expenses for the BVA segment were $3,292,427 for the six months ended
June 30, 2006 vs. $2,776,995 for the same period in 2005, for an increase of
18.5%.

Total
cost and expenses for cryobanking and related services were $236,766 for the
six months ended June 30, 2006 vs. $246,169 for the same period in 2005, for a
decrease of $9,403 or 3.8%. Operating revenues from cryobanking and other related
services decreased by 7.2% to $230,996 in 2006 from $249,056 for the same
period in 2005.

Dividend Income

Dividend
income earned on the Companys security portfolio for the six months ended
June 30, 2006 was $1,036,551 versus $1,029,352 for the same period in 2005 for
an increase of 0.0%.

Investment
Gains

Gains on the
sale of investments were $1,474,539 for the six months ended June 30, 2006
versus $771,351 for the same period in 2005. For the six months ended June 30,
2006, the Company had income from the marking to the market of short positions
of $583,679 versus a loss of $1,003,389 for the same period in 2005. Interest
expense net of interest income increased to $185,790 in 2006 versus $103,906 in
2005. Administrative expenses relating to portfolio investments were $21,246 in
2006 versus 0 for the same period in 2005. A detailed description of investment
policies and historical records over the past 13 years was included in the
recent 10K filing for year end December 31, 2005.

Operating Expenses

Daxors total
expenses from operations for the year to date second quarter of 2006 were
$3,292,427 versus $2,776,995 in 2005 for an increase of 18.5%. A significant
portion of the increase in operating costs were due to increased hiring of
personnel for the expanded research and development as well as expanded
marketing related to the blood volume analyzer. The Company had a major change
in the blood volume analyzer which we previously detailed in our most recent
filing. The Company intends to continue increasing the number of individuals
assigned to direct sales of the BVA-100 as well as those tasked with increased
education of the benefits of blood volume analysis and the related sales of
Volumex. (See research and development cost in the Companys 10-K filing for 2005).

5

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, 2006 the Company had total assets of $61,307,973 with stockholders
equity of $40,702,331 as compared to total assets of $59,565,053 with
stockholders equity of $38,744,801 at December 31, 2005. At June 30, 2006, the
Company had a net unrealized gain on available for sale securities of $34,453,486
and a deferred tax liability of $12,058,720 for net unrealized capital gains on
available-for-sale securities of $22,394,766. At December 31, 2005, the company
had a net unrealized gain of $31,596,538 and a deferred tax liability of
$11,058,788 for net unrealized capital gains on available-for-sale securities
of $20,537,750. These amounts are included in the calculation of Total
Stockholders Equity.

At
June 30, 2006, the Companys available for sale
securities had a fair market value of $59,260,152 with short-term loans of
$5,619,317. The Company has current liabilities of $20,605,642, at June 30, 2006, which
includes the deferred tax liability of $12,058,720. The deferred tax liability
would be payable if the Company chose to sell its entire portfolio. The Companys
investment portfolio has been a critical source of supplemental income to
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 10 years. The Companys portfolio has
maintained a net value above historical cost for each of the past 86
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 will explore the potential for raising additional capital.
The current primary focus will be on the BVA-100 Blood Volume Analyzer with
respect to expenditure of resources. The Company anticipates hiring additional
regional managers to the existing sales/marketing team. It is the goal of the
marketing team to develop an individual sales team for each regional manager.
The Company is also expanding its support services personnel. The decision to
develop the marketing team was partially based on the anticipation of new
publications in peer reviewed medical journals by current users of the Blood
Volume Analyzer.

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

6

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 $ 46,481 in total
stock-based compensation expense during the first six months of 2006. Total
unvested stock-based compensation expense was $37,184 at June 30, 2006 and had a
total weighted average remaining term of .49 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, 2006. However, a comprehensive
discussion of the Companys critical accounting policies and management
estimates is included in Managements Discussion and Analysis of Financial
Condition and Results of Operations in the Companys Annual Report on Form
10-K for the year ended December 31, 2005. There have been no significant
changes in critical accounting policies or management estimates since the year
ended December 31, 2005 other than the adoption of SFAS No. 123R as described
above.

Available-for-Sale Securities

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

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

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

7

Put and Call
Options

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

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

Investment
Goals, Strategies and Policies

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

1.          The
  Company maintains a diversified securities portfolio comprised primarily of
  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 engage in short positions up to 5% of the
  value of its portfolio.  The Companys
  investment policy is to maintain a minimum of 80% of its portfolio in
  electric utilities.  Investments in
  utilities are primarily in electric companies.  Investments in non-utility stocks will not exceed 15% of the
  portfolio.2.          Investment
  in speculative issues, including short sales, are a maximum of 5%.3.          Limited
  use of options to increase yearly investment income.a. The use of
  Call Options.
  Covered options can be sold up to a maximum of 20% of the value of the
  portfolio.  This provides extra income
  in addition to dividends received from the companys investments.  The risk of this strategy is that investments
  may be called away, which the company may have preferred to retain.  Therefore, a limitation of 20% is placed
  on the amount of stock on which options which can be written.  The amount of the portfolio on which
  options are actually written is usually between 3-10% of the portfolio. The
  historical turnover of the portfolio is such that the average holding period
  is in excess of 5 years.b. The use of
  Put options.
  Put options are written on stocks which the company is willing to
  purchase.  While the company does not
  have a high rate of turnover in its portfolio, there is some turnover; for
  example, due to preferred stocks being called back by the issuing company, or
  stocks being called away because call options have been written.  The use of put options is a conservative
  strategy which enables the company to buy stocks at a lower price than the
  prevailing market.  If the stock does
  not go to the put exercise price, then the company records the proceeds from
  the unexercised option as income.  If
  the put is exercised, the company obtains its stock at a lower price and has
  the additional benefit of a lower basis cost because the option price is
  incorporated into the cost basis.c.  Speculative Short Sales/Short Options.
  The company limits its speculative transactions to 5% of the portfolio
  value of the assets.  The company may
  sell uncovered calls on certain stocks.
  If the stock price does not rise to the price of the calls, the option
  is not exercised and the company records the proceeds from the sale of the
  call as income.  If the call is
  exercised, the company is then short the stock.  The company then has the choice of covering the short stock, or
  selling a put against its short stock.
  If the put is exercised, then the short sale is covered. The companys
  current accounting policy is to mark to the market each quarter any short
  positions, and include it in the income statement.  While the company may have so-called speculative positions
  equal to 5% of its accounts, in actual practice the short stock positions
  usually account for less than 5% of the assets of the company.8

The
income derived from these investments has been essential to help offset the
research and development, operating and marketing expenses related to 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 maintain financial stability
because of these returns, which have covered a significant portion of the
Companys continuing losses from operations. The Companys investment policy is
reviewed at least once yearly by the Board of Directors and the Audit
Committee.  Individual investment
decisions are made solely by Dr. Joseph Feldschuh, CEO, who devotes
approximately 5 to 7.5 hours per week to this activity.  He is assisted by a single part-time
employee.  No other member of the
Company is involved in individual investment decisions.

Revenue Recognition

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

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

The
sales of the single-use radio isotope tracer 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 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.

9


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

Item 3.   Quantitative and Qualitative Disclosures
About Market Risk

The Securities
and Exchange Commissions rule related to market risk disclosure requires that
the Company describe and quantify its 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.

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

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

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

Puts, calls
and short sales, collectively referred to as short positions, are all marked to
market for each reporting period and any gain or loss is recognized through the
Statement of Operations and is a component of Investment income (loss).

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,
2006, unrealized gains were $34,829,331 and net unrealized losses were $(375,845)
on available for sale securities for a ratio of 93 to 1.  The results from option strategies are
variable and within the past 5 years have represented from 2.1% to 33.2% of
total investment income.

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, 2006, approximately 1.9% of the
Companys available for sale securities are preferred stock.

The Company is
at risk of having certain dividend bearing common stocks involuntarily removed
from the portfolio as the result of a merger or acquisition in which cash is
paid for the stock. There is a risk that the company may not be able to replace
the stocks with holdings having a similar dividend 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 its diversity of holdings consisting of 68 separate stocks.

11

DAXOR CORPORATION 
SUMMARY OF INVESTMENTS 
AS AT JUNE 30, 2006

FAIR
  MARKET

TOTALUNREALIZEDACCOUNT

COST

VALUE

GAIN
  (LOSS)TOTAL COMMON
  STOCK

$
23,725,503

$
57,866,470

$
34,140,967TOTAL
  PREFERRED STOCK

$
896,517

$
1,205,092

$
308,575TOTAL
  EQUITIES

$
24,622,020

$
59,071,562

$
34,449,542TOTAL BONDS

$
184,646

$
188,590

$
3,944TOTAL
  PORTFOLIO

$
24,806,666

$
59,260,152

$
34,453,486DAXOR CORPORATION 
SUMMARY OF INVESTMENTS 
AS AT JUNE 30, 2005

FAIR
  MARKET

TOTALUNREALIZEDACCOUNT

COST

VALUE

GAIN
  (LOSS)TOTAL COMMON
  STOCK

$
24,062,513

$
60,412,096

$
36,349,583TOTAL
  PREFERRED STOCK

$
579,125

$
963,907

$
384,782TOTAL
  EQUITIES

$
24,641,638

$
61,376,003

$
36,734,365TOTAL BONDS

$
231,824

$
218,738

$
(13,086
)TOTAL
  PORTFOLIO

$
24,873,462

$
61,594,741

$
36,721,279Daxor
Corporation
Summary of Proceeds Received and Market Valuation at 06/30/06 
Put and Call Options

Total Proceeds




Expirations and

Proceeds




UnrealizedReceived on

Sale of

Assignments of

Received on

Market

Appreciationopen positions

Options from

Options from

open positions

Value at

(Depreciation)at 12/31/05

01/01/06-06/30/06

01/01/06-06/30/06

at 06/30/06

6/30/2006

at 06/30/06$     983,912

$     3,187,180

$     1,896,931

$     2,274,161

$     1,479,372

$     794,789Daxor
Corporation
Summary of Proceeds Received and Market Valuation at 06/30/05 
Put and Call Options

Total Proceeds




Expirations and

Proceeds




UnrealizedReceived on

Sale of

Assignments of

Received on

Market

Appreciationopen positions

Options from

Options from

open positions

Value at

(Depreciation)at 12/31/04

01/01/05-06/30/05

01/01/05-06/30/05

at 06/30/05

6/30/2005

at 06/30/05$     969,231

$     1,208,677

$     1,071,856

$     1,106,052

$     1,005,323

$     100,72912


Item 4. Controls and Procedures

As of June 30, 2006, the
Company carried out an evaluation, under the supervision and with the
participation of the Companys management, including the Companys Chief
Executive Officer, Chief Financial Officer and Treasurer, of the effectiveness
of the design and operation of the Companys disclosure controls and procedures
pursuant to Rule 13a-14 under the Securities and Exchange of 1934, as amended.

During the calendar year
ended December 31, 2005, as well as during the six months ended June 30,
2006, the Company had insufficient numbers of internal personnel possessing the
appropriate knowledge, experience and training in applying US GAAP and
reporting financial information in accordance with the requirements of the Commission.
The evaluation found insufficient controls over dissemination of information
regarding non-routine and complex transactions, which resulted in incorrect
treatment and lack of proper analysis of such transactions by accounting staff.
This weakness resulted in material adjustments proposed by our independent
registered accountants with respect to our financial statements for our
calendar years ended December 31, 2005, 2004 and 2003. As a result, the figures
for the three and six months ended June 30, 2005, which are presented in this document, required restatement from their
previous filing. Management believes this issue to be material and therefore,
deemed the design and operation of internal control in place at December 31,
2005 and June 30, 2006 to be ineffective.

In late 2005, the Company
hired a CPA to oversee the accounting department and coordinate the efforts of
analysis and dissemination. These efforts include design changes and related
monitoring of the internal control system.  While there has been a tremendous
improvement in the internal control system in the first six months of 2006, the
system is still undergoing change in order to satisfy the requirements of appropriate
internal controls.  It is managements intention to address accounting issues on a
timely basis, and prevent misstatement based on errors and/or lack of
understanding.

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

13

PART
II. OTHER INFORMATION

Item
1. Legal Proceedings

None.

Item
1A. Risk Factors

None.

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.

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 200231.2
  Certification of Principal
  Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1
  Certification of Chief
  Executive Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to
  Section 906 of the Sarbanes-Oxley Act of 200232.2
  Certification of Principal
  Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
  Section 906 of the Sarbanes-Oxley Act of 2002(b) There were no reports on Form 8-k filed.

SIGNATURES

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

DATE: August 14, 2006
  By:
  /s/ JOSEPH
  FELDSCHUH, M.D.JOSEPH FELDSCHUH, M.D.,President and Chief
  ExecutiveOfficerDATE: August 14, 2006
  By:
  /s/ STEPHEN
  FELDSCHUHSTEPHEN FELDSCHUHVice President of
  OperationsAnd Chief Financial Officer14