DAXOR CORP

Regulatory Filings • Feb 25, 2021

N-CSR 1 formncsr.htm

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

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FORM N-CSR

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CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT

INVESTMENT COMPANIES

INVESTMENT COMPANY ACT FILE NUMBER 811-22684

DAXOR CORPORATION

(Exact name of registrant as specified in charter)

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350 Fifth Avenue

Suite 4740

New York, NY 10118

(Address of principal executive offices) (Zip code)

Michael Feldschuh

350 Fifth Avenue

Suite 4740

New York, NY 10118

(Name and address of agent for service)

REGISTRANT’S TELEPHONE NUMBER, INCLUDING AREA CODE: 212-330-8500

DATE OF FISCAL YEAR END: DECEMBER 31

DATE OF REPORTING PERIOD: JANUARY 1, 2020 to DECEMBER 31, 2020

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Daxor Corporation

Financial Statements

For the Year Ended

December 31, 2020

Table of Contents

Title	Page
Shareholder Letter	1
– 2
Schedule
of Investments	3
– 5
Summary of Short Positions and Liabilities	6
Statement
of Assets and Liabilities	7
Statement
of Operations	8
Statement
of Changes in Net Assets	9
Statement
of Cash Flows	10
Financial
Highlights	11
– 12
Notes
to Financial Statements	13
– 26
Report
of the Independent Registered Accounting Firm	27
Supplemental
Data	28
General	28
Privacy
Policy	29
About
the Company’s Directors and Officers	30
Other
Information	31-33

Exhibits

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Daxor Corporation

February 25, 2021

Dear Fellow Shareholder:

I am pleased to report that 2020 was a year of many accomplishments for the Company in the areas of financial performance, commercialization of our products, groundbreaking research and development, and new prospective medical trials for the use of our diagnostic product in the management of critical care, COVID-19, and heart failure with leading institutions. The Company has been awarded supply contracts for our next-generation patent-pending blood volume analyzer system which has both military and civilian utility as well as a cooperative research agreement by The US Department of Defense. The Company has also received additional support for its next-generation analyzer from a highly-competitive grant funded by the National Institutes of Health for 2021 and was a featured company by the Sepsis Alliance at its inaugural 2020 national meeting. Exciting research showing the extremely cost-effective value of our diagnostic was presented at the 2020 Heart Failure Society of America (“HFSA”) meeting among the more than half a dozen research outcomes utilizing Daxor’s technology over the course of the year. Key hires to lead the commercialization team led to new distributor agreements and the ramping up of both sales and clinical support staff for the company. All of these developments have taken place against a backdrop of the challenging conditions of the COVID-19 pandemic which disrupted supply chain, caused massive global casualties, shut down economies, and limited the ability of hospitals to provide urgently needed routine care to patients. It was with dedication to the thousands of patients we serve every year that the Company rose to the challenge and thrived in this difficult environment, providing diagnostic testing for ICU’s filled with COVID-19 patients, as well as heart failure and a variety of other conditions that are optimally managed with our diagnostic test.

Beginning with financial performance, the Company is pleased to report a 50.4 percent increase in the unaudited revenues of our blood volume diagnostic operating division and an asset value growth of 48 cents per share for the Company. The Company’s share price rose 33.0% over the course of the year, outperforming the overall rise in the market of US stocks of 15.5% and small caps 18.5% despite intense volatility in asset prices and an impaired market conditions due to COVID disruptions. Revenue growth was driven by a combination of the sale and leasing of our capital equipment to hospitals and orders for our single-use blood volume diagnostics kits for critical care (including COVID-19 management) as well as other indications and additionally by orders from The US Department of Defense as well as third-party companies contracting with Daxor to conduct blood volume analysis on their products.

At December 31, 2020, Daxor had net assets of $15,675,186 or $3.89 per share, a 14% increase of $0.48 per share from the $3.41 per share value reported at December 31, 2019. For the year ended December 31, 2020, Daxor had dividend income of $262,938, net realized losses on investments of $1,140,264, and net realized gains from options hedging of $778,881. There was a net change in the unrealized depreciation on investments, options and securities borrowed of $1,581,557 as the COVID-19 pandemic had a significant negative impact on the markets worldwide in the early part of the year. There was a net realized loss from the operating division relating to spend on research, development, sales and overhead of $2,709,397 as the Company ramped up investment in research and development, commercial sales teams, as well as production facilities for our next generation blood volume analyzers which are anticipated to be coming to market over the next twelve months.

During the year ended December 31, 2020, under the previously issued registration statement, the Company sold in the open market to institutional investors 265,352 shares of the Company’s stock. The sales were completed in two offerings. In March 2020, the Company sold 140,352 shares at a price of $14.25 per share with net proceeds to the Company of $1,762,115. In July 2020 the Company sold 125,000 shares at a price of $20.00 per share with net proceeds to the Company of $2,273,991. No warrants were issued as part of either transaction.

Accelerating commercialization is a priority for Company management, and in this area Jean Oertel, VP is leading the way. Jean, a veteran from both Medtronic and Sensionics, has focused on building out the sales and clinical support team. To amplify the reach of our products, new distribution agreements have been signed with 3rd party distributors to reach hospitals that are not covered by Daxor’s own reps. Daxor achieved the coveted ISO 13485 certification in February of this year, which paves the way for international distributors to also sell our product in the near future; a multi-channel distribution model is anticipated to increase our sales and generate further awareness of our products and their benefit in a diverse range of medical conditions for both in-patient and out-patient care.

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Further improving the attractiveness of the Company’s offerings is new data presented at the October 2020 HFSA meeting showing that the blood volume analysis guided by Daxor’s BVA-100 is five times more “cost-effective” than the benchmark for the standard of “good value” in the metric of health care economics. The Company is able to generate compelling financial models which leverage this data for further evidence that not only does the BVA-100 reduce hospitalized heart failure mortality by over 82% on a 30 day and 365 day basis based upon previous published peer-reviewed research, but that it does so at a cost which is a fraction of other interventions that are currently administered at hospitals across the country.

Even as evidence of cost-effectiveness and clinical utility builds around the current BVA-100 analyzer, Company management has also prioritized the accelerated research and development of the next generation of point of care blood volume analyzers, operating out of Daxor’s fully-owned state-of-the-art 20,000 square foot research and production facility in Oak Ridge, Tennessee (“DORO”). The US Department of Defense and the Center for Advancing Point of Care Technology (funded by The National Institutes of Health) have awarded the Company four contract awards for Daxor’s next generation blood volume analyzer. This device will be a significant leap forward in capabilities compared to the current BVA-100. The next generation device is designed to be portable, three times faster, simpler, and able to operate in areas that a test requiring a lab to analyze results is just not practical. Daxor was awarded these highly competitive contracts on the basis of its proposals showing not only revolutionary technology but also our ability to successfully develop and commercialize diagnostics in this area where the company has over 40 years of experience as the global leader in Blood Volume analysis technology. The company applied for 6 new patents in 2020 covering aspects of the new system as well as further applications of blood volume measurement and its treatment paradigms. Management anticipates that a similar number of new patents will also be filed in 2021 as R&D accelerates and new technologies are being developed based upon contracts that have been awarded and partnerships with 3rd party technology accelerators have been signed. . The Company has added engineering, scientific, and production personnel to accelerate the development of new products at its highly-cost effective DORO facility instead of out-sourcing to expensive and slower contract research organizations and anticipates that investment in this area will accelerate this fiscal year as we develop highly-valuable patentable technology to drive growth and partnerships in years to come.

2020 also saw the initiation and continuation of research studies utilizing Daxor’s BVA for patient care. NYU Langone Health initiated an ongoing multi-center study of BVA for COVID-19 patients hospitalized in the ICU. This study which is ongoing at three hospital centers and is poised to add a fourth as the Company anticipates outcomes to be published this year. In addition, Duke University has initiated a Prospective Randomized Control Trial for the treatment of heart failure guided by BVA. This study will add to the ongoing evidence regarding the benefits of BVA for heart failure use, an area that the Company has focused on with increasing evidence of both the clinical and financial benefit for improving outcomes. The prospective trial initiated in partnership with CHF Solutions, a Minnesota-based company which specializes in precision fluid removal technology is continuing for the utilization of BVA to guide ultrafiltration/aquapheresis, although enrollment was slowed due to the pandemic limiting patient access. Research presented at the Society for Critical Care Medicine in 2020 supported the uniqueness and accuracy of BVA to assess patient volume status in the ICU, this area is also a growing part of the Company’s business.

The strong trend of healthcare is toward individualized care and cost-effectiveness. Our BVA diagnostic is a non-invasive, inexpensive, and rapid blood test which allows care teams to solve the significant challenge of accurately managing the fluid levels of patients, whether it is in the heart failure clinic or the ICU, and studies published and presented are proving just how exciting the potential for this approach is. Reducing mortality, lowering complications, reducing hospital resource use and length of stay with a non-invasive and 98% accurate test is achievable with our patented technology. Just as exciting is the next-generation of products that are in our development pipeline slated for completion this year which should further enhance the accessibility of our test and open it up to both government as well as civilian hospital systems on an international scale.

Daxor has been reporting as an investment company under the Investment Company Act of 1940 since January 1, 2012. See the Notes to the Financial Statements of Form N-CSR for further information on Daxor’s strategies and goals regarding its investments in publicly traded securities, to help fund its diagnostic operations. Because of its significant holding of publicly traded securities, the SEC currently classifies Daxor as a closed-end investment management company with a fully-owned medical operating division; however, the primary focus of management is on our operational objectives. Daxor anticipates that as the value of the operating company continues to increase as a percentage of assets owned, it will be eligible to file under its previous designation as an operating company and report as an operating company, and will take steps to accomplish this result.

Any shareholder who is interested in learning more about our medical instrumentation and biotechnology operations should visit our website at www.daxor.com or contact our investor relations representative Bret Shapiro of CORE IR at 516-222-2560 for more detailed information. We periodically issue press releases regarding research reports and placements of the BVA-100 Blood Volume Analyzer in hospitals.

Go Paperless with E-Delivery

In order to sign up for electronic delivery of shareholder reports and prospectuses, please send an email to info@daxor.com . If you do not hold your account directly with Daxor, please contact the firm that holds your account about electronic delivery.

Cordially Yours,

Michael Feldschuh

CEO and President

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Item 1. Schedule of Investments

Daxor Corporation

Schedule of Investments

December 31, 2020

| | | Fair
Value |
| --- | --- | --- |
| Common
Stock - (United States) - 40.94% | | |
| Industrials
– 0.01% | | |
| Wabtec | 13 | $ 952 |
| Investment
Services - 0.00% | | |
| Motors
Liquidation Company GUC Trust | 100 | 177 |
| Materials
- 0.60% | | |
| Enbridge
Inc. | 2,952 | 94,434 |
| Utilities
- 40.33% | | |
| Electric
Utilities – 39.94% | | |
| American
Electric Power Co. Inc. | 3,500 | 291,445 |
| Avangrid,
Inc. | 7,000 | 318,150 |
| Avista
Corporation | 6,000 | 240,840 |
| CenterPoint
Energy, Inc. | 1,000 | 21,640 |
| Centrus
Energy Corp. | 1 | 23 |
| CMS
Energy Corporation | 6,500 | 396,565 |
| DTE
Energy Company | 10,500 | 1,274,805 |
| Edison
International | 4,000 | 251,280 |
| Entergy
Corporation | 5,000 | 499,200 |
| Evergy
Inc. | 7,297 | 405,056 |
| Eversource
Energy | 4,000 | 346,040 |
| Exelon
Corporation | 3,600 | 151,992 |
| FirstEnergy
Corp. | 13,800 | 422,418 |
| National
Grid plc | 5,207 | 307,369 |
| NiSource,
Inc. | 19,000 | 435,860 |
| Pinnacle
West Capital Corporation | 3,000 | 239,850 |
| PNM
Resources, Inc. | 10,800 | 524,124 |
| Xcel
Energy, Inc. | 2,000 | 133,340 |
| | | 6,259,997 |
| Natural
Gas Utilities - 0.39% | | |
| Southwest
Gas Holdings, Inc. | 1,000 | 60,750 |
| Total
Utilities | | 6,320,747 |
| Total
Common Stock (Cost $1,808,130) - 40.94% | | $ 6,416,310 |

The accompanying notes are an integral part of these financial statements.

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Daxor Corporation

Schedule of Investments (Continued)

December 31, 2020

| | | Fair
Value | |
| --- | --- | --- | --- |
| Preferred
Stock - (United States) - 2.91% | | | |
| Banking –
2.91% | | | |
| Bank
of America Corp 7.250% Series L | 300 | $ 455,575 | |
| Total
Preferred Stock (Cost $193,985) - 2.91% | | $ 455,575 | |
| Total
Investments in Securities (Cost $2,002,115) - 43.85% | | $ 6,871,885 | |
| Investment
in Operating Division (Cost $3,118,857) - (United States) - 56.14% (1) | | $ 8,800,000 | |
| Dividends
receivable – 0.19% | | $ 29,298 | |
| Receivable
from broker – Restricted Cash – 3.93% | | $ 617,800 | |
| Other
Assets - 1.49% | | $ 233,892 | |
| Total
Assets - 105.60% | | $ 16,552,875 | |
| Total
Liabilities - (5.60%) | | $ (877,689 | ) |
| Net
Assets - 100% | | $ 15,675,186 | |

(1) The Fair Value of the Operating Division was determined by using significant unobservable inputs.

The accompanying notes are an integral part of these financial statements.

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Daxor Corporation

Schedule of Investments (Continued)

December 31, 2020

At December 31, 2020, the net unrealized appreciation on investment in securities, options and securities borrowed of $4,869,770 was composed of the following:

| Aggregate
gross unrealized appreciation for which there was an excess of value over cost | $ | |
| --- | --- | --- |
| Aggregate
gross unrealized depreciation for which there was an excess of cost over value | (63,545 | ) |
| Net
unrealized appreciation | $ 4,869,770 | |

At December 31, 2020, the net unrealized appreciation on investment in operating division was composed of the following:

Net unrealized appreciation on investment in operating division $ 5,681,143

Portfolio Analysis*

December 31, 2020

of
Net Assets
Common
Stock (United States)
Industrials	0.01 %
Investment
Services	0.00 %
Materials	0.60 %
Electric
Utilities	39.94 %
Natural
Gas Utilities	0.39 %
Total
Common Stock	40.94 %
Preferred
Stock (United States)
Banking	2.91 %
Total
Investments in Securities	43.85 %

• The Portfolio analysis table does not include exposure to derivatives.

The accompanying notes are an integral part of these financial statements.

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Daxor Corporation

Summary of Short Positions and Liabilities

December 31, 2020

| Name
of Issuer | | | Fair
Value | |
| --- | --- | --- | --- | --- |
| Securities
Sold Short (United States) (4.00)% | | | | |
| Utilities
Sector SPDR Fund ETF | (10,000 | ) | $ (627,000 | ) |
| Total
Securities sold short (proceeds $561,881) | | | $ (627,000 | ) |
| | | | $ | |

| Liabilities — Margin
loans payable - (1.09)% | (170,689 | ) |
| --- | --- | --- |
| Accounts
payable and accrued expenses (0.51)% | (80,000 | ) |
| Total
Liabilities - (5.60)% | $ (877,689 | ) |

The accompanying notes are an integral part of these financial statements.

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Daxor Corporation

Statement of Assets and Liabilities

December 31, 2020

| Assets: — Investments
in securities, at fair value (cost of $2,002,115) | $ 6,871,885 | |
| --- | --- | --- |
| Investment
in operating division, at fair value (cost of $3,118,857) | 8,800,000 | |
| Receivables
from broker: | | |
| Restricted
cash | 617,800 | |
| Dividends
receivable | 29,298 | |
| Tax
credits receivable, prepaid taxes and other assets | 233,892 | |
| Total
Assets | 16,552,875 | |
| Liabilities: | | |
| Margin
loans payable | 170,689 | |
| Securities
sold short, at fair value (proceeds $561,881) | 627,000 | |
| Accounts
payable and accrued expenses | 80,000 | |
| Total
Liabilities | 877,689 | |
| Net
Assets | $ 15,675,186 | |
| Net
Asset Value, (10,000,000 shares authorized, 5,316,530 issued and 4,033,877 shares outstanding of $0.01 par value capital stock
outstanding) | $ 3.89 | |
| Net
Assets consist of: | | |
| Capital
paid in | $ 11,438,156 | |
| Total
distributable earnings | 14,860,033 | |
| Treasury
Stock | (10,623,003 | ) |
| Net
Assets | $ 15,675,186 | |

The accompanying notes are an integral part of these financial statements.

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Daxor Corporation

Statement of Operations

For the Year Ended December 31, 2020

| Investment
Income: — Dividend
income (net of foreign withholding taxes of $1,982) | $ 262,938 | |
| --- | --- | --- |
| Other
income | 1,502 | |
| Total
Investment Income | 264,440 | |
| Expenses: | | |
| Investment
administrative charges | 554,424 | |
| Dividend
expense | 103,700 | |
| Professional
fees | 39,100 | |
| Transfer
agent fees | 28,292 | |
| Interest
expense | 8,402 | |
| Other
taxes | 8,856 | |
| Total
Expenses | 742,774 | |
| Net
Investment(Loss) | (478,334 | ) |
| Realized
and Unrealized Gain (Loss) on Investments and Other items: | | |
| Net
realized (loss) from investments in securities and securities sold short | (1,140,264 | ) |
| Net
realized gain from options | 778,881 | |
| Net
change in unrealized (depreciation) on investments, options and securities borrowed | (1,581,557 | ) |
| Net
change in unrealized appreciation on operating division | 3,400,000 | |
| Realized
loss on investment in operating division | (2,709,397 | ) |
| Net
Realized and Unrealized Loss on Investments and Investment in Operating Division | (1,252,337 | ) |
| Income
tax (benefit) | (25,280 | ) |
| Net
(Decrease) in Net Assets Resulting From Operations | $ (1,705,391 | ) |

The accompanying notes are an integral part of these financial statements.

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Daxor Corporation

Statement of Changes in Net Assets

| | Year
Ended December
31, 2020 | | Year
Ended December
31, 2019 | |
| --- | --- | --- | --- | --- |
| Decrease
in Net Assets Resulting from Operations | | | | |
| Net
investment loss | $ (478,334 | ) | $ (144,050 | ) |
| Net
realized (loss) from investments in securities and securities sold short | (1,140,264 | ) | 3,650,223 | |
| Net
realized gain from options | 778,881 | | 38,226 | |
| Net
change in unrealized (depreciation) on investments, options and securities borrowed | (1,581,557 | ) | (1,462,849 | ) |
| Net
change in unrealized appreciation on operating division | 3,400,000 | | (250,000 | ) |
| Realized
loss on investment in operating division | (2,709,397 | ) | (2,327,247 | ) |
| Income
tax benefit | 25,280 | | - | |
| Net
Decrease in Net Assets Resulting From Operations | (1,705,391 | ) | (495,697 | ) |
| Capital
Share Transactions: | | | | |
| Proceeds
from treasury stock sold | 4,036,106 | | - | |
| Proceeds
from the exercise of stock options | 201,195 | | - | |
| Increase
in net assets resulting from stock-based compensation | 377,607 | | 199,358 | |
| Net
Increase in Net Assets Resulting From Capital Share Transactions | 4,614,908 | | 199,358 | |
| Total
Net Increase (Decrease) in Net Assets | 2,909,517 | | (296,339 | ) |
| Net
Assets: | | | | |
| Beginning
of Period | 12,765,669 | | 13,062,008 | |
| End
of Period (including undistributed net investment income of $6,380,024 in 2020 and $6,941,975 in 2019 included in net assets) | $ 15,675,186 | | $ 12,765,669 | |

The accompanying notes are an integral part of these financial statements.

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Daxor Corporation

Statement of Cash Flows

For the Year Ended December 31, 2020

| Cash
flows from operating activities: — Net
decrease in net assets resulting from operations | $ (1,705,391 | ) |
| --- | --- | --- |
| Adjustment
to reconcile net decrease in net assets resulting from operations to net cash used in operating activities: | | |
| Net
realized loss from investments in securities and securities sold short | 1,140,264 | |
| Net
realized gain from options | (778,881 | ) |
| Net
change in unrealized depreciation on investments, options and securities borrowed | 1,581,557 | |
| Net
change in unrealized appreciation of operating division | (3,400,000 | ) |
| Investment
in/advances to operating division | (2,709,397 | ) |
| Realized
loss on operating division | 2,709,397 | |
| Purchases
of securities | (893,045 | ) |
| Proceeds
from sales of securities | 1,608,066 | |
| Proceeds
from securities borrowed at fair value | 16,568,139 | |
| Payments
to cover securities borrowed at fair value | (16,915,228 | ) |
| Stock
based compensation expense | 377,607 | |
| Changes
in operating assets and liabilities: | | |
| Decrease
in dividends receivable | 3,440 | |
| Increase
in tax credit receivable, prepaid taxes and other assets | (35,418 | ) |
| Increase
in accounts payable and accrued expenses | 1,250 | |
| Net
cash used in operating activities | (2,447,640 | ) |
| Cash
flows from financing activities: | | |
| Proceeds
from margin loan payable | 3,025,433 | |
| Repayment
of margin loan payable | (4,197,294 | ) |
| Proceeds
from sale of treasury stock | 4,036,106 | |
| Proceeds
from the exercise of stock options | 201,195 | |
| Net
cash provided by financing activities | 3,065,440 | |
| Net
change in cash and restricted cash | $ 617,800 | |
| Cash
and restricted cash at beginning of year | - | |
| Cash
and restricted cash at end of year | $ 617,800 | |
| Supplemental
Disclosures of Cash Flow Information: | | |
| Cash
paid during the year for: | | |
| Income
Taxes | $ 3,566 | |
| Interest
on margin loan payable | $ 8,402 | |

The accompanying notes are an integral part of these financial statements.

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Daxor Corporation

Financial Highlights

The table below sets forth financial data for weighted average shares of stock outstanding for each year and for one share of capital stock outstanding throughout the years presented. The total investment return does not reflect sales load.

| Net
Asset Value Per Share, Beginning of Year | Year
Ended December 31, 2020 — $ 3.41 | $ | 3.49 | |
| --- | --- | --- | --- | --- |
| Income
(loss) from operations: | | | | |
| Net
investment (loss) income | (0.08 | ) | (0.03 | ) |
| Net
realized and unrealized (loss)gain from investments, options and securities borrowed | (0.32 | ) | 0.59 | |
| Net
realized and unrealized gain (loss) from operating division | 0.11 | | (0.69 | ) |
| Other | 0.01 | | 0.01 | |
| Total
loss from Operations | (0.28 | ) | (0.13 | ) |
| Capital share
transactions: | | | | |
| Proceeds
from sale of treasury stock and exercise of stock options | 0.70 | | - | |
| Increase
in net assets from stock based compensation | 0.06 | | 0.05 | |
| Increase
(Decrease) in Net Asset Value Per Share | 0.48 | | (0.08 | ) |
| Net
Asset Value Per Share, End of Year | $ 3.89 | $ | 3.41 | |
| Market Price
Per Share of Common Stock, Beginning of Year | $ 9.40 | $ | 8.20 | |
| Market
Price Per Share of Common Stock, End of Year | $ 12.50 | $ | 9.40 | |
| Change
in Price Per Share of Common Stock | $ 3.10 | $ | 1.20 | |
| Total
Investment Return | 32.98 | % | 14.63 | % |
| Weighted
Average Shares Outstanding | 3,935,902 | | 3,746,858 | |
| Ratios/Supplemental
Data | | | | |
| Net
assets, End of Year (in 000’s) | $ 15,675 | $ | 12,766 | |
| Ratio
of total expenses to average net assets | 5.79 | % | 4.26 | % |
| Ratio
of net investment (loss) income after income taxes to average net assets | (3.53 | )% | (1.12 | )% |
| Portfolio
turnover rate | 12.54 | % | 0.00 | % |

The accompanying notes are an integral part of these financial statements.

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Daxor Corporation

Financial Highlights (continued)

| Net
Asset Value Per Share, Beginning of Year | Year
Ended December 31, 2018 — $ 3.68 | $ | 4.04 | | Year
Ended December 31, 2016 — $ 3.74 | |
| --- | --- | --- | --- | --- | --- | --- |
| Income
(loss) from operations: | | | | | | |
| Net
investment income | 0.00 | | 0.07 | | 0.03 | |
| Net
realized and unrealized gain (loss) from investments, options and securities borrowed | 0.03 | | 0.23 | | 0.56 | |
| Net
realized and unrealized loss from operating division | (0.36 | ) | (0.62 | ) | (0.21 | ) |
| Income
tax (expense) benefit | 0.09 | | - | | - | |
| Other | 0.05 | | (0.01 | ) | (0.05 | ) |
| Total
income (loss) from Investment Operations | (0.19 | ) | (0.33 | ) | 0.33 | |
| Less: | | | | | | |
| Distributions
to shareholders from net investment income | (0.00 | ) | (0.03 | ) | (0.03 | ) |
| Increase
(decrease) in Net Asset Value Per Share | (0.19 | ) | (0.36 | ) | 0.30 | |
| Net
Asset Value Per Share, End of Year | $ 3.49 | $ | 3.68 | | $ 4.04 | |
| Market Price
Per Share of Common Stock, Beginning of Year | $ 4.57 | $ | 8.24 | | $ 7.60 | |
| Market
Price Per Share of Common Stock, End of Year | 8.20 | | 4.57 | | 8.24 | |
| Change
in Price Per Share of Common Stock | $ 3.63 | $ | (3.67 | ) | $ 0.64 | |
| Total
Investment Return | 79.43 | % | (44.54 | )% | 8.42 | % |
| Weighted
Average Shares Outstanding | 3,741,954 | | 3,767,756 | | 3,825,476 | |
| Ratios/Supplemental
Data | | | | | | |
| Net
assets, End of Year (in 000’s) | $ 13,062 | $ | 13,758 | | $ 15,344 | |
| Ratio
of total expenses to average net assets | 3.14 | % | 1.90 | % | 2.44 | % |
| Ratio
of net investment income before income taxes to average net assets | 0.07 | % | 1.89 | % | 0.86 | % |
| Ratio
of net investment (loss) income after income taxes to average net assets | 2.55 | % | 1.72 | % | 0.78 | % |
| Portfolio
turnover rate | 0.52 | % | 3.63 | % | 7.59 | % |

The accompanying notes are an integral part of these financial statements.

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Daxor Corporation

Notes to Financial Statements

December 31, 2020

1. Organization and Investment Objective

Daxor Corporation (the “Company”) is registered under the Investment Company Act of 1940, as amended, as a diversified, closed-end management investment company.

The Company qualifies as a “controlled company” under NYSE American LLC rules, as the estate of Joseph Feldschuh, M.D. controls more than 50% of the Company’s voting power, as evidenced by the Company’s ownership records. The estate owns 63.2% of the outstanding shares. As a result, the estate has the ability to control the outcome on any matter requiring the approval of shareholders of the Company.

The Company’s investment goals, objectives and principal strategies are as follows:

| A. | The
Company’s investment goals and objectives are capital preservation, maintaining returns on capital with a high degree
of safety and generating income from dividends and option sales to help offset operating losses from the Company’s Operating
Division. |
| --- | --- |
| B. | In
order to achieve these goals, the Company maintains a diversified securities portfolio comprised primarily of electric utility
company 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 net short position is the total fair market value of the Company’s short positions reduced
by the amount due to the Company from the Broker. If the amount due from the Broker is more than the fair market value of
the short positions, the Company will have a net receivable from the Broker. The Company’s investment policy is to maintain
a minimum of 80% of its portfolio in equity securities of utility companies. The Board of Directors has authorized this minimum
to be temporarily lowered to 70% when Company management deems it to be necessary. Investments in utilities are primarily
in electric companies. Investments in non-utility stocks will generally not exceed 20% of the value of the portfolio. |

2. Significant Accounting Policies

Basis of Presentation and Use of Estimates

The Company is an investment company and follows accounting and reporting guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946 (ASC 946). The accompanying financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), including, but not limited to, ASC 946. GAAP requires the use of estimates made by management. Management believes that estimates and valuations are appropriate; however, actual results may differ from those estimates, and the valuations reflected in the accompanying financial statements may differ from the value ultimately realized upon sale or maturity.

The following is a summary of significant accounting policies consistently followed by the Company in the preparation of its financial statements.

Valuation of Investments

The Company carries its investments in securities at fair value and utilizes various methods to measure the fair value of its investments on a recurring basis. Fair value is an estimate of the exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants (i.e., the exit price at the measurement date). Fair value measurements are not adjusted for transaction costs. GAAP establishes a hierarchy that prioritizes inputs to valuation methods. The three levels of inputs are:

Level 1 - Unadjusted quoted prices in active markets for identical assets and liabilities that the Company has the ability to access.

Level 2 - Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.

Level 3 - Unobservable inputs for an asset or liability, to the extent relevant observable inputs are not available; representing the Company’s own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available.

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Daxor Corporation

Notes to Financial Statements

December 31, 2020

2. Significant Accounting Policies - (continued)

Valuations of Investments (continued)

The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.

The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement falls in its entirety, is determined based on the lowest level input that is significant to the fair value measurement in its entirety. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

Investments in securities, securities borrowed and put and call options that are freely traded and are listed on a national securities exchange are valued at the last reported sales price on the last business day of the year; securities traded on the over-the-counter market and listed securities for which no sale was reported on that date are valued at the mean between the last reported bid and asked prices.

The Company establishes valuation processes and procedures to ensure that the valuation techniques for investments that are categorized within Level 3 of the fair value hierarchy are fair, consistent, and verifiable. At December 31, 2020, Level 3 investments consist solely of the Company’s investment in its wholly owned Operating Division at fair value. The Company’s Audit Committee oversees the valuation process of the Company’s Level 3 investments. The Audit Committee is comprised of members of the Company’s Board of Directors and is responsible for the valuation processes and procedures and evaluating the overall fairness and consistent application of the valuation policies. For this valuation process the Audit Committee meets semi-annually or as needed, and in conjunction with reports from an independent valuation company determines the valuations of the Company’s Level 3 investments. Valuations determined by the Audit Committee are required to be supported by the independent valuation company whose reports may include information such as market data, third-party pricing sources; industry accepted pricing models, counterparty prices, or other appropriate methods. On an annual basis, the Company engages the services of an independent valuation company to perform an independent review of the valuation of the Company’s investment in its wholly owned Operating Division, and may adjust its valuations based on the recommendations from the valuation firm.

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Daxor Corporation

Notes to Financial Statements

December 31, 2020

2. Significant Accounting Policies - (continued)

Valuation of Derivative Instruments

The Company accounts for derivative instruments under FASB ASC 815, “Derivatives and Hedging,” which establishes accounting and reporting standards requiring that derivative instruments be recorded in the statement of assets and liabilities at fair value. The changes in the fair values of derivatives are included in the statements of operations as a component of net realized and unrealized loss from investments.

Investment Transactions and Income and Expenses

Investment transactions are accounted for on the trade date. Realized gains and losses on sales of investments are calculated on the basis of identifying the specific securities delivered. Dividend income and expense are recorded on the ex-dividend date, and interest income is recognized on the accrual basis. Expenses are recorded on an accrual basis.

Distributions

Net investment income and net realized gains are accumulated within the Company and used to pay expenses, to make additional investments or held in cash as a reserve and at the discretion of the Company, to pay dividends to shareholders.

Revenue Recognition

Effective January 1, 2018, the Company adopted ASC Topic 606, Revenue from Contracts with Customers (“ASC” topic 606). The new revenue recognition guidance requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance requires an entity to follow a five step model to (a) identify the contract(s) with a customer, (b) identify the performance obligations in the contract, (c) determine the transaction price, (d) allocate the transaction price to the performance obligations in the contract, and (e) recognize revenue when the entity satisfies a performance obligation.

The Company recognizes revenues in the Operating Division from product sales when a product is shipped and recognizes revenue from service contracts as the revenues are earned over the life of service contract and performance obligations are met.

Income Taxes

The Company accounts for income taxes under the provisions of FASB ASC 740, “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.

The Company accounts for uncertainties in income taxes under the provisions of FASB ASC 740-10-05, “Accounting for Uncertainties in Income Taxes”. The ASC clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. The ASC 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 ASC provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

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Daxor Corporation

Notes to Financial Statements

December 31, 2020

2. Significant Accounting Policies - (continued)

Treasury Stock

Treasury stock is recorded under the cost method and shown as a reduction of net assets.

3. Fair Value Measurements of Investments, Financial Instruments and Related Risks

The following tables summarize the inputs used as of December 31, 2020 for the Company’s assets and liabilities measured at fair value on a recurring basis at December 31, 2020, categorized by the above mentioned fair value hierarchy and also by denomination:

| Assets | Level
1 | Level
2 | Level
3 | Total |
| --- | --- | --- | --- | --- |
| Common
Stocks | $ 6,416,310 | $ - | $ - | $ 6,416,310 |
| Preferred
Stocks | 455,575 | - | - | 455,575 |
| Investment
in Operating Division | - | - | 8,800,000 | 8,800,000 |
| Total | $ 6,871,885 | $ - | $ 8,800,000 | $ 15,671,885 |

| Liabilities | Level
1 | Total |
| --- | --- | --- |
| Securities
sold short, at fair value | $ 627,000 | $ 627,000 |

The Company purchases equity securities in the form of common and preferred stocks, primarily in the utility sector which historically have a high degree of safety and pays dividends. The common and preferred stocks are recorded at fair value at the unadjusted closing quoted price on active securities markets.

Purchased call and put options: When the Company purchases an option; an amount equal to the premium paid by the Company is recorded as an investment on the Statement of Assets and Liabilities, the value of which is marked-to-market to reflect the current market value of the option purchased. If the purchased option expires, the Company realizes a loss equal to the amount of premium paid. When an instrument is purchased or sold through the exercise of an option, the related premium paid is added to the basis of the instrument acquired or deducted from the proceeds of the instrument sold. The risk associated with purchasing put and call options is limited to the premium paid.

Written call and put options: When the Company writes (sells) an option, an amount equal to the premium received by the Company is recorded as an obligation on the Statement of Assets and Liabilities, the value of which is marked-to-market to reflect the current market value of the written option. If the written option expires, the Company realizes a gain equal to the amount of premium received. When an instrument is purchased or sold through the exercise of an option, the related premium received is adjusted to the basis of the instrument acquired or the instrument sold. The risk associated with writing options is based on the difference between the strike price of the option and current market price of the underlying security less premium received. See Note 7 for further discussion of Investment and Market Risk Factors and risks of written call and put options.

Securities sold short: The Company sells securities that it does not own, and it will therefore be obligated to purchase such securities at a future date. The value of the open short position is recorded as a liability, and the Company records an unrealized gain or loss to the extent of the difference between the proceeds received and the value of the open short position. The Company records a realized gain or loss when a short position is closed out. By entering into short sales, the Company bears the market risk of increases in the value of the security sold short in excess of the proceeds received. Possible losses from short sales differ from losses that could be incurred from purchases of securities because losses from short sales may be unlimited whereas losses from purchases cannot exceed the total amount invested. See Note 1 regarding the Company’s investment goals and its use of covered positions and Note 7 for further discussion of Investment and Market Risk Factors.

During the year ended December 31, 2020, the Company realized proceeds of $2,153,948 from the sale of investment securities.

All transfers are recognized by the Company at the end of each reporting period. Transfers between Levels 2 and 3 (if any) generally relate to whether significant unobservable inputs are used for the fair value measurements. See Note 2 – Significant Accounting Policies for additional information related to the fair value hierarchy and valuation techniques and inputs. During the year 2020 there were no transfers between Levels.

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Daxor Corporation

Notes to Financial Statements

December 31, 2020

3. Fair Value Measurements of Investments, Financial Instruments and Related Risks (continued)

The following table is a reconciliation of the beginning and ending balances for the Company’s assets measured at fair value on a recurring basis using significant unobservable inputs (level 3) during the year ended December 31, 2020:

| | Balance
at | |
| --- | --- | --- |
| | December
31, 2020 | |
| Balance,
December 31, 2019 | $ 5,400,000 | |
| Net
change in unrealized appreciation on operating division | 3,400,000 | |
| Investment
in/advances to operating division | 2,709,397 | |
| Realized
loss on investment in operating division | (2,709,397 | ) |
| Balance,
December 31, 2020 | $ 8,800,000 | |

The Company’s Level 3 asset consists of its investment in its wholly owned Operating Division at fair value and requires significant judgment due to the absence of quoted market prices, inherent lack of liquidity, heavy reliance on Level 3 inputs, and the long-term nature of such investments. Since its inception, the Operating Division has not generated significant revenue and has incurred substantial operating losses. Due to these substantial losses, the Operating Division has been completely dependent on funding from the Company to sustain its operations. Investment in Operating Division is primarily located in Oak Ridge, Tennessee and was initially valued at transaction value for identified assets (property and equipment, land, buildings and laboratory equipment), less accumulated depreciation adjusted for investment in/advances to operating division, business operations and activity and realized losses. Based on Company initiatives started in 2016 and through 2019, related to potential partnerships, joint ventures, product development, marketing and other operations of the Operating Division, the Company hired an independent valuation company to perform a valuation of the Operating Division. The Company updated the initial 2016 valuation and subsequent valuations at December 31, 2017 through December 31, 2020, using the Income Approach and Market Approaches as defined in SFAS 157 (ASC 820). Based on the valuation approaches, the valuation ranges were $7,800,000 to $9,800,000 for the Income Approach at December 31, 2020. In determining the Income Approach value range, the Gordon Growth Model valuation technique was used with a discount rate of 24.0 % and long-term growth rate of 3.0%. Significant increases (decreases) in these unobservable inputs in isolation could result in significant changes in fair value measurements. The Income Approach was weighted 95% given the current financial performance and expectations as to longer-term revenue growth and profitability and a 5% weight to two (2) arm’s length Daxor share sales transactions which raised $4.0 million, resulting in a midpoint of value range of $8,800,000.

4. Derivative Instruments

The Company may write call and put options in order to generate additional investment income as part of its investment strategy. In the opinion of management, the use of financial derivative instruments in its investment program is appropriate and customary for the investment strategies employed reducing certain investment risks.

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Daxor Corporation

Notes to Financial Statements

December 31, 2020

4. Derivative Instruments - (continued)

The following table summarizes the Company’s activity in call and put options for the period ended December 31, 2020.

| Total
Proceeds Received
on open
positions at
01/01/20 | Sale
of Options
from 01/01/20-12/31/20 | Expirations,
Purchases and Assignments
of Options
from 01/01/20-12/31/20 | Proceeds Received
on open
positions at
12/31/20 | Market Value
at 12/31/20 | Unrealized (Loss)
at 12/31/20 |
| --- | --- | --- | --- | --- | --- |
| $ 24,063 | $ 778,881 | $ 802,944 | $ - | $ - | $ - |

For the period ended December 31, 2020, the Company recorded a realized net gain of $778,881 on call and put options.

5. Income Taxes (Benefit)

The net income tax expense (benefit) for the period ended December 31, 2020 is comprised of the following:

| Current
Income Tax Expense (Benefit): — Federal | $ (25,280 | ) |
| --- | --- | --- |
| State
and local | - | |
| Total
current income tax expense (benefit) | (25,280 | ) |
| Deferred
Tax Expense: | | |
| Federal | $ - | |
| State
and local | - | |
| Total
deferred tax expense | - | |
| Net
income tax (benefit) | $ (25,280 | ) |

The Company has a net operating loss carry forward of approximately $21,668,363 at December 31, 2020. Approximately $16,744,764 of these losses relates to years prior to 2018 and will begin to expire in 2033. Approximately $4,923,599 of these losses relate to the years 2018 through 2020, and will not expire, but are subject to limitations on usage.

The following table sets forth the net operating loss carry forwards by state and local jurisdiction at December 31, 2020:

| New
York State | $ |
| --- | --- |
| New
York City | $ 8,126,861 |
| California | $ 1,107,429 |
| Tennessee | $ 6,137,387 |
| South
Carolina | $ 9,636,414 |

For tax years beginning after December 31, 2017, the Alternative Minimum Tax (“ATM”) on corporations was repealed. Credits could be utilized to offset regular tax liability for years 2018 through 2021 and were to be fully refundable by 2021. In 2020 the C.A.R.E.S. Act was passed by the United States Congress and signed into law which accelerated the utilization and the credit available became fully refundable by 2020. As a result, the Company recorded $353,986 as income tax receivable, and benefit of the same amount in 2018 of which $189,633 was refunded in 2019. The remaining balance of $189,633 was eligible to be refunded 2020. The Company received the remaining balance of $189,633 in early 2021.

At December 31, 2020, the Company had no material unrecognized tax benefits and no adjustments to liabilities or operations were required. The Company does not expect that its unrecognized tax benefits will materially increase within the next twelve months. The Company recognizes interest and penalties related to uncertain tax positions in investment administrative expenses. As of December 31, 2020, the Company has not recorded any provisions for accrued interest and penalties related to uncertain tax positions.

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Daxor Corporation

Notes to Financial Statements

December 31, 2020

5. Income Taxes (Benefit) - (continued)

In certain cases, the Company’s uncertain tax positions are related to tax years that remain subject to examination by the relevant tax authorities. The Company files federal, state and local income tax returns in jurisdictions with varying statutes of limitations. The 2016 through 2018 tax years generally remain subject to examination by federal, state and local tax authorities.

Under Internal revenue code section 542, a company is defined as a Personal Holding Company (“PHC”) if it meets both an ownership test and an income test. The ownership test is met if a company has five or fewer shareholders that own more than 50% of the company, which is applicable to Daxor. The income test is met if PHC income items such as dividends, interest and rents exceed 60% of adjusted ordinary gross income. Adjusted ordinary income is defined as all items of income except capital gains. For the year ended December 31, 2020, more than 60% of Daxor’s adjusted gross income came from items defined as PHC income.

Determining the PHC tax liability requires computing Daxor’s “undistributed PHC income” and taxing such PHC income at the statutory rate of 20%. Undistributed PHC income is current year taxable income of the Company, exclusive of the net operating loss carry forward deduction that is allowed for regular tax purposes. The Company incurred no liability for PHC for the year ended December 31, 2020 due to the net operating losses applied to realized gains incurred during the year.

| Computed
expected provision at statutory rates | (21.0 | )% |
| --- | --- | --- |
| Valuation
allowance | 3.2 | % |
| Dividend
received deduction | (1.2 | )% |
| State
taxes | 1.4 | % |
| Non-deductible/non-taxable
and other items | 16.1 | % |
| Effective
income tax (benefit) rate | (1.5 | )% |

6. Deferred Income Taxes

Deferred income taxes result from differences in the recognition of gains and losses on marketable securities; stock options, as well as from carry forwards of the Company’s net operating losses of approximately $22,283,795 at December 31, 2020, and tax credits of approximately $1,126,000 for tax purposes. At December 31, 2020 the aggregate cost of investments for federal income tax purposes was $5,120,972.

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Daxor Corporation

Notes to Financial Statements

December 31, 2020

6. Deferred Income Taxes - (continued)

The significant components of deferred tax assets and liabilities are reflected in the following table:

| Unrealized
gains on investments in securities | $ | ) |
| --- | --- | --- |
| Unrealized
losses on short positions | 15,387 | |
| Unrealized
gain on investment in operating division | (1,342,398 | ) |
| Net
operating loss-carry forward | 6,418,640 | |
| Net
capital loss carry forward | (23,948 | ) |
| Business
tax credits carried forward | 1,126,208 | |
| Others | 14,980 | |
| Deferred
Income Tax Available for use | 5,058,195 | |
| Valuation
allowance | (5,058,195 | ) |
| Net
Deferred Tax Asset | $ - | |

Realization of deferred tax assets is dependent on future earnings. Due to the uncertainty of the realization of its net deferred tax assets, the Company has provided a valuation allowance. In assessing the potential to realize the deferred tax asset, management considers whether it is more likely than not that some or perhaps all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which these temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making their assessment. The Company recorded a valuation allowance of $5,058,195 at December 31, 2020. The valuation allowance increased $1,256,619 from December 31, 2019. If the Company becomes profitable before the expiration of the loss carry forwards, it would have the ability to utilize them in order to offset any taxable income.

7. Investment and Market Risk Factors

The Company enters into investments in securities, call and put options and securities borrowed and/or financial instruments that may have off balance sheet risks, where the potential loss due to changes in the market (market risk), failure of counterparty to perform on the transaction risk (credit risk) and other risk elements, such as interest rate risk, exceeds the value and/or obligations of such financial instruments. It is the Company’s general policy to mitigate such risks by transacting with established counterparties. The Company transacts with and custodies investment assets at UBS Financial Services, Inc. (“Broker”).

The Company’s investments in securities arise from investments in long common and preferred stocks, selling common stocks short and transacting in put and call (naked and covered) options. These investments are subject to equity risks of increases and decreases in market exchange prices such as on the NASDAQ.

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Daxor Corporation

Notes to Financial Statements

December 31, 2020

7. Investment and Market Risk Factors - (continued)

The Company is subject to certain inherent risks arising from its investing activities of selling securities short and writing put and call options. Selling securities short creates an obligation to purchase the securities at an unknown future date, subject to the Company’s discretion, at the then prevailing future market prices. Securities borrowed create the risk that the ultimate obligation may exceed the liability reflected in these financial statements.

The Company collects premiums and the opportunity to create option premium income when writing put and call options if the options expire out-of-the-money. Writing put and call options gives the option buyer the right to exercise the option against the option writer. Writing put options obligates the writer to purchase the stock at the strike price if the stocks’ current market price is below the strike price prior to expiration of the put option. The potential loss in writing a put option is the strike price less the premium collected if the stock price falls to zero. Writing call options obligates the writer to sell the stock at the strike price if the stock’s current market price is greater than the strike price prior to expiration of the call option. The potential loss in writing a naked call option is unlimited as the rise of a stock price is unlimited. The potential loss in writing a covered call is limited to the strike price less the cost of the underlying security the Company holds in the portfolio. The Company endeavors to write covered calls but may also write naked calls.

Cash receivable from broker and margin loans payable reflect accounts with the Company’s Broker. Due from broker represents amounts receivable from brokers that are available for investing but have not been invested. Margin loan payable represents obligations to the Broker for leveraging investments in securities. Investments in securities are collateral for the margin loan payable. The Company does not have the right of setoff nor netting agreements between brokers.

The Company’s investments may be subject to changes in interest rates as they may affect equity and option markets. Interest rate risk refers to the fluctuations in value of fixed-income securities resulting from the inverse relationship between price and yield. For example, an increase in general interest rates will tend to reduce the market value of already issued fixed-income investments, and a decline in general interest rates will tend to increase their value. In addition, debt securities with longer maturities, which tend to have higher yields, are subject to potentially greater fluctuations in value from changes in interest rates than obligations with shorter maturities.

The Company is subject to volatility risk which refers to the magnitude of the movement, but not the direction of the movement, in a financial instrument’s price over a defined time period. Large increases or decreases in a financial instrument’s price over a relative time period typically indicate greater volatility risk, while small increases or decreases in its price typically indicate lower volatility risk.

Legal, tax and regulatory changes continue to occur in the United States and globally, additionally, regulatory environments, as a whole, continue to evolve and change. The effect of any future legal, tax and/or regulatory changes are unknown and could be substantial and adverse.

8. Related Party Transactions

The Company reported $66,094 of portfolio administrative expenses which is included in investment administrative charges on the Statement of Operations for period ended December 31, 2020. These charges represent a portion of the payroll and related expenses of two (2) employees of the Operating Division for services performed for the Company. The Company sold 265,352 treasury shares to institutional investors during the year ended December 31, 2020 for net proceeds of $4,036,106.

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Daxor Corporation

Notes to Financial Statements

December 31, 2020

9. Margin Loan and Paycheck Protection Program (“PPP”) Loan

The Company has total margin loan payable at December 31, 2020 of $170,689. This loan is secured by the Company’s investments in marketable securities. The interest expense on the margin loans for the period ended December 31, 2020 was $8,402. The ability of the Company to incur margin debt at any given time is based on the current amount outstanding and the market value of the portfolio of marketable securities. There are no set repayment terms for the Company’s margin loan.

The following table summarizes the margin loan activity for the year ended December 31, 2020:

| Balance
at 12/31/20 — $ 170,689 | 1.288 % | Maximum
amount outstanding during
the year — $ 1,424,495 | Average
amount outstanding during
the year — $ 390,079 | 1.874 % |
| --- | --- | --- | --- | --- |

In April 2020 the Operating Division of the Company applied for and received $290,102 under the 2020 Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”). The loan is being accounted for as a liability of the Operating Division and is part of the value of the Operating Division at December 31, 2020. The Operating Division Company applied for forgiveness of the PPP loan in 2020. Forgiveness of the loan was approved on January 4, 2021 by the Small Business Administration (“SBA”).

10. Capital Stock

At December 31, 2020, there were 10,000,000 shares of $0.01 par value capital stock authorized. The paid in capital of $11,438,156 at December 31, 2020 consists of the following amounts:

| Additional
Paid in Capital in excess of par value of common stock | $ |
| --- | --- |
| Common
Stock | 53,166 |
| Total
Paid in Capital | $ 11,438,156 |

11. Treasury Stock

The Company’s Board of Directors from time to time has authorized the repurchase of shares of the Company’s common stock in the open market usually as funds are available and if the stock is trading at a price which management feels is undervalued. The Company did not repurchase any shares of the Company during the year ended December 31, 2020. During the year ended December 31, 2020, under the previously issued registration statement, the Company sold in the open market to institutional investors 265,352 shares of the Company’s stock. The sales were completed in two offerings. In March 2020, the Company sold 140,352 shares at a price of $14.25 per share, or gross proceeds of $2,000,016; net proceeds to the Company of $1,762,115. In July 2020 the Company sold 125,000 shares at a price of $20.00 per share, or gross proceeds of $2,500,000; net proceeds to the Company of $2,273,991. The Company received proceeds of $201,195 upon the exercise of stock options.

Treasury stock at December 31, 2020:

| Treasury
Stock at repurchase price | 10,623,003 |
| --- | --- |
| Treasury
Stock shares | 1,282,653 |

12. Dividends

In 2008, management instituted a policy of paying dividends when funds are available. The Company did not declare a dividend for the year 2020.

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Daxor Corporation

Notes to Financial Statements

December 31, 2020

13. Stock Options

In June 2019, the Board of Directors of the Company approved the Daxor Corporation 2020 Incentive Compensation Plan (the “2020 Plan”). In April 2020 the Company received exemptive relief from the Securities & Exchange Commission (“SEC”) and The 2020 Plan was given approval to become operational effective in April, 2020. The 2020 Plan was approved by shareholders of the Company on June 25, 2020. In addition to Stock Options, awards under the 2020 Plan can consist of Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Deferred Stock Units, Cash Awards and Bonus Stock (collectively, “Stock Awards”). The 2020 Plan is an effort to provide incentive to employees, officers, agents, consultants, and independent contractors through proprietary interest. The Board of Directors acts as the Plan Administrator, and may issue these Stock Awards at its discretion.

The 2020 Plan replaces the 2004 Stock Option Plan.

The maximum number of shares that may be issued under the 2020 Plan is 250,000 or 5% of the Company’s outstanding shares, whichever is greater. Under the provisions of the 2020 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. Previously, the Company issued options to various employees under the previous 2004 Stock Option Plan and the Stock Option Plan that was also administered by the Board of Directors. All issuances have varying vesting and expiration timelines. As at December 31, 2020, the 2020 Plan had 170,529 options outstanding and 28,788 were exercisable. The 2004 Stock Option Plan had 172,566 options outstanding and 172,566 were exercisable. The Company has not granted options under the 2004 Stock Option Plan since August 2018. The 2004 Stock Option Plan ceased operation upon approval of the 2020 Plan, although stock options that were awarded under the 2004 Plan that have not expired are still eligible to be exercised.

At December 31, 2020, there was $1,599,003 of unvested stock-based compensation expense to recognize. The Company recognized $377,607 of stock-based compensation expense, which is included in investment administrative charges in the Statement of Operations for the year ended December 31, 2020. There was no aggregate intrinsic value at December 31, 2020 as the closing price of the Company’s stock was lower than the average exercise price of the underlying options. The intrinsic value is calculated based on the difference between the closing market price of the Company’s common stock and the exercise price of the underlying options.

To calculate the option-based compensation, the Company used the Black-Scholes option-pricing model. 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.

For the year ended December 31, 2020, 170,529 stock options were granted to employees, Directors and outside consultants from the 2020 Plan with a weighted average exercise price of $14.28. The stock options granted during the year ended December 31, 2020 from the 2020 Plan are still outstanding and 28,788 stock options have vested as of December 31, 2020.

The fair values of stock options granted in the year ended December 31, 2020 were estimated using the Black-Scholes option-pricing model with the following assumptions for the year ended December 31, 2020.

	2020
Risk
free rate	0.14 %
Expected
life (in years)	4.65
Expected
volatility	79.84 %
Dividend
yield	0.00 %
Weighted Average
grant date fair value per share	$ 14.28

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Daxor Corporation

Notes to Financial Statements

December 31, 2020

13. Stock Options - (continued)

The details of employee option activity for the 2020 Plan for the year ended December 31, 2020 is as follows:

| Outstanding
and Exercisable, January 1, 2020 | - | Weighted
Average Exercise Price — $ - |
| --- | --- | --- |
| Granted | 170,529 | $ 14.28 |
| Canceled | - | - |
| Expired | - | - |
| Outstanding
at December 31, 2020 | 170,529 | $ 14.28 |

The following tables summarize information concerning currently outstanding and exercisable options at December 31, 2020:

| Range
of Exercise Prices | | Weighted
Average Remaining
Contractual Life at
December 31, 2020 | Weighted
Average Exercise Price at December 31, 2020 |
| --- | --- | --- | --- |
| $ 12.50
- $18.95 | 170,529 | 4.65
years | $ 14.28 |

| Range
of Exercise Prices | | Weighted
Average Exercise Price at December 31, 2020 |
| --- | --- | --- |
| $ 12.50
- $17.25 | 28,788 | $ 13.69 |

The details of employee option activity for the 2004 Stock Option Plan for the year ended December 31, 2020 is as follows:

| Outstanding
and Exercisable, January 1, 2020 | 194,233 | $ | 8.56 |
| --- | --- | --- | --- |
| Granted | - | | - |
| Exercised | (21,667 | ) | 9.29 |
| Expired | - | | - |
| Outstanding
at December 31, 2020 | 172,566 | $ | 8.60 |

The following tables summarize information concerning currently outstanding and exercisable options from the 2004 Stock Option Plan at December 31, 2020:

| Range
of Exercise Prices | | Weighted
Average Remaining
Contractual Life at
December 31, 2020 | Weighted
Average Exercise Price at December 31, 2020 |
| --- | --- | --- | --- |
| Below
- $9.52 | 172,566 | 2.24
years | $ 8.60 |

| Range
of Exercise Prices | | Weighted
Average Exercise Price at December 31, 2020 |
| --- | --- | --- |
| Below
- $9.52 | 172,566 | $ 8.60 |

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Daxor Corporation

Notes to Financial Statements

December 31, 2020

14. Commitment

On January 20, 2016, the Company signed a lease which commenced on January 22, 2016 and expires on June 30, 2021 for 3,112 square feet of office space in New York City. The Rent Commencement Date under the lease was June 22, 2016 and will expire on June 30, 2021.

The future minimum lease payments exclusive of future cost of living and tax escalation increases are $107,364:

| Period
Covered: | Number
of Months | Commitment |
| --- | --- | --- |
| January
1, 2021 through June 30, 2021 | 6 | $ 107,364 |
| Total
Commitment | | $ 107,364 |

The rent expense is allocated to and reflected in the Operating Division’s results of operations which are not a part of these financial statements. The Company’s Operating Division adopted Accounting Standards Update No. 2016-02, Leases (Topic842), (“ASC 842”) effective January 1, 2019 using the effective date transition method and utilizing the Company’s incremental borrowing rate of 3.3% and did not have a material effect on the operations, financial position and cash flows of its Operating Division. The Operating Division had an initial recognition right of use asset, and corresponding liability of $506,896 adopting ASC 842 on January 1, 2019. The right of use asset and corresponding liability at December 31, 2020 was $101,364.

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Daxor Corporation

Notes to Financial Statements

December 31, 2020

15 . Registration Statement

The Company has filed a Form N-2 Registration Statement under the Securities Act of 1933, which permits the Company to raise additional equity capital by issuing additional shares of common stock from time to time in varying amounts and by different offering methods, at prices and on terms to be determined by market conditions at the time of offering. During any 12-month period, the aggregate market value of securities the Company may offer may not exceed one third of the aggregate market value of voting and non-voting common equity held by persons who are not affiliates of the Company.

16. Contingency

Idant Labs, a wholly owned subsidiary of the Company settled a civil complaint in Federal District Court in the State of Illinois in relation to the sale of anonymous donor semen that allegedly led to the birth of two children with alleged autism. Idant Labs settled the civil complaint in the amount of $250,000 that was paid through the Company’s insurance company in 2019. All complaints have been dismissed in 2020.

17. Recently Issued Accounting Pronouncements

In August 2018, FASB issued Accounting Standards Update No. 2018-13 (“ASU 2018-13”) related to FASB ASC Topic 820 Fair Value Measurement and Disclosures – Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 eliminates, amends, and adds to the fair value measurement disclosure requirements of ASC Topic 820. The amendments are designed to provide more useful information to financial statement users. ASU 2018-13 is effective for interim and annual reporting periods beginning after December 15, 2019. The Company adopted ASU 2018-13 effective December 31, 2019 and did not have a material effect on the operations, financial position and cash flows of the Company.

In February 2016, the Financial Accounting Standards Board issued Accounting Standards Update No. 2016-02, Leases (Topic 842), which supersedes existing lease accounting standards. Together with subsequent amendments, this created Accounting Standards Codification Topic 842 (“ASC 842”). ASC 842 requires that a lessee recognize a right-of-use asset and a corresponding liability for its obligation under virtually all operating leases, as well as expands disclosure requirements. ASC 842 was effective for annual reporting periods beginning after December 15, 2018. Early adoption was permitted. The Company’s Operating Division adopted ASC 842 effective January 1, 2019 and did not have a material effect on the operations, financial position and cash flows of its Operating Division.

18. Coronavirus (COVID-19) Pandemic

The global outbreak of COVID-19 (commonly referred to as “coronavirus”) has disrupted economic markets and the prolonged economic impact is uncertain. The ultimate economic fallout from the pandemic, and the long-term impact on economies, markets, industries and individual issuers, are not known. The operational and financial performance of the issuers of securities in which the Funds invest depends on future developments, including the duration and spread of the outbreak, and such uncertainty may in turn adversely affect the value and liquidity of the Funds’ investments, impair the Funds’ ability to satisfy redemption requests, and negatively impact the Funds’ performance.

19. Subsequent Events

On January 22, 2021, the Company received the Federal Tax refund of $189,633. On January 4, 2021, the Company was notified by the Small Business Administration the Paycheck Protection Plan (“PPP”) loan in the amount of $290,102 was forgiven.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors of

Daxor Corporation

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of Daxor Corporation (the “Company”), including the schedule of investments, as of December 31, 2020, the related statements of operations and cash flows for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the related notes (collectively referred to as the “financial statements”) and the financial highlights for each of the years in the five year period then ended. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Company as of December 31, 2020, and the results of its operations and cash flows for the year then ended, the changes in net assets for each of the two years in the period then ended, and the financial highlights for the each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements and financial highlights are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our procedures included confirmation of securities owned as of December 31, 2020 by correspondence with the Company’s securities broker. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. We believe that our audits provide a reasonable basis for our opinion.

| /s/
WithumSmith+Brown, PC |
| --- |
| We
have served as the Company’s auditor since 2016. |
| New
York, New York |
| February
25, 2021 |

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Daxor Corporation

Supplemental Data

General

Investment Products Offered

| ● | Are
not FDIC Insured |
| --- | --- |
| ● | May
Lose Value |
| ● | Are
Not Bank Guaranteed |

The investment return and principal value of an investment in Daxor Corporation will fluctuate in part as the prices of the individual securities in which it invests fluctuate, so that your shares, when sold, may be worth more or less than their original cost. You should consider the investment objectives, risks, charges and expenses of Daxor and Daxor’s operating business carefully before investing. For a free copy of the Company’s definitive prospectus (when available), which contains this and other information, call the Company at 212- 330-8500.

This shareholder report must be preceded or accompanied by the Company’s prospectus for individuals who are not current shareholders of the Company.

Voting Proxies on Portfolio Securities

A description of the policies and procedures that the Company uses to determine how to vote proxies relating to portfolio securities owned by the Company and the Company’s proxy voting record for the 12-month period ended June 30, 2020 are available (i) without charge, upon request, by calling 1-212-330-8500 and (ii) on the Securities and Exchange Commission’s website: www.sec.gov.

Disclosure of Portfolio Holdings

The SEC has adopted the requirement that all investment companies file a complete schedule of investments with the SEC for their first and third fiscal quarters on Form N-PORT. The Company’s Form N-PORT for March 31, 2020, and September 30, 2020 reporting portfolio securities held by the Company, are available on the Commission’s website at http://www.sec.gov, and may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC. Information on the operation of the public reference room may be obtained by calling 800-SEC-0330.

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Daxor Corporation

Privacy Policy

The Company and Your Personal Privacy-

Daxor Corporation is an investment company registered with the Securities and Exchange Commission under the Investment Company Act of 1940.

What Kind of Non-Public Information do we Collect About you if you Become a Shareholder?

Daxor Corporation does not collect non-public information about our shareholders.

What Information do we disclose and to whom do we disclose it?

We do not disclose any non-public personal information about our customers or former customers of our operating division to anyone, other than our service providers who need to know such information and as otherwise permitted by law. If you want to find out what the law permits, you can read the privacy rules adopted by the Securities and Exchange Commission. They are in volume 17 of the Code of Federal Regulations, Part 248. The Commission often posts information about its regulations on its website, www.sec.gov.

What do we do to protect Your Personal Information?

We restrict access to non-public personal information about our customers or former customers to the people who need to know that information in order to perform their jobs or provide services to you. We maintain physical, electronic, and procedural safeguards to keep your personal information confidential.

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Daxor Corporation

About the Corporation’s Directors and Officers

The Corporation is governed by a Board of Directors that meets to review investments, performance, expenses and other business matters, and is responsible for protecting the interests of shareholders. The majority of the Corporation’s directors are independent of Daxor Corporation.; the only “inside” directors is an officer and a director of Daxor Corporation. The Board of Directors elects the Corporation’s officers, who are listed in the table. The business address of each director and officer is 350 Fifth Avenue, Suite 4740, New York, NY 10118.

| Name,
Address and Age | Position(s)
Held with Company | Term
of Office and
Length of Time
Served | Principal
Occupation(s) During Past
Five Years | Number
of Portfolios Overseen By Directors | Other
Directorships Held (during past five years) by Director |
| --- | --- | --- | --- | --- | --- |
| “Noninterested
Persons” | | | | | |
| James
Lombard 350 Fifth Avenue (Empire State Building), Suite 4740 New
York, New York 10118 | Director | One
year term, Director since 1989 | Director
of Administrative Services Division, New York City Council (Retired). | None | None |
| Age:
86 | | | | | |
| Henry
D Cremisi, MD 350 Fifth Avenue (Empire State Building), Suite 4740 New York, New York 10118 | Director | One
year term, Director since 2020 | Medical
Director, AstraZeneca Pharmaceuticals | None | None |
| Age:
62 | | | | | |
| Edward
Feuer 350 Fifth Avenue (Empire State Building), Suite 4740 New York, New York 10118 | Director | One
year term, Director since 2016 | Managing
Partner, Feuer & Orlando | None | None |
| Age:
65 | | | | | |
| Joy
Goudie, Esq. 350 Fifth Avenue (Empire State Building), Suite 4740 New York, New York 10118 | Director | One
year term, Director since 2020 | Partner,
Wissing Miller, LLP Patent Attorney. | None | None |
| Age:
64 | | | | | |

| Name,
Address and Age | Position(s)
Held with Company | Term
of Office and Length of Time Served | Principal
Occupation(s) During Past Five Years | Number
of Portfolios Overseen By Directors | Other
Directorships Held (during past five years) by Director |
| --- | --- | --- | --- | --- | --- |
| “Interested
Persons” | | | | | |
| Michael
Feldschuh 350 Fifth Avenue
(Empire State Building), Suite 4740
New York, New York 10118 | Director | One
year term, Director since 2013 | Executive
Vice President Chairman, President, CEO | One | None |
| Age:
51 | | | | | |
| Jonathan Feldschuh 350
Fifth Avenue
(Empire State
Building), Suite
4740, New
York, New York 10118 | Director | One
year term, Director since 2017 | Chief
Scientific Officer | None | None |
| Age
56 | | | | | |

The Daxor’s Statement of Additional Information includes additional information about the Directors and is available free of charge, upon request, by calling toll-free at 212-330-8500.

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Daxor Corporation

December 31, 2020

ITEM 2. CODE OF ETHICS

The registrant has adopted a code of ethics that applies to the registrant’s principal executive officer and principal financial officer. The registrant has not made any amendments to its code of ethics during the period covered by this report. The registrant has not granted any waivers from any provisions for the code of ethics during the period covered by this report. A copy of the registrant’s Code of Ethics is available on the Company’s website at http://www.daxor.com/wp-content/uploads/2014/10/DAXOR-CORPORATION-CODE-OF-ETHICS.pdf

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT

The registrant’s board of directors has determined that there is at least one audit committee financial expert serving on its audit committee. Edward Feuer is the “audit committee financial expert” and is considered to be “independent” as each term is defined in Item 3 of Form N-CSR.

Item 4. Principal Accountant Fees and Services

(a) Audit Fees. The aggregate fees billed for professional services rendered by WithumSmith+Brown, PC (“Withum”), the registrant’s independent registered public accounting firm, for the audit of the registrant’s annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for the fiscal years ended December 31, 2020 and December 31, 2019 were $83,946 and $82,658, respectively.

(b) Audit-Related Fees. The aggregate fees billed for assurance and related services by Withum that are reasonably related to the performance of the audit of the registrant’s financial statements and not reported under paragraph (a) of this Item 4 in the fiscal years ended December 31, 2020 and December 31, 2019 were $3,863 and $5,150, respectively. These fees include audit-related services in connection with the registrant’s “at the market” common stock issuance program and the filing of its shelf registration statements during the period. The Adviser or its affiliates have paid all audit-related fees of the registrant prior to or in connection with the registrant’s initial offering of common stock.

(c) Tax Fees. The aggregate fees billed for professional services by Withum for tax compliance, tax advice and tax planning in the fiscal years ended December 31, 2020 and December 31, 2019 were $-0-and $23,691, respectively. These fees were in connection with the preparation of the registrant’s corporate and state tax returns as well as related tax advice.

(d) All Other Fees. The aggregate fees billed for all other services not listed in (a) through (c) above by Withum in the fiscal years ended December 31, 2020 and December 31, 2019 were $0 and $0, respectively.

(e) (1) The registrant’s Audit Committee has adopted written policies relating to the pre-approval of audit and permitted non-audit services to be performed by the registrant’s independent registered public accounting firm. Under the policies, on an annual basis, the registrant’s Audit Committee reviews and pre-approves proposed audit and permitted non-audit services to be performed by the independent registered public accounting firm on behalf of the registrant.

In addition, the registrant’s Audit Committee pre-approves annually any permitted non-audit services (including audit-related services) to be provided by the independent registered public accounting firm to the registrant’s investment adviser and any entity controlling, controlled by, or under common control with the registrant’s investment adviser that provides ongoing services to the registrant (together, the “Service Affiliates”), provided, in each case, that the engagement relates directly to the operations and financial reporting of the registrant. Although the Audit Committee does not pre-approve all services provided by the independent registered public accounting firm to Service Affiliates (for instance, if the engagement does not relate directly to the operations and financial reporting of the registrant), the Audit Committee receives an annual report showing the aggregate fees paid by Service Affiliates for such services.

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

The registrant has a separately designated standing audit committee. The members are: Edward Feuer, James A. Lombard and Joy S. Goudie, Esq.

ITEM 6. SCHEDULE OF INVESTMENTS

Included herein under Item 1.

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Daxor Corporation

December 31, 2020

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Daxor Corporation is involved in many matters of corporate governance through the proxy voting process. We exercise our voting responsibilities with the primary goal of maximizing the long term value of our investments. Our consideration of proxy issues is focused on the investment implications of each proposal.

Our management evaluates and votes each proxy ballot that we receive. We do not use a proxy voting service. We recognize that a company’s management is entrusted with the day to day operations of the company, as well as long term strategic planning, subject to the oversight of the company’s board of directors. Our guidelines are based on the belief that a company’s shareholders have a responsibility to evaluate company performance and to exercise the rights and duties pertaining to ownership.

Due to the nature of our business and our size, it is unlikely that conflicts will arise in our voting of proxies of public companies. We do not engage in investment banking nor we do we have private advisory clients. In the highly unlikely event that a conflict of interest does arise on a proxy voting issue, we will defer that vote to our independent directors.

ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES

Daxor does not have an outside portfolio manager. The Chief Executive Officer of the Company, Michael Feldschuh, manages Daxor’s portfolio.

| Michael
Feldschuh 350 Fifth Avenue (Empire State Building), Suite 4740 New York, New York 10118 |
| --- |
| Age:
51 |

Michael Feldschuh has been president of Daxor since 2017. He earned his bachelor’s degree in Pre-Med studies at Columbia College, Columbia University in 1991. Prior to joining Daxor’s executive team in December of 2014 as Executive Vice President, he served as a member of the board of directors for one and a half years prior. Mr. Feldschuh headed his own hedge fund, Aristarc Capital, from 2009 to 2013 specializing in quantitative equity strategies. Prior to founding his own fund, Mr. Feldschuh was a Managing Director at Morgan Stanley Investment Management from 2005 to 2009 and also served as a Managing Director and Portfolio Manager at Millennium Partners in New York from 1997-2005. Mr. Feldschuh was a proprietary trader for Morgan Stanley & Co. from 1994-1997. Mr. Feldschuh began his career at D.E. Shaw & Co. in New York, where he worked with Jeffery Bezos prior to Mr. Bezos’s founding of Amazon.

The compensation paid to Mr. Feldschuh is set forth in the following table.

| | Aggregate | Pension
or — Benefits
Accrues | | Compensation — Fund
Complex |
| --- | --- | --- | --- | --- |
| | Compensation | as
Part of | Annual
Benefits | Paid |
| Name | From
Company | Company
Expenses | Upon
Retirement | to
Director |
| Michael
Feldschuh | $ 100,000 | None | None | $ 100,000 |

Mr. Feldschuh has deliberately elected to draw a salary that is well below what the company believes is the market rate for someone with his responsibilities and qualifications. It is the belief of the Board of Directors that annual compensation of two or three times what he is currently earning could easily be justified. The decision to keep his annual compensation at well below market rate has been made as part of an effort to preserve capital in light of the company’s ongoing losses from operations.

The following table sets forth the share ownership of Mr. Feldschuh (the dollar range of equity securities in Daxor beneficially owned by Mr. Feldschuh was over $1,000,000).

| | Number
of Shares | Percent
of |
| --- | --- | --- |
| | Beneficially | Common |
| Name
of Beneficial Owner | Owned | Stock |
| Michael
Feldschuh, President and Director* | 204,007 | 5. 1 % |

*Includes 154,007 shares of common stock and 50,000 shares of common stock issuable upon the exercise of options issued under the company’s 2004 Stock Option Plan. We ceased issuing options under the 2004 Option Plan. On April 24, 2020, we received an exemptive order that permits us to adopt an incentive compensation plan, and shareholders approved our incentive compensation plan at our 2020 annual meeting.

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ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.

None

ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

There have been no material changes to the procedures by which shareholders may recommend nominees to the Company’s Board of Directors.

ITEM 11. CONTROLS AND PROCEDURES.

(a) The certifying officers, whose certifications are included herewith, have evaluated the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”) within 90 days of this report. Deficiencies in the registrant’s disclosure controls and procedures were not adequately designed and operating effectively to ensure that information required to be disclosed by the registrant in the reports it files or submits under the 1940 Act and Securities Exchange Act of 1934 was recorded, processed, summarized and reported in a timely fashion within the time periods specified in the Securities and Exchange Commission’s rules and forms. Management has taken corrective steps to resolve these matters so that future reporting may take place within the specified time frame of the 1940 Act.

(b) There were no significant changes in the registrant’s internal control over financial reporting that occurred during the registrant’s last fiscal half-year that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting other than the above mentioned corrective steps to improve the timeliness of financial reports as required under the 1940 Act.

ITEM 12. DISCLOSURE OF SECURITIES LENDING ACTIVITIES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Daxor did not lend out portfolio securities.

ITEM 13. EXHIBITS.

(a)(2) A separate certification for the principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940, as amended (17 CFR 270.30a-2(a)) is filed herewith.

(b) Officer certifications as required by Rule 30a-2(b) under the Investment Company Act of 1940, as amended (17 CFR 270.30a-2(b)) also accompany this filing.

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