RESULTS OF OPERATIONS

In 2008 revenue from operations was $1,761,055.vs. 2007 revenue from operations of $ 1,869,779 for a decrease of 6%. In 2006, operating revenues were $1,486,449.

Equipment sales and kit sales decreased from $1,453,201 in 2007 to $1,381,105 in 2008. In 2008 the Company sold four blood volume analyzers for a total of $260,000 versus six in 2007 for $390,500. Kit sales increased by 4% in 2008 over 2007 and by 15% in 2007 over 2006. Kit sales increased by 35% in 2006 over 2005 and by 53% in 2005 over 2004. 3,113 patients, utilizing the BVA-100, had blood volume measurements in 2008 vs. 3,015 in 2007, 2,886 in 2006 and 2,132 in 2005. For the year ended December 31, 2008 the Company provided 472 Volumex doses free of charge to facilities utilizing the BVA-100 for research versus 328 in 2007, 194 in 2006,95 in 2005 and 83 in 2004.

The major reasons for the current year increase in kit sales are an increase in utilization of existing instruments along with 53 Blood Volume Analyzers placed in service at December 31, 2008 versus 50 placed in service at December 31, 2007. Effective February 1, 2007, the Company raised prices by approximately 5% on Blood Volume Kits which was the first price increase in two years. The Company did not raise prices on Blood Volume Kits in 2008.

The decrease in Gross Profit Percentage on Kit Sales for the year ended December 31, 2008 is mainly due to the aforementioned increase in Volumex doses provided free of charge to facilities using the BVA-100 for research. The main reason for the decrease in Gross Profit Percentage for Equipment Sales and Related Services from 56.3% for the year ended December 31, 2007 to 51.2% for the year ended December 31, 2008 is that six blood volume analyzers were sold in 2007 versus four in 2008. The gross margin on the blood volume analyzer is substantially higher than the gross margin on Volumex Kits.

                                                                 Equipment Sales
                                                  Kit Sales      and Other Year      Total Year
                                                  Year Ended          Ended             Ended
  Equipment Sales and                            December 31,     December 31,      December 31,
   Related Services:                                 2008             2008              2008

Revenue                                          $  1,005,981    $       375,124    $   1,381,105
Cost of Goods Sold                                    516,054            158,522          674,576
Gross Profit                                          489,927            216,602          706,529
Gross Profit Percentage                                  48.7 %             57.7 %           51.2 %




                                                                  Equipment Sales
                                                   Kit Sales      and Other Year      Total Year
                                                  Year Ended           Ended             Ended
  Equipment Sales and                            December 31,      December 31,      December 31,
   Related Services:                                 2007              2007              2007

Revenue                                          $     963,318    $       489,883    $   1,453,201
Cost of Goods Sold                                     475,811            159,127          634,938
Gross Profit                                           487,507            330,756          818,263
Gross Profit Percentage                                   50.6 %             67.5 %           56.3 %

Operating revenues from Cryobanking and related services decreased in 2008 by $36,628 or 8.8% from 2007. This was due mainly to revenue from semen storage decreasing by $19,392 or 6.9% to $262,675 versus $282,067 in the year ended December 31, 2007. There was also a decrease of $14,743 in semen analysis and other lab services. The Company's Idant Laboratories subsidiary contributed 21.6%, 22.3%, and 29.0% of operating revenues in 2008, 2007 and 2006 respectively.

Operating Expenses

For 2008, consolidated expenses from operations including cost of sales totaled $6,968,207 and the loss from operations was $5,207,152. In 2007, expenses from operations including cost of sales totaled $7,300,649; the loss from operations was $ 5,430,870. In 2006, expenses from operations including cost of sales totaled $6,911,370; the loss from operations totaled $5,424,921.

Total Operating costs including cost of sales for Daxor and the BVA segment were $6,017,752 for the year ended December 31, 2008 versus $6,351,501 for the year ended December 31, 2007 for a decrease of $ 333,749 or 5.2%. The main reason for this decrease is a reduction of $278,489 in payroll and related expenses.

Research and Development expenses for Daxor and the BVA segment decreased in 2008 by $132,751 or 5.5% to $2,257,601 from $2,390,352 in 2007. However, Daxor remains committed to making Blood Volume Analysis a standard of care in at least three disease states. In order to achieve this goal, we are continuing to spend time and money in research and development in order to get the best product to market. We are still working on the following three projects: 1) GFR: Glomeril Filtration Rate, 2) Total Body Albumin Analysis, and 3) Wipe Tests for radiation contamination and detection. We are also progressing on the next version of the delivery device for the radioactive dose Volumex. The current version is the "Max-100" which has a patent. The next version, the "Max-200" will be without a needle and should give the company extended protection with a second patent when it is completed.

Total Operating Costs including cost of sales for the Cryobanking segment were $950,455 for the year ended December 31, 2008 versus $949,148 for the year ended December 31, 2007 for an increase of $1,307 or 0.1%.

Dividend income earned in 2008 was $2,509,966 vs. $2,419,476 in 2007, for an increase of $90,490, or 3.7%. In 2006, dividend income was $2,273,737.

Gains on the sale of investments were $17,249,716 in 2008 vs. $14,853,934 in 2007, and $3,316,710 in 2006. A major reason for the increase in Gains on the sale of investments in 2008 is that the Company realized $1,173,622 in gains on a security that was sold as the result of a merger. This stock would not have otherwise been sold but would have been held by the Company as of December 31, 2008.

LIQUIDITY AND CAPITAL RESOURCES

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

At December 31, 2008, the Company had $32,973,248 in short-term debt versus $47,214,047 at December 31, 2007. The following amounts are included in short-term debt at December 31, 2008 and December 31, 2007: Income Taxes Payable of $2,643,958 and $1,295,668 respectively, Deferred Tax Liability of $8,066,823 and $15,726,213 respectively, and Securities borrowed at fair market value of $107,871 and $20,362,259. The Deferred Tax Liability represents taxes due on the unrealized gain of the investment portfolio and Securities borrowed at fair market value represent short positions in common stock.

At December 31, 2008, stockholders' equity was $43,460,641 vs. $54,915,885 at December 31, 2007. At December 31, 2008 the Company's security portfolio had a market value of $68,339,143 versus $74,919,193 at December 31, 2007. At December 31, 2008, the Company's total liabilities and stockholders' equity were $76,824,181 versus $102,560,500 at December 31, 2007.

Income from the Company's security portfolio is a major asset for the Company as it conintues its efforts in research and marketing staff. At December 31, 2008, the Company is in a satisfactory financial position with adequate funds available for its immediate and anticipated needs. The Company plans its budgetary outlays on the assumption that the raising of additional financial capital may be difficult in the next 2 to 4 years. The Company believes that its present liquidity and assets are adequate to sustain the expenses associated with its sales and marketing program.

The following table shows the Cost, Market Value, Net Unrealized Gain, Unrealized Gain and Loss at December 31st from 2004 through 2008.

                                          Fair Market      Net Unrealized                            Unrealized
   Valuation Date:            Cost           Value              Gain           Unrealized Gains        Losses

December 31, 2008         $ 50,709,601    $ 68,339,143    $     17,629,542    $       28,469,540    $ (10,839,998 )
December 31, 2007           29,987,157      74,919,193          44,932,036            47,386,399       (2,454,363 )
December 31, 2006           23,307,390      66,968,446          43,661,056            43,927,770         (266,714 )
December 31, 2005           25,649,467      57,246,006          31,596,539            32,440,131         (843,592 )
December 31, 2004           22,907,780      54,806,400          31,898,620            32,133,292         (234,672 )

The Company's invested capital has increased over the past 5 years, going from $22,907,780 in 2004 to $50,709,601 in 2008. The value of the Company's investments increased from $54,806,400 in 2004 to $68,339,143 during this 5 year period. The Company has been able to partially offset the continuing operating losses which in 2007 were the highest in the Company's history. The increase in value of the Company's assets provides an underpinning for the Company's expanding activities. While there can be no assurance that these assets will not decrease in value, it is unlikely, at the present time, that they will go back to historical cost. The Company feels, however, that with respect to the Blood Volume Analyzer and the Blood Optimization Program, it is undercapitalized. Recent inquiries have indicated that additional capital is not available on reasonable terms without great dilution to existing shareholders. The Company believes that if the blood volume analyzer becomes a standard of care in any one of the areas described in this 10-K filing, it will then have much easier access to additional capital.

CRITICAL ACCOUNTING POLICIES

Available for Sale Securities

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

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

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

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

2. The Company maintains a diversified securities portfolio comprised primarily of electric utility preferred and common stocks. The Company also sells covered calls on portions of its portfolio and also sells puts on stocks it is willing to own. It also sells uncovered calls and will engage in short positions up to 15% of the value of its portfolio. The Company's short position may temporarily rise to 20% of the Company's portfolio without any specific action because of changes in valuation, but should not exceed this amount. The Company's investment policy is to maintain approximately of 80% of its portfolio in electric utilities. Investments in utilities are primarily in electric companies. Investments in non-utility stocks will not exceed 15% of the portfolio.

3. Investment in speculative issues, including short sales, maximum of 15%.

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

a. The use of "Call" Options. Covered options can be sold up to a maximum of 20% of the value of the portfolio. This provides extra income in addition to dividends received from the company's investments. The risk of this strategy is that investments the company may have preferred to retain can be called away. Therefore, a limitation of 20% is placed on the amount of stock on which options which can be written. The amount of the portfolio on which options are actually written is usually between 3-10% of the portfolio. The actual turnover of the portfolio is such that the average holding period is in excess of 5 years for available for sale securities.

b. The use of "Put" options. Put options are written on stocks which the company is willing to purchase. While the company does not have a high rate of turnover in its portfolio, there is some turnover; for example, due to preferred stocks being called back by the issuing company, or stocks being called away because call options have been written. If the stock does not go below the put exercise price, the company records the proceeds from the sale as income. If the put is exercised, the cost basis is reduced by the proceeds received from the sale of the put option. There may be occasions where the cost basis of the stock is lower than the market price at the time the option is exercised.

c. Speculative Short Sales/Short Options. The company limits its speculative transactions to no more than 15% of the value of the portfolio. The company may sell uncovered calls on certain stocks. If the stock price does not rise to the price of the calls, the option is not exercised, and the company records the proceeds from the sale of the call as income. If the call is exercised, the company will have a short position in the related stock. The company then has the choice of covering the short position or selling a put against it. If the put is exercised, the short position is covered. The company's current accounting policy is to mark to the market at the end of each quarter any short positions, and include it in the income statement. While the company may have so-called speculative positions equal to 15% of its accounts, in actual practice the average short stock positions usually account for less than 10% of the assets of the company.

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

Management's Discussion and Analysis of Financial Condition and Results of Operations discuss the Company's condensed consolidated financial statements, which have been prepared in accordance with US GAAP. The Company considers the following accounting policies to be critical accounting policies.

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

The Company currently offers three different methods of purchasing the Blood Volume Analyzer equipment. A customer may purchase the equipment directly, lease the equipment, or rent the equipment on a month-to-month basis. The revenues generated by a direct sale or a monthly rental are recognized as revenue in the period in which the sale or rental occurred. If a customer is to select the "lease" option, the Company refers its customer to a third party finance company with which it has established a relationship, and if the lease is approved, the Company receives 100% of the sales proceeds from the finance company and recognizes 100% of the revenue. The finance company then deals directly with the customer with regard to lease payments and related collections. Daxor Corporation does not guarantee payments to the leasing company.

When Blood Volume Analyzer equipment has been sold to a customer, the Company offers a one year warranty on the product, which covers all mechanical failures. This one year warranty is effective on the date of sale of the equipment. After the one year period expires, customers may purchase a service contract through the Company. Historically, service contracts were recorded by the Company as deferred revenue and were amortized into income in the period in which they were earned. Effective January 1, 2006, the Company began offering service contracts priced on an annual basis which are billed annually or quarterly depending upon the contractual arrangement with the customer. There were four hospitals that the Company billed during the year ended December 31, 2008 for the entire amount of their annual service contract. At December 31, 2008 and December 31, 2007, deferred revenue pertaining to the historical service contracts was $17,042 and $7,417 respectively.

The storage fees associated with the cryobanked blood and semen samples are recognized as income in the period for which the fee applies. The Company invoices customers for storage fees for various time periods. These time periods range from one month up to one, two or three years. The Company will only recognize revenue for those storage fees that are earned in the current reporting period, and will defer the remaining revenues to the period in which they are earned. Effective October, 2005, the Company has altered our billing procedure as such that clients will only be billed on a quarterly basis. Therefore, future revenue recognition will not include deferred revenue on the storage fees, but rather will be earned in the same period in which the invoices are generated.

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

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

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

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

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the dates of the financial statements and the results of operations during the reporting periods.. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from those estimates

The Company accounts for income taxes under the provisions of SFAS No. 109, Accounting for Income Taxes. This pronouncement requires recognition of deferred tax assets and liabilities for the estimated future tax consequences of event 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.

In December 2002, the Company signed a lease which commenced on January 1, 2003, for its existing facility at the Empire State Building. The lease expires on December 31, 2015. The Company has occupied this space since January 1992. The company currently occupies approximately 7,200 square feet. There are options for an additional 18,000 square feet of space. The Company has acquired a 20,000 square foot manufacturing facility in Oak Ridge, Tennessee which is currently manufacturing the BVA-100 Blood Volume Analyzers, and where R&D activities are performed. The Company's Volumex syringes are filled by an FDA approved radio pharmaceutical manufacturer. The manufacturer has worked with Daxor since 1987. The manufacturer's prices are reviewed annually.

TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS


                                                          Payments Due By Period
Contractual                               Less Than       1 - 3                         More Than
Obligations                  Total         1 Year         Years        3 - 5 Years       5 years

(Long-Term Debt
Obligations)1             $   515,542    $    71,190    $  142,380    $     301,972              0

(Capital Lease
Obligations)                        0              0             0                0              0

(Operating Lease
Obligations)2             $ 2,205,588    $   315,084    $  630,168    $     630,168    $   630,168

(Purchase Obligations)              0              0             0                0              0

(Other Long-Term
Liabilities Reflected
on the Registrant's
Balance Sheet under
GAAP)                               0              0             0                0              0

Total                     $ 2,721,130    $   386,274    $  772,548    $     932,140    $   630,168

1 This amount represents the total monthly mortgage payment of $5,932 which includes principal and interest for the property purchased at 107 and 109 Meco Lane in Oak Ridge, Tennessee. There is a monthly payment of $5,932 through December of 2011. The Company has the option of making a balloon payment of $301,972 in January of 2012 or refinancing the remaining amount of the mortgage.

2 This amount represents a total monthly rental payment of $26,257 which consists of base rent of $25,535 and $722 for two separate spaces at 350 5th Avenue.

Summary of Actual Portfolio Investments

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

Because of the size of the unrealized gains in the company's portfolio, the company does not anticipate any changes which could reduce the value of the company's utility portfolio below historical cost. Utilities operate in an environment of federal, state and local regulations, and they may disproportionately affect an individual utility. The company's exposure to regulatory risk is mitigated due to it's diversity of holdings. At December 31, 2008 and 2007, the company held 104 and 63 separate stocks, respectively.

Puts and calls are marked to market for each reporting period and any gain or loss is recognized through the Statement of Operations and labeled as "Mark to market of short positions".

The following is summary information on the actual Securities Portfolio held by Daxor Corporation during the year ended and as at December 31, 2008: