Daxor (DXR) Receives Initial Decision from SEC Law Judge
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Daxor (AMEX: DXR) received an Initial Decision from an Administrative Law Judge of the Securities and Exchange Commission.
The Decision finds that Daxor is an investment company within the meaning of the Investment Company Act of 1940. The ALJ noted that "Daxor's history demonstrates a persistent, though commercially unsuccessful, attempt at selling its BVA-100." Notwithstanding these sales and marketing efforts, and the construction of its manufacturing facility in Oak Ridge, Tennessee, the ALJ placed principal emphasis on the sources of the Company's income and the composition of its assets, and found that Daxor met the quantitative and qualitative standards for being an investment company. If neither the Company nor the SEC seeks further review, the Initial Decision will become final in 21 days, at which time the SEC would set a date for Daxor to comply with the requirements of the Investment Company Act.
The company has a number of options available to it. These include taking the company private, seeking further administrative and judicial review, or registering as an investment company. If the company registers as an investment company, this would not be expected to have an impact on its operations or its research operations. It would require some additional disclosure by the company about its investments. In the past 5 years in response to SEC comments the company has greatly expanded disclosure about its investment activity. For each year during the 5-year period ended December 31, 2010, the Company lost over 5 million dollars from operations. If the Company had been unable to make up these losses from its investment income, it would have faced the possibility of bankruptcy.
The Decision finds that Daxor is an investment company within the meaning of the Investment Company Act of 1940. The ALJ noted that "Daxor's history demonstrates a persistent, though commercially unsuccessful, attempt at selling its BVA-100." Notwithstanding these sales and marketing efforts, and the construction of its manufacturing facility in Oak Ridge, Tennessee, the ALJ placed principal emphasis on the sources of the Company's income and the composition of its assets, and found that Daxor met the quantitative and qualitative standards for being an investment company. If neither the Company nor the SEC seeks further review, the Initial Decision will become final in 21 days, at which time the SEC would set a date for Daxor to comply with the requirements of the Investment Company Act.
The company has a number of options available to it. These include taking the company private, seeking further administrative and judicial review, or registering as an investment company. If the company registers as an investment company, this would not be expected to have an impact on its operations or its research operations. It would require some additional disclosure by the company about its investments. In the past 5 years in response to SEC comments the company has greatly expanded disclosure about its investment activity. For each year during the 5-year period ended December 31, 2010, the Company lost over 5 million dollars from operations. If the Company had been unable to make up these losses from its investment income, it would have faced the possibility of bankruptcy.
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