FY
                  2006
              IMAGIN
                  MOLECULAR CORPORATION
              FORM
                  10-KSB








**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      DC 20549**





**FORM
      10-KSB**




**x**  **Annual
      Report under Section 13 or 15 (d) of the Securities Exchange Act
      1934:**


For
      the
      year ended December 31, 2006





**TRANSITION
      REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT OF
      1934**


For
      the
      transition period from _____ to _____





**Commission
      file number 0-23873**








**IMAGIN
      MOLECULAR CORPORATION**


(Exact
      Name of Registrant in its Charter)





Delaware
            
            13-4099008(State
                or other jurisdiction of incorporation or organization)
            
            (IRS
                Employer Identification No.)





**104
      W. Chestnut Street, #315, Hinsdale, IL 60521**


(Address
      of principal executive offices  (Zip
      Code)





**(630)
      371-5583**


(Registrant's
      telephone number, including area code)





**Securities
      registered under Section 12(b) of the Exchange Act: None**





**Securities
      registered under Section 12(g) of the Exchange Act:**





**Common
      Stock, $.001 par value per share**





Check
      whether Registrant (1) filed all reports required to be filed by Section 13
      or
      15 (d) of the Securities Exchange Act during the past 12 months (or for such
      shorter period that the registrant was required to file such reports), and
      (2)
      has been subject to such filing requirements for the past 90 days: Yes x No o





Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B contained in this form, and no disclosure will be contained,
      to
      the best of Registrant's knowledge, in definitive proxy or information
      statements incorporated by reference in Part III of this Form 10-KSB or any
      amendment thereto. x


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


Registrant's
      revenues for its most recent fiscal year: $183,198





Market
      value of Common stock held by non-affiliates at April 2, 2007:$4,170,797.





Shares
      of
      Common Stock outstanding at April 2, 2007: 67,863,2847 shares




-1-


FY
                2006
            IMAGIN
                MOLECULAR CORPORATION
            FORM
                10-KSB




Documents
      incorporated by reference: None





Transitional
      Small Business Disclosure Format (check one): Yes x No o







-2-




FY
                2006
            IMAGIN
                MOLECULAR CORPORATION
            FORM
                10-KSB


**TABLE
      OF CONTENTS**




PagePART
                IItem
                1.
            
            Description
                of Business
            4Item
                2.
            
            Description
                of Properties
            13Item
                3.
            
            Legal
                Proceedings
            14Item
                4.
            
            Submission
                of Matters to a Vote of Security
                Holders
            14PART
                IIItem
                5.
            
            Market
                for Common Equity and Related Stockholder
                Matters
            14Item
                6.
            
            Management’s
                Discussion and Analysis of Financial Condition and
                Results of Operations
            15Item
                7.
            
            Financial
                Statements
            17Item
                8.
            
            Changes
                in and Disagreements with Accountants on Accounting and
                Financial Disclosure
            17Item 8A.
            
            Controls
                and Procedures
            18Item
                8B.
            
            Other
                Information
            18PART
                IIIItem
                9.
            
            Directors,
                Executive Officers, Promoters and Control Persons;
                Compliance with Section 16(a) of the Exchange Act
            19Item
                10.
            
            Executive
                Compensation
            21Item
                11.
            
            Security
                Ownership of Certain Beneficial Owners and Management
                and Related Stockholder Matters
            22Item 12.
            
            Certain
                Relationships and Related
                Transactions
            22Item
                13.
            
            Exhibits
            23Item
                14.
            
            Principal
                Accountant Fees and Services
            24Reports
              of Independent Certified Public
              Accountants
            26Consolidated
              Financial Statements
            28Signatures
            39Certifications
            41





-3-
 *Table
            of Contents*




FY
                2006
            IMAGIN
                MOLECULAR CORPORATION
            FORM
                10-KSB  **PART
        I**





**ITEM1.
      DESCRIPTION OF BUSINESS**




**Special
      Cautionary Notice Regarding Forward-Looking Statements**




This
      Report contains statements that constitute forward-looking statements within
      the
      meaning of Section 27A of the Securities Act of 1933 and the Securities
      Exchange Act of 1934. Various matters discussed in this document and in
      documents incorporated by reference herein, including matters discussed under
      the caption “Management’s Discussion and Analysis of Financial Condition and
      Results of Operations,” may constitute forward-looking statements for purposes
      of the Securities Act and the Securities Exchange Act. These statements are
      based on many assumptions and estimates and are not guarantees of future
      performance and may involve known and unknown risks, uncertainties and other
      factors which may cause the actual results, performance or achievements of
      Imagin Molecular Corporation (the “Company” or “Imagin”) to be materially
      different from future results, performance or achievements expressed or implied
      by such forward-looking statements. The words “expect,” “anticipate,” “intend,”
“plan,” “believe,” “seek,” “estimate,” and similar expressions are intended to
      identify such forward-looking statements. The Company’s actual results may
      differ materially from the results anticipated in these forward-looking
      statements due to a variety of factors, including, without limitation:


•
              The
                  effects of future economic conditions;•
              The
                  risks of changes in interest rates on the level and composition
                  of
                  deposits, loan demand, and the values of loan collateral, securities
                  and
                  interest-rate protection agreements, as well as interest-rate risks;•
              The
                  effects of competition from other financial institutions and financial
                  service providers operating in the Company’s market area and elsewhere,
                  including institutions operating locally, regionally, nationally
                  and
                  internationally, together with such competitors offering banking
                  products
                  and services by mail, telephone, and computer and the Internet;
                  and•
              The
                  failure of assumptions underlying the establishment of reserves
                  for
                  possible loan losses and estimations of values of collateral and
                  various
                  financial assets and liabilities.




All
      written or oral forward-looking statements attributable to the Company are
      expressly qualified in their entirety by these cautionary statements.


Imagin
          Molecular Corporation a Delaware corporation (“Imagin”, the “Registrant” or the
“Company”) is focused on business opportunities in positron emission
          tomography (PET) through holdings in strategically related divisions based
          in
          the manufacturing of PET devices ownership of PET imaging centers and the
          diagnosis and treatment of cancer, heart and neurological diseases. PET
          is an
          advanced medical diagnostic imaging procedure used by physicians in the
          detection of certain cancers, coronary disease and neurological disorders
          including Alzheimer's disease. Through its wholly owned subsidiary, Imagin
          Nuclear Partners, a New York Corporation (“INP”) the Registrant intends to
          acquire, operate and administer out-patient medical diagnostic imaging
          centers
          that utilize PET and PET/CT scanning equipment. INP specializes in using
          evidence based bioinformatics specifically positioned in the market to
          provide
          the maximal cost effective benefit to their joint venture partner and the
          community. The Registrant is also the parent of Positron Acquisition
          Corporation, a Nevada corporation (“PAC”) which is the holder of 8,026,000
          shares of common stock and 722,358 shares of Series B Convertible Preferred
          Stock of Positron Corporation, a publicly owned Texas Corporation (“Positron”),
          the manufacturers of certain of the PET scanners Imagin uses in its operations.
          Imagin Molecular Corporation is also the parent of Cipher Multimedia, Inc.
          formed in August 2002 as a new media marketing and distribution solution
          company
          that provides distribution solutions for publishers of digital
          content.
  -4-
 *Table
              of Contents*


FY
                  2006
              IMAGIN
                  MOLECULAR CORPORATION
              FORM
                  10-KSB


**CORPORATE
      ORGANIZATION**


Imagin
        Molecular Corporation was incorporated under the laws of the State of Colorado
        on September 19, 1997 as Buffalo Capital VIII, Ltd. (“Buffalo”). The Company
        commenced its operations upon incorporation. On June 21, 2000, the shareholders
        of Buffalo approved the merger of Buffalo with and into the Registrant. The
        merger was effected on July 14, 2000. As a result, the corporate domicile
        and
        name of Buffalo were changed to Delaware and Momentum Holdings Corporation
        (“Momentum”), respectively.
 
 On
        September 15, 2003, Cipher Multimedia, Inc., an Illinois corporation (“Cipher”)
        and Momentum executed a Share Exchange Agreement whereby Momentum exchanged
        14,052,800 newly issued shares of common stock for all of the issued and
        outstanding shares of capital stock of Cipher. As a result of the purchase
        and
        exchange of shares, Cipher acquired voting control of Momentum on August
        19,
        2003 and became Momentum's majority shareholder. The total number of issued
        and
        outstanding shares of Momentum after the Exchange increased to 16,452,811.
 
 On
        November 24, 2003, the Company amended its Articles of Incorporation to change
        the name of the Company to Cipher Holding Corporation and to increase its
        authorized capital stock to 100,000,000 shares, of which 95,000,000 are common
        and 5,000,000 are "blank check" preferred stock authorizing the Company's
        Board
        of Directors to set the rights and preferences of the preferred stock without
        further stockholder action.
 
 On
        April
        19, 2005, Imagin formed Positron Acquisition Corp. (“PAC”) a wholly owned
        subsidiary organized under the laws of the State of Nevada. PAC was created
        to
        acquire promissory notes made by Positron Corporation, a publicly owned Texas
        corporation (“Positron”).
 
 On
        November 18, 2005 the Company formed a wholly owned subsidiary, Imagin Nuclear
        Partners Corporation, a New York corporation (“INP”), to provide Positron
        Emission Tomography myocardial perfusion imaging technology (“PET” or “PET
        imaging technology”) and related technical and educational services to diagnose
        and treat patients with coronary artery disease and patients who are at risk
        of
        developing coronary heart disease. Imagin Nuclear Partners Corporation is
        headquartered in Niagara, New York.
 
 On
        March
        13, 2007, the Registrant redomiciled Cipher as a Nevada corporation through
        a
        merger with and into Cipher Multimedia, Inc., a Nevada
        corporation.




**BUSINESS
      DEVELOPMENT**





Through
      its wholly-owned subsidiary, Imagin Nuclear Partners Corporation, the Company
      utilizes Positron Emission Tomography myocardial perfusion imaging technology
      (“PET” or “PET imaging technology”) and related technical and educational
      services to diagnose and treat patients with coronary artery disease and
      patients who are at risk of developing coronary heart disease. The Company
      will
      attempt to establish heart health centers to provide imaging technology for
      the
      diagnosis and non-invasive management of coronary artery disease. The Company
      plans to use PET perfusion imaging and vigorous risk factor modification
      programs to diagnose and guide the management of patients with coronary artery
      disease. This program is aimed at the regression of coronary atherosclerosis
      and
      stabilization of plaque to prevent the clinical events of myocardial infarction,
      sudden death and unstable coronary syndromes requiring invasive intervention
      (PTCA or bypass surgery).





The
      Company’s methodology differs than that of traditional invasive coronary
      procedures by health care providers that has not resulted in significant
      improvement in clinical outcomes for coronary patients, primarily due to what
      the Company perceives as limitations of the imaging technology currently
      employed by health care providers and the failure to focus on lifestyle
      modification programs for coronary patients. The Company believes that the
      current barriers to entry of Positron Emission Tomography Myocardial Perfusion
      Imaging (PET MPI) have prevented widespread utilization.




-5-
 *Table
            of Contents*


FY
                2006
            IMAGIN
                MOLECULAR CORPORATION
            FORM
                10-KSB Studies
          have shown that the utilization of PET
          imaging technology is a cost-effective approach to the diagnosis of coronary
          artery disease when compared to the cost of utilizing traditional imaging
          technology and invasive procedures. The current approximate cost of a PET
          scanner, in excess of $1,500,000 continues to prevent wide spread acceptance
          of
          the technology. The Company believes that if the technology could be offered
          at
          prices equivalent to the less accurate, less expensive, routinely used,
          diagnostic exam of Single Photon Emission Computed Tomography (SPECT) that
          the
          barriers to entry will be significantly reduced leading to an increased
          utilization.


The
        Company intends to establish regional heart health centers throughout North
        America as freestanding outpatient facilities that will provide the most
        advanced imaging technology for the diagnosis and non-invasive management
        of
        coronary artery disease. An outstanding physician, nursing and technical
        staff
        will deliver this unsurpassed level of care. The Company’s key strengths are
        operational expertise in state-of the art cardiovascular PET imaging technology,
        effective clinical algorithms for coronary artery disease regression and
        an
        experienced management team.
 
 The
        Company’s operational expertise is based on the pioneering work of renowned
        cardiologist Dr. K. Lance Gould and Dr. Michael E. Merhige on coronary artery
        disease reversal and prevention through aggressive noninvasive medical
        management guided objectively in each individual patient by PET. When PET
        guided
        results were compared to conventional management using Single Photon Emission
        Computed Tomography (SPECT), the experience resulted in a 50% reduction in
        the
        utilization of angiography and bypass surgery with an associated 25% reduction
        in treatment costs. Patient outcome analysis demonstrated a 50% reduction
        in
        cardiac mortality and a 50% reduction in myocardial infarction or heart
        attack.(4) This represents a “win-win-win”, for patients, practitioners and
        health care payers, through decreased utilization of the invasive management
        of
        coronary artery disease (CABG and angiography).


**PRODUCTS
      AND SERVICES**





The
      Company intends to market its cardiovascular PET and noninvasive coronary artery
      disease reversal program to General/Family/Internal Medicine physicians in
      metropolitan areas within the United States. These physicians are the primary
      gatekeepers for patients suspected of having coronary artery disease and are
      responsible 40% of all referrals for nuclear imaging. This referral patterned
      has steadily increased more than 15% per year over the last 5 years, because
      of
      the advent of lipid management programs.





The
      company anticipates its initial target states are New York, New Jersey,
      Pennsylvania, Maryland, Florida and Texas where cardiac patient demographics
      and
      cardiovascular PET reimbursement are well established.





**Cardiovascular
      PET Perfusion Imaging**





The
      Company believes the therapeutic paradigm is now shifting away from expensive,
      anatomically driven treatment (e.g., coronary angiography followed by
      revascularization), toward identification of the vulnerable plaque, with
      subsequent biological stabilization of the atherosclerotic process, using
      aggressive lipid lowering medical management. A fundamental question for
      General/Family/Internal Medicine physicians which manage patients with coronary
      artery disease is which patients will require invasive intervention and which
      only require noninvasive but aggressive medical management. In addition those
      patients on noninvasive therapy we need to know how hard should we push lipid
      reduction to achieve coronary disease reversal in the individual
      patient?





PET
      myocardial perfusion imaging (MPI) can now assist in answering these critical
      questions for patients, insurers and referring doctors, because of the unique
      physical advantages of positron imaging power of positron emission tomography.
      PET's advantages over single photon emission computed tomography (SPECT) nuclear
      imaging results in an improvement in diagnostic accuracy results that rivals
      that of the angiogram itself.





**Coronary
      Disease Reversal Program**





The
      Company intends to educate referring physicians about the program and the
      intensive patient / primary physician relationship necessary for success.




-6-
 *Table
            of Contents*


FY
                2006
            IMAGIN
                MOLECULAR CORPORATION
            FORM
                10-KSB


Smoking
        Cessation - Stopping smoking is an essential step in the reversal program.
        There
        are many programs from insurance companies to help the patient
        quit.




Diet
      Modification - The diet that we currently recommend is no more than 10% of
      calories as fat. This includes unrestricted vegetables and protein in the form
      of skinless chicken, turkey, buffalo meat, venison, fish any and all shellfish.
      Beef and pork are once a month items. Fruit is appropriate for desert. For
      over
      weight patients, carbohydrates sources such as bread, potatoes, rice, pasta,
      pastry and sweets have to be portion controlled to achieve lean body mass.
      Once
      lean mean body mass is achieved, we add back enough of carbohydrates to stay
      at
      a static weight.




Diet
        Modification - The diet that we currently recommend is no more than 10% of
        calories as fat. This includes unrestricted vegetables and protein in the
        form
        of skinless chicken, turkey, buffalo meat, venison, fish and all shellfish.
        Beef
        and pork are once a month items. Fruit is appropriate for desert. For over
        weight patients, carbohydrates sources such as bread, potatoes, rice, pasta,
        pastry and sweets have to be portion controlled to achieve lean body mass.
        Once
        lean mean body mass is achieved, we add back enough of carbohydrates to stay
        at
        a static weight.
 
 Exercise
        Program - The three essential criteria for a successful program of physical
        activity are (1) to determine individual preferences for the type of exercise,
        (2) activity for at least thirty to sixty minutes per day for five to six
        days
        per week, (3) do something each day even if the required minimum can not
        be met.





**MARKET
      ENVIRONMENT**


Coronary
        artery disease (CAD), remains the major cause of death in the U.S., claiming
        over 650,000 lives annually, which constitutes more than 25% of all deaths
        in
        adults over 35 years of age. Moreover, nearly twice this number of acute
        myocardial infarctions occur each year. 60% of acute myocardial infarction
        and
        sudden death occur unexpectedly, in previously apparently healthy people,
        with
        no antecedent symptoms.





The
      Company believes that excessive, invasive, cardiological procedures do not
      result in improved clinical outcomes for patients. The frequency of utilization
      of coronary arteriography (CATH), coronary artery bypass surgery (CABG) and
      percutaneous transluminal coronary intervention (PTCI) procedures in the United
      States has increased annually 50 - 150% with no subsequent improvement in the
      hard endpoints of coronary death and recurrent MI at one year.





We
      have
      learned, while utilization of invasive coronary procedures in the US has
      exploded over the past few years with no improvement of outcomes, from a large
      number of well conducted lipid lowering trials, which employed quantitative
      coronary arteriography, that aggressive noninvasive management of CAD with
      a
      very low fat diet and lipid lowering drugs, can reduce acute MI and coronary
      death by up to 85% or more. Interestingly this remarkable clinical benefit
      occurs despite only minimal angiographic improvement in coronary lumen diameter.
      This is because it is the young, mild, plaque which is actively inflamed that
      is
      structurally vulnerable, and therefore prone to rupture suddenly, leading to
      death or an acute coronary syndrome, rather than the older, more severe,
      structurally stable stenosis, which is typically responsible for chronic stable
      angina. It is this stable lesion that is usually the stenosis targeted for
      mechanical intervention.





The
      management of CAD in the new millennium is undergoing critical reappraisal
      driven by the need for health care cost containment. The Company’s business plan
      is to provide a basis for the shift away from expensive, anatomically driven
      treatment (e.g., coronary angiography followed by revascularization), toward
      identification of the vulnerable plaque, with subsequent biological
      stabilization of the atherosclerotic process, using aggressive lipid lowering
      medical management. Which patients will require invasive vs. aggressive
      noninvasive management? How hard should we push lipid reduction to achieve
      coronary disease reversal in the individual patient?





**CUSTOMERS**





The
      Company’s primary customers are General/Family/Internal Medicine physicians in
      Metropolitan areas. A metropolitan population can be defined as having multiple
      General/Family/Internal Medicine physician offices and a referral population
      of
      at least 500,000 patients (The combination of men and women over the age of
      45).





-7-
 *Table
            of Contents*


FY
                2006
            IMAGIN
                MOLECULAR CORPORATION
            FORM
                10-KSB


**IMAGIN
      NUCLEAR PARTNERS CORPORATION**





On
      November 18, 2005 the Company formed a wholly owned subsidiary, Imagin Nuclear
      Partners Corporation, a New York corporation (“INP”), to provide Positron
      Emission Tomography myocardial perfusion imaging technology (“PET” or “PET
      imaging technology”) and related technical and educational services to diagnose
      and treat patients with coronary artery disease and patients who are at risk
      of
      developing coronary heart disease. Imagin Nuclear Partners Corporation is
      headquartered in Niagara, New York.




Imagin
        Nuclear Partners provides imaging technology for the diagnosis and non-invasive
        management of coronary artery disease. INP has commenced scanning patients
        at a
        cardiac center located within Beth Israel Medical Center in New
        York.





**Relationship
      with Beth Israel Hospital**




In
        February 2006, Imagin Nuclear Partners purchased a Positron HZL-R Imaging
        Camera
        from Positron as well as a CTI Infusion Cart from Bracco Diagnostics, Inc.
        Inc.
        The Company operates a PET center under the name Imagin Nuclear Partners
        in Beth
        Israel Hospital. The Company’s intention is to leverage its existing
        relationship with the New York State Department of Health Cardiac Advisory
        Committee to secure a “pilot program” aimed at demonstrating the cost efficacy
        of cardiac PET in selected markets on predetermined procedure indications.
        The
        company desires to keep the existing relationship with Beth Israel Hospital.
        Beth Israel provides Imagin Nuclear Partners Corporation a technologist and
        space in the hospital in exchange for a pre-negotiated volume of Imagin Nuclear
        Partners Corporation patients.





**Sales
      and Marketing**





The
      Company hopes to establish a “pilot program" with the New York State Department
      of Health (NYSDOH) Cardiac Advisory Committee aimed at demonstrating the cost
      efficacy of cardiac PET in selected markets on predetermined procedure
      indications. The proposed “pilot program” will involve the identification of
      historical trends in normal angiography followed by an equivocal SPECT or ECHO.
      Imagin Nuclear Partners will attempt to establish that if PET is more accurate,
      and patients who typically lead to normal angiography are studied in place
      of
      SPECT, that 50 - 75% percent of all angiograms would be eliminated. Imagin
      Nuclear Partners intends to request the Department of Health to route Medicare
      and Medicaid patients to the center for a period of two - three years. Medicaid
      patients are not routinely sought after since reimbursement is traditionally
      low
      for services rendered. However, PET imaging typically experiences a high
      reimbursement rate from Medicaid and a high percentage of patients in New York
      City rely upon Medicaid as their insurance. Imagin Nuclear Partners will
      approach physicians who primarily see Medicaid patients to solicit referrals.
      Medicaid physicians are not routinely solicited for referrals due to the
      traditional low fees associated. Imagin Nuclear Partners believes that the
      Medicaid population will result in a significant portion of their monthly
      volume.




Imagin
      Nuclear Partners also intends to solicit large self insured companies and
      present the GM report with real patient data to justify the increased use of
      PET
      along with Coronary Disease Reversal.





**Government
      Regulation**





The
      Company’s operations which assess medical imaging and physician referral will be
      required to adhere to a wide variety of other regulations governing the
      operation of its business. For example, federal regulations commonly known
      as
      the “Stark Laws” impose civil penalties and exclusion from participation in the
      Medicare program of reimbursement for referrals by physicians for “designated
      health services” to certain entities with which the referring physician has a
      financial relationship, if those referrals do not fall within an exception
      created by law or regulation. “Designated health services” include PET services.
      Implementing regulations have been issued regarding referrals for clinical
      laboratory services, but no final implementing regulations have been issued
      regarding PET services. It is possible that these proposed rules will be found
      to apply to PET scanners, thereby restricting physician referrals for PET
      services by an investor-physician or a physician who has a compensation
      arrangement with Imagin Nuclear Partners.




In
      addition, several states in which Imagin Nuclear
      Partners intends to operate have enacted or are considering legislation that
      restricts physician referral arrangements in a manner similar to the Stark
      Laws
      and requires physicians to disclose any financial interest they have with a
      health care provider to their patients to whom they recommend
      that provider. Possible sanctions for violating these provisions include
      loss of medical licensure and civil and criminal sanctions. These state laws
      vary from state to state and seldom have been interpreted by the courts or
      regulatory agencies. Nonetheless, Imagin Nuclear Partners expects that these
      laws will be strictly enforced.




-8-
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            of Contents*


FY
                2006
            IMAGIN
                MOLECULAR CORPORATION
            FORM
                10-KSB


The
      Company will also be required to comply with other state and federal laws
      prohibiting the payment or receipt of bribes, kickbacks, rebates and any other
      direct or indirect remuneration in return for or to induce the referral of
      an
      individual to a person for the furnishing, directing or arranging of services,
      items or equipment, commonly referred to as anti-kickback laws. Violation of
      the
      anti-kickback laws may result in civil and criminal penalties, loss of medical
      licensure and exclusion from the Medicare and other federal health care programs
      to the extent such federal reimbursement program beneficiaries are involved.





**Materials**





The
      company obtains PET Scanners used in the operation of its imaging business
      from
      Positron Corporation who is the obligor on the Convertible Notes we acquired
      from Imagin Diagnostic Centers, Inc. that were subsequently converted to
      Positron preferred shares.





**Customers**





Customers
      for our imaging operations will be patients of the medical centers with whom
      we
      intend to conduct our business either through joint ventures or equity
      ownership.





**Patents**





We
      do not
      have any patents or patents pending and rely on the intellectual property rights
      of Positron Corporation and other third-party suppliers.





**CIPHER
      MULTIMEDIA, INC.**




Cipher
        Multimedia, Inc., a Nevada Corporation (“Cipher”) was formed in August 2002.
        Cipher is a digital distribution solution and marketing company which secures
        and allows access to digital content through proprietary encoding, encryption
        and authorization technology. Cipher’s technology and services allow publishers
        and distributors to distribute digital content in a secure format to mass
        markets. Secured video and software content is distributed through new and
        existing commercial product offerings and distribution channels.
 
 On
        March
        13, 2007, the Registrant reorganized Cipher as a Nevada corporation via merger
        with Cipher Multimedia, Inc., a Nevada corporation (“Cipher-NV”). In accordance
        with the Plan of Merger, each ten shares of Cipher were exchanged for one
        share
        of Cipher-NV common stock. Also on March 13, 2007, the Registrant entered
        into
        employment agreements with Julia Rzeppa as President and Chairman, Corey
        Conn as
        Treasurer and Director and Domenic Hanzely as Vice President of Product
        Development and Chief Technology officer. On March 14, 2007, Cipher settled
        obligations with its two largest creditors by retiring $148,973.46 in
        obligations to Patrick G. Rooney, the Registrant’s former chairman and Chief
        Executive officer and Cipher’s founder, for 7,448,673 shares of Cipher’s common
        stock, and retiring $35,750 in exchange for the issuance of 1,787,500 shares
        of
        Cipher’s common stock. On March 20, 2007, realizing that Cipher’s software
        encryption business no longer fit the Registrant’s business model of medical
        imaging services, the Registrant’s Board of Directors resolved to spin off the
        3,513,200 shares of Cipher common stock held by the Registrant as a special
        dividend to its Shareholders of record as of March 26, 2007.


Cipher’s
      Digital Rights Management (“DRM”) technology protects or controls access to
      digital content. Cipher’s technology allows publishers and distributors to
      distribute full-feature video and/or software in a secure format.
      Secured ** digital
      content is delivered in the form of CD/DVDs, diskettes and Internet download
      format. The consumer has the ability to view a sample of the video or
      demonstration of the software before purchasing of the product by unlocking
      the
      full product for immediate use on their personal computer. The purchase and
      delivery transactions are immediate and are facilitated though Cipher’s
      transaction processing service. Cipher’s technology protects publisher’s content
      from copyright infringement by restricting access only to authorized purchasers.




-9-
 *Table
            of Contents*


FY
                2006
            IMAGIN
                MOLECULAR CORPORATION
            FORM
                10-KSB


**Digital
        Distribution Solution**
 
 Cipher
        helps enable publishers and distributors to mass distribute content in a
        locked
        format by creating campaigns that enable publishers, advertisers and
        distributors to introduce content, promote products, sell and immediately
        deliver digital content to end users. Locked digital content is delivered
        in the
        form of CD, DVD and by Internet download. Additionally, locked content can
        be
        included on the unused portion of traditional DVD’s. This system facilitates all
        aspects of the transaction; from authorizing to unlocking content, transaction
        processing to fulfillment, and from auditing to distribution of revenue to
        partners.




**Target
      Markets**





Cipher
      intends to market its goods and services to publishers and distributors that
      mass market and deliver secured full-feature video content through existing
      channels. Cipher’s target partners include major and independent film studios,
      monthly magazine and catalog companies, online and retailers, original computer
      equipment manufacturers, internet service providers and digital content direct
      marketing companies. Cipher intends to target advertisers and sponsors to
      promote their products on the content that is delivered.




The
      Company uses its technology and distribution solution to assist content
      providers in the distribution of copyrighted content. The content is mass
      distributed with minimal sales and marketing costs as well as reduced inventory
      carrying costs. Though difficult to ascertain, the Company believes that it
      has
      the only fully integrated digital delivery solution and infrastructure that
      enables all digital content to be encoded, protected, and delivered in a secure
      format. Cipher enables content publishers and distributors to participate in
      the
      selling of digital product at minimal cost.





Through
      specific campaigns content providers are able to deliver multiple titles, thus
      allowing multiple purchase opportunities from one media piece or
      location.




**Technology
      Overview**





Cipher’s
      software technology enables content to be encoded and encrypted in a secure
      environment. Cipher locks publisher’s digital content with its technology
      enabling secure distribution of the content. Currently, Cipher is the only
      company that secures digital content by creating a unique identification code
      derived from the components of the client’s personal computer. Using Cipher
      technology we are able to lock any digital content to the customer’s personal
      computer. Cipher also adds another layer of security with video content by
      securing the video to its own proprietary player.





Secured ** digital
      content is delivered in the form of CD/DVDs, PC disk drives and Internet
      download. The purchase and delivery transactions are immediate and are
      facilitated though Cipher’s transaction processing service.





Cipher’s
      proprietary transaction authorization system enables copyright owners to be
      properly compensated on sales of their digital content. For this service, the
      Company takes a percentage of the sale resulting from the use of its technology.
      Our format of delivery provides end users with an opportunity not offered in
      traditional content sales transaction.





**Revenue
      Sources**





Cipher
      potentially has several different revenue sources. Each partner and campaign
      is
      unique; therefore revenue sources are determined on a campaign by campaign
      basis.







The
      potential revenue sources consist of the following:




Revenue
      sharing with publishers and distributors on sale of digital content


Promotional
      fees from advertisers




-10-
 *Table
            of Contents*


FY
                2006
            IMAGIN
                MOLECULAR CORPORATION
            FORM
                10-KSB License
          fees from publishers and distributors
 Service
          fees based on technology provided to deliver product
 
 **Competition**
 
 The
          business marketplace of Digital Rights Management and/or direct marketing
          of
          digital content is highly competitive both at the national and international
          levels. As the competition intensifies, entry barriers become increasingly
          challenging with customers demanding higher technological and design expertise
          levels.


The
      Registrant considers all distribution companies direct competitors within the
      digital distribution marketplace, although believes that it is currently the
      only company which creates campaigns with publishers and distributors that
      mass
      market and deliver secured full-feature video content through existing
      channels.





**POSITRON
      ACQUISITION CORP.**





On
      April
      19, 2005, Imagin formed Positron Acquisition Corp. (“PAC”) a wholly-owned
      subsidiary organized under the laws of the State of Nevada. PAC was created
      to
      acquire promissory notes made by Positron Corporation, a publicly owned Texas
      corporation (“Positron”).




On
        May
        23, 2005, as an initial step, we acquired two convertible notes receivable
        issued by Positron (the “Positron Notes”) in favor of IDC. The Positron Notes
        are convertible into shares of Positron’s Series C and Series D Preferred Stock
        that are in turn convertible, under certain circumstances, into 64,000,000
        shares of Positron’s common stock, par value $.01 per share. Imagin acquired the
        Positron Notes in exchange for 30,000,000 newly issued shares of Imagin’s common
        stock. On September 30, 2006, Imagin exchanged the Positron Notes for a total
        of
        762,358 of Positron’s Series B Collectible Preferred Stock, par value $1.00 per
        share (the “Series B”). The Series B are convertible into shares of Positron’s
        common stock, par value $0.001 per share, at the rate of 100 shares of Common
        stock for each Series B. On September 7, 2006, PAC converted 40,000 shares
        of
        Series B into 4,000,000 shares of common stock.
  Positron
          designs, manufactures and markets medical imaging devices utilizing Positron
          Emission Tomography (“PET”) technology. PET technology permits the measurement
          of the biological processes of organs and tissues and produces anatomical
          and
          structural images. PET systems are used by physicians in the diagnosis
          and
          management of heart disease and certain other neurological and oncological
          illnesses.
 
 Following
          the acquisition of the Positron Notes, the Company changed its principal
          operations from multimedia encryption technology to positron emission tomography
          and medical imaging and related services.
 
 **EMPLOYEES**
 
 On
          April
          2, 2007, the Company had three full-time and one part-time
          employees.





**ITEM
      1A - RISK FACTORS**




We
        also
        caution you that this Annual Report contains forward-looking statements.
        The
        words "believes," "should be," "anticipates," "plans," "expects," "intends,"
        and
        "estimates," and similar expressions identify these forward-looking statements.
        These forward-looking statements are contained principally under the headings
        "Summary," "Risk Factors," "Financial Statements," "Management's Discussion
        and
        Analysis of Operations," "Business," and "Management." Although we believe
        that
        our expectations reflected in these forward-looking statements are based
        on
        reasonable assumptions, our expectations may not prove to be correct. Because
        these forward-looking statements are also subject to risks and uncertainties,
        actual results may differ materially from the expectations expressed by these
        forward-looking statements. Important factors that could cause actual results
        to
        differ materially from the expectations reflected in our forward-looking
        statements include the following risk factors:
  -11-
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            of Contents*


FY
                  2006
              IMAGIN
                  MOLECULAR CORPORATION
              FORM
                  10-KSB
 It
        Is
        Difficult to Evaluate Cipher’s Business and Prospects Because it Does Not Have
        Any Operating History
 
 Although
        Cipher was formed in August 2002, it has yet to generate any revenue from
        operations and is still in the development stage. Cipher’s short existence,
        coupled with its inability to transition out of the development stage, and
        its
        lack of working capital, makes it difficult to evaluate Cipher’s current
        business and prospects or to accurately predict its future revenue or results
        of
        operations. Cipher’s revenue and income potential continue to be unproven, and
        its business model is evolving. Because of the rapidly changing nature of
        computer software and encryption technology, Cipher may need to modify its
        business model to adapt to these changes. Accordingly, Cipher is subject
        to all
        of the risks, uncertainties, expenses and difficulties frequently encountered
        by
        companies seeking to break into a difficult-to-penetrate and rapidly changing
        industry segment.
  The
        Penny Stock Rules May Have an Adverse Effect Upon Liquidity of the Company’s
        Shares
 
 If
        the
        shares of the Registrant's common stock are listed on The Nasdaq Stock Market
        or
        certain other national securities exchanges and the price thereof is below
        $5.00, then subsequent purchases of such securities will be subject to the
        requirements of the penny stock rules absent the availability of another
        exemption. The SEC has adopted rules that regulate broker-dealer practices
        in
        connection with transactions in "penny stocks." Penny stocks generally are
        equity securities with a price of less than $5.00 (other than securities
        registered on certain national securities exchanges or quoted on The Nasdaq
        Stock Market). The penny stock rules require a broker-dealer to deliver a
        standardized risk disclosure document required by the SEC, to provide the
        customer with current bid and offer quotations for the penny stock, the
        compensation of the broker-dealer and its salesperson in the transaction,
        monthly account statements showing the market value of each penny stock held
        in
        the customer's account, to make a special written determination that the
        penny
        stock is a suitable investment for the purchaser and receive the purchaser's
        written agreement to the transaction. These disclosure requirements may have
        the
        effect of reducing the level of trading activity in the secondary market
        for a
        stock that becomes subject to the penny stock rules.
 
 Lack
        of Profitability
 
 The
        Company currently operates at a loss. No assurance can be given that the
        Company
        will achieve sufficient revenues for profitability. We believe that we will
        continue to incur operating and net losses for at least the foreseeable future.
        The rate at which we will incur losses is expected to increase from current
        levels for a period when we intend to increase our costs and expenses. Even
        if
        the Company attains profitability, there is no assurance that it can sustain
        or
        increase profitability on a quarterly or annual basis in the future. If revenues
        grow slower than anticipated, or if operating expenses exceed expectations
        or
        cannot be adjusted accordingly, the Company’s business, results of operations
        and financial condition will be materially and adversely affected.
 
 Dependence
        on Executive Officers and Directors
 
 The
        Company’s success is dependent on the efforts and abilities of its officers and
        directors. The Company currently does not have employment agreements with
        its
        executive officers. The loss of the services of any of these individuals
        could
        materially and adversely affect the development of the Company’s business
        plan.
 
 The
        Company’s ability to attract and retain qualified marketing and management
        personnel is critical to its operations. While management believes it will
        be
        able to attract and retain sufficient professional employees to meet its
        needs,
        there can be no assurance that management is correct. If the Company is unable
        to employ the qualified employees needed, then its business would be materially
        and adversely affected.
 
 Dependence
        Upon Third Party Relationships
 
 The
        Company will be dependent on various third parties for their technologies,
        equipment and related services and even for providing customers to the Company.
        As a result, the Company's ability to generate revenues may be adversely
        affected by the failure of these third parties to provide equipment and related
        services to the Company. In addition, there can be no assurance that the
        Company
        will be successful in establishing and maintaining such relationships with
        those
        entities on favorable terms.
 
 -12-
 *Table
                of Contents*
 FY
                      2006
                  IMAGIN
                      MOLECULAR CORPORATION
                  FORM
                      10-KSB
 Risks
            Associated with Technological Change
  The
              market in which the Registrant will compete is characterized by rapidly
              changing
              technology; evolving industry standards, frequent new product and service
              announcements, introductions and enhancements, and changing customer
              demands.
              These market characteristics are heightened by the emerging nature
              of the
              Internet and e-commerce. Accordingly, the Registrant's future success
              will
              depend on its ability to adapt to rapidly changing technologies, its
              ability to
              adapt its services to meet evolving industry standards. The Registrant's
              failure
              to successfully adapt to such changes in a timely manner could have
              a material
              adverse effect on the Company’s business, results of operations and financial
              condition.
 Government
          Regulation
 
 Laws
          and
          regulations directly applicable to the reimbursement by government and
          private
          insurance companies will have a material impact on our expected operations.
          Our
          ability to obtain payment for services which we extend to patients is directly
          related to governmental regulation, as well as, the manner in which we
          are able
          to obtain business. A change in these regulations may occur in which we
          are
          unable to adjust quickly enough in order to obtain payment to fund our
          operations or materially modify our plan of operations.
 
 Need
          for Future Funding
 
 We
          may
          need to raise additional funds through public or private debt or sale of
          equity
          to achieve our current business strategy. The financing we need may not
          be
          available when needed. Even if this financing is available, it may be on
          terms
          that we deem unacceptable or are materially adverse to your interests with
          respect to dilution of book value, dividend preferences, liquidation
          preferences, or other terms and may involve a substantial dilution to our
          shareholders. Our inability to obtain financing will inhibit our ability
          to
          implement our development strategy, and as a result, could require us to
          diminish or suspend our development strategy and possibly cease our
          operations.
 
 If
          we are
          unable to obtain additional financing on reasonable terms, we could be
          forced to
          delay, scale back or eliminate certain product and service development
          programs.
          In addition, such inability to obtain additional financing on reasonable
          terms
          could have a negative effect on our business, operating results, or financial
          condition to such extent that we are forced to restructure, file for bankruptcy,
          sell assets or cease operations, any of which could put your investment
          dollars
          at significant risk.
 
 Potential
          Decrease in Market Price
 
 Sales
          of
          substantial amounts of our common stock in the public market could decrease
          the
          prevailing market price of our common stock. If this is the case, investors
          in
          our shares of common stock may be forced to sell such shares at prices
          below the
          price they paid for their shares, or in the case of the investors in the
          May
          2006 financing, prices below the price they converted their notes and warrants
          into shares. In addition, a decreased market price may result in potential
          future investors losing confidence in us and failing to provide needed
          funding.
          This will have a negative effect on our ability to raise equity capital
          in the
          future.
 
 General
          condition of the healthcare market****
 
 The
          Company’s business is subject to global economic conditions, and in particular,
          market conditions in the healthcare industry. The Company’s operations may be
          adversely affected by the continued declines in employee benefit spending
          by
          large corporations and small to medium sized businesses. If global economic
          conditions worsen, or a prolonged slowdown in providing such benefits exists,
          then the Company may experience adverse operating results.
 **ITEM
            2. DESCRIPTION OF PROPERTY**
 
 The
            Registrant leases its current office space in Oak Brook, Illinois on
            a month to
            month basis.


-13-
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          of Contents*
  FY
                  2006
              IMAGIN
                  MOLECULAR CORPORATION
              FORM
                  10-KSB


**ITEM
      3. LEGAL PROCEEDINGS**





As
      of the
      date of this Report, no legal proceedings have been threatened against or
      settled by the Registrant.





**ITEM
      4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
      HOLDERS**





None.





**PART
      II**





**ITEM
      5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
      MATTERS**





(a)
      Market Information.





Since
      approximately November 1996, the Registrant's common stock, its only class
      of
      trading equity securities, has been traded on the NASD OTC Bulletin Board
      (“OTCBB”) under the symbol "IMGM.OB". The following table sets forth the range
      of high and low bid price information for the common stock for each fiscal
      quarter for the past two fiscal years as reported by the OTCBB. High and low
      bid
      quotations represent prices between dealers without adjustment for retail
      mark-ups, markdowns or commissions and may not necessarily represent actual
      transactions.




Year
                  Ended December 31, 2005
              
              High
                  Bid
              
              Low
                  BidFourth
                  Quarter
              
              
              .09
              
              
              .03Third
                  Quarter
              
              
              .44
              
              
              .06Second
                  Quarter
              
              
              .60
              
              
              .17First
                  Quarter
              
              
              .65
              
              
              .18
  Year
                  Ended December 31, 2006
              
              High
                  Bid
              
              Low
                  BidFourth
                  Quarter
              
              
              .08
              
              
              .04Third
                  Quarter
              
              
              .19
              
              
              .07Second
                  Quarter
              
              
              .39
              
              
              .12First
                  Quarter
              
              
              1.08
              
              
              .04




-14-
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FY
                2006
            IMAGIN
                MOLECULAR CORPORATION
            FORM
                10-KSB


(b)
      Holders





As
      of
      December 31, 2006, the approximate number of holders of record of shares of
      the
      Registrant's Common Stock, $.001 par value per share was 900. The Registrant's
      only class of trading securities, was believed by management to be as
      follows:





Title
                of Class
            
            Number
                of Record HoldersCommon
                Stock, $.001 par value
            
            900





Management
      believes there are many shareholders whose securities are held in street name
      with various brokerage houses. The exact number of shareholders is unknown
      to
      the Registrant.





(c)
      Dividends.





The
      Registrant has paid no dividends during the fiscal years ended December 31,
      2006
      and 2005. There are no restrictions on the Registrant's present or future
      ability to pay dividends.





The
      payment by the Registrant of dividends, if any, in the future rests within
      the
      discretion of its Board of Directors and will depend, among other things, upon
      the Registrant's earnings, its capital requirements, and its financial
      conditions, as well as other relevant factors.





**ITEM
      6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
      AND RESULTS OF OPERATIONS**





**Overview**





Imagin
      Molecular Corporation refocused its business strategy in April 2005 to
      concentrate on business opportunities in positron emission tomography (PET)
      through holdings in strategically related divisions based in the manufacturing
      of PET devices ownership of PET imaging center and the diagnosis and treatment
      of cancer, heart and neurological diseases. PET is an advanced medical
      diagnostic imaging procedure used by physicians in the detection of certain
      cancers, coronary disease and neurological disorders including Alzheimer's
      disease.





On
      November 18, 2005 the Company formed a wholly owned subsidiary, Imagin Nuclear
      Partners Corporation, a New York corporation (“INP”), to provide Positron
      Emission Tomography myocardial perfusion imaging technology (“PET” or “PET
      imaging technology”) and related technical and educational services to diagnose
      and treat patients with coronary artery disease and patients who are at risk
      of
      developing coronary heart disease. Imagin Nuclear Partners Corporation is
      headquartered in Niagara, New York.





Imagin
      Nuclear Partners provides imaging technology for the diagnosis and non-invasive
      management of coronary artery disease. INP has commenced scanning patients
      at a
      cardiac center located within Beth Israel Medical Center in New York. Imagin
      Nuclear Partners executed a sales agreement with Bracco Diagnostics, Inc. to
      provide rubidium, an essential isotope for cardiac PET scanning.





**Relationship
      with Beth Israel Hospital**





In
        February 2006, Imagin Nuclear Partners purchased a Positron HZL-R Imaging
        Camera
        from Positron as well as a CTI Infusion Cart from Bracco Diagnostics, Inc.
        The
        company operates a PET center under the name Imagin Nuclear Partners in Beth
        Israel Hospital. The Company’s intention is to leverage its existing
        relationship with the New York State Department of Health Cardiac Advisory
        Committee to secure a “pilot program” aimed at demonstrating the cost efficacy
        of cardiac PET in selected markets on predetermined procedure indications.
        The
        company desires to keep the existing relationship with Beth Israel Hospital.
        Beth Israel provides Imagin Nuclear Partners Corporation a technologist and
        space in the hospital in exchange for a pre-negotiated volume of Imagin Nuclear
        Partners Corporation patients.


-15-
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            of Contents*


FY
                2006
            IMAGIN
                MOLECULAR CORPORATION
            FORM
                10-KSB


**Results
          of Operations**
 
 Between
          2002 and 2005 the Company was in a development stage with limited operations.
          All revenues during this period were derived from Cipher Multimedia’s digital
          distribution. As of December 31, 2005 total revenues from inception in
          2002 were
          approximately $6,000 and total operating expenses during the same period
          were
          approximately $976,000. Results for the year ended December 31, 2006 include
          the
          operations of INP including the operations at Beth Israel Hospital. All
          of the
          Company’s revenues and a large majority of its operating expenses were generated
          by INP during the year ended December 31, 2006.
 
 For
          the
          years ended December 31, 2006 and 2005, the Company had net losses $972,817
          and
          $75,318, respectively. The current year net loss includes an operating
          loss of
          $1,070,210. In addition to a gross loss on scans, the Company issuance
          a
          significant amount of its common stock in exchange for services, contributed
          to
          the significant increase of the losses.
 
 ***Revenues*** -
          Revenue
          was generated exclusively from PET scans at Beth Israel Hospital and totaled
          $183,198 for the year ended December 31, 2006. Gross revenues from patient
          scans
          have been adjusted to reflect management’s estimate of reimbursable amounts.
          Contractual adjustments arise due to the terms of reimbursement of Medicaid,
          Medicare, and managed care providers and represent the difference between
          charges at established rates and estimated recoverable amounts. Adjustments
          are
          recognized as a reduction of revenue in the period the services are rendered.
          Since INP has a very limited history of reimbursement rates, management
          has
          reduced gross revenues by 40% to reflect potential contractual adjustments,
          an
          amount it believes to be conservative. Costs of revenues, which consist
          primarily of monthly fixed costs associated with performing the scans,
          operating
          the imaging camera and CTI infusion were $343,254. Gross loss for the year
          amounted to $160,056.
 
 ***Operating
          Expenses*** -
          Marketing and general and administrative expenses for the year ended December
          31, 2006 were $57,617 compared to $22,113 for the year ended December 31,
          2005.
          The increase over last year is due primarily to costs associated with INP
          and
          operating the Beth Israel Facility including consulting fees and depreciation
          expenses that were not incurred in 2005. Professional fees increased to
          $852,537
          from $169,707 for the years ended December 31, 2006 and 2005. The Company
          recorded professional fees expenses of $763,700 related to shares of its
          common
          stock that were issued for services performed, the majority of which was
          issued
          to firms promoting Imagin common stock to the market place. In the prior
          year
          $57,295 worth of common stock was issued for services. Other professional
          fees
          consist primarily of legal and accounting expenses.
 
 ***Other
          Income (Expense)*** -
          Interest income represents accrued interest on the notes receivable from
          Positron Corporation, including amortization of discount, through the date
          of
          conversion to Positron Series B Preferred Stock. Interest income for the
          year
          ended December 31, 2006 was $145,218 compared to $138,848 for the year
          ended
          December 31, 2005.
 
 Interest
          expense represents interest paid and accrued in 2006 on notes payable including
          $13,000 for a related party note payable and approximately $8,000 for a
          note
          payable to Cherry Creek Capital Partners, an unrelated party to whom the
          Company
          issued a 12% secured promissory note to on September 11, 2006 in the amount
          of
          $300,000. Interest expense for the year ended December 31, 2005 was $25,624
          and
          was all for related party notes or advances to shareholders, two of these
          notes
          payable were settled in January 2006.
 
 Other
          expense for the year ended December 31, 2006 includes a $25,000 settlement
          payment made on behalf of a former officer of the Company’s wholly-owned
          subsidiary Cipher Multimedia Inc .


-16-
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            of Contents*


FY
                2006
            IMAGIN
                MOLECULAR CORPORATION
            FORM
                10-KSB


**FINANCIAL
      CONDITION**





The
        Company had cash and cash equivalents of $3,138 and accounts receivable of
        $163,359 on December 31, 2006. On the same date, accounts payable and accrued
        liabilities outstanding totaled $255,823 The Company is dependent upon the
        success of INP and PET scanning and/or raising additional debt or equity
        financings to resolve the Company’s liquidity issues and allow it to continue to
        operate as a going concern.





The
      Company’s principal source of cash flows since inception has been through notes
      payable to shareholders or other related parties and issuances of common stock.





On
      December 31, 2006 the Company had an accumulated deficit of $1,958,723 and
      total
      equity of $935,309.





**ITEM
      7. FINANCIAL STATEMENTS**





The
      required Financial Statements and notes thereto are contained in a separate
      section of this report beginning with the page following the signature
      page.





**ITEM
      8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
      AND FINANCIAL DISCLOSURE**




On
      July 12, 2006, Imagin Molecular Corporation (the "Registrant") dismissed Bloom
      & Co., LLP as its independent registered public accounting firm. This action
      was approved by the Registrant's Board of Directors. The reports of Bloom &
Co., LLP on their audit of the financial statements of the Registrant as of
      and
      for the two most recent fiscal years prior to dismissal contained no adverse
      opinion or disclaimer of opinion, and were not qualified or modified as to
      uncertainty, audit scope, or accounting principles, except as follows: the
      report on the Registrant's financial statements as of and for the years ended
      December 31, 2004 and December 31, 2005, which financial statements and report
      were included in the Registrant's Annual Report on Form 10-KSB for the years
      ended December 31, 2004 and 2005, respectively, contained a separate paragraph
      that included a statement that the Registrant's recurring operating losses
      and
      working capital deficiencies raised substantial doubt about the Registrant's
      ability to continue as a going concern.




During
      the Registrant's two most recently completed fiscal years and the subsequent
      interim period through July 12, 2006, the date of the Registrant's dismissal
      of
      Bloom & Co., LLP, there were no disagreements with Bloom & Co., LLP on
      any matter of accounting principles or practices, financial statement disclosure
      or auditing scope or procedure, which disagreements, if not resolved to the
      satisfaction of Bloom & Co., LLP, would have caused them to make reference
      thereto in its report on the financial statements for such years. During the
      Registrant's two most recently completed fiscal years and through July 12,
      2006,
      none of the reportable events specified in Item 304(a)(v) of Regulation S-K
      have
      occurred.




On
      July
      10, 2006, the Registrant engaged Frank L. Sassetti & Co. to be its
      independent registered public accounting firm. The Registrant's engagement
      of
      Frank L. Sassetti & Co. was approved by the Registrant's Board of Directors.




During
      the two most recent fiscal years and through July 10, 2006, the Registrant
      has
      not consulted with Frank L. Sassetti & Co. regarding either (i) the
      application of accounting principles to a specified transaction, either
      completed or proposed; or the type of audit opinion that might be rendered
      on
      the Registrant's financial statements, and either a written report was provided
      to the Registrant or oral advice was provided that Frank L. Sassetti & Co.
      concluded was an important factor considered by the Registrant in reaching
      a
      decision as to the accounting, auditing or financial reporting issue; or (ii)
      any matter that was the subject of a disagreement and required to be reported
      under Item 304(a)(1)(iv) or Item 304(a)(1)(v) of Regulation S-K and the related
      instructions thereto.




-17-
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            of Contents*


FY
                2006
            IMAGIN
                MOLECULAR CORPORATION
            FORM
                10-KSB


**ITEM
      8A. CONTROLS AND PROCEDURES**





(a)
      Evaluation of disclosure controls and procedures





For
      purposes of rule 13a-14 and 15d-14 of the Securities Exchange Act of 1934
      ("Exchange Act") the term "disclosure controls and procedures" refers to the
      controls and other procedures of a company that are designed to ensure that
      information required to be disclosed by a company in the reports that it files
      under the Exchange Act is recorded, processed, summarized and reported within
      required time periods. Within 90 days prior to the date of this report
      ("Evaluation Date"), Imagin carried out an evaluation under the supervision
      and
      with the participation of Imagin's Chief Executive Officer and its Chief
      Financial Officer of the effectiveness of the design and operation of its
      disclosure controls and procedures. Based on that evaluation, Chief Executive
      Officer and Chief Financial Officer have concluded that, as of the Evaluation
      Date, such controls and procedures were effective at ensuring that required
      information will be disclosed on a timely basis in our periodic reports filed
      under and pursuant to the Exchange Act.





(b)
      Changes in internal controls





There
      were no significant changes to our internal controls or in other factors that
      could significantly affect our internal controls subsequent to the Evaluation
      Date.




**ITEM
        8B. OTHER INFORMATION.**
 
 On
        March
        13, 2007, the Registrant reorganized Cipher as a Nevada corporation via merger
        with Cipher Multimedia, Inc., a Nevada corporation (“Cipher-NV”). In accordance
        with the Plan of Merger, each ten shares of Cipher were exchanged for one
        share
        of Cipher-NV common stock. Also on March 13, 2007, the Registrant entered
        into
        employment agreements with Julia Rzeppa as President and Chairman, Corey
        Conn as
        Treasurer and Director and Domenic Hanzely as Vice President of Product
        Development and Chief Technology officer. On March 14, 2007, Cipher settled
        obligations with its two largest creditors by retiring $148,973.46 in
        obligations to Patrick Rooney, the Registrant’s former chairman and Chief
        Executive officer and Cipher’s founder, for 7,448,673 shares of Cipher’s common
        stock, and retiring $35,750 in exchange for the issuance of 1,787,500 shares
        of
        Cipher’s common stock. On March 20, 2007, realizing that Cipher’s software
        encryption business no longer fit the Registrant’s business model of medical
        imaging services, the Registrant’s Board of Directors resolved to spin off the
        3,513,200 shares of Cipher common stock held by the Registrant as a special
        dividend to its Shareholders of record as of March 26, 2007.




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FY
                2006
            IMAGIN
                MOLECULAR CORPORATION
            FORM
                10-KSB


**PART
      III**





**ITEM
      9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
      PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT**





(a)
      Identify Directors and Executive Officers.





The
      following table sets forth: (1) names and ages of all persons who presently
      are
      and who have been selected as directors of the Registrant; (2) all positions
      and
      offices with the Registrant held by each such person; (3) the term or office
      of
      each person named as a director; and (4) any period during which he or she
      has
      served a such:





**SUMMARY
      COMPENSATION TABLE**





Name
            
            Duration
                and Date
              Of
                Expiration of
              Present
                Term
            
            Position
                and Office
              With
                Registrant
            
            Age
                and
              Director
                SinceJoseph
                G. Oliverio
            
            One
                year
            
            Chief
                Executive
            
            37December
                31, 2007
            
            Officer,
                Director
            
            August
                18, 2006Corey
                Conn
            
            One
                year
            
            Chief
                Financial
            
            45December
                31, 2007
            
            Officer,
                Director
            
            August
                19, 2003Neil
                Sy
            
            One
                year
            
            Chairman,
            
            37December
                31, 2007
            
            Director
            
            August
                19, 2005





There
      is
      no understanding or arrangement between any directors or any other person or
      persons pursuant to which such individual, was or is to be, selected as a
      director or nominee of the Registrant.





Business
      Experience





Joseph
      G.
      Oliverio - Age 37, Mr. Oliverio commenced service as the Company’s Chief
      Executive Officer and was also appointed to serve on the Company’s Board of
      Directors. Mr. Oliverio also serves as the President of Positron Corporation,
      a
      publicly-owned Texas corporation, and affiliate of the Registrant. From 1995
      to
      2006, Mr. Oliverio was the former Chief Operating Officer of Michael E. Merhige,
      M.D., LLC, a well known coronary disease reversal and prevention center in
      Niagara, New York. Mr. Oliverio earned an MBA from the University of Phoenix
      and
      a BS in Nuclear Medicine Technology from State University of New York at
      Buffalo. Mr. Oliverio is a certified nuclear medicine technologist.


Corey
          Conn - Age 45, Chief Executive Officer, Director: Mr. Conn is a co-founder
          of
          Cipher Multimedia, Inc. Mr. Conn also serves as the Chief Financial Officer
          of
          Positron Corporation, a publicly-owned Texas corporation, and affiliate
          of the
          Registrant. Since September, 1999. Mr. Conn has served as Managing Director
          of
          Virtual Partnerships, LLC, a business development and business strategy
          consulting firm. Previously, Mr. Conn was Vice President of Business Development
          at iLX, an e-business and e-transformation services provider from June
          1996 to
          September 1999. Mr. Conn served as a member of the Board of Directors of
          Uniloc,
          Inc., from April 2000 to July 2002.
 
 Neil
        Sy -
        Age 37, Chairman, Director: Mr. Sy is currently engaged in capital raising
        ventures including consumer medicine and real estate properties in Chicago,
        Illinois and Las Vegas, Nevada. Prior thereto and from 1997 to 2003, Mr.
        Sy was
        a member of the Chicago Board Options Exchange as a market maker. Prior thereto,
        and from 1992 to 1997, Mr. Sy worked on the Chicago Board Options Exchange
        as a
        trade manager. Mr. Sy received a Bachelor’s Degree in Business Administration
        from Southern Illinois University.


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FY
                2006
            IMAGIN
                MOLECULAR CORPORATION
            FORM
                10-KSB


**Directorship**





Except
      as
      disclosed in this Item, each director of the Registrant has indicated to the
      Registrant that he is not presently a director in any other Registrant with
      a
      class of securities registered pursuant to Section 12 of the 34 Act or subject
      to the requirements of Section 15(d) of such act or any investment company
      registered under the Investment Company Act of 1940.





(b)
      Identification of Certain Significant Employees





The
      Registrant does not presently employ any person as a significant employee who
      is
      not an executive officer but who makes or is expected to make a significant
      contribution to the business of the Registrant.





(c)
      Family Relationships





No
      family
      relationship exists between any director or executive officer of the Registrant.





(d)
      Involvement in Certain Legal Proceedings





No
      event
      listed in Sub-paragraphs (1) through (4) of Subparagraph (d) of Item 401 of
      Regulation S-B, has occurred with respect to any present executive officer
      or
      director of the Registrant or any nominee for director during the past five
      years which is material to an evaluation of the ability or integrity of such
      director or officer.





Compliance
      with Section 16(a) of the Exchange Act





Section
      16(a) of the Exchange Act, as amended, requires the Registrant's executive
      officers and directors and persons who own more than 10% of a registered class
      of the Registrant's equity securities, to file with the SEC initial statements
      of beneficial ownership, reports of changes in ownership and annual reports
      concerning their ownership, of Common Stock and other equity securities of
      the
      Registrant on Forms 3, 4, and 5, respectively. Executive officers, directors
      and
      greater than 10% shareholders are required by SEC regulations to furnish the
      Registrant with copies of all Section 16(a) reports they file. To the
      Registrant's knowledge, all beneficial owners of greater than 10% of
      Registrant's Common Stock, have complied with all Section 16(a) filing
      requirements applicable to them during the Registrant's most recent fiscal
      year.


**Code
        of Ethics**
  The
        Registrant has adopted its Code of Ethics and Business Conducts that applies
        to
        all officers, directors, and employees of the Registrant. The Code of Ethics
        is
        filed as Exhibit ____ hereto.




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FY
                2006
            IMAGIN
                MOLECULAR CORPORATION
            FORM
                10-KSB


**ITEM
      10. EXECUTIVE COMPENSATION.**





(a)
      General





(1)
      through (7) All Compensation Covered. During the three fiscal years ended
      December 31, 2006, the aggregate compensation paid to, accrued or set aside
      for
      any executive officer or director of the Registrant was $0.





(b)
      Summary Compensation Table.








**SUMMARY
      COMPENSATION TABLE**


**Annual
      Compensation**





**Name
                and Position**
            
            **Year**
            
            **Salary
                (2)**Joseph
                G. Oliverio (2)
            
            2006
            
            0Chief
                Executive Officer, Director
            
            2005
            
            N/A2004
            
            N/APatrick
                G. Rooney
            
            2006
            
            N/AFormer
                Chief Executive Officer
            
            2005
            
            02004
            
            0Corey
                Conn
            
            2006
            
            0Chief
                Financial Officer, Director
            
            2005
            
            02004
            
            0Neil
                Sy
            
            2006
            
            0Chairman,
                Director
            
            2005
            
            02004
            
            N/A





(1)
      Effective August 18, 2006 Joseph G. Oliverio commenced service as the
      Registrant’s Chief Executive Officer. Mr. Oliverio was also appointed to serve
      on the Registrant’s Board of Directors. Corey Conn, who has served as the
      Registrant’s Chief Executive Officer, resigned in that capacity and will serve
      as the Registrant’s Chief Financial Officer and remain a member of the Board of
      Directors. Neil Sy resigned his appointment as the Registrant’s Chief Financial
      Officer, but will remain the Registrant’s Chairman.





(2)
      No
      officer received any bonus or other compensation.





During
      the fiscal years ended December 31, 2006 and 2005, the Registrant made no grants
      of stock options or freestanding SAR's to any executive officer or director
      of
      the Registrant




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FY
                2006
            IMAGIN
                MOLECULAR CORPORATION
            FORM
                10-KSB


**ITEM
      11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
      MANAGEMENT**





**(a)
      Security Ownership of Certain Beneficial Owners** **.** The
      information is furnished as of December 31, 2006, as to the number of shares
      of
      the Registrant's Common Stock, $.001 par value per share, owned beneficially,
      or
      known by the Registrant to own beneficially, more than 5% of any class of such
      security:





Name
                and Address
              Of
                Beneficial Owner
            
            Amount
                and Nature
              of
                Beneficial Ownership
            
            Percentage
                of ClassPatrick
                G. Rooney
            
            15,407,625
            
            22.90%Imagin
                Diagnostic Centers, Inc
            
            7,419,200
            
            11.03%





**(b)
      Security Ownership of Management.** The
      following information is furnished as of December 31, 2006, as to the number
      of
      shares of the Registrant's Common Stock, $.001 par value per share owned
      beneficially by each executive officer and director of the Registrant and by
      all
      executive officers and directors as a group:





Name
                and Address
              Of
                Beneficial Owner
            
            Amount
                and Nature
              of
                Beneficial Ownership
            
            Percentage
                of ClassJoseph
              G. Oliverio
            
            --
            
            --104
                W. Chestnut # 315Hinsdale,
                IL 60521Corey
                Conn
            
            800,000
            
            1.19%104
                  W. Chestnut # 315Hinsdale,
                  IL 60521Neil
                Sy
            
            360,000
            
            .54%104
                  W. Chestnut # 315Hinsdale,
                  IL 60521All
                Officers and Directors
            
            1,160,000
            
            1.73%As
                a Group of two persons





**ITEM12.
      CERTAIN RELATIONSHIPS AND RELATED
      TRANSACTIONS**





On
      January 2, 2006, the Registrant entered into a settlement agreement with a
      non-affiliated shareholder whereby the Registrant issued 481,481 shares of
      the
      common stock in full and final satisfaction of Ms. Rzeppa’s unpaid and
      unreimbursed expenses and advances made on behalf of the Registrant in the
      aggregate amount of $13,000. The obligation was converted at the closing bid
      price of the Registrant’s common stock as of the settlement date
      ($0.027).




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FY
                    2006
                IMAGIN
                    MOLECULAR CORPORATION
                FORM
                    10-KSB
 Also
          on
          January 2, 2006 the Registrant entered into an additional settlement agreement
          with Patrick G. Rooney, the Registrant’s former Chairman, President and Chief
          Executive Officer and affiliate shareholder whereby Mr. Rooney agreed to
          accept
          7,054,825 of the Registrant’s common stock in exchange for the full and final
          satisfaction of unpaid and unreimbursed expenses in the aggregate amount
          of
          $253,973. The obligation was converted into shares of the Registrant’s common
          stock at the average of the closing bid price five (5) trading days preceding
          the conversion ($.036)
  On
          December 29, 2006, the Registrant authorized the issuance of 586,667 shares
          of
          common stock to John Rooney, brother of the Registrant’s former President and
          Chairman, as partial settlement of a note payable due in the amount of
          $130,000.
          The note, which was due on December 31, 2006, convertible into 1,386,667
          shares
          of the Registrant’s common stock.


**ITEM
      13. EXHIBITS AND REPORTS ON FORM 8-K**





(a)
      Exhibits:




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FY
                2006
            IMAGIN
                MOLECULAR CORPORATION
            FORM
                10-KSB


**ITEM14.
      PRINCIPAL ACCOUNTANT FEES AND
      SERVICES**





The
      following table sets forth the aggregate fees billed to us for fiscal years
      ended December 31, 2006 and 2005 by our auditors. The Company’s auditors were
      Frank L. Sassetti & Co. for the fiscal year ended December 31, 2006 and
      Bloom & Co., LLP, for the fiscal year ended December 31, 2005.




2006
            
            2005Audit
                Fees (1)
            
            $
            30,000
            
            $
            37,671Non-Audit
                Fees:
            
            
            --
            
            
            --Audit
                Related Fees (2)
            
            
            --
            
            
            --Tax
                Fees (3)
            
            
            --
            
            
            --Total
                Fees paid to auditors
            
            $
            30,000
            
            $
            37,671





(1)
      Audit
      fees consist of fees billed for professional services rendered for the audit
      of
      the Registrant's annual financial statements and review of the interim
      consolidated financial statements included in quarterly reports and services
      that are normally provided in connection with statutory and regulatory filings
      or engagements.





(2)
      Audit-Related fees consist of fees billed for assurance and related services
      that are reasonably related to the performance of the audit or review of
      Imagin's consolidated financial statements and are not reported under "Audit
      Fees".





(3)
      Tax
      fees consist of fees billed for professional services rendered for tax
      compliance, tax advice and tax planning (domestic and international). These
      services include assistance regarding federal, state and international tax
      compliance, acquisitions and international tax planning.





(4)
      All
      other fees consist of fees for products and services other than the services
      reported above.





The
      Board
      of Directors has considered the role of Frank L. Sassetti & Co. in providing
      certain tax services to Imagin and has concluded that such services are
      compatible with Frank L. Sassetti Co.’s independence as our auditors. In
      addition, the Board of Directors has approved providing certain tax services
      since the effective date of the SEC rules. The rule states that an auditor
      is
      not independent of an audit client if the services it provides to the client
      are
      not appropriately approved. The Board of Directors will continue to pre-approve
      all audit and permissible non-audit services provided by the independent
      auditors until an audit committee is formed which will then he responsible
      for
      approving audit fees. We are looking for new board members that would be
      qualified to serve on an audit committee. When the audit committee is formed
      one
      of their first assignments will be to propose to the board a code of
      ethics.





The
      Board
      of Directors has adopted a policy for the pre-approval of services provided
      by
      the independent auditors, pursuant to which it may pre-approve any service
      consistent with applicable law, rules and regulations. Under the policy, the
      Board of Directors may also delegate authority to pre-approve certain specified
      audit or permissible non-audit services to one or more of its members, including
      the Chairman. A member to whom pre-approval authority has been delegated must
      report its pre-approval decisions, if any, to the Board of Directors at its
      next
      meeting, and any such pre-approvals must specify clearly in writing the services
      and fees approved. Unless the Board of Directors determines otherwise, the
      term
      for any service pre-approved by a member to whom pre-approval authority has
      been
      delegated is twelve months




-24-


FY
                2006
            IMAGIN
                MOLECULAR CORPORATION
            FORM
                10-KSB


**SIGNATURES**





Pursuant
      to the requirements of the Section 13 or 15(d) of the Securities Exchange Act
      of
      1934, the Registrant has duly caused this report to be signed on its behalf
      by
      the undersigned persons, and in the capacities so indicated on April 2,
      2007.





Imagin
      Molecular Corporation





By:
            /s/
                Joseph G. OliverioJoseph
                G. OliverioChief
                Executive Officer,DirectorBy:
            /s/Corey
                ConnCorey
                ConnChief
                Financial Officer,Director




-25-
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            of Contents*


FY
                2006
            IMAGIN
                MOLECULAR CORPORATION
            FORM
                10-KSB  Frank
        L.
        Sassetti & Co.
 Certified
        Public Accountants
 
 
 The
        Board
        of Directors
 Imagin
        Molecular Corporation
 
 
 REPORT
        OF
        INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 We
        have
        audited the accompanying balance sheet of Imagin Molecular Corporation as
        of
        December 31, 2006, and the related statements of operations, stockholders'
        equity, and cash flows for the year ended December 31, 2006. These financial
        statements are the responsibility of the Company's management. Our
        responsibility is to express an opinion on these financial statements based
        on
        our audit.
 
 We
        conducted our audit in accordance with the standards of the Public Company
        Accounting Oversight Board (United States). Those standards require that
        we plan
        and perform the audit to obtain reasonable assurance about whether the financial
        statements are free of material misstatement. An audit includes examining,
        on a
        test basis, evidence supporting the amounts and disclosures in the financial
        statements. An audit also includes assessing the accounting principles used
        and
        significant estimates made by management, as well as evaluating the overall
        financial statement presentation. We believe that our audit provides a
        reasonable basis for our opinion.
 
 In
        our
        opinion, the financial statements referred to above present fairly, in all
        material respects, the financial position of Imagin Molecular Corporation
        as of
        December 31, 2006, and the results of its operations and its cash flows for
        the
        year ended December 31, 2006, in conformity with accounting principles generally
        accepted in the United States of America.
 
 The
        accompanying financial statements have been prepared assuming that the Company
        will continue as a going concern. As discussed in Note 1 to the financial
        statements, the Company has a significant accumulated deficit which raises
        substantial doubt about the Company's ability to continue as a going concern.
        Management's plans in regard to these matters are described in Note 1. The
        financial statements do not include any adjustments that might result from
        the
        outcome of this uncertainly.
 
 
 /s/
        Frank
        L. Sassetti & Co.
 
 March
        26,
        2007
 Oak
        Park,
        Illinois
 
 
 6611
        W.
        North Avenue * Oak Park, Illinois 60302 * Phone (708) 386-1433 * Fax (708)
        386-0139


-26-
 ***Table
          of Contents***
  FY
                  2006
              IMAGIN
                  MOLECULAR CORPORATION
              FORM
                  10-KSB


BLOOM
                & CO., LLP 50 CLINTON STREET. HEMPSTEAD. NEW YORK 11550:
            
            TEL:
                516 - 486-5900CERTIFIED
                PUBLIC ACCOUNTANTS
            
            FAX:
                516 - 486-5476STEVEN
                BLOOM, CPA
              FREDERICK
                PAUKER, CPA
              SIROUSSE
                TABRIZTCHI, Ph.D. CPA
            
            MEMBER
                OF AMERICAN
              INSTITUTE
                OF
              CERTIFIED
                PUBLIC
              ACCOUNTANTS





Board
      of
      Directors Imagin Molecular Corporation


(previously
      known as Cipher Holding Corporation )


3801
      N
      Washington St. Oak Brook, IL 60523





We
      have
      audited the Consolidated balance sheet of Imagin Molecular Corporation, as
      of
      December 31, 2005 and the related consolidated statements of operations,
      accumulated deficit, and cash flows for the years ended December 31, 2005.
      These
      financial statements are the responsibility of the Company's management. Our
      responsibility is to express an opinion on these financial statements based
      on
      our audit.





We
      conducted our audit in accordance with the standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audit to obtain reasonable assurance about whether the financial
      statements are free of material misstatement. An audit also includes examining,
      on a test basis, evidence supporting the amounts and disclosures in the
      financial statements, assessing the accounting principles used and significant
      estimates made by management, as well as evaluating the overall financial
      statement presentation. We believe that our audits provide a reasonable basis
      for our opinion.





In
      our
      opinion, the consolidated financial statements referred to above present fairly,
      in all material respects, the financial position of Imagin Molecular Corporation
      as of December 31, 2005 and the results of its operations and its cash flows
      for
      the year then ended in conformity with accounting principles generally accepted
      in the United States of America.





The
      accompanying consolidated financial statements have been prepared assuming
      Imagin Molecular Corporation will continue as a going concern. As discussed
      in
      Note 3, the Company had sustained accumulated losses of $1,124,754, from
      inception to December 31, 2005 and has a net working capital deficiency of
      $565 **,** 696
      as of
      December 31, 2005 that raise substantial doubt about the Company's ability
      to
      continue as a going concern. The Company's ability to continue as a going
      concern is dependent upon the successful completion of management plans to
      raise
      equity capital to finance the operating and capital requirements of Imagin
      Molecular Corporation. The financial statements do not include any adjustments
      that might result from the outcome of this uncertainty.





/s/Bloom
      & Co., LLP


Bloom
      & Co., LLP


Hempstead,
      New York


April
      17,
      2006




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FY
                2006
            IMAGIN
                MOLECULAR CORPORATION
            FORM
                10-KSB


IMAGIN
      MOLECULAR CORPORATION


CONSOLIDATED
      BALANCE SHEETS


DECEMBER
      31, 2006 AND 2005





ASSETS2006
            
            2005Current
                assets:Cash
            
            $
            3,138
            
            $
            1,376Accounts
                receivable
            
            
            163,539
            
            
            --Total
                current assets
            
            
            166,677
            
            
            1,376Property
                and equipment, net
            
            
            234,666
            
            
            --Other
                assets:Investment
                in securities of Positron Corporation
            
            
            1,588,066Interest
                Receivable - Positron notes
            
            
            --
            
            
            72,226Convertible
                notes receivable
            
            
            --
            
            
            1,370,622Total
                assets
            
            $
            1,989,409
            
            $
            1,444,224LIABILITIES
                AND STOCKHOLDERS' (DEFICIT)Current
                liabilities:Accounts
                payable
            
            $
            97,577
            
            $
            61,195Advances
                from shareholders'
            
            
            69,616
            
            
            253,974Advances
                from affiliates
            
            
            50,000
            
            
            50,000Accrued
                expenses
            
            
            158,246
            
            
            --Current
                portion of promissory note
            
            
            81,684
            
            
            --Notes
                payable
            
            
            130,000
            
            
            143,000Advance
                from affiliate
            
            
            185,385
            
            
            --Interest
                Payable
            
            
            75,732
            
            
            58,903Total
                current liabilities
            
            
            848,240
            
            
            567,072Promissory
                note payable
            
            
            205,860
            
            
            --Stockholders’
                equity:Preferred
                Stock, 5,000,000 shares Authorized, no shares Issued and
                outstanding
            
            
            --
            
            
            --Common
                stock, $0.001 par value; 95,000,000 shares authorized and 67,276,617
                and
                50,680,311 shares issued and outstanding, on December 31, 2006 and
                2005.
            
            
            67,277
            
            
            50,680Additional
                paid-in capital
            
            
            2,826,755
            
            
            1,812,378Accumulated
                deficit
            
            
            (1,958,723
            )
            
            (985,906
            )Total
                stockholders' equity
            
            
            935,309
            
            
            877,152Total
                liabilities and stockholders' equity
            
            $
            1,989,409
            
            $
            1,444,224





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




-28-
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FY
                2006
            IMAGIN
                MOLECULAR CORPORATION
            FORM
                10-KSB


IMAGIN
      MOLECULAR CORPORATION


CONSOLIDATED
      STATEMENT OF OPERATIONS


FOR
      THE
      YEARS ENDED DECEMBER 31, 2006 AND 2005





2006
            
            2005Revenues
            
            $
            183,198
            
            $
            3,278Costs
                of revenues
            
            
            343,254
            
            
            --Gross
                loss
            
            
            (160,056
            )
            
            3,278Operating
                expenses:Professional
                fees
            
            
            852,537
            
            
            169,707Marketing,
                general and administrative
            
            
            57,617
            
            
            22,113Total
                operating expenses
            
            
            910,154
            
            
            191,820Loss
                from operations
            
            
            (1,070,210
            )
            
            (188,542
            )Other
                income (expenses):Interest
                income
            
            
            145,218
            
            
            138,848Interest
                expense
            
            
            (24,717
            )
            
            (
                25,624
            )Legal
                settlement
            
            
            (25,000
            )
            
            --Other
            
            
            1,892
            
            
            --Total
                other income
            
            
            97,393
            
            
            113,224Net
                loss
            
            
            (972,817
            )
            
            (75,318
            )Income
                taxes
            
            
            --
            
            
            --Net
                loss
            
            $
            (972,817
            )
            $
            (75,318
            )Per
                share amounts:Loss
                per share
            
            $
            (.015
            )
            $
            (.002
            )Weighted
                average common Shares
            
            
            65,612,591
            
            
            50,680,311





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




-29-
 *Table
            of Contents*


FY
                2006
            IMAGIN
                MOLECULAR CORPORATION
            FORM
                10-KSB  IMAGIN
        MOLECULAR CORPORATION
 CONSOLIDATED
        STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY
 FOR
        THE
        YEARS ENDED DECEMBER 31, 2006 AND 2005
 
 Number
                  of
                Shares
              
              Common
                Stock
              
              Additional
                  paid
                in
                  Capital
              
              Deficit
              
              TotalJanuary
                  1, 2005
              
              
              19,205,311
              
              $
              19,205
              
              $
              482,558
              
              $
              (910,588
              )
              $
              (408,825
              )Common
                  shares issued for services
              
              
              1,475,000
              
              
              1,475
              
              
              55,820
              
              
              --
              
              
              57,295Common
                  shares issued for note
              
              
              30,000,000
              
              
              30,000
              
              
              1,274,000
              
              
              --
              
              
              1,304,000Net
                  loss
              
              
              --
              
              
              --
              
              
              --
              
              
              (75,318
              )
              
              (75,318
              )December
                  31, 2005
              
              
              50,680,311
              
              
              50,680
              
              
              1,812,378
              
              
              (985,906
              )
              
              877,152Common
                  shares issued for services
              
              
              9,060,000
              
              
              9,060
              
              
              754,640
              
              
              --
              
              
              763,700Common
                  shares issued for debt repayment
              
              
              7,536,306
              
              
              7,537
              
              
              259,737
              
              
              --
              
              
              267,274Net
                  loss
              
              
              --
              
              
              --
              
              
              --
              
              
              (972,817
              )
              
              (972,817
              )December
                  31, 2006
              
              
              67,276,617
              
              $
              67,277
              
              $
              2,826,755
              
              $
              (1,958,723
              )
              $
              935,309




-30-
 ***Table
          of Contents***




FY
                2006
            IMAGIN
                MOLECULAR CORPORATION
            FORM
                10-KSB


IMAGIN
      MOLECULAR CORPORATION


CONSOLIDATED
      STATEMENT OF CASH FLOWS


FOR
      THE
      YEARS ENDED DECEMBER 31, 2006 AND 2005





2006
            
            2005Cash
                flows from operating activities::Net
                loss
            
            $
            (972,817
            )
            $
            (75,318
            )Adjustments
                to reconcile net loss to net cash used in operating
                activitiesDepreciation
                expense
            
            
            9,536
            
            
            --Common
                stock issued for services
            
            
            763,700
            
            
            57,295Amortization
                of discount on notes receivable
            
            
            (54,378
            )
            
            --Amortization
                of bond discount
            
            
            --
            
            
            (66,622
            )Changes
                in operating assets and liabilitiesAccounts
                receivable
            
            
            (163,539
            )
            
            --Interest
                receivable
            
            
            (93,638
            )
            
            (72,226
            )Accounts
                payable and accrued liabilities
            
            
            194,628
            
            
            40,000Interest
                payable
            
            
            16,829
            
            
            25,622Net
                cash used in operating activities
            
            
            (299,679
            )
            
            (91,249
            )Cash
                flows from investing activities:Purchase
                of fixed assets
            
            
            (241,105
            )
            
            --Net
                cash used in investing activities
            
            
            (241,105
            )
            
            --Cash
                flows from financing activities:Advances
                from shareholders
            
            
            69,616
            
            
            91,000Proceeds
                from promissory note
            
            
            305,111
            
            
            --Payment
                of notes
            
            
            (17,566
            )
            
            --Advance
                from affiliate
            
            
            185,385
            
            
            --Net
                cash provided by financing activities
            
            
            542,546
            
            
            91,000Net
                increase (decrease) in cash
            
            
            1,762
            
            
            (249
            )Cash
                at beginning of period
            
            
            1,376
            
            
            1,625Cash
                at end of period
            
            $
            3,138
            
            $
            1,376Supplemental
                cash flow information:Interest
                paid
            
            $
            2,780
            
            $
            --Income
                taxes paid
            
            
            --
            
            
            --





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




-31-
 *Table
            of Contents*


FY
                2006
            IMAGIN
                MOLECULAR CORPORATION
            FORM
                10-KSB


IMAGIN
      MOLECULAR CORPORATION


CONSOLIDATED
      STATEMENT OF CASH FLOWS


FOR
      THE
      YEARS ENDED DECEMBER 31, 2006 AND 2005


(CONTINUED)





Supplementary
      Schedule of Noncash Transactions





2006





On
      January 4, 2006, the Company issued 481,481 shares of common stock to a
      non-affiliated shareholder in final satisfaction of a $13,000 advance made
      to
      the Company. The shares were valued at $0.027 per share.





On
      January 4, 2006, the Company issued 7,054,825 shares of common stock to an
      affiliated shareholder in final satisfaction of a $253,974 advance made to
      the
      Company. The shares were valued at $0.036 per share.





On
      April
      13, 2006, the Company issued 50,000 shares of common stock to a consultant
      for
      services performed. The shares were valued at $0.26 per share.





On
      May
      26, 2006, the Company issued 3,000,000 shares of common stock to a consultant
      for services performed. The shares were valued at $0.17 per share





During
      September 2006, the Company converted notes receivable and accrued interest
      due
      from Positron Corporation into 762,358 shares of Positron Corporation Series
      B
      Preferred Stock, par value $1.00. The Company subsequently converted 40,000
      shares of Positron Series B Preferred Stock into 4,000,000 shares of Positron
      Corporation common stock.





On
      November 29, 2006, the Company issued 10,000 shares of common stock to a
      consultant for services performed. The shares were valued at $0.07 per
      share




2005





On
      March
      28, 2005, the Company issued 200,000 shares of common stock to a consultant
      for
      website development services performed. The shares were valued at $.04 per
      share.





On
      April
      5, 2005, the Company issued 100,000 shares of common stock to a consultant
      for
      services performed. The shares were valued at $.008 per share.





On
      June
      23, 2005, the Company issued 125,000 shares of common stock to a consultant
      for
      services performed. The shares were valued at $.008 per share.




On
      June
      29, 2005, we purchased Positron Corp. convertible promissory notes from
      Imagin Molecular Corp. for 30,000,000 restricted shares valued at $1,304,000.
      The value was determined by the actual cash paid by Imagin for the notes. The
      shares were valued at $.004 per share.





In
      December 2005, the Company issued 250,000 and 800,000 shares of common stock
      to
      two consultants for services performed. The shares were valued at $.03 and
      $.05
      per share, respectively.




-32-
 *Table
            of Contents*


FY
                2006
            IMAGIN
                MOLECULAR CORPORATION
            FORM
                10-KSB


IMAGIN
      MOLECULAR CORPORATION


NOTES
      TO
      CONSOLIDATED STATEMENTS


FOR
        THE
        YEARS ENDED DECEMBER 31, 2006 AND 2005




**NOTE
      1. BUSINESS ORGANIZATION**





Imagin
      Molecular Corporation (Imagin) (FKA) Cipher Holding Corporation ("Cipher")
      was
      originally incorporated under the laws of the State of Colorado. Imagin
      commenced operations upon incorporation and has been in the development stage
      through the first quarter of 2006 and has had very little revenue. Imagin’s
      wholly-owned subsidiary Cipher Multimedia, Inc. operates Imagin’s original
      business, a digital distribution solution and marketing company which secures
      and allows access to digital content through proprietary encoding, encryption
      and authorization technology.





In
      2005
      Imagin’s Board of Director’s resolved to change the Company’s principal
      operations from multimedia encryption technology to positron emission tomography
      and medical imaging. Operations began in the second quarter of 2006 and the
      Company no longer operates in the development stage. See Positron Acquisition
      Corp. and Imagin Nuclear Partners discussions below.




Positron
      Acquisition Corp.





On
      April
      19, 2005, the Company organized a wholly owned subsidiary, under the laws of
      the
      state of Nevada, named Positron Acquisition Corp. (“PAC”). Imagin’s original
      intent to create PAC was to acquire controlling interest in Positron Corporation
      (“Positron”), a publicly owned Texas corporation. Imagin no longer intends to
      acquire a controlling interest in Positron and PAC now serves as a holding
      company for Positron Corporation’s securities.





On
      May
      23, 2005 our Board of Directors and shareholders holding approximately 60.1%
      of
      the Company’s issued and outstanding and common stock par value $.001 per share
      (the “Common Stock”), approved a Securities Exchange Agreement (the “Exchange”)
      between our wholly-owned subsidiary Positron Acquisition Corp., a Nevada
      corporation (“PAC”) and Imagin Diagnostic Centres, Inc., a Canadian corporation
      (“IDC”). Pursuant to the terms of the Exchange, we issued 30,000,000 shares (the
      “Exchange Shares”) of our common stock, par value $.001 per share (the “Common
      Stock”) in exchange for three convertible promissory notes issued by Positron
      Corporation, a publicly owned Texas corporation (the “Positron Notes”). The
      Positron Notes are convertible into shares of Positron’s Series C and Series D
      Preferred Stock which convert, under certain circumstances, into 64,000,000
      shares of Positron’s common stock, par value $.01 per share (the “Conversion
      Shares”).





In
      accordance with the terms of the Exchange, Exchange Shares were distributed
      to
      the equity holders of IDC.





Imagin
      Nuclear Partners Corporation





In
      2006,
      the Company’s wholly-owned subsidiary Imagin Nuclear Partners Corporation
      (“INP”) commenced scanning patients using Positron Emission Tomography
      myocardial perfusion imaging technology (“PET” or “PET imaging technology”) at a
      cardiac imaging center located in Beth Israel Medical Center in New York City.
      The Company has performed PET imaging on nearly 200 hundred patients and expects
      volume to increase once marketing efforts result in increased physician
      awareness.  The Company operates under a memorandum of understanding with
      Beth Israel Medical Center and Manhattan Cardiology, owned by Andrew Van Tosh,
      M.D., a well known nuclear cardiologist in the New York City imaging community.
       The Company is aggressively moving toward definitive agreements with all
      parties.




-33-
 *Table
            of Contents*


FY
                2006
            IMAGIN
                MOLECULAR CORPORATION
            FORM
                10-KSB


IMAGIN
      MOLECULAR CORPORATION


NOTES
      TO
      CONSOLIDATED FINANCIAL STATEMENTS


DECEMBER
        31, 2006 AND 2005





INP
      intends to joint venture with hospitals or physician groups to own or operate
      nuclear medicine imaging centers throughout North America.  The Company
      plans to offer a full spectrum of Positron Emission Tomography imaging services
      as well as a robust coronary disease reversal and prevention program.  The
      Company intends to partner with cardiology groups who are less invasively
      oriented and desire program differentiation from competition.  The Company
      believes that their methodology to detection and management is more cost
      effective than traditional methods currently employed





The
      Company also intends to offer said services to Community Hospitals.  The
      Community Hospital will need to qualify in number of beds and lack of coronary
      angiographic services in order for a cardiac PET program to have the maximum
      cost effective impact on the hospital partner.  The Company has identified
      more than 2,000 hospitals that meet the joint venture criteria.






Going
      Concern





These
      financial statements have been prepared in accordance with generally accepted
      accounting principles applicable to a going concern, which contemplates the
      realization of assets and the satisfaction of liabilities and commitments in
      the
      normal course of business. The Company has sustained losses since inception
      and
      has accumulated losses of $1,958,723 as of December 31, 2006. The Company’s
      ability to continue as a going concern is dependent upon the successful
      completion of additional financing arrangements and its ability to develop
      and
      sell its services. Management plans to raise equity capital to finance the
      operating and capital requirements of the Company. While we are expending our
      best efforts to achieve the above plans, there is no assurance that such
      activity will generate sufficient funds to accomplish its business purpose,
      or
      that our business plan will be successful .





**NOTE
      2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**





*Principles
      of Consolidation and Nature of Operations*





For
      the
      years ended December 31, 2006 and 2005, the financial statements include the
      accounts and transactions of Cipher Multimedia, Inc., Positron Acquisition
      Corp.
      and Imagin Nuclear Partners Corporation (subsidiaries). All Intercompany
      transactions and balances have been eliminated.




*Cash
      and Cash Equivalents*





The
      Company considers all highly liquid instruments with original maturities of
      three months or less to be cash equivalents.





*Income
      Taxes*





The
      Company accounts for income taxes under Statement of Financial Accounting
      Standards No. 109, “Accounting for Income Taxes”. Under Statement No. 109, the
      asset and liability method is used in accounting for income taxes. Deferred
      taxes are recognized for temporary differences between the bases of assets
      and
      liabilities for financial statement and income tax purposes. The temporary
      differences relate primarily to net operating loss carryforwards. A valuation
      allowance is recorded for deferred tax assets when it is more likely than not
      that some or all of the deferred tax assets will not be realized through future
      operations.


*Revenue
        recognition*


-34-
 *Table
            of Contents*


FY
                2006
            IMAGIN
                MOLECULAR CORPORATION
            FORM
                10-KSB  IMAGIN
        MOLECULAR CORPORATION


NOTES
      TO
      CONSOLIDATED FINANCIAL STATEMENTS


DECEMBER
        31, 2006 AND 2005




The
      Company recognizes revenue from PET scans when the procedure is performed.
      Scan
      revenue represents the amount charged to patients net of contractual
      adjustments. Contractual adjustments arise due to the terms of reimbursement
      of
      Medicaid, Medicare and managed care providers. Such adjustments represent the
      difference between the charges at established rates and estimated recoverable
      amounts and are recognized as a reduction of revenue in the period services
      are
      rendered. Any differences between estimated contractual adjustments and actual
      final settlements under reimbursement contracts are recognized as contractual
      adjustments in the period final settlements are determined.





*Loss
      Per Share*





Loss
      per
      share is computed based on the weighted average number of shares of common
      stock
      outstanding. Stock options and warrants are not included in the computation
      of
      the weighted average number of shares outstanding for dilutive net loss per
      common share during each of the periods presented in the Statement of
      Operations, as the effect would be antidilutive.





*Use
      of Estimates*





The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States of America requires management to make
      estimates and assumptions that affect the reported amounts of assets and
      liabilities and disclosure of contingent assets and liabilities at the date
      of
      the financial statements and the reported amounts of revenues and expenses
      during the reporting period. Actual results could differ from those
      estimates.





**New
      Accounting Pronouncements**





In
      June
      2005, the FASB issued SFAS No. 154, "Accounting Changes and Error Corrections,"
      which will require entities that voluntarily make a change in accounting
      principle to apply that change retroactively to prior periods' financial
      statements unless this would be impracticable. SFAS No. 154supersedes Accounting
      Principles Board Opinion No. 20, "Accounting Changes"("APB No. 20"), which
      previously required that most voluntary changes in accounting principle be
      recognized by including in the current period's net income the cumulative effect
      of changing to the new accounting principle. SFAS No. 154 also makes a
      distinction between "retrospective application" of an accounting principle
      and
      the "restatement" of financial statements to reflect the correction of an error.
      Another significant change in practice under SFA No. 154 will be that if an
      entity changes its method of depreciation, amortization, or depletion for
      long-lived, non-financial assets, the change must be accounted for as a change
      in accounting principle. SFAS No. 154 applies to accounting changes and error
      corrections that are made in fiscal years beginning after December 15, 2005.
      The
      provisions of SFAS No. 154 did not effect the Company's consolidated financial
      statements





In
      June
      2006, the FASB released FASB Interpretation No. 48, "Accounting for Uncertainty
      in Income Taxes," an interpretation of FASB Statement No. 109 ("FIN 48"). FIN
      48
      prescribes a recognition threshold and measurement attribute for the financial
      statement recognition and measurement of a tax position taken or expected to
      be
      taken in a tax return. A company must determine whether it is
      "more-likely-than-not" that a tax position will be sustained upon examination,
      including resolution of any related appeals or litigation procedures, based
      on
      the technical merits of the position. Once it is determined that a position
      meets the more-likely-than-not recognition threshold, the position is measured
      to determine the amount of benefit to recognize in the financial statements.
      This interpretation is effective for fiscal years beginning after December
      15,
      2006. Earlier application of the provisions of this interpretation is encouraged
      if the enterprise has not yet issued financial statements, including interim
      financial statements, in the period this interpretation is adopted. The
      provisions of FIN 48 are not expected to have a material affect the Company's
      consolidated financial statements .




-35-
 *Table
            of Contents*


FY
                2006
            IMAGIN
                MOLECULAR CORPORATION
            FORM
                10-KSB


IMAGIN
      MOLECULAR CORPORATION


NOTES
      TO
      CONSOLIDATED FINANCIAL STATEMENTS


DECEMBER
        31, 2006 AND 2005





**NOTE
          3. IMAGIN DIAGNOSTIC CENTRES INC. CONVERTIBLE NOTES
          RECEIVABLE**


On
      June
      29, 2005, through our wholly-owned subsidiary Positron Acquisition Corporation,
      (“PAC”), we purchased notes receivable for 30,000,000 restricted shares valued
      at $1,304,000. Below is a brief history of those notes. On May 26, 2004 and
      June
      17, 2004, Positron Corporation (“Positron”)) sold two separate secured
      convertible promissory notes under a Note Purchase Agreement dated May 21,
      2004,
      to IMAGIN Diagnostic Centres, Inc. (“IDC”) in the principal amounts of $400,000
      and $300,000, respectively. Interest is charged on the outstanding principal
      at
      the rate of ten percent (10%) per annum and is payable annually to the extent
      of
      positive cash flow of Positron on the anniversary dates of these notes. The
      principal and any unpaid interest were originally due on the earlier to occur
      of
      May 21, 2006 or when declared due and payable by IDC upon occurrence of an
      event
      of default. The Company and Positron extended the due date to September 30,
      2006, on which date the notes were converted to Positron Series B Convertible
      Preferred Stock.





In
      a
      second stage of the financing IDC agreed to purchase additional secured
      convertible promissory notes in the aggregate principal amount of $1,300,000.
      These notes were to be purchased over a six and a half month period, commencing
      July 15, 2004. These notes are due and payable on May 21, 2006, the due date
      was
      subsequently extended to September 30, 2006. These notes are initially
      convertible into new shares of Series D Preferred Stock that, in turn is
      convertible into an aggregate of 52,000,000 shares of Positron common stock.
      As
      of June 30, 2005, principal of $1,208,500 has been advanced related to these
      notes. On June 30, 2005, IDC converted $575,000 of these promissory notes into
      shares of Series D Preferred Stock that, in turn were converted into 23,000,000
      shares of the Positron common stock. This conversion reduced the principal
      owed
      under these promissory notes from $1,208,500 to $633,500. On October 21, 2005,
      $770,000 of unpaid principal and interest was converted into 770,000 shares
      of
      Positron’s Series C Convertible Preferred Stock.





The
      agreements with IDC provided for a $200,000 transaction fee payable to IDC
      upon
      completion of the financing. Under terms of these agreements, this fee
      obligation was to be reduced by an amount equal to $0.02 multiplied by the
      number of warrants issued to IMAGIN. The agreements with IDC also provided
      for
      the issuance of new warrants for the purchase of 4,575,000 shares of common
      stock, which resulted in a $91,500 decrease in this fee obligation to $108,500.
      This fee obligation is included in the principal of the notes payable to IDC
      at
      June 30, 2005. The Company allocated the proceeds received from this convertible
      debt with detachable warrants using the relative fair value of the individual
      elements at the time of issuance. The notes payable to IDC contain an
      unamortized discount that is being amortized over the term of the notes
      payable.




On
      September 30, 2006 the Company converted $818,066 of principal and interest
      outstanding on the Series D Convertible Promissory Notes and the 770,000 Shares
      of Series C into 762,358 shares of Positron’s Series B Convertible Preferred
      Stock, par value $1.00 per share (the “Series B”) and subsequently converted
      40,000 Series B Preferred Stock into 4,000,000 shares of common stock, par
      value
      $0.01. Each share of Series B is convertible into 100 shares of Positron
      Corporation common stock and has 100 votes on all matters which Positron shares
      are entitled to vote. Due to the restrictions on sale or transfer of these
      securities and the significant number of underlying common shares relative
      to
      the issuers’ outstanding common shares, management believes that any adjustment
      of its investment to fair value under FAS 115 would result in an overstatement
      of the value of the investment. As such the securities are valued at the
      previous carrying value of the note receivable and accrued interest at the
      date
      of conversion.





**NOTE
      4. INCOME TAXES**





The
      Company has incurred losses since its inception and, therefore, has not been
      subject to federal income taxes. As of December 31, 2006, the Company had net
      operating loss (“NOL”) carryforwards for income tax purposes of approximately
      $2,000,000, which expire in 2022 through 2026. Under the provisions of Section
      382 of the Internal Revenue Code the greater than 50% ownership changes that
      occurred 2003 and 2004 of the Company’s common stock limited the Company’s
      ability to utilize its NOL carryforwards to reduce future taxable income and
      related tax liabilities.




Section
        382 allows an owner shift any time there is a transfer of stock by a person
        who
        directly, or indirectly, owns more than 5% of the corporation and the percentage
        of stock of the corporation owned by one or more five percent shareholders
        has
        increased, in the aggregate, by more than 50 percentage points over the lowest
        percentage of stock owned by such shareholders at any time during the "testing
        period." The "testing period" is generally a three-year period ending on
        the
        date of any owner or equity structure shift.


-36-
 *Table
            of Contents*


FY
                2006
            IMAGIN
                MOLECULAR CORPORATION
            FORM
                10-KSB


IMAGIN
      MOLECULAR CORPORATION


NOTES
      TO
      CONSOLIDATED FINANCIAL STATEMENTS


DECEMBER
        31, 2006 AND 2005





The
      amount of post-change income that may be offset by pre-change losses is limited
      each year by the "Section 382 Limitation." Generally, the Section 382 Limitation
      is an amount equal to the value of the old loss corporation multiplied by a
      rate
      established monthly by the Internal Revenue Service





For
      the
      years ended December 31, 2006 and 2005,, the Company applied the Federal
      statutory tax rate of 35%.


Deferred
      income taxes consist of the following December 31, 2006 and 2005:


2006
              
              2005Deferred
                  tax assetsNet
                  operating loss carryforwards
              
              $
              344,000
              
              $
              318,000Current
                  year provision
              
              
              340,000
              
              
              26,000684,000
              
              
              344,000Valuation
                  allowance
              
              
              (684,000
              )
              
              (344,000
              )$
              -
              
              $
              -


Due
      to
      the uncertainty of future realization of the net deferred tax asset, a valuation
      allowance has been placed against this asset.





**NOTE
      5. NOTES PAYABLE**





On
      September 11, 2006, the Company issued a 12% secured promissory note to Cherry
      Creek Capital Partners (“Cherry Creek”), an unrelated party, in the amount of
      $300,000. Pursuant to the terms of the note, commencing on October 1, 2006,
      the
      Company is required to make 41 consecutive monthly installments of $8,783,
      including interest. A final payment of all outstanding principal and accrued
      interest is due and payable on March 10, 2010. The promissory note is secured
      by
      certain assets of the Company including 4,000,000 shares of common stock of
      Positron Corporation, for which the Company has granted Cherry Creek a security
      interest. As of December 31, 2006 the principal balance of the promissory note
      is $287,544 , of which $81,684 is included in current liabilities.




As
      a
      condition of the promissory note, on September 11, 2006 the Company and Cherry
      Creek entered into an Assignment of Economic Interests whereby the Company
      shall
      be obligated to pay Cherry Creek, on a quarterly basis, an amount equal to
      5% of
      operating income (as defined in the agreement), and upon the occurrence of
      a
      liquidity event, a payment in the amount of 5% of the net proceeds of such
      transaction. At December 31, 2006, no amounts had been recorded for these
      items.




Convertible
      note with related party




On
        December 28, 2004, the Company modified and amended a promissory note made
        by
        Imagin in favor of John Rooney, brother of the Registrant’s former Chairman,
        President and Chief Executive Officer and current principal shareholder,
        in the
        principal amount of $130,000. Pursuant to the terms of the amended note,
        the
        Company accepted the obligation for the payment of the note for the release
        of
        the obligation of Imagin to repay principal and interest. The due date of
        the
        note was extended to December 31, 2006, with interest at the rate of 10%.
        The
        note was amended to be convertible into 1,386,667 shares of the Company’s common
        stock. Additional shares may be converted for unpaid interest at $.09375.
        As of
        December 31, 2006 the note and accrued interest of $39,000 was unpaid This
        interest was converted into 1,787,500 shares of common stock of Cipher
        Multimedia, Inc., the Company’s wholly-owned subsidiary. On December 29, 2006
        the Company authorized the issuance of 586,667 shares of common stock to
        Mr.
        Rooney as full and final settlement of the note.




-37-
 *Table
            of Contents*


FY
                2006
            IMAGIN
                MOLECULAR CORPORATION
            FORM
                10-KSB


IMAGIN
      MOLECULAR CORPORATION


NOTES
      TO
      CONSOLIDATED FINANCIAL STATEMENTS


DECEMBER
      31, 2006 AND 2005




Advances
        from shareholder
  Patrick
        G. Rooney, the company’s former Chairman, President and Chief Executive Officer,
        advanced funds to finance the Company’s working capital requirements. On
        December 31, 2006 and 2005 advances and loans, including accrued interest,
        made
        to the Company by Mr. Rooney totaled $98,973 and $253,974, respectively.


**NOTE
      6. RELATED PARTY TRANSACTIONS**





In
      September, INP purchased from Positron, a refurbished HZL Positron Emission
      Tomography (“PET”) Imaging System. The machine is being used at the cardiac
      imaging center located in Beth Israel Medical Center in New York City. The
      total
      cost of the machine, which includes sales tax and installation was $234,760.
      The
      Company also executed a service and maintenance contract with Positron for
      the
      machine. In 2006, Positron billed the Company $21,695 under the service
      contract. On December 31, 2006 the Company owed Positron $185,385 .





**NOTE
      7. STOCKHOLDERS' EQUITY**




On
        January 2, 2006, the Company entered into a settlement agreement with a
        non-affiliated shareholder whereby the Company issued 481,481 shares of the
        common stock in full and final satisfaction of unpaid and unreimbursed expenses
        and advances made on behalf of the Registrant in the aggregate amount of
        $13,000. The obligation was converted at the closing bid price of the Company’s
        common stock as of the settlement date ($0.027).
 
 On
        January 2, 2006 the Company entered into an additional settlement agreement
        with
        Patrick G. Rooney, the Registrant’s former Chairman, President and Chief
        Executive Officer and affiliate shareholder whereby Mr. Rooney agreed to
        accept
        7,054,825 of the Company’s common stock in exchange for the full and final
        satisfaction of unpaid and unreimbursed expenses in the aggregate amount
        of
        $253,974. The obligation was converted into shares of the Company’s common stock
        at the average of the closing bid price five (5) trading days preceding the
        conversion ($0.036).
 
 In 2006 **** the
        Company issued 9,060,000 shares of common stock in exchange for consulting
        services and other professional fees and recorded consulting fees expenses
        of
        $763,700 to reflect the fair market value of the common shares
        issued .


**NOTE
        8. SUBSEQUENT EVENT**
 
 On
        March
        13, 2007, the Registrant reorganized Cipher as a Nevada corporation via merger
        with Cipher Multimedia, Inc., a Nevada corporation (“Cipher-NV”). In accordance
        with the Plan of Merger, each ten shares of Cipher were exchanged for one
        share
        of Cipher-NV common stock. Also on March 13, 2007, the Registrant entered
        into
        employment agreements with Julia Rzeppa as President and Chairman, Corey
        Conn as
        Treasurer and Director and Domenic Hanzely as Vice President of Product
        Development and Chief Technology officer. On March 14, 2007, Cipher settled
        obligations with its two largest creditors by retiring $148,973.46 in
        obligations to Patrick Rooney, the Registrant’s former chairman and Chief
        Executive officer and Cipher’s founder, for 7,448,673 shares of Cipher’s common
        stock, and retiring $35,750 in exchange for the issuance of 1,787,500 shares
        of
        Cipher’s common stock. On March 20, 2007, realizing that Cipher’s software
        encryption business no longer fit the Registrant’s business model of medical
        imaging services, the Registrant’s Board of Directors resolved to spin off the
        3,513,200 shares of Cipher common stock held by the Registrant as a special
        dividend to its Shareholders of record as of March 26, 2007.




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 *Table
            of Contents*


FY
                2006
            IMAGIN
                MOLECULAR CORPORATION
            FORM
                10-KSB


SIGNATURES




Pursuant
        to the requirements of the Section 13 or 15(d) of the Securities Exchange
        Act of
        1934, the Registrant has duly caused this report to be signed on its behalf
        by
        the undersigned, thereunto duly authorized, in the City of New York, State
        of
        New York on April, 2, 2007.
 
 Imagin
        Molecular Corporation
   By: /s/
        Joseph G. Oliverio
 
 Joseph
        G.
        Oliverio
 Chief
        Executive Officer,
 Director


By:/ s/
      Corey Conn





Corey
      Conn


Chief
      Financial Officer,


Director




-39-


FY
                  2006
              IMAGIN
                  MOLECULAR CORPORATION
              FORM
                  10-KSB  **EXHIBITS**
 31.1
                  Chairman
                      of the Board Certification of Periodic Financial Report Pursuant
                      to
                      Section 302 of the Sarbanes-Oxley Act of 2002*31.2
                  Chief
                      Financial Officer Certification of Periodic Financial Report
                      Pursuant to
                      Section 302 of the Sarbanes-Oxley Act of 2002*32.1
                  Chairman
                      of the Board Certification Pursuant to 18 U.S.C. Section 1350,
                      as adopted
                      pursuant to section 906 of the Sarbanes-Oxley Act of
                      2002#32.2
                  Chief
                      Financial Officer Certification Pursuant to 18 U.S.C. Section
                      1350, as
                      adopted pursuant to section 906 of the Sarbanes-Oxley Act of
                      2002#
 
 *
                  Filed
                      herewith
 #
                  Furnished
                      herewith






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