**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      DC 20549**





**FORM
          10KSB
          (Amendment No. 1)**





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


For
      the
      year ended December 31, 2005





**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
            
            (IRS
                Employer Identification No.)of
                incorporation or organization)





**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 [   ]





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 ]





Registrant's
      revenues for its most recent fiscal year: $3,278





Market
      value of Common stock held by non-affiliates at March 29, 2006: $4,534,009.





Shares
      of
      Common Stock outstanding at March 29, 2006: 74,343,579 shares





Documents
      incorporated by reference: None





Transitional
          Small Business Disclosure Format (check one): Yes [ X ] No [   ]








**TABLE
      OF CONTENTS**




PagePART
                IItem
                1.
            
            Description
                of BusinessItem
                2.
            
            Description
                of PropertiesItem
                3.
            
            Legal
                ProceedingsItem
                4.
            
            Submission
                of Matters to a Vote of Security HoldersPART
                IIItem
                5.
            
            Market
                for Common Equity and Related Stockholder MattersItem
                6.
            
            Management’s
                Discussion and Analysis or Plan of OperationsItem
                7.
            
            Financial
                StatementsItem
                8.
            
            Changes
                in and Disagreements with Accountants on Accounting and Financial
                DisclosureItem 8A.
            
            Controls
                and ProceduresItem
                8B.
            
            Other
                InformationPART
                IIIItem
                9.
            
            Directors,
                Executive Officers, Promoters and Control Persons; Compliance with
                Section
                16(a) of the Exchange ActItem
                10.
            
            Executive
                CompensationItem
                11.
            
            Security
                Ownership of Certain Beneficial Owners and Management and Related
                Stockholder MattersItem 12.
            
            Certain
                Relationships and Related TransactionsItem
                13.
            
            ExhibitsItem
                14.
            
            Principal
                Accountant Fees and ServicesSignaturesCertifications












**PART
      I**





**ITEM
      1. 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”) 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. Imagin Nuclear
      Partners, a New York Corporation (“INP”) and wholly owned subsidiary of Imagin,
      is an imaging partner through which the Registrant intends to acquire, operate
      and administer out-patient medical diagnostic imaging centers that utilize
      PET
      and PET/CT scanning equipment. Imagin Nuclear Partners 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 convertible
      promissory notes convertible into approximately 70,000,000 shares of common
      stock of Positron Corporation, a publicly owned Texas Corporation (“Positron”),
      the manufacturers of certain of the PET Scanners the Company 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 a Distribution Solution for publishers of digital
      content.








**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 and has been in the development
      stage since then. 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, respectively, and Productions
      became a wholly owned subsidiary of Momentum.





On
      September 15, 2003, 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 preferred. The Company also created a new class of "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”).





**BUSINESS
      DEVELOPMENT**





Through
      its wholly-owned subsidiary, Imagin Nuclear Partners Corporation, the Company
      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.





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 $1,850,000 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 the United
      States 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 K. Lance
      Gould and 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.





Smoking
      Cessation - Stopping smoking is an essential step in the reversal program.
      There
      are many programs from insurance companies to help the patient quit. INP
      recommends the prescription of Wellbutrin as well as nicotine patches to
      expedite tobacco abstinence.




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.





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.





Cholesterol
      Management - Total cholesterol, through medical management, is controlled down
      to 110 to 140 achieving levels similar to limiting those populations that simply
      don’t have coronary disease such as found in Central China and in Central
      Africa. Our goal is to drive LDL below 90, HDL’s above 45 and triglycerides
      below 90. Statin drugs are used to accomplish acceptable values. The physician
      needs to check liver enzymes and the cholesterol profile each month for three
      months. Dose modifications are necessary to achieve regression due to the
      individual variability factor. Often combination therapy with two or more lipid
      agents is necessary.





Patients
      are instructed to take one aspirin, folic acid 2.4 mg., a B-100 daily,
      antioxidant vitamins, Vit C. 500 mg. twice a day and Vit E 400 mg.





**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. Approximately 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).





**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. Imagin Nuclear Partners executed a sales agreement
      with Bracco Diagnostics, Inc. to provide rubidium, an essential isotope for
      cardiac PET scanning. The finalization of INP's operations is subject to the
      execution of definitive agreements with the center and the consent and approval
      of Beth Israel.





**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 Inc. The company will
      operate a PET center under the name Imagin Nuclear Partners in Beth Israel
      Hospital. The company plans to exploit their 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.




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
      for
      Positron Corporation who is the obligor on the Convertible Notes we acquired
      from Imagin Diagnostic Centers, Inc.





**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., an Illinois 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.





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.





**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’s
      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
      earns revenue from several different sources. Each partner and campaign is
      unique; therefore revenue sources are determined on a campaign by campaign
      basis.





The
                    revenue sources consist of the following:


·
            Revenue
                sharing with publishers and distributors on sale of digital
                content


·
            Promotional
                fees from advertisers


·
            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.





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 issues. 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 has changed our principal
      operations from multimedia encryption technology to positron emission tomography
      and medical imaging and related services. STILL DOES THE multimedia encryption
      technology or more so plans to spin out Cipher





**EMPLOYEES**





On
      March
      30, 2006, the Company had three full-time and one part-time
      employees .








**ITEM
      1A - RISK FACTORS**





In
      addition to the other information included in this Information Statement, you
      should be aware of the following risk factors in connection with the spin-off
      and ownership of shares.





We
      also
      caution you that this Information Statement 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," "The Spin-Off," "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:





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.





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 Cipher’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.








**ITEM
      1A - RISK FACTORS**





In
      addition to the other information included in this Information Statement, you
      should be aware of the following risk factors in connection with the spin-off
      and ownership of shares.





We
      also
      caution you that this Information Statement 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," "The Spin-Off," "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:








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.





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 Cipher’s business, results of operations and financial
      condition.







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 were unable
      to employ the qualified employees needed, then its business would be materially
      and adversely affected.





Dependence
      Upon Third Party Relationships





Imagin
      will be dependent on various third parties PET Scanners for software, technical
      support and related services. As a result, Imagin’s ability to deliver various
      services to its potential users may be adversely affected by the failure of
      these third parties to provide reliable software, equipment and related services
      to Imagin. In addition, there can be no assurance that Imagin will be successful
      in establishing and maintaining such relationships with those entities on terms
      favorable to Imagin.





Risks
      Associated with Technological Change





The
      medical imaging market in which Imagin 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, Imagin’s future success will depend on
      its ability to adapt to rapidly changing technologies and its ability to adapt
      its services to meet evolving industry standards. Imagin’s failure to
      successfully adapt to such changes in a timely manner could have a material
      adverse effect on Imagin’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.





**ITEM
      2. DESCRIPTION OF PROPERTY**





Until
      ________, 2005, the Registrant leased office space from Imagin’s founder and
      principal shareholder, Patrick Rooney, on a month-to-month basis. Mr. Rooney
      did
      not assess the Registrant a rental fee. The Registrant leases its current space
      on a month to month basis.





**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**





There
      were no submissions of matters to security holders in the fourth quarter
      2005.








**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 three 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, 2004
                              
                              
                              
                              High
                                                  Bid
                              
                              Low
                                                  BidFourth
                                                  Quarter
                              
                              
                              
                              
                              .53
                              
                              
                              .28Third
                                                  Quarter
                              
                              
                              
                              
                              .80
                              
                              
                              .44Second
                                                  Quarter
                              
                              
                              
                              
                              1.23
                              
                              
                              .60First
                                                  Quarter
                              
                              
                              
                              
                              2.00
                              
                              
                              .31Year
                                                  Ended December 31, 2005
                              
                              
                              
                              
                              High
                                                  Bid
                              
                              
                              Low
                                                  BidFourth
                                                  Quarter
                              
                              
                              
                              
                              .026
                              
                              
                              .09Third
                                                  Quarter
                              
                              
                              
                              
                              .06
                              
                              
                              .44Second
                                                  Quarter
                              
                              
                              
                              
                              .17
                              
                              
                              .60First
                                                  Quarter
                              
                              
                              
                              
                              .175
                              
                              
                              .65





(b)
      Holders





As
      of
      December 31, 2005, the approximate number of holders of record of shares of
      the
      Registrant's Common Stock, $.001 par value per share was 400. 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
            400





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,
      2004
      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 OR PLAN OF
      OPERATION**





**Results
      of Operations**





We
      have
      been at a development stage since the inception of our operations on September
      13, 2002. We had $2,688 in revenues in 2004 and $3,278 in 2005. Our total
      operating expenses were $191,820 in 2005 as compared to $295,795 in 2004, a
      decrease of
      $103,975  or
      35%. Professional fees were $169,707 and accounted for 88 % of the
      total operating expenses in 2005, as compared to $237,569 or 80% of the
      operating expenses in 2004. A substantial portion of professional fees were
      for
      consulting regarding the Registrant’s services and finances.





The
      total
      operating, professional, and general and administrative expenses were $811,771
      and $130,312 from
      inception to December 31, 2005, Respectively.





We
      had
      interest income of $138,848 on notes receivable from Positron Corporation,
      an
      affiliate organization with par value of $1,425,000.





The
      total
      net loss was $75,318. Our loss for 2004 was $329,871. The total loss from
      inception to December 31, 2005 was $1,124,754.








We
      restated our financial statements and reclassified the amount of $275,000,
      previously recorded and written off as goodwill from the acquisition of the
      shares of Momentum, as a reduction in the additional paid in
      capital.





Research
      and development activities in the fiscal year ended December 31, 2005 were
      $0 as
      compared to $34,200 for 2004..








**Financial
      Condition**





The
      Company had revenues of $3,278 for 2005. The net cash used by operations were
      $148,543 and $54,535 for 2005 and 2004, respectively.





The
      principal source of cash inflows were notes payable in the amount of $180,930
      in
      2004 and $91,000 in 2005. Notes payable and common stock issued provided us
      with
      $576,666 from inception to December 31, 2005.


On
      December 31, 2005, we had a working capital deficit of $565,696 and total
      stockholders' equity of $ 738,304 .





**Plan
      of Operation**





The
      Registrant’s plan, is to continue making its services as a manager and
      administrator of medical imaging and diagnosis operation. The Registrant may
      pursue a spin-off of Cipher Multimedia, Inc. into its own publicly owned
      company. Until such time, the Registrant intends to continue offering technology
      and services to publishers and distributors to mass-market digital content
      in a
      secure format. Management does not expect substantial revenues from its
      operations and plans to raise equity capital to finance the operating and
      capital requirements of the Company, over the next year. While the Company
      is
      expending its best efforts to achieve these plans, there is no assurance that
      such activity will generate sufficient funds to accomplish its business purpose,
      or that the Company's business plans will be successful.





**ITEM
      7. FINANCIAL STATEMENTS**











**PART
      III**





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





None








**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:





Duration
                and DateOf
                Expiration of
            Position
                and Office
            Age
                andName
            Present
                Term
            With
                Registrant
            Director
                SinceNeil
                Sy
            One
                year
              December
                31, 2006
            President,
                Chief Financial
            36
              August
                19, 2005Officer
                and DirectorCorey
                Conn
            One
                year
            Chief
                Executive
            43December
                31, 2006
            Officer,
                Director
            August
                19, 2003





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**





Neil
      Sy -
      Age 37, Chairman, President, Chief Financial Officer, 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.





Corey
      Conn- Age 43, Chief Executive Officer, Director: Mr. Conn is a co-founder of
      Cipher Multimedia, Inc. 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.








**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.
      On April 18, 2004 Mr. John Rooney, brother of Patrick Rooney, the Registrant’s
      CEO and Chairman of the Board, lent us $130,000 which was changed to convertible
      debt on December 28, 2004.





(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.
      Mr. Rooney and Mr. Conn have not filed their Section 16(a) reports as executive
      officers and directors.





**ITEM
      10. EXECUTIVE COMPENSATION.**





(a)
      General





(1)
      through (7) All Compensation Covered. During the three fiscal years ended
      December 31, 2005, 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
                (1)**Patrick
                Rooney
            2005
            0Chief
                Executive Officer, Director
            2004
            02003
            0Corey
                Conn
            2005
            0Chief
                Executive Officer
            2004
            02003
            0Neil
                Sy
            2005
            0Chief
                Financial Officer
            2004
            N/A2003





(1)
      No
      officer received any bonus or other compensation.





During
      the fiscal years ended December 31, 2005 and 2004, the Registrant made no grants
      of stock options or freestanding SAR's to any executive officer or director
      of
      the Registrant.








**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, 2005, 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
            Amount
                and NatureOf
                Beneficial Owner
                              of
                                                  Beneficial Ownership
            Percentage
                of ClassPatrick
                Rooney (1)
            8,352,800
            16.9%Imagin
                Diagnostic Centers, Inc. (2)
            30,000,000
            60.67%





(1)
      Asset
      set forth in Item 12 herein, on January 2, 2006, Mr. Rooney received 7,054,824
      shares of common stock in satisfaction of unreimbursed expenses and the
      aggregate amount of $253,973.70. Accordingly Mr. Rooney now holds 15,407,625
      shares, or 20.7% of the class





(2)
      Imagin Diagnostic Centers, Inc. has informed the Registrant that it is in the
      process of distributing these shares to its individual equity-holders in
      conjunction with the anniversary of its securities exchange with the
      Registrant.





**(b)
      Security Ownership of Management.** The
      following information is furnished as of December 31, 2005, 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
                              Amount
                                                  and NatureOf
                                                  Beneficial Owner
                              of
                                                  Beneficial Ownership
                              Percentage
                                                  of ClassCorey
                                                  Conn
                              825,000
                              1.67%3801
                                                  N. Washington St.Oak
                                                  Brook, IL 60523Neil
                                                  Sy
                              360,000
                              0%3081
                                                  N. Washington St.Oakbrook,
                                                  Ill 60523All
                                                  Officers and Directors
                              1,185,000
                              1.67%As
                                                  a Group of two persons








**ITEM
      12. 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).





Also
      on
      January 2, 2006 the Registrant entered into an additional settlement agreement
      with Patrick 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
      January 4, 2006, the Registrant settled a defaulted promissory note in the
      amount of $150,000 in exchange for 6,000,000 newly issued share of the
      Registrant’s common stock. The original Note was entered into in February 2003
      between the Registrant’s wholly owned subsidiary, Cipher Multimedia, Inc., and
      Pinnacle Investment Partners, LP, a non-affiliated third party (“Pinnacle”)
      assigned the Note and the Holder thereof presented the Note to the Registrant
      for the repayment and the Registrant entered into the aforementioned settlement
      agreement.





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





(a)
      Exhibits:





No
      current reports on Form 8-K were filed for the fourth quarter
      2005.








**ITEM
      14. 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
      15. PRINCIPAL ACCOUNTING FEES AND SERVICES**





The
      following table sets forth the aggregate fees billed to us for fiscal years
      ended December 31, 2005 and 2004 by Bloom & Co., LLP, and our
      auditors:








2005
            2004Audit
                Fees (1)
            $37,671
            $14,171Non-Audit
                Fees:
            --
            --Audit
                Related Fees (2)
            --
            --Tax
                Fees (3)
            --
            500Total
                Fees paid to auditor
            $37,671
            $14,671





(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 by Bloom & Co., LLP 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 Bloom & Co., LLP in providing
      certain tax services to Imagin and has concluded that such services are
      compatible with Bloom & Co., LLP'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.








**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 20, 2005.





Imagin
      Molecular Corporation





By: /s/
      Neil Sy


Neil
          Sy


Chairman of the Board, President, Chief Financial Officer





By: /s/Corey
      Conn


Corey
      Conn


Chief
      Executive Officer,


Secretary,
      Director














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
      (previously known as Cipher Holding Corporation), a development stage company,
      as of December 31, 2005 and 2004 and the related consolidated statements of
      income, accumulated deficit, and cash flows for the years ended December 31,
      2005 and 2004 and the period from inception on September 13, 2002 to 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 audits.





We
      conducted our audits 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.





As
      more
      fully described in Notes 1 and 5 to the financial statements of the Company
      entered into a reverse merger with Cipher Multimedia, Inc. on August 19, 2003.
      The financial statements represent the financial conditions and results of
      operations of the successor company.





In
      our
      opinion, the consolidated financial statements referred to above present fairly,
      in all material respects, the financial position of Imagin Molecular Corporation
      (previously known as Cipher Holding Corporation) as of December 31, 2005 and
      2004 and the results of its operations and its cash flows for the years 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 has 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. Management's plans in regard to these matters are also
      described in Note 1. 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





**IMAGIN
      MOLECULAR CORPORATION**


**(Formerly
      known as)**


**Cipher
      Holding Corporation**


**(A
      Development Stage Company)**


**Consolidated
      Balance Sheets**


**December
      31, 2005 And 2004**





ASSETS2005
            
            2004Cash
            
            $
            1,376
            
            $
            1,625Total
                Current Assets
            
            
            1,376
            
            
            1,625Interest
                Receivable - Positron notes
            
            
            72,226
            
            
            --Notes
                Receivable - Convertible
            
            
            1,370,622
            
            
            --Total
                Assets
            
            $
            1,444,224
            
            $
            1,625LIABILITIES
                AND STOCKHOLDERS' (DEFICIT)Accounts
                payable
            
            $
            61,195
            
            $
            21,196Advances
                from shareholders
            
            
            253,974
            
            
            225,974Other
                notes and advances
            
            
            193,000
            
            
            130,000Convertible
                note payable
            
            
            --
            
            
            --Interest
                Payable
            
            
            58,903
            
            
            33,279Total
                Current Liabilities
            
            
            567,072
            
            
            410,449Commitments
                and contingenciesStockholders'
                (Deficit)(Restated- Note 2):Preferred
                Stock, 5,000,000 shareAuthorized,
                no shares issued andOutstandingCommon
                stock, $0.001 par value;100,000,000
                shares authorized and 50,680,311and
                19,205,311 shares sued and outstanding, onDecember
                31, 2005 and 2004, respectively.
            
            
            50,680
            
            
            19,205Additional
                paid-in capital
            
            
            1,812,378
            
            
            482,558(Deficit)
                accumulated during the developmentthe
                development stage
            
            
            (985,906
            )
            
            (910,587
            )Total
                Stockholders' (Deficit)
            
            
            877,152
            
            
            (408,824
            )Total
                Liabilities and Stockholders' (Deficit)
            
            $
            1,444,224
            
            $
            1,625





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














**IMAGIN
      MOLECULAR CORPORATION**


**(Formerly
      Known As)**


**Cipher
      Holding Corporation**


**(A
      Development Stage Company)**


**Consolidated
      Statement Of Operations**


**For
      The Years Ended December 31, 2005 And 2004 And**


**The
      Period From September 13, 2003 (Inception) To December 31,
      2005**





InceptionSeptember
                                                  13,2002
                toDecember
                31,2005
            
            2004
            
            2005Revenues:
            
            $
            3,278
            
            $
            2,668
            
            $
            5,946Operating
                expenses:Professional
                fees
            
            
            169,707
            
            
            237,569
            
            
            811,771Research
                and Development
            
            
            --
            
            
            34,200
            
            
            34,200Selling,
                general and administrative
            
            
            22,113
            
            
            24,026
            
            
            130,312Total
                operating expenses
            
            
            191,820
            
            
            295,795
            
            
            976,283Operating
                loss
            
            
            (188,542
            )
            
            (293,127
            )
            
            (
                970,337
            )Other
                expenses:Interest
                income
            
            
            138,848
            
            
            
            
            
            138,848Interest
                expense
            
            
            (25,624
            )
            
            (36,744
            )
            
            (154,417
            )Total
                other expenses
            
            
            (113,224
            )
            
            (36,744
            )
            
            (15,569
            )Net
                income(Loss)
            
            
            (75,318
            )
            
            (329,871
            )
            
            (985,906
            )Provision
                for income taxes:Tax
                benefit of loss carryforward
            
            
            --
            
            
            --
            
            
            --Net
                income(Loss)
            
            $
            (75,318
            
            $
            (329,871
            )
            $
            (985,906
            )Per
                share amounts:Loss
                per share
            
            
            (.0001
            )
            
            (.02
            )Weighted
                average common Shares
            
            
            50,680,311
            
            
            18,720,975





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

















**IMAGIN
      MOLECULAR CORPORATION**


**(Formerly
      known as)**


**Cipher
      Holding Corporation**


**(A
      Development Stage Company)**


**Consolidated
      Statement Of Cash Flows**


**For
      The Years Ended December 31, 2005 And 2004 And**


**The
      Period From September 13, 2003 (Inception) To December 31,
      2005**





InceptionSeptember
                13,2002
                toDecember
                31,2005
            
            2004
            
            2005Cash
                Flows From Operating Activities:Net
                (loss)
            
            $
            (
                75,318
            )
            $
            (329,871
            )
            $
            (985,906
            )Adjustments
                to Reconcile Net (Loss)to
                Net Cash (Used) by OperatingActivities:Interest
                expense -Beneficial
                conversion
            
            
            --
            
            
            10,746
            
            
            95,513Shares
                issued for services
            
            
            --
            
            
            218,850
            
            
            458,850Changes
                in operating current assets andLiabilities:Amortization
                of bond discount
            
            
            (66,622
            )
            
            
            
            
            (66,622
            )Interest
                receivable
            
            
            (72,226
            )
            
            
            
            
            (72,226
            )Accounts
                payable
            
            
            40,000
            
            
            19,742
            
            
            61,197Interest
                payable
            
            
            25,623
            
            
            25,998
            
            
            58,904Net
                Cash (Used) by OperatingActivities
            
            
            (
                148,543
            )
            
            (
                54,535
            )
            
            (450,290
            )Cash
                Flows From Financing Activities:ActivitiesAdditional
                paid in capital
            
            
            57,294
            
            
            --
            
            
            167,294Payment
                of notes payable
            
            
            --
            
            
            (125,000
            )
            
            (125,000
            )Notes
                payable shareholders'
            
            
            91,000
            
            
            50,930
            
            
            166,972Issuance
                of notes payable
            
            
            --
            
            
            130,000
            
            
            130,000Issuance
                of common stock
            
            
            --
            
            
            --
            
            
            112,400Cash
                Flows Provided by Financing Activities
            
            
            148,294
            
            
            55,930
            
            
            451,666Net
                decrease in cash
            
            
            (
                249
            )
            
            1,395
            
            
            1,376Cash
                at beginning of period
            
            
            1,625
            
            
            230
            
            
            --Cash
                at end of period
            
            $
            1,376
            
            $
            1,625
            
            $
            1,376





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
















**IMAGIN
      MOLECULAR CORPORATION**


**(Formerly
      known as)**


**Cipher
      Holding Corporation**


**(A
      Development Stage Company)**


**Consolidated
      Statement Of Changes In Stockholders’ (Deficit)**


**For
      The Years Ended December 31, 2005 And 2004**





Number
                of
            
            Common
            
            Additional
                paidShares
            
            Stock
            
            in
                Capital
            
            Deficit
            
            TotalJanuary
                1, 2004
            
            
            17,652,811
            
            $
            17,653
            
            $
            254,514
            
            $
            (
                580,717
            )
            $
            (308,550
            )Shares
                issued for services
            
            
            1,552,500
            
            
            1,552
            
            
            217,297
            
            
            --
            
            
            218,849Beneficial
                effect
            
            
            --
            
            
            --
            
            
            10,747
            
            
            --
            
            
            10,747Net
                loss
            
            
            _________
            
            
            _______
            
            
            _________
            
            
            (
                329,871
            )
            
            (329,871
            )December
                31, 2004
            
            
            19,205,311
            
            
            19,205
            
            
            482,558
            
            
            (
                910,588
            )
            
            (408,825
            )Shares
                issued for services
            
            
            1,475,000
            
            
            1,475
            
            
            55,820
            
            
            --
            
            
            57,295Shares
                issued for note
            
            
            30,000,000
            
            
            30,000
            
            
            1,274,000
            
            
            
            
            
            1,304,000Beneficial
                effect
            
            
            --
            
            
            --
            
            
            --
            
            
            --
            
            
            --Net
                loss
            
            
            --
            
            
            --
            
            
            --
            
            
            (75,318
            )
            
            (75,318
            )December
                31, 2005
            
            
            50,680,311
            
            $
            50,680
            
            $
            1,812,378
            
            $
            (985,906
            )
            $
            877,152

















**IMAGIN
      MOLECULAR CORPORATION**


**(Formerly
      known as)**


**Cipher
      Holding Corporation**


**(A
      Development Stage Company)**


**Consolidated
      Statement Of Cash Flows**


**For
      The Years Ended December 31, 2005 And 2004 And**


**The
      Period From September 13, 2003 (Inception) To December 31,
      2005**


**(Continued)**





SUPPLEMENTARY
      SCHEDULE OF NONCASH TRANSACTIONS





**2005**





On
      March
      28, 2005, the Company issued 200,000 shares of common stock, par value .001
      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, par value .001
      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, par value .001
      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,
      par value .001 to two consultants for services performed. The shares were valued
      at $.03 and $.05 per share, respectively.








**2004**





During
      the year ended December 31, 2004, 1,552,500 shares were issued in exchange
      for
      consulting services, which amounted to $76,973.





The
      amount of $10,746, the proceeds from issuance of the convertible debt, equal
      to
      the difference between the fair value of the common stock and the conversion
      price, was allocated to additional paid-in-capital. Because the debt is
      convertible at the date of issuance, the debt discount of $10,746 was charged
      to
      interest expense at that date.








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






















**IMAGIN
      MOLECULAR CORPORATION**


**(Formerly
      known as)**


**Cipher
      Holding Corporation**


**(A
      Development Stage Company)**


**Notes
      To Consolidated Financial Statements**








**NOTE
      1. BUSINESS ORGANIZATION**





Imagin
      Molecular Corporation (Imagin) (FKA) Cipher Holding Corporation ("Cipher"),
      a
      development stage company, was originally incorporated under the laws of the
      State of Colorado on September 19, 1997 under the name Buffalo Capital VI,
      Ltd.
      We commenced our operations upon incorporation and has been in the development
      stage since then and have had very little revenue. Our principal line of
      business is to acquire and operate positron emission tomography and medical
      imaging centers which have purchased equipment from our affiliate Positron
      Corporation (“Positron”).




Cipher
      Holding Corporation was a digital distribution solution and marketing company
      that secured and provided access to digital content through proprietary
      encoding, encryption and authorization technology.





**Reverse
      Merger with Momentum Holdings Corporation**




On
      August
      19, 2003, Momentum Holdings Corporation, Midwest Merger Management, LLC, a
      Kentucky limited liability Company and Brentwood Capital Corp., a New York
      Corporation consummated a Stock Purchase Agreement with Cipher Multimedia,
      Inc.,
      a privately-owned, Illinois corporation. Pursuant to the terms of the Agreement,
      Cipher Multimedia, Inc. purchased an aggregate of 1,900,000 shares of the
      2,100,011 issued and outstanding shares of Momentum Holdings Corporation. The
      purchase price of the shares was $275,000. Cipher Multimedia, Corp. delivered
      the sum of $150,000 by wire transfer and executed two promissory notes in the
      amounts of $60,000 due on September 6, 2003 and $65,000 due on December 5,
      2003.
      These notes were paid in April 2004.





Also,
      under the terms of the exchange agreement, Momentum exchanged 14,052,800
      newly-issued shares of common stock for all of the issued and outstanding shares
      of common stock of Cipher Multimedia, Corp. After the exchange the number of
      issued and outstanding shares of Momentum Holdings Corporation increased to
      16,152,811 shares.




As
      a
      result of the reverse merger agreement, Cipher Multimedia, Corp. acquired voting
      control of Momentum Holdings Corporation on August 19, 2003 and became
      Momentum's majority shareholder.




Also
      on
      August 19, 2003, Anthony R. Russo and Danny L. Pixler resigned as the sole
      officers and directors of the Company. Patrick Rooney was elected as the
      Company's President and Chairman of the Board of Directors and Corey Conn was
      elected as the Company's Chief Financial Officer, Secretary and
      Director.





**Positron
      Acquisition Corp.**





On
      April
      19, 2005, we organized a wholly-owned subsidiary company, under the laws of
      the
      State of Nevada, called Positron Acquisition Corp ("PAC"). Imagin’s original
      intent to create PAC was to acquire controlling interest in Positron
      Corporation, a publicly owned Texas corporation. Imagin no longer intends to
      acquire a controlling interest in Positron and PAC will serve as a holding
      company for Positron Corporation’s securities.





On
      May
      23, 2005, we acquired three convertible notes receivable issued by Positron
      Corporation to Imagin Diagnostic Centres, Inc., a Canadian Corporation in
      exchange for 30,000,000 shares of Imagin common stock. The Positron Notes are
      convertible into shares of Positron’s Series C and Series D Preferred shares
      that are in turn convertible, under certain circumstances, into 64,000,000
      shares with accrued interest of 6,000,000 shares of Positron’s common stock, par
      value $.01 per share. Consequently, if the Positron Notes were converted, we
      would be the controlling shareholder of Positron Corporation. However, there
      is
      no restriction on Positron for the issuance of Positron’s securities and, on a
      fully-diluted basis, we would not have a controlling interest in
      Positron.





**IMAGIN
      MOLECULAR CORPORATION**


**(Formerly
      known as)**


**Cipher
      Holding Corporation**


**(A
      Development Stage Company)**


**Notes
      To Consolidated Financial Statements**





**NOTE
      1. BUSINESS ORGANIZATION (continued)**





**Positron
      Acquisition Corp. (continued)**





Positron
      is a publicly owned Texas corporation that 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 issues. PET systems
      are used by physicians in the diagnosis and management of heart disease and
      certain other neurological and oncological illnesses.





With
      the
      acquisition of Positron Corporation we have changed our principal operations
      from multimedia encryption technology to positron emission tomography and
      medical imaging and related services.








**Acquisition
      of Positron Corporation Notes Receivable and Issuance and Distribution of New
      Shares**





On
      May
      23, 2005 our Board of Directors and shareholders holding approximately 60.1%
      of
      the Company’s issued and outstanding and common stock approved an agreement
      between our subsidiary Positron Acquisition Corp. and Imagin Diagnostic Centres,
      Inc., a Canadian corporation (“IDC”). Pursuant to the terms of the agreement, we
      issued 30,000,000 shares of our common stock, in exchange for PAC acquiring
      two
      convertible promissory notes made by Positron Corporation.





IDC
      became the controlling shareholder of the Company being the beneficial owner
      of
      30,000,000 of the 49,430,311 issued and outstanding shares of Common Stock
      upon
      consummation of the Exchange on June 29, 2005. IDC has represented that it
      will
      distribute the shares to its equity-holders as a dividend and that it has
      commenced preparations with the Company's transfer agent to do so. Upon
      distribution, IDC will no longer be the Company's controlling
      shareholder.





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.





**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 $1,124,754 as of December 31, 2005. 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.








**IMAGIN
      MOLECULAR CORPORATION**


**(Formerly
      known as)**


**Cipher
      Holding Corporation**


**(A
      Development Stage Company)**


**Notes
      To Consolidated Financial Statements**







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





*Principles
      of Consolidation and Nature of Operations*





For
      the
      year ended December 31, 2005 and 2004, the consolidated financial statements
      include the transactions of Cipher Multimedia, Inc., Positron Acquisition Corp.
      and Imagin Nuclear Partners Corporation (subsidiaries) and the transactions
      of
      Momentum Holding Corp. (parent) from August 19, 2003, the time of reverse merger
      to the end of the year. For the period September 13, 2002 to December 31, 2005,
      the consolidated financial statements include only the accounts of Cipher
      Multimedia Inc. All Intercompany transactions 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.





*Loss
      Per Share*





Loss
      per
      share is computed based on the weighted average number of shares of common
      stock
      outstanding. All per share data retroactively reflects the effect of the reverse
      acquisition.





*Accounting
      for Convertible Notes*





The
      Company has issued convertible debt securities with non-detachable conversion
      features. The note holder has the right to have the notes and all or a portion
      of accrued and unpaid interest converted into a number of shares of the Common
      Stock at a Conversion Price of $0.001 per share. The Company has recorded the
      fair value of the beneficial conversion features as interest expense and an
      increase to Additional Paid in Capital.





*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.





**IMAGIN
      MOLECULAR CORPORATION**


**(FORMERLY
      KNOWN AS)**


**Cipher
      Holding Corporation**


**(A
      Development Stage Company)**


**Notes
      To Consolidated Financial Statements**





**NOTE
      2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)**





**New
      Accounting Pronouncements**





In
      December 2004, the Financial Accounting Standards Board (FASB) issued Statement
      of Accounting Standard (SFAS) 123R, Share-Based Payment: This statement is
      a
      revision of SFAS 123, Accounting for Stock-Based Compensation and supersedes
      APB
      25, Accounting for Stock Issued to Employees. SFAS 123R requires all share-based
      payments to employees, including grants of employee stock options, to be
      recognized in the financial statements based at their fair values beginning
      with
      the first fiscal year beginning after June 15, 2005, with early adoption
      encouraged. Under the current rules, the Company will be required to adopt
      SFAS
      123R in the first quarter of fiscal 2006, beginning December 1,
      2005.





Under
      SFAS 123R, the pro forma disclosures previously permitted will no longer be
      an
      alternative to financial statement cognition. We must determine the appropriate
      fair value model to be used for valuing share-based payments to employees,
      the
      amortization method for compensation cost and the transition method to be used
      at the date of adoption. The transition methods include modified prospective
      and
      modified retrospective adoption options. Under the modified retrospective
      options, prior periods may be restated either as of the beginning of the year
      of
      adoption or for all periods presented. The modified prospective method requires
      that compensation expense be recorded for all unvested stock options and
      restricted stock at the beginning of the first of adoption of SFAS 123R, while
      the modified retrospective method would record compensation expense for all
      unvested stock options and restrictive stock beginning with the first period
      restated.





Additionally,
      SFAS 123R clarifies the timing for recognizing compensation expense for awards
      subject to acceleration of vesting on retirement. This compensation expense
      must
      be recognized over the period from the date of grant to the date retirement
      eligibility is met if it is shorter than the vesting term. The effect on future
      earnings is dependent upon a number of factors including the number of options
      granted, the vesting period, the exercise price of the options, the Company
      stock price and volatility, and other factors and therefore cannot be
      determined. However, while the adoption of FAS 123R will have no effect on
      the
      Company's cash flows or financial position, the Company believes that it will
      have an adverse effect on future results of operations.





In
      March
      2005, the U.S. Securities and Exchange Commission, or SEC, released Staff
      Accounting Bulletin 107, Share-Based Payments, ("SAB 107"). The interpretations
      in SAB 107 express views of the SEC staff, or staff, regarding the interaction
      between SFAS 123R and certain SEC rules and regulations, and provide the staff's
      views regarding the valuation of share-based payment arrangements for public
      companies. SAB 107 provides guidance related to share-based payment transactions
      with non-employees, the transition from nonpublic to public entity status,
      valuation methods (including assumptions such as expected volatility and
      expected term), the accounting for certain redeemable financial instruments
      issued under share-based payment arrangements, the classification of
      compensation expense, non-GAAP financial measures, first-time adoption of SFAS
      123R in an interim period, capitalization of compensation cost related to
      share-based payment arrangements, the accounting for income tax effects of
      share-based payment arrangements upon adoption of SFAS 123R, the modification
      of
      employee share options prior to adoption of SFAS 123R and disclosures in
      Management's Discussion and Analysis subsequent to adoption of SFAS 123R. SAB
      107 requires stock-based compensation be classified in the same expense lines
      as
      cash compensation is reported for the same employees. We will apply the
      principles of SAB 107 in conjunction with our adoption of SFAS
      123R.





In
      May
      2005, the FASB issued SFAS 154, Accounting Changes and Error Corrections, a
      replacement of APB 20, Accounting Changes and SFAS 3 Reporting Accounting
      Changes in Interim Financial Statements. SFAS 154 requires retrospective
      application to prior periods' financial statements of a voluntary change in
      accounting principle unless it is impracticable. SFAS 154 improves financial
      reporting because its requirements enhance the consistency of financial
      information between periods. SFAS 154 is effective for





**IMAGIN
      MOLECULAR CORPORATION**


**(FORMERLY
      KNOWN AS)**


**Cipher
      Holding Corporation**


**(A
      Development Stage Company)**


**Notes
      To Consolidated Financial Statements**





**NOTE
      2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)**





**New
      Accounting Pronouncements**





Accounting
      changes and corrections of errors made in fiscal years beginning after December
      15, 2005. The Company is required to adopt the provisions of SFAS 154 in its
      first fiscal quarter of fiscal 2006. We do not expect the adoption of this
      statement to have a material impact on our financial position or results of
      operations.





The
      adoption of SFAS 151, *Inventory
      Costs,* an
      amendment of ARB No. 43, Chapter 4; had no effect on the Company's financial
      position or results of operations.





***FASB
      Interpretation No. 46R, Consolidation of Variable Interest Entities - An
      Interpretation of ARB51*** The FASB
      finalized FIN 46R in December 2003. FIN 46R expands the scope of ARB51 and
      various EITFs and can require consolidation of legal structures, called *Variable
      Interest Entities (VIEs)* .
      Companies with investments in *Special
      Purpose Entities (SPEs)* were
      required to implement FIN 46R in 2003; however, companies with VIEs are
      permitted to implement in the first quarter of 2004.





Reclassifications:
      Certain prior year amounts may be reclassified to conform with the presentation
      used in 2005.





Restatement
      of financial statements




During
      2004, the Company had issued 1,552,500 restricted shares of common stock for
      consulting services. The shares were valued at $78,726. As explained in the
      note
      5, the Company used the Black Scholes model and recomputed and restated the
      fair
      value of the restricted shares at 218 **,** 850.
      As a
      result of the adjustment, the company’s professional fees and net loss increased
      by $140,324. The restatements did not change the total stockholders’ equity.












**IMAGIN
      MOLECULAR CORPORATION**


**(FORMERLY
      KNOWN AS)**


**Cipher
      Holding Corporation**


**(A
      Development Stage Company)**


**Notes
      To Consolidated Financial Statements**






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




On
      June
      29, 2005 we purchased three notes receivable from Imagin Diagnostic Centres,
      Inc. (“IDC”) in exchange for 30,000,000 restricted shares valued at $1,304,000.
      The notes were issued to IDC pursuant to a funding transaction with Positron
      Corporation (“Positron”). On May 26, 2004 and June 17, 2004, Positron
      Corporation (PC) 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 must be paid on the earlier to occur of May 21, 2006 or upon an event
      of default. The notes are initially convertible into new shares of Series C
      Preferred Stock that, in turn are convertible into an aggregate of 35,000,000
      shares of the Positron’s common stock. These notes are collateralized by all of
      the assets of Positron. As of December 31, 2005, principal of $700,000 has
      been
      advanced and remains outstanding related to these notes. Full convertibility of
      the shares of Series C Preferred Stock into common stock will require an
      amendment to the Articles of Incorporation which must be approved by Positron’s
      shareholders.





We
      also
      acquired the third Positron note in the principal amount of $725,000 due and
      payable on May 21, 2006. The notes are initially convertible into new shares
      of
      Series D Preferred Stock that, in turn is convertible into an aggregate of
      29,000,000 shares of Positron’s common stock. Full convertibility of the shares
      of Series D Preferred Stock into common stock will require an amendment to
      Positron’s Articles of Incorporation which must be approved by the shareholders.
      A majority of Positron's  shareholders
      approved the amendment on consent on October 21, 2005.




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 balance of approximately $29,000 at June 30, 2005. The
      discount of the debt is to be amortized over the term of the notes
      payable.





The
      par
      value of the notes receivable is $1,425,000. The notes were acquired at a
      discount of $121,000, based on $1,304,000 market price of our common stock
      on
      the time of acquistion. The discount is amortized over the period from
      acquisition to the maturity date of the notes, May 21, 2006, on a straight
      line
      basis.








**IMAGIN
      MOLECULAR CORPORATION**


**(FORMERLY
      KNOWN AS)**


**Cipher
      Holding Corporation**


**(A
      Development Stage Company)**


**Notes
      To Consolidated Financial Statements**





**NOTE
      4. COMMITMENT AND CONTINGENCIES**





There
      are
      no lawsuits or undisclosed contingencies at this time.





**IMAGIN
      MOLECULAR CORPORATION**


**(FORMERLY
      KNOWN AS)**


**Cipher
      Holding Corporation**


**(A
      Development Stage Company)**


**Notes
      To Consolidated Financial Statements**





**NOTE
      5. INCOME TAXES**








The
      details of deferred tax assets and liabilities are as follows:





In
      2005,
      the Company used a statutory tax rate of 35% and estimated the tax asset to
      be
      $344,000. The valuation allowance of $39,000, in 2002, was increased by
      $164,000, in 2003, $66,000 in 2004 and $75,000 in 2005 to equal the amount
      of
      the Company's tax assets that are estimated to expire without providing future
      tax benefits. Estimated Tax Year Loss Expiration Operating Asset on Net Incurred
      Date Loss Operating Loss





2002
            2022
            $
                (112,627)
            $
                39,0002003
            2023
            (468,090)
            164,0002004
            2024
            (189,546)
            66,0002005
            2025
            (214,166)
            75,000$(984,429)
            $
                344,000Valuation
                allowance
            (344,000)Net
                tax assets
            $--








Internal
      Revenue Code Section 382 establishes a limit on the amount of NOLs of Momentum
      Holding Corp. that may be used to offset income after the ownership change
      that
      occurred in 2003 and 2004. The net operating loss carryforward of Momentum
      was
      $984,429, as of December 31, 2005.





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.





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.





**NOTE
      6. NOTES PAYABLE**




Notes
      Payable Other




Imagin
      Molecular Corporation (FKA) Cipher in consideration for the purchase of the
      shares of Momentum paid the sellers $150,000 and issued two promissory notes
      in
      the amounts of $60,000 and $65,000. The $60,000 and $65,000 notes bear 9%
      interest and are payable within 30 and 120 days, respectively. These notes
      were
      repaid in April 2004.





**IMAGIN
      MOLECULAR CORPORATION**


**(FORMERLY
      KNOWN AS)**


**Cipher
      Holding Corporation**


**(A
      Development Stage Company)**


**Notes
      To Consolidated Financial Statements**




**NOTE
      6. NOTES PAYABLE (Continued)**




Related
      Party Transaction




On
      December 28, 2004, we modified and amended a promissory note made by Cipher
      in
      favor of John Rooney, brother of the Registrant’s President and Chairman, in the
      principal amount of $130,000. Pursuant to the terms of the amended note, we
      accepted the obligation for the payment of the note for the release of the
      obligation of Cipher 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 our common
      stock.




On
      December 29, 2004, John Rooney transferred the right to convert 800,000 shares
      underlying the amended note to Solaris Opportunity Fund, L.P. (“Solaris”) in
      satisfaction of unpaid obligations to Solaris in the aggregate amount of
      $30,000. The Registrant’s President and Chairman, Patrick Rooney, is the
      President of the general partner of Solaris.




Notes
      Payable to Shareholder




Mr.
      Rooney has advanced funds to finance our working capital requirements. On
      December 31, 2005 advances and loans made to us by Mr. Rooney totaled $253,974.
      On January 2, 2006, Mr. Rooney converted his advances to shares and received
      7,054,824 shares or $.036 per share for his advances.





Imagin
      Diagnostic Centres, Inc. is a Canadian corporation. Patrick J. Rooney, an equity
      holder of IDC is the father of Patrick G. Rooney, our former Chairman, President
      and Chief Executive Officer





Solaris
      Opportunity Fund, L.P.: is a Delaware limited partnership and shareholder of
      our
      common stock.





The
      President of Solaris is Patrick Rooney, our former Chairman, President, Chief
      Executive Office rand current principal shareholder.





**NOTE
      7. STOCKHOLDERS' EQUITY**





Reverse
      Acquisition





On
      August
      19, 2003, the Company, Midwest Merger Management, LLC, a Kentucky limited
      liability Company and Brentwood Capital Corp., a New York Corporation
      consummated a Stock Purchase Agreement with Cipher Multimedia, Inc., a
      privately-owned, Illinois corporation ("Cipher"). Pursuant to the terms of
      the
      Agreement, Cipher purchased an aggregate of 1,900,000 shares of the 2,100,011
      issued and outstanding shares of the Company's common Stock, par value $.001
      per
      share, from the Selling shareholders for the purchase price of $275,000 of
      cash
      and debt. Cipher delivered the sum of $150,000 by wire transfer and executed
      a
      promissory note in the amount of $60,000 due on September 6, 2003 and a second
      promissory note in the amount of $65,000 due on December 5, 2003, which was
      paid
      in 2004.





Also,
      under the terms of the exchange agreement, Momentum exchanged 14,052,800
      newly-issued shares of common stock for all of the issued and outstanding shares
      of common stock of Cipher, amounting to 100% of Cipher's outstanding capital
      stock after the Exchange, leaving 16,452,811 shares of the Company's stock
      issued and outstanding. Consequently, Cipher acquired voting control of Momentum
      on August 19, 2003 and became Momentum's majority shareholder.





The
      transaction is accounted for as a reverse merger and the Company's name was
      formally changed to Cipher Multimedia, Inc.





**IMAGIN
      MOLECULAR CORPORATION**


**(FORMERLY
      KNOWN AS)**


**Cipher
      Holding Corporation**


**(A
      Development Stage Company)**


**Notes
      To Consolidated Financial Statements**








**NOTE
      7. STOCKHOLDERS' EQUITY (continued)**





Recapitalization





In
      August
      2003, Cipher was merged into its Delaware subsidiary and renamed the surviving
      entity Cipher Holding Corporation. The principal effects of the merger were
      to
      more closely align the Company's identity with its operating business. In
      addition, the number of Common Shares authorized was increased to 100,000,000,
      common and 5,000,000 preferred. Cipher's capital accounts have been restated
      to
      give effect to this recapitalization.





Issuance
      of Common Stock





In
      2005,
      the Company issued 1,475,000 shares of common stock, par value .001 to
      consultants for services professional services performed. The value per share
      of
      the stock issued was from $.008 per share to $.05 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.








**NOTE
      9. CONVERTIBLE NOTE**





On
      December 28, 2004 we entered into an agreement with John Rooney, brother to
      the
      former Chairman, President and current principal shareholder of the Company,
      to
      convert the note John Rooney was holding for $130,000, 10% due December 31,
      2005
      into a 10 % note for $130,000 due and payable on December 31, 2006 with the
      right to convert to 1,386,667, fully and non-assessable shares at any time
      prior
      to the repayment thereof. Additional shares may be converted for unpaid interest
      at $.09375. Because of the beneficial effect of the conversion right granted
      to
      the related party we recognized an interest of $10,746 and equivalent paid
      in
      capital. We used black Schoeles model to compute the interest
      expense.





**NOTE
      10. SUBSEQUENT EVENT**





On
      January 2, 2006 Mr. Patrick Rooney converted $253,973 of debt owed to him into
      7,054,824 shares of common stock. The shares were valued at the 5 day market
      running average of the shares on January 2, 2006 or $.036 per
      share.