**UNITED
        STATES**
 **SECURITIES
        AND EXCHANGE COMMISSION**
 Washington,
        D.C. 20549
 
 **FORM
        10-QSB**
  x
                QUARTERLY
                    REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
                    ACT OF
                    1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30,
                    2007.
 
  ̈
                TRANSITION
                    REPORT UNDER SECTION
                    13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION
                    PERIOD FROM _____________     TO
                    ______________.
  Commission
        File Number: 000-29449
 
 **IMAGIN
        MOLECULAR CORPORATION**
  Delaware
              13-4099008(State
                  of Incorporation)
              (IRS
                  Employer Identification No.)
 
 
 104
        W.
        Chestnut  #315 Hinsdale, IL 60521
 (Address
        of Principal Executive Offices)
 
 
 (630)
        371-5583
 (Registrant’s
        Telephone Number)
 
 Indicate
        by check mark whether Registrant (1) filed all reports required to be filed
        by
        Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
        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
               ̈
 
 As
        of
        November 14, 2007, there were 93,663,284 shares of the Registrant’s Common
        Stock, $.001 par value outstanding.
 
 Transitional
        Small Business Disclosure Format (check
        one).  Yes    ̈  No  x
  
  
 
 FORM
                  10-QSB
              SEPTEMBER
                  30, 2007
 
 **IMAGIN
        MOLECULAR CORPORATION**
 **TABLE
        OF CONTENTS**
 **Form
        10-QSB for the quarter ended September 30, 2007**
 
 PART
                  I – FINANCIAL INFORMATION
              
              **Page**Item
                  1.  Financial Statements
              
              3Consolidated
                  Balance Sheets at September 30, 2007 and
                  December 31, 2006
              
              3Consolidated
                  Statements of Operations for the three and nine
                  months ended September 30, 2007 and 2006
              
              4Consolidated
                  Statements of Cash Flows for the nine months
                  ended September 30, 2007 and 2006
              
              5Notes
                  to Financial Statements
              
              7Item
                  2.  Management’s Discussion and
                  Analysis
              
              13Item
                  3.  Controls and
                  Procedures
              
              17PART
                  II – OTHER INFORMATION
              
              18Item
                  1.  Legal Proceedings
              
              18Item
                  2.   Unregistered Sales of Equity
                  Securities and Use of Proceeds
              
              18Item
                  3.  Submission of Matters to a Vote of
                  Security Holders
              
              18Item
                  4.   Other
                  Information
              
              18Item
                  6.  Exhibits
              
              18Signature
                  Page
              
              19
  2
 ***Table
            of Contents***
 
 FORM
                  10-QSB
              SEPTEMBER
                  30, 2007
 
 **PART
        1 – FINANCIAL INFORMATION**
 
 **ITEM
        1.  Financial Statements**
 
 The
        unaudited balance sheet of the Registrant as of September 30, 2007, the balance
        sheet at December 31, 2006, the unaudited statements of operations for the
        three
        and nine months ended September 30, 2007 and 2006, and the unaudited statements
        of cash flows for the nine months ended September 30, 2007 and 2006
        follow.  The unaudited financial statements reflect all adjustments
        that are, in the opinion of management, necessary to a fair statement of
        the
        results for the interim periods presented.
 
 **IMAGIN
        MOLECULAR CORPORATION AND SUBSIDIARIES**
 
 **CONSOLIDATED
        BALANCE SHEETS**
 
 
 **September
                  30, 2007**
                (Unaudited)
              
              
              **December31,
                  2006**ASSETSCurrent
                  assets:Cash
                  and cash equivalents
              
              $
              1,766
              
              
              $
              3,138Accounts
                  receivable
              
              
              132,356
              
              
              
              163,539Due
                  from affiliate
              
              
              740,000
              
              
              
              --Total
                  current assets
              
              
              874,122
              
              
              
              166,677Property
                  and equipment, net
              
              
              215,348
              
              
              
              234,666Other
                  assets:Investment
                  in securities of Positron Corp.
              
              
              1,588,066
              
              
              
              1,588,066Total
                  assets
              
              $
              2,677,536
              
              
              $
              1,989,409LIABILITIES
                  AND STOCKHOLDERS’ DEFICITCurrent
                  liabilities:Accounts
                  payable
              
              $
              103,982
              
              
              $
              97,577Advance
                  from shareholders
              
              
              5,100
              
              
              
              69,616Accrued
                  expenses
              
              
              152,903
              
              
              
              158,246Current
                  portion of promissory note payable
              
              
              116,450
              
              
              
              81,684Notes
                  payable – other
              
              
              --
              
              
              
              180,000Advances
                  from affiliate
              
              
              284,283
              
              
              
              185,385Interest
                  payable
              
              
              2,709
              
              
              
              75,732Total
                  current liabilities
              
              
              665,427
              
              
              
              848,240Promissory
                  note payable
              
              
              154,485
              
              
              
              205,860Majority
                  interest in consolidated subsidiary (discontinued
                  operations)
              
              
              216,977
              
              
              
              --Total
                  liabilities
              
              
              1,036,889
              
              
              
              1,054,100Stockholders’
                  Equity:Preferred
                  Stock, 5,000,000 shares Authorized, 1,000,000 shares issued and
                  outstanding
              
              
              400,000
              
              
              
              --Common
                  Stock, $0.001 par value; 95,000,000 shares authorized, 93,663,284
                  and
                  67,276,617 shares issued and outstanding
              
              
              93,663
              
              
              
              67,277Additional
                  paid-in capital
              
              
              3,530,369
              
              
              
              2,826,755Accumulated
                  deficit
              
              
              (2,383,385
              )
              
              
              (1,958,723
              )Total
                  stockholders’ equity
              
              
              1,640,647
              
              
              
              935,309Total
                  liabilities and stockholders’ equity
              
              $
              2,677,536
              
              
              $
              1,989,409
 
 See
        accompanying notes
  3
 ***Table
            of Contents***
 
 FORM
                  10-QSB
              SEPTEMBER
                  30, 2007
 
 IMAGIN
        MOLECULAR CORPORATION
 **CONSOLIDATED
        STATEMENTS OF OPERATIONS**
 (Unaudited)
 
 Three
                  Months Ended
              
              
              Nine
                  Months EndedSept.
                  30, 2007
              
              
              Sept. 30,
                  2006
              
              
              Sept. 30,
                  2007
              
              
              Sept. 30,
                  2006Revenues:
              
              $
              65,091
              
              
              $
              43,991
              
              
              $
              113,300
              
              
              $
              186,586Costs
                  of revenues:
              
              
              117,090
              
              
              
              103,900
              
              
              
              215,018
              
              
              
              271,050Gross
                  loss
              
              
              (51,999
              )
              
              
              (59,909
              )
              
              
              (101,718
              )
              
              
              (84,464
              )Operating
                  expenses:Professional
                  fees
              
              
              3,700
              
              
              
              --
              
              
              
              103,058
              
              
              
              763,000Marketing,
                  general and administrative
              
              
              21,506
              
              
              
              47,160
              
              
              
              174,503
              
              
              
              128,224Total
                  operating expenses
              
              
              25,206
              
              
              
              47,160
              
              
              
              277,561
              
              
              
              891,224Loss
                  from operations
              
              
              (77,205
              )
              
              
              (107,069
              )
              
              
              (379,279
              )
              
              
              (975,688
              )Other
                  income (expense)Interest
                  income
              
              
              --
              
              
              
              20,357
              
              
              
              --
              
              
              
              145,218Interest
                  expense
              
              
              (9,652
              )
              
              
              (3,250
              )
              
              
              (25,637
              )
              
              
              (13,578
              )Total
                  other income (expense)
              
              
              (9,652
              )
              
              
              17,107
              
              
              
              (25,637
              )
              
              
              131,640Loss
                  from continuing operations before majority interest in
                  subsidiary
              
              
              (86,857
              )
              
              
              (89,962
              )
              
              
              (404,916
              )
              
              
              (844,048
              )Majority
                  interest in loss of subsidiary
              
              
              (10,369
              )
              
              
              --
              
              
              
              (2,254
              )
              
              
              --Loss
                  from continuing operations
              
              
              (97,226
              )
              
              
              (89,962
              )
              
              
              (407,170
              )
              
              
              (844,048
              )Loss
                  from discontinued operations
              
              
              (7,779
              )
              
              
              (8,740
              )
              
              
              (17,492
              )
              
              
              (73,694
              )Net
                  loss
              
              $
              (105,005
              )
              
              $
              (98,702
              )
              
              $
              (424,662
              )
              
              $
              (917,742
              )Loss
                  Per Share:From
                  continuing operations
              
              $
              (0.0011
              )
              
              $
              (0.0013
              )
              
              $
              (0.0053
              )
              
              $
              (0.0130
              )From
                  discontinued operations
              
              $
              (0.0001
              )
              
              $
              (0.0001
              )
              
              $
              (0.0002
              )
              
              $
              (0.0011
              )Net
                  loss
              
              $
              (0.0012
              )
              
              $
              (0.0014
              )
              
              $
              (0.0055
              )
              
              $
              (0.0141
              )Weighted
                  average common shares
              
              
              88,663,284
              
              
              
              67,266,617
              
              
              
              76,016,153
              
              
              
              65,037,653
  See
        accompanying
        notes
  4
 ***Table
            of Contents***
 FORM
                  10-QSB
              SEPTEMBER
                  30, 2007
 
 **IMAGIN
        MOLECULAR CORPORATION AND
        SUBSIDIARIES**
 **CONSOLIDATED
        STATEMENTS OF CASH FLOWS**
 **(Unaudited)**
 
 
 Nine
                  Months EndedSeptember
                  30, 2007
              
              
              September
                  30, 2006Cash
                  flows from operating activities:Loss
                  from continuing operations
              
              $
              (407,170
              )
              
              $
              (844,048
              )Loss
                  from discontinued operations
              
              
              (17,492
              )
              
              
              (73,694Net
                  loss
              
              
              (424,662
              )
              
              
              (917,742
              )Adjustment
                  to reconcile net loss to net cash used in operating
                  activitiesCommon
                  stock issued for services
              
              
              230,000
              
              
              
              763,000Depreciation
                  expense
              
              
              19,317
              
              
              
              3,097Amortization
                  of discount on notes receivable
              
              
              --
              
              
              
              (54,378
              )Majority
                  interest in income of subsidiary
              
              
              2,254
              
              
              
              --Changes
                  in operating assets and liabilities:Accounts
                  receivable
              
              
              31,183
              
              
              
              (178,884
              )Interest
                  receivable
              
              
              --
              
              
              
              (93,637
              )Accounts
                  payable and accrued liabilities
              
              
              1,062
              
              
              
              241,202Interest
                  payable
              
              
              (7,914
              )
              
              
              13,578Net
                  cash used in operating activities
              
              
              (148,760
              )
              
              
              (223,764
              )Cash
                  flows from investing activities:Purchase
                  of fixed assets
              
              
              --
              
              
              
              (241,105
              )Net
                  cash used in investing activities
              
              
              --
              
              
              
              (241,105
              )Cash
                  flows from financing activities:Issuance
                  of common stock
              
              
              400,000
              
              
              
              --Issuance
                  of preferred stock
              
              
              400,000
              
              
              
              --Advances
                  from shareholders
              
              
              5,100
              
              
              
              167,290Advance
                  from affiliate
              
              
              98,898
              
              
              
              55,616Advance
                  to affiliate
              
              
              (740,000
              )
              
              
              --Payments
                  of note payable
              
              
              (16,610
              )
              
              
              --Proceeds
                  from promissory notes
              
              
              --
              
              
              
              250,000Net
                  cash provided by financing activities
              
              
              147,388
              
              
              
              472,906Net
                  increase (decrease) in cash
              
              
              (1,372
              )
              
              
              8,037Cash
                  at beginning of period
              
              
              3,138
              
              
              
              1,376Cash
                  at end of period
              
              $
              1,766
              
              
              $
              9,413Supplemental
                  cash flow information:Interest
                  paid
              
              $
              22,921
              
              
              $
              --Income
                  taxes paid
              
              
              --
              
              
              
              --
 
 See
        accompanying notes
  5
 ***Table
            of Contents***
 
 FORM
                  10-QSB
              SEPTEMBER
                  30, 2007
 
 **IMAGIN
        MOLECULAR CORPORATION AND SUBSIDIARIES**
 **CONSOLIDATED
        STATEMENT OF CASH FLOWS**
 (CONTINUED)
 
 Supplementary
        Schedule of Noncash Transactions
 
 2007
 
 On
        January 10, 2007 and March 12, 2007, the Company issued 586,667 and 800,000
        shares of common stock, par value $0.001, respectively, to two non-affiliated
        shareholders in final satisfaction of a $130,000 note payable made to the
        Company. The shares were valued at $0.06 per share.
 
 On
        March
        14, 2007, the Company issued 7,448,673 shares of its subsidiary, Cipher
        Multimedia, Inc. common stock, par value $0.001 to an affiliated shareholder
        in
        final satisfaction of $148,973 of advances and other notes payable made to
        the
        Company. The shares were valued at $0.02 per share.
 
 On
        March
        14, 2007, the Company issued 1,787,500 shares of its subsidiary, Cipher
        Multimedia, Inc. common stock, par value $0.001 to a non-affiliated shareholder
        in final satisfaction of $35,750 of interest payable related to a note payable
        made to the Company. The shares were valued at $0.02 per share.
 
 On
        March
        14, 2007, the Company issued a total of 1,500,000 shares of its subsidiary,
        Cipher Multimedia, Inc. common stock, par value $0.001 to three employees,
        including 500,000 shares to Corey N. Conn, the Registrant’s Chief Financial
        Officer, pursuant to their employment agreements. The shares were valued
        at
        $0.02 per share.
 
 On
        May
        14, 2007, the Company issued 2,000,000 shares of common stock, par value
        $0.001,
        to a consultant for services performed. The shares were valued at $0.04 per
        share.
 
 On
        May
        15, 2007, the Company issued 3,000,000 shares of common stock, par value
        $0.001,
        to     Joseph G. Oliverio, Chief Executive Officer for
        compensation. The shares were valued at $0.04 per share.
 
 2006
 
 On
        January 4, 2006, the Company issued 481,481 shares of common stock, par value
        $0.001 to a non-affiliated shareholder in final satisfaction of a $13,000
        advance made to the Company. The shares were valued at $0.027 per
        share.
 
 On
        January 4, 2006, the Company issued 7,054,825 shares of common stock, par
        value
        $0.001 to an affiliated shareholder in final satisfaction of a $253,974 advance
        made to the Company. The shares were valued at $0.036 per share.
 
 On
        April
        13, 2006, the Company issued 50,000 shares of common stock, par value $0.001
        per
        share, to a consultant for services performed. The shares were valued at
        $0.26
        per share.
 
 On
        May
        26, 2006, the Company issued 50,000 shares of common stock, par value $0.001
        per
        share, to a consultant for services performed. The shares were valued at
        $0.17
        per share.
 
 During
        September 2006, the Company converted notes receivable and accrued interest
        due
        from Positron Corporation into 762,358 shares of Positron Corporation Series
        B
        Preferred Stock, par value $1.00.  The Company subsequently converted
        40,000 shares of Positron Series B Preferred Stock into 4,000,000 shares
        of
        Positron Corporation common stock, par value $0.01.
 
 See
        accompanying notes.
  6
 ***Table
            of Contents***
 
 FORM
                  10-QSB
              SEPTEMBER
                  30, 2007
 
 **IMAGIN
        MOLECULAR CORPORATION AND
        SUBSIDIARIES**
 **SELECTED
        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 
 **NOTE
        1. BUSINESS ORGANIZATION**
 
 Imagin
        Molecular Corporation (“Imagin” or the “Company”) was originally incorporated
        under the laws of the State of Delaware.  Imagin commenced operations
        upon incorporation and was in the development stage through the first quarter
        of
        2006 and through that period had very little revenue.  Imagin’s
        subsidiary Cipher Multimedia, Inc (“Cipher”) operates Imagin’s original
        business, a digital distribution solution and marketing company which secures
        and allows access to digital content through proprietary encoding, encryption
        and authorization technology.
 
 In
        2005
        Imagin’s Board of Director’s resolved to change the Company’s principal
        operations from multimedia encryption technology to positron emission tomography
        and medical imaging. On March 20, 2007, the Company’s Board of Directors
        authorized the spin-off of Cipher to the Company’s Shareholders of record on
        March 26, 2007. Operations began in the second quarter of 2006 and the Company
        no longer operates in the development stage. See Positron Acquisition Corp.
        and
        Imagin Nuclear Partners discussions below. The results of Cipher are presented
        as discontinued operations in the Company’s consolidated statements of
        operations and cash flows.
  Positron
        Acquisition Corp.
 
 On
        April
        19, 2005, the Company organized a wholly owned subsidiary, under the laws
        of the
        state of Nevada, named Positron Acquisition Corp. (“PAC”).  Imagin’s
        original intent to create PAC was to acquire controlling interest in Positron
        Corporation (“Positron”), a publicly owned Texas corporation.
 
 On
        May
        23, 2005 the Company’s Board of Directors and shareholders holding approximately
        60.1% of the Company’s issued and outstanding and common stock par value $.001
        per share (the “Common Stock”), approved a Securities Exchange Agreement (the
“Exchange”) between the Company’s  wholly-owned subsidiary Positron
        Acquisition Corp., a Nevada corporation (“PAC”) and Imagin Diagnostic Centres,
        Inc., a Canadian corporation (“IDC”).  Pursuant to the terms of the
        Exchange, the Company issued 30,000,000 shares (the “Exchange Shares”) of its
        common stock, par value $.001 per share (the “Common Stock”) in exchange for
        three convertible promissory notes issued by Positron Corporation (“Positron”),
        a publicly owned Texas corporation.  The Positron notes are
        convertible into shares of Positron’s Series C and Series D Preferred Stock
        which convert, under certain circumstances, into 64,000,000 shares of Positron’s
        common stock, par value $.01 per share (the “Conversion Shares”).  In
        September 2006 the Company converted principal and interest of $818,066
        outstanding upon the Series D Secured Convertible Promissory Notes and 770,000
        shares of Series C Preferred Stock into 762,358 shares of Positron Corporation
        Series B Preferred Stock, and subsequently converted 40,000 shares of Series
        B
        Preferred Stock into 4,000,000 shares of the Positron Common Stock.
 
 In
        accordance with the terms of the Exchange, Exchange Shares were distributed
        to
        the equity holders of IDC.
 
 Imagin
        Nuclear Partners Corporation
 
 In
        2006,
        the Company’s wholly-owned subsidiary Imagin Nuclear Partners Corporation
        (“INP”) commenced scanning patients using Positron Emission Tomography
        myocardial perfusion imaging technology (“PET” or “PET imaging technology”) at a
        cardiac imaging center located in Beth Israel Medical Center in New York
        City
        (“BIMC”).  Through BIMC, the Company has performed PET imaging on
        several hundred patients and expects volume to increase once marketing efforts
        result in increased physician awareness.
  7
 ***Table
            of Contents***
 
 FORM
                  10-QSB
              SEPTEMBER
                  30, 2007
 
 In
        May
        2007, INP and BIMC executed a new lease agreement whereby BIMC leases PET
        scanning cameras and other related radiologic equipment from INP for the
        purpose
        of operating a PET Lab at its site.  The initial term of the agreement
        is three years. *(See NOTE 8)* INP intends to joint venture with
        hospitals or physician groups to own or operate nuclear medicine imaging
        centers
        throughout North America.  The Company plans to offer a full spectrum of
        Positron Emission Tomography imaging services as well as a robust coronary
        disease reversal and prevention program. The Company intends to partner with
        cardiology groups who are less invasively oriented and desire program
        differentiation from competition.  The Company believes that their
        methodology to detection and management is more cost effective than traditional
        methods currently employed.
  **NOTE
        2.  BASIS OF PRESENTATION**
 
 The
        interim financial statements included herein are presented in accordance
        with
        United States generally accepted accounting principles and have been prepared
        by
        us, without audit, pursuant to the rules and regulations of the Securities
        and
        Exchange Commission (the “SEC”).  Certain information and footnote
        disclosures normally included in financial statements prepared in accordance
        with generally accepted accounting principles have been condensed or omitted
        pursuant to such rules and regulations, although the Company believes that
        the
        disclosures are adequate to make the information presented not
        misleading.
 
 These
        statements reflect all adjustments, consisting of normal recurring adjustments,
        which, in the opinion of management are necessary for fair presentation of
        the
        information contained therein.  It is suggested that these interim
        financial statements be read in conjunction with the Company’s audited financial
        statements and notes thereto included in its Form 10-KSB for the fiscal year
        ended December 31, 2006.  Results of operations for the interim
        periods are not indicative of annual results.
  **NOTE
        3.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 $2,383,385 as of September 30,
        2007.  The Company’s ability to continue as a going concern is
        dependent upon the success of INP and the PET scanning at the Beth Israel
        Medical Center as well as completion of additional financing
        arrangements.  Management plans to raise equity capital to finance the
        operating and capital requirements of the Company.  While the Company
        is expending its 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 the Company’s business plan will be successful.
  **NOTE
        4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**
 
 *Principles
        of Consolidation and Nature of Operations*
 
 For
        the
        periods ended September 30, 2007 and 2006, the financial statements include
        the
        accounts and transactions of Imagin Molecular Corporation and its subsidiaries
        Cipher Multimedia, Inc., Positron Acquisition Corp. and Imagin Nuclear Partners
        Corporation. All Intercompany transactions and balances have been
        eliminated.
  *Cash
        and Cash Equivalents*
 
 The
        Company considers all highly liquid instruments with original maturities
        of
        three months or less to be cash equivalents.
  8
 ***Table
            of Contents***
 
 FORM
                  10-QSB
              SEPTEMBER
                  30, 2007
 
 *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.
 
 In
        September 2006, the FASB released FASB Interpretation No. 48, "Accounting
        for
        Uncertainty in Income Taxes," an interpretation of FASB Statement No. 109
        ("FIN
        48"). FIN 48 prescribes a recognition threshold and measurement attribute
        for
        the financial statement recognition and measurement of a tax position taken
        or
        expected to be taken in a tax return. A company must determine whether it
        is
        "more-likely-than-not" that a tax position will be sustained upon examination,
        including resolution of any related appeals or litigation procedures, based
        on
        the technical merits of the position.  Once it is determined that a
        position meets the more-likely-than-not recognition threshold, the position
        is
        measured to determine the amount of benefit to recognize in the financial
        statements. This interpretation is effective for fiscal years beginning after
        December 15, 2006.  The provisions of FIN 48 were adopted in the first
        quarter of 2007 and did not have a material effect on the Company's financial
        statements.
  *Revenue
        recognition*
 
 The
        Company recognizes revenue from PET scans when the procedure is
        performed.  Scan revenue represents the amount charged to patients net
        of contractual adjustments.  Contractual adjustments arise due to the
        terms of reimbursement of Medicaid, Medicare and managed care
        providers.  Such adjustments represent the difference between the
        charges at established rates and estimated recoverable amounts and are
        recognized as a reduction of revenue in the period services are
        rendered.  Any differences between estimated contractual adjustments
        and actual final settlements under reimbursement contracts are recognized
        as
        contractual adjustments in the period final settlements are
        determined.
 
 *Loss
        Per Share*
 
 Loss
        per
        share is computed based on the weighted average number of shares of common
        stock
        outstanding.  Stock options and warrants are not included in the
        computation of the weighted average number of shares outstanding for dilutive
        net loss per common share during each of the periods presented in the Statement
        of Operations, as the effect would be antidilutive.
 
 *Use
        of Estimates*
 
 The
        preparation of financial statements in conformity with accounting principles
        generally accepted in the United States of America requires management to
        make
        estimates and assumptions that affect the reported amounts of assets and
        liabilities and disclosure of contingent assets and liabilities at the date
        of
        the financial statements and the reported amounts of revenues and expenses
        during the reporting period. Actual results could differ from those
        estimates.
 
 **New
        Accounting Pronouncements**
 
 In
        September 2006, the FASB issued Statement of Financial Accounting Standards
        No
        157, "Fair Value Measurements". This statement defines fair value, establishes
        a
        framework for measuring fair value under generally accepted accounting
        principles, and expands disclosures about fair value measurements. The
        statement will become effective in the fiscal first quarter of 2008 and the
        Company will adopt the statement at that time. The Company believes that
        the
        adoption of SFAS No 157 will not have a material effect on its results of
        operations, cash flows or financial position.
  9
 ***Table
            of Contents***
 
 FORM
                  10-QSB
              SEPTEMBER
                  30, 2007
 
 **NOTE
        5. CIPHER MULTIMEDIA INC. REORGANIZATION / DISCONTINUED
        OPERATIONS**
 
 On
        March
        13, 2007, the Registrant reorganized its wholly-owned subsidiary Cipher
        Multimedia, Inc., an Illinois corporation (“Cipher”) as a Nevada corporation via
        merger with Cipher Multimedia, Inc., a Nevada corporation
        (“Cipher-NV”).  In accordance with the Plan of Merger, each ten shares
        of Cipher were exchanged for one share of Cipher-NV common
        stock.  Also on March 13, 2007, the Registrant entered into employment
        agreements on behalf of Cipher-NV with Julia Rzeppa as President and Chairman,
        Corey Conn as Treasurer and Director and Domenic Hanzely as Vice President
        of
        Product Development and Chief Technology officer.  Pursuant to the
        terms of the employment agreements, each received 500,000 shares of Cipher
        common stock as compensation.  Mr. Conn is also the Registrant’s Chief
        Financial Officer.  On March 14, 2007, Cipher settled obligations with
        its two largest creditors by retiring $148,973 in obligations to Patrick
        Rooney,
        the Registrant’s former chairman and Chief Executive officer and Cipher-NV's
        founder, for 7,448,673 shares of Cipher-NV common stock, and retiring $35,750
        of
        interest payable to a third-party in exchange for the issuance of 1,787,500
        shares of Cipher’s common stock.  On March 20, 2007, realizing that
        Cipher’s software encryption business no longer fit the Registrant’s business
        model of medical imaging services, the Registrant’s Board of Directors resolved
        to spin off the 3,513,200 shares of Cipher common stock held by the Registrant
        as a special dividend to its Shareholders of record as of March 26, 2007. As
        of November
        14, 2007 the spin off has not been completed.
 
 After
        the
        merger between Cipher and Cipher-NV, the Registrant no longer holds a majority
        of the common stock of the reorganized subsidiary,
        Cipher-NV.   However, in applying the requirements of Financial
        Accounting Standards Board Interpretation No. 46, as revised, (“FIN 46(R)), the
        Registrant believes itself to be the primary beneficiary as evidenced by
        continued management control over the operations of the subsidiary. This
        being
        the case, the operations of Cipher-NV for the nine months ended September
        30,
        2007 continue to be consolidated in the Registrant’s financial statements and
        are reflected as discontinued operations.
 
 Summarized
        financial information for discontinued operations for the three and nine
        months
        ended September 30, 2007 and 2006 were as follows:
 
 Three
                  Months Ended
              
              
              Nine
                  Months EndedSept.
                  30, 2007
              
              
              Sept. 30,
                  2006
              
              
              Sept. 30,
                  2007
              
              
              Sept. 30,
                  2006Operating
                  expenses:
              
              $
              7,995
              
              
              $
              9,076
              
              
              $
              28,915
              
              
              $
              50,170Other
                  expenses (income):
              
              
              (216
              )
              
              
              (336
              )
              
              
              (11423
              )
              
              
              23,524Loss
                  before majority interest
              
              
              7,779
              
              
              
              8,740
              
              
              
              17,492
              
              
              
              73,694Majority
                  interest in loss
              
              
              10,369
              
              
              
              --
              
              
              
              2,254
              
              
              
              --Net
                  loss
              
              $
              18,148
              
              
              $
              8,740
              
              
              $
              19,746
              
              
              $
              73,694
  Sept.
                    30, 2007Total
                    assets
                
                $
                218Total
                    liabilities
                
                
                233,481Minority
                    interest
                
                
                2,254Stockholders’
                    deficit
                
                
                (235,517
                )
 
   **NOTE
        6. IMAGIN DIAGNOSTIC CENTRES INC. CONVERTIBLE NOTES
        RECEIVABLE**
 
 On
        September 29, 2005, through its wholly-owned subsidiary Positron Acquisition
        Corporation, (“PAC”), the Company purchased notes receivable for 30,000,000
        restricted shares valued at $1,304,000. Below is a brief history of those
        notes.
        On May 26, 2004 and September 17, 2004, Positron Corporation (“Positron”) sold
        two separate secured convertible promissory notes under a Note Purchase
        Agreement dated May 21, 2004, to IMAGIN Diagnostic Centres, Inc. (“IDC”) in the
        principal amounts of $400,000 and $300,000, respectively. Interest is charged
        on
        the outstanding principal at the rate of ten percent (10%) per annum and
        is
        payable annually to the extent of positive cash flow of Positron on the
        anniversary dates of these notes. The principal and any unpaid interest were
        originally due on the earlier to occur of May 21, 2006 or when declared due
        and
        payable by IDC upon occurrence of an event of default. The Company and Positron
        extended the due date to September 30, 2006, on which date the notes were
        converted to Positron Series B Convertible Preferred Stock.
  10
 ***Table
            of Contents***
 
 FORM
                  10-QSB
              SEPTEMBER
                  30, 2007
 
 In
        a
        second stage of the financing IDC agreed to purchase additional secured
        convertible promissory notes in the aggregate principal amount of $1,300,000.
        These notes were to be purchased over a six and a half month period, commencing
        July 15, 2004. These notes are due and payable on May 21, 2006, the due date
        was
        subsequently extended to September 30, 2006. These notes are initially
        convertible into new shares of Series D Preferred Stock that, in turn is
        convertible into an aggregate of 52,000,000 shares of Positron common stock.
        As
        of September 30, 2005, principal of $1,208,500 has been advanced related
        to
        these notes. On September 30, 2005, IDC converted $575,000 of these promissory
        notes into shares of Series D Preferred Stock that, in turn were converted
        into
        23,000,000 shares of the Positron common stock. This conversion reduced the
        principal owed under these promissory notes from $1,208,500 to $633,500.
        On
        October 21, 2005, $770,000 of unpaid principal and interest was converted
        into
        770,000 shares of Positron’s Series C Convertible Preferred Stock.
 
 On
        September 30, 2006 the Company converted $818,066 of principal and interest
        outstanding on the Series D Convertible Promissory Notes and the 770,000
        Shares
        of Series C Preferred Stock into 762,358 shares of Positron’s Series B
        Convertible Preferred Stock, par value $1.00 per share (the “Series B”) and
        subsequently converted 40,000 Series B Preferred Stock into 4,000,000 shares
        of
        Positron common stock, par value $0.01.  Each share of Series B is
        convertible into 100 shares of Positron common stock and has 100 votes on
        all
        matters which Positron shares are entitled to vote.  Due to the
        restrictions on sale or transfer of these securities and the significant
        number
        of underlying common shares relative to the issuers’ outstanding common shares,
        management believes that any adjustment of its investment to fair value under
        FAS 115 would result in an overstatement of the value of the investment.
        As such
        the securities are valued at the previous carrying value of the note receivable
        and accrued interest at the date of conversion.
  **NOTE
        7.  PROPERTY AND EQUIPMENT**
 
 Property
        and equipment at September 30, 2007 and December 31, 2006 consisted of the
        following:
  Sept.
                  30, 2007
              
              
              Dec.
                  31, 2006Machinery
                  and equipment
              
              $
              234,760
              
              
              $
              234,760Computers
                  and software
              
              
              9,442
              
              
              
              9,442Subtotal
              
              
              244,202
              
              
              
              244,202Less:
                  accumulated depreciation
              
              
              (28,854
              )
              
              
              (9,536
              )Total
              
              $
              215,348
              
              
              $
              234,666
  **NOTE
        8.  NOTES PAYABLE**
 
 On
        September 11, 2006, the Company issued a 12% secured promissory note to Cherry
        Creek Capital Partners (“Cherry Creek”), an unrelated party, in the amount of
        $300,000.  Pursuant to the terms of the note, commencing on October 1,
        2006, the Company is required to make 41 consecutive monthly installments
        of
        $8,783, including interest.  A final payment of all outstanding
        principal and accrued interest is due and payable on March 10,
        2010.   The promissory note is secured by certain assets of the
        Company including 4,000,000 shares of common stock of Positron Corporation,
        for
        which the Company has granted Cherry Creek a security interest. As of September
        30, 2007 the principal balance of the promissory note is $270,935, of which
        $116,450 is included in current liabilities.
 
 As
        a
        condition of the promissory note, on September 11, 2006 the Company and Cherry
        Creek entered into an Assignment of Economic Interests whereby the Company
        shall
        be obligated to pay Cherry Creek, on a quarterly basis, an amount equal to
        5% of
        operating income (as defined in the agreement), and upon the occurrence of
        a
        liquidity event, a payment in the amount of 5% of the net proceeds of such
        transaction. At September 30, 2007, no amounts had been recorded for these
        items.
  11
 ***Table
            of Contents***
 
 FORM
                  10-QSB
              SEPTEMBER
                  30, 2007
 
 **NOTE
        9. EQUIPMENT LEASE AGREEMENT**
 
 In
        May
        2007, the Company’s wholly-owned subsidiary, INP and
        Beth Israel Medical Center (“BIMC”) executed an Equipment Lease
        Agreement (the “Agreement”) for certain positron emission tomography (“PET”)
        scanning cameras and related radiologic equipment (the
“Equipment”).  Under the terms of the Agreement, BIMC will lease the
        equipment for use in its on site PET Lab where it performs PET scans on its
        patients.  The initial lease term is three (3) years commencing
        on June 4, 2007 (the “Effective Date”).
 
 In
        accordance with the Agreement, BIMC shall pay INP rent for the lease of the
        equipment as follows:
 
 -
              The
                  actual aggregate technical component reimbursement received by
                  BIMC from
                  all payer sources for all PET scans performed during the three
                  (3) month
                  period commencing on the Effective Date of the Agreement (the “Initial
                  Period”).
 
 -
              $850
                  per scan for scans 1-60 performed in a given calendar month after
                  the
                  Initial Period.
 
 -
              $650
                  per scan for scans 61-120 performed in a given calendar month after
                  the
                  Initial Period.
 
 -
              $450
                  per scan for scans in excess of 120 performed in a given calendar
                  month
                  after the Initial Period.
 
 -
              A
                  minimum monthly lease payment of $51,000 is due in the event less
                  than 61
                  scans are performed by BIMC during any calendar month after the
                  Initial
                  Period
  **NOTE
        10.  RELATED PARTY TRANSACTIONS**
 
 In
        September 2006, INP purchased from Positron, a refurbished HZL Positron Emission
        Tomography (“PET”) Imaging System.  The machine is being used at the
        cardiac imaging center located in Beth Israel Medical Center in New York
        City.
        The total cost of the machine, which includes sales tax and installation
        was
        $234,760. The Company also executed a service and maintenance contract with
        Positron for the machine. For the three and nine months ended September 30,
        2007, Positron billed the Company $30,000 and $40,000, respectively under
        the
        service contract.
 
 Advances
        from and payables to affiliates at September 30, 2007 and December 31, 2006
        consisted of the following:
 
 September
                  30, 2007
              
              
              December
                  31, 2006Positron
                  Corporation and Subsidiaries
              
              $
              284,283
              
              
              $
              185,385
 
 On
        July
        24, 2007, the Company consummated a Securities Purchase and Subscription
        Agreement with Solaris Opportunity Fund, L.P., a Delaware limited partnership
        ("Solaris").  Solaris acquired 20,000,000 shares of the Registrant's
        common stock, par value $0.001 per share for a purchase price of
        $400,000.  Solaris' Managing Member, Patrick G. Rooney, is the former
        Chief Executive Officer, Chairman and principal shareholder of the Company
        and
        founder of its subsidiary Cipher Multimedia, Inc.  Mr. Rooney is
        also the Chairman of Positron Corporation, a publicly owned Texas
        corporation, which is an affiliate of the Company.
 
 Additionally,
        on July 24, 2007 and August 28, 2007, the Company consummated separate
        Securities Purchase and Subscription Agreements with Solaris. Under each
        of the
        agreements Solaris acquired 500,000 shares of the Registrant's Series A
        Convertible Preferred Stock for $200,000.  The preferred shares are
        convertible into a total of 20,000,000 shares of Imagin common
        stock.
 
 During
        the nine months ended September 30, 2007, the Company advanced funds to Positron
        Corporation.  At September 30, 2007 the outstanding amount of these
        advances totaled $740,000.
  12
 ***Table
            of Contents***
 
 FORM
                  10-QSB
              SEPTEMBER
                  30, 2007
 
 **NOTE
        11. STOCKHOLDERS' EQUITY**
 
 On
        January 10, 2007 and March 12, 2007, the Company issued 586,667 and 800,000
        shares of the Registrant’s common stock, par value $ .001 to John Rooney,
        brother of the Company’s former Chairman, President and Chief Executive Officer,
        and Jaega Corporation, respectively, as final satisfaction of a $130,000
        note
        payable to John Rooney. Pursuant to the terms of the agreement between the
        Company and Mr. Rooney, the note was convertible into 1,386,667 shares of
        the
        Company’s common stock.  In December 2006, Mr. Rooney assigned the
        conversion rights for 800,000 of the shares to Jaega Corporation.
 
 On
        May
        14, 2007, the Company issued 2,000,000 shares of the Registrant’s common stock,
        par value $0.001, to a consultant for services performed. The shares were
        valued
        at $0.04 per share.
 
 On
        May
        15, 2007, the Company issued 3,000,000 shares of the Registrant’s common stock,
        par value $0.001, to Joseph G. Oliverio, Chief Executive Officer as
        compensation. The shares were valued at $0.04 per share.
 
 On
        July
        24, 2007, the Company consummated a Securities Purchase and Subscription
        Agreement with Solaris Opportunity Fund, L.P., a Delaware limited partnership
        ("Solaris").  Solaris acquired 20,000,000 shares of the Registrant's
        common stock, par value $0.001 per share for a purchase price of
        $400,000.
 
 On
        July
        24, 2007, the Company consummated a Securities Purchase and Subscription
        Agreement with Solaris. Solaris acquired 500,000 shares of the Registrant's
        Series A Convertible Preferred Stock for $200,000.  The preferred
        shares are convertible into a total of 10,000,000 shares of Imagin common
        stock.
        The Company has authorized the issuance of 500,000 shares of Series A
        Convertible Preferred Stock, par value $0.001 per share ("Series A
        Preferred Stock") Each share of the Series A Preferred Stock is convertible
        into 20 shares of Common Stock. Holders of the Series A Preferred stock may
        vote
        on an as if converted basis on any matter requiring shareholder vote. The
        Series
        A Preferred Stock is senior to the Company's common stock in liquidation.
 
 On
        August
        28, 2007, the Company consummated Securities Purchase and Subscription
        Agreements with Solaris. Solaris acquired 500,000 shares of the Registrant's
        Series A Convertible Preferred Stock for $200,000.  The preferred
        shares are convertible into a total of 10,000,000 shares of Imagin common
        stock.
        The Company has authorized the issuance of 500,000 shares of Series A
        Convertible Preferred Stock, par value $0.001 per share ("Series A
        Preferred Stock") Each share of the Series A Preferred Stock is convertible
        into 20 shares of Common Stock. Holders of the Series A Preferred stock may
        vote
        on an as if converted basis on any matter requiring shareholder vote. The
        Series
        A Preferred Stock is senior to the Company's common stock in
        liquidation.
  **NOTE
        12. STOCK OPTION PLAN**
 
 On
        May
        14, 2007, the Company’s Board of Directors (the “Board”) adopted the 2007 Stock
        Option Plan (the “Plan”).  The Plan is administered by the Board and
        provides for grants of qualified and nonqualified stock options to directors,
        officers, employees and consultants.  The Plan authorizes the Board to
        determine the terms of each award granted under the Plan, including number
        of
        shares, exercise price, term, vesting and exercisability.  A total of
        5,000,000 shares of the Company’s common stock have been authorized for issuance
        under the Plan.  No shares have been granted as of September 30,
        2007.
   **ITEM
        2.****Management's Discussion And Analysis Of Financial Condition
        And Results Of Operation**
  Operations
        of Imagin Nuclear Partners
  Results
        for the three and nine months ended September 30, 2007 and 2006 include the
        operations of the Company’s wholly-owned subsidiary Imagin Nuclear Partners
        Corporation (“INP”).  In 2006 INP commenced scanning patients using
        Positron Emission Tomography myocardial perfusion imaging technology (“PET” or
“PET imaging technology”) at a cardiac imaging center located in Beth Israel
        Medical Center in New York City (“BIMC”.)
  13
 ***Table
            of Contents***
 
 FORM
                  10-QSB
              SEPTEMBER
                  30, 2007
 
 In
        February 2007, operations at BIMC were temporarily suspended while the Company
        and the hospital renegotiated the terms of their
        agreement.  In June 2007, the parties executed a new lease
        agreement that provides for minimum monthly lease payments to
        INP.  Scans under the new agreement commenced in June
        2007.
 
 Reorganization
        of Cipher Multimedia, Inc.
 
 On
        March
        13, 2007, the Company reorganized its wholly-owned subsidiary Cipher Multimedia,
        Inc., an Illinois corporation as a Nevada corporation via merger with Cipher
        Multimedia, Inc., a Nevada corporation (“Cipher-NV”).  In accordance
        with the Plan of Merger, each ten shares of Cipher were exchanged for one
        share
        of Cipher-NV common stock.  Also on March 13, 2007, the Registrant
        entered into employment agreements with Julia Rzeppa as President and Chairman,
        Corey Conn as Treasurer and Director and Domenic Hanzely as Vice President
        of
        Product Development and Chief Technology officer.  Pursuant to the
        terms of the employment agreements, each received 500,000 shares of Cipher
        common stock as compensation.  Mr. Conn is also the Registrant’s Chief
        Financial Officer. On March 14, 2007, Cipher settled obligations with its
        two
        largest creditors by retiring $148,973 in obligations to Patrick Rooney,
        the
        Registrant’s former chairman and Chief Executive officer and Cipher’s founder,
        for 7,448,673 shares of Cipher’s common stock, and retiring $35,750 in interest
        to a third-party in exchange for the issuance of 1,787,500 shares of Cipher’s
        common stock. As of November 14, 2007 the spin off has not been
        completed.
 
 The
        results of Cipher-NV for the nine months ended September 30, 2007 are
        consolidated in the Registrant’s financial statements and are reflected as
        discontinued operations.
 
 **Comparison
        of the Results of Operations for the Three Months ended September 30, 2007
        and
        2006**
 
 The
        Company had net losses of $105,005 and $98,702 for the three months ended
        September 30, 2007 and 2006, respectively.
 
 Revenues
        for the three months ended September 30, 2007 were $65,091 compared to $43,991
        during the three months ended September 30, 2006.  The increase is due
        in large part to the minimum lease payment of $51,000 that is due under the
        lease agreement with BIMC that was executed in May of 2007. September 2007
        was
        the first month in which the minimum payment was recognized. The Company
        continues to use an estimate of 40% for scans billed but not reimbursable
        and
        therefore net revenues recognized represent 60% of scans billed during the
        three
        months ended September 30, 2007 and 2006.  To date reimbursements from
        third party payers, including Medicare and Medicaid appear to be at
        approximately 70%-75% of gross amounts billed.
 
 The
        Company had gross losses of $51,999 and $59,909 for the three months ended
        September 30, 2007 and 2006, respectively.  For the three months ended
        September 30, 2007, costs of revenues were $117,090 compared to $103,900
        for the
        three months ended September 30, 2006.  Costs of revenues for the
        three months ended September 30, 2007 includes $30,000 of monthly maintenance
        charges billed by Positron for service of the PET system at BIMC. The
        maintenance contract was not executed until January 2007 and therefore no
        maintenance expense was charged to costs of revenues for the three months
        ended
        September 30, 2006.
 
 Operating
        expenses decreased to $25,206 from $47,160 for the three months ended September
        30, 2007 and 2006, respectively. During the three months ended September
        30,
        2006 the Company accrued approximately $41,100 of administrative expenses
        at the
        BIMC facility pursuant to the operating agreement between the hospital and
        the
        Company.  Under the current agreement executed in May 2007, the
        Company receives a fee per scan and is not obligated to pay any administrative
        expenses to the hospital. Operating expenses for the three months ended
        September 30, 2007 consist of professional fees, consulting services and
        medical
        billing charges.
  14
 ***Table
            of Contents***
 
 FORM
                  10-QSB
              SEPTEMBER
                  30, 2007
 
 Interest
        income for the three months ended September 30, 2006 of $20,357 represented
        accrued interest on a note receivable due to the Company’s wholly-owned
        subsidiary, Positron Acquisition Corporation (“PAC”) from Positron Corporation,
        an affiliate of the Company.  In September 2006, the note and all
        accrued interest were converted into Positron Corporation preferred
        stock.  The Company had no interest income for the three months ended
        September 30, 2007.  Interest expense on notes payable was $9,652 and
        $3,250 for the three months ended September 30, 2007 and 2006,
        respectively.  The 2007 expense relates to accrued interest on the
        note payable to Cherry Creek Capital Partners that was executed in September
        2006.  The 2006 interest expense of $3,250 was interest accrued on a
        related party note that was converted to equity as part of the Cipher
        reorganization in March 2007.
  **Comparison
        of the Results of Operations for the Nine Months ended September 30, 2007
        and
        2006**
 
 The
        Company had net losses of $424,662 and $917,742 for the nine months ended
        September 30, 2007 and 2006, respectively.  Losses from continuing
        operations were $407,170 and 844,048, respectively. The significantly larger
        loss in 2006 is attributable in large part to higher operating
        expenses.  Operating expenses for the nine months ended September 30,
        2006 were $613,663 higher than the same period in 2007.
 
 Revenues
        for the nine months ended September 30, 2007 were $113,300 compared to $186,586
        during the nine months ended September 30, 2006.  Operations at the
        BIMC, where the Company generates all its revenue from PET scans were
        temporarily suspended beginning in February 2007 pending the re-negotiation
        of
        the contract between the Company and the hospital.  Scans at the
        facility resumed in late June 2007.
 
 Gross
        loss of for the nine months ended September 30, 2007 was $101,718 compared
        to
        $84,464 for the same period in 2006.  For the nine months ended
        September 30, 2007 and 2006, costs of revenues were $215,018 and $271,050,
        respectively.  The larger gross loss for the nine months ended
        September 30, 2007 is attributed in large part to the low number of scans
        performed during the period as a result of the temporary suspension of
        scans.
 
 Operating
        expenses decreased to $277,561 for the nine months ended September 30, 2007
        from
        $891,224 for the same period in 2006. Professional fees for the nine months
        ended September 30, 2007 were $103,058 compared to $763,000 for the same
        period
        in 2006.  The entire 2006 expense for the nine months was the fair
        value of common stock issued for services to consultants.  During the
        nine months ended September 30, 2007, marketing, general and administrative
        expenses were $174,503 compared to $128,224 for the nine months ended September
        30, 2006.  The significant increase in 2007 is attributable primarily
        to $80,000 of common stock issued for consulting services. The Company did
        not
        issue any common stock for marketing or general and administrative services
        during the nine months ended September 30, 2006.
 
 Interest
        income for the nine months ended September 30, 2006 of $145,218 represented
        accrued interest on a note receivable due to the Company’s wholly-owned
        subsidiary, Positron Acquisition Corporation (“PAC”) from Positron Corporation,
        an affiliate of the Company.  In September 2006, the note and all
        accrued interest were converted into Positron Corporation preferred
        stock.  The Company had no interest income for the nine months ended
        September 30, 2007.  Interest expense on notes payable was $25,637 and
        $13,578 for the nine months ended September 30, 2007 and 2006,
        respectively.  The increase in interest expense results from the
        interest on the note payable to Cherry Creek which the Company entered into
        in
        September 2006.
 
 **Discontinued
        Operations of Cipher Multimedia (“Cipher”)**
 
 Losses
        from discontinued operations for the three months ended September 30, 2007
        and
        2006 were $7,779 and 8,740, respectively.  No revenue was recorded by
        Cipher in either period and losses are attributable primarily to professional
        fees and other general and administrative expenses.
  15
 ***Table
            of Contents***
 
 FORM
                  10-QSB
              SEPTEMBER
                  30, 2007
 
 Losses
        from discontinued operations for the nine months ended September 30, 2007
        and
        2006 were $17,492 and 73,694, respectively.  No revenue was recorded
        by Cipher in either period. The loss for the nine months ended September
        30,
        2007 is attributable in large part to $30,000 of compensation expense in
        the
        form of Cipher common stock.  Expenses were offset in part by
        reversals of previously accrued interest and professional fees.  The
        loss for the period ended September 30, 2006 includes a settlement payment
        of
        $25,000 to a former officer of Cipher.
 
 After
        the
        reorganization of Cipher Multimedia, Inc. in March 2007, the Company owns
        approximately 25% of the reorganized subsidiary, Cipher-NV.  As a
        result the Company has recorded majority interest in the losses of Cipher
        of
        $10,369 and $2,254 for the three and nine months ended September 30, 2007,
        respectively.
 
 **Financial
        Condition**
 
 The
        Company had cash and cash equivalents of $1,766 and accounts receivable of
        $132,356 on September 30, 2007.  On the same date, accounts payable
        and accrued liabilities outstanding totaled $256,885.  During the
        three months ended September 30, 2007 the Company received reimbursements
        from
        managed health care payers including Medicare and Medicaid in the amount
        of
        $121,000.  These reimbursements are for PET scans that were performed
        as far back as March 2006. After working through a number of procedural and
        documentation issues with Medicare and Medicaid, the Company is hopeful that
        a
        large majority of its previously billed scans will be reimbursed. Under its
        new
        arrangement with Beth Israel Medical Center, INP is guaranteed a minimum
        monthly
        number of PET scans which should ultimately improve profitability. The Company
        continues to be dependent upon INP and PET scanning at Beth Israel as its
        sole
        source of revenue.
 
 The
        Company is dependent upon the success of INP and the PET scanning at the
        Beth
        Israel facility and/or additional funds through debtor equity financings
        to
        resolve liquidity issues and allow it to continue to operate as a going
        concern.
 
 On
        September 30, 2007 the Company had an accumulated deficit of $2,383,385 and
        total equity of $1,640,647.
  **Effects
        of Inflation**
 
 The
        Registrant believes that the relatively moderate rate of inflation over the
        past
        few years has not had a significant impact on the Registrant's financial
        position or operating results.
 
 **Forward
        Looking Statements**
 
 This
        report includes "Forward-Looking Statements" within the meaning of Section
        27A
        of the Securities Act and Section 21E of the Exchange Act. Any statements
        that
        express or involve discussions with respect to predictions, expectations,
        beliefs, plans, projections, objectives, assumptions or future events or
        performance (often, but not always, using words or phrases such as "expects"
        or
        "does not expect", "is expected", "anticipates" or "does not anticipate",
        "plans", "estimates" or "intends", or stating that certain actions, events
        or
        results "may", "could", "would", "might" or "will" be taken, occur or be
        achieved) are not statements of historical fact and may be considered "forward
        looking statements". Such statements are included, among other places in
        this
        registration statement, in the sections entitled "Management's Discussion
        and
        Analysis or Plan of Operation," "Description of Business" and "Description
        of
        Property." Forward-looking statements are based on expectations, estimates
        and
        projections at the time the statements are made that involve a number of
        risks
        and uncertainties which could cause actual results or events to differ
        materially from those presently anticipated. Although the Company believes
        that
        the expectations reflected in such forward-looking statements are reasonable,
        the Registrant can give no assurance that such expectations will prove to
        have
        been correct.
  16
 ***Table
            of Contents***
  FORM
                  10-QSB
              SEPTEMBER
                  30, 2007
 
 **ITEM
        3. Controls And Procedures**
 
 (a)
        Evaluation of disclosure controls and procedures
 
 An
        evaluation of the effectiveness of the design and operation of the Company's
        disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
        and 15d-15(e) as of September 30, 2007 was carried out under the supervision
        and
        with the participation of the Company's management, including the President
        and
        Chief Executive Officer and the Chief Financial Officer (the "Certifying
        Officers"). Based on that evaluation, the Certifying Officers concluded that
        the
        Company's disclosure controls and procedures are effective.
 
 Disclosure
        controls and procedures are designed to ensure that information required
        to be
        disclosed in Company reports filed or submitted under the Securities Exchange
        Act is recorded, processed, summarized and reported within the time periods
        specified in the SEC's rules and forms. Disclosure controls and procedures
        include, without limitation, controls and procedures designed to ensure that
        information required to be disclosed in Company reports filed or submitted
        under
        the Securities Exchange Act is accumulated and communicated to management,
        including the Company’s President and Chief Financial Officer, as appropriate,
        to allow timely decisions and timely reporting regarding required
        disclosure.
 
 (b)
        Changes in internal controls
 
 There
        was
        no change to the Company's internal control over financial reporting during
        the
        quarter ended September 30, 2007 that materially affected, or is reasonably
        likely to materially affect, the Company's internal control over financial
        reporting.
  17
 ***Table
            of Contents***
 
 FORM
                  10-QSB
              SEPTEMBER
                  30, 2007
 
 **PART
        II - OTHER INFORMATION**
 
 **ITEM
        1. Legal Proceedings**
 
 None
  **ITEM
        2. Changes in Securities**
 
 There
        have been no changes in the instruments defining the rights or rights evidenced
        by any class of registered securities.
  **ITEM
        3. Defaults Upon Senior Securities**
 
 None
  **ITEM
        4. Submission of Matters to Vote of Security Holders**
 
 None
  **ITEM
        5. Other Information**
 
 None
  **ITEM
        6. Exhibits**
 
 **(a)  Exhibit
        Index**
 
 
 Exhibit
              Description
                  of the Exhibit31.1
              Chairman
                  of the Board Certification of Periodic Financial Report Pursuant
                  to
                  Section 302 of the Sarbanes-Oxley Act of 2002.31.2
              Chief
                  Financial Officer Certification of Periodic Financial Report Pursuant
                  to
                  Section 302 of the Sarbanes-Oxley Act of 2002.32.1
              Chairman
                  of the Board Certification Pursuant to 18 U.S.C. Section 1350,
                  as adopted
                  pursuant to Section 906 of the Sarbanes-Oxley Act of
                  2002.32.2
              Chief
                  Financial Officer Certification Pursuant to 18 U.S.C. Section 1350,
                  as
                  adopted pursuant to Section 906 of the Sarbanes Oxley Act of
                  2002.
  18
 ***Table
            of Contents***
 
 FORM
                  10-QSB
              SEPTEMBER
                  30, 2007
  **SIGNATURES**
 
 Pursuant
        to the requirements of the Section 13 or 15(d) of the Securities Exchange
        Act of
        1934, the Registrant has duly caused this report to be signed on its behalf
        by
        the undersigned, thereunto duly authorized.
 
 Imagin
        Molecular Corporation
 
 Date:   November
                  14, 2007
              /s/
                  Joseph G. OliverioJoseph
                  G. OliverioChief
                  Executive Office, DirectorDate:   November
                  14, 2007
              /s/
                  Corey N. ConnCorey
                  N. ConnChief
                  Financial Officer
 
 
 **EXHIBIT
        INDEX**
 
 
 Exhibit
              Description
                  of the Exhibit31.1
              Chairman
                  of the Board Certification of Periodic Financial Report Pursuant
                  to
                  Section 302 of the Sarbanes-Oxley Act of 2002.*31.2
              Chief
                  Financial Officer Certification of Periodic Financial Report Pursuant
                  to
                  Section 302 of the Sarbanes-Oxley Act of 2002.*32.1
              Chairman
                  of the Board Certification Pursuant to 18 U.S.C. Section 1350,
                  as adopted
                  pursuant to Section 906 of the Sarbanes-Oxley Act of
                  2002.#32.2
              Chief
                  Financial Officer Certification Pursuant to 18 U.S.C. Section 1350,
                  as
                  adopted pursuant to Section 906 of the Sarbanes Oxley Act of
                  2002.#
 
 *
        Filed
        herewith
 
 #
        Furnished herewith
   19