FORM
                  10-QSB
              SEPTEMBER
                  30, 2006




**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


Washington,
      D.C. 20549





**FORM
      10-QSB**





T
            QUARTERLY
                REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
                ACT OF
                1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30,
                2006.





£
            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
              T
              No
              £




As
      of
      November 14, 2006, there were 67,266,617 shares of the Registrant’s Common
      Stock, $.01 par value outstanding.




Transitional
      Small Business Disclosure Format (check one). Yes £ No T







1





FORM
                10-QSB
            SEPTEMBER
                30, 2006





**IMAGIN
      MOLECULAR CORPORATION**


**TABLE
      OF CONTENTS**


**Form
      10-QSB for the quarter ended September 30** **,
      2006**





PART
                I - FINANCIAL INFORMATION
            **Page**Item
                1. Financial Statements
            3Consolidated
                Balance Sheets at September30,
                2006 and December 31, 2005
            4Consolidated
                Statements of Operations for the three and nine
                months ended September 30, 2006 and 2005
            4Consolidated
                Statements of Cash Flows for the nine months endedSeptember 30, 2006 and 2005
            5Notes
                to Financial Statements
            6Item
                2. Management’s Discussion and
                Analysis
            13Item
                3. Controls and Procedures
            16PART
                II - OTHER INFORMATION
            17Item
                1. Legal Proceedings
            17Item
                2. Unregistered Sales of Equity Securities and Use of
                Proceeds
            17Item
                3. Submission of Matters to a Vote of Security
                Holders
            17Item
                4. Other Information
            17Item
                6. Exhibits
            17Signature
                Page
            17




2
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          of Contents*





FORM
                10-QSB
            SEPTEMBER
                30, 2006





**PART
      1 - FINANCIAL INFORMATION**





**ITEM
      1. Financial Statements**





The
      unaudited balance sheet of the Registrant as of September 30, 2006, the balance
      sheet at December 31, 2005, the unaudited statements of operations for the
      three
      and nine months ended September 30, 2006 and 2005, and the unaudited statements
      of cash flows for the nine month ended September 30, 2006 and 2005 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**





**CONSOLIDATED
      BALANCE SHEETS**





**Sept. 30,**
              **2006**
              (Unaudited)
            
            **December**
              **31,
                2005****ASSETS**Current
                assets:Cash
                and cash equivalents
            
            $
            9,413
            
            $
            1,376Accounts
                receivable
            
            
            178,884
            
            
            --Total
                current assets
            
            
            188,297
            
            
            1,376Property
                and equipment, net
            
            
            241,105Other
                assets:Investment
                in securities of Positron Corp.
            
            
            1,588,066
            
            
            --Interest
                receivable
            
            
            --
            
            
            72,226Convertible
                notes receivable
            
            
            --
            
            
            1,370,622Total
                assets
            
            $
            2,017,468
            
            $
            1,444,224**LIABILITIES
                AND STOCKHOLDERS’ DEFICIT**Current
                liabilities:Accounts
                payable
            
            $
            56,040
            
            $
            61,195Advance
                from shareholders
            
            
            55,616
            
            
            253,974Accrued
                expenses
            
            
            246,357
            
            
            --Current
                portion of promissory note payable
            
            
            105,394Notes
                payable - other
            
            
            180,000
            
            
            193,000Advance
                from affiliate
            
            
            167,290
            
            
            --Interest
                payable
            
            
            72,481
            
            
            58,903Total
                current liabilities
            
            
            883,178
            
            
            567,072Promissory
                note payable
            
            
            144,606Stockholders’
                Equity:Preferred
                Stock, 5,000,000 shares Authorized, no shares issued and
                outstanding
            
            
            --
            
            
            --Common
                Stock, $0.001 par value; 95,000,000 shares authorized, 67,266,617
                and
                50,680,311 shares issued and outstanding, on September 30 , 2006
                and
                December 31, 2005
            
            
            67,267
            
            
            50.680Additional
                paid-in capital
            
            
            2,826,065
            
            
            1,812,378Accumulated
                deficit
            
            
            (1,903,648
            )
            
            (985,906
            )Total
                stockholders’ equity
            
            
            989,684
            
            
            877,152Total
                liabilities and stockholders’ equity
            
            $
            2,017,468
            
            $
            1,444,224





See
      accompanying notes


3
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          of Contents*





FORM
                10-QSB
            SEPTEMBER
                30, 2006





**IMAGIN
      MOLECULAR CORPORATION**


**CONSOLIDATED
      STATEMENTS OF OPERATIONS**


(Unaudited)


Three
                  Months Ended
              
              Nine
                  Months EndedSept.
                  30,
                2006
              
              Sept. 30,
                2005
              
              Sept. 30,
                2006
              
              Sept. 30,
                2005Revenues:
              
              $
              43,991
              
              $
              --
              
              $
              186,586
              
              $
              --Costs
                  of revenues:
              
              
              103,900
              
              
              --
              
              
              271,050
              
              
              --Gross
                  loss:
              
              
              (59,909
              )
              
              --
              
              
              (84,464
              )
              
              --Operating
                  expenses:Professional
                  fees
              
              
              15,984
              
              
              22,644
              
              
              810,611
              
              
              102,602Marketing,
                  general and administrative
              
              
              40,252
              
              
              3,167
              
              
              130,783
              
              
              18,985Total
                  operating expenses
              
              
              56,236
              
              
              25,811
              
              
              941,394
              
              
              121,587Loss
                  from operations
              
              
              (116,145
              )
              
              (25,811
              )
              
              (1,025,858
              )
              
              (121,587
              )Other
                  income (expense)Interest
                  income
              
              
              20,357
              
              
              --
              
              
              145,218
              
              
              --Interest
                  expense
              
              
              (3,250
              )
              
              (6,437
              )
              
              (13,578
              )
              
              (19,037
              )Other
                  (expense) income
              
              
              336
              
              
              620
              
              
              (23,524
              )
              
              2,765Total
                  other income (expense)
              
              
              17,443
              
              
              (5,817
              )
              
              108,116
              
              
              (16,272
              )Net
                  loss
              
              
              (98,702
              )
              
              (31,628
              )
              
              (917,742
              )
              
              (137,859
              )Loss
                  Per Share
              
              $
              (0.001
              )
              $
              (0.001
              )
              $
              (0.014
              )
              $
              (0.005
              )Weighted
                  average common shares
              
              
              67,266,617
              
              
              49,430,311
              
              
              65,037,653
              
              
              29,684,981





See
      accompanying notes


4
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          of Contents*





FORM
                10-QSB
            SEPTEMBER
                30, 2006





**IMAGIN
      MOLECULAR CORPORATION**


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**


**Unaudited**


Nine
                  Months EndedSeptember 30,
                  2006
              
              September 30,
                  2005Cash
                  flows from operating activities:Net
                  loss
              
              $
              (917,742
              )
              $
              (137,859
              )Adjustment
                  to reconcile net loss to net cashused in operating
                  activitiesCommon
                  stock issued for services
              
              
              763,000
              
              
              9,793Depreciation
                  expense
              
              
              3,097
              
              
              --Amortization
                  of discount on notes receivable
              
              
              (54,378
              )
              
              --Changes
                  in operating assets and liabilities:Accounts
                  receivable
              
              
              (178,884
              )
              
              --Interest
                  receivable
              
              
              (93,637
              )
              
              --Accounts
                  payable and accrued liabilities
              
              
              241,202
              
              
              28,701Interest
                  payable
              
              
              13,578
              
              
              19,037Net
                  cash used in operating activities
              
              
              (223,764
              )
              
              (80,328
              )Cash
                  flows from investing activities:Purchase
                  of fixed assets
              
              
              (241,105
              )
              
              --Net
                  cash used in investing activities
              
              
              (241,105
              )
              
              --Cash
                  flows from financing activities:Advances
                  from shareholders
              
              
              167,290
              
              
              29,000Proceeds
                  from promisery notes
              
              
              250,000
              
              
              50,000Advance
                  from affiliate
              
              
              55,616
              
              
              --Net
                  cash provided by financing activities
              
              
              472,906
              
              
              79,000Net
                  increase (decrease) in cash
              
              
              8,037
              
              
              (1,328
              )Cash
                  at beginning of period
              
              
              1,376
              
              
              1,625Cash
                  at end of period
              
              $
              9,413
              
              $
              297Supplemental
                  cash flow information:Interest
                  paid
              
              $
              --
              
              $
              --Income
                  taxes paid
              
              
              --
              
              
              --




See
      accompanying notes


5
 *Table
          of Contents*





FORM
                10-QSB
            SEPTEMBER
                30, 2006





**IMAGIN
      MOLECULAR CORPORATION**


**CONSOLIDATED
      STATEMENT OF CASH FLOWS**


(CONTINUED)





Supplementary
      Schedule of Noncash Transactions





2006





On
      January 4, 2006, the Company issued 481,481 shares of common stock, par value
      .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
      .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
        May
        26, 2006, the Company issued 3,000,000 shares of common stock, par value
        $.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.








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 Diagnostics Corp. (“IDC”) for 30,000,000 restricted shares valued at
      $1,304,000. The value was determined by the actual cash paid by IDC for the
      notes.





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




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          of Contents*





FORM
                10-QSB
            SEPTEMBER
                30, 2006




**IMAGIN
        MOLECULAR CORPORATION**
 **SELECTED
        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 **NOTE
        1. BUSINESS ORGANIZATION**
  Imagin
        Molecular Corporation (Imagin) (FKA) Cipher Holding Corporation ("Cipher") was
        originally incorporated under the laws of the State of Colorado. Cipher
        commenced operations upon incorporation and has been in the development stage
        through the first quarter of 2006 and has had very little revenue. Imagin’s
        wholly-owned subsidiary Cipher Multimedia, Inc. operates Cipher’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 Directors resolved to change the Company’s principal
      operations from multimedia encryption technology to positron emission tomography
      and medical imaging. Operations began in the second quarter of 2006 and the
      Company no longer operates in the development stage. See Positron Acquisition
      Corp. and Imagin Nuclear Partners discussions below.





Positron
      Acquisition Corp.





On
      April
      19, 2005, the Company organized a wholly owned subsidiary company, 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, a publicly owned Texas corporation. Imagin no longer intends to
      acquire a controlling interest in Positron Corporation and PAC now serves as
      a
      holding company for Positron Corporation’s securities.





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





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





Imagin
      Nuclear Partners Corporation





In
      2006,
      the Company’s wholly-owned subsidiary Imagin Nuclear Partners Corporation
      (“INP”) commenced scanning patients using Positron Emission Tomography
      myocardial perfusion imaging technology (“PET” or “PET imaging technology”) at a
      cardiac imaging center located in Beth Israel Medical Center in New York City.
      The Company has performed PET imaging on more than 100 patients and expects
      volume to increase once marketing efforts result in increased physician
      awareness.  The Company operates under a memorandum of understanding with
      Beth Israel Medical Center and Manhattan Cardiology, owned by Andrew Van Tosh,
      M.D., a well know nuclear cardiologist in the New York City imaging community.
       The Company is aggressively moving toward definitive agreements with all
      parties.





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




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


7
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          of Contents*





FORM
                10-QSB
            SEPTEMBER
                30, 2006





**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 we believe 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 our audited financial statements and
      notes thereto included in its Form 10-KSB for the fiscal year ended December
      31,
      2005. 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 $1,903,648 as of September 30, 2006. The Company’s
      ability to continue as a going concern is dependent upon the successful
      completion of additional financing arrangements and its ability to develop
      and
      sell its services. Management plans to raise equity capital to finance the
      operating and capital requirements of the Company. While we are expending our
      best efforts to achieve the above plans, there is no assurance that such
      activity will generate sufficient funds to accomplish its business purpose,
      or
      that our business plan will be successful.





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





*Principles
      of Consolidation and Nature of Operations*





For
      the
      periods ended September 30, 2006 and September 30, 2005, the financial
      statements include the transactions of Cipher Multimedia, Inc., Positron
      Acquisition Corp. and Imagin Nuclear Partners Corporation (subsidiaries). 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.


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          of Contents*





FORM
                10-QSB
            SEPTEMBER
                30, 2006





*Loss
      Per Share*





Loss
      per
      share is computed based on the weighted average number of shares of common
      stock
      outstanding.





*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.


**NOTE
      5. CONVERTIBLE SECURITIES OF POSITRON CORPORATION**




On
      June
      29, 2005, through our wholly-owned subsidiary Positron Acquisition Corporation,
      (“PAC”), we purchased notes receivable for 30,000,000 restricted shares valued
      at $1,304,000. Below is a brief history of those notes. On May 26, 2004 and
      June
      17, 2004, Positron Corporation (“Positron”)) sold two separate secured
      convertible promissory notes under a Note Purchase Agreement dated May 21,
      2004,
      to IMAGIN Diagnostic Centres, Inc. (“IDC”) in the principal amounts of $400,000
      and $300,000, respectively. Interest is charged on the outstanding principal
      at
      the rate of ten percent (10%) per annum and is payable annually to the extent
      of
      positive cash flow of Positron on the anniversary dates of these notes. The
      principal and any unpaid interest must be paid 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.
      Interest will continued to accrue at 10% per annum..


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FORM
                10-QSB
            SEPTEMBER
                30, 2006





In
      a
      second stage of the financing IDC agreed to purchase additional secured
      convertible promissory notes in the aggregate principal amount of $1,300,000.
      These notes were to be purchased over a six and a half month period, commencing
      July 15, 2004. These notes are due and payable on May 21, 2006, the due date
      was
      subsequently extended to September 30, 2006. These notes are initially
      convertible into new shares of Series D Preferred Stock that, in turn is
      convertible into an aggregate of 52,000,000 shares of Positron common stock.
      As
      of June 30, 2005, principal of $1,208,500 has been advanced related to these
      notes. On June 30, 2005, IDC converted $575,000 of these promissory notes into
      shares of Series D Preferred Stock that, in turn were converted into 23,000,000
      shares of the Positron common stock. This conversion reduced the principal
      owed
      under these promissory notes from $1,208,500 to $633,500. Positron has agreed
      to
      seek such approval. We did not purchase the notes ($575,000) that were converted
      on June 30, 2005 for 23,000,000 shares of Positron of common stock. On October
      21, 2005, $770,000 of unpaid principal and interest was converted into 770,000
      shares of Positron’s Series C Convertible Preferred Stock.




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





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


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          of Contents*





FORM
                10-QSB
            SEPTEMBER
                30, 2006





**6.**
            **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.
      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. Under the
      terms of the promissory note, $50,000 was to be withheld in escrow until the
      Company delivers an executed landlord waiver from Beth Israel Medical Center
      to
      Cherry Creek. As of September 30, 2006 the waiver had not been
      delivered.




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.




On
      December 28, 2004, the Registrant modified and amended a promissory note made
      by
      Cipher in favor of John Rooney, brother of the Registrant’s former 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.





**7.**
            **RELATED
                PARTY TRANSACTIONS**





In
      September , the
      Company’s wholly-owned subsidiary Imagin Nuclear Partners purchased from
      Positron Corporation ,
      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. As of September 30, 2006
      the
      company owes Positron Corporation $ 167,290.





**8.**
            **STOCKHOLDERS’
                EQUITY**





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





On
      January 2, 2006 the Company entered into an additional settlement agreement
      with
      Patrick Rooney, the Registrant’s former Chairman, President and Chief Executive
      Officer and affiliate shareholder whereby Mr. Rooney agreed to accept 7,054,825
      of the Company’s common stock in exchange for the full and final satisfaction of
      unpaid and unreimbursed expenses in the aggregate amount of $253,974. The
      obligation was converted into shares of the Company’s common stock at the
      average of the closing bid price five (5) trading days preceding the conversion
      ($0.036).


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FORM
                10-QSB
            SEPTEMBER
                30, 2006





During
      the nine
      months ended September 30, 2006 the
      Company issued 9,050,000 shares of common stock in exchange for consulting
      services and other professional services and recorded consulting fees
      expenses of $763,000 to reflect the fair market value of the common shares
      issued.


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FORM
                10-QSB
            SEPTEMBER
                30, 2006


**ITEM
        2.**  **Management's
        Discussion And Analysis Or Plan Of Operation**




Commencement
      of Operations of Imagin Nuclear Partners





Results
      for the nine months ended September 30, 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.
      Prior to INP’s operations the Company was a development stage company generating
      very little revenue. 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.





Results
      of Operations





The
      Company had net losses of $98,702 and $917,742 for the three and nine month
      periods ended September 30, 2006, respectively. Net losses for the same periods
      in 2005 were $31,628 and 137,859, respectively. The Company issued a significant
      amount of common stock in exchange for consulting services which resulted in
      the
      significant increase in net loss in 2006 as compared to 2005.





Revenues





INP
      generated revenue through patient scans at the Beth Israel facility. Revenue
      includes both in-patient and out-patient scans at the facility and totaled
      $43,991 and 186,586 for the three and nine month period ended September 30,
      2006, respectively. Gross revenues for outpatient scans have been adjusted
      to
      reflect management’s estimate of amounts reimbursable by Medicare, Medicaid and
      insurance carriers. Cost of revenues, which are mostly fixed monthly costs
      involved with performing scans including operation of the PET imaging machines,
      were $103,900 and $271,050 for the three and nine month periods, respectively.





Operating
      Expenses





Marketing
      general and administrative expenses for the three months and nine months ended
      September 30, 2006 were $40,252 and $130,783, respectively as compared to $3,167
      and $18,985 for the same periods in 2005. The significant increases are due
      primarily to administrative costs at the Beth Israel facility including rent,
      personnel and other overhead.





Professional
      fees for the three and nine month period ended September 30, 2006 were $15,984
      and 810,611, respectively. For the same periods in 2005 professional fees
      totaled $22,644 and 102,602. During 2006 the Company issued common stock in
      exchange for consulting and other fees. The fair market value of the shares
      issued was $763,000 of this amount, $521,000 was paid to individuals providing
      the Company various financial consulting services. Other professional fees
      include legal and accounting.





Other
      Income (Expense)





Interest
      income represents
      accrued interest on the notes receivable from Positron Corporation, including
      amortization of discount, through the date of conversion to Positron Series
      B
      Preferred Stock. Interest income was $20,357 and $145,218 for the three and
      nine
      months ended September 30, 2006, respectively. No interest income was recorded
      for the same periods in 2005.




Other
        expense for the nine months ended September 30, 2006 includes a $25,000
        settlement payment to a former officer of the Company’s wholly-owned subsidiary
        Cipher Multimedia Inc.


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FORM
                10-QSB
            SEPTEMBER
                30, 2006




**Financial
      Condition**





The
      Company had cash and cash equivalents of $9,413 and accounts receivable of
      $178,884 on September 30, 2006. On the same date, accounts payable and accrued
      liabilities outstanding totaled $302,397. The Company is dependent upon the
      success of INP and PET scanning and/or raising additional debt or equity
      financings to resolve the Company’s liquidity issues and allow it to continue to
      operate as a going concern.





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





On
      September 30, 2006 the Company had an accumulated deficit of $1,903,648 and
      total equity of $989,684.


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FORM
                10-QSB
            SEPTEMBER
                30, 2006





**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 we believe 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.


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FORM
                10-QSB
            SEPTEMBER
                30, 2006





**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, 2006 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 our 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 our reports filed or submitted under the Securities
      Exchange Act is accumulated and communicated to management, including our
      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, 2006 that materially affected, or is reasonably
      likely to materially affect, the Company's internal control over financial
      reporting.


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FORM
                10-QSB
            SEPTEMBER
                30, 2006





**PART
      II - OTHER INFORMATION**





**ITEM
      1. Legal Proceedings**





None





**ITEM2.
      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**





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





**ITEM6.
      Exhibits and Reports on Form 8-K**





None








**SIGNATURES**





Pursuant
      to the requirements of the Section 13 or 15(d) of the Securities Exchange Act
      of
      1934, the Registrant has duly caused this report to be signed on its behalf
      by
      the undersigned, thereunto duly authorized, in the City of New York, State
      of
      New York on November 14, 2006.





Imagin
      Molecular Corporation





By: /s/
      Joseph G. Oliverio





Joseph
      G.
      Oliverio


Chief
      Executive Officer, Director


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FORM
                10-QSB
            SEPTEMBER
                30, 2006





**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






18