**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 JUNE 30,
                  2007.
   o
              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
        August 13, 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
  
 1
  FORM
                10-QSB
              JUNE
                  30, 2007
  **IMAGIN
        MOLECULAR CORPORATION**
 **TABLE
        OF CONTENTS**
 **Form
        10-QSB for the quarter ended June 30, 2007**
  
 PART
                  I – FINANCIAL INFORMATION
              
              **Page**Item
                  1.  Financial Statements
              
              3Consolidated
                  Balance Sheets at June 30, 2007 and December 31,
                  2006
              
              3Consolidated
                  Statements of Operations for the three and six
                  months ended June 30, 2007 and 2006
              
              4Consolidated
                  Statements of Cash Flows for the six months ended
                  June 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
                JUNE
                    30, 2007
 **PART
        1 – FINANCIAL INFORMATION**
  **ITEM
        1.  Financial Statements**
  The
        unaudited balance sheet of the Registrant as of June 30, 2007, the balance
        sheet
        at December 31, 2006, the unaudited statements of operations for the three
        and
        six months ended June 30, 2007 and 2006, and the unaudited statements of
        cash
        flows for the six months ended June 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**
 
 **June
                  30, 2007**
                (Unaudited)
              
              
              **December31,
                  2006****ASSETS**Current
                  assets:Cash
                  and cash equivalents
              
              $
              192,918
              
              
              $
              3,138Accounts
                  receivable
              
              
              188,388
              
              
              
              163,539Total
                  current assets
              
              
              381,306
              
              
              
              166,677Property
                  and equipment, net
              
              
              221,788
              
              
              
              234,666Other
                  assets:Investment
                  in securities of Positron Corp.
              
              
              1,588,066
              
              
              
              1,588,066Total
                  assets
              
              $
              2,191,160
              
              
              $
              1,989,409**LIABILITIES
                  AND STOCKHOLDERS’ DEFICIT**Current
                  liabilities:Accounts
                  payable
              
              $
              93,200
              
              
              $
              97,577Advance
                  from shareholders
              
              
              5,100
              
              
              
              69,616Accrued
                  expenses
              
              
              188,348
              
              
              
              158,246Current
                  portion of promissory note payable
              
              
              123,052
              
              
              
              81,684Notes
                  payable – other
              
              
              --
              
              
              
              180,000Advances
                  from affiliate
              
              
              254,283
              
              
              
              185,385Deposit
                  for un-issued common stock
              
              
              200,000
              
              
              
              --Interest
                  payable
              
              
              10,426
              
              
              
              75,732Total
                  current liabilities
              
              
              874,409
              
              
              
              848,240Promissory
                  note payable
              
              
              164,491
              
              
              
              205,860Majority
                  interest in consolidated subsidiary
              
              
              206,608
              
              
              
              --Stockholders’
                  Equity:Preferred
                  Stock, 5,000,000 shares Authorized, no shares
                  issued        and
                  outstanding
              
              
              --
              
              
              
              --Common
                  Stock, $0.001 par value; 95,000,000 shares authorized, 73,663,284
                  and
                  67,276,617 shares issued and outstanding
              
              
              73,663
              
              
              
              67,277Additional
                  paid-in capital
              
              
              3,150,369
              
              
              
              2,826,755Accumulated
                  deficit
              
              
              (2,278,380
              )
              
              
              (1,958,723
              )Total
                  stockholders’ equity
              
              
              945,652
              
              
              
              935,309Total
                  liabilities and stockholders’ equity
              
              $
              2,191,160
              
              
              $
              1,989,409
  See
        accompanying notes
  3
 *Table
            of Contents*
  FORM
                10-QSB
              JUNE
                  30, 2007
  **IMAGIN
        MOLECULAR CORPORATION AND SUBSIDIARIES**
 **CONSOLIDATED
        STATEMENTS OF OPERATIONS**
 (Unaudited)
 
 Three
                  Months Ended
              
              
              Six
                  Months EndedJune
                  30, 2007
              
              
              June 30,
                  2006
              
              
              June
                  30, 2007
              
              
              June 30,
                  2006Revenues:
              
              $
              12,581
              
              
              $
              142,595
              
              
              $
              48,209
              
              
              $
              142,595Costs
                  of revenues:
              
              
              29,030
              
              
              
              167,150
              
              
              
              97,928
              
              
              
              167,150Gross
                  loss
              
              
              (16,449
              )
              
              
              (24,555
              )
              
              
              (49,719
              )
              
              
              (24,555
              )Operating
                  expenses:Professional
                  fees
              
              
              257
              
              
              
              777,941
              
              
              
              12,358
              
              
              
              794,627Marketing,
                  general and administrative
              
              
              213,412
              
              
              
              83,539
              
              
              
              260,916
              
              
              
              90,531Total
                  operating expenses
              
              
              213,669
              
              
              
              861,480
              
              
              
              273,274
              
              
              
              885,158Loss
                  from operations
              
              
              (230,118
              )
              
              
              (886,035
              )
              
              
              (322,993
              )
              
              
              (909,713
              )Other
                  income (expense)Interest
                  income
              
              
              --
              
              
              
              56,319
              
              
              
              --
              
              
              
              124,861Interest
                  expense
              
              
              (7,718
              )
              
              
              (3,250
              )
              
              
              (15,985
              )
              
              
              (10,328
              )Other
                  (expense) income
              
              
              189
              
              
              
              (24,493
              )
              
              
              11,206
              
              
              
              (23,860
              )Total
                  other income (expense)
              
              
              (7,529
              )
              
              
              28,576
              
              
              
              (4,779
              )
              
              
              90,673Loss
                  before majority interest
              
              
              (237,647
              )
              
              
              (857,459
              )
              
              
              (327,772
              )
              
              
              (819,040
              )Majority
                  interest in consolidated subsidiary
              
              
              8,115
              
              
              
              --
              
              
              
              8,115
              
              
              
              --Net
                  loss
              
              $
              (229,532
              )
              
              $
              (857,459
              )
              
              $
              (319,657
              )
              
              $
              (819,040
              )Loss
                  per share
              
              $
              (0.003
              )
              
              $
              (0.013
              )
              
              $
              (0.005
              )
              
              $
              (0.013
              )Weighted
                  average common shares
              
              
              71,190,757
              
              
              
              65,281,452
              
              
              
              69,587,778
              
              
              
              63,929,328
  See
        accompanying
        notes
  4
 *Table
            of Contents*
 FORM
                  10-QSB
                JUNE
                    30, 2007
 **IMAGIN
        MOLECULAR CORPORATION AND SUBSIDIARIES**
 **CONSOLIDATED
        STATEMENTS OF CASH FLOWS**
 **Unaudited**
 
 Six
                  Months EndedJune
                  30, 2007
              
              
              June
                  30, 2006Cash
                  flows from operating activities:Net
                  (loss) income
              
              $
              (319,657
              )
              
              $
              (819,040
              )Adjustment
                  to reconcile net loss to net cash used in operating
                  activitiesCommon
                  stock issued for services
              
              
              230,000
              
              
              
              763,000Depreciation
                  expense
              
              
              12,878
              
              
              
              570Amortization
                  of discount on notes receivable
              
              
              --
              
              
              
              (54,378
              )Majority
                  interest in income of subsidiary
              
              
              (8,115
              )
              
              
              --Changes
                  in operating assets and liabilities:Accounts
                  receivable
              
              
              (24,849
              )
              
              
              (142,595
              )Interest
                  receivable
              
              
              --
              
              
              
              (70,483
              )Accounts
                  payable and accrued liabilities
              
              
              25,722
              
              
              
              148,409Interest
                  payable
              
              
              (197
              )
              
              
              10,328Net
                  cash used in operating activities
              
              
              (84,218
              )
              
              
              (164,189
              )Cash
                  flows from investing activities:Purchase
                  of fixed assets
              
              
              --
              
              
              
              (9,442
              )Net
                  cash used in investing activities
              
              
              --
              
              
              
              (9,442
              )Cash
                  flows from financing activities:Advances
                  from shareholders
              
              
              5,100
              
              
              
              40,600Advance
                  from affiliate
              
              
              68,898
              
              
              
              132,030Deposit
                  for un-issued common stock
              
              
              200,000
              
              
              
              --Net
                  cash provided by financing activities
              
              
              273,998
              
              
              
              172,630Net
                  increase (decrease) in cash
              
              
              189,780
              
              
              
              (1,001
              )Cash
                  at beginning of period
              
              
              3,138
              
              
              
              1,376Cash
                  at end of period
              
              $
              192,918
              
              
              $
              375Supplemental
                  cash flow information:Interest
                  paid
              
              $
              5,559
              
              
              $
              --Income
                  taxes paid
              
              
              --
              
              
              
              --
 
 See
        accompanying notes
  5
 *Table
            of Contents*
  FORM
                10-QSB
              JUNE
                  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
        Offier, 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.
   The
        accompanying notes are an integral part of the financial
        statements.
  6
 *Table
            of Contents*
  FORM
                  10-QSB
                JUNE
                    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.
  
 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.
 
 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.
 
 7
 *Table
            of Contents*
  FORM
                  10-QSB
                JUNE
                    30, 2007
  **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 $2,278,380 as of June 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 June 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 (subsidiaries). All Intercompany transactions
        and
        balances have been eliminated.
  8
 *Table
            of Contents*
  FORM
                10-QSB
              JUNE
                  30, 2007
  *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.
 
 In
        June
        2006, the FASB released FASB Interpretation No. 48, "Accounting for Uncertainty
        in Income Taxes," an interpretation of FASB Statement No. 109 ("FIN 48").
        FIN 48
        prescribes a recognition threshold and measurement attribute for the financial
        statement recognition and measurement of a tax position taken or expected
        to be
        taken in a tax return. A company must determine whether it is
        "more-likely-than-not" that a tax position will be sustained upon examination,
        including resolution of any related appeals or litigation procedures, based
        on
        the technical merits of the position.  Once it is determined that a
        position meets the more-likely-than-not recognition threshold, the position
        is
        measured to determine the amount of benefit to recognize in the financial
        statements. This interpretation is effective for fiscal years beginning after
        December 15, 2006.  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
        is 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
                JUNE
                    30, 2007
 **NOTE
        5. CIPHER MULTIMEDIA INC. REORGANIZATION**
 
 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’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.
 
 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 six months ended June 30, 2007
        continue to be consolidated in the Registrant’s financial
        statements.
 
 
 **NOTE
        6. IMAGIN DIAGNOSTIC CENTRES INC. CONVERTIBLE NOTES
        RECEIVABLE**
 
 On
        June
        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 June 17, 2004, Positron Corporation (“Positron”) sold two separate secured
        convertible promissory notes under a Note Purchase Agreement dated May 21,
        2004,
        to IMAGIN Diagnostic Centres, Inc. (“IDC”) in the principal amounts of $400,000
        and $300,000, respectively. Interest is charged on the outstanding principal
        at
        the rate of ten percent (10%) per annum and is payable annually to the extent
        of
        positive cash flow of Positron on the anniversary dates of these notes. The
        principal and any unpaid interest were originally due on the earlier to occur
        of
        May 21, 2006 or when declared due and payable by IDC upon occurrence of an
        event
        of default. The Company and Positron extended the due date to September 30,
        2006, on which date the notes were converted to Positron Series B Convertible
        Preferred Stock.
 
 In
        a
        second stage of the financing IDC agreed to purchase additional secured
        convertible promissory notes in the aggregate principal amount of $1,300,000.
        These notes were to be purchased over a six and a half month period, commencing
        July 15, 2004. These notes are due and payable on May 21, 2006, the due date
        was
        subsequently extended to September 30, 2006. These notes are initially
        convertible into new shares of Series D Preferred Stock that, in turn is
        convertible into an aggregate of 52,000,000 shares of Positron common stock.
        As
        of June 30, 2005, principal of $1,208,500 has been advanced related to these
        notes. On June 30, 2005, IDC converted $575,000 of these promissory notes
        into
        shares of Series D Preferred Stock that, in turn were converted into 23,000,000
        shares of the Positron common stock. This conversion reduced the principal
        owed
        under these promissory notes from $1,208,500 to $633,500. On October 21,
        2005,
        $770,000 of unpaid principal and interest was converted into 770,000 shares
        of
        Positron’s Series C Convertible Preferred Stock.
 
 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.
  10
 *Table
            of Contents*
  FORM
                10-QSB
              JUNE
                  30, 2007
  **NOTE
        7.  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 June
        30,
        2007 the principal balance of the promissory note is $287,543, of which $123,052
        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 June 30, 2007, no amounts had been recorded for these
        items.
   **NOTE
        8. 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  11
 *Table
              of Contents*
  FORM
                10-QSB
              JUNE
                  30, 2007
  **NOTE
        9.  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 six months ended June 30, 2007, Positron
        billed the Company $10,838 under the service contract. No amounts were billed
        during the three months ended June 30, 2007.
 
 Advances
        from affiliates at June 30, 2007 and December 31, 2006 consisted of the
        following:
 
 June
                  30, 2007
              
              
              December
                  31, 2006Positron
                  Corporation and Subsidiaries
              
              $
              254,283
              
              
              $
              185,385
 
 
 **NOTE
        10. 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.
 
 
 **NOTE
        11. 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 June 30,
        2007.
 
 
 **NOTE
        12. SUBSEQUENT EVENT**
 
 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–NV.  Mr. Rooney is also the
        Chairman of Positron Corporation, a publicly owned Texas corporation and
        an
        affiliate of the Company.
 
 On
        June
        29, 2007, Solaris deposited $200,000 of the funds with the Company. This
        amount
        is included as a long term liability at June 30, 2007.
  12
 *Table
            of Contents*
 FORM
                  10-QSB
                JUNE
                    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 six months ended June 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”.)
 
 In
        February 2007, operations at BIMC were temporarily suspended while the Company
        and the hospital renegotiated the terms of their agreement.  In May
        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.
 **Comparison
        of the Results of Operations for the Three Months ended June 30, 2007 and
        2006**
 
 The
        Company had net losses of $229,532 and $857,459 for the three months ended
        June
        30, 2007 and 2006, respectively.  The significantly larger loss in
        2006 resulted primarily from significantly higher operating expenses which
        included a $763,000 charge for common stock issued for services.
  Revenues
          for the three months ended June 30, 2007 were $12,581 compared to $142,595
          during the three months ended June 30, 2006.  Operations at the Beth
          Israel Medical Center (“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.  An agreement was executed in May 2007 and the hospital
          resumed providing scans on behalf of the Company in late June
          2007.  However,   limited  scans were billed
          during the three months ended June 30, 2007.
 The
        Company had gross losses of $16,449 and $24,555 for the three months ended
        June
        30, 2007 and 2006, respectively.  For the three months ended June 30,
        2007, costs of revenues were $29,030.  The gross loss is attributed in
        large part to the low number of scans performed during the
        period.  For the three months ended June 30, 2006, the Company reduced
        gross billings for scans by 30% to account for estimated non-reimbursable
        scans.
        At the time the Company had very little reimbursement history and chose to
        be
        conservative in its estimate which resulted in costs of revenues exceeding
        revenues.
  13
 *Table
            of Contents*
  FORM
                10-QSB
              JUNE
                  30, 2007
  Operating
        expenses decreased $647,811 to $213,669 for the three months ended June 30,
        2007
        from $861,480 for the same period in 2006. Professional fees for the three
        months ended June 30, 2007 were only $257 compared to $777,941 for the same
        period in 2006, which included $763,000 of common stock issued for services
        to
        consultants.  During the three months ended June 30, 2007, marketing,
        general and administrative expenses were $213,412 compared to $83,539 for
        the
        three months ended June 30, 2006.  The significant increase in 2007 is
        attributable primarily to $200,000 of common stock issued for services including
        $120,000 in compensation expense for Joseph Oliverio, the Company’s Chief
        Executive Officer.
 
 Interest
          income for the three months ended June 30, 2006 of $56,319 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 June 30,
          2007.  Interest expense on notes payable was $7,718 and $3,250 for the
          three months ended June 30, 2007 and 2006, respectively.  Other
          expense, net for the three months ended June 30, 2006 was $24,493 and included
          a
          $25,000 settlement payment to a former officer of the Company’s
          subsidiary  Cipher Multimedia Inc.  For the comparable
          period in 2007, the Company recorded miscellaneous income of
          $189.
  **Comparison
        of the Results of Operations for the Six Months ended June 30, 2007 and
        2006**
 
 The
        Company had net losses of $319,657 and $819,040 for the six months ended
        June
        30, 2007 and 2006, respectively.  The significantly larger loss in
        2006 is attributable in large part to higher operating
        expenses.  Operating expenses for the six months ended June 30, 2006
        were $611,884 higher than the same period in 2007.
 
 Revenues
        for the six months ended June 30, 2007 were $48,209 compared to $142,595
        during
        the six months ended June 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.  Revenues for the six months ended June 30, 2006 include
        approximately four months of scans.  Operations at BIMC began in late
        February 2006; however the first billings did not occur until April of that
        year.
 
 Gross
        loss of for the six months ended June 30, 2007 was $49,719 compared to $24,555
        for the same period in 2006.  For the six months ended June 30, 2007
        and 2006, costs of revenues were $97,928 and $167,150.  The larger
        gross loss in 2007 is attributed in large part to the low number of scans
        performed during the period.
 
 Operating
        expenses decreased to $273,274 for the six months ended June 30, 2007 from
        $885,158 for the same period in 2006. Professional fees for the six months
        ended
        June 30, 2007 were $12,358 compared to $794,627 for the same period in 2006,
        which included $763,000 of common stock issued for services to
        consultants.  During the six months ended June 30, 2007, marketing,
        general and administrative expenses were $260,916 compared to $90,531 for
        the
        six months ended June 30, 2006.  The significant increase in 2007 is
        attributable primarily to $230,000 of common stock issued for services including
        $150,000 in compensation expense and $80,000 in consulting fees. The company
        did
        not issue any common stock for marketing or general and administrative services
        during the six months ended June 30, 2006.
 
 Interest
        income for the six months ended June 30, 2006 of $124,861 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 six months ended June 30,
        2007.  Interest expense on notes payable was $15,985 and $10,328 for
        the six months ended June 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. Other expense,
        net for the six month ended June 30, 2006 was $23,860 and included a $25,000
        settlement payment to a former officer of the Company’s subsidiary Cipher
        Multimedia Inc.  Other income for the six months ended June 30, 2007
        includes the reversal of previously recorded accrued interest on obligations
        that were settled in full during the period.
  14
 *Table
            of Contents*
  FORM
                10-QSB
              JUNE
                  30, 2007
  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 income of $8,115 for
          the three
          and six months ended June 30, 2007.
 **Financial
        Condition**
 
 The
        Company had cash and cash equivalents of $192,918 and accounts receivable
        of
        $188,388 on June 30, 2007.  On the same date, accounts payable and
        accrued liabilities outstanding totaled $281,548.  In July 2007 the
        Company received reimbursements from managed health care payers including
        Medicare and Medicaid in the amount of $108,000.  These reimbursements
        are for PET scans that were performed as far back as March 2006. After working
        through a number of procedural 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 and cash flow. The Company continues to be dependent upon INP
        and
        PET scanning at Beth Israel as its sole source of revenue.
 
 The
        $400,000 equity investment by Solaris Opportunity Fund, L.P will allow the
        Company to pay down a significant portion of its outstanding debt to affiliates
        and operating payables.
  The
        Company is dependent upon the success of INP and the PET scanning at the
        Beth
        Israel facility and/or additional fund through debtor equity financings to
        resolve liquidity issues and allow it to continue to operate as a going
        concern.
 
 On
        June
        30, 2007 the company had an accumulated deficit of $2,278,380 and total equity
        of $945,652.
  15
 *Table
            of Contents*
 FORM
                  10-QSB
                JUNE
                    30, 2007
  **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
                JUNE
                    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 June 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 June 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
                JUNE
                    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**
  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 with Julia Rzeppa as President and Chairman, Corey Conn as Treasurer
        and Director and Domenic Hanzely as Vice President of Product Development
        and
        Chief Technology officer.  On March 14, 2007, Cipher settled
        obligations with its two largest creditors by retiring $148,973 in obligations
        to Patrick Rooney, the Registrant’s former chairman and Chief Executive officer
        and Cipher’s founder, for 7,448,673 shares of Cipher’s common stock, and
        retiring $35,750 in exchange for the issuance of 1,787,500 shares of Cipher’s
        common stock.  On March 20, 2007, realizing that Cipher’s software
        encryption business no longer fit the Registrant’s business model of medical
        imaging services, the Registrant’s Board of Directors resolved to spin off the
        3,513,200 shares of Cipher common stock held by the Registrant as a special
        dividend to its Shareholders of record as of March 26, 2007
 
 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 and an affiliate of the Company.
 
 **ITEM
        6. Exhibits**
 
 **(a)  Exhibit
        Index**
 
 Exhibit
              Description
                  of the Exhibit
  31.1
              Chairman
                  of the Board Certification of Periodic Financial Report Pursuant
                  to
                  Section 302  of the Sarbanes-Oxley Act of
                  2002.
  31.2
              Chief
                  Financial Officer Certification of Periodic Financial Report Pursuant
                  to
                  Section 302  of the Sarbanes-Oxley Act of
                  2002.
  32.1
              Chairman
                  of the Board Certification Pursuant to 18 U.S.C. Section 1350,
                  as adopted
                  pursuant to Section 906 of the Sarbanes-Oxley Act of
                  2002.
  32.2
              Chief
                  Financial Officer Certification Pursuant to 18 U.S.C. Section 1350,
                  as
                  adopted pursuant to Section 906 of the Sarbanes Oxley Act of
                  2002.
  18
 *Table
            of Contents*
  FORM
                10-QSB
              JUNE
                  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, in the City of New York, State
        of
        New York on August 13, 2007.
 
 Imagin
        Molecular Corporation
 
 Date:     August
                  13, 2007
              
              /s/
                  Joseph G. OliverioJoseph
                  G. OliverioChief
                  Executive Office, DirectorDate:     August
                  13, 2007
              
              /s/
                  Corey N. ConnCorey
                  N. ConnChief
                  Financial Officer
 
 
 **EXHIBIT
        INDEX**
 
 Exhibit
              Description
                  of the Exhibit
  31.1
              Chairman
                  of the Board Certification of Periodic Financial Report Pursuant
                  to
                  Section 302 of the Sarbanes-Oxley Act of
                  2002.*
  31.2
              Chief
                  Financial Officer Certification of Periodic Financial Report Pursuant
                  to
                  Section 302 of the Sarbanes-Oxley Act of
                  2002.*
  32.1
              Chairman
                  of the Board Certification Pursuant to 18 U.S.C. Section 1350,
                  as adopted
                  pursuant to Section 906 of the Sarbanes-Oxley Act of
                  2002.#
  32.2
              Chief
                  Financial Officer Certification Pursuant to 18 U.S.C. Section 1350,
                  as
                  adopted pursuant to Section 906 of the Sarbanes Oxley Act of
                  2002.#
  *
        Filed
        herewith
  #
        Furnished herewith
   19