UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended

JUNE 30, 2009

o	TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the transition period from ___________________________ to ___________________________

Commission file number 000-23873

IMAGIN MOLECULAR CORPORATION

(Exact Name of Registrant as specified in its charter)

Delaware	13-4099008
(State or Other Jurisdiction of Incorporation or Organization)	(IRS Employer Identification No.)

3 Grant Square, #315 Hinsdale, Illinois	60521
(Address of Principal Executive Offices)	(Zip Code)

Issuer’s Telephone Number, Including Area Code: (630) 230-8734

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ¨ No ¨

Indicate by check mark whether the registrant is a larger accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check one)

Large accelerated filer ¨	Accelerated filer ¨
Non-accelerated filer ¨	Smaller reporting company Q

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No Q

The numbers of shares outstanding of each of the issuer's classes of common equity, as of August 14, 2009, are as follows:

Class of Securities		Shares Outstanding
Common Stock, $0.001 par value		73,663,284

FORM 10-Q

JUNE 30, 2009

IMAGIN MOLECULAR CORPORATION

FOR THE QUARTER ENDED JUNE 30, 2009

TABLE OF CONTENTS

INDEX	Page

PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS	3

Consolidated Balance Sheet at June 30, 2009 (unaudited) and December 31, 2008	3

Consolidated Statements of Operations for the three and six months ended June 30, 2009 and 2008 (unaudited)	4

Consolidated Statements of Cash Flows for the six months ended June 30, 2009 and 2008 (unaudited)	5

Notes to Consolidated Financial Statements (unaudited)	7

ITEM 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	12

ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	14

ITEM 4 - CONTROLS AND PROCEDURES	14

PART II-OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS	15

ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	15

ITEM 3 - DEFAULTS UPON SENIOR SECURITIES	15

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	15

ITEM 5 - OTHER INFORMATION	15

ITEM 6 – EXHIBITS	15

Table of Contents

FORM 10-Q

JUNE 30, 2009

PART 1 – FINANCIAL INFORMATION

ITEM 1. Financial Statements

IMAGIN MOLECULAR CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

ASSETS	June 30, 2009 (unaudited)			December 31, 2008
Current assets:
Cash	$	26		$	942
Due from affiliate		21,140			--
Machine held for sale		179,983			--

Total current assets		201,149			942

Property and equipment, net		--			183,153

Other assets:
Investment in securities of Positron Corporation		338,648			376,167

Total assets	$	539,797		$	560,262

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable	$	63,946		$	64,046
Advances from shareholder		5,200			5,200
Accrued expenses		624,830			280,152
Current portion of promissory note		182,710			182,710
Due to affiliate		50,364			3,860

Total current liabilities		927,050			535,968

Majority interest in consolidated subsidiary		230,058			230,058

Total liabilities		1,157,108			766,026

Stockholders’ deficit:
Preferred Stock, $0.001 par value; 5,000,000 shares authorized		--			--
Common stock, $0.001 par value; 95,000,000 shares authorized, 94,443,284 shares issued, and 93,663,284 shares outstanding		94,443			93,663
Additional paid-in capital		3,667,014			3,628,794
Accumulated deficit		(3,998,468	)		(3,547,921	) )
Treasury stock – 20,000,000 shares		(380,300	)		(380,300	)

Total stockholders’ deficit		(617,311	)		(205,764	)

Total liabilities and stockholders’ deficit	$	539,797		$	560,262

See accompanying notes to the financial statements.

Table of Contents

FORM 10-Q

JUNE 30, 2009

IMAGIN MOLECULAR CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended						Six Months Ended
	June 30, 2009			June 30, 2008			June 30, 2009			June 30, 2008

Revenues:	$	--		$	153,000		$	--		$	306,000

Costs of revenues:		--			90,315			90,315			180,630

Gross profit (loss)		--			62,685			(90,315	)		125,370

Operating expenses:
Marketing, general and administrative		290,999			38,656			309,192			78,285

Total operating expenses		290,999			38,656			309,192			78,285

Income (loss) from operations		(290,999	)		24,029			(399,508	)		47,085

Interest income		--			23,896			--			23,896
Interest expense		(2,556	)		(6,031	)		(13,521	)		(12,868	)
Equity in losses of Positron Corporation		(20,052	)		(69,513	)		(37,519	)		(110,811	)

Total other income (expense)		(22,608	)		(51,648	)		(51,040	)		(99,783	)

Income (loss) from continuing operations before income taxes		(313,607	)		(27,619	)		((450,547	)		(52,968	)

Income taxes		--			--			--			--

Income (loss) from continuing operations		(313,607	)		(27,619	)		(450,547	)		(52,698	)

Income (loss) from discontinued operations		--			(167	)		--			4,778

Net income (loss)	$	(313,607	)	$	(27,786	)	$	(450,547	)	$	(47,920	)

Earnings (Loss) Per Share:
Basic and diluted:
From continuing operations	$	(0.0042	)	$	(0.0003	)	$	( 0.0061	)	$	( 0.0006	)
From discontinued operations	$	0.0000		$	0.0000		$	0.0000		$	0.0001
Net income (loss)	$	(0.0042	)	$	(0.0003	)	$	( 0.0061	)	$	( 0.0005	)

Weighted average common shares:		73,937,570			93,663,284			73,801,185			93,663,284

See accompanying notes to the financial statement

Table of Contents

FORM 10-Q

JUNE 30, 2009

IMAGIN MOLECULAR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	June 30, 2009			June 30, 2008

Cash flows from operating activities:
Loss from continuing operations	$	(450,547	)	$	(52,698	)

Income from discontinued operations		--			4,778

Net loss		(411,547	)		(47,920	)
Adjustment to reconcile net loss to net cash provided by (used) in operating activities
Depreciation expense		245			12,878
Loss on disposal of assets		2,925			--
Equity in losses of Positron Corporation		37,519			110,811
Common stock issued for services		39,000
Majority interest in income of subsidiary					14,600
Changes in operating assets and liabilities:
Accounts receivable		--			15,747
Interest receivable					(23,896	)
Accounts payable and accrued liabilities		344,578			(37,311	)

Net cash provided by (used in) operating activities		(26,280	)		44,909

Cash flows from investing activities:
Note receivable to related party		--			(835,000	)

Net cash used in investing activities		--			(835,000	)

Cash flows from financing activities:
Advance from affiliate		25,364			--
Payments to affiliates		--			(146,890	)
Payments of note payable		--			(52,920	)
Deposits for equity investment					200,000
Preferred stock issued		--			770,000

Net cash provided by financing activities		25,364			770,190

Net decrease in cash		(916	)		(19,901	)

Cash at beginning of period		942			24,120

Cash at end of period	$	26		$	4,219

Supplemental cash flow information:
Interest paid	$	--		$	13,931
Income taxes paid		--			--

See accompanying notes to the financial statements.

Table of Contents

FORM 10-Q

JUNE 30, 2009

IMAGIN MOLECULAR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(CONTINUED)

Supplementary Schedule of Noncash Transactions

2008

On March 10, 2008 the Company consummated a Securities Purchase and Subscription Agreements with Solaris Opportunity Fund, L.P. (“Solaris”). Under the Agreement Solaris acquired 1,850,000 shares of the Registrant's Series A Convertible Preferred Stock for $700,000. The preferred shares are convertible into a total of 37,000,000 shares of Imagin common stock. At June 30, 2008, Solaris had paid the Company $300,000 for the preferred shares and owed the Company $400,000. The Company has recorded the amount owed as a reduction of stockholders’ equity at June 30, 2008. On November 18, 2008, the Company, Solaris. Solaris Management, LLC and Positron Corporation (“Positron”) executed and consummated a Securities Exchange Agreement whereby the Company transferred and assigned all of its rights title and interest to convertible promissory notes and pledged shares to Solaris in exchange for the return of 20,000,000 shares of the Company’s common stock and the Series A Preferred Stock, to be retired and cancelled and the retirement and satisfaction of any obligations to the advances made in the amount of $200,000 to the Company by Solaris

Table of Contents

IMAGIN MOLECULAR CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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”) operated Imagin’s original business, a digital distribution solution and marketing company which secures and allows access to digital content through proprietary encoding, encryption and authorization technology.

In 2005 Imagin’s Board of Director’s resolved to change the Company’s principal operations from multimedia encryption technology to positron emission tomography and medical imaging. Operations began in the second quarter of 2006 and the Company no longer operated in the development stage. 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 The results of Cipher are presented as discontinued operations in the Company’s consolidated statements of operations and cash flows. 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.

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.

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.

INP also asserted other claims in the aggregate amount of $318,144 and ceased supplying rubidium to BIMC thereafter. Also in the first quarter 2009, BIMC asserted that INP had breached the Agreement and demanded that INP remove the scanner located therein. In August, 2009, BIMC made payment for scans and services rendered in December 2008 in the amount of $51,000. In April, 2009, INP entered into an executed agreement to sell the scanner with an unrelated third party. However, the purchaser has not yet demanded delivery of the device.

Table of Contents

NOTE 2. BASIS OF PRESENTATION

The accompanying unaudited interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X of the Securities and Exchange Commission for Interim Reporting. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.

In the opinion of Management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation for the interim periods have been included. Operating results for the three month period ended June 30, 2009, are not necessarily indicative of the results that may be expected for the year ending December 31, 2009. The accompanying financial statements and the information included under the heading “Management’s Discussion and Analysis of Financial Position and Results of Operations” should be read in conjunction with our company’s audited financial statements and related notes included in our company’s Form 10-K for the year ended December 31, 2008.

NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

For a summary of significant accounting policies (which have not changed from December 31, 2008), see the Company’s Annual Report on Form 10-K for the year ended December 31, 2008.

Principles of Consolidation and Nature of Operations

For the periods ended June 30, 2009 and 2008, the financial statements include the accounts and transactions of Imagin Molecular Corporation and its subsidiaries Cipher Multimedia, Inc. (a discontinued operation), Positron Acquisition Corp. and Imagin Nuclear Partners Corporation. All Intercompany transactions and balances have been eliminated.

Recently Issued Accounting Pronouncements

In June 2009, the FASB issued SFAS No. 168, “The ‘FASB Accounting Standards Codification’ and the Hierarchy of Generally Accepted Accounting Principles, a replacement of FASB Statement No. 162” (“SFAS 168”). SFAS 168 establishes the “FASB Accounting Standards Codification” (“Codification”), which officially launched July 1, 2009, to become the source of authoritative U.S. generally accepted accounting principles (“GAAP”) recognized by the FASB to be applied by nongovernmental entities, superseding existing FASB, American Institute of Certified Public Accountants (“AICPA”), Emerging Issues Task Force (“EITF”), and related accounting literature. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal securities laws are also sources of authoritative U.S. GAAP for SEC registrants. SFAS 168 reorganizes the previously issued GAAP pronouncements into accounting topics and displays them using a consistent structure. The subsequent issuances of new standards will be in the form of Accounting Standards Updates that will be included in the Codification. SFAS 168 will be effective for the Company as of the interim period ended September 30, 2009. As the Codification was not intended to change or alter existing GAAP, it will not have an impact on the Company’s consolidated financial statements. The only impact will be that any future references to authoritative accounting literature will be in accordance with SFAS 168 and the new numbering system prescribed by the Codification.

In May 2009, the FASB issued SFAS No. 165, “Subsequent Events” (“SFAS 165”). This standard is intended to establish general standards of accounting and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. SFAS 165 requires issuers to reflect in their financial statements and disclosures the effects of subsequent events that provide additional evidence about conditions at the balance sheet date. Disclosures should include the nature of the event and either an estimate of its financial effect or a statement that an estimate cannot be made. This standard also requires issuers to disclose the date through which they have evaluated subsequent events and whether the date corresponds with the release of their financial statements. The Company adopted SFAS 165 as of the interim period ended June 30, 2009. As the requirements under SFAS 165 are consistent with its current practice, the implementation of this standard did not have an impact on the Company’s consolidated financial statements. The Company has evaluated subsequent events through August 14, 2009, the date it filed this quarterly report on Form 10-Q.

In March 2008, the FASB issued FASB Statement No. 161 Disclosures about Derivative Instruments and Hedging Activities an amendment of FASB Statement No. 133 (“SFAS No. 161”), which changes the disclosure requirements for derivative instruments and hedging activities. Pursuant to SFAS No. 161, Entities are required to provide enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. SFAS No. 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008 with early application encouraged. SFAS No. 161 encourages but does not require disclosures for earlier periods presented for comparative purposes at initial adoption. In years after initial adoption, this Statement requires comparative disclosures only for periods subsequent to initial adoption. The adoption of SFAS No. 161 did not have a material impact on the financial results of the Company.

Table of Contents

In April 2008, the FASB issued FSP No. 142-3, Determination of the Useful Life of Intangible Assets. FSP 142-3 amends the factors an entity should consider in developing renewal or extension assumptions used in determining the useful life of recognized intangible assets under SFAS 142, Goodwill and Other Intangible Assets, and adds certain disclosures for an entity’s accounting policy of the treatment of the costs, period of extension, and total costs incurred. FSP 143-3 must be applied prospectively to intangible assets acquired after January 1, 2009. The Company does not expect the adoption of FSP142-3 to have a material impact on the financial results of the Company.

Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying financial statements.

NOTE 4. 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 $3,998,468 and total stockholders’ deficit of $617,311 as of June 30, 2009. The Company will need to raise additional capital to continue operations.

The Company has made a significant investment into the securities of Positron Corporation, a publicly owned Texas Corporation and affiliate of the Company (“Positron”). As of June 30, 2009, the Company held 4,000,000 shares of Positron’s common stock and 722,358 shares of Positron’s Series B Convertible Preferred stock.

While the Company is expending its best efforts to achieve its operating goals, 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. Furthermore, there can be no assurance that amounts invested in and advanced to Positron Corporation will ever be realized.

NOTE 5. MACHINE HELD FOR SALE

On December 31, 2008, INP advised Beth Israel Medical Center that it had breached the Equipment Lease Agreement (the “Agreement”) for certain positron emission tomography (“PET”) scanning cameras and related radiologic equipment (the “Equipment”), for failure to make certain payments under the Agreement (See Note 9). INP also asserted other claims in the aggregate amount of $318,144 and ceased supplying rubidium to BIMC thereafter. Additionally, BIMC asserted that INP had breached the Agreement and demanded that INP remove the scanner located therein. In August, 2009, BIMC made payment for scans and services rendered in December 2008 in the amount of $51,000.

On May 1, 2009, INP and Positron Corporation (“Positron”) executed a Bailment Agreement (the “Bailment”) whereby, INP shall provide the Equipment to Positron for the purpose of remanufacturing, reconditioning, remarketing and reselling. Positron will take the Equipment subject to the perfected security interest of Cherry Creek Asset-Backed Income Fund II, LP (“Cherry Creek”) (See note 8). Pursuant to the terms of the Bailment, Positron is obligated to instruct any buyer of the Equipment to remit any payment to the Company’s legal counsel for disbursement to pay off the note due Cherry Creek pursuant to a letter agreement dated May, 1 2009 between INP and Cherry Creek.

The Equipment, which was previously reported as property and equipment, net of accumulated depreciation has been reclassified to a current asset as an asset being held for sale. The Company did not record depreciation related to the Equipment during the six months ended June 30, 2009. At June 30, 2009, the net book value of the Equipment was $179,983. Management believes that the full amount of the machine is recoverable and thus no reserve is required at June 30, 2009. INP has received an executed agreement to purchase the scanner for the purchase price of $_____. However, the purchaser has not yet demanded delivery of the device.

NOTE 6. PROPERTY AND EQUIPMENT

Property and equipment at June 30, 2009 and December 31, 2008 consisted of the following:

	June 30,2009		December 31,2008
Machinery and equipment	$	--	$	234,760
Computers and software		2,941		9,442
Subtotal		2,941		244,202
Less: accumulated depreciation		(2,941)		(61,049)
Total	$	--	$	183,153

Table of Contents

NOTE 7. INVESTMENT IN SECURITIES OF POSITRON CORPORATION

At June 30, 2009, the Company owned 4,000,000 shares of Positron Corporation’s common stock, representing 2.34% of the outstanding common stock, and 722,358 of Positron’s Series B Preferred Shares or approximately 11% of the class. The Company accounts for its investment in the securities of Positron Corporation under the equity method of accounting. Based on its percentage of ownership of Positron common stock, for the three months ended June 30, 2009 and 2008, the Company recorded equity in the losses of Positron of $20,052 and $69,513, respectively. For the six months ended June 30, 2009 and 2008, the Company recorded equity in the losses of Positron of $37,519 and $110,811, respectively, reducing the carrying value of the Positron securities to $338,648 at June 30, 2009. At June 30, 2009, the Company’s 4,000,000 shares of Positron’s common stock had an aggregate market value of $180,000. Management believes that the combined fair value of the common and the preferred exceeds the carrying value at June 30, 2009 and therefore the investment has not been impaired.

Summarized financial information for Positron for the six months ended June 30, 2009 and 2008 follows:

	Six Months Ended June 30, 2009			Six Months Ended June 30, 2008
Revenues	$	701,000		$	1,193,000
Loss from operations		(1,373,000	)		(2,225,000	)
Net loss		(1,675,000	)		(3,116,000	)
Loss per share	$	(0.009	)	$	(0.028	)
Weighted average shares outstanding		185,402,000			111,251,000

	June 30, 2009
Current assets	$	1,079,000
Total assets		1,113,000
Current liabilities		7,407,000
Total liabilities		7,935,000
Stockholders’ deficit		(6,822,000	)
Common shares outstanding		209,790,384

The underlying common shares related to anti-dilutive securities not included in Positron’s net loss per share calculation as of June 30, 2009 were as follows:

Convertible Series A Preferred Stock			457,000
Convertible Series B Preferred Stock			683,819,000
Convertible Series G Preferred Stock			6,939,000
Convertible Series S Preferred Stock			1,000,000,000
Stock Warrants			131,838,000
Stock Options			19,425,000
			1,842,478,000

NOTE 8. NOTES PAYABLE

On September 11, 2006, the Company issued a 12% secured promissory note to Cherry Creek Capital Partners (“Cherry Creek”), an unrelated party, in the amount of $300,000. Pursuant to the terms of the note, commencing on October 1, 2006, as amended the Company made a payment of $17,566 in November 2006 and is required to make 30 consecutive monthly installments of $11,142, including interest, commencing in July 2007. 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, 2009 the principal balance of the promissory note is $182,710, all of which is included in current liabilities. Accrued interest on the outstanding balance was $23,068 at June 30, 2009.

The Company is in default pursuant to the terms of the promissory note. On March 16, 2009, Cherry Creek issued a Notice of Right To Cure and Demand for Payment of all past due amounts. On May 1, 2009, the Company and Cherry Creek executed a letter agreement (the “Agreement”) whereby, Cherry Creek acknowledges that Positron Corporation, in its capacity as remarketing agent (see Note 5), has taken possession of the equipment, defined in Note 9, that collateralizes the note. Pursuant to the terms of the Agreement, Positron shall instruct any buyer of the equipment to remit all payments to the Company’s legal counsel for disbursement to Cherry Creek for full payment of the note and all accrued interest.

Table of Contents

NOTE 9. EQUIPMENT LEASE AGREEMENT

In May 2007, the Company’s wholly-owned subsidiary, INP and Beth Israel Medical Center (“BIMC”) executed an Equipment Lease Agreement (the “Agreement”) for certain positron emission tomography (“PET”) scanning cameras and related radiologic equipment (the “Equipment”). Under the terms of the Agreement, BIMC will lease the equipment for use in its on site PET Lab where it performs PET scans on its patients. The initial lease term is three (3) years commencing on June 4, 2007 (the “Effective Date”).

On December 31, 2008, INP advised BIMC that it had breached the Agreement for failure to make certain payments under the Agreement. In addition, INP advised BIMC that it was seeking payment of $188,700 for 102 inpatient scans that BIMC had requested it perform on behalf of BIMC patients and had failed to reimburse INP for. Due to the uncertainty surrounding the reimbursement of the scans, the Company had either reserved against revenue amounts previously recorded or did not record these scans as revenue. In August, 2009, BIMC made payment for scans and services rendered in December 2008 in the amount of $51,000.

INP also asserted other claims in the aggregate amount of $318,144 and ceased supplying rubidium to BIMC thereafter. BIMC asserted that INP had breached the Agreement and demanded that INP remove the scanner located therein. On May 1, 2009, INP executed a bailment agreement with Positron Corporation, the terms of which provide Positron with possession of the Equipment for the purpose of remanufacturing, reconditioning, remarketing and reselling.

NOTE 10. INCOME TAXES

The Company has incurred losses since its inception and, therefore, has not been subject to federal income taxes. As of June 30, 2009, the Company had net operating loss (“NOL”) carryforwards for income tax purposes of approximately $4,200,000, which expire in 2022 through 2028. Under the provisions of Section 382 of the Internal Revenue Code the greater than 50% ownership change of the Company’s common stock limits the Company’s ability to utilize its NOL carryforwards to reduce future taxable income and related tax liabilities.

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

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

Deferred income taxes consist of the following as of June 30, 2009 and December 31, 2008:

	June 30, 2009		December 31, 2008


Deferred tax assets
Net operating loss carryforwards	$	1,409,000	$	1,282,000
Accounts receivable allowance		17,000		17,000
Unrealized loss on investment impairment and equity in losses of Positron Corporation		425,000		412,000
		1,851,000		1,711,000
Valuation allowance		(1,851,000)		(1,711,000)
	$	-	$	-

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

NOTE 11. SUBSEQUENT EVENT

On August 14, 2009, the Company authorized the issuance of options to purchase 10,000,000 shares of its Common Stock to Corey Conn, its Chief Financial Officer, and Neil Sy, its Chairman, each. The Options are exercisable at the price of $0.015 per share and expire on December 31, 2014.

Table of Contents

ITEM 2. Management's Discussion And Analysis Of Financial Condition And Results Of Operation

Relationship with Beth Israel Hospital

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 was three (3) years commencing on June 4, 2007 (the “Effective Date”).

Comparison of the Results of Operations for the Three Months ended June 30, 2009 and 2008

During the three months ended June 30, 2009 the Company had a net loss of $313,607 compared to a net loss of $27,786 for the three months ended June 30, 2008.

The Company did not record any revenues for the three months ended June 30, 2009. On December 31, 2008, INP advised BIMC that it had breached the Agreement for failure to make certain payments under the lease agreement. The Company has ceased supplying rubidium required to perform the scans. Revenues for the three months ended June 30, 2008 were $153,000.

In March 2009, the Company terminated the rubidium supply agreement. Under the terms of its agreement with its rubidium supplier, the Company was required give a 90 day notice prior to terminating the agreement. During the 90 day termination period the Company was required to continue its purchase of rubidium. The expense incurred subsequent to termination has been classified as an operating expense. For the three months ended June 30, 2008, costs of revenues were $90,315, which represents its supply of rubidium through the termination date.

Operating expenses were $290,999 and $38,656 for the three months ended June 30, 2009 and 2008, respectively. For the three months ended June 30, 2009, operating expenses include approximately $180,000 of costs due pursuant to termination provisions under the Company’s rubidium supply agreement. In prior periods, all rubidium cost were included as cost of revenues. During the three months ended June 30, 2009 the Company issued $39,000 of common stock for consulting services. Other operating costs incurred consisted primarily of professional fees.

Interest expense on notes payable was $2,556 and $6,031 for the three months ended June 30, 2009 and 2008, respectively. The decrease is due to a decrease in the principal balance of the Cherry Creek loan.

For the three months ended June 30, 2009 and 2008, the Company recorded equity in the losses of Positron of $20,052 and $69,513, respectively.

Comparison of the Results of Operations for the Six Months ended June 30, 2009 and 2008

During the six months ended June 30, 2009 the Company had a net loss of $450,547 compared to a net loss of $47,920 for the six months ended June 30, 2008.

The Company did not record any revenues during the six months ended June 30, 2009. On December 31, 2008, INP advised BIMC that it had breached the Agreement for failure to make certain payments under the lease agreement. The Company has ceased supplying rubidium required to perform the scans. Revenues for the six months ended June 30, 2008 were $306,000.

For the six months ended June 30, 2009 and 2008, costs of revenues were $90,315 and $180,630. Despite not performing any scans in 2009, the Company did incur the cost of the rubidium. In March 2009, the Company terminated the rubidium supply agreement. Under the terms of its agreement with its rubidium supplier, the Company was required give a 90 day notice prior to terminating the agreement. During the 90 day termination period the Company was required to continue its purchase of rubidium. The expense incurred subsequent to termination has been classified as an operating expense.

Table of Contents

Operating expenses were $309,192 and $78,285 for the six months ended June 30, 2009 and 2008, respectively. For the six months ended June 30, 2009, operating expenses include approximately $180,000 of costs due pursuant to termination provisions under the Company’s rubidium supply agreement. In prior periods, all rubidium cost were included as cost of revenues. During the six months ended June 30, 2009, the Company issued $39,000 of common stock for consulting services. Operating costs incurred consisted primarily of professional fees which approximated $51,000 and $57,000 during the six months ended June 30, 2009 and 2008, respectively.

Interest expense on notes payable was $13,521 and $12,868 for the six months ended June 30, 2009 and 2008, respectively. The increase is due to interest accrued on the outstanding balance on the note due to Cherry Creek. The Company did not make any principal payments during the six months ended June 30, 2009.

For the six months ended June 30, 2009 and 2008, the Company recorded equity in the losses of Positron of $37,519 and $110,811, respectively.

Liquidity and Capital Resources

At June 30, 2009, the Company had current assets of $201,149 and current liabilities of $927,050 compared to December 31, 2008 when the Company had current assets and current liabilities of $942 and $535,968, respectively. The Company reclassified to a current asset, its PET scan machine that was being leased by BIMC. The Company is currently seeking a buyer for the machine and has entered into a bailment agreement with Positron Corporation for that purpose. The net book value of the machine included in current assets was $179,983 at June 30, 2009. The increase in current liabilities is due primarily to the increase in accrued expenses due under the rubidium supply agreement.

Current liabilities at June 30, 2009 included the Cherry Creek note payable of $182,710. The Company is in default pursuant to the terms of the promissory note. On March 16, 2009 Cherry Creek issued a Notice of Right To Cure and Demand for Payment of all past due amounts. On May 1, 2009, the Company and Cherry Creek executed a letter agreement (the “Agreement”) whereby, Cherry Creek acknowledges that Positron Corporation, in its capacity as remarketing agent, has taken possession of the equipment that collateralizes the note. Pursuant to the terms of the Agreement, Positron shall instruct any buyer of the equipment to remit all payments to the Company’s legal counsel for disbursement to Cherry Creek for full payment of the note and all accrued interest.

Net cash used in operating activities during the six months ended June 30, 2009 was $26,280 compared to net cash provided by operating activities of $44,909 during the six months ended June 30, 2008. No scans were performed at BIMC during the six months ended June 30, 2009 and therefore no revenue was recorded thus resulting in a decrease in cash provided.

The Company did not have any investing activities during the six months ended June 30, 2009. During the six months ended June 30, 2008, the Company used $835,000 in investing activities related to a related party note receivable.

Net cash provided by financing activities was $25,364 and $770,190 for the six months ended June 30, 2009 and 2008, respectively. During the six months ended June 30, 2008, the Company issued preferred stock for $770,000.

On June 30, 2009 the Company had an accumulated deficit of $3,959,468 and total stockholders’ deficit of $617,311. The Company is dependent upon the sale or lease of its PET machine and additional debt or equity financings to resolve the Company’s liquidity issues and allow it to continue to operate as a going concern.

Effects of Inflation

The Registrant believes that the relatively low 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.

Table of Contents

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

The Company is not exposed to market risk related to interest rates or foreign currencies.

ITEM 4. Controls And Procedures

Disclosure Controls and Procedures

Based upon an evaluation of the effectiveness of disclosure controls and procedures, our Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO") have concluded that as of the end of the period covered by this Quarterly Report on Form 10-Q our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act) were not effective to provide reasonable assurance that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified by the rules and forms of the SEC and is accumulated and communicated to management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure. As reported in our Annual Report on Form 10-K for the year ended December 31, 2008, the Company’s chief executive and financial officer has determined that there are material weaknesses in our disclosure controls and procedures.

The material weaknesses in our disclosure control procedures are as follows:

Lack of formal policies and procedures necessary to adequately review significant accounting transactions. The Company utilizes a third party independent contractor for the preparation of its financial statements. Although the financial statements and footnotes are reviewed by our management, we do not have a formal policy to review significant accounting transactions and the accounting treatment of such transactions. The third party independent contractor is not involved in the day to day operations of the Company and may not be provided information from management on a timely basis to allow for adequate reporting/consideration of certain transactions. In the case of the Company’s recent restatement of the investment in Positron securities, a periodic review (not less than quarterly) and discussion of significant transactions (i.e. increasing advances to a related party) may have led to more timely adoption of the proper method of accounting.

Audit Committee and Financial Expert. The Company does not have a formal audit committee with a financial expert, and thus the Company lacks the board oversight role within the financial reporting process.

We intend to initiate measures to remediate the identified material weaknesses including, but not necessarily limited to, the following:

Establishing a formal review process of significant accounting transactions that includes participation of the Chief Executive Officer, the Chief Financial Officer and the Company’s corporate legal counsel.

Form an Audit Committee that will establish policies and procedures that will provide the Board of Directors a formal review process that will among other things, assure that management controls and procedures are in place and being maintained consistently.

Changes in Internal Control over Financial Reporting

As reported in our Annual Report on Form 10-K for the year ended December 31, 2008, management is aware that there a significant deficiency and a material weakness in our internal control over financial reporting and therefore has concluded that the Company’s internal controls over financial reporting were not effective as of December 31, 2008. The significant deficiency relates to a lack of segregation of duties due to the small number of employees involvement with general administrative and financial matters. The material weakness relates to a lack of formal policies and procedures necessary to adequately review significant accounting transactions.

There have not been any changes in the Company's internal control over financial reporting during the quarter ended June 30, 2009 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

Table of Contents

FORM 10-Q

SEPTEMBER 30, 2008

PART II - OTHER INFORMATION

ITEM 1. Legal Proceedings

None.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

ITEM 3. Defaults Upon Senior Securities

None.

ITEM 4. Submission of Matters to Vote of Security Holders

None.

ITEM 5. Other Information

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.

Table of Contents

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 Hinsdale, State of Illinois on August 14, 2009.

Imagin Molecular Corporation

Date: August 14, 2009	/s/ Joseph G. Oliverio
	Joseph G. Oliverio
	Chief Executive Office, Director
	(principal executive officer)

Date: August 14, 2009	/s/ Corey N. Conn
	Corey N. Conn
	Chief Financial Officer
	(principal accounting 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

IMAGIN MOLECULAR CORP 10-Q