FORM 10-QSB                                                   SEPTEMBER 30, 2003
================================================================================


                    U. S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10-QSB


   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
                                   ACT OF 1934

                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2003


                         Commission file number: 0-24092


                               [GRAPHIC  OMITTED]

                                    POSITRON



                              Positron Corporation
                               A Texas Corporation
                               I.D. No. 76-0083622
            1304 Langham Creek Drive, Suite 300, Houston, Texas 77084
                                 (281) 492-7100


Indicate  by  check mark whether the issuer (1) filed all reports required to be
filed  by  Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
past  12  months (or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing requirements for the
past  90  days.

                           Yes      X       No
                               ------------    ------------



As  of  September  30,  2003,  there  were 53,185,803 shares of the Registrant's
Common  Stock,  $  .01  par  value  outstanding.

Transitional Small Business Disclosure Format. Yes              No       X
                                                   ------------    -------------


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                                        1



FORM 10-QSB                                                          SEPTEMBER 30, 2003
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                                 POSITRON CORPORATION

                                   TABLE OF CONTENTS

                 FORM 10-QSB FOR THE QUARTER ENDED SEPTEMBER 30, 2003


                                                                                  PAGE
                                                                                 ------
                                                                               
PART I - FINANCIAL INFORMATION

       Item 1.  Condensed Financial Statements

          Condensed Balance Sheet as of September 30, 2003                           3

          Condensed Statements of Operations for the three and nine months ended
                   September 30, 2003 and 2002                                       4

          Condensed Statements of Cash Flows for the nine months ended
                   September 30, 2003 and 2002                                       5

          Selected Notes to Condensed Financial Statements                           6

       Item 2.  Management's Discussion and Analysis of Financial Condition and
                  Results of Operation                                              10

       Item 3.  Controls and Procedures                                             12

PART II - OTHER INFORMATION                                                         12

      Item 1.  Legal Proceedings

      Item 2.  Changes in Securities and Use of Proceeds

      Item 3.  Defaults Upon Senior Securities

      Item 4.  Submission of Matters to a Vote of Security Holders

      Item 5.  Other Information

      Item 6.  Exhibits and Reports on Form 8-K

Signature Page                                                                      14





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                                        2



FORM 10-QSB                                                   SEPTEMBER 30, 2003
================================================================================

                              POSITRON CORPORATION
                             CONDENSED BALANCE SHEET
                               SEPTEMBER 30, 2003
                        (IN THOUSANDS, EXCEPT SHARE DATA)
                                   (UNAUDITED)



                                                                 
ASSETS
------
Current assets:
   Cash and cash equivalents                                        $     36
   Accounts receivable, net                                              104
   Inventories                                                         1,264
   Prepaid expenses                                                       35
   Other current assets                                                   31
                                                                    ---------

          Total current assets                                         1,470

   Property and equipment, net                                           243
                                                                    ---------

                      Total assets                                  $  1,713
                                                                    =========

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
   Accounts payable, trade and accrued liabilities                  $  1,723
   Customer deposits                                                     140
   Unearned revenue                                                       35
   Current portion of capital lease obligation                             8
                                                                    ---------

          Total current liabilities                                    1,906

Stockholders' equity (deficit):
   Series A Preferred Stock:  $1.00 par value; 8% cumulative,
     convertible, redeemable; 5,450,000 shares authorized;
     510,219 shares issued and outstanding                               510
   Common Stock:  $0.01 par value; 100,000,000 shares authorized;
     53,245,959 shares issued and 53,185,803 shares outstanding          532
   Additional paid-in capital                                         55,183
   Subscription receivable                                               (30)
   Accumulated deficit                                               (56,373)
   Treasury Stock:  60,156 shares at cost                                (15)
                                                                    ---------

          Total stockholders' equity (deficit)                          (193)
                                                                    ---------

                      Total liabilities and stockholders' equity    $  1,713
                                                                    =========


                           See accompanying notes




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                                        3



FORM 10-QSB                                                                  SEPTEMBER 30, 2003
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                                      POSITRON CORPORATION
                               CONDENSED STATEMENTS OF OPERATIONS
                             (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                          (UNAUDITED)


                                                Three Months Ended        Nine Months Ended
                                             ------------------------  ------------------------
                                              Sept. 30,    Sept. 30,    Sept. 30,    Sept. 30,
                                                2003         2002         2003         2002
                                             -----------  -----------  -----------  -----------
                                                                        

Revenues:
   System sales                              $       34   $       --   $    3,459   $    3,319
   Upgrades                                          --           --          265           --
   Service and component                            342          333        1,020          994
                                             -----------  -----------  -----------  -----------

          Total revenues                            376          333        4,744        4,313

Costs of sales and services:
   System sales                                     155           --        3,171        3,272
   Upgrades                                          --           --           95           --
   Service, warranty and component                  173          136          517          437
                                             -----------  -----------  -----------  -----------

          Total costs of sales and services         328          136        3,783        3,709
                                             -----------  -----------  -----------  -----------

          Gross profit                               48          197          961          604

Operating expenses:
   Research and development                         168          272          620          804
   Selling and marketing                            101           95          277          337
   General and administrative                       332          459        1,046        1,307
                                             -----------  -----------  -----------  -----------

          Total operating expenses                  601          826        1,943        2,448
                                             -----------  -----------  -----------  -----------

          Loss from operations                     (553)        (629)        (982)      (1,844)

Other income (expense)
   Gain on sale of Cardiac PET Software              --           --        2,376           --
   Interest income                                   --           --           --            2
   Interest expense                                  --          (52)        (100)        (259)
   Deposit forfeiture                                --           --           --           50
                                             -----------  -----------  -----------  -----------

          Total other income (expense)               --          (52)       2,276         (207)
                                             -----------  -----------  -----------  -----------

Net income (loss)                            $     (553)  $     (681)  $    1,294   $   (2,051)
                                             ===========  ===========  ===========  ===========


Basic and diluted income (loss) per common
share                                        $    (0.01)  $    (0.01)  $     0.02   $    (0.03)


Weighted average number of shares
outstanding
     Basic                                       53,179       62,173       59,109       62,173
     Diluted                                     53,179       62,173       60,586       62,173


                                     See accompanying notes


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                                        4



FORM 10-QSB                                                      SEPTEMBER 30, 2003
===================================================================================

                                POSITRON CORPORATION
                         CONDENSED STATEMENTS OF CASH FLOWS
                                   (IN THOUSANDS)
                                    (UNAUDITED)


                                                               Nine Months Ended
                                                           ------------------------
                                                            Sept. 30,    Sept. 30,
                                                              2003         2002
                                                           -----------  -----------
                                                                  

Cash flows from operating activities:
   Net income (loss)                                       $    1,294   $   (2,051)
   Adjustments to reconcile net income (loss) to net cash
       used in operating activities
       Depreciation                                                65           69
       Amortization                                                --          100
       Gain on sale of Cardiac PET Software                    (2,376)          --
       Changes in operating assets and liabilities:
         Accounts receivable                                      975          (81)
         Inventory                                              2,020        1,633
         Prepaid expenses                                          48           28
         Other current assets                                      52           45
         Accounts payable and accrued liabilities                 272           32
         Customer deposits                                     (2,248)         (42)
         Unearned revenue                                        (143)        (254)
                                                           -----------  -----------

        Net cash used in operating activities                     (41)        (521)

Cash flows from investing activities:
   Capital expenditures                                            (5)          (7)
                                                           -----------  -----------

        Net cash used in investing activities                      (5)          (7)

Cash flows from financing activities:
   Repayment of capital lease obligation                          (25)         (29)
                                                           -----------  -----------

        Net cash used in financing activities                     (25)         (29)
                                                           -----------  -----------

Net decrease in cash and cash equivalents                         (71)        (557)

Cash and cash equivalents, beginning of period                    107          635
                                                           -----------  -----------

Cash and cash equivalents, end of period                   $       36   $       78
                                                           ===========  ===========


                             See accompanying notes



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                                        5

FORM 10-QSB                                                   SEPTEMBER 30, 2003
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                              POSITRON CORPORATION
                SELECTED NOTES TO CONDENSED FINANCIAL STATEMENTS

1.   BASIS OF PRESENTATION
     ---------------------

     The  accompanying unaudited interim financial statements have been prepared
     in  accordance  with generally accepted accounting principles and the rules
     of  the  U.S.  Securities  and  Exchange  Commission, and should be read in
     conjunction  with  the  audited  financial  statements  and  notes  thereto
     contained  in  the  Annual Report Form 10-KSB for Positron Corporation (the
     "Company")  for  the  year  ended  December  31,  2002.  In  the opinion of
     management,  all  adjustments,  consisting of normal recurring adjustments,
     necessary  for a fair presentation of financial position and the results of
     operations  for  the  interim periods presented have been reflected herein.
     The  results  of  operations  for  interim  periods  are  not  necessarily
     indicative  of  the  results to be expected for the full year. Notes to the
     financial  statements  which  would substantially duplicate the disclosures
     contained  in  the  audited financial statements for the most recent fiscal
     year  ended  December  31,  2002, as reported in the Form 10-KSB, have been
     omitted.

     Certain  prior  period amounts have been reclassified to conform to current
     period  presentation.

2.   ACCOUNTING POLICIES
     -------------------

     REVENUE  RECOGNITION

     Revenues  from  POSICAMTM  system  contracts  are  recognized  when  all
     significant costs have been incurred and the system has been shipped to the
     customer. The Company also recognizes revenue on bill and hold transactions
     when  the  product  is completed and is ready to be shipped and the risk of
     loss  is  transferred  to the customer. In certain cases, at the customers'
     request,  the  Company  is  storing the product for a brief period of time.
     Revenues  from  maintenance  contracts  are recognized over the term of the
     contract. Service revenues are recognized upon performance of the services.


3.   SALE OF CARDIAC PET SOFTWARE
     ----------------------------

     The  Company  entered into a loan arrangement on June 29, 2001 with Imatron
     Inc.  ("Imatron"),  a  stockholder  of  the  Company,  for  the  purpose of
     borrowing  up  to  $2,000,000  to  fund operating activities. This loan was
     collateralized by substantially all the assets of the Company. Interest was
     charged  on  the outstanding principal balance at an annual rate of 10% and
     was  payable monthly. As of June 29, 2003 the principal balance of the loan
     was  $2,000,000. Principal on the loan amounting to $1,000,000 and $500,000
     was  to  be  repaid  within five (5) business days of December 31, 2001 and
     March  31, 2002, respectively. The remaining $500,000 of loan principal and
     all  unpaid  interest  was  due  and  payable  no later than June 30, 2002.

     In  conjunction  with  the  loan,  the  Company granted Imatron warrants to
     purchase 6,000,000 shares of common stock, at an exercise price of $.30 per
     share  that  were exercisable through June 30, 2006. The warrants issued to
     Imatron  had  an  approximate  value of $200,000 at the date of issue. Such
     cost  was  treated as a loan origination cost and amortized to expense over
     the  twelve-month  term  of  the note payable, using the effective interest
     method.

     Imatron  had  previously  acquired 9,000,000 shares of the Company's common
     stock on January 22, 1999. General Electric Company ("GE") acquired Imatron
     on  December  19,  2001.

     Effective  June  29,  2003,  the Company entered into a Technology Purchase
     Agreement  to  transfer  its  Cardiac  PET  Software  to GE in exchange for
     cancellation  of  the indebtedness under this loan and the surrender of the
     9,000,000  shares  of  common  stock  and the warrant to purchase 6,000,000
     shares of common stock. The Company recognized a gain of $2,376,000 related
     to the sale of this technology. This gain resulted from the cancellation of
     the  Company's  obligation for $2,000,000 in principal and accrued interest
     of  $376,000  under  the  loan.  The Company's future commitment to provide
================================================================================


                                        6

FORM 10-QSB                                                   SEPTEMBER 30, 2003
================================================================================


     assistance  to  GE  for  the purpose of fully utilizing and exploiting this
     technology,  as  well as the compensation for these services, were provided
     for  in  a  separate  service  agreement  discussed  below.

     As  part  of  the  transactions  contemplated  by  the  Technology Purchase
     Agreement,  the Company entered into a Software License Agreement. Pursuant
     to  terms  of  the  Software  License  Agreement,  the  Company received an
     irrevocable  license from GE to continue using, modifying, distributing and
     otherwise  exploiting  the  Cardiac  PET  Software  in  perpetuity.

     In  conjunction  with  the  Technology Purchase Agreement, the Company also
     entered  into  an Agreement For Services for the purpose of assisting GE in
     fully utilizing and exploiting the Cardiac PET Software. The Company agreed
     to  provide  services  for a period of six quarters (eighteen months) for a
     fee  of  $50,000 per each 3-month period during the term of this agreement.
     GE committed to pay the fee for the first two quarters of $50,000 (total of
     $100,000)  within  two  business  days  of  the July 29, 2003 and will make
     payment  of  any  subsequent  quarters  in  advance of such quarter. GE may
     terminate the Agreement For Services at any time after it has paid the fees
     for  at  least  four  quarters.

4.   INVENTORIES
     -----------

     Inventories  at  September  30,  2003  consisted  of  the  following  (in
     thousands):



                                                                      
     Raw materials                                                       $  949
     Work in progress                                                       415
                                                                         -------
         Subtotal                                                         1,364
     Less reserve for obsolescence                                         (100)
                                                                         -------
          Total                                                          $1,264
                                                                         =======



5.   ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
     ----------------------------------------

     Accounts payable and accrued liabilities at September 30, 2003 consisted of
     the  following  (in  thousands):



                             
     Trade accounts payable                                               $  485
     Accrued royalties                                                       308
     Accrued property taxes                                                  293
     Accrued professional fees                                               180
     Accrued compensation                                                    145
     Sales taxes payable                                                     130
     Accrued rent                                                             97
     Accrued warranty costs                                                   60
     Other accrued liabilities                                                25
                                                                          ------
          Total                                                           $1,723
                                                                          ======



6.   EARNINGS PER SHARE
     ------------------

     Basic earnings per common share are based on the weighted average number of
     common  shares  outstanding  in  each  period  and  earnings  adjusted  for
     preferred  stock  dividend  requirements. Diluted earnings per common share
     assume  that  any  dilutive convertible preferred shares outstanding at the
     beginning  of  each  period  were  converted  at  those dates, with related
     interest,  preferred  stock  dividend  requirements  and outstanding common
     shares adjusted accordingly. It also assumes that outstanding common shares
     were  increased by shares issuable upon exercise of those stock options and
     warrants  for  which market price exceeds exercise price, less shares which
     could  have  been  purchased  by  the  Company  with  related proceeds. The
     convertible preferred stock and outstanding stock options and warrants were
     not  included  in  the computation of diluted earnings per common share for
     the  three  and  nine  month periods ended September 30, 2002 and the three
     month  period  ended September 30, 2003, since it would have resulted in an
     antidilutive  effect.
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                                        7

FORM 10-QSB                                                   SEPTEMBER 30, 2003
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     The  following  table  sets  forth  the  computation  of  basic and diluted
     earnings  per  share.



                                                         Three Months Ended        Nine Months Ended
                                                      ------------------------  ----------------------
                                                       Sept. 30,    Sept. 30,   Sept. 30,    Sept 30,
                                                         2003         2002         2003        2002
                                                      -----------  -----------  ----------  ----------
                                                                                
                                                            (In Thousands, except per share data)

     Numerator
       Basic and diluted income (loss)                $     (553)  $     (681)  $    1,294  $  (2,051)

     Denominator
       Denominator for basic earnings per share-
       weighted average shares                            53,179       62,173       59,109     62,173
       Effect of dilutive securities
           Convertible Series A Preferred Stock               --           --          510         --
           Stock Warrants                                     --           --          776         --
           Stock Options                                      --           --          191         --
                                                      -----------  -----------  ----------  ----------

        Denominator for diluted earnings per share-
        adjusted weighted average shares and
       assumed conversions                                53,179       62,173       60,586     62,173
                                                      ===========  ===========  ==========  ==========

     Basic and diluted income (loss) per
        share                                         $    (0.01)  $    (0.01)  $     0.02  $   (0.03)



7.   LITIGATION
     ----------

     PROFUTURES  CAPITAL  BRIDGE  FUND,  L.P.

     On  September 26, 2000, ProFutures Bridge Capital Fund, L.P. ("ProFutures")
     filed  a  complaint  against  the  Company  in  Colorado  state  court  for
     declaratory  relief and breach of contract (the "Complaint"). The Complaint
     alleged  that  the  Company breached four stock purchase warrants issued to
     ProFutures  on  the  basis  that the Company failed to notify ProFutures of
     dilutive events and failed to register the full number of shares ProFutures
     was allegedly entitled to purchase under the warrants when, on February 14,
     2000,  the  Company  registered  1,500,000  shares  of  stock  underlying
     ProFutures'  warrants  instead  of 4,867,571. The Complaint further alleged
     that  the  Company's issuance of shares of common stock to Imatron, Inc. on
     or about January 22, 1999, (the "Imatron Transaction") was a dilutive event
     pursuant  to  the  anti-dilution  provisions  contained  in  the four stock
     purchase warrants. The Complaint sought declarations that the consideration
     received  by the Company in the Imatron Transaction increased the number of
     shares  issuable  under  the warrants, the Company breached the warrants by
     failing  to  notify ProFutures of the Imatron Transaction and its effect on
     ProFutures'  warrants  at  the time of the Imatron Transaction and that the
     Company  further breached the warrants by failing to register the number of
     shares  ProFutures  alleged  were  purchasable  under  its  warrants.  The
     Complaint  sought  an  unspecified  amount  of  monetary  damages.

     The  Colorado  State  level case of ProFutures v. Positron, District Court,
     City  and  County  of Denver, Colorado, Case No. 00CV7146, was tried before
     the  Court in June 2002. The Court issued its Findings of Fact, Conclusions
     of  Law and Judgment on November 13, 2002. The Court agreed with Positron's
     determination  of the value of the consideration paid for the shares issued
     to  Imatron  and that there was no evidence of fraud by Positron. The Court
     agreed  with  ProFutures  that  Positron  breached  the 1996 stock purchase
     warrant  with  ProFutures  by  failing  to  give  ProFutures written notice
     stating  the  adjusted  exercise  price  and  the  new  number  of  shares
     deliverable  as  a  result  of  the  Imatron  Transaction and by failing to
     register the shares to which ProFutures was entitled under the warrant as a
     result  of the Imatron Transaction. Nevertheless, the Court also found that
     ProFutures'  alleged  damages  were  uncertain  and  speculative  and  that
     ProFutures was not entitled to recover actual damages. Therefore ProFutures
     was  awarded  $1  in  nominal  damages.
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                                        8

FORM 10-QSB                                                   SEPTEMBER 30, 2003
================================================================================
     ProFutures  has  appealed  the  trial  Court's  findings  and  Positron has
     cross-appealed.  Those  appeals  are  presently pending before the Court of
     Appeals,  State  of  Colorado.

     In  the  federal  case  of  ProFutures  v.  Positron, et al., United States
     District  Court  for  the  District  of  Colorado,  Case No. 02-N-0154, the
     Complaint  alleged  two  causes  of  action against the Company: fraudulent
     transfer  and  injunctive  relief. The allegations arose out of a June 2001
     loan  agreement  between  Positron and Imatron. The action was dismissed in
     2002  without  prejudice.

     CHINA  XINXING

     In  July  2001  and  February 2002, the Company received demands from China
     Xinxing  Shanghai  Import  and  Export Company ("China Xinxing"), a company
     located in Shanghai, China, for payment of an arbitration award in favor of
     China Xinxing and against the Company, in the total amount of approximately
     $297,000. The award was rendered on or about August 25, 2000 by arbitrators
     affiliated  with  the  Shanghai  Sub-commission  of the China International
     Economic  and  Trade  Arbitration Commission (CIETAC Case No. SM9872, Award
     No.  (2000)  HMZZ  1154).  The  award  represents  the  amount  of a refund
     (together  with  arbitration  costs)  of  an  advance payment made by China
     Xinxing  under  a  contract  with  the Company dated September 12, 1996. In
     August  2002,  China  Xinxing  filed  suit  in  the United States to obtain
     confirmation  and  enforcement  of  the  award.

     The  Company  entered  into  a  Settlement Agreement and Release with China
     Xinxing  in  November  2002.  The Company was obligated to pay the $297,000
     obligation  in  five  periodic monthly installments of $50,000 beginning in
     November  2002,  with a sixth final payment of approximately $47,000 due in
     March  2003.  The  Company has paid all six installments, and China Xinxing
     has  executed a Satisfaction of Judgment reflecting satisfaction all of the
     Company's  obligations  under the award, the Judgment entered on the award,
     and  the  Settlement  Agreement.

     10P10,  L.P.

     In  December  2001,  10P10,  L.P.,  the Company's previous landlord for its
     premises  located at 16350 Park Ten Place, Suite 150, Houston, Texas, filed
     a  complaint  (Cause No. 2001-65534 in the 165th Judicial District Court of
     Harris  County,  Texas)  against  the  Company  alleging  breach  of  lease
     agreement.  The  Company  disputes  the  amount  of  lease  commissions and
     construction  costs  charged  by  10P10,  L.P.  in  conjunction  with  the
     subleasing of the premises. Although 10P10, L.P. asserted a claim in excess
     of  $150,000, a subsequent analysis of the transactions under the lease has
     resulted in the reduction of the lease obligation alleged by 10P10, L.P. to
     approximately  $97,000.  Although  the  Company  disputes the amount of the
     claim,  due to the pending lawsuit, Company management has recorded $97,000
     as  an accrued liability as of September 30, 2003. Although the case is set
     for trial on a two week docket beginning November 10, 2003, the Company has
     requested  a  continuance  of  the  trial  setting  until  February  2004.

8.   SUPPLEMENTAL CASH FLOW DATA
     ---------------------------



                                             Three Months Ended       Nine Months Ended
                                           ----------------------  ----------------------
                                           Sept. 30,   Sept. 30,   Sept. 30,   Sept. 30,
                                              2003        2002        2003        2002
                                           ----------  ----------  ----------  ----------
                                                                   

     Supplemental disclosure of cash flow
     information (In thousands):
         Cash paid for interest            $        1  $        2  $        2  $        9
         Cash paid for income taxes        $       --  $       --  $       --  $       --



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                                        9

FORM 10-QSB                                                   SEPTEMBER 30, 2003
================================================================================

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

We  are including the following cautionary statement in this Quarterly Report on
Form  10-QSB  to  make  applicable  and utilize the safe harbor provision of the
Private  Securities  Litigation Reform Act of 1995

regarding  any forward-looking statements made by, or on behalf of, the Company.
Forward-looking  statements  include  statements  concerning  plans, objectives,
goals,  strategies,  future events or performance and underlying assumptions and
other  statements,  which are other than statements of historical facts. Certain
statements  contained  herein  are  forward-looking statements and, accordingly,
involve risks and uncertainties, which could cause actual results or outcomes to
differ  materially  from  those  expressed  in  the  forward-looking statements.

Our  expectations,  beliefs  and projections are expressed in good faith and are
believed  by  us  to have a reasonable basis, including without limitations, our
examination  of  historical  operating trends, data contained in our records and
other  data available from third parties, but there can be no assurance that our
expectations,  beliefs  or  projections  will  result,  or  be  achieved,  or be
accomplished.

COMPARISON OF THE RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30,
--------------------------------------------------------------------------------
2003 AND 2002
-------------

We  realized a loss of $553,000 during the three months ended September 30, 2003
compared  to  a  loss  of  $681,000  for  the  same  quarter  in  2002.

We  did  not  sell  any systems during the quarters ended September 30, 2003 and
2002.  Revenues  from  system  sales  in  the  quarter  ended September 30, 2003
included  a $34,000 increase in the contract price for a system that was sold in
a  prior  period. Our service revenues increased $9,000 to $342,000 in the three
months  ended  September  30,  2003  from  $333,000  in the same period in 2002.
Service  revenues  in  the  quarter  ended  September  30,  2003  included  the
recognition  of  $50,000  in  fees  relating  to  support provided to GE Medical
Systems  in  conjunction  with  the  purchase  of  the  Cardiac  PET  Software.

We  generated  gross  profits of $48,000 during the three months ended September
30,  2003  compared  to  $197,000  in gross profits for the same three months in
2002.  We  recognized  $34,000  in revenues from system sales in the three month
period  ended  September  30,  2003,  offset  by $155,000 in expenses related to
manufacturing  labor, equipment and overhead. We earned profits of $169,000 from
services  in  the  third  quarter  of 2003, compared to profits of $197,000 from
services  in  the  same  quarter  in  2002.

Our operating expenses decreased $225,000 to $601,000 for the three months ended
September  30,  2003  from  $826,000  for  the same period in 2002. Research and
development  expenses  declined $104,000 to $168,000 from $272,000 primarily due
to  lower payroll costs and a reduction in the use of outside consultants. Legal
fees  decreased $106,000 to $41,000 in the quarter ended September 30, 2003 from
$147,000  in  the  same period in 2002, as a result of a reduction in activities
associated  with  litigation.

Interest  expense  decreased  to a nominal amount in the quarter ended September
30,  2003,  as  a  result  of  the  cancellation  of the indebtedness to Imatron
effective  June  29,  2003.  Interest expense of $52,000 in the third quarter of
2002  was  primarily  attributable  to  the  indebtedness  to  Imatron.



COMPARISON OF THE RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30,
-------------------------------------------------------------------------------
2003 AND 2002
-------------

We  earned  income  of  $1,294,000  in  the nine months ended September 30, 2003
compared  to  a  loss  of  $2,051,000  during the same period in 2002. We earned
income  in the first nine months of 2003 primarily as a result of the $2,376,000
gain  related  to  the  sale  of  the  Cardiac  PET  Software.

We generated revenues of $3,459,000 on the sale of three systems during the nine
month  period  ended September 30, 2003. This compares to revenues of $3,319,000
from the sale of three systems in the same period in 2002. We earned revenues of
$265,000  from  upgrades of systems in the nine month period ended September 30,
2003  compared to no revenues from system upgrades in the same nine month period
in  the  previous  year. Our service revenues increased $26,000 to $1,020,000 in
the  nine  months  ended  September 30, 2003 from $994,000 in the same period in
2002.  Service  revenues  in  the  nine  month  period  ended September 30, 2003
included  the  recognition of $50,000 in fees relating to support provided to GE
Medical  Systems  in  conjunction with the purchase of the Cardiac PET Software.
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                                       10

FORM 10-QSB                                                   SEPTEMBER 30, 2003
================================================================================

We  generated  gross  profits of $961,000 during the nine months ended September
30, 2003 compared to $604,000 for the same period in 2002.  We earned profits of
$554,000  from  the sale of three systems, $170,000 from upgrades of systems and
$503,000  from  service  in the first nine months of 2003, offset by $266,000 in
expense  related  to manufacturing labor and overhead.  This compares to profits
of  $47,000 from the sale of three systems and $557,000 from service in the same
period  in  2002.

Our  operating  expenses  decreased  $505,000  to $1,943,000 for the nine months
ended  September 30, 2003 from $2,448,000 for the same period in 2002.  Research
and  development  expenses declined $184,000 to $620,000 from $804,000 primarily
due  to  lower  payroll costs and a reduction in the use of outside consultants.
Sales  and  marketing  expenses decreased $60,000 to $277,000 from $337,000 as a
result  of  lower  payroll,  travel  and  advertising  costs.  General  and
administrative  expenses  decreased  $261,000  to  $1,046,000  in the nine month
period  ended  September  30, 2003 from $1,307,000 during the same period in the
prior  year.  This decrease in general and administrative expenses was primarily
the  result  of  the  reduction  in  legal  fees by $437,000.  This decrease was
partially  offset  by  a $123,000 reduction in the amount of rent credits earned
relating  to  the  obligation  on  the  abandoned  lease  space.

Interest  expense  decreased $159,000 to $100,000 in the nine month period ended
September  30, 2003 from $259,000 for the same period in 2002.  Interest charged
on  the  loan obligation to Imatron amounted to $100,000 and $150,000 during the
nine  month  periods  ended September 30, 2003 and 2002, respectively.  Interest
expense in the nine month period ended September 30, 2002 also included $100,000
of  loan  cost  amortization.

We  recognized  a  gain of $2,376,000 on the sale of our Cardiac PET Software in
the  nine  month  period  ended  September  30,  2003.

FINANCIAL  CONDITION
--------------------

We  had cash and cash equivalents of $36,000 and accounts receivable of $104,000
on  September  30,  2003.  On the same date, we had accounts payable and accrued
liabilities  outstanding  of $1,723,000.  We did not sell any imaging systems in
the  third quarter of 2003.  In order to resolve our liquidity problems, we must
sell  imaging  systems  or  seek  alternative sources of debt or equity funding.
However, there is no assurance that we will be successful in selling new systems
or  securing  additional  debt  or  equity  funds.

Since inception, we have been unable to sell our POSICAMTM systems in quantities
sufficient  to  be  operationally  profitable.  Consequently,  we have sustained
substantial  losses.  Due  to  the sizable selling prices of our systems and the
limited  number  of systems sold or placed into service each year, revenues have
fluctuated  significantly  from year to year.  We have an accumulated deficit of
$56,373,000  at  September  30,  2003.  The Company will need to increase system
sales  to  achieve  continued  profitability.

These  events raise doubt as to our ability to continue as a going concern.  The
report  of  our  independent public accountants, which accompanied our financial
statements  for  the year ended December 31, 2002, was qualified with respect to
that risk.  If we are unable to obtain debt or equity financing to meet our cash
needs we may have to severely limit or cease our business activities or may seek
protection  from  our  creditors  under  the  bankruptcy  laws.

NEW  ACCOUNTING  PRONOUNCEMENTS
-------------------------------

Please  refer  to  the Annual Report Form 10-KSB for the year ended December 31,
2002  and  the  Quarterly Report Form 10-QSB for the quarterly period ended June
30,  2003  for  disclosures  regarding the Company's treatment of new accounting
pronouncements.


CRITICAL  ACCOUNTING  POLICIES
------------------------------

REVENUE  RECOGNITION

Revenues  from  POSICAMTM  system  contracts are recognized when all significant
costs  have  been incurred and the system has been shipped to the customer.  The
Company  also  recognizes revenue on
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                                       11

FORM 10-QSB                                                   SEPTEMBER 30, 2003
================================================================================

bill  and  hold  transactions  when  the product is completed and is ready to be
shipped  and  the risk of loss is transferred to the customer. In certain cases,
at the customers' request, the Company is storing the product for a brief period
of time. Revenues from maintenance contracts are recognized over the term of the
contract.  Service  revenues  are  recognized  upon performance of the services.


                        ITEM 3 - CONTROLS AND PROCEDURES

As  of  September  30,  2003,  the  Company carried out an evaluation, under the
supervision  and  with  the participation of the Company's management, including
the Company's Chairman of the Board of Directors and Chief Financial Officer, of
the  effectiveness  of  the  design  and  operation  of the Company's disclosure
controls  and  procedures  (as  defined  in Exchange Act Rule 13a-15(e) and Rule
15d-15(e)).  Based  upon that evaluation, the Company's Chairman of the Board of
Directors  and  Chief  Financial Officer concluded that the Company's disclosure
controls  and  procedures are effective at a reasonable level in timely alerting
them  to  material  information  relating  to the Company that is required to be
included  in  the  Company's  periodic  filings with the Securities and Exchange
Commission.  There  has  been  no  change in the Company's internal control over
financial  reporting  that  occurred  during  the  Company's  most recent fiscal
quarter  that  has  materially  affected  or  is reasonably likely to materially
affect,  the  Company's  internal  control  over  financial  reporting.


The  Company's  management, including the Chairman of the Board of Directors and
Chief Financial Officer, do not expect that the Company's disclosure controls or
internal  controls  will  prevent all error and all fraud.  A control system, no
matter  how  well  conceived  and  operated,  can  provide  only reasonable, not
absolute,  assurance  that  the  objectives of the control system are met due to
numerous  factors,  ranging  from  errors to conscious acts of an individual, or
individuals  acting  together.  In addition, the design of a control system must
reflect  the  fact  that  there  are  resource  constraints, and the benefits of
controls  must  be  considered  relative to their costs. Because of the inherent
limitations  in  a  cost-effective  control  system,  misstatements due to error
and/or  fraud  may  occur  and  not  be  detected.

                           PART II  OTHER INFORMATION


ITEM 1 - LEGAL PROCEEDINGS

The  information  regarding  legal  proceedings  set  forth above under Part I -
Financial  Information,  Note 7 to the Condensed Financial Statements, is hereby
incorporated  by  reference  into  Part  II,  Item  1  -  Legal  Proceedings.

ITEM 2 - CHANGES IN SECURITIES AND USE OF PROCEEDS

None

ITEM 3 - DEFAULTS UPON SENIOR SECURITIES

None

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

None

ITEM 5 - OTHER INFORMATION

None

ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

(a)     Exhibits

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                                       12

FORM 10-QSB                                                   SEPTEMBER 30, 2003
================================================================================

          Exhibit   Description of the Exhibit

          31.1      Chief  Executive  Officer  and  Chief  Financial  Officer
                    Certification  of  Periodic  Financial  Report  Pursuant  to
                    Section  302  of  the  Sarbanes-Oxley  Act  of  2002.

          32.1      Chief  Executive  Officer  and  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.

(b)       Reports  on  Form  8-K

          On  July  14, 2003, the Company filed a current report on Form 8-K for
the  purpose  of reporting under Item 2 thereof the cancellation of a $2,000,000
note  and  other obligations in exchange for sale of the Cardiac PET Software to
General  Electric  Company and for the purpose of reporting under Item 5 thereof
the  resignation  of  Michael  Golden  and the appointment of Gary Brooks as the
Company's  Chief  Financial  Officer.











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                                       13

FORM 10-QSB                                                   SEPTEMBER 30, 2003
================================================================================

                                   SIGNATURES

Pursuant  to  the  requirements  of  the  Securities  Exchange  Act of 1934, the
Registrant  caused  this  report  to be signed on its behalf by the undersigned,
thereunto  duly  authorized.


                                       POSITRON CORPORATION
                                       (Registrant)



Date: November 14, 2003                /s/ Gary H. Brooks
                                       ----------------------
                                       Gary H. Brooks
                                       Chairman, CEO, & CFO











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                                       14

FORM 10-QSB                                                   SEPTEMBER 30, 2003
================================================================================

                                  EXHIBIT INDEX


Exhibit     Description  of  the  Exhibit

     31.1           Chief  Executive  Officer  and  Chief  Financial  Officer
                    Certification  of  Periodic  Financial  Report  Pursuant  to
                    Section  302  of  the  Sarbanes-Oxley  Act  of  2002.

     32.1           Chief  Executive  Officer  and  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.










================================================================================


                                       15