SecProbe.io

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            [LETTERHEAD OF ALLEN MATKINS LECK GAMBLE & MALLORY LLP]

July 12, 2005

VIA EDGAR AND FAX

Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Attention:  Michele Gohlke, Branch Chief

         Re:      Positron Corporation
                  Form 10-KSB for the Year Ended December 31, 2004
                  Form 10-KSB/A for the Year Ended December 31, 2004
                  Form 10-QSB for the Quarter Ended March 31, 2005
                  File No. 000-24092

Ladies and Gentlemen:

         This letter responds to comments of the Staff (the "Staff") of the
Securities and Exchange Commission (the "Commission") contained in the letter
from the Staff to Positron Corporation (the "Company") dated June 30, 2005
regarding the above-referenced filings.

         Form 10-KSB for the Year Ended December 31, 2004
         ------------------------------------------------

         Financial Statements, page 38
         -----------------------------

         Note 3.  Inventories, page 46
         -----------------------------

         1. We note on page 2 that you reacquired one of your POSICAM systems,
which is being held in inventory for resale, and we note from page 8 that you
did not have any outstanding orders as of December 31, 2004. Tell us whether
this system can be resold and if you have recorded an inventory reserve for this
system. Additionally, please tell us why there is no amount presented in
finished goods relating to the returned system.

Response
--------

         Positron reacquired a POSICAM imaging system that had been in service
at Medical City Hospital in Dallas in 2003. This is a reacquired system, and was
not returned by the customer on account of its failure to perform properly. A
part of Positron's business is to acquire, remanufacture and resell systems that
have reached the end of their useful life. The total cost attributed to this
system was only $12,890. This cost included the $7,000 purchase price and a

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Securities and Exchange Commission
July 12, 2005

$5,890 payment to a moving company for disassembly and removal of the system
from the hospital.

         This reacquired system was shipped to Positron's facility in Houston
where it must be "remanufactured" prior to resale. Each of the individual
components (e.g. modules, electronic boards, cables, etc.) must be tested and
repaired as required so that they are functioning properly. The exterior covers
and the patient bed must also be repaired and repainted. The system must then be
reassembled and thoroughly tested to make certain that the system is functioning
within its required operating specifications. At the end of 2004, the majority
of the activities involved in the remanufacture of this system had not been
performed or completed. For this reason, although this system is ultimately held
for resale, the $12,890 cost of this system was included in work in progress at
December 31, 2004.

         Positron's marketing department is currently attempting to sell this
reacquired system. Positron has successfully sold and placed into service
various "remanufactured" systems in recent years. It is also important to note
that the value of the spare parts that could be utilized from the system exceeds
the recorded cost of $12,890. For these reasons, an inventory reserve was not
considered to be appropriate.

         In Note 3 of the financial statements the work in process inventory
amounted to $285,000 at December 31, 2004. For your information, the work in
process inventory consisted primarily of specialized parts and numerous
assembled components that are required to repair and maintain the PET imaging
systems that are currently operating at customer sites. This field service
inventory plays an essential role in the performance of the service contracts
with customers.

         Note 6.  Notes Payable to Affiliated Entity, page 47.
         -----------------------------------------------------

         2. Please tell us why you concluded that a beneficial conversion
feature does not exist with the notes issued to IMAGIN on May 26, 2004, June 17,
2004, and July 15, 2004. Please be detailed in your response.

Response:
---------

         On May 21, 2004, Positron entered into a commitment with IMAGIN
Diagnostic Centres that included $2,000,000 in financing through convertible
debt instruments. The financing agreements included a Note Purchase Agreement
for issuance of notes in the principal amount of $700,000 and a Loan Agreement
for funding up to an aggregate principal amount of $1,300,000. These financing
agreements were part of a comprehensive financing deal entered into between
Positron and IMAGIN on May 21,

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Securities and Exchange Commission
July 12, 2005

2004. In that these financing agreements were part of a comprehensive financing
arrangement, the calculation of the beneficial conversion feature was performed
on the entire $2,000,000 of convertible debt financing.

         The calculation of the beneficial conversion feature for the
convertible debt with IMAGIN is detailed on the accompanying schedule. According
to the schedule, the effective conversion price exceeded the fair value of the
common stock at the commitment date. Therefore, there is no beneficial
conversion feature associated with the convertible debt with IMAGIN.

         In addition to having a conversion price that exceeds the market price,
it is important to also point out that shareholder approval (a contingent event)
is required to facilitate the full conversion of the preferred stock into
87,000,000 common shares. An analysis of available common shares after entering
into the commitment with IMAGIN on May 21, 2004 follows:

         Total authorized common shares                      100,000,000

         Common shares issued and outstanding                (53,185,803)

         Warrants (committed shares)                         (29,120,000)

         1999 Stock Option Plan (committed shares)            (5,987,500)

         Series A Preferred Stock (committed shares)          (1,382,061)
                                                             -----------

         Remaining available common shares                    10,324,636
                                                              ==========

         In this case, debt could only be converted into the 10,324,636 common
shares that were available at May 21, 2004. The conversion of the debt into the
76,675,364 additional common shares (over 88% of the total) would require
shareholder approval. If a beneficial conversion feature had otherwise existed
with this debt, it would have been proper to apply the provisions in ETIF 98-5
and ETIF 00-27 relating to contingent events.

         Form 10-QSB for the quarter Ended March 31, 2005
         ------------------------------------------------

         Note 5.  Convertible Notes Payable to Affiliated Entity, page 7
         ---------------------------------------------------------------

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Securities and Exchange Commission
July 12, 2005

         3. We note that you determined that the convertible notes issued to
Solaris contained a beneficial conversion feature and you calculated the
beneficial conversion feature to be $1 million, equal to the amount of the
proceeds received and obligation under the notes. The promissory note filed as
Exhibit 10.84 to your Form 10-KSB/A, filed on April 19, 2005, indicates that the
debt is convertible into shares of Series E Preferred Stock at a conversion
price of $1.00 per share. Those shares are in turn convertible into an aggregate
of 22,000,000 shares of your common stock. It appears that you have recorded the
beneficial conversion feature based on the difference between the market price
of your common stock on the date of the agreement and the conversion price.
However, the conversion to common stock requires an amendment to your Articles
of Incorporation which must be approved by current stockholders. In this regard,
please tell us and revise your disclosure in future filings as appropriate as
follows:

      o     How you considered the contingency relating to stockholder approval
            of the conversion of the Series E Preferred Stock into 22,000,000
            shares of common stock in your calculation of the beneficial
            conversion feature. Refer to the guidance in paragraph 13 of EITF
            98-5 and part II of EITF 00-27.

Response:
---------

         As disclosed in the quarterly report, full convertibility of the shares
of Series E Preferred Stock into common stock will require an amendment to the
Company's Articles of Incorporation which must be approved by the shareholders.
However, an analysis of available common shares on February 28, 2005 follows:

         Total authorized common shares                    100,000,000

         Common shares issued and outstanding              (53,185,803)

         Warrants (committed shares)                       (18,150,000)

         1999 Stock Option Plan (committed shares)          (5,987,500)

         Series A Preferred Stock (committed shares)        (1,639,788)
                                                           -----------

         Remaining available common shares                  21,036,909
                                                            ==========

         Section 1.8 of the Note Purchase Agreement provides for full or partial
conversion of the Solaris debt into equity. The above analysis details that
enough shares were available to facilitate the partial conversion of the debt

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Securities and Exchange Commission
July 12, 2005

into 21,036,909 shares of common stock. Therefore, shareholder approval would
only be required to convert the remaining 963,091 shares of common stock. As
substantially all of the Solaris debt was convertible into common shares without
shareholder approval, it was deemed appropriate to record the effect of the
beneficial conversion feature.

      o     How you calculated the value of the beneficial conversion feature to
            be $1,000,000 and how you determined the fair value of the Series E
            Preferred Stock to be issued upon the initial conversion.

Response:
---------

         The fair value of the Series E Preferred Stock at the commitment date
was $2,200,000 ($0.10 market price per share times 22,000,000 common shares).
The conversion price was $1,000,000 ($0.05 conversion price per share times
22,000,000 common shares). The $1,200,000 difference is the intrinsic value of
the beneficial conversion feature. However, the beneficial conversion feature is
limited to the $1,000,000 proceeds of the debt based upon EITF 98-5.

      o     It appears that the intrinsic value of the beneficial conversion
            feature may have been greater than the proceeds from the convertible
            instrument. If so, revise future filings to clearly disclose the
            excess of the aggregate fair value of the instrument that the holder
            would receive at conversion in excess of the proceeds received.
            Refer to paragraph 6 of EITF 98-5.

Response:
---------

         The Company will revise future filings to clearly disclose the excess
of the aggregate fair value of the instrument that the holder would receive at
conversion in excess of the proceeds received.

      o     Clearly disclose all significant terms relating to the conversions
            associated with all of your outstanding convertible notes. Clearly
            describe any contingencies associated with the conversions.

Response:
---------

         The Company will revise future filings to clearly describe any
contingencies.

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Securities and Exchange Commission
July 12, 2005

         We trust that you will find the foregoing responsive to the comments of
the Staff. Comments or questions regarding this letter may be directed to
Geoffrey E. Perusse or Roger S. Mertz at (415) 837-1515.

                                                     Very truly yours,

                                                     /s/ Roger S. Mertz

                                                     Roger S. Mertz
RSM:ae

cc:      Mr. Gary Brooks - President, Positron Corporation
         Mr. Patrick G. Rooney, Chairman of the Board, Positron Corporation

<PAGE>

                                   SCHEDULE A
                                   ----------

                              Positron Corporation

                 IMAGIN Debt - Beneficial Conversion Calculation

                                  May 21, 2004

<TABLE>
<CAPTION>
<S>                                                                      <C>
FV at Commitment Date (May 21, 2004)
Conversion into Common Shares
     Series C Preferred Stock                                            35,000,000
     Series D Preferred Stock                                            52,000,000
                                                                         ----------
     Total Common Shares Issued Upon Conversion                          87,000,000

Conversion Price

Proceeds
     Note Purchase Agreement                                             $  700,000
     Loan Agreement                                                       1,300,000
                                                                         ----------
     Gross Proceeds                                                       2,000,000
Less: Value Attributed to Warrants                                          (91,500)
Less: Debt Discount                                                         (86,400)
                                                                         ----------
     Net Proceeds                                                        $1,822,100

Effective Conversion Price (per share)      ($1,822,100 / 87,000,000)    $   0.0209

Market Price of Common Stock (per share)                                 $   0.0200
</TABLE>

Conclusion
----------

As the Effective Conversion Price exceeded the FV at the Commitment Date there
is no BCF.
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