RELATED PARTY TRANSACTIONS

12 Months Ended

Dec. 31, 2012

Related Party Transactions [Abstract]

Related Party Transactions

17. RELATED PARTY TRANSACTIONS

At December 31, 2011, the Company had a $250,000 receivable from Neusoft Positron Medical Systems (NPMS), the Company’s joint venture, for excess freight charges owed and had a $218,000 payable to NPMS for the purchase of an Attrius PET system. Due to the continued supply delays in the rubidium market, the Company has experienced a significant drop in demand and has been unable to sell new machines. Due to these conditions the NPMS’s production schedules have also been affected and therefore the Company has been unable to pursue the $250,000 receivable from NPMS and has charged off this balance. During the year ended December 31, 2012, the Company recognized cost of revenues of approximately $623,000 related to the purchase of Attrius® PET systems from NPMS.

During 2011, the Company borrowed $20,000 from, its Chief Executive Officer (CEO). This loan remained unpaid as of December 31, 2011. During the twelve month ended December 31, 2012, the Company borrowed from the CEO an additional $40,000. All the advances, totaling $60,000, were repaid during 2012 and as of December 31, 2012, the Company did not have an amount due to the Chief Executive Officer.

On January 12, 2012, the Company acquired a building in Westmont, Illinois, which the Company previously leased from its Chief Executive Officer (Lender or Related Party) for corporate and administrative offices since 2010. The Company issued the Chief Executive Officer 25,000,000 shares of common stock, which were valued at approximately $250,000 and a convertible debenture of $250,000, which shall be due on December 31, 2013 and bear interest at 8% per year payable quarterly in cash. In addition, the Company issued 35,000,000 warrants (“Warrants”), which entitle the Related Party to purchase shares of the Company’s common stock, par value $0.01 per share, at an exercise price of $0.01 per share and expiring on December 31, 2013. The Lender is entitled to convert the accrued interest and principal of the Convertible Debentures into common stock of the Company at a conversion price equal to 55% of the lowest daily volume weighted average price for the three trading days preceding conversion. During the twelve months ended December 31, 2012, the Company issued 18,181,818 shares of Common Stock for repayment of $100,000 of these Convertible Debentures. At December 31, 2011, the Company had $77,000 of deferred rent related to this building recorded as an asset in the financial statements, which was expensed during the year ended December 31, 2012, and as of December 31, 2012, the Company did not have deferred rent on its balance sheet.

During the year ended December 31, 2012 the Company issued additional convertible debt to its Chief Executive Officer (“Lender”) in the amount of $1,320,000. The debt is non-interest bearing and matures on December 31, 2013. In connection with the this debt, the Company issued warrants (“Warrants”) to purchase 37,500,000 shares of the Company’s Common Stock, at an exercise price of $0.01 per share expiring on December 31, 2013. The lender is entitled to convert the accrued interest and principal of the Convertible Debentures into common stock of the Company at a conversion price equal to 55% of the lowest daily volume weighted average price for the three trading days preceding conversion.

During September and December 2012, the Company issued two non-interest bearing convertible debentures totaling $380,000 to its Chief Financial Officer (“Lender” or “CFO”). In connection with this debt, the Company issued to the CFO warrants to purchase 10,500,000 shares of the Company’s Common Stock, at an exercise price of $0.01 per share expiring on December 31, 2013. The Lender is entitled to convert the accrued interest and principal of the Convertible Debentures into common stock of the Company at a conversion price equal to 55% of the lowest daily volume weighted average price for the three trading days preceding conversion. These debentures are noninterest bearing. As of December 31, 2012, the Company all of the $380,000 debt was outstanding.

In September of 2012, the Company received an unsecured advance of $25,000 from a related party, which accrues interest at 8% per annum. This note was fully repaid as of December 31, 2012.

Key Employee Incentive Compensation

The Company has an incentive compensation plan for certain key employees and its Board of Directors.  The incentive compensation plan provides for annual bonus payments based upon achievement of certain corporate objectives as determined by the Company’s Board of Directors.