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

                                   FORM 10-QSB
                                   (Mark One)

     (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
                              EXCHANGE ACT OF 1934
                  For the quarterly period ended: MAY 31, 1999
                                                  ------------

     ( ) 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 0-21320
                                                -------

                                 MAGNA-LAB INC.
                                 --------------
        (Exact name of small business issuer as specified in its charter)

          New York                                         11-3074326
  ------------------------------                -------------------------------
 (State or other jurisdiction of               (IRS Employer Identification No.)
  incorporation or organization)

                       P. O. Box 780, Syosset, N.Y. 11791
                     --------------------------------------
                    (Address of principal executive offices)

                                 (516) 595-2111
                            -------------------------
                           (Issuer's telephone number)

--------------------------------------------------------------------------------
(Former  name,  former  address and former  fiscal year,  if changed  since last
report)

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 ( X ) No ( )

                      APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date - June 30, 1999

  Class A Common Stock, $.001 Par Value                           21,862,350
  -------------------------------------                       -----------------

  Class B Common Stock, $.001 Par Value                              738,317
  -------------------------------------                       -----------------
               Class                                                Shares



    Transitional Small Business Disclosure Format (check one) Yes ( ) No (X)


<PAGE>




PART I: FINANCIAL INFORMATION
               ITEM 1. - FINANCIAL STATEMENTS

                          MAGNA-LAB INC. AND SUBSIDIARY


                                    CONTENTS



PART 1 - FINANCIAL INFORMATION (UNAUDITED)

         ITEM 1. - FINANCIAL STATEMENTS

                  CONSOLIDATED BALANCE SHEETS                                  2

                  CONSOLDATED STATEMENTS OF OPERATIONS                         3

                  CONSOLDATED STATEMENTS OF CASH FLOWS                         4

                  CONSOLDATED STATEMENT OF STOCKHOLDERS' EQUITY                5

                  NOTES TO CONSOLDATED FINANCIAL STATEMENTS                  6-9

         ITEM 2. - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN
                 OF OPERATION                                              10-12

PART II - OTHER INFORMATION

         ITEM 2  - CHANGES IN SECURITIES AND USE OF PROCEDS                   12

         ITEM 6  - EXHIBITS AND REPORTS ON FORM 8-K                           12

SIGNATURES                                                                    13

















All items which are not  applicable or to which the answer is negative have been
omitted from this report.


<PAGE>
<TABLE>
<CAPTION>


                          MAGNA-LAB INC. AND SUBSIDIARY

                           CONSOLIDATED BALANCE SHEETS
                 May 31, 1999 (unaudited) and February 28, 1999


                                                                                      May 31,          February 28,
                                                                                       1999                1999
                                                                                      -------          ------------
                                                      ASSETS
<S>                                                                                 <C>                <C>
CURRENT ASSETS:
  Cash and cash equivalents                                                         $          0       $     67,000
                                                                                    -------------      -------------
     Total current assets                                                                      0             67,000
                                                                                    -------------      -------------

PROPERTY AND EQUIPMENT, net, and all other                                                13,000             13,000
                                                                                    -------------      -------------

                                                                                    $     13,000       $     80,000
                                                                                    =============      =============




                                       LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Accounts payable                                                                  $    406,000       $    223,000
  Accrued expenses and other current liabilities                                         617,000            608,000
                                                                                    -------------      -------------
        Total current liabilities                                                      1,023,000            831,000
                                                                                    -------------      -------------


COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' DEFICIT:
  Preferred stock, par value $.01 per share, 5,000,000
     shares authorized, no shares issued                                                       -                  -
  Common stock, Class A, par value $.001 per share,
     40,000,000 shares authorized, 21,862,350 and
     21,662,350 shares issued and outstanding, respectively.                              22,000             21,000
  Common stock, Class B, par value $.001 per share,
     3,750,000 shares authorized, 1,875,000 shares issued,
     738,317 shares outstanding                                                            1,000              1,000
  Capital in excess of par value                                                      15,664,000         15,649,000
  Accumulated deficit                                                                (16,697,000)       (16,422,000)
                                                                                     ------------      -------------
        Total stockholders' deficit                                                   (1,010,000)          (751,000)
                                                                                    -------------      -------------
                                                                                    $     13,000       $     80,000
                                                                                    =============      =============







                 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS

</TABLE>
<PAGE>
<TABLE>
<CAPTION>

                          MAGNA-LAB INC. AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (unaudited)




                                                                                         Three months ended May 31,

                                                                                             1999              1998
                                                                                             ----              ----
<S>                                                                                <C>               <C>
REVENUES                                                                           $            -    $            -
                                                                                   ---------------   ---------------

COSTS AND EXPENSES:
  Selling and marketing                                                                         -                 -
  General and administrative                                                               90,000            81,000
  Research and development                                                                185,000           222,000
                                                                                   ---------------   ---------------
                                                                                          275,000           303,000
                                                                                   ---------------   ---------------

OTHER INCOME (EXPENSE)
  Other income                                                                                  -            10,000
  Interest expense                                                                              -                 -
  Interest income                                                                               -             3,000
                                                                                   ---------------   ---------------
                                                                                                -            13,000
                                                                                   ---------------   ---------------

NET LOSS                                                                           $     (275,000)   $     (290,000)
                                                                                   ===============   ===============


WEIGHTED AVERAGE NUMBER OF
 SHARES OUTSTANDING                                                                    22,467,000        19,422,000
                                                                                   ===============   ===============

NET LOSS PER SHARE                                                                         $(0.01)           $(0.02)
                                                                                           =======           =======


















                 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS


</TABLE>


<PAGE>
<TABLE>
<CAPTION>


                          MAGNA-LAB INC. AND SUBSIDIARY


                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                Increase (Decrease) in Cash and Cash Equivalents
                                   (unaudited)



                                                                                         Three Months ended May 31,
                                                                                            1999               1998
                                                                                            ----               ----
<S>                                                                                <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                                                         $    (275,000)    $     (290,000)
                                                                                   --------------    ---------------
  Adjustments:
    Depreciation and amortization                                                              -                  -
  Effect on cash of changes in operating assets and liabilities:
    Accounts payable and accrued liabilities                                             192,000            (61,000)
                                                                                   --------------    ---------------
           Total adjustments                                                             192,000            (61,000)
                                                                                   --------------    ---------------

NET CASH USED IN OPERATING ACTIVITIES                                                    (83,000)          (351,000)
                                                                                   --------------    ---------------

CASH FLOWS FROM INVESTING ACTIVITIES:
    None                                                                                       -                  -
                                                                                   --------------    ---------------
NET CASH USED IN INVESTING ACTIVITIES                                                          -                                 -
                                                                                   --------------    ---------------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Issuance of 200,000 shares in private placement to accredited investor                30,000                  -
    Payment of offering expenses                                                         (14,000)                 -
                                                                                   --------------    ---------------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES                                       16,000                                  -
                                                                                   --------------    ---------------

NET INCREASE (DECREASE) IN CASH
 AND CASH EQUIVALENTS                                                                    (67,000)          (351,000)
CASH AND CASH EQUIVALENTS:
  Beginning of period                                                                     67,000            599,000
                                                                                   --------------    ---------------
  End of period                                                                    $           -     $      248,000
                                                                                   ==============    ===============


SUPPLEMENTAL INFORMATION ON NON-CASH TRANSACTIONS
    Common stock issued to settle account payable                                  $           -     $       20,000
                                                                                   ==============    ===============













                 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS

</TABLE>

<PAGE>

<TABLE>
<CAPTION>


                          MAGNA-LAB INC. AND SUBSIDIARY

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
               For the three months ended May 31, 1999 (unaudited)





                                                               Common Stock
                                            -------------------------------------------------       Capital in
                                                    Class A                     Class B                 Excess
                                            ----------------------        -------------------           Of Par    Accumulated
                                              Shares        Amount        Shares       Amount        Value (a)        Deficit
                                        --------------------------------------------------------------------------------------
<S>                                       <C>             <C>            <C>        <C>            <C>            <C>

BALANCES, February 28, 1999               21,662,350      $ 21,000       738,317    $   1,000      $15,649,000    (16,422,000)

CONVERT B SHARES TO A                              -             -             -            -                -              -

PRIVATE PLACEMENT OF COMMON
     STOCK                                   200,000         1,000             -            -           29,000              -

STOCK ISSUANCE EXPENSES                            -             -             -            -          (14,000)             -

NET LOSS                                           -             -             -            -                -       (275,000)
                                        --------------------------------------------------------------------------------------

BALANCES, May 31, 1999 (unaudited)        21,862,350      $ 22,000       738,317    $   1,000      $15,664,000    (16,697,000)
                                          ==========      =========      =======    ==========     ============   ============









                 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS

</TABLE>

<PAGE>




                          MAGNA-LAB INC. AND SUBSIDIARY

                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 1  - BASIS OF PRESENTATION:

The accompanying  financial statements have been prepared in accordance with the
instructions  to Form  10-QSB  and do not  include  all of the  information  and
disclosures   required  by  generally  accepted   accounting   principles.   All
adjustments  which are of a normal  recurring  nature  and,  in the  opinion  of
management,  necessary  for  a  fair  presentation  have  been  included.  These
statements should be read in conjunction with the more complete  information and
financial  statements and notes thereto  included in the Company's annual report
on Form 10-KSB for the year ended February 28, 1999.

NOTE 2 - DISCUSSION OF THE COMPANY'S  ACTIVITIES/PRODUCTS AND CASH REQUIREMENTS;
GOING CONCERN CONSIDERATION:

BACKGROUND/HISTORY  - From commencement of operations on February 10, 1992 until
1997, Magna-Lab Inc. and Subsidiary (the "Company")  developed,  received US FDA
clearance (September 1994), manufactured and marketed the MAGNA-SL, the first of
a planned series of anatomy specific MRI (Magnetic  Resonance Imaging) products.
The  Company's  efforts  to  market  and  sell  the  MAGNA-SL  did not  generate
sufficient  revenues  to  sustain  the  Company's  planned  operations  and such
operations were discontinued.  In 1997, the Company entered into a collaboration
with the Cardiac  Institute  of the Mount Sinai  School of Medicine  ("MSSM") to
advance its  development of a new disposable  medical device to make cardiac MRI
imaging more  effective  for the  diagnosis of heart  disease (the  "Cardiac MRI
Initiative").  The  Cardiac  MRI  Initiative  is  now  the  Company's  principal
activity.

CURRENT  ACTIVITIES  - In  February  1997,  the  Company  commenced  a  plan  of
restructuring of the Company's operations (the "Plan") to reposition itself into
its current activity in the Cardiac MRI Initiative.

In December 1997, the Company's efforts to raise additional financing to support
the  Cardiac MRI  Initiative  were  successful  in raising  $1.884  million in a
private  placement of 15,072,000  shares of Class A common stock (the  "December
1997  Financing").  Such financing was  conditioned on the Company  initiating a
program to pay its liabilities on a reduced basis (the "Debt Reduction  Program"
- See Note 7). Since  December 1997, the Company has: (1) initiated and advanced
the Cardiac MRI Initiative,  (2) continued the Debt Reduction Program (3) sought
to enter  into a  business  relationship  to  realize  value  for the  Company's
investment  in the MAGNA-SL and (4) raised an  additional  $362,050 in a private
placement of 2,413,667 shares of class A common stock.

Under the Plan,  in March 1997,  the majority of the  Company's  workforce  were
terminated.  Further,  in 1997, the Company vacated its production,  development
and  executive  facility and ceased the need for other assets  including  leased
assets with remaining  non-cancelable  terms,  and took other measures.  Certain
inventories  and  equipment  were  placed in  storage.  The  Company  recorded a
restructuring  charge of approximately  $1.5 million in the fourth quarter ended
February  28,  1997  for   write-downs   of  fixed   assets,   inventories   and
non-refundable  deposits made with  strategic  vendors,  as well as accruals for
lease  termination  and other costs.  While the ultimate  amount may differ from
this estimate,  the Company presently  believes that such  restructuring  charge
continues to be adequate.

The Company is  continuing  its efforts to: (1) raise  additional  capital,  (2)
advance its development  program under the Cardiac MRI Initiative,  (3) complete
the Debt  Reduction  Program and (4)  realize  value for its  investment  in the
MAGNA-SL.  There is no assurance that any of these efforts will be successful or
that the Company will be able to continue its operations,  for which the Company
presently requires additional capital.

GOING  CONCERN  CONSIDERATION  - As indicated in the  accompanying  consolidated
financial  statements,  as of May 31,  1999,  the Company had no cash,  negative
working  capital  of   approximately   $1,023,000  and  negative  net  worth  of
approximately  $1,010,000 and further,  has a development  agenda which requires
additional   financing.   Additionally,   as  indicated   in  the   accompanying
consolidated financial statements, the Company has incurred a cumulative loss of
approximately  $16.7 million since inception and has no present revenue.  Losses
have continued since May 31, 1999.  These factors,  among others,  indicate that
the Company is in need of immediate  significant  additional  financing and/or a
strategic business  arrangement in order to continue the Plan in the fiscal year
beginning  March 1, 1999.  The Company has no cash resources at May 31, 1999 and
can not fund its present operations.  Certain consultants,  an executive and the
Company's two  principal  development  partners  have  continued to work for the
Company in the absence of being paid.  In April 1999,  one of these parties (the
Company's  third  party  developer)  advised the Company it could no longer work
without current payment. In July 1999 the Company's medical collaborator advised
the Company that it could not continue to incur costs without payment.  There is
no assurance that others will continue to advance the Company's  efforts without
current pay. The Company is attempting to raise  additional  capital to continue
its planned operations.


<PAGE>

There can be no assurances  that  management's  plans described in the preceding
paragraphs  will be realized.  These  factors,  among others,  indicate that the
Company may be unable to continue operations as a going concern.


NOTE 3 - LOSS PER SHARE OF COMMON STOCK:

Net loss per share is computed  based on the weighted  average number of Class A
Common and Class B Common  shares  outstanding.  Dilutive  options and  warrants
outstanding would be considered in the computation of net income per share under
the treasury stock method when their effect is to reduce reported net income per
share.

NOTE 4 -  RELATIONSHIP  WITH THE CARDIAC  INSTITUTE OF THE MOUNT SINAI SCHOOL OF
MEDICINE:

In May 1997,  the Company  entered into a three-year  agreement with the Cardiac
Institute of the Mount Sinai School of Medicine (New York City) and Dr. Valentin
Fuster  (as  principal  investigator)  ("MSSM")  for  a  collaborative  research
arrangement  devoted to utilizing MRI in cardiac  arterial imaging (the "Cardiac
MRI Initiative").  Under the agreement, the Company is required to make payments
to MSSM of  $600,000 in each of the first and second  years and  $300,000 in the
third year. The start of the annual periods was delayed and payments of $300,000
were made to MSSM during the fiscal year ended February 28, 1998. For the fiscal
year ended  February 28, 1999,  $300,000  was paid and $350,000  (including  two
quarterly  payments  in  arrears)  was  accrued at  February  28, 1999 under the
agreement.  For the quarter ended May 31, 1999, no amounts were paid and a total
of $500,000 has been accrued (including three quarterly payments in arrears). In
July  1999,  the  Company  was  advised by MSSM that it will not incur new costs
under the collaboration due to the arrearage. The Company has also agreed to pay
royalties, as defined in the agreement, to MSSM for the sole and exclusive right
to use,  make,  have  made,  sell  and  otherwise  exploit  the  results  of the
collaboration.

The Company accrues for the cost of the collaboration  with MSSM as research and
development  expense  monthly,  subsequent  to the  delayed  start  of  payments
mentioned above.

NOTE 5 -  PROPERTY AND EQUIPMENT:

Details of property and equipment at May 31, 1999 are as follows:

         Machinery and equipment                               $760,000
         Purchased software                                      49,000
                                                               --------
                                                                809,000
         Less: accumulated depreciation and amortization        396,000
               amounts written off in restructuring charge      400,000
                                                               --------
                                                               $ 13,000
                                                               --------

<PAGE>


NOTE 6 - ACCRUED LIABILITIES:

Included in accrued  liabilities at May 31, 1999 are  approximately  $65,000 for
accrued restructuring costs.

NOTE 7 - COMMITMENTS AND CONTINGENCIES:

DEBT REDUCTION  PROGRAM - In 1997, the Company  identified new investors willing
to invest in the  Company's  Plan if, among other things,  recorded  liabilities
(then approximately $2.5 million, unaudited) could be reduced by a very material
amount. In approximately October 1997,  reorganization  counsel was retained and
the  Company  commenced  a Debt  Reduction  Program.  Under  the Debt  Reduction
Program,  the Company contacted its creditors,  informed them of the opportunity
to obtain new financing and requested  them to settle  liabilities  due them for
substantially  reduced  amounts.  Such efforts have continued  during the fiscal
years  ended  February  28,  1999 and 1998 and are  ongoing.  Additionally,  the
Company  settled  claims by  non-executive  employees  for  unpaid  payroll  and
expenses of approximately $133,000 and settled the claims of executive employees
for a reduced amount aggregating  approximately  $150,000.  Virtually all of the
employee claimants signed releases of liability.

The Company has had several  judgments  entered against it for liabilities.  The
largest of these  judgments  consisted of: (1) an October 1997 judgment in favor
of a vendor for  $300,000  entered  against  the  Company  which was settled for
$150,000  and  (2) a May  1997  judgment  in  favor  of a  former  landlord  for
approximately $120,000 and settled for approximately $100,000.

In total,  approximately  $1,400,000  of  liabilities  have been  either paid or
agreed to be reduced by the vendors.  The difference  between recorded  payables
and accruals  and amounts paid for  settlement  has are  periodically  evaluated
(generally annually) and included in other income in the consolidated  financial
statements.  Approximately  $300,000  remains in accruals and  accounts  payable
pending resolution or write-off.

The Company has a recorded  liability  to one vendor for  approximately  $22,000
and,  rather than settle,  this vendor has  continued to invoice the Company for
additional  materials  which were never received and for interest  charges.  The
vendor's claim for this $22,000 payable now exceeds  $150,000 which the Company,
in consultation with its reorganization counsel, disputes.

While the Company has had success in reducing its  liabilities  and  negotiating
with its creditors and others in accordance  with the Debt  Reduction  Plan, the
ultimate  liabilities  in these  matters are not known and the vendors,  in some
cases,  may seek  damages  in excess of  amounts  recorded  in the  consolidated
financial  statements.  The  Company  believes,  but  cannot  assure,  that  its
liability  will  not  exceed  amounts  recorded  in the  consolidated  financial
statements.

LITIGATION  - The  Company  knows of no pending  litigation  against it although
there are some unpaid judgments against the Company for various claims which the
Company  believes  do not exceed  $25,000.  Various  creditors  and others  have
threatened the Company with  litigation to recover  amounts due them and some of
these parties  retained  counsel who have contacted the Company  regarding these
claims.  While the  Company  has had success in  reducing  its  liabilities  and
obtaining  releases from its creditors,  employees and others in accordance with
the Debt Reduction Plan, the ultimate liabilities in these matters are not known
and the vendors,  in some cases,  may seek damages in excess of amounts recorded
in the consolidated financial statements. The Company believes, but no assurance
can be made,  that  its  liability  will  not  exceed  amounts  recorded  in the
consolidated financial statements.

The Company is also exposed to potential litigation from agreements entered into
in  connection  with  its  discontinued  business  activities.   Some  of  these
agreements  are  described  in the  following  paragraphs.  The  Company has not
recorded   liabilities  for  any  contingencies  that  could  arise  from  these
agreements as it cannot estimate an amount of liability, if any.

AGREEMENT  WITH ELSCINT - In June 1996,  the Company and Elscint  Cryomagnetics,
Ltd.,  a  subsidiary  of Elscint  Ltd.,  ("Elscint")  entered  into an agreement
covering a strategic business arrangement in which Elscint would manufacture the
MAGNA-SL  for  marketing  and  sale by  Elscint  in  certain  non-United  States
territories and the Company would be paid royalties.  Additionally,  Elscint and
the  Company  agreed  on  various  other  matters,   including  certain  ongoing
development support which is no longer practical given the Company's  resources.
Elscint  paid the  Company a  non-refundable  deposit of $250,000 on signing the
agreement and purchased certain  components from the Company and participated in
certain other efforts with the Company in preparation  for the  manufacture  and
sale of the MAGNA-SL.

<PAGE>

The  Company  was   obligated  to  complete   certain   development   tasks  and
enhancements,  which,  if not  completed  by  November  1996,  could  result  in
termination  of the  agreement  by Elscint.  Elscint has informed the Company in
November 1996 and again in May 1998 that it is not satisfied with the completion
of  certain  of the tasks and  believes  that the  Company  is in default of its
obligations under the agreement.  Various discussions have been had with Elscint
to resolve this matter.  No resolution  has been reached and the Company has had
little,  if any,  contact with Elscint since Elscint's MRI business was acquired
by General Electric ("GE") during 1998.

The  Company  has not  recorded  any  liability  to its  consolidated  financial
statements  for this  matter  because it is unable to  determine  what,  if any,
liability it could have to Elscint  after  defenses and  counterclaims  which it
would make against Elscint.

WARRANTY,  SERVICE, PRODUCT LIABILITY - The Company has been unable to honor its
obligations   for  one  year  warranty  and  service  for  the  MAGNA-SL   since
approximately March 1997. Additionally, product liability claims relating to the
MAGNA-SL may be asserted  against the  Company.  The Company is not aware of any
such claims,  however, there can be no assurance that such claims will not arise
and be material.

RELATIONSHIP WITH FOREIGN COMPONENT SUPPLIER - As a result of the Plan described
in Note 1, the Company  terminated its  relationship  with a foreign supplier of
components  in  which  it  had  agreements  which  contemplated  multi-year  and
multi-system   requirements.   The  Company  wrote-off   deposits,   which  were
non-refundable, of approximately $332,000 with this vendor.

RELATIONSHIP  WITH RELATED PARTY  DISTRIBUTOR - The Company entered into various
distribution  and  sales  representation  agreements  covering  the  sale of the
MAGNA-SL,  including an exclusive  arrangement for certain uses and markets with
an  entity  (Beta  Numerics,  Inc.,  "Beta")  whose  shareholders  included  two
directors and beneficial  owners of the Company's  stock and one former director
and still  beneficial  owner of the  Company's  stock.  In the fiscal year ended
February 28, 1997, the Company  established a valuation  allowance for 100% of a
receivable  from Beta, net of previously  received  deposits,  of  approximately
$256,000, net, due to non-payment.


<PAGE>


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION



  EXCEPT FOR THE HISTORICAL  INFORMATION  CONTAINED HEREIN,  THIS REPORT AND THE
   FOLLOWING DISCUSSION CONTAINS FORWARD-LOOKING  STATEMENTS WITHIN THE MEANINGS
   OF  SECTION  27A OF  THE  SECURITIES  ACT  OF  1933  AND  SECTION  21E OF THE
   SECURITIES   EXCHANGE  ACT  OF  1934.  SUCH  STATEMENTS   INVOLVE  RISKS  AND
   UNCERTAINTIES  AND THE COMPANY'S ACTUAL RESULTS COULD DIFFER  MATERIALLY FROM
   THOSE  DISCUSSED  HEREIN.  FACTORS  THAT COULD  CAUSE OR  CONTRIBUTE  TO SUCH
   DIFFERENCES INCLUDE, BUT ARE NOT LIMITED TO, THOSE DISCUSSED BELOW IN
                     FACTORS THAT MAY AFFECT FUTURE RESULTS
                     --------------------------------------


     (B) MANAGEMENT'S ANALYSIS AND DISCUSSION OR PLAN OF OPERATIONS -

     BACKGROUND/HISTORY  - From  commencement of operations on February 10, 1992
until 1997, Magna-Lab Inc. and Subsidiary (the "Company") developed, received U.
S. FDA clearance (September 1994),  manufactured and marketed the MAGNA-SL,  the
first of a planned series of anatomy specific MRI (Magnetic  Resonance  Imaging)
products. The Company's efforts to market and sell the MAGNA-SL did not generate
sufficient  revenues  to  sustain  the  Company's  planned  operations  and such
operations were discontinued. In 1997, the Company was restructured (as outlined
below) and entered into a collaboration  with the Cardiac Institute of the Mount
Sinai School of Medicine ("MSSM") to advance its development of a new disposable
medical device to make cardiac MRI imaging more effective for the diagnosis, and
in  guiding  the  treatment,  of  Coronary  Artery  Disease  (the  "Cardiac  MRI
Initiative").  The  Cardiac  MRI  Initiative  is  now  the  Company's  principal
activity.

     CURRENT  ACTIVITIES  - In February  1997,  the Company  commenced a plan of
restructuring of the Company's operations (the "Plan") to reposition itself into
its current  activity in the Cardiac MRI  Initiative.  Under the Plan,  in March
1997,  the majority of the  Company's  workforce  were  terminated,  the Company
vacated its production,  development and executive  facility and ceased the need
for other assets  including leased assets with remaining  non-cancelable  terms,
and took other  measures.  Certain  inventories  and  equipment  were  placed in
storage.  The Company  recorded a  restructuring  charge of  approximately  $1.5
million in the fourth quarter ended  February 28, 1997 for  write-downs of fixed
assets,  inventories and non-refundable deposits made with strategic vendors, as
well as accruals  for lease  termination  and other  costs.  While the  ultimate
amount may differ from this estimate,  the Company presently  believes that such
restructuring  charge  continues  to be adequate.  Capital  raising and business
development  activities  for the Cardiac MRI Initiative  were  undertaken by key
Directors,  Officers and consultants.  In May 1997, the Company entered into the
collaboration with MSSM to advance the Cardiac MRI Initiative.

     In December 1997, the Company's  efforts to raise  additional  financing to
support the Cardiac MRI Initiative  were successful in raising $1.884 million in
a private  placement of 15,072,000 shares of Class A common stock (the "December
1997  Financing").  Such financing was  conditioned on the Company  initiating a
program to pay its liabilities on a reduced basis (the "Debt Reduction  Program"
- See Notes to  Consolidated  Financial  Statements).  Since  December 1997, the
Company  has:  (1)  initiated  and  advanced  the  Cardiac MRI  Initiative,  (2)
continued  the Debt  Reduction  Program  (3)  sought  to  realize  value for the
Company's  investment  in the  MAGNA-SL  through a  business  relationship  with
Elscint or others and (4) raised an additional  $362,050 in a private  placement
of 2,413,667  shares of class A common  stock.  Efforts to realize value for the
MAGNA-SL product have been unsuccessful to date and are ongoing.

     The Company is continuing its efforts to: (1) raise additional capital, (2)
advance its development  program under the Cardiac MRI Initiative,  (3) complete
the Debt  Reduction  Program and (4)  realize  value for its  investment  in the
MAGNA-SL.  There is no assurance that any of these efforts will be successful or
that the Company will be able to continue its operations,  for which the Company
presently requires additional capital.

<PAGE>

     LIQUIDITY, CAPITAL RESOURCES AND GOING CONCERN CONSIDERATION

     As indicated in the accompanying  consolidated financial statements,  as of
May 31, 1999, the Company had no cash, negative working capital of approximately
$1,023,000 and negative net worth of approximately  $1,010,000 and further has a
development  agenda  which  requires  additional  financing.   Additionally,  as
indicated in the accompanying consolidated financial statements, the Company has
incurred a cumulative  loss of  approximately  $16.7  million  since  inception,
negative  cash flow from  operations  and has no present  revenue.  Losses  have
continued  since May 31, 1999.  These factors,  among others,  indicate that the
Company  is in need of  immediate  significant  additional  financing  and/or  a
strategic business  arrangement in order to continue the Plan in the fiscal year
beginning March 1, 1999. The Company presently has no cash resources to fund its
operations  for any material  period of time beyond May 31, 1999 and the Company
is attempting to raise  additional  capital to continue its planned  operations.
Further,  the  Company  is  delinquent  in  payment  to  its  principal  medical
collaborator,  its third party  developer  and to its principal  management  and
consultants.  The medical  collaborator advised the Company in July 1999 that it
could no longer incur new costs under the project and the third party  developer
has advised the Company that it cannot continue without payment.

     There  can  be no  assurances  that  management's  plans  described  in the
preceding  paragraphs will be realized.  These factors,  among others,  indicate
that the Company may be unable to continue operations as a going concern.

     RESULTS OF OPERATIONS -

     Operations  for the  quarter  ended  May 31,  1999  utilized  approximately
$83,000 of cash  principally in connection with activities under The Cardiac MRI
Initiative.  Payments to MSSM are  approximately  $500,000 in arrears at May 31,
1999. Net loss of  approximately  $275,000  reflects  accrual of costs under the
MSSM agreement as well as accrual of other costs incurred,  most of which remain
unpaid.

     Operations  in the  quarter  ended May 31,  1998  resulted in a net loss of
approximately $290,000. The loss results principally from the Cardiac Initiative
development activities in collaboration with the Mount Sinai School of Medicine.
Cost of the MSSM portion of the collaboration were approximately $150,000 of the
net  loss  for  the  quarter.  In May  1998,  the  Company  initiated  a  design
review/regulatory/contract  manufacturing  relationship  with a third  party and
paid $12,000 to initiate that relationship.  General and administrative expenses
consisted of executive,  administrative and business development  consultants as
well as certain occupancy, storage and professional costs.

     THE YEAR 2000 ISSUE

     The Year 2000 issue refers to the fact that many computers and applications
have been  programmed  with two digit date fields for the year.  As such, as the
century date change occurs,  date sensitive systems may not be able to recognize
the year 2000 or distinguish it from the year 1900, for example.  This inability
to  recognize or properly  interpret  the year 2000 could result in incorrect or
interrupted  processing of financial and operational  data. The effect that this
could have on information, systems and operations is not measurable but could be
significant.

     The Company uses computers in accounting and general  administration and in
various  technical  applications.  The software that the Company  currently uses
includes  versions  which are several  years old and may, or may not,  have year
2000  issues.  The Company  plans  (subject  to the  availability  of  financial
resources),  during 1999, to update its general  accounting  and  administration
software to the latest  versions  available.  The  software  used for  technical
functions is generally more current and believed to be year 2000 compliant.  The
Company believes that its collaborator,  MSSM and its outsourced developer,  Act
Medical,  Inc.  are taking the steps  necessary to be year 2000  compliant.  The
Company's  MAGNA-SL uses computer  systems which  generally are not time or date
sensitive and the Company believes are generally year 2000 compliant.  There can
be no assurance that the Company will have no disruption as a result of the year
2000 issue,  however,  management  believes  that such issues  would not cause a
significant disruption to its planned activities.

<PAGE>


FACTORS THAT MAY AFFECT FUTURE RESULTS THECOMPANY'S FUTURE OPERATING RESULTS ARE
DEPENDENT UPON MANY FACTORS INCLUDING,  BUT NOT LIMITED TO THE COMPANY'S ABILITY
TO: (I) OBTAIN SUFFICIENT CAPITAL OR A STRATEGIC BUSINESS ARRANGEMENT , WHICH IS
REQUIRED IMMEDIATELY, TO FUND ITS CONTINUED PLAN OF DEVELOPMENT OPERATIONS, (II)
PAY ITS DEBTS  INCLUDING  SIGNIFICANT  PAYMENTS  TO TRADE  CREDITORS  AND TO ITS
PRINCIPAL MEDICAL  COLLABORATOR,  WHICH ARE PRESENTLY OVERDUE,  (III) SUCCESSFUL
COMPLETION OF DEVELOPMENT OF ITS PLANNED PRODUCTS, CARDIAC VIEW AND ARTERY VIEW,
(IV)  SUCCESSFUL  BUSINESS   DEVELOPMENT  AND  MARKETING  EFFORTS  TO,  ASSUMING
COMPLETION OF THE DEVELOPMENT EFFORT IN (III) ABOVE,  COMMERCIALIZE ANY PRODUCTS
DEVELOPED, (V) MAINTAIN ITS RELATIONSHIP WITH THE CARDIAC INSTITUTE OF THE MOUNT
SINAI SCHOOL OF MEDICINE AND WITH ITS PRINCIPAL  MEDICAL  INVESTIGATOR  AND WITH
ITS THIRD PARTY  DEVELOPER  ACT MEDICAL INC.  DESPITE A SUSTAINED  PERIOD OF NON
PAYMENT,  (VI) DEVELOP PRODUCTS WHICH DO NOT INFRINGE THE INTELLECTUAL  PROPERTY
RIGHTS OF OTHERS,  (VII) PROTECT ITS PRODUCT  DEVELOPMENTS  FROM INFRINGEMENT BY
OTHERS WITH PATENTS AND OTHER  PROTECTIONS,  AS WELL AS (I) COMPETITIVE  FACTORS
AND  DEVELOPMENTS  BEYOND  THE  COMPANY'S  CONTROL  AND  (II)  GENERAL  ECONOMIC
CONDITIONS   AND   CONDITIONS   IN  THE  FINANCIAL   AND   TECHNOLOGY   MARKETS.

-------------------------------------










PART II - OTHER INFORMATION

ITEM 2. - CHANGES IN SECURITIES AND USE OF PROCEEDS

     From January 1999 through May 1999 the Company issued  2,413,667  shares of
Class A Common Stock to accredited investors for proceeds of 362,050 pursuant to
a private offering which was begun in October 1998. The proceeds were to be used
to advance the Plan of restructuring outlined above and for working capital. The
Company claims  exemption from  registration of this placement under Rule 506 of
Regulation D.


ITEM 6. - EXHIBITS AND REPORTS ON FORM 8-K

         (a) Exhibits
         Exhibit No.
         -----------
               (11)     Statement  re:  computation  of  loss  per  share  -  A
                         statement  regarding the  computation of loss per share
                         is   omitted   because   computation   can  be  clearly
                         determined   from  the   material   contained  in  this
                         Quarterly Report on Form 10-QSB.

               (27)     Financial Data Schedule

         (b) The  Company  did not file  reports on Form 8-K during the  quarter
             ended May 31, 1999.


<PAGE>


                                   SIGNATURES

In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.


                                               MAGNA-LAB INC.
                                         -------------------------------
                                                (Registrant)

Date:  July  15,  1999              By:        /s/ DANIEL M. MULVENA
            ----                         -------------------------------
                                         Daniel M. Mulvena , Chairman of the
                                         Board of Directors, Chief Executive
                                         Officer  (Principal Executive Officer),
                                         Acting Treasurer (Principal Financial
                                         and Accounting Officer)