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, 2000
                                     ------------

( )  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)

                 6800 Jericho Turnpike, #120W, Syosset, NY 11797
                 -----------------------------------------------
                    (Address of principal executive offices)

                                 (516) 393-5874
                           ---------------------------
                           (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, 2000

  Class A Common Stock, $.001 Par Value                           35,785,945
  -------------------------------------                           ----------
  Class B Common Stock, $.001 Par Value                              414,722
  -------------------------------------                           ----------
                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                                              10-11

PART II - OTHER INFORMATION

         ITEM 2 - CHANGES IN SECURITIES AND USE OF PROCEEDS                   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.

                                       1

<PAGE>
<TABLE>
<CAPTION>


                          MAGNA-LAB INC. AND SUBSIDIARY

                           CONSOLIDATED BALANCE SHEETS
                 May 31, 2000 (unaudited) and February 29, 2000


                                                                                          May 31,      February 29,
                                                                                            2000              2000
                                                                                          -------      ------------
                                     ASSETS

<S>                                                                                 <C>               <C>
CURRENT ASSETS:
  Cash and cash equivalents                                                         $   1,566,000     $   1,372,000
  Other current assets - deposit with vendor                                              130,000           130,000
                                                                                    --------------    --------------
     Total current assets                                                               1,696,000         1,502,000

PROPERTY AND EQUIPMENT, net, and all other                                                  8,000             9,000
                                                                                    --------------    --------------

                                                                                    $   1,704,000     $   1,511,000
                                                                                    ==============    ==============




                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Accounts payable                                                                  $     235,000     $     283,000
  Accrued expenses and other current liabilities                                          532,000           942,000
                                                                                    --------------    --------------
        Total current liabilities                                                         767,000         1,225,000
                                                                                    --------------    --------------

NON-CURRENT LIABILITIES                                                                         0            37,000
                                                                                    --------------    --------------



COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
  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, 35,785,945 shares issued
     and outstanding.                                                                      35,000            30,000
  Common stock, Class B, par value $.001 per share,
     3,750,000 shares authorized, 1,875,000 shares issued,
     414,722 shares outstanding                                                             1,000             1,000
  Capital in excess of par value                                                       18,692,000        17,675,000
  Accumulated deficit                                                                 (17,791,000)      (17,457,000)
                                                                                    --------------    --------------
        Total stockholders' equity                                                        937,000           249,000
                                                                                    --------------    --------------
                                                                                    $   1,704,000     $   1,511,000
                                                                                    ==============    ==============





           See accompanying notes to consolidated financial statements


</TABLE>

                                       2

<PAGE>

<TABLE>
<CAPTION>

                         MAGNA-LAB INC. AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (unaudited)




                                                                                          Three months ended May 31,
                                                                                             2000              1999
                                                                                             ----              ----

<S>                                                                                   <C>               <C>
REVENUES                                                                              $         -       $         -
                                                                                      ------------      ------------

COSTS AND EXPENSES:
  Selling and marketing                                                                         -                 -
  General and administrative                                                              140,000            90,000
  Research and development                                                                214,000           185,000
                                                                                      ------------      ------------
                                                                                          354,000           275,000
                                                                                      ------------      ------------

OTHER INCOME (EXPENSE)
  Other income                                                                                  -                 -
  Interest expense                                                                              -                 -
  Interest income                                                                          20,000                 -
                                                                                      ------------      ------------
                                                                                           20,000                 -
                                                                                      ------------      ------------

NET LOSS                                                                              $  (334,000)      $  (275,000)
                                                                                      ============      ============


WEIGHTED AVERAGE NUMBER OF
 SHARES OUTSTANDING, BASIC AND DILUTED                                                 34,963,000        22,467,000
                                                                                       ==========        ==========

NET LOSS PER SHARE, BASIC AND DILUTED                                                     $(0.01)           $(0.01)
                                                                                          =======           =======
















           See accompanying notes to consolidated financial statements


</TABLE>

                                       3

<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,
                                                                                             2000              1999
                                                                                             ----              ----
<S>                                                                                 <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                                                          $    (334,000)    $    (275,000)
                                                                                    --------------    --------------
  Adjustments:
    Depreciation and amortization                                                           1,000                 -
    Non-cash charge for warrants to consultant                                             25,000                 -
  Effect on cash of changes in operating assets and liabilities:
    Accounts payable and accrued liabilities                                             (457,000)          192.000
                                                                                    --------------    --------------
           Total adjustments                                                             (431,000)          192.000
                                                                                    --------------    --------------

NET CASH USED IN OPERATING ACTIVITIES                                                    (765,000)          (83,000)
                                                                                    --------------    --------------

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

CASH FLOWS FROM FINANCING ACTIVITIES:
    Issuance of Class A common shares in private placement to
     accredited investors                                                                 982,000            30,000
    Receipt of non-refundable deposit from Noga                                           100,000                 -
    Cost of private placements                                                           (123,000)          (14,000)
                                                                                    --------------    --------------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES                                       959,000            16,000
                                                                                    --------------    --------------

NET INCREASE (DECREASE) IN CASH
 AND CASH EQUIVALENTS                                                                     194,000           (67,000)
CASH AND CASH EQUIVALENTS:
  Beginning of period                                                                   1,372,000            67,000
                                                                                    --------------    --------------
  End of period                                                                     $   1,566,000     $           -
                                                                                    ==============    ==============


SUPPLEMENTAL INFORMATION ON NON-CASH TRANSACTIONS
    Common stock issued to settle account payable                                   $      18,000     $           -
                                                                                    ==============    ==============
    Bridge loans settled with issuance of Class A common stock                      $      20,000     $           -
                                                                                    ==============    ==============











           See accompanying notes to consolidated financial statements

</TABLE>

                                       4
<PAGE>

<TABLE>
<CAPTION>


                          MAGNA-LAB INC. AND SUBSIDIARY

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
               For the three months ended May 31, 2000 (unaudited)






                                                               Common Stock
                                               ----------------------------------------------       Capital in
                                                    Class A                     Class B               Excess
                                               -------------------        -------------------         Of Par      Accumulated
                                               Shares       Amount        Shares       Amount         Value         Deficit
                                          ------------------------------------------------------------------------------------

<S>                                         <C>          <C>              <C>        <C>         <C>             <C>
BALANCES, February 29, 2000                 30,811,087   $  30,000        735,034    $  1,000    $  17,675,000   $(17,457,000)

PRIVATE PLACEMENT                            4,463,637       5,000              -           -          977,000              -

DEPOSIT FROM NOGA                                    -           -              -           -          100,000              -

SETTLE VENDOR BALANCE                          100,000           -              -           -           18,000              -

PAY BRIDGE NOTES IN STOCK                       90,909           -              -           -           20,000              -

CONVERT B TO A SHARES                          320,312           -       (320,312)          -                -              -

CHARGE FOR WARRANTS                                  -           -              -           -           25,000              -

COSTS OF PRIVATE
  PLACEMENT                                          -           -              -           -         (123,000)             -

NET LOSS                                             -           -              -           -                -       (334,000)
                                          ------------------------------------------------------------------------------------

BALANCES, May 31, 2000                      35,785,945   $  35,000        414,722     $ 1,000    $  18,692,000   $(17,791,000)
                                         =====================================================================================




















           See accompanying notes to consolidated financial statements

</TABLE>

                                       5
<PAGE>




                          MAGNA-LAB INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

NOTE 1 - BASIS OF PRESENTATION:

The  accompanying  consolidated  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 consolidated  financial statements and notes thereto included in
the Company's annual report on Form 10-KSB for the year ended February 29, 2000.

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

COMPANY ACTIVITIES - Magna-Lab Inc. and Subsidiary (the "Company") is engaged in
research and development  activities including a collaboration with the Zena and
Michael A. Weiner Cardiovascular Institute of the Mount Sinai School of Medicine
("MSSM")  in New York.  The  Company's  activities  are  devoted  to  developing
disposable,  non-invasive  and  minimally  invasive  medical  devices for use in
increasing  the  effectiveness  of Magnetic  Resonance  Imaging  ("MRI") for the
detection and definitive  diagnosis of Coronary Artery Disease (the "Cardiac MRI
Initiative").

BACKGROUND/HISTORY  - From commencement of operations on February 10, 1992 until
1997, the Company developed,  received US FDA clearance (1994), manufactured and
marketed the  MAGNA-SL,  the first of a planned  series of anatomy  specific MRI
equipment  products.  The  Company's  efforts  to market  and sell the  MAGNA-SL
equipment did not generate  sufficient revenues to sustain the Company's planned
operations and such operations were discontinued.  In February 1997, the Company
commenced a plan of  restructuring  of the Company's  operations (the "Plan") to
reposition itself into its current activities.

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 8). Since  December  1997,  the Company has: (1) 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 and (4) raised an additional
approximately  $3,662,000  through May 31,  2000,  principally  through  private
placements of its class A common stock. Such efforts are ongoing.

GOING  CONCERN  CONSIDERATION  - As indicated in the  accompanying  consolidated
financial  statements,  as of May 31, 2000,  the Company had working  capital of
approximately  $929,000,  net  worth of  approximately  $937,000,  a net loss of
approximately  $334,000  for  the  three  months  ended  May  31,  2000  and  an
accumulated deficit of approximately $17.8 million since inception. Further, the
Company  has  no  present  revenue  and  a  development  agenda  which  requires
additional  financing.  Losses have continued since May 31, 2000. These factors,
among others,  indicate  that the Company is in need of additional  financing in
order to complete  its plans for the fiscal year  beginning  March 1, 2000.  The
Company's  efforts to raise  additional  financing  has resulted in an agreement
with  one  investor  for an  additional  $2,150,000  of  additional  capital  as
discussed further in Note 6. The Company believes that its cash resources at May
31, 2000,  together  with amounts  expected to be raised  ($2,150,000)  under an
agreement with one investor,  are sufficient to fund its operations for the year
ending  February 28,  2001,  and that  thereafter,  it will be required to raise
additional capital.

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.

                                       6

<PAGE>

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  ZENA  AND  MICHAEL  A.  WEINER  CARDIOVASCULAR
INSTITUTE OF THE MOUNT SINAI SCHOOL OF MEDICINE:

In May 1997, the Company  entered into a three-year  agreement with the Zena and
Michael A. Weiner Cardiovascular 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 until August 1997. 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, based upon the originally scheduled $600,000 annual
payments from August 1997 to July 1999 and $300,000  annual payments from August
1999 to July 2000.

For the  three  months  ended  May 31,  2000 and  1999,  $75,000  and  $150,000,
respectively, was charged to operations and $300,000 and $-0-, respectively, was
paid.   At  May  31,  2000  and  February  29,  2000,   $250,000  and  $475,000,
respectively, remained in accrued expenses.

In January and April  2000,  the  Company  and MSSM  agreed  that  certain  work
contemplated  by the Agreement  needed to be  rescheduled  as a result of, among
other things,  development  delays in 1999. As such, the Company and MSSM agreed
to the  following  schedule for payment of the accrued and  remaining  payments;
$150,000 in March 2000, $150,000 in April 2000 (both of which payments have been
made) and $150,000 in each of July and October 2000.

NOTE 5 - PROPERTY AND EQUIPMENT:

Details of property and equipment at May 31, 2000 are as follows:

         Machinery and equipment                                     $  360,000
         Purchased software                                              49,000
                                                                     -----------
                                                                        409,000
         Less: accumulated depreciation and amortization
           and write-downs                                             (401,000)
                                                                     -----------
                                                                     $    8,000
                                                                     -----------

NOTE 6 - 2000 PRIVATE PLACEMENT OF COMMON STOCK

In the fourth  quarter of the fiscal year ended  February 29, 2000,  the Company
was successful in raising  $2,218,000 under two arrangements aimed at raising an
aggregate  of  $5,000,000.  During  the  three  months  ended May 31,  2000,  an
additional  approximately  $1,082,000  was raised  bringing  the total raised to
approximately $3,300,000. These transactions are described below.

From  December  1999 through  February 29, 2000,  the Company was  successful in
raising  $1,468,000 of proceeds from the issuance of 6,672,727 shares of Class A
common  stock under a $2,000,000  private  placement  to  accredited  investors.
During the three months ended May 31, 2000, an  additional  $982,000 of proceeds
was raised from the issuance of  4,463,637  shares of Class A common stock under
this placement.

                                       7

<PAGE>

Separately,  in December 1999 an investor, Noga Investments in Technology,  Ltd.
("Noga")  made a  non-refundable  $250,000  deposit  with the  Company  toward a
proposed  investment  of  $3,000,000  for the purchase of a total of  13,636,363
shares of class A common stock over a five month period ending in May 2000.  The
agreement, as amended, calls for investments of $500,000, which were made, prior
to February 29, 2000,  an additional  non-refundable  deposit of $100,000 in May
2000 (which has been  received)  and a remaining  investment of $2,150,000 to be
made  prior to July 27,  2000.  If the  investor  keeps all of these  investment
commitments, it will receive Class A common shares for the original $250,000 and
May 2000 $100,000 non-refundable deposits. Further, this investor has the option
to invest additional amounts, as defined, at $0.22 prior to July 27, 2000.

In connection with both transactions, the Company has agreed to provide warrants
to purchase  7,000,000 shares of Class A common stock at $0.02 and has agreed to
certain representation on its Board of Directors.

Certain fees and expenses are to be paid in connection with the amounts raised.


NOTE 7 - OTHER MATTERS

DEPOSIT  WITH  VENDOR  -  Deposit  with  vendor  of  $130,000  included  in  the
accompanying  consolidated balance sheet consists of amounts on deposit with the
Company's  outsourced  manufacturer.  This amount will be deduced from the final
billings  due from this  vendor.  Billings  from this vendor for work  performed
during the three months ended May 31, 2000 were approximately $60,000.

LIABILITIES  SETTLED FOR STOCK - During the three months ended May 31, 2000, the
Company  reached  agreement with one vendor and with the holders of bridge loans
made to the  Company  in  September  1999 to  settle  these  obligations,  which
aggregated  approximately  $37,000,  for an aggregate  190,909 shares of Class A
common stock.

WARRANTS  ISSUED TO  CONSULTANT  - In March  2000,  the Company  entered  into a
contract   with  an  investor   relations   firm  calling  for  annual  fees  of
approximately $48,000 plus expenses.  Under the agreement, the Company agreed to
issue five year warrants to purchase  280,000  shares of Class A common stock at
an exercise  price of $0.22 per share.  The options vest as follows:  120,000 in
March 2000 and 160,000 in  November  2000,  subject to the  Company  electing to
continue to retain the services of this  investor  relations  firm at that time.
The warrants result in a charge to  compensation  over the period of service and
approximately  $25,000 as been included as a non-cash charge in the accompanying
consolidated statement of operations for the three months ended May 31, 2000.

NOTE 8 - COMMITMENTS AND CONTINGENCIES:

DEBT REDUCTION PROGRAM - In approximately October 1997,  reorganization  counsel
was retained and the Company  commenced a Debt  Reduction  Program to reduce its
recorded liabilities (then approximately $2.5 million,  unaudited).  The Company
contacted its creditors and informed them of the Company's opportunity to obtain
new  financing  if the  creditors  agreed  to  settle  liabilities  due them for
substantially  reduced  amounts.  Such efforts  continued during the fiscal year
ended  February  29, 2000 and are largely  complete.  Additionally,  the Company
settled the claims of its employees for unpaid payroll and expenses.

In total,  approximately $2,100,000 of liabilities have been either paid, agreed
to be reduced by the vendors or written  off by the  Company due to  inactivity.
The  difference  between  recorded  payables  and  accruals and amounts paid for
settlement  are  periodically  evaluated  and,  if  necessary,   adjusted.  Such
adjustments  are  included in other  income in the  consolidated  statements  of
operations.  There were no  adjustments  included  in  operations  for the three
months ended May 31, 2000 or 1999.  Approximately  $235,000  remains in accruals
and accounts payable pending resolution or write-off.

Additional information regarding the Debt Reduction Program is contained in Note
8 to Consolidated  Financial  Statements  contained in the Company's Form 10-KSB
for the year ended February 29, 2000.

LITIGATION  - The  Company  knows of no pending  litigation  against it although
there are some unpaid judgments  against the Company for various claims that the
Company believes do not exceed $25,000.

                                       8

<PAGE>

The Company is also exposed to potential litigation from agreements entered into
in  connection  with its  discontinued  business  activities  including  but not
limited to: (a) a 1996 agreement  with Elscint Ltd.,  (b) Warranty,  Service and
Product  Liability  related to the discontinued  product (c) an agreement with a
related party  distributor  and (d) other  matters.  These matters are discussed
further  in  Note  8 to  Consolidated  Financial  Statements  contained  in  the
Company's  Form 10-KSB for the year ended February 29, 2000. 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.

                                       9

<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,  the  Company   developed,   received  US  FDA  clearance   (1994),
manufactured and marketed the MAGNA-SL, the first of a planned series of anatomy
specific MRI equipment  products.  The Company's  efforts to market and sell the
MAGNA-SL equipment did not generate sufficient revenues to sustain the Company's
planned operations and such operations were discontinued.  In February 1997, the
Company  commenced  a plan  of  restructuring  of the  Company's  operations  to
reposition itself into its current activities.

     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 8 to  Consolidated  Financial  Statements).  Since December 1997, the
Company has: (1) 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 and (4) raised an additional  approximately  $3,662,000 through May
31, 2000,  principally  through  private  placement of its Class A common stock.
Such efforts are ongoing.


     LIQUIDITY, CAPITAL RESOURCES AND GOING CONCERN CONSIDERATION

     During the three months ended May 31, 2000, the Company's working
capital improved by  approximately  $652,000 as a result of (a) the placement of
additional shares under its private placement to accredited investors (982,000),
(b) the  receipt  of an  additional  deposit  from  Noga  toward  its  financing
commitment to the Company  ($100,000)  reduced by losses from operations and the
payment of financing costs.

     As indicated in the accompanying  consolidated financial statements,  as of
May 31, 2000, the Company had working  capital of  approximately  $929,000,  net
worth of approximately  $937,000,  a net loss of approximately  $334,000 for the
three  months  ended May 31, 2000 and an  accumulated  deficit of  approximately
$17.8 million since inception. Further, the Company has no present revenue and a
development agenda which requires  additional  financing.  Losses have continued
since May 31, 2000. These factors, among others, indicate that the Company is in
need of additional  financing in order to complete its plans for the fiscal year
beginning March 1, 2000. The Company's efforts to raise additional financing has
resulted in an  agreement  with one  investor for an  additional  $2,150,000  of
additional  capital as  discussed  further in Note 6 to  Consolidated  Financial
Statements.  The  Company  believes  that its cash  resources  at May 31,  2000,
together with amounts expected to be raised ($2,150,000) under an agreement with
one investor, are sufficient to fund its operations for the year ending February
28, 2001, and that thereafter, it will be required to raise additional capital.

     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.  Also
see - Factors That May Affect Future Results.

                                       10

<PAGE>

     RESULTS OF OPERATIONS -

     Operations  for the three months ended  February 29, 2000 resulted in a net
loss of  approximately  $334,000,  principally in connection  with the Company's
development  activities  under The  Cardiac MRI  Initiative  as well as business
development.  Research and  development  costs  totaled  approximately  $214,000
including approximately $75,000 related to the collaborative agreement with MSSM
and  approximately  $60,000  in  connection  with  the  collaboration  with  the
Company's  outsourced  manufacturer.   General  and  administrative  costs  were
approximately $140,000 reflecting management and other operating costs including
occupancy,  storage and  professional  fees,  among  other items and  included a
non-cash  charge  of  approximately  $25,000  for the  compensatory  element  of
warrants  issued to a  consultant.  Total costs and  expenses  of $354,000  were
offset by interest  income of  approximately  $20,000 as a result of higher cash
balances. The increase in total costs and expenses over the comparable period of
1999 consists  principally  of the work of the outsourced  manufacturer  and the
fees and non-cash charges associated with an investor relations consultant. Cash
used by operations totaled  approximately  $765,000  consisting of the loss from
operations  as well as the general  reduction  of  accounts  payable and accrued
liabilities, including $300,000 paid to MSSM.

     Operations  for the three months ended May 31, 1999  resulted in a net loss
of approximately $275,000 and utilized approximately $83,000 of cash principally
in connection with activities under the Cardiac MRI Initiative. Payments to MSSM
were   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 were unpaid at May 31,
1999.


     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 Company has updated its general accounting
and  administration  software to versions which it believes to be  substantially
year 2000  compliant.  The software  used for  technical  functions is generally
believed to be year 2000 compliant.  The Company believes that its collaborator,
MSSM and its  outsourced  developer,  ACT  Medical,  Inc.  have  taken 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, no material
disruptions  have occurred to date.

                     FACTORS THAT MAY AFFECT FUTURE RESULTS

The  Company'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 to fund its plan of operations, (ii)
pay its debts including significant payments to its outsourced  manufacturer and
to its principal  medical  collaborator as they come due and any residual claims
or  obligations  that may exist  relative to its  discontinued  business,  (iii)
successfully  develop its planned  products,  Cardiac View and Artery View, (iv)
successfully  accomplish  its  business  development  and  marketing  efforts to
commercialize  any products  developed,  (v) maintain its relationship  with the
Zena and Michael A. Weiner Cardiovascular Institute of the Mount Sinai School of
Medicine and with its  principal  medical  investigator,  (vi) develop  products
which do not infringe the intellectual  property rights of others, (vii) protect
its  intellectual  property rights from  infringement by others with patents and
other protections,  (viii) build the management and infrastructure  necessary to
support  the growth of its  business,  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.
-------------------------------------

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<PAGE>

PART II - OTHER INFORMATION

ITEM 2. - CHANGES IN SECURITIES AND USE OF PROCEEDS

     In the fourth  quarter  of the fiscal  year  ended  February  29,  2000 the
Company was successful in raising  $2,218,000  under two  arrangements  aimed at
raising an aggregate of  $5,000,000.  During the three months ended May 31, 2000
an additional  amount of approximately  $1,082,000 was raised bringing the total
raised to approximately $4,332,000. These transactions are described below.

     From December 1999 through February 29, 2000, the Company was successful in
raising  $1,468,000 of proceeds from the issuance of 6,672,727 shares of Class A
common stock under a $2,000,000 private placement to "accredited investors",  as
that term is defined in Regulation D  promulgated  under the  Securities  Act of
1933, as amended (the "Securities Act"). During the three months ended May 2000,
an  additional  $982,000 of proceeds  was raised from the  issuance of 4,464,637
shares  of Class A  common  stock  under  this  placement.  The  Company  claims
exemption from  registration of this private placement under section 4(2) of the
Securities Act and/or Regulation D promulgated thereunder.

     In December  1999,  the Company  entered into a letter  agreement with Noga
Investment  in  Technology,  Ltd.  ("Noga")  pursuant  to which  Noga  agreed to
purchase  $3,000,000  worth of  common  stock  at $0.22  per  share  payable  in
installments over a five month period ending May 2000. To secure its commitment,
Noga paid $250,000 as a  non-refundable  deposit.  In January and February 2000,
Noga purchased a total of $500,000 worth of common stock toward its  commitment.
In May 2000,  the agreement was amended to permit the balance to be paid by July
27, 2000 in exchange for an  additional  $100,000  which was paid by Noga to the
Company in May 2000 as an additional non-refundable deposit to secure the timely
payment of the balance  ($2,150,000).  If the  investor  fails to timely pay the
balance, the Company is entitled to keep the $350,000 in non-refundable deposits
it has  received  and all rights  that the  investor  is  entitled to under this
letter agreement terminate.  According to the letter agreement,  as amended, the
Company  agreed to provide Noga with an option to purchase  3,500,000  shares of
the Company's common stock at $0.02 per share and an option,  exercisable  prior
to July 27, 2000, to purchase the number of additional shares that are necessary
to satisfy the  requirements  for listing of the  Company's  stock on the NASDAQ
SmallCap market.

     In  connection  with both  transactions,  the Company has agreed to provide
options to purchase 7,000,000 shares of Class A common stock at $0.02, including
3,500,000 to an officer of the Company,  Mr. Allan Perres and  3,500,000 to Noga
and has agreed to nominate certain individuals to its Board of Directors.

     In March 2000,  the Company  reached  agreement with a vendor to settle its
outstanding  balance of  approximately  $18,000  through the issuance of 100,000
shares of Class A common stock.

     In May 2000,  the  Company  reached  agreement  with  three  parties  to an
aggregate  $20,000  bridge loan to settle  such  bridge loan in exchange  for an
aggregate 90,909 shares of Class A common stock.


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, 2000.

                                       12

<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,  2000         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)


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