U.S.
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON,
D.C. 20549
  FORM
10-Q
  (Mark
One)
  x
              QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
  For the
quarterly period ended: November
30, 2009
  OR
  o
              TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE
      ACT OF 1934
  For the
transition period from _____________ to _____________
  Commission
File Number 0-21320
  Magna-Lab
Inc.
 (Exact
name of smaller reporting company as specified in its charter)
  New
      York
              
              11-3074326(State
      or other jurisdiction of
              
              (IRS
      Employer Identification No.)incorporation
      or organization)6800
      Jericho Turnpike, Suite 120W, Syosset, NY 11791(Address
      of principal executive offices and Zip code)(516)
      393 5874(Issuer's
      telephone number including area code)(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 xNo o
  Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
  Large
      accelerated filer o
              
              Accelerated
      filer oNon-accelerated
      filer o
              
              Smaller
      reporting company x(Do
      not check if a smaller reporting company)
  Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes xNo o
  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 – January 11, 2010
  Class
      A Common Stock, $.001 Par Value
              
              1,176,025Class
      B Common Stock, $.001 Par Value
              
              3,304Class
              
              Shares
  
  MAGNA-LAB
      INC. AND SUBSIDIARYCONTENTSPART
      1 – FINANCIAL INFORMATIONItem
      1. – Financial StatementsCondensed Consolidated Balance Sheets
              
              1Condensed Consolidated Statements of
    Operations
              
              2Condensed Consolidated Statements of Cash
    Flows
              
              3Condensed Consolidated Statement of Stockholders’
      Deficit
              
              4Notes to Condensed Consolidated Financial
      Statements
              
              5 -
      8Item 2. - Management’s Discussion and Analysis of Financial
      ConditionAnd Results of Operations
              
              9 -
      10Item 4T – Controls and Procedures
              
              10
      - 11PART
      II - OTHER INFORMATIONItem 1A. – Risk Factors
              
              11Item 3 – Defaults Upon Senior Securities
              
              11
      - 12Item 6 – Exhibits
              
              12SIGNATURES
              
              12
 
  All items
which are not applicable or to which the answer is negative have been omitted
from this report.
  
  PARTI: FINANCIAL INFORMATIONItem
      1. - Financial StatementsMAGNA-LAB
      INC. AND SUBSIDIARYCONDENSED
      CONSOLIDATED BALANCE SHEETSASSETSNovember
      30,
              
              
              February
      28,2009
              
              
              2009(unaudited)CURRENT
      ASSETS:Cash
              
              $
              3,000
              
              
              $
              1,000Prepaid
      expense
              
              
              6,000
              
              
              
              3,000Total
      current assets
              
              $
              9,000
              
              
              $
              4,000LIABILITIES
      AND STOCKHOLDERS' DEFICITCURRENT
      LIABILITIES:Notes
      payable and accrued interest payable to a shareholder
              
              $
              215,000
              
              
              $
              158,000Accounts
      payable (including approximately $68,000 which is payable
    tothe
      Company’s President for expenses he paid on the Company’s
      behalf)
              
              
              339,000
              
              
              
              336,000Accrued
      expenses and other current liabilities
              
              
              38,000
              
              
              
              33,000Total
      current liabilities
              
              
              592,000
              
              
              
              527,000STOCKHOLDERS'
      DEFICIT:Preferred
      stock, par value $.01 per share, 5,000,000 shares
    authorized,none
      issued
              
              
              -
              
              
              
              -Common
      stock, Class A, par value $.001 per share, 120,000,000
    sharesauthorized,
      1,176,025 shares issued and outstanding at November 30,
              
              
              1,000
              
              
              
              1,0002009
      and February 28, 2009, respectivelyCommon
      stock, Class B, par value $.001 per share, 3,750,000
sharesauthorized,
      18,750 shares issued and 3,304 shares outstanding atNovember
      30, 2009 and February 28, 2009, respectively
              
              
              -
              
              
              
              -Capital-in-excess
      of par value
              
              
              27,180,000
              
              
              
              27,180,000Accumulated
      deficit
              
              
              (27,764,000
              )
              
              
              (27,704,000
              )Total
      stockholders' deficit
              
              
              (583,000
              )
              
              
              (523,000
              )Total
      liabilities and stockholders’ deficit
              
              $
              9,000
              
              
              $
              4,000
 
  See
accompanying notes to the condensed consolidated financial
statements.
  1
  MAGNA-LAB INC. AND SUBSIDIARYCONDENSED
      CONSOLIDATED STATEMENTS OF OPERATIONSThree
      and nine months ended November 30, 2009 and 2008(unaudited)Three
      months ended
              
              
              Nine
      months endedNovember
      30,
              
              
              November
      30,2009
              
              
              2008
              
              
              2009
              
              
              2008REVENUES
              
              $
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -OPERATING
      EXPENSES:General
      and administrative
              
              
              14,000
              
              
              
              16,000
              
              
              
              43,000
              
              
              
              118,000LOSS
      FROM OPERATIONS
              
              
              (14,000
              )
              
              
              (16,000
              )
              
              
              (43,000
              )
              
              
              (118,000
              )OTHER
      EXPENSE – Interest expense
              
              
              6,000
              
              
              
              4,000
              
              
              
              17,000
              
              
              
              12,000NET
      LOSS
              
              $
              (20,000
              )
              
              $
              (20,000
              )
              
              $
              (60,000
              )
              
              $
              (130,000
              )WEIGHTED
      AVERAGE NUMBEROF
      COMMON SHARES OUTSTANDING,BASIC
      AND DILUTED
              
              
              1,179,000
              
              
              
              1,179,000
              
              
              
              1,179,000
              
              
              
              1,132,000NET
      LOSS PER COMMON SHARE,BASIC
      AND DILUTED
              
              $
              (0.02
              )
              
              $
              (0.02
              )
              
              $
              (0.05
              )
              
              $
              (0.12
              )
 
  See
accompanying notes to the condensed consolidated financial
statements.
  2
  MAGNA-LAB INC. AND SUBSIDIARYCONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWSNine
      months ended November 30, 2009 and 2008(unaudited)2009
              
              
              2008CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      loss
              
              $
              (60,000
              )
              
              $
              (130,000
              )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Stock-based
      compensation expense
              
              
              -
              
              
              
              10,000Effect
      on cash of changes in operating assets and liabilities:Prepaid
      expenses and other assets
              
              
              (3,000
              )
              
              
              (2,000
              )Accounts
      payable, accrued liabilities and other current liabilities
              
              
              30,000
              
              
              
              94,000NET
      CASH USED IN OPERATING ACTIVITIES
              
              
              (33,000
              )
              
              
              (28,000
              )CASH
      PROVIDED BY FINANCING ACTIVITIES:Proceeds
      received from notes payable to shareholder
              
              
              35,000
              
              
              
              30,000NET
      INCREASE IN CASH
              
              
              2,000
              
              
              
              2,000CASH:Beginning
      of period
              
              
              1,000
              
              
              
              1,000End
      of period
              
              $
              3,000
              
              
              $
              3,000SUPPLEMENTAL
      SCHEDULE OF NON-CASH FINANCING ACTIVITIESNote
      payable used to finance insurance
              
              $
              11,000
              
              
              $
              11,000
 
  See
accompanying notes to the condensed consolidated financial
statements.
  3
  MAGNA-LAB INC. AND SUBSIDIARYCONDENSED
      CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICITFor
      the nine months ended November 30, 2009Capital-in-Common
      Stock
              
              
              ExcessClass
      A
              
              
              Class
      B
              
              
              of
      Par
              
              
              AccumulatedShares
              
              
              Amount
              
              
              Shares
              
              
              Amount
              
              
              Value
              
              
              DeficitBALANCES,
      February 28, 2009
              
              
              1,176,025
              
              
              $
              1,000
              
              
              
              3,304
              
              
              $
              -
              
              
              $
              27,180,000
              
              
              $
              (27,704,000
              )NET
      LOSS (unaudited)
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (60,000
              )BALANCES,
      November 30, 2009(unadited)
              
              
              1,176,025
              
              
              $
              1,000
              
              
              
              3,304
              
              
              $
              -
              
              
              $
              27,180,000
              
              
              $
              (27,764,000
              )
 
  See
accompanying notes to the condensed consolidated financial
statements.
  4
  MAGNA-LAB INC. AND SUBSIDIARY
  NOTES TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)
  NOTE 1 -BASIS OF PRESENTATION
AND CONSOLIDATION:
  The
accompanying condensed consolidated financial statements have been prepared in
accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X
for small business issuers and do not include all of the information and
disclosures required by accounting principles generally accepted in the United
States of America. The condensed consolidated financial statements include the
accounts of Magna-Lab Inc. and its wholly-owned subsidiary, Cardiac MRI, Inc.
(collectively, the “Company”) and all significant intercompany transactions and
balances have been eliminated in consolidation. All adjustments which are of a
normal recurring nature and, in the opinion of management, necessary for a fair
presentation have been included. These condensed consolidated financial
statements should be read in conjunction with the more complete information and
the Company’s audited consolidated financial statements and related notes
thereto included in the Company's annual report on Form 10-K for the year ended
February 28, 2009. The operating results for the three and nine months ended
November 30, 2009 are not necessarily indicative of the results that may be
expected for the year ended February 28, 2010.
  NOTE 2- DISCUSSION OF THE
COMPANY'S ACTIVITIES/PRODUCTS AND GOING CONCERN CONSIDERATION:
  Company Activities -The
Company is focused on engaging in a “reverse merger” transaction with an
unrelated business that would benefit from the Company’s public reporting
status. Additional activities have included preserving cash, making settlements
with creditors, attempting to raise capital and continuing its public
reporting.
  The
Company was previously engaged in research, development and commercialization
activities until it ceased such activities during the period September 2002
through March 2003. The Company’s efforts to raise additional capital or enter
into a strategic arrangement in order to complete commercialization of its
cardiac diagnostic Illuminator products and development of its Artery View
product or to seek other means to realize value through sale, license or
otherwise have been unsuccessful.
  Going Concern Consideration-
As indicated in the accompanying condensed consolidated financial statements, at
November 30, 2009, the Company had approximately $3,000 in cash and
approximately $583,000 in negative working capital and stockholders’ deficit and
negative cash flows from operations. For the nine months ended November 30,
2009, the Company had a net loss of approximately $60,000 and utilized
approximately $33,000 of cash in operating activities. Further, losses are
continuing subsequent to November 30, 2009. These factors, among others,
indicate that the Company is in need of additional financing or a strategic
arrangement in order to continue its planned activities for the fiscal year that
began on March 1, 2009. The Company’s plans to deal with this uncertainty are
described above in “Company Activities.” Management’s plans to enter into a
strategic arrangement or sell or license its products/technology or merge with
an unrelated business have not been successful to date and there can be no
assurance that management’s plans can be realized at all. These factors, among
others, raise substantial doubt about the Company’s ability to continue
operations as a going concern. No adjustment has been made in the accompanying
condensed consolidated financial statements to the amounts and classification of
assets and liabilities which could result should the Company be unable to
continue as a going concern.
  NOTE 3 –NET LOSS PER COMMON
SHARE:
  The
Company complies with the accounting and reporting requirements of Financial
Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)
260, “Earnings per Share, formerly Statement of Financial Accounting Standards
(“SFAS”) No. 128. Net loss per common share is computed based on the weighted
average number of Class A Common and Class B Common shares
outstanding.
  5
  Basic net
(loss) per share excludes dilution and is computed by dividing net loss
available to common stockholders by the weighted average common shares
outstanding for the year. Diluted loss per share reflects the potential dilution
that could occur if securities or other contracts to issue common stock were
exercised or converted into common stock or resulted in the issuance of common
stock that then shared in the earnings of the entity. Since there are no
options, warrants or derivative securities outstanding, basic and diluted net
loss per share were the same for the three and nine month periods ended November
30, 2009 and 2008.
  NOTE 4 –NOTES PAYABLE TO
SHAREHOLDER:
  Notes
payable include 12% unsecured notes payable to the Company’s principal
shareholder in the aggregate principal amount of $170,000, plus approximately
$45,000 of interest accrued, including $3,000 and $35,000, respectively, issued
during the three and nine months ended November 30, 2009. Such notes become due
120 days after issuance and, as such, $155,000 principal amount of such notes
are overdue at November 30, 2009. The notes that are overdue bear interest at
15% per year subsequent to their maturity date. The Company intends to make a
proposal to this principal shareholder to convert of all amounts outstanding to
them (including overdue amounts) into common stock of the Company.
  NOTE 5 –ACCOUNTS PAYABLE AND
ACCRUED EXPENSES:
  Approximately
$106,000 of accounts payable relates to intellectual property counsel fees and
costs including approximately $68,000 of which has been paid by and is therefore
due to the Company’s Chairman and President for payments he has made on the
Company’s behalf to preserve certain intellectual property rights.
  Accrued
expenses includes approximately $18,000 payable to a third party, guaranteed by
our principal shareholder, for amounts paid to an account payable in October
2007 on our behalf. This amount was to be repaid if the proposed merger
transaction with this party was not completed. This party subsequently merged
with a third party and abandoned its possible transaction with the Company.
There has not been a demand for repayment of this amount. Further, the Company
has asserted that it is due recovery of its certain costs from this third party
associated with a proposed transaction pursuant to understandings between the
parties.
  See also
Notes 3 and 8 to the audited consolidated financial statements included in the
Company’s Annual Report on Form 10-K for the year ended February 28, 2009 for
other information on outstanding liabilities and related matters.
  There was
no activity in the restructuring accrual for the pre-1997 activities during the
nine months ended November 30, 2009 or 2008. The Company periodically adjusts
the remaining accrual based on the status of the matters and activity given the
passage of time.
  NOTE 6 –STOCK-BASED
COMPENSATION:
  In
December 2004, the FASB updated its guidance for ASC 718, “Share Based Payment,”
formerly SFAS No. 123R. Among other items, ASC 718 eliminates the intrinsic
value method of accounting, and requires companies to recognize the cost of
employee services received in exchange for awards of equity instruments in the
financial statements based on the grant date fair value of those
awards.
  Stock
awards to consultants and other non-employees are accounted for based on an
estimate of their fair value at the time of grant and, in the instance of
options and warrants, are based upon a Black-Scholes option pricing
model.
  The fair
value of each option grant under ASC 718 is estimated on the date of the grant
using the Black-Scholes option pricing model with the following weighted-average
assumptions: risk free interest rate of 5%; no dividend yield; expected option
lives of five to nine years and expected volatility in excess of
200%.
  6
  In April
2004, the Board of Directors agreed to reserve 90,000 shares of class A common
stock for issuance to directors and management in the event that their efforts
result in Board approval of a merger or financing transaction. Such award, if
granted, was intended to recognize the efforts of the Board and the Merger
Committee working over an extended period of time with no or minimal
compensation for their efforts in (a) administering the wrap up of the Company’s
affairs and (b) originating, negotiating, executing and administrating a merger
and related
transactions to provide the Company shareholders with an opportunity to realize
value for their shares. On July 24, 2008, pursuant to such Board approval, the
Company entered into a definitive agreement for the merger of the Company with
Belle Haven Partners, LLC under which a company, newly formed by Belle Haven for
the purpose of acquiring all of the outstanding stock of Worldwide Equities,
Inc., a Florida corporation, would be merged into a newly formed wholly-owned
subsidiary of our company. Worldwide Equities, Inc., through its wholly-owned
subsidiary, International Global Metals, Inc., is focused on scrap metal
recycling, with an emphasis on reselling and processing ferrous and non-ferrous
scrap metal. As such, the criteria for recognition of this share compensation
was met on July 24, 2008 and the Company recorded stock-based compensation
expense of approximately $10,000 reflecting the fair value of the 90,000 shares
at the date of entry into the agreement at the closing bid price of the
Company’s stock.
  NOTE 7 –EFFECT OF RECENT
ISSUED AND ADOPTED ACCOUNTING PRONOUNCEMENTS:
  In
December 2007, the FASB updated guidance on ASC 805, “Business Combinations” ,
formerly SFAS No. 141(R). ASC 805 retains the fundamental requirements of
guidance surrounding business combinations stating that the acquisition method
of accounting be used for all business combinations and for an acquirer to be
identified for each business combination. ASC 805 defines the acquirer as the
entity that obtains control of one or more businesses in the business
combination and establishes the acquisition date as the date that the acquirer
achieves control. ASC 805 requires an acquirer to recognize the assets acquired,
the liabilities assumed, and any noncontrolling interest in the acquiree at the
acquisition date, measured at their fair values as of that date, with limited
exceptions specified in the statement. This statement applies prospectively to
business combinations for which the acquisition date is on or after the
beginning of the first annual reporting period beginning on or after December
15, 2008. The Company believes that the effect ASC 805 will have on its
condensed consolidated financial statements will only be known when and if it
completes a reverse merger transaction.
  In
December 2007, the FASB issued guidance on ASC 810, “Non controlling Interests
in Consolidated Financial Statements”, formerly SFAS 160. ASC 810 establishes
accounting and reporting standards for the non controlling interest in a
subsidiary and for the deconsolidation of a subsidiary. Minority interests will
be re characterized as non controlling interests and will be reported as a
component of equity separate from the parent’s equity, and purchases or sales of
equity interests that do not result in a change in control will be accounted for
as equity transactions. In addition, net income attributable to the non
controlling interest will be included in consolidated net income on the face of
the income statement and upon a loss of control, the interest sold, as well as
any interest retained, will be recorded at fair value with any gain or loss
recognized in earnings. This pronouncement is effective for fiscal years
beginning after December 15, 2008. The Company believes that the effect ASC 810
will have on its condensed consolidated financial statements will only be known
when and if it completes a reverse merger transaction.
  In April
2009, the FASB issued guidance intended to provide additional application
guidance and enhance disclosures regarding fair value measurements and
impairments of securities. ASC 820, formerly FAS 157-4, Determining Fair Value
When the Volume and Level of Activity for the Asset or Liability Have
Significantly Decreased and Identifying Transactions That Are Not Orderly,
provides guidelines for making fair value measurements more consistent with
guidance surrounding fair value measurements. ASC 825, formerly FSP FAS 107-1
and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments,
enhances consistency in financial reporting by increasing the frequency of fair
value disclosures. ASC 320, formerly FSP FAS 115-2 and FAS 124-2, Recognition
and Presentation of Other-Than-Temporary Impairments, provides additional
guidance designed to create greater clarity and consistency in accounting for
and presenting impairment losses on securities. ASC 820 amends guidance
surrounding fair value measurements by delaying the effective date of such
guidance for nonfinancial assets and nonfinancial liabilities, except for items
that are already recognized or disclosed at fair value in the financial
statements on a recurring basis, to fiscal years beginning after November 15,
2008.
  ASC 820
relates to determining fair values when there is no active market or where the
price inputs being used represent distressed sales. It reaffirms what initial
fair value guidance states is the objective of fair value measurement—to reflect
how much an asset would be sold for in an orderly transaction (as opposed to a
distressed or forced transaction) at the date of the financial statements under
current market conditions. Specifically, it reaffirms the need to use judgment
to ascertain if a formerly active market has become inactive and in determining fair
values when markets have become inactive.
  7
  ASC 825
relates to fair value disclosures for any financial instruments that are not
currently reflected on the balance sheet of companies at fair value. Prior to
issuing this FSP, fair values for these assets and liabilities were only
disclosed once a year. The FSP requires these disclosures on a quarterly basis,
providing qualitative and quantitative information about fair value estimates
for all those financial instruments not measured on the balance sheet at fair
value.
  ASC 320
on other-than-temporary impairments are intended to bring greater consistency to
the timing of impairment recognition, and provide greater clarity to investors
about the credit and noncredit components of impaired debt securities that are
not expected to be sold. The measure of impairment in comprehensive income
remains fair value. ASC 320 also requires increased and more timely disclosures
regarding expected cash flows, credit losses, and an aging of securities with
unrealized losses.
  The
guidance is effective for interim and annual periods ending after June 15, 2009
and have not had a material effect on the financial statements of the
Company.
  In June
2009, FASB updated its guidance in ASC 855, “Subsequent Events,” formerly SFAS
No. 165, regarding subsequent events, establishing general standards of
accounting for and disclosures of events that occur after the balance sheet date
but before the financial statements are issued or available to be issued. It is
effective for interim and annual periods ending after June 15, 2009. The
adoption of this pronouncement has not had a material effect on the condensed
consolidated financial statements.
  In June
2009, the FASB issued SFAS No. 168, “The FASB Accounting Standards Codification
and the Hierarchy of Generally Accepted Accounting Principles (“GAAP”) – a
replacement of FASB Statement No. 162,” which will become the source of
authoritative US GAAP recognized by the FASB to be applied to nongovernmental
entities. It is effective for financial statements issued for interim and annual
periods ending after September 15, 2009. The Company does not believe that this
will have a material effect on its consolidated financial
statements.
  Management
does not believe that any other recently issued, but not yet effective,
accounting standards if currently adopted would have a material effect on the
accompanying condensed consolidated financial statements.
  8
  Item2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
 
 Forward
Looking Statements
  Some
of the statements contained in this report discuss our plans and strategies for
our business or state other forward-looking statements, as this term is defined
in the Private Securities Litigation Reform Act of 1995. Statements that are not
statements of historical facts may be deemed to be forward-looking statements.
The words "anticipate," "believe," "estimate," "expect," "plan," "intend,"
"should," "seek," "will," and similar expressions are intended to identify these
forward-looking statements, but are not the exclusive means of identifying them.
These forward-looking statements reflect the current views of our management.
However, various risks, uncertainties and contingencies could cause our actual
results, performance or achievements to differ materially from those expressed
in, or implied by, these statements. See our Form 10-K for the year ended
February 28, 2009 for a discussion of certain known risks; also see Part II,
Item 1A.
  Overview,
Background and History
  We
are currently a “shell company” with no meaningful assets or operations other
than our efforts to identify and merge with an operating company. We no longer
have any full-time employees and our Chief Executive and Chief Financial
Officers serve on a part-time consulting basis.
  Prior
to March 2003, our business had been focused on pre-revenue development and
commercialization of disposable medical devices designed to enhance the
effectiveness of magnetic resonance imaging in detection and diagnosis of heart
disease. Due to the unavailability of funding, beginning in the Fall of 2002 we
essentially ceased all of our operations including product development and
commercialization activities. Our efforts to realize value for our prior
business and MRI technology have been unsuccessful. As a result, we view our
most viable option to be merging with an unrelated operating company that would
benefit from our status as a reporting company in a so-called “reverse merger”
transaction. Entering into a “reverse merger” would likely involve very
substantial dilution to the existing shareholders. It would, however, provide an
opportunity to return some value to shareholders. While we have identified and
explored merging with a number of candidates over the past few years, and
entered into definitive agreements with one candidate (which agreement was
subsequently terminated) we have no commitments to merge with any company at the
present time.
  In
order to raise cash to continue our efforts to pursue a reverse merger, on
October 31, 2005, the Company consummated a stock purchase agreement with Magna
Acquisition LLC (“MALLC”) which resulted in a change of control of our company.
Under the agreement, we sold 300,000 shares of Class A Common Stock to MALLC for
gross proceeds of $190,000, before expenses. Contemporaneous with the new
investment, MALLC purchased from our former principal stockholder 307,727 shares
of the Company’s Class A Common Stock, representing all the shares of our common
stock owned by that shareholder. Two of our directors and our Chief Financial
Officer serve as sole managers of MALLC, with the ability to vote and dispose of
the shares of our Company owned by MALLC by majority vote. These directors have
assumed a lead role with management in pursuing financing and merger candidates
and operating matters.
  MALLC
has been responsible for substantially all of our funding since October 2005.
During the period from October 2005 to November 30, 2009, MALLC loaned us an
aggregate $170,000 under a series of promissory notes payable that mature 120
days from issuance, including $5,000 and $30,000, respectively, loaned to us in
the three and nine months ended November 30, 2009. At November 30, 2009,
$155,000 face amount of such notes were beyond their maturity date and therefore
due on demand. The notes bear interest at 12% per year increasing to 15% per
year for periods beyond maturity. The Company intends to make a proposal to
MALLC to convert all of the amounts outstanding to them (including overdue
amounts) into common stock of the Company.
  While
we have reduced our expenditures very significantly, we do not have sufficient
cash to continue our activities for the coming twelve months. We currently do
not have any commitments for new funding.
  Financial Condition, Liquidity and
Capital Resources -At November 30, 2009, we had approximately $3,000 in
cash and our working capital deficit and stockholders’ deficit were both
approximately $583,000. Net loss for the nine months ended November 30, 2009 was
approximately $60,000 and cash used in operations during the nine months totaled
approximately $33,000.
  9
  Our
plan of operations for the coming twelve months is to pursue our “reverse
merger” strategy by seeking, evaluating
and negotiating with merger candidates and to continue to take actions to
preserve our cash and continue our public reporting. We do not have the cash
resources to continue our plan for the coming twelve months, even at our reduced
expenditure levels. As such, we may have to take further measures or cease
activities altogether, including terminating our public reporting
status.
  Should
we enter into a “reverse-merger” transaction, it is highly unlikely that any
funds would be allocated to our prior cardiac diagnostic business (which
business would require significant capital). Further, since we do not have the
cash to continue to preserve the intellectual property of that business, we may
be forced to abandon it altogether.
  We
currently have no material commitments for capital expenditures.
  Results of Operations –During
the three and nine months ended November 30, 2009, our net loss was
approximately $20,000 and $60,000, respectively, compared to a net loss of
approximately $20,000 and $130,000, respectively, in the three and nine months
ended November 30, 2008. The net loss in the current year nine months results
from ongoing costs of approximately $20,000 per quarter. Net loss for the prior
year nine months results from ongoing costs of approximately $20,000 per quarter
plus approximately $60,000 of costs associated with our negotiation of and entry
into a definitive agreement to merge with a target company, which agreement we
subsequently terminated due to the counterparty’s breach. In addition, in the
current year certain expenses have been reduced. While the counterparty is
obligated to reimburse up to $50,000 of our deal-related expenses, we have not
been successful in recouping such amounts. As such, we have charged such costs
to operations. Higher interest cost results from higher debt levels, and higher
default interest, in the three and nine months ended November 30, 2009 compared
to the three and nine months ended November 30, 2008.
  The
operating results for the three months ended November 30, 2009 are reflective of
our core operating costs when we are not engaged in active negotiations for a
merger transaction. Our expenses, particularly professional and consulting fees,
can increase significantly if we are actively engaged in negotiations for a
merger transaction as was the instance in the nine months ended November 30,
2008.
  Off
Balance Sheet Arrangements
  The
Company has no material off balance sheet arrangements that are likely to have a
current or future effect on our financial condition, changes in financial
condition, revenues or expenses, results of operations, liquidity, capital
resources or capital expenditures.
  Critical
Accounting Principles–
  We
have identified critical accounting principles that affect our consolidated
financial statements by considering accounting policies that involve the most
complex or subjective decisions or assessments as well as considering newly
adopted principals. They are:
  Use of Estimates, Going Concern
Consideration– Our condensed consolidated financial statements have been
prepared assuming we are a “going concern.” We are in need of immediate
substantial additional capital or a strategic business arrangement in order to
continue our planned activities. There can be no assurance that our plans to
address this need can be realized. As such, we may be unable to continue
operations as a going concern. No adjustment has been made in the condensed
consolidated financial statements which could result should we be unable to
continue as a going concern.
  Item4T. Controls and Procedures
  (a)
Evaluation of Disclosure
Controls and Procedures.The Company’s senior management is responsible
for establishing and maintaining a system of disclosure controls and procedures
(as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act
of 1934 (the “Exchange Act”) designed to ensure that the information required to
be disclosed by the Company in the reports it files or submits under the
Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the Securities and Exchange Commission’s rules and forms.
Disclosure controls and procedures include, without limitation, controls and
procedures designed to ensure that information required to be disclosed by an
issuer in the reports that it files or submits under the Exchange Act is
accumulated and communicated to the issuer’s management, including its principal
executive officer or officers and principal financial officer or officers, or persons
performing similar functions, as appropriate to allow timely decisions regarding
required disclosure.
  10
  The
Company has evaluated the effectiveness of the design and operation of its
disclosure controls and procedures under the supervision of and with the
participation of management, including the Chief Executive Officer and our Chief
Financial Officer as of the end of the period covered by this report. Based on
that evaluation, our Chief Executive Officer and Chief Financial Officer have
concluded that our disclosure controls and procedures are
effective.
  (b)
Changes in Internal Control
Over Financial Reporting.There have not been any changes in our internal
control over financial reporting (as such term is defined in Rules 13a-15(f)
under the Exchange Act) during our most recently completed fiscal quarter which
is the subject of this report that have materially affected, or are reasonably
likely to materially affect, our internal control over financial
reporting.
  There
are inherent limitations in any system of internal control. A control system, no
matter how well designed and operated, can provide only reasonable, not
absolute, assurance that its objectives are met. Further, the design of a
control system must consider that resources are not unlimited and the benefits
of controls must be considered relative to their costs. Because of the inherent
limitations in all control systems, no evaluation of controls can provide
absolute assurance that all control issues and instances of fraud, if any,
within the company have been detected. These inherent limitations include the
realities that judgment in decision-making can be faulty, and that breakdowns
can occur because of simple error or mistake. Additionally, controls can be
circumvented by the individual acts of some persons, by collusion of two or more
people, or by management override of the controls.
  _____________________________________
  PARTII - OTHER INFORMATION
  Item
1A. Risk Factors
  Any
investment in our common stock involves a high degree of risk. Some of these
many known risks that affect an investment in our Company (there can be others)
include:
  ·
              we
      have incurred significant net losses in the past and unless we receive
      additional financing, we may be forced to cease all operations and
      liquidate our company,
 ·
              we
      may issue shares of our capital stock or debt securities to raise capital
      and to complete a business combination, which would reduce the equity
      interest of our stockholders and likely cause a change in control of our
      ownership,
 ·
              if
      we merge with an unrelated business, we may divest our cardiac MRI
      technology, partly in connection with or in anticipation of a merger with
      an unrelated business or such technology may remain with the Company and
      not receive any priority in allocation of any funding that may be
      available,
 ·
              if
      we merge with an unrelated business, it is likely that our current
      officers and directors may resign upon consummation of a business
      combination,
 ·
              because
      of our limited resources and the significant competition for business
      combination opportunities, we may not be able to consummate a business
      combination with suitable growth
potential,
 ·
              we
      may be unable to obtain additional financing that may be needed to fund
      the operations and/or growth of the target
  business,
 ·
              we
      have no full time employees and are substantially dependent on the efforts
      of part-time management and members of the Board of Directors, working for
      per-diem or no cash compensation, none of whom are bound by term
      employment agreements and
 ·
              our
      significant shareholders and executive officers and directors currently
      are able, by virtue of their position as managers of Magna Acquisition
      LLC, a 56% shareholder of the Company, to influence matters requiring
      stockholder approval and their interests may conflict with those of other
      shareholders.
  For
a more complete listing and description of these and other risks that the
Company faces please see our Annual Report on Form 10-K for the year ended
February 28, 2009.
  Item3. Defaults Upon Senior Securities
  As
discussed in Managements Discussion and Analysis of Financial Condition and
Results of Operations –Overview, Background and History, $155,000 principal
amount of 12% notes payable to Magna Acquisition LLC (“MALLC)
are in default as a result of their non-payment when due. Such notes now carry a
default rate of interest of 15%. MALLC has waived the cross default that would
otherwise result from the above default with respect to the additional principal
amount of notes payable to MALLC that were issued subsequent to the above
defaults.
  11
  Item6. - Exhibits31.1
              
              Certification
      of Principal Executive Officer pursuant to Exchange Act Rule 13a – 14(a),
      as adopted pursuant
      to Section 302 of the Sarbanes-Oxley Act of
2002.31.2
              
              Certification
      of Principal Financial Officer pursuant to Exchange Act Rule 13a – 14(a),
      as adopted pursuant
      to Section 302 of the Sarbanes-Oxley Act of
2002.32.1
              
              Certification
      of Principal Executive Officer pursuant to 18 U.S.C. 1350 as adopted
      pursuant to Section 906
      of the Sarbanes-Oxley Act of 2002.32.2
              
              Certification
      of Principal Financial Officer pursuant to 18 U.S.C. 1350 as adopted
      pursuant to Section 906 of
      the Sarbanes-Oxley Act of 2002.
  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:
      January 14, 2009
              
              By:
              /s/
      Lawrence A.
      MinkoffLawrence
      A. Minkoff, Chairman, President and Chief

                  Scientific
      Officer (Principal Executive Officer)By:
              /s/
      Kenneth C. RiscicaKenneth
      C. Riscica, Treasurer and Secretary(Principal
      Financial and Accounting Officer)
   12
  INDEX
      TO EXHIBITSNo.
                
                Description31.1
                
                Certification
      of Principal Executive Officer pursuant to Exchange Act Rule 13a – 14(a),
      as adopted pursuant to
      Section 302 of the Sarbanes-Oxley Act of 2002.31.2
                
                Certification
      of Principal Financial Officer pursuant to Exchange Act Rule 13a – 14(a),
      as adopted pursuant to
      Section 302 of the Sarbanes-Oxley Act of 2002.32.1
                
                Certification
      of Principal Executive Officer pursuant to 18 U.S.C. 1350 as adopted
      pursuant to Section 906 of
      the Sarbanes-Oxley Act of 2002.32.2
                
                Certification
      of Principal Financial Officer pursuant to 18 U.S.C. 1350 as adopted
      pursuant to Section
      906 of the Sarbanes-Oxley Act of 2002.