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: AUGUST 31, 1999
                                                 ---------------

     ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
                              EXCHANGE ACT OF 1934
                     For the transition period from    to
                                                   ----  ----

                         Commission file number 0-21320
                                                -------

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

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

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

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

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

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days. Yes ( X ) No ( )

                      APPLICABLE ONLY TO CORPORATE ISSUERS

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

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

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



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


<PAGE>





PART I: FINANCIAL INFORMATION
               ITEM 1. - FINANCIAL STATEMENTS

                          MAGNA-LAB INC. AND SUBSIDIARY


                                    CONTENTS



PART 1 - FINANCIAL INFORMATION (UNAUDITED)

         ITEM 1. - FINANCIAL STATEMENTS

                  CONSOLIDATED BALANCE SHEETS                                  1

                  CONSOLDATED STATEMENTS OF OPERATIONS                         2

                  CONSOLDATED STATEMENTS OF CASH FLOWS                         3

                  CONSOLDATED STATEMENT OF STOCKHOLDERS' EQUITY                4

                  NOTES TO CONSOLDATED FINANCIAL STATEMENTS                  5-8

         ITEM 2.   - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN           9-11
                  OF OPERATION

PART II - OTHER INFORMATION

         ITEM 2 - CHANGES IN SECURITIES AND USE OF PROCEDS                    11

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

         SIGNATURES                                                           13

















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

<PAGE>
<TABLE>
<CAPTION>





                          MAGNA-LAB INC. AND SUBSIDIARY

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


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

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

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




                                       LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Accounts payable                                                                  $    271,000       $    223,000
  Accrued expenses and other current liabilities                                       1,020,000            608,000
                                                                                    -------------      -------------
        Total current liabilities                                                      1,291,000            831,000
                                                                                    -------------      -------------


COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' DEFICIT:
  Preferred stock, par value $.01 per share, 5,000,000
     shares authorized, no shares issued                                                       -                  -
  Common stock, Class A, par value $.001 per share,
     40,000,000 shares authorized, 21,862,350 and
     21,662,350 shares issued and outstanding, respectively.                              22,000             21,000
  Common stock, Class B, par value $.001 per share,
     3,750,000 shares authorized, 1,875,000 shares issued,
     738,317 shares outstanding                                                            1,000              1,000
  Capital in excess of par value                                                      15,664,000         15,649,000
  Accumulated deficit                                                                (16,965,000)       (16,422,000)
                                                                                     ------------      -------------
        Total stockholders' deficit                                                   (1,278,000)          (751,000)
                                                                                    -------------      -------------
                                                                                    $     13,000       $     80,000
                                                                                    =============      =============







                 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS

</TABLE>

                                       1
<PAGE>
<TABLE>
<CAPTION>

                          MAGNA-LAB INC. AND SUBSIDIARY

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (unaudited)









                                                            Three months ended                  Six months ended
                                                                August 31,                          August 31,

                                                           1999           1998                 1999           1998
                                                      -------------------------------------------------------------

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

COSTS AND EXPENSES:
  General and administative                               70,000         72,000              148,000        158,000
  Selling and marketing                                        -              -                    -              -
  Research and development                               199,000        207,000              395,000        422,000
                                                      -----------    -----------          -----------    -----------
                                                         269,000        279,000              543,000        580,000
                                                      -----------    -----------          -----------    -----------

OTHER INCOME (EXPENSE):
  Other income                                                 -              -                    -              -
  Interest and financing expense                               -              -                    -              -
  Interest income                                              -          1,000                    -          4,000
                                                      -----------    -----------          -----------    -----------

NET LOSS                                              $ (269,000)    $ (278,000)          $ (543,000)    $ (576,000)
                                                      ===========    ===========          ===========    ===========



WEIGHTED AVERAGE NUMBER
 OF SHARES OUTSTANDING                                22,601,000     20,187,000           22,501,000     20,187,000
                                                      ===========    ===========          ===========    ===========


NET LOSS PER SHARE                                    $    (0.01)    $    (0.01)          $    (0.02)    $    (0.03)
                                                      ===========    ===========          ===========    ===========













                 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS



</TABLE>

                                       2
<PAGE>
<TABLE>
<CAPTION>





                          MAGNA-LAB INC. AND SUBSIDIARY


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



                                                                                        Six Months ended August 31,
                                                                                             1999              1998
                                                                                             ----              ----
<S>                                                                                <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                                                         $    (543,000)    $     (576,000)
                                                                                   --------------    ---------------
  Adjustments:
    Depreciation and amortization                                                              -                  -
  Effect on cash of changes in operating assets and liabilities:
    Accounts payable and accrued liabilities                                             460,000             86,000
                                                                                   --------------    ---------------
           Total adjustments                                                             460,000             86,000
                                                                                   --------------    ---------------

NET CASH USED IN OPERATING ACTIVITIES                                                    (83,000)          (490,000)
                                                                                   --------------    ---------------

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

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

NET INCREASE (DECREASE) IN CASH
 AND CASH EQUIVALENTS                                                                    (67,000)          (490,000)
CASH AND CASH EQUIVALENTS:
  Beginning of period                                                                     67,000            599,000
                                                                                   --------------    ---------------
  End of period                                                                    $           -     $      109,000
                                                                                   ==============    ===============


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













                 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS

</TABLE>

                                       3
<PAGE>

<TABLE>
<CAPTION>


                          MAGNA-LAB INC. AND SUBSIDIARY

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





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

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

CONVERT B SHARES TO A                              -             -             -            -                -              -

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

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

NET LOSS                                           -             -             -            -                -       (543,000)
                                        --------------------------------------------------------------------------------------

BALANCES, August 31, 1999 (unaudited)     21,862,350      $ 22,000       738,317    $   1,000      $15,664,000    (16,965,000)
                                          ==========      =========      =======    ==========     ============   ============









                 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS

</TABLE>

                                       4
<PAGE>




                          MAGNA-LAB INC. AND SUBSIDIARY

                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 1 - BASIS OF PRESENTATION:

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

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

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

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

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

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


GOING  CONCERN  CONSIDERATION  - As indicated in the  accompanying  consolidated
financial  statements,  as of August 31, 1999, the Company had no cash, negative
working  capital  of   approximately   $1,291,000  and  negative  net  worth  of
approximately  $1,278,000 and further,  has a development  agenda which requires
additional financing (See, however, Note 8 regarding certain funding received in
December  1999).  Additionally,  as indicated in the  accompanying  consolidated

                                       5
<PAGE>

financial   statements,   the  Company  has  incurred  a   cumulative   loss  of
approximately  $17.0 million since inception and has no present revenue.  Losses
have continued since August 31, 1999. These factors, among others, indicate that
the Company is in need of immediate  significant  additional  financing and/or a
strategic business  arrangement in order to continue the Plan in the fiscal year
beginning  March 1, 1999.  The Company had no cash  resources at August 31, 1999
and could not fund its present operations. Certain consultants, an executive and
the Company's two principal  development partners have continued to work for the
Company in the absence of being paid.  In April 1999,  one of these parties (the
Company's  third  party  developer)  advised the Company it could no longer work
without current payment. In July 1999 the Company's medical collaborator advised
the Company that it could not continue to incur costs without payment.  There is
no assurance that others will continue to advance the Company's  efforts without
current pay. The Company is attempting to raise  additional  capital to continue
its planned operations.

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.

See Note 8 - Subsequent events regarding certain financing  received in December
1999.

NOTE 3 - LOSS PER SHARE OF COMMON STOCK:

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

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

In May 1997,  the Company  entered into a three-year  agreement with the Cardiac
Institute of the Mount Sinai School of Medicine (New York City) and Dr. Valentin
Fuster  (as  principal  investigator)  ("MSSM")  for  a  collaborative  research
arrangement  devoted to utilizing MRI in cardiac  arterial imaging (the "Cardiac
MRI Initiative").  Under the agreement, the Company is required to make payments
to MSSM of  $600,000 in each of the first and second  years and  $300,000 in the
third year. The start of the annual periods was delayed and payments of $300,000
were made to MSSM during the fiscal year ended February 28, 1998. For the fiscal
year ended  February 28, 1999,  $300,000  was paid and $350,000  (including  two
quarterly  payments  in  arrears)  was  accrued at  February  28, 1999 under the
agreement. For the quarter and six months ended August 31, 1999, no amounts were
paid and a total of $150,000 and $300,000,  respectively,  has been accrued.  At
August 31, 1999,  amounts  accrued and unpaid to MSSM were  $650,000  (including
four  quarterly  payments in arrears).  In July 1999, the Company was advised by
MSSM  that it will not  incur  new  costs  under  the  collaboration  due to the
arrearage.  The  Company  has also  agreed to pay  royalties,  as defined in the
agreement,  to MSSM for the sole and exclusive  right to use,  make,  have made,
sell and otherwise exploit the results of the collaboration.

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

NOTE 5 - PROPERTY AND EQUIPMENT:

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

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

                                       6
<PAGE>

NOTE 6 - ACCRUED LIABILITIES:

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

NOTE 7 - COMMITMENTS AND CONTINGENCIES:

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

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

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

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

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

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

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

                                       7
<PAGE>

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

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

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

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

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

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


NOTE 8 - SUBSEQUENT EVENTS

In December  1999,  the Company was  successful in closing  $650,000 of proceeds
under a private  placement  of  2,954,545  shares of Class A common stock issued
under a $5,000,000 private offering to accredited  investors.  Additionally,  an
investor  made a  non-refundable  $250,000  deposit  with the  Company  toward a
proposed  investment of  $3,000,000  over a six month period ending in May 2000.
Further,  this  investor  will have the option to invest  additional  amounts at
$0.22 prior to May 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 representations on its Board of Directors.


In November  1999,  the  Company's  Board of Directors  approved  the  issuance,
subject to  shareholder  approval of an increase in the related  option plan, of
stock options to purchase approximately  6,100,000 shares of the Company's Class
A common stock to officers directors and consultants.


                                       8
<PAGE>


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



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


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

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

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

     In December 1997, the Company's  efforts to raise  additional  financing to
support the Cardiac MRI Initiative  were successful in raising $1.884 million in
a private  placement of 15,072,000 shares of Class A common stock (the "December
1997  Financing").  Such financing was  conditioned on the Company  initiating a
program to pay its liabilities on a reduced basis (the "Debt Reduction  Program"
- See Notes to  Consolidated  Financial  Statements).  Since  December 1997, the
Company  has:  (1)  initiated  and  advanced  the  Cardiac MRI  Initiative,  (2)
continued  the Debt  Reduction  Program  (3)  sought  to  realize  value for the
Company's  investment  in the  MAGNA-SL  through a  business  relationship  with
Elscint or others and (4) raised an additional  $362,050 in a private  placement
of 2,413,667  shares of class A common stock.  During December 1999, the Company
received  proceeds of $850,000 in  connection  with its efforts to raise private
equity to support its planned  operations.  The  $850,000  consisted of $600,000
received  from  accredited  investors  in exchange for the issuance of 2,727,273
shares of Class A common stock and $250,000 non-refundable deposit received from
one investor in connection  with a letter  agreement to provide up to $3,000,000
(including the $250,000  non-refundable  deposit) to the Company in exchange for
shares  of Class A common  stock at $0.22 per share  (see  Item 2).  Efforts  to
realize value for the MAGNA-SL  product have been  unsuccessful  to date and are
ongoing.

                                       9
<PAGE>

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


     LIQUIDITY, CAPITAL RESOURCES AND GOING CONCERN CONSIDERATION

     As indicated in the accompanying  consolidated financial statements,  as of
August  31,  1999,  the  Company  had  no  cash,  negative  working  capital  of
approximately  $1,291,000 and negative net worth of approximately $1,278,000 and
further has a  development  agenda which  requires  additional  financing  (see,
however, Note 8 and Item 2 regarding certain funding received in December 1999).
Additionally,   as  indicated  in  the   accompanying   consolidated   financial
statements,  the Company has incurred a cumulative loss of  approximately  $17.0
million since  inception,  negative cash flow from operations and has no present
revenue.  Losses have  continued  since August 31, 1999.  These  factors,  among
others, indicate that the Company is in need of immediate significant additional
financing and/or a strategic business  arrangement in order to continue the Plan
in the fiscal year beginning March 1, 1999. The Company had no cash resources at
August 31, 1999 to fund its  operations  for any material  period of time beyond
August 31, 1999 and the Company is  attempting  to raise  additional  capital to
continue its planned operations.  Further,  the Company is delinquent in payment
to its  principal  medical  collaborator,  its third party  developer and to its
principal  management  and  consultants.  The medical  collaborator  advised the
Company in July 1999 that it could no longer  incur new costs  under the project
and the third party  developer  has advised the Company that it cannot  continue
without payment.

     In  December  1999,  the  Company  was  successful  in closing  $650,000 of
proceeds under a private  placement of 2,954,545  shares of Class A common stock
issued   under  a  $5,000,000   private   offering  to   accredited   investors.
Additionally,  an  investor  made a  non-refundable  $250,000  deposit  with the
Company  toward a proposed  investment  of  $3,000,000  over a six month  period
ending in May 2000. The Company's efforts to raise additional amounts from these
and  other  investors  are  ongoing.  The  Company's  continued  operations  are
dependant upon the success of such additional efforts.

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

     RESULTS OF OPERATIONS -

     Operations  for the six months ended August 31, 1999 resulted in a net loss
of approximately $543,000 and utilized approximately $83,000 of cash principally
in connection with activities under The Cardiac MRI Initiative. Payments to MSSM
are  approximately  $650,000  in  arrears  at  August  31,  1999.  Net  loss  of
approximately  $543,000  reflects  accrual of costs under the MSSM  agreement as
well as accrual of management and other costs incurred.

     Operations  in the six months ended August 31, 1998  resulted in a net loss
of approximately $576,000 and utilized cash of approximately  $490,000. The loss
results  principally from the Cardiac MRI Initiative  development  activities in
collaboration with the Mount Sinai School of Medicine.  Cost of the MSSM portion
of the  collaboration  were  approximately  $300,000 of the net loss for the six
months. In May 1998, the Company  initiated a design  review/regulatory/contract
manufacturing  relationship with a third party and paid $12,000 to initiate that
relationship.  General  and  administrative  expenses  consisted  of  executive,
administrative  and  business   development   consultants  as  well  as  certain
occupancy, storage and professional costs.

                                       10
<PAGE>

     THE YEAR 2000 ISSUE MAY CAUSE  PROBLEMS FOR THE COMPANY

     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 Year 2000 issues relate to (1) hardware,  (2) software and (3)
data. The Company uses computers in accounting and general administration and in
various  technical  applications.  The software that the Company  currently uses
includes  versions which are several years old and, the Company  believes,  have
year 2000  issues,  including  hardware  which is not Year 2000  compliant.  The
Company  would have  expected  to  (subject  to the  availability  of  financial
resources)  update  its  general  accounting  and  administration  hardware  and
software during 1999 to the latest versions available.  However, the Company has
been  essentially out of cash or other financial  resources since  approximately
March  1999.  The  Company  has,  therefore,  prepared  itself for the year 2000
computer  issue in very basic  ways such as (1)  creating  backup  files of data
which can be later loaded onto Year 2000  compliant  hardware and software,  (2)
preparation  of temporary  hardware and software  solutions and (3) setting back
the internal  clock on Company  computers so that the Year 2000 issue on Company
hardware is deferred.

     The software used for technical  functions is generally more current and is
believed,  in at least  some  cases,  to be year  2000  compliant.  The  Company
believes,  but cannot  assure,  that its  collaborator,  MSSM and its outsourced
developer,  Act  Medical,  Inc.  are taking the steps  necessary to be year 2000
compliant.  The Company's MAGNA-SL uses computer systems which generally are not
time or date  sensitive  but the Company has not tested them and  therefore,  by
definition, such systems are not Year 2000 compliant.

     There can be no  assurance  that the Company will have no  disruption  as a
result of the year 2000 issue.

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



PART II - OTHER INFORMATION

ITEM 2. - CHANGES IN SECURITIES AND USE OF PROCEEDS

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

     During  December  1999,  the  Company  received  proceeds  of  $850,000  in
connection  with its  efforts to raise  private  equity to support  its  planned
operations.   The  $850,000  consisted  of  $600,000  received  from  accredited
investors in exchange  for the  issuance of  2,727,273  shares of Class A common
stock  and  $250,000  non-refundable  deposit  received  from  one  investor  in
connection  with a letter  agreement to provide up to $3,000,000  (including the
$250,000  non-refundable deposit) to the Company in exchange for shares of Class
A common stock at $0.22 per share.  Further,  this investor will have the option
to invest additional amounts at $0.22 prior to May 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
representations  on its Board of  Directors.  These  proceeds  are to be used to
further the  Company's  Cardiac  MRI  Initiative  including  payment of existing
payables and liabilities.

                                       11
<PAGE>

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 August 31, 1999.

                                       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:  January 5, 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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