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, 2003

|_|   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
            EXCHANGE ACT OF 1934
            For the transition period from ____________to ____________

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

                                 Magna-Lab Inc.
        -----------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

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

              6800 Jericho Turnpike, Suite 120W, Syosset, NY 11791
              ----------------------------------------------------
                    (Address of principal executive offices)

                                 (516) 393 5874
                           ---------------------------
                           (Issuer's telephone number)


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

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

                      APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date - October 10, 2003

        Class A Common Stock, $.001 Par Value                     74,079,453
        -------------------------------------                     ----------

        Class B Common Stock, $.001 Par Value                        379,485
        -------------------------------------                     ----------
                        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

              CONDENSED CONSOLIDATED BALANCE SHEET                           2

              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS                3

              CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS                4

              CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT      5

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS          6-8

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

         ITEM 3 - EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES           12

PART II - OTHER INFORMATION

         ITEM 1 - LEGAL PROCEEDINGS                                          12

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

SIGNATURES                                                                   13

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


                                       1
<PAGE>

                          MAGNA-LAB INC. AND SUBSIDIARY

                      CONDENSED CONSOLIDATED BALANCE SHEET
                           August 31, 2003 (unaudited)

<TABLE>
                                     ASSETS
<S>                                                                       <C>
CURRENT ASSETS:
  Cash and cash equivalents                                               $    532,000
  Inventory, deposits and prepaid expenses                                      31,000
                                                                          ------------

     Total current assets                                                      563,000

PROPERTY AND EQUIPMENT, net                                                      8,000
                                                                          ------------

                                                                          $    571,000
                                                                          ============

                      LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES:
  Accounts payable and accrued expenses                                   $    650,000
  Estimated present value of lease exit liability, current portion             168,000
                                                                          ------------

        Total current liabilities                                              818,000
                                                                          ------------

COMMITMENTS AND CONTINGENCIES (Note 7)

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, 120,000,000
     shares authorized, 74,079,453 shares issued and outstanding                74,000
  Common stock, Class B, par value $.001 per share,
     3,750,000 shares authorized, 1,875,000 shares issued,
     379,485 shares outstanding                                                  1,000
  Capital in excess of par value                                            26,917,000
  Accumulated deficit                                                      (27,239,000)
                                                                          ------------
        Total stockholders' deficit                                           (247,000)
                                                                          ------------
                                                                          $    571,000
                                                                          ============
</TABLE>

See accompanying Notes


                                       2
<PAGE>

                          MAGNA-LAB INC. AND SUBSIDIARY

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
               Three and six months ended August 31, 2003 and 2002
                                   (unaudited)

<TABLE>
<CAPTION>
                                                Three months ended                 Six months ended
                                                    August 31,                        August 31,
                                                    ----------                        ----------

                                               2003            2002              2003            2002
                                          ---------------------------------------------------------------
<S>                                       <C>              <C>              <C>              <C>
REVENUES                                  $         --     $         --     $         --     $         --

COSTS AND EXPENSES:
  Selling, general and administrative           93,000          465,000          183,000          987,000
  Stock compensation charge                      5,000          155,000           22,000          495,000
  Research and development                      43,000          350,000           68,000          695,000
                                          ------------     ------------     ------------     ------------
                                               141,000          970,000          273,000        2,177,000
                                          ------------     ------------     ------------     ------------

OTHER INCOME (EXPENSE):
  Interest income                                1,000            7,000            2,000           17,000
  Interest imputed on present value of
    lease exit liability                        (2,000)              --           (4,000)              --
                                          ------------     ------------     ------------     ------------

NET LOSS                                  $   (142,000)    $   (963,000)    $   (275,000)    $ (2,160,000)
                                          ============     ============     ============     ============

WEIGHTED AVERAGE NUMBER
 OF SHARES OUTSTANDING,
 BASIC AND DILUTED                          74,460,000       74,460,000       74,460,000       74,460,000
                                          ============     ============     ============     ============

NET LOSS PER SHARE,
  BASIC AND DILUTED                       $      (0.00)    $      (0.01)    $      (0.00)    $      (0.03)
                                          ============     ============     ============     ============
</TABLE>

See accompanying Notes


                                       3
<PAGE>

                          MAGNA-LAB INC. AND SUBSIDIARY

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                Increase (Decrease) in Cash and Cash Equivalents
                    Six months ended August 31, 2003 and 2002
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                           2003            2002
                                                                           ----            ----
<S>                                                                 <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                                          $  (275,000)    $(2,160,000)
                                                                    -----------     -----------
  Adjustments:
    Depreciation and amortization                                        11,000          14,000
    Non-cash charge for options/warrants                                 22,000         495,000
    Allowance for related party receivable                                   --          59,000
  Effect on cash of changes in operating assets and liabilities:
    Inventory, deposits and prepaid expenses                             (1,000)         14,000
    Accounts payable and accrued expenses and all other                  11,000        (109,000)
                                                                    -----------     -----------
           Total adjustments                                             43,000         473.000
                                                                    -----------     -----------

NET CASH USED IN OPERATING ACTIVITIES                                  (232,000)     (1,687,000)
                                                                    -----------     -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Loan to Related Party, Noga                                              --         (59,000)
                                                                    -----------     -----------
NET CASH USED IN INVESTING ACTIVITIES                                        --         (59,000)
                                                                    -----------     -----------

CASH FLOWS FROM FINANCING ACTIVITIES
    None

NET DECREASE IN CASH
  AND CASH EQUIVALENTS                                                 (232,000)     (1,746,000)
CASH AND CASH EQUIVALENTS:
  Beginning of period                                                   764,000       3,091,000
                                                                    -----------     -----------
  End of period                                                     $   532,000     $ 1,345,000
                                                                    ===========     ===========

SUPPLEMENTAL INFORMATION ON NON-CASH TRANSACTIONS
    None
</TABLE>

See accompanying Notes.


                                       4
<PAGE>

                          MAGNA-LAB INC. AND SUBSIDIARY

            CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
              For the six months ended August 31, 2003 (unaudited)

<TABLE>
<CAPTION>
                                                         Common Stock
                                 ----------------------------------------------------------     Capital in
                                          Class A                          Class B                Excess
                                 ----------------------------------------------------------       of Par        Accumulated
                                   Shares         Amount             Shares       Amount           Value           Deficit
                                 ------------------------------------------------------------------------------------------
<S>                              <C>           <C>                  <C>        <C>             <C>             <C>
BALANCES, February 28, 2003      74,079,453    $     74,000         379,485    $      1,000    $ 26,895,000    $(26,964,000)

OPTION/WARRANT CHARGE                    --              --              --              --          22,000              --

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

BALANCES, August 31, 2003        74,079,453    $     74,000         379,485    $      1,000    $ 26.917,000    $(27,239,000)
                                 ==========================================================================================
</TABLE>

See accompanying Notes


                                       5
<PAGE>

                          MAGNA-LAB INC. AND SUBSIDIARY

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

NOTE 1 - BASIS OF PRESENTATION:

The accompanying condensed consolidated financial statements have been prepared
in accordance with the instructions to Form 10-QSB and do not include all of the
information and disclosures required by accounting principles generally accepted
in the United States of America. All adjustments which are of a normal recurring
nature and, in the opinion of management, necessary for a fair presentation have
been included. These statements should be read in conjunction with the more
complete information and consolidated financial statements and notes thereto
included in the Company's annual report on Form 10-KSB for the year ended
February 28, 2003.

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

Company Activities - Magna-Lab Inc. and Subsidiary (the "Company") has been
engaged in research, development and commercialization activities. The products
developed and under development are intended to non-invasively aid in the
production of high-resolution Magnetic Resonance Imaging ("MRI") images to
advance the definitive diagnosis of coronary and other heart disease. The
Company has had no product sales and has incurred net operating losses and
negative cash flows from operations since inception.

The Company has terminated all non-executive personnel, ceased substantially all
development, clinical and other activities and significantly reduced or
eliminated the compensation of executive management and the Board while the
search for new capital, a strategic arrangement or a sale or license or merger
continues (see below). If such efforts do not succeed, the Company would need to
cease all activities.

Going Concern Consideration - As indicated in the accompanying condensed
consolidated financial statements, at August 31, 2003, the Company had
approximately $532,000 in cash, approximately $255,000 in negative working
capital and stockholders' deficit of approximately $247,000. For the six months
ended August 31, 2003, the Company had a net loss of approximately $275,000 and
utilized approximately $232,000 in cash for operating activities. Further,
losses are continuing subsequent to August 31, 2003. 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, 2003. The Company's plans to deal with this
uncertainty include raising additional capital or entering into a strategic
arrangement in order to complete commercialization of its Illuminator products
and development of its Artery View product. Alternatively, the Company is
seeking other means to realize value through sale, license or otherwise or
through merger with an unrelated business with operations and revenues.

Management's plans to raise capital, enter into a strategic arrangement, sell or
license its products/technology or merge with an unrelated business with
operations and revenues 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, indicate that the Company may be unable 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 - 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. Since the effect of outstanding options is antidilutive, they have been
excluded from the Company's computation of net loss per share. Therefore, basic
and diluted loss per share were the same for all periods presented.


                                       6
<PAGE>

NOTE 4 - ACCOUNTS PAYABLE AND ACCRUED LIABILITIES:

The Company's largest accounts payable, approximately $92,000 billed by a
vendor, is the subject of litigation as described in Note 7.

Accounts payable and accrued liabilities at August 31, 2003 includes amounts
payable to management and the Board totaling approximately $113,000 representing
earned compensation voluntarily deferred. There was no activity in the
restructuring accrual during the quarter or six months ended August 31, 2003.
The Company periodically adjusts the remaining accrual based on the status of
the matters and activity given the passage of time.

In October 2003, the Board of Directors authorized management to engage in and
advance settlement discussions aimed at paying various accounts payable and
other liabilities (including the lease liability discussed in Note 7) on a
reduced basis. Such discussions are ongoing.

NOTE 5 - STOCK BASED COMPENSATION:

The Company accounts for employee and director stock-based compensation
arrangements in accordance with the provisions of Accounting Principles Board
Opinion No. 25, "Accounting for Stock Issued to Employees" (APBO No. 25), and
related interpretations, and complies with the disclosure provisions of
Statement of Financial Accounting Standards No. 123, "Accounting for Stock Based
Compensation - Transition and Disclosure." Under APBO No. 25, compensation
expense for fixed awards is based upon the difference, if any, on the date of
grant between the estimated fair value of the Company's stock and the exercise
price and is amortized over the vesting period. Stock awards to consultants and
other non-employees are accounted based on an estimate of their fair value at
the time of grant based upon a Black Sholes option valuation model. The Company
is required to disclose the pro forma net income as if the fair value method
defined in SFAS No. 123 had been applied.

Had compensation cost for the Company's stock options granted to employees and
directors been determined consistent with SFAS No. 123, the Company's net loss
and net loss per share would have been reduced to the pro forma amounts
indicated below for the three and six months ended August 31, 2003 and 2002:

<TABLE>
<CAPTION>
                                     3 Mos. 2003     3 Mos. 2002     6 Mos. 2003     6 Mos. 2002
                                     -----------     -----------     -----------     -----------
<S>                                  <C>             <C>             <C>             <C>
      Net loss as reported           $  (142,000)    $  (963,000)    $  (275,000)    $(2,160,000)
      Deduct stock based
      compensation for employee
      options determined based on
      estimated fair value using
      Black Sholes model at date
      of grant                       $        --     $  (142,000)    $        --     $  (264,000)
                                     -----------------------------------------------------------
      Pro forma net loss             $  (142,000)    $(1,105,000)    $  (275,000)    $(2,424,000)
      Loss per share:
      As reported                    ($     0.00)    ($     0.01)    ($     0.00)    ($     0.03)
      Pro forma                      ($     0.00)    ($     0.01)    ($     0.00)    ($     0.03)
</TABLE>

The fair value of each option grant under SFAS No. 123 is estimated on the date
of the grant using a Black-Sholes option pricing model with the following
weighted-average assumptions: risk free rate of 5%; no dividend yield; option
lives of five to nine years and expected volatility in excess of 200%.

NOTE 6 - OTHER MATTERS:

Loan to related party - In March 2002, the Company advanced $59,000 to an
officer of its principal shareholder, Noga Investments in Technology, Ltd.
(Noga") at his request. The loan is guaranteed by Noga, was due in March 2002
and remains unpaid. The Company established an allowance for uncollectible
accounts for this amount in August 2002 after repeated attempts to obtain
repayment were unsuccessful. In November 2002, a Receiver was appointed for Noga
as discussed further in the Form 10-KSB for the year ended February 28, 2003.
The Receiver for Noga has indicated that it does not intend to honor the
guarantee.


                                       7
<PAGE>

Non-cash charge for options/warrants issued to consultants - The non-cash charge
for options/warrants results from options granted to non-employee members of
management and to consultants. The charge in the six months ended August 31,
2002 includes approximately $120,000 related to the termination of the services
of one of these consultants in March 2002. Also see Form 10-KSB for the year
ended February 28, 2003.

NOTE 7 - COMMITMENTS AND CONTINGENCIES:

Lease commitment; exit activities - The Company has a lease commitment (as a
subtenant) for its former offices in Lynnfield, MA as described further in Note
6 to the Consolidated Financial Statements contained in its Form 10-KSB for the
year ended February 28, 2003. Since exiting the facility in October 2002, the
Company has made no payments of the monthly rent other than draw downs made
against a letter of credit in favor the sublessor which were exhausted in
November 2002. The Company has requested information concerning the sublessor's
calculation of the remaining liability under the sublease including the
allocation to the Company of reletting costs and free rent periods granted to a
new tenant, reserving its rights to object thereto. In return, counsel for the
sublessor has countered that the $16,000 credit granted by the sublessor is not
a valid credit under the lease. In June 2003, the sublessor indicated that it
would commence legal action to collect if a negotiated settlement could not be
reached. The Company and the sublessor have commenced discussions to settle this
matter and in October 2003 the Board of Directors authorized a settlement
proposal to be offered to the sublessor, which offer is being prepared with the
assistance of counsel.

Litigation - In February 2003, a vendor filed a summons and complaint seeking
collection of approximately $92,000 of billed but unpaid products and services.
Such action was filed in the Superior Court of Bristol County in the
Commonwealth of Massachusetts ("Massachusetts Court"). In May 2003 the Company
answered this complaint denying the allegations, serving various defenses and
counterclaiming for at least $126,000 for breach of contract, return of amounts
paid and return of equipment. In May 2003, the Company's answer was rejected by
the Massachusetts Court based on a procedural matter and the Massachusetts Court
entered a Default against the Company in this matter. The Company's efforts to
clear such Default were not successful and a Hearing was held on September 3,
2003 in the Massachusetts Court to award damages against the Company. At such
Hearing, damages of $92,363.87 on the principal claim were awarded to the
Plaintiff as well as interest at 12% from September 23, 2002 and Plaintiff's
attorney's fees and costs in an amount to be determined by the Court. In
September 2003, the Plaintiff made application to the Court for award of
approximately $74,000 in legal fees and costs in this matter. The Company filed
opposition to Plaintiff's application on various grounds including that they are
excessive. On October 2, 2003, a conference was held in Massachusetts Court to
review such fees and costs resulting in reductions being ordered by the court.
As a result, the Company understands that the Plaintiff has reduced their
application for legal fees and costs to approximately $38,000, which is under
review by Company counsel. As such, the total award to be granted to Plaintiff,
assuming such legal fee application, as revised, were approved by the Court,
could exceed $140,000 including interest from September 2002 but not including
further interest that would continue to accrue. Counsel has advised the Company
that the Default in Massachusetts requires action in New York in order to be
enforced. The Company, based on advice of counsel, intends to vigorously contest
this matter once the matter moves to New York.

The Company believes, based on the advice of counsel, that the ultimate
liability, if any, in this matter remains uncertain pending the Company's
planned vigorous opposition in New York.

The Default judgment and assessment of interest and attorneys fees by the
Massachusetts Court calls into question the realizablity of Company equipment
held in Massachusetts by the vendor and such equipment has accordingly been
fully depreciated at August 31, 2003.

On July 3, 2003, the Company filed an action in Supreme Court of the County of
Nassau in the State of New York against this vendor alleging breach of contract
and seeking to recover $111,251.25 paid as well as $15,000 in cash as a result
of the vendor's failure to return Company equipment as well as other matters.
This vendor filed a motion in August 2003 to have the Company's action dismissed
on various grounds. The Company answered such motion with opposition in
September 2003. The Company intends to vigorously pursue this matter.

See also, lease commitment matter above and Notes 5, 6 and 10 of Notes to
Consolidated Financial Statements included in Form 10-KSB for the year ended
February 28, 2003.


                                       8
<PAGE>

Item 2. Management's Discussion and Analysis or Plan of Operation

      Factors and Risks That May Affect Future Results

      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. 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. Some of these many risks include: (a) we
presently have only one full time employee and are dependent on part-time
management, all of whom have agreed to reduced compensation in the short term
and none of whom are bound by term employment contracts, to raise capital or
realize value for our assets, (b) if we cannot obtain additional financing, we
will not be able to continue our activities and may be forced to sell our
products/technology or merge with another company or liquidate, (c) we have
incurred and expect to continue to incur significant losses, (d) if we were to
receive new capital, we would need to re-start our operations and there is the
risk that relationships, people and processes that were available to us in the
past may not be available to us in the future on the same terms or at all (e) we
may never achieve or maintain sales or profitability, (f) we are dependent on
the Illuminator products for all of our revenue, if any, in the next twelve
months, (g) revenue for the Illuminator products is largely dependent upon
success in demonstrating a unique benefit of our product in diagnosing a
particular pathology, which has not yet occurred and is not assured, (h) revenue
for the Illuminator products, should such unique benefit be determined, is also
highly dependent upon the availability of reimbursement to physicians, hospitals
and other healthcare providers, (i) we are dependent on an outsourced
manufacturer for all of our production (j) additional development work is
necessary to commercialize our products and we have had to cut back such efforts
to preserve cash which creates a competitive disadvantage and (k) we are subject
to extensive regulation by the US Food and Drug Administration. For a more
complete description of some of the risks that the Company faces please see our
Annual Report on Form 10-KSB for the year ended February 28, 2003. We assume no
obligation to update any forward-looking statements contained in this report,
whether as a result of new information, future events or otherwise. Any
investment in our common stock involves a high degree of risk.

      Background and history

      We have been engaged in research and development activities and have
received U.S. marketing clearance from the FDA for our first two products for
use with the General Electric 1.5T Signa(R) MRI Systems. These two products,
Illuminator Probe and Illuminator Surface Coil, are intended to non-invasively
aid in the production of high-resolution MRI images of the aortic arch, the
descending aorta and the coronary vessels of the heart and associated structures
in the thoracic region to advance the definitive diagnosis of coronary heart
disease.

      We developed these products and another product (Artery View), still under
development for intravascular MRI imaging, in a collaboration with the
Cardiovascular Institute of the Mount Sinai School of Medicine in New York which
concluded in October 2000. A key element of our business development plans
consists of the conduct of human clinical studies to further investigate the
clinical effectiveness and unique advantages of our products to support future
marketing and reimbursement efforts. We established our first such study in
October 2001 with Brigham and Women's Hospital, an affiliate of Harvard Medical
School. In August 2002, we began imaging human volunteers at Dartmouth Hitchcock
Medical Center ("Dartmouth"). In November 2002, the Western Internal Review
Board of Johns Hopkins Medical Center ("JHU") approved the protocol necessary to
conduct clinical studies at JHU but we did not start those studies in order to
preserve cash.

      Our principal investor, Noga Investments in Technology, Ltd. ("Noga"), has
provided approximately 75% of our equity financing over the past three fiscal
years. In September 2002, Noga's parent company sought protection from creditors
and in November 2002 a receiver was appointed to seize and manage Noga's assets
(including Noga's investment in the Company). As the loss of Noga's financial
support and its likely impact on our prospects became clear, we changed our
plans, reducing and ultimately eliminating all of our activities other than
those aimed at preserving our core technology and other assets and seeking a
financial or strategic transaction or sale or license or technology or merger
with an unrelated operating business. We have no product sales to date and have
incurred net operating losses and negative cash flows since inception.


                                       9
<PAGE>

      Plan of Operations and Liquidity

      At August 31, 2003, we had approximately $532,000 in cash but we had
negative working capital and stockholders' deficit of approximately ($255,000)
and ($247,000), respectively, and we continue to lose money. Cash used by
operations during the six months ended August 31, 2003 totaled approximately
$232,000.

      Our plan of operations for the coming twelve months is to continue to take
action to preserve our core technology and other assets while we seek additional
capital or a strategic business arrangement or alternatively sell or license our
products/technology and or merge with an operating company. Our efforts to raise
additional capital or a strategic arrangement necessary to support our plans
have not been successful and we are actively reviewing possible merger
candidates with unrelated businesses that have revenues and operations or unique
technology and may benefit from our status as a public entity. We do not have
sufficient cash resources to continue our plan for the coming twelve months,
even at our reduced expenditure levels. Further, our management and Board are
operating with significantly reduced or no compensation and there is no
assurance that any or all of them will continue to provide services to the
Company. As such, we may have to take further measures or cease activities
altogether. See also, Notes 4 and 7 to Condensed Consolidated Financial
Statements.

      In October 2003, the Board of Directors authorized management to engage in
and advance settlement discussions aimed at paying various accounts payable and
other liabilities on a reduced basis. Initial discussions have indicated that
several items may be settled in this manner in the third quarter ending November
30, 2003.

      If our efforts to raise additional capital were to be successful, our
business plan calls for a significant increase in our expenditures. However, the
difficulties and uncertainties associated with restarting our activities after a
period of inactivity increase with the passage of time. We have no significant
commitments or plans to purchase equipment or other capital assets.

      In September 2003, damages were assessed against the Company in connection
with a Default judgment entered against the Company in May 2003 in a vendor
lawsuit in a Massachusetts Court. Such damages included interest at 12% from
September 23, 2002 and attorney's fees currently requested at approximately
$38,000, as discussed further in Note 7 to Condensed Consolidated Financial
Statements. Because the Company has no assets or operations in Massachusetts to
satisfy the judgment (other than a piece of equipment held by the Plaintiff),
Plaintiff will need to request enforcement in New York, which the Company plans
to vigorously oppose. Successful enforcement of such judgment in New York,
should it occur, would adversely affect the Company's liquidity and may further
impede the Company's plan of operation.

      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:

      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 raise capital, enter into a strategic arrangement or complete
commercialization and/or development 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.

      Accounting for Exit and Disposal Activities - The Company has adopted
Financial Accounting Standards Board Statement No. 146, Accounting for Costs of
Exit and Disposal Activities ("Statement 146"), as recommended by the Financial
Accounting Standards Board, for its exit from its Lynnfield, MA offices when it
"ceased to receive services" at the end of October 2002. The accrual of the


                                       10
<PAGE>

present value of the remaining lease obligation assumes, as an offset, that
sublease income from a subtenant located in February 2003, would be available to
mitigate the remaining obligation. Further, the Company has challenged the
computation of sublease offset made by the sublessor. Additionally, in October
2003, the Board of Directors authorized a settlement proposal to be made to the
sublessor and such proposal is being prepared. Should the new sublessee not
complete the sublease for any reason or should our challenge to the sublessor be
successful, or should we be successful in negotiating a settlement, this accrual
could be adjusted to reflect such future events.

      Use of Estimates and Assumptions - The preparation of financial statements
in accordance with accounting principles generally accepted in the United States
of America requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results can, and in
many cases will, differ from those estimates. The litigation with a vendor
discussed in Note 7 to Condensed Consolidated Financial Statements involves
contingent assets of approximately $126,000 or more (which has not been accrued
to the condensed consolidated financial statements) and liabilities potentially
in excess of $140,000 (certain of which have been recorded to the financial
statements based on management estimates). Litigation is inherently uncertain
and the ultimate resolution or settlement of this matter could occur at amounts
that differ from those reflected in the financial statements.

      Accounting for Stock-Based Compensation - We have elected to apply the
disclosure-only provisions of SFAS No. 123, Accounting for Stock-Based
Compensation. In accordance with the provisions of SFAS No. 123, we apply
Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to
Employees, and related interpretations in accounting for stock options issued.
This means that we do not charge operations for an imputed cost of options
issued to employees. We account for stock issued to non-employees in accordance
with the provisions of SFAS No. 123 and the related pronouncements. Those
pronouncements require us to charge operations and credit paid-in-capital for an
amount calculated to reflect the time value of the option or warrant utilizing a
Black Scholes methodology.


                                       11
<PAGE>

Item 3. Controls and Procedures

(a) Evaluation of disclosure controls and procedures. The chief executive
officer and our chief financial officer, after evaluating the effectiveness of
the Company's "disclosure controls and procedures" (as defined in the Securities
Exchange Act of 1934 Rules 13a-14(c) and 15-d-14(c)) as of the end of the period
covered by this quarterly report, have concluded that as of such date, our
disclosure controls and procedures were adequate and designed to ensure that
material information relating to us and required to be disclosed in the reports
we file or submit to the Securities and Exchange Commission would be made known
to them.

(b) Changes in internal controls. In connection with the evaluation referred to
in (a) above, we have identified no change in our internal control of financial
reporting that has materially affected, or is reasonably likely to materially
affect, our internal control over financial reporting.

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

PART II - OTHER INFORMATION

Item 1. - Legal Proceedings

      See Form 10-QSB for the quarter ended May 31, 2003 for a description of
developments in the matter of Medical Scientific, Inc., Plaintiff, v Magna-Lab
Inc., Defendant, in the Superior Court of Bristol County in the Commonwealth of
Massachusetts, including Default that was entered in May 2003 against the
Company on procedural grounds. The Company's efforts to clear such Default were
not successful and a Hearing was held on September 3, 2003 in the Superior Court
of Bristol County to award damages against the Company. At such Hearing, damages
of $92,363.87 on the principal claim were awarded as was interest on such amount
at 12% per annum starting from September 23, 2002 as well as Plaintiff's
attorney's fees and costs in an amount to be determined subsequently by the
Court. Plaintiff has made application to the Court for award of approximately
$74,000 in legal fees and costs in this matter. The Company filed opposition to
Plaintiff's application for legal fees and costs on various grounds including
that they are excessive. On October 2, 2003, a conference was held in
Massachusetts Court to review such fees and costs resulting in reductions being
ordered by the court. As a result, the Company understands that Plaintiff has
reduced their application for such fees and costs to approximately $38,000,
which is still under review by Company counsel. As such, the total award to be
granted to Plaintiff assuming such legal fee application were approved by the
Court, could exceed $140,000 including interest from September 2002 but not
including further interest that would accrue. Also see Note 7 to Condensed
Consolidated Financial Statements.

      On July 3, 2003, the Company filed an action in Supreme Court of the
County of Nassau in the State of New York against Medical Scientific, Inc.
alleging breach of contract and seeking to recover $111,251.25 paid to Medical
Scientific Inc. as well as recovery of $15,000 for equipment held by Medical
Scientific, Inc. as well as other matters. Medical Scientific Inc. filed a
motion in August 2003 to have such action dismissed on various grounds. The
Company answered with opposition to such motion to dismiss in September 2003.

Item 6. - Exhibits and Reports on Form 8-K

      (a)   Exhibits

            31.1  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.

      (b)   The Company filed no reports on Form 8-K during the quarter ended
            August 31, 2003.


                                       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: October 13, 2003                By: /s/ John R. Geisel
                                          --------------------------------------
                                          John R. Geisel, Chief Executive
                                          Officer (Principal Executive Officer),


                                      By: /s/ Kenneth C. Riscica
                                          --------------------------------------
                                          Treasurer and Secretary
                                          (Principal Financial and Accounting
                                          Officer)


                                       13
<PAGE>

                                  EXHIBIT INDEX

ITEM                                                                        PAGE

31.1  Certification of Principal Executive Officer pursuant to              15
      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              16
      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           17
      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           18
      U.S.C. 1350 as adopted pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002.


                                  14