NOTE 1 - BUSINESS DESCRIPTION AND
Company Activities - Magna-Lab
Inc. and Subsidiary (collectively, the Company) is focused on engaging in a reverse merger transaction
with an unrelated business that could benefit from the Companys public reporting status. Additional activities have included
preserving cash, attempting to raise capital to support its activities and continuing its public reporting.
The Company was previously engaged
in research, development and commercialization activities until it ceased such activities during the period September 2002 through
March 2003 since the Company was unable to secure financing to support its planned activities. The Companys efforts to enter
into a strategic arrangement or to seek other means to realize value for its cardiac diagnostic technologies through sale, license
or otherwise have been unsuccessful.
Going Concern Consideration - As indicated in the accompanying
consolidated financial statements, at February 29, 2012, the Company had approximately $7,000 in cash and approximately $803,000
in negative working capital and stockholders deficit. For the year ended February 29, 2012, the Company had a net loss of
approximately $84,000 and utilized approximately $43,000 in cash for operations. Further, losses are continuing subsequent to February
29, 2012. These factors, among others, indicate that the Company is in need of additional financing in order to continue its planned
activities for the fiscal year that began on March 1, 2012. The Companys plans to deal with this uncertainty are described
above in Company Activities. Managements plans to raise capital or merge with an unrelated business have not
been successful to date and there can be no assurance that managements 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
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.