Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | |
Feb. 28, 2017 | Jun. 09, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | MAGNA LAB INC | |
Entity Central Index Key | 895,464 | |
Document Type | 10-K | |
Document Period End Date | Feb. 28, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --02-28 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Public Float | $ 10,000 | |
Entity Common Stock, Shares Outstanding | 1,178,762 | |
Document Fiscal Period Focus | FY | |
Document Fiscal Year Focus | 2,017 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Feb. 28, 2017 | Feb. 29, 2016 |
CURRENT ASSETS: | ||
Cash | $ 1,000 | $ 11,000 |
Prepaid expense | 3,000 | 3,000 |
Total current assets | 4,000 | 14,000 |
CURRENT LIABILITIES: | ||
Notes payable and accrued interest payable to a shareholder | 935,000 | 816,000 |
Accounts payable, including, in 2016, approximately $68,000 which is payable to the Company’s President and CEO for expenses he paid on the Company’s behalf) | 325,000 | 415,000 |
Accrued expenses and other current liabilities | 116,000 | 41,000 |
Total current liabilities | 1,376,000 | 1,272,000 |
COMMITMENTS AND CONTINGENCIES (Notes 4, 7 and 8) | ||
STOCKHOLDERS' DEFICIT: | ||
Preferred stock, par value $.01 per share, 5,000,000 shares authorized, none issued | 0 | 0 |
Common stock, Class A, par value $.001 per share, 120,000,000 shares authorized, 1,178,762 and 1,176,373 shares, respectively, issued and outstanding at February 28, 2017 and February 29, 2016 | 1,000 | 1,000 |
Common stock, Class B, par value $.001 per share, 3,750,000 shares authorized, 18,750 shares issued, 10,000 shares forfeited, 8,183 and 5,794 shares, respectively, converted to Class A and 567 and 2,956 shares, respectively, outstanding at February 28, 2017 and February 29, 2016 | 0 | 0 |
Capital in excess of par value | 27,290,000 | 27,180,000 |
Accumulated deficit | (28,663,000) | (28,439,000) |
Total stockholders' deficit | (1,372,000) | (1,258,000) |
Total liabilities and stockholders' deficit | $ 4,000 | $ 14,000 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Feb. 28, 2017 | Feb. 29, 2016 |
Liabilities | ||
Approximate amount due to Company's President for expenses paid on the Company's behalf (in dollars) | $ 68,000 | $ 68,000 |
Stockholders Equity | ||
Preferred Stock Par Value | $ 0.01 | $ 0.01 |
Preferred Stock Shares Authorized | 5,000,000 | 5,000,000 |
Preferred Stock Shares Issued | 0 | 0 |
Common Stock Class A Par Value | $ 0.001 | $ 0.001 |
Common Stock Class A Shares Authorized | 120,000,000 | 120,000,000 |
Common Stock Class A Shares Issued | 1,178,762 | 1,176,373 |
Common Stock Class A Shares Outstanding | 1,178,762 | 1,176,373 |
Common Stock Class B Par Value | $ 0.001 | $ 0.001 |
Common Stock Class B Shares Authorized | 3,750,000 | 3,750,000 |
Common Stock Class B Shares Issued | 18,750 | 18,750 |
Common Stock Class B Shares Forfeited | 10,000 | 10,000 |
Common Stock Class B Shares Converted to Class A | 8,183 | 5,794 |
Common Stock Class B Shares Outstanding | 567 | 2,956 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Feb. 28, 2017 | Feb. 29, 2016 | |
Income Statement [Abstract] | ||
REVENUES | $ 0 | $ 0 |
OPERATING EXPENSES: | ||
General and administrative | 149,000 | 63,000 |
LOSS FROM OPERATIONS | (149,000) | (63,000) |
OTHER EXPENSE - Interest expense | (75,000) | (67,000) |
NET LOSS BEFORE INCOME TAX | (224,000) | (130,000) |
PROVISION FOR INCOME TAXES | 0 | 0 |
NET LOSS | $ (224,000) | $ (130,000) |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, BASIC AND DILUTED | 1,179,000 | 1,179,000 |
NET LOSS PER COMMON SHARE, BASIC AND DILUTED | $ (0.19) | $ (0.11) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Feb. 28, 2017 | Feb. 29, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (224,000) | $ (130,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Accounts payable, accrued liabilities and all other | 169,000 | 74,000 |
NET CASH USED IN OPERATING ACTIVITIES | (55,000) | (56,000) |
CASH PROVIDED BY FINANCING ACTIVITIES: | ||
Proceeds received from notes payable to shareholder | 45,000 | 55,000 |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 45,000 | 55,000 |
NET (DECREASE) IN CASH | (10,000) | (1,000) |
CASH: | ||
Beginning of year | 11,000 | 12,000 |
End of year | 1,000 | 11,000 |
SUPPLEMENTAL SCHEDULE ON NON-CASH FINANCING ACTITVITIES: None | ||
Liabilities assumed and forgiven in exchange for disposition of residual technology assets to the Company’s Chief Executive Officer | $ 110,000 | $ 0 |
Consolidated Statement of Stock
Consolidated Statement of Stockholders Deficit - USD ($) | Class A common stock | Class B common stock | Additional Paid In Capital | Accumulated Deficit | Total |
Shares, Balance, Beginning at Feb. 28, 2015 | 1,176,373 | 2,956 | |||
Value, Balance, Beginning at Feb. 28, 2015 | $ 1,000 | $ 0 | $ 27,180,000 | $ (28,309,000) | $ (1,128,000) |
Net Loss | (130,000) | (130,000) | |||
Shares, Balance, Ending at Feb. 29, 2016 | 1,176,373 | 2,956 | |||
Value, Balance, Ending at Feb. 29, 2016 | $ 1,000 | $ 0 | 27,180,000 | (28,439,000) | (1,258,000) |
Gain on sale of residual technology assets to CEO | 110,000 | 110,000 | |||
Convert B shares to A | 2,389 | (2,389) | |||
Net Loss | (224,000) | (224,000) | |||
Shares, Balance, Ending at Feb. 28, 2017 | 1,178,762 | 567 | |||
Value, Balance, Ending at Feb. 28, 2017 | $ 1,000 | $ 0 | $ 27,290,000 | $ (28,663,000) | $ (1,372,000) |
1. BUSINESS DESCRIPTION AND GOI
1. BUSINESS DESCRIPTION AND GOING CONCERN | 12 Months Ended |
Feb. 28, 2017 | |
Notes to Financial Statements | |
BUSINESS DESCRIPTION AND GOING CONCERN | Company Activities - 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 Company’s 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 and therefore, in January 2017, the Company sold such technology to its President and CEO in exchange for relief from certain liabilities. See also, Note 3. Going Concern Consideration |
2. SUMMARY OF SIGNIFICANT ACCOU
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Feb. 28, 2017 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Basis of Presentation – Principles of Consolidation – Cash and Cash Equivalents – Income Taxes The Company also complies with US GAAP in accounting for uncertain tax positions. A tax benefit from an uncertain position may be recognized only if it is “more likely than not” that the position is sustainable based on its technical merits. Based on its analysis, the Company has determined that it has not incurred any liability for unrecognized tax benefits as of February 28, 2017 and February 29, 2016. However, the Company's conclusions may be subject to review and adjustment at a later date based on factors including, but not limited to, on-going analyses of and changes to tax laws, regulations and interpretations thereof. The Company recognizes interest and penalties related to unrecognized tax benefits in interest expense and other expenses, respectively. No interest expense or penalties have been recognized as of and for the years ended February 28, 2017 and February 29, 2016. Generally, the Company is no longer subject to income tax examinations by major taxing authorities for years before 2014. Net Loss Per Share Basic (loss) per share excludes dilution and is computed by dividing (loss) available to common stockholders by the weighted average common shares outstanding for the year. Diluted loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. In the fiscal years ended February 28, 2017 and February 29, 2016, there were no options, warrants or derivative securities outstanding. Therefore, basic and diluted loss per share were the same for the fiscal years ended February 28, 2017 and February 29, 2016. Fair Value of Financial Instruments - Use of Estimates and Assumptions Stock-Based Compensation – Stock awards to consultants and other non-employees are accounted for based on an estimate of their fair value at the time of grant and, in the instance of options and warrants, are based upon a Black-Scholes option valuation model. The fair value of each option grant is estimated on the date of the grant using the Black-Scholes option pricing model with generally 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%. Effect of Recent Accounting Pronouncements - Management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying consolidated financial statements. Subsequent Events – |
3. ACCOUNTS PAYABLE AND ACCRUAL
3. ACCOUNTS PAYABLE AND ACCRUALS | 12 Months Ended |
Feb. 28, 2017 | |
Notes to Financial Statements | |
ACCOUNTS PAYABLE AND ACCRUALS | In January 2017, the Company’s President and Chief Executive Officer (the “CEO”) entered into an Asset Purchase Agreement (the “Purchase Agreement”) with the Company. Under the Purchase Agreement, the CEO purchased all of the intellectual property rights, any and all physical assets, any and all permits and all non-financial books, records, files, design specification, software and other data related to the Company’s magnetic resonance imaging technology. In exchange for purchased assets, the CEO (a) assumed all liabilities of the Company related exclusively to the purchased assets and (b) agreed to forgiveness or assumption of all indebtedness owing from the Company totaling approximately $110,000. As a transaction with a related party, the amount of the indebtedness forgiven or assumed, $110,000 was credited to additional paid in capital in the accompanying consolidated financial statement. Prior to the Purchase Agreement, at February 29, 2016, approximately $106,000 of accounts payable relates to intellectual property counsel fees and costs, $68,000 of which had been paid by and is therefore due to the Company’s Chairman and President for payments he has made on the Company’s behalf in prior years in an attempt to preserve certain intellectual property rights at that time. This officer ceased making such payments several years ago and, as such, the underlying intellectual property became compromised. The Company intends to make a proposal to various of its significant outstanding creditors to convert all amounts outstanding to them into common stock of the Company. At February 28, 2017 and February 29, 2016, accrued expenses includes approximately $18,000 payable to a third party, guaranteed by our principal shareholder, for amounts paid to an account payable in October 2007 on our behalf. This amount was repayable if the proposed merger transaction with this party was not completed. This party subsequently merged with another entity and abandoned its possible transaction with the Company, however there has not been a demand for repayment of this amount. At February 28, 2017 and February 29, 2016, accounts payable also includes approximately $14,000 related to certain pre-1997 accounts payable (Note 8). |
4. NOTES PAYABLE- RELATED PARY
4. NOTES PAYABLE- RELATED PARY | 12 Months Ended |
Feb. 28, 2017 | |
Notes to Financial Statements | |
NOTES PAYABLE-RELATED PARTY | During the two years ended February 28, 2017, the Company has received an aggregate of approximately $100,000 of proceeds under notes payable to its majority shareholder, Magna Acquisition LLC (“MALLC”), raising the principal amount outstanding under such notes to an aggregate of $524,000 and $479,000, respectively, (plus accrued interest of approximately $411,000 and $347,000, respectively) at February 28, 2017 and February 29, 2016. Such notes are unsecured and mature, by their terms, 120 days from issuance. At February 28, 2017 and February 29, 2016, approximately $504,000 and $464,000, respectively, face amount of such notes were beyond their maturity date and therefore due on demand. Such notes bear interest at 12% per year and such interest increases to 15% per year once the note is past its due date. Interest expense on such notes aggregated approximately $75,000 and $67,000 in the years ended February 28, 2017 and February 29, 2016, respectively. Subsequent to February 28, 2017 and through June 9, 2017 MALLC loaned an additional approximately $27,500 to the Company on the same terms as above. The Company intends to make a proposal to MALLC to convert all amounts outstanding to them (including overdue amounts) into common stock of the Company. |
5. STOCKHOLDERS' DEFICIT
5. STOCKHOLDERS' DEFICIT | 12 Months Ended |
Feb. 28, 2017 | |
Equity [Abstract] | |
STOCKHOLDERS' DEFICIT | Description of Class A and Class B Common Stock Under an agreement with an underwriter, 10,000 shares of Class B common stock were forfeited by the holders based on performance measures that were not met. During the fiscal year ended February 28, 2001, 2,698 of such forfeited shares were inadvertently released by the Company’s transfer agent; 1,376 of which have been returned. The Company has not been successful in recovering the remaining 1,322 shares. In January 2017, the Company’s CEO converted the remaining 2,389 shares of Class B common stock under his control to Class A common stock. Principal Shareholder and Related Party Relationship - Stock Grant - Stock Options and Warrants |
6. INCOME TAXES
6. INCOME TAXES | 12 Months Ended |
Feb. 28, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | At February 28, 2017 and February 29, 2016, the Company had net operating loss carryforwards of approximately $20.8 million and $20.7 million, respectively, to offset future income subject to tax and approximately $441,000 and $441,000, respectively, of research tax credits available to offset future taxes payable. These resulted in an estimated $7.2 million and $7.2 million, respectively, of federal and $1.5 million and $1.5 million, respectively, of state deferred tax assets at February 28, 2017 and February 29, 2016. A full valuation allowance has been established for these deferred tax assets since their realization is considered unlikely. The difference between the tax provision at the federal corporation tax statuary rate and the rate (zero) included in the Company’s consolidated financial statements occurs because the Company has never had any taxable income nor the ability to utilize loss carryforwards. Changes in the ownership of a majority of the fair market value of the Company's common stock would likely delay, limit or eliminate the utilization of existing net operating loss carryforwards and credits. Although a formal Section 382 study to determine whether a change in control has occurred has not been completed, the Company believes, based upon limited analysis, that such changes may have occurred in 1997, 2000 and 2005. Such carryforwards and credits expire between 2017 and 2034. |
7. OTHER MATTERS
7. OTHER MATTERS | 12 Months Ended |
Feb. 28, 2017 | |
Notes to Financial Statements | |
OTHER MATTERS | Rent expense - |
8. COMMITMENTS AND CONTINGENCIE
8. COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Feb. 28, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | Litigation – Discontinued MAGNA-SL Business and Related 1997 Restructuring; Legacy payables – Some of the amounts recorded as accounts payable may have passed the statute of limitations for purposes of the vendor seeking recovery of such monies. The Company has not undertaken a formal study to evaluate recorded payables past the statute of limitations for purposes of possible write-off of such payables. |
2. SUMMARY OF SIGNIFICANT ACC15
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Feb. 28, 2017 | |
Summary Of Significant Accounting Policies Policies | |
Basis of Presentation | The consolidated financial statements present the financial position, results of operations and cash flows of the Company in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). All dollar amounts are rounded to the nearest thousand dollars. |
Principles of Consolidation | The consolidated financial statements include the accounts of Magna-Lab Inc. and its wholly-owned subsidiary, Cardiac MRI, Inc. All significant intercompany balances and transactions have been eliminated in consolidation. |
Cash and Cash Equivalents | The Company considers all highly liquid instruments with original maturities of three months or less when acquired, to be cash equivalents. The Company had no cash equivalents at February 28, 2017 and February 29, 2016. |
Income Taxes | The Company complies with the accounting and reporting requirements of US GAAP in accounting for income taxes. The Company uses the asset and liability approach to financial reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax basis of assets and liabilities that will result in future taxable or deductible amounts and are based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred income tax assets to the amount expected to be realized. The Company also complies with US GAAP in accounting for uncertain tax positions. A tax benefit from an uncertain position may be recognized only if it is “more likely than not” that the position is sustainable based on its technical merits. Based on its analysis, the Company has determined that it has not incurred any liability for unrecognized tax benefits as of February 28, 2017 and February 29, 2016. However, the Company's conclusions may be subject to review and adjustment at a later date based on factors including, but not limited to, on-going analyses of and changes to tax laws, regulations and interpretations thereof. The Company recognizes interest and penalties related to unrecognized tax benefits in interest expense and other expenses, respectively. No interest expense or penalties have been recognized as of and for the years ended February 28, 2017 and February 29, 2016. Generally, the Company is no longer subject to income tax examinations by major taxing authorities for years before 2014. |
Net Loss Per Share | The Company complies with the accounting and reporting requirements of US GAAP in reporting its earnings per share. Net loss per share is computed based on the weighted average number of Class A Common and Class B Common shares outstanding. Basic (loss) per share excludes dilution and is computed by dividing (loss) available to common stockholders by the weighted average common shares outstanding for the year. Diluted loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. In the fiscal years ended February 28, 2017 and February 29, 2016, there were no options, warrants or derivative securities outstanding. Therefore, basic and diluted loss per share were the same for the fiscal years ended February 28, 2017 and February 29, 2016. |
Fair Value of Financial Instruments | The fair value of the Company's assets and liabilities, which qualify as financial instruments under US GAAP, approximate the carrying amounts presented in the consolidated balance sheets. |
Use of Estimates and Assumptions | The preparation of consolidated financial statements in accordance with US GAAP requires the Company’s 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 consolidated 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. |
Stock-Based Compensation | The Company complies with the US GAAP accounting and reporting requirements for its Share-Based Payments. US GAAP requires companies to recognize the cost of employee services received in exchange for awards of equity instruments in the consolidated financial statements based on the grant date fair value of those awards. Stock awards to consultants and other non-employees are accounted for based on an estimate of their fair value at the time of grant and, in the instance of options and warrants, are based upon a Black-Scholes option valuation model. The fair value of each option grant is estimated on the date of the grant using the Black-Scholes option pricing model with generally 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%. |
Effect of Recent Accounting Pronouncements | The Company has evaluated recent accounting pronouncements and believes that none of them will have a material effect on the Company’s consolidated financial statements. Management does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying consolidated financial statements. |
Subsequent Events | Management has evaluated subsequent events to determine if events or transactions occurring through the date the consolidated financial statements were available to be issued, require potential adjustment to or disclosure in the consolidated financial statements and has concluded that all such events that would require recognition or disclosure have been recognized or disclosed. |
1. BUSINESS DESCRIPTION AND G16
1. BUSINESS DESCRIPTION AND GOING CONCERN (Details Narrative) - USD ($) | 12 Months Ended | ||
Feb. 28, 2017 | Feb. 29, 2016 | Feb. 28, 2015 | |
Business Description And Going Concern Details Narrative | |||
Cash | $ 1,000 | $ 11,000 | |
Total stockholders' deficit | (1,372,000) | (1,258,000) | $ (1,128,000) |
Net loss | $ (224,000) | $ (130,000) |
3. ACCOUNTS PAYABLE AND ACCRU17
3. ACCOUNTS PAYABLE AND ACCRUALS (Details Narrative) - USD ($) | 12 Months Ended | |
Feb. 28, 2017 | Feb. 29, 2016 | |
Accounts Payable And Accruals Details Narrative | ||
Activity in the restructuring accrual for the pre-1997 activities | $ 14,000 | $ 14,000 |
7. OTHER MATTERS (Details Narra
7. OTHER MATTERS (Details Narrative) - USD ($) | 12 Months Ended | |
Feb. 28, 2017 | Feb. 29, 2016 | |
Other Matters Details Narrative | ||
Rent expense | $ 12,000 | $ 13,000 |