Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | |
Feb. 28, 2019 | Jun. 09, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | MAGNA LAB INC | |
Entity Central Index Key | 0000895464 | |
Document Type | 10-K | |
Document Period End Date | Feb. 28, 2019 | |
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 | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Shell Company | true | |
Entity Public Float | $ 10,000 | |
Entity Common Stock, Shares Outstanding | 1,178,762 | |
Document Fiscal Period Focus | FY | |
Document Fiscal Year Focus | 2019 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Feb. 28, 2019 | Feb. 28, 2018 |
CURRENT ASSETS: | ||
Cash | $ 4,000 | $ 2,000 |
Prepaid expense | 0 | 3,000 |
Total current assets | 4,000 | 5,000 |
CURRENT LIABILITIES: | ||
Notes payable and accrued interest payable to a shareholder | 1,285,000 | 1,151,000 |
Accounts payable | 342,000 | 332,000 |
Accrued expenses and other current liabilities | 41,000 | 38,000 |
Total current liabilities | 1,668,000 | 1,521,000 |
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 issued and outstanding at February 28, 2019 and 2018 | 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 converted to Class A and 567 shares outstanding at February 28, 2019 and 2018 | 0 | 0 |
Additional paid in capital | 27,290,000 | 27,290,000 |
Accumulated deficit | (28,955,000) | (28,807,000) |
Total stockholders' deficit | (1,664,000) | (1,516,000) |
Total liabilities and stockholders' deficit | $ 4,000 | $ 5,000 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Feb. 28, 2019 | Feb. 28, 2018 |
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 | 1,178,762 |
Common Stock Class A Shares Outstanding | 1,178,762 | 1,178,762 |
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 | 8,183 |
Common Stock Class B Shares Outstanding | 567 | 567 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
Income Statement [Abstract] | ||
REVENUES | $ 0 | $ 0 |
OPERATING EXPENSES: | ||
General and administrative | 48,000 | 58,000 |
LOSS FROM OPERATIONS | (48,000) | (58,000) |
OTHER EXPENSE - Interest expense | (100,000) | (86,000) |
NET LOSS BEFORE INCOME TAX | (148,000) | (144,000) |
PROVISION FOR INCOME TAXES | 0 | 0 |
NET LOSS | $ (148,000) | $ (144,000) |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, BASIC AND DILUTED | 1,179,000 | 1,179,000 |
NET LOSS PER COMMON SHARE, BASIC AND DILUTED | $ (0.13) | $ (0.12) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (148,000) | $ (144,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Accounts payable, accrued liabilities and all other | 116,000 | 89,000 |
NET CASH USED IN OPERATING ACTIVITIES | (32,000) | (55,000) |
CASH PROVIDED BY FINANCING ACTIVITIES: | ||
Proceeds received from notes payable to shareholder | 34,000 | 56,000 |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 34,000 | 56,000 |
NET CASH PROVIDED BY OR USED IN INVESTING ACTIVITIES | 0 | 0 |
NET INCREASE (DECREASE) IN CASH | 2,000 | 1,000 |
CASH: | ||
Beginning of year | 2,000 | 1,000 |
End of year | 4,000 | 2,000 |
SUPPLEMENTAL SCHEDULE ON NON-CASH FINANCING ACTITVITIES: None | ||
Liabilities settled by principal shareholder and added to note payable | $ 0 | $ 74,000 |
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, 2017 | 1,178,762 | 567 | |||
Value, Balance, Beginning at Feb. 28, 2017 | $ 1,000 | $ 0 | $ 27,290,000 | $ (28,663,000) | $ (1,372,000) |
Net Loss | (144,000) | (144,000) | |||
Shares, Balance, Ending at Feb. 28, 2018 | 1,178,762 | 567 | |||
Value, Balance, Ending at Feb. 28, 2018 | $ 1,000 | $ 0 | 27,290,000 | (28,807,000) | (1,516,000) |
Net Loss | (148,000) | (148,000) | |||
Shares, Balance, Ending at Feb. 28, 2019 | 1,178,762 | 567 | |||
Value, Balance, Ending at Feb. 28, 2019 | $ 1,000 | $ 0 | $ 27,290,000 | $ (28,955,000) | $ (1,664,000) |
1. BUSINESS DESCRIPTION AND GOI
1. BUSINESS DESCRIPTION AND GOING CONCERN | 12 Months Ended |
Feb. 28, 2019 | |
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. Going Concern Consideration |
2. SUMMARY OF SIGNIFICANT ACCOU
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Feb. 28, 2019 | |
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, 2019 and 2018. 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, 2019 and 2018. Generally, the Company is no longer subject to income tax examinations by major taxing authorities for years before 2015. 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, 2019 and 2018, 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, 2019 and 2018. 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, 2019 | |
Notes to Financial Statements | |
ACCOUNTS PAYABLE AND ACCRUALS | During the year ended Fevruary 28, 2018, accrued liabilities and accounts payable to various parties totaling approximately $74,000 were settled by our principal stockholder or its affiliates and such amounts are now payable to that principal stockholder (MALLC, see Note 4). 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, 2019 and 2018, 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, 2019 and 2018, accounts payable also includes approximately $14,000 related to certain pre-1997 accounts payable (Note 8). Some of the amounts recorded as accounts payable or accrued liabilities may have passed the statute of limitations for purposes of the counterparty 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. |
4. NOTES PAYABLE- RELATED PARTY
4. NOTES PAYABLE- RELATED PARTY | 12 Months Ended |
Feb. 28, 2019 | |
Notes to Financial Statements | |
NOTES PAYABLE-RELATED PARTY | During the two years ended February 28, 2019, the Company has received an aggregate of approximately $89,000 of proceeds under notes payable to its majority shareholder, Magna Acquisition LLC (“MALLC”) and MALLC has paid approximately $74,000 of liabilities of the Company on our behalf, raising the principal amount outstanding under such notes to an aggregate of $687,250 and $653,750, respectively, (plus accrued interest of approximately $598,000 and $497,000, respectively) at February 28, 2019 and 2018. Such notes are unsecured and mature, by their terms, 120 days from issuance. At February 28, 2019 and 2018, approximately $679,650 and $566,000, 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 $101,000 and $86,000 in the years ended February 28, 2019 and 2018, respectively. Subsequent to February 28, 2019 on May 20, 2019 a director of the Company who is also the managing member of MALLC loaned an additional approximately $10,000 to the Company on the same terms as above except that the interest rate is 10% initially and increases to 12% upon default. The Company intends to make a proposal to MALLC and to the director who loaned money to the Company in May 2019 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, 2019 | |
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. Principal Shareholder and Related Party Relationship - Stock Grant - Stock Options and Warrants |
6. INCOME TAXES
6. INCOME TAXES | 12 Months Ended |
Feb. 28, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | On December 22, 2017, the Tax Cuts and Jobs Act (the “TCJA”), which significantly modified U.S. corporate income tax law, was signed into law. The TCJA contains significant changes to corporate income taxation, including but not limited to the reduction of the corporate income tax rate from a top marginal rate of 35% to a flat rate of 21%, limitation of the tax deduction for interest expense to 30% of earnings (except for certain small businesses), limitation of the deduction for net operating losses to 80% of current year taxable income and generally eliminating net operating loss carrybacks, allowing net operating losses to carryforward without expiration, one-time taxation of offshore earnings at reduced rates regardless of whether they are repatriated, elimination of U.S. tax on foreign earnings (subject to certain important exceptions), immediate deductions for certain new investments instead of deductions for depreciation expense over time, and modifying or repealing many business deductions and credits (including changes to the orphan drug tax credit and changes to the deductibility of research and experimental expenditures that will be effective in the future). The Company has not recorded any provisional adjustments in the financial statements in accordance with its current understanding of the TCJA and guidance currently available as of this filing. At February 28, 2019 and February 29, 2018, the Company had net operating loss carryforwards of approximately $14.0 million and $13.9 million, respectively, to offset future income subject to tax. These resulted in an estimated $3.0 million and $2.9 million, respectively, of federal and $0.5 million and $0.5 million, respectively, of state deferred tax assets at February 28, 2019 and February 29, 2018. 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 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 2019 and 2035. It is likely that any “reverse merger” or settlement of existing liabilities with equity or other strategic transaction is likely to result in a change in control under Section 382. |
7. OTHER MATTERS
7. OTHER MATTERS | 12 Months Ended |
Feb. 28, 2019 | |
Notes to Financial Statements | |
OTHER MATTERS | Rent expense - |
8. COMMITMENTS AND CONTINGENCIE
8. COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Feb. 28, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | Litigation – Discontinued MAGNA-SL Business and Related 1997 Restructuring; Legacy payables – |
2. SUMMARY OF SIGNIFICANT ACC_2
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Feb. 28, 2019 | |
Summary Of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation – |
Principles of Consolidation | Principles of Consolidation – |
Cash and Cash Equivalents | Cash and Cash Equivalents - |
Income Taxes | 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, 2019 and 2018. 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, 2019 and 2018. Generally, the Company is no longer subject to income tax examinations by major taxing authorities for years before 2015. |
Net Loss Per Share | 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, 2019 and 2018, 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, 2019 and 2018. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments - |
Use of Estimates and Assumptions | Use of Estimates and Assumptions |
Stock-Based Compensation | 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 | 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 | Subsequent Events – |
1. BUSINESS DESCRIPTION AND G_2
1. BUSINESS DESCRIPTION AND GOING CONCERN (Details Narrative) - USD ($) | 12 Months Ended | ||
Feb. 28, 2019 | Feb. 28, 2018 | Feb. 28, 2017 | |
Business Description And Going Concern | |||
Cash | $ 4,000 | $ 2,000 | |
Total stockholders' deficit | (1,664,000) | (1,516,000) | $ (1,372,000) |
Net loss | $ (148,000) | $ (144,000) |
3. ACCOUNTS PAYABLE AND ACCRU_2
3. ACCOUNTS PAYABLE AND ACCRUALS (Details Narrative) - USD ($) | 12 Months Ended | |
Feb. 28, 2019 | Feb. 28, 2018 | |
Accounts Payable And Accruals | ||
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, 2019 | Feb. 28, 2018 | |
Other Matters | ||
Rent expense | $ 5,000 | $ 12,000 |