NOTE 5 - SUBSEQUENT EVENTS

3 Months Ended

May 31, 2020

Subsequent Events [Abstract]

NOTE 5 - SUBSEQUENT EVENTS

On June 30, 2020 Joel S. Kanter, individually and as representative for (i) the 607,727 common shares of a Company owned by Magna Acquisition LLC (“Magna LLC”), (ii) the $1,453,811 of promissory notes owed by the Company to Magna LLC and to Joel S. Kanter (collectively, the “Notes”), and (iii) as representative for the four directors and/or officers owning 106,032 Class A common shares of MAGAA ( the “Seller”), entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) pursuant to which the Seller agreed to sell 202,576 Class A common shares and the Notes to Activist Investing LLC., an entity owned by David Lazar (the “Purchaser”) for $105,000. The 202,576 shares represent approximately 17.2% of the 1,179,329 Class A and Class B common shares of the Company’s outstanding common shares, which is not a majority. However, Mr. Lazar, who will become the Company’s sole director and officer on or about July 18, 2020, intends to cause the Purchaser to convert some or all of the Notes (which are currently not convertible) into enough common shares so the Purchaser will become the majority shareholder of the Company. As a result, on or about July 18, 2020, there will be a change of control of the Company. There is no family relationship or other relationship between the Seller and the Purchaser. An Amendment to the Stock Purchase Agreement clarified the responsibilities of the parties for filing tax returns, and that references to the Company included Cardiac MRI, Inc., the Company’s 100% subsidiary.

In connection with the sale under the Stock Purchase Agreement, the members of the Company’s Board of Directors have agreed to resign and appoint Mr. Lazar as the sole initial director of the Company, subject to the filing and dissemination of an Information Statement, which has taken place and the passage of the 10-day period set forth in SEC Rule 14f-1. The Company’s officers will also resign at the same time, namely Lawrence A. Minkoff, Ph.D., Chief Executive Officer and Kenneth C. Riscica, Treasurer, Secretary and Chief Financial Officer. As a result thereof, Lazar became the sole Director and officer of the Company.

Additionally, in connection with the closing of the Stock Purchase Agreement, the Seller agreed to pay approximately $37,000 to settle certain liabilities of the Company for stock transfer, Edgarizing and other services (approximately $18,000) and approximately $19,000 to settle a liability for the services of our Treasurer and Secretary (Chief Financial Officer) over an extended period of time aggregating approximately $186,000. Further, upon closing of the transaction, the Purchaser performed a review of certain accounts and accruals payable (approximately $173,000 and $18,000, respectively) and received a legal opinion that such outstanding accounts payable and accrued liabilities aggregating approximately $191,000 were time-barred by the Statute of Limitations and has recorded the relief of those liabilities, and a gain on debt extinguishment, as of the closing date of the transaction. A Summary Pro Forma Balance Sheet reflecting the effects of the transactions effected at the closing of the Stock Purchase Agreement is as follows:

Summary Pro-Forma Balance Sheet at July 2, 2020

(dollars in '000's)

	May 31, 2020			Subsequent Activity			Note	Transaction Effects			Note	Pro Forma July 2, 2020
Cash and total assets	$	0		$	10,000		a.	$	0			$	0
					(10,000	)	b.
Total assets	$	0		$	0			$	0			$	0
Liabilities:
Notes and interest to related parties	$	1,435,000		$	10,000		a.	$				$	1,454,000
					9,000		d.
Accounts payable		352,000			12,000		c.		(192,000	)	e.		—
									(172,000	)	f.
Accrued liabilities		45,000			(10,000	)	b.		(12,000	)	e.		5,000
									(18,000	)	f.
Total liabilities		1,832,000			21,000				(394,000	)			1,459,000
Equity (Deficit):
Common stock paid-in capital		27,290,000							186,000		e.		27,476,000
Accumulated deficit		(29,122,000	)		(9,000	)	d.		18,000		e.		(28,935,000	)
					(12,000	)	c.		190,000		f.
Total stockholders' deficit		(1,832,000	)		(21,000	)			394,000				(1,459,000	)
Total liabilities and equity	$	0		$	0			$	0			$	0

Notes to Pro Forma:

Subsequent activity:

a. Represents loans from a director in June 2020.

b. Represents payment of expenses primarily for audit services in June 2020.

c.	Represents expenses accrued in June 2020.
d.	Additional interest accrual on notes

Transaction effects:

e. Liabilities of the Company paid and settled by the Seller.

f. Liabilities of the Company relieved.