Magna-Lab Inc. (Magna-Lab) has reported operating expenses of $16,000 for the third quarter of fiscal 2009, compared with the operating expenses of $16,000 in the year-ago quarter. It has also reported a net loss of $20,000, or $0.02 per share, for the third quarter of fiscal 2009, compared with the net loss of $83,000, or $0.08 per share, in the year-ago quarter.
Results of operations – During the nine months ended November 30, 2008, the company net loss was approximately $130,000, compared to a net loss of approximately of $156,000, in the nine months ended November 30, 2007. The net loss in the current year nine months results from ongoing costs of approximately $20,000 per quarter plus approximately $60,000 of costs associated with our negotiation of and entry into a definitive agreement to merge with a target company, which agreement we subsequently terminated due to the counterparty’s breach. While the counterparty is obligated to reimburse up to $50,000 of our deal-related expenses, there can be no assurance that we will be successful in recouping such amounts. As such, we have charged such costs to operations. Partly offsetting such increased cost are lower operating costs for occupancy, intellectual property (which costs have ceased) and costs associated with the reverse split of our shares that occurred in the prior fiscal year. Higher interest cost results from higher debt levels, and higher default interest, in the three and nine months ended November 30, 2008 compared to the three and nine months ended November 30, 2007.
The operating results for the three months ended November 30, 2008 are reflective of company core operating costs when we are not engaged in active negotiations for a merger transaction. The company expenses, particularly professional and consulting fees, can increase significantly if we are actively engaged in negotiations for a merger transaction as was the instance in the three months ended August 31, 2008.
Off balance sheet arrangements
The company has no material off balance sheet arrangements that are likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital resources or capital expenditures.