Forward Looking Statements

Some of the statements contained in this report discuss our plans and strategies for our business or state other forward-looking statements, as this term is defined in the Private Securities Litigation Reform Act of 1995. Statements that are not statements of historical facts may be deemed to be forward-looking statements. The words "anticipate," "believe," "estimate," "expect," "plan," "intend," "should," "seek," "will," and similar expressions are intended to identify these forward-looking statements but are not the exclusive means of identifying them. These forward-looking statements reflect the current views of our management. However, various risks, uncertainties and contingencies could cause our actual results, performance or achievements to differ materially from those expressed in, or implied by, these statements. See our Form 10-K for the year ended February 29, 2020 for a discussion of certain known risks; also see Part II, Item 1A.

Overview, Background and History

We are currently a "shell company" with no meaningful assets or operations other than our efforts to identify and merge with an operating company. We no longer have any full-time employees and our Chief Executive and Chief Financial Officers serve on a part-time consulting basis.

Prior to March 2003, our business had been focused on pre-revenue development and commercialization of disposable medical devices designed to enhance the effectiveness of magnetic resonance imaging in detection and diagnosis of heart disease. Due to the unavailability of funding, beginning in the fall of 2002 we essentially ceased all of our operations including product development and commercialization activities. Our efforts to realize value for our prior business and MRI technology have been unsuccessful. As a result, we view our most viable option to be merging with an unrelated operating company that would benefit from our status as a reporting company in a so-called "reverse merger" transaction. Entering into a "reverse merger" would likely involve very substantial dilution to the existing stockholders. It would, however, provide an opportunity to return some value to stockholders. While we have identified and explored merging with a number of candidates over the past few years and entered into definitive agreements with one candidate (which agreement was subsequently terminated), we have no commitments to merge with any company at the present time.

In order to raise cash to continue our efforts to pursue a reverse merger, on October 31, 2005, the Company consummated a stock purchase agreement with Magna Acquisition LLC ("MALLC") which resulted in a change of control of our Company. Under the agreement, we sold 300,000 shares of Class A Common Stock to MALLC for gross proceeds of $190,000, before expenses. Contemporaneous with the new investment, MALLC purchased from our former principal stockholder 307,727 shares of the Company's Class A Common Stock, representing all the shares of our common stock owned by that stockholder.

In January 2017, the Company's President and Chief Executive Officer at the time (the "CEO Purchaser") entered into an Asset Purchase Agreement (the "Initial Purchase Agreement") with the Company. Under the Initial Purchase Agreement, the CEO Purchaser 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 Purchaser (a) assumed all liabilities of the Company related exclusively to the purchased assets and (b) agreed to forgiveness of all indebtedness owing from the Company totaling approximately $110,000 including intellectual property counsel fees and costs, $68,000 of which had been paid by and is therefore due to the CEO Purchaser 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. The CEO Purchaser ceased making such payments several years ago and, as such, the underlying intellectual property became compromised.

On June 30, 2020, Joel S. Kanter, individually and as representative for (i) the 607,727 shares of Class A Common Stock of the Company owned by Magna Acquisition LLC ("MALLC"), (ii) the $1,453,811 of promissory notes owed by the Company to MALLC and to Joel S. Kanter (collectively, the "Notes"), and (iii) as representative for the four directors and/or officers owning 106,032 shares of Class A Common Stock of the Company (the "Seller"), entered into a Stock Purchase Agreement (the "Stock Purchase Agreement") pursuant to which the Seller agreed to sell 202,576 shares of Class A Common Stock and the Notes to Activist Investing LLC, an entity owned by David Lazar ("Activist") for $105,000. The 202,576 shares represented approximately 17.2% of the 1,179,329 shares of Class A Common Stock and Class B Common Stock of the Company's outstanding shares of common stock, which is not a majority. However, Mr. Lazar became the Company's sole director and officer on or about July 18, 2020 and caused Activist to convert the Notes (which were currently not convertible as of the date of the Stock Purchase Agreement) into 116,697,438 shares of Class A Common Stock of the Company on September 23, 2020. As a result, on or about July 18, 2020, there was a change of control of the Company. There is no family relationship or other relationship between the Seller and Activist. 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 resigned and appointed Mr. Lazar as the sole director of the Company, subject to the filing and dissemination of an Information Statement, which was filed on July 6, 2020, and the passage of the 10-day period set forth in SEC Rule 14f-1. The Company's officers also resigned 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, on or about July 18, 2020, Mr. Lazar then became the sole Director and officer of the Company.

MALLC has been responsible for substantially all of our funding since October 2005 and until June 30, 2020. During the period from October 2005 through and including August 31, 2020, MALLC loaned us an aggregate of approximately $687,000 under a series of promissory notes payable that mature 120 days from issuance. The balance of notes payable and accrued interest was approximately $1,472,000 and $1,406,000, as of August 31, 2020 and February 29, 2020, respectively. Notes payable include 12% unsecured notes payable to MALLC, in the aggregate principal amount of approximately $687,000, plus approximately $762,000 of interest accrued. In addition, notes payable include 10% unsecured notes payable to a former director of the Company (who is also a manager of MALLC) in the aggregate principal amount of approximately $19,000 plus approximately $4,000 of accrued interest. All of such notes become due 120 days after issuance and, as such, approximately $687,000 principal amount of the notes payable to MALLC are overdue at August 31, 2020. Approximately $17,000 of the notes payable to the former director are overdue. The notes that are overdue (the notes payable to MALLC and the notes payable to the former director) bear interest at 15% and 12% per year, respectively. The noteholders have not asserted that the Company is in default.

On June 2020, the former director loaned to us an additional approximately $9,000.

We entered into an agreement with MALLC and the former director to convert all amounts outstanding to them (including overdue amounts) into common stock of the Company.






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Recent Developments



COVID-19

In December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China, which has and is continuing to spread throughout other parts of the world, including the United States. On January 30, 2020, the World Health Organization declared the outbreak of the coronavirus disease (COVID-19) a "Public Health Emergency of International Concern." On January 31, 2020, U.S. Health and Human Services Secretary Alex M. Azar II declared a public health emergency for the United States to aid the U.S. healthcare community in responding to COVID-19, and on March 11, 2020 the World Health Organization characterized the outbreak as a "pandemic." COVID-19 has resulted in a widespread health crisis that has adversely affected the economies and financial markets worldwide. The business of any potential target business with which we consummate a business combination could be materially and adversely affected. Furthermore, we may be unable to complete a business combination if continued concerns relating to COVID-19 restrict travel, limit the ability to have meetings with potential investors or the target company's personnel, vendors and services providers are unavailable to negotiate and consummate a transaction in a timely manner. The extent to which COVID-19 impacts our search for a business combination will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19, the duration of the pandemic, and the actions to contain COVID-19 or treat its impact, among others. If the disruptions posed by COVID-19 or other matters of global concern continue for an extended period of time, our ability to consummate a business combination, or the operations of a target business with which we ultimately consummate a business combination, may be materially adversely affected.





Change of Control

On September 23, 2020, Activist Investing LLC (the "Seller"), the owner of 116,697,438 shares of common stock (the "Shares") upon conversion of $1,453,811 of promissory notes acquired by the Seller after the Seller purchased control of the Company in July 2020, agreed to sell the Shares to Liu Lina (the "Purchaser), a resident of China, for $255,000, pursuant to an Amended and Restated Stock Purchase Agreement (the "A&R Stock Purchase Agreement"). The first agreement between the Seller and the Purchase was superseded because it had the incorrect name of the Seller. The Seller is owned 100% owned by David Lazar. The Shares represent approximately 99.0% of the 117,876,762 shares of Class A Common Stock of our outstanding shares of common stock.

The sale of the Shares to Ms. Liu was completed on October 2, 2020. Ms. Liu, as the 99.0% majority stockholder of then appointed as directors of the Company the following three persons: Wang Jun, Wang Yang and Bai Zhihui as directors and Ms. Liu as CFO, Treasurer and Secretary (together, the "Designees"). As a result, there was a change of control of the Company; and the change of management was completed on or about October 12, 2020 (the "New Management Date"), ten (10) days after the Company's Information Statement pursuant to SEC Rule 14f-1 was filed with the SEC and mailed to the Company's stockholders. There is no family relationship or other relationship between the Seller and the Purchaser.

In connection with the sale under the Stock Purchase Agreement, Mr. Lazar resigned as an officer and director, and John B. Lowy and Dovid Kotkes have resigned as directors, and have appointed the Designees as our directors, on the New Management Date. As a result thereof, the Designees became the directors of the Company, on or about October 10, 2020.






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As of the date hereof, our authorized capital stock consists of 120,000,000 shares of common stock, par value $.001 per share, of which 117,876,762 shares of Class A Common Stock and 567 shares of Class B Common Stock are issued and outstanding, and 5,000,000 shares of Preferred Stock, par value $.001 per share, none of which shares are issued or outstanding. Holders of shares of our Class A Common Stock are entitled to one vote per share with respect to all matters to be acted on by the stockholders; and holders of shares of our Class B Common Stock are entitled to five votes per share and each share of Class B Common Stock is convertible into one share of Class A Common Stock.

Results of Operations for the Three Months Ended and Six Months Ended August 31, 2020 compared to the Three Months Ended and Six Months Ended August 31, 2019

Operating expenses for the three months ended and the six months ended August 31, 2020 were approximately $21,000 and $28,000 compared to $8,000 and $17,000 for the three months ended and the six months ended August 31, 2019 due to comparable levels of activities on both periods. Other income (expense) was approximately $305,000 for the 2020 six month period compared to $(52,000) during the same period ended August 31, 2019. The increase in other was attributable to gains from debt extinguishment and gains from settlement of accounts payable for the period ended August 31, 2020.

During the six months ended August 31, 2020 we recorded a net income of $277,000 compared to a net loss of $69,000 for the six months ended August 31, 2019.

Our expenses, particularly professional and consulting fees, can increase significantly if we are actively engaged in negotiations for a merger transaction. There can be no assurance that any of our activities will result in any transaction.

Financial Condition, Liquidity and Capital Resources





Going concern

As indicated in the accompanying interim unaudited condensed consolidated financial statements, at August 31, 2020, the Company had approximately $-0- of cash, negative working capital of approximately $1,484,000 and an accumulated deficit of $28,812 ,000. These factors, among others, indicate that the Company is in need of additional financing or a strategic arrangement in order to continue its planned activities for the fiscal year that began on March 1, 2020. The Company's plans to deal with this uncertainty are described above in "Company Activities." Management's plans to raise capital, enter into a strategic arrangement or sell or merge with an unrelated business have not been successful to date and there can be no assurance that management's plans can be realized at all. Historically, substantially all of the Company's financing, has come from stockholder loans. There can be no assurance that additional stockholder loans will be extended to the Company.

These factors, among others, raise substantial doubt about the Company's ability to continue operations as a going concern. No adjustments have been made in the accompanying condensed 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.

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.






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Critical Accounting Principles

We have identified critical accounting principles that affect our interim unaudited condensed consolidated financial statements by considering accounting policies that involve the most complex or subjective decisions or assessments as well as considering newly adopted principals. See Note 2 - Summary Of Significant Accounting Policies.

As of August 31, 2020, the impact of COVID-19 on our business continued to unfold. As a result, many of our estimates and assumptions carry a higher degree of variability and volatility. As events continue to evolve and additional information becomes available, our estimates may change in future periods.

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