<PAGE>

                                   FORM 10-QSB

                     U.S. SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE
ACT OF 1934

                      For quarter ended September 30, 1997

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
EXCHANGE ACT OF 1934

    For the transition period from                    to 
                                   ------------------    -----------------

    Commission file number  0-27654-NY
                            ----------

                   Long Island Physician Holdings Corporation
--------------------------------------------------------------------------------
         (Exact name of small business issuer specified in its charter)

          New York                                        11-3232989
--------------------------------------------------------------------------------
(State of other jurisdiction of               (IRS Employer Identification No.)
  incorporation or organization)


            One Huntington Quadrangle Suite 4C-01, Melville, NY 11747
--------------------------------------------------------------------------------
     (Address of principal executive offices)               (Zip Code)

                                 (516) 454-1900
--------------------------------------------------------------------------------
                           (Issuer's telephone number)

                                      NONE
--------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)

Indicate by check mark whether the issuer (1) has filed all reports required to
be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes         X              No 
    -----------------         --------------


Number of shares of Common Stock, $ .001 par value, outstanding as of September
30, 1997.

                   1,507 Class A and 4,334 Class B shares
                   --------------------------------------

Transitional Small Business Disclosure Format (Check One) Yes       No   X
                                                              -----    -----

<PAGE>


                                      INDEX


                                                                        Page No.
                                                                        --------

Part I.  Financial Information

    Consolidated Balance Sheets as of September 30, 1997 (unaudited).......  3

    Consolidated Statements of Operations for the nine months
    ended September 30, 1997 and September 30, 1996 (unaudited)............  4

    Consolidated Statements of Cash Flows for the nine months
    ended September 30, 1997 and September 30, 1996 (unaudited)............  5

    Notes to Consolidated Financial Statements.............................  6-7

    Management's Discussion and Analysis of Financial
    Condition and Results of Operations....................................  8-9

Part II. Other Information.................................................  10

         Signatures........................................................  10

<PAGE>


                   Long Island Physician Holdings Corporation
                      Consolidated Condensed Balance Sheets

<TABLE>
<CAPTION>
                                                                     Sept. 30,       Dec 31,
                                                                       1997           1996.
                                                                    (unaudited)     (audited)
                                                                   ---------------------------
                                     Assets

Current Assets

     <S>                                                             <C>            <C>       
     Cash                                                            $4,413,874     $6,488,324
     Accounts receivable                                              4,270,246      1,479,123
     Advances to affiliates                                             488,245         63,428
     Prepaid expenses and other assets                                   50,183         45,199
                                                                 ------------------------------
                                                                   
              Total current assets                                    9,222,548      8,076,074

Other Assets

     Restricted cash and investments                                  1,910,575      1,626,922
     Management fee retainer                                            648,657        648,657
     Goodwill                                                           236,933        249,404
                                                                 ------------------------------

Total assets                                                        $12,018,713    $10,601,057
                                                                 ==============================
                                                                   

                      Liabilities and Stockholders Equity


Current Liabilities

     Medical claims payable                                          $8,229,582     $5,222,417
     Accounts payable                                                 1,124,062        278,310
     Due to affiliates                                                        0              0
     Deferred revenue                                                    16,892        425,054
                                                                 ------------------------------

              Total current liabilities                               9,370,536      5,925,781

Minority Interest                                                       679,261        781,271
                                                                 ------------------------------

                                                                     10,049,797      6,707,052
                                                                 ------------------------------

                                                                   
Stockholders Equity

     Class A common stock, $.001 par value; 10,000 shares                     2              2
     authorized, 1,507 issued and outstanding
     Class B common stock, $.001 par value; 25,000 shares                     4              4
     authorized, 4,334 issued and outstanding
     Additional paid in capital                                      11,478,536     11,478,536
     Accumulated deficit                                             (9,509,626)    (7,584,537)
                                                                 ------------------------------
                                                                   
              Total stockholders equity                               1,968,916      3,894,005
                                                                 ------------------------------

Total liabilities and stockholders equity                           $12,018,713    $10,601,057
                                                                 ==============================
                                                                   
</TABLE>


                                       3

<PAGE>



                   Long Island Physician Holdings Corporation
     Consolidated Condensed Statements of Operations and Accumulated Deficit
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                For the three months                 For the nine month period
                                                                 ended September 30,                    ended September 30,
                                                                1997             1996                1997                1996
                                                           -------------    -------------       --------------      --------------  

<S>                                                          <C>               <C>                <C>                 <C>        
Revenue                                                      13,241,743        7,275,332          $33,881,950         $15,372,365
                                                           -------------    -------------       --------------      --------------  

     Total gross revenue                                     13,241,743        7,275,332           33,881,950          15,372,365
                                                           -------------    -------------       --------------      --------------  

Operating Expenses
     Medical expenses                                        11,227,188        6,033,857           27,455,255          12,731,012
     Management fees                                          2,794,233        2,021,818            8,355,946           5,733,279
     General and administrative expenses                        269,668          375,390              864,430           1,033,241
                                                           -------------    -------------       --------------      --------------  

     Total operating expenses                                14,291,089        8,431,065           36,675,631          19,497,532

Interest income                                                  70,942          111,185              266,583             326,755
                                                           -------------    -------------       --------------      --------------  


Loss from operations before minority interest                  (978,404)      (1,044,548)          (2,527,098)         (3,798,412)

     Income from equity investments                                              (16,163)                                  32,243
     Minority interest in loss of subsidiary                    218,726          165,018              602,009             922,148
                                                           -------------    -------------       --------------      --------------  

Net loss                                                       (759,678)        (895,693)          (1,925,089)         (2,844,021)

Accumulated deficit, beginning of period                     (8,749,948)      (4,886,760)          (7,584,537)         (2,938,432)

Distribution to shareholders of spun-off entity
                                                           -------------    -------------       --------------      --------------  

Accumulated deficit, end of period                          ($9,509,626)     ($5,782,453)         ($9,509,626)        ($5,782,453)
                                                           =============    =============       ==============      ==============  

Loss per share                                                    ($130)           ($156)               ($330)              ($492)
                                                           =============    =============       ==============      ==============  

Weighted average shares                                           5,841            5,760                5,841               5,786
                                                           =============    =============       ==============      ==============  

</TABLE>




                                       4


<PAGE>



                   Long Island Physician Holdings Corporation
                  Consolidated Condensed Cash Flows Statements
                                   (unaudited)
<TABLE>
<CAPTION>

                                                                                        For the nine months
                                                                                        ended September 30,
                                                                                     1997               1996
                                                                                --------------    ---------------
<S>                                                                              <C>                <C>         
Cash flows from operating activities:
     Net Loss                                                                    ($1,925,089)       ($2,844,021)
     Adjustments to reconcile net loss to net cash flows
       from operating activities:
        Minority interest in loss of subsidiary                                     (602,010)           577,852
        Depreciation                                                                                      2,537
        Amortization of goodwill                                                      12,471
     Changes in current assets and current liabilities:

        (Increase) in accounts receivable                                         (2,791,123)          (990,277)
        (Increase) in interest receivable                                                               (29,255)
        (Increase) in prepaid expenses and other assets                               (4,984)          (228,404)
        (Increase) decrease in advances to affiliates                               (424,817)           811,357
        (Increase) in loans receivable                                                                 (250,000)
        Increase in accounts payable and medical claims                            3,852,917          5,024,925
        (Decrease) in due to affiliates                                                                (963,613)
        Increase (decrease) in deferred revenue                                     (408,162)            34,109
                                                                                --------------    ---------------
                     Net cash (used in) provided by operating activities          (2,290,797)         1,145,210

Cash flows from investing activities:
     Net increase in restricted cash                                                (283,653)
     Net increase in other assets                                                                      (153,377)
     Purchase of fixed assets                                                                           (26,940)
     Investment in NextStage Healthcare                                                                 (52,243)
                                                                                --------------    ---------------
                                                                                
                     Net cash used in investing activities                          (283,653)          (232,560)

Cash flows from financing activities:
     Proceeds from issuance of common stock                                                             211,399
     Cash received by MDNY from Minority Shareholder                                 500,000
     Payments from cash flow reserve                                                                 (1,366,348)
                                                                                --------------    ---------------
                     Net cash used in financing activities                           500,000         (1,154,949)

                     Net (decrease) in cash                                       (2,074,450)          (242,299)
                     Cash beginning of period                                      6,488,324          7,566,472
                                                                                --------------    ---------------
                     Cash and cash equivalents, end of period                     $4,413,874         $7,324,173
                                                                                ==============    ===============
                                                                                
</TABLE>




                                       5


<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.       Unaudited Statements:

         The accompanying unaudited consolidated financial statements have been
         prepared by the Company in accordance with generally accepted
         accounting principles, pursuant to the rules and regulations of the
         Securities and Exchange Commission. Certain information and footnote
         disclosures normally included in financial statements have been
         condensed or omitted pursuant to such rules and regulations although

         management believes that the disclosures are adequate to make the
         information presented not misleading. In the opinion of management, the
         accompanying consolidated financial statements contain all adjustments
         necessary to present a fair statement of the results for the interim
         period presented. Operating results for the nine month period ended
         September 30, 1997, is not necessarily indicative of the results that
         may be expected for the year ending December 31, 1997. These financial
         statements should be read in conjunction with the consolidated
         financial statements and notes thereto for the year ended December 31,
         1996, included in the Company's Annual Statement 10-KSB.

2.       Principles of Consolidation:

         The consolidated financial statements include the accounts of Long
         Island Physician Holdings Corporation (the "Company" or "LIPH"), a
         holding company for purposes aimed at advancing the delivery of
         healthcare on Long Island, and its majority owned subsidiary, MDNY
         Healthcare, Inc. ("MDNY"), formally MDLI Healthcare, Inc., a health
         maintenance organization ("HMO"). Intercompany balances and activities
         are eliminated in consolidation.

3.       Net Loss Per Share of Common Stock:

         Net loss per share is based on the weighted average number of shares of
         Class A common stock and Class B common stock outstanding during each
         period. Such shares were authorized for issuance in connection with the
         closing of the private placement offering on September 22, 1995 and,
         accordingly, are deemed outstanding for the full period.

4.       Impact of Recently Issued Pronouncements:

         In February 1997, the Financial Accounting Standards Board issued
         Statements of Financial Accounting Standards No. 128, "Earnings per
         Share" ("SFAS No. 128"), which establishes standards for computing and
         presenting Earnings per Share (EPS). SFAS No. 128 will be effective for
         financial statements issued for periods ending after December 15, 1997.
         Earlier application is not permitted. There will not be a significant
         difference in earnings per share.

         In June 1997, the Financial Accounting Standards Board issued Statement
         of Financial Accounting Standards No. 130, "Reporting Comprehensive
         Income" ("SFAS 130"), which requires that changes in comprehensive
         income be shown in a financial statement that is displayed with the
         same prominence as other financial statements. SFAS 130 becomes
         effective in fiscal 1999. Management has not yet evaluated the affects
         of this change on the Company's financial statements.

          In June 1997, the Financial Accounting Standards Board issued
         Statement of Financial Accounting Standards No. 131, "Disclosures About
         Segments of an Enterprise and Related Information" ("SFAS 131"), which
         changes the way public companies report information about segments.
         SFAS 131, which is based

                                        6

<PAGE>

         on the management approach to segment reporting, includes requirements
         to report selected segment information quarterly and entity-wide
         disclosures about products and services, major customers, and the
         material countries in which the entity holds and reports revenue. SFAS
         131 becomes effective in fiscal 1999. Management has not yet evaluated
         the effect of this change on the Company's financial statements.

5.       Restructuring:

         Effective April 15, 1997, the Company approved a restructuring which
         will merge the Company into MDNY Holdings, Inc. ("Holdings"), a newly
         formed entity, as a result of which the shareholders of the Company
         will receive voting and non-voting interests in Holdings in the same
         proportion as their ownership in MDNY. MDNY will then became a
         wholly-owned subsidiary of Holdings. The merger is subject to the
         satisfaction of certain conditions and is expected to take place just
         prior to the time MDNY expects to complete a sale of equity securities
         in one of its expansion areas. As of the date of this filing, the
         merger has not been consummated since MDNY has not completed a sale of
         securities in one of its expansion areas.

6.       Medicare

         Effective January 1, 1997, MDNY began offering MDNY Medicare Plans to
         Medicare eligible individuals. Under risk contracts with the Federal
         Health Care Financing Administration ("HCFA"), MDNY is paid a fixed per
         member per month capitation amount by the HCFA based upon a formula of
         the projected medical expense of each Medicare member. MDNY bears the
         risk that the actual costs of the healthcare services may exceed the
         per member per month capitation amount received by MDNY.

7.       MDNY Healthcare Inc.

         During 1997, MDNY Healthcare Inc. received $500,000 from its minority
         owner Catholic Healthcare Network of Long Island relating to the
         payment of an outstanding subscription receivable.








                                        7

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF
OPERATIONS

Liquidity and Capital Resources
-------------------------------

Current assets have increased by approximately $1,146,000 to approximately
$9,222,000 at September 30, 1997 compared to approximately $8,076,000 at
December 31, 1996. Working capital at September 30, 1997 was negative by
approximately $150,000 as compared to positive working capital of approximately
$2,150,000 at December 31, 1996. The decrease in working capital of $2,300,000
is primarily due to a decrease in the cash balance used in operations. Working
capital was also affected by a decrease in subscriptions receivable by $500,000
and increases in accounts receivable, medical claims payable and accounts
payable of approximately $2,800,000, $3,000,000 and $845,000, respectively.
Accounts receivable and medical claims payable both increased due to an increase
in enrollment of 10,460 from 18,830 at December 31, 1996 to 29,290 at September
30, 1997.

The Company believes that the anticipated future cash flow from operations,
along with its cash on hand and available, will be sufficient to meet working
capital requirements during 1997. There can be no assurance, however, that the
Company will not require additional working capital and, if it does require such
capital, that such capital will be available to the Company on acceptable terms,
if at all.

In addition, the Company had $1,911,000 of cash and investments on deposit in an
escrow account in accordance with New York State Insurance Department
regulations.



Inflation
---------

The Company does not anticipate that inflation will have any significant effect
on its business particularly since the United States, the only market in which
the Company currently intends to operate, is presently experiencing a relatively
low rate of inflation.

RESULTS OF OPERATIONS
---------------------

Revenues
--------

Revenues for the nine month period ended September 30, 1997 increased
approximately $18,500,000 or 120% to approximately $33,900,000 from revenues of
approximately $15,400,000 for the nine month period ended September 30, 1996.
The increase in revenue is due primarily to a substantial increase in
enrollment. The number of enrollees increased from 17,479 at September 30, 1996
to 29,290 at September 30, 1997, or 67%.


Costs and Expenses
------------------

Total medical expenses increased by approximately $14,700,000, or 116%, from
approximately $12,700,000 for the nine month period ended September 30, 1996 to
approximately $27,455,000 for the nine month period ended September 30, 1997
primarily due to an increase in enrollment of 11,811 from September 30, 1996 to
September 30, 1997.





                                        8



<PAGE>

Total management fees and general and administrative expenses increased by
approximately $2,454,000, or 36%, from approximately $6,766,000 for the nine
month period ended September 30, 1996 to approximately $9,220,000 for the nine
month period ended September 30, 1997. These expenses increased 36% primarily
due to the substantial increases in operations. These expenses did not increase
at a rate commensurate with the increases in revenue, since the Company had to
incur significant fixed costs in the prior year in order to commence operations.
Management fees and general and administrative expenses as a percent of revenue
are expected to continue to decline in future periods as enrollment increases.

Net Loss Applicable To Common Shareholders
------------------------------------------

Net loss applicable to common shareholders was a loss of approximately
$1,925,000 or $330 per share for the nine month period ended September 30, 1997
compared to a net loss of $2,844,000 or $492 per share for the nine month period
ended September 30, 1996.









                                        9

<PAGE>


PART II - OTHER INFORMATION
---------------------------

ITEM 1 - Legal Proceedings
--------------------------

                           None

ITEM 2 - Changes In Securities
------------------------------

                           None

ITEM 3 - Defaults Upon Senior Securities
----------------------------------------

                           None

ITEM 4 - Submission Of Matters To A Vote Of Security Holders
------------------------------------------------------------

                           None

ITEM 5 - Other Information
--------------------------

                           None

ITEM 6 - Exhibits And Reports On Form 8-K
-----------------------------------------

         (b) There were no reports on Form 8-K for the three months ended
September 30, 1997.


SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized by


                               Long Island Physician Holdings Corporation
                               ------------------------------------------


Date January 16, 1998                   /s/ David Weissberg
     ----------------                   --------------------------------------
                                        David Weissberg, MD, President and CEO



Date January 16, 1998                   /s/ Paul Kolker
     ----------------                   --------------------------------------
                                        Paul Kolker, MD, Treasurer

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------






                                       10