U.S. Securities and Exchange Commission
                             Washington, D.C. 20549

                                   Form 10-QSB

(X)  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
     OF 1934 For the quarterly period ended March 31, 2006

( )  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934
     For the transition period from _____________ TO ______________

Commission file number 0-12962

                            Cambridge Holdings, Ltd.
                            ------------------------
        (Exact name of small business issuer as specified in its charter)


           Colorado                                      84-0826695
           --------                                      ----------
(State or other jurisdiction of             (IRS Employer Identification Number)
incorporation or organization)


        106 S. University Blvd., #14
              Denver, Colorado                             80209
 --------------------------------------                   --------
(Address of principal executive offices)                 (Zip Code)

Issuer's telephone number, including area code (303) 722-4008


Check whether the Issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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  [  ]

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).    Yes [ X ] No [ ]

State the number of shares outstanding of each of the Issuer's classes of common
stock, as of the latest practicable date.


            Class                                  Outstanding at April 28, 2006
Common Stock, $.025 par value                                3,509,877



<PAGE>


                            Cambridge Holdings, Ltd.
                                   Form 10-QSB

                                Table of Contents


Part I.  Financial Information...............................................3

Balance Sheets as of March 31, 2006 and June 30, 2005........................4

Statements of Operations and Comprehensive Income (Loss) for the
 three-month and nine-month periods ended March 31, 2006 and 2005............5

Statements of Cash Flows for the nine-month periods ended March 31,
  2006 and 2005............................................................6-7

Notes to Financial Statements.............................................8-10

Management's Discussion and Analysis.....................................10-12

Controls and Procedures..................................................12-13

Part II.  Other Information.................................................13

Signature Page..............................................................14







                                  Page 2 of 14
                                  Form 10-QSB
<PAGE>


                            Cambridge Holdings, Ltd.
                                   Form 10-QSB
                                 March 31, 2006



                          Part I. Financial Information

Item I.  Financial Statements
-----------------------------

The accompanying financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial information and
in accordance with the instructions for Form 10-QSB. Accordingly, they do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements.

In the opinion of management, the financial statements contain all material
adjustments, consisting only of normal recurring adjustments necessary to
present fairly the financial condition, results of operations, and cash flows of
the Company for the interim periods presented.

The results for the nine months ended March 31, 2006 are not necessarily
indicative of the results of operations for the full year. These financial
statements and related footnotes should be read in conjunction with the
financial statements and footnotes thereto included in the Company's Form 10-KSB
filed with the Securities and Exchange Commission for the year ended June 30,
2005.





                                  Page 3 of 14
                                  Form 10-QSB
<PAGE>
<TABLE>
<CAPTION>
                            CAMBRIDGE HOLDINGS, LTD.
                                 BALANCE SHEETS

                                                                            March 31,
                                                                              2006         June 30,
                                                                          (Unaudited)       2005
                                                                          -----------    -----------
                                     ASSETS
<S>                                                                       <C>            <C>
CURRENT ASSETS:
  Cash and cash equivalents                                               $   484,317    $    99,826
  Accounts receivable - related party                                              --            594
  Investment securities available for sale, net                                    --      3,225,029
  Accrued interest receivable                                                      --         57,722
  Prepaid and other assets                                                      3,271             --
  Deferred tax asset                                                               --         82,000
                                                                          -----------    -----------

       Total current assets                                                   487,588      3,465,171
                                                                          -----------    -----------

  Property and equipment, net                                                   1,924            348

  Note receivable and accrued interest                                        171,570        150,000
  Notes receivable - related party                                                 --        425,034

  Investments in LLCs                                                              --         67,391
                                                                          -----------    -----------

                                                                          $   661,082    $ 4,107,944
                                                                          ===========    ===========
                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Accounts payable and accrued expenses                                   $     3,208    $     5,605
  Accrued income taxes                                                        540,000             --
                                                                          -----------    -----------


       Total current liabilities                                              543,208          5,605
                                                                          -----------    -----------


COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
  Common Stock - $.025 par value, 15,000,000 shares
       authorized:  3,509,877 and 3,179,870 shares
       issued and outstanding, respectively                                    87,747         79,497
  Additional paid-in capital                                                3,114,167      3,048,667
  Accumulated (deficit)                                                    (3,084,040)    (1,587,876)
  Accumulated other comprehensive income (loss), net of tax:
     Net unrealized gains on securities, available for sale                        --      2,569,660
     Net unrealized loss on LLCs                                                   --         (7,609)
                                                                          -----------    -----------



  Total stockholders' equity                                                  117,874      4,102,339
                                                                          -----------    -----------


                                                                          $   661,082    $ 4,107,944
                                                                          ===========    ===========

</TABLE>

            SEE ACCOMPANYING NOTES TO UNAUDITED FINANCIAL STATEMENTS


                                  Page 4 of 14
                                  Form 10-QSB
<PAGE>
<TABLE>
<CAPTION>

                            CAMBRIDGE HOLDINGS, LTD.
            STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
                                   (UNAUDITED)


                                                 Three months ended           Nine months ended
                                                      March 31,                     March 31,
                                                 2006          2005           2006            2005
                                             -----------    -----------    -----------    -----------
<S>                                          <C>            <C>                <C>        <C>
Revenues:
Net realized gains (losses) on sales of
   investment securities                     $        --    $   (51,371)       730,771    $   (37,074)
Loss on LLC investment                                --             --             --        (65,000)
Interest and dividend income                       4,221          7,954         20,371         41,506
Gain on asset disposal                                --             --             --         15,044
                                             -----------    -----------    -----------    -----------
Total revenues                                     4,221        (43,417)       751,142        (45,524)
                                             -----------    -----------    -----------    -----------

Expenses:
Operating, general and administrative             32,965         36,537        218,270        122,527
                                             -----------    -----------    -----------    -----------

Income (loss) before income taxes                (28,744)       (79,954)       532,872       (168,051)
                                             -----------    -----------    -----------    -----------


Income tax expense (Note 5)                           --             --        622,000             --
                                             -----------    -----------    -----------    -----------



Net income (loss)                            $   (28,744)   $   (79,954)   $   (89,128)   $  (168,051)

Other comprehensive income (loss),
net of income tax:
Unrealized holding gains (losses)                     --       (337,487)    (2,569,660)      (757,926)
                                             -----------    -----------    -----------    -----------


Comprehensive income (loss)                  $   (28,744)   $  (417,441)   $(2,658,788)   $  (925,977)
                                             ===========    ===========    ===========    ===========


Basic and diluted (loss) per common share:         $ nil    $      (.03)   $      (.03)   $      (.06)
                                             -----------    ===========    ===========    ===========


Weighted average number of common
shares outstanding                             3,509,877      3,043,203      3,427,531      3,034,250

=====================================================================================================

</TABLE>

            SEE ACCOMPANYING NOTES TO UNAUDITED FINANCIAL STATEMENTS


                                  Page 5 of 14
                                  Form 10-QSB


<PAGE>

<TABLE>
<CAPTION>

                            CAMBRIDGE HOLDINGS, LTD.
                      STATEMENTS OF CASH FLOWS (UNAUDITED)


                                                              Nine months ended March 31,
                                                                  2006          2005
                                                              -----------    -----------
<S>                                                           <C>            <C>
CASH FLOWS FROM (TO) OPERATING ACTIVITIES:
Net (loss)                                                    $   (89,128)   $  (168,051)
  Adjustments to reconcile net (loss) to cash (used) by
     operating activities:
         Depreciation and amortization                                235          5,811
         Deferred income tax expense                               82,000             --
         Realized (gains) on sales of marketable securities      (730,771)        37,074
         Realized (gains) on sales of fixed assets                     --        (14,395)
         Realized loss on LLC investment                               --         65,000
         Interest earned on investment securities                      --           (206)
  Changes in:
         Accounts receivable - related party                          594             --
         Accrued interest receivable                               36,152        (40,414)
         Prepaid and other assets                                  (3,135)       (15,240)
         Accrued expenses and other                                (2,397)         1,248
         Accrued income taxes                                     540,000             --
                                                                 --------       --------


         Cash flows (used) by operating activities               (166,450)      (129,173)
                                                                 --------       --------

CASH FLOWS FROM (TO) INVESTING ACTIVITIES:
  Purchase of marketable securities                               (72,410)      (119,081)
  Proceeds from sales of marketable securities                  1,127,919        167,394
  Proceeds from sales of investment securities                         --         57,251
  Proceeds from disposal of LLC investment                         75,000             --
  Collection of notes receivable                                       --         10,000
  Additions to note receivable-related party                           --        (70,000)
  Proceeds from sales of fixed assets                                  --         34,000
  Purchases of fixed assets                                        (1,810)          (728)
                                                                ---------       --------

         Cash flows provided by investing activities            1,128,699         78,836
                                                                ---------       --------


CASH FLOWS FROM (TO) FINANCING ACTIVITIES:
  Cash dividend paid                                             (651,508)            --
  Proceeds from exercise of stock options                          73,750         55,125
                                                                ---------       --------


         Cash flows provided (used) by financing activities      (577,758)        55,125
                                                                ---------       --------


NET INCREASE IN CASH AND CASH EQUIVALENTS                         384,491          4,788

CASH AND CASH EQUIVALENTS, beginning of period                     99,826        111,766
                                                                ---------       --------

CASH AND CASH EQUIVALENTS, end of period                      $   484,317    $   116,554
                                                              ===========    ===========
</TABLE>



            SEE ACCOMPANYING NOTES TO UNAUDITED FINANCIAL STATEMENTS


                                  Page 6 of 14
                                  Form 10-QSB



<PAGE>

<TABLE>
<CAPTION>

                            CAMBRIDGE HOLDINGS, LTD.
                      STATEMENTS OF CASH FLOWS (UNAUDITED)
                                   (CONTINUED)

                                                              Nine months ended March 31,
                                                                  2006           2005
                                                              -----------    -----------
<S>                                                           <C>            <C>
SUPPLEMENTAL NON-CASH INVESTING AND
  FINANCING TRANSACTIONS:

  Issuance of a net of 130,007 shares of common stock
    in 2005 for cashless exercise of options                           --             --

  Dividend distribution of ANI and A4S common shares
   previously held for investment                                (755,528)            --

  Exchange of debt for equity in A4S                              425,034             --


</TABLE>

            SEE ACCOMPANYING NOTES TO UNAUDITED FINANCIAL STATEMENTS



                                  Page 7 of 14
                                  Form 10-QSB








<PAGE>

                            Cambridge Holdings, Ltd.
                          Notes to Financial Statements


Note 1 - Investments in Common Stock and Other

Commencing in December 2002 through August 2004, the Company made a series of
loans to A4S Security, Inc. ("A4S"). A4S, which completed an initial public
offering of its securities in July 2005, markets high-resolution mobile digital
video recording systems for security and surveillance. Cumulatively,
approximately $557,000 was invested in A4S with $132,000 (through debt
conversion and warrants exercises) represented by 18,801 common shares of A4S
and $425,000 represented by 6% convertible notes payable just prior to the A4S
initial public offering. In connection with the public offering by A4S in July
2005, the convertible notes and accrued interest were converted into a total of
approximately 439,000 common shares of A4S. In connection with certain of the
note investments, the Company received 7,133 warrants to acquire common stock of
A4S. The warrants are exercisable at an average exercise price of $5.65 per
share. Following the initial A4S investment, Greg Pusey, president and a
director of the Company, became a member of the A4S board of directors and
subsequently became the chairman. Jeffrey G. McGonegal, chief financial officer
and a director of the Company, is also the chief financial officer of A4S. The
Company distributed approximately 462,500 shares of its A4S stock to its
shareholders in December 2005 in connection with the liquidation of the Company.
This constituted all of the Company's remaining stock in A4S. The Company still
owns approximately 138,000 A4S warrants.

In December 2001, in connection with an equity investment, the Company acquired
310,000 warrants of AspenBio Pharma, Inc. ("AspenBio"). The 310,000 warrants to
purchase AspenBio common stock are exercisable at $1 per share and expire
January 1, 2007. During August 2004, in connection with an additional
investment, the Company received a warrant to acquire 28,571 shares of common
stock at $1.50 per share, expiring in August 2009. In connection with a previous
bank loan guarantee on July 5, 2002, AspenBio issued a warrant to the Company to
purchase 100,000 shares of AspenBio common stock at $1.50 per share, expiring
July 5, 2007. Greg Pusey is a director and Jeffrey G. McGonegal is the chief
financial officer of AspenBio.

During August 2005, Advanced Nutraceuticals, Inc. ("ANI") completed a cash
tender offer for up to 1,058,823 of its common shares then outstanding. The
Company owned approximately 670,000 shares of ANI prior to the tender offer and
in connection with the offer submitted all of the shares it owned, in the
tender. Since the ANI tender offer was over subscribed, the repurchase of shares
by ANI was completed on a pro rata basis, whereby approximately 37% of the
shares tendered were purchased for cash by ANI. The Company therefore received
cash of approximately $1,060,000 for the approximately 249,500 tendered shares,
leaving the Company then owning approximately 420,500 common shares of ANI
following completion of the tender offer. In December 2005 the Company
distributed such remaining shares of ANI stock to its shareholders in connection
with the liquidation of the Company. Greg Pusey is the president and a director
and Jeffrey G. McGonegal is the chief financial officer of ANI.

Note 2 - Stock Options

During August and September 2005 three directors/officers of the Company
exercised a total of 290,000 stock options with 50,000 of the options exercised
for cash proceeds of $17,500. The remaining 240,000 options were exercised
through the surrender of 109,993 common shares of the Company, owned by the
individuals. Additionally, 150,000 options held by a consultant to the Company,
were exercised for cash proceeds of $56,250, in August 2005.



                                  Page 8 of 14
                                  Form 10-QSB


<PAGE>
Note 3 - Recent Accounting Pronouncements


In December 2004, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 123(R) "Share-Based Payment", which addresses the accounting for share-based
payment transactions. SFAS No. 123(R) eliminates the ability to account for
share-based compensation transactions using APB 25, and generally requires
instead that such transactions be accounted and recognized in the statement of
operations based on their fair value. SFAS No. 123(R) will be effective for
public companies that file as small business issuers as of the first interim or
annual reporting period that begins after December 15, 2005. The Company does
not anticipate the adoption of this standard will have any impact on the
financial statements as currently there are no options outstanding. Depending
upon the amount of and terms for options that are granted in future periods, the
implementation of this standard could have a significant non-cash impact on
results of operations in future periods.

Note 4 - Dividend

At a special meeting of the Company's shareholders held November 3, 2005, the
shareholders approved a plan of liquidation of the Company and the distribution
of substantially all of the Company's cash and investment assets, in excess of a
reasonable operating reserve amount. In December 2005, a cash dividend of
$0.1825 per common share (approximate total of $651,500) was paid to
shareholders of record as of November 22, 2005. Included in that dividend
distribution were approximately 462,500 shares of common stock of A4S and
approximately 420,500 shares of common stock of ANI, with a combined cost basis
of approximately $755,500.

Note 5 - Income Taxes

The Company accounts for income taxes in accordance with Statement of Financial
Accounting Standards No. 109. SFAS No. 109 requires the Company to provide a net
deferred tax asset or liability equal to the expected future tax benefit or
expense of temporary reporting differences between book and tax accounting and
any available operating loss or tax credit carryforwards.

As of June 30, 2005, the Company had a net operating loss carryforward of
approximately $717,000, and a capital loss carryforward of approximately
$322,000. As a result of taxable gains recognizable in the year ending June 30,
2006, the Company has utilized these net operating and capital loss carryovers
and has no additional amount available at March 31, 2006.

At June 30, 2005, the net operating and capital loss carryovers had resulted in
a deferred tax asset of $488,000, against which a valuation reserve of $406,000
had been established, leaving a net deferred tax asset of $82,000, at that time.
Due to the taxable gains in the period ended March 31, 2006, the net operating
and capital losses have been utilized and the valuation reserve reversed.






                                  Page 9 of 14
                                  Form 10-QSB


<PAGE>




For the nine months ended March 31, 2006, the following is a reconciliation of
income taxes computed at the U. S. federal statutory rate to the Company's
effective rate:


         Federal income tax expense computed
                  at the Federal statutory rate             $(181,000)
         State income tax expense net of federal benefit      (40,000)
         Taxable gain attributable to distribution           (732,000)
         Change in valuation allowance                        349,000
         Other                                                (18,000)
                                                              -------
                                 Income tax expense         $(622,000)
                                                            ==========

Item 2. Management's Discussion and Analysis
        ------------------------------------

The information set forth in "Management's Discussion and Analysis" below
includes "forward looking statements" within the meaning of Section 27A of the
Securities Act, and is subject to the safe harbor created by that section.
Factors that could cause actual results to differ materially from these
contained in the forward looking statements are set forth in "Management's
Discussion and Analysis."

In connection with the SEC's regular review of our filings under the Securities
Exchange Act of 1934, we received correspondence from the SEC asking, among
other points, whether we should be registered as an investment company under the
Investment Company Act of 1940. Generally, an issuer is deemed to be an
investment company subject to registration if its holdings of "investment
securities," which usually are securities other than securities issued by
majority owned subsidiaries and government securities, exceed 40% of the value
of its total assets exclusive of government securities and cash items on an
unconsolidated basis.

Immediately following our receipt of correspondence from the SEC, we consulted
with our legal counsel about the Investment Company Act issues raised by the
SEC's letter. Our counsel recommended that we engage special legal counsel with
significant experience related to the Investment Company Act to assist us with
this issue and we did in fact engage such special counsel. Since February 2005,
our management and board have undertaken numerous discussions to investigate and
explore the best course of action. Based upon the investigation undertaken by
our management and board, including work by our legal counsel and special legal
counsel, the Company has determined that the Company has met the definition of
an "investment company" as provided in Section 3(a)(1) of the Investment Company
Act and accordingly should have been registered and reporting as an investment
company.

During multiple meetings, our board of directors reviewed and discussed the
information that management had gathered. After such discussions, the board on
June 9, 2005, unanimously concluded that the best way to maximize shareholder
value would be to liquidate the Company. Management and the Company's counsel
then developed a plan of liquidation to be completed on an orderly basis to
maximize value to the shareholders that was unanimously approved by the board of
directors on June 9, 2005. At a special meeting of the Company's shareholders
held November 3, 2005, the shareholders approved the plan of liquidation of the
Company and the distribution of substantially all of the Company's cash and
investment assets, except for a reasonable operating reserve amount. This
distribution was completed during December 2005.



                                  Page 10 of 14
                                  Form 10-QSB



<PAGE>




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

At March 31, 2006, the Company had cash and cash equivalents of $484,300 and a
working capital deficit of $55,600.

During August 2005, Advanced Nutraceuticals, Inc. ("ANI") completed a cash
tender offer for up to 1,058,823 of its common shares then outstanding. The
Company owned approximately 670,000 shares of ANI prior to the tender offer and
in connection with the offer submitted all of the shares owned in the tender.
Since the ANI tender offer was over subscribed, the repurchase of shares by ANI
was completed on a pro rata basis, whereby approximately 37% of the shares
tendered were purchased for cash by ANI. The Company therefore received cash of
approximately $1,060,000 for the approximately 249,500 tendered shares, leaving
the Company owning approximately 420,500 common shares of ANI following
completion of the tender offer. These shares were subsequently distributed to
the Company's stockholders as a dividend in December 2005. Greg Pusey is the
president and a director and Jeffrey G. McGonegal is the chief financial officer
of ANI.

For the nine-month period ended March 31, 2006, operating activities used cash
of $166,500. The net loss of $89,100 was primarily from operating expenses and
income taxes, net of the gain on the sale of the ANI shares. Gains realized on
the sale of marketable securities totalled $730,800. A non-cash deferred income
tax expense of $82,000, was recorded in the period. Accrued interest receivable
decreased providing cash of $36,200.

Cash provided by investing activities was $1,128,700 during the nine-month
period ended March 31, 2006. The Company used $72,400 to purchase marketable
securities. Proceeds from sales of marketable securities and an LLC investment
provided $1,202,900.

Financing activities during the nine-month period ended March 31, 2006 used cash
of $577,800, from a cash dividend paid of $651,500 net of $73,800 received upon
the exercise of stock options.

The Company regularly evaluates its cash and investment positions relative to
possible business or merger opportunities. Investments that were not able to be
liquidated into cash, nor able to be distributed as part of the dividend
distribution in December 2005, are being managed with a goal of having them able
to be liquidated on an orderly basis. Depending upon such assessments and
liquidations, future decisions will be made regarding reasonable operating
assets to be retained in the business and possible future distributions.

As a result of taxable income recognizable in the year ending June 30, 2006, the
Company has utilized its available net operating and capital loss carryovers and
anticipates consuming a significant portion, if not the majority of its cash
reserves for income tax payments. Other assets held by the Company are being
managed to attempt to convert them into cash on an orderly basis in the near
future, but there can be no assurance that the Company will be successful in
accomplishing that objective. The inability of the Company to generate
additional cash could impact the Company's ability to continue with its
objectives on a near term timeline.

Comprehensive Income (Loss)
---------------------------

For the nine-month periods ended March 31, 2006 and 2005, other comprehensive
(loss), net of tax, consisted of unrealized holding gains and losses on
investment securities held for resale and unrealized losses on LLCs. There was
no effect on income tax associated with the period end balances.




                                 Page 11 of 14
                                  Form 10-QSB


<PAGE>
Results of Operations
---------------------

Nine-month Period Ended March 31, 2006 compared to Nine-month Period Ended
--------------------------------------------------------------------------
March 31, 2005
--------------

The Company's revenues for the nine-month period ended March 31, 2006 totaled
approximately $751,100 consisting primarily of realized gains on sales of
marketable securities. The Company's revenues for the nine-month period ended
March 31, 2005 totaled approximately $56,600 consisting of interest on cash,
money market instruments and notes receivable of $41,500 and gains on the sale
of fixed assets of $15,000. Revenues in 2005 were offset by the loss recorded on
an LLC investment of $65,000 that was determined to be worthless in December
2004 and realized losses on sales of investment securities of $37,100.

The Company's expenses for the nine months ended March 31, 2006, totaled
$218,300, a $95,700 increase over the 2005 period. The increase was primarily
associated with additional professional fees incurred in responding to the SEC's
inquiry letter and related resolution, including the costs associated with the
Company's liquidation and asset distribution.

As a result of the income for the period and the taxable gain recognized upon
the distribution of the investment assets during the nine months ended March 31,
2006, an income tax expense of $622,000 was recorded.

Three-month Period Ended March 31, 2006 compared to Three-month Period Ended
----------------------------------------------------------------------------
March 31, 2005
--------------

The Company's revenues for the three-month period ended March 31, 2006 totaled
approximately $4,200 consisting of interest and dividend income. The Company's
revenues for the three-month period ended March 31, 2005 totaled approximately
$8,000 consisting of interest and dividend income. Revenues in 2005 were offset
by realized losses on sales of investment securities of $51,400.

The Company's expenses for the three months ended March 31, 2006 and March 31,
2005 totaled $33,000 and $36,500 respectively.


Item 3.  Controls and Procedures
         -----------------------

(a)      Evaluation of Disclosure Controls and Procedures

In connection with the Securities and Exchange Commission's ("SEC") regular
review of the Company's filings under the Securities Exchange Act of 1934, the
Company received correspondence from the SEC in February 2005 asking, among
other points, whether the Company should be registered as an "investment
company" under the Investment Company Act of 1940 (the "Investment Company
Act"). Generally, an issuer is deemed to be an investment company subject to
registration and reporting under the Investment Company Act if its holdings of
"investment securities" exceed 40% of the value of the issuer's total assets,
exclusive of government securities, securities issued by majority owned
subsidiaries and cash items on an unconsolidated basis.


                                 Page 12 of 14
                                  Form 10-QSB

<PAGE>
Immediately following the Company's receipt of this correspondence from the SEC,
the Company consulted with its legal counsel about the Investment Company Act
issues raised by the SEC's letter. The Company's counsel recommended that
special legal counsel be retained with significant experience related to the
Investment Company Act to assist the Company with this issue and such special
counsel was immediately engaged.

Based upon the investigations undertaken by the Company's management and board
of directors since February 2005, including work by the Company's legal counsel,
the Company determined that it did in fact meet the definition of an investment
company as provided in Section 3(a) (1) of the Investment Company Act during
certain periods over the last several years and, accordingly, should have been
registered and reporting under the Investment Company Act. Further, in
connection with these investigations, the Company's board of directors
evaluated, under the supervision and with the participation of the Company's
chief executive officer and chief financial officer, the effectiveness of the
design and operation of the Company's disclosure controls and procedures during
the relevant periods. Based upon these investigations and evaluations, the
Company concluded that its disclosure controls and procedures were not effective
as of the end of the period covered by this report. The Company attributes this
conclusion to the fact that its controls and procedures did not reveal that the
Company qualified as an investment company subject to the registration and
reporting requirements of the Investment Company Act.

In light of these facts, the Company's board of directors unanimously concluded
that the best way to maximize shareholder value is to liquidate the assets of
the Company for distribution to its shareholders. On June 9, 2005, the Company's
plan of liquidation was unanimously approved by the board of directors.

At a special meeting of the Company's shareholders held November 3, 2005, the
shareholders approved the plan of liquidation of the Company and the
distribution of substantially all of the Company's cash and investment assets,
except for a reasonable operating reserve amount. This distribution was
completed during December 2005.


(b)      Changes in Internal Controls

There have been no changes in internal control over financial reporting that
occurred during the most recent fiscal quarter that have materially affected, or
are reasonably likely to materially affect, the Company's internal control over
financial reporting.

                           Part II. Other Information


Item 6.  Exhibits

          (a) Exhibits 31.1, 31.2 and 32 are furnished.



                                 Page 13 of 14
                                  Form 10-QSB



<PAGE>





                            Cambridge Holdings, Ltd.
                                   Form 10-QSB
                                 March 31, 2006



                                   Signatures

In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


                                                CAMBRIDGE HOLDINGS, LTD.



May 11, 2006                          By:         /s/ Gregory Pusey
                                            ---------------------------------
                                      Gregory Pusey
                                      President and Chief Executive Officer


May 11, 2006                          By:           /s/ Jeffrey G. McGonegal
                                            ---------------------------------
                                      Jeffrey G. McGonegal
                                      Senior Vice President-Finance,
                                      Chief Financial Officer and Director




                                 Page 14 of 14
                                  Form 10-QSB


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