Form 10-Q
                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    Form 10-Q

(Mark One)

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

                For the quarterly period ended December 31, 2008

                                       OR

     ( ) 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 0-12962

                            CAMBRIDGE HOLDINGS, LTD.
                            ------------------------
             (Exact name of registrant 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)

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

Indicate by check mark whether the registrant (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 [_]

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act. (Check one)

   Large accelerated filer |_|                Accelerated filer |_|
   Non-accelerated filer |_|                  Smaller Reporting Company |X|

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).

                                 Yes [_] No [X]

The number of shares of the registrant's $.025 par value common stock
outstanding as of February 3, 2009 was 3,509,877.


<PAGE>

CAMBRIDGE HOLDINGS, LTD.

                         PART 1-- Financial Information

Item 1.      Financial Statements

Balance Sheets as of December 31, 2008 (unaudited) and June 30, 2008          3

Statements of Operations and Comprehensive Income (Loss)
      For the Three and Six Months Ended December 31, 2008
      and 2007 (unaudited)                                                    4

Statements of Cash Flows For the Six Months Ended December 31, 2008
      and 2007 (unaudited)                                                    5

Notes to Unaudited Financial Statements                                       6

Item 2.      Management's Discussion and Analysis of Financial Condition
             and Results of Operations                                        9

Item 3.      Quantitative and Qualitative Disclosures About Market Risk      12

Item 4T.     Controls and Procedures                                         12

                           PART II - Other Informatio
n

Item 1.      Legal Proceedings                                               13

Item 1A.     Risk Factors                                                    13

Item 2.      Unregistered Sales of Equity Securities and Use of Proceeds     13

Item 3.      Defaults Upon Senior Securities                                 13

Item 4.      Submission of Matters to a Vote of Security Holders             13

Item 5.      Other Information                                               14

Item 6.      Exhibits                                                        14

             Signatures                                                      15



                                  Page 2 of 15
                                   Form 10-Q
<PAGE>
<TABLE>
<CAPTION>

Part I.  Financial Information

                            CAMBRIDGE HOLDINGS, LTD.
                                 BALANCE SHEETS

                                                              December 31,
                                                                 2008         June 30,
                                                              (Unaudited)       2008
                                                              -----------    -----------
                                     ASSETS
                                     ------

CURRENT ASSETS:
<S>                                                           <C>            <C>
  Cash and cash equivalents                                   $    67,968    $    77,605
  Investment securities                                         1,811,105      1,877,121
  Prepaid and other assets                                         37,609         74,100
                                                              -----------    -----------

       Total current assets                                     1,916,682      2,028,826

  PROPERTY AND EQUIPMENT, net                                       5,666          7,209
                                                              -----------    -----------

                                                              $ 1,922,348    $ 2,036,035
                                                              ===========    ===========

                      LIABILITIES AND STOCKHOLDERS' EQUITY
                      ------------------------------------

CURRENT LIABILITIES:
  Accounts payable and accrued expenses                       $     2,634    $     3,727
  Deferred income tax liability                                   652,000        652,000
                                                              -----------    -----------


       Total current liabilities                                  654,634        655,727
                                                              -----------    -----------


COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
  Common Stock - $.025 par value, 15,000,000 shares
       authorized:  3,509,877 shares issued and outstanding        87,747         87,747
  Additional paid-in capital                                    1,803,232      1,707,132
  Accumulated (deficit)                                          (623,265)      (414,571)
                                                              -----------    -----------



  Total stockholders' equity                                    1,267,714      1,380,308
                                                              -----------    -----------


                                                              $ 1,922,348    $ 2,036,035
                                                              ===========    ===========

</TABLE>

            SEE ACCOMPANYING NOTES TO UNAUDITED FINANCIAL STATEMENTS


                                  Page 3 of 15
                                   Form 10-Q



<PAGE>
<TABLE>
<CAPTION>

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


                                                 Three months ended               Six months ended
                                                    December 31,                    December 31,
                                               2008             2007           2008            2007
Revenues:                                  ------------    ------------    ------------    ------------
<S>                                        <C>             <C>             <C>             <C>
Net gains (losses) on
   investment securities                   $    (22,831)   $   (287,288)   $    (66,016)   $  1,179,846
Interest and dividend income                        176           1,764             497           4,792
                                           ------------    ------------    ------------    ------------

Total revenues                                  (22,655)       (285,524)        (65,519)      1,184,638
                                           ------------    ------------    ------------    ------------

Expenses:
   Operating, general and administrative         29,615          25,037         149,959          55,143
                                           ------------    ------------    ------------    ------------

Income (loss) before income taxes               (52,270)       (310,561)       (215,478)      1,129,495
                                           ------------    ------------    ------------    ------------


Income tax (benefit) expense (Note 4)            (6,784)       (112,000)         (6,784)        533,000
                                           ------------    ------------    ------------    ------------



Net income (loss)                          $    (45,486)   $   (198,561)   $   (208,694)   $    596,495

Other comprehensive income (loss),
  net of income tax:
  Unrealized holding gains (losses)                  --              --              --              --
                                           ------------    ------------    ------------    ------------

Comprehensive income (loss)                $    (45,486)   $   (198,561)   $   (208,694)   $    596,495
                                           ============    ============    ============    ============


Basic and diluted income (loss)
   per common share:                       $       (.01)   $      (.06)    $       (.06)   $        .17
                                           ============    ============    ============    ============

Weighted average number of common
  shares outstanding                          3,509,877       3,509,877       3,509,877       3,509,877

</TABLE>


            SEE ACCOMPANYING NOTES TO UNAUDITED FINANCIAL STATEMENTS

                                  Page 4 of 15
                                   Form 10-Q



<PAGE>
<TABLE>
<CAPTION>
                            CAMBRIDGE HOLDINGS, LTD.
                      STATEMENTS OF CASH FLOWS (UNAUDITED)

                                                     Six months ended December 31,
                                                         2008            2007
                                                      -----------    -----------
<S>                                                   <C>            <C>
CASH FLOWS FROM (TO) OPERATING ACTIVITIES:
Net income (loss)                                     $  (208,694)   $   596,495
Adjustments to reconcile net income (loss) to cash
       provided (used) by operating activities:
         Depreciation and amortization                      1,543          1,604
         Stock-based compensation                          96,100             --
         Deferred income taxes                                 --        542,000
         Unrealized (gains) losses on trading
           investment securities                           66,015     (1,179,847)
     Changes in:
         Other assets                                      36,491         (2,256)
         Accrued expenses and other                        (1,092)        (7,469)
                                                      -----------    -----------


         Cash flows (used) by operating activities         (9,637)       (49,473)
                                                      -----------    -----------
CASH FLOWS FROM (TO) INVESTING ACTIVITIES:
  Purchase of marketable securities                            --             --
  Purchase of fixed assets                                     --             --
                                                      -----------    -----------

         Cash flows (used) by investing activities             --             --
                                                      -----------    -----------
CASH FLOWS FROM (TO) FINANCING ACTIVITIES:
  Repayment of debt                                            --        (75,000)
                                                      -----------    -----------

         Cash flows (used) by financing activities             --        (75,000)
                                                      -----------    -----------


NET INCREASE (DECREASE)
  IN CASH AND CASH EQUIVALENTS                             (9,637)      (124,473)

CASH AND CASH EQUIVALENTS, beginning of period             77,605        241,243
                                                      -----------    -----------

CASH AND CASH EQUIVALENTS, end of period              $    67,968    $   116,770
                                                      -----------    -----------


  Supplemental disclosure of cash flow information:
       Cash paid during the period for interest       $        --    $     2,000
       Cash paid during the period for income taxes   $        --    $        --
</TABLE>




            SEE ACCOMPANYING NOTES TO UNAUDITED FINANCIAL STATEMENTS

                                  Page 5 of 15
                                   Form 10-Q



<PAGE>
                            Cambridge Holdings, Ltd.
                     Notes to Unaudited Financial Statements


INTERIM FINANCIAL STATEMENTS

The accompanying financial statements of Cambridge Holdings, Ltd. (the
"Company," "we," "us" or "our") have been prepared in accordance with the
instructions to quarterly reports on Form 10-Q. In the opinion of management,
all adjustments (which include only normal recurring adjustments) necessary to
present fairly the financial position, results of operations and changes in
financial position at December 31, 2008, and for all periods presented, have
been made. Certain information and footnote data necessary for a fair
presentation of financial position and results of operations in conformity with
accounting principles generally accepted in the United States of America have
been condensed or omitted. It is therefore suggested that these financial
statements be read in conjunction with the summary of significant accounting
policies and notes to financial statements included in the Company's Form 10-KSB
filed with the SEC for the year ended June 30, 2008. The results of operations
for the period ended December 31, 2008 are not necessarily an indication of
operating results for the full year. Certain amounts in the 2007 interim
financial statements have been reclassified to conform to the 2008 presentation.

Recently issued accounting pronouncements:    In February 2007, the FASB issued
Statement of Financial Accounting Standards ("SFAS" No. 159, The Fair Value
Option for Financial Assets and Financial Liabilities ("SFAS 159"). SFAS 159
allows entities to voluntarily choose to measure certain financial assets and
liabilities at fair value ("fair value option"). The fair value option may be
elected on an instrument-by-instrument basis and is irrevocable, unless a new
election date occurs. If the fair value option is elected for an instrument,
SFAS 159 specifies that unrealized gains and losses for that instrument be
reported in earnings at each subsequent reporting date. SFAS 159 was effective
for us on July 1, 2008. We did not apply the fair value option to any of our
outstanding instruments and, therefore, SFAS 159 did not have an impact on our
consolidated financial statements.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements ("SFAS
157"), which defines fair value, establishes a framework for measuring fair
value in accordance with generally accepted accounting principles, and expands
disclosures about fair value measurements. SFAS 157 was effective for us on July
1, 2008 for all financial assets and liabilities. For all nonfinancial assets
and liabilities, SFAS 157 is effective for us on July 1, 2009. As it relates to
our financial assets and liabilities, the adoption of SFAS 157 did not have a
material impact on our consolidated financial statements. We are still in the
process of evaluating the impact that SFAS 157 will have on our nonfinancial
assets and liabilities.

Loss per share

SFAS No. 128, Earnings Per Share, requires dual presentation of basic and
diluted earnings per share (EPS) with a reconciliation of the numerator and
denominator of the basic EPS computation to the numerator and denominator of the
diluted EPS computation. Basic EPS excludes dilution. Diluted EPS reflects the
potential dilution that could occur if securities or other contracts to issue
common stock were exercised or converted into common stock or resulted in the
issuance of common stock that then shared in the earnings of the entity.

Loss per share of common stock is computed based on the weighted average number
of common shares outstanding during the period. Stock options and warrants are
not considered in the calculation, as the impact of the potential common shares
(totaling 250,000 shares at December 31, 2008 and none at December 31, 2007)
would be to decrease loss per share. Therefore, diluted loss per share is
equivalent to basic loss per share.


                                  Page 6 of 15
                                   Form 10-Q


<PAGE>

Note 1 - Investment Securities

Effective July 1, 2008 the Company adopted the provisions of SFAS No. 157, Fair
Value Measurements ("SFAS 157"). SFAS 157 defines how "fair value" should be
determined in connection with the Company's assets and also provides additional
disclosure requirements concerning the determination of fair value. The Company
has valued its investment assets using quoted prices in active markets for
identical assets (Level 1) commencing with July 1, 2008. As a result of this
adoption there were no transfers between categories and no changes in the
beginning and ending balances. There were no purchases or sales during the
period and unrealized gains and losses are as reported in the statement of
operations for the period.

At December 31, 2008 the Company's market value of trading securities consisted
primarily of securities with a fair market value of approximately $1,811,100 and
a cost of approximately $246,300. Included were 293,487 common shares of
AspenBio Pharma, Inc. ("AspenBio") at a cost of approximately $237,100 and a
fair market value of approximately $1,810,900. Also included were 3,004 common
shares ("PBAL") and 5,000 common stock purchase warrants ("PBALW") of PepperBall
Technologies, Inc. ("PepperBall") at a cost of $9,200 and a fair market value of
$300. Subsequent to December 31, 2008 the market value of the common shares of
AspenBio has decreased to approximately $481,000 as of February 6, 2009 based
upon the closing price of such shares on that date.

At June 30, 2008 the Company's market value of trading securities consisted
primarily of securities with a fair market value of approximately $1,877,200 and
a cost of approximately $246,300. Included were 293,487 common shares of
AspenBio at a cost of approximately $237,100 and a fair market value of
approximately $1,872,447. Also included were 3,004 common shares ("PBAL") and
5,000 common stock purchase warrants ("PBALW") of PepperBall at a cost of $9,200
and a fair market value of $4,700.

Note 2 - Property and Equipment Property and equipment consisted of the
following:
                                          December 31,         June 30,
                                              2008               2008
                                          (Unaudited)
                                           ----------         ----------
Computer equipment and software            $    2,445         $    2,445
Office equipment                                1,883              1,883
Furniture and fixtures                         10,026             10,026
                                           ----------         ----------
                                               14,354             14,354
Less accumulated depreciation                  (8,688)            (7,145)
                                           ----------         ----------
                                           $    5,666         $    7,209
                                           ==========         ==========


Note 3 - Stock Options

During the six months ended December 31, 2008, options to purchase a total of
250,000 shares of the Company's common stock under the Company's 2001 Stock
Option Plan (the "Plan") were issued to the Company's directors. The options
were vested upon their grant, and options to purchase 150,000 shares of common
stock are exercisable at $0.42 and expire in ten years. Options to purchase
100,000 shares of common stock are exercisable at $0.462 and expire in five
years.


                                  Page 7 of 15
                                   Form 10-Q

<PAGE>
The Company currently provides stock-based compensation to employees, directors
and consultants, under the Plan that has been approved by the Company's
shareholders providing for up to 650,000 common shares to be reserved for
issuance under the Plan. Stock options granted under the Plan generally vest
over periods of up to three years from the date of grant, as specified in the
Plan or by the compensation committee of the Company's board of directors, and
are exercisable for a period of up to ten years from the date of grant. The
Company recognized stock-based compensation during the period ended December 31,
2008 totaling $96,100.

The Company accounts for stock-based compensation SFAS No. 123 (revised 2004),
"Share-Based Payment" ("SFAS 123R"), using the modified prospective method. SFAS
123R requires the recognition of the cost of employee services received in
exchange for an award of equity instruments in the financial statements and is
measured based on the grant date fair value of the award. SFAS 123R also
requires the stock option compensation expense to be recognized over the period
during which an employee is required to provide service in exchange for the
award (generally the vesting period). The Company estimated the fair value of
each stock option at the grant date by using the Black-Scholes option pricing
model with the following weighted average assumptions used for the grants in the
six months ended December 31, 2008. Expected life; 5-10 years, Volatility,
126.3%, Risk-free interest rate, 2.91% to 3.66%, Dividend yield, 0%, and
Estimated forfeitures 0%.

The expected life of stock options represents the period of time that the stock
options granted are expected to be outstanding based on historical exercise
trends. The expected volatility is based on the historical price volatility of
the Company's common stock over the past six years, based upon management's
assessment of the appropriate life to determine volatility. The risk-free
interest rate represents the U.S. Treasury bill rate for the expected life of
the related stock options. The dividend yield represents the Company's
anticipated cash dividend over the expected life of the stock options.
Forfeitures represent the weighted average estimate of future options to be
cancelled primarily due to terminations.

A summary of stock option activity of options to employees, directors and
advisors, for the six months ended December 31, 2008 is presented below:
<TABLE>
<CAPTION>

                                         Shares      Weighted      Weighted      Aggregate
                                          Under      Average        Average      Intrinsic
                                         Option      Exercise      Remaining       Value
                                                      Price        Contractual
                                                                  Life (Years)
                                       ---------    ----------    ------------   ---------
<S>                                      <C>        <C>               <C>        <C>
Outstanding at June 30, 2008                  --    $       --
     Granted                             250,000          0.44
     Exercised                                --            --
     Forfeited                                --            --
                                       ---------    ----------
Outstanding at December 31, 2008         250,000    $     0.44        8.0        $      --
                                       =========    ==========                   =========
Exercisable at December 31, 2008         250,000    $     0.44        8.0        $      --
                                       =========    ==========                   =========
</TABLE>

The aggregate intrinsic value in the table above represents the total intrinsic
value (the difference between our closing stock price on December 31, 2008 and
the exercise price, multiplied by the number of in-the-money options) that would
have been received by the option holders, had all option holders been able to
and in fact, had exercised their options on December 31, 2008.


                                  Page 8 of 15
                                   Form 10-Q

<PAGE>
During the six months ended December 31, 2008, there were options to purchase
250,000 shares of common stock granted to directors under the Plan with a
weighted average fair value at the grant date of $0.38 per option exercisable at
an average of $0.44 per share.

As of December 31, 2008, based upon employee, advisor and consultant options
granted to that point, there was no additional unrecognized compensation cost
related to stock options that will be recorded in future periods.

Note 4 - Income Tax Expense (Benefit)

At December 31, 2008 the Company had a deferred tax liability of $652,000,
related primarily to the unrealized gain on investment securities available for
sale.

Income tax expense (benefit) consisted of:

                                                          Six Months Ended
                                                             December 31,
                                                        2008             2007
                                                     ---------        ---------
Current income tax (benefit):
              Federal                                $  (5,784)       $  (7,000)
              State                                     (1,000)          (2,000)
                                                     ---------        ---------
                                                        (6,784)          (9,000)
Deferred income tax expense:
              Federal                                       --          474,000
              State                                         --           68,000
                                                     ---------        ---------
                                                                        542,000

Total Income tax expense (benefit)                   $  (6,784)       $ 533,000
                                                     =========        =========




Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

Cambridge Holdings, Ltd. (the "Company," "we," "us," "our"), was incorporated
under the laws of the State of Colorado on June 23, 1980 under the name Jones
Optical Company. The Company's name was changed to Cambridge Holdings, Ltd. in
August 1988.

In connection with the United States Securities and Exchange Commission's (the
"SEC") regular review of our filings under the Securities Exchange Act of 1934,
we received correspondence from the SEC in 2005 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 the SEC's correspondence, 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 our board have undertaken numerous discussions to investigate
and explore the best course of action. Based upon the investigation undertaken
by our management and our board, including work by or 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.


                                  Page 9 of 15
                                   Form 10-Q

<PAGE>

During multiple meetings, our board of directors reviewed and discussed the
information that management had gathered. After such discussions, on June 9,
2005, our board of directors 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. The liquidation plan 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 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.

We have advised the SEC of our intention to liquidate our assets in order to,
among other factors described below, eliminate the applicability of the
Investment Company Act. 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 the corporation now known as PepperBall
Technologies, Inc. ("PepperBall") (formerly Security With Advanced Technology,
Inc.) and approximately 420,500 shares of common stock of Bactolac
Pharmaceutical, Inc., with a combined cost basis of approximately $755,500.

In September 2002, the Company completed a pro rata distribution to its
shareholders of 496,296 shares of the AspenBio Pharma, Inc. ("AspenBio") common
stock, which was recorded by the Company as a dividend at the shares' then
estimated fair value of $150,000. In March 2005, the Company's board of
directors approved a distribution of the 532,275 shares of the then remaining
total AspenBio common stock owned by the Company. This distribution was made on
a pro rata basis to all shareholders of record as of the close of business on
March 24, 2005 and was recorded as a dividend at the shares' estimated value of
$475,000 for financial reporting purposes. The Company's board of directors made
the decision to distribute this investment based upon the following
considerations; 1) to begin the process of reducing the Company's level of
investment assets, following the SEC's inquiry as to the Company's status as not
being in compliance with the reporting requirements under the Investment Company
Act, and 2) the board of directors did not believe that the market value of the
shares of the Company reflected the value of the underlying investments and
therefore to increase the value to its shareholders.

Commencing in December 2001, the Company made a series of investments in
AspenBio. At June 30, 2008 the Company owned 293,487 common shares of AspenBio.
In April 2007 the Company exercised warrants for cash resulting in the issuance
of 128,571 shares of AspenBio's common stock. The Company thereupon sold 100,000
shares of AspenBio common stock for approximately $445,000 in cash in order to
reduce the level of its investment assets. Greg Pusey, president of the Company,
serves as vice chairman of AspenBio's board of directors and Jeffrey G.
McGonegal, chief financial officer of the Company, serves as AspenBio's chief
financial officer. These exercises of AspenBio warrants were done to maximize
shareholder value, as the warrants were either scheduled to be redeemed for
nominal value or were scheduled to expire.

Commencing in March 2002, the Company made a series of investments in
PepperBall. PepperBall, which completed an initial public offering of its
securities in July 2005, develops and markets non-lethal and personal protection
devices and facility and mobile security systems for the security and
surveillance industries, including consumers. The Company currently owns 3,004
common shares and publicly traded warrants to purchase 5,000 shares of
PepperBall's common stock. Greg Pusey, president of the Company, serves as
chairman of PepperBall's board of directors and Jeffrey G. McGonegal, chief
financial officer of the Company, serves as PepperBall's chief financial
officer.


                                  Page 10 of 15
                                   Form 10-Q

<PAGE>
Following the 2005 distributions of virtually all of its investment traded
securities and the associated income tax ramifications from those distributions,
the Company had limited cash resources with the remainder of its investments
limited to the warrants and options it had received in earlier years as part of
prior investments and residual shares remaining from the distributions. While
the Company sought a possible combination with another entity, the value of the
shares underlying the warrants and options began to rise, with the larger valued
AspenBio warrants nearing expiration. The Company determined that, to enhance
shareholder value, the best course of action was to exercise a portion of its
AspenBio warrants for cash to the extent it was prudent and the balance on a
cashless basis as provided in the terms of the warrants. Approximately $445,000
in cash was thereupon generated by selling 100,000 of the AspenBio common
shares.

Management of the Company is currently evaluating the most prudent methods and
timing of liquidating the remaining investments held by the Company in AspenBio
and its minor holding in PepperBall. The evaluation includes consideration of
the magnitude of each holding as compared to the investee's shares outstanding
and trading volumes, the perceived current and future value of each holding and
the most effective disposal method. Management believes that this liquidation
plan will be finalized and substantially implemented within the fiscal year
ending June 30, 2009.

Results of Operations
---------------------

Three-month Period Ended December 31, 2008 compared to Three-month Period Ended
December 31, 2007

The Company's revenues for the three-month period ended December 31, 2008 was a
negative $22,700. Unrealized losses from the decline in value of marketable
securities totaled $22,800.

The Company's revenues for the three-month period ended December 31, 2007 was a
negative $285,500, consisting primarily of unrealized gains on sales of
marketable securities of $287,300. The change between the two periods resulted
primarily from changes in the market value of the investment securities.

Operating, general and administrative expenses totaled $29,600 for the
three-month period ended December 31, 2008 and $25,000 for the three-month
period ended December 31, 2007, with no significant changes between the two
periods.

Six-month Period Ended December 31, 2008 compared to Six-month Period Ended
December 31, 2007

The Company's revenues for the six-month period ended December 31, 2008 was a
negative $65,500. Unrealized losses from the decline in value of marketable
securities totaled $66,000.

The Company's revenues for the six-month period ended December 31, 2007 totaled
$1,184,600, consisting primarily of unrealized gains on sales of marketable
securities of $1,179,800. The change between the two periods' resulted primarily
from changes in the market value of the investment securities.

Operating, general and administrative expenses totaled $150,000 for the
six-month period ended December 31, 2008 and $55,100 for the six-month period
ended December 31, 2007 with the increase primarily attributable to the
stock-based compensation expense arising from the stock option grants in 2008.

During the six-month period ended December 31, 2008 an income tax benefit of
$6,700 was recorded as compared to an income tax expense of $533,000 during the
six-month period ended December 31, 2007. The income tax amounts relate
primarily to the difference in investment securities amounts recorded for
financial reporting and income tax purposes.

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

At December 31, 2008, the Company had cash and cash equivalents of $68,000 and
working capital of $1,262,000.


                                  Page 11 of 15
                                   Form 10-Q

<PAGE>
Due to recent market events that have adversely affected all industries and the
economy as a whole, management has placed increased emphasis on monitoring the
risks associated with the current environment, particularly the investment
parameters of the investments securities, the fair value of assets, and the
Company's liquidity. Subsequent to December 31, 2008, the market value of the
common shares of AspenBio has decreased to approximately $481,000 as of February
6, 2009, based upon the closing price of such shares on that date. This is a
decrease of $1,329,800 from the value at December 31, 2008.

Management will continue to monitor the risks associated with the current
environment and their impact on the Company's assets.

For the six-month period ended December 31, 2008 operating activities used cash
of $9,600. Unrealized losses on trading investment securities were $66,000.
Stock-based compensation was $96,100.

For the six-month period ended December 31, 2007 operating activities used cash
of $49,500. Unrealized gains on trading investment securities were $1,179,800
offset by an adjustment to deferred income taxes of $542,000.

There was no cash used by investing during the six-month periods ended December
31, 2008 or 2007. Financing activities consumed $75,000 of debt repaid in the
six-month period ended December 31, 2007.


    CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION AND STATEMENTS

Certain statements in Management's Discussion and Analysis of Financial
Condition and Results of Operations and other portions of this report are
forward-looking statements within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended, and are subject to the safe harbor created
thereby. These statements relate to future events or our future financial
performance and involve known and unknown risks, uncertainties and other factors
that may cause our actual results, levels of activity, performance or
achievements or our industry to be materially different from those expressed or
implied by any forward-looking statements. In some cases, forward-looking
statements can be identified by terminology such as "may," "will," "could,"
"would," "should," "expect," "plan," "anticipate," "intend," "believe,"
"estimate," "predict," "potential" or other comparable terminology. Although we
believe that the expectations reflected in these forward-looking statements are
reasonable, we can give no assurance that such expectations will prove to be
correct. Unless otherwise required by applicable securities laws, we disclaim
any intention or obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.

Item 3.   Quantitative and Qualitative Disclosures About Market Risk Not
          applicable to smaller reporting companies.

Item 4T.  Controls and Procedures

     (a)  Evaluation of Disclosure Controls and Procedures.

Our management, including our chief executive officer and our chief financial
officer, has conducted an evaluation of the effectiveness of our disclosure
controls and procedures (as defined in the Securities Exchange Act of 1934 Rules
13a-15(e) and 15d-15(e)) as of the last day of the period of the accompanying
financial statements (the "Evaluation Date"). Based on that review and
evaluation, our chief executive officer and our chief financial officer
concluded that, as of the Evaluation Date and except as described below, our
disclosure controls and procedures were adequate and effective to ensure that
material information relating to us would be made known to them by others within
the Company in a timely manner, particularly during the period in which this
quarterly report on Form 10-Q was being prepared, and that no changes are
required at this time, except as described below.

                                  Page 12 of 15
                                   Form 10-Q

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The Company did not maintain an effective control environment based on criteria
established in the COSO framework. Specifically, the Company did not adequately
design in an effective manner the procedures necessary to support on a timely
basis the requirements of the financial reporting and closing process.

Our evaluation concluded that, although policies and procedures appropriate for
operating control activities were designed, and in large part instituted, the
Company has not been successful in designing and implementing polices for the
control environment. The control environment sets the tone of an organization,
influences the control consciousness of its people, and is the foundation of all
other components of internal control over financial reporting. A material
weakness in the control environment affects all other internal control
components.

We have also identified conditions as of December 31, 2008 that we believe are
significant deficiencies in internal controls that include: 1) a lack of
segregation of duties in accounting and financial reporting activities; and 2)
the lack of a sufficient number of qualified accounting personnel. We do not
believe that these deficiencies constitute material weaknesses because of the
use of temporary controllers, the review by our chief executive officer of
accounting information and reconciliations, and the use of outside consultants.

Management believes these deficiencies in internal control did not result in
material inaccuracies or omissions of material fact and, to the best of its
knowledge, believes that the financial statements for the six months ended
December 31, 2008 fairly present in all material respects the financial
condition and results of operations for the Company in conformity with GAAP.
There is, however, a reasonable possibility that a material misstatement of the
annual or interim financial statements would not have been prevented or detected
as a result of the control environment weaknesses.

Changes in Internal Control Over Financial Reporting

There was no change in internal controls over financial reporting (as defined in
Rule 13a-15(f) promulgated under the Securities Exchange Act or 1934) identified
in connection with the evaluation described in the preceding paragraph that
occurred during the Company's first fiscal quarter that has materially affected
or is reasonably likely to materially affect the Company's internal control over
financial reporting.

                            PART II OTHER INFORMATION

Item 1.   Legal Proceedings

     None.

Item 1A.   Risk Factors

The Company's business, financial condition, operating results and cash flows
can be impacted by a number of factors, any one of which could cause the
Company's actual results to vary materially from recent results or from the
Company's anticipated future results.

Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds

     None.

Item 3.   Defaults Upon Senior Securities

     None.

Item 4.   Submission of Matters to a Vote of Security Holders

     None.

                                  Page 13 of 15
                                   Form 10-Q

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Item 5.   Other Information

     None.

Item 6.  Exhibits


         31.1  Certification of Chief Executive Officer Pursuant to Rules 13a-14
               and 15d-14 of the Securities Exchange Act of 1934

         31.2  Certification of Chief Financial Officer Pursuant to Rules 13a-14
               and 15d-14 of the Securities Exchange Act of 1934

         32.1  Certification of Chief Executive Officer and Chief Financial
               Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
               to Section 906 of the Sarbanes-Oxley Act of 2002




                                  Page 14 of 15
                                   Form 10-Q

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                                   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.


                                                   CAMBRIDGE HOLDINGS, LTD.



February 17, 2009                        By: /s/ Gregory Pusey
                                             --------------------------
                                         Gregory Pusey
                                         Chief Executive Officer, President,
                                         Treasurer and Director


February 17, 2009                        By: /s/ Jeffrey G. McGonegal
                                             -------------------------------
                                         Jeffrey G. McGonegal
                                         Senior Vice President-Finance,
                                         Chief Financial Officer and Director



                                  Page 15 of 15
                                   Form 10-Q

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