<PAGE>
                                       
                                       
                   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 SEPTEMBER 30, 1997

( ) 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)

   1722 Buffehr Creek Road,
       Vail, Colorado                                      81657 
(Address of principal executive offices)                (Zip Code)

Issuer's telephone number, including area code         (970) 479-2800


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

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 November 7, 1997
Common Stock, $.025 par value                              3,388,400
<PAGE>

                           CAMBRIDGE HOLDINGS, LTD.
                                 FORM 10-QSB
                                       
                              TABLE OF CONTENTS
                                       
                                       
Part I.  Financial Information........................................     3

Balance Sheets as of September 30, 1997 and June 30,1997. ............ 4 & 5

Statements of Income for the three month periods ended September 30,
1997 and September 30, 1996...........................................     6

Statements of Cash Flows for the three month periods ended September 30,
1997 and September 30, 1996...........................................     7

Management's Discussion and Analysis of Financial Condition and 
Results of Operations.................................................  8-12

Part II.  Other Information...........................................    12

Signature Page........................................................... 13


                                 Form 10-QSB
                                 Page 2 of 13
<PAGE>

                           CAMBRIDGE HOLDINGS, LTD.
                                       
                                 FORM 10-QSB
                                       
                              SEPTEMBER 30, 1997
                                       
                                       
                                       
                        PART I.  FINANCIAL INFORMATION
                                       
ITEM I.  FINANCIAL STATEMENTS

The unaudited financial statements reflect all adjustments and contain all
information necessary, in the opinion of management, for a fair presentation of
the financial position and results of operation for the interim periods reported
when these statements are read in conjunction with the notes to financial
statements included in the Registrant's Form 10-KSB for the year ended June 30,
1997.


                                 Form 10-QSB
                                 Page 3 of 13
<PAGE>

                           CAMBRIDGE HOLDINGS, LTD.
                                BALANCE SHEET
                                 (Unaudited)
<TABLE>
<CAPTION>
                                                     SEPTEMBER 30, JUNE 30,
                                                           1997        1997
<S>                                                  <C>           <C>
      ASSETS
CURRENT:
  Cash and cash equivalents                           $1,503,895   $1,640,216
  Investment securities - available for sale             659,583      694,491
  Investment in Partnership                              101,278      101,278
  Notes receivable                                       375,000      425,000
  Prepaids and other                                     107,805      155,088

-----------------------------------------------------------------------------
Total current assets                                   2,747,561    3,016,073

-----------------------------------------------------------------------------
LONG-TERM ASSETS
  Other assets                                            46,664        3,007
  Notes receivable-related party                         723,053      356,660
  Real estate developments                               925,000      380,768

-----------------------------------------------------------------------------
                                                      $4,442,278   $3,756,508

-----------------------------------------------------------------------------
</TABLE>


                                     Form 10-QSB
                                     Page 4 of 13
<PAGE>

                               CAMBRIDGE HOLDINGS, LTD.
                                    BALANCE SHEET
                                     (Unaudited)
<TABLE>
<CAPTION>
                                                       SEPTEMBER 30,  JUNE 30,
                                                            1997        1997
<S>                                                    <C>            <C>
   LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accrued liabilities                                     $8,413      $13,223
  Deferred income taxes                                   50,000       50,000

-----------------------------------------------------------------------------
Total current liabilities                                 58,413       63,223

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

LONG-TERM LIABILITIES                                    675,000            -

-----------------------------------------------------------------------------
                                                         733,413       63,223

STOCKHOLDERS' EQUITY:
  Common Stock - $.025 par value, 15,000,000
  shares authorized:  3,388,400 shares issued and
  outstanding as of September 30, 1997 and
  June 30, 1997                                           84,791       84,710
  Additional paid-in capital                           3,177,904    3,174,785
  Retained earnings                                      347,886      358,509
  Net unrealized gain on investment securities
    available for sale                                    98,284       75,281

-----------------------------------------------------------------------------
Total stockholders' equity                             3,708,865    3,693,285

-----------------------------------------------------------------------------
                                                      $4,442,278   $3,756,508

-----------------------------------------------------------------------------
</TABLE>

                                 Form 10-QSB
                                 Page 5 of 13
<PAGE>

                           CAMBRIDGE HOLDINGS, LTD.
                           STATEMENTS OF OPERATION
                                 (unaudited)
<TABLE>
<CAPTION>
                                          THREE MONTHS        THREE MONTHS
                                              ENDED               ENDED
                                         SEPTEMBER 30, 1997  SEPTEMBER 30, 1996
<S>                                      <C>                  <C>
REVENUES:
  Gains on sales of
    investment securities                      $5,730          $        -
  Interest and dividend income                 30,510              42,005

-------------------------------------------------------------------------
Total revenues                                 36,240              42,005

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

EXPENSES:
  Operating, general, and
  administrative                               36,001              41,458
  Interest                                     10,862                  30

-------------------------------------------------------------------------
Total expenses                                 46,863              41,488

-------------------------------------------------------------------------
INCOME BEFORE TAXES ON INCOME                $(10,623)               $517

TAXES ON INCOME                                     -                   -

-------------------------------------------------------------------------
NET INCOME                                   $(10,623)               $517

-------------------------------------------------------------------------
NET INCOME PER COMMON
  AND COMMON EQUIVALENT SHARE:                    nil                 nil

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

WEIGHTED AVERAGE NUMBER OF
  COMMON AND COMMON EQUIVALENT
  SHARES OUTSTANDING                        3,388,400           3,443,039

-------------------------------------------------------------------------
</TABLE>


                                 Form 10-QSB
                                 Page 6 of 13
<PAGE>
                                       
                           CAMBRIDGE HOLDINGS, LTD.
                     STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
                                                     THREE MONTHS      THREE MONTHS
                                                         ENDED            ENDED
                                                  SEPTEMBER 30, 1997 SEPTEMBER 30, 1996
<S>                                               <C>                <C>
OPERATING ACTIVITIES:
  Net income (loss)                                     $(10,623)              $517
  Adjustment to reconcile net income 
    to cash provided by operating activities:
  Gain on sales of investment securities                  (5,730)
  Changes in operating assets and liabilities:
  Prepaids and other                                      47,283             (7,692)
  Accounts payable and accrued liabilities                (4,810)             8,039

-----------------------------------------------------------------------------------
NET CASH PROVIDED BY OPERATING
  ACTIVITIES                                              26,120                864

-----------------------------------------------------------------------------------
INVESTING ACTIVITIES:
  Purchase of investment securities                      (23,121)            (8,750)
  Proceeds from sales of investment
    securities                                            86,762                  -
  Net proceeds upon maturity of
    short term investments                                     -            755,807
  Collections on note receivable                          64,375             50,000
  Purchase of land                                      (925,000)                 -
  Purchase of automobile                                 (43,657)                 -

-----------------------------------------------------------------------------------
NET CASH PROVIDED (USED)
  IN INVESTING ACTIVITIES                               (840,641)           797,057

-----------------------------------------------------------------------------------
FINANCING ACTIVITIES:
  Principal payments on notes payable                          -                  -
  Proceeds from notes payable                            675,000                  -
  Proceeds from exercise of stock option                   3,200             10,773

-----------------------------------------------------------------------------------
Net cash provided by                                     678,200             10,773
      FINANCING ACTIVITIES                                                                                       
-----------------------------------------------------------------------------------
INCREASE (DECREASE) IN CASH                             (136,321)           808,694

CASH AND CASH EQUIVALENTS,
  beginning of period                                  1,640,216          1,304,273

-----------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS,
  end of period                                       $1,503,895         $2,112,967

-----------------------------------------------------------------------------------
</TABLE>


                                     Form 10-QSB
                                     Page 7 of 13
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

The  information set forth in "Management's Discussion and Analysis of Financial
Condition and Results of Operations" 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 of Financial Condition and
Results of Operations."


LIQUIDITY AND CAPITAL RESOURCES

During the fiscal year ended June 30, 1997, the Company purchased in two
separate transactions from two different unaffiliated sellers raw land in an
area known as Cordillera Valley Club in Eagle County, Colorado west of Vail. 
Each lot has been conveyed to a limited liability company in which the Company
is a member with a 50% interest.  Each lot is being developed into a separate
luxury residence.

The two lots purchased by the Company are known as Lot 2 and Lot 19, which were
purchased for $357,000 and $366,000, respectively.  In May 1997, the Company
conveyed Lot 2 to CVC Lot 2 LLC for its purchase price of Lot 2, resulting in no
gain or loss to the Company.  CVC Lot 2 LLC is a limited liability company
organized in Colorado in March 1997.  The members of CVC Lot 2 LLC are the
Company and Zneimer Company, Inc., each of which has contributed $1,000 to the
capital of CVC Lot 2 LLC and each of which has a 50% interest in the net profits
and losses of CVC Lot 2 LLC.  Zneimer Company, Inc. is the manager of CVC Lot 2
LLC.  CVC Lot 2 LLC was formed for the limited purpose of developing,
constructing and selling the residential dwelling upon Lot 2 unless otherwise
agreed to by both members.

In May 1997, the Company conveyed Lot 2 to CVC Lot 2 LLC in consideration for a
promissory note for $357,000 secured by a mortgage on the Lot 2 property.  The
note bears interest at the prime rate at the Firstbank of Avon, as changed from
time to time, which commenced at 8.5%.  The note is due on the earlier of sale
of the property or December 31, 1998.  CVC Lot 2 LLC has obtained a construction
loan of $963,700 from the Firstbank of Avon, Colorado, which construction loan
has been guaranteed by Zneimer Company, Inc. and its sole shareholder Edward J.
Zneimer.  The construction loan bears interest at the prime rate of the
Firstbank of Avon as changed from time to time, which commenced at 8.5%.  The
construction loan matures on May 10, 1998 and is secured by a mortgage on the
Lot 2 property.  The mortgage held by the Company to secure its note made by CVC
Lot 2 LLC has been subordinated to the construction loan.  Zneimer Company, Inc.
and Mr. Zneimer, individually, have guaranteed 50% of the principal amount of
the note made by CVC Lot 2 LLC to the Company.  In the event the capital
contributions and proceeds of the construction loan are insufficient to enable
CVC Lot 2 LLC to develop and sell the Lot 2 property, Zneimer Company, Inc. has
agreed with the Company to


                                 Form 10-QSB
                                 Page 8 of 13
<PAGE>
                                       
purchase a 50% interest in the Company's note from CVC Lot 2 LLC at a purchase
price equal to 50% of the original principal amount, in which event the guaranty
to the Company will be canceled.  The Company and Zneimer Company, Inc. have
agreed that they will each contribute such additional capital contributions to
CVC Lot 2 LLC in the form of unsecured loans, subject to a maximum of $100,000
each, as may be required to complete the development and sale of the Lot 2
property.

The Lot 2 property is currently under construction and is expected to be
completed in calendar 1997.  The general contractor is Integrated Resources LLC,
which is owned and managed by Edward J. Zneimer.  The residence being
constructed will be a custom-designed single-family home featuring an open,
multi-level floor plan with high ceilings and large covered porches overlooking
the Tom Fazio designed Cordillera Valley Golf Club golf course.  The home will
include five bedrooms, 4 1/2 baths, three fireplaces and an oversized three-car
garage.  The Lot 2 property has been listed for sale at $1,750,000.

In August 1997, the Company conveyed Lot 19 to CVC Lot 19 LLC for its purchase
price of Lot 19, resulting in no gain or loss to the Company.   CVC Lot 19 LLC
is a limited liability company organized in Colorado in March 1997.  The members
of CVC Lot 19 LLC are the Company and Zneimer Company, Inc., each of which has
contributed $1,000 to the capital of CVC Lot 19 LLC and each of which has a 50%
interest in the net profits and losses of CVC Lot 19 LLC.  Zneimer Company, Inc.
is the manager of CVC Lot 19 LLC.  CVC Lot 19 LLC was formed for the limited
purpose of developing, constructing and selling a residential dwelling upon Lot
19 unless otherwise agreed by both members.

In August 1997, the Company conveyed Lot 19 to CVC Lot 19 LLC in consideration
for a promissory note for $366,000 secured by a mortgage on the Lot 19 property.
The note bears interest at the prime rate at the Firstbank of Avon, as changed
from time to time, which commenced at 8.5%.  The note is due on the earlier of
sale of the property or December 31, 1998.  CVC Lot 19 LLC has obtained a
construction loan of $1,019,000 from the Firstbank of Avon, Colorado, which
construction loan has been guaranteed by Zneimer Company, Inc. and its sole
shareholder Edward J. Zneimer.  The construction loan bears interest at the
prime rate of the Firstbank of Avon as changed from time to time, which
commenced at 8.5%.  The construction loan matures in 1998 and is secured by a
mortgage on the Lot 19 property.  The mortgage held by the Company to secure its
note made by CVC Lot 19 LLC has been subordinated to the construction loan. 
Zneimer Company, Inc. and Mr. Zneimer, individually, have guaranteed 50% of the
principal amount of the note made by CVC Lot 19 LLC to the Company.  In the
event the capital contributions and proceeds of the construction loan are
insufficient to enable CVC Lot 19 LLC to develop and sell the Lot 19 property,
Zneimer Company, Inc. has agreed with the Company to purchase a 50% interest in
the Company's note from CVC Lot 19 LLC at a purchase price equal to 50% of the
original principal amount, in which event the guaranty to the Company will be
canceled.  The Company and Zneimer Company, Inc. have agreed that they will each
contribute such additional capital contributions to CVC Lot 19 LLC in the form
of unsecured loans, subject to a maximum of $100,000 each, as may be required to
complete the development and sale of the Lot 19 property.  CVC Lot 19 LLC has
appointed Integrated


                                 Form 10-QSB
                                 Page 9 of 13
<PAGE>
                                       
Resources LLC as the general contractor.  The Lot 19 property is currently under
construction and should be completed within the next year.  The residence to be
constructed will be a custom-designed single-family home similar to the home
being constructed on Lot 2.

During the quarter ended September 30, 1997, the Company purchased raw land in
Glenwood Springs, Colorado for $925,000, including a mortgage of $675,000.  The
mortgage bears interest at 9% per annum, payable $5,431 per month and is due on
July 15, 1999.  There is no prepayment penalty.  The Company expects to enter
into an arrangement with Zneimer Company, Inc. for possible commercial
development of this property.  The Company has not made a determination of what
type of development will be undertaken on this property.

The Company is currently considering other real estate development activities,
as well as other business opportunities. In addition to real property
acquisitions, the Company may consider the possible acquisition of, or merger
with, another business entity, or other type of business transactions.  The
Company does not intend to limit its search to companies in real estate
activities. 

For the three month period ended September 30, 1997, operating activities
generated positive cash flow of $26,100.  Prepaid expenses increased by
approximately $47,300 in the three month period ended September 30, 1997.  The
Company sold investment securities during the three month period ended September
30, 1997 resulting in realized gains of $5,700.   Accounts payable and accrued
liabilities decreased by $4,800.

Cash used in investing activities was $840,600 during the three month period
ended September 30, 1997, of which approximately $23,100 was used to purchase
investment securities, approximately $86,800 was the net proceeds from sales of
investment securities, and $64,400 was the collection of notes receivable.  The
Company purchased an automobile for $43,700. The prices of the securities held
by the Company are often highly volatile.  In addition, trading in these
securities may be thin or there may be other impediments to, or restrictions on,
transfer.  As noted above, the Company purchased raw land in Colorado.

Financing activities during the three month period ended September 30, 1997
provided cash of $678,200 of which $3,200 was generated from the exercise of
stock options net of repurchases and $675,000 was from the proceeds from a
mortgage taken to buy raw land.
         
At September 30, 1997, the Company had cash and cash equivalents of $1,503,900
and working capital of $2,689,100.  The Company believes that its working
capital is adequate for its present real estate expenditures as described above.
The Company has no understandings or agreements on any other particular property
or business.  Any such future acquisitions or other business arrangements could
involve substantial expenditures.  Moreover, the Company could incur substantial
expenses in connection with the evaluation of business opportunities.  In its
consideration of potential business opportunities, the Company expects to
consider the potential effect on its liquidity.

                                 Form 10-QSB
                                Page 10 of 13
<PAGE>

NEW ACCOUNTING PRONOUNCEMENTS

On March 3, 1997, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 128 "Earnings Per Share" (SFAS
No.128).  This pronouncement provides a different method of calculating earnings
per share than is currently used in accordance with Accounting Board Opinion
(APB) No. 15, "Earnings Per Share".  SFAS No. 128 provides for the calculation
of "Basic" and "Diluted" earnings per share.  Basic earnings per share includes
no dilution and is computed by dividing income available to common shareholders
by the weighted average number of common shares outstanding for the period. 
Diluted earnings per share reflects the potential dilution of securities that
could share in the earnings of an entity, similar to fully diluted earnings per
share.  The Company will adopt SFAS No.128 in 1998 and its implementation is not
expected to have a material effect on the consolidated financial statements.

In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130, Reporting Comprehensive Income (SFAS
130), which establishes standards for reporting and display of comprehensive
income, its components and accumulated balances.  Comprehensive income is
defined to include all changes in equity except those resulting from investments
by owners and distributions to owners.  Among other disclosures, SFAS 130
requires that all items that are required to be recognized under current
accounting standards as components of comprehensive income be reported in a
financial statement that is displayed with the same prominence as other
financial statements.
                                           
Also, in June 1997, FASB issued SFAS No.131, "Disclosures about Segments of an
Enterprise and Related Information" which supersedes SFAS No.14, "Financial
Reporting for Segments of a Business Enterprise."  SFAS No. 131 establishes
standards for the way that public companies report information about operating
segments in annual financial statements and requires reporting of selected
information about operating segments in interim financial statements issued to
the public.  It also establishes standards for disclosures regarding products
and services, geographic areas and major customers. SFAS No. 131 defines
operating segments as components of a company about which separate financial
information is available that is evaluated regularly by the chief operating
decision maker in deciding how to allocate resources and in assessing
performance.

SFAS 130 and 131 are effective for financial statements for periods beginning
after December 15, 1997 and requires comparative information for earlier years
to be restated.  Because of the recent issuance of the standard, management has
been unable to fully evaluate the impact, if any, the standard may have on
future financial statement disclosures.  Results of operations and financial
position, however, will be unaffected by implementation of this standard.
                                       
                                       
                                 Form 10-QSB
                                Page 11 of 13
<PAGE>

RESULTS OF OPERATIONS

THREE MONTH PERIOD ENDED SEPTEMBER 30, 1997 COMPARED TO THREE MONTH PERIOD 
ENDED SEPTEMBER 30, 1996

The Company's revenues for the three month period ended September 30, 1997
totaled approximately $36,200, consisting of interest on temporary cash and
other money market instruments and, dividend receipts of $30,500 and realized
gains on sales of investment securities of $5,700.  Revenues for the three month
period ended September 30, 1996 totaled approximately $42,000, which consisted
of interest and dividend receipts. 

During the three month periods ended September 30, 1997 and September 30, 1996,
the Company incurred operating, general and administrative costs of
approximately $46,900 and $41,500, respectively.   The Company had losses for 
the three month period ended September 30, 1997 of approximately $10,600 as 
compared with income before taxes of approximately $500 for the three month 
period ended September 30, 1996. 

                         PART II.  OTHER INFORMATION


Not Applicable


                                     Form 10-QSB
                                    Page 12 of 13
<PAGE>
                                       
                           CAMBRIDGE HOLDINGS, LTD.
                                       
                                       
                                       
                                 FORM 10-QSB
                                       
                              SEPTEMBER 30, 1997
                                       
                                       
                                       
                                  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.




November 13, 1997                      By:   /s/ Gregory Pusey
                                         ---------------------------------------
                                             Gregory Pusey
                                             President, Treasurer and Director


                                    Form 10-QSB
                                    Page 13 of 13