<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 DECEMBER 31, 1999
( )    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,                         81657
               Vail, Colorado                            (Zip Code)
(Address of principal executive offices)
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 February 7, 1999
     Common Stock, $.025 par value                   3,029,870

<PAGE>

                            CAMBRIDGE HOLDINGS, LTD.
                                   FORM 10-QSB

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                          <C>
Part I.  Financial Information....................................................3

Balance Sheets as of December 31, 1999 and June 30, 1999......................4 & 5

Statements of Operations for the six-month periods ended December 31,
1999 and December 31, 1998........................................................6

Statements of Cash Flows for the six-month periods ended December 31,
1999 and December 31, 1998........................................................7

Management's Discussion and Analysis of Financial Condition and Results of
Operations.....................................................................8-11

Part II.  Other Information......................................................11

Signature Page...................................................................12

</TABLE>

                                  Page 2 of 12
                                  Form 10-QSB
<PAGE>

                            CAMBRIDGE HOLDINGS, LTD.

                                   FORM 10-QSB

                                DECEMBER 31, 1999



                          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, 1999.


                                  Page 3 of 12
                                  Form 10-QSB
<PAGE>

                            CAMBRIDGE HOLDINGS, LTD.
                                 BALANCE SHEETS

<TABLE>
<CAPTION>
                                                  DECEMBER 31,         JUNE 30,
                                                      1999               1999
                                                  (UNAUDITED)
<S>                                               <C>                <C>
   ASSETS
CURRENT:
  Cash and cash equivalents                        $  416,982         $  194,447
  Investment securities - available for sale        1,429,162          1,683,136
  Notes receivable-related party                      962,737            905,636
  Deferred tax asset                                   44,000             44,000
  Prepaids and other                                   44,160             45,888
  Real estate developments                            939,199            939,199
--------------------------------------------------------------------------------
Total current assets                                3,836,240          3,812,306
--------------------------------------------------------------------------------
LONG-TERM ASSETS
  Fixed assets                                         35,210             27,130
--------------------------------------------------------------------------------
                                                   $3,871,450         $3,839,436
================================================================================
</TABLE>

                                  Page 4 of 12
                                  Form 10-QSB

<PAGE>

                            CAMBRIDGE HOLDINGS, LTD.
                                 BALANCE SHEETS

<TABLE>
<CAPTION>
                                                     DECEMBER 31      JUNE 30
                                                        1999           1999
                                                     (UNAUDITED)
<S>                                                  <C>            <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accrued liabilities                                $    8,870     $   14,751
  Deferred income taxes                                  17,150         17,150
  Notes Payable                                         351,686        665,782
------------------------------------------------------------------------------
Total current liabilities                               377,706        697,683
------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY:
  Common Stock - $.025 par value, 15,000,000
  shares authorized:  3,029,870 shares issued and
  outstanding as of December 31, 1999 and
  June 30, 1999                                          75,747         75,747
  Additional paid-in capital                          2,997,292      2,997,292
  Retained earnings                                     (14,744)        39,653
  Net unrealized gain on investment
     securities available for sale                      435,449         29,061
------------------------------------------------------------------------------
Total stockholders' equity                            3,493,744      3,141,753
------------------------------------------------------------------------------
                                                     $3,871,450      3,839,436
==============================================================================
</TABLE>

                                  Page 5 of 12
                                  Form 10-QSB

<PAGE>

                            CAMBRIDGE HOLDINGS, LTD.
                            STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                               THREE MONTHS      THREE MONTHS      SIX MONTHS        SIX MONTHS
                                                   ENDED             ENDED            ENDED             ENDED
                                               DEC. 31, 1999     DEC. 31, 1998    DEC. 31, 1999     DEC. 31, 1998
<S>                                            <C>               <C>              <C>               <C>
REVENUES:
   Realized losses on sales of
       investment securities                       (11,598)          (1,242)          (18,887)          (1,242)
   Unrealized Gains (losses) on
         Securities held for trading                     -           12,222                 -          (28,928)
   Interest and dividend income                     10,468            7,147            31,033           16,532
   Collection of Note Receivable
       Previously written off                       30,000                -            30,000                -
-------------------------------------------------------------------------------------------------------------------
Total revenues (losses)                             28,870           18,127            42,146          (13,638)
-------------------------------------------------------------------------------------------------------------------

EXPENSES:
   Operating, general, and administrative           40,368           67,273            78,009          101,474
   Investment write off                                  -                -                 -          101,278
   Interest                                          8,070           15,056            18,534           30,140
-------------------------------------------------------------------------------------------------------------------
Total expenses                                      48,438           82,329            96,543          232,892
-------------------------------------------------------------------------------------------------------------------
NET LOSS                                        $  (19,568)      $  (64,202)          (54,397)        (246,530)
   Other Comprehensive (loss),
       net of income tax:
   Unrealized holding gains (losses)               419,592           18,689           406,388          (67,098)
-------------------------------------------------------------------------------------------------------------------
COMPREHENSIVE INCOME (LOSS)                     $  400,024       $  (45,513)       $  351,991         (313,628)
===================================================================================================================
BASIC AND DILUTED (LOSS)
   PER COMMON SHARE:                            $     (.01)      $     (.02)       $     (.02)      $     (.07)
===================================================================================================================
WEIGHTED AVERAGE NUMBER OF
   COMMON AND COMMON EQUIVALENT
   SHARES OUTSTANDING                            3,029,870        3,370,400         3,029,870        3,359,279
===================================================================================================================
</TABLE>

                                  Page 6 of 12
                                  Form 10-QSB

<PAGE>

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

<TABLE>
<CAPTION>
                                                                    SIX MONTHS                         SIX MONTHS
                                                                       ENDED                              ENDED
                                                                   DEC. 31, 1999                      DEC. 31, 1998
<S>                                                                <C>                                <C>
OPERATING ACTIVITIES:
   Net loss                                                         $ (54,397)                        $ (246,530)
   Adjustment to reconcile net loss to cash
     used in operating activities:
       Write off of investments                                             -                            101,278
       Interest income paid in investment securities                  (22,222)                                 -
       Depreciation and amortization                                    9,342                              6,406
       Realized gains (losses) on sales of
         marketable securities                                        (24,147)                             1,242
     Changes in operating assets and liabilities:
     Prepaids and other                                                 1,728                              1,693
     Accounts payable and accrued liabilities                          (5,881)                             3,026
-------------------------------------------------------------------------------------------------------------------
NET CASH USED IN OPERATING ACTIVITIES                                 (95,577)                          (132,885)

-------------------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES:
  Purchases of property and equipment                                 (17,423)                           (97,905)
  Proceeds from sales of investment securities                        627,976                            131,311
  Collections on note receivable                                            -                              6,162
  Investments in note receivable-related party                        (57,101)                           (61,257)
  Purchase of marketable securities                                  (105,476)                                 -
  Proceeds from sales of marketable securities                        184,232                                  -
  Decrease in value of trading securities                                   -                                  -

-------------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY (USED  IN) INVESTING ACTIVITIES                  632,208                            (21,689)

-------------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES:
  Principal payments on notes payable                                (314,096)                            (2,447)
  Proceeds from exercise of stock options                                   -                              3,437

-------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities                  (314,096)                               990

-------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                      222,535                           (153,584)
CASH AND CASH EQUIVALENTS,  beginning of period                       194,447                          1,674,523

-------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents,  end of period                           $ 416,982                         $1,520,939
===================================================================================================================

</TABLE>

                                  Page 7 of 12
                                  Form 10-QSB

<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 was conveyed to a limited liability company in which the Company is
a member with a 50% interest (CVC Lot 2 LLC and CVC Lot 19 LLC). Each lot has
been developed with a separate luxury residence and is offered for sale.
Construction on the properties was completed in early 1998. It is presently
unknown when these properties will be sold or what proceeds will be realized
upon sale. Due to the delay on sale of these properties, CVC Lot 19, LLC has
agreed to rent the CVC Lot 19 at a monthly rental fee of $5,700. As of the
date of this filing, CVC Lot 19 LLC has collected $34,200 in rental income.
The delay on the sale of these properties is likely to cause the LLC's to
incur a loss in these transactions and may cause the Company to be
constrained in its ability to engage in other transactions.

In July 1997, the Company purchased approximately three acres of raw land in
Glenwood Springs, Colorado for $925,000, including a mortgage of $675,000.
The mortgage bore interest at 9% per annum, payable $5,431 per month and was
due on January 15, 2000. The Company paid $300,000 on this mortgage in July
1999 and paid the balance due on the mortgage of $351,700 on January 15,
2000. Since the acquisition of this property, preliminary engineering for
possible development of the property has commenced. It is presently the
intention of management to resell the 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 types of business
transactions. The Company does not intend to limit its search to companies in
real estate activities. A substantial amount of time may lapse and the
Company may expend considerable funds for consulting, legal, accounting and
other fees before the Company is able, if at all, to acquire other real
estate interests or businesses outside the real estate industry. From time to
time, the Company also acquires equity securities, which have a potential for
capital gains and losses or, in some cases, income potential. The Company has
no limitations on the percentage of assets that may be invested in any one
instrument, or type of investment, nor is the Company limited in the types of
real estate in which the Company may invest. The Company's determination of
the method of

                                  Page 8 of 12
                                  Form 10-QSB

<PAGE>

operating and financing its properties is not fixed, and will, instead depend
on the type of property purchased and the Company's objective in operating
the particular property.

For the six-month period ended December 31, 1999, operating activities used
cash of $95,600. The Company had interest income paid on investment
securities of $22,200. Realized losses on sales of marketable securities were
$24,100. Prepaid expenses increased by approximately $1,700 in the six-month
period ended December 31, 1999. The Company recorded depreciation on fixed
assets of $9,300. Accounts payable and accrued liabilities decreased by
$5,900.

Cash provided by investing activities was $632,200 during the six-month
period ended December 31, 1999, of which approximately $628,000 and $184,200
was provided by the proceeds from sales of investment and marketable
securities, respectively. The Company used $17,400 to purchase fixed assets.
Approximately $105,500 was used to purchase marketable securities and $57,100
was loaned to related parties, CVC #19 LLC and CVC #2 LLC.

Financing activities during the six-month period ended December 31, 1999 used
cash of $314,100 that was used for principal payments on notes payable.

At December 31, 1999, the Company had cash and cash equivalents of $417,000
and working capital of $3,458,500. 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.

COMPREHENSIVE INCOME (LOSS)

Effective July 1, 1998, Cambridge Holdings, Ltd. Adopted FASB Statement No.
130, Reporting Comprehensive Income ("SFAS No. 130"). SFAS No. 130 requires
the reporting of comprehensive income in addition to net income (loss) from
operations. Comprehensive income (loss) is a more inclusive financial
reporting methodology that includes disclosure of certain financial
information that historically has not been recognized in the calculation of
net income (loss).

The change in net unrealized securities gains (losses) recognized in other
comprehensive income includes two components: (1) unrealized gains (losses)
that arose during the period from changes in market value of securities that
were held during the period (Holding gains (losses)), and (2) gains or
(losses) that were previously unrealized, but have been recognized in current
period net income due to sales of available-for sale securities
(reclassification for realized gains). This reclassification has no effect on
total comprehensive income or stockholders' equity.

                                  Page 9 of 12
                                  Form 10-QSB

<PAGE>

The following table presents the components of other comprehensive income
(loss), net of tax:

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
Six-months ended December 31,                          1999            1998
-------------------------------------------------------------------------------
<S>                                           <C>               <C>
Holding gains (losses)                             $387,501        $(67,098)
Reclassification for realized losses                 18,887               -
-------------------------------------------------------------------------------
Increase (Decrease) in net unrealized
  Securities gains recognized in other
    Comprehensive income                           $406,388        $(67,098)
===============================================================================

</TABLE>

YEAR 2000 COMPLIANCE

The Company completed a review and risk assessment of all technology items
used in its operations. The Company's accounting software program as well as
other office software were upgraded during 1999 to be Year 2000 compliant.
The Company incurred no significant operational problems due to the year 2000
problem.

RESULTS OF OPERATIONS

SIX MONTH PERIOD ENDED DECEMBER 31, 1999 COMPARED TO SIX MONTH PERIOD ENDED
DECEMBER 31, 1998

The Company's revenues for the six-month period ended December 31, 1999
totaled approximately $42,100, consisting of interest on temporary cash on
hand and other money market instruments of $31,000 offset by realized losses
on investment securities of $18,900. The Company received $30,000 on a note
receivable that was previously written off. Revenues for the six-month period
ended December 31, 1998 totaled approximately $16,500, which consisted of
interest and dividend income.

During the six month period ended December 31, 1998, the Company incurred a
write-down of investments of $101,300 and a net decrease in the valuation of
bonds and other securities held for trading of $28,900. The investment
written off during the quarter was an investment in a partnership that
management considers to be worthless. The decrease in the value of the bonds
is directly related to the decline in market conditions. Management does not
feel that the mid-year results of operations are indicative of the expected
full-year results as the partnership write-off is a one-time charge and it is
expected that the market will recover.

During the six-month periods ended December 31, 1999 and December 31, 1998,
the Company incurred operating, general and administrative costs of
approximately $78,000 and 101,500, respectively. The Company had losses
before any income tax benefit for the six-month period ended December 31,
1999 of approximately $54,400 as compared with $246,500 for the six-month
period ended December 31, 1998.

                                 Page 10 of 12
                                  Form 10-QSB
<PAGE>

                           PART II. OTHER INFORMATION
Not Applicable.


                                 Page 11 of 12
                                  Form 10-QSB

<PAGE>

                            CAMBRIDGE HOLDINGS, LTD.


                                   FORM 10-QSB

                                DECEMBER 31, 1999



                                   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.


February 14, 2000                      By: /s/ Gregory Pusey
                                          ---------------------------------
                                          Gregory Pusey
                                          President, Treasurer and Director

                                 Page 12 of 12
                                  Form 10-QSB