<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, 1998

( ) 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 November 5, 1998
    Common Stock, $.025 par value                    3,408,400




<PAGE>


                            CAMBRIDGE HOLDINGS, LTD.
                                   FORM 10-QSB

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

Balance Sheets as of September 30, 1998 and June 30, 1998.................4 & 5

Statements of Operations for the three month periods ended September 30,
1998 and September 30, 1997 ..................................................6

Statements of Cash Flows for the three month periods ended September 30,
1998 and September 30, 1997 ..................................................7

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

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

Signature Page ..............................................................14
</TABLE>






                                  Form 10-QSB
                                  Page 2 of 14


<PAGE>


                            CAMBRIDGE HOLDINGS, LTD.

                                   FORM 10-QSB

                               SEPTEMBER 30, 1998

                          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,
1998.

                                  Form 10-QSB
                                  Page 3 of 14


<PAGE>


                            CAMBRIDGE HOLDINGS, LTD.
                                 BALANCE SHEET


<TABLE>
<CAPTION>

                                                    SEPTEMBER 30,        JUNE 30,
                                                        1998              1998
                                                     (Unaudited)
<S>                                                 <C>                <C>
    ASSETS
CURRENT:
  Cash and cash equivalents                            $1,579,440      $1,674,523
  Investment securities - available for sale, net
     allowance for potential losses of $102,000           431,007         570,848
  Investment in Partnership                                    --         101,278
  Notes receivable-related party                          794,337         774,303
  Convertible notes receivable                             40,375          42,500
  Prepaids and other                                       41,520          43,212
  Real estate developments                                939,199         939,199
  Deferred Income Tax                                      48,000              --

---------------------------------------------------------------------------------
Total current assets                                    3,873,878       4,145,863

---------------------------------------------------------------------------------
LONG-TERM ASSETS
  Fixed assets                                             35,396          38,600

---------------------------------------------------------------------------------
                                                       $3,909,274      $4,184,463
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
</TABLE>








                                   Form 10-QSB
                                  Page 4 of 14


<PAGE>


                            CAMBRIDGE HOLDINGS, LTD.
                                  BALANCE SHEET

<TABLE>
<CAPTION>

                                                    SEPTEMBER 30,        JUNE 30,
                                                        1998              1998
                                                     (Unaudited)
<S>                                                 <C>                <C>
   LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:

  Accrued liabilities                                $     9,146       $   12,393
  Deferred income taxes                                       --            6,054
  Notes Payable                                          669,579          670,789

----------------------------------------------------------------------------------
Total current liabilities                                678,725          689,236

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

STOCKHOLDERS' EQUITY:

  Common Stock - $.025 par value, 15,000,000
  shares authorized: 3,408,400 shares
  issued and outstanding as of September 30, 1998
  and 3,398,400 shares issued and outstanding as
  of June 30, 1998                                        85,211           84,960
  Additional paid-in capital                           3,180,921        3,177,735
  Retained earnings                                       39,664          221,992
  Net unrealized gain (loss) on investment
     securities available for sale                       (75,247)          10,540

----------------------------------------------------------------------------------
Total stockholders' equity                             3,230,549        3,495,227

----------------------------------------------------------------------------------
                                                     $ 3,909,274       $4,184,463
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
</TABLE>




                                   Form 10-QSB
                                  Page 5 of 14


<PAGE>


                            CAMBRIDGE HOLDINGS, LTD.
                            STATEMENTS OF OPERATIONS
                                   (unaudited)

<TABLE>
<CAPTION>
                                           THREE MONTHS      THREE MONTHS
                                               ENDED           ENDED
                                       SEPTEMBER 30, 1998  SEPTEMBER 30, 1997
<S>                                    <C>                 <C>
REVENUES:
  Realized gains (losses) on 
    sales of investment securities                --           $    5,730
  Unrealized Gains (losses) on 
    securities held for trading          $   (41,151)                  --
  Loss on write-down of
     partnership investment                 (101,278)                  --
  Interest and dividend income                 9,386               30,510

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

Total revenues                              (133,043)              36,240

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

EXPENSES:
  Operating, general, and
  administrative                              34,201               36,001
  Interest                                    15,084               10,862

--------------------------------------------------------------------------
Total expenses                                49,285               46,863

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

NET LOSS                                 $  (182,328)          $  (10,623)
OTHER COMPREHENSIVE INCOME,
    NET OF INCOME TAX:
  Unrealized holding gains (losses)          (85,787)              20,003

--------------------------------------------------------------------------
COMPREHENSIVE INCOME (LOSS)              $  (268,115)          $    9,380

--------------------------------------------------------------------------
--------------------------------------------------------------------------
BASIC AND DILUTED INCOME (LOSS)
  PER COMMON SHARE:                      $      (.05)                 nil

--------------------------------------------------------------------------
--------------------------------------------------------------------------
WEIGHTED AVERAGE NUMBER OF
  COMMON AND COMMON EQUIVALENT
  SHARES OUTSTANDING                       3,402,356            3,388,400

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


                                   Form 10-QSB
                                  Page 6 of 14


<PAGE>



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

<TABLE>
<CAPTION>
                                                          THREE MONTHS       THREE MONTHS
                                                              ENDED              ENDED
                                                         SEPTEMBER 30, 1998  SEPTEMBER 30, 1997
<S>                                                      <C>                 <C>
OPERATING ACTIVITIES:
  Net income (loss)                                          $  (182,328)      $   (10,623)
  Adjustment to reconcile net income (loss)
    to cash provided by operating activities:
  Realized (Gains) Losses on sales of 
    investment securities                                             --            (5,730)
  Unrealized loss on trading securities                           41,151                --
  Depreciation and amortization                                    3,205
  Loss on write-down of investments                              101,278                --
Changes in operating assets and liabilities:
      Prepaids and other                                           1,693            47,283
      Accounts payable and accrued liabilities                    (3,248)           (4,810)

--------------------------------------------------------------------------------------------
NET CASH PROVIDED BY (USED IN)
   OPERATING ACTIVITIES                                          (38,249)           26,120

--------------------------------------------------------------------------------------------
INVESTING ACTIVITIES:
  Purchase of land                                                    --          (250,000)
  Purchase of investment securities                                   --           (23,121)
  Proceeds from sales of investment securities                        --            86,762
  Collections on note receivable                                   2,125            64,375
  Purchase of note receivable-related party                      (20,035)               --
  Purchase of automobile                                              --           (43,657)
  Decrease in value of trading securities                        (41,151)               --

--------------------------------------------------------------------------------------------
NET CASH PROVIDED BY (USED
  IN) INVESTING ACTIVITIES                                       (59,061)         (165,641)

--------------------------------------------------------------------------------------------
FINANCING ACTIVITIES:
  Principal payments on notes payable                             (1,210)               --
  Proceeds from exercise of stock options                          3,437             3,200

--------------------------------------------------------------------------------------------
Net cash provided by                                               
      financing activities                                         2,227             3,200

--------------------------------------------------------------------------------------------
DECREASE IN CASH                                                 (95,083)         (136,321)
CASH AND CASH EQUIVALENTS,                                       
  beginning of period                                          1,674,523         1,640,216

--------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS,
  end of period                                              $ 1,579,440       $ 1,503,895
--------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------
</TABLE>

                                   Form 10-QSB
                                  Page 7 of 14


<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 of 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 which the Company is a
member with a 50% interest. Each lot has been developed with 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. CVC Lot 2 LLC and CVC Lot 19
LLC are limited liability companies organized in Colorado in March 1997. Zneimer
Company, Inc. is the manager of both LLC's. CVC Lot 2 LLC and CVC Lot 19 LLC
were formed for the limited purpose of developing, constructing and selling a
residential dwelling upon their lots unless otherwise agreed to by both members.
The members of CVC Lot 2 LLC and CVC Lot 19 LLC are the Company and Zneimer
Company, Inc., each of which has contributed $1,000 to the capital of the LLC's
and each of which has a 50% interest in the net profits and losses of the LLC's.

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, 1999 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.

                                   Form 10-QSB
                                  Page 8 of 14


<PAGE>




In February 1998, the Company entered an agreement to loan CVC Lot 2 LLC as much
as $56,250, secured by a Third Mortgage Deed to provide additional capital
required to complete the development and sale of the Lot 2 property. The loan
earns interest at a rate of 12%. CVC Lot 2 LLC has subsequently borrowed the
entire amount available of $56,250. Beginning in August 1998, the Company and
Zneimer Company have contributed equally such additional capital required to
complete the development and sale of the Lot 2 property in the form of unsecured
loans, subject to a maximum of $100,000 each. The Company has contributed an
additional $27,763 as of the date of this filing.

In the event the additional capital contributions and proceeds of the
construction loan are still insufficient to enable CVC Lot 2 LLC to sell the Lot
2 property, Zneimer Company, Inc. has agreed with the Company to 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. As of the date of this filing, the Company has not exercised
this option.

Construction on Lot 2 was completed in early 1998 and modifications were
undertaken in mid-1998. The general contractor was Integrated Resources LLC,
which is owned and managed by Mr. Zneimer. The residence is 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 includes four bedrooms, 4 1/2 baths, three
fireplaces and an oversized three-car garage. The Lot 2 property has been listed
for sale at $1,595,000. Due to the inability to sell the home to date,
management is in the process of making changes to the house to make it more
saleable and is concerned that the anticipated profit may not be earned.

The transactions involving Lot 19 were substantially identical to those
involving Lot 2 except that the entity to which Lot 19 was conveyed was CVC Lot
19 LLC, the amount paid for Lot 19 was $366,000 and the construction loan was
for $1,019,000. An additional agreement was made between the Company and CVC #19
LLC in September 1998 in which the Company agreed to loan CVC Lot 19 LLC an
additional $50,000, secured by a Third Mortgage Deed to provide additional
capital required to complete the development and sale of the Lot 19 property.
The loan earns interest at a rate of 12%. CVC Lot 19 LLC has not borrowed any
funds as of the date of this filing. 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. In September 1998, the Company and Zneimer Company each contributed
$12,280 which is the only additional capital contributed thus far. Construction
on Lot 19 was completed in 1998 and the listed price for the property is
$1,595,000.

                                   Form 10-QSB
                                  Page 9 of 14


<PAGE>




The lots are located in Cordillera Valley Club, a mountain golf community of 1
to 11-acre home sites and custom-designed residences, tennis courts, 15 miles of
hiking and cross-country ski trails, a fly-fishing river, mountain bike and
nature trails. The lots are being developed in a golf community planned with
care for natural aesthetic values. Accordingly, the home sites in the community
are being developed to minimize the impact of development upon the varied
vegetation and indigenous wildlife unique to the area. Deer and elk grazing and
calving areas have been carefully preserved along with native grasses, shrubs
and trees. The home sites in the community have been planned to maximize
mountain views, as well as the extensive aspen groves, forests of fir and
spruce, and varied terrain of adjacent canyons and draws which is characteristic
of the area.

Cordillera Valley Club is located in an area referred to as the "Upper Eagle
Valley" which lies west of Vail. The Vail and Beaver Creek resorts are located
25 and 15 minutes away, respectively, by car from Cordillera. Vail was founded
in 1962, and is now the nation's largest ski area by acreage of skiable terrain.
The economy of the Upper Eagle Valley is based primarily upon the resort
industry, with major revenues being derived from skiing, real estate
concessions, restaurants, and short-term lodging. Cordillera is primarily a
second home/resort community. As such, it may have a greater than average
susceptibility to general economic conditions, and may be impacted by the cost,
accessibility and continued desirability of area recreational facilities such as
the Vail and Beaver Creek ski areas as well as the private golf facilities. In
addition, there will be significant competition from other developers in
Cordillera as well as other developments in the area, including some which are
in close proximity to Cordillera. The impact of this competition cannot be
assessed because future demand cannot be predicted with accuracy and the factors
influencing the success of each development are speculative.

During the quarter ended September 30, 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 bears interest at 9% 
per annum, payable $5,431 per month and is due on July 15, 1999. The Company 
anticipates either refinancing this loan upon maturity or selling the 
property to pay the mortgage.  Plans to build a condominium/office 
development on one acre of this property have been developed and discussed 
with the City of Glenwood Springs, subject to the fulfillment of certain 
conditions, a final decision regarding development of the project has not 
been made. In the event the Company determines to proceed with the project, 
it is anticipated that the Company will enter into an arrangement with 
Zneimer Company, Inc. to develop 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.

                                   Form 10-QSB
                                  Page 10 of 14


<PAGE>




For the three month period ended September 30, 1998, operating activities used
cash of $38,200. Prepaid expenses decreased by approximately $1,700 in the three
month period ended September 30, 1998. The Company recorded depreciation on
fixed assets of $3,200. Accounts payable and accrued liabilities decreased by
$3,200.

The Company wrote-down the value of an investment which was determined to be
worthless for $101,300. The Company is considering taking legal action to
recover this investment, although no proceedings have started as of the date of
this document. 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.

Cash used for investing activities was $59,100 during the three month period 
ended September 30, 1998, of which approximately $20,035 was loaned to 
related parties, CVC #19 LLC and CVC #2 LLC and $2,125 was the collection of 
notes receivable. Cash decreased $41,200 related to value changes in trading 
securities.

Financing activities during the three month period ended September 30, 1998
provided cash of $2,200 of which $3,400 was generated from the exercise of stock
options net of repurchases and $1,200 was principal payments on notes payable.

At September 30, 1998, the Company had cash and cash equivalents of $1,579,400
and working capital of $3,195,153. 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.

NET INCOME (LOSS) PER SHARE

Through June 30, 1998 the Company followed the provisions of Accounting
Principles Board Opinion (APB) No. 15, "Earnings Per Share". Effective for the
year that will end June 30, 1998, the Company implemented Statement of Financial
Accounting Standards (SFAS) No. 128, "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 stockholders 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. In loss periods, dilutive common equivalent shares
are excluded as the effect would be anti-dilutive. Basic and diluted earnings
per share are the same for all periods presented.

                                   Form 10-QSB
                                  Page 11 of 14


<PAGE>




Options to purchase 130,000 shares of common stock were not included in the
compu- tation of diluted EPS because their effect was anti-dilutive for the
three months ended September 30, 1998. None of the options were exercised as of
the date of this filing.

NEW ACCOUNTING PRONOUNCEMENTS

Effective July 1,1998, Cambridge Holdings, Ltd. adopted FASB Statement No. 130,
REPORTING COMPREHENSIVE INCOME.  Statement No. 130 requires the reporting of
comprehensive income in addition to net income from operations.  Comprehensive
income 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.

The Company at the end of the quarter held securities classified as
available-for-sale, which have unrealized losses of $129,301 before tax. The
before tax and after tax amount for the securities held, as well as the tax
(expense)/benefit of those securities held at September 30, 1998 and 1997 is
presented below.

<TABLE>
<CAPTION>

                                                           Tax
                                            Before       (Expense)/       After
Three months ended Sept. 30, 1998             Tax         Benefit          Tax
                                              ---         -------          ---
<S>                                        <C>             <C>          <C>
Unrealized holding losses                  $(139,841)      $54,054      $(85,787)
Reclassification adjustment for
  Gains/losses included in net income             --            --            --
                                           ---------       -------      -------- 
                                           $(139,841)      $54,054      $(85,787)
                                           ---------       -------      -------- 
                                           ---------       -------      -------- 
</TABLE>



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.

In February 1998, the FASB issued SFAS No. 132, "Employer' Disclosures about
adopted Pensions and Other Postretirement Benefits" which standardizes the
disclosure requirements for pensions and other postretirement benefits and
requires additional information on changes in the benefit obligations and fair
values of plan assets that will facilitate financial analysis. SFAS No. 132 is
effective for years beginning after December 15, 1997 and requires comparative
information for earlier years to be restated, unless such information is not
readily available. Management believes the adoption of this statement will have
no material impact on the Company's financial statements.

                                   Form 10-QSB
                                  Page 12 of 14


<PAGE>

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities" which requires companies to record
derivatives on the balance sheet as assets or liabilities, measured at fair
market value. Gains or losses resulting from changes in the values of those
derivatives would be accounted for depending on the use of the derivative and
whether it qualifies for hedge accounting. The key criterion for hedge
accounting is that the hedging relationship must be highly effective in
achieving offsetting changes in fair value or cash flows. SFAS No. 133 is
effective for fiscal years beginning after June 15, 1999. Management believes
the adoption of this statement will have no material impact on the Company's
financial statements.

YEAR 2000 COMPLIANCE


The Company has completed a review and risk assessment of all technology items
used in its operations. The Company believes that the year 2000 problem will
pose no significant operational problems. The Company's accounting software
program as well as other office software will be upgraded during 1999 to be year
2000 compliant. The Company estimates that the cost of the upgrades will be
approximately $1,000. The Company will review the status of the year 2000 issues
with its financial institutions.

RESULTS OF OPERATIONS.

THREE MONTH PERIOD ENDED SEPTEMBER 30, 1998 COMPARED TO THREE MONTH PERIOD 
ENDED SEPTEMBER 30, 1997 The Company's revenues for the three month period 
ended September 30, 1998 totaled approximately $9,400, consisting of interest 
on temporary cash on hand and other money market instruments. Revenues for 
the three month period ended September 30, 1997 totaled approximately 
$36,200, which consisted of interest income of $30,500 and realized gains of 
$5,700.

During the three month period ended September 30, 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 $41,151 compared to $0 for 
the quarter ended September 30, 1997. 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 first quarter 
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 three month periods ended September 30, 1998 and September 30, 1997,
the Company incurred operating, general and administrative costs of
approximately $49,300 and $46,900, respectively. The Company had losses before
any income tax benefit for the three month period ended September 30, 1998 of
approximately $182,300 as compared with $10,600 for the three month period ended
September 30, 1997.

                           PART II. OTHER INFORMATION

Not Applicable.

                                   From 10-QSB
                                  Page 13 of 14


<PAGE>

                            CAMBRIDGE HOLDINGS, LTD.

                                   FORM 10-QSB

                               SEPTEMBER 30, 1998

                                   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 16, 1998                   By: /s/ Gregory Pusey
                                       -------------------------------------
                                         Gregory Pusey
                                         President, Treasurer and Director

                                   Form 10-QSB
                                  Page 14 of 14