<PAGE>


                       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
                  SEPTEMBER 30, 2000
                                                 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: 1-13861

                         MED-EMERG INTERNATIONAL INC.
                         (Exact Name of Registrant as Specified in Its Charter)

PROVINCE OF ONTARIO, CANADA
(State or Other Jurisdiction of Incorporation or Organization)

2550 Argentia Road, Suite 205
Mississauga, Ontario, Canada                         L5N 5R1
(Address of Principal Executive Offices)             (Zip Code)

Registrant's telephone number, including area code:  (905) 858-1368

                  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 [ ]

                  As of November 14, 2000, 6,415,220 shares of the registrant's
Common Stock were outstanding.


<PAGE>


                                   PART I
                            FINANCIAL INFORMATION


ITEM 1.  FINANCIAL STATEMENTS

                          MED-EMERG INTERNATIONAL INC.
                           CONSOLIDATED BALANCE SHEET
      AS AT SEPTEMBER 30, 2000 (UNAUDITED) AND DECEMBER 31, 1999 (AUDITED)
                                    (IN US$)

<TABLE>
<CAPTION>
                                            September 30                  December 31
                                                2000                         1999
                                         ----------------------------------------------------
<S>                                       <C>                           <C>
ASSETS

CURRENT ASSETS
 Cash and short term investments          $       98,870                $     229,966
 Accounts receivable                           2,441,631                    2,453,700
 Prepaid expenses and other                      589,119                      281,385
                                         ----------------------------------------------------
                                               3,129,620                    2,965,051
                                         ----------------------------------------------------

Capital assets                                 3,133,610                    2,329,847
Other assets                                   2,557,447                    4,005,768
Deferred income taxes                          1,137,579                      766,270
                                         ----------------------------------------------------
                                          $    9,958,256                $  10,066,936
                                         ====================================================

LIABILITIES

CURRENT LIABILITIES
 Bank Indebtedness (note 3)               $    1,535,716                $   1,401,096
 Accounts payable and accrued
 liabilities                                   2,355,809                    1,917,153
 Restructuring reserve                           134,193                      356,889
 Current portion of long-term debt                63,190                      172,145
                                         ----------------------------------------------------
                                               4,088,908                    3,847,283

Long term debt                                   313,944                      518,338
Minority Interest                              1,124,582                            -
Deferred income taxes                            457,114                      470,384
                                         ----------------------------------------------------
                                               5,984,548                    4,836,005
                                         ----------------------------------------------------

 Capital Stock                                 8,648,495                    8,251,290
 Convertible Debenture                           405,371                      405,371
 Contributed surplus                           1,022,100                    1,022,100
 Deficit                                      (6,073,714)                  (4,335,566)
 Cumulative translation adjustment              (28,544)                    (112,264)
                                         ----------------------------------------------------
                                               3,973,708                    5,230,931
                                         ----------------------------------------------------
                                          $    9,958,256                $  10,066,936
                                         ====================================================
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.


                                       1
<PAGE>

                          MED-EMERG INTERNATIONAL INC.
                      CONSOLIDATED STATEMENT OF OPERATIONS
    FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2000 (UNAUDITED)
                                    (IN US$)

<TABLE>
<CAPTION>
                                                      Three Months Ended                   Nine Months Ended
                                              -----------------------------------------------------------------------
                                               September 30       September 30       September 30       September 30
                                                   2000               1999               2000               1999
                                              -----------------------------------------------------------------------
<S>                                            <C>                <C>                <C>                <C>
REVENUE                                        $  3,911,233       $  3,349,624       $ 12,230,051       $  9,225,396
PHYSICIAN FEES AND OTHER DIRECT COSTS             2,521,504          2,505,769          7,639,729          6,749,007
                                              -----------------------------------------------------------------------
                                                  1,389,729            843,855          4,590,322          2,476,389
                                              -----------------------------------------------------------------------
EXPENSES
    Salaries and benefits                           709,952            397,571          2,343,453          1,145,666
    General and administration                      348,846            158,855            609,582            417,022
    Occupancy costs and supplies                    470,081            188,547          1,377,621            509,849
    Public company costs                             60,366             81,542            115,843            234,784
    Physician recruitment and marketing              84,113             42,580            160,132            117,515
                                              -----------------------------------------------------------------------
                                                  1,673,358            869,095          4,606,631          2,424,836
                                              -----------------------------------------------------------------------
INCOME BEFORE HEALTHYCONNECT.COM,
    DEPRECIATION, AMORTIZATION
    INTEREST, TAXES & FINANCING COSTS              (283,629)           (25,240)           (16,309)            51,553

    HealthyConnect.com operations                  (234,607)                 -         (1,403,743)           205,870
                                              -----------------------------------------------------------------------
INCOME BEFORE DEPRECIATION, AMORTIZATION
   INTEREST, TAXES & FINANCING COSTS                 85,057            (25,240)        (1,420,052)          (154,317)
                                              -----------------------------------------------------------------------
   Depreciation                                      85,057             65,553            271,990            175,229
   Interest and financing expense                    56,995              8,615            151,941             16,092
   Goodwill amortization                             92,504             15,032            277,843             44,635
                                              -----------------------------------------------------------------------
                                                    234,556             89,200            701,774            235,956
                                              -----------------------------------------------------------------------
OPERATING LOSS BEFORE UNUSUAL ITEMS
   AND INCOME TAXES                                (752,792)          (114,440)        (2,121,826)          (390,273)
   Loss on disposition (note 4)                    (111,252)                 -           (111,252)                 -
   Dilution gain from HealthyConnect.com            162,731                               162,731
                                              -----------------------------------------------------------------------

LOSS BEFORE INCOME TAXES                           (701,313)          (114,440)        (2,027,347)          (390,273)
   Income taxes (recovery)                         (133,356)           (25,177)          (434,542)          (146,545)
                                              -----------------------------------------------------------------------

NET LOSS BEFORE PREFERRED SHARE DIVIDENDS          (567,957)           (89,263)        (1,635,805)          (243,728)

   Preferred share dividends                        (33,934)           (33,244)          (102,343)          (100,292)
                                              -----------------------------------------------------------------------

NET LOSS                                           (601,891)          (122,507)        (1,738,148)          (344,020)

Deficit, beginning of the year                   (5,471,823)        (3,556,020)        (4,335,566)        (3,334,507)
                                              -----------------------------------------------------------------------

DEFICIT, END OF THE YEAR                       $ (6,073,714)      $ (3,678,527)      $ (6,073,714)      $ (3,678,527)
                                              =======================================================================

BASIC AND FULLY DILUTED LOSS, PER SHARE        $      (0.11)      $      (0.04)      $      (0.31)      $      (0.11)
                                              =======================================================================

WEIGHTED AVERAGE NUMBER OF COMMON SHARES          5,656,825          3,095,544          5,656,825          3,095,544
                                              =======================================================================
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.


                                       2
<PAGE>

                          MED-EMERG INTERNATIONAL INC.
                      CONSOLIDATED STATEMENT OF CASH FLOWS
     AS AT SEPTEMBER 30, 2000 (UNAUDITED) AND SEPTEMBER 30, 1999 (UNAUDITED)
                                    (IN US$)

<TABLE>
<CAPTION>
                                                                      September 30            September 30
                                                                          2000                    1999
                                                                     ---------------------------------------
<S>                                                                   <C>                     <C>
CASH FLOWS FROM OPERATING ACTIVITIES
 Net loss for the period                                              $ (1,635,805)           $   (243,728)
 Adjustments for:
  Amortization of capital assets                                           271,990                 175,229
  Goodwill amortization                                                    277,843                  44,635
  Deferred income taxes                                                   (434,542)               (146,545)
  Dilution gain from HealthyConnect.com                                   (164,428)                      -
  Stock compensation                                                        39,398                       -
                                                                     ---------------------------------------
                                                                        (1,645,544)               (170,409)
 Increase (decrease) in non-cash working capital components               (122,775)               (324,328)
                                                                     ---------------------------------------
                                                                        (1,768,319)               (494,737)
                                                                     ---------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES
 Additions to capital assets                                            (1,075,753)               (468,640)
 Business acquisitions (note 4)                                                  -                (130,550)
 Other assets                                                            1,170,478                (138,759)
                                                                     ---------------------------------------
                                                                            94,725               (737,949)
                                                                     ---------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES
 Bank indebtedness                                                         134,620                  16,797
 Issue of common shares                                                    357,807                       -
 Repurchase of shares                                                            -                  (1,579)
 Term loans                                                                      -                 186,783
 Obligation  / (obligations repaid) under capital lease                   (108,955)                (39,002)
 Issuance/(repayment) of debt                                             (204,394)                      -
 Due to minority interest                                                1,124,582                  99,371
 Dividends paid on preference shares                                             -                (100,292)
                                                                     ---------------------------------------
                                                                         1,303,660                 162,078
                                                                     ---------------------------------------
Effect of foreign currency exchange rate changes                           238,839                  (1,230)

INCREASE (DECREASE) IN CASH AND SHORT-TERM INVESTMENTS                    (131,095)             (1,071,838)
Cash and short-term investments, beginning of year                         229,965               1,090,582
                                                                     ---------------------------------------
Cash and short-term investments, end of year                          $     98,870            $     18,744
                                                                     =======================================
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.


                                       3
<PAGE>

MED-EMERG INTERNATIONAL INC.
Notes to Unaudited Consolidated Financial Statements
Nine months ended September 30, 2000 and 1999


1.       ORGANIZATION AND DESCRIPTION OF BUSINESS

         Med-Emerg International Inc. is a publicly traded company listed on the
         NASDAQ Exchange. The Company completed its initial public offering in
         February, 1998.

         Med-Emerg International Inc. is a physician management services
         organization specializing in the delivery of emergency and primary
         healthcare related services. The Company is committed through
         information technology and its physician management services to
         delivering an internet-based healthcare network with the objective of
         delivering quality and timely access to healthcare products and
         services. The Company has decided to continue to focus on the
         development of its internet based technology of HealthyConnect.com.
         Therefore, the Company has an on-going requirement to raise capital to
         finance the on-going technology developments of HealthyConnect.com.

         The Company's operations are divided into three divisions, Physician
         and Nurse Recruitment, Physician Management Services and
         HealthyConnect.com.

         On a contractual basis, the Company provides emergency department
         physician and nurse recruitment, staffing and administrative support
         services to hospitals. At September 30, 2000, the Company had 14
         contracts for physician staffing and 6 contracts for nurse staffing.

         Under physician management services, the Company owns and manages
         medical clinic facilities providing physicians with the ability to
         practice within a professional managed network enabling the physician
         to concentrate on the clinical aspects of their practices. All the
         clinic assets including medical equipment are owned by the company. At
         September 30, 2000, the Company owned and managed 26 clinics.

         HealthyConnect.com is an internet-based health portal that will connect
         physicians, patients, third party payors and consumers to a "virtual
         world" of healthcare products and services. The Company is
         electronically connecting its clinical facilities and establishing
         strategic partnerships in delivering a comprehensive healthcare
         program.


2.       BASIS OF PRESENTATION

         The accompanying unaudited consolidated financial statements have been
         prepared in accordance with Canadian generally accepted accounting
         principles for interim financial reporting. These financial statements
         consolidate, with minority interest, the accounts of Med-Emerg
         International Inc. and all wholly- and partially-owned subsidiaries of
         Med-Emerg International Inc.

         In the opinion of management, the unaudited interim consolidated
         financial statements contained in this report reflect all adjustments,
         consisting of only normal recurring accruals, which are necessary for a
         fair presentation of the financial position, and the results of
         operations for the interim periods presented. The results of operations
         for any interim period are not necessarily indicative of the results
         for the full year.

         These consolidated financial statements, footnote disclosures and other
         information should be read in conjunction with the consolidated
         financial statements and the notes thereto included in the Company's
         Annual Report on Form 10-K for the year ended December 31, 1999.


                                       4
<PAGE>

MED-EMERG INTERNATIONAL INC.
Notes to Unaudited Consolidated Financial Statements
Nine months ended September 30, 2000 and 1999


3.       BANK COVENANTS

         The Company is required to comply with its bank covenant ratios. At
         September 30, 2000 the Company was not in compliance with these
         covenants. The Company is in the process of raising capital as
         indicated in note 7 under commitments.


4.       ACQUISITIONS AND DISPOSITIONS

         On June 19, 2000, the Company, through its subsidiary,
         HealthyConnect.com, Inc., purchased all of the outstanding securities
         of Harmonie Group, Inc. (Boston, Massachusetts), a leading provider of
         hospital based web enabled patient information management software. The
         Company purchased the securities of Harmonie in exchange for 2,600,000
         HealthyConnect.com, Inc. common shares. Further, in the event that
         HealthyConnect.com, Inc. does not become a publicly traded company
         within fourteen months of the close of the transaction, the former
         shareholders of Harmonie shall have the option to convert the
         HealthyConnect.com, Inc. common shares into an aggregate 1,100,000
         Med-Emerg common shares and a $1,425,000 convertible debenture, payable
         at Med-Emerg's sole option, in either cash or shares, for a period of
         five (5) years.

         Effective November 5, 1999, the Company purchased all of the
         outstanding securities of YFMC Healthcare Inc. in exchange for similar
         securities of Med-Emerg International Inc. on the following basis:

         i.   In the case of holders of YFMC Common Shares, one Med-Emerg Common
              Share was issued for every 6 7/8 shares of YFMC. This resulted in
              the issuance of 1,658,566 Med-Emerg Common Shares.
         ii.  In the case of holders of YFMC Preferred Shares, one Med-Emerg
              Common Share was issued for every 10 YFMC First Preferred Shares,
              resulting in the issuance of 100,000 Med-Emerg Common Shares.
         iii. In the case of holders of YFMC Series A Warrants, one Med-Emerg
              Series A Warrant was issued for every 8 warrants of YFMC,
              resulting in the issuance of 44,585 Med-Emerg Series A Warrants.
         iv.  In the case of holders of YFMC Series B Warrants, one Med-Emerg
              Series B Warrant was issued for every 8 warrants of YFMC,
              resulting in the issuance of 44,585 Med-Emerg Series B Warrants.
         v.   In the case of holders of YFMC stock options, one Med-Emerg stock
              option for every 8 YFMC stock options.

         The Company has determined that there will be integration costs
         associated with the business combination with YFMC Healthcare Inc. The
         Company plans to dispose of duplicate functions and unprofitable
         operations as part of a formal plan of integration. At December 31,
         1999 a liability of $356,889 was established as the estimated cost of
         the integration plan. The Company expects to complete the plan by
         December 31, 2000.

         In addition, during the fiscal year 1999, the Company also acquired
         ownership interest in the following companies that operate medical
         clinics: 45% of Medical Urgent Care Inc., 51% of Caremedics (Elmvale)
         Inc. and 51% of York Lanes Health Centres Ltd. The following is a
         summary of the assets purchased and liabilities assumed with the
         exception of Harmonie Group Inc.:


                                       5
<PAGE>

MED-EMERG INTERNATIONAL INC.
Notes to Unaudited Consolidated Financial Statements
Nine months ended September 30, 2000 and 1999


4.       ACQUISITIONS AND DISPOSITIONS (cont'd)

<TABLE>
<CAPTION>
                                         YFMC
                                       Healthcare          Other
                                          Inc.          Acquisitions         Total
                                     -------------------------------------------------
<S>                                   <C>               <C>               <C>
Current assets                        $   666,495       $    23,052       $   689,547
Capital assets                          1,381,885           374,136         1,756,021
Other long-term assets                    702,656                 -           702,656
Goodwill                                1,736,571           170,821         1,907,392
Less liabilities assumed               (1,394,439)         (361,612)       (1,756,051)
Less reverse for restructuring           (356,889)                -          (356,889)
Less minority interest                          -           (28,221)          (28,221)
                                     -------------------------------------------------
Purchase price                          2,736,279           178,176         2,914,455
Less: share consideration              (2,232,906)                -        (2,232,906)
Less: stock options and warrants          (41,775)                -           (41,775)
                                     -------------------------------------------------
Cash consideration                    $   461,598       $   178,176       $   639,774
                                     =================================================
</TABLE>

         In July 2000, the Company divested its 70% interest in Spirotech
         Health Services Inc. for an aggregate purchase price of $9,500 CND.

         In August 2000, the Company divested its 45% interest in an Urgent Care
         Centre, Medical Urgent Care Inc. ("MUCI"). MUCI purchased and redeemed
         the Company's shares in MUCI for an aggregate purchase price of
         $42,000CND. As part of the transaction, the agreement between the
         Company and MUCI was terminated, effective August 2000.


5.       CANADIAN AND UNITED STATES ACCOUNTING POLICY DIFFERENCES

         These consolidated financial statements have been prepared in
         accordance with Canadian generally accepted accounting principles
         ("Canadian GAAP"), which conform in all material respects applicable to
         the Company, with those in the United States ("U.S. GAAP") during the
         periods presented except with respect to the following:

         Consolidated statements of operations

         If United States GAAP were employed, net loss for the period would be
         adjusted as follows:

<TABLE>
<CAPTION>
                                                                September               September
                                                                   2000                    1999
                                                                                        (Note 21)

            <S>                                               <C>                      <C>
            Net income (loss) based on Canadian GAAP          $ (1,635,805)            $ (243,728)
            Start-up costs amortized/(deferred)                    (33,840)               (33,840)
            HealthyConnect.com costs capitalized                         --               117,981
                                                              -------------            -----------
            Net loss based on United States GAAP              $ (1,669,645)            $ (327,870)
                                                              -------------            -----------
            Primary loss per share                            $      (0.29)            $    (0.14)
                                                              =============            ===========
</TABLE>


                                       6
<PAGE>

MED-EMERG INTERNATIONAL INC.
Notes to Unaudited Consolidated Financial Statements
Nine months ended September 30, 2000 and 1999


5.       CANADIAN AND UNITED STATES ACCOUNTING POLICY DIFFERENCES (cont'd)

         If United States GAAP were employed, deficit, other assets, prepaid and
         other assets, and total liabilities would be adjusted as follows:

<TABLE>
<CAPTION>
                                                               September           December
                                                                  2000               1999
                                                             --------------     --------------
           <S>                                               <C>                <C>
           Deficit based on Canadian GAAP                    $  (6,073,714)     $  (4,335,566)
           Start-up costs deferred                                (148,861)          (255,040)
           Goodwill amortization                                  (277,843)            (8,925)
                                                             --------------     --------------
                                                             $  (6,500,418)     $  (4,599,531)
                                                             ==============     ==============
           Other assets based on Canadian GAAP               $   1,137,579      $   4,005,768
           Start-up costs deferred                                (148,861)          (255,040)
           Goodwill on purchase of YFMC Healthcare Inc.          1,071,522          1,087,872
                                                             --------------     --------------
                                                             $  (2,060,240)     $   4,838,600
                                                             ==============     ==============
           Total liabilities based on Canadian GAAP          $   5,984,548      $   4,836,005
           Convertible debenture                                   405,371            405,371
                                                             --------------     --------------
                                                             $   6,389,919      $   5,241,376
                                                             ==============     ==============
</TABLE>

         (a)    Deferred Income Taxes

                Under U.S. GAAP, the Company is required to follow Statement of
                Financial Accounting Standards (SFAS No. 109) "Accounting for
                Income Taxes", which requires the use of the "asset and
                liability method" of accounting for deferred income taxes, which
                gives recognition to deferred taxes on all "temporary
                differences" (differences between accounting basis and tax basis
                of the Company's assets and liabilities, such as the
                non-deductible values attributed to assets in a business
                combination) using current enacted tax rates. In addition, SFAS
                No. 109 requires the Company to record all deferred tax assets,
                including future tax benefits of capital losses carried forward,
                and to record a "valuation allowance" for any deferred tax
                assets where it is more likely than not that the asset will not
                be realized. The Company has followed this method under Canadian
                GAAP.

         (b)    Deferred Start-up Costs

                Under Canadian GAAP, development and start-up costs, which meet
                certain criteria, are deferred and amortized. Under United
                States GAAP, development and start-up costs are expensed as
                incurred.


                                       7
<PAGE>

MED-EMERG INTERNATIONAL INC.
Notes to Unaudited Consolidated Financial Statements
Nine months ended September 30, 2000 and 1999


5.       CANADIAN AND UNITED STATES ACCOUNTING POLICY DIFFERENCES (cont'd)

         (c)    Convertible Debenture

                Under U.S. GAAP, convertible debentures are presented as
                liabilities, regardless of the attributes of the convertible
                debenture, and transferred to equity upon conversion, whereas,
                under Canadian GAAP, the likelihood of conversion to equity is
                considered in determining the classification between liability
                or equity.

         (d)    Earnings Per Share

                U.S. GAAP requires common shares and warrants to purchase common
                shares, issued or exercisable at prices below the initial public
                offering ("I.P.O.") price and which were issued within one year
                prior to the initial filing of the registration statement
                relating to the I.P.O., to be treated as if the common shares
                were outstanding from the beginning of the period in the
                calculation of weighted average number of common shares
                outstanding and loss per share, even where such inclusion is
                anti-dilutive. Primary earnings per common share is determined
                using the weighted average number of shares outstanding during
                the year, adjusted to reflect the application of the treasury
                stock method for outstanding options and warrants in accordance
                with U.S. GAAP.

          (e)   Stock Compensation

                Statement of Financial Accounting Standards No. 123, "Accounting
                for Stock-Based Compensation" (SFAS 123), was issued by the
                Financial Accounting Standards Board in October 1995. SFAS 123
                establishes financial accounting and reporting standards for
                transactions in which an entity issues its equity instruments to
                acquire goods or services from non-employees, as well as
                stock-based employee compensation plans. All transactions in
                which goods or services are the consideration received for the
                issuance of equity instruments are to be accounted for based on
                the fair value of the consideration received or the fair value
                of the equity instrument issued, whichever is more reliably
                measurable.

                For those transactions described in note 9 of the audited
                consolidated financial statements for Med-Emerg International
                Inc. for the year ended December 31, 1999 and under SFAS 123:


                -   the issuance of 125,000 common shares to promissory note
                    holders resulted in a charge to income (finance expense)
                    over the term of the related promissory note payable, at
                    $2.05 per share equal to $256,250 of which $196,943 has been
                    charged to earnings in the year ended December 31, 1997 and
                    $50,470 has been charged to earnings in the period ended
                    December 31, 1998.

                -   the issuance of 50,000 shares to a director for services
                    rendered resulted in a charge to income at $2.05 per share
                    equal to $100,400 in the year ended December 31, 1997.

                -   the issuance of an option on November 1, 1996 to a director
                    to acquire 700,000 shares (note 13) has resulted in a charge
                    to income equal to $934,033 in 1996 based on $2.05 per
                    share, and the "minimum value" method of calculation
                    permitted under SFAS 123 for non-public entities.


                                       8
<PAGE>

MED-EMERG INTERNATIONAL INC.
Notes to Unaudited Consolidated Financial Statements
Nine months ended September 30, 2000 and 1999


5.       CANADIAN AND UNITED STATES ACCOUNTING POLICY DIFFERENCES (cont'd)

                As allowed by SFAS 123, the Company has decided to continue to
                use Accounting Principles Board Opinion No. 25 "Accounting for
                Stock Issued to Employees" in accounting for the Company's Stock
                Option Plan (the "Plan") for U.S. GAAP purposes, pursuant to
                which there is no significant difference between U.S. and
                Canadian GAAP in the accounting for the granting of options
                under the Plan.

         (f)    Goodwill

                Under U.S. GAAP, the purchase price of an acquisition involving
                the issuance of shares is determined based on the share price
                for the period surrounding the announcement date of the
                acquisition. The share price used for the YFMC Healthcare Inc.
                acquisition under U.S. GAAP was $1.859. Under Canadian GAAP, the
                purchase price is determined based on the share price on the
                date the transaction is consummated. The share price used for
                the YFMC Healthcare Inc. acquisition under Canadian GAAP
                was $1.25.

         (g)    Shareholders' Equity

                Under U.S. GAAP, loans issued to officers to acquire stock are
                presented as a deduction from shareholders' equity (deficit).

                Under Canadian GAAP, the detachable stock purchase warrants
                issued as in conjunction with the private stock offering on
                January 22, 1996 and subsequently surrendered, all as described
                in note 13, have been given no recognition in the financial
                statements.

                Under U.S. GAAP, detachable stock purchase warrants are given
                separate recognition from the primary security issued. Upon
                initial recognition, the carrying amount of the two securities
                is allocated based on the relative fair values at the date of
                issuance. Under U.S. GAAP, based on an ascribed fair value of
                $0.364 for each of the 1,000,000 share warrants issued, share
                capital would be lower by $36,406 and, given that the stock
                purchase warrants were cancelled during the year, the carrying
                amount of contributed surplus would be increased by $36,406.


                                       9
<PAGE>

MED-EMERG INTERNATIONAL INC.
Notes to Unaudited Consolidated Financial Statements
Nine months ended September 30, 2000 and 1999



5.       CANADIAN AND UNITED STATES ACCOUNTING POLICY DIFFERENCES (cont'd)

                The effect on shareholders' equity would be as follows:

<TABLE>
<CAPTION>
                                                                                       September         December
                                                                                          2000             1999
                                                                                    -------------      -------------
                     <S>                                                            <C>                <C>
                     Capital stock (as previously shown)                            $  8,648,495       $  8,251,290
                     Capital stock issued on purchase of YFMC Healthcare Inc.          1,087,872          1,087,872
                     Ascribed fair value of share purchase warrants issued               (36,406)           (36,406)
                                                                                    -------------      -------------
                     Capital stock - U.S. GAAP                                         9,699,961          9,302,756
                     Share purchase loan to officer                                      (44,978)           (44,978)
                                                                                    -------------      -------------
                     Net capital stock - U.S. GAAP                                     9,654,983          9,257,778
                                                                                    -------------      -------------
                     Convertible debenture (as previously shown)                         405,371            405,371
                     Convertible debenture included in long-term debt                   (405,371)          (405,371)
                                                                                    -------------      -------------
                     Convertible debenture - U.S. GAAP                                         -                  -
                     Contributed surplus (as previously shown)                         1,022,100          1,022,100
                     Share purchase warrants                                              36,406             36,406
                                                                                    -------------      -------------
                     Contributed surplus - U.S. GAAP                                   1,058,506          1,058,506
                                                                                    -------------      -------------
                     Deficit - U.S. GAAP                                              (6,156,780)        (4,599,531)
                                                                                    -------------      -------------
                     Shareholders' equity (deficit) - U.S. GAAP                     $  4,556,709       $  5,716,753
                                                                                    =============      =============
</TABLE>

         (h)    Comprehensive Income

                Statement of Financial Accounting Standards No. 130, "Reporting
                Comprehensive Income" (SFAS 130), was issued by the Financial
                Accounting Standards Board in June 1997. SFAS 123 establishes
                standards for reporting and display of comprehensive income and
                its components in the financial statements. SFAS 130 is
                effective for fiscal years beginning after December 15, 1997.
                Reclassification of financial statements for earlier period
                provided for comparative purposes is required.


                                       10
<PAGE>

MED-EMERG INTERNATIONAL INC.
Notes to Unaudited Consolidated Financial Statements
Nine months ended September 30, 2000 and 1999


6.       SEGMENTED INFORMATION

         The Company operates under three divisions: Physician and Nurse
         Recruitment, Physician Management Services and Integrated Health
         Services Delivery Network (IHSDN).

         The Physician and Nurse Recruitment involves contracting with hospitals
         for the provision of physician staffing, nurse staffing and
         administrative support services. The Company also contracts with
         clinical facilities and local communities for the locum or permanent
         placement of a physician in a community.

         The Physician Management Services division owns and manages medical
         clinic facilities, which provide physicians with the ability to
         practice medicine in a professionally managed environment. The clinics
         include family practice, walk-in services, and other related services
         such as massage therapy and chiropractic services.

         The IHSDN division involves electronically linking clinic facilities
         and other healthcare service providers into a network. This
         internet-based network will provide healthcare professionals and
         consumers access to medical services, products, communications and
         information tools.


                                       11
<PAGE>

MED-EMERG INTERNATIONAL INC.
Notes to Unaudited Consolidated Financial Statements
Nine months ended September 30, 2000 and 1999


6.       SEGMENTED INFORMATION (cont'd)

         Details are as follows:
<TABLE>
<CAPTION>
                                                                                 September 30, 2000
                                                          -----------------------------------------------------------------
                                                           Physician         Physician
                                                           & Nurse           Management
                                                           Recruiting        Services           IHSDN         Consolidated
                                                          -----------------------------------------------------------------

                                                                        Three months ended September 30, 2000
                                                          -----------------------------------------------------------------
         <S>                                               <C>               <C>              <C>             <C>
         Revenue                                           1,723,638         2,187,595                -         3,911,233
         Gross Margin                                        186,525         1,203,204                -         1,389,729
         Operating income before Corporate Overhead          153,898            26,897          (234,607)         (53,812)
         & Public Company-related costs
         Corporate Overhead                                        -                 -                -          (404,058)
         Public Company-related costs                              -                 -                -           (60,366)
                                                                                                              ------------
         Operating loss                                                                                          (518,236)
</TABLE>

<TABLE>
<CAPTION>
                                                                         Nine months ended September 30, 2000
                                                          -----------------------------------------------------------------
         <S>                                               <C>               <C>              <C>             <C>
         Revenue                                           5,477,435         6,752,616                -        12,230,051
         Gross Margin                                        879,460         3,710,862                -         4,590,322

         Operating income before Corporate Overhead          614,312           488,653       (1,403,743)         (300,778)
         & Public Company-related costs
         Corporate Overhead                                                                                    (1,003,826)
         Public Company-related costs                                                                            (115,448)
                                                                                                              ------------
         Operating loss                                                                                        (1,420,052)

         Assets employed at period end                     3,097,961         1,746,749        5,113,546         9,958,256
         Depreciation and amortization                       106,463           443,369                -           549,833
</TABLE>


                                       12
<PAGE>

MED-EMERG INTERNATIONAL INC.
Notes to Unaudited Consolidated Financial Statements
Nine months ended September 30, 2000 and 1999


6. SEGMENTED INFORMATION (cont'd)

<TABLE>
<CAPTION>
                                                                                 September 30, 1999
                                                          -----------------------------------------------------------------
                                                           Physician         Physician
                                                           & Nurse           Management
                                                           Recruiting        Services           IHSDN         Consolidated
                                                          -----------------------------------------------------------------

                                                                        Three months ended September 30, 1999
                                                          -----------------------------------------------------------------
         <S>                                               <C>               <C>              <C>             <C>
         Revenue                                           2,274,268         1,075,357               -        3,349,624
         Gross Margin                                        321,746           522,109               -          843,855
         Operating income before Corporate Overhead          151,756            80,825               -          232,581
         & Public Company-related costs
         Corporate Overhead                                        -                 -               -         (176,279)
         Public Company-related costs                              -                 -               -          (81,542)
                                                                                                              ----------
         Operating loss                                                                                         (25,240)
</TABLE>

<TABLE>
<CAPTION>
                                                                         Nine months ended September 30, 1999
                                                          -----------------------------------------------------------------
         <S>                                               <C>               <C>              <C>             <C>
         Revenue                                           6,007,263         3,218,133               -        9,225,396
         Gross Margin                                        957,128         1,519,261               -        2,476,389
         Operating income before Corporate Overhead          606,648           277,315        (205,870)         678,093
         & Public Company-related costs
         Corporate Overhead                                                                                    (597,627)
         Public Company-related costs                                                                          (234,784)
                                                                                                              ----------
         Operating loss                                                                                        (154,318)

         Assets employed at period end                     3,654,004         1,759,750         340,778        5,754,532
         Depreciation and amortization                        73,619           146,246               -          219,865
</TABLE>


                                       13
<PAGE>

MED-EMERG INTERNATIONAL INC.
Notes to Unaudited Consolidated Financial Statements
Nine months ended September 30, 2000 and 1999


7.       COMMITMENTS

         In April 2000, the Company raised, through a private offering, gross
         proceeds of $600,000 at $2.00 per share, thereby issuing 300,000
         shares of Med-Emerg International Inc. In October 2000, under the same
         private offering but with an adjusted subscription price of $1.00 per
         share for both new and initial investors, the Company raised an
         additional $345,000 on the issuance of 710,000 shares of Med-Emerg
         International Inc.

         On March 1, 2000, the Company issued a private placement memorandum for
         equity financing, pursuant to which the Company sold 300,000 shares of
         its common stock at a price of $2.00 per share resulting in gross
         proceeds of $600,000.

         On May 25, 2000, the Company and HealthyConnect.com, Inc. entered into
         an agency agreement with BNP (Canada) Securities Inc. wherein BNP will
         act as agent for a private placement of HealthyConnect.com, Inc. Common
         Shares. The terms and conditions of the agreement, provides, amongst
         other things, the following: (1) the size of the offering will have an
         aggregate value of $6,000,000 US, representing a value of 30% of the
         HealthyConnect.com, Inc. Common Shares; (2) Subscribers of the offering
         shall have the right to convert their HealthyConnect.com, Inc. Common
         Shares into Med-Emerg Common Shares, exchangeable upon certain
         conditions to be negotiated. In the event that subscribers of the
         offering elect to convert their HealthyConnect.com, Inc. Common Shares
         into Med-Emerg Common Shares, then holders of Med-Emerg Common Shares,
         at such time, will have their interests in Med-Emerg diluted. To date,
         the Company raised $300,000 on the issuance of 433,928 common shares
         and 433,928 warrants (convertible at $0.69136USD) shares of
         HealthyConnect.com, Inc.


8.       SUBSEQUENT EVENTS

         On October 20, 2000, the Company entered into a Letter of Intent with
         1stinhealth, Inc., a transaction processing company located in
         Hasbrouck, New Jersey whereby the Company has agreed to purchase
         1stinhealth, Inc. upon such terms, which include the following: (1) the
         Company is to issue 43,000,000 shares of common stock of the Company in
         exchange for all of the issued and outstanding shares of capital stock
         of 1stinhealth, Inc.; (2) The Company's current operations, including
         all assets and liabilities (but excluding HealthyConnect.com), will be
         purchased by an entity in which Dr. Ramesh Zacharias, the current CEO
         of the Company, will participate as a shareholder, officer, director,
         and/or employee on terms acceptable to the boards of the Company and
         1stinhealth, Inc.; (3) Seventy-five percent of the Company's holdings
         in HealthyConnect.com shall be distributed to the Company's
         shareholders prior to the closing of the proposed transaction. The
         remaining twenty-five percent of the Company's holdings shall remain in
         the newly combined entity. The transaction is subject to satisfactory
         completion of due diligence, execution of a definitive agreement,
         shareholder and regulatory approval, obtaining financing for the newly
         combined entity and other customary terms and conditions.


                                       14
<PAGE>

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

OVERVIEW

Med-Emerg International Inc. ("Med-Emerg" or the "Company"), based in Ontario,
Canada, is a provider of a broad range of quality healthcare management
services. Established in 1983, the Company specializes in the coordination and
contract staffing of emergency physicians for hospitals and clinics in Canada.
Though emergency-related services are still an important component of the
Company's business, Med-Emerg has expanded to offer a wide variety of medical
services including recruitment, nurse staffing, physician management services
and an internet-based healthcare network.

Med-Emerg is positioned to establish industry leadership by providing integrated
professional management services in the delivery of healthcare to the healthcare
consumer. The Company's operations are divided into three divisions: Physician
and Nurse Recruitment Services, Physician Management Services and an internet
based healthcare network called HealthyConnect.com. Med-Emerg's strategy has
been to remain focused on these three divisions while continuing to broaden its
consolidation of physicians over a wider geographic base. Med-Emerg believes
that it is well positioned to benefit from the aging of the baby boomer
population, to capitalize on recent developments within the North American
healthcare environment and to integrate opportunities available through internet
technology. Specifically, the Company's strategy has been to leverage its 17
years of physician recruitment experience in becoming a dominant player in
Physician Management Services and to develop an internet-based healthcare
network that connects physicians, patients, hospitals, third party payers and
consumers to a "virtual world" of healthcare products, services and health
information.

The Company continues to promote its medical manpower staffing services
throughout Canada. Demand for emergency care has grown significantly over the
past ten years, notwithstanding the small proportion of physicians focusing on
emergency medicine. Moreover, recruitment of experienced emergency medicine
practitioners by hospitals in other countries is intense and such demand is
expected to continue for some time. Given the uncertainties associated with
patient volumes in several Ontario hospital emergency departments, the pool of
available physicians willing to practice emergency medicine has been declining.

The Company's ability to provide solutions and source physicians and highly
skilled nurses will be enhanced by its success in developing its dominant status
in the Physician Management Services Organization (PMSO) sector. The Company's
business strategy has been to integrate and through its physicians program offer
the family physician a comprehensive practice opportunity. Management believes
that the creation of a dominant PMSO status will significantly contribute to the
Company's efforts in growing its emergency services recruitment division.

HealthyConnect.com is a web management information technology company with
proprietary software and architecture engineering. HealthyConnect.com's
leading software, WebKit-TM-, offers a "plug and play" web infrastructure
backboned with a distributed authoring system allowing individuals with
little or no programming experience to manage multi-department and facilities
intranet environments. In addition to its hospital-based software,
HealthyConnect.com has developed the Professional Health Monitor-TM-, a
physician office management software and Clinic@Home-TM-, a consumer health
management software. On March 22, 2000, the Company launched
HealthyConnect.com, its internet-based health portal.

Targeted purchasers of HealthyConnect.com's software applications are hospitals,
consumers, physicians and other healthcare providers and healthcare product
suppliers. Consumers will benefit from 24-hour, 7-day a week access, via the
internet and telephone. In addition, consumers will have multiple-site secure
access to their own and their family members' electronic medical records, access
to a physician management health and wellness centre and convenient at-home
shopping for healthcare products and services.

On October 20, 2000, the Company entered into a Letter of Intent with
1stinhealth, Inc., a transaction processing company located in Hasbrouck, New
Jersey whereby the Company has agreed to purchase 1stinhealth, Inc. upon such
terms, which include the following: (1) the Company is to issue 43,000,000
shares of common stock of the Company in exchange for all of the issued and
outstanding shares of capital stock of 1stinhealth, Inc.; (2) The Company's
current operations, including all assets and liabilities (but excluding
HealthyConnect.com), will be purchased by an entity in which Dr. Ramesh
Zacharias, the current CEO of the Company, will participate as a shareholder,
officer, director, and/or employee on terms acceptable to the boards of the
Company and 1stinhealth, Inc.; (3) Seventy-five percent of the Company's
holdings in HealthyConnect.com shall be distributed to the Company's
shareholders prior to the closing of the proposed transaction. The remaining
twenty-five percent of the Company's holdings shall remain in the newly combined
entity. The transaction is subject to satisfactory completion of due diligence,
execution of a definitive agreement, shareholder and regulatory approval,
obtaining financing for the newly combined entity and other customary terms and
conditions.

In July 2000, the company divested its 70% interest in Spirotech Health
Services Inc for an aggregate purchase price of $9,500 CND.

In August 2000, the Company divested its 45% interest in an Urgent Care Centre,
Medical Urgent Care Inc. ("MUCI"). MUCI purchased and redeemed the Company's
shares in MUCI for an aggregate purchase price of $42,000CND. As


                                       15
<PAGE>

part of the transaction, the agreement between the Company and MUCI was
terminated, effective August 2000.

On June 21, 2000, HealthyConnect.com, Inc. and Travelbyus.com Ltd. entered
into an agreement which combines online consumer products in the travel and
healthcare sectors. The terms of the agreement provide, amongst other things,
for the issuance of 1,200,000 HealthyConnect.com, Inc. common shares to
Travelbyus and, in addition, the purchase by Travelbyus of $2,500,000 of
HealthyConnect.com, Inc. stock in exchange for 1,000,000 Travelbyus common
shares.

On June 19, 2000, HealthyConnect.com, Inc. and Harmonie Group, Inc. (Boston,
Massachusetts), entered into an agreement and plan of merger whereby
Healthyconnect.com, Inc. purchased all of the outstanding shares of
Harmonie Group, Inc. in exchange for 2,600,000 common shares of
Healthyconnect.com, Inc. As part of the transaction, the Company entered
into a conditional stock exchange agreement with the shareholders
of Harmonie Group, Inc., which provides that, in the event that
Healthyconnect.com, Inc. does not become a publicly traded company
within fourteen months of the close of the transaction, the Harmonie
Group, Inc. shareholders shall have the option to convert the
Healthyconnect.com, Inc. common shares into an aggregate 1,100,000
Med-Emerg common shares and a $1,425,000 convertible debenture, payable
at Med-Emerg's sole option, in either cash or shares. Harmonie Group, Inc.
developed a software called WebKit, which delivers three essential functions:
authoring/editing system, advanced content management capabilities and
utilization of legacy data.

On March 29, 2000, HealthyConnect.com, Inc. and DocISP.com (King of Prussia,
Pennsylvania), an internet service provider designed for physicians and allied
health professionals, entered into a joint venture agreement to combine their
on-line product offering. DocISP.com provides free unrestricted internet access,
web site hosting and support, e-mail, e-health commerce, customized medical
news, research, practice management systems and tools, continuing medical
education, and various other web-enabled capabilities currently under
development. HealthyConnect.com and DocISP.com will co-brand their products and
employ existing distribution and sales resources to establish products in the
market.

HealthyConnect.com will enable physicians and other healthcare providers to
access reliable information and provide them with additional support in
delivering cost effective, high quality healthcare services. Benefits include
24-hour coverage for patients, access to a comprehensive physician medical
reference database, online continuing medical education courses, tools for
chronic disease management, and participation in clinical trials and web
casting. HealthyConnect.com will link healthcare product and service suppliers
with our clinical network family. Convenient and secure access and at
home/office browsing and purchasing capabilities will facilitate direct sales
opportunities for member suppliers. Healthcare product and service suppliers
that may benefit from using HealthyConnect.com include pharmaceutical companies,
insurance companies, employers, government, managed care organizations,
physicians and hospitals.

HealthyConnect.com has assembled several key strategic partners that will
provide health information content, end to end transaction processing capability
and e-commerce goods and services to its customers. HealthyConnect.com has
negotiated, amongst others, a relationship with AstraTek, a software product
development firm, delivering advanced technologies to Fortune 1000 companies and
financial institutions and Data General (a division of EMC corporation), a
leading supplier of servers and storage systems, and services for information
systems users worldwide. AstraTek assisted in the development and launch of the
HealthyConnect.com portal. Data General(a division of EMC corporation) will
provide a consolidated computing infrastructure to support HealthyConnect.com
including hardware, software and network support.

Management of Med-Emerg sees HealthyConnect.com as a significant opportunity to
create a profitable business line while providing healthcare organizations with
new web-based technologies to increase practice efficiency, achieve measurable
cost savings and improve the quality of care.

On February 18, 2000, the Company announced the signing of a Business
Combination Agreement ("BCA") to purchase all of the issued and outstanding


                                       16
<PAGE>

shares of Laser Rejuvenation Clinics Ltd. ("LRC"), a publicly listed company on
the Canadian Venture Exchange, on the basis of one Med-Emerg common share and
1/3 of a warrant to purchase a Med-Emerg common share at a price of US$3.00 per
share for every 12.85 shares of LRC. The BCA contained certain conditions which
were not met, thereby terminating the BCA and all obligations of both parties
under the BCA.

On November 5, 1999, the shareholders of the Company approved the issuance of up
to 1,799,502 additional common shares in connection with the take over bid by
the Company for all the issued and outstanding securities of YFMC Healthcare
Inc. ("YFMC"), a Canadian physician management services organization that owns
and manages 22 medical clinics. Pursuant to the business combination agreement,
dated August 10, 1999, the Company mailed a take-over bid circular on November
5, 1999 to all YFMC shareholders making an offer to purchase all the issued and
outstanding securities of YFMC on the following basis:

a.       In the case of holders of YFMC Common Shares, one Med-Emerg Common
         Share for every 6 7/8 shares of YFMC
b.       In the case of holders of YFMC Series A Warrants, one Med-Emerg Series
         A Warrant for every 8 warrants of YFMC
c.       In the case of holders of YFMC Series B Warrants, one Med-Emerg Series
         B Warrant for every 8 warrants of YFMC
d.       In the case of holders of YFMC Preferred Shares, one Med-Emerg Common
         Share, subject to certain conditions, one Med-Emerg Common Shares for
         every 10 YFMC First Preferred Shares.

The Company issued 1,758,556 Common Shares to complete the transaction. In
addition, Med-Emerg substituted for every eight options to acquire YFMC Common
Shares under the YFMC Stock Option Plan, the right to acquire one Med-Emerg
Common Share at an exercise price of $1.75.


RESULTS OF OPERATIONS

Nine Months Ended September 30, 2000 compared to Nine Months Ended
September 30, 1999

REVENUES. Revenues increased by $561,609 or 16.8% from $3,349,624 in the
third quarter of 1999 to $3,911,233 in the third quarter of 2000.
Year-to-date revenue increased by $3,004,655 or 32.6% to $12,230,051 for the
nine months ended September 30, 2000 compared to $9,225,396 for the same
period in 1999. The revenue growth is largely attributable to the
acquisitions of YFMC Healthcare Inc.

Revenues generated by Physician Management Services increased by $1,112,238
or 103.4% from $1,075,357 in the third quarter of 1999 to $2,187,595 during
the third quarter of 2000. For the nine months ended September 30, 2000,
Physician Management Services revenue was $6,752,616, which represents an
increase of $3,534,483 over the nine months ended September 30, 1999. The
acquisition of YFMC Healthcare Inc. acquired in November 1999 contributed
$1,096,012 to revenue for the three months ended and $3,462,629 for the nine
months ended September 30, 2000.

                                       17
<PAGE>

Revenues from Physician and Nurse Recruiting decreased by $550,630 or 24.2%
from $2,274,268 in the third quarter of 1999 to $1,723,638 during the third
quarter of 2000. Revenues for the nine months ended September 30, 2000 were
$5,477,435, a $529,828 decrease from the same period in 1999.

PHYSICIAN FEES AND OTHER DIRECT COSTS. Physician fees and direct costs, which
primarily represents fees to contract physicians, increased $15,735 or 0.6%
from $2,505,769 in the third quarter of 1999 to $2,521,504 in the third
quarter of 2000. For the nine months ended September 30, 2000, physician fees
and direct costs increased $890,722 or 13.2% to $7,639,729 from $6,749,007
for the nine months ended September 30, 1999. Physician fees and other direct
costs decreased as a percent of revenue, representing 62.5% of revenues for
the nine months ended September 30, 2000 and 73.2% of revenues for the nine
months ended September 30, 1999. The decrease as a percent of revenue is
largely due to the mix of revenue between Physician & Nurse Recruiting and
Physician Management Services.

As the Physician Management Services revenues increase, the larger gross margin
related to Physician Management Services results in a decrease in physician fees
and other direct costs as a percent of revenue.

OPERATING EXPENSES. Operating expenses have increased by $2,181,795 or 90% to
$4,606,631 in the first nine months of 2000 from $2,424,836 in the first nine
months of 1999. For the third quarter ended September 30, 2000, operating
expenses were $1,673,358, which represents an increase of $804,263 or 92.5%
increase over operating expenses for the third quarter ended September 30,
1999. There are several factors contributing to the increase in operating
expenses, including the development of the HealthyConnect.com division and the
acquisition of YFMC Healthcare Inc. in November 1999.

The company recently launched an integrated health services delivery network
called HealthyConnect.com. This internet-based healthcare network will
connect physicians, hospitals, third party payors and consumers and allow all
participants to access and exchange healthcare related information, purchase
products and services, and communicate more cost-effectively with one
another. The total year-to-date HealthyConnect.com development expense is
$1,403,743.

During the fourth quarter of 1999, the company completed the acquisitions of
YFMC Healthcare Inc. This acquisition added $591,987 to operating expenses in
the third quarter of 2000 and $1,868,505 for the nine months ended September 30,
2000.

NET PROFIT/LOSS. As a result of the above items, the Company reported loss
before HealthyConnect.com, depreciation, amortization, interest, taxes, and
financing costs of $283,629 for the three months ended September 30, 2000 as
compared to net loss of $25,240 for the three months ended September 30,
1999. Loss before HealthyConnect.com, depreciation, amortization, interest,
taxes, and financing costs for the nine months ended September 30, 2000 was
$16,309 as compared to income of $51,553 for the nine months ended September
30, 1999. The company reported a net loss of $601,891 for the three months
ended September 30, 2000 as compared to a net loss of $122,507 for the three
months ended September 30, 1999. For the nine months ended September 30,
2000, the Company reported a net loss of $1,738,148 as compared to a net loss
of $344,020 for the nine months ended September 30, 1999.

LIQUIDITY AND CAPITAL RESOURCES

As at September 30, 2000, the company's working capital deficit totaled
$959,288. In addition, the company has available credit facilities for up to
approximately CDN$4,500,000 (US$3,095,975). The Company established credit
facilities that provide operating lines of credit amounting to CDN$2,600,000
(US$1,788,786), bearing interest at the bank's prime lending rate plus 0.5% to
1.0% per annum with interest payable monthly, and capital lines of credit
amounting to CDN$1,850,000 (US$1,272,800). The capital lines of interest of
credit bear varying interest rates from the bank's prime lending rate plus 0.75%
to 9.65% per annum. As at September 30, 2000, the Company has drawn
approximately $1,535,716 against the operating facility and $334,228 against
the capital facility.


                                       18
<PAGE>

In March 2000, the Company raised gross proceeds of $500,000 on the issuance of
250,000 shares of Med-Emerg International Inc. In April 2000, the Company raised
an additional $100,000 on the issuance of 50,000 shares. In April 2000, the
Company raised, through a private offering, gross proceeds of $600,000USD, at
$2.00USD per share, thereby issuing 300,000 shares of Med-Emerg International
Inc. In October 2000, under the same private offering but with an adjusted
subscription price of $1.00USD per share for both new and initial investors, the
Company raised an additional $345,000USD on the issuance of 710,000 shares of
Med-Emerg International Inc.

The Company is in the process of raising funds for its development initiatives
in HealthyConnect.com. In the early part of the third quarter, the Company,
through its agent BNP (Canada) Securities Inc., raised gross proceeds of
$300,000 on the issuance of 433,928 common shares and 433,928 warrants
(convertible at $0.69136USD) shares of HealthyConnect.com, a subsidiary of
Med-Emerg International Inc. In addition, the Company borrowed $175,000 from its
strategic partner, Travel By Us, for the continuing development of
HealthyConnect.com. The $175,000 is repayable on terms to be negotiated by the
parties.

In order to provide the financing necessary for the further development of
HealthyConnect.com and the continued pursuit of the company's long-term
acquisition strategy, the company expects to issue equity and debt securities,
the availability and terms of which will depend upon market and other
conditions. There can be no assurance that such additional financing will be
available on terms acceptable to the company.

Forward-looking statements of Med-Emerg International Inc. included herein or
incorporated by reference including, but not limited to, those regarding future
business prospects, the acquisition of additional clinics, the adequacy of
capital resources and other statements regarding trends relating to various
revenue and expense items, could be affected by a number of uncertainties and
other factors beyond management's control.


                                 PART II

                            OTHER INFORMATION


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

   (a) Exhibit 27 - Financial data schedule.

   (b) On July 5, 2000, the Company filed a report on Form 8-K pursuant to
       Item 2 "Acquisition or Disposition of Assets." On September 5, 2000,
       the Company filed a report on Form 8-K pursuant to Item 7 "Exhibits"
       financial statements required to be filed in connection with the
       Company's July 5, 2000 Form 8-K filing.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.


                          MED-EMERG INTERNATIONAL INC.



                          By:      /s/ RAMESH ZACHARIAS

                                   Ramesh Zacharias
                                   Chief Executive Officer
Date:  November 20, 2000


                                       19