<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 MARCH 31, 1999

                                       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 April 30, 1999, 3,095,544 shares of the registrant's Common Stock
were outstanding.


<PAGE>


MED-EMERG INTERNATIONAL INC.
Consolidated Balance Sheets
March 31, 1999 (unaudited) and December 31, 1998
(Expressed in Canadian dollars)

<TABLE>
<CAPTION>
                                                           March 31            December 31
                                                               1999                   1998
                                                         ----------            -----------
                                                             CDN  $                 CDN  $
<S>                                                      <C>                   <C>
                                     ASSETS
                                     ------
CURRENT ASSETS

       Cash                                              $   999,423           $ 1,669,899
       Accounts receivable                                 2,838,728             2,765,491
       Prepaid and other                                     697,654               439,310
                                                         -----------           -----------
                                                           4,535,805             4,874,700

LOANS AND ADVANCES                                           177,640               135,175
CAPITAL ASSETS                                             1,402,445               883,463
OTHER ASSETS                                               1,934,392             1,763,330
DEFERRED INCOME TAXES                                        770,155               695,800
                                                         -----------           -----------
                                                         $ 8,820,437           $ 8,352,468
                                                         -----------           -----------
                                                         -----------           -----------

                      LIABILITIES AND SHAREHOLDERS' EQUITY
                      ------------------------------------
CURRENT LIABILITIES

       Bank indebtedness                                 $   148,918           $   209,281
       Accounts payable and accrued liabilities            2,423,206             2,282,658
       Lease obligation - current portion                     89,474                87,401
                                                         -----------           -----------
                                                           2,661,598             2,579,340

BANK TERM LOAN                                               378,698                 -
OBLIGATIONS UNDER CAPITAL LEASE                               79,514               102,322
DUE TO MINORITY SHAREHOLDERS                                  16,553                 -
                                                         -----------           -----------
                                                           3,136,363             2,681,662
                                                         -----------           -----------

MINORITY INTEREST                                            161,173                 -

SHAREHOLDERS' EQUITY
       Capital stock                                       8,325,811             8,328,164
       Convertible debenture                                 590,625               590,625
       Contributed surplus                                 1,316,980             1,316,980
       Deficit                                           (4,710,515)           (4,564,963)
                                                         -----------           -----------
                                                           5,522,901             5,670,806
                                                         -----------           -----------
                                                         $ 8,820,437           $ 8,352,468
                                                         -----------           -----------
                                                         -----------           -----------
</TABLE>


<PAGE>


MED-EMERG INTERNATIONAL INC.
Consolidated Statements of Operations
Three months ended March 31, 1999 and 1998(unaudited)
(Expressed in Canadian dollars)

<TABLE>
<CAPTION>
                                                                    March 31              March 31
                                                                        1999                  1998
                                                                  ----------           -----------
                                                                      CDN  $                CDN  $
<S>                                                               <C>                  <C>

REVENUE                                                          $ 4,229,185           $ 3,605,099

PHYSICIAN FEES AND OTHER DIRECT COSTS                              3,075,038             2,881,442
                                                                 -----------           -----------
                                                                   1,154,147               723,657
                                                                 -----------           -----------

EXPENSES
       Salaries and benefits                                         519,517               415,122
       General and administration                                    161,422               113,999
       Occupancy costs and supplies                                  212,447               104,614
       Product development                                           155,149                  -
       Public company costs                                          118,603                  -
       Travel and marketing                                           57,765                37,950
                                                                 -----------           -----------
                                                                   1,224,903               671,685
                                                                 -----------           -----------
EARNINGS (LOSS) FROM OPERATIONS                                     (70,756)                51,972

       Interest and financing expense                                  2,665                 5,247
       Depreciation and amortization                                  95,567                31,821
                                                                 -----------           -----------
NET INCOME BEFORE TAXES                                            (168,988)                14,904

       Income tax recovery (expense)                                  74,355               (3,875)
                                                                 -----------           -----------
NET INCOME (LOSS)                                                $  (94,633)           $    11,029

PREFERRED SHARE DIVIDENDS                                           (50,919)              (20,987)
                                                                 -----------           -----------
NET INCOME (LOSS) APPLICABLE TO COMMON SHARES                    $ (145,552)           $   (9,958)
                                                                 -----------           -----------
                                                                 -----------           -----------


NET INCOME (LOSS) BEFORE PREFERRED SHARE DIVIDEND,
       PER COMMON SHARE                                          $    (0.03)           $      0.00

PREFERRED SHARE DIVIDEND, PER COMMON SHARE                            (0.02)                  0.00
                                                                 -----------           -----------
BASIC AND FULLY DILUTED INCOME (LOSS), PER COMMON SHARE          $    (0.05)           $      0.00
                                                                 -----------           -----------
                                                                 -----------           -----------


WEIGHTED AVERAGE NUMBER OF COMMON SHARES                           3,095,588             2,501,131
                                                                 -----------           -----------
                                                                 -----------           -----------
</TABLE>


<PAGE>


MED-EMERG INTERNATIONAL INC.
Consolidated Statements of Changes in Financial Position
Three months ended March 31, 1999 (unaudited) and 1998 (unaudited)
(Expressed in Canadian dollars)

<TABLE>
<CAPTION>
                                                                    March 31             March 31
                                                                        1999                 1998
                                                                  ----------          -----------
                                                                      CDN  $               CDN  $
<S>                                                               <C>                 <C>

OPERATING ACTIVITIES

       Net income (loss)                                        $  (94,633)           $    11,029
       Items not affecting cash
            Depreciation and amortization                            95,567                31,821
            Deferred income taxes                                  (74,355)               (5,702)
                                                                  ----------          -----------
                                                                   (73,421)                37,148

       Changes in non-cash operating items
            Accounts receivable                                    (73,237)             (208,000)
            Prepaid and other                                     (258,344)                85,258
            Accounts payable and accrued liabilities                140,549             (148,255)
                                                                  ----------          -----------
       Cash provided by (used in) operating activities            (264,453)             (233,849)
                                                                  ----------          -----------
INVESTING ACTIVITIES

       Acquisitions                                               (194,520)                 -
       Additions to capital assets                                (576,091)              (15,055)
       Loans and advances                                          (42,466)                  -
       Other assets                                                (15,000)               543,764
       Minority interest                                            161,173                  -
                                                                  ----------          -----------
                                                                  (666,904)               528,709
                                                                  ----------          -----------

FINANCING ACTIVITIES

       Bank term loan                                               378,698                  -
       Issuance of common shares and warrants                             -             4,936,468
       Repurchase of common shares                                  (2,353)                  -
       Obligation under capital lease                              (20,735)               (8,131)
       Repayment of promissory note                                       -             (941,074)
       Due to minority shareholders                                  16,553                  -
       Dividends declared                                          (50,919)              (20,987)
                                                                  ----------          -----------
                                                                    321,244             3,966,276
                                                                  ----------          -----------
Increase (decrease) in cash position                              (610,113)             4,261,136

Cash position, net, beginning of the period                       1,460,618             (851,834)
                                                                  ----------          -----------
Cash position, net, end of period                               $   850,505           $ 3,409,302
                                                                  ----------          -----------
                                                                  ----------          -----------
Cash position is comprised of:

       Cash                                                     $   999,423           $ 3,554,635
       Bank indebtedness                                          (148,918)             (145,333)
                                                                  ----------          -----------
                                                                $   850,505           $ 3,409,302
                                                                  ----------          -----------
                                                                  ----------          -----------
</TABLE>

<PAGE>


MED-EMERG INTERNATIONAL INC.
Notes to Unaudited Consolidated Financial Statements
Three months ended March 31, 1999 and 1998


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 platform as a management services
         organization to delivering an internet-based healthcare network with
         the objective of delivering quality, timely and access to healthcare
         products and services.

         The Company's operations are divided into three divisions, Physician
         and Nurse Recruitment, Physician Management Services and Integrated
         Health Services Delivery Network.

         On a contractual basis, the Company provides emergency department
         physician and nurse recruitment, staffing and administrative support
         services to hospitals. At March 31, 1999, the Company had 18 contracts
         under its management.

         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
         March 31, 1999, the Company owned and managed 10 clinics.

         The Company has newly created a division called Integrated Health
         Service Delivery Network (IHSDN). IHSDN is an internet-based network
         that connects 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, 1998.



<PAGE>

MED-EMERG INTERNATIONAL INC.
Notes to Unaudited Consolidated Financial Statements
Three months ended March 31, 1999 and 1998


3.       ACQUISITIONS

         During the first quarter of 1999, the Company acquired ownership
         interests 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 assets purchased and liabilities assumes:

<TABLE>
<CAPTION>

                                             Medical         Caremedics           York Lanes
                                         Urgent Care           (Elmvale)              Health
                                                Inc.                Inc.         Centres Ltd.            Total
                                       -------------         -----------         -----------           ---------
         <S>                           <C>                   <C>                 <C>                   <C>


         Current assets                    $  20,983           $  28,182           $  19,891           $  69,056
         Capital assets                      475,069              13,937              60,000             549,006
         Goodwill                            167,788              26,706                   -             194,494
         Less liabilities assumed          (423,840)            (10,484)            (40,744)           (475,068)
         Less minority interest            (129,480)              25,659            (39,147)           (142,968)
                                       -------------         -----------         -----------           ---------
                                           $ 110,520           $  84,000                   -           $ 194,520
                                       -------------         -----------         -----------           ---------
                                       -------------         -----------         -----------           ---------
</TABLE>


4.       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>

                                                                  March              March
                                                                   1999               1998
                                                               ---------           ---------
         <S>                                                   <C>                 <C>

         Net income (loss) based on Canadian GAAP             $ (94,633)          $   11,029
         Deferred start-up costs amortized/(deferred)             16,710            (85,125)
         Deferred acquisition costs                             (60,653)                 -
                                                              ---------           ---------
        Net loss based on United States GAAP                  $(138,576)          $ (74,096)
                                                              ---------           ---------
         Primary loss per share                               $   (0.06)          $   (0.05)
                                                              ---------           ---------
                                                              ---------           ---------
</TABLE>

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


<PAGE>

MED-EMERG INTERNATIONAL INC.
Notes to Unaudited Consolidated Financial Statements
Three months ended March 31, 1999 and 1998


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

<TABLE>
<CAPTION>

                                                                 March              December
                                                                  1999                  1998
                                                           -----------           -----------
         <S>                                               <C>                   <C>

         Deficit based on Canadian GAAP                    $(4,710,515)          $(4,564,963)
         Deferred start-up costs                              (404,462)             (421,172)
         Deferred acquisition costs                           (106,877)              (46,224)
                                                           ------------          ------------
                                                           $(5,221,854)          $(5,032,359)
                                                           ------------          ------------
                                                           ------------          ------------

         Other assets based on Canadian GAAP               $  1,934,392          $  1,763,330
         Deferred start-up costs                              (404,462)             (421,172)
                                                           ------------          ------------
                                                           $  1,529,930          $  1,342,158
                                                           ------------          ------------
                                                           ------------          ------------

         Prepaid and other assets based on
              Canadian GAAP                                $    697,654          $    439,310
         Deferred acquisition costs                           (106,877)              (46,224)
                                                           ------------          ------------
                                                           $    590,777          $    393,086
                                                           ------------          ------------
                                                           ------------          ------------

         Total liabilities based on Canadian GAAP          $  3,136,363          $  2,681,662
         Convertible debenture                                  590,625               590,625
                                                           ------------          ------------
                                                           $  3,726,988          $  3,272,287
                                                           ------------          ------------
                                                           ------------          ------------
</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.


<PAGE>


MED-EMERG INTERNATIONAL INC.
Notes to Unaudited Consolidated Financial Statements
Three months ended March 31, 1999 and 1998


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

         (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.

         (c)      Deferred Acquisition Costs

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

         (d)      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.

         (e)      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.

         (f)      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 10 of the audited
                  consolidated financial statements for Med-Emerg International
                  Inc. for the year ended December 31, 1998 and under SFAS 123:


<PAGE>

MED-EMERG INTERNATIONAL INC.
Notes to Unaudited Consolidated Financial Statements
Three months ended March 31, 1999 and 1998


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

                  -        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 $2.78 (US$2.05) per share equal to
                           $347,500 of which $272,648 has been charged to
                           earnings in the year ended December 31, 1997 and
                           $74,852 has been charged to earnings in the period
                           ended March 31, 1998.

                  -        the issuance of 50,000 shares to a director for
                           services rendered resulted in a charge to income at
                           $2.78 (US$2.05) per share equal to $139,000 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 $1,246,000
                           in 1996 based on $2.78 (US$2.05) per share, and the
                           "minimum value" method of calculation permitted
                           under SFAS 123 for non-public entities.

                  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.

         (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 $0.50 for each of the 1,000,000 share warrants
                  issued, share capital would be lower by $50,000 and, given
                  that the stock purchase warrants were cancelled during the
                  year, the carrying amount of contributed surplus would be
                  increased by $50,000.


                  The effect on shareholders' equity would be as follows:
<TABLE>
<CAPTION>
                                                              March              December
                                                               1999                  1998
                                                        -----------           -----------
         <S>                                            <C>                   <C>

         Capital stock (as previously shown)            $ 8,325,811           $ 8,328,164

         Ascribed fair value of share purchase
          warrants issued                                  (50,000)              (50,000)
                                                        -----------           -----------
</TABLE>


<PAGE>


MED-EMERG INTERNATIONAL INC.
Notes to Unaudited Consolidated Financial Statements
Three months ended March 31, 1999 and 1998


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

<TABLE>
<CAPTION>
         <S>                                                       <C>                   <C>


         Capital stock - U.S. GAAP                                   8,275,811             8,278,164
         Share purchase loan to officer                               (60,000)              (60,000)
                                                                   -----------           -----------
         Net capital stock - U.S. GAAP                               8,215,811             8,218,165
                                                                   -----------           -----------
         Convertible debenture (as previously shown)                   590,625               590,625
         Convertible debenture included in long-term debt            (590,625)             (590,625)
                                                                   -----------           -----------

         Convertible debenture - U.S. GAAP                                   -                     -

         Contributed surplus (as previously shown)                   1,316,980             1,316,980
         Share purchase warrants                                        50,000                50,000
                                                                   -----------           -----------

         Contributed surplus - U.S. GAAP                             1,366,980             1,366,980
                                                                   -----------           -----------

         Deficit - U.S. GAAP                                       (5,221,854)           (5,032,359)
                                                                   -----------           -----------
         Shareholders' equity (deficit) - U.S. GAAP                $ 4,360,937           $ 4,552,785
                                                                   -----------           -----------
                                                                   -----------           -----------
</TABLE>

         (h)      Consolidated Statement of Changes in Financial Position

                  Operating activities reflect interest paid of $13,209 during
                  the period ended March 31, 1999 (March 31, 1998 - $24,448)
                  and income taxes paid of nil during the period ended March
                  31, 1999 (March 31, 1998 - nil).

                  Under U.S. GAAP, bank indebtedness would not be included as a
                  component of cash position in the consolidated statement of
                  changes in financial position. Accordingly, the $60,363
                  decrease at March 31, 1999 (March 31, 1998 - $1,399,071
                  decrease) would be presented as a financing activity for each
                  year.


         (i)      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. The adoption of SFAS 130 will have no
                  impact on the Company's consolidated results of operations,
                  financial position or cash flows.





<PAGE>


MED-EMERG INTERNATIONAL INC.
Notes to Unaudited Consolidated Financial Statements
Three months ended March 31, 1999 and 1998

5.       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.

         Details are as follows:

<TABLE>
<CAPTION>

                                                                                   March 31, 1999
                                                         ---------------------------------------------------------------
                                                          Physician          Physician
                                                            & Nurse         Management
                                                         Recruiting           Services           IHSDN      Consolidated
                                                         ----------         ----------      ----------      ------------
         <S>                                             <C>                <C>             <C>             <C>
         Revenue                                          2,765,863          1,553,322            -            4,229,185
         Gross margin                                       455,290            698,857            -            1,154,147

         Operating income before Corporate Overhead
           & Public Company-related costs                   330,183            181,350        (155,148)          356,385
         Corporate Overhead                                                                                    (308,538)
         Public Company-related costs                                                                          (118,603)
                                                                                                               ---------
         Operating loss                                                                                         (70,756)

         Assets employed at year end                      5,548,357          3,060,664         211,416         8,820,437
         Depreciation and amortization                       36,004             59,563            -               95,567
         Capital expenditures                                17,857            558,234            -              576,091
</TABLE>


<PAGE>


MED-EMERG INTERNATIONAL INC.
Notes to Unaudited Consolidated Financial Statements
Three months ended March 31, 1999 and 1998



5.       SEGMENTED INFORMATION (cont'd)

<TABLE>
<CAPTION>


                                                                                  March 31, 1998
                                                         ---------------------------------------------------------------
                                                          Physician          Physician
                                                            & Nurse         Management
                                                         Recruiting           Services           IHSDN      Consolidated
                                                         ----------         ----------      ----------      ------------
         <S>                                             <C>                <C>             <C>             <C>
         Revenue                                          2,884,452            720,647            -            3,605,099
         Gross margin                                       421,490            302,167            -              723,657

         Operating income before Corporate Overhead
           & Public Company-related costs                   239,438            151,977            -              391,415
         Corporate Overhead                                                                                    (309,655)
         Public Company-related costs                                                                           (35,035)
                                                                                                               ---------
         Operating income                                                                                         46,725

         Assets employed at year end                      6,036,253          1,530,286            -            7,566,539
         Depreciation and amortization                       13,500             18,321            -               31,821
         Capital expenditures                                11,419              3,636            -               15,055
</TABLE>

<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 nurse staffing, physician management
services and an internet-based healthcare network.

Med-Emerg is positioned to establish industry leadership in Canada by
providing integrated professional management services in the delivery of
healthcare to the Canadian 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 is to remain focussed 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 is to leverage its 15 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, third party payors and consumers to a "virtual world" of healthcare
products and services.

In the first quarter of 1999, the company launched an internet-based
healthcare network, called HealthyConnect.com, that will allow participants
to access and exchange healthcare related information, purchase healthcare
products and services, and communicate more cost-effectively with one
another. HealthyConnect.com provides a platform by which the Company can
benefit from business opportunities that are complementary to its other two
divisions. These opportunities include the provision of clinical trial
services, the marketing of patient focussed medical information, and the
ability of third party service providers to efficiently conduct their
operations through an electronically integrated business partnership.

This integrated and rapidly growing Canadian Physician Management Services
structure will be well positioned to provide physicians with the beneficial
aspects of managed care, including dealing with the business complexities of
cross-relationships with service providers, and day-to-day operating
efficiencies required to maximize earnings from their practice of medicine.

In January of 1999, the Company acquired a 45% interest in an Urgent Care
Centre, Medical Urgent Care Inc. The Company developed and opened its first
Urgent Care Centre in September 1997. The Urgent Care Centre concept consists
of a group of emergency trained physicians, a medical laboratory, a
diagnostic radiology service, and a pharmacy, each of which must be present
for the others to co-exist, and each of which is provided by a separately
owned company. The Company manages the clinic component of the Urgent Care
Centre and provides the support staff for this component. Ownership of
Medical Urgent Care Inc. is shared with the group of emergency trained
physicians that provides the medical service in the clinic component.

In February, 1999, the Company became party to a lease for the clinic located
within York University in Toronto, Canada. The Company has entered into a
five-year management services agreement to manage to clinic for a monthly fee
based on revenues generated by the clinic. The Company has a 51% interest in
the company that owns the clinic.

In March of 1999, the Company purchased 51% of the outstanding capital of
Caremedics (Elmvale) Inc., a multi-physician primary healthcare clinic
located in Ottawa, Canada. The Company entered into a five-year management
services agreement to manage the clinic for a monthly fee based on revenues
generated by the clinic.

<PAGE>

Complementary to the development of the Physician Management Services
Organization (PMSO) and internet business, 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 is 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 in Canada
will significantly contribute to the Company's efforts in growing its
emergency services recruitment division. It is management's intention to
continue to market its PMSO services to the Canadian physician community,
which totals approximately 55,000 members strong and collects annual billings
of approximately $11.0 billion.

RESULTS OF OPERATIONS

First Quarter Ended March 31, 1999 compared to First Quarter Ended March 31,
1998

REVENUES. Revenues increased by $624,086 or 17.3% from $3,605,099 in the
first quarter of 1998 to $4,229,185 in the first quarter of 1999. The revenue
growth is attributable to the clinic acquisitions, growth in existing clinic
business and growth in nurse staffing, offset by a decline in the hospital
staffing revenue.

Revenues generated by Physician Management Services increased by $832,675 or
115% from $720,647 in the first quarter of 1998 to $1,553,322 during the
first quarter of 1999. The three acquisitions that were completed in the
second and third quarters of 1998 contributed $457,481 additional revenue to
the first quarter of 1999. The three acquisitions that were completed during
the first quarter of 1999 contributed $115,998 to revenue. The Dundas Urgent
Care Centre was a start-up operation in 1998. In 1999, this Centre
contributed $180,274 to first quarter revenues. The remaining increase in
Physician Management Services revenue is a result of increased patient
volumes and additional physicians working in the family practice and walk-in
clinics.

Revenues from Physician and Nurse Recruiting decreased by $208,589 or 7.2% to
$2,675,863 during the first quarter of 1999 from $2,884,452 during same
period for 1998. The decrease in revenue occurred in the physician staffing
component of this division. Two new contracts entered into in the latter part
of fiscal 1998 and a consulting project competed in March 1999 contributed to
revenue in the first quarter of 1999, but five contracts from the first
quarter of 1998 were not renewed. The net loss of revenue from these
contracts caused first quarter revenues to decrease by $441,652 compared to
the same period last year. Offsetting this net loss in revenue was an
increase of $111,552 in revenue earned from existing and continuing
contracts. This is due to increased patient volumes and new contract pricing.
The nurse staffing component contributed an additional $121,511 to revenue in
the first quarter of 1999 as compared to the same period last year. This
increase came from a significant increase in the provision of services to one
hospital under an existing contract plus the net addition of one contract.

PHYSICIAN FEES AND OTHER DIRECT COSTS. Physician fees and direct costs, which
primarily represents fees to contract physicians, increased $193,596 or 5.4%
from $2,881,442 in the first quarter of 1998 to $3,075,038 in the first
quarter of 1999. Physician fees and other direct costs decreased as a percent
of revenue, representing 72.7% of revenues for the quarter ended March 31,
1999 and 79.9% of revenues for the quarter ended March 31, 1998. 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 causes a decrease in physician fees
and other direct costs as a percent of revenue.

<PAGE>

Physician fees and other direct costs of the Physician Management Services
division increased by $435,985 or 104% from the first quarter of 1998
compared to the same period in 1999. This increase is consistent with the
increase in revenue.

Physician fees and other direct costs of the Physician & Nurse Recruiting
division decreased by $242,389 or 9.8% from the first quarter of 1998
compared to the same period in 1999. This decrease is consistent with the
decrease in revenue.

OPERATING EXPENSES. Operating expenses have increased by $550,636 or 81.3% to
$1,227,568 in the first quarter of 1999 from $676,932 in the first quarter of
1998. There are several factors contributing to the increase in operating
expenses, including the development of the IHSDN division, the clinic
acquisitions in 1998 and 1999, and the operations of the Dundas Urgent Care
Centre.

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. During the first quarter of 1999, the company expense $155,149 on
the development of this concept.

During the second and third quarters of 1998, the company completed the
acquisitions of two companies, JC Medical Management Inc. and Doctors On Call
Ltd., and acquired the remaining two-thirds of the Glenderry Medical Walk-in
Clinic. These acquisitions added $115,053 to operating expenses in the first
quarter of 1999. During the first quarter of 1999, the company completed the
acquisition of a controlling interest in three other companies, all of which
operate medical clinics. These acquisitions added $118,820 to operating
expenses in the first quarter of 1999.

During the first quarter of 1998, the Dundas Urgent Care Centre was
considered a start-up operation. During 1999, this Urgent Care Centre added
$78,943 to operating expenses. The remaining increase in operating expenses
of $82,671 from first quarter of 1998 to first quarter of 1999 relates to an
increase in general overhead costs.

NET LOSS. As a result of the above items, the Company reported a net loss of
$94,633 for the three months ended March 31, 1999 as compared to net income
of $11,029 for the three months ended March 31, 1998. The company's effective
tax rate increased to approximately 44% in 1999 from approximately 26% in
1998 due to the change in status under Canadian taxation rules from a
privately-held company to a company with shares that are publicly traded.

LIQUIDITY AND CAPITAL RESOURCES

Through its acquisitions completed in the first quarter of 1999, the Company
assumed bank term loans in the amount of $378,698. Approximately $270,632 was
loaned to subsidiaries of the Company under the Small Business Investment
Loans program in which the Canadian government guarantees 75% to 90% of the
principal balance of the loan. The remaining balance consists of capital
loans for asset purchases.

As at March 31, 1999, the company's working capital totaled $1,874,207. In
addition, the company has available credit facilities for up to approximately
$3,000,000. The Company established credit facilities in June 1998 that
provide an available demand, revolving, operating line of credit amounting to
$2,000,000, bearing interest at the bank's prime lending rate plus 0.5% per
annum with interest payable monthly, and an available demand, non-revolving,
capital line of credit amounting to $1,000,000. The capital line of credit
bears interest at the bank's prime lending rate plus 0.75% per annum with
interest payable monthly. The company believes that the combination of funds
available under the company's bank credit facility, together with its current
cash position, should be sufficient to meet the company's operating
requirements through 1999.

In addition, in order to provide the funds 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

<PAGE>

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.

ITEM 3:   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

No disclosure required.

<PAGE>


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/ Carl Pahapill
                                      ------------------------
                                      Carl Pahapill
                                      President and Chief Operating Officer
Date:  June 16, 1999