**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**







**FORM
      10-Q-A**





(MARK
      ONE)


x
            QUARTERLY
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934FOR
                THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2005*OR*o
            TRANSITION
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934FOR
                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)





6711
                Mississauga Road, Suite 404Mississauga,
                Ontario, Canada
            L5N
                2W3(Address
                of Principal Executive Offices)
            (Zip
                Code)





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





Securities
      registered or to be registered pursuant to Section 12(g) of the
      Act.





(Title
                of each
                class)
            (Name
                of each
                exchange on which registered)COMMON
                STOCK, NO PAR VALUE
            OTC
                Bulletin BoardREDEEMABLE
                COMMON STOCKPURCHASE
                WARRANTS
            OTC
                Bulletin Board




Securities
      for which there is a reporting obligation pursuant to Section 15(d) of the
      Act.
      NONE





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
      o





Indicate
      by check mark whether registrant is an accelerated filer (as defined in Exchange
      Act Rule 12(b)-2). Yes o  No
      x





The
      aggregate market value of the shares of Common Stock (based upon the closing
      sales price of the Company’s Common Stock as reported on the OTC Bulletin Board
      on September 30, 2005) of the registrant held by non-affiliates was
      approximately US$ 11,655,000.





As
      of
      September 30, 2005, 58,277,696 shares of the registrant’s Common Stock were
      outstanding.





(All
      figures in US dollars unless otherwise indicated.)










1








**MED-EMERG
      INTERNATIONAL INC.**





SEPTEMBER
      30, 2005 QUARTERLY REPORT ON FORM 10-Q











TABLE
      OF CONTENTS











PART
      I:
      FINANCIAL INFORMATION




Item
                1.
            Financial
                StatementsItem
                2.
            Management’s
                Discussion and Analysis of Financial Condition and Results
                of OperationsItem
                3.
            Quantitative
                and Qualitative Disclosures about Market RiskItem
                4.
            Controls
                and Procedures




PART
      II: OTHER INFORMATION





Item
                5.
            Exhibits
                and Reports on Form 8-K(a)
                Exhibits(b)
                Reports on Form 8-KSignatures








2


**SPECIAL
      NOTE REGARDING FORWARD-LOOKING STATEMENTS**





This
      Quarterly Report on Form 10-Q contains forward-looking statements as defined
      by
      the Private Securities Litigation Reform Act of 1995. Forward-looking statements
      include statements concerning plans, objectives, goals, strategies, future
      events or performance and underlying assumptions and other statements, which
      are
      other than statements of historical facts. These statements are subject to
      uncertainties and risks including, but not limited to, product and service
      demand and acceptance, changes in technology, economic conditions, the impact
      of
      competition and pricing, government regulation, and other risks defined in
      this
      document and in statements filed from time to time with the Securities and
      Exchange Commission. All such forward-looking statements are expressly qualified
      by these cautionary statements and any other cautionary statements that may
      accompany the forward-looking statements. In addition, Med Emerg International
      Inc. (“MEII” or the “Company”) disclaims any obligations to update any
      forward-looking statements to reflect events or circumstances after the date
      hereof.





**PART
      I: FINANCIAL INFORMATION**





**ITEM
      1.**  **CONDENSED FINANCIAL STATEMENTS**





Consolidated
      Balance Sheets as at September 30, 2005 (unaudited) and December 31, 2004
      (audited)





Consolidated
      Statement of Operations and Deficit for the three months and nine months ended
      September 30, 2005 and 2004 (unaudited)





Consolidated
      Statement of Cash Flows for the three months and nine months ended September
      30,
      2005 and 2004 (unaudited)





Notes
      to Unaudited Consolidated Financial Statements

















3





**Med-Emerg
      International Inc.**


**Consolidated
      Balance Sheet**


**As
      at September 30, 2005 (Unaudited) and December 31, 2004
      (Audited)**


**(in
      US$)**





Sept
                30
            
            December
                312005
            
            2004**Assets****Current
                assets**Cash
            
            $
            531,871
            
            $
            2,312,156Accounts
                receivable
            
            
            2,242,275
            
            
            1,452,586Prepaid
                expenses and other
            
            
            76,962
            
            
            72,557Discontinued
                operations (note 4)
            
            
            1,046,531
            
            
            2,655,0983,897,639
            
            
            6,492,397Long-term
                investment
            
            
            83,195
            
            
            83,195Property,
                plant and equipment
            
            
            461,584
            
            
            470,243Goodwill
            
            
            237,596
            
            
            237,596Discontinued
                operations (note 4)
            
            
            30,062
            
            
            38,596$
            4,710,076
            
            $
            7,322,027**Liabilities
                and Shareholders' Equity****Current
                liabilities**Accounts
                payable and accrued liabilities
            
            $
            1,982,584
            
            $
            1,661,794Discontinued
                operations (note 4)
            
            
            1,413,308
            
            
            3,606,4763,395,892
            
            
            5,268,270**Long-term
                liabilities**Notes
                payable
            
            
            599,991
            
            
            599,991Discontinued
                operations (note 4)
            
            
            675,582
            
            
            894,5174,671,465
            
            
            6,762,778Contingent
                liabilities (note 9)**Shareholders'
                Equity**Capital
                stock (note 5)
            
            
            16,044,736
            
            
            16,044,736Contributed
                surplus (note 6)
            
            
            2,833,553
            
            
            2,536,409Deficit
                (note 10)
            
            
            (18,039,689
            )
            
            (17,221,105
            )Cumulative
                translation adjustment
            
            
            (799,989
            )
            
            (800,791
            )38,611
            
            
            559,249$
            4,710,076
            
            $
            7,322,027




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









































4





**Med-Emerg
      International Inc.**


**Consolidated
      Statement of Operations and Deficit**


**Three
      and nine months ended September 30, 2005 and 2004
      (Unaudited)**


**(in
      US$)**





**THREE
                MONTHS ENDED**
            
            **NINE
                MONTHS ENDED**Sept
                30
            
            Sept
                30
            
            Sept
                30
            
            Sept
                302005
            
            2004
            
            2005
            
            2004**Revenue**
            
            $
            4,109,121
            
            $
            2,281,743
            
            $
            10,199,166
            
            
            6,905,925**Less:
                Physician fees and other direct costs**
            
            
            3,103,642
            
            
            1,748,042
            
            
            7,624,921
            
            
            5,261,0091,005,479
            
            
            533,701
            
            
            2,574,245
            
            
            1,644,916**Expenses**Salaries
                and
                benefits
            
            
            610,671
            
            
            521,706
            
            
            1,881,950
            
            
            1,432,679General
                and administration
            
            
            223,424
            
            
            254,224
            
            
            655,170
            
            
            685,728Occupancy
                costs
                and supplies
            
            
            121,261
            
            
            49,785
            
            
            350,158
            
            
            219,233Closing
                costs
            
            
            -
            
            
            4,682
            
            
            -
            
            
            596,967Travel
                and marketing
            
            
            34,538
            
            
            43,044
            
            
            177,942
            
            
            173,266989,894
            
            
            873,441
            
            
            3,065,220
            
            
            3,107,873**Earnings
                (Loss) before under noted items**
            
            
            15,585
            
            
            (339,740
            )
            
            (490,975
            )
            
            (1,462,957
            )Interest
                income
            
            
            781
            
            
            -
            
            
            (6,334
            )
            
            0Interest
                and
                financing expenses
            
            
            -
            
            
            78,362
            
            
            -
            
            
            162,219Amortization
                of
                property, plant, and equipment
            
            
            60,897
            
            
            32,010
            
            
            160,859
            
            
            55,050Stock
                compensation expense
            
            
            27,786
            
            
            26,034
            
            
            297,144
            
            
            71,48089,464
            
            
            136,406
            
            
            451,669
            
            
            288,749**Net
                loss before discontinued operations**
            
            
            (73,879
            )
            
            (476,146
            )
            
            (942,644
            )
            
            (1,751,706
            )**Discontinued
                operations**Income
                (loss) from discontinued operations (note 4 )
            
            
            (63,279
            )
            
            241,279
            
            
            124,060
            
            
            678,673**Net
                loss**
            
            
            (137,158
            )
            
            (234,867
            )
            
            (818,584
            )
            
            (1,073,033
            )Preferred
                share
                dividends
            
            
            -
            
            
            -
            
            
            -
            
            
            (33,223
            )Forgiveness
                of
                preferred share dividends
            
            
            -
            
            
            -
            
            
            -
            
            
            563,477**Net
                loss attributable to common shareholders**
            
            
            (137,158
            )
            
            (234,867
            )
            
            (818,584
            )
            
            (542,779
            )**Deficit,
                beginning of the period**
            
            
            (17,902,531
            )
            
            (16,733,221
            )
            
            (17,221,105
            )
            
            (16,425,309
            )**Deficit,
                end of the period**
            
            $
            (18,039,689
            )
            $
            (16,968,088
            )
            $
            (18,039,689
            )
            $
            (16,968,088
            )**Basic
                loss per common share**Continuing
                operations
            
            $
            (0.00
            )
            $
            (0.01
            )
            $
            (0.02
            )
            $
            (0.04
            )Discontinued
                operations
            
            $
            (0.00
            )
            $
            0.00
            
            $
            0.00
            
            $
            0.02**Weighted
                average common shares outstanding**
            
            
            58,277,696
            
            
            58,277,696
            
            
            58,277,696
            
            
            31,217,545





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





5





**Med-Emerg
      International Inc.**


**Consolidated
      Statement of Cash Flows**


**Three
      and nine months ended September 30, 2005 and 2004
      (Unaudited)**


**(in
      US$)**





THREE
                MONTHS ENDED
            
            NINE
                MONTHS ENDEDSept
                30
            
            Sept
                30
            
            Sept
                30
            
            Sept
                302005
            
            2004
            
            2005
            
            2004**Cash
                Flows from Operating Activities**Net
                loss before discontinued operations
            
            $
            (73,879
            )
            $
            (480,337
            )
            $
            (942,644
            )
            $
            (1,755,897
            )Adjustments
                for:Amortization
                of
                property, plant and equipment
            
            
            60,897
            
            
            32,010
            
            
            160,859
            
            
            55,050Stock
                compensation expense
            
            
            27,786
            
            
            26,034
            
            
            297,144
            
            
            71,48014,804
            
            
            (422,293
            )
            
            (484,641
            )
            
            (1,629,367
            )Decrease
                in
                non-cash working capital components
            
            
            (97,902
            )
            
            (582,722
            )
            
            (473,304
            )
            
            (420,079
            )Discontinued
                operations (note 4)
            
            
            63,088
            
            
            (649,373
            )
            
            (670,131
            )
            
            (866,114
            )(20,010
            )
            
            (1,654,388
            )
            
            (1,628,076
            )
            
            (2,915,560
            )**Cash
                Flows from Investing Activities**Additions
                to
                property, plant, and equipment
            
            
            (51,185
            )
            
            (127,364
            )
            
            (152,200
            )
            
            (311,170
            )Discontinued
                operations (note 4)
            
            
            (1,605
            )
            
            (3,734
            )
            
            (811
            )
            
            (15,107
            )(52,790
            )
            
            (131,098
            )
            
            (153,011
            )
            
            (326,277
            )**Cash
                Flows from Financing Activities**Demand
                loan
            
            
            -
            
            
            (455,412
            )
            
            -Common
                shares issued
            
            
            -
            
            
            -
            
            
            -
            
            
            4,500,000-
            
            
            (455,412
            )
            
            -
            
            
            4,500,000Effect
                of foreign currency exchange rate changes
            
            
            20,211
            
            
            80,090
            
            
            802
            
            
            142,186**Increase
                (decrease) in cash**
            
            
            (52,589
            )
            
            (2,160,808
            )
            
            (1,780,285
            )
            
            1,400,349Cash,
                beginning of the period
            
            
            584,460
            
            
            3,941,467
            
            
            2,312,156
            
            
            380,310**Cash,
                end of the period**
            
            $
            531,871
            
            $
            1,780,659
            
            $
            531,871
            
            $
            1,780,659





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








6








**MED-EMERG
      INTERNATIONAL INC**


**Notes
      to Unaudited Consolidated Financial Statements**


**Nine
      months ended September 30, 2005 and 2004**





**1. ORGANIZATION
      AND DESCRIPTION OF BUSINESS**





Med-Emerg
      International Inc. (“MEII” or the “Company”) is a private sector provider of
      quality healthcare management services to the Canadian healthcare industry.





The
      Company is publicly traded and listed on the OTC Bulletin Board. The Company
      completed its initial public offering in February 1998.





The
      Company’s operations were divided into four units during the 2004 fiscal year.
      The contract with the Department of National Defence (“DND”) expired on March
      31, 2005. MEII’s three remaining business units are: Staffing Solutions, Medical
      Services and Healthcare Consulting.





For
      Staffing Solutions, the Company provides emergency department physician and
      nurse recruitment, staffing and administrative support services to hospitals
      and
      federal corrections facilities, on a contractual basis, and physician and nurse
      practitioners to select long-term facilities in Ontario, British Columbia and
      Nova Scotia. At September 30, 2005, the Company had about 50 physician and
      nurse
      staffing contracts.




The
      Medical Services division provides special access Remicade ’ infusion services to patients suffering from Crohn’s disease and rheumatoid
      arthritis at clinic locations across Ontario. In November 2004, the Company
      acquired a pain management clinic and commenced offering services to Canadians
      who experience chronic pain. The Company now offers these services at four
      locations in the Greater Toronto Area.




MEII
      provides Healthcare Consulting services to select Canadian private and public
      institutions on issues related to a variety of healthcare topics.





**2. BASIS
      OF
      PRESENTATION**





The
      accompanying unaudited consolidated financial statements have been prepared
      in
      accordance with Canadian generally accepted accounting principles (GAAP). These
      financial statements consolidate the accounts of MEII and its wholly owned
      subsidiaries: 927563 Ontario Inc., 927564 Ontario Inc., Med-Emerg Inc.,
      Med-Emerg Health Centres Inc., YFMC Healthcare Inc., YFMC Healthcare (Alberta)
      Inc., Doctors on Call Ltd, CPM Health Centres Inc and OPA Locum Direct
      Inc.





Significant
      intercompany accounts and transactions have been eliminated on
      consolidation.





The
      consolidated financial statements are expressed in U.S. dollars. Differences
      between Canadian and United States accounting principles are described in note
      8.





In
      the
      opinion of management, the unaudited interim consolidated financial statements
      follow the same accounting policies and methods of application as the most
      recent audited annual financial statements.





Operating
      results for the interim periods are not necessarily indicative of the results
      that may be expected for the year ended December 31, 2005.





These
      unaudited consolidated financial statements are condensed, and do not include
      all disclosures required for annual financial statements, which are contained
      in
      the notes to the Company’s audited consolidated financial statements filed as
      part of the Company’s Form 10-K for the year ended December 31, 2004. These
      unaudited 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, 2004.





7














**3. SUMMARY
      OF
      SIGNIFICANT ACCOUNTING POLICIES**





a) **Use
      of estimates**




The
      preparation of consolidated financial statements in conformity with Canadian
      generally accepted accounting principles requires management to make estimates
      and assumptions that affect the reported amounts of assets and liabilities
      and
      disclosure of contingent liabilities during the reporting period. Significant
      areas requiring the use of estimates relate to: 1) the reported amounts of
      revenues and expenses, 2) the disclosure of contingent liabilities, 3) the
      carrying value of property, plant, and equipment and the rate of amortization
      related thereto. Actual results could differ from those estimates. When
      adjustments become necessary, those adjustments are reported in earnings in
      the
      period in which they become known.





b) **Long-term
      investments**





Investments
      are accounted for at cost when the conditions for equity accounting are not
      present, and on the equity basis when significant influence exists. Declines
      in
      market values of investments are expensed when such declines are considered
      to
      be other than temporary.





c) **Property,
      plant, and equipment**





Property,
      plant, and equipment are recorded at cost and are amortized over their estimated
      useful lives at the undernoted rates and methods:





Furniture
                and fixtures
            20%
            Declining
                balanceComputer
                software
            100%
            Declining
                balanceComputer
                hardware
            30%
            Declining
                balanceLeasehold
                improvements
            3-5
                years
            Straight-line





d) **Goodwill**





Goodwill
      is the excess of the purchase price of assets over the fair value of the
      underlying net identifiable assets. The Company has adopted CICA Handbook
      Section 3062 “Goodwill and Other Intangible Assets”, which states that goodwill
      and indefinite life intangible assets should no longer be amortized, but should
      be tested for impairment at least on an annual basis. The Company is unaware
      of
      any condition existing to indicate a permanent decline in the value of the
      goodwill as at the period end. An evaluation for determining whether a condition
      exists to indicate a permanent decline in the value of goodwill, will be
      undertaken at the year end.





e) **Impairment
      charges**





At
      least annually and when events and circumstances warrant a review, the Company
      evaluates the carrying value of its assets for potential impairment. An
      impairment loss is recognized when the estimated net realizable value of any
      asset is less than its carrying value. Any impairment in assets is written
      down
      and charged to earnings in the year.





f) **Revenue
      recognition**





The
      company has adopted the provisions of EIC - 123 and EITF 99-19. Both address
      the
      reporting of revenue on a gross basis as a principal versus on a net basis
      as an
      agent. The pronouncements generally state that revenue should be reported on
      a
      gross basis if:


•
            The
                enterprise is the primary obligor in the
                relationship;


•
            The
                enterprise has latitude in establishing
                price;


•
            The
                enterprise performs part of the
                service;


•
            The
                enterprise has discretion in supplier
                selection;


8





•
            The
                enterprise is involved in the determination of service specifications;
                and


•
            The
                enterprise has credit risk.





With
      the exception of determining how the specific service is delivered, MEII meets
      the six tests identified for each of its service offerings. Accordingly revenue
      is reported on a gross basis for all business units.




The
      following is a description of MEII’s revenue recognition policies for each of
      the significant business units.





**(1) Staffing
      Solutions:**





Revenue
      is reported on a gross basis.





MEII
      acts as a principal in providing these services. MEII (a) negotiates price
      with
      the customers; and (b) contracts with emergency room physician and nursing
      personnel to provide services to hospitals and correctional facilities in
      Ontario, British Columbia and Nova Scotia, a mix of rural and urban facilities
      including tertiary care centres. MEII recruits, schedules and bills the customer
      for the services provided and encounters credit risk in the event of
      non-payment.





Contracts
      are both fee-for-service and fixed monthly contracts. Contracts are negotiated
      annually and are cancelable by either party on 60 days notice.





Revenue
      is recognized on a current basis, as services are delivered.





**(2) Medical
      Services:**





Revenue
      is reported on a gross basis.





Under
      contracts with Schering-Plough Canada and Novartis Pharmaceuticals Canada Inc,
      MEII acts as the coordinator for the community-based infusion of certain
      medications for the treatment of patients with rheumatoid arthritis, Chron’s
      disease and certain cancers. MEII recruits, schedules and bills the customer
      for
      the services provided and encounters credit risk in the event of
      non-payment.





The
      Company acts as the principal in providing pain management treatments to
      patients in its Toronto-based clinics. MEII recruits, schedules and bills the
      customer for the services provided and encounters credit risk in the event
      of
      non-payment.





Revenue
      is recognized on a current basis, as services are delivered.





**(3) Healthcare
      Consulting:**





Revenue
      is reported on a gross basis.





MEII
      is
      involved with several provincial governments, advising on a variety of issues
      related to primary care staffing, training and integrated service delivery
      models. MEII also advises several aboriginal communities with regards to
      healthcare infrastructure service delivery issues.





Revenue
      is recognized over the life of the contracts, based on pre-defined
      milestones.





**(4) Government
      Healthcare Services (Includes Department of National Defence (“DND”))-
      Discontinued Operations:**





Revenue
      is reported on a gross basis.





MEII
      negotiated an administrative management contract with Public Works and
      Government Services Canada (“PWGSC”) to provide personnel to Canadian armed
      forces across Canada on behalf of the Minister of National Defence.





Under
      the terms of the contract, MEII had the responsibility to hire medical personnel
      and support staff and where necessary provide appropriate training and
      supervision of the work performed at the respective bases across Canada. MEII


9


billed
      DND for the work performed by these individuals and in turn paid the medical
      personnel and support staff based on the terms of the respective contracts
      signed with them. In the event of payment dispute, MEII had the credit risk.
      This contract expired on March 31, 2005.





Revenue
      is recognized on a current basis, as services are delivered.





**(g)** **Future
      income taxes**





The
      Company accounts for income taxes using the asset and liability method. Future
      tax assets and liabilities are recognized for the future taxes attributable
      to
      the temporary differences between the financial statement carrying amounts
      of
      existing assets and liabilities and their respective tax carrying values. Future
      tax assets and liabilities are measured using enacted or substantially enacted
      tax rates expected to apply to taxable income in the years in which those
      temporary differences are expected to be recovered or settled. A valuation
      allowance against future tax assets is provided to the extent that the
      realization of these future tax assets is not “more likely than
      not”.





**(h)** **Cash**





Cash
      consists of cash on hand and in banks.





**(i)** **Foreign
      currency translation**





The
      Company maintains its books and records in Canadian dollars. The consolidated
      financial statements are converted to U.S. dollars as the Company is a reporting
      Company under the Securities laws of the United States of America. The
      translation method used is the current rate method. Under the current rate
      method all assets and liabilities are translated at the current rate prevailing
      at the balance sheet date, shareholders’ equity (deficit) is translated at
      historical rates and all income and expense items are translated at average
      rates for the year. Due to the fact that items in the consolidated financial
      statements are being translated at different rates according to their nature,
      a
      translation adjustment is created. This translation adjustment has been included
      in the cumulative translation adjustment.





**(j)** **Stock
      compensation expenses**





The
      Company has adopted section 3870 issued by the CICA in respect of stock based
      compensation and other stock based payments. This section requires that a fair
      value based method of accounting be applied to all stock based payments to
      non-employees and to direct awards of stock to employees. The standard requires
      the recognition of a compensation expense for grants of stock, stock options,
      and other equity instruments to employees based on the estimated fair value
      of
      the instruments at the grant date.





**(k)** **Loss
      per share attributable to common shareholders**





Basic
      loss per share attributable to common shareholders is computed by dividing
      the
      net loss attributable to common shareholders before discontinued operations
      over
      the weighted average number of common shares outstanding, including contingently
      issuable shares where the contingency has been resolved. Due to the loss for
      all
      periods presented, all potential common shares outstanding are considered
      anti-dilutive and are excluded from the calculation of diluted loss per
      share.





**4. DISCONTINUED
      OPERATIONS**





The
      contract with DND, to provide personnel to Canadian armed forces across Canada,
      expired on March 31, 2005. This was a significant contract generating separate
      identifiable cash flows, and hence it has been classified as a discontinued
      operation, and accounted for accordingly.


10


The
      summarized statements of income for the Discontinued Business for the nine
      months ended September 30, 2005 and 2004 are as follows:




Sep-05
            
            Sep-04Revenue
            
            $
            11,197,573
            
            $
            27,921,872Physician
                fees and other direct costs
            
            
            10,439,851
            
            
            26,064,964Gross
                margin
            
            
            757,722
            
            
            1,856,908Operating,
                  general and administrativeexpenses
            
            
            557,909
            
            
            973,941Amortization
            
            
            9,345
            
            
            35,180Interest
                and financing
            
            
            66,409
            
            
            169,114Income
                from discontinued operations
            
            $
            124,059
            
            $
            678,673





The
      summarized balance sheets for the Discontinued Business as at September 30,
      2005
      and December 31, 2004 are as follows:




Sep-05
            
            Dec-04Current
                assetsCash
            
            $
            7,040
            
            $
            800Accounts
                receivable
            
            
            1,039,491
            
            
            2,652,044Prepaid
                expenses and other
            
            
            0
            
            
            2,2541,046,531
            
            
            2,655,098Property,
                plant and equipment
            
            
            30,062
            
            
            38,596$
            1,076,593
            
            $
            2,693,694Current
                liabilitiesAccounts
                payable and accrued liabilities
            
            $
            1,413,308
            
            $
            3,606,476Long-term
                liabilitesAccounts
                payable and accrued liabilities
            
            
            675,582
            
            
            894,517$
            2,088,890
            
            $
            4,500,993Net
                assets
            
            
            ($1,012,297
            )
            
            ($1,807,299
            )







11




**5. CAPITAL
      STOCK**





On
      June
      15, 2004, the Company issued 39,360,272 common shares for $4,500,000. As a
      condition of the transaction, Preferred Shares, 50% of which were indirectly
      held by Dr. Zacharias, the CEO of MEII, were converted into 9,348,000 common
      shares; and unpaid preferred share dividends, in the amount of $579,582, were
      forgiven.




The
      investment resulted from the previously announced letter of intent signed by
      MEII and Global Healthcare Workforce Limited (“GHW”) of London, UK.




The
      Investors received 43,708,272 common shares of MEII, of which 39,360,272 were
      purchased from the Company for $4,500,000 and 4,348,000 were purchased directly
      from the Preferred Shareholder for $500,000. Closing costs including legal,
      travel and due diligence costs for the equity financing amounted to $609,214,
      and were expensed during the second quarter of 2004.




In
      addition to issuing the common shares, MEII also issued to the Investors and
      the
      former Preferred Shareholder, anti-dilution warrants (the “New Warrants”) to
      purchase common shares of MEII at prices of either $0.50 per common share or
      $1.00 per common share. The exercise of the New Warrants is directly tied to
      the
      exercise of existing options and warrants at $0.50 per common share and $1.00
      per common share that are currently outstanding. The exercise of the New
      Warrants is intended to allow the Investors and former Preferred Shareholder
      to
      maintain their pro rata share of their equity position.




**6. CONTRIBUTED
      SURPLUS**





During
      the first quarter of 2005, the terms of the common stock purchase warrants
      were
      amended, extending the expiry of these warrants from February 11, 2005 to
      February 11, 2006. As a result of this, stock compensation expense of $225,442
      was recorded. In addition, an amount of $25,675 has been recorded as stock
      compensation expense for options granted to an employee in 2004 for the portion
      that vested in the first quarter of 2005. These amounts have been credited
      to
      contributed surplus.





During
      the second quarter of 2005, an amount of $18,241 has been recorded as stock
      compensation expense for options granted to an employee in 2004 for the portion
      that vested in the second quarter of 2005. These amounts have been credited
      to
      contributed surplus.





During
      the third quarter of 2005, an amount of $27,786 has been recorded as stock
      compensation expense. This amount has been credited to contributed surplus.
      This
      includes 100,000 options granted during the third quarter, alongwith stock
      compensation expense for options granted to an employee in 2004 for the portion
      that vested in the third quarter of 2005.





During
      the first quarter of 2004, 100,000 options were granted with an exercise price
      of $0.50 per option. The options vested immediately and are available for a
      term
      of five years expiring on January 30, 2009. Due to the issuance of new options
      the fair value amounting to $40,876 has been determined using an option pricing
      model (Black Scholes) as per section 3870 of the CICA handbook. This amount
      has
      been credited to contributed surplus.





During
      the second quarter of 2004, 250,000 options were granted to an employee with
      an
      exercise price of $0.115 per option. 125,000 options vest every year. Options
      for 125,000 shares were exercisable on the first anniversary and options for
      the
      remaining 125,000 would be exercisable on the second anniversary of the
      employment agreement. Due to the issuance of new options, the fair value
      amounting to $57,746 has been determined using an option pricing model (Black
      Scholes) as per section 3870 of the CICA handbook. This amount has been credited
      to contributed surplus.





During
      the second quarter of 2004, 1,000,000 options were granted to each of two
      employees, and 150,000 each to two other employees, at an exercise price of
      $0.115 per option. Twenty per cent of these options lapsed at June 30, 2005,
      when specified earnings tests were not achieved. The remaining 80% of these
      options are subject to future earnings tests. Since the earnings tests are
      in a
      future period, no expense is recognized in the current quarter.





During
      the fourth quarter of 2004, 100,000 options were granted in connection with
      the
      acquisition of the Scarborough pain clinic. An amount of $39,938 has been
      credited to contributed surplus.











12


**7. RELATED
      PARTY
      TRANSACTIONS**





Consulting
      fees of approximately $28,592 (Cdn $35,000) were paid to each of two directors,
      who have been retained as consultants. Besides, amounts of $9,803 (Cdn $12,000)
      were paid to a company associated with a director, in consideration for the
      provision of office and related services in the United Kingdom.





**8. 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 with those in the United States (“U.S. GAAP”) during the
      periods presented, except with respect to the following:





(a) Shareholders’
      equity (deficit)





Under
      Canadian GAAP, the purchase price of an acquisition is determined based on
      the
      share price on the date the transaction is consummated. Under U.S. GAAP, the
      purchase price of an acquisition where shares are issued 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
      Canadian GAAP was $1.25. The share price used for the YFMC Healthcare Inc.
      acquisition under U.S. GAAP was $1.859. The differential was allocated to
      Goodwill at that time. Subsequently the Goodwill was impaired and
      written-off.





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 Canadian GAAP, the detachable stock purchase warrants issued
      in conjunction with the private stock offering on January 22, 1996 and
      subsequently surrendered, have been given no recognition in the financial
      statements. 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, the carrying amount
      of contributed surplus would be increased by $36,406.





Under
      U.S. GAAP the effect on shareholders’ equity (deficit) would be adjusted as
      follows:





September
              2005
            
            December
              2004Capital
                stock (as previously shown)
            
            $
            16,044,736
            
            $
            16,044,736Capital
                stock issued on purchase of YFMC Healthcare Inc.
            
            
            1,087,872
            
            
            1,087,872Ascribed
                fair value of share purchase warrants issued
            
            
            (36,406
            )
            
            (36,406
            )Capital
                stock - U.S. GAAP
            
            
            17,096,202
            
            
            17,096,202Contributed
                surplus (as previously shown)
            
            
            2,833,553
            
            
            2,536,409Share
                purchase warrants
            
            
            36,406
            
            
            36,406Paid-in-capital
                - U.S. GAAP
            
            
            2,869,959
            
            
            2,572,815Deficit
                (as previously shown)
            
            
            (18,039,689
            )
            
            (17,221,105
            )Cumulative
                translation adjustment
            
            
            (799,989
            )
            
            (800,791
            )Shareholders’
                equity - U.S. GAAP
            
            $
            1,126,483
            
            $
            1,647,121





(b) Comprehensive
      loss





Statement
      of Financial Accounting Standards No. 130, “Reporting Comprehensive Income”
(SFAS 130), establishes standards for reporting and display of comprehensive
      loss and its components in the financial statements. Under U.S.


13


GAAP,
      the comprehensive loss for the nine months ended September 30, 2005 and 2004
      would be adjusted as follows:





**Sept**
            
            **Sept****2005**
            
            **2004**Net
                loss - U.S. GAAP
            
            
            ($818,584
            )
            
            ($542,779
            )Foreign
                currency translation adjustment
            
            
            802
            
            
            142,186Comprehensive
                loss
            
            
            ($817,782
            )
            
            ($400,593
            )





**9. CONTINGENT
      LIABILITIES**





(i)
            There
                is uncertainty with respect to the Company’s liability arising from a
                contractual dispute with a customer. Based on the advice of counsel,
                the
                Company is of the view that it is unlikely that the Company will
                be found
                liable for these costs. The costs associated with this contingent
                liability range from $400 thousand to $1.3
                million.





(ii)
            Claims
                have been made against the Company for general damages for breach
                of
                contract and in tort.A claim for approximately $423,000 has been
                made
                against the company for wrongful termination of a person working
                on a
                third party contract. A second claim for unspecified damages has
                been made
                against the company for wrongful dismissal and breach of contract.
                The
                Company’s lawyers are of the view that liability, if any, would be the
                responsibility of the third party contractor. The Company’s lawyers are of
                the opinion that the amount claimed grossly exceeds what a court
                would
                award in light of the current law. Since the Company’s lawyers are of the
                opinion that these claims are unlikely to succeed, no provision has
                been
                made in respect thereof in these consolidated financial statements.





(iii)
            The
                Company sub-leased certain premises to third parties when it disposed
                of
                its clinic operations. In case of payment defaults by the third parties,
                the Company could be held liable for rent on these premises. Rent
                for
                these premises over the next seven years, during the respective lease
                terms, totals $1.7 million. In July of this year the Company was
                notified
                that one of the third parties was in default on their rent, in the
                amount
                of $29 thousand. We have been in touch with the third party and they
                are
                endeavoring to remedy the
                situation.





Any
      liability resulting from the above will be reflected as a charge to income
      in
      the year incurred.





**10. DEFICIT**





On
      August 18, 2004, at the Company’s Annual and Special meeting of shareholders,
      shareholders adopted a resolution to reduce the stated capital account of common
      shares, by the amount of the deficit as at the end of the fiscal quarter
      following the shareholders’ meeting.





Shareholders'
      Equity has been restaed on the Balance Sheet based on a review of FRR 210,
      concerning quasi reorganizations, which led management to reverse the accounting
      treatment previously applied.


**11. COMPARATIVE
      FIGURES**





Certain
      figures in the 2004 financial statements have been reclassified and restated
      to
      conform with the basis of presentation in 2005.


14


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





Forward-looking
      statements of Med-Emerg International Inc. ("MEII" or the "Company) 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





**BACKGROUND**





Based
      in Ontario, Canada, Med Emerg International Inc (“MEII”) is an established
      health care solutions provider. Founded in 1983, initially to provide contract
      staffing of emergency room physicians and nurses, the Company has expanded
      to
      offer a wide variety of healthcare staffing solutions and medical services
      to
      governments, communities and facilities across Canada.





In
      these times, with the Canadian Healthcare system facing continuous challenges
      on
      several fronts, opportunities exist for a company like MEII to deliver
      innovative solutions within the confines of the Canada Health Act. Demand for
      more complex services from an ageing population, the capital and human resource
      requirements of new lifesaving technology and the need to retrofit existing
      ageing facilities all place
      strain on
      thesystem. The situation is exacerbated by burn-out in the workplace
      caused by declining enrolments in health professions and increased levels of
      retirement by the existing practitioners. The increasing severity of the
      condition now manifests itself in daily headlines announcing long waiting lists
      for elective surgery, shortages of family physicians and the governments
      struggle to keep pace with the ever increasing costs of a publicly funded,
      universally available healthcare system.




The
      Company currently employs staff covering several categories of healthcare
      professionals including physicians, dentists, pharmacists and nurses.





As
      a
      healthcare solutions provider, MEII in addition to its staffing business
      provides medical services such as chronic pain management and intravenous
      infusion services for pharmaceutical companies in conveniently located
      community-based clinics.





As
      a
      result of its many years of healthcare experience, MEII has developed a
      comprehensive understanding of primary care renewal, project evaluation, and
      healthcare human resource planning.




The
      Company's operations are divided into three units: Staffing Solutions, Medical
      Services and Healthcare Consulting Services.





**STAFFING
      SOLUTIONS**





Hospitals
      are increasingly turning to third-party experts to devise and implement
      improvements to the recruitment and management of their clinical staff. We
      provide physician staffing services to approximately 50 healthcare facilities
      in
      various provinces, including rural and urban facilities as well as tertiary
      care
      centers. In 2004 the company introduced Primary Health Care Nurse Practitioners
      to our mix of healthcare providers in hospitals.




MEII
      has developed a unique integrated staffing solution as a result of an approach
      by the Whitby Mental Health Centre to recruit primary care physicians. Reviewing
      the patient population, the nature of the cases being treated, and the total
      cost of the current system, MEII pioneered an integrated health care model
      combining Primary Care Physicians with Primary Care Nurse Practitioners. This
      was the first time a nurse practitioner function was introduced into a mental




15


health
      setting. The program, now in its ninth year of operation, has received high
      satisfaction ratings from both staff and patients, resulting in the Whitby
      Mental Health Centre receiving the ACE award from the Ministry of Health for
      Innovation in Health Care Delivery Design. In June 2002, the Centre for
      Addiction and Mental Health awarded MEII a similar contract for primary care
      services.




Since
      1990, the Company has been involved in the provision of healthcare services
      in
      some of the most difficult environments. The Company currently provides after
      hours physician coverage to 8 federal penitentiaries in Ontario, and has
      developed a unique delivery model in a provincial penitentiary in Nova Scotia,
      using Physician Assistants supported telephonically by emergency
      physicians.




In
      March 2005, MEII reached an understanding with the Ontario Pharmacists’
Association, to create a program to provide temporary placement of pharmacists
      in pharmacies across the province. MEII will be responsible for the recruitment,
      credentialing, placement and monitoring of the pharmacists.





**MEDICAL
      SERVICES**




In
      addition to its healthcare staffing solutions, MEII provides innovative medical
      services directly to healthcare consumers.




*Infusion
      Services*


In
      March 2001, Med-Emerg entered into an agreement with Schering-Plough Canada
      to
      become a coordinator for the community-based infusion of RemicadeTM, in
      Ontario.  This contract capitalizes on the Company's access to clinics for
      the treatment of patients with disabling rheumatoid arthritis and Crohn's
      disease. The Company has established over 20 infusion sites to-date and
      delivered over 6,000 infusions in 2004. MEII is expecting continued growth
      for
      this service, as the trend seems to be to move infusion services from
      institution settings into community based settings.





*Pain
      Management Services*


Med-Emerg’s
      chronic pain management service, CPM Health Centres (“CPM”), was launched in
      November 2004 with the acquisition of the Scarborough Pain Clinic. Three
      additional locations have since been opened. CPM has developed a standardized
      approach to the treatment of chronic pain, using an integrated
      multi-disciplinary approach including anesthetists, ER physicians,
      physiotherapists and chiropractors, amongst others.





It
      is
      estimated that more than 20% of Canadians suffer from chronic pain (unexplained
      pain lasting more than 6 months). This equates to more than 1,500,000 people
      living in southern Ontario who would potentially access medical services for
      the
      treatment of pain. Existing facilities in the region are backlogged with waiting
      times of 4-6 months. Due to the large demand, existing facilities in the rural
      areas are backlogged with waiting times of between 4-12 months.





With
      the objective of reducing these waiting times, the Company has created a
      two-pronged approach to improving service availability to that require
      professional chronic pain management care. The Company developed and launched
      a
      training program specifically designed to educate emergency room physicians
      in
      chronic pain management. The first group has completed the didactic portion
      of
      the training program. MEII is now scheduling these doctors in our Toronto-area
      clinics to complete the clinical portion of their training.





16


Preliminary
      plans have been completed to increase the capacity and throughput of the
      Scarborough clinic by doubling the number of clinical pain providers and
      increasing the hours and days of operation of the facility.





Plans
      are underway to open additional sites in 2005.





**HEALTHCARE
      CONSULTING**




Over
      the years, MEII has developed significant experience in international and
      domestic healthcare consulting. Currently, the Company is involved with several
      provincial governments, advising on a variety of issues related to primary
      care
      staffing, training and integrated service delivery models. The Company recently
      completed a project for the four Atlantic Provinces (New Brunswick, Nova Scotia,
      PEI and Newfoundland and Labrador) and has created an innovative health human
      resource planning tool which is focused on a needs based model as opposed to
      the
      traditional supply based design. The Atlantic project has received wide
      recognition in the marketplace, and it is reasonable to expect new business
      opportunities as a result of this. The Company has recently been awarded
      contracts by the Canadian Nurses Association and the Canadian Medical
      Association in addition to several other smaller healthcare consulting
      projects.





**GOVERNMENT
      HEALTHCARE SERVICES - DISCONTINUED OPERATIONS**




In
      March of 2001, the Company was awarded an administrative management services
      contract, the largest of its kind, to provide medical staffing for military
      bases of the Department of National Defence (DND) across Canada. The contract
      had an initial period of three years ending on March 31, 2004, but the contract
      was amended and extended until March 31, 2005.





In
      May
      2004, Public Works and Government Services Canada (PWGSC) re-tendered the
      Contract, which was set to expire March 31, 2005. The Company responded to
      the
      tender proposal and its bid was one of three considered by PWGSC. In December
      2004 MEII learned that it was not successful in its bid to win a follow-on
      contract with DND. Its contractual relationship with the Canadian government
      for
      DND medical staffing services ended on March 31, 2005.





After
      learning that its bid had not been successful, in January 2005 the Company
      launched a Cdn.$100,000,000 lawsuit against the winning bidder and a former
      employee of the Company.  The Company believes that the successful bidder
      used confidential information obtained through the hiring of a former MEII
      employee to win the contract, and that the former MEII employee retained by
      the
      successful bidder breached his legal obligations by disclosing financial and
      other information confidential to Med-Emerg.  On January 31, 2005, the
      Company filed a complaint with the Canadian International Trade Tribunal
      (CITT).  The CITT is the administrative tribunal in Canada with the
      jurisdiction to conduct inquiries into complaints by potential suppliers
      concerning procurement by the federal government departments and agencies,
      including DND and PWGSC. In its submission to the CITT, Med-Emerg questioned
      the
      manner in which the Government of Canada’s procurement for the DND medical
      staffing contract, valued at $448,810,965, was conducted, including the
      evaluation of its proposal submitted in response to the Request for Proposal
      (RFP). Specifically, the Company alleged that PWGSC:




>
            Awarded
                the contract to a bidder that did not meet the mandatory requirements
                of
                the bid;


>
            Introduced
                unpublished evaluation criteria to the evaluation process,
                and


>
            Failed
                to properly apply the published evaluation
                criteria.


17


In
      filing the complaint, the company sought to terminate the contract award to
      the
      winning bidder, to have MEII awarded the contract, or in the alternative, to
      have a new bid process conducted.  In the further alternative, the Company
      asked that it be compensated for lost profit on the contract and the costs
      associated with the filing of the complaint. On June 15, 2005 the CITT
      ruled that the Company’s complaint against PWGSC was valid, in part, and awarded
      the Company its reasonable costs. On July 15, 2005 the Company filed an
      application for judicial review into the CITT decision. In its decision CITT
      held that PWGSC breached the applicable trade agreements in conducting its
      procurement. Despite this, the CITT declined to grant any remedy aside from
      the
      award of reasonable costs.




**RESULTS
      OF OPERATIONS**




NET
      LOSS BEFORE DISCONTINUED OPERATIONS





The
      Company reported a net loss before discontinued operations of $942,644 for
      the
      nine months ended September 30, 2005 compared to a net loss of $1,755,897 for
      the nine months ended September 30, 2004. The loss amounted to $0.02 per share
      for continuing operations for the nine months ended September 30, 2005 compared
      with a loss of $0.04 per share for continuing operations for the nine months
      ended September 30, 2004.





The
      Company reported a net loss before discontinued operations of $73 thousand
      for
      the three months ended September 30, 2005 compared to a net loss of $480
      thousand for the three months ended September 30, 2004. The loss amounted to
      $0.00 per share for continuing operations for the three months ended September
      30, 2005 compared with a loss of $0.01 per share for continuing operations
      for
      the three months ended September 30, 2004.





The
      most significant elements contributing to the decreased losses for the nine
      month period are an increase in gross margin of about $900 thousand, the
      non-recurrence of closing costs of $600 thousand and the reduction of interest
      and financing costs of $170 thousand. These were partially offset by increased
      salaries of $450 thousand, increased occupancy costs of $130 thousand, increased
      amortization costs of $105 thousand, and increased stock compensation costs
      of
      $230 thousand.





For
      the
      three months ended September 30, 2005, the decreased losses are largely
      attributable to an increase in gross margin of $470 thousand a reduction in
      interest and financing costs of $80 thousand and a reduction of other costs
      totaling $15 thousand. These were partially offset by increased salaries of
      $90
      thousand and occupancy costs of $70 thousand.





The
      Company continues to implement its strategic plan of realigning the business
      units and pursuing profitable opportunities that are consistent with its current
      operating strategy.





REVENUE





The
      Company’s revenue for the nine months ended September 30, 2005 increased to
      $10.2 million compared to $6.9 million for the nine months ended September
      30,
      2004 or by 48%.





The
      Company’s revenue for the three months ended September 30, 2005 increased to
      $4.1 million, compared to $2.3 million for the three months ended September
      30,
      2004 or by 80%.





This
      revenue increase was mainly attributable to the Medical Services Division where
      increases were experienced in both the Infusion Services and the Pain Management
      segments of the business.





18


Revenue
      from the Institutional Staffing Division increased to $6.7 million for the
      nine
      months ended September 30, 2005 compared to $5.5 million for the nine months
      ended September 30, 2004 an increase of approximately 22%.





Revenue
      from the Infusion Services Division increased significantly to $1.3 million
      for
      the nine months ended September 30, 2005 compared to $.8 million for the nine
      months ended September 30, 2004 an increase of approximately 63%. This increase
      results from a similar increase in the number of Remicade
      infusions.





Revenue
      from the Pain Management segment was $1.0 million for the nine months ended
      September 30, 2005 as compared to $NIL for the corresponding period last year.
      The Pain Management division commenced operations in November 2004.





Revenue
      from the Healthcare Consulting division increased to $.76 million for the nine
      months ended September 30, 2005 compared to $0.59 million for the corresponding
      period in the prior year, an increase of approximately 30%.





GROSS
      MARGIN





Gross
      Margin (revenue less direct costs) for the nine months ended September 30,
      2005
      increased to $2.6 million compared to $1.6 million for the nine months ended
      September 30, 2004, an increase of approximately 56%.





Gross
      Margin (revenue less direct costs) for the three months ended September 30,
      2005
      increased to $1.0 million compared to $0.5 million for the three months ended
      September 30, 2004, an increase of approximately 88%.





This
      increase in gross margin was due to the Medical Services Division which enjoyed
      increased gross margins associated with growth in the division.











19











OPERATING
      EXPENSES





Operating
      expenses from continuing operations totaled $3.,1 million for the nine months
      ended September 30, 2005 compared to $3.1for the nine months ended September
      30,
      2004 There was an increase in salaries and benefits of $0.45 million plus
      various other costs totaling $0.15 million but these were offset with the
      non-recurrence of closing costs as compared to the prior period.





AMORTIZATION
      AND INTEREST





Interest
      and financing costs were eliminated in the period, decreasing from $162 thousand
      for the nine months ended September 30, 2004 and yielding interest income of
      $6
      thousand for the nine months ended September 30, 2005. This is due to the fact
      that, with the equity financing, the Company has reduced its reliance on banks
      and other financial institutions.





INCOME
      TAXES





The
      Company has loss carry forwards of approximately $8.5 million to be applied
      against future corporate income taxes. This benefit has not been reflected
      in
      these statements.





**ITEM
      3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
      RISK**





There
      are no financial instruments that are sensitive to changes in interest rates
      or
      exposed to foreign currency exchange gains/losses.








20








**ITEM
      4: CONTROLS AND PROCEDURES**





Included
      on the signature page of this report is the Certification that is required
      under
      Section 302 of the Sarbanes-Oxley Act of 2002. This section of the report
      contains information concerning the controls evaluation referred to in the
      Section 302 Certifications and the information contained herein should be read
      in conjunction with the Certification.





Internal
      controls are designed with the objective of ensuring that assets are
      safeguarded, transactions are authorized, and financial reports are prepared
      on
      a timely basis in accordance with generally accepted accounting principles
      in
      the United States. The disclosure procedures are designed to comply with the
      regulations established by the U.S. Securities and Exchange
      Commission.





Internal
      controls, no matter how designed, have limitations. It is the Company's intent
      that the internal controls be conceived to provide adequate, but not absolute,
      assurance that the objectives of the controls are met on a consistent basis.
      Management plans to continue its review of internal controls and disclosure
      procedures on an ongoing basis.





Evaluation
        of Disclosure Controls and Procedures: Our management with the participation
        of our principal executive officer and principal financial officer has evaluated
        the effectiveness of our disclosure controls and procedures, as such term
        is
        defined in Rules 13a-15(e) and 15(d) -15(e) under the Securities Act of 1934,
        as
        amended (the "Exchange Act") pursuant to Rule 13a -15c under the Exchange
        Act as
        of the end of the period covered by this
        Annual Report on Form 10K-A.
  We
        have established disclosure controls and procedures to ensure that material
        information relating to the Company is made known to the officers who certify
        the financial statements and to other members of senior management and the
        Audit
        Committee of the Board of Directors. As was initially reported, management
        was
        satisfied that its disclosure controls and procedures were effective. Subsequent
        to such evaluations, as a result of a review by the Securities and Exchange
        Commission (the "SEC") of our 10K filing, we reviewed the adequacy of our
        disclosure of certain matters related to Management's Discussion and Analysis
        and the Notes to the Consolidated Financial Statements. After this review
        management and the Audit Committee of the Board of Directors determined to
        expand the disclosure in Management's Discussion and Analysis and in the
        Notes
        to the Financial Statements.
  This
        led our management to conclude that the Company's disclosure controls and
        procedures were not sufficiently effective as of December 31, 2004, March
        31,
        2005 and June 30, 2006, to ensure that information required to be disclosed
        in
        the Company's filings and submissions to the SEC under the Exchange Act are
        summarized and reported within the required time periods.
  **Remediation
        Measures for Identified Disclosure Controls and Procedures Deficiencies**
  Management's
        newly
        implemented measures to address the deficiencies in its disclosure controls
        and
        procedures include:
  1. Management
        will
        require continuing education during 2005 and 2006 of its accounting and finance
        staff to ensure compliance with financial reporting and compliance practices;
 2. Management
        will where
        necessary retain outside advisors to assist in the analysis of its disclosure
        requirements and its compliance, therewith;
 3. The
        Company will
        assess the staffing levels and expertise in its accounting and finance areas
        and
        take necessary steps to ensure appropriate levels of skills;
 4. The
        Company and the
        Audit Committee, as necessary, will consider additional items, or will alter
        the
        planned steps identified above to further remediate the material weaknesses
        identified above.


There
      were no significant changes in the Company's internal and disclosure controls
      or
      in other factors that could significantly affect such internal and disclosure
      controls subsequent to the date of their evaluation.





**PART
      II: OTHER INFORMATION**





**ITEM
      1. LEGAL PROCEEDINGS**





(i)
            There
                is uncertainty with respect to the Company’s liability arising from a
                contractual dispute with a customer. Based on the advice of counsel,
                the
                Company is of the view that it is unlikely that the Company will
                be found
                liablefor these costs. The costs associated with this contingent
                liability
                range from $400 thousand to $1.3
                million.





(ii)
            Claims
                have been made against the Company for general damages for breach
                of
                contract and in tort.A claim for approximately $423,000 has been
                made
                against the company for wrongful termination of a person working
                on a
                third party contract. A second claim for unspecified damages has
                been made
                against the company for wrongful dismissal and breach of contract.
                The
                Company’s lawyers are of the view that liability, if any, would be the
                responsibility of the third party contractor. The Company’s lawyers are of
                the opinion that the amount claimed grossly exceeds what a court
                would
                award in light of the current law. Since the Company’s lawyers are of the
                opinion that these claims are unlikely to succeed, no provision has
                been
                made in respect thereof in these consolidated financial statements.





(iii)
            The
                Company sub-leased certain premises to third parties when it disposed
                of
                its clinic operations. In case of payment defaults by the third parties,
                the Company could be held liable for rent on these premises. Rent
                for
                these premises over the next seven years, during the respective lease
                terms, totals


21


$1.7
      million. In July of this year the Company was notified that one of the third
      parties was in default on their rent, in the amount of $29 thousand. We have
      been in touch with the third party and they are endeavoring to remedy the
      situation.





**ITEM
      2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
      PROCEEDS**





On
      June
      15, 2004, the Company issued 39,360,272 common shares for $4,500,000. As a
      condition of the transaction, Preferred Shares, 50% of which were indirectly
      held by Dr. Zacharias, the CEO of MEII, were converted into 9,348,000 common
      shares; and unpaid preferred share dividends, in the amount of $579,582, were
      forgiven.




The
      investment resulted from the previously announced letter of intent signed by
      MEII and Global Healthcare Workforce Limited (“GHW”) of London, UK.




The
      Investors received 43,708,272 common shares of MEII, of which 39,360,272 were
      purchased from the Company for $4,500,000 and 4,348,000 were purchased directly
      from the Preferred Shareholder for $500,000. Closing costs including legal,
      travel and due diligence costs for the equity financing amounted to $609,214,
      and were expensed during the second quarter of 2004.




In
      addition to issuing the common shares, MEII also issued to the Investors and
      the
      former Preferred Shareholder, anti-dilution warrants (the “New Warrants”) to
      purchase common shares of MEII at prices of either $0.50 per common share or
      $1.00 per common share. The exercise of the New Warrants is directly tied to
      the
      exercise of existing options and warrants at $0.50 per common share and $1.00
      per common share that are currently outstanding. The exercise of the New
      Warrants is intended to allow the Investors and former Preferred Shareholder
      to
      maintain their pro rata share of their equity position.




**ITEM
      3. DEFAULTS UPON SENIOR SECURITIES**





None





**ITEM
      4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS**





None





**ITEM
      5. OTHER INFORMATION**





None





**ITEM
      6. EXHIBITS AND REPORTS OF FORM 8-K**





(a)
      Exhibits





Exhibit
                31
            Rule
                13a-14(a)/15d-14(a) Certifications. Filed herewith.Exhibit
                32.1
            Certification
                by the Chief Executive Officer Relating to a Periodic Report Containing
                Financial Statements.*Exhibit
                32.2
            Certification
                by the Chief Financial Officer Relating to a Periodic Report Containing
                Financial Statements.*

















22


(b)
      Reports on Form 8-K





Attached


*
      The
      Exhibit attached to this Form 10-Q shall not be deemed "filed" for purposes
      of
      Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or
      otherwise subject to liability under that section, nor shall it be deemed
      incorporated by reference in any filing under the Securities Act of 1933, as
      amended, or the Exchange Act, except as expressly set forth by specific
      reference in such filing.







23


**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 ZachariasRamesh
                ZachariasChief
                Executive Officer





Date:  March
      1, 2006








24