<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 JUNE 30, 2004
                                           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)

6711 Mississauga Road, Suite 404
Mississauga, 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 Board
REDEEMABLE COMMON STOCK
PURCHASE 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 [ ]

                   Indicate by check mark whether registrant is an accelerated
filer (as defined in Exchange Act Rule 12(b)-2). Yes [ ] 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 August 11, 2004) of the
         registrant held by non-affiliates on June 30, 2004 was approximately
         US$ 22,145,524.

                  As of June 30, 2004, 58,277,696 shares of the registrant's
Common Stock were outstanding.

(All figures in US dollars unless otherwise indicated.)

<Page>

                          MED-EMERG INTERNATIONAL INC.

                   JUNE 30, 2004 QUARTERLY REPORT ON FORM 10-Q






                                TABLE OF CONTENTS



                          PART I: FINANCIAL INFORMATION



Item 1.           Financial Statements

Item 2.           Management's Discussion and Analysis of Financial Condition
                      and Results of Operations

Item 3.           Quantitative and Qualitative Disclosures about Market Risk

Item 4.           Controls and Procedures


                           PART II: OTHER INFORMATION

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

                  Signatures


                                                                               2
<Page>

                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.   FINANCIAL STATEMENTS


Consolidated Balance Sheets as at June 30, 2004 (unaudited) and December 31,
2003 (audited)

Consolidated Statements of Operations and Deficit for the three and six months
ended June 30, 2004 and 2003 (unaudited)

Consolidated Statement of Cash Flows for the three and six months ended June 30,
2004 and 2003 (unaudited)

Notes to Unaudited Consolidated Financial Statements

                                                                               3

<Page>

                          MED-EMERG INTERNATIONAL INC.
                           CONSOLIDATED BALANCE SHEET
         AS AT JUNE 30, 2004 (UNAUDITED) AND DECEMBER 31, 2003 (AUDITED)
                                    (IN US$)

<Table>
<Caption>
                                                                     JUNE 30                  DECEMBER 31
                                                                      2004                        2003
                                                               ------------------           ----------------
<S>                                                                 <C>                          <C>
ASSETS

CURRENT ASSETS
             Cash and short-term investments                        $  3,940,605                 $  129,132
             Accounts receivable (note 5)                              4,282,284                  3,409,771
             Prepaid expenses and other                                   99,469                     81,041
             Discontinued operations (note 4)                              5,244                    102,740
                                                               ------------------           ----------------
                                                                       8,327,602                  3,722,684

Long-term investment                                                     131,204                    134,979

Property, plant and equipment                                            335,643                    186,562
                                                               ------------------           ----------------
                                                                    $  8,794,449                $ 4,044,225
                                                               ==================           ================

LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES
             Demand loan (note 6)                                    $   455,412                   $      -
             Accounts payable and accrued liabilities                  5,668,091                  6,717,406
             Discontinued operations (note 4)                                839                     60,703
                                                               ------------------           ----------------
                                                                       6,124,342                  6,778,109
LONG-TERM LIABILITIES
             Long-term debt (note 8)                                   1,066,286                          -
                                                               ------------------           ----------------
                                                                       7,190,628                  6,778,109
                                                               ------------------           ----------------

Contingent liabilities (note 13)

SHAREHOLDERS' EQUITY (DEFICIT)
             Capital stock (note 9)                                   16,044,736                 11,544,736
             Contributed surplus (note 10)                             2,443,295                  2,397,849
             Convertible debentures (note 11)                            494,492                    414,434
             Deficit                                                (16,628,748)               (16,265,370)
             Cumulative translation adjustment                         (749,954)                  (825,533)
                                                               ------------------           ----------------
                                                                       1,603,821                (2,733,884)
                                                               ------------------           ----------------
                                                                    $  8,794,449                $ 4,044,225
                                                               ==================           ================
</Table>


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


                                                                               4
<Page>

                          MED-EMERG INTERNATIONAL INC.
                CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
          THREE AND SIX MONTHS ENDED JUNE 30, 2004 AND 2003 (UNAUDITED)
                                    (IN US$)

<Table>
<Caption>
                                                                   THREE MONTHS ENDED                   SIX MONTHS ENDED
                                                                  JUNE 30          JUNE 30          JUNE 30           JUNE 30
                                                                   2004             2003             2004              2003
                                                                -------------------------------------------------------------------
<S>                                                             >               <C>               <C>              <C>
REVENUE                                                         $  10,569,207    $  16,348,865     $  23,122,808        27,616,806
DIRECT COSTS                                                        9,399,312       14,843,936        20,769,179        25,136,583
                                                                -------------------------------------------------------------------
                                                                    1,169,895        1,504,929         2,353,629         2,480,223
                                                                -------------------------------------------------------------------
EXPENSES
            Salaries and benefits                                     714,759          587,765         1,339,728         1,083,945
            General and  administration                               298,555          772,734           568,786         1,022,362
            Occupancy costs and supplies                               83,258           77,441           179,301           156,619
            Closing costs (note 9)                                    592,285                -           592,285                 -
            Travel and marketing                                      101,675           99,348           215,185           173,304
                                                                -------------------------------------------------------------------
                                                                    1,790,532        1,537,288         2,895,285         2,436,230
                                                                -------------------------------------------------------------------
INCOME (LOSS) BEFORE UNDERNOTED ITEMS                                (620,637)         (32,359)         (541,656)            43,993
                                                                -------------------------------------------------------------------
            Interest and financing expense                             72,399          190,603           201,519           341,300
            Amortization of property, plant and equipment              26,249           27,377            46,098            48,600
            Stock compensation expenses (note 10)                       5,076          385,229            45,446         1,118,856
            Preferred share dividends forgiven (note 9)              (563,477)                          (563,477)
                                                                -------------------------------------------------------------------
                                                                     (459,753)         603,209          (270,414)        1,508,756
                                                                -------------------------------------------------------------------

OPERATING LOSS BEFORE INCOME TAXES                                   (160,884)        (635,568)         (271,242)       (1,464,763)
INCOME TAXES                                                                -           13,845                              13,845
                                                                -------------------------------------------------------------------
NET LOSS BEFORE MINORITY INTEREST AND PREFERRED SHARE DIVIDENDS      (160,884)        (649,413)         (271,242)       (1,478,608)
            Minority interest                                               -            (706)                               (505)
                                                                -------------------------------------------------------------------
NET LOSS BEFORE PREFERRED SHARE DIVIDENDS                            (160,884)        (648,707)         (271,242)       (1,478,103)
            Preferred share dividends                                    (527)           33,749            33,223            67,499
                                                                -------------------------------------------------------------------
NET LOSS BEFORE DISCONTINUED OPERATIONS                              (160,357)        (682,456)         (304,465)       (1,545,602)

LOSS FROM OPERATIONS OF DISCONTINUED COMPONENT (NOTE4)                      7         (71,179)           (3,449)         (131,135)
                                                                -------------------------------------------------------------------
NET LOSS FOR THE PERIOD                                              (160,350)        (753,635)         (307,914)       (1,676,737)

DEFICIT, BEGINNING OF THE PERIOD                                  (16,441,106)     (15,281,263)      (16,265,370)      (14,333,572)

            Convertible debenture charges (note 11)                   (27,292)         (26,473)          (55,464)          (51,062)
                                                                -------------------------------------------------------------------
DEFICIT, END OF THE PERIOD                                      $ (16,628,748)    $(16,061,371)     $(16,628,748)    $ (16,061,371)
                                                                ===================================================================
BASIC LOSS PER COMMON SHARE
            Continuing operations                               $       (0.01)    $      (0.08)     $      (0.02)    $       (0.17)
            Discontinued operations                                      0.00            (0.01)            (0.00)            (0.01)
                                                                ===================================================================
WEIGHTED AVERAGE BASIC COMMON SHARES OUTSTANDING                   25,805,515        9,444,332        17,687,469         9,444,332
                                                                ===================================================================
</Table>

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


                                                                               5
<Page>

                          MED-EMERG INTERNATIONAL INC.
                      CONSOLIDATED STATEMENT OF CASH FLOWS
          THREE AND SIX MONTHS ENDED JUNE 30, 2004 AND 2003 (UNAUDITED)
                                    (IN US$)
<Table>
<Caption>
                                                                            THREE MONTHS ENDED                SIX MONTHS ENDED
                                                                         JUNE 30           JUNE 30         JUNE 30        JUNE 30
                                                                           2004             2003             2004           2003
                                                                     ---------------------------------------------------------------
<S>                                                                    <C>                    <C>       <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES
         Net loss for the period before discontinued operations       $     (160,357)        (682,456)      (304,465)    (1,545,602)
         Adjustments for:
              Amortization of property, plant and equipment                   26,249           27,377         46,098         48,600
              Minority interest                                                                  (515)             -            190
              Stock compensation expenses (note 10)                            5,076          385,229         45,446      1,118,856
              Convertible debentures (note 11)                                12,103          (8,834)         24,594         22,641
              Investment in AIM Health Group Ltd.                              2,251                           3,775
                                                                     ---------------------------------------------------------------
                                                                            (114,678)        (279,199)      (184,552)      (355,315)

         Increase (decrease) in non-cash working capital components         (429,569)       1,498,878       (873,970)     1,231,197
         Discontinued operations (note4)                                       5,391          (33,938)        34,183         66,656
                                                                     ---------------------------------------------------------------
                                                                            (538,856)       1,185,741     (1,024,339)       942,538
                                                                     ---------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
         Additions to property, plant and equipment                         (176,445)         (59,069)      (195,179)      (107,519)
         Discontinued operations (note 4)                                          -          (68,879)             -       (147,015)
                                                                     ---------------------------------------------------------------
                                                                            (176,445)        (127,948)      (195,179)      (254,534)
                                                                     ---------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
         Demand loan (note 6)                                               (318,017)        (306,009)       455,412        136,765
         Deferred financing costs incurred                                         -           16,788                        42,883
         Issuance (repayment) of debt                                              -          (70,000)                     (175,000)
         Discontinued operations (note 4)                                          -           (4,533)                       (8,513)
         Common shares issued                                              4,500,000                       4,500,000
                                                                     ---------------------------------------------------------------
                                                                           4,181,983         (363,754)     4,955,412         (3,865)
                                                                     ---------------------------------------------------------------
Effect of foreign currency exchange rate changes                              45,190         (179,624)        75,579       (332,351)
                                                                     ---------------------------------------------------------------
INCREASE (DECREASE) IN CASH                                                3,511,872          514,415      3,811,473        351,788
Cash, beginning of period                                                    428,733          (73,010)       129,132         89,617
                                                                     ---------------------------------------------------------------
Cash, end of period                                                    $   3,940,605          441,405   $  3,940,605     $  441,405
                                                                     ===============================================================
</Table>

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


                                                                               6

<Page>


MED-EMERG INTERNATIONAL INC.
Notes to Unaudited Consolidated Financial Statements
Six months ended June 30, 2004 and 2003

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 five units during the 2003 fiscal
year. Subsequent to 2003 the Company is no longer actively involved in the
Medical Clinics business. MEII's four remaining business units are:
Institutional Staffing, Government Healthcare Services (including Department of
National Defence), Infusion Services and Healthcare Consulting.

For Institutional Staffing, 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. At June 30, 2004,
the Company had 26 contracts for physician staffing and 6 contracts for nurse
staffing.

The Company provides medical personnel to the entire Canadian Forces ("CF"). The
Company provides in-garrison healthcare at bases across Canada. Through this
contract the Company recruits, schedules and manages physicians, nurses,
dentists, physiotherapists and other healthcare professionals to provide
services as required by the CF health authority resident at each base.

The Company provides special access Remicade(TM) infusion services to patients
suffering from Crohn's disease and rheumatoid arthritis at clinic locations
across Canada. The Company recently signed an agreement with Novartis
Pharmaceuticals Canada Inc. and has begun to supply Zometa(TM) for treating
cancer patients with bone metastases.

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

These financial statements consolidate, with minority interest, the accounts of
MEII and all wholly- and partially-owned subsidiaries of MEII. The consolidated
financial statements are expressed in US dollars and are prepared in accordance
with Canadian generally accepted accounting principles. Differences between
Canadian and United States accounting principles are described in note 12.

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, 2004.

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, 2003.

All intercompany accounts and transactions have been eliminated on
consolidation.

                                                                               7

<Page>

MED-EMERG INTERNATIONAL INC.
Notes to Unaudited Consolidated Financial Statements
Six months ended June 30, 2004 and 2003


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.

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 balance
               Computer software         100%              Declining balance
               Computer hardware         30%               Declining balance
               Leasehold improvements    5-10 years        Straight-line

d)       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.

e)       Revenue recognition

The company has adopted the provisions of Emerging Issues Committee ("EIC") -
123, issued by the Canadian Institute of Chartered Accountants (CICA) which
became effective on January 1, 2002. EIC -123 addresses the reporting of revenue
on a gross basis as a principal versus on a net basis as an agent.

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

(1) Institutional Staffing:

Revenue is reported on a gross basis.

                                                                               8

<Page>

MED-EMERG INTERNATIONAL INC.
Notes to Unaudited Consolidated Financial Statements
Six months ended June 30, 2004 and 2003


MEII acts as a principal in providing these services. MEII contracts with
emergency room physician and nursing personnel to provide services to hospitals
in Ontario, a mix of rural and urban facilities including tertiary care centres.

In 2002, MEII commenced a new line of business, which involves contracting with
physicians and nurse practitioners to provide services to long-term care
facilities in Ontario.

(2) Infusion 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.

(3)  Government Healthcare Services (Includes Department of National Defence
     ("DND")):

Revenue is reported on a gross basis.

MEII has 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 has 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
bills DND for the work performed by these individuals and in turns pays the
medical personnel and support staff based on the terms of the respective
contracts signed with them.

(4) Healthcare Consulting:

Revenue is reported on a gross basis.

f)       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
realizations of these future tax assets is not more likely than not.

g)       Cash and short-term investments

Cash and short-term investments consist of cash on hand and in banks, and
short-term investments with Canadian banks and other credit worthy parties, due
within three months.

                                                                               9

<Page>

MED-EMERG INTERNATIONAL INC.
Notes to Unaudited Consolidated Financial Statements
Six months ended June 30, 2004 and 2003

h)       Foreign currency translation

During 2002, the Company adopted the recommendation of the CICA handbook section
1650 Foreign Currency Translation. The amended standard eliminates the deferral
and amortization approach to exchange gains and losses on long-term monetary
items and requires the disclosure of the exchange gains and losses included in
the calculation of net income. There is no material effect of this change in
accounting policy on the financial statements of the Company.

The Company maintains its books and records in Canadian dollars. The financial
statements are converted to U.S. dollars as the Company is a reporting issuer in
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' 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
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.

i)       Stock compensation

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.

4.        DISCONTINUED OPERATIONS

ONTARIO MEDICAL CLINICS SALE

On September 5, 2003 the Company entered into a transaction with AIM Health
Group Inc. ("AIM") to dispose of MEII's Ontario-based clinic operations and more
specifically the following clinics: Elmvale, Merivale, Herongate, Kanata,
Orleans, Hillside, Hampton, PSA, Caresource, Pond Mills, Central, Glenderry,
Dundas and Wallaceburg.

The Company sold the subsidiary corporations that owned these clinics to AIM.
The names of these corporations are as follows: 1189543 Ontario Inc. (and its
subsidiaries 1180668 Ontario Inc., 1292363 Ontario Corporation and 1024528
Ontario Inc.), Med-Plus Health Centres Ltd. (and its subsidiary Glenderry
Medical Walk-In Clinic Inc.), Med-Emerg Urgent Care Inc. and Caremedics
(Elmvale) Inc.

MEII sold all of the shares owned by MEII in these companies (including all
assets and liabilities of the companies identified above), complete with all
lease and employee obligations.

In consideration for the sale of the shares of these corporations, MEII received
$591,017 ($775,000 CDN). The purchase price was settled as follows:

     I.    $381,300 ($500,000 CDN) cash upon signing the purchase and sale
           agreement on September 5, 2003.

     II.   $38,130 ($50,000 CDN) cash upon the date of closing of the
           transaction of the purchase and sale for the purchased shares

     III.  $38,130 ($50,000 CDN) cash on the later of the renegotiation of
           certain contractual obligations

                                                                              10

<Page>

MED-EMERG INTERNATIONAL INC.
Notes to Unaudited Consolidated Financial Statements
Six months ended June 30, 2004 and 2003

           related to one of the clinic operations


     IV.   $133,455 ($175,000 CDN) by way of issuance by AIM of 175,000 Class A
           preference shares in the capital of AIM, with a face value of $0.77
           ($1 CDN) per share on September 30, 2003.

This transaction resulted in a $104,138 gain on disposition of these clinic
companies as the proceeds received by MEII were in excess of the net book values
of the companies sold. The Company has accounted for the investment using the
cost method at a value of $0.77 ($1 CDN) for each Class A preference share. It
is the Company's intention to hold the Class A preference shares for greater
than one year and accordingly it has classified the investment as long-term.

Each Class A preference share entitles the holder to receive for each fiscal
year as declared by the board of directors of AIM a cumulative dividend at an
amount equal to the greater of:
     I.   Three (3%) percent of the amount recorded in the stated capital
          account maintained in respect of the Class A preference shares of AIM
          ("fixed dividends"); and
     II.  Twenty (20%) of the cumulative net income of the clinic corporations
          calculated under generally accepted accounting principles on a basis
          consistent with those of the previous years ("variable dividends").

The cumulative amount of the fixed dividends paid to the holders of Class A
preference shares in prior years shall reduce the variable dividends payable to
the holders of Class A preference shares in a given year.

MEII and AIM will continue to work together to ensure the long-term successful
development of these clinics.

ALBERTA MEDICAL CLINICS SALE

On December 31, 2003 MEII's indirect wholly-owned subsidiary YFMC Healthcare
(Alberta) Inc. sold certain assets of the following four medical clinics located
in the province of Alberta: Martindale Medical Centre, McKnight Village Medical
Clinic, Jasper Avenue Medical Clinic, and West Edmonton Mall Medical Centre. In
consideration of the sale MEII shall receive $15,252 ($20,000 CDN) in cash
during the 2004 fiscal year, of which an amount of $3,813 ($5,000 CDN) has been
received to date.

This transaction resulted in a $51,581 loss on disposition of these clinic
companies as the net assets of the companies sold were higher than proceeds
received by MEII.

MANITOBA MEDICAL CLINIC SALE

During the fourth quarter of 2003 MEII sold certain assets of the Wildwood
Medical Centre located in Winnipeg, Manitoba. In consideration for the sale,
MEII received $6,482($8,500 CDN) in cash. This transaction resulted in net loss
of $19,024 upon disposition as the net assets of the companies sold were higher
than proceeds received by MEII.

5.  ACCOUNTS RECEIVABLE

Included in Accounts Receivable is an amount of $743,700 ($991,998 CDN) owing
from Sunnybrook Womens' College Hospital ("Sunnybrook") for nursing services
provided in June 2003, to assist in responding to the SARS crisis, which
affected the Province of Ontario. The funds to settle this account were
previously remitted to the Company by the Ontario Ministry of Health ("MOH").
Subsequently, the MOH requested that these funds be repaid and in turn that the
Company should seek compensation

                                                                              11

<Page>

MED-EMERG INTERNATIONAL INC.
Notes to Unaudited Consolidated Financial Statements
Six months ended June 30, 2004 and 2003

directly from Sunnybrook. Accordingly, the Company has recorded a receivable
from Sunnybrook and a payable to Ontario Ministry of Health for the equivalent
amount. In July 2004, the amounts owing from Sunnybrook and owing to MOH were
settled, upon receipt of approximately CDN$ 977,000 from Sunnybrook.

6.  DEMAND LOAN

The demand loan amount includes amounts owing to Morrison Financial Services
Limited ("MFSL") under the terms described in note 7(b). The loan has been
subsequently repaid on July 23rd, 2004.

7. REFINANCING ACTIVITIES

a) On May 24, 2002 the Company issued a $720,000 discounted secured debenture,
with net proceeds of $600,000 and repaid bank loans from the net proceeds.

The terms of the secured debenture include:
     1.  maturity date of June 1, 2003
     2.  an effective interest rate of 23.4% per annum
     3.  convertible into common shares at $1 per share at the option of the
         holder
     4.  216,000 restricted common shares issued to the debenture holders
     5.  redeemable on or before 180th day from the date of the closing at 115%
         of the principal amount, and any date thereafter at 120% of the
         principal amount.

A principal shareholder of the Company guaranteed the debenture, providing as
security, unrestricted free trading common shares of the Company equivalent to
150% of the face value of the debenture. In exchange for the guarantee, the
Company issued to the guarantor shareholder common share purchase options to
purchase 100,000 common shares at $1.00 per share. In the event that the market
value of the common shares provided as security falls below 200 % of the face
amount of the debenture, the Company was required to pledge additional
securities to return the market value to 200% of the face amount.

The secured debenture was repaid, in full, on July 2, 2003.

b) On June 28, 2002, MFSL paid HSBC $475,406 on MEII's behalf. This had the
effect of reducing the Company's total debt by $228,459 since the obligation to
HSBC was eliminated at a discounted value. MFSL provided the Company with a
full-recourse invoice discounted facility in an amount not to exceed $555,597
based on purchasing and advancing up to 75% of the face amount of a qualifying
invoice with the balance held on reserve until the invoice is collected in full.
The facility had a term of one year, with an annualized interest rate of 34.22%
that matured on June 28, 2003. The Company renegotiated this loan agreement with
MFSL. The following clauses of the agreement were amended as follows:

     1.   Facility: The maximum amount of the facility increased from $571,951
          ($750,000 CDN) in aggregate advances outstanding from time to time, to
          a maximum of $762,602 ($1,000,000 CDN). The advance rate increased
          from 75% of the face amount of qualifying invoices to 80%.
     2.   Term: The term of the facility is for a one year period that commenced
          on July 1, 2003.
     3.   Discount fees: The discount fees charged are reduced from 34.22% to
          24% on an annualized basis.

In addition to the specific Standard Form Assignments (General), all amounts due
to MFSL are secured by a general security agreement on all assets and
undertakings of MEII. The terms of this

                                                                              12

<Page>

MED-EMERG INTERNATIONAL INC.
Notes to Unaudited Consolidated Financial Statements
Six months ended June 30, 2004 and 2003

agreement are currently under review by the Company, with a view to
renegotiating the loan agreement .

8. LONG-TERM DEBT

The amount of $1,066,286 pertains to the long term portion of the Goods and
Services Tax which is payable over a period of five years, as per an agreement
between the Company and the Canada Revenue Agency ("CRA"). An amount of $22,492
($30,000 CDN) is payable monthly and is reviewable every six months.
Accordingly, the current portion of this debt has been classified under Accounts
payable and accrued liabilities. The CRA will register a Lien under the Personal
Property Security Act with the Province of Ontario to secure its position.


9. CAPITAL STOCK


On June 15, 2004, the Company issued 39,360,272 common shares for US$4,500,000.
As a condition of the transaction, Preference Shares, 50% of which are
indirectly held by Dr. Zacharias, the CEO of MEII, were converted into 9,348,000
common shares; and unpaid preference share dividends, in the amount of US$
563,477, 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 US$4,500,000 and 4,348,000 were purchased
directly from the Preference Shareholder for $500,000. Closing costs including
legal, travel and due diligence costs for the equity financing amounted to
$592,285, and have been expensed during the quarter.


In addition to issuing the common shares, MEII also issued to the Investors and
the former Preference 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 Preference Shareholder
to maintain their pro rata share of their equity position.


10. CONTRIBUTED SURPLUS

During the first quarter of 2004, 100,000 options were granted with an exercise
price of $0.50 per option. The options vest 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 $39,740 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. Options for 125,000 shares shall be
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 $5,706 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.

                                                                              13

<Page>

MED-EMERG INTERNATIONAL INC.
Notes to Unaudited Consolidated Financial Statements
Six months ended June 30, 2004 and 2003

Management options amounting to 1,000,000 each were granted to two employees,
and 150,000 each to two other employees, at an exercise price of $0.115 per
option. The vesting of these options is subject to a future earnings hurdle
test. Since the earnings test is in a future period, no expense is recognized in
the current quarter.

During the first quarter of 2003, the terms of warrants were amended entitling
each warrant holder to purchase one share of common stock at a price of $0.50
(previously $4.50). Due to this amendment, the fair value amounting to $733,627
had been determined, and was credited to contributed surplus.

11. CONVERTIBLE DEBENTURES

The convertible debentures were issued on September 30, 2001, are due on
September 30, 2006 and bear interest at 7%. MEII may pay the principal amount
and accrued interest at any time prior to maturity by way of cash or shares of
MEII common stock or a combination of cash and MEII common stock at the
discretion of the Company. Accordingly, these debentures have been reflected in
the financial statements at its estimated present value and included in
shareholder's equity (deficit).

<Table>
<Caption>
                                                UNDISCOUNTED TOTAL      PRESENT VALUE
<S>                                                  <C>                   <C>
Principal due on September 30, 2006                  $590,536              $92,130
Interest due on September 30, 2006                    206,688               32,245
                                                     --------              --------
                                                     $797,224             $124,375
                                                     --------              --------
                                                     --------              --------
</Table>


The above debentures will be accreted to their principal values at the rate of
45% per annum on the net present values shown. During the first six months of
2004, an amount of $55,464 was accreted to principal with corresponding charge
to retained earnings.

Convertible debentures at December 31, 2001             $124,375
Interest costs in 2002                                   52,985
Convertible debenture charges in 2002                    84,080
                                                   --------------------
Convertible debentures at December 31, 2002              261,440
                                                   --------------------
Interest costs in 2003                                   46,998
Convertible debenture charges in 2003                    105,996
                                                   --------------------
Convertible debentures at December 31, 2003             $414,434
                                                   --------------------
Interest costs for six months ended June 2004            24,594
Convertible debenture charges in 2004                    55,464
                                                   --------------------
Convertible debentures at June 30, 2004                 $494,492
                                                   ====================

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

12. 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:

                                                                              14

<Page>

MED-EMERG INTERNATIONAL INC.
Notes to Unaudited Consolidated Financial Statements
Six months ended June 30, 2004 and 2003

(a)     Deficit

Under Canadian GAAP, the convertible debentures have been presented in
Shareholders' deficit as the Company has the option to satisfy the debt by way
of cash or shares or a combination of cash and shares. The debentures have been
discounted to reflect the net present value as at the balance sheet date. Under
U.S. GAAP, these obligations should be shown as long-term debt on the balance
sheet.

If U.S. GAAP were employed, deficit for the period would be adjusted as follows:

<Table>
<Caption>
                                                          JUNE            DECEMBER
                                                          2004              2003
<S>                                                  <C>                <C>
Deficit based on Canadian GAAP                       $ (16,628,748)     $ (16,265,370)
Convertible debentures (note 9)                        (233,989)          (289,453)
                                                   -------------------------------------
Deficit based on US GAAP                             ($16,862,737)      ($16,554,823)
                                                   =====================================
</Table>


(b) 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.

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.

                                                                              15

<Page>

MED-EMERG INTERNATIONAL INC.
Notes to Unaudited Consolidated Financial Statements
Six months ended June 30, 2004 and 2003

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

<Table>
<Caption>
                                                                                    JUNE                    DECEMBER
                                                                                    2004                      2003
<S>                                                                                 <C>                       <C>
             Capital stock                                                          $16,044,736               $11,544,736
             Capital stock issued on purchase of YFMC Healthcare Inc.                 1,087,872                 1,087,872
             Ascribed fair value of share purchase warrants issued                      (36,406)                  (36,406)
                                                                             -------------------        ------------------
             Capital stock - U.S. GAAP                                               17,096,202                12,596,202
                                                                             -------------------        ------------------
             Contributed surplus                                                      2,443,295                 2,397,849
             Share purchase warrants                                                     36,406                    36,406
                                                                             -------------------        ------------------
             Paid-in-capital - U.S. GAAP                                              2,479,701                 2,434,255
                                                                             -------------------        ------------------
             Deficit - U.S. GAAP                                                    (16,862,737)              (16,554,823)
             Cumulative translation adjustment                                         (749,954)                 (825,533)
                                                                             -------------------        ------------------
             Shareholders' equity (deficit) - U.S. GAAP                              $1,963,212              ($2,349,899)
                                                                             ===================        ==================
</Table>

(c) 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.
GAAP, the comprehensive loss for the six months ended June 30, 2004 and 2003
would be adjusted as follows:

<Table>
<Caption>
                                                                     JUNE                          JUNE
                                                                     2004                          2003
<S>                                                                   <C>                         <C>
              Net loss - U.S. GAAP                                    ($307,914)                  ($1,676,737)
              Foreign currency translation adjustment                    75,579                      (332,351)
                                                               ------------------            ------------------
              Comprehensive loss                                      ($232,335)                  ($2,009,088)
                                                               ==================            ==================
</Table>


(d) Recently issued Accounting Standards

The following standards were issued by the Financial Accounting Standards Board
during 2003 and 2002:

               SFAS No. 143 - Accounting for asset retirement obligations - this
               standard requires that entities record the fair value of a
               liability for an asset retirement obligation in the period in
               which it is incurred. This standard is effective for fiscal years
               beginning after June 15, 2002.

                                                                              16

<Page>

MED-EMERG INTERNATIONAL INC.
Notes to Unaudited Consolidated Financial Statements
Six months ended June 30, 2004 and 2003


               SFAS No. 144 - Accounting for the impairment or disposal of
               long-lived assets. This standard supercedes SFAS No. 121 -
               Accounting for the impairment of long-lived assets

               and for long-lived assets to be disposed of. This standard
               requires that businesses recognize impairment when the financial
               statement carrying amount of long-lived asset or asset group
               exceeds its fair value and is not recoverable.

               SFAS No. 145 - Rescission of FASB Statements No. 4, 44 and 64,
               Amendment of FASB No. 13, and Technical Corrections. SFAS 145
               updates, clarifies and simplifies existing accounting
               pronouncements. SFAS 145 rescinds Statement No. 4, which required
               all gains and losses from extinguishments of debt to be
               aggregated and, if material, classified as an extraordinary
               items, net of related income tax effect. As a result, the
               criteria in APB Opinion No. 30 will now be used to classify those
               gains and losses because Statement No. 4 has been rescinded.
               Statement No. 44 was issued to establish accounting requirements
               for the effects of transition to provisions of the Motor Carrier
               Act of 1980. Because the transition has been completed, Statement
               No. 44 is no longer necessary.

               SFAS No. 146 - Accounting for Cost Associated with the Exit of
               Disposal Activities. SFAS 146 requires companies to recognize
               costs associated with exit or disposal activities when they are
               incurred rather than at the date of commitment to an exit or
               disposal plan. Previous accounting guidance was provided by
               Emerging Issues Task Force ("EITF") Issue No. 94-3. SFAS 146
               replaces EITF94-3. The Statement is to be applied prospectively
               to exit or disposal activities initiated after December 31, 2002.

               SFAS No. 147 - Acquisition of certain financial institutions an
               amendment of SFAS 72 and 144 and SFAS interpretation number 9
               issued October 2002 and relates to acquisitions of financial
               institutions.

               SFAS No. 148 - Accounting for stock based compensation-transition
               and disclosure an amendment of SFAS 123 issued December 2002 and
               permits two additional transition methods for entities that adopt
               the fair value based method of accounting for stock based
               employee compensation to avoid the ramp-up effect arising from
               prospective application. This statement also improves the
               prominence and clarity of the pro-forma disclosures required by
               SFAS 123.

               SFAS No. 149 - Amendment of statement 133 on derivative
               instruments and hedging activities. This statement amends and
               clarifies financial accounting and reporting for derivative
               instruments embedded in other contracts (collectively referred to
               as derivatives) and for hedging activities under FASB 133
               accounting for derivative instruments and hedging activities.

               SFAS No. 150- Accounting for certain financial instruments with
               characteristics of both liabilities and equity. This statement
               establishes standards for how an issuer classifies and measures
               certain financial instruments with characteristics of both
               liabilities and equity.

The Company believes that the above standards would not have a material impact
on its financial position, results of operations or cash flows as it relates to
the reconciliation of Canadian and United States accounting policy differences.

                                                                              17


<Page>

MED-EMERG INTERNATIONAL INC.
Notes to Unaudited Consolidated Financial Statements
Six months ended June 30, 2004 and 2003

13. ECONOMIC DEPENDENCE

Approximately 80% of revenue and 53% of gross margin is derived from one
customer,DND, (64% of revenue and 27% of gross margin during the first six
months of 2003). Receivables for this customer amounted to 55% of total
receivables as at June 30, 2004 (36% of total receivables as at June 30, 2003).
The loss of a material amount of revenue to this customer could have a material
adverse effect on operations of the Company.

14. CONTINGENT LIABILITIES

     (i)      YMFC HealthCare Inc., a wholly owned subsidiary of the Company, is
              in receipt of a letter from Canada Revenue Agency ("CRA") dated
              April 30, 2001, adjusting YFMC's Goods and Services Tax returns
              for the period from December 31, 1992, to December 31, 1996. The
              total amount claimed by CRA for this period is $249,000. In the
              event that YFMC is ultimately found liable, the Company intends to
              claim an indemnity for such amount against the directors and
              certain named principals of YFMC pursuant to the Company's rights
              under the purchase agreement for YFMC executed on August 10, 1999.
              The Company's legal counsel has advised that CRA does not intend
              to pursue YFMC for these amounts.

     (ii)     There is uncertainty with respect to the Company's liability for
              Goods and Services tax pertaining to certain services, which it
              provides, and with respect to the Company's liability for Workers
              Safety and Insurance Board premiums pertaining to its contract
              with PGWSC. The measurement of this uncertainty is not
              determinable and accordingly no provision has been made in respect
              thereof in these financial statements.


     (iii)    A claim has been made against the Company for general damages for
              breach of contract and in tort. No specific amount of damages are
              claimed, and it is not possible to estimate what the damages might
              be. The Company's lawyers are of the opinion that this claim is
              unlikely to succeed, and accordingly no provision has been made in
              respect thereof in these financial statements.


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


15. COMPARATIVE FIGURES

Certain figures in the 2003 financial statements have been reclassified and
restated to conform with the basis of presentation in 2004.


                                                                              18

<Page>

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

OVERVIEW

MEII is a Canadian Company (OTCC:MDER) founded in 1983 by Dr. Ramesh Zacharias
in response to a shortage of emergency physicians in rural Ontario hospitals.

Based in Ontario, Canada, MEII 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 room physicians and nurses
for hospitals in Canada. Though emergency-related services are still an
important component of the Company's business, MEII has expanded to offer a wide
variety of medical services including non-hospital staffing, healthcare
staffing, the recruitment and staffing of various healthcare professionals to
fulfill a contract with the Department of National Defence ("DND"), contracts
with leading pharmaceutical companies, to provide infusion services to patients
and a range of healthcare consulting services.

The Canadian healthcare system faces continuous challenges on several fronts.
Demand for more complex services from an ageing population, the capital and
human resource requirements of new lifesaving technology, retrofit of existing
ageing facilities and declining enrolments in health professions due to
retirement, burn-out and workplace dissatisfaction have all contributed to the
stress and strains that our existing system now manifests in the headlines as
long waiting lists for elective surgery, shortages of family physicians and
government's struggle with ever increasing costs of providing effective care
with the publicly funded system that Canadians have grown to expect.

The Company currently employs more than 1,200 professional staff across Canada
including physicians, dentists, pharmacists, nurses and 23 other categories of
regulated health professionals who provide clinical services to:
     -    rural and urban hospitals including academic teaching centres;
     -    long term care facilities;
     -    correctional facilities;
     -    all Canadian Forces bases medical and pharmacy facilities; and
     -    mental health facilities

The following statistics are inherent to the Company.
     -    one in ten physicians in Ontario have been associated with MEII at
          some point in their career
     -    the Company has provided more than two million hours of physician and
          nurse coverage such that one in ten residents of Ontario have been
          treated by a MEII provider in a public healthcare facility.
     -    the Company was the first to pioneer the use of expanded role nurses
          in a non-hospital environment at Pearson International Airport. This
          innovative model has become the standard for integrated primary
          healthcare delivery across the province. In fact, one of MEII's
          clients recently won an award from the Ministry of Health for
          "Innovation in Primary Healthcare"

In addition to its staffing business, the company provides IV infusion services
for Pharmaceutical companies in community based clinics across Canada,
delivering medications to patients in a comfortable setting who would otherwise
have to be infused in hospital. As a result if its experience,

                                                                              19

<Page>

MEII has been involved as a consultant to a number of significant healthcare
initiatives in Canada including:
     -   staffing of Department of National Defence bases Borden and Gagetown
         with healthcare personnel during the Kosovo refugee crisis;
     -    staffing of SARS hospitals during the SARS crisis in Toronto;
     -    primary care renewal design for Province of Saskatchewan;
     -    primary care project evaluation for Province of Newfoundland/Labrador;
          and
     -    healthcare human resource planning project for the 4 Atlantic
          provinces

With over 2,500 healthcare providers in its roster, MEII has built its
reputation and infrastructure in recruiting and retaining professionals from
across Canada. The recent equity investment from a group of Canadian and
International investors provides an international recruiting presence and
capability to its Canadian healthcare operations.

The Company is positioned to build on its industry leadership by providing
integrated professional management services in the delivery of healthcare to the
healthcare consumer. The Company's operations are divided into four units:
Institutional Staffing, Government Healthcare Services, Infusion Services, and
Healthcare Consulting Services.

INSTITUTIONAL STAFFING

The Company provides ER physicians and Intensive Care Unit ("ICU") nurse
staffing services to approximately 32 hospitals in Ontario, a mix of rural and
urban facilities including tertiary care centers. In 1991, the Company
introduced registered nurses into its staffing mix, when it developed a
cost-effective model for the Lester B. Pearson International Airport utilizing
"expanded role" registered nurses. The Company went on to launch a business
devoted entirely to the provision of emergency trained registered nurses to
hospitals in 1997. During the first six months of 2004, the hospital staffing
unit provided approximately 25,000 hours of physician and 4,500 hours of nursing
coverage respectively. The Company pays its physicians on an hourly or sessional
basis, and receives a monthly administrative fee from each hospital.

HOSPITAL STAFFING OPERATIONS

The principal operating activities of the Hospital Staffing Division include the
following:

RECRUITMENT AND CREDENTIALING. MEII has developed into one of the larger
providers of physician and nurse recruitment and placement services to many
communities and hospitals across Canada. Services include the complete
assessment of a community's needs, practice opportunities, the development of a
recruitment strategy and implementation process.

The recruitment and certifying of credentials of qualified independent contract
physicians and nurses are a central aspect of the Company's operations.
Full-time employees of the Company are dedicated to this task.

QUALITY ASSURANCE. The Company maintains a Quality Assurance program designed to
ensure consistency in clinical practice performance. These systems are subject
to review and examination by independent hospital credential and regulatory
agencies. The efficiency of these systems, and the performance of the Company's
contract physicians are critical to maintaining a good relationship with the
hospitals, as well as minimizing the exposure of the Company to liability
claims.

TIME SCHEDULING. The scheduling of physician and nurse hours is performed daily,
weekly or monthly. Under some of the hospital contracts, multiple physician
coverage is required during certain periods. For nursing services, hospitals
contact the Company with their shift requirements. Because of varying other
demands on the contract nurses and physicians, the scheduling process is complex
and requires significant attention by MEII's staff.

                                                                              20

<Page>

BILLING AND COLLECTION SERVICES. Fees generated by emergency department coverage
of physicians are comprised of two elements: (i) hospital administrative fees
which are on a fixed fee or a fee-for-service basis; and (ii) physician
services. Under each hospital contract, the Company has the responsibility for
the billing and collection of physician fees. The Company's bad debt experience
in collection of physician fees has historically been less than 1% of allowable
billings. With recent technological developments it is anticipated that bad
debts will reduce further.

PERSONNEL ADMINISTRATION. The Company assists the contracted physicians with
administration, including administration of physician fee reimbursement. In
addition, the Company provides for the administration of fringe benefit
programs, which may include but are not limited to life insurance, health
insurance, professional dues and disability insurance.

The Company expects to continue its growth through staffing additional hospital
contracts. In particular, the Company intends to both strategically target
hospitals and physician groups. Management actively seeks opportunities to
competitively bid for hospital contracts.


CONTRACTS WITH HOSPITALS FOR PHYSICIAN STAFFING.

MEII provides contract physician staffing services to hospitals on either
fee-for-service contracts, or fixed fee per shift contracts. Physicians under
contract to the Company authorize the Company to bill and collect fees. Pursuant
to such contracts, MEII assumes responsibility for billing and collection and
assumes risks of administrative error and subsequent non-payment. All of these
factors are taken into consideration by the Company in arriving at appropriate
contractual arrangements with healthcare institutions and professionals. The
hospital contracts are generally for one year and automatically renew if not
terminated.


CONTRACTS WITH HOSPITALS FOR NURSE STAFFING.

The Company provides nursing coverage to hospital emergency departments on a
shift-by-shift basis. The Company charges a fixed hourly rate for every hour of
nursing coverage provided. The hospital contracts are generally for one year and
automatically renew if not terminated.

RECRUITMENT OF ER NURSES.

The Company recruits and screens potential candidates to serve as emergency room
nurses in hospitals that have contracted for the Company's staffing services.
The Company requires all nurses to meet its qualification criteria.


GOVERNMENT HEALTHCARE SERVICES

DEPARTMENT OF NATIONAL DEFENCE ("DND")

In March of 2001, the Company was awarded the administrative management services
contract, the largest of its kind, to provide medical personnel to the Canadian
Armed Forces ("CF") bases across Canada. The contract had an initial period of
three years ending on March 31, 2004, but recently the contract was amended and
extended until March 31, 2005. As the service administrator, the Company
recruits, credentials, schedules and pays physicians, nurses, dentists,
physiotherapists and other regulated healthcare professionals as required by the
local health authority resident on each base. The Company is paid a monthly
administrative management fee by the DND that is linked to the number of
providers being managed.

                                                                              21


<Page>

The primary benefit to DND from this contract is the creation of a "one stop
shopping" arrangement for the military base. As part of a national organization,
the Company's recruiters source health service providers from all regions of
Canada. By developing a long-term relationship with their employees and
sub-contractors, and being able to react quickly to changing local conditions,
the Company provides some stability in the workforce and enhances continuity in
the delivery of patient care for the DND.

INFUSION SERVICES

MEII continues to develop its Integrated Infusion Service, which provides
clients/patients with a safe, comfortable and convenient infusion care setting
to ensure the optimal administration of special drug therapies. In addition to
providing infusions of Remicade (TM) (Schering Plough) to patients with Crohn's
disease and rheumatoid arthritis, MEII has recently signed an agreement to
supply Zometa(TM) (Novartis) for treating cancer patients with bone metastases.
The Infusion Services is comprised of a team of dedicated health care providers
and coordinators develop individualized plans for each client/patient ensuring
compliance to prescribed therapies for optimal health outcomes. MEII has
alliances with many key healthcare groups forming a unique team focused on a
"continuum of care" delivering the best service to patients and the prescribing
physicians. Each infusion clinic follows rigorous standard operating procedures
ensuring a consistent, highly professional infusion service.

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. MEII is also advising
several aboriginal communities with regards to healthcare infrastructure and
delivery issues. MEII relies on a broad network of industry professionals to
augment its resident expertise. The Company thereby ensures that industry
leading minds and experience are brought to bear in all situations.

RESULTS OF OPERATIONS

NET LOSS

The Company reported a net loss of $307,914 for the six months ended June 30,
2004 compared to a net loss of $1,676,737 for the six months ended June 30,
2003. The loss amounted to $0.02 per share for continuing operations and $0.00
loss for discontinued operations for the six months ended June 30, 2004 compared
with a loss of $0.17 per share for continuing operations and $0.01 per share for
discontinued operations for the six months ended June 30, 2003. The Company
reported a net loss of $160,350 for the three months ended June 30, 2004
compared to a net loss of $753,635 for the three months ended June 30, 2003. The
main reasons for the decrease in loss during the first six months of 2004 is the
lower amount of non-cash Stock compensation expense recorded, and the lower
amounts of Interest and financing expenses. Furthermore, the Company has
implemented their strategic plan of realigning the business units and the
consolidation and closure of non-performing medical clinics. MEII continues to
pursue profitable contracts that are consistent with its current operating
strategy.

REVENUE

The Company's revenue for the six months ended June 30, 2004 decreased to
$23,122,808, compared to $ 27,616,806 for the six months ended June 30, 2003 or
by 16%. The Company's revenue for the three months ended June 30, 2004 decreased
to $10,569,207, compared to $16,348,865 for the three months ended June 30, 2003
or by 35%.

                                                                              22


<Page>

This revenue decline was mainly attributable to the Institutional staffing
division which had increased revenues in the first six months of 2003 due to
increased physician and nurse staffing during the SARS outbreak.

Revenue from the Government Healthcare Services division amounted to $18,566,586
for the six months ended June 30, 2004 compared to $20,277,933 for the six
months ended June 30, 2003. As at June 30, 2004, the Company provided
approximately 655 medical personnel at DND bases across Canada, compared to 854
as at June 30, 2003.

Revenue from the Institutional Staffing division decreased significantly to
$3,728,633 for the six months ended June 30, 2004 compared to $6,934,595 for the
six months ended June 30, 2003 a decrease of approximately 46%. This is due to
the additional revenue generated in 2003 due to the SARS outbreak.

Revenue from the Infusion Services division increased to $524,309 for the six
months ended June 30, 2004 compared to $428,703 for the six months ended June
30, 2003 an increase of approximately 22%. This increase is due to the increase
in Remicade infusions.

GROSS MARGIN

Gross Margin (revenue less direct costs) for the six months ended June 30, 2004
decreased to $2,353,629 compared to $2,480,223 for the six months ended June 30,
2003, a decrease of approximately 5%. Gross margin for the three months ended
June 30, 2004 decreased to $1,169,895 compared to $1,504,929 for the three
months ended June 30, 2003, a decrease of approximately 22%. This decrease in
gross margin was due to the Institutional Staffing division experiencing lower
volumes.

Physician fees and direct costs, primarily fees paid to contract physicians and
other healthcare workers remained comparable to the prior period at
approximately 90%.

OPERATING EXPENSES

Operating expenses from continuing operations totaled $2,895,285 for the six
months ended June 30, 2004 compared to $2,436,230 for the six months ended June
30, 2003, an increase of approximately 19%. Operating expenses from continuing
operations totaled $1,790,532 for the three months ended June 30, 2004 compared
to $1,537,288 for the three months ended June 30, 2003, an increase of
approximately 16%. The increase results mainly from the one-time impact of the
closing costs of $592,285 associated with the equity financing. Also associated
with the equity financing, the Company recognized a one-time benefit of
$563,477, due to the forgiveness of unpaid accrued preferred share dividends.
There was an increase in salaries and benefits and travel and marketing as
compared to the prior period. There has been a decrease in General and
administration costs during the first six months of 2004.

AMORTIZATION AND INTEREST

Interest and financing costs decreased from $341,300 for the six months ended
June 30, 2003 to $201,519 for the six months ended June 30, 2004. Interest and
financing costs decreased from $190,603 for the three months ended June 30, 2003
to $72,399 for the three months ended June 30, 2004. This is due to the fact
that the company negotiated lower borrowing rates on its loan facilities, and
repaid the secured debenture.

INCOME TAXES

The Company has loss carry forwards of approximately $4.0 million to be applied
against future corporate income taxes. This benefit has not been reflected in
these statements.

                                                                              23

<Page>

LIQUIDITY AND CAPITAL RESOURCES

a) On May 24, 2002 the Company issued a $720,000 discounted secured debenture,
with net proceeds of $600,000 and repaid bank loans from the net proceeds.

The terms of the secured debenture include:
     1.  maturity date of June 1, 2003
     2.  an effective interest rate of 23.4% per annum
     3.  convertible into common shares at $1 per share at the option of the
         holder
     4.  216,000 restricted common shares issued to the debenture holders
     5.  redeemable on or before 180th day from the date of the closing at 115%
         of the principal amount, and any date thereafter at 120% of the
         principal amount.

A principal shareholder of the Company guaranteed the debenture, providing as
security, unrestricted free trading common shares of the Company equivalent to
150% of the face value of the debenture. In exchange for the guarantee, the
Company issued to the guarantor shareholder common share purchase options to
purchase 100,000 common shares at $1.00 per share. In the event that the market
value of the common shares provided as security falls below 200% of the face
amount of the debenture, the Company was required to pledge additional
securities to return the market value to 200% of the face amount.

The secured debenture was repaid, in full, on July 2, 2003.

b) On June 28, 2002, MFSL paid HSBC $475,406 on MEII's behalf. This had the
effect of reducing the Company's total debt by $228,459 since the obligation to
the HSBC was eliminated at a discounted value. MFSL provided the Company with a
full-recourse invoice discounted facility in an amount not to exceed $555,597
based on purchasing and advancing up to 75% of the face amount of a qualifying
invoice with the balance held on reserve until the invoice is collected in full.
The facility had a term of one year, with an annualized interest rate of 34.22%
that matured on June 28, 2003. The Company renegotiated this loan agreement with
MFSL. The following clauses of the agreement were amended as follows:

     1.   Facility: The maximum amount of the facility increased from $571,951
          ($750,000 CDN) in aggregate advances outstanding from time to time, to
          a maximum of $762,602 ($1,000,000 CDN). The advance rate increased
          from 75% of the face amount of qualifying invoices to 80%.
     2.   Term: The term of the facility is for a one year period that commenced
          on July 1, 2003.
     3.   Discount fees: The discount fees charged are reduced from 34.22% to
          24% on an annualized basis.

In addition to the specific Standard Form Assignments (General), all amounts due
to MFSL are secured by a general security agreement on all assets and
undertakings of MEII. The terms of this agreement are currently under review by
the Company, with a view to renegotiating the loan agreement.


c) On June 15, 2004, the Company issued 39,360,272 common shares for
US$4,500,000. As a condition of the transaction, Preference Shares, 50% of which
are indirectly held by Dr. Zacharias, the CEO of MEII, were converted into
9,348,000 common shares; and unpaid preference share dividends, in the amount of
US$ 563,477, were forgiven.

                                                                              24

<Page>

The investment resulted from the previously announced letter of intent signed by
Med-Emerg and Global Healthcare Workforce Limited ("GHW") of London, UK.


The Investors received 43,708,272 common shares of Med-Emerg, of which
39,360,272 were purchased from the Company for US$4,500,000 and 4,348,000 were
purchased directly from the Preference Shareholder for US$500,000.


In addition to issuing the common shares, MEII also issued to the Investors and
the former Preference 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 Preference Shareholder
to maintain their pro rata share of their equity position.





ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

At June 30, 2004 the Company held $3,941,104 in US dollars. These amounts were
converted to Canadian dollars as of July 23, 2004. Besides the above, there are
no other financial instruments that are sensitive to changes in interest rates
or exposed to foreign currency exchange gains/losses.


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 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.

The Company's chief executive officer and chief financial officer, after
supervising and participating in an evaluation of the effectiveness of the
Company's internal and disclosure controls and procedures during the six months
ended June 30, 2004 (the "Evaluation Date"), have concluded that as of the
Evaluation Date, the Company's internal and disclosure controls and procedures
were effective.

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.

                                                                              25

<Page>

PART II:  OTHER INFORMATION

ITEM 5. EXHIBITS AND REPORTS OF FORM 8-K

(a) Exhibits

Exhibit 31   Rule 13a-14(a)/15d-14(a) Certifications.
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.*


EXHIBIT 31

CERTIFICATIONS

I, Dr. Ramesh Zacharias, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Med-Emerg International
Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

         a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;

         b) evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and

         c) disclosed in this quarterly report any change in the registrant's
internal control over financial reporting that occurred during the registrant's
third fiscal quarter that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting.

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of registrant's board of directors
(or persons performing the equivalent functions):

                                                                              26

<Page>

         a) all significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and

         b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal control
over financial reporting.


Date:  August 14, 2004
                                                      _______________________
                                                      Dr. Ramesh Zacharias
                                                      Chief Executive Officer

I, William Danis, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Med-Emerg International
Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

         a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;

         b) evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and

         c) disclosed in this quarterly report any change in the registrant's
internal control over financial reporting that occurred during the registrant's
third fiscal quarter that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting.

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of registrant's board of directors
(or persons performing the equivalent functions):

         a) all significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and

         b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal control
over financial reporting.

Date:  August 14, 2004
                                                     _________________________
                                                     William Danis
                                                     Chief Financial Officer

                                                                              27


<Page>






Exhibit 32.1
                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Med-Emerg International Inc. (the
"Company") on Form 10-Q for the period ending March 31, 2004 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, Dr.
Ramesh Zacharias Chief Executive Officer of the Company, certify, pursuant to 18
U.S.C. ss. 1350, as adopted pursuant to ss.906 of the Sarbanes-Oxley Act of
2002, that to the best of my knowledge:


1) The Report fully complies with the requirements of section 13(a) or 15(d) of
the Securities Exchange Act of 1934; and

2) The information contained in the Report fairly presents, in all material
respects, the financial condition and result of operations of the Company.

Dated: August 14, 2004

                                            By:
                                            Name: Dr. Ramesh Zacharias
                                            Title: Chief Executive Officer

                                                                              28


<Page>







Exhibit 32.2
                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Med-Emerg International Inc. (the
"Company") on Form 10-Q for the period ending March 31, 2004 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, William
Danis Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. ss.
1350, as adopted pursuant to ss.906 of the Sarbanes-Oxley Act of 2002, that to
the best of my knowledge:


1) The Report fully complies with the requirements of section 13(a) or 15(d) of
the Securities Exchange Act of 1934; and

2) The information contained in the Report fairly presents, in all material
respects, the financial condition and result of operations of the Company.

Dated: August 14, 2004

                                            By:
                                            Name: William Danis
                                            Title: Chief Financial Officer





(b) Reports on Form 8-K

None.

* 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.


                                                                              29


<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/ Ramesh Zacharias

                                                Ramesh Zacharias
                                                Chief Executive Officer
Date:     August 14, 2004





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