<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                     --------------------------------------
                                    FORM 10-Q

(MARK ONE)
      [X]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
            EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2001
                                       OR
      [ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
            SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM
            __________ TO __________

                         COMMISSION FILE NUMBER: 1-13861

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

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

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

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

                  Indicate by check mark whether the registrant: (1) has filed
all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes [X] No [ ]

                  As of May 15, 2001, 7,017,994 shares of the registrant's
Common Stock were outstanding.

<PAGE>


                          Med-Emerg International Inc.
                           Consolidated Balance Sheet
        As at March 31, 2001 (unaudited) and December 31, 2000 (audited)
                                    (in US$)

<TABLE>
<CAPTION>
                                                                  MARCH 31                    DECEMBER 31
                                                                     2001                         2000
                                                             ------------------            -----------------
<S>                                                                <C>                          <C>
ASSETS

CURRENT ASSETS
              Cash and short term investments                         $ 72,844                   $  121,765
              Accounts receivable                                    2,123,565                    1,994,446
              Prepaid expenses and other                               268,151                      231,167
                                                             ------------------            -----------------
                                                                     2,464,560                    2,347,378
                                                             ------------------            -----------------
Capital assets                                                       1,572,948                    1,667,716
Goodwill                                                             1,722,144                    1,837,275
Other assets                                                         3,130,617                    3,372,761
Deferred income taxes                                                  261,529                      159,440
                                                             ------------------            -----------------
                                                                   $ 9,151,798                  $ 9,384,570
                                                             ==================            =================
LIABILITIES

CURRENT LIABILITIES
              Bank Indebtedness (note 3)                           $ 1,484,403                  $ 1,567,676
              Accounts payable and accrued liabilities               2,925,829                    2,721,131
              Restructuring reserve                                     29,414                       36,908
              Note payable to a related party                          191,449                      175,059
              Current portion of long-term debt                        274,837                      318,562
                                                             ------------------            -----------------
                                                                     4,905,932                    4,819,336

Long term debt                                                               -                       11,537
                                                             ------------------            -----------------
                                                                     4,905,932                    4,830,873
                                                             ------------------            -----------------
Minority interest                                                      446,365                      411,352
                                                             ------------------            -----------------


Commitments and contingencies (note 7)

              Capital Stock                                         10,058,975                   10,058,975
              Contributed surplus                                    1,022,100                    1,022,100
              Deficit                                               (6,803,896)                  (6,634,408)
              Cumulative translation adjustment                       (477,678)                    (304,322)
                                                             ------------------            -----------------
                                                                     3,799,501                    4,142,345
                                                             ------------------            -----------------
                                                                   $ 9,151,798                  $ 9,384,570
                                                             ==================            =================
</TABLE>


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


<PAGE>

                          Med-Emerg International Inc.
                      Consolidated Statement of Operations
             Three Months Ended March 31, 2001 and 2000 (unaudited)
                                    (in US$)

<TABLE>
<CAPTION>
                                                                         MARCH                     MARCH
                                                                          2001                     2000
                                                                --------------------------------------------
<S>                                                                     <C>                    <C>
REVENUE                                                                  $ 3,759,713            $ 3,799,593

PHYSICIAN FEES AND OTHER DIRECT COSTS                                      2,276,606              2,274,554
                                                                ---------------------       ----------------
                                                                           1,483,107              1,525,039
                                                                ---------------------       ----------------
EXPENSES
            Salaries and benefits                                          $ 760,927              $ 705,371
            General and administration                                       161,827                159,735
            Occupancy costs and supplies                                     406,682                432,362
            Public company costs                                              14,786                 21,692
            Travel & Marketing                                                42,590                 47,943
                                                                ---------------------       ----------------
                                                                           1,386,812              1,367,103
                                                                ---------------------       ----------------
INCOME BEFORE INTEREST & FINANCING COSTS,
            AMORTIZATION, HEALTHYCONNECT.COM & TAXES                          96,295                157,936
                                                                ---------------------       ----------------
            Interest and financing expense                                    50,501                 49,604
            Amortization of capital assets                                    44,101                 95,850
            Amortization of goodwill                                          37,102                 91,166
            Amortization of other assets                                      43,887                      -
            Amortization of Healthy Connect.com software costs               115,025                      -
            Healthy Connect.com development costs                            156,270                465,944
            Dilution Gain                                                    (25,938)                     -
                                                                ---------------------       ----------------
                                                                             420,948                702,564
                                                                ---------------------       ----------------
LOSS BEFORE INCOME TAXES                                                    (324,653)              (544,628)
            Income taxes (recovery)                                         (129,861)              (119,819)
                                                                ---------------------       ----------------

NET LOSS BEFORE MINORITY INTEREST & PREFERRED SHARES                        (194,792)              (424,809)
            Minority Interest                                                (59,055)                     -
                                                                ---------------------       ----------------
NET LOSS BEFORE PREFERRED SHARE DIVIDENDS                                   (135,737)              (424,809)
            Preferred share dividends                                        (33,750)               (34,358)
                                                                ---------------------       ----------------

NET LOSS                                                                    (169,487)              (459,167)

DEFICIT, BEGINNING OF THE PERIOD                                          (6,634,409)            (4,335,566)
                                                                ---------------------       ----------------
DEFICIT, END OF THE PERIOD                                              $ (6,803,896)          $ (4,794,733)
                                                                =====================       ================
BASIC AND FULLY DILUTED LOSS, PER SHARE                                      $ (0.02)               $ (0.09)
                                                                =====================       ================
WEIGHTED AVERAGE NUMBER OF COMMON SHARES                                   7,017,994              5,243,825
                                                                =====================       ================
</TABLE>

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

<PAGE>

                          Med-Emerg International Inc.
                      Consolidated Statement of Cash Flows
                    As at March 31, 2001 and 2000 (unaudited)
                                    (in US$)

<TABLE>
<CAPTION>
                                                                               March 31                March 31
                                                                                 2001                    2000
                                                                        -------------------      -----------------
<S>                                                                             <C>                    <C>
CASH FLOWS FROM OPERATING ACTIVITIES
          Net loss for the period                                               $ (135,737)            $ (424,809)
          Adjustments for:
                 Amortization of capital assets                                     44,101                 95,850
                 Amortization of goodwill and other assets                         196,014                 91,166
                 Deferred income taxes                                            (129,861)              (117,767)
                 Dilution gain from HealthyConnect.com                             (25,938)
                 Minority interest                                                 (59,055)
                 Stock compensation                                                      -                 40,133
                                                                        -------------------      -----------------
                                                                                  (110,475)              (315,427)
          Increase (decrease) in non-cash working capital components                55,707                (69,231)
                                                                        -------------------      -----------------
                                                                                   (54,768)              (384,658)
                                                                        -------------------      -----------------
CASH FLOWS FROM INVESTING ACTIVITIES
          Additions to capital assets                                              (20,463)                     -
          Proceeds from disposals                                                        -                 42,942
          Other Assets                                                                   -                200,043
                                                                        -------------------      -----------------
                                                                                   (20,463)               242,985
                                                                        -------------------      -----------------
CASH FLOWS FROM FINANCING ACTIVITIES
          Bank indebtedness                                                        (16,231)              (300,094)
          Issue of common shares                                                         -                357,072
          Term loans advanced                                                            -                 58,573
          Obligations repaid under capital lease                                      (566)                     -
          Repayment of debt                                                        (41,746)               (72,969)
          Due to minority Interest                                                  54,363                      -
          Due to related parties                                                    24,671                      -
                                                                        -------------------      -----------------
                                                                                    20,491                 42,582
                                                                        -------------------      -----------------
Effect of foreign currency exchange rate changes                                     5,820                (17,205)

DECREASE IN CASH AND SHORT-TERM INVESTMENTS                                        (48,921)              (116,296)
Cash and short-term investments, beginning of period                               121,765                229,965
                                                                        -------------------      -----------------
Cash and short-term investments, end of period                                    $ 72,844              $ 113,669
                                                                        ===================      =================
</TABLE>

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

<PAGE>

MED-EMERG INTERNATIONAL INC.
Notes to Unaudited Consolidated Financial Statements
Three months ended March 31, 2001 and 2000


1.       ORGANIZATION AND DESCRIPTION OF BUSINESS

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

         The Company's operations are divided into three divisions, Physician
         and Nurse Recruitment Services, Physician Management Services and an
         internet-based healthcare network called HealthyConnect.com.
         Med-Emerg's strategy in 2001 will be to focus on Physician and Nurse
         Recruitment Services and Physician Management Services. The Company
         intends to broaden its recruiting and management services over a
         wider geographic base, as well as pursuing opportunities for our
         expertise in the pharmaceutical industries and federal government
         contracts.

         On a contractual basis, the Company provides emergency department
         physician and nurse recruitment, staffing and administrative support
         services to hospitals. At March 31, 2001, the Company had 15 contracts
         for physician staffing and 8 contracts for nurse staffing.

         Under physician management services, the Company owns and manages
         medical clinic facilities providing physicians with the ability to
         practice within a professional managed network enabling the physician
         to concentrate on the clinical aspects of their practices. All the
         clinic assets including medical equipment are owned by the company. At
         March 31, 2001, the Company owned and managed 23 clinics.

         On March 8th, 2001, Med-Emerg was awarded a 3-year management
         service contract to manage up to 400 medical personnel to all Canadian
         Forces Bases across Canada. The contract, which is effective
         immediately, extends through March 31, 2004. Through this agreement
         Med-Emerg will recruit, schedule and manage physicians, nurses,
         dentists, physiotherapists and other regulated healthcare
         professionals to provide services as required by the Canadian Forces
         health authority resident on each base.

         As a result of management and the board's decision to focus on the
         core business, the Company intends to divest its interest in
         HealthyConnect.com in fiscal 2001.

2.       BASIS OF PRESENTATION

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

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

         These consolidated financial statements, footnote disclosures and other
         information should be read in conjunction with the consolidated
         financial statements and the notes thereto included in the Company's
         Annual Report on Form 10-K for the year ended December 31, 2000.

<PAGE>

MED-EMERG INTERNATIONAL INC.
Notes to Unaudited Consolidated Financial Statements
Three months ended March 31, 2001 and 2000


3.       BANK COVENANTS

         As at March 31, the Company was in violation of certain loan
         covenants and its bankers have requested repayment of the advances.
         The Company is currently in negotiation with its bankers to secure
         extensions of existing arrangements and final settlement.


4.       ACQUISITIONS AND DISPOSITIONS

         Effective November 5, 1999, the Company purchased all of the
         outstanding securities of YFMC Healthcare Inc. a Canadian physician
         management services organization that owns and manages 22 medical
         clinics in exchange for similar securities of the Company. As at
         December 31, 1999, the Company provided for $356,889 for integration
         costs in connection with the acquisition. As at March 31, 2001 there
         was a balance of $ 29,414 which is expected to be utilized in
         connection with the leasing costs of one office currently vacant.


         As part of a strategic plan to restructure its operation and focus on
         its core business, during fiscal year 2000, the company disposed of the
         three unprofitable clinics namely, Spirotech, Britannia Urgent Care and
         J.C. Medical Management Inc.


5.       CANADIAN AND UNITED STATES ACCOUNTING POLICY DIFFERENCES

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

         Consolidated statements of operations

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

<TABLE>
<CAPTION>
                                                                     March          March
                                                                      2001           2000
<S>                                                           <C>               <C>
         Net income (loss) based on Canadian GAAP             $  (135,737)      $ (424,809)
         Start-up costs amortized/(deferred)                       10,994           11,055
         Deferred acquisition costs                                     -          (15,641)
         Goodwill amortization                                    (13,710)               -
         Dilution Gain                                            (25,938)               -
                                                              ------------      -----------
         Net loss based on United States GAAP                 $  (164,391)      $ (429,395)
                                                              ------------      -----------
         Primary loss per share                               $     (0.02)      $    (0.08)
                                                              ------------      -----------
                                                              ------------      -----------
</TABLE>


<PAGE>

MED-EMERG INTERNATIONAL INC.
Notes to Unaudited Consolidated Financial Statements
Three months ended March 31, 2001 and 2000


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

         If United States GAAP were employed, deficit, goodwill and other
         assets and deferred start-up costs, would be adjusted as follows:


<TABLE>
<CAPTION>
                                                                            March           December
                                                                             2001               2000
                                                                   --------------     --------------
<S>                                                                <C>                <C>
         Deficit based on Canadian GAAP                            $  (6,803,896)     $  (6,634,408)
         Start-up costs deferred                                        (181,600)          (200,907)
         Goodwill amortization                                           (77,029)           (63,319)
         Dilution Gain                                                   (25,938)        (1,188,525)
                                                                   --------------     --------------
                                                                   $  (7,088,463)     $  (8,087,159)
                                                                   --------------     --------------
                                                                   --------------     --------------

         Goodwill & other assets based on Canadian GAAP            $   4,852,761      $   5,210,036
         Start-up costs deferred                                        (181,600)          (200,907)
         Goodwill on purchase of YFMC Healthcare Inc.                  1,010,843          1,024,553
                                                                   --------------     --------------
                                                                   $   5,682,004      $   6,033,682
                                                                   --------------     --------------
                                                                   --------------     --------------
</TABLE>

         (a)    Deferred Income Taxes

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

<PAGE>

MED-EMERG INTERNATIONAL INC.
Notes to Unaudited Consolidated Financial Statements
Three months ended March 31, 2001 and 2000

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


         (b)    Deferred Start-up Costs

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


         (c)    Dilution Gain

                Under US GAAP, the gain realized on the issuance of the
                shares of a subsidiary to third party at an amount greater
                than the net book value is treated as additional paid in
                capital.

         (d)    Earnings Per Share

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

          (e)   Stock Compensation

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


<PAGE>

MED-EMERG INTERNATIONAL INC.
Notes to Unaudited Consolidated Financial Statements
Three months ended March 31, 2001 and 2000


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

                As allowed by SFAS 123, the Company has decided to continue to
                use Accounting Principles Board Opinion No. 25 "Accounting for
                Stock Issued to Employees" in accounting for the Company's Stock
                Option Plan (the "Plan") for U.S. GAAP purposes.


         (f)    Goodwill

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

          (g)   Shareholders' Equity

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

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

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


<PAGE>

MED-EMERG INTERNATIONAL INC.
Notes to Unaudited Consolidated Financial Statements
Three months ended March 31, 2001 and 2000

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

                The effect on shareholders' equity would be as follows:

<TABLE>
<CAPTION>
                                                                                March           December
                                                                                 2001               2000
                                                                        -------------       ------------
<S>                                                                     <C>                 <C>
         Capital stock                                                  $  10,058,975       $ 10,058,975
         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                                      11,110,441         11,110,441
            Share purchase loan to officer                                          -                  -
                                                                        -------------       ------------
            Net capital stock - U.S. GAAP                                  11,110,441         11,110,441
                                                                        -------------       ------------
                                                                        -------------       ------------
        Contributed surplus                                                1,022,100           1,022,100
         Share purchase warrants                                               36,406             36,406
                                                                        -------------       ------------
         Contributed surplus - U.S. GAAP                                    1,058,506          1,058,506
                                                                        -------------       ------------
         Deficit - U.S. GAAP                                               (7,088,463)        (8,087,159)
         Cumulative translation adjustment                                   (477,678)          (304,322)
                                                                        -------------       ------------
         Shareholders' equity (deficit) - U.S. GAAP                      $  4,602,806       $  3,777,466
                                                                        -------------       ------------
                                                                        -------------       ------------
</TABLE>


         (h)    Comprehensive Income

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


<TABLE>
<CAPTION>
                                                                                March              March
                                                                                 2001               2000
                                                                        -------------       ------------
<S>                                                                     <C>                 <C>
         Net Income (loss) (U.S. GAAP)                                  $    (164,391)       $  (429,395)
         Foreign currency translation adjustment                        $    (173,356)       $   (36,803)
                                                                        -------------       ------------
         Comprehensive loss                                             $    (337,747)       $  (466,198)
                                                                        -------------       ------------
</TABLE>

(i)    REVENUE REPORTING
       Under U.S GAAP, EITF 99-19 outlines the items, which should be
       considered in determining whether revenue should be reported on a
       gross or on a net basis. In assessing whether revenue should be
       reported gross with separate display of cost of sales to arrive at
       gross profit, or on a net basis, the SEC staff considers whether the
       company:

         1.  Acts as a principal in the transaction,
         2.  takes title to the products,
         3.  has risks and rewards of ownership, such as risk of loss for
             collection, delivery, or returns, and
         4.  acts as agent or broker with compensation on a commission or fee
             basis.

       The company acts both as principal and as an agent or broker in the
       management of the clinics. As a result the revenue amount reported in
       the financial statements is a mix of both gross and net revenues.
       Under US GAAP, the mix of gross and net revenue to be reported on the
       Income statement would be as follows:

                                                           March        March
                                                            2001         2000
                                                       ---------    ---------
       On a gross basis (Physician and nurse
       recruiting)                                     1,732,433    1,880,177
       On a net basis (Physician management services)  1,111,281    1,220,952
                                                       ---------    ---------
       Total revenue                                   2,843,714    3,101,129
       Less: Physician fees and other direct expenses  1,360,607    1,576,090
                                                       ---------    ---------
       Gross Margin                                    1,483,107    1,525,039
                                                       ---------    ---------
                                                       ---------    ---------

<PAGE>

MED-EMERG INTERNATIONAL INC.
Notes to Unaudited Consolidated Financial Statements Three months ended March
31, 2001 and 2000


6.       SEGMENTED INFORMATION

         The Company operates under three divisions: Physician and Nurse
         Recruitment, Physician Management Services and Healthy Connect.com.

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

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

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

         Details are as follows:
<TABLE>
<CAPTION>
                                                                         March 31, 2001
                                                    --------------------------------------------------------
                                                     Physician       Physician
                                                       & Nurse      Management          Healthy
                                                    Recruiting        Services      Connect.com   Consolidated
                                                    ----------      ----------      -----------   ------------
<S>                                                  <C>             <C>            <C>            <C>
         Revenue                                     1,732,433       2,027,280             -       3,759,713
         Gross margin                                  371,826       1,111,281             -       1,483,107

         Operating income before Corporate Overhead
           & Public Company-related costs              123,524         141,974      (271,295)         44,203
         Corporate Overhead                                                                         (204,417)
         Public Company-related costs                                                                (14,786)
                                                                                                    --------
         Operating loss                                                                             (175,000)

         Assets employed at end of period            3,660,719       5,491,079             -       9,151,798
         Depreciation and amortization                  11,714          32,837             -          44,101
         Capital expenditures                                -          20,463             -          20,463
</TABLE>

<PAGE>

MED-EMERG INTERNATIONAL INC.
Notes to Unaudited Consolidated Financial Statements
Three months ended March 31, 2001 and 2000


6.       SEGMENTED INFORMATION (cont'd)

<TABLE>
<CAPTION>
                                                                          March 31, 2000
                                                    --------------------------------------------------------
                                                     Physician       Physician
                                                       & Nurse      Management          Healthy
                                                    Recruiting        Services      Connect.com   Consolidated
                                                    ----------      ----------      -----------   ------------
<S>                                                  <C>             <C>            <C>            <C>
         Revenue                                     1,880,177       1,919,416             -       3,799,593
         Gross margin                                  304,087       1,220,952             -       1,525,039

         Operating income before Corporate Overhead
           & Public Company-related costs              206,013         205,666      (465,944)        (54,265)
         Corporate Overhead                                                                         (232,051)
         Public Company-related costs                                                                (21,692)
                                                                                                -------------
         Operating loss                                                                             (308,008)

         Assets employed at end of period            3,799,366       5,699,049             -       9,498,415
         Depreciation and amortization                  25,459          70,391             -          95,850
         Capital expenditures                           23,315          19,619             -          42,934

</TABLE>


7.       COMMITMENTS AND CONTINGENCIES

         "YMFC HealthCare Inc., a wholly owned subsidiary of MEII, is in receipt
         of a letter from Canada Customs and Revenue Agency ("CCRA") 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 CCRA for this period is $253,379. In the event that
         YFMC becomes liable to pay any such amount to CCRA, MEII will claim an
         indemnity for such amount against the directors and certain named
         principals of YFMC pursuant to MEII's rights under the Business
         Combination Agreement executed on August 10, 1999."


8.       SUBSEQUENT EVENTS

         (i)  Pursuant to an agreement dated April 6, 2001, the Company
         raised $500,000 (before issuance costs) subject to the issuance of
         1,000,000 shares at $0.50 each, through a private placement.

         (ii) In order to comply with its performance obligations in respect of
         the contract with Public Works and Government Services ("PWGSC") for
         civilian health care services for in-garrison support for the
         Canadian Forces, the company has obtained a financing facility on
         April 23, 2001 in the amount of CAN$4,300,000 (US$2,745,000) from
         Morrison Financial Services Limited ("Morrison Financial"). Under
         this facility, Morrison Financial will purchase qualifying invoices
         issued to PWGSC, advancing up to 80% of the face amount to the
         company at the time of presentment with the balance paid out in full
         upon collection of the invoice. Discount fees will be calculated at
         2.25% of the face amount of each invoice. This facility will be
         secured by a general security agreement granting Morrison Financial
         a charge on all assets and undertakings of the company,
         implementation of appropriate procedures and completion of all
         requirements under the Financial Administration Act and postponement
         and subordination of all security in the company held by a third
         party (bank) but only in respect of this financing.


<PAGE>


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

OVERVIEW

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

Med-Emerg is positioned to establish industry leadership by providing integrated
professional management services in the delivery of healthcare to the healthcare
consumer. The Company's operations are divided into three divisions: Physician
and Nurse Recruitment Services, Physician Management Services and an internet
based healthcare network called HealthyConnect.com. Med-Emerg's strategy is to
remain focussed on these three divisions while continuing to broaden its
consolidation of physicians over a wider geographic base. Med-Emerg believes
that it is well positioned to benefit from the aging of the baby boomer
population, to capitalize on recent developments within the North American
healthcare environment and to integrate opportunities available through internet
technology. Specifically, the Company's strategy is to leverage its 15 years of
physician recruitment experience in becoming a dominant player in Physician
Management Services and to develop an internet-based healthcare network that
connects physicians, patients, third party payors and consumers to a "virtual
world" of healthcare products, services and health information.

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

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

MEII was deliberate in business development strategy to leverage its knowledge
of the public hospital and clinic staffing business into a new, untouched
horizontal market, government agency healthcare staffing. In Canada, provincial
and federal governments are responsible for operating and staffing health
facilities associated with Canada's military, Department of Veteran's Affairs,
Corrections and Penitentiary Services, Royal Canadian Mounted Police and
Canada's Aboriginal Peoples. The services are often poorly managed.


<PAGE>

The company was successful in being awarded the contract for civilian
in-garrison healthcare services for the Department of National Defense. The
contract, the largest of its kind in Canada is a six year agreement (three plus
another three years option to renew) that will see MEII recruit and staff an
annual complement in excess of 400 full time healthcare providers in all
Canadian Forces Bases. Annual costs of services provided under this contract are
expected to be $23 million. MEII receives an annual administrative fee to
recruit and manage required personnel. The contract, awarded on March 8, 2001 is
currently on schedule in its implementation phase. During this stage, MEII has
hired regional recruiting staff across Canada to service local Canadian Forces
Bases. Standard operating procedures and training programs have been completed,
documented and approved by Defense staff. Leveraging off its 18 years experience
in the physician and nurse emergency staffing business has enabled MEII to
implement this contract quickly and efficiently. Senior staff managing this
project has previous Canadian military experience and this has been helpful in
matching the project requirements to the specific needs of full time regular
forces. This contract and its supporting infrastructure creates a robust
horizontal platform that will allow MEII to take advantage of other major
government staffing contracts, both to penetrate its traditional hospital
staffing and physician management services across Canada.

On March 15, 2001, Med-Emerg International Inc. and Schering Canada Inc., a
leading Canadian pharmaceutical supplier, entered into an agreement to have
MEII clinics provide special access Remicade-TM- infusion services to
patients suffering from Crohn's Disease and Rheumatoid Arthritis.

Under this agreement, MEII medical staff will provide all infusion services
for patients referred to Schering Canada Inc.'s Remicade-TM- program at clinic
locations across Canada. Remicade-TM- reduces inflammation in patients with
Crohn's disease and rheumatoid arthritis by binding to and neutralizing
TNF-alpha on the cell membrane and in the blood. TNF-alpha is a key
inflammatory mediator, or cytokine, in rheumatoid arthritis, Crohn's disease
and other autoimmune disorders.

About 40,000 Canadians have Crohn's disease, a severe gastrointestinal-tract
inflammation that causes diarrhea, abdominal pain, fever and weight loss. In
severe cases, patients develop intestinal blockages and ulcer-like channels
called fistulas that burrow through the bowel wall. It mostly strikes women,
usually between the ages 20 and 35. There is no cure. Most patients are
treated with steroids to reduce the inflammation; some require repeated
surgeries to remove damaged parts of the intestine. In one of the largest
clinical studies ever conducted in patients with advanced rheumatoid
arthritis, Remicade-TM- produced significant reductions in symptoms. The
patients continued to improve after treatment, which ranged from 30 to 54
weeks.

<PAGE>

RESULTS OF OPERATIONS

First Quarter Ended March 31, 2001 compared to First Quarter Ended March 31,
2000

REVENUES. Revenues decreased by $39,880 or 1% from $3,799,593 in the first
quarter of 2000 to $3,759,713 in the first quarter of 2001.

Revenues generated by Physician Management Services increased by $107,864 or
5.6% from $1,919,416 in the first quarter of 2000 to $2,027,280 during the
first quarter of 2001.

Revenues from Physician and Nurse Recruiting decreased by $147,744 or 7.9% to
$1,732,433 during the first quarter of 2001 from $1,880,177 during same period
for 2000.

PHYSICIAN FEES AND OTHER DIRECT COSTS. Physician fees and direct costs, which
primarily represents fees to contract physicians, increased $2,052 or .09%
from $2,274,554 in the first quarter of 2000 to $2,276,606 in the first
quarter of 2001. Physician fees and other direct costs increased as a percent
of revenue, representing 60.6% of revenues for the quarter ended March 31,
2001 and 59.9% of revenues for the quarter ended March 31, 2000. The increase
as a percent of revenue is largely due to the mix of revenue between
Physician & Nurse Recruiting and Physician Management Services. As the
Physician Management Services revenues increase, the larger gross margin
related to Physician Management Services causes a decrease in physician fees
and other direct costs as a percent of revenue.

Physician fees and other direct costs of the Physician Management Services
division increased by $215,484 or 31.1% from the first quarter of 2001 compared
to the same period in 2000.

Physician fees and other direct costs of the Physician & Nurse Recruiting
division decreased by $215,484 or 13.7% from the first quarter of 2001 compared
to the same period in 2000.

OPERATING EXPENSES. Operating expenses have increased by $19,709 or 1.4% to
$1,386,812 in the first quarter of 2001 from $1,367,103 in the first quarter of
2000.


<PAGE>

NET PROFIT/LOSS. The Company reported income before HealthyConnect.com,
amortization, interest, taxes and financing costs of $96,295 for the three
months ended March 31, 2001 as compared to $157,935 for the three months
ended March 31, 2000. The company reported a net loss of $194,792 for the
three months ended March 31, 2001 as compared to $424,809 for the three
months ended March 31, 2000.

Under U.S. GAAP, the Company reported a net loss of $(164,391) for the three
months ended March 31, 2001 as compared to a net loss of $(429,395) for the
three months ended March 31, 2000.

LIQUIDITY AND CAPITAL RESOURCES

As at March 31, 2001, the company's working capital deficit totaled
$2,441,372. The company has available credit facilities for up to
approximately $3,117,855. During the period, the Company was in violation of
its loan covenants and its bankers have requested repayment of advances. The
company is in negotiation with its bankers to secure extensions of existing
arrangements and final settlement. The Company established credit facilities
that provide operating lines of credit amounting to $1,600,534, bearing
interest at the bank's prime lending rate plus 0.5% to 1.0% per annum with
interest payable monthly, and capital lines of credit amounting to 1,567,676.
The capital lines of credit bear varying interest rates from the bank's prime
lending rate plus 0.75% to 9.65% per annum. As at March 31, 2001, the Company
has drawn approximately $666,900 against the operating facility and $121,154
against the capital facility.

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



ITEM 3:      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

No disclosure required.

<PAGE>


SIGNATURES


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


                                        MED-EMERG INTERNATIONAL INC.



                                        By:      /s/ Ramesh Zacharias

                                                 Ramesh Zacharias
                                                 Chief Executive Officer
Date:  May 18, 2001