UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

[X]      QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
         ACT OF 1934

                  For the Quarterly Period Ended March 31, 1999

                       Commission file number 333-05826-A

[ ]      TRANSITION REPORT UNDER SECTION 13 OR 16(d) OF THE SECURITIES EXCHANGE
         ACT OF 1934

         For The Transition Period From ___________ To _______________.

                           ATLANTIC INTEGRATED HEALTH
                                  INCORPORATED
        (Exact name of small business issuer as specified in its charter)

             North Carolina                                56-1966823
--------------------------------------         ---------------------------------
        (State of Incorporation)               (IRS Employer Identification No.)


                        1315 S. Glenburnie Road, Suite A5
                         New Bern, North Carolina 28562
                         ------------------------------
                    (Address of principal executive offices)

                                 (252) 514-0057
                                 --------------
                         (Registrant's telephone number)

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 past 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 the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.

                     Class                        Outstanding as of May 10, 1999
                     -----                        ------------------------------

     Primary Class, $1.00 par value                           312,500
     Referral Class, $1.00 par value                          454,000
     Nonprofit Class, nonvoting, $1.00 par value                4,500

Transitional Small Business Disclosure Format (check one): Yes [ ]   No [X]

<PAGE>


                         PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

                     ATLANTIC INTEGRATED HEALTH INCORPORATED

                           Consolidated Balance Sheets

<TABLE>
<CAPTION>

ASSETS                                                                     March 31,       December 31,
------                                                                       1999              1998
                                                                         ------------      ------------
                                                                          (Unaudited)         (Note)
<S>                                                                      <C>               <C>
Cash ...............................................................     $    201,175      $    115,507
Accounts receivable, less allowance for
     uncollectible accounts of $5,000 in 1999 and 1998 .............           80,793            64,934
Prepaid expenses ...................................................            2,756             3,562
                                                                         ------------      ------------
                       Total current assets ........................          284,724           184,003
Office equipment, net ..............................................            6,427             6,803
Deferred costs and other intangible assets .........................               --            82,711
                                                                         ------------      ------------
Total assets .......................................................     $    291,151      $    273,517
                                                                         ============      ============

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------

Current liabilities - Accounts payable .............................     $     34,845      $     45,766
                                                                         ------------      ------------
Long-term debt - Convertible debenture and accrued interest ........           94,050            92,700
                                                                         ------------      ------------
Stockholders' equity:
     Common stock - $1 par value-
          Primary class, authorized 1,000,000 shares; 312,500
              and 302,500 shares issued and outstanding in
              1999 and 1998, respectively ..........................          312,500           302,500
          Referral class, authorized 1,800,000 shares; 370,000
              and 454,000 shares issued and outstanding in
              1999 and 1998, respectively ..........................          454,000           370,000
          Nonprofit class, nonvoting, authorized 200,000
              shares; 4,500 and 2,500 shares issued and
              outstanding in 1999 and 1998, respectively ...........            4,500             2,500
     Additional paid-in capital ....................................           74,000            74,000
     Syndication costs .............................................         (105,000)         (105,000)
     Stock subscription and stockholder notes receivable ...........          (45,050)          (36,100)
     Accumulated deficit ...........................................         (532,694)         (472,849)
                                                                         ------------      ------------
Total stockholders' equity .........................................          162,256           135,051
                                                                         ------------      ------------
Total liabilities and stockholders' equity .........................     $    291,151      $    273,517
                                                                         ============      ============
</TABLE>

Note:    The balance sheet as of December 31, 1998 has been derived from the
         audited financial statements at that date but does not include all of
         the information and footnotes required by generally accepted accounting
         principles.

          See accompanying notes to consolidated financial statements.


                                       2
<PAGE>


                     ATLANTIC INTEGRATED HEALTH INCORPORATED

                      Consolidated Statements of Operations
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                     Three Months Ended
                                                                         March 31,
                                                                ----------------------------
                                                                    1999             1998
                                                                -----------      -----------
<S>                                                             <C>              <C>
Revenue ...................................................     $   123,077      $    65,031
                                                                -----------      -----------
Expenses:
     Consulting fees ......................................           8,217            3,102
     Salaries and wages ...................................          68,201           78,897
     Recruiting and education .............................           5,945            2,653
     Office expense and other .............................          14,389           16,667
     Rent .................................................           2,398            1,038
     Interest .............................................           1,350               --
     Depreciation and amortization ........................             625            2,033
                                                                -----------      -----------
                       Total expenses .....................         101,125          104,390
                                                                -----------      -----------
Operating income (loss) ...................................          21,952          (39,359)
Interest income ...........................................             914              330
                                                                -----------      -----------
Income (loss) before cumulative effect of a change
     in accounting principle ..............................          22,866          (39,029)


Cumulative effect of a change in accounting
     principle ............................................         (82,711)              --
                                                                -----------      -----------
Net loss ..................................................     $   (59,845)     $   (39,029)
                                                                ===========      ===========


Income (loss) per basic common share:
     Income (loss) before cumulative effect of a
        change in accounting principle ....................     $       .03      $      (.07)
     Cumulative effect of a change in accounting
        principle .........................................            (.12)              --
                                                                -----------      -----------
     Net loss .............................................     $      (.09)     $      (.07)
                                                                ===========      ===========
Basic average common shares outstanding ...................         712,333          586,333
                                                                ===========      ===========
</TABLE>


          See accompanying notes to consolidated financial statements.


                                       3
<PAGE>


                     ATLANTIC INTEGRATED HEALTH INCORPORATED

                      Consolidated Statements of Cash Flows
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                             Three Months Ended
                                                                                                  March 31,
                                                                                            1999             1998
                                                                                        -----------      -----------
<S>                                                                                     <C>              <C>
Cash flows from operating activities:
Net loss ..........................................................................     $   (59,845)     $   (39,029)
Adjustments to reconcile net loss to net cash used in operating activities-
              Depreciation and amortization .......................................             625            2,034
              Cumulative effect of a change in accounting principle ...............          82,711               --
              Increase in accounts receivable .....................................         (15,859)         (20,551)
              Decrease in prepaid expenses ........................................             806            2,886
              Increase in accrued interest payable ................................           1,350               --
              (Decrease) increase in accounts payable .............................         (10,921)          21,124
                                                                                        -----------      -----------
                       Net cash used in operating activities ......................          (1,133)         (33,536)
                                                                                        -----------      -----------

Cash flows from investing activities:
     Purchase of office equipment .................................................            (249)              --
                                                                                        -----------      -----------
                       Net cash used in investing activities ......................            (249)              --
                                                                                        -----------      -----------

Cash flows provided by financing activities:
     Proceeds from issuance of common stock .......................................          87,050           39,035
                                                                                        -----------      -----------
                       Net cash provided by financing activities ..................          87,050           39,035
                                                                                        -----------      -----------

Net increase in cash ..............................................................          85,668            5,499
Cash, beginning of period .........................................................         115,507          101,776
                                                                                        -----------      -----------
Cash, end of period ...............................................................     $   201,175      $   107,275
                                                                                        ===========      ===========
Supplemental disclosure:
     Common stock issued in exchange for notes ....................................     $     8,950      $     2,965
                                                                                        ===========      ===========
</TABLE>

          See accompanying notes to consolidated financial statements.


                                       4
<PAGE>


                     ATLANTIC INTEGRATED HEALTH INCORPORATED

                                   FORM 10-QSB
                                 MARCH 31, 1999

             Notes to Consolidated Financial Statements (Unaudited)

1.       INTERIM FINANCIAL INFORMATION

         In the opinion of management, the accompanying unaudited consolidated
financial statements contain all necessary adjustments, which are of a normal
recurring nature, to present fairly the financial position of Atlantic
Integrated Health Incorporated and its wholly-owned subsidiary, The Beacon
Company, as of March 31, 1999 and 1998, the results of operations for the three
months ended March 31, 1999 and 1998, and the cash flows for the three months
ended March 31, 1999 and 1998, in conformity with generally accepted accounting
principles. Operating results for the three month periods ended March 31, 1999
are not necessarily indicative of the results that may be expected for the year
ended December 31, 1999.

         These unaudited interim consolidated financial statements should be
read in conjunction with the financial statements and related notes contained in
the Company's Annual Report on Form 10-KSB dated December 31, 1998.

2.       INVESTMENT

         The Company, in conjunction with Kanawha Insurance Company ("Kanawha"),
formed Beacon in January 1997 when each contributed $1,000 of capital for an
equal number of shares. Beacon plans to market and sell health care services and
related employee benefit products, primarily in Eastern North Carolina. The
Company accounted for its investment on the equity method.

         On June 24, 1998, the Company purchased all of the shares of common
stock of Beacon held by Kanawha in exchange for $1,000 cash and the issuance by
Beacon of a convertible, subordinated debenture in the principal amount of
$90,000 (the "Debenture"). The Debenture is due and payable on June 30, 2003 and
bears interest at the rate of 6% per annum. The Debenture is convertible into 4%
of Beacon's outstanding common stock if Beacon completes a public offering of
its common stock. Beacon does not have any right to redeem the Debenture prior
to maturity. Upon the occurrence of an "Event of Default," as defined under the
Debenture, the entire unpaid principal and accrued interest will become
immediately due and payable.

         As a result of this transaction, Beacon has been consolidated with the
Company as of March 31, 1999 and for the period from June 24, 1998 through March
31, 1999.

3.       NET LOSS PER SHARE

         Net loss per share is computed by dividing the net loss for the period
by the weighted average number of shares of common stock outstanding during the
period.

4.       EXTENSION OF STOCK OFFERING

         On June 24, 1998, the Company filed a Post-Effective Amendment No. 3 to
its Registration Statement on Form SB-2 to extend its stock offering which
terminated on April 28, 1998. On August 7, 1998, the Company filed a
Post-Effective Amendment No. 4 to its Registration Statement in response to
comments received from the Securities and Exchange Commission. The Securities
and Exchange


                                       5
<PAGE>


Commission declared the Post-Effective Amendment No. 4 effective on August 12,
1998. From August 12, 1998 to March 10, 1999, Atlantic has sold an aggregate of
14,000 Primary Class Common Shares, 136,000 Referral Class Common Shares and
2,000 Nonprofit Class Nonvoting Common Shares. During the initial offering
period from December 30, 1996 through July 28, 1997, the Company sold an
aggregate of 116,000 Primary Class Common Shares and 216,000 Referral Class
Common Shares. During the second offering period from September 30, 1997 to
April 28, 1998, the Company sold an aggregate of 26,000 Primary Class Common
Shares, 76,000 Referral Class Common Shares and no Nonprofit Class Nonvoting
Common Shares. Atlantic plans to file Post-Effective Amendment No. 5 to continue
the offering and add additional physicians to the Atlantic network.

5.       NEWLY ISSUED ACCOUNTING STANDARD

         In April 1998, the American Institute of Certified Public Accountants
issued Statement of Position No. 98-5 "Reporting on the Costs of Start-Up
Activities" (SOP 98-5) which provides guidance on the financial reporting of
start-up costs and organization costs and requires that all non-governmental
entities expense the costs of start-up activities as these costs are incurred
instead of being capitalized and amortized. Atlantic adopted SOP 98-5 on January
1, 1999. The initial impact of adopting SOP 98-5 resulted in a charge of
$82,711, which has been reflected as a cumulative effect of a change in
accounting principle in the accompanying consolidated statement of operations
for the quarter ended March 31, 1999.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATION

         THIS FORM 10-QSB CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS. FOR THIS
PURPOSE, ANY STATEMENTS CONTAINED IN THIS FORM 10-QSB THAT ARE NOT STATEMENTS OF
HISTORICAL FACT MAY BE DEEMED TO BE FORWARD-LOOKING STATEMENTS. WITHOUT LIMITING
THE FOREGOING, WORDS SUCH AS "MAY," "WILL," "EXPECT," BELIEVE," "ANTICIPATE,"
"ESTIMATE" OR "CONTINUE" OR THE NEGATIVE OR OTHER VARIATIONS THEREOF OR
COMPARABLE TERMINOLOGY ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS.
THESE STATEMENTS BY THEIR NATURE INVOLVE SUBSTANTIAL RISKS AND UNCERTAINTIES,
AND ACTUAL RESULTS MAY DIFFER MATERIALLY DEPENDING ON A VARIETY OF FACTORS,
INCLUDING THOSE DESCRIBED UNDER THE CAPTION "RISK FACTORS" CONTAINED IN THE
COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR THE FISCAL YEAR ENDED DECEMBER 31,
1998.

         The following discussion of the results of the operations and financial
condition of Atlantic should be read in conjunction with Atlantic's Consolidated
Financial Statements and the related notes thereto.

OVERVIEW

         Atlantic is an independent, physician-owned and governed, integrated
medical practice group network. Since its inception, Atlantic has focused its
efforts on providing administrative services to participating physicians and
medical practice groups and on developing a community-based, integrated health
care delivery system to provide quality, cost-effective health care to the
citizens of Eastern North Carolina.

         Atlantic is in the process of integrating, economically and clinically,
physicians practicing primarily in single-specialty medical practice groups into
a larger multi-specialty network of physicians and medical practice groups.
Physicians participating in Atlantic's network provide primary and referral
specialty heath care services to managed care health plan enrollees and other
patients. Atlantic continues to develop strategic alliances with payors of
health care services and other health care providers to achieve greater
coordination of the delivery of and payment of health care services.


                                       6
<PAGE>


         As of May 9, 1999, Atlantic had entered into Medical Services Provider
Agreements covering over 500 physicians located in 21 counties of Eastern North
Carolina. The Medical Services Provider Agreements require participating
physicians to comply with key operating policies and procedures established by
Atlantic's physician Board of Directors. Additionally, as of May 9, 1999,
Atlantic through its subsidiary, The Beacon Company, had entered into Facility
Participation Agreements with seven hospitals in Eastern North Carolina. The
Facility Participation Agreements allow Atlantic to work with local hospitals on
joint contracting opportunities.

         Atlantic derives its revenues from four main sources. The first are
fees paid by employers, managed care health plans, and other third-party payors
to access Atlantic's integrated provider network. The second are commissions and
fees paid by employers for health plan related administrative and consulting
services. The third are fees paid by vendors on behalf of participating
physicians for providing group purchasing and related services, and the last is
administrative service fees paid by participating physicians.

         Atlantic plans to continue to provide administrative, group purchasing
and other services to participating physicians and to collect fees for
performing such services during 1999. Management, however, believes that
Atlantic's long term success will result from its continued ability to generate
revenues from managed care plans, HMOs, insurance carriers, employers and other
buyers of health care services for obtaining access to Atlantic's network and
health plan management services.

         Atlantic continues to meet directly with the management of major
regional employers and their employee benefits consultants to discuss Atlantic's
network and health plan management services. Although no assurance can be given,
Atlantic believes that it will continue to generate income from access and
management fees paid by buyers of health care services in 1999. As of May 9,
1999, Atlantic had agreements with employers covering over 6,000 lives.

         Atlantic entered into certain agreements with Kanawha in February 1998.
These agreements outline duties and responsibilities of each organization to
develop a variety of health plans to be marketed to small and large employers in
Atlantic's target markets. Initially, the parties intended to develop and
distribute HMO, PPO and third party administrator health plan products. Since
the agreements were executed, Kanawha has exited the HMO marketplace in North
Carolina. However, Atlantic and Kanawha are still working together to launch a
preferred provider organization and jointly market their health plan products to
self-insured payors.

         In connection with these agreements, Atlantic and Kanawha formed The
Beacon Company. Beacon is licensed by the State of North Carolina as an
insurance agency and serves as the general agent for the sale of Kanawha/Beacon
health plan products. Initially, Atlantic and Kanawha each purchased 1,000
shares of common stock of Beacon. However, in June 1998, Atlantic purchased all
of the 1,000 shares of Beacon common stock owned by Kanawha in exchange for
$1,000 cash and the issuance by Beacon of a convertible, subordinated debenture
in the principal amount of $90,000. The Debenture is due and payable on June 30,
2003 and bears interest at the rate of 6% per annum. The Debenture is
convertible into 4% of Beacon's outstanding common stock if Beacon completes a
public offering of its common stock. Beacon does not have any right to redeem
the Debenture prior to maturity. Upon the occurrence of an "Event of Default,"
as defined under the Debenture, the entire unpaid principal and accrued interest
will become immediately due and payable.

         Although the management of Atlantic finds it difficult to forecast when
exactly its operations will become profitable, management believes that
Atlantic's profitability is largely dependent upon several factors, including
(i) the number of physicians participating in Atlantic's network; and (ii) the
number of contracts and long-term relationships between Atlantic and managed
care health plans, insurance carriers, employers and other buyers of health care
services.


                                       7
<PAGE>


RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 1999 COMPARED TO THREE MONTHS ENDED MARCH 31, 1998

         Revenue increased from $65,031 for the three months ended March 31,
1998 to $123,077 for the three months ended March 31, 1999, an increase of
$58,046, or 89%. This increase was due to a strong growth in group purchasing
contract revenue and network access fees.

         Operating expenses decreased from $104,390 for the three months ended
March 31, 1998 to $101,125 for the three months ended March 31, 1999. This
decrease was attributable to a decrease in salaries and wages which was
partially offset by increases in consulting fees and rent expense.

         Salaries and wages decreased from $78,897 for the three months ended
March 31, 1998 to $68,201 for the three months ended March 31, 1999, a decrease
of $10,696. This decrease was due to incentive compensation paid in fourth
quarter of 1998 as opposed to the first quarter of 1999. Excluding the incentive
compensation, salaries and wages would have increased in 1999 because of
additional employees. Office and other expenses decreased slightly from $16,667
in the three months ended March 31, 1998 to $14,389 in the three months ended
March 31, 1999, a decrease of $2,278. This decrease was due to a temporary
decrease in fees paid to credential the physician network. Consulting fees
increased from $3,102 for the three months ended March 31, 1998 to $8,217 for
the three months ended March 31, 1999, an increase of $5,115.

         The operating income for Atlantic before the cumulative effect of
change in accounting principle was $21,952 for the three months ended March 31,
1999 compared to an operating loss of $39,359 for the three months ended March
31, 1998. The operating income for the first quarter of 1999 primarily resulted
from an increase in revenues and a decrease in salaries and wages paid during
the three months ended March 31, 1999. Atlantic incurred a net loss after the
cumulative effect of a change in accounting principle of $59,845 in the three
months ended March 31, 1999 compared with a net loss of $39,029 in the three
months ended March 31, 1998. The net loss primarily resulted from the adoption
by Atlantic of the provisions of Statement of Position No. 98-5, "Reporting on
the Costs of Start-Up Activities" (SOP 98-5) at the beginning of the first
quarter of 1999. SOP 98-5 provides guidance on the financial reporting of
start-up costs and organization costs and requires that all non-governmental
entities expense the costs of start-up activities as these costs are incurred
instead of being capitalized and amortized. The initial impact of adopting SOP
98-5 resulted in a charge of $82,711. While Atlantic's operating income before
the cumulative effect of adopting SOP 98-5 exceeded management's expectations
during the first quarter of 1999, management anticipates continued operating
losses for the next two years.

LIQUIDITY AND CAPITAL RESOURCES

         To date, Atlantic has financed its operations primarily through the
sale of equity securities and the collection of network development and access
fees and administrative fees.

         On October 19, 1996, Atlantic filed a Registration Statement on Form
SB-2 with the Commission, pursuant to which Atlantic registered for offer and
sale under the federal securities laws (i) 700,000 Primary Class Common Shares;
(ii) 1,400,000 Referral Class Common Shares; and (iii) 150,000 Nonprofit Class
Nonvoting Common Shares. The Commission declared Atlantic's Registration
Statement effective on December 30, 1996, and certain officers and directors of
Atlantic commenced sale of Atlantic's shares shortly thereafter. During the
initial offering period which closed on July 28, 1997, Atlantic sold 116,000
Primary Class Common Shares, 216,000 Referral Class Common Shares and no
Nonprofit Class Nonvoting Common Shares. On September 22, 1997, Atlantic filed a
Post-Effective Amendment No. 2 to the Registration Statement. The Commission
declared the Post-Effective Amendment No. 2 effective on September 30, 1997.
During the second offering period which closed on April 28, 1998, Atlantic sold
an aggregate of 26,000 Primary Class Common Shares, 76,000 Referral


                                       8
<PAGE>


Class Common Shares and no Nonprofit Class Nonvoting Common Shares. On June 24,
1998, Atlantic filed a Post-Effective Amendment No. 3 and on August 7, 1998 a
Post-Effective Amendment No. 4 in response to the Commission's comments on
Post-Effective Amendment No. 3. The Commission declared the Post-Effective
Amendment No. 4 effective on August 12, 1998. During the third offering period
which closed on March 10, 1999, Atlantic sold an aggregate of 14,000 Primary
Class Common Shares, 136,000 Referral Class Common Shares and 2,000 Nonprofit
Class Nonvoting Common Shares. Atlantic sold an aggregate of 156,000 Primary
Class Common Shares, 428,000 Referral Class Common Shares and 2,000 Nonprofit
Class Nonvoting Common Shares since the Registration Statement was first
declared effective on December 30, 1996. Atlantic plans to file Post-Effective
Amendment No. 5 to continue the offering and add additional physicians to the
Atlantic network. The net proceeds from Atlantic's Offering have been used for
working capital.

         Atlantic had $247,123 and $112,446 in working capital at March 31, 1999
and 1998, respectively. Atlantic's cash was $201,175 and $107,275 at March 31,
1999 and 1998, respectively. The increase in Atlantic's working capital and cash
balance is due to the increase in revenues described above and Atlantic's stock
offering. Depending upon the success of Atlantic's stock offering, which
Atlantic believes it will reactivate in the second quarter of 1999, and the
amount of future revenue derived from network development and access fees,
Atlantic believes that sufficient liquidity is available to satisfy its working
capital through December 31, 1999. In the event that the Company's future stock
sales and revenues derived from network development and access fees are lower
than projected, the Company anticipates that it may charge its shareholders
assessments, reduce the number of its employees or decrease compensation paid to
its officers.

         Atlantic did not have any material commitments for capital expenditures
as of March 31, 1999.


                                       9
<PAGE>


                           PART II - OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

         None.

ITEM 2 - CHANGES IN SECURITIES AND USE OF PROCEEDS

         During the three months ended March 31, 1999, the Company has not
         issued or sold any securities that were not registered under the
         Securities Act of 1933, as amended.

         On October 19, 1996, Atlantic filed a Registration Statement on Form
         SB-2 with the Commission, pursuant to which Atlantic registered for
         offer and sale under the federal securities laws (i) 700,000 Primary
         Class Common Shares; (ii) 1,400,000 Referral Class Common Shares; and
         (iii) 150,000 Nonprofit Class Nonvoting Common Shares. The Commission
         declared Atlantic's Registration Statement effective on December 30,
         1996, and certain officers and directors of Atlantic commenced sale of
         Atlantic's shares shortly thereafter. During the initial offering
         period which closed on July 28, 1997, Atlantic sold 116,000 Primary
         Class Common Shares, 216,000 Referral Class Common Shares and no
         Nonprofit Class Nonvoting Common Shares. On September 22, 1997,
         Atlantic filed a Post-Effective Amendment No. 2 to the Registration
         Statement. The Commission declared the Post-Effective Amendment No. 2
         effective on September 30, 1997. During the second offering period
         which closed on April 28, 1998, Atlantic sold an aggregate of 26,000
         Primary Class Common Shares, 76,000 Referral Class Common Shares and no
         Nonprofit Class Nonvoting Common Shares. On June 24, 1998, Atlantic
         filed a Post-Effective Amendment No. 3 and on August 7, 1998 a
         Post-Effective Amendment No. 4 in response to the Commission's comments
         on Post-Effective Amendment No. 3. The Commission declared the
         Post-Effective Amendment No. 4 effective on August 12, 1998. During the
         third offering period which closed on March 10, 1999, Atlantic sold an
         aggregate of 14,000 Primary Class Common Shares, 136,000 Referral Class
         Common Shares and 2,000 Nonprofit Class Nonvoting Common Shares.
         Atlantic sold an aggregate of 156,000 Primary Class Common Shares,
         428,000 Referral Class Common Shares and 2,000 Nonprofit Class
         Nonvoting Common Shares since the Registration Statement was first
         declared effective on December 30, 1996. Atlantic plans to file
         Post-Effective Amendment No. 5 to continue the offering and add
         additional physicians to the Atlantic network.

         Since the Registration Statement was first declared effective on
         December 30, 1996, the Company has received $586,000 in gross proceeds,
         $105,000 of which the Company estimates has been used for offering
         expenses and the balance of which has been used for working capital.
         All of the expenses incurred in connection with the offering were paid
         to unrelated parties or entities. The vast majority of the offering
         expenses were paid to attorneys, accountants and financial printers.
         The balance of the net proceeds received by Atlantic was used to fund
         general working capital purposes, including payment of rent and the
         salaries of certain directors and officers.

ITEM 3 - DEFAULTS UPON SENIOR SECURITIES

         Not applicable.

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         None.


                                       10
<PAGE>


ITEM 5 - OTHER INFORMATION

         None.

ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

         (a)      Exhibits.

                  Exhibit
                  Number                   Description
                  ------                   -----------

                    27.1                   Financial Data Schedule

         (b)      Reports on Form 8-K

                  No reports on Form 8-K were filed during the quarter ended
                  March 31, 1999.


                                       11
<PAGE>


                                   SIGNATURES

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

                                   ATLANTIC INTEGRATED HEALTH
May 10, 1999                       INCORPORATED


                                   By: /s/ J. Philip Mahaney Jr., M.D.
                                       -----------------------------------------
                                           J. Philip Mahaney, Jr., M.D.
                                           President and Chief Executive Officer
                                           (principal executive officer)


                                   By: /s/ Stephen W. Nuckolls
                                       -----------------------------------------
                                           Stephen W. Nuckolls
                                           Chief Financial Officer
                                           (principal financial and accounting
                                           officer)


                                       12
<PAGE>


                                  EXHIBIT INDEX


Exhibit Number             Description                       Location
--------------             -----------                       --------

    27.1             Financial Data Schedule       Filed herewith electronically


                                       13