<PAGE>   1

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

 (Mark One)

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

For the quarterly period ended June 30, 2000
                               ------------------------------------------------

                                       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              000-29795
                       --------------------------------------------------------

                                 MegaWorld, Inc.
-------------------------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)


               DELAWARE                             11-3118271
-----------------------------------   -----------------------------------------
   (State or other jurisdiction of    (I.R.S. Employer Identification Number)
    incorporation or organization)


6250 North Houston Rosslyn Road, Houston, Texas              77091
-------------------------------------------------------------------------------
  (Address of principal executive offices)                 (Zip Code)



                                 (713) 462-6906
--------------------------------------------------------------------------------
                           (Issuer's telephone number)

--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report)

         Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act 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
     ----       ---

         State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date: 42,042,372 outstanding as
of August 11, 2000.


<PAGE>   2
                                MEGAWORLD, INC.

                                     INDEX


<TABLE>
<CAPTION>
                                                                                       PAGE NO.
                                                                                       --------

<S>           <C>                                                                         <C>
PART I.  FINANCIAL INFORMATION

         Item 1. Financial Statements.................................................    3

                  Condensed Consolidated Balance Sheets (Unaudited)
                           June 30, 2000 and September 30, 1999.......................    3

                  Condensed Consolidated Statements of Operations (Unaudited)
                           Three Months and Nine Months Ended
                                    June 30, 2000 and 1999............................    4

                  Condensed Consolidated Statements of Cash Flows (Unaudited)
                           Nine Months Ended
                           June 30, 2000 and 1999.....................................    5

                  Notes to Interim Financial Statements...............................    6


         Item 2.  Management's Discussion and
                           Analysis or Plan of Operation..............................    7

PART II. OTHER INFORMATION

         Item 4.  Submission of Matters to a Vote of Security Holders.................   12

         Item 6.  Exhibits and Reports on Form 8-K....................................   13
</TABLE>



<PAGE>   3

                                 MEGAWORLD, INC
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)


<TABLE>
<CAPTION>
                                                                       JUNE 30,        SEPT 30,
                                                                         2000           1999
                                                                     -----------      ---------
                                                                     (unaudited)

<S>                                                                   <C>             <C>
ASSETS
CURRENT ASSETS:
         Cash and cash equivalents                                    $       7       $      37
         Receivables trade                                                   62            --
         Receivables from related parties                                     2              15
         Other current assets                                              --                29
         Discontinued operations                                             58             592
                                                                      ---------       ---------

                     TOTAL CURRENT ASSETS                                   129             673

Property & equipment, net                                                 1,721             347
Asset held for sale                                                        --               622
Other assets, net                                                         1,878              27
                                                                      ---------       ---------

                     TOTAL ASSETS                                     $   3,728       $   1,669
                                                                      =========       =========

LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
         Accounts payable, trade                                      $   2,309       $   1,951
         Accrued liabilities                                              1,272             851
         Convertible Notes Payable                                          667             513
         Notes due to stockholders and affiliates                         2,220           1,449
         Note payable to bank                                               785             785
                                                                      ---------       ---------
                     TOTAL CURRENT LIABILITIES                            7,253           5,549

CONTINGENCIES (NOTE 2)                                                     --              --

STOCKHOLDERS' DEFICIT:
         Common stock, $.0001 par value; 100,000,000
          shares authorized;
          42,022,372 and 40,180,706 shares issued and
          outstanding in 2000 and 1999, respectively                          4               4
             Additional paid-in capital                                  11,221           7,999
             Accumulated deficit                                        (14,750)        (11,883)
                                                                      ---------       ---------

                     TOTAL STOCKHOLDERS' DEFICIT                         (3,525)         (3,880)
                                                                      ---------       ---------

                     TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT      $   3,728       $   1,669
                                                                      =========       =========
</TABLE>


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





                                       3
<PAGE>   4
                        MEGAWORLD, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
              (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS - UNAUDITED)


<TABLE>
<CAPTION>
                                                              THREE MONTHS                  NINE MONTHS
                                                             ENDED JUNE 30,                ENDED JUNE 30,
                                                        -----------------------       -----------------------
                                                          2000           1999           2000           1999
                                                        --------       --------       --------       --------

<S>                                                     <C>            <C>            <C>            <C>
REVENUE:

            Product                                     $     67       $   --         $     67       $   --
            Other                                              4             25             10             25
                                                        --------       --------       --------       --------
                      Total revenue                           71             25             77             25

COSTS AND EXPENSES:

            Cost of products                                  29           --               29           --
            Impairment of asset held for sale                622           --              622           --
            Compensation expense                            --             --              500           --
            Selling and marketing expenses                    91            112            283            124
            General & administrative expenses                339            355            929            670
            Interest expense                                --              156              0            156
                                                        --------       --------       --------       --------
                      Total costs and expenses             1,081            623          2,363            950
                                                        --------       --------       --------       --------

LOSS
            Continuing operations                         (1,010)          (598)        (2,286)          (925)
            Discontinued operations                         (142)          (963)          (581)          (777)
                                                        --------       --------       --------       --------

Net loss to common stockholders                         $ (1,152)      $ (1,561)      $ (2,867)      $ (1,702)
                                                        ========       ========       ========       ========

LOSS PER SHARE:
            Loss from continuing operations
             per common share:
                      Basic and diluted                    (0.02)         (0.02)         (0.06)         (0.03)


            Loss from discontinued operations
             per common share:
                      Basic and diluted                     --            (0.03)         (0.01)         (0.03)


            NET LOSS:
                      Basic and diluted                    (0.03)         (0.05)         (0.07)         (0.06)


Weighted average shares - basic and diluted               40,708         33,781         40,371         29,744
                                                        --------       --------       --------       --------
</TABLE>


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


                                       4
<PAGE>   5
                        MEGAWORLD, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                           (IN THOUSANDS - UNAUDITED)


<TABLE>
<CAPTION>
                                                                             NINE MONTHS
                                                                            ENDED JUNE 30,
                                                                      -----------------------
                                                                        2000           1999
                                                                      --------       --------
<S>                                                                   <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss                                                              $ (2,867)      $ (1,702)
Adjustments to reconcile net loss to net
cash (used) provided by operating activities:

   Amortization                                                              2           --
   Non-cash compensation                                                   517           --
   Impairment of asset held for sale                                       622           --

   Changes in current assets and liabilities
         Receivables and advances                                          (49)           (45)
         Other current assets                                               29            (47)
         Accounts payable                                                  358            (11)
         Other current liabilities                                         421            294
   Discontinued Operations                                                 534          1,864
   Other, net                                                             (233)          --
                                                                      --------       --------

                Net cash (used) provided by operating activities          (666)           353


CASH FLOWS FROM INVESTING ACTIVITIES -
       Purchase property and equipment                                    (744)          (347)


CASH FLOWS FROM FINANCING ACTIVITIES:
         Proceeds from sale of common stock                                455              3
         Proceeds from notes payable-shareholder                           771           --
         Proceeds from notes payable                                       154           --
                                                                      --------       --------

             Net cash provided by financing activities                   1,380              3
                                                                      --------       --------

NET CHANGE IN CASH AND CASH EQUIVALENTS                                    (30)             9

CASH AND CASH EQUIVALENTS:
         Beginning of period                                                37              0
                                                                      --------       --------

         End of period                                                $      7       $      9
                                                                      ========       ========



SUPPLEMENTAL CASH FLOW INFORMATION:
         Cash paid for interest                                       $    182       $    211
         Contribution of net liabilities from a
           related entity                                                 --              219
         Note payable issued to stockholders in
           merger                                                         --            8,000
         Non cash transactions
           Purchase of equipment in exchange for
             common stock                                                  559           --
           Common stock issued for deposit on
             equipment purchase                                       $  1,691       $   --
</TABLE>


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

                                       5
<PAGE>   6

                        MEGAWORLD, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION

         The consolidated financial statements reflect the accounts of
MegaWorld, Inc. and its majority and wholly owned subsidiaries ("MegaWorld" or
the "Company"), and the effect of discontinued operations. The Company's
consolidated statements of operations, which include the results of Total
Building Systems, Inc., have been adjusted to reflect TBS in discontinued
operations.

         The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with Rule 310 of Regulation S-B for interim
financial statements required to be filed with the Securities and Exchange
Commission and do not include all information and footnotes required by
generally accepted accounting principles. However, in the opinion of management,
the information furnished reflects all adjustments, consisting of normal
recurring adjustments, which are necessary to make a fair presentation of
financial position and operating results for the interim periods. The
accompanying condensed consolidated financial statements should be read in
conjunction with the audited consolidated financial statements for the fiscal
period ended September 30, 1999. The results of operations for the three months
and nine months ended June 30, 2000, are not necessarily indicative of the
results to be expected for the year ending September 30, 2000.

         Amounts in the June 30, 1999 and September 30, 1999 condensed
consolidated financial statements have been reclassified whenever necessary to
conform with the current period's presentation.

2. SIGNIFICANT DEVELOPMENTS

         Foreclosure on TBS assets and Discontinuance of the Modular Building
Operation

         In March 2000, The Company's primary lender initiated foreclosure
proceedings on the land and buildings, used in the modular building operation,
which secured the outstanding bank debt. The Company is in current negotiations
to finalize the terms of the settlement arrangement on the foreclosure. In May
2000, the Company adopted a plan to sell its assets utilized in the modular
building manufacturing operation of the business. The completion of the sale of
such assets is expected to occur during the fourth quarter of fiscal 2000.
Management does not anticipate recognizing a loss on disposal in connection with
the discontinued operation.

         The current asset of the discontinued operations includes deposits and
receivables totaling approximately $58,000.

         The Company incurred interest expense totaling $0, $194,711, $184,531,
and $523,996 during the three months ended June 30, 2000 and 1999, and the nine
months ended June 30, 2000 and 1999, respectively for the modular building
operations. All of the interest expense was



                                       6
<PAGE>   7

associated with the discontinued operations. None of the interest costs incurred
have been capitalized.

Employment Agreement Termination

         In March 2000, the Company negotiated termination of an employment
agreement. Under the terms, the Company would reduce the option price to the
former employee to $.0001 from the original exercise price which approximated
fair value of the stock at the grant date. This re-pricing of 400,000 options
created $500,000 compensation expense to the Company as the options had
previously vested.

New Accounting Policy

         Software Development Costs -- Costs incurred in the research, design
and development of software are charged to expense until technological
feasibility is established, after which remaining software production costs are
capitalized and amortized, based upon the greater of the ratio of current gross
revenues for such product to total anticipated revenues or the straight-line
basis over five years. The Company has not reached technological feasibility on
any of the products that are under development to date.

         The Company will periodically assess the net realizable value of its
software products based upon future net revenues anticipated from its various
software products.

Impairment of Asset Held for Sale

         During the quarter ended June 30, 2000, certain stockholders of the
Company removed as a director of MegaWorld, a person who sold a company that
held an interest in a castle in Italy to the Company under a plan to develop the
property as a timeshare resort. Subsequent to this director's removal, the
Company entered into litigation concerning the transactions with the former
director. In June 2000, the Company impaired the Asset Held for Sale to reflect
the valuation of the asset to zero and has continued to accrue the costs due to
the ongoing litigation.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

         In accordance with the "safe-harbor" provisions of the Private
Securities Litigation Reform Act of 1995, the Company notes that certain
statements in this Form 10-QSB which are forward-looking involve risks and
uncertainties that may impact the Company's results of operations. When used
herein, the words "believe", "anticipate", "estimate", "expect", "should" and
similar expressions are intended to identify such forward-looking statements.
While these forward-looking statements are made in good faith, no statement
should be relied upon as predictions of future events. In addition, future
operating markets, the ability to obtain new licensing/development fees,
competition, legal and other conditions could cause actual results to differ
materially from those in the forward-looking statements.



                                       7
<PAGE>   8

         The primary objective of MegaWorld is to provide telecom, Internet and
data network communications services from the United States to international and
domestic destinations. The business objectives of MegaWorld include providing
Internet access to domestic Internet service providers ("ISPs"), long distance
connections to international telephone carriers, and Voice over Internet
Protocol ("VoIP") transportation of voice, data and multimedia services from the
United States to select global destinations.

         The Company's communications services are based on various methods of
transmitting data through telephone lines ("circuit-switched") and by dividing
the information into small "packets" that are individually routed primarily
through Internet connectors ("packet-switched"). The Company intends to
integrate circuit-switched data transmissions with packet-switched technologies
and currently markets these products and services to domestic and international
wholesale communication providers, Internet service providers and telephone
companies. To date, no significant revenues have been generated from its
operations.

         The Company has designed a core network of operations to accommodate
not only circuit-switched telecommunications but also "real-time" (i.e., the
operation of virtually simultaneous input and response) Internet communications
and other packet-switched communications. In designing its core network, the
Company incorporated what it believes to be the most advanced data network
technology available, including ATM core network packet switches that can
support up to 2.5 gigabytes of data transfer per second, IP (Internet Protocol)
Routers, fiber optic cables, and satellite communication networks. The Company
currently purchases its network servers from Sun Microsystems, Inc., its system
software from Oracle Corp. and its data network provider services from Level (3)
Communications, Inc. ("Level (3)"). The Company maintains its network servers
and much of its other network equipment under co-location agreements with Level
(3), which provides worldwide telecommunications access for the Company. In
connection with these agreements, the Company maintains a direct fiber optic
connection to Level (3), enabling the Company to provide the same type of
service as Level (3) and making the Company a "Tier I" Internet access provider.

         The Company believes that most telecommunications providers and
virtually all wireless communications providers operate under Signaling System
number 7 software ("SS7"), which controls the dialing and routing of
connections. The Company's network also uses servers with SS7 technology, which
enables the Company to effectively communicate with both traditional cable and
wireless network systems. This allows the Company's network to integrate with
the communications networks of other telecommunications providers and to take
advantage of the same network efficiencies as the large network providers, thus
reducing access time and costs. Moreover, the Company is installing new
software, which will enable it to offer Internet access which management
believes to be more efficient and higher speed than is currently available in
the marketplace. The Company plans to begin beta testing of this new software
during August, 2000. The Company intends to complete the beta testing and launch
the system to Internet service providers and other service providers, such as
telephone companies, on or about September 1, 2000.

         Although the third quarter produced a loss, significant progress was
made during the quarter in completing the infrastructure required for certain
telecommunications products and



                                       8
<PAGE>   9

services to be offered by the Company. Although revenues were not recognized
from these projects in the third quarter, revenue streams from these projects
are expected to begin in the Company's fourth fiscal quarter.

QUARTER ENDED JUNE 30, 2000 COMPARED TO QUARTER ENDED JUNE 30, 1999

         Revenue totaling $71,000 was recognized for the three months ended June
30, 2000, compared to $25,000 for the three months ended June 30, 1999, an
increase of $48,000 or 184%. June 30, 2000 revenues were mainly derived from the
sale of equipment. The $25,000 revenue recognized in quarter ending June 30,
1999 was from miscellaneous non-recurring services.

         Costs relating to goods sold in the third quarter 2000, totaled
$29,000, with no cost of goods recognized in third quarter 1999. June 30, 2000
cost of goods were 43% of product revenue.

         Selling and marketing expenses decreased $21,000 or 19% from $112,000
to $91,000 for the quarter ended June 30, 1999 compared to the quarter ended
June 30, 2000. The quarter ended June 30, 1999 reflected $53,000 in consulting
fees as compared to $28,000 for quarter ended June 30, 2000, a $25,000 or 47%
decrease. This increase is a result of providing technical support in the
Hackensack, New Jersey operations.

         General and administrative expenses recognized in the quarter ended
June 30, 2000 were $961,000 as compared to $355,000 for quarter ended June 30,
1999. This represents an increase of $606,000 or 171%. $622,500 of the increase
represents writing off certain real estate held for time share development as an
impaired asset held for sale (see note 2 to the condensed consolidated financial
statements). Salaries decreased from $156,000 to $119,000 for the periods ended
June 30, 1999 and June 30, 2000 respectively, representing a $37,000 or 24%
decrease. Rent decreased from $19,000 for the period ended June 30, 1999 to
$15,000 for the period ended June 30, 2000. MegaWorld's headquarters relocated
from New York to Houston, which reduced the Company's monthly lease expense. An
increase in professional fees for quarter ended June 30, 2000 of $92,000 and
$28,000 were attributed to higher legal fees and accounting fees respectively,
compared to $10,000 and $0 respectively for the same period in 1999. These fees
were incurred, in part, to meet the reporting requirements associated with being
a public company.

NINE MONTHS ENDED JUNE 30, 2000 COMPARED TO NINE MONTHS ENDED JUNE 30, 1999

         Revenue increased 208% or $52,000 from $25,000 for the nine months
ended June 30, 1999 to $77,000 for the nine months ended June 30, 2000. The
increase is due to the sale of equipment to a customer in connection with
foreign long distance service contracts.

         Cost of sales recognized for the nine months ended June 30, 2000 was
$29,000 as compared to no cost of sales recognized for the same period in the
prior year.



                                       9
<PAGE>   10

         Sales and marketing expenses were $283,000 and $124,000 for the nine
months ended June 30, 2000 and June 30, 1999 respectively. The increase of
$159,000, or 128% is mainly due to establishing an office and hiring personnel
to support sales, technical and marketing operations in Hackensack, New Jersey.
Rent increased $33,000 for the nine months ended June 30, 2000 as compared to no
rent expense for the nine months ended June 30, 1999. Salaries increased $75,000
or 167% due to hiring full time sales and marketing personnel, increasing from
$45,000 to $120,000 for the nine months ended June 30, 1999 as compared to June
30, 2000. Full time technical consulting personnel for the Hackensack facility
increased from $53,000 to $70,000 for the nine months ended June 30, 1999 and
June 30, 2000 respectively, an increase of $17,000 or 32%.

         General and administrative expenses increased by $1,380,000, or 206%,
for the nine months ended June 30, 2000 as compared to the same period in 1999.
Expenses totaled $2,050,000 for period ended June 30, 2000 as compared to
$670,000 for the same period in 1999. $622,500 of the increase relates to
writing off an impaired asset that was held for sale (see note 2 to the
condensed consolidated financial statements). An additional $500,000 increase
relates to a non-cash compensation expense, relating to the Company's negotiated
termination of an employment agreement (see note 2 to the condensed consolidated
financial statements). Salary and benefit expense decreased overall by $29,000
from $364,000 for the nine months ended June 30, 1999 to $335,000 for the nine
months ended June 30, 2000. The decreased expense was due to the resignation of
certain officers during the nine months ended June 30, 1999. An increase in
professional fees for the nine months ended June 30, 2000 of $203,000 and
$86,000 were attributable to higher legal fees and accounting fees respectively,
compared to $18,000 and $2,000 respectively for the same period in 1999. These
fees were incurred, in part, to meet the reporting requirements associated with
being a public company.

LIQUIDITY AND CAPITAL RESOURCES

         At June 30, 2000 the Company had cash and cash equivalents of $7,000
representing a decrease of $2,000 since June 30, 1999. Net cash used by
operating activities was $666,000 for the nine months ended June 30, 2000 as
compared to $353,000 net cash provided by operating activities for the
comparable period of 1999. Net cash used by investing activities for the nine
months ended June 30, 2000 was $744,000 as compared to $347,000 used by
investing activities for the nine months ended June 30, 1999. $1,380,000 net
cash was provided by financing activities for nine months ended June 30, 2000 as
compared to $3,000 for the same period in 1999. The $666,000 cash used by
operating activities is primarily reflected by the operating loss of $2,867,000
for the nine months ended June 30, 2000.

         Limited access to working capital and long-term capital, to date, has
effectively controlled the speed in which the Company has been able to implement
its business plan. The business plan has been, and will continue to be,
implemented as fast as funding is available, and on a business opportunity or
project basis. The net effect has been reduced gross revenues, profits and
returns to investors. The Company's principal cash requirements to date have
been to fund working capital and to service its debts. Because revenue from
operations has been inadequate to completely fund these requirements, the
Company has supplemented its revenue from operations with proceeds from its
private offerings of securities, loans from the Chairman



                                       10
<PAGE>   11

and other shareholders, and extensions of credit from vendors in order to meet
its working capital requirements.

         The Company's principal historic revenue generating activities have
been associated with its construction and fabrication of modular structures,
primarily for the energy, transportation and telecommunications industries,
through its Total Building Systems, Inc. subsidiary ("TBS"). As a result of (i)
a sustained downturn in the domestic energy services industry, (ii) TBS'
inability to develop sufficient product lines that were not oil and gas
dependent and (iii) management's belief that the MegaWorld's telecommunications
business was likely to yield a higher return on investment than TBS, management
discontinued all TBS operations in May 2000 and made plans to dispose of all TBS
assets.

         The modular manufacturing facility of TBS was located in Northwest
Houston and was subject to a mortgage which secured the principal amount of
$3,765,000, and advances pursuant to a $1,000,000 revolving credit promissory
note, each held by Compass Bank. In May 2000, the Company reached an agreement
with Compass Bank whereby the Bank foreclosed on the mortgage and agreed to
apply the proceeds of the sale of the facility to the mortgage and amounts
outstanding pursuant to the revolving credit loan agreement between the Company
and Compass Bank. In connection with this agreement, the Company granted to
Compass Bank a security interest in all the personal property of TBS and agreed
to sell all TBS personal property on or before July 31, 2000. Pursuant to the
agreement, the Company owed a deficiency of $784,615 to Compass Bank. This
amount is to be paid in monthly installments of interest with the balance due on
November 10, 2000 and bears interest at a rate of 9.5% per annum. MegaWorld and
TBS have agreed to guaranty repayment of the deficiency for the benefit of
Compass Bank.

         On May 19, 2000, management entered into an agreement with Machinery
Acquisition, Inc. ("MAI") whereby MAI purchased all of the tangible personal
property of TBS for $265,000, except certain items considered to be a part of
the real property located at TBS' Northwest Houston facility described above. On
July 11, 2000, Plant Machinery, Inc. ("PMI"), an affiliate of MAI auctioned the
assets of TBS. From the proceeds of the auction, MAI recovered a total of
$391,527, which equals $76,784 in expenses and $314,742 paid to the Company.

         The Company has made arrangements to meet a significant portion of its
future capital requirements, and the Company is involved in discussions with
other potential sources to satisfy its remaining future capital needs. The
Company anticipates that within a few months after the infrastructure for the
Communications Division has been implemented and commercial service initiated,
the Company will be able to satisfy its funding requirements for operations from
such revenue.

FUTURE NEEDS

         The Company anticipates that it will spend $5 to $6 million per year
over a two year period to develop the infrastructure required to implement its
business plan and initiate the delivery of commercial services in each of the
categories contained in its business plan. However, the international
telecommunications industry is highly regulated. There can be no



                                       11
<PAGE>   12

assurance that the Company's business plan can be implemented for the
anticipated cost or within the anticipated period.

         The Company has taken several steps to address its capital needs and
liquidity requirements. On June 9, 2000 MegaWorld entered into a contract with
Cabletron Systems, Inc. ("Cabletron"), a leading supplier of telecommunications
equipment, for the issuance of 1,666,666 shares of MegaWorld common stock in
consideration for $250,000 in cash and telecommunications equipment valued at
$2,250,000. In addition, Cabletron has agreed to purchase an additional 166,666
shares of common stock for $250,000 in cash when MegaWorld has collected an
aggregate of $2 million in revenue from its service provider business and
Cabletron has agreed to make another such purchase when MegaWorld has collected
an aggregate of $4 million from its service provider business.

          Effective June 28, 2000 MegaWorld entered into an agreement with
Mockingbird Networks ("Mockingbird"), a leading supplier of telecommunications
equipment, for the issuance of 495,833 shares of MegaWorld common stock in
consideration for telecommunications equipment valued at $743,750.

         The Company anticipates that it will address the remainder of its
liquidity and capital requirements through a private placement of its common
stock. There can be no assurance, however, that such private placement will be
successful or that the Company will otherwise be successful in obtaining
sufficient funds to meet its capital and liquidity needs.


PART II. OTHER INFORMATION

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

         On May 1, 2000, certain stockholders of the Company removed Michael
Giamalvo as a director of the Company through action by written consent. Mr.
Giamalvo was removed through action by written consent executed by holders of an
aggregate of 25,290,780 shares of the Company's common stock, representing
approximately 62.7% of the voting power of all outstanding securities of the
Company.

         After removal of Mr. Giamalvo as a director of the Company, Charles D.
McPhail, Chairman of the board of directors and Chief Executive Officer of the
Company, was the sole remaining director of the Company. On May 11, 2000, at a
meeting of the sole director of the Company, George S. Dinsdale, President and
Chief Operating Officer of the Company's Communications Division, and John L.
Waddell, Jr., were elected to serve as directors of the Company.

         Following the removal of Mr. Giamalvo as a director of the Company, the
Company began negotiations to rescind the still uncompleted transaction in which
the Company had entered into an agreement to acquire all outstanding shares of
Castello Ratti Enterprises Srl (the "Castle Acquisition Agreement"), a company
whose principal asset is its 40-year leasehold interest in a 1,000-year-old
Italian castle. The Company also (i) sought to recover common stock



                                       12
<PAGE>   13

issued to Mr. Giamalvo to extend the Company's deferred payment obligations
under the Castle Acquisition Agreement and (ii) attempted to settle a dispute
with Mr. Giamalvo concerning cash amounts due under his employment agreement
with respect to base salary and his reimbursement for payment of
business-related expenses. The Company and Mr. Giamalvo have each filed demands
for arbitration and the Company has also filed a lawsuit to resolve these
issues. See "Legal Proceedings" in the Company's Quarterly Report on Form 10-QSB
for the quarter ended March 31, 2000 (Commission File No. 000-2795).

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)      Exhibits:

                  10.1     Letter Agreement, dated May 19, 2000, between the
                           Company and Machinery Acquisitions International,
                           Inc. and Plant & Machinery, Inc. Incorporated by
                           reference Exhibit 10.1 to the Company's Quarterly
                           Report on Form 10QSB for the fiscal quarter ended
                           March 31, 2000. Commission File No. 000-29795.

                  10.2     Settlement and Deficiency Agreement, dated as of
                           March 28, 2000, between Total Building Systems, Inc.,
                           JoyVer Investments, LLC and Charles D. McPhail and
                           Compass Bank. Incorporated by reference Exhibit 10.2
                           to the Company's Quarterly Report on Form 10QSB for
                           the fiscal quarter ended March 31, 2000. Commission
                           File No. 000-29795.

                  10.3     Guaranty of TBS and the Company with respect to the
                           Deficiency for the benefit of Compass Bank.
                           Incorporated by reference Exhibit 10.3 to the
                           Company's Quarterly Report on Form 10QSB for the
                           fiscal quarter ended March 31, 2000. Commission File
                           No. 000-29795.

                  10.4     Common Stock Purchase Agreement dated June 28, 2000,
                           by and among MegaWorld, Inc. and Mockingbird
                           Networks, [Inc.].

                  27       Financial Data Schedule

         (b)      Reports of Form 8-K:

                  None



                                       13
<PAGE>   14


                                    SIGNATURE

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



                                    MEGAWORLD, INC.


Date: August 14, 2000               /s/ CHARLES D. McPHAIL
                                    -------------------------------------------
                                    Charles D. McPhail,
                                    President and Treasurer



                                       14
<PAGE>   15


                                  EXHIBIT INDEX

                                   DESCRIPTION

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                                   DESCRIPTION
-------                                  -----------

<S>      <C>
10.4     Common Stock Purchase Agreement dated June 28, 2000, by and among MegaWorld, Inc. and Mockingbird
         Networks, [Inc.].

27       Financial Data Schedule
</TABLE>