<PAGE>   1
================================================================================

                       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: FEBRUARY 29, 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: 1-8645




                              MEGO FINANCIAL CORP.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)


<TABLE>
<S>                                                       <C>
                    NEW YORK                                 13-5629885
        (STATE OR OTHER JURISDICTION OF                    (I.R.S. EMPLOYER
         INCORPORATION OR ORGANIZATION)                   IDENTIFICATION NO.)
</TABLE>


                   4310 PARADISE ROAD, LAS VEGAS, NEVADA 89109
               (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

                                 (702) 737-3700
              (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)


        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 [ ]



                      APPLICABLE ONLY TO CORPORATE ISSUERS:

        As of April 12, 2000, there were 3,500,557 shares of Common Stock, $.01
par value per share, of the Registrant outstanding.

================================================================================


<PAGE>   2
                     MEGO FINANCIAL CORP. AND SUBSIDIARIES


                                      INDEX


<TABLE>
<CAPTION>
                                                                                                  Page
                                                                                                  ----
<S>                                                                                               <C>
PART I     FINANCIAL INFORMATION

Item 1.    Condensed Financial Statements (unaudited)

           Condensed Consolidated Balance Sheets at February 29, 2000 and August 31, 1999........    1

           Condensed Consolidated Income Statements for the Three and Six Months Ended
             February 29, 2000 and February 28, 1999.............................................    2

           Condensed Consolidated Statements of Stockholders' Equity for the Six Months Ended
             February 29, 2000...................................................................    3

           Condensed Consolidated Statements of Cash Flows for the Six Months Ended
             February 29, 2000 and February 28, 1999.............................................    4

           Notes to Condensed Consolidated Financial Statements..................................    5

Item 2.    Management's Discussion and Analysis of Financial Condition
             and Results of Operations...........................................................    6

Item 3.    Quantitative and Qualitative Disclosures About Market Risk............................   14

PART II    OTHER INFORMATION

Item 1.    Legal Proceedings.....................................................................   15

Item 6.    Exhibits and Reports on Form 8-K......................................................   15

SIGNATURE .......................................................................................   16
</TABLE>


                                       i


<PAGE>   3
PART I    FINANCIAL INFORMATION
ITEM 1.   CONDENSED FINANCIAL STATEMENTS

                      MEGO FINANCIAL CORP. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                (thousands of dollars, except per share amounts)
                                   (unaudited)


<TABLE>
<CAPTION>
                                                                                         FEBRUARY 29,   AUGUST 31,
ASSETS                                                                                       2000          1999
                                                                                         ------------   ----------
<S>                                                                                      <C>            <C>
Cash and cash equivalents                                                                 $  1,850      $  1,821
Restricted cash                                                                              1,277         1,676
Notes receivable, net of allowance for cancellations and discounts of $13,921 at
    February 29, 2000 and $14,340 at August 31, 1999                                        82,427        69,300
Interest only receivables, at fair value                                                     2,295         2,566
Timeshare interests held for sale                                                           27,506        29,529
Land and improvements inventory                                                              5,270         6,649
Other investments                                                                            4,787         5,111
Property and equipment, net of accumulated depreciation of $16,623 at February 29,
    2000 and $16,252  at August 31, 1999                                                    23,044        23,560
Deferred selling costs                                                                       5,205         4,285
Prepaid debt expenses                                                                        1,902         1,757
Other assets                                                                                15,446        12,707
                                                                                          --------      --------

            TOTAL ASSETS                                                                  $171,009      $158,961
                                                                                          ========      ========


LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
    Notes and contracts payable                                                           $115,942      $104,555
    Accounts payable and accrued liabilities                                                17,382        18,141
    Reserve for notes receivable sold with recourse                                          3,472         4,162
    Deposits                                                                                 2,714         2,287
    Accrued income taxes                                                                     3,505         3,505
                                                                                          --------      --------

            Total liabilities before subordinated debt                                     143,015       132,650
                                                                                          --------      --------

Subordinated debt                                                                            4,500         4,478


Stockholders' equity:
    Preferred stock, $.01 par value (authorized--5,000,000 shares, none outstanding)             -             -
    Common stock, $.01 par value (authorized--50,000,000 shares; 3,500,557
      shares issued and outstanding at February 29, 2000 and August 31, 1999)                   35            35
    Additional paid-in capital                                                              13,068        13,068
    Retained earnings                                                                       10,391         8,730
                                                                                          --------      --------

            Total stockholders' equity                                                      23,494        21,833
                                                                                          --------      --------

            TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                    $171,009      $158,961
                                                                                          ========      ========
</TABLE>


           See notes to condensed consolidated financial statements.


                                       1


<PAGE>   4
                      MEGO FINANCIAL CORP. AND SUBSIDIARIES
                           CONDENSED INCOME STATEMENTS
                (thousands of dollars, except per share amounts)
                                   (unaudited)


<TABLE>
<CAPTION>
                                                             THREE MONTHS ENDED                 SIX MONTHS ENDED
                                                        ----------------------------       ----------------------------
                                                        FEBRUARY 29,     FEBRUARY 28,      FEBRUARY 29,     FEBRUARY 28,
                                                           2000             1999              2000             1999
                                                        -----------      -----------       -----------      -----------
<S>                                                     <C>              <C>               <C>              <C>
REVENUES
    Timeshare interest sales, net                       $    10,906      $     8,559       $    22,897      $    17,609
    Land sales, net                                           4,563            3,518             8,582            7,009
    Interest income                                           3,172            1,952             6,043            3,944
    Financial income                                            269              400               541              709
    Gain on sale of investments                                 678                -               678              513
    Incidental operations                                       511              586             1,135            1,276
    Other                                                       919              871             1,839            1,691
                                                        -----------      -----------       -----------      -----------
            Total revenues                                   21,018           15,886            41,715           32,751
                                                        -----------      -----------       -----------      -----------

COSTS AND EXPENSES
    Direct cost of:
      Timeshare interest sales                                2,210            1,680             4,588            3,434
      Land sales                                                741              682             1,297            1,262
      Incidental operations                                     499              461             1,099            1,112
    Marketing and sales                                       8,593            7,782            17,867           16,615
    Depreciation                                                461              488               951            1,008
    Interest expense                                          3,113            2,173             5,979            4,261
    General and administrative                                4,395            3,411             8,273            6,971
                                                        -----------      -----------       -----------      -----------
            Total costs and expenses                         20,012           16,677            40,054           34,663
                                                        -----------      -----------       -----------      -----------


INCOME (LOSS) BEFORE INCOME TAXES                             1,006             (791)            1,661           (1,912)

INCOME TAXES (BENEFIT)                                            -             (269)                -             (650)
                                                        -----------      -----------       -----------      -----------


NET INCOME (LOSS) APPLICABLE TO COMMON STOCK            $     1,006      $      (522)      $     1,661      $    (1,262)
                                                        ===========      ===========       ===========      ===========

EARNINGS (LOSS) PER COMMON SHARE
    Basic:
      Net income (loss) applicable to common stock      $      0.29      $     (0.15)      $      0.47      $     (0.36)
                                                        ===========      ===========       ===========      ===========


      Weighted-average number of common shares            3,500,557        3,500,557         3,500,557        3,500,557
                                                        ===========      ===========       ===========      ===========

    Diluted:
      Net income (loss) applicable to common stock      $      0.29      $     (0.15)      $      0.47      $     (0.36)
                                                        ===========      ===========       ===========      ===========

      Weighted-average number of common shares and
      common share equivalents outstanding                3,500,557        3,500,557         3,500,557        3,500,557
                                                        ===========      ===========       ===========      ===========
</TABLE>


            See notes to condensed consolidated financial statements.


                                       2


<PAGE>   5
                      MEGO FINANCIAL CORP. AND SUBSIDIARIES
            CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                (thousands of dollars, except per share amounts)
                                   (unaudited)


<TABLE>
<CAPTION>
                                               COMMON STOCK
                                              $.01 PAR VALUE          ADDITIONAL
                                         ------------------------       PAID-IN       RETAINED
                                           SHARES         AMOUNT        CAPITAL        EARNINGS        TOTAL
                                         ---------      ---------     ----------      ---------      ---------
<S>                                      <C>            <C>           <C>             <C>            <C>
Balance at August 31, 1999               3,500,557      $      35      $  13,068      $   8,730      $  21,833

Net income for the six months ended
   February 29, 2000                             -              -              -          1,661          1,661
                                         ---------      ---------      ---------      ---------      ---------

Balance at February 29, 2000             3,500,557      $      35      $  13,068      $  10,391      $  23,494
                                         =========      =========      =========      =========      =========
</TABLE>


            See notes to condensed consolidated financial statements.


                                       3


<PAGE>   6
                      MEGO FINANCIAL CORP. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (thousands of dollars)
                                   (unaudited)


<TABLE>
<CAPTION>
                                                                                                   SIX MONTHS ENDED
                                                                                              ----------------------------
                                                                                              FEBRUARY 29,    FEBRUARY 28,
                                                                                                 2000            1999
                                                                                              -----------     ------------
<S>                                                                                           <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES
    Net income (loss)                                                                         $    1,661       $   (1,262)
                                                                                              ----------       ----------
    Adjustments to reconcile net income (loss) to net cash used in operating activities:
      Charges to allowance for cancellations                                                      (3,831)          (3,280)
      Provision for cancellations                                                                  2,717            2,276
      Gain on sale of other investments                                                             (678)            (513)
      Cost of sales                                                                                5,885            4,697
      Depreciation                                                                                   951            1,008
      Amortization of interest only receivables                                                      271              320
      Repayments on notes receivable                                                              24,334           20,485
      Additions to notes receivable                                                              (36,347)         (27,085)
      Purchase of land and timeshare interests                                                    (2,483)          (2,339)
      Changes in operating assets and liabilities:
        (Increase) decrease in restricted cash                                                       399              (79)
        Increase in other assets                                                                  (3,574)          (3,617)
        Increase in deferred selling costs                                                          (920)            (310)
        Increase (decrease) in accounts payable and accrued liabilities                             (759)             682
        Increase (decrease) in deposits                                                              427             (926)
        Decrease in accrued income taxes                                                               -             (783)
                                                                                              ----------       ----------

          Total adjustments                                                                      (13,608)          (9,464)
                                                                                              ----------       ----------

            Net cash used in operating activities                                                (11,947)         (10,726)
                                                                                              ----------       ----------


CASH FLOWS FROM INVESTING ACTIVITIES
    Purchase of property and equipment                                                              (435)            (898)
    Proceeds from the sale of other investments                                                    1,001              597
    Additions to other investments                                                                   (29)            (101)
    Decrease in other investments                                                                     30              150
                                                                                              ----------       ----------

            Net cash provided by (used in) investing activities                                      567             (252)
                                                                                              ----------       ----------

CASH FLOWS FROM FINANCING ACTIVITIES
    Proceeds from borrowings                                                                      33,675           27,022
    Reduction of debt                                                                            (22,288)         (16,337)
    Payments on subordinated debt                                                                   (215)            (252)
    Increase in subordinated debt                                                                    237              307
                                                                                              ----------       ----------

            Net cash provided by financing activities                                             11,409           10,740
                                                                                              ----------       ----------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                                  29             (238)

CASH AND CASH EQUIVALENTS-- BEGINNING OF PERIOD                                                    1,821            1,813
                                                                                              ----------       ----------

CASH AND CASH EQUIVALENTS-- END OF PERIOD                                                     $    1,850       $    1,575
                                                                                              ==========       ==========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
    Cash paid during the year for:
      Interest, net of amounts capitalized                                                    $    5,795       $    4,167
                                                                                              ==========       ==========

SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES
    Issuance of warrants related to debt                                                      $        -       $       33
</TABLE>


            See notes to condensed consolidated financial statements.


                                       4


<PAGE>   7
                      MEGO FINANCIAL CORP. AND SUBSIDIARIES
            NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR
            THE THREE AND SIX MONTHS ENDED FEBRUARY 29, 2000 AND 1999
                                   (unaudited)


1. FINANCIAL STATEMENTS

        In the opinion of management, when read in conjunction with the audited
Consolidated Financial Statements for the years ended August 31, 1999 and 1998,
contained in the Form 10-K of Mego Financial Corp. (Mego Financial) filed with
the Securities and Exchange Commission for the year ended August 31, 1999, the
accompanying unaudited Condensed Consolidated Financial Statements contain all
of the information necessary to present fairly the financial position of Mego
Financial and subsidiaries at February 29, 2000, the results of its operations
for the three and six months ended February 29, 2000 and February 28, 1999, the
change in stockholders' equity for the six months ended February 29, 2000 and
the cash flows for the six months ended February 29, 2000 and February 28, 1999.
All intercompany accounts between the parent and its subsidiaries have been
eliminated.

        The preparation of financial statements in conformity with generally
accepted accounting principles (GAAP) requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates. In the
opinion of management, all material adjustments necessary for the fair
presentation of these statements have been included herein which are normal and
recurring in nature. The results of operations for the three and six months
ended February 29, 2000 are not necessarily indicative of the results to be
expected for the full year.

2. NATURE OF OPERATIONS

        Mego Financial, through its wholly-owned subsidiary, Preferred Equities
Corporation (PEC), established in 1970, is a premier developer of timeshare
properties and a provider of consumer financing to purchasers of its timeshare
intervals and land parcels, in select resort areas. PEC also manages timeshare
properties, and receives management fees as well as fees based on sales of
timeshare interests. By providing financing to virtually all of its customers,
PEC also originates consumer receivables that it hypothecates and services. In
February 1988, Mego Financial acquired PEC, pursuant to an assignment by the
Assignors (Comay Corp., Growth Realty Inc., RER Corp., and H&H Financial, Inc.)
of their contract right to purchase PEC. Mego Financial and its subsidiaries are
herein collectively referred to as the Company. Mego Financial was incorporated
under the laws of the state of New York in 1954 under the name Mego Corp. and,
in 1992, changed its name to Mego Financial Corp.

        To facilitate its sales of timeshare interests, the Company has entered
into several trust agreements. The trustees administer the collection of the
related notes receivable. The Company has assigned title to certain of its
resort properties in Nevada and its interest in certain related notes receivable
to the trustees.

3. STOCKHOLDERS' EQUITY

        Mego Financial's stock option plan (Stock Option Plan), which was
amended and restated as of September 16, 1998 upon the approval of Mego
Financial's shareholders, provides for grants of non-qualified and qualified
incentive options to officers, key employees and directors. Options for 58,906
shares were outstanding as of February 29, 2000.


                                       5


<PAGE>   8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

SPECIAL CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS

        The following Management's Discussion and Analysis of Financial
Condition and Results of Operations section contains certain forward-looking
statements and information relating to Mego Financial Corp. (Mego Financial)
(Mego Financial and it subsidiaries are referred to herein collectively as the
Company) that are based on the beliefs of management as well as assumptions made
by and information currently available to management. Such forward-looking
statements include, without limitation, the Company's expectation and estimates
as to the Company's business operations, including the introduction of new
timeshare and land sales programs and future financial performance, including
growth in revenues and net income and cash flows. Such forward-looking
statements also include, without limitation, the Company's expectations and
beliefs as to the results of its year 2000 compliance efforts and the impact on
the Company's operations of efforts its lenders and other third parties in
respect of such compliance. In addition, included herein, the words
"anticipates," "believes," "estimates," "expects," "plans," "intends" and
similar expressions, as they relate to the Company or its management, are
intended to identify forward-looking statements. Such statements reflect the
current views of the Company's management with respect to future events and are
subject to certain risks, uncertainties and assumptions. In addition, the
Company specifically advises readers that the factors listed under the caption
"Liquidity and Capital Resources" could cause actual results to differ
materially from those expressed in any forward-looking statement. Should one or
more of these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially from those
described herein as anticipated, believed, estimated or expected.

        The following discussion and analysis should be read in conjunction with
the Condensed Consolidated Financial Statements, including the notes thereto,
contained elsewhere herein and in the Company's Form 10-K for the fiscal year
ended August 31, 1999.

GENERAL

        The business of the Company is primarily the marketing, financing and
sale of timeshare interests, retail lots and land parcels, and servicing the
related receivables, and operating and/or managing timeshare properties. The
Company, through its subsidiary Preferred Equities Corporation (PEC), provides
financing to purchasers of its timeshare interests and land. This financing is
generally evidenced by notes secured by deeds of trust and mortgages. These
notes receivable are generally, payable over a period up to twelve years, bear
interest at rates ranging from 10.0% to 15.5%, and require equal monthly
installments of principal and interest.

PEC

        PEC recognizes revenue primarily from sales of timeshare interests and
land sales in resort areas, gain on sale of receivables and interest income. PEC
periodically sells its consumer receivables while generally retaining the
servicing rights. Revenue from sales of timeshare interests and land is
recognized after the requisite rescission period has expired and at such time as
the purchaser has paid at least 10% of the sales price for sales of timeshare
interests and 20% of the sales price for land sales. Land sales typically meet
these requirements within six to ten months of closing, and sales of timeshare
interests typically meet these requirements at the time of sale. The sales
price, less a provision for cancellation, is recorded as revenue and the
allocated cost related to such net revenue of the timeshare interest or land
parcel is recorded as expense in the year that revenue is recognized. When
revenue related to land sales is recognized, the portion of the sales price
attributable to uncompleted required improvements, if any, is deferred.

        Notes receivable with payment delinquencies of 90 days or more have been
considered in determining the allowance for cancellations. Cancellations occur
when the note receivable is determined to be uncollectible and the related
collateral, if any, has been recovered. Cancellation of a note receivable in the
quarter the revenue is recognized is deemed to not represent a sale and is
accounted for as a reversal of the revenue with an adjustment to cost of sales.
Cancellation of a note receivable subsequent to the quarter the revenue was
recognized is charged to the allowance for cancellations.

        Gain on sale of notes receivable includes the present value of the
differential between contractual interest rates charged to borrowers on notes
receivable sold by PEC and the interest rates to be received by the purchasers
of such notes receivable, after considering the effects of estimated prepayments
and a normal servicing fee. PEC retains certain


                                       6


<PAGE>   9
participations in cash flows from the sold notes receivable and generally
retains the associated servicing rights. PEC generally sells its notes
receivable at par value.

        The present values of expected net cash flows from the sale of notes
receivable are recorded at the time of sale as interest only receivables.
Interest only receivables are amortized as a charge to income, as payments are
received on the retained interest differential over the estimated life of the
underlying notes receivable. Interest only receivables are recorded at the lower
of unamortized cost or estimated fair value. The expected cash flows used to
determine the interest only receivables asset have been reduced for potential
losses under recourse provisions of the sales agreements. Reserve for notes
receivable sold with recourse represents PEC's estimate of the fair value of its
future credit losses to be incurred over the lives of the notes receivable in
connection with the recourse provisions of the sales agreements and is shown
separately as a liability in the Company's Condensed Consolidated Balance
Sheets.

        In discounting cash flows related to notes receivable sales, PEC defers
servicing income at an annual rate of 1% and discounts cash flows on its sales
at the rate it believes a purchaser would require as a rate of return. Earned
servicing income is included under the caption of financial income. The cash
flows were discounted to present value using a discount rate of 15% for the six
months ended February 29, 2000 and February 28, 1999. PEC has developed its
assumptions based on experience with its own portfolio, available market data
and consultation with its financial advisors.

        In determining expected cash flows, management considers economic
conditions at the date of sale. In subsequent periods, these estimates may be
revised as necessary using the original discount rate, and any losses arising
from prepayment and loss experience will be recognized as realized.

        Provision for cancellations relating to notes receivable is recorded as
expense in amounts sufficient to maintain the allowance at a level considered
adequate to provide for anticipated losses resulting from customers' failure to
fulfill their obligations under the terms of their notes receivable. PEC records
provision for cancellations at the time revenue is recognized, based on
historical experience and current economic factors. The related allowance for
cancellations represents PEC's estimate of the amount of the future credit
losses to be incurred over the lives of the notes receivable. The allowance for
cancellations is adjusted for actual cancellations experienced, including
cancellations related to previously sold notes receivable which were reacquired
pursuant to the recourse obligations discussed herein. Such allowance is also
reduced to establish the separate liability for reserve for notes receivable
sold with recourse. PEC's judgment in determining the adequacy of this allowance
is based upon a periodic review of its portfolio of notes receivable. These
reviews take into consideration changes in the nature and level of the
portfolio, historical cancellation experience, current economic conditions which
may affect the purchasers' ability to pay, changes in collateral values,
estimated value of inventory that may be reacquired and overall portfolio
quality. Changes in the allowance as a result of such reviews are included in
the provision for cancellations.

        Fees for servicing notes receivable originated by PEC and sold with
servicing rights retained are generally based on a stipulated percentage of the
outstanding principal balance of such notes receivable and are recognized when
earned. Interest received on notes receivable sold, less amounts paid to
investors, is reported as financial income. Interest only receivables are
amortized systematically to reduce notes receivable servicing income to an
amount representing normal servicing income and the present value discount. Late
charges and other miscellaneous income are recognized when collected. Costs to
service notes receivable are recorded to expense as incurred. Interest income
represents the interest received on loans held in PEC's portfolio, the accretion
of the discount on the interest only receivables and interest on cash funds.

        Total costs and expenses consist primarily of marketing and sales
expenses, general and administrative expenses, direct costs of sales of
timeshare interests and land, depreciation and amortization and interest
expense. Marketing and sales costs directly attributable to unrecognized sales
are accounted for as deferred selling costs until such time as the sale is
recognized or cancelled prior to recognition.


        Land sales as of February 29, 2000 exclude $18.7 million of sales not
yet recognized under generally accepted accounting principles (GAAP) since the
requisite payment amounts have not yet been received or the respective recission
periods have not yet expired. Of the $18.7 million unrecognized land sales, the
Company estimates that it will ultimately


                                       7


<PAGE>   10
recognize $15.3 million of revenues, which would be reduced by a provision for
cancellations of $1.4 million, deferred selling costs of $4.3 million and cost
of sales of $2.1 million.

        PEC has entered into financing arrangements with certain purchasers of
timeshare interests and land whereby an interest rate of 5% per annum is charged
on those sales where the aggregate down payment is at least 50% of the purchase
price and the balance is payable in 36 or fewer monthly payments. Notes
receivable of $6.0 million at February 29, 2000 and August 31, 1999,
respectively, were made under this arrangement.

RESULTS OF OPERATIONS

Three Months Ended February 29, 2000 Compared to Three Months Ended February 28,
1999

        Total revenues for the Company increased 32.3% or $5.1 million to $21.0
million during the three months ended February 29, 2000 from $15.9 million
during the three months ended February 28, 1999. The increase was primarily due
to a net increase of $3.4 million in timeshare and land sales to $15.5 million
during the three months ended February 29, 2000 from $12.1 million during the
three months ended February 28, 1999 (net timeshare sales increased by $2.4
million and net land sales increased by $1.0), an increase in interest income to
$3.2 million during the three months ended February 29, 2000 from $2.0 million
during the three months ended February 28, 1999 and a gain of $678,000 on sale
of other investments during the three months ended February 29, 2000.

        Gross sales of timeshare interests increased to $12.0 million during the
three months ended February 29, 2000 from $9.4 million during the three months
ended February 28, 1999, an increase of 28.0%. Net sales of timeshare interests
increased to $11.0 million from $8.6 million, an increase of 27.4%. The
provision for cancellations represented 9.2% and 8.8%, respectively, of gross
sales of timeshare interests for the three months ended February 29, 2000 and
February 28, 1999.

        Gross sales of land increased to $4.8 million during the three months
ended February 29, 2000 from $3.8 million during the three months ended February
28, 1999, an increase of 25.9%. Net sales of land increased to $4.6 million
during the three months ended February 29, 2000 from $3.5 million during the
three months ended February 28, 1999, an increase of 29.7%. The provision for
cancellations decreased to 4.2% of gross sales of land for the three months
ended February 29, 2000 from 7.0% for the three months ended February 28, 1999,
primarily due to a decrease in cancellation experience during the second quarter
of fiscal 2000 and a downward adjustment based on the results of the customary
quarterly review of the adequacy of the allowance.

        Interest income increased 62.5% to $3.2 million for the three months
ended February 29, 2000 from $2.0 million for the three months ended February
28, 1999, primarily due to increased notes receivable for the current quarter.

        A net gain on sale of other investments of $678,000, resulting from the
sale of two golf courses, was recorded for the three months ended February 29,
2000.

        Total costs and expenses for the Company increased to $20.0 million for
the three months ended February 29, 2000 from $16.7 million for the three months
ended February 28, 1999, an increase of 20.0%. The increase resulted primarily
from an increase in direct costs of timeshare sales to $2.2 million from $1.7
million, an increase of 31.6%; an increase of $811,000 in marketing and sales
expense, an increase of 10.4%; an increase of $940,000 in interest expense, an
increase of 43.3%; and, an increase of $984,000 in general and administrative
expenses, an increase of 28.8%. The increase in direct costs of timeshare sales
is attributable to higher net timeshare sales during the current fiscal quarter
compared to the same quarter last year. The increase in marketing and sales
expenses is due primarily to higher gross sales. As discussed below, marketing
and sales expenses decreased as a percentage of gross sales. The increase in
interest expense is due to increased notes and contracts payable. The increase
in general and administrative expenses is due to the increase in escrow
collection costs related to the increased sales volume and an increase in
maintenance fees paid to Homeowner Associations by PEC.

        As a percentage of gross sales of timeshare interests and land,
marketing and sales expenses relating thereto decreased to 51.2% during the
three months ended February 29, 2000 from 59.1% during the three months ended
February 28, 1999, and cost of sales decreased to 17.6% during the three months
ended February 29, 2000 from 17.9% during the three months ended February 28,
1999. Subsequent to the first quarter of fiscal 1999, the Company restructured
its marketing and


                                       8


<PAGE>   11
sales programs, which restructuring included the closing of unprofitable sales
locations, the elimination of certain marketing programs and the layoff of
related personnel. Sales prices of timeshare interests are typically lower than
those of land, while selling costs per sale, other than commissions, are
approximately the same in amount for timeshare interests and land; accordingly,
the Company generally realizes lower profit margins from sales of timeshare
interests than from sales of land.

        Interest expense increased to $3.1 million during the three months ended
February 29, 2000 from $2.2 million during the three months ended February 28,
1999, an increase of 43.3%. The increase is a result of increased notes and
contracts payable during the three months ended February 29, 2000 compared to
the three months ended February 28, 1999. This increase relates to interest
carrying costs for maintaining the notes in the Company's owned portfolio.
Historically, PEC has from time to time sold notes receivable and applied the
net proceeds to reduce its outstanding debt. There have been no such sales since
August 1998.

        Pre-tax income of $1.0 million was earned during the three months ended
February 29, 2000 compared to a pre-tax loss of $791,000 during the three months
ended February 28, 1999. The improvement in the three months ended February 29,
2000 resulted from the $5.1 million increase in revenues partially offset by the
$3.3 million increase in expenses.

        No income taxes were recorded for the three months ended February 29,
2000 compared to a tax benefit of $269,000 during the three months ended
February 28, 1999, due to the use of net operating loss carryforwards which were
previously fully reserved and currently are used to offset income on a
consolidated basis. Income taxes are recorded, and the liability is adjusted,
based on an ongoing review of related facts and circumstances.

        Net income applicable to common stock amounted to $1.0 million during
the three months ended February 29, 2000 compared to a net loss applicable to
common stock of $522,000 during the three months ended February 28, 1999,
primarily due to the forgoing.

Six Months Ended February 29, 2000 Compared to Six Months Ended February 28,
1999

        Total revenues for the Company increased 27.4%, or $9.0 million, to
$41.7 million during the six months ended February 29, 2000 from $32.8 million
during the six months ended February 28, 1999. The increase was primarily due to
an increase in timeshare and land sales to $31.5 million during the six months
ended February 29, 2000 from $24.6 million during the six months ended February
28, 1999 (net timeshare sales increased by $5.3 million and net land sales
increased by $1.6 million), an increase in interest income to $6.0 million
during the six months ended February 29, 2000 from $3.9 million during the six
months ended February 28, 1999, and a gain on sale of other investments of
$678,000 during the six months ended February 29, 2000 compared to $513,000
during the six months ended February 28, 1999.

        Gross sales of timeshare interests increased to $25.3 million during the
six months ended February 29, 2000 compared to $19.4 million during the six
months ended February 28, 1999, an increase of 30.3%. Net sales of timeshare
interests increased to $22.9 million from $17.6 million, an increase of 30.0%.
The provision for cancellations represented 9.5% and 9.3%, respectively, of
gross sales of timeshare interests for the six months ended February 29, 2000
and February 28, 1999.

        Gross sales of land increased to $8.9 million during the six months
ended February 29, 2000 from $7.5 million during the six months ended February
28, 1999, an increase of 19.0%. Net sales of land increased to $8.6 million
during the six months ended February 29, 2000 from $7.0 million during the six
months ended February 28, 1999, an increase of 22.4%. The provision for
cancellations decreased to 3.6% of gross sales of land for the six months ended
February 29, 2000 from 6.3% for the six months ended February 28, 1999,
primarily due to a decrease in cancellation experience during the six months
ended February 29, 2000 and a downward adjustment based on the results of the
customary quarterly review of the allowance adequacy.

        Interest income increased to $6.0 million for the six months ended
February 29, 2000 from $3.9 million for the six months ended February 28, 1999,
an increase of 53.2%, primarily due to increased notes receivable for the
current period.


                                       9


<PAGE>   12
        A net gain on sale of other investments of $678,000, resulting from the
sale of two golf courses in Pahrump, was recorded for the six months ended
February 29, 2000 compared to a gain in the amount of $513,000 on the sale of a
commercial land parcel recorded for the six months ended February 28, 1999.

        Total costs and expenses for the Company increased to $40.1 million for
the six months ended February 29, 2000 from $34.7 million for the six months
ended February 28, 1999, an increase of 15.6%. The increase resulted primarily
from an increase in direct costs of timeshare sales to $4.6 million from $3.4
million, an increase of 33.6%; an increase in marketing and sales expenses to
$17.9 million from $16.6 million, an increase of 7.5%; an increase in interest
expense to $6.0 million from $4.3 million, an increase of 40.3% and an increase
in general and administrative expenses to $8.3 million from $7.0 million, an
increase of 18.7%. The increase in direct costs of timeshare sales is
attributable to higher net timeshare sales during the current fiscal period
compared to the same period last fiscal year. The increase in marketing and
sales expenses is due primarily to higher gross sales. As discussed below, the
increase in these expenses on a dollar basis was accompanied by a decrease in
marketing and sales expenses as a percentage of gross sales. The increase in
interest expense is due to increased notes and contracts payable. The increase
in general and administrative expenses is primarily due to the increase in
escrow collection costs related to sales volume and an increase in maintenance
fees paid to Homeowner Associations by PEC.

        As a percentage of gross sales of timeshare interests and land,
marketing and sales expenses relating thereto decreased to 52.2% during the six
months ended February 29, 2000 from 61.8% during the six months ended February
28, 1999, and cost of sales decreased to 17.2% during the six months ended
February 29, 2000 from 17.5% during the six months ended February 28, 1999.
Sales prices of timeshare interests are typically lower than those of land,
while selling costs per sale, other than commissions, are approximately the same
in amount for timeshare interests and land; accordingly, the Company generally
realizes lower profit margins from sales of timeshare interests than from sales
of land.

        Interest expense increased to $6.0 million during the six months ended
February 29, 2000 from $4.3 million during the six months ended February 28,
1999, an increase of 40.3%. The increase is a result of increased notes and
contracts payable during the six months ended February 29, 2000 compared to the
six months ended February 28, 1999.

        Pre-tax income of $1.7 million was earned during the six months ended
February 29, 2000 compared to a pre-tax loss of $1.9 million during the six
months ended February 28, 1999. The improvement in the first six months of
fiscal 2000 resulted from the $9.0 million increase in revenues partially offset
by the $5.4 million increase in expenses.

        No income tax provision or benefit was recorded for the six months ended
February 29, 2000 compared to an income tax benefit of $650,000 during the six
months ended February 28, 1999, due to the use of net operating loss
carryforwards which were previously fully reserved and currently are used to
offset income on a consolidated basis. Income taxes are recorded, and the
liability is adjusted, based on an ongoing review of related facts and
circumstances.

        Net income applicable to common stock was $1.7 million during the six
months ended February 29, 2000 compared to a net loss applicable to common stock
of $1.3 million during the six months ended February 28, 1999, primarily due to
the foregoing.

LIQUIDITY AND CAPITAL RESOURCES

        Cash and cash equivalents for the Company was $1.9 million at February
29, 2000 compared to $1.8 million at August 31, 1999.

        PEC's cash requirements arise from the acquisition of timeshare
properties and land, payments of operating expenses, payments of income taxes to
Mego Financial, payments of principal and interest on debt obligations, and
payments of marketing and sales expenses in connection with sales of timeshare
interests and land. Marketing and sales expenses payable by PEC in connection
with sales of timeshare interests and land typically exceed the down payments
received at the time of sale, as a result of which PEC generates a cash
shortfall. This cash shortfall and PEC's other cash requirements are funded
primarily through advances under PEC's lines of credit in the aggregate amount
of $133.5 million, sales of receivables and cash flows from operations. At
February 29, 2000, no commitments existed for material capital expenditures.


                                       10


<PAGE>   13
        At February 29, 2000, PEC had arrangements with 4 institutional lenders
for the financing of receivables in connection with sales of timeshare interests
and land and the acquisition of timeshare properties and land, which provide for
lines of credit of up to an aggregate of $133.5 million. Such lines of credit
are secured by timeshare and land receivables and mortgages. At February 29,
2000, an aggregate of $114.0 million was outstanding under such lines of credit,
and $19.5 million was available for borrowing. Under the terms of these lines of
credit, PEC may borrow 70% to 90% of the balances of the pledged timeshare and
land receivables. PEC is required to comply with certain covenants under these
agreements, which, among other things, require PEC to meet certain minimum
tangible net worth requirements. The most stringent of such requirements
provides that PEC maintain a minimum tangible net worth of $25 million. At
February 29, 2000, PEC exceeded this net worth requirement by $3.8 million.
Summarized lines of credit information and accompanying notes relating to these
lines of credit outstanding at February 29, 2000, consist of the following
(thousands of dollars):


<TABLE>
<CAPTION>
     BORROWING            MAXIMUM
     AMOUNT AT           BORROWING          REVOLVING
 FEBRUARY 29, 2000        AMOUNTS       EXPIRATION DATE (a)       MATURITY DATE       INTEREST RATE
 -----------------       ---------    ---------------------       -------------    --------------------
<S>                      <C>          <C>                         <C>              <C>
      $  72,994          $   75,000   (b)  May 31, 2000             Various        Prime +  2.0 - 2.25%
      ---------          ----------

         15,605              15,000   (c)  December 1, 2002         Various        Prime +  2.0
          5,850              11,500   (d)  May 31, 2000             Various        Prime +  2.0 - 3.00%
      ---------          ----------
         21,455              26,500        Considered one borrowing line for the maximum amount.
      ---------          ----------

         17,611              30,000   (e)  June 30, 2001            Various        Libor +  4.0 - 4.25%
          1,972               1,972   (f)                           July 31, 2000  Prime +  2.0 - 2.25%
      ---------          ----------
      $ 114,032          $  133,472
      =========          ==========
</TABLE>


(a)     Revolving expiration dates represent the expiration of the revolving
        features of the lines of credit , at which time the credit lines become
        loans with fixed maturities. As is customary, the Company is negotiating
        for extensions of the revolving periods expiring in fiscal year 2000.

(b)     Restrictions include PEC's requirement to maintain a minimum tangible
        net worth of $25 million. Other restrictions, commencing with the fiscal
        quarter ended November 30, 1999, include: PEC's requirement to maintain
        costs and expenses for marketing and sales and general and
        administrative expenses relating to net processed sales for each fiscal
        quarter; PEC's requirement to maintain a minimum net processed sales
        requirement for each fiscal quarter; and PEC's requirement not to exceed
        a ratio of 4:1 of consolidated total liabilities to consolidated
        tangible net worth. At February 29, 2000, $56.7 million of loans secured
        by receivables were outstanding related to financings at prime plus 2%,
        of which $37.7 million of loans secured by land receivables mature May
        15, 2010 and $19.0 million of loans secured by timeshare receivables
        mature May 15, 2007. The outstanding borrowing amount includes $6.4
        million in acquisition and development (A&D) financing maturing October
        1, 2005 for the corporate office buildings, which is an amortizing loan,
        and a real estate loan with an outstanding balance of $1.2 million
        maturing December 31, 2000, all bearing interest at prime plus 2.25%.
        The remaining A&D loans, receivables loans and a resort lobby loan
        outstanding of $8.6 million are at prime plus 2% and mature at various
        dates through February 18, 2001.

        In December 1998, Finova Capital Corporation (FINOVA), PEC and Mego
        Financial entered into an Agreement under which FINOVA agreed to make a
        loan in the amount of $5,662,000 to PEC with an original maturity date
        of June 30, 1999, which date has been extended to December 31, 2000.
        Mego Financial guaranteed the loan and issued warrants to FINOVA to
        purchase a total of 83,333 shares of common stock of Mego Financial at
        an exercise price of $6.00 per share, exercisable within a five-year
        period commencing January 1, 1999. The balance outstanding under this
        Agreement, which is included in the $73.0 million balance in the
        preceding table, was $3.4 million as of February 29, 2000.

(c)     Restrictions include PEC's requirement to maintain a minimum tangible
        net worth of $25 million during the life of the loan. These credit lines
        include available financing for A&D and receivables. At February 29,
        2000, $7.2


                                       11


<PAGE>   14
        million was outstanding under the A&D loan, which matures on June 30,
        2004, and $8.4 million was outstanding under the receivables loan, which
        matures on May 31, 2004.

(d)     Restrictions include PEC's requirement to maintain a minimum tangible
        net worth of $15 million. This credit line consists of receivable
        financing with a maturity date of May 31, 2004, under which $1.9 million
        was outstanding at February 29, 2000 , and a real estate loan of $4.0
        million with a maturity date of August 30, 2000.

(e)     Restrictions include PEC's requirement to maintain a minimum tangible
        net worth of $17 million during the life of the loan. These credit lines
        include available financings for A&D and receivables. At February 29,
        2000, $3.4 million was outstanding under the A&D loans which have a
        maturity date of June 30, 2001 and bear interest at the 90-day London
        Interbank Offering Rate (LIBOR) plus 4.25%. The available receivable
        financings, of which $14.2 million was outstanding at February 29, 2000,
        are at 90-day LIBOR plus 4% and have a maturity date of June 5, 2005.

(f)     Restrictions include PEC's requirement to maintain a minimum tangible
        net worth of $25 million.

        A schedule of the cash shortfall arising from recognized and
unrecognized sales for the periods indicated is set forth below (thousands of
dollars):


<TABLE>
<CAPTION>
                                                          THREE MONTHS ENDED                    SIX MONTHS ENDED
                                                 ------------------------------------  --------------------------------------
                                                 FEBRUARY 29, 2000  FEBRUARY 28, 1999  FEBRUARY 29, 2000    FEBRUARY 28, 1999
                                                 -----------------  -----------------  -----------------    -----------------
<S>                                              <C>                <C>                <C>                  <C>
Marketing and selling expenses attributable
    to recognized and unrecognized sales            $      8,990      $      7,931        $     18,787        $     16,927

Less:  Down payments                                      (2,617)           (2,670)             (5,678)             (5,402)
                                                    ------------      ------------        ------------        ------------

Cash Shortfall                                      $      6,373      $      5,261        $     13,109        $     11,525
                                                    ============      ============        ============        ============
</TABLE>


        During the six month periods ended February 29, 2000 and February 28,
1999, PEC did not sell any notes receivable.


        PEC sells notes receivable subject to recourse provisions as contained
in each agreement. PEC is obligated under these agreements to replace or
repurchase accounts that become over 90 days delinquent or are otherwise subject
to replacement or repurchase in either cash or receivables generally at the
option of the purchaser. At February 29, 2000, PEC was contingently liable to
replace or repurchase notes receivable sold with recourse totaling $48.4
million. The repurchase provisions provide for substitution of receivables as
recourse for $19.9 million of sold notes receivable and cash payments for
repurchase relating to $28.5 million of sold notes receivable. The undiscounted
amounts of the recourse obligations on such notes receivable were $4.7 million
and $6.5 million at February 29, 2000 and February 28, 1999, respectively. PEC
continually reviews the adequacy of this liability. These reviews take into
consideration changes in the nature and level of the portfolio, current and
future economic conditions which may affect the obligors' ability to pay,
changes in collateral values, estimated value of inventory that may be
reacquired and overall portfolio quality.

        The components of the Company's debt, including lines of credit consist
of the following (thousands of dollars):


<TABLE>
<CAPTION>
                                                          FEBRUARY 29,        AUGUST 31,
                                                              2000               1999
                                                          ------------        ----------
<S>                                                       <C>                 <C>
Notes collateralized by receivables                        $   81,270         $   67,457
Mortgages collateralized by real estate properties             33,605             35,846
Installment contracts and other notes payable                   1,067              1,252
                                                           ----------         ----------
       Total                                               $  115,942         $  104,555
                                                           ==========         ==========
</TABLE>


                                       12


<PAGE>   15
FINANCIAL CONDITION

        Changes in the aggregate of the allowance for cancellations, excluding
discounts, and the reserve for notes receivable sold with recourse for the six
months ended February 29, 2000, consisted of the following (thousands of
dollars):


<TABLE>
<S>                                                           <C>
Balance at beginning of period                                $ 18,149
  Provision for cancellations                                    2,717
  Amounts charged to allowance for cancellations, net           (3,831)
                                                              --------
Balance at end of period                                      $ 17,035
                                                              ========
</TABLE>


        The allowance for cancellations and the reserve for notes receivable
sold with recourse consisted of the following at these dates (thousands of
dollars):


<TABLE>
<CAPTION>
                                                        FEBRUARY 29,        AUGUST 31,
                                                            2000               1999
                                                        ------------        ----------
<S>                                                     <C>                 <C>
Allowance for cancellations, excluding discounts         $   13,563         $   13,987
Reserve for notes receivable sold with recourse               3,472              4,162
                                                         ----------         ----------
       Total                                             $   17,035         $   18,149
                                                         ==========         ==========
</TABLE>


February 29, 2000 Compared to August 31, 1999

        Cash and cash equivalents increased to $1.9 million at February 29, 2000
from $1.8 million at August 31, 1999.

        Notes receivable, net, increased 19.0% to $82.4 million at February 29,
2000 from $69.3 million at August 31, 1999 primarily as a result of net new
receivables added, and no sales of receivables during the six months ended
February 29, 2000.

        Timeshare interests held for sale decreased 6.9% to $27.5 million at
February 29, 2000 from $29.5 million at August 31, 1999.

        Land and improvements inventory decreased 20.7% to $5.3 million at
February 29, 2000 from $6.7 million at August 31, 1999.

        Notes and contracts payable increased 10.9% to $115.9 million at
February 29, 2000 from $104.6 million at August 31, 1999. There were increased
borrowings and no receivable sales during the six months ended February 29,
2000. The proceeds of such sales would normally be used to pay down debt.

        Reserve for notes receivable sold with recourse decreased 16.6% to $3.5
million at February 29, 2000 from $4.2 million at August 31, 1999 due to the
reduced balance of the sold notes receivable. Recourse to the Company on sales
of notes receivable is governed by the agreements between the purchasers and the
Company.

        Stockholders' equity increased 7.6% to $23.5 million at February 29,
2000 from $21.8 million at August 31, 1999.

YEAR 2000 COMPLIANCE

        The Company believes it is Year 2000 compliant. There have been no
significant problems experienced as a result of the occurrence of Year 2000
which have disrupted operations. The Company will continue to monitor its
operations for Year 2000 problems.


                                       13


<PAGE>   16
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

        There was no material change for the three months ended February 29,
2000 in the information about the Company's "Quantitative and Qualitative
Disclosures About Market Risk" as disclosed in its Annual Report on Form 10-K
for the fiscal year ended August 31, 1999.


                                       14


<PAGE>   17
PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

        On February 23, 1998, an action was filed by Robert J. Feeney, as a
purported class action against Mego Mortgage Corporation, (MMC) a former
subsidiary of Mego Financial, and Jeffrey S. Moore, the former President and
Chief Executive Officer of MMC. On June 29, 1998, an amended complaint was filed
which, among other things, added Mego Financial as a defendant. On March 13,
2000, the court dismissed with prejudice the case brought against MMC and Mego
Financial.

        On August 27, 1998, an action was filed in Nevada District Court, County
of Clark, No. A392585, by Robert and Jocelyne Henry, husband and wife
individually and on behalf of all others similarly situated against PEC, PEC's
wholly-owned subsidiary, Central Nevada Utilities Company (CNUC), and certain
other defendants. The plaintiffs' complaint asked for class action relief
claiming that PEC and CNUC were guilty of collecting certain betterment fees and
not providing sewer and water lines to their property. The court determined that
plaintiffs had not properly pursued their administrative remedies with the
Nevada Public Utilities Commission (PUC) and dismissed plaintiffs' amended
complaint, without prejudice. Notwithstanding plaintiffs' appeal of the
dismissal, plaintiff filed for administrative relief with the PUC. On November
17, 1999, the PUC found that CNUC, the only defendant over which the PUC has
jurisdiction, was not in violation of any duties owed the plaintiffs or
otherwise in violation of CNUC's approved tariffs. Subsequent to the PUC's
decision, plaintiffs attempted to voluntarily dismiss their appeal of the trial
court's order dismissing their case without prejudice and directing plaintiffs
to exhaust their administrative remedies. Defendant PEC has challenged this
voluntary dismissal arguing it is entitled to fees incurred in defense of the
appeal. To date, the Supreme Court of Nevada has not ruled on PEC's motion and
plaintiffs have not refiled their complaint.

        There has been no material change in the status of other litigation
reported in the Company's Annual Report on Form 10-K for the year ended August
31, 1999.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K


<TABLE>
<CAPTION>
EXHIBIT
 NUMBER                                     DESCRIPTION
-------                                     -----------
<S>            <C>
10.199         Fifth Amendment to Forbearance Agreement and Amendment Number 10
               to Second Amended and Restated and Consolidated Loan and Security
               Agreement dated as of February 25, 2000 by and among FINOVA
               Capital Corporation, Preferred Equities Corporation, and Mego
               Financial Corp.

10.200         Eighth Amendment to Assignment and Assumption Agreement by and
               between RER Corp., COMAY Corp., Growth Realty Inc. and H&H
               Financial Inc., and Mego Financial Corp., dated January 31,
               2000.

10.201         Amended, Restated and Increased Receivables Promissory Note No. 1
               by Preferred Equities Corp. to Heller Financial, Inc. dated
               December 22, 1999.

10.202         Amended, Restated and Consolidated Acquisition Promissory Note
               No. 1 by Preferred Equities Corp. to Heller Financial, Inc. dated
               December 22, 1999.

10.203         Fourth Amendment to Interval Receivables Loan and Security
               Agreement dated December 22, 1999 between Heller Financial, Inc.,
               and Preferred Equities Corporation.

10.204         Third Amendment to Acquisition and Construction Loan Agreement
               dated December 22, 1999 between Heller Financial, Inc., and
               Preferred Equities Corporation.

10.205         General Loan and Security Agreement (Inventory Loan) executed
               December 17, 1999 by and among Textron Financial Corp., Preferred
               Equities Corp. and Steamboat Suites, Inc.

10.206         General Loan and Security Agreement (Receivable Loan Facility)
               executed December 17, 1999 by and among Textron Financial Corp.,
               Preferred Equities Corp. and Steamboat Suites, Inc.

10.207         Sixth Amendment to Forbearance Agreement and Amendment No. 11 to
               Second Amended and Restated and Consolidated Loan and Security
               Agreement dated March 31, 2000 by and among FINOVA Capital
               Corporation, Preferred Equities Corporation and Mego Financial
               Corp.

27.1           Financial Data Schedule (for SEC use only).
</TABLE>


No reports on Form 8-K were filed during the period.


                                       15


<PAGE>   18
                                    SIGNATURE


Pursuant to the requirements 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.


                             MEGO FINANCIAL CORP.


                             By:/s/ Charles G. Baltuskonis
                                -------------------------------
                                Charles G. Baltuskonis
                                Vice President and Chief Accounting Officer



Date:   April 14, 2000


                                       16