SECURITIES AND EXCHANGE COMMISSION

                             Washington, DC. 20549

                                   FORM 10-Q

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



  For Quarter Ended    SEPTEMBER 30, 1996      Commission File Number   0-9643
--------------------------------------------------------------------------------


                              MEGATECH CORPORATION
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


            Massachusetts                             04-2461059
--------------------------------------------------------------------------------
    (State or other jurisdiction of                 (IRS. Employer
     incorporation of organization)              Identification No.)


   555 WOBURN Street, TEWKSBURY,  MA                    01876
--------------------------------------------------------------------------------
(Address of principal executive offices)              (Zip Code)

     Registrant's telephone number, including area code:   (508) 937-9600
--------------------------------------------------------------------------------

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


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


The  number  of  shares  of the  registrant's  common  stock  outstanding  as of
SEPTEMBER 30, 1996 was 3,784,808.



                              MEGATECH CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                  SEPTEMBER 30     DECEMBER 31
                                                                      1996            1995
                                                                  (UNAUDITED)        AUDITED
                                                                  ------------     -----------


<S>                                                                <C>              <C>
ASSETS
Current assets:

  Cash and cash equivalents                                        $   68,365       $   55,578

  Accounts receivable - net:                                          397,501          531,429

    Other receivable                                                    4,778            2,967

  Prepaid expenses                                                     20,156            5,539

  Inventories at lower of cost (first-in first-out) or market         346,033          327,336
                                                                   ---------------------------


      Total current assets                                            836,833          922,849
                                                                   ---------------------------

Property, plant and equipment, at cost net of accumulated 
 depreciation of $354,192.79 in 1996 and $328,336 in 1995              99,393          118,531

Security deposits                                                       7,666            7,666
                                                                   ---------------------------
      Total Assets                                                 $  943,892       $1,049,046
                                                                   ===========================



<F*>   See accompanying notes to consolidated financial statements.
</TABLE>



                              MEGATECH CORPORATION
                     CONDENSED CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                                                                  SEPTEMBER 30     DECEMBER 31
                                                                      1996            1995
                                                                  (UNAUDITED)        AUDITED
                                                                  ------------     -----------

<S>                                                                <C>              <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Current portion of long-term debt                                $        0       $   37,000
  Current portion of lease payable                                        860            2,976
  Trade Accounts Payable                                              234,867          239,589
  Accrued expenses                                                     62,030           36,734
  Accrued State Income Taxes                                             (187)
                                                                   ---------------------------

      Total current liabilities                                       297,570          316,299
                                                                   ---------------------------

Equipment lease, net of current portion                                 1,230            1,230
                                                                   ---------------------------

      Total liabilities                                            $  298,801       $  317,529
                                                                   ---------------------------

Stockholders' equity:
  Common Stock, par value $.0143 per share, 5,000,000 shares 
   authorized; 3,785,208 & 3,762,258 shares issued and 
   outstanding, respectively                                           54,115           53,800
  Additional paid-in capital                                        4,013,819        4,010,833
  Deficit                                                          (3,422,842)      (3,333,116)
                                                                   ---------------------------

      Total stockholders' equity                                      645,091          731,517
                                                                   ---------------------------

      Total Liabilities and Stockholders' Equity                   $  943,892       $1,049,046
                                                                   ===========================



<F*>   See accompanying notes to consolidated financial statements.
</TABLE>


                              MEGATECH CORPORATION
                      CONSOLIDATED STATEMENT OF OPERATIONS
                                  (UNAUDITED)


<TABLE>
<CAPTION>
                                                         NINE MONTHS ENDED                   QUARTER ENDED
                                                    ---------------------------       ---------------------------
                                                    SEPT. 1996       SEPT. 1995       SEPT. 1996       SEPT. 1995
                                                    ----------       ----------       ----------       ----------

<S>                                                 <C>              <C>              <C>              <C>
Sales                                               $1,486,802       $2,106,285       $  587,749       $  592,826

Cost of goods sold                                     891,270        1,209,929          306,194          356,711
                                                    -------------------------------------------------------------

      Gross profit                                     595,532          896,356          281,555          236,115

Operating expenses:
  Selling, general and administrative expenses         665,304          898,732          245,664          284,199
  Research and development                              18,206           51,458            9,965           15,201
                                                    -------------------------------------------------------------

  Profit (loss) from operations                        (87,978)         (53,834)          25,926          (63,285)

Other income and (expense):
  Interest                                              (1,034)          (2,965)            (404)            (749)
  Other                                                      0          (12,762)               0           (4,640)
  Legal                                                   (846)           2,003             (846)               0
                                                    -------------------------------------------------------------
Total other income and (expense)                        (1,879)         (13,724)          (1,250)          (5,389)

Net profit (loss)                                  ($   89,857)     ($   67,558)      $   24,676      ($   68,674)
                                                    =============================================================

Net profit (loss) per share                        ($    0.024)     ($    0.018)      $    0.007      ($    0.019)
                                                    =============================================================

Weighted average number of shares outstanding        3,784,808        3,671,258        3,785,208        3,671,258
                                                    =============================================================
</TABLE>



                              MEGATECH CORPORATION
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                             NINE MONTHS ENDED
                                                        ---------------------------
                                                        SEPT. 1996       SEPT. 1995
                                                        ----------       ----------

<S>                                                     <C>              <C>
Cash flows from operating activities:
  Net profit (loss)                                     $  24,676        $   1,116

Adjustments to reconcile net income to net cash 
 provided by operating activities:
  Depreciation and amortization                             9,546           10,295

Changes in operating assets and liabilities:
  Accounts receivable, trade                             (138,505)         (75,805)
  Accounts receivable, other                                1,514           (1,086)
  Prepaid expenses                                         (6,048)         (12,614)
  Inventories                                             (37,165)         158,149
  Notes payable - current                                    (772)         (11,105)
  Accounts payable                                         69,129          (92,084)
  Accrued expenses                                         51,143          (86,308)
  Security deposit - Rent Building                              0           (2,033)
                                                        --------------------------

Net cash provided (used) by operating activities          (26,482)        (111,476)

Cash flows from investing activities:
  Purchases of property and equipment                      (1,451)         (74,882)

Cash flows from financing activities:
  Payments on capital lease obligations                         0           (1,317)
  Principal payments on long-term debt                          0           (1,959)
  Proceeds from issuance of common stock                        0            1,330
  Additional paid in capital                                    0           72,521
                                                        --------------------------

Net cash used by financing activities                           0           70,575

Net increase (decrease) in cash and cash equivalents      (27,932)        (115,784)

Cash & cash equivalents, beginning of period               96,298          189,051
                                                        --------------------------

Cash & cash equivalents, end of period                  $  68,365        $  73,267
                                                        ==========================
</TABLE>



                              MEGATECH CORPORATION
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1996


1.   BASIS OF PRESENTATION:
     ----------------------

     The  accompanying   unaudited  condensed  financial  statements  have  been
     prepared in accordance with generally  accepted  accounting  principles for
     interim financial  information and pursuant to the rules and regulations of
     the Securities and Exchange  Commission.  Accordingly,  they do not include
     all of  the  information  and  footnotes  required  by  generally  accepted
     accounting principles for complete Financial Statements.

     In the opinion of management,  all adjustments  necessary to present fairly
     the financial  position,  results of operations and cash flows at September
     30,  1996 and for all  periods  presented  have been made.  The  results of
     operation for the nine months ended  September 30, 1996 are not necessarily
     indicative of the operating results that may be expected for the year ended
     December  31,  1996.  It  is  suggested  that  the  condensed  consolidated
     financial  statements be read in conjunction with the financial  statements
     and notes  thereto  included  in the  Company's  December  31,  1995 annual
     report.


2.   INVENTORIES:
     ------------

     Inventories consist of the following:

<TABLE>
<CAPTION>
                                               SEPT. 30      DEC. 31
                                                 1996         1995
                                               --------      -------

            <S>                                <C>           <C>
            Raw materials                      142,643       226,359
            Work in process                     74,062             0
            Finished goods                     139,327       110,977
                                               ---------------------
                                               356,033       337,336

            Less reserve for obsolescence       10,000        10,000
                                               ---------------------

                                               346,033       327,336
                                               =====================
</TABLE>


                              MEGATECH CORPORATION
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                               SEPTEMBER 30, 1996


RESULTS OF OPERATIONS:
----------------------


NINE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED WITH
 NINE MONTHS ENDED SEPTEMBER 30, 1995

     Consolidated  net  sales  for the nine  months  ended  September  30,  1996
decreased by $.6 million compared to the  corresponding  period of 1995. This is
primarily due to lower overall international sales, specifically from Mexico.

     Gross profit for the nine months ended  September 30, 1996  decreased by 3%
compared to the  corresponding  period in 1995.  As a percentage of total sales,
gross profit was 40% in the nine months ended  September 30, 1996 as compared to
43% in the  corresponding  period of 1995.  The  decrease is due to product mix,
where higher  percentage of resale items were sold  carrying  lower gross profit
margins.

     Selling,  General  &  Administrative  expenses  for the nine  months  ended
September  30, 1996  decreased  from the  corresponding  period of 1995 by $ .27
million or 28%. The  decrease is  primarily a result of lower sales  commissions
which were due to the decreased overall sales.

     Research and  Development  expenses for the nine months ended September 30,
1996  decreased  from the  corresponding  period  of 1995 by $.03  million.  The
decrease is attributable to reduction in research projects.



                              MEGATECH CORPORATION
                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
                               SEPTEMBER 30, 1996


LIQUIDITY AND CAPITAL RESOURCES:
--------------------------------

     Working  capital for the nine months ended  September 30, 1996 was $539,263
as compared to $596,642 in working  capital at September 30, 1995.  The decrease
was primarily attributable to lower accounts receivables.

     The company  maintains a secured  line of credit in the amount of $200,000.
At September 30, 1996,  no  borrowings  were  outstanding  under this line.  The
company  believes that cash  generated from  operations,  together with existing
sources  of  debt  financing,  will  be  sufficient  to  meet  foreseeable  cash
requirements for the next twelve months.

     The firm's  backlog as of  September  30, 1996 was  approximately  $455,981
compared to $ 407,691 for same period ended in 1995.


3.   MAJOR CUSTOMER INFORMATION:
     ---------------------------

     For the period ended  September  30, 1996,  sales to four  unrelated  sales
representatives  in California,  Arizona,  Mississippi and Mexico comprised 14%,
17%, 12% and 18% of total sales, respectively.

     No other single customer accounted for more than 10% of the Company's sales
for the same period in 1996.



                           PART II: OTHER INFORMATION


Item 1. Legal Proceedings:                       Not applicable
--------------------------

Item 2. Changes in Securities:                   Not applicable
------------------------------

Item 3. Defaults Upon Senior Securities:         Not applicable
----------------------------------------

Item 4. Submission of Matters to a 
         Vote of Security Holders:               Not applicable
----------------------------------

Item 5. Other Information:                       Not applicable
--------------------------

Item 6. Exhibits and Reports in Form 8-K:        Not applicable
-----------------------------------------


                                   SIGNATURES
                                ----------------


     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.



                              MEGATECH CORPORATION
                                  (Registrant)


        SEPTEMBER 30, 1996                  /s/ VAHAN V. BASMAJIAN
----------------------------------          ---------------------------------
               Date                         Vahan V. Basmajian
                                            President, Treasurer