SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, DC. 20549

                                  FORM 10-K

              ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
                     THE SECURITIES EXCHANGE ACT OF 1934

[X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
      EXCHANGE ACT OF 1934
      (FEE REQUIRED)

      FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999 OR

[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
      EXCHANGE ACT OF 1934
      (NO FEE REQUIRED)

      FOR THE TRANSITION PERIOD FROM                   TO

                         Commission File No.  0-9646

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

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

        555   Woburn Street, Tewksbury,  Massachusetts       01876
        ----------------------------------------------    ----------
        (Address of principal executive offices)          (Zip Code)

    Registrant's telephone number, including area code:    (978) 937-9600

     Securities registered pursuant to section 12(b) of the Act:    NONE

     Securities registered pursuant to section 12(g) of the Act:    NONE

                        Common Stock, Par Value .0143

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  __XX__       No _____

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. [  ]

The aggregate market value of the registrant's Common Stock held by non-
affiliates of the registrant based upon the closing sale price of the
Common Stock on March 14, 2000 was approximately $253,167 based on the
average of the closing bid and asked quotations of the Common Stock in the
over the counter market.  The number of shares held by nonaffiliates was
1,157,600.   Shares of Common Stock held by each officer and director and
by each person who owns 5% or more of the outstanding Common Stock have
been excluded in that such persons may be deemed to be affiliates.  This
determination of affiliate status is not necessarily a conclusive
determination for other purposes.

The number of shares of par value $ .0143 common stock outstanding as of
March 14, 2000 was 3,813,708

Portions of the registrant's definitive Proxy Statement for its Annual
Meeting of the stockholders to be held on May 8, 2000 (the "Proxy
Statement") are incorporated by reference into Part III.


                                   PART I


Item 1- Description of Business
-------------------------------

(a)   General Development of Business
      -------------------------------

      Megatech Corporation  (Megatech or the Company) was established in
1970 and is engaged in the production and sale of educational training
programs and equipment in the energy  power and transportation areas sold
domestically and internationally to educational institutions and government
agencies.

      Megatech manufactures educational training equipment which consist of
modular technology workstations which are designed to provide students with
hands-on experience working with various technologies such as: automotive,
environmental, fiber-optic, microwave, laser, alternate energies,
electronic, personal computer kits and multi-media. In conjunction with the
educational equipment, Megatech produces over 200 video training programs
and student manuals which enable students to follow a self-paced self-
guided program to learn the technologies described above.

      The Company competes with a number of major suppliers of school
training equipment and several small single product line companies through
the uniqueness of its products, and the quality of its training programs.
Most of the sales to states, cities, towns and school districts are the
results of having submitted sealed bids and having been awarded the sale
based on being the lowest bidder, directly or through independent sales rep
organizations.

      There was one customer which accounted for 36%, 28% and 20% of total
sales for the years ended December 31, 1999, 1998 and 1997.  No other
customers accounted for more than 10% of sales in each of the years ended
December 31, 1999, 1998 and 1997.

      Approximately 39%, 46% and 33% of sales during the years ended
December 31, 1999, 1998 and 1997, respectively, were from international
sales.

      The Company's backlog as of December 31, 1999 and 1998 was $803,524
and $459,929, respectively.

      As of December 31, 1999, the Company had 13 full-time and 2 part-time
employees, in addition to it's independent domestic and international sales
rep organizations.


(b)   Financial Information About Industry Segments
      ---------------------------------------------

      N/A


(c)   Narrative Description of Business
      ---------------------------------

      See (a) above.


(d)   Financial Information About Foreign and Domestic Operations and
      ---------------------------------------------------------------
      Exports Sales
      -------------

      The Company presently has no operations in foreign countries.


      Export sales of the Company were as follows:
      --------------------------------------------

<TABLE>
<CAPTION>

                          Percent of
      Year     Amount     Total Sales
      ----     ------     -----------

      <S>     <C>             <C>
      1999    $699,214        39%

      1998    $847,077        46%

      1997    $693,481        33%

</TABLE>

      Most of these sales are made upon receipt of Irrevocable Letters of
Credit or prepayments.


Item 2 - Properties
-------------------

      The Company's  administrative, sales and marketing, research and
development, and manufacturing facility is located in Tewksbury,
Massachusetts and consists of approximately 20,000 square feet under a
lease with a related party which expired in November, 1999.  The company
now leases the facility on a tenant at will basis.  The current facility
will accommodate twice the current production levels.  There is ample
expansion capability beyond the current capacity for additional square
footage for manufacturing.


Item 3 - Legal Proceedings
--------------------------

      None


Item 4 - Submission of Matters to a Vote of Security Holders:
-------------------------------------------------------------

      During the fourth quarter of 1999, no matters were submitted to a
vote of the security holders through the solicitation of proxies or
otherwise.


                                   PART II


Item 5 - Market for the Registrant's Common Equity and Related Stockholders
---------------------------------------------------------------------------
         Matters
         -------

      The Company's Common Stock is traded in the over-the-counter market,
National Association of Security Dealers through the NASD  electronic
bulletin board under the symbol MGTC. The following table sets forth the
periods indicated, the closing high and low Bid Quotations of the Common
Stock in the over-the-counter market.  These Quotations represent prices
between dealers, do not include retail markup, markdowns or commissions and
do not necessarily represent actual transactions.

<TABLE>
<CAPTION>

                             High    Low
                             ----    ---

      <S>     <C>            <C>     <C>
      1999    1st Quarter    .31     .06
              2nd Quarter    .50     .13
              3rd Quarter    .44     .13
              4th Quarter    .38     .13

      1998    1st Quarter    .25     .05
              2nd Quarter    .25     .05
              3rd Quarter    .25     .03
              4th Quarter    .25     .04

      1997    1st Quarter    .25     .02
              2nd Quarter    .25     .02
              3rd Quarter    .25     .02
              4th Quarter    .25     .02

</TABLE>

      As of March 14, 2000, there were approximately 837 Shareholders based
upon the number of record holders as of that date.  The Company has paid no
cash dividends since it's inception in 1970. At the present time, the
Company intends to retain all potential earnings for future growth of the
business.


Item 6 - Selected Financial Data
--------------------------------

      The following table summarizes certain financial data which are
qualified by more detailed financial statements included herein.

<TABLE>
<CAPTION>

                                   1999         1998         1997         1996         1995
                                   ----         ----         ----         ----         ----

<S>                             <C>          <C>          <C>          <C>          <C>
Sales                           1,794,553    1,844,782    2,097,454    2,216,978    2,824,912
Income (Loss) from operations       1,992      (99,081)    (130,842)     (94,578)     (48,310)
Net Income (Loss)                   1,593      (99,535)    (129,606)     (95,633)     (57,504)
Net Income (Loss)
 per Common share                   0.001       (0.026)      (0.034)      (0.025)      (0.015)
Weighted average shares
 outstanding                    3,805,239    3,792,308    3,790,122    3,784,566    3,731,425
Total Assets                      795,247      788,374      936,784    1,052,450    1,049,046
Long Term Obligations              37,500          -0-          -0-        - 0 -        1,230
Stockholders' equity              412,880      410,287      545,733      660,255      731,517
Cash Dividends Per Share                0          -0-          -0-        - 0 -        - 0 -

</TABLE>

Item 7 - Management's Discussion and Analysis of Financial Condition
--------------------------------------------------------------------
         and Results of Operation
         ------------------------

      1999 Compared with 1998

     Sales for 1999 decreased from the corresponding period of 1998 by $
0.05 million or 3%, to $1.8 million.  This decrease was primarily due to a
decrease in international sales. Domestic sales in 1999 were $ 1.1 million
or 61% of total sales, compared to $ 1 million or 54% of total sales in
1998.  International sales in 1999 were $0.7 million or 39% of total sales,
compared to $ 0.8 million or 46% of total sales in 1998.

      Gross profit for 1999 increased from the corresponding period of 1998
by $0.04 million, or 5%, to $0.8 million.  As a percentage of total sales,
gross profit increased to 42% in 1999 compared to 39% in 1998.  Currently,
there are no known future increases in costs of materials, labor or other
price increases which could have an effect on sales other than normal
inflation increases.

      Selling and marketing expenses for 1999 decreased from the
corresponding period of 1998 by approximately $ 0.06 million or 9% to $ 0.6
million.  As a percentage of total sales, selling and marketing expenses
decreased to 32% for 1999 compared to 34% for 1998.  The decrease is
primarily due to a decrease in commissions paid to sales reps.

      General and administrative expenses for 1999 remained steady at $.16
million and 9% of sales in 1999 and 1998.

      Research and development expenses for 1999 remained steady at $.02
million and 1% of sales in 1999 and 1998.

      Income from operations for 1999 as compared to the same period of
1998 increased by $ .10 million. As a percentage of total sales, operating
income increased to .11% for 1999 compared to operating losses of 5.4% in
1998.  The operating income in 1999 are a result of the factors indicated
above.

      1998 Compared with 1997
      -----------------------

      Sales for 1998 decreased from the corresponding period of 1997 by $
0.25 million or 12%, to $1.8 million.  This decrease was primarily due to a
decrease in overall sales volume. Domestic sales in 1998 were $ 1 million
or 54% of total sales, compared to $ 1.4 million or 67% of total sales in
1997.  International sales in 1998 were $0.8 million or 46% of total sales,
compared to $ 0.7 million or 33% of total sales in 1997.  The Company
believes that the decrease in overall sales is due to declining domestic
sales.

      Gross profit for 1998 decreased from the corresponding period of 1997
by $0.15 million, or 17%, to $0.7 million.  As a percentage of total sales,
gross profit was 39% and 41% for 1998 and 1997, respectively.  Currently,
there are no known future increases in costs of materials, labor or other
price increases which could have an effect on sales other than normal
inflation increases.

      Selling and marketing expenses for 1998 decreased from the
corresponding period of 1997 by approximately $ 0.2 million or 22% to $ 0.6
million.  As a percentage of total sales, selling and marketing expenses
decreased to 34% for 1998 compared to 38% for 1997.  The decrease is
primarily due to changes in marketing staff.

      General and administrative expenses for 1998 decreased from the
corresponding period of 1997 by $.01 million, or 7% to $0.17 million.  The
decrease in G & A expenses is the result of changes in office staff.  As a
percentage of total sales, G & A expenses increased to 9.1% in 1998
compared to 8.7% in 1997.

      Research and development expenses for 1998 remained relatively steady
in comparison to 1997 at $ .02 million.  As a percentage of total sales, R
& D expenses also remained steady at 1.0% of sales in 1998 and 1997.

      Loss from operations for 1998 as compared to the same period of 1997
decreased by $ .03 million. As a percentage of total sales, operating
losses decreased to 5.4% for 1998 compared to 6.2% for 1997. The operating
losses are a result of the factors indicated above.

      Liquidity and capital resources
      -------------------------------

      Working capital at December 31, 1999 was $376,983 as compared to
$330,476 in working capital at December 31, 1998.  The increase was
attributable to the net income for the year ended December 31, 1999 as well
borrowings from long term debt.

      The Company maintains a $ 100,000 line-of-credit agreement with a
bank.  The line is collateralized by a security interest in substantially
all assets of the Company.  Interest is payable monthly at the bank's prime
rate plus 1.5%.  There were no borrowings outstanding  on this line at
December 31, 1999.

      Long term debt of $37,500 at December 31, 1999 consists of  8%
convertible notes payable. There are no other notes payable outstanding at
December 31, 1999.

      Capital expenditures totaled approximately $16,000 in 1999 and $7,000
in 1998.  No material purchase or capital commitments exist at December 31,
1999.

      The Company believes that cash generated from operations, together
with the existing sources of debt financing, will be sufficient to meet
foreseeable cash requirements through 2000.


Item 7a - Quantitative and Qualitative Disclosures about Market Risk
--------------------------------------------------------------------

      Not appicable.


Item 8 - Financial Statements and Supplementary Data
----------------------------------------------------

      Financial statements and schedules together with the auditors'
reports thereon are referred to Part IV and are attached hereto.


Item 9 - Changes in and Disagreements with Accountants on Accounting and
------------------------------------------------------------------------
         Financial Disclosures
         ---------------------


     1.    Disagreements with Accountants on Accounting and Financial
           Disclosure:


           None


     2.    Changes in Registrant's Certifying Accountants


           None


                                  PART III


Item 10 - Directors, Executive Officers of the Registrant
---------------------------------------------------------

      The information required with respect to the Directors and the
Executive Officers of the Company is incorporated herein by reference to
"Executive Officers" in the Proxy Statement and is incorporated herein by
reference.


Item 11 - Executive Compensation
--------------------------------

      The information required with respect to executive compensation of
the Company is incorporated herein by reference to "Executive Officer
Compensation" in the Proxy Statement and is incorporated herein by
reference.


Item 12 - Security Ownership of Certain Beneficial Owners and Management
------------------------------------------------------------------------

      The information required by this item with respect to security
ownership and management and certain beneficial owners of the Company is
incorporated by reference to the caption "Stock Ownership of Directors,
Executive Officers and Principal Stockholders" contained in the Proxy
Statement and is incorporated herein by reference.

      The Company knows of no arrangements, including any pledge by any
person of securities of the Company, the operation of which may at a
subsequent date result in a change in control of the Company.  The Company
also knows of no agreements among its shareholders which relate to voting
or investment power of its shares of Common Stock.


Item 13 - Certain Relationships and Related Transactions
--------------------------------------------------------

      The Company has signed an agreement with Cramer Production Company,
Inc. (Cramer) of Norwood, Massachusetts, to produce a series of
instructional video tapes supporting modular technology programs offered by
the Company.  An officer/shareholder of Cramer is director of the Company.
Cramer is responsible under the agreement for all video production and
video cassette reproduction. The videotapes are exclusively marketed by
Company.  The Company provides scripts for the modules, technical
representatives, program materials and is also responsible for packaging,
design and promotion. Purchases from Cramer under this agreement were
approximately $4,500 , $ 21,300 and $30,200 for the years ended December
31, 1999, 1998 and 1997, respectively.

      Commissions paid to a related entity for the  years ended December
31, 1999, 1998 and 1997 were approximately $12,000, $27,000 and $26,000,
respectively.

      The Company has entered into a lease agreement for its Tewksbury,
Massachusetts facility with Lorig Corporation, which is owned by members of
the family of an officer and majority stockholder of the Company.  The
Company believes the lease agreement  is either favorable or comparable to
others based on a market value of the facility.  The lease expired in
November, 1999 and the Company now leases the facility on a tenant at will
basis.


                                   PART IV


<TABLE>
<CAPTION>

Item 14 - Exhibits, Financial Statements, Schedules and Reports on Form 8-K    Page
---------------------------------------------------------------------------    ----

      <S>                                                                       <C>
      a)    The following documents are filed as a part of this Report:

            1.    Financial Statement:

                  Report of Independent Certified Public Accountants            10

                  Balance sheet at December 31, 1999 and 1998                   11

                  Statement of operations for the years
                  ended December 31, 1999, 1998 and 1997                        12

                  Statement of Stockholders' equity for the years
                  ended December 31, 1999, 1998 and 1997                        13

                  Statement of cash flows for the years
                  ended December 31, 1999, 1998 and 1997                        14

                  Notes to Financial Statements                                 15


            2.    Schedules for the years ended December 31, 1999, 1998
                  and 1997

                  Schedule II - Valuation and Qualifying Accounts               20

                  All other schedules called for under Regulation S-X are
                  not submitted because they are not applicable or not
                  required, or because the required information is included
                  in the Consolidated financial statements and notes
                  thereto.


            3.    Exhibits:

                  The following exhibits are filed herewith:

                  27.1 Financial data schedule                                  22


      b)    Reports on Form 8-K:

            The Company filed no Reports on Form 8-K with the Securities
            and Exchange Commissions during the quarter ended December 31,
            1999.

</TABLE>

             REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
             --------------------------------------------------

To the Board of Directors and Stockholders of
 Megatech Corporation

      We have audited the accompanying balance sheet of Megatech
Corporation as of December 31, 1999 and 1998, and the related statements of
operations, stockholders' equity and cash flows for the years ended
December 31, 1999, 1998 and 1997. These financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

      We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe our audits provide a
reasonable basis for our opinion.

      In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Megatech
Corporation as of December 31, 1999 and 1998, and the results of its
operations and its cash flows for the years ended December 31, 1999, 1998
and 1997 in conformity with generally accepted accounting principles.

      Our audits, referred to above, also include the financial schedules
listed in the Index at Item 14(a)(2). In our opinion, based on our audit,
such financial schedules present fairly the information required to be set
forth therein.



                                       SULLIVAN BILLE, P.C.


Tewksbury, Massachusetts
February 22, 2000


                            MEGATECH CORPORATION
                            ====================

                  BALANCE SHEET, DECEMBER 31, 1999 AND 1998

<TABLE>
<CAPTION>

                                                    1999           1998
---------------------------------------------------------------------------

<S>                                              <C>            <C>

               A S S E T S
               ===========

CURRENT ASSETS:
  Cash and cash equivalents                      $    75,857    $   187,580
  Accounts receivable:
    Trade (less allowance for doubtful
     accounts: 1999, $9,934; 1998, $10,166)          280,389        101,502
    Other                                              3,581         14,149
  Inventories                                        357,662        399,868
  Prepaid expenses                                     4,361          5,464
                                                 --------------------------
      Total current assets                           721,850        708,563

PROPERTY AND EQUIPMENT - Net                          65,731         72,145

OTHER ASSETS                                           7,666          7,666
                                                 --------------------------

      TOTAL                                      $   795,247    $   788,374
                                                 ==========================

       L I A B I L I T I E S  A N D
   S T O C K H O L D E R S'  E Q U I T Y

CURRENT LIABILITIES:
  Accounts payable - trade                       $    77,192    $   163,729
  Accrued liabilities:
    Customer advanced payments                       172,953        142,609
    Accrued commissions                               24,055          7,334
    Other                                             70,667         64,415
                                                 --------------------------

      Total current liabilities                      344,867        378,087
                                                 --------------------------

LONG-TERM DEBT                                        37,500
                                                 --------------------------

STOCKHOLDERS' EQUITY:
  Common stock, authorized, 5,000,000 shares
   of $.0143 par value; issued and
   outstanding: 1999, 3,812,308 shares;
   1998, 3,792,308 shares                             54,516         54,230
  Additional paid-in capital                       4,014,661      4,013,947
  Deficit                                         (3,656,297)    (3,657,890)
                                                 --------------------------

      Stockholders' equity - net                     412,880        410,287
                                                 --------------------------

      TOTAL                                      $   795,247    $   788,374
                                                 ==========================

</TABLE>

                     See notes to financial statements.


                            MEGATECH CORPORATION
                            ====================

                           STATEMENT OF OPERATIONS
            FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997

<TABLE>
<CAPTION>

                                              1999          1998          1997
---------------------------------------------------------------------------------

<S>                                        <C>           <C>           <C>
SALES                                      $1,794,553    $1,844,782    $2,097,454
COST OF SALES                               1,034,245     1,123,575     1,227,910
                                           --------------------------------------
GROSS PROFIT                                  760,308       721,207       869,544
                                           --------------------------------------

OPERATING EXPENSES:
  Selling and marketing                       569,882       626,836       798,965
  General and administrative                  166,726       168,048       181,428
  Research and development                     21,708        25,404        19,993
                                           --------------------------------------

      Total operating expenses                758,316       820,288     1,000,386
                                           --------------------------------------
INCOME (LOSS) FROM OPERATIONS                   1,992       (99,081)     (130,842)
OTHER INCOME (EXPENSE) - Net                     (399)         (454)        1,236
                                           --------------------------------------
NET INCOME (LOSS)                          $    1,593    $  (99,535)   $ (129,606)
                                           ======================================
NET INCOME (LOSS) PER SHARE - Basic and
 diluted                                   $     .001    $    (.026)   $    (.034)
                                           ======================================

</TABLE>

                     See notes to financial statements.


                            MEGATECH CORPORATION
                            ====================

                      STATEMENT OF STOCKHOLDERS' EQUITY
            FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997

<TABLE>
<CAPTION>

                                    COMMON STOCK        ADDITIONAL
                                --------------------     PAID-IN                      STOCKHOLDERS'
                                SHARES       AMOUNT      CAPITAL        DEFICIT       EQUITY - NET
---------------------------------------------------------------------------------------------------

<S>                             <C>          <C>        <C>           <C>               <C>
BALANCE AT DECEMBER 31, 1996    3,789,308    $54,187    $4,034,817    $(3,428,749)      $660,255
ISSUANCE OF COMMON STOCK            3,000         43           406                           449
COMPENSATION                                                14,875                        14,875
STOCK OPTIONS TERMINATED                                      (240)                         (240)
NET LOSS FOR THE YEAR                                                    (129,606)      (129,606)
                                ----------------------------------------------------------------

BALANCE AT DECEMBER 31, 1997    3,792,308     54,230     4,049,858     (3,558,355)       545,733
COMPENSATION                                                 8,714                         8,714
STOCK OPTIONS TERMINATED                                   (44,625)                      (44,625)
NET LOSS FOR THE YEAR                                                     (99,535)       (99,535)
                                ----------------------------------------------------------------

BALANCE AT DECEMBER 31, 1998    3,792,308     54,230     4,013,947     (3,657,890)       410,287
ISSUANCE OF COMMON STOCK           20,000        286           714                         1,000
NET INCOME FOR THE YEAR                                                     1,593          1,593
                                ----------------------------------------------------------------

BALANCE AT DECEMBER 31, 1999    3,812,308    $54,516    $4,014,661    $(3,656,297)      $412,880
                                ================================================================

</TABLE>

                     See notes to financial statements.


                            MEGATECH CORPORATION
                            ====================

                           STATEMENT OF CASH FLOWS
            FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997

<TABLE>
<CAPTION>

                                                          1999         1998          1997
-------------------------------------------------------------------------------------------

<S>                                                    <C>          <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                                    $   1,593    $ (99,535)    $(129,606)

  Adjustments to reconcile net income (loss) to net
   Cash provided by (used in) operating activities:
    Non-cash charges (credit) to net income (loss):
      Depreciation and amortization                       19,092       20,509        23,851
      Compensation funded by stock options - net                      (35,911)       14,635
      Common stock awarded as compensation                 1,000                        449
      Loss on sale of property and equipment               3,225
    Decrease (increase) in current assets:
    Accounts receivable                                 (168,319)     241,030       103,457
    Inventories                                           42,206        9,683       (29,172)
    Prepaid expenses                                       1,103       16,693        (5,030)
  Increase (decrease) in current liabilities:
    Accounts payable                                     (86,537)    (109,654)      (44,880)
    Accrued liabilities                                   53,317      121,690        19,988
                                                       ------------------------------------
      Net cash provided by (used in)
       operating activities                             (133,320)     164,505       (46,308)
                                                       ------------------------------------
CASH FLOWS USED IN INVESTING ACTIVITIES -
  Additions to property and equipment                    (15,903)      (6,951)      (13,184)
                                                       ------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from (payments on) line of credit - net                    (25,000)       25,000
  Payments on capital lease obligation                                               (1,252)
  Proceeds from issuance of long-term debt                37,500
                                                       ------------------------------------

      Net cash provided by (used in)
       financing activities                               37,500      (25,000)       23,748
                                                       ------------------------------------
NET INCREASE (DECREASE) IN CASH AND CASH
 EQUIVALENTS                                            (111,723)     132,554       (35,744)

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR           187,580       55,026        90,770
                                                       ------------------------------------
CASH AND CASH EQUIVALENTS AT END OF YEAR               $  75,857    $ 187,580     $  55,026
                                                       ====================================
SUPPLEMENTAL CASH FLOW INFORMATION:
  Interest paid                                        $     839    $     892     $     756
  Taxes paid                                                 351          715         1,393

</TABLE>

                     See notes to financial statements.

                            MEGATECH CORPORATION
                            ====================

                        NOTES TO FINANCIAL STATEMENTS
                      DECEMBER 31, 1999, 1998 AND 1997

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

1.    OPERATIONS

      Megatech Corporation is engaged in the production and sale of
        educational training programs in the energy, power and
        transportation areas which are sold domestically and internationally
        to educational institutions and government agencies. Inherent in the
        line of business in which the Company is engaged, is the risk of
        product line obsolescence due to technological advances. There also
        exists the risk that certain customers, such as governmental
        agencies, which are funded by tax revenues, may be subject to budget
        reductions. The Company grants credit to its customers.
        Approximately 39%, 46% and 33% of sales during the years ended
        December 31, 1999, 1998 and 1997, respectively, were from
        international sales.

      There was one customer that accounted for 36%, 28% and 20% of sales
        for the years ended December 31, 1999, 1998 and 1997, respectively.
        No other customers accounted for more than 10% of sales in each of
        the years ended December 31, 1999, 1998 and 1997.

2.    SIGNIFICANT ACCOUNTING POLICIES

      Use of Estimates
      ----------------

      The preparation of financial statements in conformity with generally
        accepted accounting principles 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.

      Revenue Recognition
      -------------------

      Revenue from product sales are recognized upon shipment. Revenue for
        maintenance and service and other revenues are recognized as the
        services are performed.

      Cash and Cash Equivalents
      -------------------------

      For purposes of reporting cash flows, cash and cash equivalents
        include cash and all highly liquid investments with original
        maturities of three months or less.

      Inventories
      -----------

      Inventories are valued at the lower of cost (first-in-first-out
        method) or market.


      Property and Equipment
      ----------------------

      Property and equipment are recorded at cost. Depreciation and
        amortization are computed principally on the straight-line method
        for financial accounting purposes, and accelerated methods for tax
        purposes, over the estimated useful lives of the assets.

      Leasehold improvements are amortized on the straight-line method over
        their respective lives or the lease terms, whichever is shorter.

      Costs of maintenance and repairs are charged to expense while costs of
        significant renewals and betterments are capitalized.

      Income Taxes
      ------------

      Income taxes are accounted for under the asset and liability method.
        Deferred tax assets and liabilities are recognized for the future
        tax consequences attributable to differences between the financial
        statement carrying amounts of existing assets and liabilities and
        their respective tax bases and operating loss and tax credit
        carryforwards. Deferred tax assets and liabilities are measured
        using enacted tax rates expected to apply to taxable income in the
        years in which those temporary differences are expected to be
        recovered or settled. The effect on deferred tax assets and
        liabilities of a change in tax rates is recognized in income in the
        period that includes the enactment date. A valuation allowance is
        used to reduce deferred tax assets when it is "more likely than not"
        that some portion or all of the deferred tax assets will not be
        realized.

3.    INVENTORIES

      Inventories consisted of the following:

<TABLE>
<CAPTION>

                             December 31,
                         --------------------
                           1999        1998
                           ----        ----

      <S>                <C>         <C>
      Raw material       $182,614    $186,176
      Work in Process      29,903      37,477
      Finished goods      145,145     176,215
                         --------------------
            Total        $357,662    $399,868
                         ====================

</TABLE>

4.    PROPERTY AND EQUIPMENT

<TABLE>
<CAPTION>

      Property and equipment consisted of the following:

                                                December 31,
                                            --------------------
                                              1999        1998
                                              ----        ----

       <S>                                  <C>         <C>
       Machinery and equipment              $242,571    $237,081
       Office equipment                      134,684     124,270
       Leasehold improvements                 69,776      69,776
       Automobile                             26,944      32,632
                                            --------------------
             Total                           473,975     463,759
       Less accumulated depreciation and
        Amortization                         408,244     391,614
                                            --------------------
      Property and equipment - net          $ 65,731    $ 72,145
                                            ====================

</TABLE>

      The useful lives employed for computing depreciation and amortization
        on principal classes of property and equipment are as follows:

<TABLE>
<CAPTION>

         Class Description       Years
         -----------------       -----

      <S>                        <C>
      Machinery and equipment    5 - 7
      Office equipment           5 - 7
      Leasehold improvements      10
      Automobile                   5

</TABLE>

5.    LINE OF CREDIT

      The Company has a $100,000 line-of-credit agreement with a bank. The
        line is collateralized by a security interest in substantially all
        assets of the Company. Interest is payable monthly at the bank's
        prime rate plus 1.5% (1999, 10%; 1998, 9.25%). There were no
        borrowings outstanding on this line at December 31, 1999 and 1998.

6.    LONG-TERM DEBT

      Long-term debt of $37,500 at December 31, 1999, consisted of 8%
        convertible notes payable. Interest is payable quarterly and the
        outstanding principle balance is due June 2001. The notes are
        convertible at the option of the holder into shares of the Company's
        common stock at a conversion rate of $1 per share. If at anytime
        prior to the notes maturity date or conversion by the holder, the
        Company's common stock has market price of at least $2 for five
        consecutive trading days, the notes are convertible at the option of
        the Company into shares of the Company's common stock at a
        conversion rate of $1 per share.

7.    LEASE AGREEMENTS

      The Company leased its office, research and production facility in
        Tewksbury, Massachusetts from a related party, under a five- year
        operating lease which expired in November 1999. The Company now
        leases the facility on a tenant-at-will basis. The Company is
        responsible for all operating expenses and maintenance costs. Rent
        expense was approximately $85,000, $86,000 and $85,000 for the years
        ended December 31, 1999, 1998 and 1997, respectively.

8.    INCOME TAXES

      The Company has available federal net operating loss carryforwards of
        approximately $1,821,400 expiring through December 2018 and state
        operating loss carryforwards of approximately $300,200 expiring
        through December 2003.

      Significant components of the Company's deferred tax assets and
        liabilities are as follows:

<TABLE>
<CAPTION>

                                                     December 31,
                                               ------------------------
                                                 1999          1998
                                                 ----          ----

      <S>                                      <C>          <C>
      Deferred income tax assets:
        Federal and state net operating
         loss carryforwards                    $ 647,800    $   977,900
        Allowance for doubtful accounts,
         reserves and accruals                    42,100         42,400
                                              -------------------------
            Total deferred income tax
             Assets                              689,900      1,020,300

      Deferred income tax liabilities - tax
       over book depreciation                     (9,000)        (7,600)
      Valuation allowance for deferred tax
       Assets                                   (680,900)    (1,012,700)
                                               ------------------------
       Net recognized deferred income tax
        Benefit                                $   -0-      $    -0-
                                               ========================

</TABLE>

9.    RELATED PARTY TRANSACTIONS

      The Company has an agreement with Cramer Production Company, Inc.
        (Cramer) of Norwood, Massachusetts to produce a series of
        instructional video tapes supporting modular technology programs
        offered by the Company. An officer/shareholder of Cramer is a
        director of the Company. Cramer is responsible under the agreement
        for all video production and video cassette reproduction. The
        videotapes are exclusively marketed by the Company. The Company
        provides scripts for the modules, technical representatives, program
        materials and is also responsible for packaging, design and
        promotion. Purchases from Cramer under this agreement, included in
        cost of sales, were approximately $4,500, $21,300 and $30,200 for
        the years ended December 31, 1999, 1998 and 1997, respectively.

      Commissions paid to a related entity were approximately $12,000,
        $27,000 and $26,000 during 1999, 1998 and 1997, respectively.

10.   EMPLOYEE BENEFIT PLAN

      The Company has a SIMPLE IRA Plan (the Plan), which covers all
        employees who meet certain requirements. Under the terms of the
        Plan, the Board of Directors determines annually the amount of the
        matching contribution. The matching contribution for the years ended
        December 31, 1999, 1998 and 1997 were approximately $4,400, $6,300
        and $2,400, respectively.

11.   NET INCOME (LOSS) PER SHARE

      Basic net income (loss) per share has been computed using the weighted
        average number of common shares outstanding.

      Diluted net income (loss) per share gives effect to all dilutive
        potential common shares that were outstanding during the period.
        None of the convertible debt or options outstanding at period end
        were included in the diluted net income (loss) per share calculation
        for the years ended December 31, 1999, 1998 and 1997, since they
        were anti-dilutive.

      The weighted average number of shares outstanding is as follows:

<TABLE>
<CAPTION>

                     Year Ended      Number of
                     December 31,     Shares
                     ------------    ---------

                         <S>         <C>
                         1999        3,805,239
                         1998        3,792,308
                         1997        3,790,122

</TABLE>

12.   STOCK OPTIONS PLANS

      The Company had issued stock options to various directors, officers,
        employees and others under various stock option plans. Under the
        terms of the plans, one third of the options become exercisable one
        year from the date of grant, two thirds two years from the date of
        grant and all options expire three years from the date of grant.

      The following table summarizes stock option activity:

<TABLE>
<CAPTION>

                                                    Stock         Price
                                                   Options      Per Share
                                                   -------      ---------

      <S>                                          <C>         <C>
      Outstanding at December 31, 1996              76,000      .15 - $2.75
      Expired or cancelled                         (34,000)     .15 -  1.00

      Outstanding at December 31, 1997              42,000     1.00 - 2.75
      Expired                                      (42,000)    1.00 - 2.75

      Outstanding at December 31, 1998 and 1999        -0-           $ -0-

</TABLE>

                                                                   SCHEDULE II


                            MEGATECH CORPORATION
                            ====================

<TABLE>
<CAPTION>

                                            VALUATION AND QUALIFYING ACCOUNTS
----------------------------------------------------------------------------------------------------
            COLUMN A                  COLUMN B             COLUMN C             COLUMN D    COLUMN E
----------------------------------------------------------------------------------------------------
                                                          ADDITIONS
                                                   ------------------------
                                     BALANCE AT    CHARGED TO    CHARGED TO                  BALANCE
                                      BEGINNING     COSTS AND      OTHER                      AT END
           DESCRIPTION                 OF YEAR      EXPENSES      ACCOUNTS     DEDUCTIONS    OF YEAR
----------------------------------------------------------------------------------------------------

<S>                                   <C>             <C>           <C>           <C>        <C>
Year Ended December 31, 1997:
------------------------------
  Reserve for obsolescence            $10,000         $-0-          $-0-          $-0-       $10,000
  Allowance for doubtful accounts     $11,580         $-0-          $-0-          $510       $11,070

Year Ended December 31, 1998:
-----------------------------
  Reserve for obsolescence            $10,000         $-0-          $-0-          $-0-       $10,000
  Allowance for doubtful accounts     $11,070         $-0-          $-0-          $904       $10,166

Year Ended December 31, 1999:
-----------------------------
  Reserve for obsolescence            $10,000         $-0-          $-0-          $-0-       $10,000
  Allowance for doubtful accounts     $10,166         $-0-          $-0-          $232       $ 9,934
----------------------------------------------------------------------------------------------------

</TABLE>


                                 SIGNATURES


      Pursuant to the requirements of Section 13 or 15 (d) 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)


By:   /s/  Vahan V. Basmajian
      ----------------------
      Vahan V. Basmajian, President, Treasurer and Director


Date:  March 28, 2000


      Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons on behalf of the
registrant and in the capacities and on the date indicated.


By:   /s/  Vahan V. Basmajian
      -----------------------
      Vahan V. Basmajian, President, Treasurer and Director


By:   /s/  Ralph E. Hawes
      -------------------
      Ralph E. Hawes, Director


By:   /s/  Dennis A. Humphrey
      -----------------------
      Dennis A. Humphrey, Director & Clerk


By:   /s/  Thomas J. Martin
      ---------------------
      Thomas J. Martin, Director


By:   /s/  Henry P. Ingwersen
      -----------------------
      Henry P. Ingwersen, Director


Date:  March 28, 2000